July 12, 2016
The long-term principal and interest payment schedule for Chicago's general obligation debt swelled by about $1.7 billion last year as Mayor Rahm Emanuel and his finance team scrambled to fix a downgrade-driven liquidity quagmire that threatened the city's balance sheet. "The good news is we're taking action, that's a positive and a change in Chicago," said Brian Battle, director of trading at Performance Trust Capital Partners. The bad news, he said, is that the city is captive to the state's budget struggles and political gridlock. The city needs state approval for further pension funding changes and could lose out on its share of income tax revenue and other funds as part of a state budget solution, he added.
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