SPRINGFIELD - Tuesday afternoon, State Treasurer Dan Rutherford showed frustration with Illinois budget tenders, who have let Illinois credit rating sink to yet another low, this time affecting the public universities' credit rating.
“For the second time in the past week, Moody’s Investors Service has bad news for Illinois. Moody’s is placing the ‘long-term ratings of all Illinois public universities under review for possible downgrade.’ This should serve as a wakeup call once and for all. How many of these warnings must the state get in one calendar year before leaders finally get the message to get their act together?
"We started the year off with Moody’s downgrading Illinois’ credit rating in January. Lawmakers did not make significant pension reforms during this year’s legislative session, so it came as no surprise when Standard & Poor’s cut Illinois’ credit rating in August. Now it’s December, and we are ending the year with more disturbing news regarding our state finances.
Rutherford said unless signficant change takes place immediately, the situation will only worsen.
"Just a few days ago, Moody’s lowered our state’s credit outlook to negative. And now the latest Moody’s report states that the long-term ratings of state public universities are under review due to ‘significant dependence on the state for operating funds and fringe benefits, as well as extensive appropriation payment delays in a challenging budget environment that continues to pressure Illinois’ public universities cash flow and liquidity.’ Moody's rates a ‘total of $2.6 billion of rated university debt.’
"I hope the governor and legislature can start the new year by passing a fair and constitutional pension reform plan into law.”
“Last week, Moody’s stated that the state’s credit rating could go up with ‘implementation of a credible, comprehensive long-term pension funding plan’ and ‘substantial progress in reducing payment backlog, with adoption of legal framework or plan to prevent renewed buildup of bills.’ This is a great state, and we cannot take another year of credit hits.”
The latest report from Moody’s can be found here: http://www.moodys.com/research/Moodys-places-long-term-ratings-of-all-Illinois-public-universities--PR_262552