S&P Lowers Illinois Credit Rating, Blames Pensions

Standard & Poor's rating services has lowered Illinois' credit rating, blaming the state's pension problems.

The New York-based agency said Friday that the rating on the state's general obligation bonds was downgraded to A- from A. The agency also gave an A- rating to $500 million in general obligation bonds that the state plans to release in February. The agency says the outlook is negative.

Standard & Poor's credit analysts say the downgrade reflects what the agency sees as the state's "weakened pension-funded rations" and lack of action on reform measures to improve the state's worst-in-the-nation pension crisis. Illinois has a $96 billion pension deficit.

It's not the first time it happened.

Standard & Poor's Ratings Services lowered Illinois' credit rating in the face of "weak pension funding levels and lack of action on reform measures" last August. That news came after legislators reached no solution for the climbing $80 billion-plus public pension deficit during a special session two weeks ago.

Since then, the situation remains the same.

Lawmakers were expected to vote in January on Gov. Pat Quinn's last-minute proposal to create an eight-member commission to deal with the $96 billion crisis, but it became clear that not enough legislators supported the idea and a vote was never called.

“Pension reform has confounded Illinois legislatures and governors for 70 years,” Quinn said. “There’ve been 12 governors, 13 speakers of the house and 12 presidents of the senate that have grappled with this issue, and we have continued to grapple with this issue. We’re working night and day on this issue.”