Same old, same old
There's no escaping the state's financial woes.
Bad news rolls off Illinois legislators like water from a duck's back.
But in case any of them cares, there's more bad news on Illinois' financial front. (Skeptics can be forgiven if they thought things could not get any worse.)
Late last week, the Standard & Poor's rating service downgraded the state's bond rating from A to A-, the lowest of the 50 states.
The downgrade means that taxpayers will have to pay higher interest rates when the state issues bonds or borrows money.
The rating agency attributed this latest in a series of downgrades to the state's staggering financial problems, most particularly the Legislature's refusal (no other word fits) to address the underfunding of Illinois' five public pension systems.
The pensions are underfunded by roughly $95 billion, a debt that increases each day.
"The downgrade reflects what we view as the state's weakened pension funding ratios and lack of action on reform measures intended to improve funding levels and diminish cost pressures associated with annual contributions," the rating agency stated.
S&P also warned that the state's bond rating remains in further peril.
"While it is unusual for a state rating to fall into the 'BBB' category, lack of action on pension reform and upcoming budget challenges could result in further credit deterioration, particularly if it translates into weaker liquidity," S&P stated.
The report noted that Gov. Pat Quinn and legislators could take action to ameliorate the situation but said there is "limited upside potential for the rating in the next two years given the size of the accumulated deficit and the liability challenges Illinois faces."
Perhaps to dramatize the problem, the Quinn administration Wednesday postponed a planned $500 million bond sale. Quinn budget spokesman Abdon Pallasch issued a statement on Quinn's behalf that read, "The state of Illinois has delayed Wednesday's scheduled bond sale. Our conversations with potential bidders lead us to believe the market is unsettled because of recent actions and comments by the bond-rating agencies. We plan to schedule a new bond sale after the markets have had time to digest the news."
The downgrade, the cancelled bond sale and the continuing chaos surrounding state finances are predictable consequences of state officials' inability to summon the courage to act. But as the state draws ever closer to the abyss, avoidance becomes not only more costly but also more difficult.