While the Bond Buyer's Midwest Municipal Market Conference was being held Tuesday at the InterContinental Chicago hotel on Michigan Avenue, over a dozen Chicago Teachers Union (CTU) members and their allies protested outside the event this morning.
Holding signs reading, "CPS: Broke on Purpose," the education activists were there to highlight controversial financial deals the Chicago Public Schools (CPS) has with banks and to call for fair-share revenue options to help tackle the school district's pressing fiscal issues.
Those at the protest, spearheaded by the Caucus of Rank and File Educators (CORE), marched in a circle chanting, "Fat cats profit and kids come last. Who pays taxes? The working class."
"There's been numerous long-term financial deals, bond deals, swap deals that have put CPS under a heavy burden of debt," explained CTU organizer Martin Ritter. "They've got bad financial advisers. Many of them are at this conference."
Conference attendees included financial institutions or their affiliated companies that have ties to controversial and costly auction-rate bond and interest-rate swap agreements with CPS, such as Bank of America and Loop Capital Markets LLC. Among those speaking at the conference was Adela Cepeda of A.C. Advisory Inc., which advised the school district on the financial deals.
"These people are making millions of dollars of profit and fees off our schools," Ritter said. "The mayor can take his political will, talk to his banker and bond market pals, and say, 'Hey, hold up on the profit. We have some serious problems. We need all the money we can get to fund the operations of our public schools, to give our workers a fair contract, to make our obligation and contractual commitments to the pension fund, and [to] find ways to get out of this crisis.'"
Representatives from the Chicago Alliance of Charter School Teachers and Staff (Chicago ACTS), Northside Action for Justice and the Pilsen Alliance were protesting with CTU members.
"The main message is that we should tax the wealthy and renegotiate those toxic swaps," said Chicago ACTS Local 4343 President Brian Harris. "We are acknowledging that (CPS is) broke, and it's for a reason. There are sources of revenue."
Here's video from today's protest, including comments from Northside Action for Justice's Ryne Poelker:
Cash-strapped CPS faces a more than $1 billion cash shortfall in the 2016 fiscal year, among other financial issues. Last week, the Chicago Board of Education OK'd over $1 billion in borrowing to help address the district's budget pressures.
"It's really important for the community to know that we are under a mountain of poorly-structured debt," said CPS teacher Michelle Gunderson. "And what we're asking for is for more revenue income, especially in terms that are progressive."
A millionaire tax and a financial transaction tax were among the revenue options mentioned by those at the protest.
"If we do not find new sources of revenue, this debt will crush us, because our bond rating is just abysmal," Gunderson said. "The only way to build our bond rating up is to be able to tell people who invest in these instruments that we have the will to raise money and fund our schools."
The protest took place the same day CTU's contract with the school district expires. CPS was also required to make a $634 million payment to the Chicago Teachers' Pension Fund by Tuesday.
Regarding the pension matter, news broke early Tuesday evening that CPS made the full payment today. The district did so after efforts to delay the pension payment for a brief amount of time failed to advance in the legislature.
On the contract issue, Ritter said the union is "still in negotiations with the board for a fair contract" and talks "will continue throughout the summer."
Gunderson, who is with the CTU's bargaining team, said the union's current contract will remain in place until the two sides reach an agreement on a new contract.
Union officials said last week that contract negations between the two sides had stalled.
"They left the table," Gunderson said of the school district. "It's up to them to come back."
The union has reportedly steered away from requesting a pay raise, but is standing firm on teacher evaluation issues and other matters that would not impact the district financially.
The fact that the school district is in dire financial straits is not lost on the union, Gunderson added.
"We are the one [group of] workers in this city who've said we will negotiate a pay freeze, but we're not going to say we're going to take a pay freeze without fighting for our kids and improvement in our schools," she said.
As part of contract talks, CTU has put forward several "non-economic" items that Gunderson says would "drastically change the life inside classrooms and make the focus more on children than on paperwork, testing, [and] punitive evaluation."
Gunderson said the CTU disagrees with the school district's proposal of addressing those "non-economic" items through task forces and committees.
"If we are going to accept a pay freeze, we need it as a contractual agreement that (CPS) will do what they need to do to improve the lives of children in classrooms," she said.
Asked about the possibility of a teachers' strike, Gunderson said: "Because of [a] new Illinois state law, we do need a 75 percent threshold of all members in order to strike. But it would be wrong for us not to build towards a strike, because the withholding of our labor might be what we have to do to fight for our kids."
UPDATE (8:10 p.m.): CPS Interim CEO Jesse Ruiz issued the following statement on the district's pension payment:
Springfield has failed to address Chicago Public Schools' financial crisis, so today CPS made its 2015 pension payment by borrowing money. As an immediate consequence of driving the district further into debt and our need to address the existing structural deficit - which is also driven by decades of pension neglect - CPS will make $200 million in cuts. As we have said, CPS could not make the payment and keep cuts away from the classroom, so while school will start on time, our classrooms will be impacted.
According to CPS, 1,400 positions will be "impacted" by the cuts starting Wednesday.
UPDATE (9:25 p.m.): In response to the news that 1,400 positions will be affected by CPS' cuts, CTU President Karen Lewis issued the following statement:
We are blindsided by reports that the district intends to lay off 1,400 public school educators, given that we just met with them yesterday and there was no mention of this action. These layoffs prove that the Board never intended to make the pension payment in good faith and that they are using this to justify more attacks on our classrooms. Putting 1,400 people out of work is no way to balance a budget and resource our schools. This is going to hurt our students and the most vulnerable children in our district. These cuts are a result of a history of poor fiscal management by the Board of Education. Mayor Rahm Emanuel's handpicked board has led this district over a financial cliff. We are outraged at this deceptive action that only furthers the distrust teachers, parents and students have with the Board. We thought it suspect at the time that the Board was pressuring us to sign off on an agreement on yesterday, before we had a complete agreement. This is retaliatory and unnecessary because (the mayor) refuses to seek revenue options to stabilize CPS.