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S&P Global upgrades state credit rating

Thursday, Feb 23, 2023 - Posted by Rich Miller

* Some pointy heads are gonna explode… again…

Governor JB Pritzker today celebrated S&P Global Ratings’ upgrade of Illinois bonds. This latest action means that Illinois has received a total of seven upgrades in less than two years under Governor Pritzker. This fiscal progress was achieved due to strong fiscal leadership by Gov. Pritzker and Democrats in the General Assembly.

S&P Global Ratings announced a ratings upgrade to A- for Illinois’ General Obligation bonds, its third upgrade of Illinois’ bonds since July 2021. The last time Illinois had an A- rating from S&P was before May of 2016. Fitch Ratings upgraded Illinois’ bonds by two notches last spring, the first Fitch upgrade for Illinois’ General Obligation bonds since June 2000. Illinois received two upgrades from Moody’s Investor Service in two separate actions in April 2022 and June 2021.

“I am thrilled to see our hard work at righting the past fiscal wrongs of our state reflected in today’s action by S&P with another credit rating upgrade—the third such upgrade in just two years,” said Governor JB Pritzker. “Our continued fiscal responsibility and smart budgeting will save Illinois taxpayers millions from adjusted interest rates, and my partners in the General Assembly and I look forward to building on that success.”

The upgrade follows unveiling of the Governor Pritzker’s proposed fiscal year 2024 budget which builds on four years of historic progress with balanced budgets, a Budget Stabilization Fund on track to hit $2.3 billion, elimination of the state’s bill backlog and reaching $1 trillion GDP. The proposed spending plan maintains the Governor’s commitment to fiscal responsibility while growing Illinois into an economic powerhouse and makes transformative, generational investments in early childhood education and efforts to fight poverty.

“The upgrade on the GO debt reflects our view that Illinois’ commitment and execution to strengthen its budgetary flexibility and stability, supported by accelerating repayment of its liabilities, rebuilding its Budget Stabilization Fund to decade highs; and a slowing of statutory pension funding growth, will likely continue during the outlook period,” S&P Global stated.

S&P last upgraded the state’s bonds in May 2022 and today’s analysis credited the state’s recent actions in paying longstanding debts, rapid and early repayment debts taken on during the pandemic-induced recession and transparent reporting both from the Comptroller and the Governor’s Office of Management and Budget.

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

…Adding… The S&P report is here

The GO rating on Illinois reflects our view of the state’s:

    - Deep and diverse economic base;
    - Adequate liquidity with access to currently untapped interfund borrowing options, and a growing budget stabilization fund (BSF);
    - Expectation that open collective bargaining units will be settled in a timely manner; and
    - Transparent reporting both from the comptroller and the governor’s office of management and budget that we expect will be sustained or improve.

Offsetting factors, in our opinion, include:

    - High pension and other postemployment benefit (OPEB) liabilities and a pension funding practice where the statutory pension funding is designed to attain a 90% funded status in 2045, which is just part of one of the least conservative funding methodologies in the nation among peers;
    - Trend of annual financial audits being released later than in most other states; and
    - Population declines that are forecast to continue, and if this accelerates could potentially challenge economic growth.

The stable outlook reflects our view that Illinois’ near-term credit profile has stabilized, given improved liquidity, an economy rebounding from the COVID-19 pandemic-driven recession, and historic levels of direct federal support.

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

If the state continues to improve pension, OPEB, and BSF funding levels, while shrinking the structural deficit that we believe was created by not funding to an actuarially determined contribution level 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.

…Adding… The governor announced the upgrade during a speech today. Click here for the video.

…Adding… Speaker Welch…

“Less than two years ago we celebrated Illinois’ first credit rating increase in decades. Today, we celebrate our seventh, and a return to A-level credit. This is further affirmation that Democrats are making fiscally responsible decisions that move our state forward. I’m proud of what we’ve accomplished together, and I look forward to continued progress and success for the people of Illinois.”

…Adding… History time with Hannah…


…Adding… Sen. Elgie Sims, the chair of the Senate Appropriations Committee and Majority Caucus Appropriations Leader…

“Today’s news is yet another sign the years of fiscal responsibility from the General Assembly is paying off. In recent years, we have been able put money back in the pockets of the state’s hardworking families and provide funding for the people who need the most help – all while paying down our bill backlog. Illinois is a standout state when it comes to putting the needs of our residents first, and we do so in a responsible and equitable way.

