58 Comments - haverford - Thursday, Oct 22, 15 @ 2:22 pm: Rauner’s aware he can’t just sell Illinois or walk away when he drives it completely into the ditch, right? - Anon221 - Thursday, Oct 22, 15 @ 2:24 pm: WHAT COULD MAKE THE RATING GO UP- Funny thing, Moody’s doesn’t mention the TurnAround Agenda as an option. Hmmm. - Abe the Babe - Thursday, Oct 22, 15 @ 2:24 pm: The costs of the turnaround agenda are piling up. But im sure it is outweighed by the billions in benefits that would come from eliminating bargaining rights. - Cubs in '15 - Thursday, Oct 22, 15 @ 2:25 pm: “WHAT COULD MAKE THE RATING GO UP - Implementation of a realistic plan to provide long-term funding for pension obligations - Progress in reducing payment backlog and adoption of legal framework to prevent renewed build-up of unpaid bills - Expectation of sustainable, structural budget balance” Oops, they must’ve inadvertently left out union busting. - Anon221 - Thursday, Oct 22, 15 @ 2:25 pm: haverford- He can walk away. That’s a major part of this problem. He’s winning after all. His personal income tells him so. - CharlieKratos - Thursday, Oct 22, 15 @ 2:26 pm: No “emphasis added” for the lazy? - RNUG - Thursday, Oct 22, 15 @ 2:28 pm: Gee … seems like every item on the list is somehow tied to either the need for more revenue or the lack of current revenue. - Arizona Bob - Thursday, Oct 22, 15 @ 2:29 pm: The problem is likely more the intransigence they see from Madigan and Cullerton than the raw financial situation. Madigan has profited politically for spending beyond Illinoisan’s means for decades, and he’s unwilling to “own” a tax increase to pay for his patronage and political power. I’d bet if Madigan would propose a reasonable plan to stop, or at least limit, growth of state expenditures (especially K-12 education), deal with the long term accrued pension liabilities from a dedicated tax (income or retirement), and enact reforms to give Illinois governments more control of their spending (goodbye, public employee strikes), all would be forgiven from the bond rating agencies. Budgetary constipation and Madigan’s political cowardice is primarily what’s driving this problem, NOT just Rauner’s defanging of public unions. - RNUG - Thursday, Oct 22, 15 @ 2:29 pm: == Rauner’s aware he can’t just sell Illinois or walk away when he drives it completely into the ditch, right? == He can’t sell it but he can resign and walk away. - Stones - Thursday, Oct 22, 15 @ 2:32 pm: We can pay it in increased interest on downgraded bond rates or pay it in increased income taxes - your choice, Governor. The longer you wait the more expensive the fix becomes. - Honeybear - Thursday, Oct 22, 15 @ 2:33 pm: These credit rating downgrades are tremendously bad things. Talk about something that is NOT pro-business. A true pro-business governor would have avoided downgrades like the plague. - GA Watcher - Thursday, Oct 22, 15 @ 2:34 pm: “Everything is on track and moving forward.” - Governor Bruce Rauner - Willie Stark - Thursday, Oct 22, 15 @ 2:35 pm: RNUG — very fashionable in Republican circles these days! See: Boehner, John. - Honeybear - Thursday, Oct 22, 15 @ 2:36 pm: RNUG- that’s an interesting thing to ponder. What kind of Governor would Sanguinetti be? I met her once. She seemed genuine. I actually got a good vibe from her. - Chicago Cynic - Thursday, Oct 22, 15 @ 2:37 pm: It’s all the fault of Mike Madigan and the ratings agencies he controls. - Qui Tam - Thursday, Oct 22, 15 @ 2:39 pm: =WHAT COULD MAKE THE RATING GO UP - Implementation of a realistic plan to provide long-term funding for pension obligations - Progress in reducing payment backlog and adoption of legal framework to prevent renewed build-up of unpaid bills - Expectation of sustainable, structural budget balance=== Enough already. It’s time Rauner showed the specific fiscal benefits, including timeline and dollars from his “turnaround agenda”. It’s long past time to disclose the justification for the costs and harm done by his turnaround agenda budget strategy. - AC - Thursday, Oct 22, 15 @ 2:41 pm: ==What kind of Governor would Sanguinetti be?