Illinois Comptroller Susana Mendoza runs for Chicago mayor

Illinois State Comptroller's office

When Illinois Comptroller Susana Mendoza announced her candidacy for Chicago mayor last week, she had the same message for financial markets and everyday Chicagoans: The best way to help the people of Chicago is "to respect the taxpayer dollar and stretch its value."

Chicago hasn't done that under the administration of Mayor Brandon Johnson, Mendoza suggested, saying taxpayers "really need to understand that the worse our credit gets, the more expensive doing business in Chicago becomes."

Fitch Ratings and KBRA downgraded the city in February, and Chicago has seen some high-profile bond deals fall flat — as when Goldman Sachs had to take down $75 million of unsold Sales Tax Securitization Corp. bonds in November — or get pulled from the market at the last minute.

The Johnson administration has also had an increasingly contentious relationship with City Council, which passed an alternative 2026 budget over Johnson's head in December.

The mayoral election is in February, with an April runoff if no candidate gets a majority.

In an interview with The Bond Buyer, Mendoza, a Democrat, stressed her knowledge of city and state government — she was city clerk of Chicago from 2011 to 2016 and a state representative before that, and as comptroller has worked closely with Gov. JB Pritzker — and her fluency across languages and cultures. 

"I joke around that I'm multilingual: I speak English, I speak Spanish, and I'm fluent in credit rating agency speak," she said. "Because they don't speak straight up, but they're giving you smoke signals as to what you need to be doing to get on that path to earning credit upgrades — and even more importantly, what not to do so that you avoid getting downgraded."

Mendoza pointed to her work managing the state's finances through ten bond rating upgrades and said she looks forward to earning a similar string of upgrades for Chicago.

"I believe on day one the credit rating agencies will know that Chicago finally has an adult in the room who takes the city's credit standing very, very seriously, and who will put my unmatched financial management experience to work on behalf of the taxpayers of Chicago," she said.

Investors have had some cause for worry during the Johnson administration, said Howard Cure, partner and director of municipal bond research for Evercore Wealth Management. 

"I think some investors were concerned when the idea of delaying pension payments (came up)," Cure said. "The other area of concern was using debt issuance to pay for operating expenses, like the renegotiated firefighters' contract, rather than using recurring revenues. You're creating a liability for an operating expense, which is not good."

Chicago has also faced persistent criticism for using one-time revenues to balance its budget, including through record tax increment financing district sweeps. 

Investors will be watching Chicago's debt practices, Cure said. "You don't want to revert back to the scoop-and-toss type of debt structures, either."

Chicago needs to get its structurally imbalanced budget and elevated debt burden under control to right its financial ship, said Mohammed Murad, head of municipal credit research at PT Asset Management.

"Continued pressure on either of these areas could further reduce financial flexibility at a future time when it may be needed most," Murad said by email. "Investors generally distinguish between borrowing for long-term investments and borrowing to fund budget gaps, and the latter potentially tends to draw more attention." 

Mendoza said if elected, she'll be taking a close look at the city's spending and debt practices.

"What I need to do as mayor is curb the city's addiction to spending," she said. "I'm going to stop the hemorrhaging of our city's finances, like I did for the state, and we're going to find efficiencies everywhere we can. 

"I'm also going to take a strong look at all the bond authorizations that have been let out, do a deep dive into that, and be extremely transparent as to what the city's financial problems are," she said. She noted that some bond deals have come with backloaded structures — skipping payments for the first few years, paying interest only for over a decade. 

"I'm not afraid of the problem; I'm afraid of what I can't see. So, as long as I can see it, I can fix it," she added.

Murad stressed that Chicago has many credit strengths — primarily its diverse economy and corporate presence — and noted that "course-correcting during a period of economic stability is often more manageable." 

Investors will be watching Chicago for signals that would improve market confidence, he said, such as "the adoption of a long-term fiscal plan and demonstrated execution toward placing the city on a more sustainable financial trajectory."

Between now and the Feb. 23 mayoral election, investors will also be interested in candidates' plans around "quality of life issues" — what's happening in the economically struggling areas of the city and on Michigan Ave., or how to redevelop office space in the Loop — and the role of TIF districts in redevelopment, as well as their attitude toward business, Cure said.

"I think the city was hurt by having these unfunded mandates like the additional pension monies going to different groups, which the state put through," he added. 

Mendoza pointed to her experience getting legislation passed at the state level and said she'll work with City Council to find efficiencies, an area where some aldermen argue the Johnson administration has fallen short.

"Folks might forget, but as city clerk of Chicago, I was the only entity that actually cut my own budget when I came into that office, and I made a point of always returning money back to the taxpayers in every one of my yearly budgets," Mendoza said.

She said that under the Johnson administration, the city's costs of borrowing have risen while the administration has returned to City Council seeking millions more in bond authorizations. 

"We're paying Ferrari prices for not even a bicycle being delivered," she said.

The mayoral race is shaping up to be a crowded field; in addition to the incumbent, Cook County Treasurer Maria Pappas, Rep. Mike Quigley, businessman Joe Holberg and newcomer Liam Stanton have also announced, while businessman Willie Wilson and Secretary of State Alexi Giannoulias are reportedly considering running. 

But it's going to be a matter of getting out the vote, Cure said. And Mendoza's resume and roots in Chicago — she was born in the Little Village neighborhood and returned there after graduating college — may give her a leg up. 

As a Chicagoan, Mendoza had strong words for the Johnson administration after news broke that the board of directors of the NFL's Chicago Bears voted to prioritize a stadium in Hammond, Indiana.

"That it has come to this is yet another major failure from a mayoral administration that has chased business, jobs and revenue out of Chicago," Mendoza said in a statement. "City Hall didn't have a plan, and this is the result."

Mendoza said her pledge to investors is a straightforward one: if she's elected, fiscal responsibility is making a comeback. 

"We are never going to default on debt service, we're never going to skip a payment or be late on a payment," she said. "In fact, I changed the law in Illinois to allow me to pay pensions even faster."