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* The state’s bill backlog as of yesterday was $14.5 billion.
That backlog is “headed in the direction of being a factor that just by itself really threatens the sort of financial foundations of the state,” Ted Hampton, Moody’s lead analyst on Illinois, said in an interview, citing litigation from those demanding payment. “There is kind of an uncertain but very real legal and political limit to the state’s ability to keep deferring payments.”
* More…
“We are probably approaching that point of impaired ability to function at basic level,” said John Humphrey, the Chicago-based head of credit research for Gurtin Municipal Bond Management, which oversees about $10.1 billion of state and local debt and has steered clear of Illinois. “We’ve already probably passed that point. We haven’t seen this in a modern state before.” […]
Bond-rating companies have warned of further ratings cuts, signaling that Illinois could be the first state since at least 1970 to lose investment-grade status. […]
Despite the gridlock, Illinois hasn’t missed any bond payments and state law requires it to continue making monthly deposits to its debt-service funds. Still, the fighting has impeded any progress on bolstering a state retirement system that has more than $129 billion of unfunded liabilities — a source of stress that has helped drive its rating down.
posted by Rich Miller
Wednesday, May 31, 17 @ 9:13 am
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Time to re-run that commercial of Rauner criticizing the governor for his ineptness leading to numerous credit downgrades!
Comment by Norseman Wednesday, May 31, 17 @ 9:16 am
“We’ll have to destroy ya to save ya”
Comment by Anonymous Wednesday, May 31, 17 @ 9:18 am
OOps, that comment was from retired guy ~ We’ll have to destroy ya to save ya”
Comment by retired guy Wednesday, May 31, 17 @ 9:19 am
Hard to believe Rauner can look Illinoisans in the eye and say it’s all been worth being the first governor in 198 years not to manage enacting a budget. Surely to god the sane members of the business community don’t think it. And, where will they stand come next year?
Comment by Moe Berg Wednesday, May 31, 17 @ 9:20 am
Reform!
Shake it up!
Hang in there!
Is that better now?
Comment by wordslinger Wednesday, May 31, 17 @ 9:20 am
Isn’t this what every aspiring governor would aim to accomplish? Destruction of the state he/she runs? Quite the fait accompli! He’ll go down in history as a great one! /s
Comment by AnonymousOne Wednesday, May 31, 17 @ 9:22 am
MJM …it is better to deal with the Devil you know than the one you don’t.
Comment by Texas Red Wednesday, May 31, 17 @ 9:24 am
“Mission accomplished:”
B. Rauner June 2017
(Illinois’ very own economic hit man.)
Comment by TinyDancer(FKASue) Wednesday, May 31, 17 @ 9:32 am
===The comptroller has estimated that the state will owe at least $800 million in interest and fees on overdue bills by the end of June.===
This seems like a high cost for the tax payers of Illinois for the current situation. I wonder how much more a bond rating downgrade into ‘junk’ territory will cost the taxpayers?
Comment by Hit or Miss Wednesday, May 31, 17 @ 9:35 am
===That backlog is “headed in the direction of being a factor that just by itself really threatens the sort of financial foundations of the state,”===
Bruce and Diana Rauner are getting the best return for that campaign money.
The legacy of the RaunerS will be the deception they made, in money and ads they both participated, and the glory of their well-executed plan to destroy a state, it’s social services, and the state universities… all in TWO years.
Thank you Diana and Bruce, you made quick work of your mission.
Comment by Oswego Willy Wednesday, May 31, 17 @ 10:01 am
One option that had been available to our public colleges and universities was to sell bonds to balance the greatly reduced support from the state. This has helped some survive to this point.
Yet, this only adds to the ultimate cost of attendance which makes out of state colleges more attractive.
Investors who have these bonds are doing well, and expecting that they will eventually be paid.
I have been willing to make an investment in bonds offered by UIUC but EDJONES does not even offer these to their clients because of their ratings.
Comment by illini Wednesday, May 31, 17 @ 10:06 am
We didn’t have a governor presenting new sources of state revenue and budget cuts to offset the decrease in revenue that occurred after the expiration of the 5% income tax.
A real governor would have had a plan when he cut the state revenue. We didn’t have a governor, instead we had Bruce Rauner.
Rauner used this disaster to push for extreme reforms he didn’t campaign on, or received a mandate to do. His “Turnaround Agenda” was not budget related and hence failed to address the budget crisis foremost in Illinois.
Rauner failed to provide immediate budgetary remedies to address the growing budgetary crisis. Without leading, Illinois went leaderless after 2015.
Rauner now wants us to reelect him to finish a job, he never started, and worse, allowed to explode during his administration, hoping it would create political opportunities for his unwanted agenda.
Regardless of intent, Rauner failed to govern as promised, failed to work within government to sell his policies, failed to compromise, and failed to lead. Every governor needs temporary agreements and fixes to lead a government towards their policy goals. Sadly, Rauner denounced this proven technique as “duct tape”, completely failing his supporters.
Comment by VanillaMan Wednesday, May 31, 17 @ 10:08 am
The Dems continue to lay low - afraid of voters and corporate media that don’t know the difference between paying your past due bills & spending.
Comment by Deadbeat Conservative Wednesday, May 31, 17 @ 11:08 am
Bruce Rauner’s Illinois: Past the point of “impaired ability to function at basic level.”
And all in two years.
“We haven’t seen this in a modern state before” says Moody’s.
Moody’s Mr. Rauner.
Comment by 37B Wednesday, May 31, 17 @ 1:01 pm
Duh!? $120 billion in pension obligations is ok, but $15 billion in IOU’s is death?
Comment by blue dog dem Wednesday, May 31, 17 @ 1:29 pm
–$120 billion in pension obligations is ok, but $15 billion in IOU’s is death?–
You could take a course at your community college and they could explain the difference between long-term liabilities and operating deficits.
Kind of like the difference between your mortgage balance and being short on the grocery and utility bills.
Comment by wordslinger Wednesday, May 31, 17 @ 1:34 pm
- You could take a course at your community college -
Probably not for long.
Comment by Daniel Plainview Wednesday, May 31, 17 @ 1:36 pm
…kinda like your mortgage balance and being short on the grocery and utility bills.
My engineering degree from the U of I-C really has a hard time distinguishing a difference. Your talent at explaining things would be greatly appreciated. Thanks.
Comment by blue dog dem Wednesday, May 31, 17 @ 2:30 pm
Laughing—–pension obligations that has caused stress
Well…….yeeeesssss. Especially when everyone wants to play the lawsuit game by introducing bills that take years to get a ruling in court vs taking action to pay down that debt and attack the problem.
Paying our debt obligations to those who have served us gradually but proactively would go a long way toward solving a myriad of problems.
Comment by Anonymous Wednesday, May 31, 17 @ 2:47 pm