Tom Cross: Hit to State Bond Rating 'Embarrassing'
The next step might mean the state's credit rating is downgraded.
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With the Illinois General Assembly failing to act on pension reform earlier this week, the State of Illinois’ bond rating took a hit on Friday as Fitch Ratings put Illinois’ bond obligations on negative watch.
The next step could mean Fitch's downgrading of the state’s credit rating, which would only add to the state’s financial woes.
“The Rating Watch Negative reflects the ongoing inability of the state to address its large and growing unfunded pension liability, most recently through the failure to pass pension reform in the 'lame duck' portion of the 97th general assembly legislature that ended on Jan. 8,” Fitch Ratings said in a news release Friday.
Illinois State Treasurer Dan Rutherford reacted Friday to the negative watch announcement.
“Failure to enact pension reforms will eventually bring Illinois to its financial breaking point, and it will be worse than any fiscal calamity we have seen thus far in this state,” Rutherford said in a news release. “Our state’s credit rating cannot afford to take another hit.”
Fitch Ratings said that Illinois’ long-term liabilities, particularly pension liabilities, are very high for a state. As of June 30, 2012, the unfunded actuarial accrued liability was reported at $94.6 billion, resulting in a 40.4 percent reported funded ratio, Fitch Ratings said.
Illinois House of Representatives Minority Leader Tom Cross of Oswego also responded to the downgrade announcement.
“Fitch’s downgrade of our bond rating is embarrassing and may cost the state more money—money that we clearly do not have. How many more times do we have to be downgraded to prompt action in the General Assembly? I have worked and will continue to work with other members in the House and Senate to pass meaningful pension reform.”
Rutherford criticized Gov. Pat Quinn, noting that it’s been two years since a 66 percent income tax increase was passed at Quinn’s request. The income tax increase was billed as a way to solve the state’s financial woes, but Rutherford said money matters have only gotten worse.
“In the past decade, the state’s bonded debt has nearly tripled. Illinois’ debt is colossal and growing-- our debt obligations now exceed $200 billion. It is estimated that the failure to address the state’s pension liability is costing the state at least $17 million per day. It is beyond irresponsible to let this continue. The state needs to reign in the pension escalation and not use long-term borrowing as a ‘solution’ to this problem.”
Editor's note: Patch Editor Mary Ann Lopez is the author of this report.
Stacy Tettemer
3:37 pm on Friday, January 11, 2013
Tom,
When your spending is constantly higher than your income your credit rating goes down. The private sector has known that for a long time. How long before the Government learns>
John Tips
4:13 pm on Friday, January 11, 2013
Tom, you and I have spoken many times before about state related issues. Again I wish to call upon you to seriously look at the elimination of townships in our state. Townships once provided a governmental service which was used by residents mainly due to the travel distance to their county seats. Today with modern cars, fax machines, the Internet and all the marvels associated with modern life - townships are nothing more then anarchism left over from the early roots of this state!
By eliminating townships as a whole - local and county governments can easily provide these services which townships now provide. By eliminating townships the people of Illinois can downsize a government which is out of control with taxes and spending!
Again I ask you, and the general assembly seriously look at the elimination of this repetitive form of government! Their are only 20 states left that have township governments - let us make Illinois another state that moves us forward to saving money!
Pat Stiles
10:12 am on Saturday, January 12, 2013
Agree
Phillip Cleary
9:24 pm on Sunday, January 13, 2013
No one want's to eliminate the Township level of Government because at that level it provides Precinct workers that help those elected become so. Precinct's provide some with enough votes in an otherwise hostile district to make the petition process viable and also provide necessary votes to get elected. I served for 10 years a Joliet Twp. GOP Vice Chair. In Joliet the majority of conservative votes happened at the precinct level. The alternative would be sort of like Illinois in the General Election, winner takes all. We really don't want that.
HockeyFan
5:58 pm on Friday, January 11, 2013
Tom,
You and everyone else in the General Assembly have known for at least a year that that pension issue needed a solution. Some people I know that are affected directly by the issue just want it resolved one way or another so they plan for their retirement. I feel the cost of living issue is the biggest problem. I know of someone personally who retired under one of George Ryan's plan. They got 80% of their pay plus paid medical coverage and have received each year for 11 years a 2 to 3% cost of living raise a year. Do the math. I know many people that now make more being retired than they did while they were working all because of the cost of living increases. That is what is costing the state so much money.
SonofJohn
6:25 pm on Friday, January 11, 2013
The Democrats and Chicago machine will continue to follow the rabbit down the rabbit hole.Public liberal Unions will continue dictating to the legislature and Illinois will loose it's rating soon. The uneducated or as some call them the low information voters will continue voting for the left..................time to take the RED Pill?
