Latest Post | Last 10 Posts | Archives
Previous Post: Another hostage on death’s door
Next Post: Support House Bill 40
Posted in:
* From the public finance/muni bonds reporter for Debtwire Municipals…
#Illinois in an “ominous situation” now approaching service level insolvency due to lack of budget, says S&P analyst at 2017 outlook forum.
— Caitlin Devitt (@Caitlindevitt) March 9, 2017
In re Illinois downgrade to junk: "Nothing is off the table … we think it’s very impt the state reach a budget agreement" says S&P analyst
— Caitlin Devitt (@Caitlindevitt) March 9, 2017
posted by Rich Miller
Tuesday, Mar 14, 17 @ 9:17 am
Sorry, comments are closed at this time.
Previous Post: Another hostage on death’s door
Next Post: Support House Bill 40
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
Service level insolvency…definition please.
Comment by TinyDancer(FKASue) Tuesday, Mar 14, 17 @ 9:23 am
Mostly because we are a willing deadbeat . Last weeks report put us at 126 billion in debt about 10k percapita and 20 % of gdp compared to an average of 29% for all states.
Comment by illinois manufacturer Tuesday, Mar 14, 17 @ 9:23 am
Governor should figure out how to provide all the services that statute says “shall” be provided. A budget sure would help.
Comment by Anonymous Tuesday, Mar 14, 17 @ 9:27 am
Do these folks mean budget or tax increases.?
Comment by Blue dog dem Tuesday, Mar 14, 17 @ 9:29 am
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.
Comment by Norseman Tuesday, Mar 14, 17 @ 9:31 am
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.
Comment by Archiesmom Tuesday, Mar 14, 17 @ 9:32 am
== Rauner was going to run Illinois like a business. ==
He is. It’s a bust-out operation.
Comment by RNUG Tuesday, Mar 14, 17 @ 9:33 am
RNUG - what’s the statistic? Oh yeah, 80% of businesses fail. Shucks.
Comment by Hambone Tuesday, Mar 14, 17 @ 9:38 am
—
He is. It’s a bust-out operation.
—
What I’d like to see is a comparison between Rauner’s method’s here — and Rauner running his previous “successes.”
My guess is that the methodologies are exactly — exactly — the same. Run the business into the ground, say bye-bye to the employees, and then pocket whatever’s left.
Contracts? Vendors?
See you in court. I’m outta here.
Comment by Mr. K Tuesday, Mar 14, 17 @ 9:40 am
===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.])
Comment by Ducky LaMoore Tuesday, Mar 14, 17 @ 9:40 am
@TinyDancer(FKASue)
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.
Comment by BK Bro Tuesday, Mar 14, 17 @ 9:40 am
And that’s assuming you have the workers to do the job.
Rauner has ruined us
Comment by Honeybear Tuesday, Mar 14, 17 @ 9:54 am
I see a new entry on the “Illinois budget impasse” page on Wikipedia
Comment by Rabid Tuesday, Mar 14, 17 @ 10:00 am
Honeybear,
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.
Comment by Maximus Tuesday, Mar 14, 17 @ 10:03 am
== 80% of businesses fail. ==
If you’re going to quote it, get it right: 80% of NEW (startups) businesses fail.
Illinois isn’t a new business.
Comment by RNUG Tuesday, Mar 14, 17 @ 10:11 am
== Granted, he hasn’t helped but this problem has been building for a long, long time. ==
Rauner has, arguably, accelerated the failure.
Comment by RNUG Tuesday, Mar 14, 17 @ 10:12 am
@BK Bro
=When the government collects taxes=
Ah…..there’s the rub.
Comment by TinyDancer(FKASue) Tuesday, Mar 14, 17 @ 10:13 am
Madigan and the Credit Agencies He Controls
Comment by Dee Lay Tuesday, Mar 14, 17 @ 10:20 am
===arguably===
No argument about it.
Comment by Rich Miller Tuesday, Mar 14, 17 @ 10:22 am
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
Comment by Annonin' Tuesday, Mar 14, 17 @ 10:23 am
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.
Comment by word Tuesday, Mar 14, 17 @ 10:29 am
I blame Mike Madigan and the S&P he controls.
Comment by Juvenal Tuesday, Mar 14, 17 @ 10:30 am
===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.
Comment by Ducky LaMoore Tuesday, Mar 14, 17 @ 10:40 am
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?
Sure we were crappy before
Now we are a steaming pile of dysfunction.
Rauner took it all the way
Comment by Honeybear Tuesday, Mar 14, 17 @ 10:46 am
@Annonin’
Nice. Yeah Illinois doesn’t have an legitimate financial problems. Blame the evil rating agencies!
Comment by BK Bro Tuesday, Mar 14, 17 @ 10:59 am
” … approaching service level insolvency …”
The state has long been insolvent by any regularly accepted definition of insolvency.
Comment by Deft Wing Tuesday, Mar 14, 17 @ 11:11 am
Conservative friends: How is that flat tax and big tax cut workin out?
Comment by Liberty Tuesday, Mar 14, 17 @ 11:15 am
Well, that flat tax thingy is in the constitution. So there’s that. And as to a tax cut … Not sure what you’re referring to there. When was there a tax cut?
Comment by Deft Wing Tuesday, Mar 14, 17 @ 11:33 am
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?
Comment by Honeybear Tuesday, Mar 14, 17 @ 11:41 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.
Comment by Last Bull Moose Tuesday, Mar 14, 17 @ 11:42 am
“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.
Comment by Annonin' Tuesday, Mar 14, 17 @ 12:08 pm
Governor, you can’t handle the job. Please resign, take Slip ‘N Sue with you.
Comment by DuPage Tuesday, Mar 14, 17 @ 1:07 pm
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.
Comment by the Cardinal Tuesday, Mar 14, 17 @ 1:31 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.
Comment by facts are stubborn things Tuesday, Mar 14, 17 @ 1:32 pm
Yuge tax increase coming! Glad I out of Chicago.
Comment by AtsuiTX Tuesday, Mar 14, 17 @ 2:47 pm
“Balanced” Illinois budgets got us here….
And Honeybear, we’ve been a steaming pile for a long time, it was just hidden in plain sight behind a pile of underfunded pensions. Everyone’s equally culpable.
And even if this path was accelerated by Rauner, so what? We were on it. Why kick the problems that much further down the road to toward the next generation that didn’t create it???
Comment by Shemp Tuesday, Mar 14, 17 @ 3:46 pm
== Granted, he hasn’t helped but this problem has been building for a long, long time. ==
== Rauner has, arguably, accelerated the failure. ==
This here by RNUG is correct. He did inherit a huge pension debt, but the backlog of bills went from 4.5b to 12b, not only under his watch, but because of his approach.
Comment by Nikolas Name Tuesday, Mar 14, 17 @ 4:45 pm
Annonin’ do you disagree with that substitution? Imagine Slip & Sue up on top of one of those three-story billboards put up alongside the hard road.
Comment by Arthur Andersen Tuesday, Mar 14, 17 @ 7:45 pm