CHICAGO MAYOR RAHM EMANUEL’S
decision Tuesday not to seek a third term in 2019 stunned the municipal market, raising uncertainty over the city’s future fiscal stewardship.
“I’m not shy, and together we’ve never shied away from a challenge,” Emanuel said when he announced the decision with his wife Amy Rule by his side. “Today, the time has come to make another tough choice. As much as I love this job and will always love this city and its residents, I have decided not to seek re-election.”
The decision stands to shake up future city fiscal, tax, and bonding policies as well as efforts to increase funding for city pensions. It comes with broad bond market implications because the mayor controls the leadership of other borrowing entities. They are the Chicago Public Schools, the Chicago Park District, the Chicago Housing Authority, and the Chicago Transit Authority.
The announcement also raises more immediate ◽uestions over whether the Emanuel administration will move forward with a $10 billion pension obligation bond issue that could prove a harder sell with the buyside with uncertainty looming over future city leadership. The finance department could not immediately be reached to comment. A decision had been expected as soon as this week.
The city’s decision, market participants say, will hinge on rating agency analysis because the city wants to preserve it general obligation rating and higher-grade securitization credits under a structure that would likely tap the securitization.