Public pension problems are behind Fitch Ratings' downgrade of the credit worthiness of Chicago's bond debt.
The rating on $8 billion in general obligation bonds backed by property taxes was dropped from AA- to A-. The rating on $497 million in sales tax bonds, which are paid for by local sales tax and Chicago's share of state sales tax, was also dropped. Two-hundred-million dollars in commercial paper notes, paid for by a general obligation pledge from any available city fund, saw a downgrade as well.
Chicago's pension programs for city and fire employees have no more than 30 percent of the funds needed to cover obligations.
The rating downgrade will make it more expensive for the city to borrow money.
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