Illinois S&P Rating is Worst in the Nation

State Treasurer Dan Rutherford says poor credit rating will cost taxpayers.

Standard & Poor’s rating services downgraded Illinois’ credit rating today to A-, with a negative outlook, making it the lowest rating of all 50 states.

State Treasurer Dan Rutherford blamed the negative rating on inaction on the public pension system by Gov. Pat Quinn and the general assembly, at a press conference today. Illinois has a $96 billion pension deficit.

Rutherford pointed out numerous instances in which the state had set a deadline to address pension reform and did not meet the deadline, which was followed by a downgrade in the state’s credit rating.

“Every time a deadline is set and nothing happens substantively, there is a negative action by rating agencies, Rutherford said.

Rutherford explained that the poor credit rating affects the state the same as a poor credit rating would affect an individual. 

“If you went out to borrow 500 dollars, because you have such bad credit, it will cost 95 dollars more in interest than better rated states,” Rutherford said. 

“This is absolutely bad news of for taxpayers; this affects what we are paying in interest as opposed to principal,” he said. He said the poor credit rating will have an effect on state universities, road construction and other public institutions because as projects are paid for, more will go to interest than principal. 

Rutherford said state leaders need to cut the budget and address pension reform.

Standard & Poor's credit analysts say the downgrade reflects what the agency sees as the state's "weakened pension-funded rations" and lack of action on reform measures to improve the state's worst-in-the-nation pension crisis, according to AP. 

