CHICAGO (CBS/AP) — Moody’s Investors Service has downgraded Chicago’s credit rating, citing the city’s unfunded pension liabilities.
The agency announced Tuesday it’s lowering the rating on $8.3 billion in debt from A3 to Baa1, putting it only three notches above junk-bond status.READ MORE: Shuttered By Pandemic Last Summer, Guthrie's Tavern In Wrigleyville Has New Owner And Will Be Reopening
Moody’s gave Chicago a negative outlook indicating another downgrade could occur if there’s no pension fix. Moody’s says the rating “reflects the city’s massive and growing unfunded pension liabilities.”
Moody’s says those liabilities “threaten the city’s fiscal solvency” unless major revenue and other budgetary adjustments are adopted soon and are sustained for years to come.READ MORE: Morgan Park Neighbors Say Woman Put Poison-Laced Hot Dogs On Lawn For Dogs To Eat; Alderman Says It's Not Legal, Even On Private Property
The lower rating means the city will have to pay high interest rates.
Moody’s says a commitment to increasing tax revenue is one thing that could raise the rating. Chicago now has the worst credit rating of any major city except Detroit.MORE NEWS: Chicago Heights Couple's SUV Was Stolen In Less Than A Minute With No Key Needed; Worry Mounts About Ease Of Theft For Dodge SRT Vehicles
(TM and © Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)