(The Center Square) – For the first time since the 1990s, Illinois has received a bond rating upgrade from Moody’s Investor Service.
This follows an upgrade from Fitch Ratings last week.
Gov. J.B. Pritzker called a news conference Tuesday to announce the upgrade.
“Achieving a ratings upgrade in this case from Moody’s for the first time in 23 years, that is something that we should all pay attention to,” Pritzker said. “It’s a huge note of progress for our state and I am very proud.”
Moody’s upgraded Illinois’ rating on General Obligation bonds from Baa3 with a stable outlook to Baa2 with a stable outlook.
Bill Bergman, director of research for Truth in Accounting, said credit ratings can be misleading.
"It's ironic that Illinois government officials are claiming their financial management is responsible for the turn in fortune, when a widespread public calamity coupled with their own edicts unleashed a massive federal bailout. In some ways, this is even more disgusting than government's responsibility for, and reaction to, the 2008-2009 financial crisis," Bergman said.
Moody’s had previously downgraded Illinois’ rating on General Obligation bonds on three different occasions.
The rating of a state’s bonds is a measure of their credit quality. A higher bond rating generally means the state can borrow at a lower interest rate.
“I couldn’t be happier that our hard work is producing results,” Illinois Comptroller Suzanna Mendoza said in a statement. “This means lower costs for Illinois taxpayers. As you have seen in recent months, even in the middle of a global pandemic, my administration has successfully paid down a backlog of bills that just four years ago hit $16.7 billion – down to $2.9 billion today – and did so while prioritizing the most vulnerable people in our state."
Senate President Don Harmon also praised the news.
“Stability and responsibility produce results. You don’t need to ruin people’s lives to have sound fiscal policies and positive outcomes," he said. "I want to thank Governor Pritzker and Speaker Welch for their teamwork in helping us find a better way forward."
But Ted Dabrowski and John Kingler at Wirepoints said credit shouldn't go to state officials, but to the federal government for providing $138 billion in COVID relief to the state over the past 15 months.
"Credit, instead, the massive $138 billion in federal funds from the multiple COVID relief and stimulus packages – as compiled by the Committee for Responsible Federal Budget – that are now flooding Illinois’ public and private sectors," they wrote. "Those billions have significantly reduced the probability of a bond default – which is ultimately what Moody’s really cares about."