Illinois Treasurer Dan Rutherford Reacts to Moody’s Downgrading of Illinois’ Debt Rating
Office of Illinois State Treasure|Saturday, January 7, 2012
CHICAGO – January 6, 2012 - “Today’s downgrade of Illinois’ credit rating by Moody’s reinforces my commitment to sounding the alarm regarding Illinois’ unsustainable reliance on debt.”
“The downgrade will result in Illinois taxpayers paying an estimated additional $60 million to repay the issuance of next week’s scheduled $800 bond sale. In addition, this may impact Illinois institutional bond holders which may have to sell their current Illinois bond holdings because their investment policies require minimum bond ratings greater than our new rating.”
“Last May, I released my position paper titled ‘No More Debt’ (http://treasurer.il.gov/news/PositionPaperonDebt.pdf) warning taxpayers of the financial position we face today. When the state’s past borrowing is combined with unpaid bills and unfunded pension and retiree healthcare benefits, every Illinois household shoulders more than $40,000 of debt. Habitual borrowing has lowered Illinois’ own credit rating to a level where borrowing additional funds has become dramatically more expensive. The halo effect caused by the state’s miserable credit rating is also cast on Illinois municipalities making borrowing for local projects more expensive too.”
“I will continue to encourage lawmakers to reform the state’s public pension system and find new ways to cut spending. Taxpayers deserve nothing less.”
