Consequences Increase for Illinois Without a State Budget
A major credit rating agency has downgraded Illinois' rating to two levels above ``junk'' status, citing the ``political gridlock'' that's prevented the state from getting a balanced budget for more than a year.
Moody's Investors Service lowered Illinois' rating Wednesday on $26 billion in debt by one level, to Baa2. The downgrade also affects $2.75 billion in revenue bonds.
Moody's noted Illinois has a multibillion-dollar budget gap and its bill backlog is likely to exceed a previous record of $10 billion.
Illinois had the worst credit rating of any state even before the current impasse between Republican Gov. Bruce Rauner and majority Democrats.
Lawmakers adjourned their spring session last month without approving a budget for the second straight year.
The lower rating means taxpayers pay more when Illinois borrows money.
Illinois’ comptroller says lottery winners could once again not collect their winnings if there’s no state budget approved by July first.
Eleven months ago - there was no full state budget. But lawmakers approved a small amount of spending to pay for things like salt for icy roads, heat for low income residents in the winter, and lottery winners.
But Comptroller Leslie Munger says - all that money expires July 1. And lawmakers will have to re-approve it all over again.
"This budget stalemate is causing irreparable harm to the very people and organizations that our government exists to serve."
As for the latest in budget talks?
Wednesday Democrats and Republicans disagreed over whether political insults influence budget negotiations.
The Illinois Department of Transportation plans to spend about 2 billion dollars on roads projects for the next fiscal year that starts July 1 ... if there's a budget.
The lack of a deal could kill the construction season. That's what business leaders, contractors, laborers and other members of the Transportation for Illinois Coalition say.
Co-chair Todd Maisch, who's also CEO of the state Chamber of Commerce, says no spending on roads this summer would cause construction firms to close, or layoff workers.
He says it's critical to have a budget deal by the end of the month.
"If you have this kind of loss of jobs that we're talking about and the overall investment, then the overall economy gets hurt."
Maisch says even if there is no roadwork, it'll cost Illinois taxpayers -- the state will need to pay to make closed construction projects safe.
He also says Illinois would also lose grant money from the federal government.