The major credit rating agencies’ decisions to downgrade the City of Chicago, Chicago Public Schools, and the Chicago Park District have put Chicago’s financial problems under the microscope. These downgrades are baseless because none of Chicago’s governmental units are actually in any danger of defaulting on their debt. Instead, the downgrades appear to be driven by a desire to advance an austerity agenda in Chicago and to slash government workers’ pensions.


Much of the public discourse has already moved in this direction, focusing on the need to fix the budget by enacting painful cuts. This is wrongheaded because the problem in Chicago is not that the city is spending too much money on community services. As Our Kind of Town: A Financial Plan That Puts Chicago’s Communities First by Saqib Bhatti and Carrie Sloan argues, the real problem is that there is not enough revenue coming in from the city’s wealthiest residents and its largest, most profitable corporations. The one area in which the city’s governmental units are spending too much is on their financial deals. The City of Chicago and Chicago Public Schools are trapped in a host of predatory municipal finance deals that cost taxpayers tens of millions of dollars every year. Instead of cutting services for residents, the city should look to reduce its financial expenses.

Balancing the budget on the backs of Chicago’s working families will only exacerbate economic inequality in the city and compound the pain felt by communities that are already struggling to get by. The people of Chicago need a new financial plan that puts communities first.