BEFORE
FACT-FINDING PANEL
STEVEN M. BIERIG (Fact-Finder and Neutral Chair)
ROBERT E. BLOCH (Union Panel Member)
JOSEPH T. MORIARTY (Board Panel Member)

In the Matter of the Fact-finding
Between
THE BOARD OF EDUCATION
OF THE CITY OF CHICAGO

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and
THE CHICAGO TEACHERS
UNION, LOCAL 1, AMERICAN
FEDERATION OF TEACHERS,
AFL-CIO

CASE NO.: 16-77
(Fact-Finding)

DISSENT BY UNION PANEL MEMBER ROBERT BLOCH

I must respectfully dissent.
The Neutral Fact Finder's report will be Dead On Arrival – not because of his failure to
carefully consider and act upon his statutory duty, but because his hands are tied by a statute that
won't permit him to consider the most pressing issue affecting negotiations. And by simply
recommending adoption of an earlier failed proposal, his report won’t bring the parties any
closer to a contract settlement.
The reality is that the Chicago Board of Education simply cannot afford to sign a contract
with the Chicago Teachers Union. CPS finances have surpassed the danger zone and are now

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 nearly at meltdown. We need revenue solutions to finance public education, not more cuts to the
system, which has already been cut well past the bone and now threatens the vital organs. The
Fact Finder was constrained by a statute drafted by the Board of Education that prohibits
consideration of revenue solutions to address CPS's extreme financial problems. Forced to build
those financial problems into his report, the Fact Finder was unable to recommend anything new
that would assist the parties in reaching an agreement.
CPS is broke on purpose. As the Fact Finder determined, CPS has a $1.1 billion deficit
and is $6.7 billion in debt. Its total debt now well exceeds its entire annual budget of $5.7
billion. Even with its most recent round of financing, by June 30, 2016 CPS will have a negative
cash position of -$846 million. This means, in effect, that by June it will have overdrawn its
bank account by $846 million. There are serious doubts whether CPS will be able to open its
doors next fall.
This financial mess didn't happen by accident. CPS has failed for decades to secure a
source of stable, sustainable, and increasing funding to finance its operations. CPS has also
suffered from a history of fiscal mismanagement, and the City of Chicago has raided the property
tax base supporting CPS operations by diverting hundreds of millions of property tax dollars to
downtown TIFs. CPS has postponed hundreds of millions of dollars in mandatory pension
contributions until its pension obligations have become unsustainable. And in an act of
monumentally poor judgment, CPS balanced its budget this year – which is required by law – by
assuming the State would provide $480 million in aid that never came. CPS’s problems are
compounded by Governor Rauner's jihad against CPS, its educators and their collective voice,
the CTU, in support of his extremist agenda.

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 The solution to these problems requires legislation to establish a sustainable and
progressive source of funding for public education. CPS can’t afford any contract proposal –
including its own – until it achieves a stable funding source. But CPS's educators didn't create
this problem, and long term cuts in their compensation won't solve the problem.
The previously-rejected CPS January 29 proposal recommended by the Fact Finder
actually reduces teacher and PSRP take home pay over the 4-year period of the contract.
Though the 7% pension pickup has been a contract fixture for 35 years, the January 29 proposal
recommended by the Fact Finder will eliminate the 7% pension pickup, which both reduces take
home pay by 7% and reduces the salary basis on which pensions are calculated - a double
whammy. Adding up the cumulative effects of eliminating the 7% pickup and the burden of
increased health care costs against the salary increases, under the January 29 proposal CPS
educators will take home less money on June 30, 2019 than they earned on July 1, 2014. Also
under the proposal, for the first time in 50 years, educators won’t receive the step and lane
adjustments this school year that they have always received based on their longevity and
educational attainment.
The cumulative economic effect of the January 29 proposal is shown in the chart below:

School year

Salary
Increase
(COLA)

Step/Lanes

7%
Pension
Pickup

Health Care

Total
cumulative
pay

None

Unchanged

Unchanged

Freeze

2015-16

0.00%

2016-17

+2.75%

Yes

-3.50%

-1.00%

-1.75%

2017-18

+3.00%

Yes

-3.50%

-1.00%

-3.25%

2018-19

+3.00%

Yes

unchanged

- .25%

n/a

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 It is no surprise that this proposal, when tendered by CPS on January 29, was
unanimously rejected by the Union's big bargaining team, and it will be no surprise when the
Union rejects this proposal again.
Ironically, CPS has itself rejected the January 29 proposal recommended by the Fact
Finder. As the Fact Finder noted (p. 15), in CPS's March 10 Final Offer it announced that it
couldn't afford its own January 29 proposal any more. Moreover, at the fact finding hearing,
CPS candidly admitted it can't afford its March 10 Offer either. Its financial problems are so
severe that without structural reform in financing public education it can’t afford its own or the
Union's contract proposals. What is the point of long term cuts to employee compensation when
they are insufficient to solve CPS's budget problems? Everyone agrees that the differences in
cost between the Union's proposals and CPS proposals are insignificant when compared to the
scope of CPS's budget and cash flow deficits.
It was perhaps inevitable that the Neutral Fact Finder would have no new ideas for the
parties and instead attempted only to resuscitate a dead proposal. But the decisions cited by the
Fact Finder to justify this course all arose in interest arbitrations where the Union and the
employer had achieved tentative agreements at the bargaining table that were later rejected on
ratification votes. Here, however, as the Fact Finder found, there was no tentative agreement
achieved, only a promise by the Union to take CPS's January 29 proposal back to its big
bargaining team. That bargaining team rejected the CPS proposal unanimously.
That said, there were many positive non-economic elements to the January 29 proposal
that merited serious consideration, most of which are listed in the fact finder's report. These
terms were positive developments – in many cases, breakthroughs – in improving the educational

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 environment for teachers and students and seeking long-term solutions to chronically
underfunded public education. But these improvements weren't sufficient to overcome other
unacceptable terms, and they failed to address one of the most pressing problems: the attrition of
educators in the school district and resulting increases in class sizes. CPS refused to make
meaningful commitments in this area, and in fact took steps to accelerate the problem by
encouraging teacher retirements without committing to hire new teachers in their places.
The Fact Finder’s limited options in fashioning a recommended award arise from
intractable problems in the face of CPS’s funding crisis. More effort will be needed – including
reforms to the Educational Labor Relations Act, which has impeded more than assisted the
parties in negotiating labor contracts.

______________________________
Robert E. Bloch
Union Panel Member
Dated: April 16, 2016

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