Capitol Fax.com - Your Illinois News Radar » The stunning costs of CPS borrowing
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
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        

19 Comments
  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.


TrackBack URI

Sorry, comments for this post are now closed.


* Reader comments closed for the weekend
* Amazon HQ2 site list unveiled
* Out of sight out of mind?
* Frerichs tries to use state investments to prod Facebook into cleaning up its act
* The rise of the billionaire governors
* Camelot promises to grow lottery sales by 40 percent
* Munger tries to defend Rauner veto of Debt Transparency Act
* Rauner: "I can’t comment on any business disputes"
* Question of the day
* Rauner finally takes a stand on a federal issue
* Moody's says "political backlash" against pop tax could make other tax hikes more difficult
* Report: Amazon subsidy could add up to $2 billion
* *** UPDATED x1 *** 10,800 jobs lost in a single month, but Illinois media barely notices
* SUBSCRIBERS ONLY - Supplement to today’s edition
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* MLB open thread
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............
<


Loading


* Chicago releases list of possible Amazon headqu.....
* Compare possible Amazon sites as Chicago's HQ2 .....


* EXCHANGE: Encounter group spawns group of lifelong friends
* EXCHANGE: Woman finds meaning in helping animals in need
* Medical students in limbo as young immigrant program ends
* Chicago releases list of possible Amazon headquarters sites
* Chicago Public Schools enrollment declines by about 10,000
* Police end investigation of Illinois woman's freezer death
* Group works to reopen Civil War museum in Illinois
* Rauner outlines $200 million in cuts to Illinois budget
* 2nd school forfeits football game at Chicago due to safety
* 2nd school forfeits football game at Chicago due to safety

* Illinois Lottery's new manager projects $4B in sales
* UIS students could study at newly proposed Chicago research center
* Aaron Schock attorneys contest federal claims on misstatements
* Under the Dome Podcast: Will lawmakers address gun control during the veto session?
* Chicago lawyer announces bid for Illinois attorney general
* Illinois borrows $1.5B at reduced interest to pay down debt
* Rauner cuts human services, other area in state budget
* Pritzker makes list of richest Americans; Rauner releases tax returns
* Pritzker makes list of richest Americans; Gov. Rauner doesn't
* Pritzker makes list of richest Americans, Gov. Rauner doesn't

* Is Dem primary over? No, but Pritzker rivals need to pick up pace
* The biggest Chicago-area building sales
* Here are the sites Chicago is pitching to Amazon
* Emanuel's challenges are far from over
* Clarification


* 2 charged after thousands of illegal cigarettes found in Skokie raid
* 3 people shot in Greektown
* Man shot in East Garfield Park
* 24-year-old man shot in Humboldt Park
* Man, 21, seriously wounded in Fernwood shooting
* Man, 42, wounded in Humboldt Park shooting
* Man, 21, shot during armed robbery in Belmont Cragin
* Man grazed by bullet in Oakland
* Re-envisioned ‘Dracula’ a hysteria of blood-letting
* Georgia Nicols horoscopes for Oct. 21, 2017


* How to talk to Holocaust survivors in the future? In Take a Stand's holograms, an answer
* 3 shot at Taco Burrito King in Greektown
* The kindest team in the major leagues
* For Cubs, once may not be enough, but twice had better hurry
* Five key questions facing the Cubs this offseason
* Reputation restoration: Bears rebuilding defense and rediscovering pride
* Reader wonders if parental jealousy is normal
* Georgia lawmaker, the wife of ex-HHS Secretary, asks about quarantining HIV patients
* Judge tosses $417 million award in Johnson & Johnson baby powder cancer case
* Cubs will try to protect pitching prospects while bridging gap to majors


» Lawmaker Says Facebook Refuses To Fact Check Ads
» State Week: Chasing Amazon, Bonding Debt
» Teaching Kids To ‘Say Something’ In An Era of School Shootings
» Illinois Issues: Cities Lose Out On Retail Tax As Online Shopping Booms
» What Could Hurt Chicago’s Bid For Amazon’s HQ2?
» At CPS, More Special Education Dollars Go To White, Wealthier Students
» Illinois Bond Sale To Help Pay $16bn Debts
» Mayor To Propose Higher Prices For Ridesharing, Big Concerts
» WBEZ Investigation: CPS Secretly Overhauled Special Education At Students’ Expense
» How's The Illinois Economy? For Rauner Administration, Depends On The Audience


