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CHICAGO (AP) — A 2005 state law has failed to discourage many Illinois school districts from using large pay raises to fatten the pensions of retiring educators, according to a newspaper examination of state records.
The Chicago Tribune's review of pension and salary data found hundreds of school districts have continued to dole out large raises to educators approaching retirement despite financial penalties imposed under the law and the fact that many districts are in debt and the state is grappling with a public employee pension crisis.
As a result, Illinois taxpayers have been hit twice, having to pay for both the salary spikes and the penalty payments that were meant to discourage them, the newspaper reported (http://trib.in/1IRgbYL ).
The penalty price tag alone collectively rose to $38 million by 2014, the newspaper found. In some individual districts, penalty fees have totaled hundreds of thousands of dollars. And the raises themselves pushed some administrator salaries higher than $300,000 and, in one case, $400,000. The higher pay changes pension calculations, meaning higher retirement benefits.
The decade-old law, which imposed the penalties on districts that provide raises larger than 6 percent to outgoing educators, was meant to reduce the burden on the Teachers' Retirement System of the State of Illinois. That's the largest state pension system and one of the worst-funded in the nation. It serves suburban Chicago and downstate teachers. Schools within Chicago have a separate pension system and were not included in the law.
The newspaper review found that of the 48,000 teachers and administrators who have retired since the law went into effect, about 4,800 got raises of 20 percent or more just before retiring. About 15,000 got raises of 6 percent or greater.
The largest single penalty in the state was for $225,884, which was paid by Homewood-Flossmoor Community High School District 233 in Chicago's southern suburbs. It was triggered by two 20 percent raises for then-Superintendent Laura Murray before she retired in 2008. Her final earnings topped $402,000 and her pension is about $288,000 a year.
"It was crazy. What they forget is that it was taxpayer money," said former school board candidate Don Popravak, a critic of the district's spending.
Murray did not return phone messages seeking comment, the newspaper said.
District spokeswoman Jodi Bryant said the public was not made aware of the payment because it would have been improper for the board to openly discuss it during litigation that unsuccessfully contested the penalty. She added that no public board vote was held because the district had no say over the required fee.
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Information from: Chicago Tribune, http://www.chicagotribune.com
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