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Chicago’s credit rating took a hit on Tuesday as S&P Global Ratings downgraded the city’s general obligation bond rating from ‘BBB+’ to ‘BBB.’ The adjustment, which resolved the negative credit watch placed on the city earlier this year, comes with a stable outlook. However, city officials argue the rating fails to reflect Chicago’s robust economic fundamentals and its ability to meet financial obligations.
Despite the downgrade, Mayor Brandon Johnson and other leaders emphasized the city’s economic resilience, pointing to steady growth and transformative development projects as evidence of its fiscal health. According to World Business Chicago, 2024 saw 118 pro-Chicago business decisions, including 57 within the city limits—10 of which were on the historically underserved South and West Sides.
“Chicago’s economic strength is undeniable,” said Johnson. “The S&P report focuses on the fiscal challenges we face, but it does not accurately reflect our fundamental economic strength or the steps we’ve taken to address legacy issues. We will continue working collaboratively to achieve structural balance and strengthen Chicago’s financial future.”
Growth Amid Challenges
Chicago’s economic output, which surpasses that of many countries, is supported by a growing labor force. Between October and November 2024, the regional labor force expanded by over 10,000 workers to 5.06 million, marking the largest labor force in the last decade.
Major infrastructure and development projects further underscore the city’s economic momentum. These initiatives include the Illinois Quantum and Microelectronics Park, backed by the Department of Defense; the redevelopment of O’Hare International Airport through the Terminal Area Plan; and the Obama Presidential Center. Additionally, the $2 billion federally funded expansion of the Chicago Transit Authority’s Red Line is expected to improve transit and unlock economic opportunities for South Side residents.
The Johnson administration also highlighted fiscal measures aimed at tackling the city’s long-standing financial issues, including pensions. Notably, Chicago maintained a $272 million advance pension payment during the 2025 budget negotiations—a decision praised by S&P as essential to maintaining fiscal stability and avoiding further deterioration in pension funding levels.
Officials Push Back on Rating
City officials, including Chief Financial Officer Jill Jaworski, expressed disappointment with S&P’s rating, arguing it doesn’t fully consider recent progress.
“We do not agree with this adjustment,” said Jaworski. “Our administration has taken deliberate steps to stabilize pension funding, maintain strong liquidity, and implement structural reforms. Chicago’s vibrant economy and our commitment to fiscal responsibility will guide us through these challenges.”
In a statement, Mayor Johnson reiterated his administration’s commitment to creating sustainable fiscal policies through transparency, collaboration, and innovation.
“Chicago has always faced challenges head-on,” Johnson said. “We will continue to engage with all stakeholders to ensure progress and accountability for our financial future.”