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

Tyler Durden's picture

Last week we reported that as Illinois, a state which now faces over $15 billion in backlogged bills, struggles over the next two weeks to somehow come up with its first budget in three years ahead of a June 30 fiscal year end, and faces an imminent ratings downgrade to junk - the first ever in US state history - traders finally puked, sending the yield on its bonds surging after a judge ruled at the start of the month 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 ditch attempt to resolve the ongoing budget impasse and prevent a potential crisis, which may culminate with an eventual default by the distressed state, yesterday the WSJ reported that 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.

“Everyone needs to get serious and get to work,” he said in a video announcing the session that his office posted on Facebook.

As reported previously, 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 Republicans 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.

That, however, is being blocked by Rauner, who wants Democrats to approve changes he says are needed to improve Illinois’ long-term financial health before he’ll support a tax increase. Among them are "term limits for lawmakers, a four-year property tax freeze and new workers’ compensation laws that would reduce costs for employers." Democrats have balked at the full list, saying they’re willing to approve some items on Rauner’s list, but that what he’s demanding "keeps changing or goes too far and would hurt working families." Senate Democrats also note that they approved a $37 billion budget with $3 billion in cuts and an income tax increase in May. The House has not taken up that plan.

In a scenario reminiscent of ongoing events in insolvent Greece, state funding has been reduced or eliminated in areas such as social services and higher education. Many vendors have gone months without being paid. And increasingly, they’re filing lawsuits to try to get paid. As discussed last week, the courts already have ruled in favor of state workers who want paychecks, as well as lottery winners whose payouts were put on hold. Transit agencies have sued, as has a coalition of social service agencies, including one that’s run by Rauner’s wife. Health care plans that administer the state’s Medicaid program also asked a federal judge to order Mendoza’s office to immediately pay $2 billion in unpaid bills. "They argued that access to health care for the poor and other vulnerable groups was impaired or “at grave risk” because the state wasn’t paying providers, causing them to leave the program."

As one after another deadline looms, on June 7, Judge Joan Lefkow ruled that Illinois isn’t complying with a previous agreement to pay the bills and gave attorneys for the providers and the state until Tuesday to work out a level of payment.

Meanwhile, comtroller Mendoza says whatever that amount will be, it will likely put Illinois at the point where 100 percent of revenues must be paid to one of the office’s “core priorities,” such as those required by court order. And if this lawsuit doesn’t do it, the next court ruling against the state will.

In other words, the already insolvent state is about to be slammed with another deluge for bills which it can't pay. Then, she’s not sure what will happen, other than more damage.

“Once the money’s gone, the money’s gone, and I can’t print it,” Mendoza said, perhaps envious of the residents of the Marriner Eccles building who have never faced a similar predicament.

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IntTheLight's picture

The ruling class that you abhor is intentionally flooding white countries, 8% of the world's population, with third world parasites. And those parasites are incapable of caring for themselves, much less creating functioning societies.

All races are not equal. I can differentiate between a pit bull and a Labrador. Humans also can be differentiated by breed. Why can't you understand that?

new game's picture

stacker, simple shit maynard, they have a mental disease. now how is that cured?

entitlement mentality fostered by politicians for votes. it is in the 8th inning and the score inticates no extra innings.

i know the answer, do you? appease the fuckers with some platitude statement? sure that works...

so who is going to repair the roads? hmmmm. simple solution. no check unless you report to the road crew...

soup lines(ebt cards). simple solution. get off your ass and report to the training center for a work appretice job learning to run equipment to fix roads and build infastructure.

apply this nationwide and wow, problem solved.

or send them to afganistan(lol).

Fuelling Chaos's picture

Which are you.. mindless pit bull or thoughtful, beneficial to society Lab

IntTheLight's picture

Pit bulls are not mindless but are very aggressive animals that you don't want near children.

stacking12321's picture

there's a huge difference between being able to differentiate between people from different backgrounds, and making an effort at every turn to foster hatred against other people.

why can't you understand that?

i'm against the globalists flooding europe with refugees, btw, and i'm against their welfare state.

that doesn't mean i support jubal's psychopathy and vile brand of hatred, which is a mental sickness.

Anon2017's picture

Too bad Illinois and Chicago had so many corrupt white Christian politicians over the decades. 

Antifaschistische's picture

What I find that the Obama/Hillary/DNC machine, continues to be SOOOO busy trying to politically rub-out Trump, that they haven't accomplished ANYTHING on their historical road to destroying America.

