Mayor Johnson Tightens CPS Language, Stands Pat on $830M Infrastructure Bond on Eve of Showdown Vote
Mayor Brandon Johnson on Tuesday tightened liberal language pertaining to Chicago Public Schools, but refused to shrink his $830 million general obligation bond issue or revise a back-loaded repayment schedule that raises the overall price tag to $2 billion.
New Language Rules Out Use of Bond Proceeds for Disputed Pension Payment or Teacher Contract
Johnson’s offer to tighten the language governing bond proceeds earmarked for CPS would rule out use of those funds to make a disputed pension payment for non-teaching school employees or to help pay for a teachers’ contract still being negotiated.
New Language for Bond Proceeds Earmarked for CPS
The new language states: “Each grant or loan of authorized funds shall be made only for a capital project located within the city at the direction of the alderman representing the ward in which the capital project is located and more than $75 million of the proceeds of the bonds shall be used for such grants or loans.”
Alderman Bill Conway Plans to Substitute Own Proposal
On Wednesday, Alderman Bill Conway (34th) plans to substitute his own plan to shrink the bond issue to $508 million — $108 million for the aldermanic menu and $400 million for other capital projects.
Conway’s Proposal: Smaller Bond Issue, Standard Repayment Schedule
The back-loaded repayment plan would be replaced by a standard 30-year home mortgage payment schedule, with annual payments maxing out at $34.5 million. Chicago taxpayers would theoretically save $1 billion in financing costs.
Ald. Timmy Knudsen Opposes Bond Issue in Current Form
Attorney Timmy Knudsen, shown in September 2022, opposes the mayor’s proposed bond issue in its current form.
Knudsen’s Proposal: Shrink Bond Issue, Eliminate Interest-Only Payments
Lakefront Ald. Timmy Knudsen (43rd) is a solid “No” vote. Knudsen wants to shrink the mayor’s $830 million bond issue by 20% — to $664 million — and eliminate “interest-only” payments to avoid “kicking the can down the road.”
Conclusion
As the City Council prepares to vote on the $830 million infrastructure bond issue, the fate of the proposal remains uncertain. While Mayor Johnson has made some concessions, including tightening language related to Chicago Public Schools, the proposal still faces opposition from some aldermen.
FAQs
Q: What is the proposed bond issue for?
A: The proposed bond issue is for $830 million to fund infrastructure projects in Chicago.
Q: What is the current plan for repayment?
A: The current plan is for the city to make interest-only payments until 2045, with annual debt payments ballooning to $136.9 million in 2050 and remaining there until the bonds are fully retired in 2055.
Q: What is the alternative proposal from Ald. Bill Conway?
A: Conway’s proposal would shrink the bond issue to $508 million and replace the back-loaded repayment schedule with a standard 30-year home mortgage payment schedule, with annual payments maxing out at $34.5 million.
