The Land Of Lincoln May Soon Receive A Most Dubious Honor
Posted: 06-28-2017 01:26 AM
North America's Venezuela:
"Welcome To The Banana Republic Of Illinois"
On Track To Be First State With 'Junk' Credit Rating -
“We’re in a death spiral—Illinois has the worst pension crisis in the nation and needs the boldest reforms,” Ted Dabrowski, Illinois Policy Institute’s vice president of policy, told Fox News. “There is no doubt that junk bond rating is on its way.”
S&P Global Ratings has warned the agency will likely lower Illinois' credit rating to below investment grade if feuding lawmakers fail to agree on a state budget for a third straight year. Lawmakers are now in a special session in an effort to break the budget impasse, prodded by Republican Gov. Bruce Rauner, who has referred to his state as a “banana republic.”
The state currently faces $130 billion in unfunded pension obligations and a backlog of unpaid bills worth $15 billion. A downgrade to “junk” status would increase the cost of borrowing for critical infrastructure, or refinancing existing debt.
Even as some lawmakers see hope for a deal, if the budget fails, Illinois will—literally—lose the lottery.
Dabrowski said passing a budget would “stave off” the junk rating, but the pension crisis in the state could only be remedied by “bold reforms,” such as a transition from pensions to 401(k) plans. He said the state risks becoming the “financial deadbeat of the nation.”
FULL STORY
"Welcome To The Banana Republic Of Illinois"
On Track To Be First State With 'Junk' Credit Rating -
“We’re in a death spiral—Illinois has the worst pension crisis in the nation and needs the boldest reforms,” Ted Dabrowski, Illinois Policy Institute’s vice president of policy, told Fox News. “There is no doubt that junk bond rating is on its way.”
S&P Global Ratings has warned the agency will likely lower Illinois' credit rating to below investment grade if feuding lawmakers fail to agree on a state budget for a third straight year. Lawmakers are now in a special session in an effort to break the budget impasse, prodded by Republican Gov. Bruce Rauner, who has referred to his state as a “banana republic.”
The state currently faces $130 billion in unfunded pension obligations and a backlog of unpaid bills worth $15 billion. A downgrade to “junk” status would increase the cost of borrowing for critical infrastructure, or refinancing existing debt.
Even as some lawmakers see hope for a deal, if the budget fails, Illinois will—literally—lose the lottery.
Dabrowski said passing a budget would “stave off” the junk rating, but the pension crisis in the state could only be remedied by “bold reforms,” such as a transition from pensions to 401(k) plans. He said the state risks becoming the “financial deadbeat of the nation.”
FULL STORY