SPRINGFIELD — — Illinois taxpayers will pony up at least $130 million extra in interest payments for a bond sale this week due to lowered credit ratings because lawmakers have failed to solve the state's $97 billion pension crisis.
Two weeks after two credit-rating agencies downgraded the state's rating to an all-time low, the state sold $1.3 billion in bonds Wednesday to pay for capital projects around the state. Among them are an upgrade of Chicago's elevated rail system, improvements to highways and university campuses and the purchase of land for a suburban airport south of Chicago.
Gov. Pat Quinn's office announced the costs of the bond sale, explaining that the $130 million — to be paid over the 25-year life of the bonds — is the difference between what the state paid this week and what it would have paid when it had a better credit rating just three years ago. It now has the worst rating of any state in the nation.
"Legislative inertia has a price, and today the price for taxpayers was an extra $130 million," Quinn said in a statement. "As I've warned repeatedly, this is an emergency."
State Treasurer Dan Rutherford said his office calculated that Illinois is paying $235 million more than it would have paid when it enjoyed a high credit rating in the early 1990s. There have been 13 downgrades for Illinois over the last four years by multiple agencies, all tied to the Legislature's inaction on pension reform.
Rutherford, a Republican who has announced a challenge to Quinn in next year's election, said another ratings downgrade is likely in store if lawmakers continue to punt on the pension issue.
"We've had all sorts of (deadlines) and benchmarks," Rutherford told The Associated Press. "Each time a date has been given and there has (been inaction)...it has had a direct consequence on the bond rating."