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Rauner administration warns bond buyers: “The state’s financial condition is now materially worse than the state’s anticipated financial condition”

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Jan 7 Illinois’ ongoing state budget battle is being downplayed by Governor Bruce Rauner’s administration ahead of a $480 million bond sale - the state’s first in 20 months.

An impasse between the Republican governor and Democratic lawmakers has left the fiscally shaky fifth-largest U.S. state without a budget for the fiscal year that began July 1. But an online investor presentation posted Dec. 30 for the Jan. 14 bond sale gave a generally rosy assessment of Rauner’s dealings with a Democratic-led legislature.

Illinois Budget Director Tim Nuding emphasized actions taken to patch a hole in the fiscal 2015 budget and provide some fiscal 2016 funding to local governments, lottery winners, federal grant recipients and others.

“Another example of the legislature working together to solve problems,” he said, without discussing the factors blocking a budget accord. Those involve Rauner’s push for collective bargaining curbs, legislative term limits and redistricting changes, and business-friendly moves like making it harder for injured workers to collect damages from their employers.

* But the Bond Buyer looks past the feel-good investor presentation and focuses on a different document…

Illinois’ first bond offering statement in 20 months prominently lays out a trove of warnings about the state’s stressed fiscal condition, from failed pension reforms and budget gridlock to its weakened credit and negative swap valuations. […]

“Particular attention should be given to the investment considerations described below which, among other things, could affect the financial condition of the state and therefore result in a repayment risk for investors, and could also affect the liquidity/market value of the bonds after they are issued,” the offering statement warns. […]

“The state’s financial condition has been materially adversely affected by the budget impasse,” says the offering statement which additionally warns that the bill backlog is expected to grow significantly. […]

“The state’s financial condition is now materially worse than the state’s anticipated financial condition” if the reforms had been upheld, the offering statement says. […]

Additionally, liquidity and bank risks are posed by the state’s $600 million of floating-rate paper from a 2003 issue, although the variable-rate debt represents just a small piece of the state’s $26 billion GO debt portfolio. […]

The offering statement reports that the state may seek to undertake a cash flow borrowing […]

The offering statement reports that as the state rating falls, fees of the credit providers and interest rates on any advances adjust.

Whew.

Also, cash flow borrowing makes sense when money is so tight, but they resisted doing it all last year.

…Adding… Tribune on a report from S&P…

The agency said that while “it might seem obvious” that the state’s credit rating should be downgraded from its current A- position — already the lowest in the nation — Illinois has provided data that shows it has “sufficient internal liquidity” to make debt payments through the end of the current spending year, which ends June 30.

“A budget crisis does not necessarily constitute a debt crisis,” S&P wrote. “From a global ratings scale perspective, we still view the state’s ability to meet its debt obligations as they come strong… In fact, to formulate an argument otherwise, in our view, requires overemphasizing the state’s budget politics relative to its fundamental ability to pay its debt service.”

Still, the agency warned that while the state’s credit is not worthy of a downgrade at this time, “we also do not currently see a pathway to upward rating migration anytime soon.” S&P noted that continued spending despite a drop in revenues following the 2015 income tax rollback means Illinois could face a bill backlog of nearly $10 billion, noting a large accumulation of bills by the end of the budget year “could tip the state’s rating lower.”

posted by Rich Miller
Friday, Jan 8, 16 @ 8:28 am

Comments

“The state sale is expected to benefit from investor hunger for yield.” - from Rich’s second linked document.

Let the “hunger games” begin!

Comment by Anon221 Friday, Jan 8, 16 @ 8:37 am
Who was it that requested the income tax hike be allowed to expire?

Hmmm.

It looks more and more like someone who made that request wanted to create a crisis. Congratulations, Governor. You succeeded in your dastardly plan.

Comment by Aldyth Friday, Jan 8, 16 @ 8:38 am
The backstory here — and I hope we learn more about this in the coming months — is that someone is benefitting from this crisis. It’s too tin-foily to say that this was planned from the get-go so that someone — or some group — was always meant to benefit.

But it sure seems like a remote — albeit slim — possibility.

Comment by Frenchie Mendoza Friday, Jan 8, 16 @ 8:45 am
Too bad we don’t have a governor.

Comment by VanillaMan Friday, Jan 8, 16 @ 8:46 am
Link to the State’s presentations and documents on the GO sale-

http://www.illinois.gov/gov/budget/capitalmarkets/Pages/default.aspx

Comment by Anon221 Friday, Jan 8, 16 @ 8:50 am
I get why Tom Nuding is saying, exactly why he’s saying it that way too.

