* Illinois has been downgraded by Fitch, but it’s not as bad as it could’ve been…
Fitch Ratings downgraded the state of Illinois’ general obligation bond rating on Wednesday to A, down two notches from AA-minus. Analysts cited the failure of the state to enact a budget that addresses its spending needs and structural deficit.
The rating is removed from Rating Watch Negative, where it was placed April 9, 2009.
The Outlook is Stable.
The downgrade reflects the significant scope of the budgetary problem and the failure of the state to enact a budget that fully addresses its current spending needs and its large structural budget deficit. The enacted budget relies heavily on non-recurring revenues, particularly the use of debt to finance current operations, which will contribute to continued difficulty in structuring a balanced budget in the future. […]
The extent of the current fiscal problem has been clear for several months as revenue estimates were downsized; however, comprehensive solutions have been repeatedly delayed.
Thank goodness it wasn’t a California-like downgrade.
Also, the state’s Build Illinois bonds were reaffirmed at AA.