Current city officials don’t dispute the Tribune’s analysis. “There’s no question that Mayor Emanuel inherited extraordinary financial problems,” a city spokeswoman said in a statement.
In an interview, Lois Scott, the city’s chief financial officer, said: “The legacy liabilities of the city are significant. People talk about it with respect to pensions, but debt is part of that legacy as well. It is not sustainable. And we need to address it.”
The administration, she said, has been working to rein in spending and cut smarter deals when it borrows.
Yet little has been done to limit the borrowing since Emanuel took office in 2011. Just like Daley, Emanuel has used bond money for short-term budget relief.
Scott, a longtime broker and financial adviser who worked on Chicago bond deals before joining Emanuel’s team in 2011, said the city can’t afford to tackle all of its financial problems at once. Raising taxes would threaten economic growth, she said.
Instead, the administration is using bond money to buy time, hoping that future growth will help pull Chicago out of the doldrums.
“It is a tool to be used to address financial challenges from time to time,” Scott said. “Debt is a way to reallocate burdens and opportunities across generations.”
New public buildings open with ribbon-cuttings and photo ops, but there is no fanfare when the city issues bonds. In fact, the city provides little information to the public about this complicated yet crucial civic act — and those details often turn out to be wildly inaccurate.
To track the city’s borrowing and spending, the Tribune extracted details on 49 general obligation bond deals, then filed requests under the Freedom of Information Act for records on expenditures. The city did not provide the spending data until the Tribune hired outside lawyers to press for the information.