As if more reasons are needed to end the budget impasse, Moody’s Investors Service and Standard & Poor’s on June 9 further downgraded Illinois’ credit bond rating, Fitch Ratings placed the state on negative watch. The bond ratings agencies all pointed to the political gridlock that has led to the ongoing budget impasse and lack of action to address the state’s significantly underfunded pension system.
Bonds are a tool the state uses to borrow money. The lower Illinois’ credit rating, the higher the interest rate the state will pay on a loan. Moody’s projected that the state’s bill backlog will surpass prior peak levels of about $10 billion in the coming months unless a budget deal is reached. Moody’s also cautioned that another downgrade could be imminent, and noted the state has a negative outlook, even with the downgrade.
Also on June 9, Comptroller Leslie Munger spoke out, stressing that the “hardship caused by the state’s ongoing budget impasse will grow significantly if Illinois enters a new fiscal year on July without further action in Springfield.” Though much of the state’s expenses are being funded through court orders, consent decrees and ongoing appropriations, many other important state services and programs rely on action by the General Assembly and the Governor.
Munger stressed on the need to end the budget impasse to allow schools to open, ensure vendors are paid, and to keep state government operations running. Without new legislation, Munger said $23 billion in existing spending for schools, 9-1-1 call centers, domestic violence shelters, federally-funded social and human services and higher education will stop next month.
Munger said the best thing Springfield can do is come together on a bipartisan spending plan.