Ms. Karen Lewis: Be Strong, Get Well.
“Broken dreams,” my Dad used to remind me are the “been’
brothers of our existence. “Could ‘a been, Should ‘a been, and Would ‘a
been.”
Looking back at the magnificent address Ms. Karen Lewis
provided the City Club of Chicago in the spring of this year, there is no
doubt.
Could have been. Should
have been. Would have been.
Reading her speech reveals her adamant refusal to be blinded by injustice and political chicanery, her promise to the parents and children of the public school system in our city, and the great depth of her commitment to all the people of Chicago. If you have never read the speech, now is the time to do so and send good
thoughts to her.
KAREN LEWIS PUBLIC ADDRESS:
'IT'S ABOUT THE MONEY'
CITY CLUB CHICAGO
Monday, May 5, 2014
"On
behalf of the members and staff of the Chicago Teachers Union, I want to thank
you for inviting me to the City Club again. I am always honored and pleased to
stand before you.
One
of my fondest memories of growing up in Chicago was when I was about seven
years and my father would take me out on Saturdays for a ride around the city
in his old Plymouth. I smiled as Lake Michigan whizzed by my window and I
thought its waters flowed from the most striking ocean in the world. I marveled
at the skyscrapers and imagined them as the real monsters of the midway; ones
that came alive at night to play football in the middle of Soldier’s Field.
I
remember one time, however, as we were blazing down 63rd Street with
the EL screeching on the tracks overhead, when my father became distracted for
just a second and nearly hit a panhandler standing too far in the street.
My father, ever the teacher, grumbled something under his breath about people
needing to keep their focus—though I don’t think he was judging the man at all.
He then he went on to talk about what it meant to be “in poverty” versus what
it meant to be “poor.” I’m not sure what it was about that man or that
incident, but it seemed to me that my father was talking more to himself than
me—or maybe he was just thinking aloud. But, I can still remember what he said
to me:
“Never
lose your focus Karen; there’s a reason your eyes are in the front of your
head,” my father said. “Poverty is an economic condition—something created by
social and political systems--but being poor is a psychological condition, and
it’s created by hopelessness and despair. You can have all the money in the
world and be a poor and sorry soul. You can have very little and be rich in
character, rich in spirit. Never let them break you down,” he said, not saying
to whom he was referring. “Education is the answer, you hear me Karen? You get
an education, you maintain your dignity and then you fight like hell to never
let anyone take it from you. You get an education and you’ll never let anyone
take from you what’s rightfully yours, you hear me? Someone wants to put
you in poverty; you better fight like hell, ‘lest you find yourself lost,
broken, and poor. You be smart. You keep your focus.”
Later
that night, after dinner and my mother tucked me into bed with promises of
sweet dreams (unlike my father who had scared me to death); I thought the
things my father said on the way home. I think I vowed right then, that
night that I would let anyone send me into poverty. That if someone wanted to
take something from me or do something to me that I did not ask for that I
stand up for myself, that I would fight like hell—just like my father said.
I
am reminded of this story because this is where I find myself right now:
focused and fighting like hell for the 30,000 educators who elected, Jesse,
Michael, Kristine and me to our office. Our members don’t want to wind up in
poverty because somebody who just rode into town wants to take away their
livelihoods. Its as if the 1 percent isn’t satisfied with having most of it. It
seems they want it all.
And,
they justify their behavior by determining among themselves “who is worthy” and
who isn’t. They do stuff like determine which children receive another brand
new, unsolicited, selective enrollment high school in their neighborhood and
which children have 49 schools in their communities wiped off the face of the
map. They develop social identifiers to determine who amongst us are “strivers”
and who amongst us are in the 25 percent who will “never amount to anything, or
be anything” and therefore aren’t worthy of investment. They question your
values without ever coming truthful about their own.
These
influencers manage by chaos and carnage. These are among the city’s fathers who
are calling for our pensions and the destruction of our unions. Instead
of engaging in a public good and being real heroes, by dramatically funding
neighborhood schools, helping to ease student debt, and ensuring teachers and
other public employees have the resources they need to give our young people a
21st Century, world-class education, our leaders see opportunity in
crisis and so they manufacture a great deal of them.
CRISIS AS A MANAGEMENT TOOL
Isn’t
that what we hear whenever our elected officials want to reduce, cut or
diminish something—it’s a crisis! This is their go-to management tool. CPS said
it had a billion dollar deficit. With a billion dollar deficit the Board
somehow found a way to authorize 13 new charter operations; to fund three new
turnarounds with costs that could trend in upwards of $21 million; to spend $10
million for new furniture; to announce new air conditioning for every school;
to unveil surprise plans for a $60 million Barak Obama High School on the North
Side in honor of a South Side trailblazer; and the list goes on and on and on.
