A bond rating agency has issued a warning about Illinois. Fitch Ratings warned Friday that it could cut Illinois’ rating. Citing a lack of public pension reform, the agency said in a statement that “the burden of large unfunded pension liabilities and growing annual pension expenses is unsustainable.” The agency says public pension reform is critical to Illinois’ fiscal position.
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Gov. Pat Quinn says while there was inaction during the Lame Duck session, lawmakers are coming closer to a pension reform deal. “I talked to the Senate president yesterday, John Cullerton. He has a bill called Senate Bill 1 that’s already introduced,” Quinn said. “That’s the kind of take-charge attitude that I like to see.” Quinn says S.B. 1 has some “new features” and “new compromises” when compared to the pension reform bill passed in the Senate last year.
As to what Quinn would say to rating agencies, “I think that it’s important that our bond rating agencies give us as much time as possible in order to stabilize the pension system,” Quinn said. Fitch currently rates Illinois at “A” but has issued a Rating Watch Negative. Last month Moody’s Investors Services warned it could drop Illinois’ A2 rating, also citing a lack of action on pension reform.