For years, it was conventional wisdom that the most financially-challenged state in the US – whether it comes to overall debt burden, outlays, tax collections, underfunded pension and retirement obligations, or simply credit rating – was Illinois, followed closely by New Jersey in second place.
Submitted by Mark Glennon of Wirepoints
An audible gasp went out in the breakout room I was in at last month’s pension event cosponsored by The Civic Federation and the Federal Reserve Bank of Chicago. That was when a speaker from the Chicago Fed proposed levying, across the state and in addition to current property taxes, a special property assessment they estimate would be about 1% of actual property value each year for 30 years.
Evidently, that wasn’t reality-shock enough. This week the Chicago Fed published that proposal formally. It’s linked here.
It surely ranks among the most blatantly inhumane and foolish ideas we’ve seen yet.
Illinois is drowning under a mountain of debt, unpaid bills and underfunded pension liabilities and it’s largest city, Chicago, is suffering from a staggering outbreak of violent crime not seen since gang wars engulfed major cities from LA to New York in the mid-90’s. Here is just a small taste of some of our posts on Illinois’ challenges:
Given that, it’s hardly surprising that the Prairie State lost a net 33,700 residents in fiscal year 2017, according to the Census Bureau. Also not surprising is the fact that the mass exodus from Illinois was the largest of any state in the country with lower taxed, lower cost of living states like Texas and Florida posting the biggest gains.
Illinois is chasing a moving target as it tries to dig out of the nation’s worst budget crises, and a review obtained by The Associated Press shows $7.5 billion worth of unpaid bills — as much as half the total — hadn’t been sent to the official who writes the checks by the end of June.
Although many of those IOUs have since been paid, a similar amount in unprocessed bills has replaced them in the last three months, Comptroller Susana Mendoza‘s office said Monday. That’s in addition to $9 billion worth of checks that are at the office but being delayed because the state lacks the money to pay them.
Continue reading “WHO WOULD DO BUSINESS WITH THE STATE OF ILLINOIS?”
Authored by Adam Andrzejewski via Forbes.com,
The ‘Big Dogs’ of local government in Illinois.
Illinois is broke and continues to flirt with junk bond status. But the state’s financial woes aren’t stopping 63,000 government employees from bringing home six-figure salaries and higher.
Whenever we open the books, Illinois is consistently one of the worst offenders. Recently, we found auto pound supervisors in Chicago making $144,453; nurses at state corrections earning up to $254,781; junior college presidents making $465,420; university doctors earning $1.6 million; and 84 small-town “managers” out-earning every U.S. governor.
Guest Post by Martin Armstrong
Illinois House had voted 72-45 to pass a 32% income tax hike as government refuses to address the real issue of a never-ending need for more and more tax revenue to keep state employees rolling in their pensions. The governor vetoed the tax increase and he was overriden.
Continue reading “Illinois – Poster Child for the Coming Sovereign Debt Crisis”
First Maine, then Connecticut, and finally late on Friday, confirming the worst case outcome many had expected, Illinois entered its third straight fiscal year without a budget as Republican Governor Bruce Rauner and Democratic lawmakers failed to agree on how to compromise over the government’s chronic deficits, pushing it closer toward becoming the first junk-rated U.S. state.
By the end of Friday – the last day of the fiscal year – Illinois legislators failed to enact a budget, and while negotiations continued amid some glimmers of hope and lawmakers planned to meet over the weekend, the failure marked a continuation of the historic impasse that’s left Illinois without a full-year budget since mid-2015, and which, recall, S&P warned one month ago will likely result in a humiliating and unprecedented downgrade of the 5th most populous US state to junk status.
Then came the begging.
Guest Post by Patrick J. Buchanan
If Gov. Bruce Rauner and his legislature in Springfield do not put a budget together by Friday, the Land of Lincoln will be the first state in the Union to see its debt plunge into junk-bond status.
Illinois has $14.5 billion in overdue bills, $130 billion in unfunded pension obligations, and no budget. “We can’t manage our money,” says Rauner. “We’re like a banana republic.”
Speaking of banana republics, Puerto Rico, which owes $74 billion to creditors who hold its tax-exempt bonds, and $40 billion in unfunded pension liabilities, has already entered bankruptcy proceedings.
The island’s imaginative 38-year-old governor, Ricardo Rossello, however, has a solution. Call Uncle Sam. On June 11, Rossello held a plebiscite, with a 23 percent turnout, that voted 97 percent to make Puerto Rico our 51st state.