But, CPS and the mayor forgot to tell people that their billion-dollar
deficit included the $681 million pension payment that was slated for 2014.
And they forgot to mention their surplus. (This year the payment is about $685
million.)
But
then again, the Board and City Hall forget to tell us a lot of things—like how
charter schools fair no better than neighborhood schools. In many cases they
fair worse. How these operations are in Springfield using taxpayer money and
private donations to fight legislation that would hold them accountable and put
them under the complete authority of the same Board of Education as the rest of
us. How is it in 2014, that we still have a major school district in this
country with separate and unequal policies?
The
time is coming where charters cannot dodge accountability; and when their
educational employees will have to unionize in order to secure their benefits
and protect the integrity of their classrooms. And, CTU will be right here, red
shirts in hand, waiting for them when they do.
A LEADERSHIP CRISIS
This
city does not have a pension crisis. It has a leadership crisis--although,
CNN’s mockumentary called Chicagoland would have the world believe this
is a town with one heroic school principal; and, where one lone ranger
named Rahm, and his trusty side-kick McCarthy, run around solving everybody’s
problems by executing “tough choices” with cool one-liners and good lighting.
CNN wants us to believe this is a magical land on some utopian island
where race, class, history, democracy, and context, does not matter to the
people who call this place home and the mayor’s only valid opposition is
a nine-year-old boy on the South Side.
Chicago
is a city of diverse neighborhoods with rich histories and unique subcultures.
What you saw were stereotypes and social and political challenges out of
context. It wasn’t just the African Americans on that CNN nonsense that were
stereotyped, so what’s Chicago’s middle class. The blacks only issue is youth
violence and internally directed despair and the white folk in this town only
care about their season tickets and parking meters. As you were watching did
you hear the dog whistle go off?
I’m
reading a book by Ian Haney Lopez called “Dog Whistle Politics: How coded
racial appeals have reinvented racism and wrecked the middle class.” I know
some of you cringe when I bring up race, but I’m not going to stop talking
about it until it is no longer relevant. Dog Whistle.
We
don’t need Hollywood producers to carve out a fictitious narrative about our
city while touting the benefits of a colonial mentality to make this work
exciting. Do we? They say there’s a million stories in the naked city, well
let’s talk about the tale of broken promises.
Promises
were made to the public employees of this city and those promises have been
broken.
IT’S ABOUT THE MONEY
And,
when we ask, why are you trying to cheat us to us? Instead of answers we get
faulty logic and false choices. “Drastic pension cuts or no pensions at
all.” “More funding for the classroom or pension benefits for failing
teachers.” “Fully funded pensions or a 150 percent increase in property taxes?”
False choices. The wrong questions. What we should be asking is why does
a law like 4.5 exist on the books that makes it difficult for Chicago parents
and educators to negotiate over class sizes? Why is Chicago the only school
district without a representative elected school board? Why are public services
and public sector employees under this constant attack by our leaders?
It’s
about the money. Its so folks like Ken Griffin and Bruce Rauner, who make more
per second and per minute than many workers in Illinois earn per hour, can
constantly meddle in education policy while they continue to not pay their fair
share. It’s so someone like billionaire John Arnold, who ran Enron into the
ground and stole the pensions of thousands of workers in one of the largest
pension heists in this nation’s history can inflict the same kind of damage
upon Chicago. These are the same folk who are rabid about teacher
accountability.
Look,
if all of these hedge fund managers and venture capitalists were really
concerned about “shared sacrifices,” they’d create some jobs and institute a
living wage for Illinois families instead of destroying our city like a swarm
of Gucci-winged locusts. Why can’t they pay their fair share?
We
don’t have a pension crisis. We have a pension shortfall and a crisis in
leadership. We have someone on the fifth floor who lacks the political will to
do what is just, what is honorable, what is legal. We have someone who
governs via “press release” and controlled PR campaigns. We have elected
officials in Springfield who seek to punish people who did everything right,
who did nothing wrong, by paying into their retirement system. We have a
governor who is caught between a rock and a hard place; but even if that is so,
he must have the moral courage to do what is right and equitable for working
families in Illinois.
Instead
of citing this shortfall as reason to end expensive tax cuts and subsidies,
CPS, the mayor and other lawmakers are citing it as a reason to slash retiree
benefits.
CPS
proposed major cuts to retirees’ pensions during the Spring 2013 legislative
session. CTU opposed any cuts to retirees, not just the incredibly
draconian cuts Mayor Emanuel supports. These proposed cuts mainly affect
retirees through suppression of cost-of-living adjustments. Under the CPS
proposal, COLAs would be limited to 3% simple interest on the first $25,000 in
retirement income, up to a maximum annual increase of $750. Over time a retiree
would lose thousands of dollars in pension benefits.
