Aug 3, 2015
Chicago will pay 150 million extra dollars in interest, on top of the already high interest, on the 1.1 billion dollars it borrowed this month. This is because its bonds were recently given a “junk” rating.
Supposedly, the city has to pay high interest rates because of the high risk it might not be able to pay back the loans – but investors know better. Chicago is a wealthy city, and it has written into the loans that it will increase property taxes “without limitation” if it has to, in order to make bond payments. One investment manager put it this way: “We believe the city has the ability to raise revenue and cut expenses. If you are a citizen with the city, you don’t necessarily want to hear that.”
No, Chicago workers don’t want to hear that! People who work for the city don’t want to take cuts. Taxpayers don’t want to pay more and get fewer services. And they damn well don’t want to see rich investors get 150 million dollars taken out of city services.