22 Comments - Anonymous - Wednesday, Jan 30, 13 @ 10:01 am: uh-oh is right. but is this a market response or a Quinn ploy. can’t. say I’m certain but it ought to send chills thrunthe GA - Anon. - Wednesday, Jan 30, 13 @ 10:08 am: Connect the dots La la la la laa (apologies to Pee-Wee). Credit rating is poor because of pension crisis. Pension payments not made because of…”After a six-month trial, a federal jury convicted Ryan in 2006 of steering millions of dollars in state business to lobbyists and friends in return for vacations, gifts and other benefits to Ryan and his family.” - Chicago Tribune. “He’s suffered terribly”. - Jim Thompson - Norseman - Wednesday, Jan 30, 13 @ 10:10 am: Without more information, I’d put my money on ploy. I look forward to reading Word’s insightful comment on this development. - Mr. Grassroots - Wednesday, Jan 30, 13 @ 10:20 am: Yes. of course a ploy, in a sense. But isn’t this necessary on Gov. Quinn’s part since he cannot seem to get the attention of lawmakers, including standing on his head. Is the real ploy Madigan holding things up in the House? Is not the real ploy on the part of the Republicans not to at least discuss the property tax subsidy supplied by the state for everywhere but the city of Chicago? Every day this thing is delayed is costing the state money. Every day another state program must be cut to keep up the pension payments. Why oh why has there been a delay? And I don’t doubt it is a very tough situation. So a ploy, yes, it is a ploy. But a good ploy for really good reasons. What’s a Governor to do? - walkinfool - Wednesday, Jan 30, 13 @ 10:24 am: If a ploy, it’s a good one. - Robert the Bruce - Wednesday, Jan 30, 13 @ 10:38 am: It still could be a ploy, but more likely it is simply advice from underwriters to delay for a bit. Once the sale goes through, hopefully a reporter will ask what the difference is between this bond sale’s interest rate and the last bond sale’s interest rate. - Captain Illini - Wednesday, Jan 30, 13 @ 10:38 am: The fact is that if the state went ahead with the bond sale, all would be gobbled up regardless of our rating…so the ploy is trying to hide that fact. - Steve Bartin - Wednesday, Jan 30, 13 @ 10:38 am: The demand for loaning money to Illinois isn’t what it used to be. Just a reminder. - Anonymous - Wednesday, Jan 30, 13 @ 10:39 am: Sorry. Seems like teh Anons’ posting may be on the wrong thread? - phocion - Wednesday, Jan 30, 13 @ 10:47 am: What were the bond proceeds designated for? - Anyone Remember? - Wednesday, Jan 30, 13 @ 10:48 am: Ploy. Unless bond funded work grinds to a halt, the sale is not necessary at this time. In a perfect world, bonds are sold to provide the necessary cash. If there are no bonds sold, there is no cash. - cassandra - Wednesday, Jan 30, 13 @ 10:48 am: A little crisis-mongering here? Typical of the Quinn admin. It’s almost spring, time for sky is falling rhetoric, perhaps more than usual because of the 2014 primary, a nanosecond away in political time. Middle class taxpayers, and especially middle class state retirees, better hang on to their wallets. Despite their doomsday rhetoric about the vanishing middle class. the Democrats seem awfully anxious to get into middle class wallets, the attack on the COLA being a prime (and rather sneaky) example. Most people don’t realize when making their financial calculations, how destructive inflation is to a budget. And neither party wants us to figure it out. - iThink - Wednesday, Jan 30, 13 @ 10:49 am: ====discuss the property tax subsidy supplied by the state for everywhere but the city of Chicago=== I would double check the money supplied per student by the state in Chicago compared to everywhere else before you make such statements. While it is true Chicago pays their teacher pension system directly, they get a much higher payment from the state to make that happen. The collar suburban districts get much less funding from the state. If this cost shift happens, the state-aid formula needs to be revisited and normed on a per student cost basis - it’s the only way to be fair to all tax payers. - Demoralized - Wednesday, Jan 30, 13 @ 10:51 am: @Anyone: Bonds aren’t sold just for the heck of it. There is always some lead time as far as when the cash is needed but the sale is always done because the cash is needed. - Ahoy! - Wednesday, Jan 30, 13 @ 10:56 am: Ploy or not, at least it’s very believable. It seems to be a long time in the making; the State has taken no action the past two years in dealing with its largest budget problem. People (and I’m sure the bond markets as well) are losing faith in the Illinois government to solve the problem. - Robert the Bruce - Wednesday, Jan 30, 13 @ 10:59 am: Whenever the state issues more debt, the reactions on both side are extreme a) OMG, the state is going bankrupt! Nobody will buy our bonds! b) Nothing to worry about here; investors will still buy up the state’s debt. The truth is somewhere in between those extreme viewpoints. The state’s debt will sell, but at higher interest rates than other states pay, causing the state to throw away more money than it would if there had been pension reform progress. The question is how much more money. - Cook County Commoner - Wednesday, Jan 30, 13 @ 11:05 am: “We plan to schedule a new bond sale after the markets have had time to digest the news.” Possible Translation: We thought the markets would overlook the most recent Illinois debt downgrade and state and local governments’ unwillingness to implement serious government employee pension and healtcare changes and the mounting unpaid bills held by the state. We were wrong. The interest rate the bond buyers would likely demand would raise howls from the opposition. Accordingly, we need time to “work with” the large institutional buyers to see if there is anything we “can do for them” (wink, nod) in order to get a lower rate and hopefully be able to say to voters: “Forget the bond rating agencies. Buyers still love our paper.” - Anyone Remember? - Wednesday, Jan 30, 13 @ 11:06 am: iThink Technically, Chicago does NOT make the pension payment. Eric Zorn busted that one last July. http://blogs.chicagotribune.com/news_columnists_ezorn/2012/07/pension.html - Anyone Remember? - Wednesday, Jan 30, 13 @ 11:08 am: Demoralized There have been limits on how far in advance bonds can be sold, related to the tax exempt interest. - dave - Wednesday, Jan 30, 13 @ 1:01 pm: **Cross: “We stand ready to address these issues today”** Funny, because Cross and the House Republicans have been utterly unable to put enough votes on any pension bill. And his blatant refusal to support the cost-shift, which is a) good public policy, and b) probably the only constitutional change on the table, says a helluva’ lot about Cross’s true desire to solve the problem. - wordslinger - Wednesday, Jan 30, 13 @ 2:50 pm: –The interest rate the bond buyers would likely demand would raise howls from the opposition. Accordingly, we need time to “work with” the large institutional buyers to see if there is anything we “can do for them” (wink, nod)– It’s a competitive bid, not a negotiated sale. If anyone would be inclined to participate in any “winking, or nodding” to save the state a few bucks, I would the weigh the personal upsides/downsides to that. I don’t see any personal upsides. The downsides are severe. - Formerly Known As... - Wednesday, Jan 30, 13 @ 3:39 pm: === Funny, because Cross and the House Republicans === Ah yes, if only the Dems had a few more seats. It would all be different then. Sorry, comments for this post are now closed.