Chicago City Council passes controversial bond
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The City Council voted Wednesday to approve an $830 million bond issue to fund infrastructure improvements, despite concerns over the amount and terms of repayment.
Why it matters: After a bruising budget season and recent downgrading of the city's credit rating, the fight illustrates continued distrust between Mayor Brandon Johnson and alders over how to handle municipal finances.
Between the lines: Mayors have long used bond issues for city maintenance, but part of the fight here — and this gets a little wonky — is about the type of bond and how it's repaid.
- Critics, including Ald. Bill Conway (34th) and Civic Federation president Joe Ferguson, note that the "structured" nature of this bond, which delays principal payments for 20 years, will cost taxpayers $395 million more than a conventional bond would.
- Ferguson, in a Tribune op-ed, acknowledged that some past city bonds have followed a similar structure, but said it's a practice "City Hall needs to avoid in today's fiscal fix."
The other side: Ald. Pat Dowell (3rd), who chairs the finance committee, defended the proposal in a different op-ed, saying that the backloaded repayment structure, which puts a heavier burden on future taxpayers, is meant to "level the playing field for current taxpayers" who are now shouldering hefty payments for existing debt.
- In other words: We're stuck paying for the borrowing of our forefathers, so, to make it even, our kids will need to pay most of this debt.
The compromise: While Johnson resisted calls to change the amount and terms of the bond, he did address concerns by amending the wording to clarify that the money could not be used to cover controversial non-teacher Chicago Public Schools pensions.
Yes, but: This week, WBEZ reported that the mayor has renewed calls for the CPS board to borrow money to pay for those pensions.