Hmm, we wondered. Why such a difference?
As it turns out, the Johnson administration wants to keep the cash-strapped city from having to make payments on these bonds for another three years. The extra amount the city is borrowing would go largely toward making interest payments on the debt through 2029.
In describing the arrangement to us, Fitch actually used the dreaded municipal-bond financing term, “scoop and toss.” As in the frowned-upon practice of refinancing existing debt and extending it into the future, thereby raising the total cost of whatever costs that initial debt was covering in the first place — a method Chicago mayors largely have eschewed since Richard M. Daley retired.
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The latest move is for Chicago to take on more debt, not pay it (not even interest) during Brandon Johnson’s reign. Yolo!