WSIL -- A bond rating downgrade from a national agency puts the Illinois budget mess in very stark terms.
Fitch ratings puts the blame on Illinois leaders for what it calls "unprecedented failure" to address the state's financial woes.
Senate leaders, who've come closest so far in crafting a potential budget plan, say they hope the downgrade can add to the urgency to pass the senate plan, and fix a "broken" system. But Fitch believes it may come too late.
The ratings downgrade hits Illinois hard, because the state carries $26 billion in debt, plus billions more in debt issued by state agencies.
Going from BBB plus, but plain BBB means that when Illinois goes into the bond market to borrow money, it will have to pay higher interest rates, meaning it cost more to pay off the debt with money raised from taxpayers.
Fitch said its downgrade "reflects the unprecedented failure of the state to enact a full budget, which has resulted in increased accumulated liabilities and reduced financial flexibility."
It's one reason, in an interview a few weeks ago, Governor Bruce Rauner said he'll continue pushing for a full budget to get the state moving again.
"Well, stopgap spending, that's deficit and incomplete. It's what's gotten us into this mess, so it's not a good answer," said Rauner.
The governor believes Illinois can grow its way out of its current financial hole, but Fitch believes, so far, Illinois has let that train completely pass it by.
"Illinois has failed to capitalize on the economic growth of recent years to bolster its financial position, has resulted in a marked deterioration in the state's finances," said Finch.
Governor Rauner continues to believe, business reforms can make the state more competitive and help kick-start the kind of growth that could begin to put money into the state's bank account.
"GE said, 'Illinois, first choice.' They wanted to move their corporation headquarters and many manufacturing jobs, but they said, 'Governor Rauner, please, show that you're not going to do to us what Connecticut did, just keep raising income taxes to cover deficit spending and unfunded pensions."
Even if current budget talks result in a budget, Fitch believes, "the failure to act, to date, has fundamentally weakened the state's financial profile."