While Gov. Bruce Rauner and the majority of Illinois lawmakers pat each other on the back for passing what they have said is a balanced budget, another ratings agency has concluded it’s structurally out of balance.
Moody’s said Illinois’ spending plan has some credit-positives, like the optional pension buyout plans. S&P said the budget relies too much on savings that can’t be guaranteed, like the optional pension buyout plans.
Fitch analyst Eric Kim said the buyout plan isn’t even in place yet.
“Those proposals haven’t been finalized,” Kim said. “They’re going to take at least a few months, maybe most of the next fiscal year to implement, so depending on how long it takes, that can also limit how much in savings the state can accrue.”
Earlier this month, the Illinois’ Teachers’ Retirement System said it’s still working on legislative approval for various administrative rules to implement the buyout plan, and changes to computer systems.
“But because the act requires the funding for the buyouts to come from $1 billion in state bond proceeds, the program will not start until the bonds have been sold and the money deposited with the comptroller's office,” TRS Communications Director Dave Urbanek said. “The bond sale is completely out of our hands.”
Kim said another problem with the fiscal 2019 spending plan is it doesn’t address the state's backlog of bills. The amount the state owes in past-due bills stood at more than $7.5 billion as of Wednesday. Read more.....