(WSIL) -- Governor JB Pritzker is applauding the state's improved bond rating from Moody's Investor Service on Tuesday.
This is the first such upgrade from a credit rating agency in more than 20 years.
Moody’s last upgraded the state’s bonds in June of 1998 and Tuesday's upgrade credited “material improvements,� with only “constrained use of federal aid,� including increased pension payments, repayment of federal borrowing and keeping the bill backlog in check.
“I promised to restore fiscal stability to Illinois, and Moody’s ratings upgrade demonstrates that Illinois� finances are heading in the right direction for the first time in two decades. A ratings upgrade pays momentous dividends for taxpayers, and the people of Illinois deserve credit for their incredible resilience and determination,” said Governor JB Pritzker. “This upgrade is the result of many leaders working together on a strong fiscal plan and putting that plan in place, and I would like to especially thank Speaker Welch, President Harmon, Leader Greg Harris, Senator Sims, Comptroller Mendoza and Treasurer Frerichs for their partnership. I also applaud Moody’s for answering our request to take a fresh look at the State and their willingness to listen to our progress and our plans.”�
Moody’s upgraded Illinois� rating on its General Obligation bonds from Baa3 with a stable outlook to Baa2 with a stable outlook, and also upgraded the Metropolitan Pier and Exposition Authority ratings to Baa3 from Ba1 based on the state’s support. Build Illinois bonds were upgraded to Baa2 from Baa3.
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.
However, according to the , “Illinois still faces longer-term challenges from unusually large unfunded pension liabilities, which are routinely shortchanged under the state’s funding statute. These liabilities could exert growing pressure as the impact of federal support dissipates, barring significant revenue increases or other fiscal changes.�
Last week, Fitch rating agency upgraded Illinois from BBB- with a negative outlook to BBB- with a positive outlook.