CS
9:29 pm on Saturday, January 12, 2013
Teachers get 75% of their pay after 34 years of teaching. At 60 years of age and 30 years of teaching they get 60% of their last 4 years. COLA payments help them keep up with rising gas, food, utilities and taxes. They do not get social security and WE DO PAY FOR OUR OWN MEDICAL. We are covered through TRS, and without we pay $600 per month. The legislators, including Tom, are trying to fix their problem by punishing teachers who are retired.
ctc3
4:39 pm on Sunday, January 13, 2013
In the technology related private sector, many retirees, when adding their pension and social security together, the total is less than 75% of their salary and they get little or no medical payed for. I'm all for teachers getting what they can, but I also feel that an elementary school teacher, who after 30 years of teaching makes more than $90,000 a year, should realize how lucky they are to be eligible for a pension of $67,500. I know Private sector retirees who retired making $120,000 a year and their pension plus social security is less than $50,000. I'm not saying public sector employees don't deserve what the unions have fought for, but they need to realize it's way above average compared to the general population, and that even with some adjustments which may lower their pensions, they will still be at or above average.
Phillip Cleary
9:39 pm on Sunday, January 13, 2013
CS, after 34 years you were making $100K plus. Wouldn't that make you near the 1% that all the liberal rail against? Look at the difference between Publicly employed and the average citizen? You do very well regardless of your Insurance contributions. At any rate Obama care will save us all, isn't that the propaganda line? Ask you Union to sign you on with the rest of us!
CS
9:54 pm on Sunday, January 13, 2013
I wish I made $100,000 when I retired. I made 1/2 that! That is the problem with a bill on pensions that fit all. You hear about those making $100,000, but that is now, not 12 years ago. The real reason, legislators need to talk with union leaders, so they work out a pension plan that is fair for all. Oh, and my medical insurance premiums go up yearly and I don't get social security. I began 30 years ago making $8,500. Not all pensioners are the same! I wish I were one of the 1%.
Phillip Cleary
10:26 pm on Sunday, January 13, 2013
CS, in 1982 a an E-4 In the US navy I made $518 a month. I decided at that point that the government couldn't support me. I'll never be able to retire. If you have good for you. Why do you think you should be able to have a hand in my pocket. You made your decision I made mine and now we have to live with it. Don't blame the tax payers blame the politicians that took your money spent elsewhere and now leave you out to dry. Call Mike Madigan he has the handle on the finance's and has for many years. Oh yes, your Union gave him that power.
SonofJohn
6:13 pm on Friday, January 11, 2013
Democrats running the show for years now, they only have themselves to blame. Liberal/Progressive/socialist agenda.
Vote cross out
6:37 pm on Friday, January 11, 2013
Drivers licenses for ilegals and taking away gun rights were more important than the pension issue
It only costs what 17 million a day no need to rush the pension reform
Tom just change that R to a D
Wow
10:38 pm on Friday, January 11, 2013
100 % right were worried about giving illegals drivers licences and taking away gun rights. Tom why did you have to support giving illegals licences? More important items such as this pension mess!
John Tips
12:49 pm on Saturday, January 12, 2013
I also strongly DISAGREE with allowing drivers licenses to Illegal aliens! They have BROKEN OUR LAW by being here in the first place! What makes anyone think that they will abide by our laws now?
Furthermore - the argument some lawmakers made in their approval of this act was that "The Illegals will drive anyway" which by it's nature should not be tolerated!
We should insist that as a part of them driving - they must pay for their insurance in full for the entire year! Then make that irrevocable, so they cannot cancel and obtain a refund after proving to the court that they have insurance! Their licenses should be renewed every year as well!
We need to insist that our legislature make it mandatory on judges that they impose at minimum a $1000.00 dollar fine on people who drive without insurance in Illinois. We need this law to avoid the loophole we presently have in our current law. This loophole allows judges discretion, and allows people to drive without insurance by paying the maximum fine of $500.00 if they are caught.
With most insurance costs being over $100.00 per month - it is more feasible for non-insured people to wait to get caught without insurance and pay the fine rather then to pay $1200.00 per year to be insured! We need to close this impropriety!
Please Call your representative and insist on these changes!
Jeri
6:56 pm on Friday, January 11, 2013
This state stinks ....Looking forward to leaving Democratic land. All this money spent on salaries of all these people to make decisions and all I hear is swish of the flushing toilet. Over spending, people need to help themselves(look at the culture of offspring), vote with knowledge what a novel idea, and maybe term limits thrown in to the pot to simmer. Too many cooks in the kitchen.
