Capitol - Your Illinois News Radar » The stunning costs of CPS borrowing
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
The stunning costs of CPS borrowing

Monday, Jul 31, 2017

* Tribune

Chicago Public Schools’ latest long-term borrowing deal will buy the district a bit of financial breathing room through 2019 but comes at an immense cost to future generations.

By the time the $500 million loan is paid off, children now entering kindergarten will be in their mid-30s and the school district will have spent $850 million in interest costs alone — making the total expense of the bond issue a whopping $1.35 billion.

And only a small fraction of the money from the long-term bonds issued in July will be used for school construction or classroom improvements, which budget experts say should be the primary use for long-term debt. CPS is using the biggest chunk of the loan to reimburse itself for failed bond market deals the district previously covered with cash. Another large portion will be used to shave a few hundred million dollars off old debts — even as it extends those debts as much as 25 years.

In addition, the deal commits an enormous sum of state aid to bondholders through 2046, even as state funding remains at the center of an ongoing battle in Springfield. If state aid is ever not enough to cover bond payments, CPS has pledged to turn to property taxes to pay for the loan.

Go read the whole thing.

- Posted by Rich Miller        

  1. - Anonymous - Monday, Jul 31, 17 @ 9:05 am:

    It’s bad not to pay your bills in a timely fashion and then have to borrow and pay huge interest amounts. We’ve had cheap tax rates and skated. Bills have come due.

  2. - Keyrock - Monday, Jul 31, 17 @ 9:09 am:

    Daley did this. Rahm hasn’t fixed it. You can argue about the role of state education funding, bloated contracts, labor costs, charter schools, school closings, etc. All may have a role. But this is a massive failure of governance by Chicago’s mayors.

  3. - Ravenswood Right Winger - Monday, Jul 31, 17 @ 9:20 am:

    Mayors Own. Especially when the Chicago Mayors appoint the members of the CPS School Board, instead of having CPS board members elected like every other school board in Illinois.

  4. - Anonymous - Monday, Jul 31, 17 @ 9:21 am:

    Kick the can politics is the hallmark of politicians with a apex priority of self-promotion, and slithering aversion to responsibility and accountability.

  5. - Jimbo2 - Monday, Jul 31, 17 @ 9:23 am:

    While I agree Daley I and II bear the greatest responsibility for this and Rahm hasn’t done near enough to fix it. The timing of this CPS expose strikes me as a little too convenient for Rauner. Once again the Trib is playing politics. What solutions do they put forward?

  6. - Rich Miller - Monday, Jul 31, 17 @ 9:26 am:

    ===Once again the Trib is playing politics===

    Remove your hyperpartisan tinfoil hat. These are reporters, not editorial writers. You print it when you get it.

  7. - Upstate - Monday, Jul 31, 17 @ 9:26 am:

    =While I agree Daley I and II bear the greatest responsibility for this=

    Daley I ????? I seem to recall he passed in 1976.

  8. - City Zen - Monday, Jul 31, 17 @ 9:27 am:

    Is there another school district in this state with so much wealth yet so many students in poverty?

  9. - Jimbo2 - Monday, Jul 31, 17 @ 9:29 am:

    I don’t say the content is not correct. Just that the timing is suspect. Maybe I missed information that indicates that this is a breaking story or evidence that the reporters just submitted the story.

  10. - Anonymous - Monday, Jul 31, 17 @ 9:43 am:

    Time for Chicago homeowners to be taxed as high as those outside of Cook County, don’t you think?

  11. - DuPage - Monday, Jul 31, 17 @ 10:22 am:

    @- Anonymous - Monday, Jul 31, 17 @ 9:43 am:

    ===Time for Chicago homeowners to be taxed as high as those outside of Cook County, don’t you think?===

    The Cook County assessments on residential property should be equalized with the rest of the state. People in Chicago think their taxes are high, but Chicago and Cook County taxes are low compared to the collar counties.

