Subsidized Teacher Housing

From the Chicago Tribune.

From the Chicago Tribune.

The Chicago Tribune had a big article on Thursday about how some school districts in affluent areas are providing subsidized housing for teachers.

It reminded me of one solution put forth for the South High School bleacher controversy.

Amberwood homes behind the south side of the football bleachers.

Amberwood homes behind the south side of the football bleachers.

The suggestion was that Crystal Lake High School District 155 just buy the homes behind the stadium seats and rent them to teachers.

Fanciful, but that approach might have cost less than the resulting alternative.


Subsidized Teacher Housing — 11 Comments

  1. That is a good idea.

    Think creatively.

    Republicans say they hate lawsuits and the courts until they use them like in Bush vs Gore, Boehner’s lawsuit against Obama, and these local suits which only give attorneys big money which taxpayers must pay for.

  2. The unmentioned irony here is that housing costs being ‘high’ is a function of 3.5%- 4.6% property tax rates in McHenry County. (Housing here is cheap, and worth less every year due to the property tax rate).

    McHenry County property tax rate– a Property tax rate which is double to triple the national average property tax rate (quadruple the Indiana State-capped property tax rate of 1%)– is a function of the anomalous high teacher salary/pension/health finance contracts/work conditions (low student-teacher ratios for example).

    SO, we wouldn’t have ‘high housing costs’ here if not for the tax rate.
    we wouldn’t have a high tax rate here if not for all the teachers’ fulfilled demands and desires.

  3. Just have a retired teacher or administrator buy the houses and rent them to new teachers.

    A starting teacher with no experience in the Crystal Lake / Cary / Fox River Grove / Lakewood High School District earns $45,841.

    A $1,500 monthly mortgage x 12 months = $18,000.

    Add taxes and insurance, a starting teacher is close qualifying for such a mortgage, definitely after working a few years with the built in pay hikes on the salary grid, those being step (work another year) and lane (earn a certain number of college credits).

    The following information applies to Tier 1 TRS pensions; Tier 2 benefits apply to those beginning their career January 1, 2011 or after.

    A recently retired full career teacher can easily qualify to buy multiple houses.

    The starting pensions for full career teachers in the Chicago suburbs are around $75,000 with a 3% annual increase (Cost of Living Allowance aka COLA).

    Most teachers and administrators retire with less than 35 years worked, yet 35 years of service.

    How is that so?

    Due to perks such as exchanging unused sick leave for years of service credit (can accumulate up to 340 sick days which can be exchanged for 2 years of service credit).

    Due to perks such as Early Retirement Option (ERO) which will sunset June 2016 unless renewed by the Illinois General Assembly.

    ERO requires a one time contribution from the teacher / administrator and the school district.

    The school district contribution is 2x the teacher / administrator contribution.

    Most teachers and administrators retire around age 55 – 60 if they began a teaching career out of college.

    Lifetime employee pension contributions for a teacher who worked 33 years and exchanged 2 years of service credit to retire with 35 years of service, if the teacher retires earning an average of $100,000 her last 4 years worked, would be about $75,000 – $150,000, closer in most cases to $75,000.

    So here’s how that plays out in a chart.

    This is the TRS pension payout for 35 years with the annual 3% COLA and starting pension of $75,000.

    Age – Years Retired – Current Year Pension – Cumulative Pension

    55 – 01 – $075,000 – $0,075,000
    56 – 02 – $077,250 – $0,152,250
    57 – 03 – $079,568 – $0,231,818
    58 – 04 – $081,955 – $0,313,772
    59 – 05 – $084,413 – $0,398,185
    60 – 06 – $086,946 – $0,485,131
    61 – 07 – $089,554 – $0,574,685
    62 – 08 – $092,241 – $0,666,925
    63 – 09 – $095,008 – $0,761,933
    64 – 10 – $097,858 – $0,859,791
    65 – 11 – $100,794 – $0,960,585
    66 – 12 – $103,818 – $1,064,402
    67 – 13 – $106,932 – $1,171,334
    68 – 14 – $110,140 – $1,281,474
    69 – 15 – $113,444 – $1,394,919
    70 – 16 – $116,848 – $1,511,766
    71 – 17 – $120,353 – $1,632,119
    72 – 18 – $123,964 – $1,756,083
    73 – 19 – $127,682 – $1,883,765
    74 – 20 – $131,513 – $2,015,278
    75 – 21 – $135,458 – $2,150,736
    76 – 22 – $139,522 – $2,290,259
    77 – 23 – $143,708 – $2,433,966
    78 – 24 – $148,019 – $2,581,985
    79 – 25 – $152,460 – $2,734,445
    80 – 26 – $157,033 – $2,891,478
    81 – 27 – $161,744 – $3,053,223
    82 – 28 – $166,597 – $3,219,819
    83 – 29 – $171,595 – $3,391,414
    84 – 30 – $176,742 – $3,568,156
    85 – 31 – $182,045 – $3,750,201
    86 – 32 – $187,506 – $3,937,707
    87 – 33 – $193,131 – $4,130,838
    88 – 34 – $198,925 – $4,329,763
    89 – 35 – $204,893 – $4,534,656

    So in this scenario the teacher worked 35 years, retired at age 55, was in retirement 35 years, lived to age 90, and recouped their lifetime employee pension contributions in 1 – 2 years.

