Standard and Poor's has slightly upgraded Illinois' credit, still at
A-minus, but with a developing future. The state had been rated
A-minus with a negative outlook.
"S&P's new outlook only means that Illinois' credit rating could be
raised or lowered in the short term," said Ben VanMetre, senior
budget and tax policy analyst at the Illinois Policy Institute.
|SLIGHTLY LESS TERRIBLE:
Illinois’ credit is bad, but gets a pension reform bump.
Standard and Poor's released a statement that paints a mixed picture
"Although we view the consensus achieved by Illinois on this
difficult issue as positive from a credit standpoint, the developing
outlook reflects the implementation risk — legal and budgetary —
associated with various provisions of the pension reform, as well as
the overall structural budget challenges facing the state," Standard
& Poor's credit analyst Robin Prunty said in a statement.
In other words: Illinois' credit is going to remain terrible until
the courts rule on the pension reform law.
And if the court rules against Illinois? Standard and Poor's said
there will be repercussions.
[to top of second column]
"If the pension reform is declared unconstitutional or invalid, or
implementation is delayed and there is a lack of consensus and
action among policy makers on the structural budget gaps and
outstanding payables, we believe there could be a profound and
negative effect on the state's budgetary performance and liquidity,"
the statement said.
VanMetre said the Illinois Supreme Court is not the only thing
Illinois taxpayers should worry about.
"Illinois' credit rating is still at risk. Prior to the bill's
passage, Illinois' pension funds had just 39 cents of every dollar
needed to meet their future obligations, based on the most recent official
numbers. After these recent reforms, the pension funds will only have 45 cents
for every dollar they should have," VanMetre
said. "And the savings are far short of the amount necessary to help
plug the state's 2016 budget shortfall of $4.5 billion."
Contact Benjamin Yount at
Ben@IllinoisWatchdog.org and find him
article courtesy of