== Honeybear, just remember, the 4 out of 10 union households who voted for Rauner said, “We already have Pat Quinn, how could it possibly get worse?” - Juice - Thursday, Oct 22, 15 @ 2:45 pm: #winning - Formerly Known As... - Thursday, Oct 22, 15 @ 2:46 pm: From worst to… worst? PSA: ==All parties may now reuse recent talking points from the Fitch downgrade.== /s - Beaner - Thursday, Oct 22, 15 @ 2:47 pm: The lower the bond rating on our tax free muni-bonds, the more money wealthy people make investing in them. The lower the bond rating, the juicier the placement fees on the issuance of new bonds. Does anyone think this is going to end without the issue of $10 billion or more in new Bonds? I still can’t find anything in all the Rauner campaign material I have saved at my home that he planned to run up a huge accounts payable and issue billions in new long term debt. - Tatler - Thursday, Oct 22, 15 @ 2:48 pm: ‘Today, I think, was basically an up. … I feel good about it.’ Governor _____? - Just a Guy - Thursday, Oct 22, 15 @ 2:49 pm: I don’t want anyone as governor who as Lt. Guv tells people to just call her “Hot Mama.” This was when she was acting in the official capacity of her office. Call me crazy. - Sad days - Thursday, Oct 22, 15 @ 2:49 pm: How about a trade, sent the Governor home and bring Edgar. Or Thompson for that matter. At least something would get done. - Enviro - Thursday, Oct 22, 15 @ 2:51 pm: The fiscal benefits of the turnaround agenda would be an ever increasing income inequality. This would be a hard sell to the voters of Illinois. This is why there will be no disclosure. - @MisterJayEm - Thursday, Oct 22, 15 @ 2:52 pm: More “leverage” for the Governor? – MrJM - AnonymousOne - Thursday, Oct 22, 15 @ 2:52 pm: Yes, there is great money to be made in this financial folly.. For some. This governor is a man with a plan. For some. - Norseman - Thursday, Oct 22, 15 @ 2:53 pm: === “I don’t know how much more patience the rating agencies will have. The state is going down a path that is going to be difficult to recover from,” === Follow the Rauner brick road, follow the Rauner brick road Follow, follow, follow, follow, follow the Rauner brick road Follow the Rauner brick, follow the Rauner brick Follow the Rauner brick road You’re off to see the wiz, the sorrowful wizard of biz! You’ll find that he thinks he’s a financial whiz of biz of biz that kind of wiz, However, oh ever, we ain’t a biz that’s helped by wiz The ratings agency says that’s so, so hurtfully so Because, because, because, because, because Because that hostage thing he does Unstablizes the finances, unpredictable finances makes it bad so terribly bad You’re off to see the wiz, the sorrowful wizard of biz! - TwoFeetThick - Thursday, Oct 22, 15 @ 2:53 pm: A lot of money to be made; the plan is proceeding perfectly. The best part is no one will ever catch on and, even if they did, it would be tough to prove. Being “incompetent” isn’t illegal, after all. - Frenchie Mendoza - Thursday, Oct 22, 15 @ 2:55 pm: Moody’s and Fitch do not understand the current economic situation. It is imperative that collective bargaining rights be curtailed or eliminated. This will improve the outlook for Illinois. It will lead to more jobs, better job security, and a better working environment for all Illinoisans. Lump these guys in with Edgar and Thompson. It’s just one opinion — and we should be looking forward. Not backward. - DuPage - Thursday, Oct 22, 15 @ 2:56 pm: Another day, another Rauner downgrade for Illinois. - Frenchie Mendoza - Thursday, Oct 22, 15 @ 2:57 pm: We’re winning! - 47th Ward - Thursday, Oct 22, 15 @ 3:02 pm: Heck of a job Raunie. - Juvenal - Thursday, Oct 22, 15 @ 3:03 pm: === despite a favorable economic climate === In case you missed that poke, Oswego Willy, not only did Moody’s not say we need to pass the turnaround agenda, they said Illinois is a good place to do business, generally speaking. - scholar athlete - Thursday, Oct 22, 15 @ 3:07 pm: Hey, Frenchie: Is your irony so subtle that a guy like me with a PhD in lit just can’t get it? I’m not being snarky here, believe