(Reuters) - Chicago public school teachers are threatening to strike on Monday for the first time since 1987 in a clash with Mayor Rahm Emanuel that has national implications because many states and cities are grappling with similar tight budgets and underperforming schools.
Here are some of the key issues, and the stakes, in the Chicago dispute.
NATIONAL SCOPE: A walkout by Chicago teachers would be the largest private- or public-sector strike in the United States in a year. Some 29,000 California nurses and medical workers staged a walkout in September 2011 and 45,000 Verizon Communications workers struck for two weeks in August 2011.
Chicago Public Schools is the nation's third-largest school district after New York City and Los Angeles, with 402,000 students in kindergarten through high school (50,000 are in non-union charter schools). The union represents 29,000 teachers, counselors, nurses and other support staff. Most Chicago schools began classes last week.
The last teachers' strike in a major U.S. city was in late August and early September 2006 in Detroit, involving fewer than a third the number of teachers in the Chicago public schools.
FINANCES: The state of Illinois and city of Chicago are in dire financial straits, leaving the school district little room to maneuver in the dispute.
To close a $665 million deficit for the budget year that began in July, the district drained financial reserves and levied property taxes at the highest level allowed by law.
Like the state of Illinois and cities and states across the country, Chicago schools face what the independent watchdog Civic Federation called a "looming pension crisis" over an underfunded pension system and a growing number of retiring teachers drawing benefits.
"It is readily apparent that the district may no longer be able to afford its existing pension system," the Civic Federation said.
The Illinois Legislature has failed to take action to curb public-sector pension programs, even though Illinois has the most underfunded state pension systems in the nation.
Both Moody's Investor Services and Standard and Poor's Ratings Services cut the debt ratings of Chicago Public Schools after it announced the fiscal 2013 budget. The downgrades could force the district to pay higher interest rates on debt.
Fitch Ratings, which has warned it also could downgrade Chicago Public Schools' debt rating, said a teachers strike would make it more difficult for the district because it would have to spend money on a contingency plan to supervise children temporarily.
SALARIES: The Chicago School Board rescinded a scheduled 4 percent pay raise for teachers last year because of its budget problems. It is offering the teachers a pay increase of 2 percent a year over four years, which is what it assumed in the 2013 budget. The union wants the rescinded raise restored plus annual increases higher than those offered by the city.
Chicago teachers make a mean of $61,790 annually for a primary school teacher to $69,470 for high school, according to government figures, which is slightly lower than New York City but a bit higher than Los Angeles. Chicago spends $7,946 a year on instruction per student, which is in line with most school districts in Illinois but well below some of the wealthiest suburban Chicago districts.
The union is concerned that Chicago - which has closed dozens of schools in recent years - may close scores more because of falling enrollment or poor performance. Emanuel wants to expand the number of charter schools, which are publicly funded but privately run. Most charter schools are non-union and have gotten mixed student results. The union argues that the city is draining funds from public schools for charters.
More than 80 percent of Chicago students qualify for free lunches because they come from low-income households.
SCHOOL DAY: When Emanuel took office in 2011, Chicago was the only one of 30 major city school districts where elementary school students received less than 1,000 hours of instruction a year, and he vowed to implement a longer school day. He and the union agreed before schools opened this month to extend the school day by about 90 minutes. The deal calls for hiring about 500 more teachers from union members laid off previously at a cost of $50 million, rather than making existing teachers work longer hours. The hiring of those teachers has become an issue in the talks as the union wants them hired based on seniority and Emanuel wants school principals to make the decisions.
CLASS SIZE: The union wants a sharp reduction in class sizes, which it says will improve learning. An Illinois state law says unions cannot bargain over the issue.
The union released a study last year saying that average class sizes in Chicago were among the highest in Illinois at 24.2 in kindergarten, 25.2 in third grade and 25.1 in high school. Those are similar to class sizes in New York City.
The current contract between Chicago and teachers sets a ceiling of 28 per kindergarten and primary school class and 31 for upper grades, but the union says the city routinely exceeds that. It cited one elementary school that considered having 42 students in one class before parents and the union objected. The union says the city's plan to close more schools would lead to bigger class sizes.
STANDARDIZED TESTS: On the most recent federal skills test, Chicago students fared worse than students in many other urban districts, such as Austin, Texas, and New York, although they did slightly better than students in Los Angeles and Washington.
In math, fourth-graders in Chicago scored 224, below the big-city average of 233 and the national average of 240 on the National Assessment of Educational Progress. In reading, Chicago fourth-graders scored 203, compared with an average big-city score of 211 and well below the national average of 220. Results were similar for eighth-graders.
Illinois passed a law requiring that at least 20 percent of teacher evaluations be linked to the performance of students on such standardized tests. Emanuel wants a higher percentage linked to student performance. The union disagrees.
CONTINGENCY PLAN: The city has set aside $25 million for a contingency plan to supervise students at 144 locations during a strike. Each site will provide students in need with breakfast and lunch and activities to keep them occupied for half a day. About 60 churches also will open their doors to students.
The union has called the plan a "train wreck," and has expressed concern that many of the adults supervising children at the locations have not had proper training. Some parents also are worried about the potential for problems in areas where there has been a surge in gang violence this summer.
Sources: U.S. Department of Education, Bureau of Labor Statistics, Illinois Education Report Card, Chicago Public Schools, Chicago Teachers Union, National Center on Time and Learning, Civic Federation.
(Compiled by Greg McCune, James B. Kelleher, Mary Wisniewski, Stephanie Simon and Karen Pierog; editing by Peter Cooney and Mohammad Zargham)