The following news article is reprinted from Crain’s Chicago Business:
Illinois public universities risk being downgraded, Moody’s Investors Service announced today, singling out schools ranging from the University of Illinois at Urbana-Champaign to Northern Illinois University in DeKalb.
The other universities mentioned by Moody’s include Eastern Illinois University, Governors State University, Illinois State University, Northeastern Illinois University, Southern Illinois University and Western Illinois University.
The universities are overly dependent on the state for “operating funds and fringe benefits,” Moody’s said in a statement. The agency also noted “extensive appropriation payment delays in a challenging budget environment that continues to pressure Illinois’ public universities cash flow and liquidity.”
Moody’s doesn’t have a high opinion of Illinois’ debt. Last week the credit rating agency signaled that the state’s already low rating may soon be lowered again, based on a pessimistic outlook that Illinois can reduce its pension costs. Illinois already is Moody’s lowest rated state, one notch below California.
The lack of leadership in Springfield, failing to control their deficit spending and pension underfunding, is now creating a fiscal cliff for government entities in the rest of the state – par for the course with Illinois having the lowest Moody’s bond rating in the nation.