States with a progressive income tax see greater income inequality, and have seen income inequality rise faster than states without a progressive income tax.View Report
One rating agency cited Illinois’ “persistent crisis-like budget environment” as explanation for the state’s near-junk credit. A spending cap constitutional amendment and pension reform could go a long way toward putting the state on a healthier fiscal path.
Record-breaking borrowing to fund Illinois' even more massive pension debt is no real solution to the state's pension problem.
S&P Global Ratings has warned that Illinois’ bond sale to help pay old bills could merely add more debt to Illinois’ burden if the state does not also enact fiscal reforms.
House Bill 3004 would have put banks and bondholders ahead of taxpayers and those who rely on government services. But Gov. Bruce Rauner’s amendatory veto strips the bill of those bailout provisions.
Of the three major ratings agencies, only Moody’s Investors Service has indicated that Illinois lawmakers’ lack of long-term solutions for reducing that debt is a severe problem.
Chicago Mayor Rahm Emanuel expressed little concern over Moody’s Investors Service’s announcement that it might downgrade Chicago’s already-junk-rated bonds over CPS budget problems.
Illinois’ bond rating may not be junk, but the state’s finances still are.
Chicago Public Schools has issued an additional $500 million in long-term high-interest bonds, following $387 million the district borrowed from JPMorgan in June.
In two separate deals with JPMorgan, CPS borrowed $387M to make a teacher pension payment at end of June and as a result of the deal, will accumulate at least $7M in interest.
Illinois’ bonds are currently priced like they are junk-rated.