“S&P Global Ratings’ upgrade of Illinois bonds shows our fiscally responsible budgeting approach is working and is independent proof that our state is headed in the right direction. Our future looks bright and I look forward to continued collaborative efforts during this year’s budget negotiation process to keep the state on this upward economic trajectory.”

  24 Comments      


Question of the day

Thursday, Feb 23, 2023 - Posted by Rich Miller

* Background is here if you need it. A group of Republican legislators held a press conference today demanding legislative hearings on the long-troubled Choate Developmental Center. Here’s Assistant House Republican Leader Charlie Meier

We’re here today because we have a plan and we want to protect these residents. Our first is installing temporary cameras in common areas. … Implement ongoing staff training to include residents’ rights, abuse and neglect definitions, reporting for Office of Investigator General mandatory reporting and documenting as well. Educate staff on past abuse issues experienced at Choate and train them to be aware of the issues to report incidents and how to take appropriate action.

A mass, and I say a mass hiring of qualified staff. We’ve done hirings before because of COVID bringing in a mass hiring so that we have a group of new workers there that won’t feel threatened maybe from a few bad apples of the past workers that threaten to try to cover up abuse. Let’s train them. Let’s get them in there. Let’s not hire two or four or 10 at a time. Let’s bring in a group of 50 workers or more immediately to help take care of the shortage of workers and to bring some new life blood in there and get things turned around.

Track staff incidents by location and trends. By using the data collected to implement changes, monitor staff identified in the tracking and incorporate supervisory management staff to increase overall observances. Number five, increased administrative and security inspections. The center director and assistant center director along with other professional staff must make unannounced visits on all three shifts, morning, noon, Saturdays, Sundays, four in the morning, two in the morning. This is their job, this is what they’re being paid for. They need to be out there walking the halls seeing their residents and should be after sharp while on a first name basis with them. Security staff must report all incidents of improper behavior. Any staff who bullies or intimidates or threatens residents or other staff should be immediately removed from their job station. There must be zero tolerance of staff intimidating other staff or residents.

Six, improve overall accountability of staff performance to include job duties, Investigator General reporting, active treatment and adherence of policies and procedures. This would require accountability from the administration and the professional staff. Seven, remind employees if they see something is wrong, report it. Employees are mandated reporters. Their position is protected under the Whistleblower Act. They don’t have to be revealed who released this but they need to report it. Too much is going on unreported. Increase the amount of active treatment and activities for the residents. Why? Because individuals who are busy and active have much fewer behavioral issues, which should lead to less negative interaction with staff and individuals. And if additional activity staff is needed, then hire them.

Nine, encourage and welcome parents, guardians and visiting their loved ones by telling them ‘be in there.’ They shouldn’t have to call and set up a time when they’re coming. These are their loved ones. They should be able to visit their family members in their family members home whenever they want. Encourage more groups like the grandparents groups, where individuals come and adopt the resident there and act as a grandparent to them. So we have more oversight going in there. More people around to be seen. Staff should continue to be reminded that Choate is home for these individuals and they should be retreated with respect and dignity. Encourage the decorating of the hallways and room. This is a small thing, but the more the homes are clean, well decorated and welcoming the more staff and residents will take pride in their home. Designate a specific phone line for guardians and families to contact that is available all hours and does not go unanswered for days when they’re trying to get a hold of their loved one or tell them that there’s been a medical change that their doctor wants. …

Assign an interim director, assistant director to Choate Development Center. This director should be someone who has previously supervised employees at another center and is well trained on state rules, regulations and expectations. This interim director can monitor and help retrain the president, director and assistant director reevaluate the Office of Inspector General reporting system as it currently operates. Staff who are mandated reporters are not protected or kept anonymous during the investigation process. This turns into cases has a tendency in reporting. The OIG involvement in allegations needs more protection for the employees and the investigators and they need to happen within a month. We have investigations that don’t start till nine or 13 months later. These employees are placed on paid leave. The state of Illinois paying for them, they’re not working. And we’re not finding out what happened to these residents. Put a person in there permanently from the office and let them start and get these investigations done within a month. If they’re found guilty, they need to be fired immediately.

Please pardon all transcription errors.

Leader Meier said bills have been filed and more will be. He pointed to legislation he’s worked on for several years.

From the reporting, it looks like the biggest problem is a tight-knit cover-up culture of really horrible acts. Everybody knows everybody in that little town. Too many people appear to protect each other no matter what. Employees should be required to report misdeeds and should be severely punished if they don’t, or if they perjure themselves. That’s essentially what the IG wants. And it ought to be in more places than Choate.

