Ralph Martire, director of the Center for Tax and Budget Accountability, said the latest downgrade to junk bond status will cost the city an additional $200 million to $300 million, on top of its existing budget deficit and employee pension fund shortfalls.
With the city’s bond rating just a couple levels above junk status, Mayor Emanuel told the Civic Federation he is ending or phasing out some of the city’s more questionable borrowing practices.
Standard & Poor’s cited Chicago’s $19.4 billion pension crisis, the city’s mountain of debt, and its historic “reluctance to adjust taxes” despite its sweeping home-rule powers and diverse economy.
Chicago’s 30,000 retired city employees are trying to stop Mayor Rahm Emanuel from phasing out the city’s 55 percent subsidy for retiree health care and foisting Obamacare on them.
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.
Gov. Pat Quinn has called for a special session of the Illinois General Assembly in two weeks, after the state’s credit rating was downgraded again over lawmakers’ failure to approve comprehensive pension reforms.
Illinois Attorney General Lisa Madigan has joined the federal government and 13 other attorneys general in suing for changes in the way Standard & Poor’s rates mortgage bonds.
Standard & Poor’s said Friday that the rating on the state’s general obligation bonds was downgraded to A- from A.
Gov. Pat Quinn says, when state lawmakers go back to Springfield for their final session before the new legislature takes over, addressing the pension mess has to be their top priority.
One of the nation’s bond rating agencies is out with another warning about the Chicago Public Schools system’s financial future.
Illinois Comptroller Judy Baar Topinka says people should be very fearful about the downgrading of the state’s bond rating by Standard & Poor’s.
Mayor Rahm Emanuel’s administration on Friday took its second hit in one week from a Wall Street rating agency when Moody’s Investors Service dropped the bond rating on billions of dollars in O’Hare Airport bonds about to go to market.
On the same day Moody’s Investors Service downgraded the Chicago Public Schools’ bond rating, the Chicago Teachers Union slammed the district’s plan to raid its reserve funds to balance the budget as a stunt designed to turn the public against teachers.
Gov. Pat Quinn and the state’s four legislative leaders remained split on how to fix the state’s severely underfunded public pension systems, though the governor did signal a shift in philosophy regarding teacher pensions.
Moody’s lowered Illinois’ rating Friday by another notch, to A2. No other state has such a low rating from Moody’s.
A published report indicates that the O’Hare expansion project might be hurting the city’s financial standing.