Illinois lawmakers’ failure to pass a pension overhaul has led to yet another downgrade of the state’s bond rating. It’s the second hit in as many weeks.
This time, Standard and Poor’s has lowered Illinois to an A-.
The agency says the downgrade is caused by legislators’ lack of action on measures that would reduce the state’s ballooning pension costs.
Treasurer Dan Rutherford, a Republican, says it’s irresponsible that legislators and the governor haven’t done anything about it.
RUTHERFORD “Every deadline set and inaction occurred, it costs us a negative issuance. We know have joined the bottom of the pile, we are the bottom of the pile according to Standard and Poor’s.”
Standard and Poors analysts say that lawmakers’ poor track record the past couple of years makes them pessimistic that will change. The agency’s report says that even if something does pass, legal challenges could leave Illinois with a pension problem for years to come.
And that’s not all. The report notes that Illinois has other budget problems, including an income tax hike set to expire in 2014.
The downgrade could make it more costly for Illinois to borrow money for projects and other needs. (Amanda Vinicky)