This piece was originally written as blog posts in the Substack newsletter “Fred Klonsky in Retirement.” It has been edited for length and style.
The first round of the Chicago mayoral election is over and the two candidates left standing are former Chicago Public Schools CEO Paul Vallas and Cook County Commissioner Brandon Johnson.
I have not kept it a secret that I supported and voted for Mayor Lori Lightfoot. Among the reasons, and not the least of them, was that as a retired teacher and pension activist I saw Lightfoot as a unique politician who kept her word in addressing the City’s obligation to fund public pensions.
Paul Vallas, on the other hand, is a pension thief.
Brandon Johnson will get my vote.
Vallas may want to avoid discussing his role in plunging the teacher pension fund into debt during his time as CPS boss. But I’m here to remind folks about what he did, especially City workers who may have short memories.
In 1995, lawmakers in Springfield turned over control of the financially ailing school district to former Mayor Richard M. Daley, who put Vallas in charge.
The Chicago Teachers’ Pension Fund was in reasonably good financial standing when Vallas assumed control of the schools. Until then, city property taxpayers had paid into a special levy dedicated solely to funding teacher pensions.
But Daley and Vallas were working under new rules. The state legislature allowed property tax dollars, which had previously flowed directly into the pension fund for teachers, to go to CPS instead. And in 1997, legislators in GOP-controlled Springfield permitted the district to forego payments into the pension fund entirely.
Daley and “I-have-always-been-a-Democrat” Vallas took advantage of the change in the law, and a decade began in which money once earmarked for pensions was used instead to help cover operating costs—like using a credit card to pay a credit card bill.
In a case of gross historical revisionism, Vallas boasts that as CEO he balanced CPS budgets and built up surpluses.
My jaw dropped when, during a televised debate, Vallas made claims about how he made timely payments to the Chicago Teachers’ Pension Fund—and nobody, not even Johnson, challenged him.
During Vallas’s six years with the district, and for several years following his tenure, CPS paid almost zero toward teacher pensions, leading to big deficits until Lightfoot began increasing the payments again.
If the legislature in Springfield hadn’t enabled Vallas to divert pension payments towards operating costs, the pension fund would have been paid $93 million in 1995. Instead, it got $10 million.
Over the next decade, the fund was out $2 billion.
The economy was booming during Vallas’s years as CEO, so the pension fund balance was still sound when he departed CPS in 2001 to run school systems in Philadelphia, Bridgeport (Connecticut), and New Orleans.
But the reckoning for the Chicago Teachers’ Pension Fund began a few years later as the investment market weakened and unfunded liabilities began to rise.
Daley’s administration briefly resumed paying into the pension fund, but requested a “pension payment holiday” that was still in effect when Rahm Emanuel took office.
Daley, Vallas, and Emanuel can all be blamed for moving the pension fund from being nearly fully funded, to the debt Mayor Lightfoot finally addressed when she came into office.
And now Vallas wants another go at pension theft.
We can’t let that happen.
Fred Klonsky is a spouse, father, grandfather, retired public school teacher, former local union president, blogger, and aging activist.