* A small bit of good news. From a press release…
Fitch Ratings has affirmed the state of Illinois’ Issuer Default Rating (IDR) at ‘BBB’ and revised the Outlook to Stable from Negative.
Additionally, Fitch has affirmed the ‘BBB’ ratings on the state’s outstanding GO bonds, and the ‘A-’ ratings on the Build Illinois senior and junior obligation sales tax revenue bonds, which are linked to the state’s IDR based on state dedicated tax analysis.
The Rating Outlook for the above bonds has been revised to Stable. […]
The Outlook revision to Stable reflects key developments over the last three months for the state including an unanticipated revenue surge in April 2019 that positioned the state to resolve a sizable fiscal 2019 mid-year budget gap and enact an on-time fiscal 2020 budget. The positive April revenue surprise seen in Illinois, and other states, supported a significant increase in fiscal 2020 estimated revenues, easing the path to budget adoption and allowing the state to reduce (but not eliminate) reliance on non-recurring measures. The state now has a plausible and achievable 2020 budget plan, leaving the state better positioned from a fiscal perspective, and the potential for a rating downgrade in the near-term has receded. The recent gains, however, are somewhat tenuous and their sustainability hinges on the state’s actions over the next several years, particularly around the November 2020 ballot initiative on the graduated individual income tax.
Illinois’ ‘BBB’ IDR and GO ratings continue to reflect an ongoing pattern of weak operating performance and irresolute fiscal decision-making that has produced a credit position well below the level that the state’s broad economic base and substantial independent legal ability to control its budget would otherwise support. The state’s elevated long-term liability position remains a key credit challenge.
More at the link.
…Adding… Deputy Gov. Dan Hynes…
Illinois is already much stronger than we were a year ago, and it’s refreshing that Fitch is recognizing the good news and progress we’ve made so far. We know we have a long way to go, but we are committed to improving our long term fiscal stability and building an economy that works for everyone.