Standard & Poor's has lowered Illinois' credit rating due to concern over the state's failure to address its $96 billion pension fund deficit, becoming the second ratings agency to do so.
The company said Friday that it downgraded Illinois' general obligation bonds from A to A-minus and has given an A-minus rating to $500 million in general obligation bonds that the state plans to issue in February.
The move makes Illinois the worst credit risk in the country, tying it with California as S&P’s lowest-rated state, although California has a position outlook and Illinois' is negative.
The ratings agency says that given the Legislature's track record, it doesn't think lawmakers will fully address the pension fund deficit, which was caused by decades of underfunding.
Treasurer Dan Rutherford says Illinois' credit rating downgrade is likely to cost taxpayers more in interest when the state issues bond, and that lawmakers' inaction has Illinois "headed for financial disaster."
Gov. Pat Quinn said earlier Friday that rating agencies won't give Illinois better marks until the General Assembly passes pension reform.
Moody's downgraded Illinois' rating in December.