Chicago school board approves $1 billion in borrowing

Chicago school board approves $1 billion in borrowing

$840 million will be used for construction; $160 million will be used to refinance bonds.

The Chicago school board has approved a plan to borrow up to $1 billion to pay for construction projects and refinance some of the school system's other debts.

The Chicago Tribune reports that the school district will borrow up to $840 million to pay for construction projects that the district won't publicly detail until after it goes to the market for that set of bonds.

In addition, the school board approved issuing an extra $160 million in bonds to refinance some of its existing debt.

New bonds could have at a steep cost because of the district's junk-level credit ratings from Wall Street analysts.

In addition to the borrowing, the district will have to revise its operating budget to include "additional costs" expected to result from a new contract with the Chicago Teachers Union.

The school system had already put forth a multibillion operating budget that was balanced on assumptions that included a prediction the district could cut $300 million through a host of "management reforms and efficiencies."

Schools officials say that so far they have identified $95 million of those savings.

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