CHICAGO (CBS) – The head of a budget watchdog group said a major of the Chicago’s credit rating on Thursday was no surprise, but is very troubling for residents.
WBBM Newsradio Political Editor Craig Dellimore reports Civic Federation President Laurence Msall called the triple downgrade of the city’s debt rating by Moody’s Investors Service is a “horrible bit of news for anyone who cares about city government.”
Msall said the move is “extraordinary,” and he blamed it on state lawmakers’ failure to approve pension reform.
“It is unfortunately the natural result of the legislature and the governor’s failure to address state pension reform, which could then be applied to the city pension funds,” Msall said.
He said the downgrade means, when the City needs to borrow money — which it does every day — it will cost a lot more for interest payments.
That means the city will have less money for day-to-day services, which will impact Chicago residents.
“The average citizen is likely to see this expressed in not having enough resources available, in terms of when phones are answered; not having enough resources for adding priority areas, whether it’s public safety or education,” Msall said.
He noted the mayor had warned about a credit downgrade as he pushed for pension reform in Springfield, and had taken steps on his own to improve the city’s pension debt, such as phasing out a 55 percent subsidy for retiree health care coverage by 2017. Thirty thousand retired city workers would be forced to switch to Obamacare under that plan.