Moody’s Investor’s Service on Tuesday dropped Chicago’s bond rating two more notches — to junk status — turning up the heat on Mayor Rahm Emanuel to raise property taxes and on the Illinois General Assembly to approve a Chicago casino.
“It is irresponsible to play politics with Chicago’s financial future by pushing the city to increase taxes on residents without [pension] reform,” Emanuel was quoted as saying in an emailed statement.
The decision to drop the bond rating that determines city borrowing costs — from Baa2 to Ba1 with a negative outlook — comes just days after the state Supreme Court unanimously overturned state pension reforms and placed Emanuel’s plan to save two of four city employee pension funds in similar jeopardy.
The rating applies to $8.1 billion in general-obligation debt, $542 million in outstanding sales tax revenue debt and $268 million in outstanding and authorized motor fuel tax revenue.