Standard & Poor's Increases District 202's Bond Rating to A+

In the midst of what has been an almost endlessly gloomy financial picture for , a bit of good news: Standard & Poor's has increased the district's bond rating to A+.

What that means is when the district sells bonds to generate financing -- such as the tax anticipation bonds the school board will authorize at its Monday night meeting -- it should be able to do so a lower interest rate.

The rating is similar to a personal credit score. The lower the standing, the greater the risk and the higher the interest rate charged.

"The upgrade is due to improvement in the district's financial position following the district's efforts to restore balanced operations with substantial budget cuts," Standard & Poor's credit analyst John Kenward said in announcing the increased rating.

Among the positives cited are the district's stable outlook, strong income level, consistent enrollment and lack of plans to incur more long-term debt, Kenward said.

"It is good news because school districts do need to borrow money all of the time ... and this should improve the interest rate," district spokesman Tom Hernandez said. "We have done a tremendous amount of work to get to this point."

The school board and administration have cut $43 million from the district's budget since 2009. Most of that savings has come through program cuts, new employee contracts and the loss of 275 employees through attrition and layoffs.

In other words, the positive review given by the Standard & Poor's "has come at a cost," Hernandez said. And it may have only a short-term effect given the for future years' budgets, he said.

Employee salaries and benefits make up 75 percent of the district's budget, so it's likely at least some future budget cuts will mean more job losses, he said.

And if Gov. Pat Quinn is successful in his plan to shift teacher pensions from the state budget to local districts, which he announced in his State of the State address this week, it "will add tens of millions of dollars to the budget," Hernandez said.