A credit ratings agency is disappointed that the legislature adjourned without taking action on lowering pension costs. Its analysts want a quick resolution. The governor and legislative leaders met today but failed to reach an agreement. Amanda Vinicky reports:
Your credit score matters if you’re looking to borrow money. A lower score generally leads to higher interest payments.
The same concept applies to the state. Except in Illinois’ case, a higher interest rate could cost taxpayers an extra half billion dollars.
Lawmakers fear Illinois’ credit ratings will suffer as long as the state continues having the most underfunded pension systems in the nation.
It’s a fear given credence in a new bulletin from Standard & Poor’s. The ratings agency says it considers Illinois’ failure to overhaul pensions “negative from a credit standpoint.”
Governor Pat Quinn says he takes that threat seriously. He’s pressing for the legislature to pass a measure before July.
PAT QUINN: ”Ideally, you know, we have to sign a budget by the end of the month. I’d like to also sign pension reform. This is our rendezvous with reality.”
But as Standard & Poor’s says in its report, that’s a “much more significant challenge” now. Because it’s after May, it would take a 3/5ths vote, not just a simple majority, to pass the legislation.
Quinn and legislative leaders are scheduled to meet again to talk about pensions the week of June 18th. He says by then, they’ll have time to find more information about the key question dividing legislators: if, and how, to make schools pick up the cost of public teachers’ retirement benefits.