Moody's is threatening to lower the state's credit rating because of the state's inability to act on pension reform.
As Gov. Pat Quinn held another event heralding new spending under the state's three year old, $33 billion capital program, elsewhere state officials saw the warning from Moody's and wondered if the state's bond rating was about to be lowered again and if it would cost more to borrow money for future public works projects.
"It is sobering to all of us to have these credit rating agencies, whether its Moody's or one of the others saying we have more work to do," said Quinn.
More work, according to Moody's, by the Illinois General Assembly. Last week, the lawmakers failed to reform the state's public pension systems which are at least $83 billion in debt.
The Moody's report said "inaction on the state's pension liabilities will further strain this lowest-rated state's finances."
"When your government goes out into the market to borrow money for brick and mortar that it will cost you more in interest because you have a lower credit rating," said Dan Rutherford (R) Illinois treasurer.
Mayor Rahm Emanuel expressed concern that a possible state credit downgrade could spread to Chicago which also has billions in unfunded city pension liabilities.
"And the warning, from in this case Moody's, is a warning that the clock is running and you can't wish it away," said Emanuel. "As I always say, denial is not a longterm strategy."
The governor still blames inaction on pension reform on obstructionist Republican lawmakers in the General Assembly.
"The Republican legislators and the leaders last Friday, they refused to do anything," said Quinn. "They wouldn't even reform their own pension system."
"So the minority party in this state are the obstructionists? No, I don't agree with that," said Rutherford. "Stop that! Its time for people to stop being politicians and stand up and be statesmen."
