Capitol Fax.com - Your Illinois News Radar » City claims it now has more magic money
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
City claims it now has more magic money

Wednesday, Jan 22, 2020

* Greg Hinz

Due to some highly advantageous market conditions, a big refinancing of $1.5 billion in city debt last week will end up saving the city an extra $100 million in finance costs in coming years, according to Chief Financial Officer Jeannie Huang Bennett.

All the savings on debt that in some cases will extend for decades will be booked in 2021, Bennett said.

Though some would prefer that income be spread over the term of the debt rather than taken in a lump sum upfront, there’s no question the windfall will give Mayor Lori Lightfoot’s administration a big leg up when it moves late this year to fill what undoubtedly will be large pension-related holes in the mayor’s 2021 budget.

- Posted by Rich Miller        

14 Comments
  1. - Rufus - Wednesday, Jan 22, 20 @ 11:42 am:

    The Queen of Debt strikes again!


  2. - Fav human - Wednesday, Jan 22, 20 @ 11:44 am:

    Like it will be used mostly for pensions….


  3. - City Zen - Wednesday, Jan 22, 20 @ 11:48 am:

    I’m reminded of The Simpsons Lionel Hutz when he suddenly changed his business card from “Works on Contingency No Money Down” to “Works on Contingency? No, Money Down”


  4. - Upon Further Review - Wednesday, Jan 22, 20 @ 12:02 pm:

    Magic money is an accurate characterization. Booking all of the savings in 2021 that take decades to accrue is government think at its’ most questionable. . . . .


  5. - Rich Hill - Wednesday, Jan 22, 20 @ 12:26 pm:

    Nick Madrigal’s impending arrival at Comiskey is bringing magic everywhere.


  6. - Father Ted - Wednesday, Jan 22, 20 @ 12:28 pm:

    I might be missing something, but it seems interesting that the city financed its debt- thereby costing more- yet when the debt is affected by fortunate external conditions, it’s characterized as a windfall.


  7. - JP Altgeld - Wednesday, Jan 22, 20 @ 12:33 pm:

    These announcements always confuse me. Just take the money and be quiet about it. Hard to cry poor later when these types of announcements get made now. People stop trusting the validity of all of it.


  8. - West Side the Best Side - Wednesday, Jan 22, 20 @ 1:19 pm:

    Magic Money usually appears for such things as 606 Trail, River Walk, planters in the middle of streets, never for such mundane things as pensions.


  9. - low level - Wednesday, Jan 22, 20 @ 1:43 pm:

    Its not “magic” at all. Its real savings from lower rates.


  10. - Rich Miller - Wednesday, Jan 22, 20 @ 2:26 pm:

    ===Its real savings===

    Spread out over decades, but claimed up front.


  11. - Upon Further Review - Wednesday, Jan 22, 20 @ 2:37 pm:

    Rich is right here . . . . .spending “savings” up front in their entirety is spending dollars you do not have available.

    Leading to what? Borrowing money to pay the debt service on money that you “saved” but spent prematurely.

    Can Dilbert be far behind?


  12. - Anonanonsir - Wednesday, Jan 22, 20 @ 2:53 pm:

    ==some would prefer that income be spread over the term of the debt rather than taken in a lump sum upfront==

    Makes sense. That could be, say, $5 million a year over 20 years instead of $100 million now. Tough choice.
    Of course, Lightfoot might say that we made the deal so we get the credit.


  13. - Da Big Bad Wolf - Wednesday, Jan 22, 20 @ 3:03 pm:

    == That could be, say, $5 million a year over 20 years instead of $100 million now. Tough choice.==
    Not so tough really. 20 years from now that 5 million will be worth less than it is now. Whether invested or paying off debts, interest rates make the money more valuable now.


  14. - DarkDante - Wednesday, Jan 22, 20 @ 3:42 pm:

    ==I might be missing something…==

    The city saves money by refinancing its debt at a lower interest rate, effectively generating “revenue” but reducing interest expense in a kind of interest rate arbitrage. The city got more than it was expecting b/c of the “hot market” for high yielding municipal bonds.


TrackBack URI

Sorry, comments for this post are now closed.


* Moody's: "Illinois is in decent shape" but there's trouble ahead
* Question of the day
* SUBSCRIBERS ONLY - Fundraiser list; 3rd House District update
* Today's quotable
* Team IL For Mike Is Growing
* Noted fantasist responds to Pritzker
* *** UPDATED x1 - Urlacher resigns from Civil Service Commission *** Corruption roundup
* Vaccinate your kids!
* CTBA breaks with Pritzker over education funding proposal
* Court stops Chicago from restricting free speech in Millennium Park
* Blagojevich benefits from a process he spurned as governor
* How Madigan helped take care of ComEd/Exelon while the company took care of his people
* Sen. Landek's town hit with federal subpoena on Nice, Madigan, Mapes, McClain and Kevin Quinn
* Open thread
* The Chronic Disease Coalition Supports The Illinois Kidney Care Alliance
* *** LIVE COVERAGE ***
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

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

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

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

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

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

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


Loading


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

Archives
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
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

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




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