Illinois lawmakers are rushing to pass a budget to make sure the state avoids a junk credit rating.
The Illinois House is pushing through a $36 billion spending plan that includes a $5 billion income tax hike in the hopes the Illinois Senate will pass it over concerns that credit-rating companies will give the state a bad credit rating if the state does not pass a budget, Bloomberg Markets reported.
The Associated Press reports that the Senate took no action on the House-approved budget as of Monday afternoon, but the legislature will be in session again Tuesday at 10 a.m. CDT.
Even if the bill passes the Senate, Gov. Bruce Rauner has vowed to veto the bill because of the $5 billion income tax hike.
Illinois had not passed a budget for two years and started its third year without a budget because of conflicts between the Republican governor and the Democrat-majority legislature.
The state is facing $14.6 billion in unpaid bills and a $6 billion deficit in addition to the possibility that their credit ratings will plunge to junk level, Politico reported.
S&P and Moody’s Investors Service rated the state’s credit “one level above junk” as of June 1 and said that they would downgrade the state’s rating again around July 1 if Illinois fails to pass a budget that takes the deficit into account.
If S&P downgrades Illinois once more, it will be the first state to have a junk credit rating.
Illinois is expected to run out of money by August if they do not pass a budget, affecting things such as school funding, pension payments, and the state’s payroll, according to Democrat State Comptroller Susana Mendoza.