The state of Illinois is a fiscal disaster no funding for schools no funding for road repair no funding for all of the essentials needs of the people who reside in this state and yet these politicians both democrat and republican continue to sit at the table and continue to get nothing done here are the particulars to their arguments and considering the fact that this state hasn't had a budget in 3 years it's a sad case
The Democratic-controlled Legislature's vote last week to create a $36 billion framework over Republican Gov. Bruce Rauner's vetoes ended the nation's longest fiscal stalemate since at least the Great Depression. At the core of the budget was a $5 billion income tax increase.
The tax hike is retroactive to July 1, and the state could start seeing some additional money within weeks. But after unchecked "autopilot" spending that outstripped incoming revenue by $600 million a month, Illinois has a $14.7 billion jumble of overdue bills.
The tax increase also does nothing to directly address the haunting, $130 billion shortfall in pension obligations to retired and current state workers.
The debt-reduction plan also includes more debt, although slightly less costly. It allows Rauner to sell up to $6 billion in bonds, on top of the $30 billion the state already owes from past loans. The idea is the interest owed on bonded indebtedness would be less than what is owed on overdue bills. The state must pay 1 percent per month on any bill unpaid for 90 days.
But while less, the state can expect to pay double what a more financially sound state would pay on bond-sale interest — as low as 2 percent. That's because the state's creditworthiness has been downgraded amid the budget crisis. On a $480 million sale last fall, the state is paying 4.2 percent, and that was before major credit-rating agencies knocked down the rating further. One, Moody's Investors Service, said a downgrade to "junk" status could come regardless of a budget deal.
More immediately, Democratic Comptroller Susana Mendoza predicts there will be enough money to cover basic services in August; she had warned that without a deal, she would fall $185 million short. If added income tax revenue isn't sufficient, the law allows for borrowing or otherwise taking $1.5 billion from money accumulated in state funds created for other purposes.
Mendoza said in a YouTube video that she would begin by paying bills that draw matching dollars from the federal government, such as those covered by the Medicaid health care program. Bills with high late payment interest also get priority.