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Illinois moves closer to becoming first ‘junk’ state with negative credit outlook
Illinois Policy Institute ^ | April 12, 2020 | Adam Schuster

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 ...


TOPICS: Business/Economy; Crime/Corruption; Extended News; Government; News/Current Events; US: Arkansas; US: California; US: Illinois; US: Indiana; US: Michigan; US: New Jersey; US: New York; US: Tennessee; US: Wisconsin
KEYWORDS: chicago; credit; debt; economy; illinois; municipalbonds
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To: FLT-bird

Good advice.
This will not end well.


21 posted on 04/12/2020 9:31:37 AM PDT by Lurkinanloomin (Natural Born Citizens Are Born Here of Citizen Parents_Know Islam, No Peace-No Islam, Know Peace)
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To: dfwgator

I’m surprised NY has an AA+ still.

who’s rating these things? :)


22 posted on 04/12/2020 9:33:51 AM PDT by dp0622 (Radicals, racists dont point finges aat me I'm a small town white boy Just tryin to make ends meet)
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To: george76
"Illinois moves closer to becoming first ‘junk’ state with negative credit outlook"

That's another trick biden learned from obama.
23 posted on 04/12/2020 9:36:27 AM PDT by clearcarbon
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To: george76

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!!!


24 posted on 04/12/2020 9:53:20 AM PDT by eyeamok
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To: dp0622

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.


25 posted on 04/12/2020 9:56:50 AM PDT by Alberta's Child ("And somewhere in the darkness ... the gambler, he broke even.")
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To: Lurker

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.


26 posted on 04/12/2020 9:58:18 AM PDT by hsmomx3
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To: george76

NY and other big cities is not far behind, lets get rid of these rat corrupt scumbags


27 posted on 04/12/2020 9:58:46 AM PDT by ronnie raygun
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To: Alberta's Child

I did no know that. Thanks for the info.


28 posted on 04/12/2020 10:00:06 AM PDT by dp0622 (Radicals, racists dont point finges aat me I'm a small town white boy Just tryin to make ends meet)
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To: george76

Illinois (Chicago/’Cook County) has been “junk” for decades.


29 posted on 04/12/2020 10:03:09 AM PDT by Bonemaker (invictus maneo)
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To: george76

I love a happy ending.


30 posted on 04/12/2020 10:03:18 AM PDT by kiryandil (Chris Wallace: Because someone has to drive the Clown Car)
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To: FLT-bird
Don’t be the one stuck looking for a seat when the music stops. Get out now.

Truer words...

31 posted on 04/12/2020 10:05:55 AM PDT by kiryandil (Chris Wallace: Because someone has to drive the Clown Car)
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To: From The Deer Stand
Danger: Democrats in charge!!

Venezuela in the viewfinder.

32 posted on 04/12/2020 10:09:14 AM PDT by Don Corleone (The truth the whole truth and nothing but the truth)
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To: george76

Socialists want your money, your children, your wife or your life in no particular order.


33 posted on 04/12/2020 10:11:38 AM PDT by PGalt
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To: kearnyirish2; FLT-bird
A lot of people working remotely now will realize they don’t need to live in these places.

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.

34 posted on 04/12/2020 10:12:26 AM PDT by kiryandil (Chris Wallace: Because someone has to drive the Clown Car)
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To: eyeamok

“Can’t they just Raise Taxes???”

Raise taxes or “rendition” some seniors...oh...wait...


35 posted on 04/12/2020 10:13:43 AM PDT by PGalt
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To: george76

You get what you vote for. People are just fidiotic or just don’t care.


36 posted on 04/12/2020 10:16:38 AM PDT by shanover (...To disarm the people is the best and most effectual way to enslave them.-S.Adams)
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To: eyeamok

The problem is that states themselves cannot declare bankruptcy, just subdivisions thereof. Congress would need to amend the code first.


37 posted on 04/12/2020 10:20:10 AM PDT by socalgop
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To: Lazamataz

Governor FatAss Prickster is doing this all deliberately to pass his “progressive income tax” without voter consent. Watch.


38 posted on 04/12/2020 10:28:53 AM PDT by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: Lazamataz

You know, the fat, POS Prickster is about one ham sammich away from literally exploding. I hope he eats that ham sammich today.


39 posted on 04/12/2020 10:29:32 AM PDT by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: george76

And still, insane public union pensions will be left unscathed.


40 posted on 04/12/2020 10:29:45 AM PDT by 2banana (My common ground with islamic terrorists - they want to die for allah and we want to kill them.)
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