Illinois Earns Credit Upgrade from Moody’s Investor Service
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[March 15, 2023]
SPRINGFIELD -- Governor JB Pritzker today hailed Moody’s Investor
Service upgrade of Illinois bonds to A3, the second major rating agency
to return Illinois’ credit to the ‘A’ category. The action also
represents the eighth upgrade in less than two years under Governor
Pritzker following eight downgrades under the previous administration.
The continued fiscal progress by the state of Illinois was achieved due
to continued strong fiscal leadership by Governor Pritzker and Democrats
in the General Assembly.
Moody’s said Illinois’ improving governance was a key consideration in
the action. “We consider improving governance to be a key consideration
in this action.” Illinois, it said, is “displaying improved management
of its budget by making conservative revenue assumptions and applying
surplus revenue towards the payment of debt and growth in reserves.”
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“This credit upgrade, our second one this year, is the result of the
steps we’ve taken in Illinois to put ourselves on firm fiscal footing.
We have balanced our budget, paid our bills on time, cleared out decades
of debt, made extra pension payments, and saved billions for a rainy
day,” said Governor JB Pritzker. “There’s more work to be done, but it’s
clear we have undone decades of damage and ushered a new era of fiscal
responsibility in Illinois. I look forward to building on this record by
working with the General Assembly to pass the state’s fifth straight
balanced budget later this spring.”
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Moody’s Investor Service announced a ratings upgrade to A3 (stable
outlook) from Baa1 for Illinois’ General Obligation bonds, its third
upgrade of Illinois’ bonds since June 2021. The last time Illinois
had an A3 rating from Moody’s was prior to September 2015. Moody’s
also upgraded Build Illinois sales tax bonds to A3 (stable outlook)
from Baa3 (stable outlook).
S&P Global Ratings announced a ratings upgrade to A- for Illinois’
General Obligation bonds last month, its third upgrade of Illinois’
bonds since July 2021. Fitch Ratings upgraded Illinois’ bonds by two
notches last spring, the first Fitch upgrade for Illinois’ General
Obligation bonds since June 2000. Illinois received two upgrades
from Moody’s Investor Service in two separate actions in April 2022
and June 2021.
The upgrades follow the unveiling of the Governor Pritzker’s
proposed fiscal year 2024 budget which builds on four years of
historic progress with balanced budgets, a Budget Stabilization Fund
on track to hit $2.3 billion, elimination of the state’s bill
backlog and reaching $1 trillion GDP. The proposed spending plan
maintains the Governor’s commitment to fiscal responsibility while
growing Illinois into an economic powerhouse and making
transformative, generational investments in education and efforts to
fight poverty.
The rating of a state’s bonds is a measure of their credit quality.
A higher bond rating generally means the state can borrow at a lower
interest rate, saving taxpayers millions of dollars.
Between 2015 and 2017, the State of Illinois suffered eight credit
rating downgrades and sat at the top of many analysts’ lists of the
worst managed states in the nation. At its worst, Illinois’ bill
backlog hit nearly $17 billion. |