Rauner was going to run Illinois like a business. A CEO running his business like Rauner is running Illinois would be thrown out on his ear. Unfortunately, we have to wait until 2018 to throw this incompetent out.
My understanding is that service level solvency is the ability to provide services at the level and quality that are required and desired for the health, safety, and welfare of the community. That’s a pretty big hit from S&P.
===Do these folks mean budget or tax increases.?===
Oh that collectivist Standard and Poor’s. Can you believe that capitalists actually believe in paying their bills?! Outrageous! (To answer the question, probably both if enough can’t be cut [and it can’t, if it could, Rauner would have proposed a balanced budget by now.])
Service level insolvency is a situation where a unit of government cannot provide day-to-day services because it cannot fund them. When the government collects taxes and those taxes go to pay off existing debt and other long term financial obligations, day-to-day services like policing, public works maintenance, counter services, etc. get cut.
It’s been a trend in California for the past decade. Cities become weighed down with pension and other forms of debt obligations and literally can’t fund the hourly wages for public safety and other personnel. City of San Bernardino was a good example. They literally didn’t have enough money to buy fuel for police cars for a while.
I can totally see this happening in Illinois, especially with the legal/court ordered spending for certain services (pensions and other court-mandated spending). Illinois is in a lose-lose as far as revenue is concerned. Residents are leaving the state because the diminishing/flat economic opportunities, leaving fewer people to pay for state services. An income tax increase will surely aggravate and encourage even more people to leave, but the state really needs the money.
It wasn’t Rauner that ruined us. Granted, he hasn’t helped but this problem has been building for a long, long time. The system currently in place in Illinois that allows all the court ordered spending and the lack of balanced budgets and the borrowing has pushed our debt level way too high.
Let’s be honeest.
Groups like S&P gave us the Bush-Cheney Worldwide Economic Depression in ‘07 and ‘08 so why waste time listening to them?
Furthermore let’s remember that old bills could be nearly zero had some GOPies voted for the bond issue in ‘11.
And then keepin’ the temporary tax hike was critical.
Finally let’s agree that remap, term limits even work comp does not mean rapid new prosperity.
Hope that helps
Once SOI debt goes junk, make sure you get an order in early on the next offering, especially the tax-exempt kind. It’s going to be oversubscribed multiple times.
There’s no chance in the world that the state can default and the juice will be sweet. Might as well get something out of this fiasco.
By the way, the rating agencies know that the state will never default on its debt. In their anachronistic model, they’re not actually assessing risk, they’re ranking the state’s fiscal position compared to the other states.
Put it this way: these are the same guys that gave subprime MBS AAA ratings, even when they had no clue as to ther actual creditworthiness, They simply bet that the housing bubble would keep expanding, increasing the value of the underlying assets, making creditworthiness a moot point.
You could foreclose on those mortgages and resell over and over again, and as long as the property values kept increasing, it didn’t matter.
===Groups like S&P gave us the Bush-Cheney Worldwide Economic Depression in ‘07 and ‘08 so why waste time listening to them?===
Yeah they messed up. They didn’t follow their own rules for determining creditworthiness. That doesn’t mean the rules were bad. It just means that a large human failure occurred. Let’s not toss the baby out with the bathwater.
Maximus who’s the one who won’t do his job without opposition killing reforms first’
Who moves the football every time?
Who has caused the workforce to decrease by 30%
Who has destroyed the private social service network.
Who is crippling higher education?
It’s also Rauners administration. Go look at the brave beautiful folks who came out to oppose Dimas and his changes for overtime rules. I can’t believe Dimas was quoted as saying something like “people shouldn’t depend on just caregiver. They need to find a back up”.
Dimas has no idea how hard it is to find one! Not to mention the trust relationship that has to be there.
Karma is going to come back at Dimas.
I just can’t stand what’s being done to our good and loving folks.
What kind of people have we become?
- Last Bull Moose - Tuesday, Mar 14, 17 @ 11:42 am:
The flat tax makes the majority realize that they are part of the solution. Otherwise the majority would increase taxes on the wealthy minority.
The tax increase should have been extended. Even conservatives believe core State functions need to be funded.
“That doesn’t mean the rules were bad. It just means that a large human failure occurred. Let’s not toss the baby out with the bathwater.”
Mr/Ms Ducky we ought to toss baby, water and tub.
No question state financial position sux big time, but we already know that….big news today is the zillions handed out by wingman for IT mumbo jumbo …BTA Wingman was a prop for Slip and Sue presser on human traffickin’ billboards.
Once and former Great State of Illinois. State, Please get it over with; raise taxes in all sectors, pay bills, provide services in short do your job… move along nothing to see here. Hey Look !there are elections on the horizon.
- facts are stubborn things - Tuesday, Mar 14, 17 @ 1:32 pm:
MJM has been saying for 2 years, almost every day, that the number one problem facing the state of Illinois is a budget. Gov. Rauner please set down and negotiate a budget without TA items and get this state back on track. Let the 2018 elections be a referendum on your TA agenda. The budget should be a balance of cuts and revenue and this problem should be solved in moderation and without throwing insults at MJM.