DEBUNKING THE PENSION MYTH
Our
officials and their allies want the public to believe that public sector
workers are greedy and undeserving of the defined benefit. Unlike most
workers, teachers do not receive social security. We are not eligible for free
Medicare Part A—our premiums average $451 per month—and that doesn’t include
doctor’s fees and prescription medicine. We’re talking $41,584 a year for a
teacher who is fully vested after 28 years of service, and much less for
paraprofessionals.
It
should be noted that under Mayor Emanuel it doesn’t look like many of us will
make it to 28 years. Is that the scheme—fire us before we become fully vested?
Nearly 3,000 educators have lost of their teaching positions under his reign
alone, many of whom are African American, female and over the age of 50.
Let’s
face the facts. No retired school clerk is getting rich off of $26,000 a year.
No one is living high on the hog. We don’t have nine homes to choose from like
Bruce Rauner with his $18 watch.
This
is about nearly 30,000 school employees who are being asked to agree to do more
with less. This is about my 85-year-old mother whose only income is her
pension. I don’t want her choosing between her prescriptions and whether or not
she’ll by food. This is about Carrene Beverly Bass, a dedicated teacher,
who will be laid off this year because her school, Dvorak, was recently turned
over to AUSL. She’s too young to retire, and if she can’t find a new
teaching position, what happens then? You want her lose her job, take a cut to
her retirement security and then turn around and pay more in property taxes?
Does that make sense to anyone besides the mayor?
401K PENSION SCHEME
And
they act as if our pensions are crippling the system: Less than 15 percent of
private sector employees in the U.S. now have defined benefit pension programs,
down from nearly 40 percent in 1979. However, cash-value plans (401ks) have
grown, from 16 percent to over 42 percent. The CTU is not interested in
casino-style capitalism where the very people who trashed our economy in 2005
are now entrusted with our lives. We do not want to move into a 401k-styled
plan. This would prove to be a disastrous, and the Board would still have to
make its outstanding contribution as guaranteed by law.
HOW WE GOT THERE
Illinois
taxpayers have benefited from the diversion of billions of dollars of pension
money to cover other public expenditures for 17 years. Chicago taxpayers
contribute about 18 percent of the State’s tax revenues, but the Chicago
Teachers Pension Fund (CTPF) receives only a tiny portion of the State’s
funding for teacher pensions.
It
is CTU’s position that new taxes dedicated to reimbursing the CTPF would not be
contributions to a so-called broken system. We believe if the rich
would just pay their share we could actually fix the pension system injured by
the diversion of retirement money used to bailout politicians for their poor
fiscal planning through the years. We believe new taxes should be
directed toward those sectors of the economy that are most robust and provide
the strongest growth opportunities.
REVENUE PROPOSALS
We
have to get more creative about revenue generation. How they make this overdue
payment is not our responsibility. Yet, we want to show the Board, our
parents and this city that we are always willing to work with them and find
equitable solutions.
We’ve
been very vocal about wanting CPS to renegotiate bad loans with banks and
calling for TIF reform. We should delay the expiration of the TIFS and use a
small section of that revenue it would create to produce a series of bonds. We
support what Cook County Clerk David Orr said recently on the subject: “Chicago
homeowners are being asked to pay more for pensions without receiving any
additional services while corporations and private interests in TIF districts
continue to reap their reward.” Orr said he “believe there is a way to
restructure TIF funds to ease the pension burden at no additional cost to
taxpayers.” We should go back and look at his recommendations.
We
believe there should be a commuter tax on individuals who live outside of the
City but work here and rely on city services. This is something we know the
mayor supports and this is also an opportunity for us to work together on
something. This proposal is a flat 1 percent tax on incomes of those who live
outside Chicago but work in the city. Suburban residents benefit from the urban
core’s global influence, as well as the income opportunities provided by
employers based in the city. The City valued this tax at $300 million based on
the 620,000 non-residents who work in Chicago and earn an estimated $30 billion
in income.[i]
We’ve
been saying all along, the rich must pay their fair share. We support a
fair and progressive income tax. As our researcher Sarah Hainds points out:
“Having everyone in Illinois pay 5 percent in income tax is absurd. The
estimated median family income by census tract in Chicago range from $5,016 on
the Near West Side to $280,388 on the Near North Side, with a city average of
$48,000. Illinois could haul in $57 million just from a minor increase in the
income tax of six people who are among the most influential in maintaining the
status quo in education funding and policy: Bruce Rauner, Penny Pritzker, Ken
Griffin, Andrew Broy, David Vitale and Barbara Byrd-Bennett.” Illinois
has lost an estimated $2.5 billion in tax revenue due to the abuse of tax
havens.