Which Bruce Rauner, do I “believe”?

Capitol Fax Post;

https://capitolfax.com/2015/10/26/the-biggest-hostage-of-all/

===“Credit rating is pretty irrelevant to me. I don’t work for credit-rating agencies. I work for the people of Illinois…”===

Ok, Capitol Fax Post;

https://capitolfax.com/2014/08/06/traders-pushing-up-state-bond-yields-but-no-state-issuances-on-horizon/

===“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 […]===

Let’s note that the Candidate Rauner and the Rauner Campaign stated a “Governor Rauner” would own the change needed.

Rauner’s lack of a budget and the impasse Rauner is feeding with his required decimation of collective bargaining and prevailing wage and those roadblocks preventing a real and honest…

“…working together to solve problems,”

Borrowing? Sure. But any and all factors into the interest and the rates that borrowing are under… they belong to the Rauner Administration.

Comment by Oswego Willy Friday, Jan 8, 16 @ 8:51 am
“negative swap valuations”

“as the state rating falls, fees of the credit providers and interest rates on any advances adjust”

We have a winner!!! Hedge Funds! They are going to make a pile win or lose. (via great interest rates on zillions, or collecting payouts from the swap bets.)

Sorry little taxpayers, that’s what happens when a hedge fund king buys political office.

Comment by cdog Friday, Jan 8, 16 @ 8:52 am
===In a report on Thursday, Standard & Poor’s said “ideologically divisive policy initiatives” were impeding progress on tackling Illinois’ fiscal woes.===

Yep. Now try making that a headline instead of burying it 2/3 of the way in.

Comment by Ducky LaMoore Friday, Jan 8, 16 @ 8:52 am
“we also do not currently see a pathway to upward rating migration anytime soon.”

“Anytime soon” = prior to November 6, 2018.

– MrJM

Comment by @MisterJayEm Friday, Jan 8, 16 @ 9:00 am
Don’t loan me money I am a bad risk…

Comment by burbanite Friday, Jan 8, 16 @ 9:07 am
–“The state’s financial condition is now materially worse than the state’s anticipated financial condition”–

LOL, “unanticipated?” By whom? The comatose?

What other result could have been possibly anticipated from the “leveraging” strategy?

This is the plan in action. This is was what was supposed to happen to further the reactionary, non-fiscal agenda.

In the interest of “transparency,” perhaps the governor’s office can post the preliminary official statement the Bond Buyer is referencing so citizens can get the real dope on the state’s fiscal position.

Strangely, it doesn’t seem to be on OMB’s site.

Comment by wordslinger Friday, Jan 8, 16 @ 9:10 am
Bonds, schmonds, what’s the plan to get some more taxpayers in Illinois? How can we do good works without more people putting cash in the coffer? Can’t raise tax rates too much or the people will start electing those who promise to lower said rates.

Over time there are two choices - get more taxpayers or accept a smaller state government with fewer services. Many here believe people are leaving Illinois because the weather is bad and the land is flat. If so, continuing a long-term policy of higher taxes will give them another reason to go.

Fire away.

Comment by Junior Friday, Jan 8, 16 @ 9:12 am
I have repeatedly stated that borrowing at this time would be a bad idea, and one of those factors is that the statement that is required for any bond issue is a legal document that must accurately reflect the State’s situation or the state risks being sued (again) by investors or the SEC for misleading investors. Now, the question about that statement is whether or not it is accurate enough to avoid a lawsuit?

I suspect that the bonds will again be over subscribed and that the People of Illinois will again be paying more in interest than was needed.

Comment by Anon Friday, Jan 8, 16 @ 9:18 am
Cdog,

===We have a winner!!! Hedge Funds! They are going to make a pile win or lose.===

They won’t lose. If the state defaults on the bonds, they’ll just go to court and the state will be ordered to pay. So long as the State of Illinois exists, this is a zero risk investment.

There’s a reason why the Dodd-Frank Act made it law for CRAs to adjust their practices to accommodate the really low rates of defaults.

Comment by Anon Friday, Jan 8, 16 @ 9:21 am
==Don’t loan me money I am a bad risk…==

The Ty Fayner approach!

