Moody's has downgraded Illinois' credit rating to A2, the lowest mark it gives to any U.S. state. The move comes as Illinois prepares to issue $800 million in general obligation bonds next week.

Moody's doesn't use the word "mess" in its statement, although that's essentially what it describes when it talks about the state's finances:

The downgrade of the state's long-term debt follows a legislative session in which the state took no steps to implement lasting solutions to its severe pension under-funding or to its chronic bill payment delays. Failure to address these challenges undermines near- to intermediate-term prospects for fiscal recovery. It remains to be seen whether the state has the political willingness to impose durable policies leading to fiscal strength ....

Illinois' new offering documents show that its chronic pension shortfall got even worse in fiscal 2011. According to Bond Buyer,  the unfunded pension liability grew by $7 billion last year, and the funded ratio -- the amount of liabilities that can be covered by fund assets -- fell to 43 percent from 45 percent.