S&P Gives Illinois Negative Outlook
Standard & Poor's Ratings Services has changed itsoutlook on Illinois' credit rating for the worse, revising its outlook from "developing'' to "negative'' on Illinois' A-minus rating.
S&P says the state's $35.7 billion budget isn't structurally balanced. It also cites an Illinois Supreme Court ruling that found the state can't force retirees to pay for part of their health care.
Standard & Poor's analyst Robin Prunty says the new state budget is to blame -- it's not "structurally aligned."
Prunty says during the recession, all states experienced difficulties. But they're getting over it, while Illinois is still grappling with budget gaps.
"Most states are in a fiscal recovery mode, where they're building reserve funds and addressing other fiscal challenges, and that's where Illinois diverges," she said.
The case is seen as a possible indicator of how the court will rule on a challenge to the statewide pension overhaul approved last year.
S&P says if the pension overhaul is found unconstitutional it could have a "profound and negative effect on Illinois' budgetary performance and liquidity.''
Gov. Pat Quinn's budget office says the move is a "predictable result'' from the Legislature passing an "incomplete budget."
Standard and Poor's did have good things to say about Illinois -- like that it's placed a high priority on paying off debts, its residents' income is above-average, and the economy - anchored by Chicago - is "deep and diverse."