ILLINOIS (WITI) -- The state of Illinois takes a big financial hit after its credit rating dropped to the lowest in the nation. The downgrade has the state treasurer Dan Rutherford pointing the blame at Illinois' governor and general assembly.
The warning came Saturday, January 26th from state treasurer Dan Rutherford.
The Standard and Poor's downgrade from A to A- puts Illinois last on the list behind California, and means a higher cost to borrow money.
On Wednesday, the state will issue $500 million in new bonds to pay for roads and other transportation projects.
Rutherford says the credit downgrade will cost taxpayers an additional $95 million in interest when compared to a perfect AAA bond rating enjoyed by 11 other states including neighboring Indiana, Iowa and Missouri.
"Our problem in Illinois is that we have not substantively and fairly addressed the state public pension issue," Rutherford said.
Rutherford points to Governor Quinn and the Democratically controlled General Assembly for making matters worse in the last two years -- raising taxes in the state but not acting on pension reform.
"This problem didn't come along just now it's been accumulating for actually decades. Each time the governor set a deadline and didn't meet it there was some negative reaction. It's become quite evident to me that the general assembly has not registered what these negative impacts are to be enough to cause a change in the public pensions," Rutherford said.
Rutherford says reform should come in the form of new cost of living adjustments and sliding healthcare costs based on pension income -- all of which is a hard sell in Springfield but would put the state back on better financial ground.
"Illinois is a very good place and we can turn this place around. But the first thing we need to do is fix this in a fair way, our public pensions," Rutherford said.