Chicago's dire financial situation just got significantly worse.

>> That's according to a Wall Street ratings agency which warned today about the impact of a new state law that will boost payments to some retired police officers and firefighters.

Let's listen to Mayor Brandon Johnson acknowledged that the city's pension crisis is intensifying >> you know, in my concern, of course, I am.

You know, do I believe that all hope is lost?

Know?

We have reached a point now where there's no return.

>> Our Heather Sharon joins us now with more.

So Heather, Governor, JB Pritzker on Friday signed into law a bill that will change.

How much retired Chicago police officers and firefighters earn from their pensions.

Break it down for us.

So this law will do 2 One, it will ensure that Chicago firefighters and police officers don't get less when they retire than other first responders in other parts of the state.

>> The second thing it will do will make sure that those hired after 2010 don't earn retirement benefits less than what they would get if they worked for a private company and paid into Social Security that would violate federal law.

But in all this, bill alone will add 11 billion dollars to the cities already significant pension debt, which totals nearly 36 billion dollar.

Yeah, obviously had a huge mountain of debt for the city to tackle.

So.

>> Did the city asked the governor to veto the bill >> known but it wouldn't mattered if they had because it passed with an overwhelming majority through the General Assembly.

Mayor Johnson told us today he did ask the governor's office to couple it with a measure that would have allowed the city to pay for this new bill.

Now, the city has very limited ability to raise taxes on its residents.

So, for example, if the city wanted to impose a sales tax on services and not just good, it would need a change in state law that did not come along with this bill.

>> Okay.

So Wall Street ratings agency S and P they are sounding the alarm about this bill.

What are they concerned about?

Well, they're concerned about 2 things.

One, the city does not have an extra 11 billion dollars to pay into its pension funds.

But it also said that this law, which as it was crafted, is more generous than it needed to be to pass legal muster.

And since the city is in such dire financial straits, they said the city and the state should have just done the Speaking of those dire straits, the city is facing a projected 1.2 billion dollar deficit and its next budget next year.

How much is this bill going to exacerbate that budget gas?

So we're not sure yet the city has until the end of the month to release its official budget forecast for 2026.

That will do 2 things that will tell us exactly how much the city has to pay into its pension funds.

Now, before this bill passed, that Bill was going to be 2.7 billion dollars next year.

That forecast.

We'll also tell us exactly now how big that deficit actually We'll be watching for it.

I have a feeling forecast.

Might be a little stormy have Thanks so