Pension Crisis Lowers City's Fiscal Outlook Again
By aaroncynic in News on Jul 18, 2013 8:40PM
Yesterday, Moody’s Investors Services lowered Chicago’s general obligation and sales tax ratings, Crain’s Chicago reports. The credit rating agency dropped the City’s score from A3 to Aa3, citing the pension crisis and sales tax debt for the downgrade. In addition, Moody’s gave Chicago’s credit a negative outlook based on an increase in pension payments, saying they would “place material strain on the city's operating budget.”
In a statement, Moody’s called on the Illinois General Assembly to enact legislation regarding pension reform that would “withstand inevitable litigation” to alleviate costs. The state however, is mired in its own fiscal troubles, as Moody’s and two other credit agencies downgraded Illinois’ credit score last month over pensions. Mayor Rahm Emanuel echoed the concerns of Moody’s downgrade, saying in a statement:
Without comprehensive pension relief from Springfield, municipalities such as Chicago will continue to receive negative reviews from rating agencies. Since I became Mayor, I have used every tool available to tackle and reform government, strengthen our financial position, and invest in our City's future. The pension crisis that is nearing our doorstep puts all of those investments at risk.