Wall Street agency looks at CPS finances 'for a potential downgrade'

Moody's Investors Service said on Thursday that it may downgrade its already gloomy outlook for Chicago Public Schools finances because of the state's "ongoing failure" to help finance the district's operations.

The Wall Street ratings agency announcement that it would review some $5 billion worth of the district's junk-rated bonds "for possible downgrade" came on the same day state lawmakers overrode Republican Gov. Bruce Rauner's vetoes of an income tax increase and a budget plan.

But the vote doesn't end the debate over state education funding, and how it impacts money CPS needs to operate and avoid expensive bond rating downgrades.

The state budget doles K-12 education funds through a model that remains pending in the legislature. Democrats in the House and Senate have approved a bill to create that model but have not yet sent it to Rauner's desk. The governor has threatened to veto the legislation, describing it as a Chicago "bailout." CPS officials have said the measure would send the district $300 million.

Read more: http://www.chicagotribune.com/news/local/breaking/ct-moodys-chicago-schools-downgrade-review-met-20170706-story.html