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* Shruti Singh at Bloomberg…
As Governor J.B. Pritzker nears his one-year anniversary in office, investors are signaling that Illinois is making some gains even as the worst-rated state grapples with rising pension debt and the highest borrowing costs among its peers.
Pritzker, a Democrat, and other state leaders have earned credit from the $3.8 trillion municipal market for achieving some fiscal stability. Illinois’s bond-market penalty, the premium that investors have long demanded to hold the state’s debt, fell to the lowest since 2015 this week, which some debt holders say is due to optimism for potential new tax revenue and others attribute to overall strong demand for high-yield muni bonds.
“There is distinct improvement” over the past year, said John Ceffalio, a credit analyst for AllianceBernstein LP, which owns Illinois bonds among its approximately $47 billion of municipal debt. “The big thing from the credit side is increased political stability and economic and revenue growth.” […]
Illinois has put itself in a “better position” given its revenue gains, willingness to raise taxes and planned infrastructure investment, Ted Hampton, an analyst for Moody’s Investors Service, said in an interview.
Still, Illinois’s “massive pension liability” has made it an “outlier” in terms of the scale of its fixed costs relative to its revenue, Hampton said. Illinois’s so-called fixed-cost ratio is 36.4% in 2018, the nation’s highest and four times the median of U.S. states tracked by Moody’s, which didn’t include a few states in its most recent calculation.
posted by Rich Miller
Friday, Jan 10, 20 @ 3:42 pm
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=== “There is distinct improvement” over the past year===
Funny what a difference a competent governor makes.
By nearly every measure, Illinois was worse off with Bruce Rauner.
Illinois is trying to climb out of Raunerism and face a new day with Pritzker.
Whew.
Comment by Oswego Willy Friday, Jan 10, 20 @ 4:01 pm
“There is distinct improvement” over the past year, said John Ceffalio, a credit analyst for AllianceBernstein LP, which owns Illinois bonds among its approximately $47 billion of municipal debt. “The big thing from the credit side is increased political stability and economic and revenue growth.”
Yup.
Comment by Chicago Cynic Friday, Jan 10, 20 @ 4:03 pm
“=== “There is distinct improvement” over the past year===” That’s funny, I thought Michael Madigan was the problem?
Comment by Skeptic Friday, Jan 10, 20 @ 4:11 pm
When being fiscally conservative means raising revenue and repairing infrastructure. The Fair Tax side needs to push the message that raising taxes on the rich is the right thing to do for our recovery.
Comment by Grandson of Man Friday, Jan 10, 20 @ 4:17 pm
Deck chairs on the Titanic
Comment by Flat Bed Ford Friday, Jan 10, 20 @ 4:17 pm
=== Deck chairs on the Titanic===
It’s Friday. It’s good news.
Repeating Kassian foolishness to ignore good news…
(Sigh)
Comment by Oswego Willy Friday, Jan 10, 20 @ 4:24 pm