Unable To Pay Bills, Illinois Sends "Dear Contractor" Letter Telling Firms To Halt Road Work On July 1

Tyler Durden's picture

Authored by Mike Shedlock via MishTalk.com,

The state of Illinois has not passed a budget for close to three years.

Arguably it’s just as well because Illinois budgets for decades have been nothing but a moth-eaten collection of lies, one time deficits repeated endlessly, and financial wizardry statements designed to disguise Illinois’ real problems: failure to rein in spending coupled with a very business unfriendly environment.

As Illinois’ bond rating careens towards junk, Illinois Unpaid Bills Jumped to $14.3 Billion. Today, the state told contractors to halt roadwork other than that required for safety.

Dear Contractor

I do not have a link, but here is the letter in image form.

This does not raise much alarm in Illinois has these kinds of letters went out last year as well. It’s simply business as usual in Illinois.

My IDOT contact, who wishes to be left unnamed, reports …

Hello Mish

 

Last year when they did this the extra work bill to the state cost millions of taxpayer dollars. At the last minute, the shutdown was averted but not until the shutdown measures were employed and thus extra cost was due to contractors and consultants.

 

Look out for the Road Builders Association to come out with an estimate of what it will cost this time around after the letter today.

 

Last year, the supplier for paper and toilet paper had not been paid and thus various offices were reportedly cut off of supply. IDOT employees were going to have to work from home due to the potential unsanitary conditions.

Five Illinois Universities Rated Junk

Yesterday, the Illinois Policy Institute reported MOODY’S DOWNGRADES 7 ILLINOIS UNIVERSITIES, 5 ARE JUNK.

Everybody wants to blame the downgrades on the state’s current budget impasse. The stalemate of nearly two years has led to cuts in state appropriations to Illinois universities. But the universities’ financial difficulties started before the state’s budget gridlock and are largely of their own making. Illinois colleges and universities have long overspent on bloated bureaucracies and expensive compensation and benefits, prioritizing administrators over students.

 

For years, university and college officials across the state have hiked tuition to pay for administrative hiring sprees, generous executive compensation and out-of-control pensions. Their spending priorities distorted university finances long before the budget impasse began.

 

The number of administrators in Illinois’ universities grew by nearly a third (31.1 percent) between 2004 and 2010. At the same time, faculty only increased 1.8 percent, and the number of students only grew 2.3 percent.

Illinois Tuition Fees

Retirement Costs Soars

Blame Who?

It is easy to blame Governor Rauner, but he is last on my list. Illinois has been in trouble for decades. The state’s only solution has been to tax, and tax, and tax.

That is precisely the same position as Chicago Mayor Rahn Emanuel.

The result is easy to predict.

Illinois’ Economic Growth is Worse than During the Great Depression

Illinois’ total state economic activity has increased by only 4 percent since 2007, which is lower than the U.S.’ 10 percent GDP growth during the worst decade of the Great Depression according to the Illinois Policy Institute.

Illinois Employment

Feed Me

Illinois Debt Backlog

It took $31.6 billion of new tax revenue to reduce the backlog of bills by $1.3 billion. But the complete picture is much worse as Illinois’ pension debt rose more than $25B from 2010 through 2015.

Failed State

  1. On June 4, 2017, Politico reported How Illinois became America’s failed state.
  2. The Heratige Foundation beat Politico to the idea by a mile with its September 28, 2015 analysis Illinois: The Anatomy of a Failed Liberal State.
  3. The Chicago Tribune is behind the times with its January 3, 2017 analysis, Illinois in danger of becoming a failed state.

Illinois is not in danger of becoming a failed state, it is a failed state. I have been talking about this for years.

Five Desperately Needed Reforms

  1. Municipal bankruptcy legislation
  2. Pension reform
  3. Right-to-Work legislation
  4. End of prevailing wage laws
  5. Workers’ compensation reform

Number one on my list of Illinois reforms is bankruptcy legislation. It is the only hope for numerous Illinois cities whose hands are also tied by union-sponsored prevailing wage laws.

Despite massive gains in the stock market since 2009, Illinois pension plans have gotten deeper and deeper into the hole.

Even a modest pullback in the stock market will sink numerous Illinois pension plans. I expect much worse than a modest pullback.

Tax hikes are not the answer. Reform is the answer, and bankruptcy reform is at the top of the list.

Required Pension Contributions to Double or Triple

Inquiring minds will also wish to consider Required Pension Contributions of California Cities Will Double in Five Years says Policy Institute: Quadruple is More Likely.

The same fate or worse faces Illinois.

Madigan Sponsored Problem 

The problem is on Speaker Madigan’s side. He insists on tax hikes first and reforms second.

Governor Rauner has held out and I support that policy. Once the governor agrees to tax hikes, no reforms will ever take place.

