With apologies to Detroit’s $15.7 billion long-term debt, and the budget problems in California that led Stockton to become the largest U.S. city ever to file bankruptcy, Illinois might be in the worst financial shape of any city or state in the country.
The issue is Illinois has racked up nearly $100 billion — yes, with a “B” — in unfunded state employee pension liabilities.
As a result, Fitch downgraded the state’s already-lowest-in-the-nation credit rating even further Monday. Moody’s followed suit Thursday, also citing its belief that nothing will change on the pension front anytime soon. These downgrades come days after the state legislature adjourned for the summer without addressing the unpaid obligations it owes, though the situation has become so dire, Illinois Gov. Pat Quinn has called the state Congress back for a June 19 special session. Read