February 27, 2023
Illinois’ credit rating upgraded from worst to tied for worst. Illinois’ credit rating got upgraded from worst in the country to tying with New Jersey for the worst.
For a seventh time in two years, Illinois’ credit rating was increased Thursday with the announcement from S&P Global ratings.
“The upgrade on the [general obligation] debt reflects our view that Illinois’ commitment and execution to strengthen its budgetary flexibility and stability, supported by accelerating repayment of its liabilities, rebuilding its budget stabilization fund to decade highs; and a slowing of statutory pension funding growth, will likely continue during the outlook period,” S&P Global Ratings credit analyst Geoff Buswick said.
Illinois’ outstanding $27.7 billion GO bonds were upgraded from BBB+, the worst in the country, to A-, tied with New Jersey GO bond ratings. The last time Illinois had the A- rating was in December 2015.
The state’s appropriation-backed debt saw an increase Thursday from BBB to BBB+ and moral obligation debt from B+ to BBB-. Build Illinois bonds, paid for with gas tax and other fee increases, goes from A- to A.
Illinois’ credit upgrade cannot fully make up for the effect of rising global interest rates. Illinois taxpayers will continue to pay higher interest rates in 2023 on the State’s outstanding multi-billion-dollar debt load than was paid in 2022 and previous years.
The credit rating enhancement reflects Illinois’ hard work at recovering from the debt crisis created by political dysfunction and the COVID-19 pandemic and resulting shutdown orders. The advocacy and outreach of the House Republican Caucus were significant in getting the State of Illinois to pay back a large debt chunk, money owed by the once-insolvent Illinois Unemployment Insurance (UI) Trust Fund. S&P credited Illinois’ increased liquidity, and its “deep and diverse” private-sector economic base, for the credit rating move. At the same time, however, S&P continued to point to Illinois’ continued significant burden of unfunded pension liabilities.
Illinois State Lottery reports results for the first half of FY23. The Illinois State Lottery reported record sales of $1.8 billion, with a net revenue intake of $468 million, in the six-month period. Sales were paced by a succession of multistate jackpot games that rolled over into super-sized prizes. One of the $1 billion-plus ticket winners, awarded in July 2022, was a ticket sold in Des Plaines, Illinois. In addition to this mammoth ticket, other Illinois Lottery players collected almost $1.2 billion in prizes during the six-month period. The reporting period began on July 1, 2022, just before the Des Plaines jackpot, and ended on December 31, 2022. Net proceeds from Illinois Lottery ticket sales, other than specialty scratch-off tickets to benefit specific causes, are deposited in the Common School Fund to benefit Illinois public education.
Gov. Pritzker elevates the status of Illinois’ chief anti-terrorism agency. The Illinois Emergency Management Agency (IEMA) will now be known as the Illinois Emergency Management Agency and Office of Homeland Security. The reorganization means that the fight against terrorism in Illinois will now be headed by a person who will be a Deputy Director, a senior law enforcement official. The Homeland Security Advisor will coordinate with cabinet-level public safety agencies throughout Illinois on terrorism-related strategic issues, including cybercrime and electronic sabotage. The change also elevates the current Illinois Terrorism task Force to the level of a permanent board of advisors, the Illinois Homeland Security Advisory Council. The change will better situate IEMA to apply for and pass through federal grants to local law enforcement and the private sector aimed at the reduction and prevention of terrorism and sabotage.
The state government reorganization move was filed on Tuesday, February 21, as Executive Order 2023-03. The Illinois Constitution grants broad powers to the Governor to reconfigure State government agencies. The reconfigurations have to maintain the sets of State government responsibilities previously created by the General Assembly through State law. In this case, the General Assembly has already asked IEMA to fight against terrorism and sabotage, and this executive order continues this General Assembly policy.