Rezin responds to Moody's downgrading of Illinois
Illinois has been downgraded once again by Moody’s Investor Services, and State Sen. Sue Rezin (R-Morris) says the state's routine of borrowing and spending needs to stop.
The news of the downgrading comes on the heels of a grim three-year budget outlook released by Gov. Pat Quinn on Tuesday, Jan. 3.
Moody’s has now declared Illinois’ outlook as negative instead of stable and has lowered the state’s general obligation bond rating to A2 from A1. The report said the rationale behind lowering the rate was due to the lack of steps taken to “implement lasting solutions to its severe pension under-funding” and the state’s “chronic bill payment delays.”
Moody’s said that “the failure to address these challenges undermines near to intermediate term prospects for fiscal recovery.”
Sen. Rezin said that Illinois has been downgraded by Moody’s 11 times in the last 10 years.
“The fact that our state is still being downgraded signals that changes must happen,” Rezin said. “We must stop borrowing because that is not a solution to getting out of debt. Our debt to revenue ratio is four to one. That’s not a sustainable system. Just last week, the Governor projected we will have a $500 million shortfall this year, despite the tax increase that was passed last January.”
Sen. Rezin has repeatedly said that the independent assessments of the state’s finances should show legislators and the Governor that a real change needs to happen. Illinois’ credit ratings are the worst in state history, and it is estimated that the low ratings will cost an additional $550 million in interest.
“It’s important to note that our fiscal policies have not improved our credit ratings,” Sen. Rezin said. “When you implement one policy and see that it does not work, the only sensible solution is to make a change.
"We have not been upgraded since the tax increase last January, which was a plan we were told was going to help pay the backlog of bills. We now see it has done nothing to truly get to the root of our spending problem – something Senate Republicans predicted from the start.”
Sen. Rezin calls for a comprehensive budget plan where the income tax increase is rolled back, no long term borrowing takes places, bills are paid on time, and the budget is balanced permanently. She says if this is done, Illinois’ credit rating will be improved and the state will be put back on a solid financial footing.