Comment by Joe M Friday, Jan 8, 16 @ 9:21 am
There is no mention of the turnaround agenda in the bond document, no political items at all. It only mentions that collective bargaining with AFSCME is ongoing and also discusses pension systems. IT DOES NOT MENTION TERM LIMITS, WORK COMP, OR REMAP EFFORTS.

Comment by 360 Degree TurnAround Friday, Jan 8, 16 @ 9:21 am
This disaster brought to you by the Rauner anti-union crusade.

Comment by Norseman Friday, Jan 8, 16 @ 9:22 am
The disaster largely brought to you by too many years of almost unlimited union power.

Comment by Junior Friday, Jan 8, 16 @ 9:30 am
Anyone ever consider Rauner doesn’t care… at all? Maybe his goal is keep taxes low for 4 years and push IL closer to default.

Comment by Robert the 1st Friday, Jan 8, 16 @ 9:39 am
- Junior -

Read McKinney in Crains on what got us here.

Then, get back to us.

Your drive-by isn’t even clever…

Comment by Oswego Willy Friday, Jan 8, 16 @ 9:42 am
=Read McKinney in Crains on what got us here=

Willy, I know you like that article because it lays it on both Dem and Republican Governors… but to Junior’s point… weren’t all those Governors backed by AFSCME?

Rauner is the first ever not. Correct?

Comment by Robert the 1st Friday, Jan 8, 16 @ 9:45 am
“we also do not currently see a pathway to upward rating migration anytime soon”

Show of hands ..who wants to picket the SP/Bond Buyer offices for FAILING to reveal how the SuperStars non budget issues are a pathway to heaven ?
Hmmmm….fire, aim, ready
BTW it does appear the good bankers at Chase are on both sides of the swaps mentioned nice work

Comment by Annonin' Friday, Jan 8, 16 @ 9:45 am
- Robert the 1st -,

The McKinney piece points out the decisions, the actors, and the continued problems and pitfalls all the way back to Thompson.

I don’t get your point on Unions, as I don’t fully understand - Junior - and that drive-by.

The Illinois Constitution is quite clear. Because Rauner despises unions, wants them obliterated and all other governors from Thompson to Quinn didn’t want unions destroyed and held the Illinois hostage to destroy unions doesn’t make all other governors Labor “favorites” or catered to Labor’s every whim.

Read McKinney.

Comment by Oswego Willy Friday, Jan 8, 16 @ 9:53 am
Oh, Willy, worried about others in your personal sand box again…. Always demeaning the opinions of others. You do have a special skill, builder of echo chambers.

Comment by Junior Friday, Jan 8, 16 @ 9:53 am
Oh - Junior -, attacking me won’t make your drive-by any stronger, lol

Comment by Oswego Willy Friday, Jan 8, 16 @ 9:56 am
OW-

I didn’t have a point. Junior did, however off topic.

So to summarize your long response to my question, “YES”

Comment by Robert the 1st Friday, Jan 8, 16 @ 9:57 am
Gee, if only someone hadn’t spent the past year trash talking the State. That same someone could have gotten a budget in place, any budget, in place and been perceived as better off. Plus anybody who thought the pension reform bill was going to hold up was smoking some of that wacky tobaccy and drinking the Sidley Austin kool-aid.

On a more serious note, the State did do cash flow management this past year … instead of borrowing with interest and repayment required, they just swept all the funds for cash. It appears that a dollar is a dollar to be to Rauner’s team, regardless of the original intent for that dollar.

Reading between the lines, the more interesting part is the notations it is not really a debt crisis per se and that the state can (S&P report implied) solve the current problems by restoring previous revenue sources and / or tap into (new) revenue.

The State isn’t broke; it’s just having all it’s assets, including revenue raising sources, mis-managed. If only we had someone in charge with financial management skills …

Comment by RNUG Friday, Jan 8, 16 @ 9:59 am
==The disaster largely brought to you by too many years of almost unlimited union power.==

Where “almost unlimited union power” is defined down to “couldn’t kill an unconstitutional pension bill with a Dem Governor and legislature”.

Comment by Boss Tweed Friday, Jan 8, 16 @ 10:01 am
Translation: “We failed to perform at anticipated financial levels because our turnaround reforms weren’t passed. Don’t blame us!”

Sorry, the numbers and forecasts don’t say that, and the raters don’t care.

They only care when you give them confidence that a sensible budget agreement is imminent.

Comment by walker Friday, Jan 8, 16 @ 10:04 am
- Robert the 1st -

AFSCME was neutral in 1990 and 1994 Governor’s race after supporting Thompson in 1986.

