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For CPS, the largest US municipal junk bond issuer since the turn of the century, the cash crunch has returned in a big way. It’s short about $734 million, with more deficits coming: They’re expected to reach $835 million in fiscal 2030.
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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“CPS Struggles to Make The Math Work” – News flash CPS, the math doesn’t work and hasn’t worked for decades. The only proper correction for this problem is to cut costs and right-size the entire operation to address real, basic education needs. Close and sell under utilized school property, fire the thousands of employees hired during covid with one-time covid money, Stop replacing 10’s of thousands of Chrome books for students who are chronically “losing” them, give the teachers the power to get rid of students who are disruptive in class and non-performing, cancel the $3B psychological student evaluation “program”… Read more »
Why aren’t these Jacobins wearing red?
The bond market fails to recognize that Chicago is the epicenter of public debt and that the actual responsible parties for the debt of CPS, City of Chicago, Chicago Park District, Cook County, Municipal Water Reclamation District, etc.,etc., are the same taxpayers. These same taxpayers are responsible for the unfunded pension liabilities as well as any deficits in the bond issuers’ budgets. At a minimum any new prospectus should be issued with a skull and crossed-bones to highlight the poisonous nature of the offering. Caveat Emptor! When will bondholders start to sue the underwriters for failure to prudently, professionally and… Read more »
Very true. There is a pervasive silo mentality that runs throughout Chicagoland and its media. You can look at any one unit of government and think that its problems are very manageable, but in aggregate it is a different story. The bond world, too, often succumbs to that silo mentality.
You think the people issuing the debt don’t know about the risk of Chicago’s debt? They are well aware but they are addicted to the premium. Once they stop willingly lending money then we will finally see massive changes in Chicago. Think NY City in 1975. Massive tax increases and massive layoffs/service cuts.
Sadly, I think you are right. Most voters don’t react until they actually have a tax bill in their hands. By then it’s too late.
Correction: Johnson was a union activist ( and still is ) that briefly posed as a teacher that wouldn’t assign homework because it was “ racist “. Tell the story truthfully or don’t tell it at all.
Here is a prediction, everything collapses just before the Christmas break. Then every leader will focus like a laser beam on the problem and a blue ribbon committee, empowered to borrow money, will be formed.
The CPS is flat A$$ broke. The teachers want to enslave the next few generations to debt payment. The math does not even close to adding up. There should be a cap on the amount of money any Illinois government body can borrow. This is what is destroying Ilinois and should be stopped.