Fitch Ratings, one of three major ratings agencies, today lowered Illinois' credit rating after lawmakers failed to enact a solution to fix the state's nearly $100 billion pension shortfall.
The firm said it would drop the Illinois rating from "A'' to "A-." Illinois already has the lowest rating in the nation. Lower ratings mean paying higher interest rates on borrowed money.
"Fitch believes that the burden of large unfunded pension liabilities and growing annual pension expenses is unsustainable," the firm said in a statement, "and that failure to achieve reform measures despite the substantial focus on this topic exacerbates concern about management's willingness and ability to address the state's numerous fiscal challenges.
Gov. Pat Quinn said in a statement the downgrade is no surprise.
State Treasurer Dan Rutherford said, “It is not the least bit shocking that Fitch Ratings has bad news for Illinois. Once again, state leaders have failed to enact meaningful and constitutional pension reform. It is disgraceful that this year’s legislative session ended without a new pension plan on the books.”
“This rating action means that there have been ten negative issuances against Illinois by the various ratings agencies to Illinois’ bonding entities since the beginning of 2012,” said Rutherford.
