Illinois receives another bond rating upgrade from Moody’s
CHICAGO (WGEM) - Gov. J.B. Pritzker, and other Democratic leaders, celebrated Thursday the announcement of another improved bond rating for Illinois.
Moody’s upgraded the state’s rating for general obligation bonds and Build Illinois sales tax bonds to BAA1 stable outlook. Both bonds were previously rated as BAA2 stable outlook.
This is the second credit rating upgrade from Moody’s in less than a year, but it is also the third upgrade from Wall Street in 10 months. The first Moody’s upgrade was announced on June 29 while S&P Global upgraded Illinois’ status on July 8. Pritzker said this happened after Democrats passed, and signed, a budget with a $500 million payment toward pension obligations and the first contribution to the state’s rainy-day fund in 18 years.
“Higher credit ratings result in elimination of wasteful spending and they mean that we will have more resources for education, for health care, public safety, and future tax breaks,” Pritzker said.
Higher bond ratings can help states borrow money at a lower interest rate, saving taxpayers millions of dollars.
Illinois suffered eight credit rating downgrades during the budget impasse from 2015 to 2017. Pritzker said the state still has more work ahead to climb out of the financial hole dug over decades.
House Speaker Emanuel “Chris” Welch (D-Hillside) said the credit rating increase affirms that Democrats are getting the state’s finances back on track through responsible leadership.
“We’ve turned Bruce Rauner’s $17 billion debt into a surplus, and now we’re using that financial stability to make historic investments in human services and public safety, and put money back into the pockets of hardworking families,” Welch said.
Pritzker thanked Welch, House Majority Leader Greg Harris, Sen. Elgie Sims, Treasurer Michael Frerichs, and Comptroller Susana Mendoza for their partnership in the effort.
“I knew that through our smart fiscal management, this upgrade was on the horizon,” Mendoza said. “This is not by chance. Even before a penny of American Rescue Plan Act (ARPA) federal stimulus dollars came to Illinois, the Illinois Office of Comptroller methodically paid down the state’s bills and shortened the bill payment cycle.”
However, Senate GOP Leader Dan McConchie (R-Hawthorn Woods) said Pritzker is tricking Illinoisans into thinking he created a fiscally-responsible government while ignoring the state’s $16 billion “federal bailout.”
“The truth is, Pritzker continues to put Illinois on a path toward fiscal insolvency by increasing state spending and failing to address the systemic issues that are causing people to flee this state,” McConchie said. “Should he remain in office next year, he is going to be confronted with a major hangover after the federal money dries up and state spending is at a record high.”
Still, Pritzker stressed it is better to see the state improving than dropping in the national ranks for financial stability.
“I would say that if you put us on a billboard chart, we’d be approaching the top in terms of most improved and the significant investments that we’ve made for our future,” Pritzker said.
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