The rating agency warned in a press release July 5 that it was placing Illinois “under review” for a possible downgrade — even after acknowledging the impact of additional tax revenues.
Illinois is only one notch above junk status. If Moody’s decides to downgrade Illinois, Illinois will be the first state in the nation to ever fall to junk status.
The agency decided to put the state under review despite the fact that it expects lawmakers to override Governor Bruce Rauner’s veto of the $4.8 billion tax hike, saying the review “incorporates our expectation that the legislature will implement revenue increases.”
That revenue isn’t enough to counterbalance the “further deterioration” of the state’s unpaid bills and pension crisis.
That means the bad budget lawmakers are pushing to enact is very likely a “junk” budget.
In fact, Illinois has already been trading at junk levels ever since the state was ordered to property fund its Medicaid obligations last month.