*** UPDATE 1 *** Tribune…
The governor also held Democrats responsible for Thursday’s rating cut.
“Madigan’s majority owns this downgrade because they didn’t even attempt to pass a balanced budget, get our pension liability under control, and other changes that would put Illinois on better financial footing,” said Eleni Demertzis, a spokeswoman for Rauner. “The governor will continue working toward a truly balanced budget with changes to our system to grow jobs and provide real and lasting property tax relief.”
“Her comment is typical Rauner incompetence, and that’s too bad,” said Steve Brown, a spokesman for Madigan.
*** UPDATE 2 *** Pritzker campaign…
“A day after Bruce Rauner once again failed to produce a budget, the Illinois economy is already feeling the devastating impacts,” said JB Pritzker. “Under Bruce Rauner’s failed leadership, Illinois’ general obligation debt is now a step away from junk, the lowest ever for a U.S State. What we’re seeing is a state economy in shambles as state debt skyrockets and Bruce Rauner stumbles past 700 days without a budget. This will have long term ramifications for the economy of our state and it will take years to clean up Rauner’s mess. We need a governor who understands how to get results in Springfield and it is clear that Bruce Rauner will never be up to the job.”
*** UPDATE 3 *** Kelly Welsh, President, Civic Committee of The Commercial Club of Chicago…
“The failure of Illinois leaders to pass a budget has – as predicted – resulted in immediate action to downgrade state bonds. Once again, the State of Illinois debt backlog increases and taxpayers are on the hook for hundreds of millions of dollars in unnecessary debt payments, while schools and universities are put at risk and our communities suffer from deteriorating social services. With “Bringing Illinois Back,” the Civic Committee provided a sensible framework for resolving this fiscal crisis, which required change and compromise from our government leaders in Springfield. Their failure to act is inflicting serious damage on our state.”
*** UPDATE 4 *** Sen. Daniel Biss…
“Infuriating. Wall Street banks will now get even more of our tax dollars because Rauner and Madigan have failed again on the budget.”
[ *** End Of Updates *** ]
* Bloomberg…
Illinois had its bond rating cut to a step above junk by S&P Global Ratings because of the long-running political stalemate over the budget that’s kept the state from dealing with its chronic deficits.
The company warned that the rating could be cut again, which would make Illinois the first state since at least 1970 with a below investment grade. S&P said debt backed by state appropriations, including those issued by its sports authority, were cut to BB+, one step into junk.
“The rating actions largely reflect the severe deterioration of Illinois’ fiscal condition, a byproduct of its stalemated budget negotiations, now approaching the start of a third fiscal year,” S&P analyst Gabriel Petek said in a statement. “The unrelenting political brinkmanship now poses a threat to the timely payment of the state’s core priority payments.”
* Press release…
S&P Global Ratings lowered its rating on Illinois’ general obligation (GO) bonds to ‘BBB-’ from ‘BBB’. We also lowered our ratings to ‘BB+’ from ‘BBB-’ on the state’s appropriation debt, including bonds issued by the Illinois Sports Facility Authority and the Metropolitan Pier & Exposition Authority. Finally, we lowered to ‘BB-’ from ‘BB’ our ratings on the state’s moral obligation-backed debt. The ratings are on CreditWatch with negative implications.
“The rating actions largely reflect the severe deterioration of Illinois’ fiscal condition, a byproduct of its stalemated budget negotiations, now approaching the start of a third fiscal year,” said S&P Global Ratings credit analyst Gabriel Petek. “We placed the ratings on CreditWatch with negative implications because, in our view, the unrelenting political brinkmanship now poses a threat to the timely payment of the state’s core priority payments.”
We also believe that Illinois is now at risk of entering a negative credit spiral, where downgraded credit ratings would trigger contingent demands on state liquidity, further exacerbating its fiscal distress. Although CreditWatch typically has a 90-day time horizon, we anticipate resolving Illinois’ placement around the start of its 2018 fiscal year, which begins on July 1. If lawmakers fail to reach agreement on a budget with provisions designed to reduce the state’s structural deficit, it’s likely we will again lower the ratings. In our view, the ongoing budget impasse has increased the nonpayment risk associated with Illinois’ obligations that require a budget appropriation before they can be funded. We now view these payment obligations as having speculative-grade characteristics.