  12. - Rod - Monday, Jul 31, 17 @ 10:27 am:

    Actually Jimbo2, this is the second article Mr. Perez has done on CPS borrowing, its timing is consistent with CPS releasing the underlying terms of its additional debt just about a week and a half ago. Juan Perez is an excellent reporter and is totally aware of rhe educational consequences of the imposition of greater austerity on CPS schools. I only wish his article would have touched on what is called the combined tax burden on Chicago home and business owners that is growling exponentially to keep CPS afloat. CPS will have to do some pretty awfully things in the near future.

  13. - Whatever - Monday, Jul 31, 17 @ 10:50 am:

    Where is Squeezy the Python when the costs of our bonded debt actually come to light? Does Squeezy only care about pensions?

  14. - Rich Miller - Monday, Jul 31, 17 @ 10:57 am:

    ===Does Squeezy only care about pensions?===

    His full name was Squeezy the Pension Python. So, yes.

  15. - Anon Downstate - Monday, Jul 31, 17 @ 11:09 am:

    In summary:

    1) $500 million dollar bond issue
    2) $850 million dollars in interest over term of the bond issue.
    3) $1.350 billion dollar total.

    This is truly a terrible deal. This looks like a two year deal to bridge the 2018 election to get JB Pritzker as governor at a middling cost to the taxpayers of ‘only’ $850 million dollars.

    And then most of the $500 mil raised is actually going to be used to unwind previous bad financial deals that CPS entered into?

    The clown show that is CPS appears to be taking lessons in creative financing from the government of Venezuela.

  16. - Hit or Miss - Monday, Jul 31, 17 @ 1:37 pm:

    ===Time for Chicago homeowners to be taxed as high as those outside of Cook County===

    It would be good if the Chicago property tax rate just equaled the average rate for the rest of Cook County.

  17. - TinyDancer(FKASue) - Monday, Jul 31, 17 @ 2:48 pm:

    The real story here is toxic predatory debt instruments - swaps, CAB (Capital Appreciation Bonds), etc. - the mayors were allowed to essentially take out the municipal version of pay day loans.
    The banks are the banks - they’ll do anything we let them do.
    Why do we allow our mayors to do this?
    These instruments and anything resembling them should be banned from municipal finance.

  18. - Just Wondering - Monday, Jul 31, 17 @ 5:31 pm:

    I’m still trying to figure out how this makes sense to anyone, in any way. The debt load we are taking on - mind you through a bond - leaves no lasting vestiges of improvement. No new schools. No long-term improvements. Just a shell game that hides financial mismanagement. If I tried to do that at my job, I wouldn’t only be fired, but they’d probably try to find a way to place me in prison.

  19. - anon2 - Monday, Jul 31, 17 @ 5:59 pm:

    == Daley is to blame.==

    The legislature and governor agreed to the pension holiday Daley asked for, so the State is complicit in the funding crisis.

Sorry, comments for this post are now closed.

* Reader comments closed until April 2
* Quick hits before vacation
* Heads up!
* First-day whiplash in mayor's race
* Pritzker hit on taxes
* Even Trib tires of "Because... Madigan!"
* What goes around eventually comes around
* Londrigan turns to face Davis
* *** UPDATED x1 - DGA follows suit *** Pritzker uses Ives in new video
* Illinois House Bill HB 4900 is Unconstitutional
* Rauner on the hustings
* Quote of the week
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* The natives are getting restless
* Yesterday's stories

Visit our advertisers...








* Governor Rauner kicks off general election camp.....
* At campaign stop in West Frankfort, Gov. Rauner.....
* Rauner signature frees up schools to get money .....
* The 'ignorant' columnist overhears a conversation..
* Weaver proposes pension change..
* Letter: Raise age for statewide tobacco sales t.....
* Illinois governor compares foes' tactics to 'ma.....
* Rauner Signs School Funding Fix - Peoria Public.....

