Capitol Fax.com - Your Illinois News Radar » S&P also gives Illinois a double-notch upgrade
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
S&P also gives Illinois a double-notch upgrade

Friday, May 6, 2022 - Posted by Rich Miller

* Press release…

Governor JB Pritzker today applauded S&P Global Ratings’ upgrade of Illinois bonds. This latest action means that Illinois has now received two-notch bond rating upgrades from the three major credit rating agencies in the last year – a total of six upgrades in less than a year. This fiscal progress was attained due to strong fiscal leadership by Gov. Pritzker and Democrats in the General Assembly, despite a global pandemic and the economic challenges left by previous administrations.

S&P Global Ratings announced on Friday its second upgrade of Illinois’ bonds since July 2021. Fitch Ratings upgraded Illinois’ bonds by two notches this week, the first Fitch upgrade for Illinois’ General Obligation bonds since June 2000. Illinois received an upgrade from Moody’s Investor Service last month, the second such upgrade by Moody’s in 10 months.

“These achievements bear repeating: balanced budgets four years in a row, paying the state’s bills on time, early repayment of pandemic-related borrowing, clearing out debts left by previous administrations, making higher-than-required pension payments, setting aside $1 billion in savings for a rainy day. After more than 20 years without receiving a credit upgrade, the rating agencies are taking notice of our tremendous progress,” said Governor Pritzker. “Along with our partners in the General Assembly and my fellow constitutional officers, we will continue to build on our success and lead this state in a fiscally responsible manner.”

“The upgrade reflects what we view as improvement in the state’s financial flexibility and monthly revenue reporting transparency, continued timely budget adoption and elimination of the bill backlog, as well as recent surplus revenues being used to promote what we view as longer-term financial stability, although credit pressures remain,” S&P Global stated.

S&P last upgraded the state’s bonds in July 2021, and today’s analysis credited stronger-than-forecast tax revenues and transparent reporting both from the Comptroller and the Governor’s Office of Management and Budget aiding in addressing longstanding credit weaknesses.

The Governor thanked House Speaker Chris Welch, Senate President Don Harmon, Leader Greg Harris, Senator Elgie Sims, Comptroller Susana Mendoza and Treasurer Michael Frerichs for their ongoing commitment to Illinois’ fiscal well-being.

The upgrades follow the enactment of the state’s fourth balanced budget in a row, while providing $1.8 billion in tax relief to the working families of Illinois and marked Illinois’ first contribution to a Rainy-Day Fund in 18 years, as well as a $500 million extra payment toward the state’s pensions. The historic budget places Illinois it its strongest financial position in a generation while funding key investments for education, human services, law enforcement and violence prevention.

S&P Global upgraded Illinois’ rating on its General Obligation bonds to BBB+ (stable outlook) from BBB (positive outlook), and also upgraded Build Illinois sales tax bonds to A- (stable outlook) from BBB+ (positive outlook).

Fitch upgraded Illinois’ rating on its General Obligation bonds to BBB+ (stable outlook) from BBB- (positive outlook), and also upgraded Build Illinois sales tax bonds to A (stable outlook) from BBB+ (positive outlook).

Moody’s upgraded Illinois’ rating on its General Obligation bonds to Baa1 (stable outlook) from Baa2 (stable outlook), and also upgraded Build Illinois sales tax bonds to Baa1 from Baa2 while maintaining their stable outlook.

The rating of a state’s bonds is a measure of their credit quality. A higher bond rating generally means the state can borrow at a lower interest rate, saving taxpayers millions of dollars.

Between 2015 and 2017, the State of Illinois suffered eight credit rating downgrades and sat at the top of many analysts’ lists of the worst managed states in the nation. At its worst, Illinois’ bill backlog hit nearly $17 billion.

Key Actions – Responsible Fiscal Management

Fiscally responsible choices over the last three years have resulted in historic progress toward financial stability in Illinois.

