Illinois’ credit rating remains one notch above junk status, according to Fitch Ratings, but the firm changed the state’s outlook from “negative” to “stable,” thanks in large part to a surprise influx of tax revenue in April and Gov. J.B. Pritzker’s approval of a “plausible and achievable” $40 billion spending plan for the budget year that began July 1.
“The positive April revenue surprise seen in Illinois, and other states, supported a significant increase in fiscal 2020 estimated revenues, easing the path to budget adoption and allowing the state to reduce (but not eliminate) reliance on non-recurring measures,” Fitch said. “The state now has a plausible and achievable 2020 budget plan, leaving the state better positioned from a fiscal perspective, and the potential for a rating downgrade in the near-term has receded.”
Fitch noted that growing unfunded pension liabilities remain a major concern for the state’s financial future. The five statewide funds together have $134 billion in unfunded liabilities.