Again, I am confused, lol

Comment by Oswego Willy Friday, Jan 8, 16 @ 10:05 am
Brucie is running the state just like his takeover strategy–financially destroy the company you just bought so you can…do what?

Comment by D.P.Gumby Friday, Jan 8, 16 @ 10:06 am
Robert, there is a tad of bias here against Rauner, which minimizes the ability to talk through issues and learn from others who have a different perspective. Demeaning those who disagree with my viewpoints does very little to sway them to my side.

Comment by Junior Friday, Jan 8, 16 @ 10:09 am
- Junior -

If you have a point, make it, I’m not stopping you.

Attacking me isn’t a point.

Comment by Oswego Willy Friday, Jan 8, 16 @ 10:12 am
Willy-

1990 and 1994 huh? How much money did AFSCME donate to Jim Edgar again? Very neutral indeed.

So again, Rauner is the first governor not backed by AFSCME.

Comment by Robert the 1st Friday, Jan 8, 16 @ 10:13 am
===How much money did AFSCME donate to Jim Edgar again?===

How much?

Comment by Oswego Willy Friday, Jan 8, 16 @ 10:15 am
=The back story here=
Won’t be in the Trib, that’s for sure.

Comment by Hedley Lamarr Friday, Jan 8, 16 @ 10:19 am
I had two posts prior to your initial jab at me. The first concerned growing the tax base. The second was highly witty retort to a post blaming the current economic situation on Rauner’s policies. To be more specific….the point was the unions get some blame, too. At that point I hadn’t conversed with you. Your response was witty, but also demeaning, like the teacher with the disappointing child. Then snark comes back your way, and you cry. Interesting.

Now, I’d expect you to disagree with my positions, but those two posts are indeed “points”. If you didn’t understand them - I think you understood them just fine - you had the option to ask for clarification. Instead you chose a response designed to not engage.

Comment by Junior Friday, Jan 8, 16 @ 10:26 am
I concede on the Edgar donations. I thought I had read that before but can’t find anything now.

Comment by Robert the 1st Friday, Jan 8, 16 @ 10:28 am
- Junior -

===Then snark comes back your way, and you cry.===

I didn’t cry, I laughed. “Unlimited Union Power” is a drive-by.

Your own response about a sandbox, I laughed at you agaun there too…

You’re welcome.

I won’t feed you anymore.

Again, McKinney frames it as well as its been framed all in one place, interviews included.

Rauner, personally, is holding Illinois hostage for an end to collective bargaining, and an end to prevailing wage.

Rauner has said so, Ron Sandack has said so. It real, it’s Rauner choosing.

Comment by Oswego Willy Friday, Jan 8, 16 @ 10:35 am
There is no reason for the rating on the State’s general obligation bonds to drop farther. The bonds are paid at the top of the revenue waterfall and have a downward sloping profile meaning the State pays less and less each future year.

The bonds will be the last thing the State doesn’t pay due to the protections for bondholders and the inability of the State to declare bankruptcy. Social services, pension payments, payroll, etc will all be paid AFTER the bonds.

The State is in deep trouble but its bonds are not.

Comment by Former Bartender Friday, Jan 8, 16 @ 10:37 am
Begs the ?..in the big $ world Rauner lives in how does he personally gain from such actions…if he is nefarious? There has to be some $play.

Comment by flea Friday, Jan 8, 16 @ 10:37 am
- Robert the 1st -

That’s why McKinney vs. “unlimited Union power” is indeed just drive-by drivel.

McKinney lets no one off the hook, no seedy undercurrent, it’s there.

All good, bud.

Comment by Oswego Willy Friday, Jan 8, 16 @ 10:40 am
Rauner is smart, and succeds at everything. So you have to conclude this destruction is calculated and deliberate.

I also have a hunch he had a meeting somewhere w his anti union brain trust on his way home from vacation–he no sooner arrived than he was back to his strident “its all madigans fault”.

Comment by Langhorne Friday, Jan 8, 16 @ 10:46 am
grow the tax base?

I would love to read a good historical example of the success of trickle-down, supply-side economics. Especially an example that has immediate effects. Most of what I have read on this subject, leaves me very wary.

Even if you (talking to you Junior) can find and show good evidence of successful supply-side policies that improve lives for LOTS OF PEOPLE, isn’t that the wrong tool for the job at hand?

