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Illinois S&P Rating is Worst in the Nation

State Treasurer Dan Rutherford says poor credit rating will cost taxpayers.

 

Standard & Poor’s rating services downgraded Illinois’ credit rating today to A-, with a negative outlook, making it the lowest rating of all 50 states.

State Treasurer Dan Rutherford blamed the negative rating on inaction on the public pension system by Gov. Pat Quinn and the general assembly, at a press conference today. Illinois has a $96 billion pension deficit.

Rutherford pointed out numerous instances in which the state had set a deadline to address pension reform and did not meet the deadline, which was followed by a downgrade in the state’s credit rating.

“Every time a deadline is set and nothing happens substantively, there is a negative action by rating agencies, Rutherford said.

Rutherford explained that the poor credit rating affects the state the same as a poor credit rating would affect an individual. 

“If you went out to borrow 500 dollars, because you have such bad credit, it will cost 95 dollars more in interest than better rated states,” Rutherford said. 

“This is absolutely bad news of for taxpayers; this affects what we are paying in interest as opposed to principal,” he said. He said the poor credit rating will have an effect on state universities, road construction and other public institutions because as projects are paid for, more will go to interest than principal. 

Rutherford said state leaders need to cut the budget and address pension reform.

Standard & Poor's credit analysts say the downgrade reflects what the agency sees as the state's "weakened pension-funded rations" and lack of action on reform measures to improve the state's worst-in-the-nation pension crisis, according to AP. 

Related Topics: Illinois Credit Downgrade, Illinois Pensions, Illinois State Treasurer Dan Rutherford, Pension Reform, and Standard & Poor's

Dan Arenov

3:00 pm on Friday, January 25, 2013

Even the staunchest supporters of labor unions (FDR) KNEW that unionizing public employees was a BAD idea.

The union leaders tell the politicians that if the state gives them more money, better benefits, etc. and in return, the union will contribute union dues (extracted from the employees) to the political campaigns of these politicians.

Then the employees vote for them again.

Then the contract comes due.. the same parties 'negotiate' with each other. The politicians give the unions what they want...in return for political contributions (employee union dues)...

The union employees vote for the politician again.

So on. So forth.

The Democrats and the public employee unions have totally ruined this state.

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RB

4:31 pm on Friday, January 25, 2013

Do some research and you will find that the Democrats had a plan to pay back pensions as early as 1994. Jim Edgar shot it down and came up with the wonderful (not) repayment plan we have today. Don't blame the Democrats when this can be traced directly to a Republican Governor. It's been a bipartisan problem since 1945 which became worse under Mr. Edgar.

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RationalTht

10:40 pm on Saturday, January 26, 2013

@RB - what about the last 10 years - could they not have done anything since they controlled everything. Oh yeah, they did, they gave the unions A RAISE in the middle of the night.

Also, the Democrats and Madigan have controlled the house for all except TWO of the past THIRTY years. This is a DEMOCRAT/UNION problem.

Dan Cox

4:15 pm on Friday, January 25, 2013

96 Billion in Pension Debt, another 6 Billion in unpaid Debt., and getting 116 Million deeper in Debt, everyday.... every single day... another 116 Million Deeper!!!! If the State of Illinois were a business, a court would have ordered a Bankruptcy already. Yet, the state keeps on doing the same things, as businesses flee and so do residents. A 67% State Income Tax increase last year will become permanent and still, the State will go deeper and deeper in debt.

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Jay Emerson

4:18 pm on Friday, January 25, 2013

And the bad news is that there's nothing we can do about it. Between government employees, unionized government employees and all the other non-government unions that support the democrats we're screwed.

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Walter White

4:22 pm on Friday, January 25, 2013

And yet the Republicans still can't find candidates to win elections. Pathetic.

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RationalTht

10:41 pm on Saturday, January 26, 2013

The Democrats will vote for anyone that will give them their handouts - the leeches now out number the working voters in this state.

McCloud

4:24 pm on Friday, January 25, 2013

No way to dispute that. Now Democrats are in high gear to make the nation broke.

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Dan Cox

4:37 pm on Friday, January 25, 2013

RB Are you serious, really? You want to pull out a so-called plan from almost 20 years ago, that was as lame as the constitutional plan they have now. BTW... the latest news is that the Statye of Illinois is closer to 200 Billion in Debt, according to another Patch article. I think I'll be moving soon.

