Chicago’s deep financial problems worsened Friday as a Wall Street bond-rating agency dramatically downgraded the credit of the city’s school system — triggering penalties that could come to more than $200 million.
...Chicago Public Schools is required to maintain a certain credit rating under the terms of complex debt “swap” deals with financial institutions. Failure to do so could activate termination clauses in the deals and CPS could have to make payments to the financial institutions.
Friday’s report from Fitch means CPS has dropped below the threshold for terminating the deals. According to Fitch, CPS could be forced to pay $263 million in penalties as a result...
...Even after closing a record number of schools, cutting administrative costs and raising property taxes, CPS has projected a budget deficit of more than $1 billion for the coming school year.
Interestingly, the Chicago Democrat machine is being torn asunder by the conflict between the unions and city leaders like Rahm Emanuel. Union leadership continues to fleece taxpayers while insisting that their unsustainable retirement benefits can be maintained. Emanuel, faced with these mathematical impossibilities, is suggesting that the unions must be reined in. Pass the popcorn.






















