Chicago proposes $481 million bond to pay police misconduct bills

The City of Chicago faces a $481 million debt for police misconduct cases, a sum the administration plans to spread over five to seven years. This borrowing strategy emerged during the first of a series of budget hearings held at City Hall on Monday.

Mayor Brandon Johnson’s proposed $17.6 billion budget relies on the sale of bonds to cover these legal costs. The Department of Finance estimates an interest rate of 6.923% for the first $350 million in bonds, which are expected to be issued in 2027. At that rate, interest would add more than $139 million to the total cost, requiring annual payments of about $98 million.

The Johnson administration argues that settling these cases now will save the city between $300 million and $400 million compared with continuing to litigate them. Aldermen questioned the financial team on how much the borrowing could ultimately cost taxpayers, noting that the final interest rate will not be set until the bonds are actually sold.

A proposed corporate head tax also drew scrutiny during the Monday hearing. Before the budget proposal was unveiled, 29 aldermen signed a letter opposing the tax on businesses. Ald. Brendan Reilly stated on Monday that this opposition has not diminished. Some aldermen contend the tax could cost Chicago jobs and drive businesses out of the city, though a 2025 WBEZ analysis found little historical or data-driven evidence to support that claim.

The mayor needs at least 26 votes from the 50-member City Council to approve the budget. The hearings will continue as aldermen review the financial details of the plan.