Bond Downgrade
- Moody's Investors Service has slashed Chicago's general obligation and sales tax ratings by three notches to A3 from Aa3 due to the city's large and growing pension liabilities and related budget troubles.
The move affects $8.2 billion of Chicago's general obligation and sales tax debt, Moody's said in a statement. It will make it more expensive for the city to borrow money, and Moody's said it may further downgrade the ratings if conditions don't improve.
"The current administration has made efforts to reduce costs and achieve operational efficiencies, but the magnitude of the city's pension obligations has precluded any meaningful financial improvements," Moody's said.
The credit rating agency added that its negative outlook is based on the "dramatic spike in annual pension payments scheduled to take effect in the 2015 budget year."
And the outlook continues to be negative, meaning the death-spiral of Chicago gets tighter and tighter as Rahm continues to spend money on nonsense to buy votes while neglecting the debts owed. But what does he care? He make almost $11 million in shady insider deals just for showing up to work, so his needs are taken care of forever. He even claims he saw this entire fiasco unfolding...because he's a financial whiz, you know:
- "This confirms what I have been saying for more than a year," Chicago Mayor Rahm Emanuel said in a statement. "Without comprehensive pension relief from Springfield, municipalities such as Chicago will continue to receive negative reviews from rating agencies."
"Since I became Mayor, I have used every tool available to tackle and reform government, strengthen our financial position, and invest in our City's future," he added. "The pension crisis that is nearing our doorstep puts all of those investments at risk."
Every tool except the ones that actually enable Chicago to fulfill its obligations. You know, like committing casino money to fill the hole or supporting the state law requiring the actuarial contributions to be made to bring the pensions up to solvency.
Labels: money questions
posted by SCC at 12:02 AM
39 Comments:
How about not pissing away money for stuipd bike lanes, boat houses, basketball venues, etc. Take the 1.4 BILLION (as of 2009, lastest posted) in TIF funds and pay down debt.
Anyone who gives credence to Rahm as a capable financial manager should ask where his personal millions have gone.
Think about it. He supposedly parlayed his Clinton days into $18 million during his private sector stint. Less than 10 years later he's only making ~$150,000 above his salary. That's less than 1% return.
Comprehensive pension relief means you pay more, work longer and get less.
Any questions ?
Someone should remind Rahm and Bill Daley that it was his predecessor and brother that created this mess by using the pension fund as his spending account.
I've said this before. If you are the type of person that uses the tax system as a form of forced savings so that you will get a tax refund at the end of the year. You're gonna get burned.
THEY HAVE NO MONEY!
Adjust your w-4 holdings accordingly. Talk to your accountant.
Don't let these people that are planning to rob city pensions hold your money so that you can get a tax refund at the end of the year. YOU'RE NUTZ if you do that.
Tuition reimbursement, healthcare expenses, benefit programs would all be at risk of being chopped just like that if the city files bankruptcy, right?
Oh and get ready for more economy pain too. There are at least 80,000 people in Illinois that just got on avg. a $50 a week cut in income beginning in July due to the Obama sequester.
These are people that were on unemployment and their benefits are being cut.
That's a pretty big chunk a change for someone living on that small pittance of unemployment to hold them over til the next job. It's also what...about $4 million dollars total A WEEK out of the economy being spent to support other businesses.
It will take a while to show up in the economic reports so keep in mind that it's coming. Add it to the next round of teacher layoffs.
So by the way. Anyone know how to get Madigan to call our boss and demand a raise for us for absolutely no reason at all? I"d like a raise to.
Ok. I gotta ask. How are we in debt for salestax??? Is that like collecting for a little extra for the guy upstairs, but not paying him? Like not paying the tribute to the head of a crooked organization? Maybe the leg-breakers from Illinois will come for that little bastard mayor!
Hahaha.
How bad is it really?
Well are these not the same rating agencies that told people that invested in those bundled mortgage investments that the bundled mortgages were rated triple A safe?
We all know how that turned out.
The top 1% is selling off assets and the transfer of wealth continues with the money going into off shore investments.
When push comes to shove these same people will ride off into the sunset. In Rahm's case he will prolly return to his Israel homeland where a dirty bad of laundry sits in someones basement to prove that he's still a resident there.
Left behind will be a smoldering crater like Detroit stripped of it's wealth.
Look what happens in any Banana republic. The last thing that gets raided is the treasury and then the leaders leave town.
/sarcasm??
The stability of the city is sliding down. This is a time to cut back on ALL frivolous projects.
Time to cut back some of the patronage jobs.
I love writing citations on anyone whom I believe voted for Obama.
I believe the vast bulk of these individuals are tax eaters and any penny that can be squeezed out of them should go for the general welfare.
Yea keeping feeding the ghetto rats so hard working people get screwed out of a pension they took a job and worked for. ASSHOLES!!
Why hasn't one single media outlet laid the blame for the pension fiasco at the feet of the man mainly responsible for it?
Shortshanks.
We contributed our share. The city has not made the proper payments into the pension fund for the past 25 years or so.
But there's plenty of money for insider contracts for wrought iron fences and flower boxes that obstruct drivers' view. And now there's money for a stadium for DePaul.
Now we're paying $67M for speed cameras to the children? How many children are actually hit by cars every year? 20? 30? How long until the city sees a return on that investment? Because those cameras are there to generate revenue, not protect the children. I'm guessing never.
A 55 million TIF tax dollar gift to DePaul, a private and wealthy institution, for a basketball arena and the Mayors view is pensions are the problem.
You mean the $19k the average police widow receives annually is bankrupting the City?
The Mayors of NYC and LA are able to manage their police and fire pension obligations without any rating downgrades and yet their pensions and retiree health care benefits are higher than Chicago's.
