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July 6, 2022

Is Congress paving way for Illinois to file Bankruptcy?

By Kirk Allen & John Kraft

On June 15, 2017

Illinois (ECWd) –

We want to first make it very clear, we have yet to get anyone to go on the record pertaining to the information we are going to share, thus, we cannot validate the information.  That being the case, we are simply informing our readers of what is being shared with us from multiple sources and only time will tell if this information is true.

According to unnamed sources, we have been told that the US Congress is workings towards passage of a bill that would allow Illinois and others to file bankruptcy. Such a bill may not be all that different than that found in the Purto Rico bankruptcy that recently took place.  A claimed reason for the bankruptcy push, according to persons unwilling to go on the record, is because the State of Illinois is having a hard time selling bonds.

A quick review of the Illinois website on bonds reflects the last issuance of General Obligations bonds was in October of 2016 for $1,303,145.00. With a General Assembly that can’t pass a budget, bond ratings next to junk, back due bills of $15,106,335,665.00, and pension obligations of $203 Billion according to Illinois Policy and $250 Billion according to Jeffrey Brown, a financial economist at the University of Illinois, it becomes clear the state is facing financial calamity. 

Compound that financial typhoon with the fact the Illinois investment portfolio is of only $13,864,344,339.79,  it’s no wonder Congress may be prepping Bankruptcy rules to bail out Illinois and other states. 

Our source has cited at least fives states making the push for such legislation.  Illinois, California, New Jersey, New York, and Michigan.

Although we believe bankrupcty will lead to even greater financial concerns for those that are effected, all the indicators are, Bankrupcty is coming to Illinois.

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18 Comments
  • Dwight KAy
    Posted at 14:26h, 15 June

    People and businesses leaving Illinois in big numbers – that’s revenue lost. But even if people and businesses were not leaving, it is not possible to dig out of the ditch Mike Madigan’s team has put Illinois in. There is no economist that holds any financial hope for Illinois’ ability to work itself out of a disaster 40 years in the making. The idea of increasing income tax 5.3B is not sufficient
    to even consider it working cash. Its over!

    • Homer
      Posted at 18:32h, 15 June

      40 yrs wow let’s think a minute how many republican governors did we have during this time

      • Richard Davis
        Posted at 06:30h, 16 June

        Considering that Jim Edgar left the State in the black, we’ve had 1 Republican and 2 Democrats to run this state into the ground.

      • Eric
        Posted at 08:12h, 16 June

        It’s silly to count repub vs.dem. governors over the last 40 years. It doesn’t matter who the governor is when you’ve had dem. super-majorities in the statehouse virtually the entire time.

        Votes for democrat legislators were bought and paid for with unrealistic and unpayable pension benefit promises. The long term has now arrived. This is Illinois blow-up year.

        • George Hanshaw
          Posted at 11:27h, 16 June

          All anyone needs to do is divide a $250 billion pension liability by 12.8 million people to see the impossibility of anything BUT bankruptcy. How many times in the past 20’years have we NOT run a deficit, covered up with shorting the pension funds or selling bonds? With that track record, who really expects us to be able to our away a SURPLUS of a quarter trillion dollars?

  • Jannie
    Posted at 14:26h, 15 June

    It doesn’t make sense that they don’t have some sort of budget – why not just follow the same budget they had previous, or previous to when the extra tax we paid expired. No one seems to be watching spending. It’s a mess.

    • Mark Glennon
      Posted at 19:05h, 15 June

      It’s actually unavoidable that they don’t have a budget — at least a real one. There’s not one to be had. Truly balancing it would require impossible, absurd tax increases.

  • Mike Duff
    Posted at 14:56h, 15 June

    The state failed to pay $9.1B interest that was due on a Pension Obligation Bond, You don’t
    recover from that and all the other long term debt.

  • Mark Glennon
    Posted at 18:48h, 15 June

    I think it’s a mistake to say bankruptcy is a bailout. Illinois is now a drag on the national economy. Bankruptcy requires no taxpayer money from the US. On the contrary, giving it a fresh start through bankruptcy would increase taxes paid from IL to the US and reduce dependence on safety net programs here. Fail to authorize bankruptcy and there would be some pushing for a real bailout.

    • George Hanshaw
      Posted at 11:09h, 16 June

      I don’t think a bailout would really be possible. If it were done for Illinois, Connecticut, New Jersey, New York, and California would all be on that bandwagon.

  • Danni Smith
    Posted at 20:50h, 15 June

    I favor bankruptcy. It will end the engorged gub employee payroll and end their obscene pensions. It is the only solution, unless of course you want to raise my property tax to the same due amount as the value of my home and my state income tax to 100%. Who has been in denial? Not I. I have said for several years we ARE bankrupt, just not calling it that-calling it , “raise taxes”. I think by October 1, 2017.

  • Richard Davis
    Posted at 06:32h, 16 June

    What will filing bankruptcy solve? With Democrats in charge, in 30 years well be right back where are now.

    • George Hanshaw
      Posted at 11:05h, 16 June

      That actually might be true, but all the bond holders and pensioners getting stiffed does sort of restore the discipline of the marketplace. Union workers are less likely to give time, effort, and money to politicians who can’t deliver on their promises and bond buyers aren’t going to loan money to states they believe are cooking the books – at least not after they’ve already been burned once.

  • Ri
    Posted at 06:36h, 16 June

    Interesting to see the states wanting to file bankruptcy are all controlled by Democrats.

  • Rick
    Posted at 09:08h, 16 June

    Silly to blame state workers for election of dems. About half are R’s so that amounts to around 35,000 votes that were “bought”.

  • Rory Steidl
    Posted at 10:22h, 16 June

    Consider the impact when the state doesn’t pay its obligations, to anyone? Not to the small vendors who have employees and families, not to the large companies, not to any one. Consider the credit rating and the resulting borrowing cost to the state – and all of us – after declaring bankruptcy. Responsible legislative leadership is the only answer. If you think that bankruptcy will result in financial hardship only to state employees and retirees…you are a fool. Bankruptcy is simply a green light to continue doing the things that got us here in the first place. It fixes nothing. Wake up.

  • George Hanshaw
    Posted at 10:56h, 16 June

    Like Puerto Rico, at this point there is very little choice. It’s no longer a matter of politics or even economics, it is simple math. You cannot squeeze the needed money from 12.8 million (and falling) people and you will simply drive away the ones who can afford to leave (who in this case happen to be the ones we most need) if you try.

  • Mike
    Posted at 01:46h, 21 June

    Add $40B for State of Illinois GO Capital, Special Purpose, & Pension Obligation Bond debt service (principal & interest) payable from 2017 – 2042.

    http://www.illinois.gov/gov/budget/capitalmarkets/Documents/Bond%20Sale%20Disclosures/2016/November%202016%20GO%20DS%20Disclosure.pdf

    http://www.illinois.gov/gov/budget/capitalmarkets/Pages/BondSaleDisclosures.aspx

    Tollway is probably additional.

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