CRAIN’S CHICAGO BUSINESS / Greg Hinz
While most of City Hall is trying to figure out how much to raise taxes and fees, Treasurer Kurt Summers says he has found a way to boost the city’s income by $30 million to $40 million a year.
And he says there is “no risk” to his plan, though some may disagree.
At issue is where the city parks its working cash and whether it ought to be invested in 30- to 90-day accounts that pay almost nothing or in one- or two-year securities that pay a few percent or so.
In recent years the city has had as much as $3 billion—cash from tax collections, O’Hare International Airport landing fees, tax-increment financing and other accounts—”siloed” in short-term instruments when, reasonably, it needs no more than $1.5 billion for short-term needs, Summers said.
“It’s the equivalent of sticking big money or cash under your mattress or in a piggy bank,” he said. To let that continue would be “irresponsible.”
So as part of his proposed budget before the City Council, Summers wants to shift much of that to longer-term, better-paying paper. Right now, Chicago has four months of cash on hand when most cities have just 45 days’ worth, his office says.
Summers said that even though the money would go into longer-term accounts, such assets can easily be converted to cash and are of no concern, even with Chicago’s other budget woes.
“There is no risk,” he said. “These are all liquid investments.”
Only about half of the new income would be available for the city’s corporate, or operating, fund. The other returns would go to various special-purpose funds.