Southern Illinois University was one of six public universities to receive a credit downgrade Tuesday as the political stalemate between Illinois lawmakers and Republican Gov. Bruce Rauner carries the state through its fourth month without a budget.

Moody’s Investors Service reduced SIU and Northern Illinois University’s ratings to Baa1 — three levels above “junk” status. Northeastern Illinois University was downgraded to Baa2. Eastern Illinois University, Western Illinois University and Governors State University now have the lowest credit rating of public institutions in the state, lingering one level above speculative grade. 

“This is probably as low as I’ve seen [credit ratings] for the state universities as long as I’ve been following it,” said SIU System President Randy Dunn.

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Illinois was also lowered to a Baa1 credit rating last week because of uncertainty of the state’s fiscal future. Dunn said SIU’s downgrade is tied to the state rating because the university largely depends on state appropriations.

The university has $289 million in rated debt and is 43 percent reliant on state appropriations, according to a report by the credit-rating company.

Moving forward, Dunn said the university plans to increase cash-on-hand by pursuing strategies already in place to meet the budget shortfall. He also said the university was able to maintain a higher rating compared to smaller schools because it is part of a system that operates over three campuses, effectively spreading operational costs over a greater number of students.

Dunn called the direct impact of costing more to borrow “negligible” for SIU, as the university has no plans to take on new debt. But, he said the lowered rating does hurt the university’s reputation.

“There is a reputational aspect to a downgrade that causes other institutions in financial agencies to look and generally wonder what’s going on,” he said.

Lawmakers are scheduled to meet with Rauner on Nov. 18 to discuss the state’s fiscal crisis. The governor has said he does not expect a resolution to come from the meeting, and has blamed Democratic Speaker of the House Michael Madigan of preventing a budget to force a tax increase. 

SIU was also given a “negative outlook” by Moody’s, meaning the rating could fall further should it see a decline in state support or further deterioration of Illinois’ credit rating.

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Bill Lukitsch can be reached a [email protected] or on Twitter @Bill_LukitschDE