credit rating

Michael Madigan
Brian Mackey / NPR Illinois

Two bond rating agencies say Illinois is on the right path with the budget plan passed Sunday in the state House of Representatives.

Brian Mackey / NPR Illinois

Illinois will enter a third straight year without a budget. But lawmakers say they’re getting closer, and will continue to meet this weekend.

Michael Madigan
Brian Mackey / NPR Illinois

As Illinois closes in on a second full year without a budget, the top leaders of the General Assembly met Sunday for the first time this year. There are some signs of progress.

A federal judge says Illinois has to prioritize payments for Medicaid providers, but the state doesn't have enough revenue to meet its spending obligations. Could Illinois soon run out of money? Does the market really think Illinois could default on its debt?

Brian Mackey / NPR Illinois

A day after the Illinois General Assembly ended it’s spring session without passing a budget, two bond rating agencies have downgraded the state’s credit.

The actions, by S&P Global Ratings and Moody's Investors Service, leave state government debt just one step above “junk” status.

The Quad, University of Illinois Urbana-Champaign
Clay Gregory / flickr.com/claygregory (CC BY-NC 2.0)

Six of Illinois’ state universities have been put on notice for credit downgrades. It’s the latest knock on state government after more than 21 months without a full budget.

Digging a hole. A really deep hole.
David Stillman / Flickr.com/stilldavid (CC-BY-NC)

Gov. Bruce Rauner will make his annual budget address to the Illinois General Assembly this Wednesday. It comes as state government has gone more than 19 months without a real budget.

That’s led the financial experts at credit rating agencies to issue a series of downgrades and dire assessments. The latest is called "For Illinois, Having a Plan Beats No Plan." It comes from S&P Global Ratings, where Gabriel Petek analyzes state governments.

University of Illinois Public Affairs

The University of Illinois has received a relatively glowing financial report from Moody's Investor Service, but it comes with warnings.

In a just-released report, Moody's analysts commend administrators for having years ago prepared to weather fiscal storms like the one higher education's facing now.

The state of Illinois may have the nation's worst credit rating. But its largest public university system -- the University of Illinois -- gets a far better grade.

WUIS

Illinois is preparing to hit the bond market even as the budget impasse has dimmed analysts' views of the state's credit worthiness.

Just as if your credit score declined, Illinois' lower rating makes borrowing more expensive.

Republican Gov. Bruce Rauner says he's still going to try to a half a billion dollars worth of bonds Thursday to pay for roads and bridges.

Examining Financial Health (stethescope on piggy bank)
https://www.flickr.com/photos/socialeurope / EU Social

Illinois' fiscal health continues to tumble, in the eyes of the analysts who assign credit ratings.

Moody's. S&P. Fitch. All three of the nation's big credit rating agencies have taken notice of the state's ongoing budget impasse.

None are impressed with what they're seeing. 

Printed budgets
WNIJ

Illinois could see its already worst-in-the-nation credit rating sink further -- all the way down to "junk" status. Moody's Vice President Ted Hampton says investors have asked the ratings agency if that's even possible.

State Week logo (capitol dome)
Brian Mackey / NPR Illinois | 91.9 UIS

Illinois still has no budget plan and no progress on an agreement is in sight.  The state is spending far more than it's taking in, higher education and social services have largely been left out to dry, and Illinois' credit rating continues to be downgraded.  Meanwhile, Governor Rauner is beginning to face criticism from within his own party.  Kurt Erickson of Lee Enterprises joins the panel discussion this week.

Amanda Vinicky / WUIS / Illinois Issues

A credit analyst with Moody's says Illinois' bond rating will remain unchanged, despite the state entering its third month without a budget. But the chances of a downgrade increase the longer gridlock continues.

Illinois has the nations' lowest credit rating -- a grade that symbolizes its fiscal troubles, and adds to them; a lower score makes it costlier to borrow.

But the rating won't drop any further just yet.

