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Illinois treasurer warns of another possible credit downgrade

August 24, 2012

Online Staff Report

Illinois State Treasurer Dan Rutherford (R) issued the following statement Aug. 23 in response to a financial warning issued by Moody’s for the State of Illinois:

Moody’s Investors Service in their Aug. 23 bulletin declared that the Illinois legislature’s failure to enact pension reforms during last week’s special session is ‘credit negative’ for Illinois (A2 stable) and they warned that ‘inaction on the state’s pension liabilities will further strain this lowest-rated U.S. state’s finances.’

It looks like Illinois could be heading for another credit downgrade, which will only cost taxpayers more,” Rutherford said. “I have continuously warned the General Assembly and the governor that failure to act on the state pension crisis will create more financial problems in this state that is already the lowest-rated credit in the United States. I will continue to urge the General Assembly and the governor to work towards comprehensive reforms that would repair Illinois’ fiscal health and ensure the viability of our state retirees’ pensions.”

Revenues realized from the 2011 income tax increase have already been consumed by the large, escalating cost of the state’s pension systems,” Rutherford said. “Illinois’ available resources can neither pay off its massive debt nor cover the cost of providing needed state services to all of its citizens. Comprehensive, constitutional and fair pension reforms are required to reverse this situation.”

Posted Aug. 24, 2012

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