From Illinois News Network
A combination of expected increases in unfunded pension liabilities, billions in outstanding general obligation debt, and hundreds of millions in outstanding sales tax revenue and motor fuel tax debt are all reasons for downgrading the City of Chicago bond rating to junk status.
Moody’s Investors Services issued the credit rating downgrade from Baa2 to Ba1 for the Windy City Tuesday. In a press release Moody’s says the recent state Supreme Court ruling on pension reform means the options to curb the costs are narrowed considerably. That’s something the investors service says will put increased strain on the city’s financial operations.
The ratings service has also downgraded the city’s water and sewer enterprises. Outlooks remain negative, according to Moody’s, signalling the credit challenges will continue both in the near and long term.
Moody’s says to make the ratings go up the city or state can halt the growth of unfunded pension liabilities or find revenue growth or reductions in operating expenditures to accommodate increased pension costs.
Tort reform hearing lasts hours
Even though there are no official proposals to bring about caps on lawsuit payouts, victims of medical malpractice say they are bad. That’s one of the themes from an hours-long Committee of the Whole hearing in the Illinois House Tuesday. The hearing on tort reform featured people who suffered from medical malpractice. The hearing also featured researchers saying caps on payouts don’t play into where a doctor ends up practicing. However House Minority Leader Jim Durkin said that premiums for Illinois doctors are far higher than premiums in other states which he believes leads to doctors looking to locate.
“When you’re paying a neurosurgeon, who’s paying approximately $240,000 a year in premiums in Illinois and he can drive a few miles east to Indiana and pay $57,000 or a few miles north to Wisconsin to pay $53,000 it is a heavy factor they are going to use in that final analysis on where they chose to hang their shingle and practice medicine.”
Freshman Republican Representative Mark Batinick said he’s unaware of any proposed legislation to bring about caps. But Democratic Representative Lou Lang read from Governor Bruce Rauner’s Turnaround Agenda which mentions caps on unreasonable judgements.
“I don’t see anything on the Turnaround Agenda nor has anybody else on the floor talked about caps on insurance premiums.”
Caps weren’t only focus of tort reform hearing
The hours-long hearing featured victims of medical malpractice who have received settlements for their claims. The hearing also featured the wives of two slain Illinois State Police troopers. Elizabeth Sauter, wife of James Sauter who was killed by a semi truck in 2013, said Illinois lawmakers should not vote for a cap on wrongful death or malpractice claims.
“Putting a cap on penalizing these companies just further encourages them to make careless decisions and continue unsafe practices. Putting a cap on these lawsuits mean you care more about big businesses than you do about the citizens you represent.”
Several other witnesses expressed similar sentiments about caps. But possible caps weren’t the only focus Tuesday. Medical malpractice rarely gets resolved. Professor Bernard Black, who provided research on malpractice, said claims often take a long time to litigate and rarely lead to true changes to the medical industry.
“And then how do we have the energy, and yes the budget, to follow up and say ‘here are the lessons we’re learning from these adverse events reporting’ and how do we push them back out to hospitals the way that the FAA pushes the adverse events back out to the airlines? We don’t have that in place.”
Medical society says onerous climate factor in location decisions
Meanwhile the president of the Illinois State Medical Society says Illinois loses nearly half of the physicians who complete a medical residency with two-thirds citing Illinois’ reputation for lawsuit abuse as an influencing factor. Society president Scott Cooper says an onerous medical lawsuit climate also forces existing doctors to drop or limit certain procedures that are considered high-risk or may order more tests than is necessary, something Cooper refers to as “defensive medicine.” Cooper also says that states with strong medical liability protections spend less on health care through lower medical liability insurance and attract and retain a strong physician workforce. While Cooper says the Society believe in fair compensation for patients who are harmed, reforms are necessary and lawmakers should deliberate big-picture medical needs when considering lawsuit reforms.