It is not the modest middle class police and fire pensions that created the problem rather it is continuing fiscal mismanagement and skewed priorities.
But hey, lets GIVE DePaul University 300 Million for a stadium.
It is this kind of spending that will wind Chicago up like Detroit!
Chicago will be joining Detroit soon in bankruptcy court. If Rahm really wants to fix things all he has to do is cut spending and lower taxes, it seems to be working in every red state.
Let's get that Legacy Park up in the memory of a woman who was part of a crime family, never holding any elected office; before we run out of money. Meanwhile in addition to closing more schools than any other City in U.S. history, we are announcing laying off another 2,100 employees over firing of hundreds of others. But we really need that park. Maybe Retired City employees who will have no pension can set up camp in that park.Baby"G".
It costs the city $50k per shooting. Times that by 3000 shootings.
$150,000,000 for shootings +
$ 50,000,000 for VRI police overtime
I propose seizing money and assets from the gangster disciples and vice lords to help cover the expenses.
-Garry M
This started with the 1967 riots... white folks left in droves. Go to Detroit today.. still miles of homes burned out that were not destroyed..."urban farms" being built to use the land....and 50+ yrs of a corrupt system that lined its own pockets....
You're such a raincloud, SCC! Look at the bright side...
1) The VDI has been in full swing for quite a few months now. Cops have been on this site bragging about how much they've earned working it, even though it's obvious that a lot of them haven't actually performed much work while assigned to the VDI.
2) The city has only spent about $25 mil on OT, almost depleting the entireOT budget for the CPD by July of this year. We can slam the dems here with impunity, only let's not do it too loudly while so many anti-dem officers milk the system, right?
To 7/19/2013 01:58:00 AM
That 1% you type about all the time are raging liberal democrats, dare I say socialists. Sounds like some occupy people are still trolling this board
Welcome to Illinois, the new Detroit
Why would the mayor accept a $100 million loan from the G for the river walk? He couldn't care less about the city's dire financial straits. He's either incompetent or a thief.
But hey, at least we found the money for really important stuff like $1MIL for Ceasefire and $55MIL for Maggie Daley Park, right?
Can't blame the Republicans for this whole fiasco; there aren't any!
Excuse me mayor! Charity begins at home? How many bodyguards do you,your wife, you kids have? How much do they make? All over $120,000 per year at sergeants rate which when they retire draws more from the pension fund, for a valet job! How many gas eating those do you have? Why does Cpd have so many bloated exempts? Do we need these big wasted salaries who also draw a huge undeserved pension? Lets make. Pd pensions payout no higher than last civil rank, for instance no more than a lieutenants pay rate for pension purposes! Come on mr mayor do as you say not as you do?
After the auto manufacturers moved most of their manufacturing elsewhere, government became the largest employer in Detroit. Government does not produce anything - not wealth, not productivity - all it does is feed on itself until the money runs out.
Cops, firefighters and teachers are the three largest unions in the city. Instead of working to change things, they continued to pull the levers for Democrats in every election.
Now, with bankruptcy filed, the city can stop pension payments to retirees, void all contracts, fire cops, FF's, techers and reduce everyone else's wages.
Think it won't happen here? Who is the largest employer in Cook County? The government! So, to all you idiots who keep voting Democrat, remember this: your days are numbered, and you have no one to blame but yourselves!
Pension obligations. Just wait to see all the articles how that is the police's fault, like we have been seeing for years.
...and yet there's money for a complete "Maggie's" park overhaul, new riverwalk, new stadium, etc, etc, ad NAUSEUM.
Get your life vest on, because we are circling the drain in Shitcago and TinyD's got both hands on the flusher!
Rahm's voters have proven themselves too expensive.
Does anyone know who is running for office this election that is a conservative supporting PO's?
There better be 100 guys lining up for signatures without FOP support.
We've hit the trifecta!
President Downgrade
Governor Downgrade
Mayor Downgrade
And what do we win?
More corruption!
More taxes!
More gun laws (not sure why, but it fits)!
Abandon fucking ship!!!
Chiraq is well on it's way to becoming another failed Democrat-created nightmare like Detroit.
It'll just take more time due to the financial markets here that MoTown never had.
only the superintendent should receive a gold braid pension and that should be based on average salary for the last 10 years
lts and captains will command districts and areas for straight days and week ends off
it's a bunch of bs paying the incompetent exempts , most never passed the sgt or lt test
it's all on the square kid
Pension obligations. Just wait to see all the articles how that is the police's fault, like we have been seeing for years
Never happen. Everyone is writing commentaries on the fact that the politicians underfunding the pensions is the problem. No one is blaming the police, the problem is they admit the politicians screwed up, but they arent being held responsible and Rahm is saying lets move on, we cant correct the past mistakes,
Why hasn't one single media outlet laid the blame for the pension fiasco at the feet of the man mainly responsible for it?
All the newspapers and media outlets are blaming the politicians for underfunding the pension.
But they are saying that was in the past and there is no money to correct, so we have to move on. total bs , but we are the ones who will get screwed
Realistically, what can they do to him. Have him write out a billion dollar check. We are screwed, the media knows whos fault it is but has no solution
Chitroit
Can the mayor spin or what?
We don't need 50 aldermen, Rahm....you PUTZ!
ah yes. il policy inst.
sez we are just a fours steps away from junk bond rating.
well, we have seen a city go bankrupt(detroit)
now we have a "ringside" seat to see between the potatohead and tiny dancer which goes first the city or the state go "belly up"
O/T btw what happens to the detroit police dept? does the county and the state take over do they still keep working?
but the p.o.s. can find 5 million to spend on a park to honor maggie daley.
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