CHICAGO (AP/CBS) — Standard & Poor’s rating services has lowered Illinois’ credit rating, blaming the state’s pension problems.
The New York-based agency said Friday that the rating on the state’s general obligation bonds was downgraded to A- from A. The agency also gave an A- rating to $500 million in general obligation bonds that the state plans to release in February. The agency says the outlook is negative.
Standard & Poor’s credit analysts say the downgrade reflects what the agency sees as the state’s “weakened pension-funded rations” and lack of action on reform measures to improve the state’s worst-in-the-nation pension crisis. Illinois has a $96 billion pension deficit.
Ratings agencies have been downgrading Illinois’ credit over the last several years. Moody’s Investors Services and Fitch Ratings both downgraded the state’s credit outlook in recent months.
Standard & Poor’s says that given the Legislature’s track record, it doesn’t think lawmakers will fully address the pension fund deficit.
Jill Schlesinger, editor-at-large of CBS Moneywatch.com, says the downgrade should not result in increased borrowing costs for the state but represents a shot across the bow at Illinois government finances.
(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)