State credit rating downgraded again

State credit rating downgraded again

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Illinois's credit rating was downgraded once again today, after the General Assembly went home Friday without doing anything about $100 billion in unfunded pension liabilities.

The state's credit rating was already lower than any other state in the union. Experts said the lowered rating will cost taxpayers hundreds of millions of dollars in higher interest rates and service cuts.

Experts told FOX 32 News one result of the higher interest rates is that the state will have fewer dollars to spend this summer on roads, bridges and other capital projects. A foundation sometimes crumbles quietly bit by bit. Illinois's financial foundation is taking a huge hit from this.

"We are seeing the slow, financial collapse of the State of Illinois," said Civic Federation President Laurence Msall. "It is dangerously close to not being  able to access the credit markets. We need the legislature to come together, recognize the magnitude of the problem and come up with a solution. It might not be good politics. It might not be easy. It's not what anyone wants. But it's what needs to be done, in order to save our state."

Gov. Quinn -- who's stayed away from reporters and cameras since last week -- issued a press release Monday declaring that he would discuss the credit crisis Tuesday at a meeting with State Senate President John Cullerton and House Speaker Mike Madigan.  A spokesman for Madigan, though, said he was out of state and would not attend the meeting. In the political background: the growing expectation that Madigan's daughter, Attorney General Lisa Madigan, may run against Quinn in next spring's Democratic gubernatorial primary, attacking him for the state's out-of-control budget problems.

In the recent disastrous legislative session, Speaker Madigan backed a plan that would have cut about $30 billion off the state's longterm pension debt, freeing up substantial funds for schools and other purposes.  Calling Madigan's plan unconstitutional, Senate President Cullerton and government employee union leaders had a plan to cut pension debt by only one-third as much.

In announcing Illinois government's reduced credit rating, New York's Fitch Ratings blasted not only the "ongoing inability of the state to address its large and growing unfunded pension liability." They also ripped the operating budget's "mismatch between spending and revenues," which will leave a huge pile of unpaid bills at the end of the year.

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