Illinois State Treasurer Dan Rutherford Reacts to Fitch’s Downgrade on Illinois

SPRINGFIELD—June 3, 2013— “It is not the least bit shocking that Fitch Ratings has bad news for Illinois. Once again, state leaders have failed to enact meaningful and constitutional pension reform. It is disgraceful that this year’s legislative session ended without a new pension plan on the books.”

“Fitch announced another downgrade of Illinois’ General Obligation $27.5 billion dollar bond debt to an A- from A, and the rating outlook is negative, the lowest of all 50 states. Additionally, ratings based on state appropriations went to BBB+ from A-, and the rating outlook is negative. Fitch stated ‘the downgrade reflects the ongoing inability of the state to address its large and growing unfunded pension liability, most recently through the failure to pass pension reform during the regular legislative session that ended May 31st.’”

“This rating action means that there have been ten negative issuances against Illinois by the various ratings agencies to Illinois’ bonding entities since the beginning of 2012.”

“The failure to address the state’s pension liability costs the state millions of dollars each day, plus these downgrades could continue to make borrowing additional funds even more expensive. I believe state leaders have unfinished pension reform work that needs to be accomplished at the Capitol. It is beyond irresponsible to let this continue.”