Bond rating firms knock down AG’s claim
An attempt by Attorney General Lisa Madigan’s office to stir up fear about the delay in implementing SERS, SURS and TRS pension cuts fell flat after major bond rating agencies said the stay of the pension-cutting law would have no impact on the state’s financial outlook.
On May 14, Sangamon County Circuit Court Judge John Belz granted the request of the We Are One Illinois union coalition, which includes AFSCME, to issue a temporary restraining order and preliminary injunction that will prevent the new pension law – Public Act 98-599, or Senate Bill 1 – from going into effect until the court determines whether the bill is constitutional.
Following that decision, the Attorney General’s office issued a statement that claimed “this decision will likely further burden the systems and hurt taxpayers.”
There’s no evidence, however, that the stay of the law will have any impact. Fitch Ratings, a major credit-rating house that plays a role in determining the value of state bonds, said a legal challenge to the pension law was long-expected.
“Fitch Ratings issued a statement today saying experts expected a strong legal challenge to the overhaul that became law last fall,” the Associated Press reported. “And it pointed out that no one is counting on savings from the bill any time soon.”
Another ratings firm, Standard & Poor’s, also announced the stay will not affect the state’s credit rating.
Even Gov. Pat Quinn’s office isn’t expecting the stay to have any impact – the changes in the law weren’t factored into this year’s budget proposal, “anticipating that this issue would still be working its way through the court system,” a Quinn spokesman said.
