Standard & Poor’s Downgrades Illinois Debt, Rutherford Reacts

Standard and Poor’s has lowered their rating on bonds issued by the state of Illinois today. 

Illinois, the worst-funded pension system, had the rating on its general- obligation debt cut one level by Standard & Poor’s and may face more downgrades, Bloomberg Businessweek reported. 

Illinois was dropped from an A+ rating to an A rating, including the warning from S&P analysts that Illinois has a negative outlook.

“Illinois plans to issue General Obligation bonds in September of 2012. The cost of these bonds to taxpayers will increase because of the lower A rating. Analysts at S&P noted ‘the downgrade reflects the state's weak pension funding levels and lack of action on reform measures intended to improve funding levels and diminish cost pressures associated with annual contributions’ in their statement issued today.”

“Just as I said last week after we received a sobering warning from Moody’s, I urge the legislature to act decisively towards comprehensive, constitutional, and fair pension reforms that will reverse this situation, Illinois Treasuer Dan Rutherford said in a statement.

"It’s not even two years since the largest income tax increase in Illinois history, and those revenues have already been consumed by the escalating cost of the state’s pension systems," Rutherford said. "Taxpayers are justifiably frustrated and angry over Springfield’s lack of action to protect their dollars."

—Submitted by Catie Sheehan Gibson, Rutherford's Deputy Press Secretary