Illinois rating cut to Baa1 by Moody’s over budget battle

The Moody’s credit rating agency has downgraded $26.8 billion in Illinois’ general obligation bonds, saying the move was due to the state’s weakening financial position during the year.

Moody’s also lowered ratings on the state’s sales-tax bonds – known as Build Illinois – to “Baa1” from “A3”, and on the state’s subject to appropriation bonds (issued by the Metropolitan Pier and Exposition Authority and for the state’s Civic Center program) to “Baa2” from “Baa1”, according to the release.

“I wish, like everyone else, everything would straighten itself out in Springfield”, said O’Dekirk, adding he’s becoming increasingly concerned about Illinois withholding money owed to local governments because of the budget impasse.

Fitch Ratings on Monday downgraded its rating on the state’s outstanding bonds for the same reasons.

Two ratings agencies this week downgraded Illinois’ credit rating.

In a statement released by spokeswoman Rikeesha Phelon, Democratic Senate President John Cullerton contended that under Republican Gov. Bruce Rauner, the state’s revenue has declined, services have been cut and job growth has slowed. Rauner’s office says he’s not beholden to credit ratings agencies and that his agenda will help Illinois long-term. Still, Illinois is contemplating a return to the municipal bond market this fiscal year after an absence of almost 1-1/2 years. “One person has completely paralyzed the state and is holding up compromise, and that’s [House Speaker Michael Madigan]”.

“We passed a spending plan that would have provided there would not have been this collateral damage”, said Madigan.