S&P Downgrades Illinois' Debt Rating Over Failure to Reform Pension Funds
Standard & Poor's has announced that it is downgrading the debt rating of the state of Illinois to A-.
The downgrade is the result of the state's failure to deal with pension liabilities. The state was also given a negative outlook by S&P, meaning another downgrade could follow if changes are not made.
Governor Pat Quinn has been pushing for pension reform for months, even claiming last year that he was "put on earth" to solve the problem. But fellow Democrats, who control the state legislature, have been uncooperative. His most recent plan for an independent pension commission did not even receive a vote in the Assembly.
Last October, an Illinois State Budget Crisis Task Force issued a report which concluded state liabilities were "not fiscally sustainable." The report, which was prepared by analysts, including some who have advised the President, blamed decades of poor leadership for the problem.
Rather than renegotiate pension and health care contracts the state cannot afford, politicians have chosen to borrow to cover expenses. Illinois currently has the second highest per capita debt of any state.