* Crain’s…
Moody’s Investors Service revised the state’s outlook from stable to positive yesterday, affirming the state’s A3 issuer rating. That positive outlook hinged on the possibility of continued growth in state revenue, Moody’s said in a written statement.
“Revision of the outlook to positive is driven by continued improvement in fund balance and budget reserves, which has been supported by stability in revenue and state decisions to shore up financial health,” according to Moody’s. “Affirmation of the ratings recognizes lingering downside risks to the state’s credit profile, including outsize liabilities stemming from unfunded pensions.” […]
Moody’s latest outlook on Illinois is a rosier report than the one it issued last year, when the credit reporting agency described Illinois’ financial position as weak and pointed to underlying challenges like the state’s constitutional protection of pension benefits.
…Adding… Comptroller Mendoza…
“Bond rating agencies notice when Illinois puts more money toward the Rainy Day Fund and the Pension Stabilization Fund, as we have been and must continue to keep doing,” Comptroller Susana A. Mendoza said Tuesday.
Moody’s Analytics changed its outlook on Illinois bonds from “stable” to “positive” Tuesday, citing Illinois’ “continued improvement in fund balance and budget reserves, which has been supported by stability in revenue and state decisions to shore up financial health,”
“I thank the General Assembly and Governor Pritzker for keeping their focus on responsible budgeting and I urge legislators to support my Rainy Day bill, HB2551, which would require the state going forward to make regular deposits into the Rainy Day and Pension Stabilization funds,” Mendoza said.
In raising its outlook on Illinois, Moody’s noted among factors that could lead to more credit upgrades to Illinois: “Further increases in pension contributions that accelerate reductions in outstanding liabilities relative to current projections.”
“We’ve had nine consecutive credit upgrades and we want to keep going,” Mendoza said. “Better ratings from the bond rating agencies mean lower costs for Illinois taxpayers on infrastructure projects like roads and bridges.”
- Huh? - Tuesday, Apr 23, 24 @ 10:18 am:
This can’t be good. /s
- Dirty Red - Tuesday, Apr 23, 24 @ 10:27 am:
Wow.
- Southern Dude - Tuesday, Apr 23, 24 @ 10:38 am:
Interesting timing on this report- right after a campaign to contact legislators about improving Tier 2 pensions.
- New Day - Tuesday, Apr 23, 24 @ 10:43 am:
“Interesting timing on this report- right after a campaign to contact legislators about improving Tier 2 pensions.”
What are you suggesting? Seems like more good news. What’s the negative spin? Are you a nattering nabob of negativism?
- Rich Miller - Tuesday, Apr 23, 24 @ 10:46 am:
===What are you suggesting?===
That he doesn’t understand how this works.
- Proud Sucker - Tuesday, Apr 23, 24 @ 11:06 am:
“This can’t be good. /s”
Not snark if you are IPI, truly not good for them.
- TheInvisibleMan - Tuesday, Apr 23, 24 @ 11:07 am:
There are a not insignificant number of people who made major life decisions like buying a house, based on the previous years of negativity around this topic from certain pointy wires circles. People who were absolutely certain in 2016 the state would ‘collapse in bankruptcy’ and using that as a reason to not purchase a house and to instead continue renting.
Those years of misinformation have had real impacts on people who have now missed out on one of the largest increases in residential property value in the history of the state.
They even missed out on the once in a lifetime opportunity to buy tax free state bonds during that time, with interest paid out at rates which will likely never be seen again.
I feel no pity for them, and I wrap myself in my warm and comfortable smugness.
- Incandenza - Tuesday, Apr 23, 24 @ 11:21 am:
= There are a not insignificant number of people who made major life decisions like buying a house, based on the previous years of negativity around this topic =
This seems like something that is really hard to measure, just like understanding how significant taxes are when people factor moving out of state. Just because people say so doesn’t actually mean it is a significant factor in decision making. Do you have any surveys that even indicate this is the case?
- Grandson of Man - Tuesday, Apr 23, 24 @ 11:25 am:
More good financial news and positive momentum for the state. Real fiscal conservatives and pro-business people would approve.