* Former UI aviation institute now a Parkland College program
* Report: Illinois high school referee shortage getting worse
* Storm forecast to bring up to 9 inches of snow to Illinois
* Man dies, officers wounded in shootout in suburban Chicago
* Report: Number of referees in Illinois continues to drop
* Workers find, return wallet 20 years after nurse lost it
* Chicago-area woman charged with murder in mother's death
* Police looking for 3 vehicles after wrestler killed in crash
* Chicago mayor, congressman part of Puerto Rico delegation
* Mattoon teen admits to social media threat of gun violence

* $18 million gift to benefit LLCC agriculture program
* Illinois Supreme Court won't take up Rauner's appeal of step pay case
* Former campaign worker sues Madigan fund in sexual harassment case
* Rauner says he has yet to speak to Ives after primary win
* LLCC gets $18 million donation to benefit agriculture program
* Fact check: Rauner cites own remarks as proof of outside support for Election Night claim
* Under the Dome Podcast: It's Pritzker vs. Rauner
* Marijuana referendum could strengthen movement to legalize in Illinois, but naysayers say ballot question unfair
* Illinois Democrats giddy about odds of retaking governor's office
* New exhibit at Lincoln museum honors four U.S. presidents with ties to Illinois

* Corrections
* In withdrawal: The babies of Illinois' opioid epidemic
* Higher Chicago heating bills fuel bonus bump for Milwaukee utility execs
* Higher Chicago heating bills fuel bonus bump for Milwaukee execs
* Is Mariano's parent merging with Target?

* Big-man Lauri Markkanen makes his return, but Bulls still lose fourth straight
* How the Cubs plan to take a 31-year-old, four-time All-Star to the next level
* Army Corps faces questions about vetting border wall company
* Hijacked vehicle crashes in West Garfield Park, 3 juveniles arrested
* Controversial priest: Homophobia in church ‘always going to be there’
* Authorities: 1 killed, 3 seriously injured in Little Village crash
* Orange Dinosaur is done: Former Bears TE Martellus Bennett to retire
* A look at what the crystal ball has to say about the future of Chicago baseball
* Film shows black women as hidden figures in pro wrestling
* Work begins to rebuild roof of historic Woodlawn church gutted by 2015 fire

* Stop feeling sorry for the Austin bomber
* Artifacts from 1893 World’s Fair found beneath Obama center site, but report signals construction can proceed
* More people are seeking out mental health care, but psychiatrists are in short supply: 'It's getting worse'
* Facebook was never free: What Mark Zuckerberg's shocking admissions reveal
* Trump issues order to ban most transgender troops from military
* Porter Moser brings Loyola to brink of 'basketball immortality'
* Kansas brings sanity back to March in 80-76 win over Clemson
* 1 killed, 3 critically injured in West Side crash
* Bucks' bench big night powers 118-105 victory over Bulls
* Winter storm hits portions of Chicago area Saturday

» March 23, 2018: Gentlemen, Start Your Engines
» Final School Funding Bill Signed Into Law
» State Week: Lessons Of The 2018 Primary
» Mural Highlights Acclaimed Artist Keith Haring's Effect On Aspiring Artists
» Future of Artificial Intelligence; Mindfulness In Schools; Teaching The Trail Of Tears
» WBEZ’s Chicago and Illinois News Roundup: March 23, 2018
» The Week in Review: General Election Already Underway
» Web Extra, The Week in Review: Arthur Jones’ Primary Win
» #643 SXSW 2018
» March 22, 2018 - Full Show

* Guest View: A renewed focus on railroad crossing safety
* Hugh Hewitt: John Bolton is a great addition to the White House
* Thumbs down to apathy on Election Day
* $18 million gift to benefit LLCC agriculture program
* Counterpoint: Kudlow's fossilized beliefs could lead Trump further astray
* Point: Kudlow's skills will keep US economy rolling in fast lane
* Eugene Robinson: We should not reward the authors of torture
* Illinois Supreme Court won't take up Rauner's appeal of step pay case
* Former campaign worker sues Madigan fund in sexual harassment case
* Rauner says he has yet to speak to Ives after primary win

