Chicago moved forward in its effort to rescue a pair of pension funds and stabilize its finances when Illinois Governor Pat Quinn signed a bill that cuts benefits and makes employees pay more for retirement.
Richard Ciccarone, chief research officer at McDonnell Investment Management, will focus on his other companies tracking local governments and the $3.7 trillion U.S. municipal market when he retires from the firm at the end of the year.
Republicans are poised to win the most governorships since 1994 as candidates including Pennsylvania’s Tom Corbett , Michigan’s Rick Snyder and Ohio’s John Kasich seize on the faltering economy and persistent unemployment in bids to take over Democrat-led states.
Municipal-bond insurance, which once covered half of the $400 billion of debt sold by U.S. state and local governments annually, “won’t be making a comeback,” said Howard Cure , director of municipal research at Evercore Wealth Management.
Chicago is now the city of big debt, where each of its 2.7 million residents -- from infants in diapers to senior citizens on fixed incomes -- is on the hook for about $20,000 in long-term pension promises and bond obligations. Like the relentless snow clogging the city’s streets, it just keeps piling up.
Illinois has set aside only 45 percent of what it needs to meet public-worker pension obligations, the worst of any U.S. state. Standard & Poor’s may cut its bond rating if lawmakers don’t come up with a fix tomorrow. Investors are unfazed.