So...they have been so kind and willing to accept the election results...I'm sure the whitehouse will be in a great mood when Chicago knocks on the White House door asking for a handout.

peddling-fiction's picture

When that goes SNAP, the INSanity begins in earnest.


vato poco's picture

all those goddamn farmers and small towns downstate fucking things up, no doubt

nightwish's picture

Never let a crisis go to waste

Blame it on a few republican politicians in that shithole state, Trump, Kim jung or even Putin, just not any dems and certainly not Rahm emanuel

Mr. Universe's picture

They are going to need these boys to round things up after it all burns!

warsev's picture

Could be a long hot summer in Chicago. I agree with you, but at the same time I feel sorry for those Chicagoans who are low-income and hard-working and are sure to take the brunt of this in the end.

vato poco's picture

"Giant Asteroid to Wipe Out All Life on Earth - women and minorities hardest hit!"

shovelhead's picture

Lifestyle page in NY Times?

MrTouchdown's picture

The low income, hard working people already left Chicago, along with high income, not hard working people. Soon the high income, hard working people will leave, and then the leftovers will purge themselves.

yogibear's picture

Shitcago has shooting?s and killings daily. Like an uncivilized country. The natives in the ghetto will be active when it gets hot.

JLee2027's picture

They will always work, they just won't be able to buy enough. 

Rothbardian in Cleveland's picture

You gonna go tell all the kids in the ghetto how happy you are that momma can't feed them? I'm sure they'll agree. There are innocent people caught up in this that could even die. Anarchy and chaos is not a real answer. When their kids are starving what kind of strong man emerges from that kind of mess? Your short term elation will end with a boot on your neck. There are better ways to fix this peacefully.

stacking12321's picture

it is bizarre that you have as your avatar the anarcho capitalist flag yet you state that anarchy is not the answer, and then go on to mis-represent anarchy as chaos and violence, when it is the exact opposte. are you a fake anarchist, or merely mis-informed?

as far as a "strong man" emerging from chaos, that is ABSOLUTELY NOT ANARCHY, that is rulership of one man over others through violence, same as government, and if you can't understand that simple fact, then you have FAILED at grasping what anarchy is all about.

anarchy is NOT chaos, it is the rejection of violence, and the recognition that each of us is the sole authority over our own life, and the opportunity to create a better model than by having thugs with guns ruling over us.

kickasso's picture

"anarchy is NOT chaos, it is the rejection of violence ...."

Not quite. Anarchy is not the absence of rules, it is the absence of rulers. In an anarchist society, I can easily envisage circumstances under which I might support a democratic decision in favour of violence - for example, to expel an invading army that tries to steal my land.

merizobeach's picture

To kickasso and stacking12321, you have my appreciation for your words in explanation of anarchism; it is one of the most widely underconsidered and misunderstood philosophies.  Gregory David Roberts, in Shantaram, quite eloquently put it thus:

"No political philosophy I ever heard of loves the human race as much as anarchism. Every other way of looking at the world says that people have to be controlled, and ordered around, and governed. Only the anarchists trust human beings enough to let them work it out for themselves."

stacking12321's picture

to be clear, i did not say anarchy is the absence of rules, and yes i agree with you that anarchy is the absence of rulers, quite correct.

also, the example you give of expelling an invading army through force, most anarchists would agree that is NOT violence, that is self defence.

it is the initiation of force, the invasion itself, that is violence.

Rothbardian in Cleveland's picture

I need to update my avatar. I'll find a monarchist photo to substitute my changing worldview. Been a while since I posted. I wrongly chose "anarchy" as the word to proxy for a series of posters who, in my opinion, seem to gleefully look forward to the deterioration of a system that will lead to violence and human suffering. Those that would suffer are not all deserved of retribution. Most are misled and in the case of kids not even aware at all. My comment was to address the joy of destruction that I perceived.

stacking12321's picture

to be sure, there will be a lot of suffering when the system falls apart, and there's no avoiding that. failed government policies and decades of selling future generations into debt-servitude have ensured that pain is coming.

i don't know the specific series of posters you're referring to, so i can't comment on that. but i suspect most anarchists and libertarians feel so downtrodden and oppressed by a system they feel have robbed them of their dignity and liberty, as well as earnings, they look forward to its collapse.

not because of the suffering that will inevitably come with it, but because of the destruction of the system that has tormented them.

Vilfredo Pareto's picture

Anarchy and chaos are not a real answer lol.  What do you mean?  That has always been next in the cycle of politics after democracy.    


