Chicago Faces Higher Borrowing Costs After Credit Downgrades

Budget disputes between Mayor and City Council lead to credit rating cuts.

Published on Feb. 26, 2026

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Budget disputes between Chicago Mayor Brandon Johnson and the City Council have contributed to credit downgrades from rating agencies Fitch and Kroll, signaling that the city will face rising interest rates on its municipal borrowing.

Why it matters

Credit downgrades make it more expensive for the city to borrow money for infrastructure projects, services, and other public needs. This could impact the city's ability to fund critical initiatives and may lead to higher taxes or reduced spending in other areas.

The details

The credit downgrades from Fitch and Kroll were attributed to ongoing budget disagreements between Mayor Johnson and the City Council. These disputes have created uncertainty around the city's fiscal management and long-term planning.

  • The credit downgrades from Fitch and Kroll were announced on February 26, 2026.

The players

Mayor Brandon Johnson

The current mayor of Chicago who is engaged in budget disputes with the City Council.

Chicago City Council

The legislative body of the City of Chicago that is in budget negotiations with Mayor Johnson.

Fitch

A major credit rating agency that downgraded Chicago's credit rating.

Kroll

A credit rating agency that also downgraded Chicago's credit rating.

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What they’re saying

“These credit downgrades will make it more difficult and expensive for the city to borrow money, which could impact our ability to fund critical infrastructure and services.”

— Mayor Brandon Johnson (ChicagoLIVE)

What’s next

The city will need to work quickly to resolve the budget disputes with the City Council in order to stabilize its credit rating and borrowing costs.

The takeaway

Chicago's credit downgrades highlight the importance of fiscal responsibility and cooperation between city leadership. Unresolved budget conflicts can have significant financial consequences for municipalities.