CHICAGO -- The Chicago Teachers' Union on Thursday approved a contract with the Chicago Board of Education, clearing the way for the Illinois General Assembly to consider a $300 million bond-financed bailout of the beleaguered school system this week.
Teachers voted 15,765 to 9,025 in favor of the two-year contract, which had been approved earlier this month by the union's house of delegates. Union representatives worked out the contract with board officials after weeks of intensive discussions aimed at keeping the schools open.
The contract freezes salaries, requires 1.5% of teachers' salaries to pay for health care, sanctions a $110 million loan over two years from the teachers' pension fund to the board, and goes along with the board's imposition of larger class sizes until January.
"In the spirit of ~let's make sure the schools stay open,' we did a very hard sell," said Jackie Gallagher, spokeswoman for the teachers' union.
The school system is currently under a federal court order, which expires Nov. 15, to keep schools open despite a state law that requires a balanced budget before classes can begin. The board has a $298 million deficit in its $2.8 billion budget for fiscal 1994, which began Sept. 1.
The Chicago School Finance Authority, the board's financial oversight panel, is expected to appeal the court order early, next week, an authority official said.
The concessions in the union contract along with a two-year $300 million bonding proposal are key elements of the board's plan to eliminate the deficit and keep schools open through the end of the school year.
However. state lawmakers must approve the issuance of the general obligation bonds by the Finance Authority. Lawmakers also have to pass legislation enabling the board to tap teacher pension fund revenues and allowing the allocation of $18 million of restricted state funds to help balance the school system's budget.
The legislature is scheduled to convene tomorrow to take up the board's plan. House Speaker Michael Madigan, D-Chicago, who helped broker the union contract, held up consideration of the plan earlier this month until teachers voted on the contract. His spokesman did not return phone calls on Friday.
But the current plan will meet with opposition in the Republican-controlled Senate, which passed legislation on Sept. 20 that includes the issuance of $275 million of bonds to bail out Chicago schools and a reform package. The legislation would not address the immediate financial needs of the school system because it would not take effect until July 1994.
Mark Gordon, a spokesman for Senate President James Philip, R-Wood Dale, said Friday that Republican lawmakers are not expected to show much support for the Board of Education's plan. He said that the absence of reforms in the plan make it less likely that Republican support will be forthcoming.
"At this stage, the reforms are nonexistent," Gordon said.
Gov. Jim Edgar, on the other hand, believes that the teachers union contract does contain some reforms and he hopes that a legislative solution to the board's financial problems can be worked out this week., according to his spokesman.
The General Assembly is scheduled to complete its fall session next week.
Standard & Poor's Corp. placed about $30.5 million of board-secured unenhanced debt on CreditWatch with negative implications. Moody's Investors Service said the ratings outlook for the unenhanced debt of both the board and the School Finance Authority is poor.
