Despite already having among the lowest bond ratings of the nation’s major cities, Moody’s Investors Service downgraded Chicago’s bond rating even lower to Baa2—”two notches above ‘junk’ status’,” according to the Chicago Tribune, which summarized the context of the bond rating in a Feb. 27, report:

“The city has $8.3 billion in taxpayer-backed bond debt, thanks in part to its expensive habits of putting off principal payments and using debt to close budget gaps.

“Chicago’s four pension funds have about $20 billion in unfunded debt. Without further action by the state, Chicago will have to increase its payments to those retirement accounts by $600 million next year and even more after that. Recent efforts to manage those ballooning obligations by changing two of the funds are tied up in court battles.

“Decades of pension underfunding, failure of the General Assembly to provide pension reform, and the city of Chicago’s years of reliance on debt to fund operations have put the city in this financial position,” said Civic Federation President Laurence Msall.

“It is difficult to see how the next administration will be able to maintain the level of pension funding required under state law, as well as its rising debt payments, without significant new revenue or dramatic reductions in city services.”