Moody’s has become the second organization in a week to downgrade the credit rating of the State of Illinois.
Fitch Ratings Service dropped the state’s rating Monday, June 3, 2013, from “A” to “A-,” citing the state’s unfunded pension liability as a major contributor to the downgrade.
The state legislature adjourned Friday, May 31, 2013 without passing a measure to handle the state’s $100 billion unfunded pension obligations.
In the words of Illinois Governor Pat Quinn, “Here we go again.”
Moody’s has joined Fitch in downgrading the state’s credit rating from A2 to A3, publishing their downgrade Thursday, June 6.
Moody’s cites the “General Assembly’s inability to steer the state from a path to fiscal distress,” in the downgrade statement.
Moody’s assumes the state won’t take action on the pension liabilities issue any time soon, and so it maintained a “negative” outlook for the state’s credit rating.
Quinn said he will call lawmakers back for a special session later June 19 to work on the pension issue.
Standard & Poors has, so far, kept the state at an A- rating but has said that could change if the pension issue continues to go unresolved.