Illinois’ FY2023 budget:

    · Deposits $1 billion to the Budget Stabilization Fund (BSF) across FY2022 and FY2023 - the first deposits in 18 years. Also creates ongoing, permanent funding for BSF for the first time.

    · Contributes an additional $500 million directly towards state unfunded pension liabilities, reducing long-term liabilities by an estimated $1.8 billion.

    · Pays down $4 billion in debts across FY2022 and FY2023, including eliminating the payment delays in the employee and retiree health insurance program through $898 million in FY2022 supplemental appropriations.

    · Keeps pace with payment of the state’s bills, with estimated bill payment delays at the lowest levels since before the Great Recession, saving taxpayers hundreds of millions in unnecessary interest costs.

...Adding… Speaker Chris Welch…

“Another day, another credit upgrade. The consensus is clear— Illinois is getting its fiscal house back in order. Instead of the typical defer and delay we grew accustomed to under previous administrations, Democrats are facing our financial challenges head on and it’s paying off.”

…Adding… From S&P…

The upgrade reflects what we view as improvement in the state’s financial flexibility and monthly revenue reporting transparency, continued timely budget adoption and elimination of the bill backlog, as well as recent surplus revenues being used to promote what we view as longer-term financial stability, although credit pressures remain. […]

The upgrade reflects our view that Illinois’ enacted $46 billion fiscal 2023 budget, along with the state’s plans for using fiscal 2022 surplus revenues and deploying federal aid, will likely support its trend of financial stability. […]

Although Illinois’ fiscal 2023 general fund budget is balanced in terms of current-year obligations, we do not view it as structurally balanced due to the treatment of pension obligations. Overall, the budget is 3.9% larger than the fiscal 2022 initially adopted budget, but 5.0% smaller than estimated general fund final spend in fiscal 2022. […]

Upside scenario
If the state continues to improve pension, OPEB, and BSF funding levels, while shrinking the statutorily created structural deficit without experiencing meaningful deterioration in other credit factors, we could raise the rating. Although not required for us to consider an upgrade, a return to a more abbreviated audit-release period would be in line with that of higher-rated peers.

Downside scenario
We could lower the rating if a structural deficit were to increase, derived from economic uncertainties; worsening revenue collection; or increases in pension, OPEB, or other fixed-cost obligations.

…Adding… Comptroller Mendoza…

A 6th upgrade in less than a year proves Illinois is on the right path toward fixing its finances.

S&P Global Ratings praised Illinois’ responsible budget as it raised the state’s rating Friday – the second time in less than a year it has upgraded the state’s rating. All three major ratings agencies have now raised the state’s ratings two notches in less than a year. This comes after 20 years of downgrades – the bulk of them – eight – under the previous administration.

“These upgrades are good news for Illinois taxpayers because they lower the costs for public works projects like roads and bridges that taxpayers pay for,” Comptroller Susana Mendoza said.

In her six years in office, Comptroller Mendoza has paid down bills and shortened the time state vendors wait to be paid.

“I’ve paid the backlog down from $16.7 billion to an accounts payable of $2.5 billion today,” Comptroller Susana Mendoza said. “The oldest bill in my office is 14 working days old, down from 210 business days when I took office. In all their upgrades, the rating agencies have noted that progress.”

Comptroller Mendoza also championed a series of transparency reforms that passed the General Assembly by unanimous or near-unanimous margins, opening the state’s books for taxpayers, legislators and the rating agencies to see.

“Stronger-than-forecast tax revenues and transparent reporting both from the comptroller and the governor’s office of management and budget aiding in addressing longstanding credit weaknesses,” S&P said in its announcement Friday.

S&P, like Fitch ratings on Thursday, praised the responsibility of this budget passed by the General Assembly and signed by Governor Pritzker that included savings championed by Comptroller Mendoza. It included $1 billion for the state’s Rainy Day Fund and $500 million in additional payments to the pension fund, lowering that fund’s shortfall by $1.8 billion.

