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* But Moody’s is still out there…
S&P likes Illinois budget overrides, moves state from review w/ negative outlook to stable: Odds of junk status "substantially diminished."
— Dave McKinney (@davemckinney) July 12, 2017
"We no longer believe the state is at risk of experiencing a liquidity crisis in the near term as it was before." https://t.co/mbnOg6wKU6
— Monique Garcia (@moniquegarcia) July 12, 2017
But S&P warns IL "will almost certainly suffer an extended fiscal hangover from the impasse."
— Monique Garcia (@moniquegarcia) July 12, 2017
Also notes "a disconcerting lack of consensus among state officials on the way forward." https://t.co/cOrWSJkwkS
— Monique Garcia (@moniquegarcia) July 12, 2017
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.
posted by Rich Miller
Wednesday, Jul 12, 17 @ 1:43 pm
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Watch the false told ya so’s start flying from both sides in 3…2…1
Comment by Sgt. Slaughter Wednesday, Jul 12, 17 @ 1:56 pm
The liquidity crisis abating does not equate to “we saved the state!”
Yes, short-term cash flow has improved but the fundamental financial weakenesses remain in crisis condition: Illinois has enormous debt, especially pension debt & unfunded liabilities the state simply cannot pay.
Cue Moody’s.
Comment by Deft Wing Wednesday, Jul 12, 17 @ 1:58 pm
Wait… Rauner said we needed his reforms first before we get this type of news.
Comment by Real Wednesday, Jul 12, 17 @ 1:59 pm
Thank you working poor and middle classes.
Comment by blue dog dem Wednesday, Jul 12, 17 @ 2:02 pm
Once they start paying off some debt, the upgrades will come.
Comment by Anonymous Wednesday, Jul 12, 17 @ 2:09 pm
They block out the noise and just watch what happens.
Comment by A guy Wednesday, Jul 12, 17 @ 2:19 pm
Most folks who don’t drink the Rauner and IPI kool aid would agree that passing the budget was the right thing to do. They would also agree that the budget is just the first step, there’s a lot of heavy lifting left to do.
Comment by The Dude Abides Wednesday, Jul 12, 17 @ 2:21 pm
Rauner is an ideological man, and his ideology prevented his success as a politician for the past 2 and 1/2 years. America is not an ideological country. Our great leaders — Lincoln and FDR for instance — were pragmatic politicians with an ingenious understanding of ordinary people. It is not too late for the governor, but he should reach out to other folks across party lines, and he should cooperate with them to build the future of our state. If he sticks to his ideology then he is a loser and he should get out of politics. He can comment on public life from the sidelines.
Comment by Anonymous Wednesday, Jul 12, 17 @ 2:27 pm
I find it nauseating that IPI and Rauner, condemn a 1.2% tax hike as 32% huge taxation, but believe it is ok for the interest of the Illinois bond debt to increase 500% or more. Where is the tax payers outrage for that?
Comment by So tired of political hacks Wednesday, Jul 12, 17 @ 2:42 pm
Rauner is an ideological man, and his ideology prevented his success as a politician for the past 2 and 1/2 years. America is not an ideological country. Our great leaders — Lincoln and FDR for instance — were pragmatic politicians with an ingenious understanding of ordinary people. It is not too late for the governor, but he should reach out to other folks across party lines, and he should cooperate with them to build the future of our state. If he sticks to his ideology then he is a loser and he should get out of politics. He can comment on public life from the sidelines.
……
Research the Koch brothers. Rauner is very smart and the damage he did was intentional. He is not working to make Illinois better for ordinary people. Only for the top 1%.
Comment by Real Wednesday, Jul 12, 17 @ 2:43 pm
Yes. I agree. That was my own point in fact. He has this view, and it is at odds with the way politics works in our country. For this reason, he failed and he will fail in the future. If he were to ditch the ideology and become pragmatic, however, then he would succeed.
Comment by Anonymous Wednesday, Jul 12, 17 @ 2:49 pm
Implementation of the budget will be critical to prevent the further eroding Illinois. Rauner needs to be held to the fire of that implementation. He can so easily place roadblocks, pitfalls, and blind alleys, and the courts can only force so much action. Agencies can still hold up the invoice and voucher processes. Mendoza and Frierichs are going to be keys to keeping the heat turned on.
