* Press release…
House Speaker Michael J. Madigan issued the following statement after Moody’s Investor Services downgraded Illinois’ credit Thursday. The downgrade comes just three days after Fitch Ratings issued a downgrade of its own to the state’s credit rating:
“Two credit downgrades in the same week are certainly nothing to claim victory over and nothing to ignore. These downgrades will have direct consequences on state taxpayers. The interest rate on future debt repayment will be higher, costing taxpayers more for the foreseeable future.
“Yet despite the Fitch Ratings downgrade Monday, Governor Rauner has insisted on moving ahead with his agenda, which would damage middle-class families’ standard of living and drive down wages, despite the clear lack of support for his agenda from Democrats and Republicans alike.
“With its own credit downgrade Thursday, Moody’s made it very clear that what the state needs to do is focus on eliminating our budget deficit, creating a long-term plan to fund the state’s pensions and reducing the state’s bill backlog.
“We all want economic growth, more business investment and more good-paying jobs for hard-working families in every part of Illinois. That is not in question. These priorities can be achieved through a state budget that takes a balanced approach with some spending cuts and some new revenue, not by slashing services and programs that families count on.
“The biggest issue facing Illinois is the state budget deficit. Two credit downgrades in less than a week have driven home that important fact. So I urge the governor, again, to put aside his agenda that Democrats and Republicans alike oppose - an agenda that will hurt middle-class and struggling families - and instead focus on a budget that helps all Illinoisans.”
…Adding… From the governor’s office…
Hi, Rich –
The report is another confirmation that years of unbalanced budgets, deficit spending and mismanagement have damaged Illinois’ fiscal health and major, structural reforms are needed to restore it. This is more proof that instead of blocking all reforms and passing a broken budget that was $4 billion in the hole, the Super Majority in charge of the legislature should partner with the governor to enact real reforms that will grow jobs and free up more resources to balance the budget.
All the best,
Lyndsey
Um, the downgrade focused pretty exclusively on actions (or lack thereof) during calendar year 2015.
- Keyrock - Thursday, Oct 22, 15 @ 5:02 pm:
FYI. McQueary has posted a new column pointing out (with much justification) that Madigan has been a supporter of corporate welfare and not a lifelong defender of the middle class.
Of course, she doesn’t mention the GOP role, paints a one-sided picture, and drops the ‘”ic” from “Democratic.”
- Tone - Thursday, Oct 22, 15 @ 5:07 pm:
I agree with everything McQueary wrote, though I do hate when people say Democrat Party vs. Democratic Party.
- Rich Miller - Thursday, Oct 22, 15 @ 5:08 pm:
We’ll get to the McQueary thing tomorrow. Yoga instructor is on her way over for our first class.
- allknowingmasterofracoondom - Thursday, Oct 22, 15 @ 5:10 pm:
Cmon Rich….this is about bad credit risk, which Illinois has been for 10+ years. And the debt has been there longer. Fixing credit ratings by raising “revenue” (aka taxes) is what afflicts our state. When does it end?
- 47th Ward - Thursday, Oct 22, 15 @ 5:15 pm:
Hi, Lyndsey-
“The downgrades reflect weakening of the state’s financial position during 2015 and our expectation that an ongoing budget stalemate will lead to further deterioration. Structural budget imbalance, accounts payable, and other fiscal metrics are back-tracking, despite a favorable economic climate, leaving the state more vulnerable to the next economic downturn, barring unexpectedly strong and swift corrective actions.”
All the best,
Moodys
PS: Hold the ketchup.
- In a Minute - Thursday, Oct 22, 15 @ 5:15 pm:
Haven’t read the Moody’s report in detail, but Fitch cited the inability of Illinois to deal with structural pension problems as one basis for its downgrade.
At this point, Madigan and the Democrats have the supermajority in the legislature to do a tax increase and enact a budget. But they must look at the numbers and know that those actions alone will not quiet the concerns of the ratings agencies. You 1) have to have structural reform of pension and other large drivers of state outlays and 2) have meaningful jobs and economic growth in the state to bring in revenue.
Other states have done structural reforms like Rauner wants and that is how they turned it around. Illinois should do it too.
- drew - Thursday, Oct 22, 15 @ 5:17 pm:
“Fixing credit ratings by raising “revenue” (aka taxes) is what afflicts our state.”
