Tuesday, July 14, 2015

Chicago's Financial Fire

Chicago's Financial Fire by Aaron M. Renn, City Journal July 12, 2015:
"After years of warnings, financial reality is hitting home in Chicago, clouding Mayor Rahm Emanuel’s hope for a transformational legacy.
In March, Moody’s downgraded the city’s credit rating to junk, but Chicago’s financial hole long predates its ratings slide.
The trouble began emerging at least as far back as 2003, albeit under the radar.
Then, as the Great Recession pummeled municipal budgets around the country, former Mayor Richard M. Daley engaged in dubious deals, such as the city’s parking-meter lease.
In 2010, as Daley’s tenure neared its close, Crain’s Chicago Business published an exposé on the troubling levels of debt that the mayor’s administration had accumulated. 
In 2013, after Daley had left office, the Chicago Tribune ran a series further detailing the city’s questionable debt practices, such as “scoop and toss”—that is, rolling over debt at higher cost as it came due, rather than paying it off.
Chicago’s pension woes, along with Illinois’, started attracting media coverage—as did financial can-kicking by agencies like the Chicago Public Schools (CPS), which drained its reserves in 2012 and created a 2015 budget showing 14 months of revenue (“loopy,” said the Tribune).
So for several years now, the media have been telling Chicagoans that there’s a financial crisis. 
But it hasn’t really felt like one, at least not in the booming Loop and on the North Side."

No comments: