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.
Gov. Pat Quinn's office said it was "encouraged" that two of the three agencies decided not to lower the Illinois rating. Spokeswoman Kelly Kraft attributed it to cost-cutting and efforts to overhaul Medicaid, pensions and workers' compensation.
"More needs to be done," Kraft added.
