A pair of major ratings agencies are at odds over Illinois’long-term credit outlook.
While Fitch Ratings and S&P Global Ratings both agree the state’s current ratings still stand at just a notch above junk status, they see things differently beyond that point.
Fitch rates the state’s outlook as negative, while S&P revised it to stable.
Fitch officials explained their rating “reflected an ongoing pattern of weak operating performance and irresolute fiscal decision-making that has produced a credit position well below the level the state’s broad economic base and substantial independent legal ability to control its budget would otherwise support.”
With the state poised to soon cash in on its share of at least $7.5 billion coming from the federal relief package just passed in Congress, the agency added “spending growth, absent policy actions, is likely to be higher than revenue growth, driven mainly by increasing pension demands. Pension costs are unusually large and will continue to grow under current law.”
Meanwhile, S&P said the state's stable outlook from negative "reflects the waning of fiscal and economic uncertainty stemming from the COVID-19 pandemic and subsequent economic downturn."
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