- Lurker - Tuesday, Apr 23, 24 @ 11:28 am:
I miss OW and LP. It made this good news even more special when you read their barbs. 🤔. Well, maybe I just miss OW.
- ArchPundit - Tuesday, Apr 23, 24 @ 11:34 am:
It’s bad news for the State of Illinois by IPI is the new, “It’s good news for John McCain.”
- Google Is Your Friend - Tuesday, Apr 23, 24 @ 11:39 am:
Don’t worry folks, the rumblings aren’t an earthquake, it’s just McCombie and Curran stomping their feet, pouting, and shouting, “I’ll never change my talking points, I don’t care what the news is!”
- Flyin'Elvis'-Utah Chapter - Tuesday, Apr 23, 24 @ 12:09 pm:
“interesting timing on this report”
A comment that only proves some people can find conspiracies in their soup.
- TheInvisibleMan - Tuesday, Apr 23, 24 @ 12:09 pm:
–Do you have any surveys that even indicate this is the case?–
Allen Skillicorn
- RNUG - Tuesday, Apr 23, 24 @ 12:27 pm:
JB’s statements are quite nuanced on the subject of the pensions. He’s pretty much signaling he is open to a Safe Harbor fix for the teachers and other non-coordinated employees. But there is problem there in that nobody can agree on exactly when the Safe Harbor problem may occur and / or exactly what the fix can be.
One thing I do expect in the next few years is the salary cap will be lifted. That likely will fix part of the issue.
Later rather than sooner they will have to address the cobbled together part COLA / part AAI formula. But I don’t expect that to happen until the Safe Harbor numbers are clearer, say 5 to 10 years from now.
- RNUG - Tuesday, Apr 23, 24 @ 12:39 pm:
== just like understanding how significant taxes are when people factor moving out of state. Just because people say so doesn’t actually mean it is a significant factor in decision making. ==
Anecdotal … I have watched friend move south “because of taxes”, with them mostly focusing on the property tax. But have to also focus on the other taxes and fees different States impose.
And cost of living can be a big factor. Outside a couple of metro areas, the cost of living in Illinois is fairly low.
To cite 2 examples, one couple with a really nice house moved and bought a fairly equivalent home maybe 15% more expensive, so housing was pretty much a wash with lower property taxes. Another couple both a new place that cost about 5 times their previous modest home; they are still saving on property taxes, but not that much and had to lay out a lot of savings (capital) to do so … and they sacrificed services since they are on a private road on a mountain they and 9 other property owners have to maintain. It goes without saying they have well and septic to maintain also.
Bottom line is that there are a lot of factors, and people focusing just on taxes may get some nasty surprises.
- JS Mill - Tuesday, Apr 23, 24 @ 1:10 pm:
RNUG hitting the nail on the head in two consecutive posts…as usual.
The other Tier 2 fix could be lowering the retirement age.
- Dumby - Tuesday, Apr 23, 24 @ 1:13 pm:
Pritzker listens to the rating agencies (thank god). I assume they wouldn’t be jumping for joy about benefit enhancements without increased funding to pay for said benefit enhancements. It’s one thing to fix Tier 2 to comply with federal law. Anything beyond that would seem like it is going to require labor to push a tax increase. And given what happened with the fair tax…but what do I know?
- ArchPundit - Tuesday, Apr 23, 24 @ 1:54 pm:
RNUG, great posts as always. Dumby, one thing to consider is that if voters see better stewardship and good reasons for passing a tax increase, there might be more interest. That said, if the Guv runs for President he probably doesn’t want to highlight that fight–or maybe he does, but it complicates whether he wants to take that on again.
- Who else - Tuesday, Apr 23, 24 @ 1:59 pm:
Thank goodness for the Comptroller. She’s the one who makes all this possible. /s
- It's OVER - Tuesday, Apr 23, 24 @ 2:30 pm:
This is horrible news for John Tillman and IPI. Another cash injection from Dick Uihlein straight into Tillman’s personal bank account will hopefully put Illinois on the wrong track again.