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Pension Mess Blamed
Wed August 29, 2012
Illinois Bond Rating Takes a Hit
Standard & Poor's downgraded Illinois' credit rating Wednesday, citing concerns over the state's inability to address its massively underfunded employee pension plans.
The action was taken less than two weeks after a special session in which Illinois lawmakers failed to reach an agreement on changing the state pension systems. Illinois still ranks 49th among the states, better only than California.
S & P credit analyst Robin Prunty acknowledged Illinois has made improvements in its overall budget picture, such as this year's huge cuts to health care for the poor, elderly and disabled. But Prunty said it has not been enough.
"Their pension funds are in a very weak position relative to virtually every other state," Prunty said.
The lower credit rating could mean Illinois will have to pay more when it borrows money for road construction and other needs.
Illinois politicians from both political parties rushed to say "I told you so."
"I've said this before: That if Illinois does not substantively act, particularly on its pension situation, that this downgrade will come," said Treasurer Dan Rutherford.
Governor Pat Quinn said he wants to meet with legislative leaders next month to continue trying to find a compromise on reducing pension costs.
Thanks to Illinois Public Radio