Chicago mayor wants to borrow $830M, which could benefit his Chicago Teachers Union cronies
Mayor Brandon Johnson asked to borrow $830 million one day after the city’s credit rating dipping to near-junk status. He would have broad discretion over how to spend the money – including on his friends at the Chicago Teachers Union.
Chicago Mayor Brandon Johnson asked the city to take out $830 million in bonds just one day after Chicago’s credit rating hit near-junk status, according to Standard & Poor’s Global.
Johnson claims the bonds are for infrastructure and capital improvements, but there is broad language in how the money could be spent. He could use it for the contract his former coworkers at the Chicago Teachers Union are seeking.
In listing acceptable uses for funds, the ordinance includes “loans or grants to assist individuals, not-for-profit organizations, or educational or cultural institutions, or for-profit organizations, or to assist other municipal corporations, units of local government, school districts, the State or the United States of America.”
Johnson could use the borrowed money to pay for the city’s contract with the CTU, which is his former employer and his largest campaign contributor at nearly $2.3 million. CTU is in the middle of contract negotiations with Chicago Public Schools.
S&P putting Chicago’s credit rating from BBB+ to BBB, two grades away from junk status, should be enough reason to reconsider borrowing nearly $1 billion. Illinois Comptroller Susana Mendoza said council members should reject the added debt.
“Meantime, I strongly urge the members of the Chicago City Council to vote ‘no’ on the additional $830 million in borrowing,” she said. “If Johnson insists on pursuing a path leading Chicago over a fiscal cliff, you should choose to avoid that cliff dive.”
Borrowing money can be necessary for infrastructure projects, but at least you have an asset at the end in the form of a building. Borrowing to pay for CTU’s contract just puts taxpayers and CPS students at greater risk in the future.