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* Reuters…
May 11 Illinois faces costly consequences if it fails to pass a budget by the end of May and is hit with more credit rating downgrades, state lawmakers were warned this week.
John Miller, co-head of fixed income at Nuveen Asset Management, told a House committee on Thursday that reaching a balanced budget deal by May 31 is “absolutely critical” for the nation’s fifth-largest state.
He said the move could stabilize or improve Illinois’ triple-B credit ratings, which are two notches above junk and the lowest among U.S. states. Without a budget agreement, Illinois risks falling into junk, where the pool of investors willing or able to purchase its debt is much smaller, he added.
Miller said contagion from Illinois’ shaky credit standing has spread to other municipal bond issuers in the state, resulting in an extra $930 million in annual debt service paid statewide. […]
Records from S&P, Moody’s, and Fitch Ratings dating back about half a century or more show no states rated junk.
* Related…
* Illinois Issues: Fiscal Fantasy
posted by Rich Miller
Friday, May 12, 17 @ 9:11 am
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A property tax freeze and cuts to local government revenues will cure those bond rating concerns./snark
Comment by Dance Band on the Titanic Friday, May 12, 17 @ 9:37 am
“Excellent!” said Gov. Rauner. “All is going according to plan!”
Comment by Keyrock Friday, May 12, 17 @ 9:39 am
Question for Durkin/Radogno-
Why does Rauner desire junk bond status for his state?
Comment by Slippin' Jimmy Friday, May 12, 17 @ 9:42 am
An extra $930 million in annual debt service statewide.
That’s real money, that’s bread off your table, for nothing, It’s real, it was predictable, it was according to plan.
No dorm-room babbling can justify this robbery.
Comment by wordslinger Friday, May 12, 17 @ 9:43 am
Hey Rauner is just runnin’ the state like a business.
Comment by Anonymous Friday, May 12, 17 @ 9:50 am
Municipal BK is sounding very good right now.
Comment by Ron Friday, May 12, 17 @ 9:52 am
Sadly, Nobody really cares… Will anyone care around election time? Who??
Comment by Union Man Friday, May 12, 17 @ 9:54 am
The states financial issues are not BVR fault. The whole state has been in financial trouble due to the kick the can down the road strategy. Only the middle class and low income people are hurting due to decades of poor financial management and insider deals. Wealthy people can pay the higher taxes or just leave the state at a drop of a dime.
Comment by Rocky Rosi Friday, May 12, 17 @ 9:57 am
@- wordslinger - Friday, May 12, 17 @ 9:43 am:
An extra $930 million in annual debt service statewide.
===That’s real money, that’s bread off your table, for nothing===
Not quite for nothing. Rauner’s buddies are happy to soak up all the extra interest on the state bonds that we will have to pay.
Comment by DuPage Friday, May 12, 17 @ 10:01 am
http://www.governing.com/gov-data/state-municipal-bankruptcy-laws-policies-map.html
Comment by Ron Friday, May 12, 17 @ 10:03 am
Ron, your pleasure at the willful engineering of an extra billion in debt service to add pressure for muni bankruptcy is misanthropic.
That’s your troll-toll from me. So hi to the gang in Kopje..
Comment by wordslinger Friday, May 12, 17 @ 10:08 am
We’ve already established that these “structural reforms ” will have very little fiscal impact. 1.4%
So why create the hostage situation that spreads like a contagion the effects of which are ruining families, businesses and institutions? Over a million effected and that was almost a year ago.
Why?
1) Because Illinois is the test case for an ALEC Corporate fantasy take over plan.
2) because a majority of republicans now worship profit and narcissism in a religious manner. Don’t tell me there isn’t a Gospel, a divinity, an orthodoxy and Orthopraxy. I’d also in fairness say corporate neoliberal DEMS do the same. I was only half playing yesterday by saying they worship Mammon, the biblical God of wealth and materialism.
Adherents are absolutely willing to sacrifice our state to that God.
All their needs in negotiation go to large corporations and the owner/investor class. Prove me wrong.
That is religious Zealotry there.
