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What’s the “real” deadline?

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Illinois

That raises the question: What is the real deadline for the Legislature to approve a budget and stave off further financial disaster, now that the June 30 deadline has passed and the state has entered its third consecutive year without a real budget?

The real deadline, if there is one, exists only in the minds of two people, Gov. Bruce Rauner and House Speaker Michael Madigan, who don’t want the rest of us to know what it is because it might weaken their negotiating position.

I personally would think it is 8 a.m. Wednesday, July 5, the day after the holiday, when Wall Street gets back to business.

That would seem to be the earliest the bond rating agencies would lower the boom on Illinois and throw the state into junk bond status over its incompetent governance.

The ratings agencies had threatened to reassess the state’s bond rating as early as Saturday, and there’s nothing that says they will wait, but the betting around here is that the long holiday weekend provides a little more time.

If there’s no real progress demonstrated today, all heck might break loose in New York tomorrow, even though the ratings agencies are closed. We’ll see.

posted by Rich Miller
Sunday, Jul 2, 17 @ 12:45 pm

Comments

There are likely two speeches at the bond agencies ready to go based on either income. Even on a holiday, it doesn’t take much to hit the “send” button.

Comment by A guy Sunday, Jul 2, 17 @ 12:56 pm
I meant outcome. That may have been a Freudian slip there. lol

Comment by A guy Sunday, Jul 2, 17 @ 12:56 pm
Playing chicken with Wall Street. What could possibly go wrong?

Comment by Bruce(no not him) Sunday, Jul 2, 17 @ 12:56 pm
The real deadline in a couple of weeks when the state starts skipping the GSA payments to school districts.

Comment by Dance Band on the Titanic Sunday, Jul 2, 17 @ 1:16 pm
I don’t understand the point of delaying further at this late stage. Perceived leverage/pressure?

Comment by Moby Sunday, Jul 2, 17 @ 1:18 pm
Real deadline is when enough schools can’t open (or keep open) their doors in August or September. Rating downgrade isn’t enough of a pressure point.

Comment by Deadline Daddy Sunday, Jul 2, 17 @ 1:23 pm
The deadline was 2 days ago. A judge told the comptroller to come up with an extra couple hundred million per month, and that money doesn’t exist. The choice now is: increase income taxes to a moderate amount comparable with most other states, or watch IL residents die from lack of medical care or housing, like in medieval times.

Comment by Three-Finger Brown Sunday, Jul 2, 17 @ 1:46 pm
The real deadline passed on Friday with Lefkow’s ruling. Good luck coming up with those payments regardless of whether the new tax rates are appoved

Comment by Sue Sunday, Jul 2, 17 @ 1:47 pm
The “real deadline” passed two years ago. We are now experiencing the “or else” portion of the equation.

Now it’s just about the varying levels of pain thresholds for members, leaders and the Governor. But don’t kid yourself, the real deadline is well behind us.

Comment by A guy Sunday, Jul 2, 17 @ 1:53 pm
Deadline for road construction is 7am Wednesday morning. No IDOT budget means no road construction.

Comment by Huh? Sunday, Jul 2, 17 @ 2:04 pm
The real deadline is August 2017. That is when K-12 schools opens their doors for the new year.

Comment by Mama Sunday, Jul 2, 17 @ 2:52 pm
If this gets to the point that the state misses GSA payments to schools, a handful will start to skip bill payments to vendors in order to conserve cash to make payroll, pension, and benefits payments. Bond payments are on auto pilot for schools.

Two months without GSA (4 payments) and an educated guess is between 20 and 50 schools cannot stay open. Every missed set of GSA payments will add 20 to 50 districts.

Fall property tax payments will help but that will be short lived.
By then something will have happened I suspect. But it would be ugly.

Comment by JS Mill Sunday, Jul 2, 17 @ 3:23 pm
“I personally would think it is 8 a.m. Wednesday, July 5, the day after the holiday, when Wall Street gets back to business.”

Whenever the bond traders get back to work is the date. Why wait until July 5th? This is a golden opportunity to make a lot of money, unless you are an Illinois taxpayer who will pay dearly for the lack of a budget.

Comment by Small town taxpayer Sunday, Jul 2, 17 @ 3:27 pm