The Chicago City Council authorized a $1.5 billion bond refinancing plan Tuesday that Mayor Brandon Johnson and his budget officials hope will help close an end-of-year deficit.
That plan is expected to bring in $110 million in savings by refinancing hundreds of millions in debt under better market conditions and terms. It passed by a 35 to 12 vote.
Calling it the “fiscally responsible thing to do,” Finance Committee Chair Ald. Pat Dowell noted the deal doesn’t raise taxes or levy fines on residents.
“We’re not kicking the can down the road, we’re not adding to the city’s debt burden,” Dowell said. “Every day, we hear calls to eliminate waste, and that’s exactly what we’re doing this afternoon.”
Approval of the bond deal already had been baked into the 2024 budget — which came as an unpleasant surprise to some alderpersons — and budget officials warned that not greenlighting the sale would add $70 million to the city’s deficit.
Even with the refinancing, the city still faces a $223 million deficit it must close by the end of this year, and a $982.4 million budget gap for 2025.
Opponents earlier this month used a procedural maneuver to delay the measure, raising concerns over how it would affect the city’s credit rating long-term.
Ald. Bill Conway (34th), who has been a vocal critic of the administration’s spending, said his own initial skepticism was overcome by an amendment that ensured the funds could be used only for cost-saving debt refinancing — and not operating expenses.
“It would be easy to reflexively dismiss this proposal…” Conway said. “I know that each and every one of you, or at least most of you, ran for alderman to make our city better and to govern, not to simply obstruct for the sake of politics. So I urge you to vote for this.”
Ald. Raymond Lopez (15th), who voted against the proposal, decried the city’s borrowing more broadly and said he worries the bond deal will “kick the can further and further, interest rates are changing against us, and when fees are still stacked against us.”
The city’s Chief Financial Officer, Jill Jaworski, recently batted back criticism in an Op-Ed published in Crain’s Chicago Business. She called the plan “a standard part of responsible debt management.”
Johnson is expected to lay out what other measures he plans to take to close next year’s massive deficit in his Oct. 30 budget address. His administration has repeatedly said all options are on the table, including layoffs, furloughs and a property tax increase.
Tessa Weinberg and Mariah Woelfel cover politics for WBEZ.