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TOP OFFICIAL: State of Illinois in Massive Financial Crisis Mode

Posted on Sunday, 18th June 2017 @ 05:29 PM by Text Size A | A | A

 
Susana Mendoza

Illinois Comptroller Susana Mendoza is warning that new court orders in lawsuits filed by state suppliers that are owed money mean her office is required to pay out more than Illinois receives in revenue each month. This means there would be no money left for so-called “discretionary” spending — a category that in Illinois includes school buses and some ambulance services. “I don’t know what part of ‘We are in massive crisis mode’ the General Assembly and the governor don’t understand. This is not a false alarm,” said Mendoza. “The magic tricks run out after a while, and that’s where we’re at.”

As I have previously pointed out, Illinois already has $15 billion in overdue bills and the lowest credit rating of any state, and Moody’s has warned it will downgrade the rating to “junk” if there’s no budget before the next fiscal year begins July 1.

Though such a crisis is fundamentally about out of control spending, to some degree what you have in Illinois is a Republican governor going up against a Democratic legislature.

Chicago Magazine explains:

[Governor Bruce] Rauner’s political weaknesses also gave Democrats incentive to resist him. “Mitch McConnell is one of the smartest political minds of his generation,” [political consultant Thomas]Bowen says. “He correctly identified that if you break anything, it hurts the leader of the government. That’s what he understood. The evidence is that the executive wears the jacket. Rauner’s biggest failing is that if there’s no budget, it’s his fault. He thinks he can blame [Speaker Michael] Madigan; that’s not what voters think.”

Democrats have reason to believe that 2018 will be an extremely advantageous year for them because of the national political situation. Midterms are always difficult for the party in power, and Donald Trump’s waning popularity and the tumult within his administration suggest an even worse map than usual. In other states with Republican legislatures, that could be offset by favorable maps, but in Illinois it could easily cut the other way. It’s not inevitable, and voter anger over the impasse could hurt Democratic legislators. But, the anticipation of a leftward swing gives Democrats an incentive to resist compromise.

So a major political standoff in an odd way, in the short-term, is shrinking the Illinois government. That’s the short-term.  in the longer-term, it could mean bankruptcy for the state, much higher taxes or both.

 –RW

 

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