Ald. Anthony Beale (9), who called for the finance committee hearing, is pictured at a council meeting in February 2025. [Don Vincent/The Daily Line]

The City Council’s finance committee on Tuesday will gather to hear subject matter on the city’s recent credit ratings downgrades and negative financial outlook. 

The Committee on Finance will meet at 10 a.m. in council chambers. 

First, the committee is set to hold a subject matter hearing on the impacts of the recent credit adjustments from ratings agencies. Ald. Anthony Beale (9) called for the hearing using a resolution (R2025-0014903) he introduced in January, just after S&P Global Ratings downgraded the city’s credit rating from BBB+ to BBB. 

“To avoid future credit downgrades and skyrocketing debt costs in the face of uncertain economic conditions, the City must engage in a serious discussion about controlling the City’s soaring pension costs, spiraling personnel costs, massive debt load and structural budget deficit,” according to the resolution. 

Since Beale introduced the resolution, the Kroll Bond Rating Agency downgraded the city’s long-term general obligation bond rating from A to A- as a result of the city’s reliance on one-time fixes to address structural budget gaps and service burdensome debt obligations. 

Additionally, since Beale’s resolution was introduced, the City Council narrowly passed a controversial $830 million general obligation bond package (SO2025-0014841) to fund projects from the city’s 2024-2028 Capital Improvement Plan. The bond deal was criticized by opponents who argued the proposed repayment structure was disfavorable to the city because principal payments will start after 18 years of interest payments, and payment of the debt won’t begin until 2027. 

Related: City Council approves $830M general obligation bond authorization to fund capital projects in narrow vote 

And just last week, Fitch Ratings adjusted the financial outlook for the city and several of its general obligation bonds for housing, economic development and infrastructure projects from “stable” to “negative.” Fitch explained the change was “driven by a lack of substantial progress procuring permanent and high impact solutions to [the city’s] structure budget gap.” 

Ald. Bill Conway (34), the vice chair of the finance committee, said the downgrades and outlook change will make it costlier for the city to borrow money and said in a statement “it’s clear we need to rebuild trust and collaboration. Chicago can’t afford this kind of financial mismanagement.” 

Beale’s resolution calls for the Budget Director Annette Guzman, Chief Financial Officer Jill Jaworski, Comptroller Michael Belsky, and Treasurer Melissa Conyears-Ervin to be present at the hearing. 

A spokesperson for Finance Chair Pat Dowell (3) said Guzman, Jaworski, Joel Flores, first deputy director of the comptroller’s office, and Craig Slack, deputy treasurer and chief investment officer for the treasurer’s office, will attend. 

The hearing will also touch on a resolution (R2025-0016013) from Ald. Gilbert Villegas (36) that calls on the federal government to preserve the tax-exempt status of municipal bonds. 

Some Congressional Republicans had been mulling the removal of the tax-exempt status of municipal bonds among ways to pay for the extension of the Tax Cuts and Jobs Act and other provisions of the latest budget reconciliation bill. The version that passed the House of Representatives last week did not end up changing any of the statuses of those bonds, according to the National Association of Counties. 

Villegas told The Daily Line that even though the latest version of the bill doesn’t include changes to municipal bonds’ tax-exempt status, some congresspeople still want to pursue it as an option to pay for tax cuts.

Dante Moreno, legislative manager for finance, administration and intergovernmental relations at the National League of Cities, is also expected to testify, Villegas said.