Comptroller asks for upgrade to Illinois’ worst-in-nation credit

[February 08, 2022]  By Greg Bishop

(The Center Square) – Illinois Comptroller Susana Mendoza is asking the credit ratings agencies to upgrade Illinois’ worst-in-the-nation status.

S&P Global has Illinois at BBB. Moody’s has the state at Baa2. That’s after upgrades from the agencies last year. Fitch has Illinois at BBB-.

“My office is doing everything possible to manage the current backlog of bills and address Illinois’ finances head-on,” Mendoza said in a letter to the agencies that her office announced Monday. “The Illinois Office of Comptroller urges you to consider these positive factors and progress made in strengthening Illinois’ financial position when evaluating Illinois’ creditworthiness.”

Mendoza said in the letter she has paid back recent borrowing from a federal program. Illinois was the only state to borrow from the Federal Reserve’s Municipal Liquidity Fund for a total of $2.6 billion.

“We did not wait until the end of the fiscal year to pay it off and instead finished the repayment last month, nearly two years early, and saved taxpayers an estimated $82 million in interest,” she wrote. “It is important to note that these payments to the Federal Reserve were drawn from state revenues without using direct federal relief funds.”

She went on to say her office plans to pay back more borrowing and if that “is not sufficient to lead to a favorable review, [Gov. J.B. Pritzker’s] recently announced budget proposal will surely check off any remaining doubts that Illinois is on the right track to fiscal stability.”

The governor in his budget address last week proposed spending nearly $4 billion more than the current fiscal year. He did not address the $4.5 billion in unemployment trust fund debt.

After the governor’s address Wednesday, Mendoza heralded the work she’s done to pay down the state’s bills that peaked at nearly $17 billion by borrowing $6 billion.

“By leveraging these federal matches, I was able to turn that $6 billion into $9 billion and then shave that off the $16.7 billion backlog,” Mendoza told The Center Square.
 

Her office has partnered with Pritzker to do more, she said, sounding optimistic for the future of the state’s finances.

“We’ve now received two credit upgrades instead of the eight credit downgrades that the state had received before I became comptroller [in 2016],” Mendoza said.

McHenry County Auditor Shannon Teresi is seeking the Republican nomination for comptroller. She questioned the rosy picture Mendoza paints.

“If you see a map of all the states, all the states are green. Illinois is sitting in the center red,” Teresi told WMAY. “No other states have a credit rating like Illinois does.”

She criticized borrowing to pay bills.

“She has taken on even more debt,” Teresi said. “The deficit has grown under Susana Mendoza and J.B. Pritzker.”

Teresi said one-party rule in Illinois has to be broken up so there’s more accountability for taxpayers.

The primary is June 28. The midterm general election is Nov. 8.