SPRINGFIELD—State Treasurer Dan Rutherford reacted Friday to news that Fitch Ratings was going to downgrade the state’s credit rating.
Fitch is one of three national investor agencies that grade the financial status of governments, among other groups.
“Fitch Ratings announced that the agency has placed Illinois’ general obligation bonds rating on negative watch,” Rutherford said. “Fitch decided to do this because of the state’s inability ‘to address its large and growing unfunded pension liability.
“The next step could potentially be the downgrade of the state’s credit rating from Fitch,” Rutherford, a Republican from Chenoa, added. “Failure to enact pension reforms will eventually bring Illinois to its financial breaking point, and it will be worse than any fiscal calamity we have seen thus far in this state. Our state’s credit rating cannot afford to take another hit.”
Rutherford, one of a handful of Republicans mulling a run at the Governor’s office in 2014, took aim directly at Gov. Pat Quinn.
“Furthermore, it has now been two years since Quinn’s 66 percent income tax hike was passed, and though it was billed as a measure that would help solve the state’s financial problems, money matters in Illinois have only gotten worse. On Jan. 11, 2011, the state’s backlog of bills was reportedly $8.5 billion. Today the state owes vendors nearly $9 billion dollars.”
In his comments, Rutherford also blasted the state’s growing debt and obligations.
“In the past decade, the state’s bonded debt has nearly tripled,” Rutherford said. “Illinois’ debt is colossal and growing — our debt obligations now exceed $200 billion. It is estimated that the failure to address the state’s pension liability is costing the state at least $17 million per day. It is beyond irresponsible to let this continue. The state needs to reign in the pension escalation and not use long-term borrowing as a ‘solution’ to this problem.”