I disagree, but even so, what’s the alternative? Kicking the can down the road, not paying our debt? Is that supposed to help our credit rating?
- Keyrock - Thursday, Oct 22, 15 @ 5:19 pm:
In a minute–
“Other states have raised taxes like Illinois needs and that is how they turned it around. Illinois should do it too.”
There, fixed it for you.
- Ducky LaMoore - Thursday, Oct 22, 15 @ 5:19 pm:
===Cmon Rich….this is about bad credit risk, which Illinois has been for 10+ years. And the debt has been there longer. Fixing credit ratings by raising “revenue” (aka taxes) is what afflicts our state. When does it end?===
When the dummies that run the state set a permanent tax rate instead of a temporary one.
===At this point, Madigan and the Democrats have the supermajority in the legislature to do a tax increase and enact a budget.===
Yeah tell that to Jack Franks and all the other moderate dems that you mistake for Madiganbots.
- Oswego Willy - Thursday, Oct 22, 15 @ 5:20 pm:
===We’ll get to the McQueary thing tomorrow.===
Oooh, Kristen…a Hurricane is a-brewin’
To the Post,
Hi Lindsey-
Your Raunerite useless word jumble competely ignores… what is actually being addressed.
Your “cut and paste” is quite good, and your use of a continual run-on sentence doesn’t reek of an amateur flack. Actually, the thoughtless words do that all by themselves. Periods are your friends, and help make the pointless points your pretending to make… seem… important.
Other than that, well done!
All the best,
Oswego Willy
- Qui Tam - Thursday, Oct 22, 15 @ 5:26 pm:
allknowingmasterofracoondom - Thursday, Oct 22, 15 @ 5:10 pm:
=Cmon Rich….this is about bad credit risk, which Illinois has been for 10+ years. And the debt has been there longer. Fixing credit ratings by raising “revenue” (aka taxes) is what afflicts our state. When does it end?=
Whaaaat? It’s not about “bad credit risk” its about worsening credit situation in 2015.
- In a Minute - Thursday, Oct 22, 15 @ 5:26 pm:
Keyrock-
2011 called and it wants you to know that an increases in taxes alone will not do it unless you want more downgrades.
- James Knell - Thursday, Oct 22, 15 @ 5:28 pm:
Look! It’s a union squirrel!
- olddog - Thursday, Oct 22, 15 @ 5:31 pm:
== We’ll get to the McQueary thing tomorrow. Yoga instructor is on her way over for our first class. ==
Good for you! Whatever Hurrican Kristen had to say, it can wait.
- archimedes - Thursday, Oct 22, 15 @ 5:33 pm:
If we still had the tax rate from 2011, we wouldn’t have been downgraded.
- Keyrock - Thursday, Oct 22, 15 @ 5:34 pm:
In a minute–
We were paying the pension ramp payments and paying down the bill backlog at 5%. Now we’re not. Moody’s noticed.
- Wordslinger - Thursday, Oct 22, 15 @ 5:36 pm:
Looks like poor Lyndsey got the sticky end today.
When you read the Moody’s rationale, and then her response, tne poor kid comes off as concussed. They bear no relationship to each other.
If the Frat Boy superstars lack tne wit or imagination to produce anything other than tne same old boilerplate, regardless of issue or context, they should at least put their own names to it, rather than pushing it off on a subordinate.
- Keyrock - Thursday, Oct 22, 15 @ 5:37 pm:
Hi OW-
Sorry about Lindsey’s word jumble. I’m still busy trying to answer the question of the day, so she took this one.
- ck
- Oswego Willy - Thursday, Oct 22, 15 @ 5:45 pm:
- Keyrock -, lol…
“Hi ck-
Thanks for the heads-up. I know you’d at least have one period between your talking point word scrambles. She’ll “catch up”.
Thanks!
ow”
Can you pass that on for me, - Keyrock -?
- PublicServant - Thursday, Oct 22, 15 @ 5:47 pm:
Word, what the heck is with your H key? Tne is driving me nuts.
- Wensicia - Thursday, Oct 22, 15 @ 5:48 pm:
Hannibal Rauner to his Superstars:
“I love it when a plan comes together!”
