Transit agencies take loan hit

Outstanding loans for Metra, Pace and the CTA were downgraded by a top financial analyst Monday, increasing the chances the taxpayer-backed agencies will have to pay more to borrow in the future.

Moodys Investors Service downgraded $2.5 billion in outstanding bonds Monday for the Regional Transportation Authority, which oversees the Chicago area's trains and buses.

As the RTA looks forward to putting out billions of dollars in additional bonds, that means the oversight agency could have to pay hundreds of thousands of dollars more in interest a year.

Moodys analyst John Ceffalio says taxpayers should blame the state, which has been chronically late in paying out sales tax dollars to the RTA as well as other payments to schools and vendors, such as hospitals and social service providers.

Ceffalio said the state's backlog of bills and the economy were the key factors in ratcheting down the RTA from Moodys third highest rating to its fourth, Aa3. The state itself is currently receiving the fifth highest rating from Moodys, A1.

"The RTA is influenced by the fiscal challenges of the state of Illinois," said Ceffalio. "The state has been chronically late on its payments to vendors and to other government entities and that includes the RTA."

Currently the state is facing a budget shortfall of nearly $12 billion over two years. Lawmakers have approved a $29 billion public works spending package that includes projects for the CTA, Metra and Pace. However, it has not yet gone to Gov. Pat Quinn's desk for his signature as lawmakers continue to bargain over how to solve the state's budget crisis.

Joe Costello, the chief financial officer for the RTA, said the Moodys downgrading could cost the transit agencies when they go to get loans for the public works plan. But the RTA will try to bring the rating back up before that happens, he added.

"We will be back talking to them," Costello said. s