Last week, Chicago got some bad news from Moody’s. On the heels of an Illinois Supreme Court decision that struck down a pension reform law, the ratings agency cut the city to junk status, triggering some $2.2 billion in accelerated payment rights for the city’s creditors and complicating Mayor Rahm Emanuel’s efforts to refinance nearly a billion in floating rate notes and borrow another $200 million to pay off the accompanying swaps.
The Moody’s downgrade in many ways punctuates what has been a rapid deterioration in state and local government finances across the country, a situation that’s forcing lawmakers to slash budgets and cut funding for a variety of state-funded programs.
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