Illinois' credit standing took another hit on Monday as Fitch Ratings downgraded the state's rating for the first time on Governor Bruce Rauner's watch, citing the deterioration of state finances during a four-month budget impasse.
Illinois has no budget yet for the fiscal year that began on July 1, and the stalemate between Republican Rauner and Democrats who run the legislature has taken a bite out of state services. The downgrade is the most potent sign yet that it is worsening the state's already precarious standing on Wall Street.
The one-notch downgrade from A-minus to BBB-plus, affecting $26.8 billion of general obligation bonds, leaves Illinois as the only U.S. state with a rating in the low investment grade triple-B level. Fitch has previously dropped only California to that level in 2003 and 2009, according to Karen Krop, a Fitch analyst.