Medill Reports | Ald. Fioretti: City Council bond vote puts Chicago on the ‘real road to Detroit’
TUA President Jim Tobin was quoted about Chicago debt in Northwestern University’s Medill Reports.
Despite Chicago’s debt being among the worst in the nation, the City Council voted Wednesday to allow the city to issue bonds up to $900 million and authorized borrowing another $1 billion for Midway Airport.
The measure passed without discussion, with only Ald. Scott Waguespack (32nd), Ald. Bob Fioretti (2nd), Ald. Brendan Reilly (42nd) and Ald. John Arena (45th) voting no.
This action comes less than a year after Moody’s downgraded Chicago’s credit rating by three notches.
Fioretti said he voted no for two reasons: a lack of transparency in the proceedings and his feeling the council was “kicking the can down the road.”
Fioretti, who is not a member of the finance committee, attended Monday’s meeting and said, although he asked questions, he learned little about the plan.
“This is The Parking Meter: 2,” Fioretti said, referring to former Mayor Richard Daley’s controversial lease of the city’s parking meters to Chicago Parking Meters, LLC. The lease was widely criticized for its lack of transparency.
Fioretti said Chicago is headed in a dangerous direction and faults fellow aldermen for refusing acknowledge the problem.
“Nobody wants to discuss the real road to Detroit that we are on at this point,” he said.
Sarah Wetmore, vice president and research director of the Civic Federation, wrote in an email that it is important to distinguish between the kinds of debt the city issues.
The portion of the debt the city said will be used for safety-related building repairs is necessary, she wrote, to keep government infrastructure sound.
About $120 million of the $900 million would be used to push debt to future years, according to Wetmore.
“The unsustainable savings have helped balance the city’s current year operating budgets, but they also greatly increase the city’s long-term obligations,” she wrote. “The city must find a more sustainable way to address the growing gap between its spending and available revenues.”
Wetmore warned of dire consequences if they city cannot curtail its spending and continues to rack up debt.
“It will be forced to choose between a significant increase in the property tax, crippling cuts to city services or some combination of both,” she wrote.
Finally, Wetmore wrote, the city’s credit rating could be hurt by the amassed debt, which would make borrowing in the future more expensive and possibly limit borrowing opportunities.
Some were more forceful in their criticism.
Jim Tobin, president of Taxpayers United of America, said the law is “horrible.”
Tobin said the action amounts to the council “stealing the peoples money. They should all be thrown from office.”
The law is pushing financial obligations onto future generations and making them responsible for “lavish, gold-plated pensions,” Tobin said.