Illinois is Bankrupt

Illinois is essentially bankrupt. Unfortunately, there is no provision for states to declare bankruptcy.

States can default, however, and default is an easy prediction for Illinois’ public union pensions.

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silvercity's picture

They know how to fix the roads properly, but doing it wrong pays so much more. Remember, the purpose of government; the only purpose of government is to spend your money!

itstippy's picture

IDOT has an absolutely mindblowing number of orange construction barrels.  Millions; maybe even billions.  Someone must have a sweetheart contract to supply orange construction barrels to the State Of Illinois.

They can't begin to store them all, so they warehouse them along the roads and pay contractors to move them about.  One drives past twenty miles of orange barrels, finally passes a "construction crew" of three guys wearing yellow hard hats leaning on shovels with two guys in white hard hats supervising them, and then another twenty miles of orange barrels.

Driving South from Wisconsin on I-94 you know when you've reached the Illinois state line because the orange barrels start.  They widen out after half a mile to accommodate the toll booth, then squeeze the lanes back down again until the next toll booth ten miles later.  

Illinois drivers are notorious for roaring along Wisconsin highways at breakneck speeds.  It's not that they're bad or reckless drivers; it's the sheer joy of freedom from orange barrels that makes them mash the accelerator down.  Former Illinois commuters, now retired in Florida, report "orange barrel" nightmares for years after they've left the state.

silvercity's picture

Thanks for the laugh, and yes it is true even in the metro-east of St Louis.

helloimjohnnycat's picture

Each barrel will make a splendid personal flotation device suitable for a one-way trip back to da' Mudderland !

gnomewhutimsayin' ?

Pumpkin's picture

Fiat causes rot.  It will only get worse.

withglee's picture

Fiat causes rot.  It will only get worse.

Tell us what your alternative to "fiat" is. Tell us how it works.

Budnacho's picture

Well it's called "Gold" and you see with a limited supply they can no longer do what they do with FIAT....create out of thin air. 

Worked for over 8,000 years....Gold...pretty nifty shit!

Scuba Steve's picture

Or at least fiat backed by that nifty shit (among maybe some other PMs)

withglee's picture
Scuba Steve Budnacho Jun 15, 2017 12:11 PM

Or at least fiat backed by that nifty shit (among maybe some other PMs)

Show us the case what that was ever true. I was there in 1964,1965 when it was demonstrated not to be true. They removed the silver content from the coins completely ... and nothing changed ... they still traded for exactly the same amount of gasoline.

I was there in the early 70's when the French called their bluff ... and proved it not to be true ... and bingo, all of a sudden two times as many dollars are need to trade for an ounce they claimed as backing. Some backing.

How in the world can something for which there is only 1oz per person on earth back all money. That's less than $2,000 in today's dollar terms ... chump change.

Stupid is as stupid thinks. Can you get the money you spent on the seminar back? Ask them for it in PM just for grins.

silvercity's picture

Gold never worked. Look at the Spanish Empire after they got all that New World gold.

withglee's picture

ilvercity Budnacho Jun 15, 2017 1:10 PM

Gold never worked. Look at the Spanish Empire after they got all that New World gold.

Actually it did work in another time and another place ... as the money changer's con in that time and place. It worked for them to front run traders, maintain their farming operation, and demand tribute.

But it was never money.

Our current dollar really is money ... very very bad money with a designed in 4% leak from an "improper" MOE (Medium of Exhcange) process ... instituted by the money changers for the money changers at the expense of traders.

Enough is enough.

 

marathonman's picture

Gold, silver, copper, brass, and lead.  All are elements of 'sound' money.

withglee's picture
marathonman Budnacho Jun 15, 2017 4:05 PM

Gold, silver, copper, brass, and lead.  All are elements of 'sound' money.

All are just stuff. Just "elements" on the periodic table of elements (except brass). They have never been money and never will be money. They are just stuff.

Money is obviously and provably "an in-process promise to complete a trade over time and space". It is created by traders ... and only by traders. It is destroyed by traders when they deliver as promised ... or reclaimed when defaulted by interest collection of like amount.

When a trade involves those so-called "elements of sound money", that trade is not longer in process. It is complete. It has been delivered as promised ... on-the-spot. Time and space are not involved at all. Therefore it is "not" money.

At best it is a clumsy, expensive, inefficient, trade restraining, stand-in for money ... and it's always at the wrong place at the wrong time.

withglee's picture
Budnacho withglee Jun 15, 2017 11:23 AM

Well it's called "Gold" and you see with a limited supply they can no longer do what they do with FIAT....create out of thin air. 

Right. "They", traders, can no longer trade over time and space because that trade would be restrained by the fact that there is only 1oz of gold per person on earth ... less than $2,000 in dollar terms. Chump change. Wake up stupid!