* Agreement reached in lawsuit filed by Saline County Clerk
* BASEBALL: Oh, no ... Dragons lose to Richwoods
* GIRLS SOCCER: Pekin roughs up Rock Island
* HS Baseball: Monticello vs. Westville
* Forrest man killed in crash near Saunemin
* Check out these brunch spots this Easter Sunday
* Agriculture industry worries over effects of tariffs
* At campaign stop in West Frankfort, Gov. Rauner calls Pritzker ‘corrupt’ and a ‘tax cheat’
* One of the shooting victims from Easter Sunday 2016 shooting testifies in Tim Beaty murder trial
* Former East St. Louis man gets 5 years in prison for possession of three spent bullet shells

* Former St. Charles man gets 17 years for beating, shooting at wife
* Baseball: Thomson, Vernon Hills outscore Zion-Benton
* Girls soccer: Stevenson powers up, shuts down Hersey
* Two facing weapons charges in Aurora
* Trump order would ban most transgender troops from serving

* Rep. Quigley: Democratic Memo Response in ...
* Deters wants to end congressional dysfunction
* Carson defends delay in LGBT homeless prot...
* Stella holds strong lead in GOP primary fo...
* Five reasons why US tech titans are having...
* Lesbian Super PAC endorses straight woman ...
* 7 Democrats talk strategy for winning Tues...
* ELECTIONS 14th Congressional Dist. candida...
* 'Cannabis candidate' accused of abusing wo...
* White House's Hope Hicks declines to answe...

* Trump: I'll never sign a bill like this again...
* The real reasons Congress can't act on gun......
* Border wall, DACA could stall federal fund......
* Federal funding measure approved to avoid ......
* Portman, Durbin introduce resolution marki......

* Deportation imminent for Miguel Perez Jr.,......
* Former Obama Spokesman Denounces Deportati......
* Congressional Democrats plan to join 'Marc......
* Dem senator introduces bill to publicize T......
* Deportation proceedings begin for Afghan W......

* Progressive?
* Hitting Left with the Klonsky Brothers. Episode 59. Summing up the Illinois primary elections.
* Universities Deploy Chatbots to Aid Students in the Admissions Process and Beyond
* 10 Resources for finding edtech jobs
* Global Boom in Private Enrollments
* Professor on online activities: They get ‘students talking more and me talking less’
* Race and Gender Bias in Online Courses
* Education needs innovation to keep it fresh. Can social learning environments provide the boost?
* Let’s make Pritzker and Rauner pay more—a lot more—in state income taxes
* Hundreds of Chicago students to protest gun violence outside Stroger Hospital this weekend

* February Flooding Information
* IEMA Urges People to Prepare for Severe Weather
* Governor issues state disaster proclamation for flooding in Iroquois, Kankakee, Vermilion Counties
* Winter Storm Warnings for Areas Along and North of I-80
* IEMA Encourages People to Prepare for Earthquakes

* Shareholders vote current Qualcomm board back in, but with skepticism
* Folding iPhone progress, Galaxy S9 responsiveness issues & more – Pocketnow Daily
* KGI: Next week’s iPad refresh will work with Apple Pencil
* HTC U12+ will be the company’s only flagship of 2018
* Formula 1: How sensor technology is changing the race
* Gun deaths could become easier to study thanks to the new spending bill
* Elon Musk deletes Facebook pages he didn’t even know he had

* Renteria to use 'abundance of caution' for Abreu
* Giolito, Moncada are White Sox to watch in '18
* Giolito, Moncada are White Sox to watch in '18
* White Sox have roster battles in bullpen
* Spring Stats Glance
* Skole among 3 reassigned to Minors camp
* White Sox Top 10 Prospects for 2018: Part Two

Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005


RSS Feed 2.0
Comments RSS 2.0

Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller