The Latest: 2 positive credit agency notices for Illinois

SPRINGFIELD, Ill. – The Latest on a legislative session on Illinois’ budget as the state enters a third straight year without a spending plan (all times local):

1:55 p.m.

Another bond house has chimed in with a positive note on Illinois’ financial outlook.

S&P Global Ratings issued a notice Monday that a House vote to raise $5 billion through an income-tax increase “represents a meaningful step toward the enactment of a comprehensive budget.”

Illinois has been without a budget for two years. It has a $6.2 billion deficit and backlogged bills total $14.7 billion. The major credit agencies had warned of a downgrade to “junk” status without swift action.

S&P cautioned that even with a budget “it’s likely that Illinois’ finances would remain strained and vulnerable to unanticipated economic stresses.”

Fitch Ratings issued a similar notice Monday morning, a day after the House vote. But the measure’s fate remains unclear in the Senate, which is poised to take up the measure Monday.

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12:15 p.m.

Despite warnings of another downgrade to Illinois’ already worst-in-the-nation credit rating, one agency is citing “concrete progress” toward a budget impasse resolution after a flurry of weekend activity.

Fitch Ratings issued a statement Monday noting the steps legislators have taken, including a Sunday House vote to raise the income tax rate by 32 per cent. It did not change the state’s rating, saying it will continue to “monitor the developments.” The Senate is poised to take up the measure Monday.

Illinois has entered a third straight fiscal year without a budget and its credit rating is one notch above “junk” status. The state is also carrying a $6.2 billion annual deficit and $14.7 billion in overdue bills.

Illinois lawmakers have been meeting at the Capitol for the last two weeks in an effort to end the gridlock between the Democrat-controlled Legislature and Republican Gov. Bruce Rauner.

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6:30 a.m.

Illinois lawmakers are back to work after a dramatic vote in the House to increase income taxes by 32 per cent.

Attention turns Monday to the Senate, where lawmakers will consider the budget measures approved by the House a day earlier. The tax legislation increases the personal income tax rate from 3.75 per cent to just under 5 per cent. Corporations would pay 7 per cent instead of 5.25 per cent.

Republican Gov. Bruce Rauner already promised to veto it.

Also moving to the Senate is a $36 billion spending plan the House OK’d Sunday. It’s about $1 billion less than the spending outline the Senate passed in May.

The House turns its attention to other matters such as a Senate plan to borrow billions of dollars to pay down overdue bills.