S&P Improves Financial Outlook On Illinois
A major credit-rating house has taken a more positive outlook on Illinois debt than it has in years after last week's pension-reform vote.
Standard & Poor's affirmed its A- rating on state debt backed by general tax revenue Tuesday but revised its outlook from "negative'' to "developing.''
The ratings agency says "developing'' means the rating could be raised or lowered in the next two years.
Analyst Robin Prunty says the change is positive but risk remains because workers unions will likely sue over the pension law Gov. Pat Quinn signed Thursday.
“I am pleased the ratings agencies are recognizing that Illinois is moving in the right direction," said Quinn, in a press release. “As I’ve always made clear, one of the many reasons to resolve Illinois’ pension crisis was the negative impact it had on our bond rating, which cost taxpayers more money to finance critical repairs and improvements to roads, bridges and schools."
The law reduces state workers' contributions to pensions but cuts their benefits in a 30-year plan to erase a $100 billion retirement-account deficit.
Quinn promised in a statement it would be the "first of many positive developments'' for Illinois.