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RB

4:47 pm on Friday, January 25, 2013

Dan, I don't want to pull out a plan from 20 years ago. I simply pointed out that a plan was proposed by the Democrats and Edgar would not go along with it. He wanted his own plan, the one we are dealing with today. You can't blame just Democrats. We have to move forward and solve it. You and others harass the Democrats when the Republican fingers are all over the mess we are in....right along with Democrats. Both parties screwed this up!

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Dan Cox

8:16 pm on Friday, January 25, 2013

Daniel Krudup, Michael Madigan and John Cullerton are elected to their positions by Chicago residents, not people in Deerfield. While you are correct about them being ignorant partyline voters, Districts of these two are in Chicago.

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RationalTht

10:42 pm on Saturday, January 26, 2013

Dan - as long as people in IL send democrats to Springfield, that is the leadership we get. They are voting for those people by proxy.

Wooter von Salzberg

4:41 pm on Friday, January 25, 2013

It is getting more and more embarrassing to tell people that I meet, "I live in Chicago!"

Did you see what FORD has announced to the City of Detroit? This will never happen in Illinois! I would not invest $$$'s in this state. Sadly, so do a lot of major corporations!

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Dan Cox

4:54 pm on Friday, January 25, 2013

Yes, and can you blame thjem? The City of Chicago residents elect Speaker Michael Madigan and Senate President John Cullerton back into office, no matter how bad of a job they do. The State of Illinois would be better off, if it allowed Chicago to split off and be its own State, with Cook County as its boundries.

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Daniel Krudop

7:07 pm on Friday, January 25, 2013

@Dan Cox

Don't blame the residents of Chicago. Folks here in Deerfield and the surrounding area also wanted to keep Madigan and Cullerton to stay in power since they elected a Democrat for both the State Senate and the House.

@ Walter White,

I believe there were some very qualified Republican candidates this time around but the constituency in this area prefers Democrats no matter how corrupt and no matter what damage they do to the State.

McCloud

4:44 pm on Friday, January 25, 2013

Democrats have held full power in this state for the last 15 years at least. Did they lose their little plan for pensions from 1994? Nice try snake liberal.

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RB

4:48 pm on Friday, January 25, 2013

Just facts. You don't like them but you obviously didn't do any research. Typical.

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Walter White

5:12 pm on Friday, January 25, 2013

Facts always get in the way of a good story.

Gary

4:57 pm on Friday, January 25, 2013

The Illinois Democrats are trapped. The demands of their own constituents are driving the State into bankruptcy and they don't have any Republicans to blame for it. They control every lever of power in the State, but they frozen in their tracks doing nothing... waiting.... waiting... waiting... for a chance to blame Republicans for this disaster.

They will not get that chance.

Democrats can only survive when they have Republicans to blame for the disastrous results of their own policies. I can just see what goes on in those smoke-filled back rooms in Chicago, with the crackle from random firing of illegally owned guns in the background. "Who's left to blame!" "Who's left to tax!" "What businesses are left to demonize!" "Are there no Republicans left to fleece?!"

The Democrats own this problem and they CAN NOT solve it on their own.

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RB

5:02 pm on Friday, January 25, 2013

The problem goes back to 1945. The Democrats had a plan that would have solved the problem starting in 1994. Republican Jim Edgar insisted on his own plan. That's the ramp plan we are living with today. Repeat.

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RRP

7:03 pm on Friday, January 25, 2013

When did Edgar get a vote?

Jay Emerson

5:53 pm on Friday, January 25, 2013

RB, spoken like a true democrat and part of the problem!

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RB

11:55 am on Friday, February 1, 2013

Jim Edgar, Republican. Makes over $300,000 per year from the State.
Jim Edgar, Republican signed into law Senate Bill 3,(sponsored by Republicans) which allowed government school teachers and administrators outside of Chicago to retire after 34 years of teaching and receive 75 percent of their final pay.
Jim Edgar, Republican turned down a Democrat sponsored plan that would have successfully solved the Pension mess - building since 1945, for his own plan....the one we have today.
So, to say I'm part of the problem? I don't draw a State pension. I didn't rob Peter to pay Paul. I didn't set up the teachers. That was all done by Jim Edgar...a Republican.