The ‘BBB-’ GO rating reflects our view of the state’s:
• Large and growing structural budget deficit now projected to top $7 billion (18% of expenditures) in fiscal 2018;
• Unpaid bills that have mushroomed to the equivalent of more than one-third of annual general funds’ expenditures;
• Elevated fixed costs and depleted budget reserves, the combination of which renders the state vulnerable to even more fiscal pressure when the economy enters a slowdown;
• Exposure to stepped-up interest costs related to variable-rate debt and swap termination payments tied to rating triggers;
• Distressed pension funding levels that will require substantial contribution increases in the coming years; and
• Inability to deliver adequate and timely funding for various important public services and institutions as a consequence of dysfunctional budget politics.
Partially offsetting these weaknesses is our view of:
• Well-established priority of payment for GO debt service established by statute;
• Ability to adjust certain cash disbursements to stabilize cash flow and to access substantial amounts of cash reserves on deposit in other funds for debt service, if needed, and for operations if authorized by statute;
• Deep and diverse economic base anchored by the Chicago metropolitan statistical area, though with a growth outlook that is expected to trail the nation’s through the next five years;
• Above-average income levels; and
• Substantial ability to adjust revenues, expenditures, and disbursements–albeit with a current lack of agreement on how to do so.
* Meanwhile…
S&P Global Ratings lowered to ‘AA-’ from ‘AAA’ its rating on Illinois’ Build Illinois sales tax revenue bonds. The rating is on CreditWatch with negative implications.
“The rating actions reflect our view that, with the negative pressure on the state’s creditworthiness intensifying, the risk of interference with the flow of revenues pledged to the repayment of its Build Illinois sales tax bonds has increased,” said S&P Global Ratings credit analyst Gabriel Petek. “The CreditWatch placement reflects the likelihood that we would lower the rating further if the state’s general obligation rating were downgraded again.”
Our views are balanced against the fact that debt service, at about $325 million in fiscal 2017 and declining thereafter, is equivalent to less than 10% of the state’s structural budget deficit in its general funds. We continue to believe the state will adhere to legal provisions that insulate debt service on the bonds from its budget impasse. However, we believe the risk of a disruption is somewhat greater with the state’s overall fiscal condition experiencing more acute levels of distress.
- wordslinger - Thursday, Jun 1, 17 @ 10:30 am:
McPier was AAA two years ago.
Keep in mind, this destruction is planned and willful, not the result of an economic downturn.
Heckuva job, Raunie.
- Slippin' Jimmy - Thursday, Jun 1, 17 @ 10:31 am:
Unrelenting political brinkmanship= testosterone fueled insanity!
- Anonymous - Thursday, Jun 1, 17 @ 10:33 am:
Planned and willful, that’s for sure. Something to look back at with pride for our governor. Does he think about how/what he’ll be remembered for?
Could we possibly have found another human being in this state to care less?
- Reality Check - Thursday, Jun 1, 17 @ 10:34 am:
“I’ve been successful at everything I’ve ever done.” - Bruce Rauner
- My button is broke... - Thursday, Jun 1, 17 @ 10:34 am:
You have to wonder how things will be if this continues and the nation enters a recession…
- William j Kelly - Thursday, Jun 1, 17 @ 10:36 am:
I hate to say I told you so but I told you so. www.williamjkelly.org
- Ducky LaMoore - Thursday, Jun 1, 17 @ 10:36 am:
===You have to wonder how things will be if this continues and the nation enters a recession…===
Total absolute destruction of all things even close to the brink. And a rebuilding that will probably never happen.
- Reality Check - Thursday, Jun 1, 17 @ 10:38 am:
Planned and willful.
“Crisis creates opportunity. Crisis creates leverage … and we’ve got to use that leverage.” - Bruce Rauner
- Ghost - Thursday, Jun 1, 17 @ 10:39 am:
so now the clock can carry junk to show our bond status
- 37B - Thursday, Jun 1, 17 @ 10:40 am:
“We haven’t seen this in a modern state before” says Moody’s lead analyst on Illinois.
