[media-credit id=7 align=”alignright” width=”150″][/media-credit]As WBBM Newsradio’s Bob Conway reports, Moody’s Investors Service has downgraded Chicago’s school system’s debt status, warning that the Chicago School Board, because of various provisions of the new teachers’ contract, will be hard-pressed to make the budget adjustments needed to close an estimated $1 billion gap for fiscal 2014.
Moody’s says the downgrade from A1 to A2 reflects a weakened financial picture brought about not only by the contract, but also by a depletion of financial reserves, a future increase in pension payments and the slow pace of state aid. And Moody’s warns further rating downgrades would be likely unless the problems are addressed.
This is the second time Moody’s has downgraded the CPS’ bond rating in the past three months.
This downgrade was brought to you by the teacher’s union.