Mayoral candidate Jesus “Chuy” Garcia said Mayor Rahm Emanuel’s decision to fund a pre-kindergarten program through high-interest bonds is flawed.
He made the comments at a news conference at a South Side day care facility. The location was chosen to highlight what Garcia said are problems with the funding of an Emanuel administration program that uses “social impact bonds” purchased by private investors to pay for a pre-kindergarten program.
The bonds carry a high rate of interest that sparked concern when the measure was approved by the City Council late last year.
“The initiative . . . is costly, and the promise that it makes to make pre-K accessible to the parents of Chicago hasn’t materialized,” Garcia said.
Emanuel fired back by accusing Garcia of being a Johnny-come-lately to the issue of early childhood education.
“We’re five days before the election. It’s the first time he’s ever said anything about early childhood education. We’ve had six debates,” the mayor said, after joining leaders of Chicago’s technology community at Michele Clark H.S., 5101 W. Harrison, to announce plans to hire nearly 1,000 employees by Dec. 31.
There’s a “difference between being mayor and making progress and doing the tough things necessary and just protesting. It requires leadership. For those who’ve been around politics for 30 years who were silent, they’re complicit by being complacent. His schools — four of them in Little Village — used to have half-day kindergarten. Not as an alderman, not as a state senator did he ever introduce an amendment to change that. We got the job done. That’s the difference.”
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The $17 million used on the program came from private investors, with Goldman Sachs Social Impact Fund and Northern Trust as senior lenders. Subordinate lenders are the J.B. and M.K. Pritzker Family Foundation. The annual interest rate of 6.3 percent will allow lenders to more than double their $17 million investment over an 18-year period.
“We need to reclaim the money from the bad deals that have been engaged in by this administration, including the social impact bonds, the toxic swaps the fees and the use of TIF for projects that don’t need it, that are simply there because of well-connected relationships to the mayor,” Garcia said.
Garcia’s “pay-to-play” allegations about the so-called “social impact bonds” that Emanuel used to bankroll the early childhood expansion were raised by the City Council’s Progressive Caucus on the day aldermen approved the mayor’s plan.
Emanuel had an answer for that, too.
“We raised the standards, expanded the accessibility. In four years, we changed 20 years of bad politics in the city of Chicago. Five cities are now trying this as an innovation to get there. Under his model, we wouldn’t have universal pre-K. We’d be back to half-day kindergarten. You can protest or you can make progress,” the mayor said.