Another Win For Governor Quinn: Illinois Has the Lowest Credit Rating of all the States!

Friday, January 20, AD 2012

 

I have designated Governor Quinn of my homestate of Illinois the worst governor in the country.  Not content to rest on his laurels, Governor Quinn has continued to misgovern the Land of Lincoln with the skill of a spendthrift who is afraid that he has a cent somewhere that remains unspent.  Such diligence will always reap a reward, and one has now come to Quinn:

Illinois, unable to solve its long-running financial problems, was given the lowest credit rating of any state in the country by Moody’s Investors Service on Friday, a move that will increase costs to taxpayers.

A second agency, Standard & Poor’s, left its Illinois rating unchanged but warned of a negative outlook that could lead to a downgrade in the future. A day earlier, Fitch Ratings also left the rating unchanged and declared a stable outlook.

Lower credit ratings generally mean the state winds up paying more interest when it borrows money by selling bonds.

Both Moody’s and S&P said they are troubled by Illinois’ failure to balance its budget and strengthen government pension systems, although a tax increase and other measures have helped.

Moody’s cited “weak management practices” and a recent legislative session that “took no steps to implement lasting solutions.”

Moody’s now rates Illinois “A2,” below any other state. Only one state, California, qualifies for the next-highest rating. All the rest are ranked higher.

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3 Responses to Another Win For Governor Quinn: Illinois Has the Lowest Credit Rating of all the States!

  • Congratulations, Illinois!

    I was TDY at Chanute AFB one winter. That was enough Illinois for me. Although, winter in the TX panhandle was . . .

    When you least expect it, expect it.
    The US is next.

  • Winter in Central Illinois, America’s Siberia at its worst, can indeed be memorable T.Shaw, as I thought to myself one day in 1979 when I was trudging to class at the U of I and found the fabric of my parka beginning to crack in the 37 below zero temperatures.

  • It seemed that only things cutting the wind between the North Pole and Chanute/Champaign-Urbana were barbed wire and outhouses.

Bankruptcy Coming Soon to a State Near You

Friday, January 21, AD 2011

4 Responses to Bankruptcy Coming Soon to a State Near You

  • Actually, methinks someone is attempting to float a trial balloon that is likely to be shot down. Note the nearly complete lack of attribution in the story — not to mention it’s so vague (what “policy makers” are they talking about?) that any journalism instructor worth his or her salt would give it a failing grade or insist it be rewritten.

    Is it possible that this story might also have been leaked or planted in an attempt to manipulate bond markets?

    As bad as giant budget deficits are, a formal “state bankruptcy” proceeding would mean in effect surrendering state sovereignty and control of state finances over to the federal court system — and that would be a cure far worse than the disease. It would raise gigantic constitutional issues that would take decades to resolve.

  • It’s certainly possible that it is a trial balloon Elaine, and I agree with you that bankruptcy raises big constitutional issues. However I think it is coming. Some states, Illinois and California, have gotten themselves into such a fiscal mess that they are in de facto bankruptcy already. De jure bankruptcy will follow when a state can no longer muster the resources to continue basic state services. I think Illinois will reach that point sooner rather than later.

  • According to current projections per the Center on Budget and Policy Priorities, these are the states with the worst proportionate revenue shortfalls, rank ordered:

    Nevada
    Illinois
    New Jersey
    Texas
    California*
    Oregon*
    Minnesota
    Louisiana
    Connecticut

    Nevada has had the most wretched real estate crash in the country and suffers 14% unemployment. The situation in California has been much the same, with the addition of an appalling legislature. Texas is a puzzle, however, given its general prosperity.

  • “Texas is a puzzle, however, given its general prosperity.”

    Texas has a two-year budget cycle. Their last budget (2009-10) was probably based on revenue projections and receipts made before the worst of the recession hit, and during the oil price spike in 2008. Only now (and convieniently, only after Gov. Perry got reelected) has the recessionary decline in revenues become evident. Note also that only 20 percent of their state workforce is unionized, so public employee unions aren’t the culprit there.

    I’m kind of surprised to see Minnesota on the list also, given that it has a reputation for extremely “clean” government, and (to my knowledge) is not renowned for having a high number of unionized employees or persons dependent on expensive social programs either.