“You shall know them by their fruits”
Comment by Honeybear Friday, May 12, 17 @ 10:11 am
Things are proceeding according to plan, for Bruce the bust-out king and the vicious nihilists who hate government and want to blow it up.
Bruce the bankrupter, folks. He’s doing it on purpose, believe me, okay?He’s wrecking the state so he and his paper-pushin’ supporters can feast on the wreckage. Sad!
“The states financial issues are not BVR fault.”
He’s the governor, and the state is far worse than before. He owns the status quo.
You really wanna know how phony he is and how he purposely evades responsibility? He said yesterday that he shares the frustration of those who booed him at CSU. It’s his standard cop-out phrase–sharing frustration. Dude, they were booing YOU.
Comment by Grandson of Man Friday, May 12, 17 @ 10:14 am
===“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
Comment by Oswego Willy Friday, May 12, 17 @ 10:20 am
Most states in the USA allow some form of municipal BK. Illinois needs to get on board.
http://www.governing.com/gov-data/state-municipal-bankruptcy-laws-policies-map.html
Comment by Anonymous Friday, May 12, 17 @ 10:21 am
Funny thing, many municipal financial challenges have nothing to do with state funding. Rather, pension obligations are choking these communities.
Comment by Downstate Friday, May 12, 17 @ 10:32 am
News flash: the reason the Governor had to move out of the Mansion was discovered today, when Squeezey the Pension Python was found on the Mansion’s second floor. 3 sources have told us that Gov. Rauner was secretly feeding the snake. It is now 40 feet long and leaving unpleasant remnants of its presence that are fouling the Mansion, and threatening to foul the entire state.
When asked for comment, the Governor said that only workers comp. reform and term limits could stop Squeezey’s growth.
Comment by Keyrock Friday, May 12, 17 @ 10:55 am
“corporate neoliberal DEMS do the same”
Sorry to digress, but some on the far left thought there was no difference between Trump and Clinton. Some thought Quinn was Koch brothers lite. To me these are extremists, and some could be so staunch as to cut people’s faces off to spite their noses. If they can’t see the difference–now–between Quinn and Rauner, and Trump and Clinton, then wow. Millions of people could lose health insurance, and public union fair share fees could be ended (among other harms), because theoretically to the likes of Cornell West, Susan Sarandon and Bernie bros, Democrats are not pure enough for them.
Comment by Grandson of Man Friday, May 12, 17 @ 11:11 am
Rauner can deny all he wants, spin all he wants. The Chicago State grads know who is to blame and said do. I don’t know any human service provider anymore that thinks he’s not to blame. Even my neighbors in my solidly red district know who is to blame. He is delusional if he thinks he gets re-elected without a budget.
Comment by CCP Hostage Friday, May 12, 17 @ 11:16 am
==many municipal financial challenges have nothing to do with state funding==
That’s not quite true. The current state of affairs certainly hasn’t helped local government finances. While it may not be a primary driver it has certainly exacerbated the situation.
Comment by Demoralized Friday, May 12, 17 @ 11:24 am
GoM, I wasn’t saying there was no difference between Trump and Clinton. But I also think that the Democratic Party had better address the free market neoliberalism pretty fast and not stifle honest open debate and dialogue about it. Worship of money and defining it as success is in my opinion a false God. And yes I have a huge problem with it when HRC was paid for a speech at Rauners investment firm whole he was running against Quinn. Was it 180000 or 280000 that she hot for it? Main Street not Wall Street is what I’m all about.
Wall Street and this Mammonism is what is behind
Health insurance
Behind anti Union efforts
Follow the money right back to Wall Street
I’ll proudly wear the label of extremist
And this whole purity thing is laughable
Establishment is just worried
I’m big into accountability for all
Including myself.
Comment by Honeybear Friday, May 12, 17 @ 11:36 am
Rauner sees himself as a persistent rascal who cannot be bargained with, pursuaded or insulted from his beliefs.