Money is "an in-process promise to complete a trade over time and space". It is created by traders making promises (out of thin air) and getting them certified. You do it when you buy something on time. The money changers have brainwashed you into calling that a loan, as if it's from them. It's not ... it's "you" creating money.

Worked for over 8,000 years....Gold...pretty nifty shit!

Ah ... nothing like religion for the truly stupid!

Spine of Ruprecht's picture

Religion.?  You must have full faith and credit!  Peace, and properity!  It is the will of Landru!

 

https://www.youtube.com/watch?v=nZMuBIJxmnA

withglee's picture
Spine of Ruprecht withglee Jun 15, 2017 9:33 PM

Religion.?  You must have full faith and credit!  Peace, and properity!  It is the will of Landru!

 

https://www.youtube.com/watch?v=nZMuBIJxmnA

You don't become right by citing something else that is also wrong ... and also pretty religious in nature.

I didn't view your video. I'm out of Bytes for this month.

withglee's picture

Seashells.

They would work if they weren't so easy to counterfeit (i.e. just pick up without certification). They're not quite as simple as our government's counterfeiting operation ... but right up there with it.

helloimjohnnycat's picture

Fast answer is an easy solution....

 

Fiat is fine as long as no joos are folding the paper !

withglee's picture

Fast answer is an easy solution....

Fiat is fine as long as no joos are folding the paper !

Meaning????

Spine of Ruprecht's picture

Meaning say what you mean and quit pretending you're Aristotle.  Gawwwwd.

withglee's picture
Spine of Ruprecht withglee Jun 15, 2017 9:05 PM

Meaning say what you mean and quit pretending you're Aristotle.  Gawwwwd.

If that was your intent, your reply should have been to yourself ... not me. I always say what I mean.

Dusty Rhodes' Muffler's picture

Signed papers on my new Home in SEMO today...hey, Illinois, go fuck yer Mother, yeah?

JailBanksters's picture

Too bad the Government can't create their own debt free money,

instead they have to pay interest to a private bank for creating money out of thin air so they can loan it to the Government.

Where does the Government get the money to pay the Interest, they borrow it from the same bank.

 

 

 

Spine of Ruprecht's picture

I have full faith and credit.  How can you be a pessimist in the shade of full faith and credit?

Sparehead's picture

Your jest reminds me of the airhead "journalist" that did a piece about how the dollar was backed by the full faith and credit of the US while gold was backed by nothing. You don't even need to be a gold bug to appreciate that one. I did a hasty search for the clip, but not surprisingly it's gone. http://www.naturalnews.com/033740_gold_journalism.html#

JailBanksters's picture

The US Dollar is backed up by Guns, Tanks and Missiles, just ask Hussain or Ghadafi, Oops you can't they were whacked.

Ever wonder why the US spends more on Military than the next top 10 countries of the World.

The greatest threat to the US is not a Guy on Camel, but those that refuse to trade with other countries without using US Dollars.

 

withglee's picture
JailBanksters Jun 15, 2017 10:34 AM

Too bad the Government can't create their own debt free money,

Governments are instituted by money changers for money changers. They create money just like other traders like you and me ... well, not exactly like you and me ... they never deliver on their trades. They just roll them over and that is default ... perpetual default is counterfeiting.

"All" money is debt (an in-process promise to complete a trade over time and space). And that's not bad. Not mopping up defaults with interest collections of like amount ... that is what is bad. It has governments financing themselves with inflation.

instead they have to pay interest to a private bank for creating money out of thin air so they can loan it to the Government.

It's not interest. Interest just reclaims defaults. It is "tribute". And the money changers don't create money ... only traders do.

Where does the Government get the money to pay the Interest, they borrow it from the same bank.

All the money collected by governments in the form of taxes, fees, etc. goes to the money changers as their demand for tribute. All governments are therefore sustained only on counterfeiting. It is how the money changers designed it and it is working splendidly ... as do all Ponzi schemes until they quit working.

Iterative secession. It's way overdue.

farflungstar's picture

Crippling debt and usury: Palms a-rubbin', comin' & a-goin'

silvercity's picture

They can create their own debt free money. Jfk proposed doing so before they killed him.

JailBanksters's picture

Sure, ever wonder who really ordered JFK fet whacked

adr's picture

It costs more to pay for Mrs. McShitty's retirement than three or four working teachers in their 20s. Retired teachers also like to double or triple dip as substitutes.

Being 55 and pulling in $70k a year to shit on her ass and maybe add another $25k as a part time sub is a great gig for a woman that probably couldn't hack a job in another sector.

Most of these retired teachers are also helping to fuel the house flipping con game, since they know they will get another $100k next year, they all start flipping homes to be like their heroes on HGTV.

Fuck retired teachers. Give them the ultimatum, you take a 50% pension cut or you get nothing. Sadly that still won't balance the problem and put pension plans in the black. Getting $25-30k a year for a retired teacher is more than enough. My local school district won't pay a new teacher more than $25k a year and their benefits are cut to almost nothing.