Scott A. Marquardt January 26, 2013 at 02:31 AM
I dont care who did what how long ago. As long as Oblowme is in office, Illinois, his homestate is screwed.
Deadcatbounce January 26, 2013 at 03:45 AM
There are plenty of governors whose fingerprints are on this mess, Edgar's not the only one RB. Get educated 1971 - Pension maximum raised to 75% from 60%. That didn't take long. - Annual COLA raised to 2% from 1.5% - No pension reduction if younger than 60 with 35 years service. 1972 - 85 sick days (1/2 year service) allowed for early retirement. 1973 - Survivor benefits paid at age 50 instead of 55. 1978 - Annual COLA raised to 3% from 2% (not compounded) 1979 - ERO (Early Retirement Option) allowed. 1980 - Retiree health insurance program established. 1982 - Employer pick-up of employee contributions allowed. 1983 - Unmarried children over 18 eligible for health insurance coverage. 1984 - Sick leave credit upped to 170 days from 85 days. 1990 - 3% COLA compounded. 1990 - Survivors get COLA. 1990 - Disability and pensions added for part-time and substitute teachers. 1991 - Retiree health care premiums 75% subsidy. 1998 - Waive Early Retirement cost - 34 work-years becomes 35 years for pension.
Deadcatbounce January 26, 2013 at 03:50 AM
Let me see, Madigan has been in office since 1977. That means he has been around for almost all of these pension enhancements. But let's blame Edgar, right RB!
RB January 26, 2013 at 03:59 AM
Deadcat, I know that. The Dems were getting sole blame, I simply pointed out Republicans are not clean in this mess, it's all over them, too. Governors have to sign these bills and for the next few days at least there is one Democrat AND one Republican in prison. So their $%#t does stink too.
Doug Daluga January 26, 2013 at 06:04 AM
Do you mean President Obama?
RB January 26, 2013 at 01:04 PM
Unfortunately, I imagine he means what he says. The hate from these people is pretty extreme. Further evidence of why they should not have Assault Weapons as they assemble their Militia of haters. They still get to vote, however.
Jac Charlier January 26, 2013 at 01:34 PM
Will you vote for your State Rep and Senator in the next election cycle? The damage being done to the IL economy and everyday people is very, very real. Your State Rep and State Senator (if in office prior to 2010) who have passed numerous State budgets and intentionally ignored the growing pension debt are now the same people who are trying to "solve" the pension debt without being ACCOUNTABLE for what they have done. They benefited from the problem by being able to avoid making spending reduction decisions (which they could have done slowly and carefully) and now are trying to benefit by spinning the tale they are here to resolve the situation created by _____________ (insert any State politician other than themselves). As for the $9 Billion backlog of bills, that is for another posting.
Malta January 26, 2013 at 01:50 PM
Soon enough obamacare. And the unending social welfare benefits that have turned America into a welfare nanny state will result in a Greek style situation.....Illinois will be asking for bailouts....people will be growing gardens for food and cutting down trees to burn for warmth...the "great society"
chris January 26, 2013 at 01:57 PM
It's too bad the state and city I was born, raised and lived in has come to such a tragic end. The blame game goes back and forth when in fact there's no difference between Republicans and Democrats in Illinois. This is a union labor stronghold that has bought and sold politicians and has driven out businesses and bankrupted governments. There isn't a single government agency in Illinois that isn't mismanaged or corrupt. From the Tollway Authority, to the MPEA, CTA, RTA, MWRD pick the acronym, it's nothing more than a patronage employee scheme that squeeze money and businesses out of Illinois. We are moving and taking our business with us and will never look back. If you're crazy enough to stay and put your financial security and future into the hands of Illinois government, I admire your optimism, but question your judgement. Illinois is worse than dead, it's on (very expensive) life support, and you're picking up the tab.
RB IS A Pompous ASS January 26, 2013 at 02:40 PM
No Doug i'm pretty positive he means OBLOWME. To RB: Simply put so even you can understand this. You Sir or Madame or even both. are a Pompous ASS
Glenn Posner January 26, 2013 at 03:01 PM
Red AND Blue, shame on you. This back and fourth finger pointing (good cop/bad cop) serves no useful purpose as both parties are "cut from the same cloth." It appears that Illinois is simply THE microcasm for the entire nation's financial crisis.
Charles January 26, 2013 at 03:08 PM
This is indeed coming. Obamacare can not be sustained under the way things are now. The liberal Democrats have absolutely no economic sense at all. They write checks they can not cover or hope to cover.
Jac Charlier January 26, 2013 at 07:00 PM
So, will you vote for your incumbent State Rep and Senator in 2014? Will you back somebody else? I appreciate a good discussion with back and forth. At the end of it all, what changes will you take to put words into action?
grandpa January 26, 2013 at 07:41 PM
When the voters act like children it is certain that Santa Claus will be elected.
Dan Cox January 26, 2013 at 08:19 PM
Jac, you know that most of the Chicago populace will just punch any name with a (D) next to it, even if they have been under investigation, like Congressman Jesse Jackson Jr. Il. State Rep. Derrick Smith, and now Il. Rep. Le Shaun Ford.
John Brinkmann January 26, 2013 at 09:59 PM
one needn't look around for much of anything Republican in Chicago/Cook County leadership---it doesn't exist...thats long been the history and tradition...and you aren't going to find much Republican representation in Springfield as well---there's only been brief periods of Republican control in the state house or senate for well over 50 years...No matter how much Democrats here try and spin this thing, there's no denying the party has held forth with long standing majority of state and city (Chicago) power, and must be held accountable for the misery and bankrupt condition of both
RB January 26, 2013 at 10:15 PM
If you go back through the 70's a Republican Governor has held office more than twice as long as a Democrat. So, your theory is not grounded in fact. Chicago?- yep, Democrat.
Gary January 26, 2013 at 10:21 PM
So you don't believe some vote from Republican Jim Edgar in 1994 set in motion a whole set of events that have led to the bankruptcy of Illinois? But you sound like a Republican yourself, so your opinion doesn't count. One thing we've learned from this last election is that the Democrat base will believe anything the Democrat leadership throws out there as long as it makes Republicans look bad. I am prepared to believe that they could blame the mess on Edgar, and that the rank and file Dems would buy it. But.... ...what happens after that? The Dems are in power and things are falling apart. Now I know they are waiting for the "recovery" to come around and pull their butts out of the fire, but since Obama got re-elected there's no chance of that happening, so they are staring at 4 years of economic deterioration which means 4 years of excuses and casting blame on anyone but themselves and their constituents. This should be interesting to watch.
Jac Charlier January 27, 2013 at 03:57 AM
Dan - We can also look at the political families that have "lorded" over our political scene for so many years. For multiple generations they and their families have amassed jobs, pensions and benefits for themselves, of course. Depending on where you live, you may have one, two or even more of these royal citizens.
RationalTht January 27, 2013 at 04:40 AM
@RB - what about the last 10 years - could they not have done anything since they controlled everything. Oh yeah, they did, they gave the unions A RAISE in the middle of the night. Also, the Democrats and Madigan have controlled the house for all except TWO of the past THIRTY years. This is a DEMOCRAT/UNION problem.
RationalTht January 27, 2013 at 04:41 AM
The Democrats will vote for anyone that will give them their handouts - the leeches now out number the working voters in this state.
RationalTht January 27, 2013 at 04:42 AM
Dan - as long as people in IL send democrats to Springfield, that is the leadership we get. They are voting for those people by proxy.
McCloud January 27, 2013 at 11:58 AM
Your theory is grounded on LSD. Democrats have run this state into the ground, without question. Reaching back to Rutherford B Hayes shows just how weak your excuses have become.
Just Sayin January 27, 2013 at 03:10 PM
McClown....and republiCONS have run their entire party into the ground. LOL.
Jac Charlier January 27, 2013 at 03:30 PM
OK to debate R or D being at fault...on this issue, try this on for size as an alternative. Use the Illinois legislative website to see how your State Rep and State Sen (D or R) has voted on pension payments, budgets, etc... http://www.ilga.gov/ My contention is that other than 2010 State Reps and State Senators, in the last 10 years many have cast their vote that has brought us to $100-$125 Billion in pension debt and $9 Billion backlog of bills owed to businesses. They knew this was happening and did nothing. The damage to the IL economy is as real as the votes cast by politicians to preserve their incumbency.
Deadcatbounce January 27, 2013 at 04:07 PM
Thea's good. democrats are running the entire state into financial ruin. LOL.
Jac Charlier January 27, 2013 at 08:55 PM
Dan - The specific issue of the pension debt can be safely traced to 1994 as that is when the current pension payment "ramp" was invented. I use the word invented intentionally as the ramp was not based on fiscal reality but on political comfort. That falls primarily on Republicans with Dems going along. However, in the last 10 years (since 2002) the Dems must bear the majority of the blame as they have voted repeatedly for budgets that followed this fiscal magic all the while (and this is critical) knowing full well what was coming. As I have pointed out before, one of the worst parts of the story is that those same State Representatives and Senators who have been voting are now acting as if they will "solve" the pension debt issue while accepting/acknowledging absolutely no ACCOUNTABILITY for it. This is why in my postings and discussions I ask the relevant question - "Will you vote for your State Representative and Senator when the time comes?".
RationalTht January 27, 2013 at 09:42 PM
RB - the democrats have controlled everything for the past decade or so, but have only managed to give RAISES and make things worse.
Vicky Kujawa February 02, 2013 at 04:18 PM
Just Lyin' (again), it's because of corrupt Liberal idiots like Quinn and Madigan that this state is beyond financial repair.
John Parker May 09, 2013 at 02:16 AM
The 630 educators who retired from District 211 (Schaumburg, Hoffman Estates, Palatine) averaged pension payments of $86,982 last year, almost twice the state average, according to records from the Illinois Teachers' Retirement System. To put this in context, the total pension debt-per-household in Suburban North West Cook County is $35,774


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