Comment by Anon221 Wednesday, Jul 12, 17 @ 2:49 pm
“But Moody’s is still out there”
Yep. In so many ways.
Comment by Michelle Flaherty Wednesday, Jul 12, 17 @ 2:55 pm
“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.”
I wish this sentence was even remotely true
1. the budget is not balanced
from just yesterday:
State contributions to pension plans will decline $1.5 billion in fiscal 2018, by far the largest single spending cut in the budget. And some $900 million of that reduction reflects wishful thinking about future investment returns at state employee pension funds.
2. this budget has certainly not ended the chaos, the pension mess is not fixed and the k -12 school funding is not agreed to
Why do politicians overstate whatever is remotely positive and understate and ignore the serious problems that remain in Illinois?
Any surprise why Illinois residents have so little faith in their elected officials?
Comment by Lucky Pierre Wednesday, Jul 12, 17 @ 2:55 pm
Implementing “turnaround agenda” items that help to stabilize the state going forward seems to be exactly what the rating agencies would like to see.
Comment by justacitizen Wednesday, Jul 12, 17 @ 3:04 pm
DW, “can’t” and “don’t wanna” are not synonyms.
But if you can show your work to support “can’t,” please do so.
Comment by wordslinger Wednesday, Jul 12, 17 @ 3:12 pm
“However, Moody’s Investors Service has indicated it might cut Illinois’ rate regardless of the budget.”
Any sort of timeline for this. Does the S&P or Moodys hold equal importance?
Comment by Seats Wednesday, Jul 12, 17 @ 3:18 pm
The irony of Lucky woefully pondering why people overstate positions
Comment by Michelle Flaherty Wednesday, Jul 12, 17 @ 3:25 pm
The irony of Lucky being correct.
Comment by Keyrock Wednesday, Jul 12, 17 @ 3:31 pm
Where was Madigan’s compromise?
Comment by Yobagoya Wednesday, Jul 12, 17 @ 3:53 pm
S&P likes mike and does not like the turnaround agenda path
Comment by Rabid Wednesday, Jul 12, 17 @ 4:13 pm
–Nothing yet from the governor’s office, which has been silent pretty much all week.–
They are too busy with their radical candor.
Comment by Ahoy! Wednesday, Jul 12, 17 @ 4:51 pm
We were assured the budget was balanced and spent 1 billion less than what the Governor proposed.
Neither is true unfortunately.
Decade after decade of smoke and mirrors from Springfield obfuscating the lack of a constitutionally required balanced budget.
Comment by Lucky Pierre Wednesday, Jul 12, 17 @ 5:55 pm
- Lucky Pierre -
… and yet, Rauner’s signed stopgap budget he signed, appears to be more out of whack than this budget(?)
Think that was $7-8 billion or something…
You should be so upset with Rauner, why aren’t you?
Comment by Oswego Willy Wednesday, Jul 12, 17 @ 6:00 pm
the govenors is hiding in the fox hole under his stairs, cowering from the press
Comment by Rabid Wednesday, Jul 12, 17 @ 6:21 pm
Rauner knows better than to poke the financial crisis bear right now. Reminder, he actively lobbied to have credit ratings agencies downgrade Illinois in the lead up to his election. Actively. Lobbied. Ratings Agencies. To downgrade Illinois. So he knows how damaging junk would be to his re-election chances.
Comment by Biker Wednesday, Jul 12, 17 @ 7:03 pm
I sure hope the governor blames Madigan for this.
Comment by Harvest76 Wednesday, Jul 12, 17 @ 8:32 pm
How bizarre is it that a governor of a state does not even acknowledge that this action has taken place?
Quite a tantrum he’s havin’ this week.
Dude, you got the money you wanted, and you can blame the other guys.
Who cares if some reporters said you got your tukkus handed to you?
Comment by wordslinger Wednesday, Jul 12, 17 @ 8:36 pm
=Research the Koch brothers. Rauner is very smart and the damage he did was intentional.=
Until we have term limits the Kochs can’t buy every GA and Senate seat just yet. Remember the “job creators excited about term limits”? I can think of two and they’re brothers. Until that day, the Kochs and their hired help will have to be pragmatic.
Comment by Da big bad wolf Thursday, Jul 13, 17 @ 9:37 am