Comptroller Mendoza supported an effort to require regular ongoing payments into both funds. The budget includes $45 million a year for the Rainy Day Fund, but Comptroller Mendoza will continue seeking to raise that number.

“Six upgrades in less than a year make it clear that Illinois is continuing on the right path that the Comptroller’s Office, working together with the Governor’s Office and the legislative leaders, began when I took office to make strategic and fiscally responsible cash management decisions,” Comptroller Mendoza said. “I’ve been laser-focused on transparency of fiscal information, paying down the state’s debts, and prioritized saving for a rainy day. Let’s keep it going.”

       

13 Comments
  1. - Oswego Willy - Friday, May 6, 22 @ 11:41 am:

    Another piece of good news that’s contrary to those folks who spend their time orbiting Illinois politics just spelunking for misery… our state has a lot to be proud of.

    Grifters need to shift their pitches, lol


  2. - MisterJayEm - Friday, May 6, 22 @ 11:54 am:

    The upgrades follow the enactment of the state’s fourth balanced budget in a row, while providing $1.8 billion in tax relief to the working families of Illinois and marked Illinois’ first contribution to a Rainy-Day Fund in 18 years, as well as a $500 million extra payment toward the state’s pensions.

    And during a pandemic, no less.

    – MrJM


  3. - Cheap Seats - Friday, May 6, 22 @ 11:58 am:

    It’s almost like not purposely sabotaging your state has positive results. Who’da thunk it?


  4. - Grandson of Man - Friday, May 6, 22 @ 12:06 pm:

    It’s not just raining a lot of rain in Ellinois these days. It’s raining fiscal improvement and responsibility. Consider where we came from and the spelunkers’ deliberate attempt to financially break us, to bust unions. They need to take the last seat in the last row in the back, before they can criticize anyone on fiscal and economic policy.


  5. - Nathan - Friday, May 6, 22 @ 12:09 pm:

    This is what happens when the adults are allowed to get to work.


  6. - H-W - Friday, May 6, 22 @ 12:41 pm:

    Very well deserved results for an Administration that has taken serious the need address our fiscal crisis. Well done, and thank you.


  7. - Predecessorage - Friday, May 6, 22 @ 12:41 pm:

    Amazing that Dems aren’t making a bigger issue of zero republican support for any budget that earned all of these upgrades.


  8. - natty lite - Friday, May 6, 22 @ 12:45 pm:

    Single notch, not double. But great news!


  9. - Henry Francis - Friday, May 6, 22 @ 1:14 pm:

    Well this puts a damper on the Boeing news.


  10. - Anyone Remember - Friday, May 6, 22 @ 1:21 pm:

    Someone check on Greg Bishop. /s


  11. - Nick - Friday, May 6, 22 @ 1:36 pm:

    Democrats are the party of fiscal responsibility


  12. - Anonymous - Friday, May 6, 22 @ 3:29 pm:

    This is good news, but it is unrelated Illinois budget decisions. Federal revenues and revenues in most states have far exceeded expectations for reasons that are not fully understood. The permanence of this good news is far from certain.


  13. - Anyone Remember - Friday, May 6, 22 @ 3:36 pm:

    === The permanence of this good news is far from certain.===

    Did they blow it like Ryan did? Like Thompson’s FY 1986 budget (the number of new jobs was greater than the number of votes he won by in 1982)?


Sorry, comments for this post are now closed.


* Debate coverage roundup
* Proft paper, or not?
* Great mystery solved, kinda
* Today's quotable
* SUBSCRIBERS ONLY - Supplement to today's edition
* Open thread
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Debate open thread
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............


Loading


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
October 2022
September 2022
August 2022
July 2022
June 2022
May 2022
April 2022
March 2022
February 2022
January 2022
December 2021
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020
June 2020
May 2020
April 2020
March 2020
February 2020
January 2020
December 2019
November 2019
October 2019
September 2019
August 2019
July 2019
June 2019
May 2019
April 2019
March 2019
February 2019
January 2019
December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018
March 2018
February 2018
January 2018
December 2017
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller