SPRINGFIELD — Illinois, unable to solve its long-running financial problems, was given the lowest credit rating of any state in the country by Moody’s Investors Service on Friday, a move that will increase costs to taxpayers.
A second agency, Standard & Poor’s, left its Illinois rating unchanged but warned of a negative outlook that could lead to a downgrade in the future. A day earlier, Fitch Ratings also left the rating unchanged and declared a stable outlook.
Lower credit ratings generally mean the state winds up paying more interest when it borrows money by selling bonds.
Both Moody’s and S&P said they are troubled by Illinois’ failure to balance its budget and strengthen government pension systems, although a tax increase and other measures have helped.
Moody’s cited “weak management practices” and a recent legislative session that “took no steps to implement lasting solutions.”
Moody’s now rates Illinois “A2,” below any other state. Only one state, California, qualifies for the next-highest rating. All the rest are ranked higher.
Standard & Poor’s flip-flops the states in its ratings. California is worst, with Illinois a notch above.
Read more at The Chicago Sun-Times.