We want corporate loopholes closed: According to Pew Center,
public pensions face a 30-year shortfall of $1.38 trillion, or $46 billion on
an annual basis. This is dwarfed by the $80 billion a year states and cities
spend on corporate subsidies also known as welfare.
But
chief among our proposals is our call for a LaSalle Street Tax also
known as a financial transaction tax or FTT. This would generate between $10
billion to $12 billion annually for Illinois with about $2 billion going to the
city of Chicago. This very small tax seeks $1 on both the buyer and on the
seller of futures contracts and a $2 tax on derivatives contracts that are
executed through the facilities of the Chicago Mercantile Exchange (CME) and
the Chicago Board Options Exchange (CBOE), two of the largest financial markets
in the world.
Each
year the value of products traded on these two exchanges totals well over $900
trillion, according to FTT expert William Barclay, board member of the Chicago
Political Economy Group. The average contract size is more than $225,000.
So under our proposal the tax amount is less than 2/1000s of percent of the
contract’s value. You and I pay more taxes on our take our orders at McDonald’s
than buyers and sellers would pay in this proposal.
It
should be further noted, the payment of the LaSalle Street Tax does not fall on
the trading venue but rather on the entities, institutional and individuals who
trade. The products under this tax are not traded on any other exchanges. Some
of them (products) such as the S&P 500 index futures and options are
exclusively licensed to these two exchanges. Therefore, there would be no
incentive for the exchanges to pick up and move, as some have suggested.
Although the exchanges do not pay the LaSalle Street Tax, they do provide a low
cost and technically simple means to collect the tax.
Who
pays? Most derivative trading is done by large institutions and individuals
such as investment banks, day traders, hedge funds and brokers, as well as,
accounts held by high net worth individuals. The bulk of the revenue would come
from the top 1 percent and the institutions that handle their money.
Can
this work? Yes it can. There are similar taxes in the UK, Switzerland, Hong
Kong, France and other countries. These are all large markets and the tax has
been in place for several years or even decades. The markets in these countries
have not been hurt and the exchanges have not moved away.
In
administering the LaSalle Street Tax, the clearing houses already serve as
collection agencies for transaction fees and they could easily collect a
financial transaction tax at low cost.
I
know a financial transaction tax isn’t popular with our Board president and the
mayor—both of whom have direct ties to the MERC. I know they are very
concerned about their super wealthy friends and colleagues having to pay a
whopping 0.01 percent on the underlying notional value of their trades. I get
it. The wealthy do not want to pay their fair share. I get it—instead of the uber
rich giving up a single dollar on a quarter of a million dollars, their
defenders would have our senior citizens lose thousands of dollars in benefit
cuts.
But,
I believe Illinois could use $10 billion to $12 billion annually. Imagine the
possibilities of having this new pool of revenue. Imagine the impact on the
lives of people in our state who are dependent on social services, mental
health, job training, education, affordable housing and retirement security.
Currently,
there are two FTT proposals that have been submitted to the Illinois
legislature: HB 1554 calling for the $1 and $2 taxes, respectively, and a
revised HB5929 that would instead impose a much lower financial transaction tax
(say .50 or .75 cents) that would also raise significant amounts of money from
high volume trading.
The
LaSalle Street tax is good tax policy for Illinois. The rate is very low
compared to the value of the contract; the tax would fall primarily on high
income individuals and wealthy institutions; it would discourage useless
short-term trading; and it taxes the sector that caused the financial crisis
that led to the Great Recession in the first place.
IN CONCLUSION
We
stand in solidarity with our brothers and sisters in We Are One Illinois and
the We Are One Chicago in fighting this broad daylight pension heist.
The
Chicago Teachers Union is proud to work with AFSCME, SEIU Healthcare, and the
fire, nurse and police unions. In total, we represent the real backbone of
Chicago. We are the first responders; the people who take care of the sick, the
impoverished, the illiterate; the people who keep this city functioning. Our
internal challenge is to maintain our focus, to support one another and resist
the urge to appeal to narrowed interests.
Our
elected lawmakers must have the political will to generate revenue that isn’t
derived from cutting, reducing, and punishing those who have already paid their
fair share.
If
the mayor can honor a contract for parking meters he can also honor the
constitutional provision of retirement security. And, if he cannot, then maybe
its time we send him into an early retirement.
Chicago
Teachers Union will continue to expose the predatory corporate and political
interests that eschew an elected, representative school board because the
handpicked school board of the mayor refuses to honor the wishes of parents
that want smaller class sizes, wrap around services, libraries, art, music,
physical education, appropriately staffing levels, an end of high-stakes
testing and a stable education workforce—the schools our children deserve.
Thank
you."