Pardon the metaphor–The taxpayer’s house has been lit on fire. We need to fight the fire, not watch it burn and file a sketchy insurance claim.

Comment by cdog Friday, Jan 8, 16 @ 10:51 am
Ok, Junior et al, explain how unlimited union power caused the GA to underfund pensions for the last hundred years? Pensions were underfunded well before public employees unionized. In fact many non-union employees get public pensions such as the governor’s staff, the GA, and the judges.

A lot of the problems with teachers and university pension systems is the result of board giving administrators end of career pay raises to boost their pensions. Again these are not union people. So your comments avoid the truth as to the real reasons behind the pension crisis and the resulting lower bond ratings.

Comment by A Jack Friday, Jan 8, 16 @ 10:55 am
Willy, was the post immediately preceeding mine also a drive by? Why no response to that one.

I have no issue with your not responding to me. That would have been the preferred option earlier if you didn’t want to add content. I’d rather talk topics; bickering with you without content isn’t productive or fun.

Comment by Junior Friday, Jan 8, 16 @ 10:58 am
Do not feed trolls….

- A Jack -

I think if you just go to the 1970 Constitution, and the or soon guarantee, and the Edgar Pension Ramp, you don’t need to go a hundred years, just start with that Pesky constitution and where McKinney begins to look; Thompson.

Comment by Oswego Willy Friday, Jan 8, 16 @ 11:02 am
“pension guarantees”

Apologies

Comment by Oswego Willy Friday, Jan 8, 16 @ 11:04 am
@ Anon 9:21 am “If the state defaults on the bonds, they’ll just go to court and the state will be ordered to pay.”

That’s one way to bank on it. But if there are swaps being sold for a negative outcome, the swap owner gets paid regardless; either via the interest rate or collecting on the CDS.

Win/win for the Big Money Hedge folks.

(over-imagination kicking in…..Could be a two-fer in the event of a nuclear meltdown. Court ordered interest payments and swap benefits. It would be interesting to read a swap contract.)

Comment by cdog Friday, Jan 8, 16 @ 11:14 am
Junior, don’t forget the traditional volume that accompanies certain commenter’s posts. If they can’t deride or distract from the point, they will drown you out by simply repeating the different iterations of the same thing over and over and over again to suffocate dissenting opinion or analysis.

Comment by Anonymous Friday, Jan 8, 16 @ 11:14 am
Cdog -thanks for the response. I wasn’t talking supply side economics. Isn’t it a math problem? It seems to me that there are fewer taxpayers trying to help a growing number of people who need help, as well as covering the expenses of the state and it’s employees. We could raise taxes, but there is a political limit to that. We could also drastically reduce services, which is also unpalatable. Or we can find ways to increase the raw number of taxpayers. Not sure what the argument is against this one, because it eases the stress on the other difficult options. Also not sure Rauner’s plans in this area would be productive. I think it is a discussion worth having.

Comment by Junior Friday, Jan 8, 16 @ 11:15 am
Another interesting fact: Governor Walker gave state employees the right to unionize in 1973, three years AFTER the constitutional clause for non-diminishment of pensions.

There were municipal unions before that point, but their
pension system is well funded and has nothing to do with the state’s bond rating.

So again, the anti-union posters are jousting at windmills.

Comment by A Jack Friday, Jan 8, 16 @ 11:17 am
==- RNUG - Friday, Jan 8, 16 @ 9:59 am:
“The State isn’t broke; it’s just having all it’s assets, including revenue raising sources, mis-managed. If only we had someone in charge with financial management skills…”==
RNUG, I thought mismanagement of State Funds was illegal. No?

Comment by Mama Friday, Jan 8, 16 @ 11:21 am
- A Jack -

You’re ruining the narrative.

The goal of any administration should be to look at the pension debt as if is, which is real and guaranteed and work to find solutions, constitutional solutions, while paying on what is owed to pensions.

Pat Quinn paid the obligation. One of the few things, administratively, you can point to as “good” in the governor and his governing.

Comment by Oswego Willy Friday, Jan 8, 16 @ 11:21 am
“A lot of the problems with teachers and university pension systems is the result of board giving administrators end of career pay raises to boost their pensions.”

A Jack – I agree that these are bad and should be rooted out, but I seriously doubt that they amount to a hill of beans compared to long-term underfunding of the state’s pension obligations. This is one of several red-herrings used to disguise the main cause of the pension debt and build resentment against public workers in general, union and nonunion alike.

