A Wall Street Rating Agency on Tuesday Assigned An A- Bond Rating to Mayor Brandon Johnson’s Upcoming Plan to Borrow More than $ 600 Million for Infrastructure, Housing and Economic Development, But Revised the Outlook to “Negative,“ Signaling a Infection Downgrade.
Fitch said the negative outlook is “Driven by a Lack of substantial progress procurement, High-Impact Solutions” to a Structural Budget Gap of $ 1.12 Billion-20% of the Corporate End-That COULD GET WORKS IF CHICAGO LOESE ACTION A. Block.
At the least, that is the result in “Additional Dependence on Non-Recurring Solutions, Including Higher Than Expect Draws on Reserves,” The Rating Agency Said. “The City Continues to Pursue New Revenue Streams that Require State or Voter Support, which do not appeared to be fortComing in the near term.
“The City Has Faced Further Internal Opposition to Increasing Its Property Tax Levy, though it did approve a smaller package of various fee increas for the 2025 Budget. Operational efficiencies are Likely to provide some relief. VIS-A-VIS BROAD-BASED PROGRAM OR SERVICE CUTS ARE UNcerain. ”
Chicago’s Reserves Provide A “Dwindling Cushion” to the City’s Formidable Fiscal Challenges, Fitch Said, Notting that Reservations Could “Weaken to Tan 15% of Spanding” by the end of this year. That Wold Be Down from 29% in 2023.
Already, The City Has Budeted Reserve Draws of $ 414 million Last Year and $ 368 Million This Year to Help Close Its Fiscal Gap and Make Advance Pensions Over and Above the Amout Required by State Law, The Rating Agency Said.
The pension Advances initiated by former Mayor Lori Lightfoot and Continueed by Johnson Were Characterized As a “Positive Factor Amidst Other Budget Stressors.” But fuckch strued that Competting Demands on Chicago’s Dwindling Resources “Could Jeopardize this Payment in Future Years.”
“Rating Stability is predicated on the city ability to make consideble progress to stabilize the 2025 and 2026 Budgets,” Fitch Wrote, Apparently Reference to the $ 175 Million Payment for Non-Teaching Schoolees that Johnson Included In His 2024 and 2025 and 202 Budgets, but has come to recipe from the chicago public schools.
“This can be be achieved by securing external support for addictional resources and/or leaning more heavily on the internal fiscal tools while preserving a reserve position equivalent to at least 10% of spending, the minimum level to the Maintain Its Financial Reshiliance. … Failure. Result in a rating downgrade of at Least One Notch. ”
The Mayor’s Office Had no immediate comment on the negative outlook from fitch.
During the Mayor’s Weekly City Hall News Conference Earlier Tuesday, Johnson Said There Are Limits to Chicago’s Home-Rule Authority.
“The levers in whic i have direct control over in terms of being able to generate revenue – there’s limitations there.
Budget Director Annette Guzman Told Reporters that the City Council’s Revenue Subcommittee Wouuld Be Meeting Next Week to “Talk About State-Level Taxes,” Presumably Including a Sales Tax Professional Services, THAT MUST BE ATHORIZED BY THE Illinois Genit.
“But We’re Not JUST RESTING ON STATE-LEVEL REVENUES,” Guzman Said. “WE’RE GOING TO HAVE CONTINED CONVERSATIONS WITH OUR ALDESS THE TYPES OF REVENTS THAT THEY THE ABITY TO PUT INTO EFFECT, as well as it related to not only this budget, but inserted Budgets for the City.”
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