Fitch downgrades Illinois credit rating to `negative` - New York News | NYC Breaking News

On Friday, another credit rating agency declared the State of Illinois's fiscal outlook "negative."

The Fitch agency blamed the General Assembly's failure to act on the nearly $100 billion in unfunded liability the state faces for public employee pensions. Governor Quinn told our Political Editor Mike Flannery that finding a solution is now his top priority.

The governor noted that the very first proposal introduced when the new General Assembly was sworn in this week--Senate Bill 1--was a sweeping rewrite of retirement benefits for government workers and their funding.

Governor Quinn said a statement issued Friday by Fitch Ratings appeared to borrow from speeches he's been making for a year. It urged the state to take action, "within the next six months that limits the impact of (rising) pension payments on the budget while bolstering pension funded levels. Failure to achieve meaningful results would lead to a downgrade of the (credit) rating."

But while virtually everyone in the State Capitol says "something" should be done, there is no agreement on what that should be. One big cause of soaring pension costs: the guaranteed 3% raise given each year, whether or not the cost of living has actually increased that much.

"You gotta deal with the cost of living," Quinn says. "The cost of living adjustment, we've gotta make some changes. We've got to deal with the employer contributions. That's what the government does. But also employee contribution. We may have to ask for more there."

"We're willing to look at that," Quinn said in response to a statement about the unions paying more. "That's a possibility. And I think we've made progress in narrowing the differences between the House and Senate, the different players and the different bills."

When those players return to the Capitol next month, the governor said he wants them not to deal with casino gambling and other issues he dubbed "shiny objects." That is, not until they've fixed Illinois's worst in the nation credit rating by reducing its huge pension debt.