Comment by X-prof Friday, Jan 8, 16 @ 11:23 am
Junior-
You are all over the place. You want people to want to live here, supply them with good paying jobs. You want to be like the southern right to work states, people are going to choose the south. Why would I move my family from my warm and cozy state of Georgia to make the same money in cold dreary Illinois??

Comment by Trolling Troll Friday, Jan 8, 16 @ 11:26 am
With the states low credit rating I see the bond sale as a great way to make money, for Wall St. For the tax payers of Illinois the outlook is for higher taxes and fewer government services.

Comment by Hit or Miss Friday, Jan 8, 16 @ 11:31 am
It’s enough to wonder how some of these insiders and connected individuals manage to hold down active and politically influential positions while also producing such a prodigious volume of comments.

Maybe they are independently wealthy. Maybe they are knowledgable retirees with few other hobbies. Maybe they are posting from their Mom’s basement. You never know on the Internet.

Comment by Anonymous Friday, Jan 8, 16 @ 11:32 am
== Maybe they are knowledgable retirees with few other hobbies. ==

Maybe our hobbies are the outdoor summer type. Personally, I don’t like to play with classic cars in the salt … it’s kind of hard on them, rust wise.

Comment by RNUG Friday, Jan 8, 16 @ 11:36 am
TTroll - perhaps you’re right, there’s nothing to be done to increase the number of private sector jobs in Illinois. If so, we’ll need to keep raising taxes and lowering expenses. If the private tax base increases, taxes don’t have to be raised as much and expenses don’t have to be cut as much. Rauner has at least tried to talk about how to do this. What is Madigan’s plan here? Or does he also think it isn’t possible?

Comment by Junior Friday, Jan 8, 16 @ 11:39 am
The governor’s calendar will make this crystal clear

Comment by Anonymous Friday, Jan 8, 16 @ 11:39 am
“Nice little state you got here, mister. It’d be a shame if something were to happen to it, know what I mean?”

Stick ‘em up, Taxpayers!

The rating agencies and the banks (with an assist from billboards screaming “Illinois is Broke”) are basically allowed to operate as a criminal enterprise.
The standards for downgrading municipal debt do not match the standards for corporate debt or other structured finance deals.

Moody’s recently changed their rating model as it relates to pensions, using a different discount rate that increases the perceived size of future pension liabilities. This has made Moody’s gloomier about municipal finance, even though nothing has changed in the municipalities themselves, only their yardstick.

The rating agencies appear to still be using statistical analyses informed by the wave of state and local bankruptcies during the Depression, an era before deposit insurance and other safeguards.

No state has defaulted on general obligation bonds in 80 years, since the Great Depression.

Comment by Sue Friday, Jan 8, 16 @ 11:40 am
Governor Rauber has no plan, Governor Rauner has yet to propose a budget that doesn’t require revenue, and at the same time won’t raise taxes to pay for his own sham budget, which, in its form, has yet to be voted on.

Rauner vetoed 18 Approp bills, passed by Madigan and Cullerton, less the K-12 funding Approp.

Don’t let the facts of the budget history get in the way of the “Rauner is finding solutions” narrative on the budget when it’s not remotely true, given Rauner’s own budget requires revenue, but won’t rekease his own budget hostage until…

Decimating collective bargaining and eliminating prevailing wage…

… other than that, yeah… what is Madigan doing, lol

Comment by Oswego Willy Friday, Jan 8, 16 @ 11:46 am
Junior. Your points that could be discussed about increasing tax base, treacherousness of tax increases, declining support for too many taxpayer-funded services (I caught your “good works” point earlier), are all good ones. However…

The point that is being missed, by most people who would agree quickly with your positions, is that all of those issues are irrelevant, even irreverent, to the REAL DAMAGE being done NOW by Rauner’s twisted game.

To me, Rauner’s actions are not justifiable for any end outcome. He has become a character that is worse than any he chides.

The man needs to clean this mess up, via good leadership and truth (leave the s+up1d talking points behind), then work on what policies he thinks will help Illinois go forward.

I really don’t want to talk about that other stuff because it is pretty much a waste of time in the current realities.

Comment by cdog Friday, Jan 8, 16 @ 11:48 am
–Maybe they are independently wealthy. Maybe they are knowledgable retirees with few other hobbies. Maybe they are posting from their Mom’s basement. You never know on the Internet.–

And some are chronic victims who believe they are entitled to have their shallow talking points accepted without challenge on a blog devoted to discussing real issues intelligently and substantively.