Hairy Callahan
8:55 pm on Friday, January 11, 2013
I agree Jeri, but I'll add this; The elected officials keep the focus of reform on the workers at the bottom of totem pole. These elected officials take an office for as little as 4 years and get a lifetime pension and lifetime medical benefits?! Meanwhile the working class public servant such as teachers, cops, fireman, public works, etc work the required 20,25,30,35 years and get medicare at 65 like the rest of us (hopefully), are under fire? And some of these people wont get social security. The top of the totem pole is where the problem really lies.
Pat Stiles
10:11 am on Saturday, January 12, 2013
I agree term limits are needed. But most officials will say you need to keep seasoned veteran politicians around because they know how things work, and it will take time to bring the new ones up to speed. Seems the seasoned ones ran the state into the ground. If you have common sense you can be a politician.
Butch W
7:49 pm on Friday, January 11, 2013
Texas has a surplus to their budget by keeping costs down and having part time elected officials. Corruption has been a problem in Illinois for many years now. To date we are 50% conviction rate of govenors The saddest part is Blogo first ran on a platform to clean u state government. Taxes keep going up and government just keeps spending.
Tom
The people of this state are unable to trust anyone who runs for elected office by the history of garbage that has represented us!!!! When are we going to get a group of people who are going to set an example and work together for the good of the state over party politics???? THE TIME IS NOW!!!!! Springfield dont vote yourselves a raise make some hard decisions and save this state from going bankrupt. Illinois is all over national news as one of the worst run states in America lead maybe by California. YOU ALL IN SPRINGFIELD SHOULD BE ASHAMED AT THE LACK OF ACTION. we need leaders who will work together not for your reelection bank accounts. We need leaders who will comb over every budget to be sure our tax dollars are being spent properly and getting the most bang for the buck!!!!!!
Walt Hines
8:20 pm on Friday, January 11, 2013
The state keeps spending money they don't have and so does our school district. I can only imagine what's going to happen next year, how much in the red will we be short for 308. Throwing 2 big additions on to two schools was not something we could afford. Now they have to come to the tax payers for money to operate. I see a cold day in hell before that takes place. Either way you look at it we're in serious trouble!!
By cutting the pensions will it really bring us out of the hole or not? I see that a temporary fix not long term. Is Mr. Cross willing to have his entitlements cut?
SonofJohn
10:01 pm on Friday, January 11, 2013
9:59 pm on Friday, January 11, 2013
When public unions retirees make more retired than when they were working in many cases ,something is terribly wrong in the state of Illinois. The Chicago run machine politics is a cloud over the State of Illinois and in particular the people.
The uneducated, low information voters keep voting them in, they are part of the problem.
Jeri
4:53 pm on Saturday, January 12, 2013
That is how anyone wins is with the Chicago voters. Isn't that scarey. Kinda scarey all over. Our peers refuse to be educated. With term limits we can get the INFORMED average Joe to be educated by all the people on staff. This should be a dollar sense project but what happens? The liberal people get all emotional and berate anyone they can. It gets far too emotional and who wants to stick their neck out and receive that treatment. Just look at these blogs on the Patch.
Voice of reason 503
12:38 am on Saturday, January 12, 2013
I finally have to comment. There is more than one state retirement system. IMRF and SLEP are Illinois pensions that are around 86% funded. The big difference you ask??? The state legislature cannot touch the money (not that bogo didn't try) and that employees and the city's n county's have to make the required contributions. The Illinois legigislature caused the underfunded retirements because the state kick the can by not making the payment and taking money out on an IOU that they now want to pass on also. It's not the unions that are the bad guys.
SonofJohn
1:25 am on Saturday, January 12, 2013
The unions are in bed with the politicians, true or false? I don't see the unions supporting the idea of smaller government, do you?
Butch W
3:23 pm on Saturday, January 12, 2013
sonofjohn is correct the union leaders have been in bed with the politicians for years. It would be graet to retire on more than you made working if it could be paid for. Some hard changes are coming for state of Illinois employees's. Hate to see people lose out on something they worked for and were promised but in the end the deals that were made may have to be changed or the state will need to make large cuts elsewhere it is not fair to keep dumping new taxes on residence to pay for the poor spending habits of those in Springfield. If the state goes bankrupt a judge will make those changes anyway. State employees may have to contribute more to their benefits as we do in the private sector through no fault of their own
Voice of reason 503
12:42 am on Saturday, January 12, 2013
By the way...Illinois sucks...I'm headed for Wyoming.
