Illinois credit rating lowered

Illinois's credit rating on $19.3 billion of municipal debt was put on Fitch Ratings' watch list for a possible cut as its sales and income taxes declined.

Fitch cut the state's rating one level to AA-, its fourth highest rating, from AA in December on news that the budget deficit was widening. Since then, Illinois's finances have worsened, its projected two-year budget deficit growing to $11.6 billion, Fitch said.

Illinois plans to sell $150 million of bonds for public works tomorrow. In the next few months, it may sell as much as $2.3 billion of short-term debt to balance its budget.

Moody's Investors Services cut the state's rating on April 3 one level to A1, its fifth highest, with a stable outlook. Standard & Poor's cut Illinois's rating one level to AA-, its fourth-highest, on March 10, citing inaction on the deficit.