Illinois state government is getting a slightly better assessment from one of the major credit rating agencies.
Fitch Ratings had Illinois' budgetary outlook as “negative.” Now they’ve upgraded that to “stable.”
But Illinois’s debt still has the worst rating of any state in the nation — the lowest score one can have and still be considered a good investment.
“Right now the state has been committing to spending money on things and providing services that it doesn’t really have all the money to pay for,” Eric Kim, Fitch's lead analyst for Illinois, said Thursday in a telephone interview.
“A question for the state over the long term — the thing that we’re focused on — is: Is the state going to be able to either find more money to pay for those things? Or be willing to cut some of those things that it’s providing, those different services, to match up with the monies that it actually has available to pay for them?” Kim asked.
Illinois' current and previous budgets are only balanced because the state received an unexpected tax windfall in April.
The administration of Gov. J.B. Pritzker touted Fitch’s assessment.
"Illinois is already much stronger than we were a year ago, and it’s refreshing that Fitch is recognizing the good news and progress we’ve made so far,” Deputy Gov. Dan Hynes said in a statement. “We know we have a long way to go, but we are committed to improving our long term fiscal stability and building an economy that works for everyone.”
Meanwhile, Gov. J.B. Pritzker is urging voters to approve a constitutional amendment next fall that would give the state a progressive income tax, where the wealthy pay more.
But Fitch says even if voters approve that, the state should use the increased money to pay down old bills — not create new programs.
That, Fitch says, is the only way Illinois can hope to improve its credit rating.