just before it goes completely black. Remember all of those estimates of difficulty the Chicago Public Schools will face in paying this year’s expenses let alone the new, improved, higher expenses called for in the new contract with the Chicago Teachers Union? In all likelihood it’s going to be even more difficult for the CPS to pay its bills than I thought. Moody’s has just lowered the rating on its bonds:
Sept 27 (Reuters) – The credit rating for the Chicago Board of Education was cut to A2 from A1 by Moody’s Investors Service on Thursday, which cited the “moderate” increase salaries for teachers under the new labor accord that has yet to be ratified.
The school system, the nation’s third largest, has not budgeted for those pay rises, Moody’s said.
The outlook on the debt – about $6.4 billion – remains negative.
Other factors cited in the downgrade include spending down its reserves, the overhang of unpaid pension fund installments, and the state’s fiscal problems which will probably decrease, delay, or both the state’s contribution to the CPS’s revenues, roughly a third of the total.
The article goes on to substantiate nearly everything I’ve been saying for some time, e.g. raising the property tax rate must be approved by the voters.