|
The court's ruling on Friday raises doubts that Governor
Bruce Rauner's alternative plan to cut pension costs can be
implemented, Moody's said. The governor's approach, which has
yet to be incorporated in legislation, would force employees'
future benefit accruals into a less-generous plan devised for
workers who were hired after 2010, the agency said.
Illinois will come under increasing pressure to manage its
pension liabilities through other means, Moody's said.
A focal point is trying to shifting the funding burden for
teachers and public university employees to their employers,
which could be negative for the credit standing of state
universities and for many local governments, Moody's said.
Another approach may be cutting spending on other services or
raising taxes to free up funds for growing funding requirements,
Moody's said.
At A3 with a negative outlook, Illinois has the lowest Moody's
rating among the 50 states due to its chronic structural budget
deficit, a $105 billion unfunded pension liability and revenue
loss from the recent partial rollback of temporary income tax
rates. (Reporting by Megan Davies; Editing by Leslie Adler;
Editing by Leslie Adler)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
|
|
