Posted on 04/23/2015 1:27:44 PM PDT by george76
The Chicago Public Schools — already facing a federal criminal investigation of its CEO and a projected $1.1 billion budget deficit next school year — now must pay a price for those problems through higher interest rates on a new $300 million bond deal.
The rates lured investors to buy the bonds, which CPS says it will use to pay off recently completed construction projects. But they also mean Chicago taxpayers will pay more over the life of the borrowing deal, financial analysts said Wednesday.
The main bond issue — for $280 million to be repaid over 25 years — took place Tuesday in three phases. The interest rates CPS had to pay to borrow the money through the bond deal ranged between 5.25 percent and 6 percent, according to the federal Municipal Securities Rulemaking Board.
...
CPS and the city of Chicago have a difficult time in the bond market because of their budgetary problems and also the state government’s financial straits.
“It doesn’t help CPS that it’s an entity within the state of Illinois,” he said. “All borrowers in Illinois pay what you could call a penalty rate. Our financials aren’t that great, and we have a pension problem that hasn’t been addressed.”
...
CPS’ payment into the city teacher-pension fund totals $700 million this year — compared to $200 million during the 2012-13 school year. CPS officials hope lawmakers in Springfield will take steps to help them address the projected $1.1 billion budget shortfall in the next school year.
(Excerpt) Read more at chicago.suntimes.com ...
so they want a bailout from Springfield? But the state of Illinois has its own financial problems, doesn’t it? In which case, how case Springfield bail out Chicago public schools to the tune of $1.1 billion? That’s some serious money to be short.
How are “they” going to pay it? Like everything else, the taxpayer will get stuck with the bill.
The prospectus for the bonds included this phrase:
“Are you going to believe me, or your lying eyes?”
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