Illinois's Credit Rating To Hit 'Junk' Status?
Illinois could see its already worst-in-the-nation credit rating sink further--all the way to "junk" status.
Moody's Vice President Ted Hampton says investors have asked the ratings agency if that's even possible.
Because they can raise taxes, states are generally considered safe, and mostly have high ratings.
But Hampton says there's no credit floor. It is possible for Illinois' rating to drop to "junk."
"It's just a couple of notches away from that...well, three notches below where it is now. It certainly is conceivable. We have a negative outlook which indicates that we see further deterioration in the credit situation as being more likely," Hampton said.
Credit ratings are an indicator of a government’s fiscal position; lower ratings drive up borrowing costs.
Illinois is ending its fifth month without a state budget. Hampton says even if lawmakers reached an agreement now, the state's credit standing would not improve right away.