When you want to talk about Chicago’s finances, or about its police/community relations, Mike Fourcher’s the go-to guy. He publishes the Daily Line, Chicago’s on-line subscriber news service. He joins us this week to talk about the impeding Dep’t of Justice report on the Chicago Police, Tiger Woods and, yes, the bond markets – and their demand for more taxes from Chicagoans.
Chicago’s going out for a big bond buy this week, and Fourcher says its fate is more or less being determined by the ratings houses – and at least one of them considers Chicago Junk. But others don’t agree, and there’s some talk, for the fist time, that Chicago may be clawing its way back.
“Now the consequences for a city when they have a junk versus investment grade rating, for a lot of investment agency investment groups that triggers how they have to treat that money,” Fourcher explains. “And they have to require much much higher interest rates to be paid to them for the borrowing. It could be the difference between paying 4% and 8% for the City, the City paying an extra 4% on that money in order to be able to borrow, and that’s tens of millions of dollars just for this borrowing. And there’s going to be other borrowing that the City is going to do. So there is this intense pressure that’s coming from investors in the open market for Chicago to raise its base taxes much higher”
“Raise its base taxes even higher” isn’t something any mayor wants to hear. But that’s what the lenders are saying, according to Fourcher. “So, I think that there has been a real movement among investors that Chicago is not really paying enough and that they want to see Chicago paying more, and that’s what this fight is about with the bond issue that the City wants to do.”
The Department of Justice was about to release its highly-anticipated report on the Chicago Police just as we started this conversation, but despite not having seen it, certain things were easy to predict.
“Well,” Fourcher asserts, “we’re definitely going to see changes. I think there’s no question about it, and I think that from what I can see Superintendent Johnson is committed to making changes and improving things. He’s really done a lot of things that are unpleasant for a police superintendent, like putting pressure on police officers, like changing some of the culture about what happens to a police officer after a questionable shoot. You know those things are important. And I think that Mayor Emanuel has gotten the message that there needs to be reform. But, one of the things that you keep hearing, and we did in December an interview of about 50 or 60 neighborhood leaders throughout the City. One of the things that we kept hearing was that the Mayor is clearly working very hard. There’s no question about it. We’ve never met anybody that works as hard as he does, and he wants to do well. That’s very clear, but he is missing empathy and he is missing some understanding and warmth.”
As we say, Chicago Newsroom is also a pretty good radio show, and you can listen in your earbuds at our SoundCloud page, right HERE.
And you can read a full transcript of this week’s show right HEREcn-transcript-january-5-2017