Illinois had its credit rating cut one level after lawmakers failed to restructure state pension systems saddled with almost $100 billion in unfunded liabilities.
Fitch Ratings cut the state's $27.5 billion in general obligation bonds to A- from A Monday, citing the inaction in the legislative session that ended May 31.
Lawmakers adjourned without taking final votes on proposals to reduce an unfunded pension liability that grows by $17 million a day. As they left the capitol in Springfield, with plans to return in late October, members of both parties acknowledged a credit cut was almost unavoidable. Gov. Pat Quinn called the leaders of the state House of Representatives and the Senate to a meeting Tuesday.
“If I could issue an executive order to resolve the pension crisis, I would have done it a long time ago,” Mr. Quinn said in a statement from his office in Chicago. He called the credit cut “no surprise.”
The governor said the meeting with House Speaker Michael Madigan and Senate President John Cullerton would be held to discuss a possible means to resolving the pension impasse.
“I cannot act alone,” Mr. Quinn said in the statement. “Legislators must send me a bill to get this job done.”
Fitch analysts led by Karen Krop, a senior director in New York, called the growing pension deficit “unsustainable” and said the inaction by lawmakers raises questions about the state's ability to deal with “numerous fiscal challenges.”
The new Fitch grade, six steps from top-rated, puts its score in line with Standard & Poor's, while Moody's Investors Service put it one level higher at A2, data compiled by Bloomberg show.