CPS Bonds Tanking
Not what you want to see during a financial crisis:
A credit rating agency has changed its outlook for Chicago Public Schools bonds from stable to negative because of the district's troubled financial situation.
Fitch Rating, with headquarters in both New York and London, said the district's financial challenges in 2014 when CPS will face $338 million in back pension payments is leading to the negative outlook.
That means higher borrowing costs and lower yields on bonds.
And that means CPS will jack up their portion of the property taxes the limit again.
Didn't Michigan citizens sue to decouple the school funding from property taxes a few years ago? We know there are states out there that don't fund schools this way and we don't hear about them being the worst in the nation.
Labels: money questions
posted by SCC at 12:01 AM
19 Comments:
I support a giant tax increase. If we give the worst school system in the country more money things will improve. The children will all want to learn and that ghetto single parent will take an interest in their child's future.
Won't someone PLEASE think of the children? Let's put up some speeding cameras.
Can we recall incompetent politicians like 9.5, Quinn, etc...? They are driving this city, county, and state into the ground. Stroger was a complete moron who should never have had that job. WE NEED TERM LIMITS!
This fucking state has that restriction everywhere but chicago. Why do u think the downstate republicans are fighting the pension funding bill. Man everyone better wake the luck up and start paying attention!!!! Including you.
Meanwhile.... welfare mothers continue to crank out 5-10 kids, starting at 16yrs
Each kid depending on the government to house, feed, and educate them until they cycle into the Illinois prison system
Deficits? Wait another 16 yrs until the next cycle begins breading
Can't you see the hand-writting on the wall? I'll explain.
Remember how the Illinois lottery was supposed to be all about the schools and how it's "for the children"?
What happened?
The lottery was outsourced to the highest bidder and guess what!
"Lottery manager misses revenue goal by about $100M"
Do you think that would impact the schools budget enough to cause a bond downgrade?
Ohhh but wait there's more. Here's the latest on the lottery outfit
"Company turned record profit for lottery, but it could face penalties for falling short of target"
"The company hired to manage the Illinois Lottery fell nearly $100 million short of the profits it promised during its inaugural year as the nation's first private manager of a state lottery, records show."
"Northstar Lottery Group committed to collecting $825 million in net revenue. But according to a Tribune analysis of the lottery's preliminary financial results for the 2012 fiscal year that ended in June, it collected $726 million"
***
Even so, the company could face tens of millions in penalties for failing to reach its original financial goal for the state. Faced with that possibility, it has been trying for nearly a year to reduce the profit commitment it made as part of its winning bid.
(Got that! They only had the lottery for a year and for a year they have been trying to back out of the commitment they made. From about day one!)
Northstar officials have asked for $119 million in concessions and expect to request an additional $19 million, said state Rep. Jack Franks, D-Marengo.
The matter is in arbitration, but if Northstar is granted its requests, it would wipe out any need for the company to pay penalties and could even require the state to pay millions in bonuses.
"That's a lot of schools we could pay for," said Franks, a vocal critic of the decision to hire a private manager. "I can tell you I'm pretty upset about it, and I want to make sure the citizens get the deal they were promised."
read the whole thing it's amazing.
http://articles.chicagotribune.com/2012-07-31/news/ct-met-lottery-appeal-20120731_1_northstar-lottery-group-illinois-lottery-private-manager
They want a do over!!
They outbid there nearest competitor by $120 million dollars and when they won the contract they immediately wanted a do over on the terms right after winning, knocking off the $120 million that they overbid.
Then they fall $100 million short of what they said they can produce and want the terms redone so that they can hand out bonuses instead of paying the state penalties.
I think the fix is in.
(cue the violins)
You know this poor company really done so well compared to how the lottery was performing before (look, see they are making a profit) we should give them a break and pay them bonuses instead of penalties right?
Forgetaboutit, the contract.
We can probably get some campaign donations here ya know. Get it? So what if they just bid that number to knock off the competition and are either unwilling or unable to meet the commitment that they have signed. They didn't mean it. Let 'em go..haha.
Parking Meter contract two point zero. Hurrah for them -- screw the taxpayers and the kids. The contracts mean NOTHING.
Seems to me there can be only one "worst in the nation" and guess it is Chicago.
Oh well, we keep on paying higher and higher taxes.
But rate of increase is decreasing. Right Rhambo?
just imagine if everyone stopped playing the lottery.
"We know there are states out there that don't fund schools this way and we don't hear about them being the worst in the nation."
that's because they're not Felinois.
one correction: higher borrowing costs = higher yields (which is just the overall return of the bond, which is the interest rate plus whatever you are paid back above/below the price you bought the bond at), not lower
(this also equals lower prices on the bonds)
Wait, you think that funding the schools from general revenue will be cheaper than the property tax hikes? Oh, my. At least now they are limited to the property tax revenue. Without it they'd be limited to the state's ability to borrow.
The CPS property tax proceeds are funneled-off into the mayor's TIF's and stays there until he decides who or what he wants to use the money for.
NO ifs, ands, or buts.
They can run but they can't hide!
Funny that our good Mayor won't open the books though and keeps denying the teachers FOIA requests to them. I know alot of people are trying to get rid of his self appointed school board, and most aldermen, including our clown in the 19th ward, are opposed and it won't appear on the November ballot....
A special assessment of 10K per household would work. yes you can do without a new car.
"Didn't Michigan citizens sue to decouple the school funding from property taxes a few years ago? We know there are states out there that don't fund schools this way and we don't hear about them being the worst in the nation."
THANK YOU!
That's a real boat-rocker. I never felt that it was fair for, say, old people trying to survive to lose their house over paying for the sixth generation of other people's exploding population, but I didn't know other states actually do this.
"The company hired to manage the Illinois Lottery...Northstar Lottery Group..."
--8/07/2012 12:42:00 AM
Holy God. Every time you turn around. Another selloff, another "outsource," another parasite taking a cut of the action.
Most of the "economy" seems to be based on stuff like this.
Bernanke has started using phrases like "going to go over a cliff."
did they ever solve that teacher strike issue. i haven't hear about it lately?
Anonymous said...
Meanwhile.... welfare mothers continue to crank out 5-10 kids, starting at 16yrs
Each kid depending on the government to house, feed, and educate them until they cycle into the Illinois prison system
Deficits? Wait another 16 yrs until the next cycle begins breading
8/07/2012 12:34:00 AM
Anonymous
16...Aren't you being a bit optimistic? 13 is about the average age.
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