    That is mainstream for teachers retiring now in the Chicago suburbs.

    This is not an anomaly.

    This is the result of 45 years of legislative pension benefit hikes and local school board salary hikes and State of Illinois General State Aid hikes and Federal government hikes for public education and school bond referendums (don’t save for projects just issue bonds and use the money instead for salary and benefit hikes by shuffling money around from fund to fund) and tax rate referendums and the list goes on and on.

  4. Now you know why teachers don’t contribute to Social Security.

    How long would a person have to live to earn $4,534,656 in Social Security?

    How much would the person have contributed to Social Security to receive those benefits?

    Social Security doesn’t have any employers picking up the employee contribution to Social Security.

    How fair is all that.

  5. So let’s break down the above teacher pension numbers so we can see the power of the 3% COLA.

    $0 to $1M takes 11 years.

    $1M to $2M takes 8 years.

    $2M to $3M takes 7 years.

    $3M to $4M takes 6 years.

    The teacher earned $4 Million dollars cumulatively in taxpayer subsidized pension payouts after 32 years of retirement at age $86 with the annual pension increasing from $75K to $193K.

    The teacher will be earning more in retirement than the average working stiff will actually working.

    Administrators make even more than teachers in retirement on average.


    The Chicago Tribune article referenced above was an Associated Press article the Chicago Tribune picked up.

    Chicago Tribune
    Cities Look at Subsidized Housing to Stem Teacher Shortages
    by Lisa Leff
    Associated Press
    January 3, 2016–teachers-housing-shortage-20160103-story.html

    The cities they looked at or referenced are San Francisco, Silicon Valley, Seattle, Aspen ski resort area of Colorado, Oakland, Milwaukee, Odessa TX, Asheville NC, New York City, Santa Clara CA, and Los Angeles.

    There was no reference to Chicago, no reference to Illinois, and no reference to a comparison of teacher salaries, benefits, pensions, and retiree healthcare around the country.

    As we can see from the above example in comments, full career teachers and administrators in Illinois retiring now in the Chicago suburbs have an off the charts lucrative pension deal due to legislative pension benefit hikes and local school board salary hikes, and that is not including taxpayer subsidized retiree healthcare and other perks.

    The fact the pensions are not sustainable because the legislative benefit hikes were granted over 45 years when pensions were already underfunded and salaries were also being hiked is a problem though.

    It’s amazing teachers and administrators have gotten away with the scheme this long.

    Apparently not many taxpayers understand teachers and administrators are going to be earning $1 million, $2 million, $3 million, $4 million, and more in retirement.

    Apparently many taxpayers are not very good with retirement finance.

    Teachers do not deserve those pensions.

    They deserve fully funded reasonable pensions.

    That’s not what they have.

    They have underfunded unreasonable pensions.

    Because their elected union leaders went for and received unaffordable hiked pensions.

    The pension benefits in place at the beginning of the teacher and administrator’s career, which were already underfunded, are greatly less than the benefits in place at the end of their career, due to legislative pension benefit hikes and local school board salary hikes.

    So they didn’t enter their profession for these pensions, because these pensions didn’t exist at the beginning of their career.

    Ditto for fire, police, and the rest.

    Now if someone began their career more recently, then their pensions and salaries have not been hiked as much, but they started their career at a time when their pension fund was most likely greatly underfunded, and the fact their pensions were overly generous was being made, so they don’t have a good excuse to expect their pensions to be paid in full either.

    Good luck finding taxpayers to pay all these pensions.

    That will be a big challenge.

    IMRF benefits have not been hiked as much, but they have been hiked too, and many local municipalities are struggling to keep up with the IMRF pension funding demands.

    Each pension system and pension is unique.

  6. Oh and the average working stiff is subject to state payroll taxes, whereas the Illinois public sector pensions are state income tax free (as is all retirement income in Illinois).

    By deferring the most lucrative aspect of their compensation (pensions) to retirement, the Illinois public sector worker gets a big tax break.

  7. According to Wikipedia:

    “The Roaring Fork Valley is a geographical region in western Colorado in the United States. The Roaring Fork Valley is one of the most affluent regions in Colorado and the U.S. as well as one of the most populous and economically vital areas of the Colorado Western Slope. The Valley is defined by the valley of the Roaring Fork River and its tributaries, including the Crystal and Fryingpan River. It includes the communities of Aspen, Snowmass Village, Basalt, Carbondale, and Glenwood Springs. Mount Sopris and the Roaring Fork River serve as symbols of the Roaring Fork Valley.”

    According to
    public school district finance peer search,
    this extremely affluent Colorado community spends significantly less per student per year than Woodstock D200, spends less in every category, takes about the same amount per student per year from local sources ($9000 per student)–that is, taxpayers.

    I urge all McHenry County taxpayers to use this search tool to see how much their own school districts are spending relative to the school District in Colorado which mayt be considered among most affluent in America.


    (Public School District Public Finance Peer Search).

    Results have several tabs for revenue, expenditures and demographics.

  8. Lol, better yet give the homes as a “perk” to the superintendent and his family.

    He has young daughters.

    See how he likes having people peep into their bedroom windows and watch them as they play in their own yard.

    Force the board president to live here too as he still believes he did nothing wrong.

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