Illinois State Official: “We Are In Massive Crisis Mode, This Is Not A False Alarm”

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It is no suprise to most, that the state of Illinois has been struggling for some time now to pay its bills. Currently, Illinois faces over $15 billion in backlogged bills. The state hasn’t had a budget in the last three years. This is soon going to cause a ratings downgrade to junk – FIRST EVER in US STATE HISTORY!

Recently a judge ruled that the state is violating consent decrees and previous orders, and instructed the state to achieve “substantial compliance with consent decrees”, further pressuring its financial situation.

In a last attempt to resolve the ongoing budget impasse, Illinois Gov. Rauner ordered lawmakers to return for a special session this week, but the two sides still seem far apart. Republican Gov. Bruce Rauner ordered the special session starting Monday, as the backlog of unpaid bills reaches $15.1 billion.

Gov. Rauner is urging everyone “to get serious and get to work“.

Here’s a little background information to get you up to speed:

The problem is for more than 30 years, the Democrats and House Speaker Michael Madigan have controlled our General Assembly and the spending in Illinois. Unfortunately, for most citizens in Illinois, Speaker Madigan’s loyalty lies to the Democratic Political Machine in Chicago, not the citizens of Illinois.

Speaker Madigan believes the solution is higher taxes to support greater spending. Madigan and the Illinois Democrats would rather hold the schools and government hostage to force a massive tax hike than try and curtail spending. It’s the insanity of that thinking that has put Illinois into it’s current financial mess and major debt of $15 BILLION.

Yes, Illinois currently has a Republican Governor, Bruce Rauner. However, everyone knows the legislature is run by Democrats and the likes of Michael Madigan, who have veto proof and a super-majority in both houses. Democrats effectively run Illinois and have for years.


In 2015, over 22,000 people left the state. In the Chicago area alone there were over 6,000 residents who moved out of state!

Illinois has one of the worst ranked states for unemployment. The Land of Lincoln has been hemorrhaging residents because of punishingly high workers’ compensation costs and soaring property-tax bills. Many businesses are treading water or performing triage.

Illinois is home to some of the highest property taxes in the nation, according to the nonpartisan Tax Foundation.

Compared with pre-recession levels in January 2008, Illinois has 90,000 fewer manufacturing jobs.

Illinois companies, including steel fabricators, train-car manufacturers, and welding companies, save almost $10 million in premiums every year just by moving to Indiana.

Chief Executive Magazine’s “2014 Best and Worst States for Business” report ranked Illinois 48th out of 50, with many CEOs venting their opinions on why wrote:

Corruption and union pensions have made Illinois a poor alternative for business. Continually avoiding [addressing and fixing]the problems have only exacerbated the situation. 

Illinois is rated in the worst category; their taxing scheme is deleterious toward small business … The Illinois House assembly is inept in addressing the hard issues.… They are a taxing and spending machine with little regard to the consequences and impacts to its citizens and businesses.

Illinois is a horrendous state in which to do business. It is governed by a class of incompetent, corrupt politicians. It’s like doing business in a third-world country.

And then there’s the matter of property taxes, which are the second-highest in the United States.

Finally, there’s Michael Madigan, Speaker of the Illinois House and chairman of the state’s Democratic Party. Speaker Madigan is the longest-serving speaker in state history and is referred to as the “Velvet Hammer — a.k.a. the Real Governor of Illinois.”

Gov. Bruce Rauner is pushing a property-tax freeze and workers’ compensation reform to bring costs in line with those in peer states. But Illinois House Speaker Mike Madigan has repeatedly dismissed these calls for reform as “nonbudgetary,” and thus not worthy of discussion.

As long as Madigan is owned by the AFL-CIO, the Illinois Education Association, the Illinois Federation of Teachers, the Chicago Teachers Union, and, of course, the SEIU — the Service Employees International Union — which have been successfully funding his reelection campaigns for years residents of Illinois won’t see any change.

As a result, Illinois has at least $111 billion in unfunded pension liability, not counting liability for health costs – about one dollar in four collected by the state is paying for public-sector pensions.

In addition, property taxes are so high in Illinois that 34 percent of households in the state spend more than 30 percent of their income on housing. As Illinois Policy expressed it, taxes are “like a second mortgage,” averaging $3,939 a year, the second highest in the nation, and only $32 below New Jersey, the country’s worst offender.


Currently, the state Transportation Department said it would stop roadwork by July 1 if Illinois entered its third consecutive fiscal year without a budget – the longest such stretch of any US state – while the Powerball lottery said it may be forced to dump Illinois over its lack of budget. For now, state workers have continued to receive pay because of court orders, but school districts, colleges and medical and social service providers are under increasing strain.

And yet, despite the sharp selloff in Illinois GO bonds which some had expected could force the two sides to reach a bargin, neither the Democrat-led legislature, nor Governor Bruce Rauner appear closer to a consensus. Which probably explains today’s Associated Press “shock piece” exposing just how serious the situation could become in under two weeks absent a resolution.

It focuses on State Comptroller Susana Mendoza – who has had the unenviable job of essentially sitting at the kitchen table trying to figure out how to pay the bills – who is warning that the previously discussed 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. That means there would be no money left for so-called “discretionary” spending – a category that in Illinois includes school buses, domestic violence shelters 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, a Chicago Democrat.

The magic tricks run out after a while, and that’s where we’re at.

As AP sums it up, “it’s a new low, even for a state that’s seen its financial situation grow increasingly desperate”, a state which has a website dedicated to tracking the daily amount in overdue bills…

… and has the lowest credit rating of any state.

 Lawmakers from both parties have acknowledged Illinois needs to raise taxes to make up for revenue lost when a previous tax hike expired, leaving the state on pace to take in $6 billion less than it is spending this year — even without a budget.
Here’s Illinois’ Gov. Rauner calling for a Special Session to Pass a Budget:


The state of Illinois is in an unprecedented crisis. A serious financial crisis and debt that has been ignored and pushed down the road for too long.

The state of Illinois must change it’s direction if it wishes to solve its current and historical debt at hand. As Governor Rauner states, “Everyone needs to get serious and get to work.”

Republicans have layed out a compromised budget plan to reduce wasteful spending in the state of Illinois. There is a serious sense of urgency at hand.

However, it’s hard for any citizens in Illinois to expect significant changes, as long as, the ‘Velvet Hammer’ or Democratic Speaker Madigan is in charge in Illinois.

H/T Zero Hedge


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