The State of Illinois celebrated the an improved bond rating from Moody’s Investor Service on Thursday, the second such upgrade by Moody’s in less than a year and third overall in two decades. Moody’s last upgraded the state’s bonds in June of 2021 and the upgrade credited the state’s “solid tax revenue growth over the past year” which expanded the state’s ability to rebuild financial reserves and increase payments toward unfunded liabilities. Moody’s noted that Illinois is “on track to close the current fiscal 2022 with its strongest fund balance in over a decade,” its progress in repaying its debts, and its increased pension contributions, taken as an indication of the state’s increased commitment to paying its pension debt.

The upgrade follows the enactment of the state’s fourth balanced budget in a row, while providing $1.8 billion in tax relief to the working families of Illinois and marked Illinois’ first contribution to a Rainy-Day Fund in 18 years, as well as a $500 million overpayment toward the state’s pensions. The historic budget places Illinois it its strongest financial position in a generation while funding key investments for education, human services, law enforcement and violence prevention. The rating of a state’s bonds is a measure of their credit quality. A higher bond rating generally means the state can borrow at a lower interest rate, saving taxpayers millions of dollars.