Rutherford: Credit downgrade will cost Illinois

Treasurer Dan Rutherford says Illinois will pay up to $65M in road and school construction bonding because of its lower credit rating. (WJBC file photo)

Illinois Treasurer Dan Rutherford said Tuesday that the state’s recent credit downgrade will come at a cost.

Moody’s Investors Service on Friday gave Illinois the worst credit rating in the nation, A2, because lawmakers have implemented no long-term solutions to curtail the state’s debt.

Rutherford said that will likely mean paying more for borrowing. He says when the state goes into the market on Wednesday to secure $800 million in bonds for road and school construction, the state will likely end up paying as much as $65 million more.

Gov. Pat Quinn had criticized Rutherford previously for sounding alarms about the state’s shaky credit. Rutherford says the downgrade affirms his claims.

“The governor said ‘loose lips sink ships.’ Well governor, guess what, it never was a secret, it isn’t a secret and Moody’s has shouted you out,” Rutherford said.

Rutherford says public pensions are the state’s biggest expense and must be addressed.

Rutherford OK with online sales tax

Meanwhile, Rutherford says he has no problem with states requiring online retailers collect sales tax. Indiana has reached a deal with Amazon.com which will begin collecting sales tax for its customers in Indiana starting in 2014.

“I think it’s abundantly fair,” Rutherford said.

Illinois already passed an online tax for businesses that have a physical presence in the state. Amazon dodged the tax by dropping its affiliates in Illinois.

Click here to listen to Scott and Colleen’s interview with Rutherford.

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Eric Stock can be reached at eric@wjbc.com.