Treasurer Neely’s Statement on Illinois’ Failure to Act on Pension Reform

Last August, Standard & Poor’s downgraded Illinois’ credit rating because of the State’s large budget deficit and the failure to put forth a plan to deal with our $96 Billion unfunded pension liability. Despite a bipartisan plan supported by Governor Quinn and passed by the House Pension Committee, the General Assembly chose to continue the previous trend of inaction. Today Fitch Ratings, which already ranked Illinois’ credit as the lowest among the 50 states, put our State on “negative watch”. The result of this action and the increasing unease shown by the other two ratings agencies is that Illinois is facing the serious possibility of an additional downgrade.

The problem with the potential of two credit downgrades in less than 1 year is that it could significantly increase the price Illinois pays to borrow money. The more money we have to allocate to paying interest on debt, the less we have for important things like public safety, good schools, and safe roads.

We can no longer afford to hide from our pension liability problem. Each day that we wait and postpone action increases the costs down the line. All sides must be willing to give a little to preserve the solvency our pension systems and the solvency of our State.