In a last-ditch effort to deal with the Chicago's mounting debt crisis, Mayor Rahm Emanuel has asked City Council to approve his request to borrow $1.1 billion.
The loan would help cover short-term debt, but it would also add to the long-term burden and could affect future generations of taxpayers in Chicago. The city's Finance Committee will meet to discuss the borrowing on Monday.
The $1.1 billion would specifically be used to complete Emanuel's debt restructuring plan, to pay off major court judgment and to cover police backpay, among other debts, according to the Chicago Tribune.
The city's financial problems have been growing for years, but they have been thrown into the spotlight even more lately as Moody's downgraded the city's bond status to junk level as well as downgraded Chicago Public Schools, the park district and the Cook County Forest Preserve.
Furthermore, Chicago Public Schools faces the possibility of filing for bankruptcy if it cannot pay $634 million to the Chicago Teachers Pension Fund by June 30.
The mayor's second term officially began amid all of these recent financial pitfalls, casting a shadow on the optimism that began his first term in 2011.
Oddly, the amount of money the mayor wants is the same amount that former Mayor Richard M. Daley earned for Chicago in 2008 under the 75-year lease he negotiated with the private Chicago Parking Meters LLC. Incidentally, that money is all but gone by now. To be fair to Emanuel, most of that money was gone before he even took office in 2011, according to the Chicago Tribune.
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The borrowing has not yet been approved, but it seems likely City Council will provide its authorization as the options narrow and the debt burden grows.
"It sounds like we don't have much of a choice," Ald. Nicholas Sposato of the 38th Ward told the Tribune. "This is a way to at least put our finger in the hole in the dike for now."