me. I love subtle irony, but I don’t know your “voice” well enough to judge what you’ve written here, e.g., Moody’s and Fitch don’t understand the current economic situation. That can’t be spoken without irony. Help a dimwit out, dude. What’s your voice? - Norseman - Thursday, Oct 22, 15 @ 3:14 pm: scholar athlete, I’ll try to explain it to you. Frenchie was channeling his snarkiest Rauner rhetoric impression. Think opposite. To cut to the chase - Rauner bad. - Wordslinger - Thursday, Oct 22, 15 @ 3:17 pm: – The state is comparatively wealthy and economically diverse…– Well, we’ll get that turned around. - Mama - Thursday, Oct 22, 15 @ 3:20 pm: “He can’t sell it but he can resign and walk away.” Oh.. please tell me he will throw up his hands and leave.. - Frenchie Mendoza - Thursday, Oct 22, 15 @ 3:20 pm: — Help a dimwit out, dude. What’s your voice? — I have an MFA — no PhD — but I should have added “/s” to indicate snark. I’m still waiting for someone like Moody’s or Fitch — or whoever else — to indicate that, yes, collective bargaining is what’s doing the greatest harm to Illinois. I think I’ll be waiting for a long time, though. - Wordslinger - Thursday, Oct 22, 15 @ 3:22 pm: – The downgrades reflect weakening of the state’s financial position during 2015…– Wow, Quinn really screwed things up between Jan. 1 and Jan. 12. - Muni Guy - Thursday, Oct 22, 15 @ 3:37 pm: It’s all Rauner’s fault. On the job for 10 months, and suddenly there was a $100+ billion pension hole and $7 billion in unpaid bills. Wow, he should have just agreed with the status quo and continued on our great path. Would the last state employee please remember to turn out the lights when everyone else is gone. - cb - Thursday, Oct 22, 15 @ 3:38 pm: Rating down grades do not immediately affect the cost of borrowing for the state or add any additional cost. If they can reach an budget agreement and add some real reforms that will grow the economy when the state does go back to the financial markets an automatic rating review will occur and should increase the rating and outlook accordingly. Without any reforms to grow the economic climate then the rating will be affirmed or even lowered. A deficit spending budget just for appearances like last fiscal year’s budget have more negative affects on the bond ratings. - burbanite - Thursday, Oct 22, 15 @ 3:39 pm: Does any one know how much these downgrades are costing us? I know they are costing Chicago a fortune. - Scholar athlete - Thursday, Oct 22, 15 @ 3:40 pm: Thanks, Frenchie, et al. I’m very relieved. Tone can be difficult via electronic keyboard. I need to visit here much more regularly to learn the voices. For the briefest of moments I thought you might be a Raunerbot or, worse, one of his superstar staffers - cb - Thursday, Oct 22, 15 @ 3:45 pm: ==Does any one know how much these downgrades are costing us? I know they are costing Chicago a fortune.== Chicago utilized “Credit Default Swaps” a financial tool that arbitrags the spread between Chicago debt fixed rate and the current lower variable debt. A rating change affects the spread and just lowered the arbitraged amount. To my knowledge the state (and most prudent governments) do not utilize credit default swaps. - Rich Miller - Thursday, Oct 22, 15 @ 3:46 pm: ===On the job for 10 months, and suddenly there was a $100+ billion pension hole and $7 billion in unpaid bills=== The pension debt is not on him. Nobody put it on him. However, he is the governor. So dealing with that debt and the unpaid bills is his responsibility. He’s not a victim here. He’s the governor. He was elected. Have Republicans been out of power for so long that they have no clue about responsibility? Grow up. Get in the game. Deal with the problems. This downgrade is on him. Period. - Demoralized - Thursday, Oct 22, 15 @ 3:50 pm: ==he should have just agreed with the status quo== I am so sick and tired of this argument. I don’t think anybody is arguing for the status quo. But a lot of us are arguing for pragmatism. The Governor’s anti-union proposals aren’t going anywhere. So why continue to beat that dead horse? - Formerly Known As... - Thursday, Oct 22, 15 @ 4:00 pm: ==A deficit spending budget just for appearances like last fiscal year’s budget have more negative affects on the bond ratings.