“The Market Seems Unimpressed with Quinn’s Plans”

  by Mark Cavers Last week Bloomberg News reported that bond markets are reacting poorly to Governor Quinn’s tax and spend approach. Rather than putting the state back on firm ground, we are in a more precarious position then we were four months ago. From the Bloomberg article: “The market seems unimpressed with Quinn’s plans. The extra yield investors...

by Mark Cavers
Last week Bloomberg News reported that bond markets are reacting poorly to Governor Quinn’s tax and spend approach. Rather than putting the state back on firm ground, we are in a more precarious position then we were four months ago. From the Bloomberg article:

“The market seems unimpressed with Quinn’s plans. The extra yield investors demand to hold an Illinois state general obligation bond maturing in May 2024 rather than top-rated debt has risen 38 basis points since Jan. 3, according to a Bloomberg Valuation index. For Wisconsin, whose Governor Scott Walker has promised a smaller government, the so-called spread on a general obligation bond maturing in June 2022 has fallen 7 basis points over the same period.”

The failure to reform spending has driven up the cost of borrowing for the State and without a commitment to drawing down spending our fiscal health will continue to deteriorate and the cost of borrowing will continue to rise. The Institute has presented an alternative budget that is balanced without borrowing or the recently passed tax hike and is a major step towards fixing our states finances.

You can read the full Bloomberg News article here.