Governor Quinn suggested that he might suspend $1 million in aid to local governments unless he gets approval to borrow over $4 billion to finance state spending. Illinois has an $8 billion budget gap. About $2 billion of the gap is for Medicaid and health insurance which must be paid for the state to continue getting a 57 percent match rate from the federal government.
Illinois’ debt position is one of the worst in the country. The state is ranked in the top five with the highest debt and pension funding needs, currently at $6,692 per capita. Illinois’ general obligation bonds were rated A1 with a negative outlook by Moody’s in January, the lowest rating in the nation.