Economic

Illinois’ credit upgrade forecasts stabilizing state economy

MOLINE, Ill. (KWQC) – From 2015 to 2017 Illinois’ credit was downgraded 7 times. Now, In 2022, things are improving for the state.

On April 21, Moody’s Credit Corporation upgraded Illinois’ credit to a rating of BAA1, marking the state’s third bump in 10 months, which gives Illinoisians’ tax dollars more spending power.

William Polley, an economics professor at Western Illinois University-Quad Cities campus, said the credit upgrade is more of a forecast for the state’s economy.

“It’s a reflection that the general economic and political climate has improved,” Polley said. “That’s expected to continue going forward, and that’s good news for the state.”

With the improved rating, borrowing should become less expensive for the state, which could lead to more road or building projects being funded.

“It allows our dollars to go farther we’ll get a little bit more benefit for the dollars that we spend,’ Polley said. “A little bit more bang for the buck, so to speak, because the borrowing costs will be lower.”

In a bi-state region like the QC, even Iowa residents might feel the impact of Illinois’ economy stabilizing.

“The the two states have such a symbiotic relationship, that what benefits one in these terms definitely helps both,” Polley said. “That means there’s going to be more projects happening on the Illinois side of the river, and that benefits both states in this metro area.”

While the upgrade might be a step in the right direction for Illinois, it’s not smooth sailing yet. Polley said COVID-19 relief money helped stabilize the state, but as it moves out of the pandemic, it needs to come up with a plan.

“So that money, while it’s still coming to a certain extent now is going to dry up at some point in the future,” Polley said. “The state needs to make sure that it is on good footing when that money dries up so that we can continue this progress into the future.”

Illinois’ new credit rating is seven steps below the highest on Moody’s scale of AAA, which the State of Iowa currently holds.

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