Illinois Bonds Get Another Downgrade
By Jim Meadows, with additional reporting from The Associated Press
Gov. Pat Quinn says the latest downgrading of Illinois’ credit rating by a bond credit rating firm comes as “no surprise”.
In a news release, Fitch Ratings announced Monday it downgraded its rating on $27.5 billion in Illinois’ outstanding general obligation bonds from “A” down to “A Minus.”
Fitch specifically cited the state’s “ongoing inability … to address its large and growing unfunded pension liability.”
Illinois already has the lowest rating in the nation. Lower ratings mean paying higher interest rates on borrowed money.
In a statement, Quinn said such downgrades will continue to happen until lawmakers pass a pension reform bill. He said he plans to meet with Illinois House Speaker Michael Madigan and Senate President John Cullerton on Tuesday.
"It is disgraceful that this year’s legislative session ended without a new pension plan on the books," said Illinois Treasurer Dan Rutherford. "I believe state leaders have unfinished pension reform work that needs to be accomplished at the Capitol. It is beyond irresponsible to let this continue.”
Decades of state underfunding has left the five employee retirement systems $97 billion below what they need to cover future obligations.
The Illinois House and Senate both enacted their own plans toward a solution, but neither chamber would take up the other's proposal.
The General Assembly adjourned its spring session Friday without taking any action.