Comment by wordslinger Friday, Jan 8, 16 @ 12:00 pm
While OW and Junior continue their hand to hand combat it appears the SuperStars underestimated the court ordered spending they agreed to by about +$1.2 billion.
No big deal and as soon as the march on the Bond Buyer and SP is over we will secure the border to prevent anyone else from fleeing. Meanwhile the SuperStars will continue their hunt for the Syrian refugees, but have decided if they are rich taxpayers they will stay until the crisis is averted.

Comment by Annonin' Friday, Jan 8, 16 @ 12:08 pm
Arm-twisting, Wall Street style:

In a 2011 report, Dean Baker of the Center for Economic and Policy Research argued that while projected multi-trillion-dollar shortfalls may seem like a crisis requiring major pension benefit cuts, those shortfalls should be considered in the context of overall public budgets over the time that the pension benefits are scheduled to be paid out.

“The size of the projected state and local government shortfalls measured as a share of future gross state products appear manageable,” Baker wrote. “The total shortfall for the pension funds is less than 0.2 percent of projected gross state product over the next 30 years for most states. Even in the cases of the states with the largest shortfalls, the gap is less than 0.5 percent of projected state product.”

Comment by Sue Friday, Jan 8, 16 @ 12:08 pm
Well - Anonin’ - …if all the guesstimating is about $1.2 billion off, I better conceded and climb on board that dee-stryoin’ unions because it has to be the Labor Movement, they were the ones who guesstimated wrong while holding hostages.

Need a big ole broom to sweep $1.2 billion(?)

And - Wordslinger -, well said, as usual.

Comment by Oswego Willy Friday, Jan 8, 16 @ 12:15 pm
X-prof, your 11:36 post is spot-on. The growth in the unfunded liability caused by “pension spiking” is maybe 1-2 percent tops. The primary driver is of course the State’s long-term underfunding of the systems.

Signed,
Knowledgeable Annuitant who can’t travel with his Illinois DL

Comment by Arthur Andersen Friday, Jan 8, 16 @ 12:53 pm
And Arthur, remember, this underfunding is Rauner’s fault. Or, alternatively, it is no big deal.

Comment by Junior Friday, Jan 8, 16 @ 1:05 pm
Rauner’s accomplishments in office, to give credit where credit is due:

1. Made the state’s financial condition materially worse.

2. Made everything else related to state funding worse.

3. Made everyone, every organization, and every vendor depending on promised state funding worse off then they were a year ago.

Any others? I can’t think of any right now.

Comment by DuPage Friday, Jan 8, 16 @ 1:17 pm
DuPage, you left out the attention he brought to Charlie Parker’s breakfast horseshoe.

Comment by AC Friday, Jan 8, 16 @ 1:23 pm
Junior - You described this blog as a sandbox… Let’s stick with that analogy… OW - it looks like you got sand in somebody’s eye by being politically incorrect… You would think that, junior would be wearing big boy pants by now and be against requiring posters to be PC…. Maybe it’s only when someone that’s kind of different is offended is when this country is too caught up in being Politically Correct… Maybe not…

Comment by Triple fat Friday, Jan 8, 16 @ 1:29 pm
DuPage - fair enough. But in the interest of fairness, the accomplishments you note are also the accomplishments of Madigan and Cullerton.

Comment by Junior Friday, Jan 8, 16 @ 1:31 pm
Edgar and Thompson seem to think Rauner owns…

I’ll stick with Edgar and Rauner.

Rauner is holding the hostages, Rauner owns the mess.

Even the Owl doesn’t blame Madigan…

“@RonSandack: I’m frustrated 2, but taking steps towards reforming IL more important than short term budget stalemate.”

Sandack knows. The hostages are Rauner’s

Comment by Oswego Willy Friday, Jan 8, 16 @ 1:35 pm
==Junior: “what’s the plan to get some more taxpayers in Illinois?”

We’ll strengthen and make more affordable our system of higher education to attract the best and the brightest, and keep the best and the brightest here. Oh wait, I forgot, Rauner wants our higher education decimated, so never mind!

Comment by Concerned Friday, Jan 8, 16 @ 1:41 pm
Junior-
I think the first thing would be a budget. The business that I own is very small compared to the governor’s business, and I’ve never been in politics, but I do know that even in my small world we can’t do anything without a budget. Well we could but we’d be out of business.

