CARY, Ill. – For the past several years, Illinois‘ Cary District 26 was a prime example of the damage a demanding teachers union and a weak school board can inflict on a public school system.
District 26 was in such bad financial shape that it started cutting student programs and borrowing against future tax revenues just to pay its bills, including the irresponsible and unsustainable retirement benefits it was paying out to teachers.
As required by the teachers’ union contract, retiring Cary teachers were given 6 percent annual pay raises during the last four years of employment, in order to drive up their pension benefits from the state. This practice gained notoriety as the “6-6-6” format, which is an accurate description of the plan and its effect on the budgets of schools and the state of Illinois.
Retirees were also given $20,000 cash bonuses, as stipulated by the contract.
It was no surprise that Cary’s labor costs kept going up, even as student programs and services went down. Seventy-five of the district’s 225 teachers were laid off. Class sizes skyrocketed, and any academics not required by the state – such as music and art – were cut.
Turned off by the district’s big-spending, self-destructive ways, taxpayers refused to increase the property tax limiting rate, a form of permanent taxation used to fund Illinois schools. Things looked so bleak that a state takeover seemed imminent.
But no longer.
The Cary school board recently finalized a new three-year contract with its teachers unions that eliminates the “6-6-6″ benefit boondoggle, imposes a 3 percent pay cut next year and a hard pay freeze in the next two years. Not only that, but the school day is being lengthened by 30 minutes. The district’s financial outlook has improved enough that a state takeover is no longer a concern.
Two things made Cary’s survival possible: a school board willing to take a hard line against ridiculous union demands, and Illinois’ new transparency law that requires the board and union to publish their “final, best” contract offer once talks reach an impasse.
The district that was once the poster child for union excess is now being hailed by one newspaper for its “groundbreaking moves” to phase out the pension padding practice that “absolutely must end all over Illinois.”
The Employer Strikes Back
Chris Jenner has been on the Cary District 26 school board since 2005, and currently serves as the board’s secretary.
According to Jenner, the district needed a slimmed-down teachers’ contract if it was to avoid a financial crisis.
“In September of 2010, the school board realized the district’s condition was unsustainable,” Jenner told EAG. A state takeover seemed likely.
He said a small group of union sympathizers actively wanted a state takeover as a way of forcing a property tax limiting rate increase. The more tax revenue raised by the district, the fewer concessions the Cary Education Association would be forced to make.
Recent history suggests that when the Illinois State Board of Education takes over a school district, it is more likely to raise taxes than it is to cut expensive provisions from the teachers’ union contract. The Land of Lincoln has apparently become the Land of Unions.
In November 2010, Cary’s taxpayers did approve a $15 million working cash bond referendum that “was not nearly as large or as permanent as a limiting rate increase would have been,” Jenner said.
The revenue enabled the district to stop borrowing money to pay its bills and to create “a small cushion of money in the bank.
“That hugely decreased our chances of a state takeover,” Jenner said.
In December 2010, the school board and the CEA began discussing the terms of a new teachers’ contract, nine months before the previous deal was to expire.
The Cary school board decided that the era of ridiculous retirement benefits – the “6-6-6″ scheme and the $20,000 retirement bonus – was over.
The union balked at the changes, and contract talks dragged on into the summer – which was when Illinois’ new education reform law, SB 7, took effect. The board declared an impasse, forcing both sides to publish their “final, best offer” online last July. Cary was the first district in the state to take advantage of the new law.
“When details of negotiations became public, community support for the district seemed to increase, while secrecy had the opposite effect,” Jenner said.
The board imposed its final, best contract offer two days before the previous deal expired. Because the union doesn’t control these board members, the CEA knew it couldn’t push the issue. The union chose to accept the deal.
“If a school board doesn’t have ties to the union, it leads to a reasonable and fair contract,” Jenner said. “The Cary board is made up of private citizens who pay their bills on time and think the government should, too. They have common sense.”
Jenner thinks the new contract “just may prevent us from going broke.”
The new contract isn’t perfect. According to Jenner, 40 percent of district teachers are already in the retirement “pipeline” and will still take advantage of the “6-6-6″ plan. But the gravy train will no longer run for the younger employees.
From almost going broke to breaking new ground, Cary District 26’s approach to contract negotiations should be an inspiration for school officials nationwide who are trying to keep their districts from insolvency.
“To achieve a contract like this requires a majority of the board to genuinely want to do it, and a teacher association that is able to see and understand financial realities,” Jenner said.