A credit rating agency found Gov. J.B. Pritzker’s ‘fair tax’ would fail to close the state’s deficit or adequately fund essential services.
Illinois’ financial outlook was changed from ‘stable’ to ‘negative’ by two major ratings firms, raising the risk the state’s credit rating will formally fall to non-investment grade status.
Illinois Gov. J.B. Pritzker previously floated a pension plan that included pawning-off state assets, taking on more high-interest debt and reducing pension funding before walking back the plan amid criticism. Here’s a real solution.
A report from one of the largest credit rating agencies criticized Gov. J.B. Pritzker’s “dubious” budget proposal for avoiding necessary fiscal reforms.
Despite finding favor among some politicians and political candidates in Illinois, states with a progressive income tax are more vulnerable during recessions than flat-tax states.
S&P Global Ratings has warned that Illinois’ bond sale to help pay old bills could merely add more debt to Illinois’ burden if the state does not also enact fiscal reforms.
Of the three major ratings agencies, only Moody’s Investors Service has indicated that Illinois lawmakers’ lack of long-term solutions for reducing that debt is a severe problem.
Illinois’ bond rating may not be junk, but the state’s finances still are.
The state’s bill backlog is expected to hit $22.7 billion and pension costs are predicted to grow 14 percent by fiscal year 2018.
S&P cited Illinois lawmakers’ failure to pass a budget and the lengthy budget impasse as reasons for its one-notch credit downgrade. Over the years, Illinois’ state credit rating has been downgraded multiple times due to massive spending and excessive borrowing.