Also, where are they gonna get the qualified people the Republicans want to hire? It’s easy to snap your fingers and say “Let’s bring in a group of 50 workers or more immediately.” Actually doing that is quite another thing in the current labor market, and particularly in an area where not enough qualified people live.

Leader Meier blamed this on “bad apples.” I’m sure there are some very good employees at Choate, but the bad apples appear to have long ago spoiled the barrel

That collusion led the inspector general to find Choate itself negligent. The facility, the OIG said, must be held responsible for “failing to prevent the establishment of a culture in which so many employees chose to protect their fellow employees instead of protecting an abused individual and apparently felt comfortable doing so.”

The OIG report concluded: “That so many employees participated in the cover-up of the abuse of [the patient] suggests that this type of conduct may be endemic at Choate.” Previous reporting by the news organizations revealed credible abuse allegations in which the state’s attorney declined to bring charges because he said that employees would not cooperate in determining what happened.

* The Republicans said today that they want to prevent a Choate closure. Here’s Rep. Paul Jacobs

We cannot and will not accept a blanket policy that throws our hands up in the air in disgust and close down the facility that means so much to residents in my area and in that area. We have not begun the process of trying to fix the problems, let alone exhaust every single solitary legislative and administrative option that we have. We cannot and will not accept the attitude that nothing can be done. So, Governor, we’re asking you to work with us work with us. Work with your Democrat and Republican partners in the legislature.

* I asked the governor’s office this morning to send me a list of things the administration has done at Choate so far…

Increased security and surveillance

    • Cameras installed in approved indoor and outdoor areas that do not have a reasonable expectation of privacy (ongoing).
    • Increased security staff by 5 positions including one security officer chief.
    • Increased internal security staff by 2 positions.
    • Increased management presence in living areas and professional staff presence after hours.

Independent, Third-Party review

    • Equip for Equality investigation staff conducting chart reviews, staff interviews, and monitoring of unit conditions.
    Training and consultation
    • New and re-training sessions for all staff
    • Illinois Crisis Prevention Network has provided ongoing consultation to develop individualized behavior plans for residents in need of enhanced support.

Visible, physical improvements to Choate living areas and homes.

    • Completed a pilot environmental improvement project in 2 homes – Redbud and Dogwood – which are rolling out Center-wide.

Senior Onsite Visitor/Leadership Reporting Liaison:

    • Brought retired CMS Assistant Director Steve McCurdy to report to DD Director to perform an on-site, on-the-ground, common-sense, immediate-term review of the Center.
    • Met extensively with residents, families/guardians and staff, focusing on the health and safety of these individuals.

Illinois State Police (ISP) Collaboration

    • ISP’s Division of Internal Investigation came on-site to conduct an assessment of the Center including a review of security, physical structure needs, etc.
    • Supported updates to staff training with a focus on team building and collective accountability.

NASDDDS Technical Assistance:

    • Used ICDD funding to receive technical assistance from the National Association of State Directors of Developmental Disabilities Services (NASDDDS) on building additional I/DD community capacity.
    • Technical assistance grew from FY22 capacity report – An Evaluation of Community Capacity Barriers and Opportunities for Expansion in Illinois for Adult DD Waiver Services – focusing on support for residents and capacity for SODC system improvements.

…Adding… AFSCME Council 31…

“As the union of Choate Mental Health and Developmental Center employees, we welcome the support and partnership of anyone of good will who wants to work to improve it. Long before the current attention paid to the facility, AFSCME has urged legislators and the Department of Human Services to increase staffing (allowing for more programs and activities), expand staff training and invest in repairing and maintaining the buildings and grounds.

“For some 270 people with multiple challenges that require intensive supports, Choate is home. Its services have no analog elsewhere. That’s why residents’ families value Choate so highly, and it’s a tribute to the dedicated employees who provide compassionate, attentive, round-the-clock care.

“It’s regrettable that it took disturbing media reports of past misconduct to underscore the need for improvements at Choate, but the wrongful actions of a few cannot overshadow the deep commitment of the overwhelming majority of employees to Choate’s residents and to making the facility the best it can be. That must begin with reversing its staff shortage and investing in its physical infrastructure.”

The Question: Do you think Choate Developmental Center is redeemable? Please explain your answer. Thanks.

  45 Comments      


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