Moody's questions Illinois' ability to pay bills

TUBS / Wikipedia

SPRINGFIELD, Ill. (AP) - A major bond-rating agency says Illinois' fiscal challenges linger despite approval of the first state budget in two years.

Moody's Investors Service issued a report Friday. It notes that an income tax increase approved this month will generate nearly $5 billion more a year.

It says the new revenue will ease the Prairie State's cash crunch. The political squabbling since 2015 between Republican Gov. Bruce Rauner and Democrats who control the General Assembly has contributed to a backlog of bills of nearly $15 billion.

The report was written by Moody's assistant vice president David Levett. He questions the state's ability to "generate sustained surpluses" to reduce the backlog.

He also warns that schools will not open if they don't get funding through a new method which Rauner says he'll veto.