Surprise: Illinois slapped with credit downgrade
posted at 1:02 pm on June 4, 2013 by Guy Benson
A state can’t drop any lower than 50th out of 50, but it can work diligently to pull away from its closest rival on the credit downgrade scoreboard (your move, California). So congratulations, Illinois, on your unparalleled basketcase status:
One of the three major ratings agencies has downgraded the value of Illinois state government credit. Fitch Ratings said Monday it would drop the Illinois rating from “A” to “A-” based on lawmakers’ failure to enact a solution to the state’s public-employee pension crisis. Illinois already has the lowest rating in the nation. Lower ratings mean paying higher interest rates on borrowed money.
Hey, why spin this as being dead last? Turn that frown upside-down, Illinois: You’re number one, in a certain sense! Totally coincidentally, Illinois is home to Democratic super-majorities in both legislative chambers and a Democratic governor. State Republicans are literally powerless to slow down their state’s cliff-bound freight train, but I’m sure this is somehow their fault anyway. Moody’s is also threatening another credit downgrade for Illinois, which is already ranked 50th in their rankings as well. The state boasts a $100 billion (!) unfunded pension liability for government workers, and a massive structural deficit that has resulted in piles of unpaid bills. Illinois Democrats hiked taxes significantly on families and businesses in 2011. Meanwhile, neighboring states governed by Republicans have (again, totally coincidentally) earned credit rating improvements in recent years. Moody’s rated Scott Walker’s controversial budget reforms “credit positive,” Rick Snyder’s Michigan (fresh off passage of right to work legislation) received a credit upgrade by Fitch in April, and Mitch Daniels’ (now Mike Pence’s) Indiana has maintained its perfect AAA rating.