Chicago Public Schools borrow $275 million at sky-high interest rate

Sun-Times ^ | 06/19/2017 | Lauren FitzPatrick and Fran Spielman

[george76]

The Chicago Public Schools will pay 6.39 percent — an extraordinary interest rate by short-term lending standards — to borrow $275 million it needs to make a mandatory payment for retiree pensions before a June 30 deadline.

That’s more than four times the interest rate a typical government would pay on the same borrowing deal

...

It’s yet another sign of the dire financial condition of the nation’s third-largest public school system, which for months has had a “junk” credit rating from Wall Street financial institutions.

CPS officials secured the $275 million on Monday from J.P. Morgan. It’s the final chunk of cash needed to make the $721 million payment for teacher pensions that’s due at the end of the month

...

An additional $112 million that’s needed to fund district operations will be borrowed separately.

[going hot]

Borrowing monies to pay the pension. Only in Chicago, with libs in "control", as it were.

Soon to be seen in CA, where the unfunded mandates for public pensions is astronomical.

[Leaning Right]

> Didn’t the Ill annoyed Supreme tyrants rule the state must pay out the full pensions by law? <

Yes, and that was the legally correct ruling, as the Illinois state constitution prohibits the reduction of pensions.

So that part of the constitution will simply have to be changed. Some retired folks have an annual school pension of $20,000. Leave them alone. But other people are pulling in large, obscenely large, amounts. They’ve got to take a haircut.

Now, will the Illinois legislature find the courage to fix their constitution? Of course not.

[fungoking]

It's just what you do in the hood. Out of cash before the government comes in? Just go to the high interest loan shop on the corner.

[moovova]

I’m betting the money was delivered cash in a briefcase by a guy named Guido.

Until the loan is paid back, I foresee broken legs, a missing school board member or two, and maybe a horse head in a bed.

The word “vig” comes to mind.

[RayChuang88]

The financial issues of Cook and DePage counties in Illinois will result in that state filing for bankruptcy within 18 months. And that increases the possibility that Illinois could be dissolved as a state and revert to Federal territory status until an all-new, totally reformed government is created.

[samtheman]

https://www.youtube.com/watch?v=SAfzUWztJVM

[GOPJ]

Chicago - and the vile state of Illinois - can DO Stupid because if citizens don't like it the pubahs will stop fixing roads and put the kibosh on fire and police departments.

It's called shaking down gullible citizens... keep voting for democrat fools... ‘cause the rest of us are NOT going to bail your worthless hides on this one. We're gonna watch and laugh.

[rdcbn]

Operating costs are $112 million and pensions are $721 million ?!? 6.44 times as much? And they’re borrowing 46.5% of their total expenses each month? Yeah, that’s sustainable financing...

---

It's much easier to pay “no show” workers when they “retired” and don't have to show up for work

This avoids embarrassing situations like one on New Orleans after Katrina where it was discovered that about half the police pay roll was phantom workers. You can only send so many phantom employees to Las Vegas for vacation and only for so long before people catch on

[GOPJ]

Chicago - and the vile state of Illinois - can DO Stupid because if citizens don't like it the pubahs will stop fixing roads and put the kibosh on fire and police departments.

It's called shaking down gullible citizens... keep voting for democrat fools... ‘cause the rest of us are NOT going to bail out your worthless hides on this one. We're gonna watch and laugh.

[EC Washington]

It will never be paid back. Teachers and Administrators are retiring after 30 years with 80% of their pay. You have way too many people pulling $100,000+ a year in pension payments for the rest of their lives. That does not count benefits such as medical care for the retiree and spouse. Dems and unions set up a house cards that will always be in debt.

[rightwingintelligentsia]

How are they going to pay back the loan?

Simple. 300% tax on the rich.

[cyclotic]

Call Jake and Elwood, get the band back together and have a huge concert.

No problem.

[Leaning Right]

> an MBTA employee (the MBTA is Boston’s regional transit system) retired with a $97,000/yr pension <

Most pensions work off of a formula. And part of that formula is usually “three highest years’ salary”. So it might look something like this:

0.02 x years of service x three highest years’ salary

The troublemaker is that last factor. Many folks will take all sorts of overtime (at time and a half) during their last three years of employment. So they are making huge amounts of money in those last three years. And so they get a huge pension.

It is a (legal) abuse of a loophole in the system.

[Liz]

Chicago Public Schools will pay an extraordinary 6.39% to borrow $275M
to make a mandatory payment for retiree pensions (June 30 deadline).

Citizens need to demand to know how many govt checks public employees are cashing.