Stacy Tettemer
2:51 pm on Saturday, January 12, 2013
that might be a good idea. Anyone want to buy a house that if you get a 20 yr mortgage you will have paid more in taxes than you paid for the house.
Pat Stiles
10:03 am on Saturday, January 12, 2013
It's embarrassing, really is that the best you can say. Tom, and Kay and the rest of our elected offcials created this mess and now they are red faced and embarrased. But they won't reform themselves. And they will always blame the Democrats, or Chicago. I think it's time to stop playing that excuse card it doesn't work anymore. Democrat or Repulican you are elected to do whats right for the people of Il. not for what makes you and your party richer. But we also have to blame ourselves for not taking our time to get just little informed on what our local and state governments are doing. More people can tell you who got voted off dancing with the stars, but can't tell you who you local offcials are. You see they depend on our apathy to get elected, so they can do what they are doing in Springfield day by day. This problem didn't pop up overnight. Tom what happened to HB5931 this would of helped municpalities in a big way along with the taxpayers.
Bill T
12:04 pm on Saturday, January 12, 2013
Start with your own pension Mr. Cross. State legislators with just 20 years experience get the same percentage of their salaries in retirement as it takes teachers 34 years to achieve. Plus they get additional increases for every extra year of service. Many have retired with over 100% of their salary in retirement.
Active and retired educators can pay fees/increased contributions to supplement the retirement system but no one is interested in making the system more stable. The only goal able to be articulated by the GA is to reduce or eliminate state contributions to the system. Higher salary members need to be paying an increased percent toward the system instead of just cutting benefits to the 35 year veteran kindergarten teacher!
Jeri
5:01 pm on Saturday, January 12, 2013
I know this is a simple problem but look at the WIC program. the shopper can go over the allotted amount and buy name brand. Only the cashier stops it and no one but my daughter does. She gets yelled at by the shopper all the time but the people behind the shopper commend her. Multiply that by the state vouchers.
Olivia5307
6:49 pm on Saturday, January 12, 2013
Tom, have another photo taken of yourself. You look drunk in this one.
Buckgrove
9:38 pm on Saturday, January 12, 2013
Former Republican Governor , Jim Edgar, said another tax hike is neccesary. Former Republican Congressman Joe Walsh says there is no Republican Party in Illinois.
CS
11:26 am on Sunday, January 13, 2013
Maybe a graduated income tax is a great solution. Why should someone making $20,000 a year pay the same tax as someone who is making $200,000 a year!
ctc3
4:59 pm on Sunday, January 13, 2013
"Why should someone making $20,000 a year pay the same tax as someone who is making $200,000 a year!" - Because someone who's making $200,000 a year is already paying 10 times the state income tax as someone who makes $2,000 a year. I'd rather see the government spend time to ensure the person making $200,000 a year not be able to deduct and loophole their way down to paying much less. I compare paying taxes to buying a car, it upsets people to realize their neighbor payed $4,000 les for the exact same car they just bought. It upsets people when they find out someone making more than them pays less of a percentage of their income than themselves.
John Tips
8:42 pm on Sunday, January 13, 2013
As a former Federal employee myself I will have to interject at this point. I am now retired after 37 yrs of service. My salary was about $60, 000. per year. During my career I payed 7.5% into my own retirement system and will NEVER be able to collect any Social Security. All Federal Employees now pay into Medicare/Medicaid as well. For the fruits of my 37 yrs of labor, - I receive my retirement pay, from which is deducted Federal Income taxes, health insurance, dental insurance, and life insurance leaving me with about $1,950. to live on!
My retirement pay, and benefits are far below that of teachers, and many other State of Illinois retirees! So anyone who blames federal employees for all the woes of this land are misinformed. On last years retirement pay I have payed almost,
$3.420. dollars in federal taxes!
SonofJohn
10:16 pm on Tuesday, January 15, 2013
!950 wow you live on more than me, I was private sector retired Lucky you..... enjoy.
John Tips
8:57 am on Wednesday, January 16, 2013
SonofJohn,
We don't know where you worked, for how long or what retirement other then social security you are receiving. Many retired people live on more than I receive per month as well. My good friend from high school "lee" went into the service at 19. Today, Lee is retired from the Military, after serving on active duty for 24 years, he went to work for the railroad and vested in with railroad retirement benefits. Together with both retirements, Lee is taking home almost $5000.00 per month - now that is a good retirement! Sadly I never had the drive to do the military thing for as many years (I am a vet though) as Lee, but such is life - you get out of it what you invest in!