“I’m not done.” Fake Bruce Rauner.
- Almost the Weekend - Thursday, Jun 1, 17 @ 10:44 am:
Bruce Rauner to Bruce Rauner, “Hold my beer (Stag)”
- Mr. K. - Thursday, Jun 1, 17 @ 10:46 am:
I still wonder: is there a chance Rauner doesn’t run for re-election? What if he just walks away?
- illini - Thursday, Jun 1, 17 @ 10:47 am:
Our Universities are already in Junk Bond status and the state is close to joining them.
Mission ALMOST Accomplished.
- @MisterJayEm - Thursday, Jun 1, 17 @ 10:50 am:
“McPier was AAA two years ago.”
Good Lord.
– MrJM
- PackingMyBags - Thursday, Jun 1, 17 @ 10:51 am:
Any increase in taxes will cause even more people to leave and lower wages, which will mean no real increase in revenue. What then? Most of us know the answer but the unrepresentative powers from Chicago don’t seem care.
- Arsenal - Thursday, Jun 1, 17 @ 10:55 am:
== is there a chance Rauner doesn’t run for re-election? What if he just walks away?==
Even if he didn’t want to, the pressure from the Republican/Griffin/Uhlien Party would be enormous. Who else they got? Without incumbency and money, there’d be no shot at a Republican winning in ‘18.
- Arsenal - Thursday, Jun 1, 17 @ 10:56 am:
==Any increase in taxes will cause even more people to leave and lower wages, which will mean no real increase in revenue.==
Show your work.
- Montrose - Thursday, Jun 1, 17 @ 10:57 am:
*Any increase in taxes will cause even more people to leave and lower wages, which will mean no real increase in revenue. What then? Most of us know the answer but the unrepresentative powers from Chicago don’t seem care.*
How do we pay off $14b in back bills without new revenue? How? Your ideology does match up with our reality.
- phocion - Thursday, Jun 1, 17 @ 10:59 am:
Plenty of blame to go around, people.
- Oswego Willy - Thursday, Jun 1, 17 @ 11:02 am:
Oh - phocion -…
===Plenty of blame to go around, people.===
Nope… Sorry. No… “Good Try”
===“Illinois’ credit rating has been downgraded 13 times under Pat Quinn and now, because of his failed leadership, our state’s economy and finances are still broken. Pat Quinn put special interest politics ahead of Illinois workers. We need to change direction before it’s too late.” – Rauner campaign spokesperson Mike Schrimpf===
Candidate Rauner says the governor owns… so there’s that.
“Questions?”
- Illinois O'Malley - Thursday, Jun 1, 17 @ 11:03 am:
With $3.50 corn wish I would of sold my farm few years ago and used the money for these high-yield, low-risk bonds…
- Rich Miller - Thursday, Jun 1, 17 @ 11:07 am:
===What if he just walks away?===
Don’t be silly.
- Chicago Cynic - Thursday, Jun 1, 17 @ 11:10 am:
There’s a super-easy way to get the ratings agencies to upgrade us. Just get a damned budget done…now!
I have been very resistant to agree with those who say this was Rauner’s strategy all along. But it’s hard to look at his conduct and conclude anything else. How does that man sleep at night?
- JS Mill - Thursday, Jun 1, 17 @ 11:15 am:
=Any increase in taxes will cause even more people to leave and lower wages, which will mean no real increase in revenue. What then? Most of us know the answer but the unrepresentative powers from Chicago don’t seem care.=
Where are they going? To states that are performing worse economically? For highly dubious “tax” advantages?
Illinois has real problems- degrading infrastructure, a crippled social services sector, a University system in economic crisis- but the canard of “reforms” and not “business friendly” just does not match the data.
Why are we ahead of the business friendly paradises like Kansas, Indiana, and Wisconsin? That is a question that does not feed phony talking points well. It does not help phony political ads. It does not make it easier for the uber wealthy to get more tax breaks.
