“The state continues to manage its budgetary deficit by deferring payments to vendors and others,” the agency added, while also pointing out that “the state expects to use additional deficit borrowing to close its projected budget gap.”
In December 2009, the credit rating agency said that a downgrade was probable if the state did not take significant strides to address its substantial debt. Fitch noted that it seems unlikely Illinois would take those steps: “…it appears now that budget solutions will continue to be pushed out to the future, budgetary balance will continue to rely on sizeable borrowing, and those reliant on state payments will continue to have long waits to be paid.”
Though the agency noted that the state’s recent attempt to lower its pension liabilities is a “credit positive,” the short-term benefit is negligible and thus did not substantially benefit Illinois when it came to maintaining the state’s previous A bond rating.
By placing the state on Rating Watch Negative, Fitch Ratings acknowledges that the state is likely to face further downgrades of its credit rating. Only California has a lower credit rating from all three agencies than Illinois.
COMMITTEE EXAMINES LOSS OF TRADE SHOWS
Also this week, members of the Joint Committee on the Metropolitan Pier and Exposition Authority met to address the issue of lucrative trade shows leaving Chicago.
A panel of show managers and show exhibitors testified before lawmakers on April 1 in Chicago. An exodus of trade shows—representing an industry that brings revenues to state and Chicago coffers—has lawmakers concerned about the competitiveness and appeal of Chicago’s McCormick Place convention center.
Show managers and exhibitors explained that antiquated rules and other problems at the Metropolitan Pier and Exposition Authority, known as McPier, has made the facility less desirable, and has forced them to consider moving to other venues out of state. The loss of several major trade shows to less expensive venues in other cities, like Las Vegas and Orlando, prompted the formation of the Joint Committee on the Metropolitan Pier and Exposition Authority.
Legislators hope that testimony from show managers and exhibitors, and insights from representatives at McPier will provide guidance in how to best restore McCormick Place as a viable option for high-profile, lucrative trade shows. Next week, the committee will hear from union representatives and McCormick Place officials.
On behalf of the staff at my legislative offices, I wish you and yours a Happy Easter!