CHICAGO (WLS) --Illinois' low credit rating took another hit as it was downgraded to two steps above junk levels, prompting a warning from the state's comptroller Leslie Munger that Illinois would need to double taxes to get out of its budget crisis.
"The thought that we can simply raise taxes alone is not a solution to get us to a balanced budget," Munger said.
Munger says Illinois' fiscal situation is so dire, resolving it with a state income tax increase alone would require more than doubling the current 3.75 percent rate to nearly 8 percent.
Last week Republican Governor Bruce Rauner - who is demanding pro-business, union-weakening reforms in return for a tax increase - warned that another credit downgrade was imminent after the Democratic-controlled general assembly adjourned without recommending a balanced budget for the second year in a row.
A Rauner spokeswoman wrote, "This report underscores the need for real structural changes to repair the years of unbalanced budgets and deficit spending by the majority party."
But House Speaker Michael Madigan, Illinois' top Democrat, wrote, "The downgrade is directly attributable to Governor Rauner's reckless decision to hold the state hostage for more than a year and to create the crisis he desired."
Pressure on lawmakers and the governor built outside the Thompson Center where hundreds rallied demanding more money for public schools.
"We need that to happen now," said Velia Soto. Asked about a tax increase, she said, "I think at this point everything is on the table."
Comptroller Munger says on July 1, she will stop new state payments for K-12 education, colleges and MAP Grants, 911 call centers, domestic violence shelters, child and elderly nutrition programs and lottery winners. Without stop-gap funding that will all shut down three weeks from Friday.
She called the Moody's downgrade a reflection of just how risky it is to loan money to Springfield.
"And the fact that we are finishing up one year without a budget and that we are about to enter our next year without a budget certainly makes us look riskier," she said.