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‘That is our goal’: Chicago mayor nets council win on controversial borrowing plan
Critics say the plan is risky and could saddle the city with additional debt if interest rates turn out to be higher than expected.
CHICAGO - The Chicago City Council has passed a controversial plan to refinance $1.5 billion in existing debt, with promises that it will produce around $90 million in taxpayer savings due to lower interest rates.
"This is debt that we’re genuinely getting lower interest rates on, saving on our payments," said 1st Ward Alderman Daniel LaSpata. "It has benefits for 2024, 2025, and beyond."
But critics say the plan is risky and could saddle the city with additional debt if interest rates turn out to be higher than expected. If that’s the case, city Chief Financial Officer Jill Jaworski said the city will wait to refinance until rates go down.
"We’re not selling bonds to sell bonds," Jaworski said. "We’re doing this transaction solely to save money—that is our goal. If the savings are not sufficient, we’ll delay and wait for another time when rates are better."
Alderman Brian Hopkins (2nd Ward) voted no on the plan, saying the city can’t borrow its way out of its budget issues.
"I don’t trust the figures I’ve been given. I can’t support this right now," Hopkins said. "We’d be incurring additional debt. That is not the right thing to do right now as we’re going into budget season."
CFO Jill Jaworski said the savings could end up being higher than $90 million. It’s unclear how much of that would go toward reducing the city’s 2025 budget deficit, as Jaworski noted that much of the expected savings has already been factored into the city’s budget forecast.