* Illinois’ bad credit rating is now hurting Chicago’s rating. Moody’s just lowered the rating on the city’s motor fuel tax borrowing and assigned it a negative outlook…
“Debt service on the motor fuel tax bonds of the city of Chicago is secured by a senor lien pledge of a portion of the city’s allocation of state motor fuel tax revenues,” Moody’s said in a statement. “With legislative approval, the state has the authority to reduce pledged revenues by reducing . . . motor fuel tax revenues to the city.”
The “risk of non-appropriation” of the state money to Chicago exists as the state struggles to raise cash for its own needs, Moody’s added, implying that the risk that the state will keep the money rather than pass it along to Chicago actually is growing.
Moody’s also cited the state’s declining credit rating and reduced revenues from per-gallon state taxes on gasoline, which have dropped as the price of gas has risen. […]
“Assignment of the negative outlook (on the motor fuel debt) is in keeping with the negative outlook assigned to the state’s general obligation debt,” Moody’s concluded.