A major credit rating agency says Illinois' rating won't be lowered to ``junk'' but warns the state still faces serious financial challenges and long-term risks.
Moody's Investors Service on Thursday affirmed Illinois' current rating with a negative outlook, saying a downgrade remains possible in the next two years.
Moody's put Illinois under review for a downgrade earlier this month, after the state entered its third fiscal year without a budget. That would've made Illinois the first U.S. state to have a rating below investment grade, and cost taxpayers millions of dollars more.
Moody's says the budget legislators approved July 6 over Gov. Bruce Rauner's objections moved Illinois ``closer to fiscal balance.''
But, the agency warns the budget doesn't reduce Illinois' unfunded pension liability, which is larger than any other state.