Local elected officials reacted with criticism and others with potential solutions when Moody’s downgraded Illinois’ debt to A2 from A1 Friday, making an investment in the state’s bonds potentially the riskiest of all 50 states’ securities.
Illinois had been tied with California at the bottom of the list, according to the Bloomberg News Service, until Friday’s action put it alone at the bottom.
, who is retiring at the end of her term in a year, called for the entire Illinois General Assembly to work together to do something about getting the rating higher again.
“This is somber news and a very great challenge for Illinois,’ Garrett said. “We’ve come to a crossroads and must find a solution in a bipartisan and fair way for our taxpayers.”
The effect on Illinois taxpayers was foremost on the mind of U.S. recognizing citizens must pay higher interest on money Gov. Patrick Quinn plans to borrow later this month.
"Moody's decision to downgrade Illinois debt echoes the judgment of my Sovereign Debt Advisory Board report last year,” Kirk said in a prepared statement. “We are reaping the results of years of irresponsible spending and debt."
and recognize years of neglect to the state’s pension liabilities are a major part of the problem demanding immediate attention.
“It’s unfortunate,” Nekritz said of the downgrade. “We can and will take steps to correct it. At the top of the list is our pension debt. It’s unfortunate all of our new revenue will be tied up in the next year’s pension liability and it will be up to us to make cuts necessary to accommodate the issue.”
Biss considers Medicaid liability as well as pension responsibility areas requiring immediate attention. “This strengthens our resolve to put in place workable and sustainable budgets that take into account all liabilities including our pension and Medicaid liabilities,” he said.
While the state’s debt has been downgraded, a number of suburban communities like Deerfield, Lake Forest, Highland Park, , Wilmette, Winnetka and Glenview have AAA bond ratings, the highest possible.
Just like the reduction of the federal government’s bond status by Standard & Poor’s over the summer, the action by Moody’s Friday should not affect the local ratings. Highland Park Corporation Counsel Steve Elrod made that clear in August in the face of the federal action.