I'm also tired of hearing them complain about how hard their jobs are. YOU WORK JUST OVER HALF THE YEAR AND FEWER HOURS PER DAY THAN ANYONE ELSE!!!! Other than maybe bank tellers, but that has changed now that most banks are open until 5 or 6.

Hey teacher, you want to try and produce a product line and come up with sales strategies to make money in a dying market? Do you want to deal with overseas factories everyday? Teaching is a cakewalk compared to most other jobs. By the way, my wife is a teacher and yes, she couldn't do what I do in a million years even if she went to college and studied it for 20 years.

markar's picture

Can't do. It's written in the IL constitution. They are truly fucked.

Scuba Steve's picture

They can and will as soon as the hammers start falling ... like the dude said above, they wont escape, their pension will take a haircut like everyone elses.

kumquatsunite's picture

You forgot...all the teachers now simply stand in front of the class and rotely repeat the lesson; there is no "learning" going on. The number of illiterates moved to the next grade (not my problem!) is astounding. 

Plus, all these so-called teachers take majority of pass/fail classes/pedagogy in college. They couldn't teach if their lives depended on it. Unfortunately, it is the lives of the youth who are destroyed by the non-education.

jmfortz's picture

As you know James Hodgkinson was from Illinois.  do you suppose this incompetent democrat-run State drove him over the edge?

Korprit_Phlunkie's picture

Yes, but he was weak minded and believed it was TRUMP and republicans fault and all along it was demon rats and HIS OWN fault.

Kprime's picture

he was taxed to death, just needed a bullet to get some sleep. sleep deprivation will drive you nuts.  speaking of nuts, perhaps .gov should start handing out snickers bars to calm the slaves.

withglee's picture

Arguably it’s just as well because Illinois budgets for decades have been nothing but a moth-eaten collection of lies, one time deficits repeated endlessly, and financial wizardry statements designed to disguise Illinois’ real problems: failure to rein in spending coupled with a very business unfriendly environment.

All is well in all Ponzi schemes ... until it is no longer well. When the money changers lose control of the governments they institute for their own protection, well... it's just a matter of time.

Iterative secession. And after that, I'll find a space with no money changers and no government ... just principles and pockets of democracy where it works ... with 50 people or less. It will have a "proper" MOE (Medium of Exchange) process instituted by responsible traders for responsible traders.

silvercity's picture

Eventually the Federal Courts will re-negotiate the Ill. pensions. What cannot continue, won't. I live in Ill. and when bankruptcy, by any name, occurs I will be only minimally affected, just like most citizens of Ill. Those with state pensions and those who own municipal bonds will be hurt badly.

withglee's picture

Eventually the Federal Courts will re-negotiate the Ill. pensions. What cannot continue, won't. I live in Ill. and when bankruptcy, by any name, occurs I will be only minimally affected, just like most citizens of Ill. Those with state pensions and those who own municipal bonds will be hurt badly.

Right. Tell that to the people in Weimar Germany. Read "When Money Dies" by Ferguson. Heck, tell it to the people in Venezuela right now. Re-examine your premises. I suspect in Illinois, like everywhere, more than half of the entire population works for government or is dependent on government. That's not minimal effect, even on those who aren't in that 1/2. The others need to trade with that half

OKUSA's picture

It starts at the top. Most counties, municipalities, etc are just doing what the fed gov does. Eventually we will all be taxed until there is nothing left. It will truly be interesting to see how gov continues to function when people just cannot pay anymore.

SpanishGoop's picture

I think it will be more interesting if people refuse to pay anymore.

 

SpanishGoop's picture

Pam R. Simon Director

Office of Business and Workforce Diversety.

 

Just fire his (or her) ass to start with and a couple more of those jobs and there will be plenty of money for some asphalt.

 

 

Korprit_Phlunkie's picture

Diversity, inclusion, sustainability, are buzzwards that mark the downfall of America and then the world.

GunnyG's picture

Just raise taxes. That seems to be the universal panacea for the Liberal morons in the Blue States.

Sparehead's picture

Better make sure your Mad Max machines can handle the Illinois wasteland roads.

innertrader's picture

So that's why everyone is buying huge trucks with huge tires and wheels!!!

SETH RICH!

TRIUMPH with TRUMP!!!

 

 

innertrader's picture

THE DEMOS are destroying, or have destroyed, this country and will do ANYTHING to prevent TRUMP from saving it!!!  Not surprising that soetoro's political base was Chicago AND that he isn't a Citizen!  We stand up now or it's over, period!!!  Thank GOD for TRUMP!!!

My advice would be to move to TEXAS. ZERO STATE INCOME TAX!!!

 

SETH RICH!

TRIUMPH with TRUMP!!!