Rating agencies skeptical of Illinois' resolve on debt

Thursday, September 16, 2010

Illinois is 0-3 this year with major bond rating agencies, thanks to a growing pile of debt, including pension debt, based on a compilation of reports by the state Comptroller’s Office.

Here are summaries of each agency’s evaluation:

* Standard and Poor’s. Put Illinois on a “negative watch” at the end of 2009 and in April updated its analysis to warn that the problem has only worsened because the state’s “willingness to implement difficult and politically unpopular measures to restore budget balance is questionable in our view.”

* Moody’s. Downgraded state’s bonds in June. The agency based its downgrade on “a chronic lack of political will that indicates further erosion of an already weak financial position.”

* Fitch. Also downgraded the state’s bond rating in June. “Downgrade reflects the magnitude and persistent nature of the state’s fiscal problems and passages of a budget for (fiscal) 2011 that does not address either the annual operating deficit or accumulated liabilities.”