We need to improve for sure. Workers comp improvement is needed. Regulatory (red tape) improvement is needed. Bit no improvement is needed more than paying our bills and investing in our infrastructure. Those are tangible actions that will directly result in improved conditions in Illinois like job and economic growth.
I posted the stuff below on another thread but it works her too…just some real math
FY 16 Q 4 GDP Growth by state-
IL- 1.7%
WI- 0.9%
IN- 0.8%
IA- 0.4%
MO- 1.5%
KY- 1.5%
TN- 1.5%
AR- 0.5%
MN- 1.7%
MI- 2.1%
https://www.bea.gov/newsreleases/regional/gdp_state/qgsp_newsrelease.htm
- Deserve Dem Dose - Thursday, Jun 1, 17 @ 11:15 am:
The whole Illinois RepublIcan Party is responsible for this catastrophe, not just Rauner.
- phocion - Thursday, Jun 1, 17 @ 11:22 am:
Oh Willy, continuing to schill for Madigan. You’re right, the House’s refusal to pass a budget to present to Rauner has nothing to do with anything except Rauner. The House’s refusal to take a serious look at any meaningful reform is all on Rauner. The House’s continued game playing for political purposes is Rauner’s fault. Yep, there’s only one branch of government in Illinois - the Executive. The legislature is completely blameless for the utter dystopia we are all looking at. Thanks for clarifying that for everyone, Willy.
- Cubs in '16 - Thursday, Jun 1, 17 @ 11:24 am:
===How does that man sleep at night?===
Very well from what I hear.
- TwoFeetThick - Thursday, Jun 1, 17 @ 11:30 am:
The reduction in bond ratings is, in my opinion, a central goal of the Rauner Administration. There’s a lot of money to be made, at essentially zero risk. It’s the perfect crime–very hard to prove (unless somewhere there’s a paper trail showing intent). Someone (feds please!) needs to look into this.
- SAP - Thursday, Jun 1, 17 @ 11:31 am:
This music feels oddly appropriate: https://www.youtube.com/watch?v=Tl71DM84Wc4
- Arsenal - Thursday, Jun 1, 17 @ 11:32 am:
== You’re right, the House’s refusal to pass a budget to present to Rauner has nothing to do with anything except Rauner.==
While I do agree that more than Rauner got us here, there was very little point in voting for a bill that Rauner was just going to veto.
- Anonymous - Thursday, Jun 1, 17 @ 11:32 am:
phocion–
So what’s the different factor in this administration that’s causing these shutdowns, lack of budget and lowered bond ratings? Has this occurred under every other governor’s tenure? Uh, duh, I think not.
- Oswego Willy - Thursday, Jun 1, 17 @ 11:33 am:
Oh - phocion -, LOL…
I’m not shilling for Madigan, I’m just making you understand, as clear as possible, that Candidate Rauner blamed Quinn. How is that shilling for Madigan? lol.
I know Rauner’s own words are inconvenient for you, infer that. I really do. Governors own. Rauner is purposely destroying Illinois to boot.
Your beef is with Gov. Rauner… Candidate Rauner tells you so.
Right? Exactly right, lol
- Sue - Thursday, Jun 1, 17 @ 11:35 am:
Yea- it’s Rauners fault we have a 100 Biilion plus pension liability along with billions more in retiree health care exposure- untenable union contracts- deferred infrastructure repairs etc etc so let’s blame the Governor for 40 years of Madigzns stewardship
- AC - Thursday, Jun 1, 17 @ 11:40 am:
==let’s blame the Governor for 40 years of Madigzns stewardship==
I’d settle for holding Rauner responsible for what’s happened during his tenure.
- Back to the Mountains - Thursday, Jun 1, 17 @ 11:45 am:
I can’t decide if this is intentional or just the sad byproduct of a holy war. If it is intentional, it’s working perfectly. If it isn’t, then pick one thing and focus. The house has practically burnt down and we’re still arguing over the best way to fight the fire.
