| inbluevt | Date: Thursday, 2013/07/18, 5:57 AM | Message # 1 | DMCA |
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Mounting pension liabilities havecost Chicago another cut in its credit standing as Moody’sInvestors Service reduced the general-obligation debt rating for the nation’s third-largest city by three steps to A3, citing a $36 billion retirement-fund deficit and “unrelenting public safety demands” on the budget.
Moody’s also placed the city’s $7.7 billion in general-obligation bonds under a negative outlook, indicating anothercut may be made. The moves follow a review that began in April, when the New York-based rating company said it was reevaluating the credit effects of municipal retirement obligations.
Public pensions nationwide are under significant stress following the longest recession since the depression and the financial crisis that punished asset values. The magnitude of the estimated deficit for all plans ranges from $900 billion to more than $4 trillion, depending on the assumptions used.
“Absent significant growth in the city’s operatingrevenues, escalating pension funding requirements will increasingly strain the city’s operating budget, as pension outlays compete with other spending priorities, including debt service and public safety,” Moody’s analysts said yesterday in the report. They also cited the political obstacles to meaningful retirement system reform at the state level.
Read on
 A girl sits on the glass balcony at the skydeck of the Willis Tower in Chicago
Message edited by inbluevt - Thursday, 2013/07/18, 6:00 AM |
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