CHICAGO – Chicago’s motor fuel tax credit took its second ratings hit in a week with Moody’s Investors Service dropping its rating one level to Baa1 citing exposure to Illinois, which has been hit with downgrades over pension inaction.

Moody’s also left a negative outlook on the rating for $271 million of revenue bonds.  The bonds are primarily secured by the city’s share of motor fuel taxes which are distributed based on a state mandated formula and distribution is subject to appropriation. The General Assembly can reduce tax rates and change the allocation formula which is based on population.

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