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RB

6:30 pm on Friday, January 25, 2013

Jim Edgar, Republican. Makes over $300,000 per year from the State.
Jim Edgar, Republican signed into law Senate Bill 3, sponsored in the State Senate by St. Sen. Larry Bomke (R-50, Springfield) and Rep Raymond Poe (R-99, Springfield) in the State House. This allowed government school teachers and administrators outside of Chicago to retire after 34 years of teaching and receive 75 percent of their final pay.
Jim Edgar, Republican turned down a Democrat sponsored plan that would have successfully solved the Pension mess that had been building since 1945, for his own plan....the one we have today.
So, to say I'm part of the problem? I don't draw a State pension. I didn't rob Peter to pay Paul. I didn't set up the teachers, that was all Jim Edgar...a Republican.

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Deadcatbounce

9:45 pm on Friday, January 25, 2013

There are plenty of governors whose fingerprints are on this mess, Edgar's not the only one RB. Get educated
1971 - Pension maximum raised to 75% from 60%. That didn't take long.
- Annual COLA raised to 2% from 1.5%
- No pension reduction if younger than 60 with 35 years service.
1972 - 85 sick days (1/2 year service) allowed for early retirement.
1973 - Survivor benefits paid at age 50 instead of 55.
1978 - Annual COLA raised to 3% from 2% (not compounded)
1979 - ERO (Early Retirement Option) allowed.
1980 - Retiree health insurance program established.
1982 - Employer pick-up of employee contributions allowed.
1983 - Unmarried children over 18 eligible for health insurance coverage.
1984 - Sick leave credit upped to 170 days from 85 days.
1990 - 3% COLA compounded.
1990 - Survivors get COLA.
1990 - Disability and pensions added for part-time and substitute teachers.
1991 - Retiree health care premiums 75% subsidy.
1998 - Waive Early Retirement cost - 34 work-years becomes 35 years for pension.

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Deadcatbounce

9:50 pm on Friday, January 25, 2013

Let me see, Madigan has been in office since 1977. That means he has been around for almost all of these pension enhancements. But let's blame Edgar, right RB!

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RB

9:59 pm on Friday, January 25, 2013

Deadcat, I know that. The Dems were getting sole blame, I simply pointed out Republicans are not clean in this mess, it's all over them, too. Governors have to sign these bills and for the next few days at least there is one Democrat AND one Republican in prison. So their $%#t does stink too.

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RationalTht

3:42 pm on Sunday, January 27, 2013

RB - the democrats have controlled everything for the past decade or so, but have only managed to give RAISES and make things worse.

Dan Cox

6:44 pm on Friday, January 25, 2013

Wisconsin, has a plan, Illinois needs to do the same!

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Scott A. Marquardt

8:31 pm on Friday, January 25, 2013

I dont care who did what how long ago. As long as Oblowme is in office, Illinois, his homestate is screwed.

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RB

7:04 am on Saturday, January 26, 2013

Unfortunately, I imagine he means what he says. The hate from these people is pretty extreme. Further evidence of why they should not have Assault Weapons as they assemble their Militia of haters. They still get to vote, however.

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RB IS A Pompous ASS

8:40 am on Saturday, January 26, 2013

No Doug i'm pretty positive he means OBLOWME.
To RB: Simply put so even you can understand this. You Sir or Madame or even both. are a Pompous ASS

Jac Charlier

7:35 am on Saturday, January 26, 2013

Will you vote for your State Rep and Senator in the next election cycle? The damage being done to the IL economy and everyday people is very, very real. Your State Rep and State Senator (if in office prior to 2010) who have passed numerous State budgets and intentionally ignored the growing pension debt are now the same people who are trying to "solve" the pension debt without being ACCOUNTABLE for what they have done. They benefited from the problem by being able to avoid making spending reduction decisions (which they could have done slowly and carefully) and now are trying to benefit by spinning the tale they are here to resolve the situation created by _____________ (insert any State politician other than themselves). As for the $9 Billion backlog of bills, that is for another posting.

