Chicago District Plans to Borrow $1 Billion
The Chicago school district is set for another round of borrowing, the Chicago Sun-Times reports.
According to the newspaper, the city's board of education approved plans to borrow up to $1 billion on Wednesday, with the money going toward construction costs and to refinancing high-interest debt.
The paper also reported that the $1 billion in new borrowing does not take into account money that the cash-strapped district will need to run the district until tax receipts show up next spring—about $945 million.
According to the Sun-Times, the district still has not fully disclosed the ultimate cost of the new labor contract offer it made to the teachers' union to stave off a strike.
The union's house of delegates approved the deal last week. The nearly 28,000 union membership was expected to vote on the offer this week, but that vote was pushed to next Monday and Tuesday.
Parts of the contract's costs will be covered by funds from the city's Tax Increment Financing, or TIF. Mayor Rahm Emanuel has committed to sending $87.5 million from TIF funds to the district—an increase from the $32.5 million that was originally planned, according to the Chicago Tribune. Steering more money from TIF to the district was a major priority for the teacher's union.
Still, that money will not be enough to cover the cost of the deal, which includes base salary increases, early-retirement incentives, and more money for overenrolled classes.
The district had argued for nearly a year that it could not continue to pay 7 percent of the 9 percent that union members contribute toward their pension payments. But the deal the two sides eventually struck will continue that practice for current union members. New members will have to pick up the full cost of the pension payment, but that weight will be offset by a pay increase.