Amanda Vinicky / NPR Illinois | 91.9 UIS

Credit ratings agencies have had swift reactions to Friday's state Supreme Court decision that found Illinois' 2013 pension law unconstitutional.

Illinois' was expecting to save billions by reducing state workers, teachers' and university employees' retirement benefits. But not anymore, thanks to an unanimous decision by the state's high court tossing the law.

Amanda Vinicky

There's a reason analysts say Illinois has the nation's lowest credit rating. It has the nation's largest unfunded pension liability. A 2013 law that’s facing a challenge before the Illinois Supreme Court is intended to help.

Illinois is facing a budget hole in the billions, thanks to a rollback of the income tax. If the high court tosses out the pension law, there'll be more fiscal pressure.

Analysts like Moody's Ted Hampton say the rating won't likely drop further, even if the justices toss the law because the rating already presumes the law cannot be implemented.

flickr/dborman

A major credit rating agency has come out with a blunt assessment of Gov. Bruce Rauner's proposed budget for Illinois.

The budget Rauner presented last week calls for massive cuts in state spending -- without any increase in taxes.

Moody's Investor Service dismisses the chance that parts, let alone all, of the plan will ever become a reality.

ILGA.gov

A new report from Moody's investors service says Illinois still faces "daunting pension challenges" despite a 2013 law intended to curb the state's pension costs. So do its cities. 

The Moody's report lays it out starkly: Illinois' pension burden is significantly higher than other states. And yet Illinois' legal framework gives "very limited" flexibility for dealing with that.

Wall Street's view of Illinois' financial health has taken a hit, thanks largely to the state budget that took effect at the start of this month. Pensions also continue to be a drag. 

When Illinois Democrats passed the state's latest budget, many seemed to hold their nose. Credit ratings agencies are more direct: Standard & Poors has revised Illinois' credit outlook to "negative." 

It says the new budget "is not structurally balanced and will contribute to growing."

John Cullerton
Brian Mackey / NPR Illinois | 91.9 UIS

The credit rating agency Moody's says Illinois is at risk of undermining progress toward better finances. It says the failure to extend current income tax rates could lead to a worsening deficit.

Moody's says because lawmakers failed to stop an automatic tax cut scheduled for the end of the year, Illinois could have to increase its backlog of unpaid bills. The state already has the lowest credit rating in the nation.

Republicans say this shows Illinois needs to further reduce costs, but Democratic Senate President John Cullerton says there isn't that much left to cut.

ILGA.gov

Illinois' pension overhaul might be on hold, but credit ratings agencies say they're not concerned. A Sangamon County judge Wednesday ruled that reductions to public employees' retirement benefits will not go into effect next month, as planned.                                                  

Brian Mackey/WUIS

A major credit rating agency says the next two months will be "critical" for the future of Illinois' finances. The key question is whether to make a temporary tax hike permanent.

Like most of the big credit rating agencies, Standard & Poor's has been bearish on Illinois finances — lowering the state's credit rating four times in recent years.

Martin Luby
Institute of Government and Public Affairs

When it comes to finances, the State of Illinois has a poor reputation.   New research shows how the state's negative perception is costing taxpayers. 

Illinois already has the worst credit rating among states.  And while that adds to the cost of borrowing money, Illinois winds up paying even more because investors view it as risky of default.

wikimedia

A major credit-rating house has taken a more positive
outlook on Illinois debt than it has in years after last week's pension-reform
vote.
 
Standard & Poor's affirmed its A- rating on state debt backed by general tax
revenue Tuesday but revised its outlook from ``negative'' to ``developing.''
 
The ratings agency says ``developing'' means the rating could be raised or
lowered in the next two years. Analyst Robin Prunty says the change is positive
but risk remains because workers unions will likely sue over the pension law

  Governor Pat Quinn says Illinois' failure to solve its pension problem means the state will have to pay $130 million more in interest on bonds it sold Wednesday. But a new study is questioning Illinois' low debt rating.

Illinois got an average interest rate of five percent on the $1.3 billion bond sale — and had to turn away many potential buyers.