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b garrett

7:50 am on Saturday, January 26, 2013

Soon enough obamacare. And the unending social welfare benefits that have turned America into a welfare nanny state will result in a Greek style situation.....Illinois will be asking for bailouts....people will be growing gardens for food and cutting down trees to burn for warmth...the "great society"

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Charles

9:08 am on Saturday, January 26, 2013

This is indeed coming. Obamacare can not be sustained under the way things are now. The liberal Democrats have absolutely no economic sense at all. They write checks they can not cover or hope to cover.

chris

7:57 am on Saturday, January 26, 2013

It's too bad the state and city I was born, raised and lived in has come to such a tragic end. The blame game goes back and forth when in fact there's no difference between Republicans and Democrats in Illinois.
This is a union labor stronghold that has bought and sold politicians and has driven out businesses and bankrupted governments.
There isn't a single government agency in Illinois that isn't mismanaged or corrupt. From the Tollway Authority, to the MPEA, CTA, RTA, MWRD pick the acronym, it's nothing more than a patronage employee scheme that squeeze money and businesses out of Illinois.
We are moving and taking our business with us and will never look back. If you're crazy enough to stay and put your financial security and future into the hands of Illinois government, I admire your optimism, but question your judgement. Illinois is worse than dead, it's on (very expensive) life support, and you're picking up the tab.

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Glenn Posner

9:01 am on Saturday, January 26, 2013

Red AND Blue, shame on you. This back and fourth finger pointing (good cop/bad cop) serves no useful purpose as both parties are "cut from the same cloth." It appears that Illinois is simply THE microcasm for the entire nation's financial crisis.

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Dan Arenov

11:09 am on Saturday, January 26, 2013

Sorry Glenn, but that's wrong.

Listen, this isn't so much about governors, so those who are bringing up the names of different governors... that's not the crux of the problem.

Chicago, as the state's largest city (by far) with the most public union employees and the most state reps, holds the cards.

It's the Democrat 'machine' politics of Chicago that has got the state into this mess...it's not hard to connect these dots, is it?

Glenn, this is not like finger pointing at Congress and asking ourselves who the bigger obstructionist is, Harry Reid or John Boehner.

This is simple. It's right in front of our eyes. The Democrats in Chicago have ruined the financial solvency for the entire state of Illinois.

For anyone in denial, as Glenn is here..shame on YOU for not facing the facts.

Jac Charlier

1:00 pm on Saturday, January 26, 2013

So, will you vote for your incumbent State Rep and Senator in 2014? Will you back somebody else? I appreciate a good discussion with back and forth. At the end of it all, what changes will you take to put words into action?

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Dan Cox

2:19 pm on Saturday, January 26, 2013

Jac, you know that most of the Chicago populace will just punch any name with a (D) next to it, even if they have been under investigation, like Congressman Jesse Jackson Jr. Il. State Rep. Derrick Smith, and now Il. Rep. Le Shaun Ford.

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Jac Charlier

9:57 pm on Saturday, January 26, 2013

Dan - We can also look at the political families that have "lorded" over our political scene for so many years. For multiple generations they and their families have amassed jobs, pensions and benefits for themselves, of course. Depending on where you live, you may have one, two or even more of these royal citizens.

grandpa

1:41 pm on Saturday, January 26, 2013

When the voters act like children it is certain that Santa Claus will be elected.

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John Brinkmann

3:59 pm on Saturday, January 26, 2013

one needn't look around for much of anything Republican in Chicago/Cook County leadership---it doesn't exist...thats long been the history and tradition...and you aren't going to find much Republican representation in Springfield as well---there's only been brief periods of Republican control in the state house or senate for well over 50 years...No matter how much Democrats here try and spin this thing, there's no denying the party has held forth with long standing majority of state and city (Chicago) power, and must be held accountable for the misery and bankrupt condition of both

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RB

4:15 pm on Saturday, January 26, 2013

If you go back through the 70's a Republican Governor has held office more than twice as long as a Democrat. So, your theory is not grounded in fact. Chicago?- yep, Democrat.

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Gary

4:21 pm on Saturday, January 26, 2013

So you don't believe some vote from Republican Jim Edgar in 1994 set in motion a whole set of events that have led to the bankruptcy of Illinois? But you sound like a Republican yourself, so your opinion doesn't count.

