Financial Experts Agree with Rep. Wilhour: Governor’s Budget Plan Insufficient
SPRINGFIELD…State Representative Blaine Wilhour (R-Beecher City), a business owner and farmer, has said even before he was sworn in to the Illinois General Assembly, that the State needs real reform and fiscal restraint.
Now, another bond ratings organization has publicly criticized the recent budget proposal by the new governor and backs up what Rep. Wilhour continues to say…”We need real leadership and reforms to reduce our backlog of bills, fix the workers compensation system, and properly fund pension obligations. The time for kicking the can down the road has long passed. The Governor and the legislature have a historic opportunity to implement real solutions to our long-standing problems and we need to take advantage of that.”
The following is an excerpt of an article by Fitch Ratings, Inc. that backs up these criticisms of the FY2020 budget proposal:
“The fiscal 2020 executive budget plan recently introduced by Illinois’ governor would not materially address the state’s structural budget issues in the current fiscal year or the next, says Fitch Ratings.
Illinois’ ‘BBB’ Issuer Default Rating (IDR) reflects an ongoing pattern of weak operating performance and irresolute fiscal decision-making. The Negative Rating Outlook reflects our assessment that near-term fiscal challenges will pressure the rating.
“Fitch has indicated that we would lower the state’s IDR (bond rating) if Illinois returned to a pattern of deferring payments for near-term budget balancing. Elements of the governor’s proposal, including a $1.5 billion GO (General Obligation) bill backlog borrowing that reduces but leaves largely unresolved the 2019 deficit and numerous one-time measures in fiscal 2020, appear to do that without a clear path toward long-term balance. The legislature will take up the executive budget, a multi-part pension proposal, and a possible capital improvements bill over the next several months, with the goal of enacting a final budget by June 30. Fitch plans to review the state’s rating and Negative Outlook following passage of a final budget for fiscal 2020.”
Rep Wilhour responded that “in other words, the rating agency is saying that this budget does little to address long-term stability and the practice of deferring pension payments (pension holidays) in order to artificially “balance” a budget is not sound fiscal practice and if continued would result in a devastating downgrade.”
You may read the complete article by Fitch Ratings online at www.fitchratings.com/site/pr/10064553.