- Wordslinger - Thursday, Oct 22, 15 @ 5:50 pm:
In a Minute, still living in the fantasy world.
The alleged Dem super-majority failed to override vetoes more than 60 times this year. The one successful veto override, tne heroin bill, was nearly unanimous in both chambers.
With that record, how in the world do you think they could pass a budget and tax increase on tneir own, even if they wanted to, which they most certainly dont? It’s absurd.
As for “structural pension reform,” you might have missed it, but the Supremes ruled that you can’t walk away from or diminish earned pension obligations, and that includes the unfunded liability.
Pretending otherwise is pointless.
- Wordslinger - Thursday, Oct 22, 15 @ 5:57 pm:
PS, that’s funny. Looks right on my screen. Maybe my fat fingers are hitting the n somehow as I roll along. Apologies.
On the bright side, now I can blame any stupid thing I write on my keyboard.
Good to have someone or something else to blame.
- Arsenal - Thursday, Oct 22, 15 @ 6:00 pm:
==At this point, Madigan and the Democrats have the supermajority in the legislature to do a tax increase and enact a budget.==
No, they don’t, and it’s not even clear that they want to do one, so I’m not sure why you guys think this goading tactic is worth it.
==But they must look at the numbers and know that those actions alone will not quiet the concerns of the ratings agencies.==
No one has ever suggested tax hikes alone.
==You 1) have to have structural reform of pension and other large drivers of state outlays and 2) have meaningful jobs and economic growth in the state to bring in revenue.==
Okay, when Rauner introduces either of those, you let me know, okay?
- Macbeth - Thursday, Oct 22, 15 @ 6:03 pm:
But … we’re winning!
- Charlie Wheeler - Thursday, Oct 22, 15 @ 6:15 pm:
Point of information:
A credit rating is a judgment of the relative risk involved in lending money, i.e., how likely is it that the loan will be repaid? Thus, a lower credit rating suggests the borrower is less likely to repay the loan than a borrower with a higher credit rating. Illinois has the lowest credit rating of the 50 states, so in the judgment of the rating agencies, Illinois is more likely to default on its bond obligations than any other state. History, however, does not suggest Illinois– a sovereign entity with broad revenue-raising power– is a poor credit risk. A brief review:
Illinois defaulted on a bond issue early in 1842, “when the state hypothecated (sold at market value) bonds with a face value of $804,000 for which only $261,500 was received.”
Source: Howard. Mostly Good and Competent Men, p.74.
At his December, 1842, inauguration, Gov. Thomas Ford pledged that the state would make good on its debt, and after convincing the General Assembly to levy a property tax for that purpose, bondholders were repaid in full by summer, 1846.
Source: Howard, pp. 82-84.
Illinois has not missed a bond payment in the ensuing 173 years.
A good source for additional background on state bond defaults is “The Safety of State Bonds: A Historical Perspective” by David Waring at http://www.learnbonds.com/state-bond-defaults/.
Charlie Wheeler
- Big Muddy - Thursday, Oct 22, 15 @ 6:23 pm:
Madigan is all about the budget. All those committee of the whole’s all summer long where numbers were discussed non-stop? He sure is a champion of a balanced budget! Has been for years!
/s
- Former Hoosier - Thursday, Oct 22, 15 @ 6:24 pm:
OW 5:22 lol!
The gov’s people have a limited repertoire. Sometimes the “blah, blah, blah” works (kinda, sorta) but lately, the responses are out of left field and don’t speak to the issue(s) at hand. The “broken record” responses aren’t really workin’.
- Qui Tam - Thursday, Oct 22, 15 @ 6:32 pm:
=Other states have done structural reforms like Rauner wants and that is how they turned it around. Illinois should do it too.=
You mean like Kansas & New Jersey?
- Oswego Willy - Thursday, Oct 22, 15 @ 6:33 pm:
- Former Hoosier -, thanks.
I’d like to think, for Lindsey’s own sake, that wasn’t a real work product, and it was just a boilerplate run-on sentence as to make sure Rauner (the Governor’s Office) has their own quote out there to counter Madigan.
My note was just to let them all I read.
OW
- Oswego Willy - Thursday, Oct 22, 15 @ 6:37 pm:
My note was just to let them all know I read.
