Clik here to view.
Two Republican leaders are reacting to the news that the State of Illinois now has the lowest bond rating of any state in the nation.
A story in the Chicago Tribune reports that the no other state has as low a rate. The lower rating means the state will pay more interest when it sells bonds.
Moody’s Investors Service lowered the State of Illinois' general obligation bond rating to A2 from A1 and revised the state's outlook to stable from negative, according to a news release from Moody’s issued on Friday. The bond rating service said the rating downgrade was the result of a legislative session where the state took no steps to put in place any lasting solutions to its severe pension under-funding or to its chronic bill payment delays.
“Failure to address these challenges undermines near- to intermediate-term prospects for fiscal recovery,” Moody’s said in its news release. “It remains to be seen whether the state has the political willingness to impose durable policies leading to fiscal strength, though in the recent past it has reached consensus on difficult decisions, such as temporary income tax increases enacted last year that stabilized state finances and reduced the state's need for non-recurring budgetary measures.”
In reaction to the news of the downgrade Republican leaders Tom Cross and Christine Radogno issued a statement:
“Today’s downgrade in our bond rating is obviously very bad news for our state and it proves that the General Assembly and the Governor must do some very substantive things this spring that show we are committed to fundamentally changing the way we structure our budget now and going forward. Enacting major pension reform and Medicaid reforms must be at the top of the list. Obviously the practice of nibbling around the edges on reform and other budget strategies has not convinced these bond rating agencies that we are on the road to recovery. We must be bold and deliberate this Spring.”
