CHICAGO – Illinois’ credit rating has fallen so low that the state is too risky an investment for even itself, Comptroller Susana Mendoza and Treasurer Michael Frerichs announced Friday.
The State Treasurer’s guidelines say the state should not invest in bonds with anything less than an A-minus rating. See guideline 5.0 (k) http://illinoistreasurer.gov/TWOCMS/media/doc/State%20Portfolio%20--%20Investment%20Policy_FINAL.pdf
Moody’s and Standard & Poor’s both lowered the state’s credit rating to one level above junk-bond status Thursday after the Governor and the legislature failed to reach agreement on a budget before the scheduled end of the session. This is the lowest Illinois’ bonds have been rated in the state’s 44-year history of bond ratings. The Fiscal Year ends June 30 and the agencies warn more downgrades could happen then if the impasse continues.
That means higher costs to taxpayers; more difficulty raising funds for Illinois' most basic needs; and further cuts in services for the state’s educational institutions and its most vulnerable residents. Rating agencies and business groups are urging Governor Rauner to stop holding the budget hostage to his pet projects and negotiate a balanced budget in good faith with legislative leaders.
You can view the PDF version of this release here.