Springfield, ILL. – Major credit-rating agencies warned Tuesday that Illinois' financial situation is weak but could improve if the proposed state budget works.
Moody's Investors Service downgraded the state's credit rating one notch. But the rating is still among the highest handed out. Missouri also has a high rating.
Moody's believes investing in Illinois bond sales is riskier because Illinois has $13 billion dollars in debt and plans to borrow another $10 billion dollars to help fill a budget deficit.
That's a one-time fix that could backfire, if interest rates sharply increase in the future.
Standard and Poor's Ratings Services and Fitch Ratings both issued negative long-term outlooks for Illinois' finances but did not downgrade its rating.
A spokeswoman for Governor Rod Blagojevich says the governor convinced the agencies his proposed budget will work in bringing the state back into the black.