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Governor Calls Special Session On Pensions After Another Credit Downgrade

CHICAGO (CBS) -- Gov. Pat Quinn has called for a special session of the Illinois General Assembly in two weeks, after the state's credit rating was downgraded again over lawmakers' failure to approve comprehensive pension reforms.

On Thursday, Moody's Investors Service lowered the state's bond rating from A3 to A2 – just three levels above junk bond status.

Earlier this week, Fitch Ratings also downgraded the state's credit rating.

Governor Calls Special Session On Pensions

The firms both cited the lack of action to reduce the state's $100 billion pension debt.

The state already had the worst credit rating in the U.S.

"Here we go again," Quinn said. "Will two downgrades in one week be enough to convince the General Assembly that our pension crisis can't be ignored anymore?"

The governor called for a special session of the Legislature on June 19 to deal with pension reform.

Last Friday, lawmakers adjourned their spring session after failing to reach an agreement on pension reform. A bill backed by House Speaker Michael Madigan was overwhelmingly rejected by the Illinois Senate. A competing measure backed by Senate President John Cullerton was never called for a vote in the Illinois House.

"Time and time again over the past two years, I have proposed, asked and pushed members of the General Assembly to send me a comprehensive pension reform bill," Quinn said Thursday. "Time and time again, failure to act by deadlines has resulted in the bond rating agencies lowering our credit rating, which hurts our economy, wastes taxpayer money and shortchanges the education of our children. Illinois taxpayers are paying a price of $17 million a day for the General Assembly's lack of action on comprehensive pension reform."

The hit to the state's credit rating makes it more expensive for the state to borrow money when it sells bonds to pay for construction projects or other long-term ventures.

House Minority Leader Tom Cross (R-Oswego) said the failure to reach a compromise "just further reinforces the inadequate job of the General Assembly, specifically the two leaders on the Democrats' side in this past session, to not get pension reform done."

Cullerton issued a statement saying it's time to identify a reasonable compromise that can pass both chambers with a three-fifths majority. He likely means his proposal, since Madigan's was voted down 16-42.

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