CHICAGO (AP) – A major credit rating agency has downgraded Illinois’ rating to two levels above “junk” status, citing the “political gridlock” that’s prevented the state from getting a balanced budget for more than a year.
Moody’s Investors Service lowered Illinois’ rating Wednesday on $26 billion in debt by one level, to Baa2. The downgrade also affects $2.75 billion in revenue bonds.
Moody’s noted Illinois has a multibillion-dollar budget gap and its bill backlog is likely to exceed a previous record of $10 billion.
Illinois had the worst credit rating of any state even before the current impasse between Republican Gov. Bruce Rauner and majority Democrats.
Lawmakers adjourned their spring session last month without approving a budget for the second straight year.
The lower rating means taxpayers pay more when Illinois borrows money.