I've read many parts of the current contract between the Board of Education (BOE) and the Chicago Teacher's Union (CTU), dated 2007-2012, which is available online.
The contract negotiations have been going on for the past year because the contract ended at the end of the past school year.
--Starting salary for a bachelor's educated first year teacher in the '11-'12 year is $47,268/year for a 38-week appointment with a 5% increase to the second year (and, of course, increases for each year thereafter). Years of experience are referred to as "steps," and level of education is referred to as "lanes." There are six lanes. Bachelor's, master's, master's plus 15 sem hrs, master's plus 30 sem hours, master's plus 45 sem hours, and doctorate. Each lane also has a higher starting first-year salary. The $47,268 is the bare minimum a teacher can earn for a 38-week appointment. They are required, by contract, to receive their salaries in 26 equal payments via direct deposit.
There has been much press on Mayor Emanuel's rescinding of the 4% increase. There is one important thing to note about this: the 4% increase is related to the base pay in the last year of the contract. In other words, a teacher would still get an increase for experience or higher educational level attained, even when the 4% contract increase didn't occur. A teacher did not have a flat salary for two years in a row; it increased 5% for the step up in one year experience.
--Pension is calculated as 75% of the average of the last five years' salary. The salary amount above does not include pension funding. Pension funding amounts are determined by state law, currently set at 9% of annual pay. The split between BOE funding and teacher funding is negotiated by contract. Current contract has the BOE kicking in 7% of annual pay and the teacher kicking in 2%. A 3% COLA is added to all CTU pension payments every year.
There is a voluntary 403(b) with no BOE match.
Teachers do not participate in Social Security. By comparison, workers who participate in SS kick in 4.2% of salary with the employer kicking in 6.2%.
SS is also calculated according to the average monthly income (AMI) over the 35 highest years earnings, indexed for inflation. Then, the first $767 of AMI is paid at 90%, $768-$4624 is paid at 32%, and anything over $4624 is paid at 15%. In other words, a worker today whose average salary over 35 years was $47,268 would receive $1705.08 per month at full retirement age (66 for those born between 1950 and 1960-something; after that, full retirement age is 67). If retiring at 62, you are eligible for 75% of that amount.
A teacher whose average salary over the past five years was $47,268 would receive $2945.25 per month at full retirement age (60 with 20 years service).
--Teachers are paid an hourly rate for after-school activities. Instructional activities earn $36.50 per hour, while non-instructional activities earn $32.50. (Instructional activities are defined in the contract, but I can't find the definition of non-instructional activities.) There is also a table of hourly compensation associated with coaching and extracurriculars, usually at the rate of $24.33/hr with a maximum number of hours per year allowed. For example, the head football coaches have max hrs of 240/year. The lowest number of max hrs is 17 hrs/year, but the number of max hours varies considerably by position. This extra compensation is not eligible for pension calculations on either the contributory side nor the annuity side.
--Teachers contribute anywhere from 1.3% (single, cheapest plan) to 2.8% (family, most expensive plan) of their salaries for health benefits. However, that percent of income is based on the step and lane as of January 2007. For example, if in 2011, a teacher has seven years experience and a bachelor's degree, the contribution percentage is not based on this particular teacher's salary in 2011. Instead, the 2011 amount for healthcare contributions is based on the 2007 salary for a teacher with seven years experience and a bachelor's degree. The only way the current salary comes into play for purposes of healthcare contributions is if healthcare costs increase during the contract period. If the increase in healthcare benefits costs increase above 5%, the contribution will be based on current salary. If the increase is 1% to 5%, fifty percent of the difference between a contribution calculated at the 2007 salary and 2011 salary is added to the base contribution. However, at no time will more than 1.3% to 2.8% be the contribution rate.
--In the current contract, class sizes are defined. Administrators calculate the number of teachers based on projected enrollment figures via registrations at a certain date. Unfortunately, for schools that have different proportions of students in different grade levels, this requires creative shuffling of teacher assignments. For example, in newly-opened schools, the upper grades usually have less students per graduating class than the lower grades. In those situations, you might find combined classrooms (4th graders with 5th graders) with one teacher, while the lower grades may have two teachers assigned to 1st grade.
--About CPS' longer school day. In July, the agreement negotiated did not require current teachers to work the longer school day. Instead, 477 previously laid off teachers were rehired ("recalled") to pick up the extra time added to the school day. I have no idea at all how that works.
The issues, according to the Chicago Tribune.
The teachers need a new contract. A union shouldn't work without one. The negotiations needed to happen.
However, the yearly salary increases are exorbitant, and I don't think most commenters on news stories understand how the increases have worked in the past. The 4% increases for the past five years didn't increase pay 4%. They increased pay by base contract pay of 4% and by step every year. For 09-10, a first-year bachelor's educated teacher with a 38-week appointment received $45,450. In 10-11, the same teacher received $49,724, an 8.6% increase. That is simply unsustainable.
With these increases come increases in pension funding. So the unsustainable pay and step increases are made even more problematic by the direct increase in pension funding needs.
My current tax bill shows that 52.7% went to the board of education. That 52.7% is $2804.05. That amount is less than the annual pension contribution by BOE for only one first-year teacher with a bachelor's degree in '10-'11. The property taxes on one middle-class household in Chicago can't even pay for the first year pension contribution of a newbie teacher.
WHERE IS THE MONEY COMING FROM!?!?!