Fitch Ratings, one of three major ratings agencies, on Monday lowered Illinois' credit rating after lawmakers failed to enact a solution to fix the state's nearly $100 billion pension shortfall.
The firm said it would drop the Illinois rating from "A'' to "A-." Illinois already has the lowest rating in the nation. Lower ratings mean paying higher interest rates on borrowed money.
"Fitch believes that the burden of large unfunded pension liabilities and growing annual pension expenses is unsustainable," the firm said in a statement, "and that failure to achieve reform measures despite the substantial focus on this topic exacerbates concern about management's willingness and ability to address the state's numerous fiscal challenges.
Gov. Pat Quinn said in a statement the downgrade is no surprise.
“As I have repeatedly made clear to the General Assembly, this will continue to happen until legislators pass a comprehensive pension reform bill, and put it on my desk," Quinn said. “Every time the General Assembly misses the deadline, Illinois’ credit rating is downgraded, which hurts our economy, wastes taxpayer dollars and shortchanges the education of our children.
Quinn said he plans to meet with legislative leaders Tuesday and "keep fighting for pension reform until it is the law of the land.”
The Associated Press contributed to this report