== @cb is on it. As Moody’s said August 31, a ==fix== is more than just a budget or tax increase ==With Illinois facing financial duress on several fronts, Moody’s Investors Service on Monday suggested that even if officials reinstate an income tax increase that was allowed to sunset in January it won’t be enough to plug a $5 billion budget hole. A report by Moody’s stressed that passing a budget was not Illinois’ biggest problem. The larger issue was creating a revenue stream and finding a way to tackle pension debt — a mammoth problem that has taken a backseat to the state’s budget impasse. The report stated that in addition to increasing individual income tax rates to 4.75 percent from 3.75 percent and corporate rates to 6.75 percent from 5.25 percent, Illinois would still have to cut $1.7 billion in spending and find even more new revenue for the remaining $500 million.== - RNUG - Thursday, Oct 22, 15 @ 4:12 pm: It’s all going according to plan. Once Rauner gets his budget finally passed in 2018, he can claim he oversaw the State’s first credit upgrade in it’s ratings!!! /s? - Norseman - Thursday, Oct 22, 15 @ 4:13 pm: === A deficit spending budget just for appearances like last fiscal year’s budget have more negative affects on the bond ratings. === What the … is a “deficit spending budget just for appearances”? LOL Let me understand the goofy logic here. The ratings agencies say we need to get our budget in order NOW. Rauner responds with no budget until reforms of dubious value and certainly not of any impact for several years down the road, if any positive impact, are passed. I guess that’s what was meant by path. Rauner’s taking us down the primrose path. - Blue dog dem - Thursday, Oct 22, 15 @ 4:14 pm: Seems to me I have read this somewhere before. Actually very similar wording to General Motors circ 2008. - cb - Thursday, Oct 22, 15 @ 4:15 pm: ===What the … is a “deficit spending budget just for appearances”? LOL== Like last fiscal year’s budget that was NOT balanced .. which is not funny - Norseman - Thursday, Oct 22, 15 @ 4:41 pm: cb, define a budget for appearances. - cb - Thursday, Oct 22, 15 @ 4:45 pm: ==cb, define a budget for appearances.– A budget that is presented as balanced with unrealistic (inflated) revenue estimates and/or unrealistic (deflated) expenditures. - AC - Thursday, Oct 22, 15 @ 4:48 pm: Did Rauner, somehow, not realize the financial mess the state was in before he took office? I mean, it wasn’t like he ran for governor of another state with a huge surplus like North Dakota during the oil boom and they gave him Illinois as a consolation prize. The “100 years of corruption” ads included Madigan, who Rauner knew he would need to work with. In November, I wondered what the “dog that caught the bus” would do with the state, and even now I’m still not sure what he’ll ever accomplish in this state. - Wordslinger - Thursday, Oct 22, 15 @ 5:03 pm: Muni Guy, you obviously didnt read the Summary Rating Rationale before you launched into Full Whining Victim mode. Read the first sentence, for crying out loud. Does that confuse you? - Wordslinger - Thursday, Oct 22, 15 @ 5:09 pm: cb, the rating agencies actually publish the reasons for tneir actions, as they have done so here. You want to show us in a Summary Ratings Rationale when a negative action was taken for a “deficit spending budget just for appearances.” - Angry Chicagoan - Thursday, Oct 22, 15 @ 8:13 pm: Did you see Jordan Klepper’s lottery standoff spot on last night’s Daily Show? Kind of says it all. - Anonymous - Friday, Oct 23, 15 @ 9:24 am: ==You want to show us in a Summary Ratings Rationale when a negative action was taken for a “deficit spending budget just for appearances.”=== Reading is a skill… From Moody’s Report stating “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” deficit spending budget = “Structural budget imbalance” Sorry, comments for this post are now closed.