Mayor Emanuel Reveals Plans For Tackling City's Debt
CHICAGO (CBS) -- Mayor Rahm Emanuel announced some strong steps to confront the city's crushing bond debt, reports WBBM Political Editor Craig Dellimore.
With the city's bond rating just a couple levels above junk status, Mayor Emanuel told the Civic Federation he is ending or phasing out some of the city's more questionable borrowing practices.
"For a little over a decade, the city was paying its legal settlements and judgements by issuing 30 year debt instead of using the money from its annual budget like other cities," Emanuel said. "In addition, the city engaged in a series of bad financial deals and transactions where risks were clearly underestimated that are now requiring large, lump sum payments from taxpayers."
The mayor also said he will end the practice called 'scoop and toss' where debt is rolled over and extended., instead of being paid off and assuming the Illinois Supreme Court lets the city's existing pension deal stand, no sure thing, Emanuel says workers agreed to pay more.
"So 30 percent of the savings, city employees are stepping up. We do another on efficiency and then we do the rest on revenue," Emanuel said. "It's a revenue and reform model."
Civic Federation leader Laurence Msall acknowledges revenue means taxpayers.
"Yes, this is going to require either additional new revenue or further cuts in the city's operating budget in order to finance," Msall said.
Property taxes have sometimes been suggested.