By Monique Garcia
12:11 PM CST, January 30, 2013
Illinois budget officials say the state will delay today's planned sale of $500 million in construction bonds after a recent credit downgrade.
A spokesman for Gov. Pat Quinn's budget office said the decision was made after conversations with potential bidders led officials "to believe the market is unsettled because of recent actions and comments made by the bond rating agencies."
It's unclear when the state would go back to the market or if the delay would impact the building schedule of a statewide public works program.
Last week, Standard and Poor's downgraded the state's credit rating from A to A-minus. The move means Illinois has the worst ranking of all 50 states, a distinction the state had already earned from Moody's. The ratings mean it could cost the state more to borrow money as investors seek higher interest rates.
The rating agencies blame the lack of action in Springfield on reforming the state's vastly underfunded public employee pension system. Quinn has been unsuccessfully pushing for changes for a year. The delay in bond sales could up the pressure on lawmakers to act sooner rather than later, particularly if it impacts construction of schools and roads in their districts.
House Republican leader Tom Cross of Oswego issued a statement about Quinn's move today.
"The administration's decision to pull the $500 million bond sale today is a clear indication that officials were concerned that we might pay too much in interest, in large part due to our awful credit rating. Our failure to pass meaningful pension reform, to pay down our large backlog of bills and to live within our means is contributing to this uncertainty in the markets for us," the statement read.
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