City Of Chicago Responds To S&P Credit Rating Adjustment
Proactive Measures and Economic Resilience Drive City’s Commitment
CHICAGO—Today, S&P Global Ratings announced the downgrade of Chicago’s general obligation bond rating from 'BBB+' to 'BBB.' This rating action resolved the negative credit watch the agency had assigned to the City and their outlook is now stable. Despite the public budget negotiations over the last couple of months, the City’s credit fundamentals have not changed, and the rating does not accurately reflect the strength of the City’s credit or ability to meet its debt and pension obligations.
Chicagoland’s economic output is larger than most countries, the region has seen steady economic growth for decades, and the local economy continues to grow. Chicagoland’s labor force also increased from 5,052,596 to 5,062,661 (+10,065) between October 2024 and November 2024. This is the region’s largest labor force in at least the last 10 years.
The economic strength of Chicago is showcased by several transformative development projects, including the Illinois Quantum and Microelectronics Park on the City's south side, anchored by PsiQuantum and supported by the Department of Defense; the expansion and redevelopment of O'Hare International Airport through the Terminal Area Plan; the 1901 Project and the revitalization of the area surrounding the United Center; the Obama Presidential Center, and the expansion of the Chicago Transit Authority's Red Line Extension Project, which recently secured nearly $2 billion in federal funding. This extension will unlock significant economic opportunities and provide improved transit times for south side residents.
According to World Business Chicago, 2024 saw 118 pro-Chicago decisions, including 57 in the City (including 10 on the south and west sides) and 61 in the suburbs. These projects highlight Chicago's commitment to economic growth, job creation and global competitiveness.
“The S&P report focuses on the fiscal challenges we face, but it does not accurately reflect our fundamental economic strength and the steps we’ve taken to address legacy issues. My administration remains committed to working collaboratively with the City Council to achieve structural balance and strengthen Chicago’s financial future,” Mayor Brandon Johnson said. “We will meet these challenges head-on, just as Chicago has always done and we will engage with all stakeholders to create sustainable policies that reflect our shared commitment to progress and accountability."
Despite the challenges outlined in S&P’s report, the City’s stable outlook reflects its reserves, proactive pension-advance policy and resilient local economy. The report commended the City for its consistent and responsible approach to addressing fiscal pressures. Notably, S&P praised the City’s decision to uphold its $272 million advance pension payment during the 2025 budget negotiations, describing it as “essential for fiscal stability, as it prevents further deterioration in pension funding levels, reducing the risk of even greater long-term budgetary challenges.”
"The City of Chicago is firmly focused on delivering sustainable solutions to our structural fiscal challenges and we have a track record to prove it. We do not agree with this rating adjustment, as it does not accurately reflect the strength of the City’s credit. We have taken deliberate steps in recent years to stabilize pension funding and maintain strong liquidity. Moving forward, our administration will continue to prioritize structural reforms and collaborative solutions that ensure Chicago’s financial resilience,” Chief Financial Officer Jill Jaworski said. “We are confident that our City's vibrant economy and our commitment to fiscal responsibility will guide us through these challenges."
The Johnson Administration is fully committed to fostering transparency, collaboration and innovative solutions to strengthen Chicago’s financial foundation and ensure a sustainable fiscal future.
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