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..
...
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.
...
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 ...
Good advice.
This will not end well.
I’m surprised NY has an AA+ still.
who’s rating these things? :)
Can’t they just Raise Taxes???
This is when Thousands of Lawyers start brushing up on Chapter 9 of the Bankruptcy Code. Lots of States are poised to go bankrupt and hopefully wipe out their unsustainable PENSIONS!!!
For all its flaws, New York has a very strong pension system. Your biggest problem is future health care costs for government retirees, but that’s a problem that every state faces in one form or another.
Same here and the people who keep voting for democrats....all they are doing is praising this lunatic in charge of the state. I just do not understand my friends and family.
NY and other big cities is not far behind, lets get rid of these rat corrupt scumbags
I did no know that. Thanks for the info.
Illinois (Chicago/’Cook County) has been “junk” for decades.
I love a happy ending.
Truer words...
Venezuela in the viewfinder.
Socialists want your money, your children, your wife or your life in no particular order.
When the Dems decided to play the "shut down the economy" card - they weren't bright enough to run through the unintended consequences...
And the Dems are playing "chicken" with their property tax money machines - the schools and the teachers.
People are going to start wondering why they're paying for buildings that can't be used, because they're pestilence factories.
"It is to laugh." - those wild & crazy Czechs.
“Can’t they just Raise Taxes???”
Raise taxes or “rendition” some seniors...oh...wait...
You get what you vote for. People are just fidiotic or just don’t care.
The problem is that states themselves cannot declare bankruptcy, just subdivisions thereof. Congress would need to amend the code first.
Governor FatAss Prickster is doing this all deliberately to pass his “progressive income tax” without voter consent. Watch.
You know, the fat, POS Prickster is about one ham sammich away from literally exploding. I hope he eats that ham sammich today.
And still, insane public union pensions will be left unscathed.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.