CHICAGO (Reuters) – Illinois’ new budget does little to tackle the state’s financial problems like escalating pension contributions and a structural deficit, dimming prospects for a credit rating upgrade, S&P Global Ratings said on Tuesday.
The $38.5 billion fiscal 2019 budget was signed into law on Monday by Governor Bruce Rauner following its bipartisan approval by state lawmakers last week in a marked departure from a political impasse that left Illinois without complete budgets for an unprecedented two straight fiscal years.
Emergence - Budget - Process - Credit - Implications
“While the emergence of a more collaborative budget process has potentially constructive credit implications, the substance of the package largely represents an extension of the status quo,” S&P said in a report.
The credit rating agency, which rates Illinois’ general obligation bonds a notch above junk at BBB-minus, added that the state had made little headway in dealing with a chronic backlog of unpaid bills that stood at $7.1 billion on Tuesday aside from selling $6 billion of bonds last year to shrink the bill pile.
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higher rating,” the report said.
Rachel Bold, a Rauner spokeswoman, said: “It’s no secret that we have more work to...
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