- Oswego Willy - Thursday, Jun 1, 17 @ 11:47 am:
=== let’s blame the Governor for 40 years of Madigzns stewardship==
I’d settle for holding Rauner responsible for what’s happened during his tenure.===
That’s a bridge too far for Raunerites.
Madigan deserves blame. There’s no question. The irony lost on Raunerites is…
Blame Quinn!
Blame Rauner for same as Quinn!
…
…
Blame Madigan!
Raunerites are a confusing lot, lol
- fakecion - Thursday, Jun 1, 17 @ 11:58 am:
=The House’s refusal to take a serious look at any meaningful reform is all on Rauner.=
Phocion may want to look up the definition of “reform”.
Assuming there ever were actual proposed reforms, which are budgetary reforms?
- Anonymous - Thursday, Jun 1, 17 @ 11:59 am:
No one’s talking about what’s happened in the past to acquire the hole we’re in. What non-Raunerites can see clearly is what is being done about it under Rauner? Not only nothing, but he’s deliberately making it far worse and happy to do so! That doesn’t sound like someone with the best interests of the state in mind.
- Oswego Willy - Thursday, Jun 1, 17 @ 12:05 pm:
Pick a name. Please.
Thank you.
It’s a bit ironically tragic that Rauner’s quotes and positions in a campaign that Raunerites point to as the reason for reforms completely ignore where Rauner blames Quinn, and see that the same blame is attached to Rauner.
Embarrassing, actually.
- SOIL M - Thursday, Jun 1, 17 @ 12:12 pm:
When Ryan was Governor my Dad used to say of him that Ryan did more for the IL. Democratic Party than any Democrat had done in 20 years. The damage that Rauner is doing to the Republican will be felt far more than what Ryan did. I put the weight of this going forward on House and Senate GOP. The only way out of this gridlock is for them to stand up and work out a compromise that will pass with a veto proof majority. Dont even answer calls from the governors office. And unite behind a Primary opponent against Rauner for 2018. The damage done by selling out your party to the Raunerites has to come to an end and you have to start attempts to repair it.
- Huh? - Thursday, Jun 1, 17 @ 12:12 pm:
Do I hear junk bond status from Moody’s? What about you Fitch? What do I hear, come on somebody give me a junk bond rating.
- Flynn's mom - Thursday, Jun 1, 17 @ 12:18 pm:
Are junk bonds reformable?
- JohnnyPyleDriver - Thursday, Jun 1, 17 @ 1:06 pm:
Does the Dem budget balance? Every single reference to it I’ve seen in the news says the same thing, almost verbatim: “spends $37 billion by raising $5.4 billion in taxes.”
What does it bring in?
- Oswego Willy - Thursday, Jun 1, 17 @ 1:18 pm:
To the update…
Let’s make very clear…
===”Madigan’s majority owns this downgrade because…===
“Rauner Word Jumble, phony, Rauner Word Jumble, Madigan, Rauner Word Jumble…”
Rewind, Candidate Rauner… downgrades…
===“Illinois’ credit rating has been downgraded 13 times under Pat Quinn and now, because of his failed leadership, our state’s economy and finances are still broken. Pat Quinn put special interest politics ahead of Illinois workers. We need to change direction before it’s too late.” – Rauner campaign spokesperson Mike Schrimpf===
Mr. Brown?
===…comment is typical Rauner incompetence, and that’s too bad,” said Steve Brown, a spokesman for Madigan.===
… I’d add, that it’s Rauner ignoring the words the campaign thought governors own.
- DuPage Moderate - Thursday, Jun 1, 17 @ 1:25 pm:
Rauner is going to win again. Enjoy the next 6 years of this.
- Mike Cirrincione - Thursday, Jun 1, 17 @ 1:32 pm:
Maybe if Governor Duck Tape wasn’t spendin’ his time makin’ TV commercials and instead took the job seriously, his responses would be legit.
- Oswego Willy - Thursday, Jun 1, 17 @ 1:40 pm:
To Pritzker…
===”A day after Bruce Rauner once again failed… “Under Bruce Rauner’s failed leadership.., What we’re seeing is… Bruce Rauner stumbles… Rauner’s mess… Bruce Rauner will never be up to the job.”===
That’s a Crew, when they have the time, get it done.
