Monday, October 24, 2016
(CPS) Chicago Public Schools plans to borrow as much as $1 BILLION DOLLARS for new school construction due to Chicago Illegal Beaner Expansion
The Chicago Board of Education on Wednesday is expected to approve borrowing as much as $840 million. But CPS won't tell the public what it plans to spend the money on until after the district goes to market for the new bonds.
In addition, the school board also is set to vote on issuing an additional $160 million in bonds to re-finance some of its old debt.
CPS' financial reputation has been a regular target for Wall Street analysts, a point reiterated by last month's decision by Moody's Investors Service to drop the district's bond rating further into junk status. That could cost CPS more money when it sells new bonds.
The construction loans would be repaid with money generated by a City Council-approved pool of property tax dollars earmarked for school infrastructure. While the district is treading water financially, a building program is likely to be politically popular throughout much of the city.
CPS has said the bonds would pay for renovation and construction projects, as well as equipment purchases. The district already has proposed a $338 million capital budget to be financed partly with $233 million in borrowing against the recently enacted property tax levy for school projects.
The school board also has to revise its spending plan to make room for a tentative deal reached this month with the Chicago Teachers Union, but that's not on the agenda for Wednesday's meeting. Hundreds of school-based union leaders endorsed a recent tentative agreement, sending it on for a final vote this week by the CTU's rank and file.
The district still hasn't laid out the deal's effects on a budget that also assumes state lawmakers will come through with more than $200 million. But budget revisions require the district to carry out a new series of public hearings. It's not clear when that will happen, as the district said hearing dates won't be announced after union members vote on the contract.
On Dec. 7, the school board is expected to take up the revised budget after canceling a scheduled November meeting.