Chicago's debt rating downgraded in lead-up to mayoral runoff
Chicago currently has $8.3 billion in bond debt.
By Thor Benson Contact the Author | Feb. 28, 2015 at 6:42 PM
CHICAGO, Feb. 28 (UPI) -- Moody's Investors Service has downgraded Chicago's debt rating to Baa2 from a Baa1, citing large pension burdens.
The rating mentions Chicago's $8.3 billion in bond debt, $542 million of sales tax revenue debt and $268 million of motor fuel tax revenue debt.
"Decades of pension underfunding, failure of the General Assembly to provide pension reform, and the city of Chicago's years of reliance on debt to fund operations have put the city in this financial position," Civic Federation President Laurence Msall told the Chicago Tribune.
Baa2 is only two steps above what is called "junk" status, and it shows the large burden on Chicago's economy leading up to a mayoral runoff on April 7. Jesus "Chuy" Garcia, who's running against sitting Mayor Rahm Emanuel, cited the downgrade as evidence Emanuel's financial policy is flawed.
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