Illinois Death Watch Continues…
by John Rubino via DollarCollapse.com,
ZeroHedge.com
Jun 19, 2017
It’s been a long time coming, but Illinois’ slow-mo financial disaster is now front page news. A few recent examples:
Roadwork Could Shut Down Across Illinois Due To Budget Impasse
(Chicagoist) – Roadwork across Illinois may grind to a halt at the end of June due to the continued state budget impasse, a representative for the Illinois Department of Transportation (IDOT) announced Wednesday. IDOT will be unable to pay contractors on July 1, unless the state passes a stopgap funding measure.
IDOT has told contractors that “all construction work is to shut down on June 30,” according to a statement. “Contractors will be advised to secure work zones to ensure their safety during any potential shutdown.”
Illinois has gone almost two full years without a state budget, which has hit education funding throughout the state and generated more than $14 billion in unpaid bills.14
Summer is both a high-volume construction season and a vaguely ominous time to cease road repairs; just last week, IDOT released a statement warning that the heat could lead to pavement “buckling or blowing out.”
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Powerball, Mega Millions to Halt Illinois Lottery Due to State’s Inability to Pay Winners
(Mish) – Both Powerball and Mega Millions Lotteries Will Pull Out of Illinois on June 30 due to the budget impasse.
Without a budget in place, the state is not authorized to make payments to the association or Mega Millions.
Lottery proceeds are about 2% of state revenue. Speaking of revenue corporate income tax collection is down 41.3%. Sales taxes are flat. How is this supposed to work?
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Could Illinois be the first state to file for bankruptcy?
(CBS) – Illinois residents may feel some solidarity with the likes of Puerto Rico and Detroit.
A financial crunch is spiraling into a serious problem for Illinois lawmakers, prompting some observers to wonder if the state might make history by becoming the first to go bankrupt. At the moment, it’s impossible for a state to file for bankruptcy protection, which is only afforded to counties and municipalities like Detroit.
Chapter 9 bankruptcy protection could be extended to states if Congress took up the issue, although Stanford Law School professor Michael McConnell noted in an article last year that he believed the precedents are iffy for extending the option to states. Nevertheless, Illinois is in a serious financial pickle, which is why radical options such as bankruptcy are being floated as potential solutions.
Ratings agency Moody’s Investor Service earlier this month downgraded Illinois’ general obligation bonds to its lowest investment grade rating, citing the state’s growing pile of unpaid bills and its mounting pension deficit. Illinois, by the way, has the lowest credit rating of any state. Lower ratings mean higher borrowing costs, since lenders view such borrowers as riskier bets.
“Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance, allowing a backlog of bills to approach $15 billion, or about 40 percent of the state’s operating budget,” the agency noted.
As noted by the Fiscal Times, Illinois is the only state that’s been operating without a balanced and complete budget for almost two years.
“We’re like a banana republic. We can’t manage our money,” Gov. Bruce Rauner said after the Illinois Legislature failed to produce a full 2017 budget earlier this month.
Two Big Questions
The Rest…HERE
