Obama must be so proud…

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Illinois credit rating sinks to worst in nation

Chicago Tribune: Illinois fell to the bottom of all 50 states in the rankings of a major credit ratings agency Friday following the failure of Gov. Pat Quinn and lawmakers to fix the state’s hemorrhaging pension system during this month’s lame-duck session.
Standard & Poor’s Ratings Service downgraded Illinois in what is the latest fallout over the $96.8 billion debt to five state pension systems. The New York rating firm’s ranking signaled taxpayers may pay tens of millions of dollars more in interest when the state borrows money for roads and other projects.
“It’s absolutely bad news for taxpayers,” said Dan Rutherford, the Republican state treasurer. Illinois received its bottom-of-the-pack ranking when it fell from an “A” rating to “A-minus.”
That’s the same rating as California, but California has a positive outlook. Illinois’ fragile overall financial status netted it a negative outlook, putting it behind California overall. The ratings came out now because Illinois plans to issue $500 million in bonds within days.
Exactly how much Illinois’ credit-rating slide ultimately will cost taxpayers is unknown until the demand for the state’s bonds is measured in the markets. But Rutherford estimated the state will pay $95 million more in interest than if Illinois had a AAA rating, which is much higher.
Even before the downgrade was revealed, Quinn said in Chicago the “pressure is higher than ever” to solve the pension problem because “credit rating agencies are screaming at the top of their voice” for final action. The Democratic governor and lawmakers couldn’t cut a pension deal despite his deadline for the outgoing legislature to act before the new General Assembly was sworn in Jan. 9.
On Friday, Quinn called for lawmakers to take up legislation sponsored by Senate President John Cullerton, D-Chicago, that combines two rival pension plans emerging from the House and Senate. Both rein in costs by reducing benefits, an action unions have argued is unconstitutional. Cullerton spokeswoman Rikeesha Phelon said the rating agencies are “confirming what we all recognize. It’s time for action on pensions.”
House Republican leader Tom Cross of Oswego maintained Friday’s downgrade underscores the “gravity of Illinois’ fiscal crisis.” Moody’s already ranks Illinois 50th among the states, and Fitch ranks the state 49th but warns of a negative watch, Rutherford said.
One other ominous point in the Standard & Poor’s report is that inaction could lead to downgrading Illinois to “BBB,” an “unusual” low rating for any state. The agency noted a “lack of action on pension reform and upcoming budget challenges could result in further credit deterioration.”
“Most states will build reserves when the economy is performing well, and that typically provides a cushion when the revenues deteriorate,” said Robin Prunty, the S&P analyst who heads the agency’s state ratings group. “But Illinois has never really carried or accumulated any kind of budgetary reserves.
On top of the pension meltdown, Illinois faces more grim budget duties. The state already has made major cuts in school funding in two straight budgets, and the Quinn administration predicted more cuts are on the way. In addition, a 67 percent increase in the income tax rate lawmakers imposed in 2011 starts to decline in 2015. And the state has billions of dollars in unpaid bills.
Maybe when Illinois hits $16TRILLION+ in debt Obama will really be impressed.

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0 responses to “Obama must be so proud…

  1. Look carefully at Illinois. This is the direction our pres is taking us. A perfect picture of our future. Last in economic stability in the world? Slavery to our debt. We will end up with the ultra rich and all of us who support them.

  2. It’s the Chicago way…

  3. Obama claims to be so proud of the fact that he WON the election. Forget the fact that he won the election by getting the majority of the the votes from welfare recipients, illegals who should not even be allowed to vote to start with, the youth that is just starting out on their own, or at least should be, but isn’t. He won the election from people who do not pay taxes or support this country financially. Obama simple was the best Santa Clause running.

  4. Ill Annoy. Mr Quinn should be calling for Glass Steagall reinstatement. If he isn’t doing so, that indicates that he is knowingly allowing this situation to get worse and worse, just as Congress is allowing our economic situation nationwide to get worse and worse. The agencies who decide the interest rates are part of the looting and gouging policy of the oligarchs, their banks and the Wall Street crowd. Propped up by none other than Ben Bernanke, aided and abetted by Mr Geithner who is retiring from the post of Treasury Secretary.
    I wonder why? This ‘ring job’ is blatently going about siphoning off every last dime out of the US citizens’ pockets. There will be a dictator installed in Detroit very shortly, so wait for that to set a precedent for many other cities en suite. We have a challenge to dictatorial presidential actions now because of the appointments of the Labor Board or whatever it was, saying that they were unconstitutional, which could spill over into the economic arena of endless bailouts and protection of Wall Street, as Lanny Breuer just recently admitted overrode his obligation to up hold our justice system in order to save Wall Streeters. Resignations all the way around would help us, from those who may see prosecution on the horizon, we could be seeing a glimmer of hope at the end of the tunnel.

  5. Do not believe a word coming out from an Illinois Dem. politician by the name of Cullerton . Lived in that hell-hole my first 28 yrs . His daddy P.J. was a slime-bag . Like father like son …


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