CHICAGO (WLS) -- For years, the City of Chicago has been swimming in debt, to the point where the word "bankruptcy" has been tossed around. In an effort to put the city on better financial footing, the City Council overwhelmingly supported an Emanuel administration-backed deal that refinances $3 billion in debt.
"We should not have to pay banks higher interest rates when you can get lower rates," Mayor Rahm Emanuel said at the Wednesday City Council meeting.
Emanuel said paying lower rates will free up money to pay for more police or after school programs. The new financing scheme refinances the debt by using $650 million a year in sales tax revenue.
Some aldermen who opposed the deal compared it to the disastrous parking meter deal.
"We are setting ourselves up for a long-term loss for a short-term gain," said 35th Ward Alderman Carlos Ramirez-Rosa.
Alderman Leslie Hairston (5th Ward), who voted against the parking meter deal, said it's unfair to make the same comparison, although, she said, City Council created the debt so she understands why some aldermen may not trust the deal.
"People are made, people are tired and people want their government to work for them," Ald. Hairston said.
Others said the deal is a no-brainer and will save taxpayers money.
"This takes us to the point where we had difficulty selling bonds, where people are lining up to get them," said 40th Ward Alderman Patrick O'Connor.
"We can save money that you are all hollering about, spending too much money," said 34th Ward Alderman Carrie Austin.
Supporters are confident the deal will eventually help Chicago get rid of its junk bond status. The new debt scheme is already used in New York City, Philadelphia and Washington, D.C.
City Council supports debt refinancing plan for Chicago