CASE IN POINT:

Obama paid her $175K plus federal perks as Valerie Jarrett
pocketed $36K pension from Part-Time Chicago Transit job
dailycaller.com ^ | 2/17/2016 Chuck Ross / FR Posted by rktman

Chicago is known for its L-train. But it's the gravy train that White House senior adviser Valerie Jarrett prefers to ride.

In addition to the $173,922 Jarrett earns per annum as President Obama's senior adviser, she is also paid an annual pension of $35,660 for the eight years she served as chairman of the Chicago Transit Authority, according to a Chicago Sun Times investigation.

Jarrett was appointed to chairman of the agency - a part-time position - in 1995 by then-mayor Richard Daley, whose brother, William Daley, served as Obama's chief of staff. Jarrett served as the former mayor's deputy chief of staff and was appointed to numerous other positions during his term. (Excerpt) Read more at dailycaller.com ...

======================================

Wonder how many transportation bonds were issued while Jarrett was at Chicago Transit? Her pension payout would pale against her hidden income from lucrative Chicago bond deals.

[Liz]

Read more at chicago.suntimes.com ...

In Sept 2013, the daughter of infamous “God D**n America” Rev Wright, and 12 other Democrats were charged with embezzling $16 million in Federal health grants (tax dollars) earmarked for AIDS charities and programs for the poor and needy. More than one of the defendants had direct ties to President Barack Obama.

===============================================

ONCE UPON A TIME IN GANGLAND CHICAGO Rev Jeremiah's Wright's beloved daughter was convicted for looting a $1.25 million state grant which financed a tax- exempt, not-for-profit work and education program called "We Are Our Brother's Keeper," owned by Regina Evans, former police chief of Country Club Hills, and her husband, Ronald Evans Jr.

Back in 6/8/13 Chicago Police Chief Regina Evans (above) pleaded guilty to government fraud and money-laundering related to the misuse of a $1.25 million state grant to the non-profit she ran with her husband, Ronald Evans Jr.

==========================================

Earlier, in October 11, 2011, Police Chief Regina Evans Resigned

COUNTRY CLUB HILLS, Ill. (CBSLOCAL.COM) Country Club Hills Mayor said that negotiations were underway to clear the way for the resignation of police Chief Regina Evans, in office for about two years,

<><> Regina Evans was on (ahem) disability leave since August 2011,

<><> it was earlier reported that Illinois AG's office is suing Regina Evans' n/p over its handling of state job training grant worth more than $500,000.

<><> Evans also signed off on invoices for a controversial summer camp where the campers — including children of aldermen who voted for it — got paid to attend (Chicago-way--"redistribution of income").

<><> Most recently, Evans came under fire for overseeing a 2011 part-time police program where 10 part-time police officers were hired.... bur that many had questionable backgrounds, and weren’t qualified to do police work. They were ordered to turn in their guns and badges (got high-paid city sanitation jobs).

The SouthtownStar contributed to this report, via the Sun-Times Media Wire.

===================================================

Just goes to show: sap-happy Dem/Libs love to say they're "for" their fellow-man---while conniving to make a buck on it.

================================================

CHICAGO GANGLAND IN THE WH---Obama'll do anything to change the national conversation about illegals, contamination, contagion, and the overthrow of the US govt. “My Brother’s Keeper” is an initiative recently organized by Pres Obama w/ our tax dollars----that aims "to boost the life chances" of young African and Hispanic men.

======================================

BACKSTORY "My Brother's Keeper" is a scam that originated in Chicagoland----and it reared its ugly head in Washington.

WASH/POST---Community lenders’ network commits to lend $1 billion in support of Obama's ‘My Brother’s Keeper’ / By Zachary A. Goldfarb, March 6, 2014

A network of (ahem) community lenders is committing to lending (?) $1 billion in support of President Obama’s “My Brother’s Keeper” initiative that aims to boost the life chances of young African and Hispanic men.

==============================================

Valerie Jarrett attended "My Brother's Keeper" events....so did Valerie have her portable wire transfer kit with her? B/c a day without wire-transferring offshore makes Obama and Michelle nervous.

[TomGuy]

6.39% is sky high interest rate?

LOL

I can remember when moneymarket accounts were earning a moderately low 8%.

[libstripper]

FTA:

The mayor is considering taxing high net-worth individuals, downtown businesses or both to put CPS on more solid financial ground.

Gee, and how's the city to keep those people and businesses after it does that??

[Mariner]

It’s not a bad investment for JP Morgan.
A government bailout is nearly certain for the CPS.

Disgracefully.

[Chgogal]

DummycRats are too stupid and greedy for words. Heaven forbid that this teachers pay into their own retirement fund. Jerks.

[Fresh Wind]

How are they going to pay back the loan?

They will borrow the money at an even higher interest rate. What could possibly go wrong?