- Wordslinger - Thursday, Oct 22, 15 @ 6:39 pm:
Charlie makes excellent points.
I don’t think Illinois bonds are any riskier now than they were yesterday, or under Quinn, or when they were AA+ under Blago.
In fact, given statutory protections and the state’s sovereign authority, it’s absurd they are not AAA when compared to other muni and, especially, corporate debt.
- Norseman - Thursday, Oct 22, 15 @ 6:40 pm:
Willy, love your insight on the Rauner press
Operationsideshow.- Oswego Willy - Thursday, Oct 22, 15 @ 6:46 pm:
- Norseman -,
Thanks, bud. Their own transparency is probably not the type of transparency their looking for, but, if I can be the completely unwanted and “never asked for” Press Release “Ombudsman”…
- Tone - Thursday, Oct 22, 15 @ 6:47 pm:
There isn’t enough money to pay the pensions and operate our current government. As taxes go higher and higher, people will flee in ever greater numbers leaving less and less taxpayers and less tax collections.
Illinois can’t continue on the path blazed by Edgar and Madigan.
- Oswego Willy - Thursday, Oct 22, 15 @ 6:56 pm:
- Tone -,
If you’re anglin’ to get in the Rauner Press Shop, I’ll put in the good word. You stay on message, and usually, mix up your talking points enough to be “fresh boilerplate”…
No, it’s a compliment, really…
- the Cardinal - Thursday, Oct 22, 15 @ 6:59 pm:
If there was an ounce of credit to be found They would all bum rush the buffet like it was a Sunday morning at the Drake. When there is responsibility (blame) to be had you could shoot a howitzer off in the dome and not hit soul. Somebody gotta wear the jacket.
- PublicServant - Thursday, Oct 22, 15 @ 7:01 pm:
Where will they flee to, tone? So, since there’s not enough money to pay pension obligations, what should we do? Help us, with your astounding insight, fix our fiscal problems here in Illinois? Please…tell us what to do.
- Tone - Thursday, Oct 22, 15 @ 7:02 pm:
Smartass comments won’t save Illinois. I don’t work for any politician. Folks can keep their heads buried. Illinois is sinking fast, smart people will continue to leave. Never ending tax increases won’t help.
I still have some hope, but it’s slowly slipping away.
- Southern Illinois Hoopdee - Thursday, Oct 22, 15 @ 7:03 pm:
Tone, where was this mass exodus in the days of the 5% tax rate? What are your numbers to back up the exodus?
All the states nearby offer a clear hit in the quality of living of Illinois. Copying their path and not having quality of living isn’t going to be a fix.
- Wordslinger - Thursday, Oct 22, 15 @ 7:04 pm:
well, Tone, a smart guy like you should make a move.
- Oswego Willy - Thursday, Oct 22, 15 @ 7:07 pm:
- Tone -,
===…smart people will continue to leave.===
So… you’re not smart?
Aw, I think you’re being too hard on yourself.”, staying and not being smart, I guess according to you.
Where can I email you to send that recommendation letter to the Rauner Press Shop. Your use of talking points is being wasted, you need to join that shop…
- Arsenal - Thursday, Oct 22, 15 @ 7:22 pm:
==As taxes go higher and higher, people will flee in ever greater numbers leaving less and less taxpayers and less tax collections.==
Where will they go? There’s several states with higher income taxes than Illinois.
- AnonymousOne - Thursday, Oct 22, 15 @ 7:23 pm:
Several?
- Tone - Thursday, Oct 22, 15 @ 7:29 pm:
Yes, but significantly lower costs of living. And much better job prospects. Illinois is at the bottom of the barrel in job growth.
Illinois lost population according to the 2014 census estimates. It will only get worse with higher taxes and as other states create thousands of more jobs than we do.
- Juice - Thursday, Oct 22, 15 @ 7:30 pm:
Willy, Tone is in China or London. Remember?
But seriously. Illinois is a $720 billion economy. A few billion in tax increases to meet our obligations is not going to turn Illinois into a deserted island. Especially considering that the state did not fall apart when the income tax rate was 5%. Maybe not improve as much as people would have liked. But we weren’t in a death spiral a year ago. And we’re not in one now. Our leaders, but especially the Governor, need to stop avoiding their confrontation with reality in the hopes of amending our current social structure.
