Thursday, May 5, 2022
SPRINGFIELD— Today, Fitch Ratings gave the state a two-notch, bond-rating upgrade, noting the state’s “fundamental improvements in Illinois’ fiscal resilience.” This is the first Fitch upgrade for Illinois in more than 20 years. It comes on the heels of an upgrade from Moody’s Investors Services last month.
Earlier in the year, Comptroller Susana A. Mendoza repaid Illinois’ federal loans years ahead of schedule, saving Illinois taxpayers $82 million.
“Prudent expense management allows the state to accelerate repayment of various budgetary liabilities,” Fitch said in its double-upgrade Thursday.
Last year, Moody’s upgraded the state’s rating on June 29, which was the first upgrade the state had earned in more than two decades. The next week, on July 8, S&P Global upgraded the state’s credit rating as well.
With Fitch’s announcement today, the state’s credit has now been boosted five times in less than a year.
“Our state has now earned five credit upgrades during my tenure as Comptroller, it’s an amazing accomplishment and I’m very proud that my team and state leaders are showing you can lead with empathy – prioritizing human and social services as well as promises made to state retirees about their pensions – while also prioritizing fiscal responsibility,” Comptroller Mendoza said.
Comptroller Mendoza has focused on paying down the state’s backlog of bills and shrinking the time state vendors wait to be paid.
“According to the March report, the Office of the Comptroller's bill payment cycle, or the age of the state's oldest unpaid general funds voucher for external vendors was 18 business days as of March 31. The Comptroller reports this metric has steadily decreased (aside from seasonal variation) from a peak of 210 days in November 2017,” Fitch wrote.
Under the prior governor, the state had suffered a 736-day budget impasse and eight credit downgrades, during much better economic times.
Moody’s and Fitch both cited the state’s contributions into reserves as a reason for the recent upgrades.
Comptroller Mendoza has been a strong proponent and driver of reviving the state’s Budget Stabilization Fund – commonly referred to as the Rainy Day Fund.
The FY ’23 budget signed by Gov. JB Pritzker includes $1 billion for the Rainy Day Fund and an additional $500 million to the Pension Stabilization Fund, saving Illinois taxpayers $1.8 billion in the long run.
Under Comptroller Mendoza, there is no longer a bill backlog, rather an accounts payable, that stands at about $2.1 billion today. That’s down from nearly $17 billion in 2017.
“We’re putting our best fiscal foot forward, and we’re earning recognition for these great strides we’re making,” said Comptroller Mendoza. “Even better days are yet ahead if we keep leading with fiscal responsibility.”