Credit scores are kind of like opinions: Everyone has one.
Even the state of Illinois. (Well, a credit rating, technically).
And ours just got better.
Illinois just received its 12th credit upgrade under Gov. JB Pritzker.
Here’s the caveat: Even after S&P raised Illinois to an A rating, the state remains the lowest-rated in the nation.
In less than a week, Moody’s boosted Illinois’ rating, and now S&P Global Ratings has elevated its rating for the state’s general obligation debt to an A from an A-.
More Top Picks Best Amazon Prime Day Adjustable Dumbbell Deals 2026
For perspective, Illinois stands alone at A. The next-lowest states — Kentucky, New Jersey and Pennsylvania — are rated A+, while every other state rated by S&P is at least AA-.
S&P specifically applauded Illinois’ recent record of “conservative budgeting and proactive management.”
Take that use of “conservative” with a grain — or 20 — of salt. Everything is relative.
All to the good, and we applaud any good news when it comes to our fiscal fortunes.
We’ll keep this upgrade in perspective, however.
First, an upgrade like this doesn’t necessarily mean anything to ordinary Illinoisans, but it may mean something to their wallets. With a better rating, Illinois should pay less interest when it borrows money, which could mean fewer taxpayer dollars going to debt service. And our state certainly tends to borrow plenty of money.
Second, S&P’s upgrade came with a big catch: Yes, Illinois has gotten better at managing its finances, but an enormous structural problem remains beneath that progress. As such, its message on Illinois’ future standing came with substantial carrots and sticks.
The agency noted it could lower its A rating if economic and revenue performance are weaker than forecast or if the state “does not address emergent sources of potential budget pressure proactively through adequate and timely structural solutions.”
Conversely, if the state does take proactive, meaningful steps towards addressing its most significant “budgetary risks,” S&P indicated Illinois could earn another upgrade.
The message to Springfield from the ratings agency is clear: Take action to address the perpetual elephant in the room — Illinois’ $144 billion pension crisis — and you get rewarded. Fail to do so at your own risk.
While the governor’s messaging on S&P’s credit upgrade is that Illinois is on a path toward “long-term financial security,” in reality what’s happened is that Illinois has substantially improved its financial management without adequately solving its long-term finances.
A March S&P pension report sheds more light on how credit agencies view Illinois’ risk.
The gist? Illinois is making its legally required payments and it’s still not enough. As S&P authors write, pension costs remain “significantly short of meaningful funding progress.” Even the $700 million in supplemental pension contributions the state has made in recent years, which sounds impressive in isolation, amounted to roughly 0.5% of Illinois’ fiscal 2025 net pension liability, according to S&P.
Moody’s makes the same point: “Illinois remains an outlier among states for its high leverage and fixed costs, driven by large unfunded pension liabilities.”
That perspective offers a reminder that the steps state leaders have taken in recent years are not even close to what needs doing to erase the state’s enormous structural problems.
Credit ratings are ultimately about confidence, and while outsiders’ views on Illinois’ fiscal stability have been improving steadily of late, we have much ground to cover before Illinois’ books are truly as rosy as some would have you believe.
Simply put, S&P’s upgrade masks its most important message: Illinois’ pension problem remains one of the biggest obstacles standing between the state and still better credit.
In the meantime, remember: Despite a slew of credit upgrades, Illinois is still dead last.
Submit a letter, of no more than 400 words, to the editor here or email [email protected].
More Top Picks Best Motorcycles Gloves For Arthritis Sufferers