CHICAGO — Standard & Poor's Wednesday revised its outlook on Cook County, Ill., home to Chicago, to negative from stable amid the county's many financial headaches.
S&P affirmed its AA rating on the nation's second-most populous county.
All three major ratings agencies now have the county on negative outlook.
The negative ratings action comes despite a 1% sales tax increase Cook County enacted in July. County Board President Toni Preckwinkle pushed the unpopular tax, saying it would generate $474 million in new money for the county's coffers.
The bulk of the revenue will go to pay the county's unfunded pensions. Cook, the second largest county in the country, faces a $6.5 billion unfunded pension tab.
But the measure was not enough to stave off the negative outlook from S&P.
"The negative outlook reflects our view of the county's challenges in rebuilding its general fund available reserves in 2015," Helen Samuelson said in a press release. "Further pressuring the rating is the task of maintaining similar reserve levels in 2016 while successfully controlling rising fixed budgetary costs, including its rising pension obligations, public safety, jail, court and enterprise health system."
In response, a county spokesman highlighted the rating agency's praise for the county's financial management.
"While we disagree with the decision to assign a negative outlook, we are pleased to see S&P acknowledge our actions to address our legacy debt and pension liabilities," spokesman Frank Shuftan said in an email. "We remain committed to stabilizing our financial position and fiscal structure by facing problems head on, and we will be introducing a comprehensive budget plan to increase efficiency and decrease expenditures by more than $100 million."
Preckwinkle is expected to unveil her 2016 budget proposal in early or mid-October, Shuftan said. The county's fiscal year begins Dec. 1.
Moody's Investors Service dropped Cook one notch to A2 from A1 in June, largely due to the pensions. Fitch Ratings rates the county A-plus, after downgrading it in July 2014, also due to the pension obligation.
The county has said it would consider refinancing its variable-rate debt if its rating fell to A3 or A-minus.