The city of Chicago borrowed $220 million for a police and fire pension payment due by the end of the year.
The city took out the loan with a 3 percent interest rate in order to have the pension funds ready by a state-mandated March 1 deadline, officials said Monday.
Chicago Mayor Rahm Emanuel's 2016 budget included a $588 million property tax hike for police and fire pensions and school construction. Still, the mayor's spending plan depends on the state for pension funding changes, which have cleared both legislative chambers but have not yet been sent to Republican Gov. Bruce Rauner. The governor has called for the Chicago pension to bill to be included "as part of a larger package of structural reform bills."
The pension funding changes would give the city more time to make its pension payments, cutting pension costs due this year by $219 million.
With the pension changes in place, the state could return the $220 million it borrowed from its $900 million short-term credit line.
In other pension-related news, the Illinois Supreme Court is expected to hand down a decision Thursday regarding Chicago's 2014 overhaul of its Municipal and Laborers pension funds.
Last July, a Cook County Judge deemed the city's pension overhaul unconstitutional. The city appealed the lower court ruling to the Illinois Supreme Court.
The Cook County judge's ruling against Chicago's pension measure was guided by a May decision from the Illinois Supreme Court involving a state pension reform law.
The state's high court struck down the state pension measure on the grounds that it violated the Illinois Constitution's pension clause, which states that contractual pension benefits cannot be reduced.