On May 12 and 13, Chicago received a series of downgrades in its credit ratings for the city itself, the Chicago Board of Education (CBE), and the Chicago Park District. The downgrades began Moody’s Investors Service’s (MIS) decision to lower Chicago’s credit rating two notches to the noninvestment-grade “Ba1” level with a negative outlook. The embarrassment continued the next day when the CBE and Chicago Park District ratings dropped three notches to junk levels.
Unless local and state governments act now, a tsunami of underfunded public pension plan obligations will soon rush ashore and drown taxpayers with tax hikes and crippling debt.
In recent weeks, Illinois legislators have considered several major pension reform proposals. Several pieces of legislation were considered by legislators that attempted to take some positive steps towards controlling costs…