* Guest Column: What taxpayers should demand from next attorney general
* Ed Rogers: The Democratic Party's obsession with Hollywood celebrities was bound to blow up
* Illinois Lottery's new manager projects $4B in sales
* Counterpoint: Updating antiquated systems will open door to transparency
* Point: Taxpayers deserve a better look at the state’s bills
* Thumbs Up: To recent acts of kindness in Springfield
* Eugene Robinson: Trump's the one who didn't know 'what he was signing up for'
* UIS students could study at newly proposed Chicago research center
* Aaron Schock attorneys contest federal claims on misstatements
* Illinois Trial Lawyers Association: U.S. Chamber Poll is another attack on the rights of Illinois citizens


* Safe driving: Fatal teen accidents halved in last decade
* Photo: Light in the dark
* Morgan County sees population increase between 2011-2015
* Police Beat
* Reader photo: Color of night
* Illinois Lottery
* Upcoming Services for Oct. 21
* Pearl Zanotti
* Irene Astin
* Karrie K. Sims


* The Latest: Munich police arrest suspect, say motive unknown
* With single weekly flight, remote St. Helena extends welcome
* WHO chief selects Zimbabwe's Mugabe as 'goodwill ambassador'
* The Latest: Spanish Cabinet meets to act on Catalonia
* Germany: Police say several people stabbed in Munich

* Naperville's Lauren Underwood to run for R...
* Rival: Kinzinger not conservative - MyWebT...
* Measure extends term of FSOC independent m...
* Helsinki Commission urges Erdogan to end p...
* Dissident artist Ai Weiwei and US Rep. Ran...
* Hultgren 'disappointed' about potential re...
* Democratic 14th Congressional District can...
* GOP congressmen say Rauner 'let down' Illi...
* Bipartisan group of lawmakers pushes job t...
* Hundreds of high school students tour Smit...

* Rock Island gets $971183 in federal grants......

* Rock Island gets $971183 in federal grants......
* Rock Island gets $971,183 in federal grant......

* Do knee-jerk pols put any thought into votes they cast on govt. business?
* Chicago Design Week’s best events
* Illinois teacher retirees: What the hell is Walgreen’s up to?
* Raimondo and Rahm make an offer to Amazon. It’s a secret.
* Will Third Time Be The Charm For 4537 N. Clark?
* The Chicago Trib’s scab columnist John Kass calls me a fanatic.
* Hitting Left with the Klonsky Brothers episode #37. Charles Thomas.
* Live From the Green Mill... It's Saturday Night!
* Forgotten Chicago Talks About Chicago's Arcade History, Saturday At The Bezazian
* Positive Loitering At Wilson/Broadway Tonight 6PM - 7PM


* Illinois Awarded Funds to Offer Advanced Training on Detecting Impaired Driving
* Illinois EPA Announces Upcoming Household Hazardous Waste Collection Events
* IEMA Highlights Emergency Preparedness for People with Access and Functional Needs in May - Ready Illinois website offers preparedness tips for people, caregivers
* First Lady Launches Illinois Family Connects
* Governor and Lt. Governor Unveil 2016 Journal of Local Government Shared Service Best Practices

  
* Redesigning the TechCrunch app
* JerryRigEverything slams Pixel 2 durability
* Google Pixel 2: A Fantastic First Impression (Video)
* Google Home Mini starts shipping, Verizon promotes JBL Link 300
* Sharp AQUOS R compact tucks selfie camera into under-5-inch display
* Google kicks off Playtime 2017 for app developers
* Better pictures of OnePlus 5T leak with 2:1 display in clear view

* Petricka undergoes surgery on right elbow
* Avisail sees similarities in rebuild, stellar year
* White Sox Arizona Fall League overview
* Ron Gardenhire’s second chance back in AL Central
* Jimenez among prospects in winter leagues
* The five longest White Sox home runs of 2017
* We may as well talk radical realignment


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
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

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




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