If Chicago Public Schools ever misses a debt payment, property owners would see taxes jump

The Chicago Tribune reports:

As Chicago Public Schools' money troubles worsen, students and their families face increasing uncertainty. Dozens of classroom staff were laid off last month after the school district cut principals' second-semester budgets. A strike is looming as CPS prepares to slash teacher benefits.

But if the school district ever comes up short on its debt payments, the investors who bought CPS' bonds can rest assured they will get what they are owed — straight from Chicago taxpayers.

The school district's bond contracts include a little-known provision that would trigger a property tax increase if CPS fails to pay. The county clerk would deliver that additional revenue directly to a bank — much the way a creditor might garnish an individual's wages.

"Citizens don't know the extent to which their own assets are pledged to pay bondholders," said Matt Fabian, a partner at Concord, Mass.-based Municipal Market Analytics.

No word yet from Barack Obama on this story. The Obama coalition pledges its' assets for excellent public schools ! There's nothing like strength through unity with a Democrat Mayor since 1931 , and a City Council with all 50 Aldermen being members of the Democrat party.