Comment by Trolling Troll Friday, Jan 8, 16 @ 1:42 pm
Hi Triple - I am wearing pull-ups, my friend. Other than that, not sure what you’re talking about. Whaddya got on the merits?

Comment by Junior Friday, Jan 8, 16 @ 1:44 pm
Willy - agree that the hostages are Rauner’s. If he released the hostages unilaterally, how much of his agenda would Madigan give down the road? Imo, zero.

Comment by Junior Friday, Jan 8, 16 @ 1:57 pm
TTroll - true, but your annual budget is part of your overall business plan. Rauner is talking about the overall business plan and Madigan is talking about the budget. Rauner sees them as one issue, Madigan as two separate things.

Comment by Junior Friday, Jan 8, 16 @ 2:02 pm
Junior, you are caught up in the violence of the Turnaround, again, son.

“But in the interest of fairness, the accomplishments you note are also the accomplishments of Madigan and Cullerton.”

How did Madigan and Cullerton make state’s financial condition materially worse? They sent a budget so the state could have kept operating for most institutions/vendors. (and in obvious need of a REVENUE COMPROMISE, regardless of the tax-free world fantasies of Rauner’s message targets.)

How did Madigan and Cullerton make everything else related to state funding worse? Tipped off Moody’s that the state was operating by court order and fund-raiding?

How did Madigan and Cullerton, make everyone, every organization, and every vendor depending on promised state funding worse off then they were a year ago?

It all comes back to Rauner. He, and his followers, are playing games on a solid yellow line of a highway.

Comment by cdog Friday, Jan 8, 16 @ 2:05 pm
If Rauner won’t release hostages, because beating Madigan and destroying unions is more important then people, or Illinois, then there’s no way of holding the GA responsible for the conscious and purposeful willingness of destroying all things, including social services, and Rauner himself will own, as all governors do.

“Pat Quinn failed.” - Candidate Bruce Rauner.

When the Governor gets to doin’ the doable, things will change, or Madigan and Cullerton will then take enormous heat.

Not a moment sooner.

Comment by Oswego Willy Friday, Jan 8, 16 @ 2:17 pm
Willy, agree on the doable. My understanding is that he’s somewhat limited because of the legislature. What things are doable that would cause concern in Madigan and Cullerton?

Comment by Junior Friday, Jan 8, 16 @ 2:28 pm
“What things are doable that would cause concern in Madigan and Cullerton?”

That made me laugh out loud.

Maybe Rauner could put clothes on and admit he has been playing Emperor with No Clothes for 12 months. That would definitely concern Madigan and Cullerton.

Comment by cdog Friday, Jan 8, 16 @ 2:36 pm
A governor is only limited by 60/30.

The rest is a governor, an Illinois Governor, arguably one of the most powerful of all governors, constitutionally, in the country.

Thinking Rauner has his hands tied is folly and ignorant to 60/30 and a governor’s levers of power.

Rauner is choosing to be feeble. Why still amazes me, and to show “strength” Rauner takes hostages… not a way to run a railroad.

Comment by Oswego Willy Friday, Jan 8, 16 @ 2:36 pm
Willy - okay, but what specific things would you have him do?

As an aside, my impression is that outsiders - aka, not participants on message boards - believe Rauner is being strong by standing up to Madigan, even those who didn’t vote for him.

Comment by Junior Friday, Jan 8, 16 @ 2:44 pm
Cdog - if you’re of the opinion the stalemate has caused serious problems, it seems clear that both sides of the stalemate get some blame. Either side has the ability to end this by caving in. You seem to want Rauner to cave. Rauner’s supporters want Madigan to cave. Seems pretty even. Glad I gave you a laugh.

Comment by Junior Friday, Jan 8, 16 @ 2:50 pm
Use the “search” key;

I have opined here what Rauner coukd/should do, chapter and verse, A-Z.

If you have a specific question to that, go for it.

It’s Friday, lol

Start with a budget and Edgar’s admonishment.

Jim Edgar says governors own, and why, and what aby governor should do.

Comment by Oswego Willy Friday, Jan 8, 16 @ 2:51 pm
The “pathway” Rauner sees is the same pathway the Morlocks set up for the Eloy. Residents and legislators are all supposed to be dully trudging into the Governor’s shed.

Comment by James Friday, Jan 8, 16 @ 3:36 pm
Willy - understood. Don’t feel like spending the time either. Have a good weekend.

Comment by Junior Friday, Jan 8, 16 @ 3:43 pm