Fitch Ratings on Wednesday downgraded Illinois ratings by one notch to BBB and said it remains on negative watch, meaning it could downgrade the state's debt rating again in the near term. The BBB rating is just two notches above speculative, or "junk," status. The action "reflects the unprecedented failure of the state to enact a full budget for two consecutive years and the financial implications of spending far in excess of available revenues, which has resulted in increased accumulated liabilities and reduced financial flexibility," the agency said in a statement. Even if a resolution is reached soon, the failure to act before now has weakened the state's financial profile, Fitch said. The decision to keep the rating on review for another possible downgrade reflects Fitch's expectation that Illinois will struggle to find a temporary or permanent solution and will continue to delay and defer payments instead of balancing the budget. Also: Chicago tied for highest unemployment rate among big cities.
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