- Norseman - Thursday, Oct 22, 15 @ 7:42 pm:
Hoopdee, nice response.
I do recommend not feeding Tone. He’s a troll and we don’t feed them. Lest they multiply to intolerable levels. Trolls are readily identified by their ridiculous doomsday predictions.
- Oswego Willy - Thursday, Oct 22, 15 @ 7:42 pm:
- Juice -, thanks for reminding me.
Started me thinking, if you’re gonna mail it in, might as well mail it in overseas.
- Juice - Thursday, Oct 22, 15 @ 7:43 pm:
Oh. I forgot. Our population grew in population in 2011, 2012, and 2013. But went down slightly in 2014. Because of the 5% tax rate.
With that logic, I’m going with that people fled the state in 2014 because they feared what might happen when the tax rate goes down. That must be the only explanation.
I mean seriously, it’s a survey, and the difference in population based on a survey from 2013 to 2014 in a state of 12.8 million and change is statistically irrelevant.
- Joe M - Thursday, Oct 22, 15 @ 7:48 pm:
== several?== [states with higher income taxes than Illinois]
AnonymousOne, you forgot to put /snark with your post. I hope you weren’t being serious. Of the approximately 42 states that have state income taxes, only about one or tow, have a top individual tax rate lower than Illinois’ Look it up:
http://taxfoundation.org/article/state-individual-income-tax-rates-and-brackets-2015
- Qui Tam - Thursday, Oct 22, 15 @ 7:58 pm:
=It will only get worse with higher taxes and as other states create thousands of more jobs than we do.=
Have majority of other states repealed their service taxes so they match the 0% in IL?
- Tone - Thursday, Oct 22, 15 @ 8:00 pm:
From very little population growth to population loss and one of the worst job growth rates in the nation over the last 15 years imply something very wrong in our state. Tax increases aren’t the answer.
- Oswego Willy - Thursday, Oct 22, 15 @ 8:02 pm:
Do not feed trolls.
- JackD - Thursday, Oct 22, 15 @ 8:10 pm:
Interesting that the downgrades have come since Governor Rauner took office and not before.
- JS Mill - Thursday, Oct 22, 15 @ 8:15 pm:
=…help make the pointless points your pretending…=
Seriously, how in the world do you come up with something like that? I am thinking of having it tattooed on my arm, just crazy good stuff. So many on their game tonight.
The mass exodus stuff is just goofy, I heard it from a community member tonight. Of course he just bought more rental property so it makes complete sense. So many people spew this nonsense without really thinking about it.
If you don’t pay your bills business naturally goes into the crapper. Like it or not state government is a major economic driver and actually performs many essential services that, if privatized, would be an absolute disaster as has happened in may places. parking meters and lottery come to mind.
You want growth/ I mean do you really want it? Then you have to follow a plan that actually leads to it versus one that is proven not too, like Kansas for instance.
- AnonymousOne - Thursday, Oct 22, 15 @ 8:21 pm:
Joe M. you are correct. I did forget to put snark on my comment. If you talk state tax rates, we are among the lowest. I understand the local tax/property tax thing……but to speak only of state taxes, we are darn low.
- Tone - Thursday, Oct 22, 15 @ 8:31 pm:
Scary how little regard people have for the state’s future. Bottom of the barrel in population and job growth. And taxes will solve our problems….
- Enviro - Thursday, Oct 22, 15 @ 8:34 pm:
In a Minute@5:15
Other states have done structural reforms like Rauner wants and that is how they drove down wages for the middle class and increased income inequality in their states.
We won’t do that in Illinois.
- Arsenal - Thursday, Oct 22, 15 @ 8:36 pm:
==And taxes will solve our problems==
They’ll balance the budget, and as you’ve stated, they won’t affect population once you control for other factors.
I mean, the Governor *is* proposing policies that will inflate the cost of living, reduce wages, and generally lower the quality of life in the state, so I understand your pessimism!
- Oswego Willy - Thursday, Oct 22, 15 @ 8:37 pm:
===Seriously, how in the world do you come up with something like that? I am thinking of having it tattooed on my arm…===
Well thank you, lots of great stuff going on, totally agree.
