How CPS bonds could lead to a tax increase

Whenever Chicago Public Schools issues an alternate revenue bond, the school board approves a tax increase equivalent to the amount needed for the debt payments. Up to now, such taxes have never been collected because the district has been able to use other sources of revenue to pay what it owes. The decisive moment arrives each February, when CPS must deposit sufficient funds with “trustee” banks.

Does the deposit arrive on time and in full?

YES

NO

The trustee banks determine that the deposit is sufficient.

The trustee banks determine that the deposit is insufficient and direct CPS to increase taxes.

Bank

The school board approves a measure canceling the tax increase.

The school board does not approve a measure canceling the tax increase. The county clerk collects additional taxes and delivers them straight to the trustee banks.

Local government

Property owners do not have to pay more.

Property owners pay more. If CPS had not made last year’s debt payment, the owner of a $250,000 home would have had to pay up to $725 extra this year.