Chicago Public Schools seeks $1.55
billion credit line
Send a link to a friend
[August 23, 2016]
CHICAGO (Reuters) - The
cash-strapped Chicago public school system will rely on a $1.55 billion
line of credit in fiscal 2017 to boost cash flow, up from $1.065 billion
in fiscal 2016, according to a briefing document released by the
district on Monday.
The bigger credit line will be on the agenda for the Chicago Board
of Education's Wednesday meeting, along with a $5.4 billion
operating budget, a $250 million property tax hike earmarked for
teacher pensions and authorization to issue up to $945 million of
general obligation bonds for capital projects.
The nation's third-largest public school district said it needs
access to $485 million more in short-term funding as it ends the
practice of restructuring outstanding bonds to push off debt
payments and because its receipt of property taxes will be a few
weeks later next year.
![](http://archives.lincolndailynews.com/2016/Aug/23/images/ads/current/charrons_bch041713.png) Chicago Public Schools (CPS) said it was working to finalize deals
with lenders. Interest costs for the credit lines are budgeted at
$34 million in fiscal 2017. The district tapped a bank line of
credit in June to complete a $676 million fiscal 2016 contribution
to its teachers' pension fund.
Escalating pension payments, drained reserves and debt dependency
have pushed CPS' credit ratings to junk. As a result, investors have
demanded hefty yields for the district's bonds.
[to top of second column] |
![](../images/082316pics/news_a3.jpg)
The exterior of Florence B. Price Public School is seen in Chicago, Illinois,
in this photo taken on October 5, 2012. REUTERS/Jim Young
![](../images/ads/current/richardson_lda_031116.png)
The proposed budget to be voted on by the board of education,
appointed by Chicago Mayor Rahm Emanuel, relies on optimistic
assumptions of union give backs and added funding support from
Illinois' gridlocked state government.
(Reporting by Karen Pierog; Editing by Bill Trott)
[© 2016 Thomson Reuters. All rights
reserved.]
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
![](http://archives.lincolndailynews.com/2016/Aug/23/images/ads/current/encompass-grain-farmers-Daily-after-book.png) |