Posted by StreetWise in Magazine Articles
Gov. Pat Quinn called an emergency session of the Illinois General Assembly for June 19 after its failure to enact pension reform before May 31 adjournment and the subsequent downgrading of the state’s credit by two major investor services.
“Every time the General Assembly misses the deadline, Illinois’ credit rating is downgraded, which hurts our economy, wastes taxpayer dollars and shortchanges the education of our children,” Quinn said on his website. “If I could issue an executive order to resolve the pension crisis, I would have done it a long time ago. But I cannot act alone. Legislators must send me a bill to get this job done.”
On June 6, Moody’s lowered the state’s rating for its $27 bonded indebtedness from A2 to A3, worst in the U.S.
On June 3, Fitch downgraded Illinois general obligation bonds from “A” to “A-“ and gave a negative outlook based on the inability to solve the well-publicized pension and budget crises. Downgrading the state’s credit means that it will pay more for borrowing, said Ted Dabrowski, vice president of policy at the Illinois Policy Institute. “The state already pays the highest penalty rate in the nation – nearly three times higher than California’s.”
Fitch noted that the state’s pension liabilities are only 40 percent funded, yet taking an increasing share of the state budget. Meanwhile, the state has a $5 billion backlog of unpaid bills.
The Illinois Human Services budget, meanwhile, passed both the House and Senate before adjournment, according to the Chicago Coalition for the Homeless.
Homeless prevention funding – one-time grants for rent, utilities or emergency expenses – was funded at $4 million, the same as this year.
Emergency and transitional housing was funded at $9.4 million, up $300,000 (3.3 percent) from this year.
Homeless youth services were funded at $4.6 million for FY 2014, an increase of $500,000 or 12.2 percent.
Supportive housing services was funded at $27.7 million for next year, slightly less than the $29 million advocates sought but an increase of $3 million over Gov. Quinn’s proposed budget.
By Suzanne Hanney