Reuters reports that the ongoing troubles with the City of Chicago's mounting pension liabilities have led the Moody's rating agency to drop the city's status to "negative."
On Thursday, the credit rating company announced the revision in the city's Aa3 general obligation rating, which had previously been "stable."
"Chicago's administration has yet to unveil a detailed strategy for improving pension funding levels and is not currently contributing the full annual required contributions," the agency said, in a statement. "Should pension pressures continue to escalate absent a specific plan of reform, the city's credit quality will likely weaken."
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At present, the unfunded liability for pensions covering police, firefighters and other municipal workers is expected to reach $19.2 billion by the end of this year, up from $14.6 billion at the end of 2009.
Chicago's CFO, Lois Scott, said Mayor Rahm Emanuel is working to create more long-term financial security for the city, but suggested that state lawmakers need to play a role in fixing the pension issue.
"The cost of continued inaction will lead to further burden on taxpayers who have done nothing wrong and have been asked to sacrifice so much already," she said, in a statement.
Gov. Pat Quinn has put forward a controversial plan to help ease the state's growing $83 billion unfunded liability.
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