Despite Illinois Failing to Meet Its Obligation to Social Service Providers Payments on Interest Rate Swaps Continue. State has lost over $600m, expects losses to approach $1 billion.
On Tuesday the ReFund America Project will be releasing a new report, Turned Around, examining how interest rate swaps are torpedoing state and local budgets at a time when Illinois can least afford it. Social service providers impacted by the Governor’s freeze on payments and program cuts will join with the report’s author, Saqib Bhatti, and elected officials to hold a press conference calling for legislative hearings investigating the damage done and pursuit of legal remedies. The continued payments toward bank profits on these predatory deals in the absence of an approved budget and the fact that the state has not taken legal action or sought negotiation to recover losses on these deals, as other interest rate swap holders in other states have done, is a scandal.
The Report release and press conference will be held TUESDAY, January 19th, 2016 11:30 a.m., at Chicago Temple, 2nd Floor, 77 W. Washington St, in Chicago.
Those to be in attendance are:
State Senator Daniel Biss, 9th Senate District
Saqib Bhatti, Director of the ReFund America Project & Fellow at the Roosevelt Institute
Amisha Patel, Executive Director Grassroots Collaborative
Ron Baiman, Assistant Professor of Economics, Chicago Political Economy Group
Evan Cauble-Johnson, Chief Development Officer, Inspiration Corporation
Marcos Ceniceros, Brighton Park Neighborhood Council
Illinois is in the middle of a major budget crisis. Currently Illinois is more than halfway through the fiscal year and Springfield has yet to pass a budget. In the absence of a budget, state payments for many essential services have been halted, significantly delayed, or faced dramatic cuts. This has had disastrous impact for the state’s social service infrastructure and working families across the state.
The report shows that at the same time the state was making deep cuts or eliminating vital services and programs like MAP grants, homeless services, and childcare assistance, profitable Wall Street banks like Bank of America, Loop Financial, Goldman Sachs, JPMorgan Chase, and Citigroup continued to be paid millions of dollars on predatory financial deals known as interest rate swaps.
The Progressive Reform Caucus of the Chicago City Council recently pushed back against these bad bank deals by forcing Mayor Emanuel to remove funding for $106 million in voluntary swap termination payments from a massive borrowing plan. The report outlines how elected officials can push back against these toxic deals at the state level and what more can be done to alleviate the City of Chicago and Chicago Public Schools’ interest rate swaps.
Grassroots Collaborative is Action Now, American Friends Service Committee – Great Lakes Region, Brighton Park Neighborhood Council, Chicago Coalition for the Homeless, Chicago Teachers Union, Enlace Chicago, Illinois Hunger Coalition, Jane Addams Senior Caucus, ONE Northside, Service Employees International Union Healthcare Illinois Indiana