Pension Reform Issue Threatens Illinois Credit Rating
SPRINGFIELD, Ill (IRN) – If pension reform legislation isn’t sorted out and passed by the end of the fiscal year, the state could see its credit rating affected.
Standard & Poor’s Ratings Services will evaluate the state’s FY 2013 when it is enacted on July 1st to “assess the state’s progress on structural alignment of revenues and expenditures.” A press release from the company goes on to say that no action was taken on pension reform and the ratings firm considers it negative from a credit standpoint. S&P says the outlook on Illinois’ A+ rating remains negative and they will resolve the outlook based on the review.
Republican legislative leaders say to avoid a downgrade, pass what’s already agreed on and work on other nuances of funding over the summer. “There is an agreement on the benefit reform that produces savings that would satisfy the bond houses so I think we ought to act on those and this other discussion, that’s complicated by we don’t know what the numbers are, we need to figure out how it interplays with other funding mechanisms, could be done over the summer,” said Senate Republican Leader Christine Radogno (R-Lemont).
But Gov. Pat Quinn wants one package that includes shifting the cost of pensions from the state to suburban and Downstate schools over time. “I told the…leaders that we’ve got to move quickly,” Quinn said. He says he wants legislative leaders to meet again towards the end of the month to hash out a deal before he signs the FY2013 budget into law.