Get used to the idea of school strikes
Updated: September 19, 2012 4:08PM
I’m willing to guess that the teachers’ strikes in Lake Forest and Chicago are just the tip of the iceberg of what is to come.
Because the looming cash crisis in Illinois — long-term debt combined with less revenue — is creating an intolerable situation for local government. Schools, which depend on local property tax revenue more than any other local government, will be the first to feel the crunch.
Just look at the current situation. The state is broke. It increased income taxes last year. It still is broke. Promises have been made to public employees, including teachers, in the form of pensions and other benefits that the state can’t keep. Officials failed to sock away enough money in good times, and now that bad times are here, they can’t afford to catch up. All new revenue in education would have to go to pay for pensions, not pay increases. And even that might not be enough.
Property taxes are not going to be a stable form of revenue for local government. Here’s why:
In the past five years, property values have plummeted up to 30 percent in some suburbs. That means the tax base, which lags years behind real value, is getting smaller. When the tax base shrinks, it produces less tax revenue.
The only way to get the same amount or more money from a smaller tax base is to raise tax rates.
It’s what Bill Clinton called arithmetic.
With 30 percent of home sales being foreclosures or short sales, who is going to pay those higher tax rates on homes that are worth less? It doesn’t take much to foresee how property taxes could make a home unaffordable to a prospective first-time buyer who can easily afford the mortgage, but thinks twice about paying that much for taxes.
School administrators are trying to cope with the reality of the situation. That’s why in Chicago and Lake Forest, administrators are seeking to change the pay structure and accountability more than anything.
Teachers correctly see changes in salary structures for new teachers and performance review requirements as chinks in their armor of guaranteed raises and jobs for life — or at least until they retire at 55.
And you can pretty much bet that in coming years, retirement benefits for new teachers will be a tough negotiating point.
Sure, teachers deserve better pay. So do cops, firefighters, nurses and a lot of working people.
But reality is different. Someone will have to sacrifice to meet the others’ demands. Do we really want to get into a debate over whose sacrifice is morally superior?