By Benjamin Yount | Illinois Watchdog
SPRINGFIELD – The financial markets are again teaching Illinois a lesson about not acting on pension reform.
Illinois Gov. Pat Quinn’s office says the state has “delayed” a $500 million bond sale to calm nerves in the market.
The full statement from the governor’s office reads “The state of Illinois has delayed Wednesday’s scheduled bond sale. Our conversations with potential bidders lead us to believe the market is unsettled because of recent actions and comments by the bond rating agencies. We plan to schedule a new bond sale after the markets have had time to digest the news.”
This is the second blow to Illinois’ credit, or ability to borrow money, in two weeks.
Last Friday Standard and Poor’s downgraded Illinois’ credit to an A-, in part because lawmakers did not act on pension reform in their early January lame duck session. Illinois has a worst in the nation pension debt of anywhere between $96 billion and $130 billion.
Illinois House Republican Leader Tom Cross said in a statement that “Our failure to pass meaningful pension reform, to pay down our large backlog of bills and to live within our means is contributing to this uncertainty in the markets for us.”
Cross added that the inaction on pensions has forced the state to look at astronomical interest rates, and he said that realization is why the Quinn administration delayed the bond sale.
S&P said Illinois could be downgraded again if lawmakers do not act on pensions and other budget issue this spring. The legislature is just beginning its spring session, lawmakers must pass a budget by June 1.
You can contact Benjamin Yount at Ben@IllinoisWatchdog.org