This. All day. This.
OW
- Precinct Captain - Thursday, Jun 1, 17 @ 1:45 pm:
Governor Downgrade!
- The Captain - Thursday, Jun 1, 17 @ 1:47 pm:
You don’t need Pritzker’s money to match Pritzker’s anti-Rauner message above. I don’t understand why the rest of them aren’t standing up to Rauner as aggressively as Pritzker is.
- wordslinger - Thursday, Jun 1, 17 @ 1:47 pm:
–“Her comment is typical Rauner incompetence, and that’s too bad,” said Steve Brown, a spokesman for Madigan.–
No, it’s not incompetence. The plan in action is squeeze the beast and it’s workin’ just swell.
The incompetence is on the part of the Dems who don’t recognize and call it for what it is and sell it to the people.
The Rauner communications crew, as perfidiously juvenile as they are, are running circles around the likes of Brown. The Dems incompetence borders on complicity.
- Mama - Thursday, Jun 1, 17 @ 1:52 pm:
The Raunerites are the only ones who can get a budget passed because the Dems cannot do it alone. The Raunerites have to stop using Rauner’s money in order & go against Rauner’s wishes in order to get a budget passed. It appears ‘The Raunerites’ care more about the money than the state of IL.
- So tired of political hacks - Thursday, Jun 1, 17 @ 1:54 pm:
=Sue=
Are you serious, which of the problems you listed are better of now than 2.5 years ago. Madigan and the dems are a major part of the problem but not for the reason you complain about. Their failure was to continue running Illinois without raising taxes because people like you and Rauner always cry about higher taxes. So they siphoned the money out of public pensions and education by under funding them for the last 30 years. Now the reps want to rub there faces in it of the supposed 3.7 billion in savings 2.5 billion on the backs of public employees. Do your homework and quit just using republican talking points. Rauner has made every aspect of this state worse off then when he took office.
- AnonymousOne - Thursday, Jun 1, 17 @ 1:55 pm:
On what performance credits would Rauner win again? What improvements has he made for the benefit of ILlinois citizens? What credit should he be given? Achievements, please? Balance sheet? I”d like to be informed of the positive work being done.
- Mama - Thursday, Jun 1, 17 @ 1:55 pm:
Mr. Kennedy? Any thoughts??
- phocion - Thursday, Jun 1, 17 @ 1:55 pm:
Fakecion, you honor me in mocking my pseudonym. I’ll bet that even makes Willy jealous!
- Oswego Willy - Thursday, Jun 1, 17 @ 1:59 pm:
===… you honor me in mocking my pseudonym. I’ll bet that even makes Willy jealous!===
Nah. Our back and forth warms my heart enough.
:)
To the Civic Conmittee,
That is really good stuff.
“Why?”
When you have an actual blueprint, words have something behind them, instead of hollow platitudes.
Much respect to that update.
- DuPage Bard - Thursday, Jun 1, 17 @ 2:54 pm:
And so it goes……down the drain.
- Anon221 - Thursday, Jun 1, 17 @ 3:45 pm:
And while the State falls apart, Dr. Rauner is breathless about tomorrow’s FB event for the People’s House! Hope they have enough fiddles for the event! https://twitter.com/i/web/status/870375093473554432
- cdog - Thursday, Jun 1, 17 @ 6:39 pm:
What other options, besides squeezing, are there to gaining control of a beast?
(This implies agreement that over 40 years the State of Illinois government, and its self-inflicted obligations, have evolved into a beast)
- Just Me - Thursday, Jun 1, 17 @ 10:31 pm:
Rauner and Madigan don’t care about solving this crisis, they’ve made this war personal, and just want to “win” while they other “loses.” A compromise is not possible in this climate. The needs of the citizens they claim to represent are not a factor in their considerations.
Both of them sleep in comfortable beds, have all their bills paid, know what their retirement will look like, don’t worry about paying for the medical care, and have a life of comfort complete with expensive vacations in their second homes.
They’re both baffoons and unworthy of public office if you ask me.