Correction: The Northern Star incorrectly reported that NIU has sufficient cash flow to get through May and reserves to get through July. NIU actually has sufficient funds to get through summer 2016, fall 2016 and spring 2017, Phillips said at a Feb. 16 Town Hall meeting.

Moody’s Investors Service has downgraded NIU’s credit ratings from Baa1 to Baa2 due to a lack of a state appropriations.

Moody’s Investors Service ranks the creditworthiness of borrowers using a standardized ratings scale that measures expected investor loss in the event of a default.

The downgrade reflects expected weakening of operating cash flow due to a lack of state appropriations resulting from the failure of Illinois to enact a budget, according to a report issued by Moody’s Investor Services.

NIU has not received state funds for Fiscal Year 2016 due to a lack of agreement on Gov. Bruce Rauner’s FY 2016 proposed budget, which includes reduction in funds to public entities, including NIU’s $93 million in allocations for FY 2015 being cut to about $64 million.

The report also stated the downgrade factored in NIU’s narrow cash flow that will continue due to falling enrollment and modest reserves.

Spring 2016 enrollment is 18,519, the lowest in the 34 years recorded by NIU Institutional Research.

NIU’s last downgrade came on Oct. 26 because of a high reliance on Illinois for operating funding. Before that, NIU was downgraded in 2013.

“One of the things in our conversations that [Moody’s] said is that we are actually more aggressive than almost any other public university in working to address these issues,” said Alan Phillips, vice president of Administration and Finance.

Phillips said Moody’s Investors Service said NIU will come out of this better than most due to efficiency efforts such as program prioritization.

NIU could be further downgraded if state appropriations are declined significantly, according to a report issued by Moody’s Investor Services.

Phillips said NIU has sufficient cash flow to get through May and reserves to get through July.