The mayor has recently unveiled his plan to Wall Street investors about how he intends to resolve the city's current budget shortfall: Take on new debt to pay off the old.
His $1.2 billion package is meant to pay off old bonds with the proceeds from new ones, known as "scoop and toss" borrowing. It's a stopgap solution that augments negative long-term consequences. It's basically taking out a loan- going into debt to pay off long-standing debts. Imagine taking out another mortgage on your house to pay for your current one. That, in effect, is what's happening with the city.
Some of the newly-incurred debt is intended to pay short-term expenses. This debt will take the form of taxable bonds, because the government won't sign off on tax-free bonds for routine operating expenses. Unfortunately, these types of bonds come with higher interest rates.
The mayor plans to borrow money just to pay some of the interest on the new debt.
He claims this is the last time he will take on debt to pay short-term expenses.
Admittedly, his predecessor relied on similar tactics, but that doesn't give Emanuel an excuse to perpetuate them. It seems a little like what the federal government has done with the debt ceiling. Instead of holding officials accountable, we just keep giving them leeway to continue detrimental policies that just postpone a fiscal crisis rather than address underlying causes and mismanagement.
All this is going on amid pressure to continue to fund city pensions and increase the police force.
And who ends up being accountable? That's right, the tax-payers. Residents will have to bear the brunt of the mayor's fiscal foibles by stretching their resources to contend with increased property, water, and sewer taxes. (And whatever else the city may come up with).
Conveniently, the mayor has set things out so that the fallout from the scoop and toss policies won't be felt completely until the early 2020s, when he's out of office, unless of course, he's elected again. If he serves another term, one wonders whether hell just maintain the status quo.
A precarious situation or crisis tends to snowball when it isn't promptly and properly dealt with. How long are Chicago residents going to be held responsible for the mayor's lack of accountability? What will the impact be for them when the problem becomes something that can't be resolved by short-term solutions?
Those are questions we need to consider when Emanuel's term ends in 2019. By then, people may forget about the "scoop and toss" policy because everything will seem, on the surface at least, to be running smoothly.
We need some one in office who's going to balance the budget. We also need to accept that there are no quick fixes. This fiscal shortfall didn't happen overnight. Likewise, it's going to take some time, and bi-partisan cooperation, to restore the city's fiscal shortcomings.