Another Quarter Billion
- A potential year-end budget shortfall has forced Mayor Rahm Emanuel's administration to borrow $220 million in yet another sign of the city's precarious pension funding status.
The city drew the money down from its $900 million line of short-term credit, which is akin to putting the tab on a credit card. The loan carries an interest rate of about 3 percent.
The money is not due to police and fire pension funds until the end of the year. But the city had to borrow the money to meet a March 1 deadline for having the cash in its treasury, Budget Director Alexandra Holt said. "State law requires that we deposit the money with the treasurer to demonstrate we have the money available if it's needed," she said.
The city is required to raise enough money through property taxes to make the police and fire pension contributions, which increased dramatically this year, to start closing a combined $12.2 billion shortfall in the two pension funds. If the city doesn't expect to raise enough from property taxes, it must deposit the anticipated shortfall by March 1.
But hey, Rahm can keep announcing "rails to trails" at how many millions of dollars per mile of prime mugging real estate?