Posted on 04/12/2020 9:15:37 AM PDT by george76
Illinois’ financial outlook was changed from ‘stable’ to ‘negative’ by two major ratings firms, raising the risk the state’s credit rating will formally fall to non-investment grade status..
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the state is actually paying higher interest on its debt today than it was in June 2017, according to Crain’s Chicago Business. When investors demand higher interest it generally reflects a higher risk that borrowers will default.
Illinois was the least prepared to weather a recession heading into the coronavirus crisis, with only about 15 minutes of state spending saved in a rainy day fund.
Lower credit ratings mean investors will demand higher interest payments to buy state debt, raising the cost of borrowing to taxpayers. In fiscal year 2020, Illinois will spend almost $2.1 billion on payments for existing bonds or over 5% of the state budget. Fiscally healthy Tennessee will spend just $327 million, or 0.8% of the state’s $40.8 billion budget, on debt service for the coming year.
Illinois’ worst-in-the-nation credit has been built during two decades of the state spending more than it brings in, driven primarily by the pension crisis. The state has been downgraded a total of 21 times since 2009.
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A drop to junk status would shock municipal bond markets nationwide, shaking investor confidence that state and local government debts are a secure investment. Credit ratings are a signal to investors about a borrower’s ability to meet its financial obligations. No U.S. state has defaulted, or failed to make payments, on its bonds since Arkansas in 1933.
(Excerpt) Read more at illinoispolicy.org ...
But just keep voting for Democrats, Illinois.
Pingo
Danger: Democrats in charge!!
When my home State finally crashes it’s gonna be epic.
I’m going to laugh my ass off.
L
And the idiot Governor just clamped down harder on their shutdown.
Yep, elections have consequences.
Danger: Democrats in charge!!
*****************
Sombody should design a “road sign” with appropriate icons for that.
The states have unlimited powers of taxation. I’m sure they can manage to stay solvent. If they find it unpleasant, well, maybe they’ll decide to cut spending again.
I would have done somas well. Even he can see the end is near and he’d like a head start.
As I keep saying to anybody in Ill-noize...get out now while you can. Move your business. Sell your house before your property value is destroyed a la Detroit. Its obvious what’s coming. They cannot cut back on the gold plated pensions and healthcare benefits they gave to public sector employees as per the state constitution. So they will just keep raising taxes and raising taxes until they kill off businesses and then people really flee the state in droves. That will kill property values. Don’t be the one stuck looking for a seat when the music stops. Get out now.
There is a reason that Foxconn built in Southern Wisconsin. They wanted to take advantage of flights into Chicago, but wanted to be outside of the permanent tax onslaught that is Illinois.
It’s never a Democrat’s fault, they’ll just find the nearest Republican to blame, and the press will happily oblige.
And just remember, when you move to wherever you go: We don't give a s___ how you did it in Illinois!
Same situation in NJ and neighboring NY.
A lot of people working remotely now will realize they don’t need to live in these places.
Surprise, surprise.
/Naught
Democrats ruin everything good.
The states have unlimited powers of taxation.
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Correct in theory. But meaningless if the tax base is shrinking.
They will raise property taxes, which is popular because they feel no one can pick up their house and move it out of state. But when the taxes render the property incapable of being profitable, landowners will walk away. Detroit was full of abandoned houses that no would buy even for a dollar, because they would also have to pay the back taxes on the houses.
with only about 15 minutes of state spending saved in a rainy day fund...
That should do :)
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