He’s our great white 19th century missionary, unmoved by tradition, customs, or beliefs of those he sees as ignorant heathens. Flatten the villages, sell off the assets, turn Illinois into a globally competative location that can compete with Macau, the Philippines, or Indiana by providing workers cheaper than found at the old Triangle Shirt Factory a century ago.
He sees us as needing his enlightenment, his salvation, and political enemies as wicked tribal chiefs.
He doesn’t care about state government - and he’s the governor! Why would he care what happens to municipalities, counties, or school districts?
Comment by VanillaMan Friday, May 12, 17 @ 11:53 am
Right before the election in 2014, Ken Griffin and Bruce Rauner made a $1 bet on whether Bruce could get the States bond rating status to junk within 4 years. When Bruce is involuntarily retired as Governor in 2019, he will collect on that $1 bet and then buy tons of those junk bonds at premium interest /s?
Comment by Ratso Rizzo Friday, May 12, 17 @ 11:59 am
“He is delusional if he thinks he gets re-elected without a budget.”
I’d think that reelection would be the motivating factor that would make Rauner agree to a budget. He’s not stupid–unless stupidity means extreme arrogance–thinkin’ he’d win without passing a budget.
If bankruptcy is his final aim, Rauner would be pleased with this news, the chain reaction of financial harm that spreads and affects local governments.
Honeybear,
I’m sorry and didn’t mean any offense. Lots of people courageously swallowed their beliefs and voted for Clinton in the General when Sanders was their choice.
I’m angry and frightened, too–frightened of millions of people losing health insurance, as imperfect as it is, and Medicaid. Atty. Gen. Sessions just announced that he directing prosecutors to push for maximum sentences. This scares and angers me.
Comment by Grandson of Man Friday, May 12, 17 @ 12:24 pm
Ratso- I hope the bet wasn’t with JB. Then they’d just be trading places.
Comment by Keyrock Friday, May 12, 17 @ 12:32 pm
honeybear, that’s quite the Bernie screed you got going on there. Too bad 95% of that is garbage.
Comment by Ron Friday, May 12, 17 @ 12:36 pm
=== Keyrock - Friday, May 12, 17 @ 12:32 pm:
Ratso- I hope the bet wasn’t with JB. Then they’d just be trading places.===
Touché
Comment by Ratso Rizzo Friday, May 12, 17 @ 12:42 pm
== Municipal BK is sounding very good right now. ==
That is exactly why a State imposed property tax freeze and the State slashing Revenue Sharing by more than a third are bad ideas. The State would be forcing municipalities into fiscal insolvency.
And I’m not 100% sure the State can arbitrarily impose a property tax freeze. If you look at the PTELL cap, it was / is adopted by referendum on a county by county basis. I would argue any freeze would have to be done the same way, and not allowed to be imposed by the State.
Comment by RNUG Friday, May 12, 17 @ 12:48 pm
GoM, my apologies as well. My words came off to harsh. Take heart! Momentum for change is gathering. It’s always darkest before dawn. We must must must learn our lessons and put people first. Main Street before Wall Street. People before profit.
Comment by Honeybear Friday, May 12, 17 @ 12:57 pm
Ron- your Lord Mammon calls you back to tend to your profits
Comment by Honeybear Friday, May 12, 17 @ 1:00 pm
Honeybear, my lord is my wife. Pretty simple life. No gods, no demons.
Comment by Ron Friday, May 12, 17 @ 1:40 pm
True, but far from the only way state dysfunction is hurting local governments.
Comment by Liandro Friday, May 12, 17 @ 3:52 pm
–True, but far from the only way state dysfunction is hurting local governments.–
A cool billion a year in unnecessary juice from local taxpayers to bondholders might be a good place to stop digging.
Unless, of course, the objective is to push local governments into financial distress and have them begging for the bankruptcy option.
They don’t make “fiscal conservatives” like they used to.
Comment by wordslinger Friday, May 12, 17 @ 4:05 pm
No one is allowed to be fiscally conservative because every “program” seems to be sacred these days. So BK is the best option to rationalize government spending.
Comment by Ron Friday, May 12, 17 @ 4:08 pm