Do us both a solid, before you get that tattooed, spell check. OW
To the Post,
I remember Candidate Rauner blaiming 13 downgrades on Governor Quinn, for better or worse.
Governor Rauner now has 2 downgrades. Governors own, they always do.
As an aside, Ms. Walters, I apologize for misspelling your name “Lindsey” instead of Lyndsey. An oversight, and I am sorry.
So you know, if that’s why you haven’t responded to my note, I understand…
OW
- Arsenal - Thursday, Oct 22, 15 @ 8:44 pm:
==as other states create thousands of more jobs than we do==
It’s so weird that you don’t want to try to fix *that* problem, you just want to preserve the status quo on taxes.
- Tuesday's Pizza - Thursday, Oct 22, 15 @ 8:55 pm:
I thought I was reading IPI for a sec there. Sure fire way to know is “mass exodus”..”structural reform”…”I love Rauner”..oh and the total lack of statistics of how these reforms will improve, anything.
- Groundhog Day - Thursday, Oct 22, 15 @ 9:00 pm:
Yes, it looked like a whole raft of Raunerbots were released right when this post went up. Weird
- CharlieKratos - Thursday, Oct 22, 15 @ 9:27 pm:
They were laying in wait,or maybe their shift just started.
- Omega Man - Thursday, Oct 22, 15 @ 9:27 pm:
Next on MSNBC, “When Raunerbots Attack!”
- DonaldTrump - Thursday, Oct 22, 15 @ 9:31 pm:
Really? You think they looked at 2015 in a vacuume?
And congrats on the yoga instructor!👍
- GoCubsGo - Thursday, Oct 22, 15 @ 9:49 pm:
==Illinois lost population according to the 2014 census estimates.==
It would appear you’re choosing a pretty small set of data there. 2013 to 2014 right? Man, if those saps had just held out a bit longer they could have enjoyed the 2015 tax cut! I can point to Census data that shows the state gaining population since 2010. But whatever. Based on cuts to the congressional delegation, Illinois has been losing population to other states since the 1940s. Who shall we blame for that? Henry Horner or Adlai Stevenson?
- Anonymous - Thursday, Oct 22, 15 @ 10:08 pm:
Of course Madigan is urging focus on this budget and only this budget. If the focus is on anything else, he’s in for it worse than Rauner.
- Wordslinger - Thursday, Oct 22, 15 @ 10:12 pm:
DT, why dont you read the rationale and you’ll know exactly what they looked at?
It’s right there on the blog. Seek and ye shall find.
- Been There - Thursday, Oct 22, 15 @ 11:00 pm:
===Um, the downgrade focused pretty exclusively on actions (or lack thereof) during calendar year 2015====
Is there anyone, anywhere that can say with a straight face we are better off now than a year ago? It’s amazing when Rauner talks about how bad things were and we can’t go back those days. Wth? As bad as things “may” have been they are twice as worse now.
- Georg Sande - Friday, Oct 23, 15 @ 6:21 am:
– “Um, the downgrade focused pretty exclusively on actions (or lack thereof) during calendar year 2015.” –
Right. The LATEST downgrade did. But come on man, these downgrades in the aggregate reflect a pattern & practice of financial neglect/abuse that accelerated under 12 years of one-party rule. Could you imagine if Blago or Quinn were in charge?! Madigan would have rolled them with a massive tax increase, more borrowing and a few accounting gimmicks that would make Moody’s et al. apocalyptic.
And hey “Been There” you are delusional.
- Arsenal - Friday, Oct 23, 15 @ 7:33 am:
==Right. The LATEST downgrade did.==
And the Governor who suffered the latest downgrade said he doesn’t want to focus on the past.
==reflect a pattern & practice of financial neglect/abuse that accelerated under 12 years of one-party rule==
The Governor who just suffered this downgrade made sure to note that Republican Governors made decisions that lead to this.
==Could you imagine if Blago or Quinn were in charge?!==
I don’t have to imagine Rauner being in charge and suffering a downgrade.
- Oswego Willy - Friday, Oct 23, 15 @ 7:44 am:
Well said, - Arsenal -
- Ms. Disability - Friday, Oct 23, 15 @ 2:52 pm:
All I know is people are dying, and suffering because you politicians can’t or won’t come up with a budget. Sad.