The Free Press, Mankato, MN

State, national news

November 6, 2013

Spending in Chicago marked by desperation, political expediency, little oversight

(Continued)

City officials became so reliant on bond money that they even turned to it to cover retroactive pay and pension contributions. It also has been used to pay for mistakes, including cases of racial discrimination and police brutality that resulted in expensive legal judgments and settlements.

Most of Chicago’s debt woes can be traced to the long reign of former Mayor Richard M. Daley, but the borrowing he relied on so heavily has continued under Rahm Emanuel as his administration gropes for ways to deal with the financial problems it inherited.

When the Tribune analyzed $9.8 billion in proceeds from general obligation bonds issued from 2000 to 2012, it found that nearly half of the money went to paper over growing budget problems. Among the findings:

—City officials used about $3 billion to settle one-time legal expenses, cover closing costs on the bonds, pay off short-term bank loans and buy vehicles and other relatively short-lived equipment.

—Even more money went to refinance old bonds. That’s smart if it saves money. But the city put $1.8 billion toward deals that will end up costing taxpayers millions more in the long run by racking up years of extra interest payments.

—Less than a third of the total borrowing — $3.2 billion — went to capital improvements that might benefit future generations. Even in this category, the newspaper found hundreds of millions of dollars in questionable spending on short-lived items.

In many suburbs, officials who want to issue bonds to build schools or swimming pools must provide detailed spending plans and put their proposals to a popular vote. Referendums also are held in Philadelphia, Los Angeles and other major U.S. cities.

But Illinois law allows Chicago to borrow billions without asking residents’ permission or providing much information about how the money is spent.

There is no limit on the city’s general obligation debt, and the sole check and balance is the City Council, a body that rarely pushes back on major mayoral decisions. Since 2007, aldermen have authorized $7.6 billion in general obligation bond issuances without a single dissenting vote. And each year they get millions in bond proceeds to dole out for projects in their wards.

Text Only | Photo Reprints
State, national news
  • Poet takes his act to Las Vegas LAS VEGAS — The old poet is dressed in black, his platinum-blond hair rakishly moussed. He stands amid the hubbub, facing a stern test of his crafted words and carnival-barker delivery. The venue is a smoky lounge called Ichabod’s, east of the Strip.

    July 23, 2014

  • Minnesota race track to refund horse owners ST. PAUL, Minn. (AP) — A Minnesota race track manager says the track will refund horse owners after an audit found it shorted race purses by nearly $437,000 over four years. The St. Paul Pioneer Press reports (http://bit.ly/1p9mtEh ) the Running Aces

    July 23, 2014

  • Bodies of Malaysia jet victims leave Ukraine KHARKIV, Ukraine (AP) — Two military aircraft carrying the first bodies of victims of the Malaysia Airlines crash left the embattled plains of eastern Ukraine Wednesday, while British investigators began work on a pair of "black boxes" to retrieve da

    July 23, 2014

  • Attorney general sues 2 Minn. colleges ST. PAUL, Minn. (AP) — Minnesota's attorney general has filed a lawsuit against two colleges, accusing the schools of misleading criminal justice students about their ability to land a job in their field and about transferring credits to other instit

    July 22, 2014

  • sniper wife pic Jurors start considering Ventura case ST. PAUL — An attorney for Jesse Ventura asked a federal jury Tuesday to award the former Minnesota governor millions of dollars in damages for what he claimed is a lie in a memoir by the late military sniper Chris Kyle. Ventura testified during the

    July 22, 2014 2 Photos

  • Target debuts shopping app "In a Snap" will recognize images

    July 22, 2014

  • Feds to monitor Newark police Probe found pattern of unconstitutional policing

    July 22, 2014

  • Thousands without power due to storms MCGREGOR (AP) — Thousands of Minnesotans are without electricity after powerful storms moved through central and northeastern Minnesota. Strong winds of 50 to 70 mph knocked down trees and power lines overnight Monday. Minnesota Power and Lake Count

    July 22, 2014

  • Ellison urges Minn. to aid Central American minors ST. PAUL, Minn. (AP) — A Minnesota congressman is leading efforts to bring more unaccompanied children fleeing Central America to the state. But, immigration advocates and nonprofit groups that serve refugees are concerned Minnesota might not be abl

    July 22, 2014

  • Detroit retirees back pension cuts by a landslide DETROIT (AP) — A year after filing for bankruptcy, Detroit is building momentum to get out, especially after workers and retirees voted in favor of major pension changes just a few weeks before a judge holds a crucial trial that could end the largest

    July 22, 2014