Mayor Emanuel on the CPS Cash Crunch, City Budget
Mayor Rahm Emanuel joins Chicago Tonight to talk about the pension payment owed by CPS next week, the school system and city's budget deficits, and whether he expects any good news from Springfield.
CPS Deficit, Pension Payments
Chicago Public Schools is facing a $1.1 billion budget deficit, most of which is tied to a $634 million pension payment due at the end of the month. It appears as though the district will not be getting any help from Springfield—Tuesday the Illinois House of Representatives wasn’t able to pass a bill to delay the pension payment until August 10.
This comes less than a month after the CTU rallied in the Loop to demonstrate their frustrations with the district, while contract negotiations between the district and CTU continue.
The cash-strapped school district is looking to borrow $200 million, as well as take out a separate line of credit to borrow nearly a billion dollars to fund the coming fiscal year, according to the Chicago Tribune. The CPS Board of Education is slated to vote on both of those measures on Wednesday. CPS’ ability to borrow could be hampered by Moody’s Investors Service downgrade of its credit rating in May to one notch above junk status.
A recent report by Ernst & Young examined CPS finances and its deficit.
City Budget Deficit
The city of Chicago is facing its own budget issues, and the City Council recently approved a $1.1 billion borrowing plan to help the city refinance old debt. In May, Moody’s Investors Service downgraded the city’s credit rating to junk status, citing the Illinois Supreme Court ruling of the 2013 pension reform law as unconstitutional. The city’s junk bond status could’ve triggered $900 million in payments to banks because of variable rate and interest rate swap deals negotiated under the Daley administration. In order to avoid that, the city converted those deals to fixed rate deals at a cost of $383 million (which will be paid for with borrowed funds).
While the 2013 pension reform law has been overturned, there’s a plan to fund Chicago’s police and fire pension in Springfield. The measure passed both houses of the Illinois General Assembly at the end of the spring legislative session. The bill, which hasn’t been signed by Gov. Bruce Rauner, adjusts the payment schedule and requires the funds to be 90 percent funded in 40 years (the current schedule requires it to reach that level in the next 25 years).
The mayor has been lobbying hard for a city-owned casino to help pay for its pensions. While a few hearings were held in May on the issue and Rauner is open to adding more casinos in the state, legislation did not make it through the full legislature before the end of the regular session.
Chicago Crime and Community Relations with Police
Homicides in the city are up. Through Wednesday, June 17, Chicago has seen 197 homicides, compared to 171 reported through June 17, 2014, according to an analysis by the RedEye.
Earlier this year, the city of Chicago approved a reparations package for victims of former Chicago police Cmdr. Jon Burge, as it tries to close the grim chapter of police brutality under Burge’s watch. While that chapter comes to a close, the spotlight has shifted to other egregious actions by police officers, including a pair of Chicago police officers holding rifles and posing next to a black man wearing deer antlers, and a dashcam video showing a Chicago police officer firing at a vehicle filled with unarmed black teenagers.
Watch The Chicago Reporter’s video of a Chicago police officer opening fire on unarmed black teenagers in a car in December 2013.