Chiacgo Public Schools has been delivered another blow to their reputation. Their credit rating has been rated at junk. This is truly an issue meaning the school system will have even more difficulty getting financial backing to continue. EarHustle411 asks how does this issue get corrected? Our children are the futur and unfortunately the big wigs at CPS are not seeing that decisions being made there are affecting everyone, the teachers, the kids and the city.
With a a school system that is virtually bankrupt and in the toilet how does this city expect to keep people living here ? It’s so very sad that these issues were a longtime in the making but no one is being held accountable and those that suffer brunt of it are our teachers and the children. People caught up in the mess of the powers that be and nothing is being done …except cutbacks and devastation.
Read more as reported by the Chicago Sun-Times:
A third financial ratings agency lowered the credit rating for the Chicago Public Schools to “junk” status on Friday, dealing another blow to the cash-strapped city school system.
The move by Standard & Poor’s Ratings Service followed similarly grim statements issued recently by the other two major agencies, Fitch Ratings and Moody’s Investors Services.
After observing “the board’s decisions in constructing” a new budget for the coming fiscal year, Standard & Poor’s downgraded CPS’ long-term rating from “BBB” to “BB” with a negative outlook.
In a statement, Standard & Poor’s made references to the Chicago Board of Education’s perennial deficits, dwindling cash reserves and the vote last month to borrow as much $1.16 billion by selling bonds.
“The rating action reflects our view of the proposed fiscal 2016 budget, which includes what we view as the board’s continued structural imbalance and low liquidity with a reliance on external borrowing for cash flow needs,” said Standard & Poor’s credit analyst Jennifer Boyd.
The agency warned that it could further lower its rating of the school district’s debt within the next year.
Moody’s rated CPS debt at junk status in May, and Fitch announced it too had lowered the CPS credit rating to junk level on July 27.
Those actions suggest CPS will pay higher interest rates when the planned bond sales take place in the coming months.
“There is no question that Chicago Public Schools faces enormous financial challenges, and this report from S&P confirms the urgency of reaching a comprehensive budget solution with our partners in Springfield to prioritize education funding and finally end pension inequity,” CPS’ chief financial officer, Ginger Ostro, said Friday. “As our students in the classroom are making historic strides, it’s more important than ever for our leaders to work together to protect their gains.”
Source: Chicago Sun-Times