This week, Illinois’ credit rating was downgraded again based primarily on the state’s continuing budget deficit.
Fitch Ratings recently downgraded Illinois, which now has the second-lowest rating in the nation after California. The downgrade comes on the heels of a Moody’s Investors Service downgrade, which tied Illinois with California for the worst-rated state in the nation.
The two downgrades bring the total number of downgrades since early 2009 to eight. Illinois has only been downgraded 17 times in its history, and almost half of those occurred during the last one-and-a-half years.
Credit downgrades serve as independent “report cards” of the state’s finances. The lower the state’s credit rating, the more it costs when the state tries to borrow money. It’s likely that these downgrades will lead to hundreds of millions of dollars in higher interest costs in the future.
Illinois is now officially tied with California for the worst credit score in the nation, with the state’s bond rating lowered June 4 by Moody’s Investors Service.
In lowering Illinois’ bond rating one notch to A1, Moody’s pointed to the state’s inability to address its financial problems, including an unbalanced budget, billions in unpaid bills and faltering revenues. Moody’s said the failure to tackle Illinois’ fiscal issues “underscores a chronic lack of political will that indicates further erosion of an already weak financial position.”
With the new rating, Illinois has now tied California for the worst credit rating in the nation from Moody’s. It’s also anticipated that the other two major credit rating agencies will soon downgrade Illinois. A lower state credit rating usually translates into higher costs when the state tries to borrow money.
Although Democrat leaders have said lawmakers are likely to resume work on the state budget before the end of June, it remains uncertain when lawmakers will return to Springfield.
The Governor continues to push for additional borrowing to fund higher state spending, and neither he nor his party’s legislative leaders have shown any serious interest in Republican alternatives that could save the state money and eliminate the need for additional borrowing.
Republicans have been wrongly accused of not helping to identify solutions to the state’s budget problems, because the fact is Republicans have never refused any negotiation. When invited to the table, they’ve bargained in good faith even as others walked away.
The Senate wrapped up a two-day trip back to Springfield May 27 by advancing budget bills, approving tax amnesty legislation and overriding an amendatory veto of McPier reform legislation, but did not consider a measure to borrow $4 billion that would be used to finance the state’s pension obligations.
The state budget—in House Bill 859 and Senate Bill 1215— has been advanced by the House of Representatives and will now be sent to Governor Pat Quinn.
The measures will increase state spending by $1 billion over the previous year, spending about $6 billion more than the state will take in. In addition, more than $6 billion in bills from the current fiscal year will be left unpaid.
No Senate Republicans supported the deficit budget.
Senator Brady discusses the lack of leadership by current Administration
During a press conference May 27 in the State Capitol, Senator Bill Brady discusses the lack of leadership shown by the current Administration and how its mishandling of the state budget will affect Illinois citizens.
Also participating in the press conference were Senate Republican Leader Christine Radogno of Lemont (at right) and House Republican Leader Tom Cross of Oswego (at left).
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This week, Illinois’ credit rating was downgraded again based primarily on the state’s continuing budget deficit.
Illinois is now officially tied with California for the worst credit score in the nation, with the state’s bond rating lowered June 4 by Moody’s Investors Service.
Although Democrat leaders have said lawmakers are likely to resume work on the state budget before the end of June, it remains uncertain when lawmakers will return to Springfield.
The Senate wrapped up a two-day trip back to Springfield May 27 by advancing budget bills, approving tax amnesty legislation and overriding an amendatory veto of McPier reform legislation, but did not consider a measure to borrow $4 billion that would be used to finance the state’s pension obligations.