Unless we get some serious non hedonically adjusted GDP growth that is where we are headed.  I can't see 3 plus percent non adjusted annualized GDP growth over the next 20 years, so buckle up lol.  Might get a bit bumpy. 

markitect's picture

I live in Chicago right next to a housing project.  The women all go to work every day.  I see them in their Best Buy, Target, Subway uniforms every morning.  They probably make minimum wage.  My kid plays with their kids at the local playground and her kids are always polite and call me sir.  The problem isnt EBT, Snap, Niggers, Democrats or republicans, the problem is we offshored and devalued work.  These people have nothing to do.  What kind of heartless asshole would impovrish his fellow countryman so they could save a few dollars buying crap from China or wherever the fuck else?  Thats Ilinois's problem, Michigan's problem,....our "best and brightest" sold us out.  Laugh at us but understand its coming to your state next.

WakeUpPeeeeeople's picture

That's exactly what they are saying in Venezuela

mary mary's picture

11 jobs and 10 workers = happiness

9 jobs and 10 workers = misery

the movie "Precious"

The only solution is to quit pumping out so many kids.  That will happen as soon as Big Liberal Government quits paying people 50-shades-of-Welfare to pump out kids.

IntTheLight's picture

Really? Where? They don't work and the shooting is out of control. You are a liar! And the dindus don't say sir. Stop making stuff up.

cheech_wizard's picture

Why, if I didn't know better, I'd say they named the website after you personally.


IntTheLight's picture

You do know that website tracks Chicago shootings right? And are you aware of who is doing all that shooting?

A group of 10 black kids goaded one into punching a tourist in grant park. That happens all the time. Tourist was knocked down.

BLM shut down Michigan Avenue, blocked store fronts, and screamed at white families.

People have a right to be disgusted with such uncivilized behavior.

The Cosby show is not reality. Turn off the TV, get out of the house and see what life is really like.

Shinebama's picture

One of the funniest things I've seen was at a place that used to be on 83 near O'Hare that imported all kinds of cheap crap from China. I had to laugh when I saw an American flag that was made in China.

divingengineer's picture

And it could sure as hell happen to Silicon Valley too.
Smart ass mother fuckers can't look around and see that most of them are Asian and Indian already?

stacking12321's picture

indians ARE asian.

but that aside, i live in silicon valley, i couldn't give a fuck if whoever i'm dealing with is asian or not, all i care is, can i make a buck off them?

in fact, i prefer dealing with asians, as they will work for smaller margins.

whites are fat and lazy (i include myself in this category), and i will generally not be able to get a good deal from them.

Jubal Early's picture

 (i include myself in this category)

Ah, the truth comes out.  One of (((those))) people who are white when it is to their advantage, but quickly shed their skin when something is disadvantageous to their tribe.  And remember, never, never, never snitch on your tribe or you will end up like Seth Rich.

stacking12321's picture

wtf are you talking about, dumbass?

people don't "shed their skin", being white is not good or bad, it just is.

if anything, it's probably an advantage to be white.

83_vf_1100_c's picture

"The women all go to work every day. "

  I see you didn't mention the men.

IntTheLight's picture

Because he is a liar. Those women do not work either. They simply reproduce. Like rats.

markitect's picture

Come see for yourself, corner of Blackhawk and Hudson, jagoff.  You try raising kids with a minimum wage job.  There are actual working poor mixed in with upper midd le and upper class in this city who have more dignity and character than your sorry ass.

IntTheLight's picture

I am familiar with the Marshall Field apartments and the area. I also know people who live in Old Town near subsidized housing who are tired of the gunfire. Why doesn't any subsidized housing go to white families? That is expensive real estate. So because a race of people destroyed the south and west side, we now must give them subsidized housing up north?

Read crime in boystown. It is eye opening. Or second city cop.

Omen IV's picture

The parties that sold america out are part of organized crime - doesnt take much intelligence or education to pay off a politician or create the rules regulations and laws to make monopoly profits

devnickle's picture

Sad it's come to this. IllNoise has been swirling the shitter for a decade. Now, at 11:59 PM it's an emergency. Your tax dollars at work. It's gonna take red cross airdrops for food and medicine. Welcome to the banana republic......

Cloud9.5's picture

I have great sympathy for starving people but I do not have the resources to help more than one or two. I have 5 children. My first obligation is to get them through the bottle neck. According to we are going to lose 270 million people by 2025. I am going to do my best to make sure my 5 kids are numbered in that 54 million survivors. You may do what you wish but at this point moral outrage is spitting in the wind.

stacking12321's picture

"we"? who is we? you identify with the 330 million shmucks calling themselves americans that have paid taxes for the last few decades and allowed their government to perpetrate unspoken horrors and terrorism on the rest of the world?

fuck those assholes, they desrve to experience the horrors they've perpetrated on everyone else. is interesting, but it's just speculation.

i would rather spit on america's grave than try to support or prop up such a bankrupt (morally as well as financially) empire.