Over strenuous objections from Mayor Brandon Johnson’s most powerful ally, a City Council committee backed a measure Monday that would make it more difficult for Chicago to borrow money and increase the mountain of debt imposed on future generations of taxpayers.
Retiring Ald. Marty Quinn (13th) initially wanted to raise the threshold for approving city borrowing from a simple majority, or 26 votes, to a two-thirds majority, or 34 votes. That would have allowed 17 Council members to block future borrowing.
But Quinn lowered the bar to three-fifths, or 30 votes, in an attempt to appease colleagues and attract additional votes — and it worked. On Monday, the Finance Committee approved the revised ordinance by a vote of 21 to 9.
It was the latest show of force by a renegade majority of City Council members that rejected Johnson’s corporate head tax and muscled through an alternative city budget.
Budget Committee Chair Jason Ervin (28th) questioned the timing of the latest power play. It came a day after Johnson launched his re-election bid and just weeks before the mayor unveils his fourth and, possibly final city budget.
“Twenty-six votes is enough to pass any and every item that we do. And to allow a minority of members to effectively hold everybody hostage — I don’t think is in the best interest, not only of this city, but how democracy works,” Ervin told committee members.
“Why now?… We need to look at the optics of how this will be perceived — especially in minority communities as to what’s being done to whom, by whom.”
Senior mayoral adviser Jason Lee has similarly argued that allowing a minority to block “bond ordinances for critical infrastructure for whatever reason” would only “lead to gridlock and potentially harmful delays on critical investments that the city needs to make to preserve” roads, bridges and other aging infrastructure.
“Who knows what interests a super-minority might have, what political interests they might have at any given time to bring the city to a halt? You don’t want to create an opportunity for a super-minority to play politics with critical infrastructure that keeps the city going,” Lee has told the Sun-Times.
Ald. Brendan Reilly (42nd) countered that the higher borrowing threshold is “not about who the current mayor is… This change applies to all future mayors.”
“This body has started to — and it’s refreshing — act independently of administrations and the executive, and by requiring the super-majority vote, it makes the dialogue and engagement with each of us more valuable,” Reilly said.
“When you need more votes to get debt issued, it requires very specific conversations with each of us… Having more cooks in the kitchen to push back and ask tough questions to determine whether or not the amount of debt we’re issuing is prudent or in the taxpayers interest [is a good thing]. We want more scrutiny. We want more vetting.”
Last year, the City Council came close to blocking an $830 million general obligation bond issue that included a back-loaded repayment schedule that raised the overall price tag to $2 billion.
Johnson’s 26-23 victory was secured only after the mayor had to cast the third tie-breaking vote of his tenure — by breaking the 25-25 tie to kill Reilly’s attempt to postpone the vote.
“When we borrow, we are making a promise that future taxpayers and future City Councils are gonna be required to keep. And given our current debt burden, our pension obligations, the many fiscal challenges we have ahead of us, it’s entirely reasonable that taking on of new debt should really require a higher level of consensus,” said Downtown Ald. Bill Conway (34th), a former investment banker.
Civic Federation President Joe Ferguson was lukewarm about a two-thirds requirement, saying it “has some strengths and weaknesses.” But he supports a three-fifths threshold.
“Whether this is a long-term fix or just a temporary pumping of the brakes, it is necessary and probably sends a good signal to the rating agencies that we kind of get that we can’t continue the way that we’ve been going so, let’s slow it down,” Ferguson said.
Ferguson pointed to the negative outlook letter that Standard & Poor’s issued recently about the Chicago Public Schools and how its financial crisis affects city finances.
“We’re hurtling towards the edge — an edge where nobody knows where the tipping point is. One step above junk bond status. Yet what are we doing? We’re proposing the issuing of more debt,” Ferguson said. “This isn’t a political thing. This is math.”
According to the Civic Federation, the city’s outstanding net debt rose by 32.8% — from $22 billion to $29.2 billion— between 2014 and 2013.