One thing we've learned from this last election is that the Democrat base will believe anything the Democrat leadership throws out there as long as it makes Republicans look bad. I am prepared to believe that they could blame the mess on Edgar, and that the rank and file Dems would buy it. But....

...what happens after that? The Dems are in power and things are falling apart.

Now I know they are waiting for the "recovery" to come around and pull their butts out of the fire, but since Obama got re-elected there's no chance of that happening, so they are staring at 4 years of economic deterioration which means 4 years of excuses and casting blame on anyone but themselves and their constituents.

This should be interesting to watch.

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McCloud

5:58 am on Sunday, January 27, 2013

Your theory is grounded on LSD. Democrats have run this state into the ground, without question. Reaching back to Rutherford B Hayes shows just how weak your excuses have become.

Just Sayin

9:10 am on Sunday, January 27, 2013

McClown....and republiCONS have run their entire party into the ground. LOL.

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Dan Arenov

11:55 am on Friday, February 1, 2013

This is pretty much a cut and dried 'debate'.

We have one liberal poster continue to bring up the fact that Illinois has had its share of Republican governors, so the Republicans are to blame in part for the sorry state of our state.

And we have another who resorts to her typical name calling as a debate tactic.

No reasonable person can disagree with the final answer; Democrats, particularly the Democrat 'machine' in Chicago, has ruined the fiscal solvency of our state.

The bizarre thing about this is that Illinois Democrats are embraced in D.C. and by the liberal elitists of the northeast. Why is that? Why is someone like Dick Durbin positioned to be the next Senate majority leader when his own state is so god awful. Why didn't Barack Obama pay any kind of penalty for being from Illinois?

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Deadcatbounce

10:07 am on Sunday, January 27, 2013

Thea's good. democrats are running the entire state into financial ruin. LOL.

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Vicky Kujawa

10:18 am on Saturday, February 2, 2013

Just Lyin' (again), it's because of corrupt Liberal idiots like Quinn and Madigan that this state is beyond financial repair.

Jac Charlier

9:30 am on Sunday, January 27, 2013

OK to debate R or D being at fault...on this issue, try this on for size as an alternative. Use the Illinois legislative website to see how your State Rep and State Sen (D or R) has voted on pension payments, budgets, etc... http://www.ilga.gov/ My contention is that other than 2010 State Reps and State Senators, in the last 10 years many have cast their vote that has brought us to $100-$125 Billion in pension debt and $9 Billion backlog of bills owed to businesses. They knew this was happening and did nothing. The damage to the IL economy is as real as the votes cast by politicians to preserve their incumbency.

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Dan Arenov

9:40 am on Sunday, January 27, 2013

Jac, this goes back a lot farther than 10 or 20 years.

This goes back to the advent of public employees being unionized and the Democrat party doing the tango with them, in vicious cycle 'negotiations', over and over and over.

No, this is not a debate about R or D. Which party benefits from the votes of Illinois public employees? Where are most of these employees located?

This is not a debate at all. Why can't liberals admit, for once, that it's the Democrats fault that things are so bad in Illinois?

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Jac Charlier

2:55 pm on Sunday, January 27, 2013

Dan - The specific issue of the pension debt can be safely traced to 1994 as that is when the current pension payment "ramp" was invented. I use the word invented intentionally as the ramp was not based on fiscal reality but on political comfort. That falls primarily on Republicans with Dems going along. However, in the last 10 years (since 2002) the Dems must bear the majority of the blame as they have voted repeatedly for budgets that followed this fiscal magic all the while (and this is critical) knowing full well what was coming. As I have pointed out before, one of the worst parts of the story is that those same State Representatives and Senators who have been voting are now acting as if they will "solve" the pension debt issue while accepting/acknowledging absolutely no ACCOUNTABILITY for it. This is why in my postings and discussions I ask the relevant question - "Will you vote for your State Representative and Senator when the time comes?".

John Parker

9:16 pm on Wednesday, May 8, 2013

The 630 educators who retired from District 211 (Schaumburg, Hoffman Estates, Palatine) averaged pension payments of $86,982 last year, almost twice the state average, according to records from the Illinois Teachers' Retirement System.
To put this in context, the total pension debt-per-household in Suburban North West Cook County is $35,774

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