June 7 Moody's Investors Service on Friday
downgraded the City of Chicago's (IL) motor fuel tax debt to
Baa1 from A3. The outlook remains negative.
About $271 million of rated motor fuel tax debt is affected.
Moody's which on Thursday cut the rating on the State of
Illinois to A3 said that the state's ongoing budget problems
"enhance the risk that motor fuel tax revenues could be diverted
for other state purposes."
"With legislative approval, the state has the authority to
reduce pledged revenues by reducing motor fuel tax rates,
increasing appropriations for various state purposes from gross
motor fuel tax revenues, or reducing the allocation of remaining
motor fuel tax revenues to municipalities," the agency said.
It also explained that the rating on Chicago's motor fuel
tax "s capped at a rating level below the state's general