* But Moody’s is still out there…
They’re right, of course, about the prolonged “fiscal hangover” and the “disconcerting lack of consensus.”
*** UPDATE 1 *** Greg Hinz…
Despite the budget, “The state almost certainly (will) suffer an extended hangover” from two-year impasse that preceded it. “Revenue spent on servicing and retiring the roughly $15 billion in unpaid bills is unavailable for contribution to the state’s severely underfunded pension systems or to fund state services. It also crowds out fiscal capacity the state might otherwise use to accommodate a reduction in tax rates.”
“Nevertheless,” it concludes, “despite being fractured and delayed, passage of the budget represents an affirmation of lawmakers’ collective willingness to prioritize the state’s fundamental claims-paying ability at an investment-grade level.”
S&P’s action won immediate praise from Senate President John Cullerton. Said his spokesman, “The entire point of this balanced budget was to end the chaos and move the state toward the stability it desperately needs. Those efforts appear to have been recognized and appreciated, but obviously more work is needed to get Illinois back to greatness.”
No word yet from Rauner, who in recent days has lost or pushed out almost all of his media team, or House Speaker Michael Madigan.
*** UPDATE 2 *** Press release…
Speaker Michael J. Madigan issued the following statement Wednesday after Standard & Poor’s reacted positively to passage of a bipartisan balanced budget:
“S&P’s action today is a strong signal that the balanced budget enacted by Republicans and Democrats is an important step in the right direction. At the end of June, I wrote to the rating agencies and asked that they temporarily withhold judgment and give legislators more time to enact a budget, and I’m grateful for the legislators on both sides of the aisle who used this time to work together and make the difficult decisions needed to start getting Illinois back on track.
“There is more work to be done, and it’s clear from S&P’s statement that rating agencies, like all Illinois residents, are hoping Governor Rauner will work in good faith with legislators to address these challenges rather than rejecting compromise by turning further to the extreme right.”
*** UPDATE 3 *** Comptroller Susana Mendoza…
We can all be thankful that S & P recognized the brave votes by legislators of both parties to put our state back on the right path to fiscal responsibility. The markets can be confident the state will meet its obligations on debt service and pensions. Much more work is needed to fix the state’s finances — and Democratic and Republican legislators proved last week they can work together — with or without the governor — to get necessary reforms done.
Nothing yet from the governor’s office, which has been silent pretty much all week.