Agencies Hold Off On Junk Status — For Now
Two bond rating agencies say Illinois is on the right path with the budget plan passed Sunday in the state House of Representatives.
After two years without a budget, the rating agencies have had Illinois teetering on the brink of “junk bond” status. That would force the state to lose more money on the routine financial transactions that keep government running.
But now, with the House passing both spending and tax legislation, both Fitch Ratings and S&P Global Ratings issued statements that sound cautiously optimistic.
Speaker Michael Madigan says that’s good news: “I’m very pleased that we’ve gotten positive responses from rating agencies such as Standard & Poor's and Fitch concerning the action taken in the House last night.”
Fitch praised the plan’s “significant” budget cuts, but also cautioned that failure to finish the job would result in a downgrade.
The Illinois Senate still has to approve the budget. And even if that happens, Gov. Bruce Rauner says he’ll veto it.