Illinois’ debt per student is the 11th highest of any state in the nation. It is almost 15 percent higher than the national average of $8,764.View Report
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.
Bailout bills moving in the Illinois General Assembly would attempt to turn Illinois’ massive debt problems into guaranteed profits for banks and bondholders and a lower standard of living for other Illinoisans.
Illinois has the lowest credit rating among the 50 states, forcing taxpayers to pay hundreds of millions of dollars more in borrowing costs than residents of states in better fiscal condition.
The most recent round of city borrowing is a sign of things to come.