Illinois Death Watch Continues...

Tyler Durden's picture

Authored by John Rubino via DollarCollapse.com,

It’s been a long time coming, but Illinois’ slow-mo financial disaster is now front page news. A few recent examples:

Roadwork Could Shut Down Across Illinois Due To Budget Impasse

(Chicagoist) – Roadwork across Illinois may grind to a halt at the end of June due to the continued state budget impasse, a representative for the Illinois Department of Transportation (IDOT) announced Wednesday. IDOT will be unable to pay contractors on July 1, unless the state passes a stopgap funding measure.

 

IDOT has told contractors that “all construction work is to shut down on June 30,” according to a statement. “Contractors will be advised to secure work zones to ensure their safety during any potential shutdown.”

 

Illinois has gone almost two full years without a state budget, which has hit education funding throughout the state and generated more than $14 billion in unpaid bills.14

 

Summer is both a high-volume construction season and a vaguely ominous time to cease road repairs; just last week, IDOT released a statement warning that the heat could lead to pavement “buckling or blowing out.”

—————

Powerball, Mega Millions to Halt Illinois Lottery Due to State’s Inability to Pay Winners

(Mish) – Both Powerball and Mega Millions Lotteries Will Pull Out of Illinois on June 30 due to the budget impasse.

 

Without a budget in place, the state is not authorized to make payments to the association or Mega Millions.

 

Lottery proceeds are about 2% of state revenue. Speaking of revenue corporate income tax collection is down 41.3%. Sales taxes are flat. How is this supposed to work?

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Could Illinois be the first state to file for bankruptcy?

(CBS) – Illinois residents may feel some solidarity with the likes of Puerto Rico and Detroit.

 

A financial crunch is spiraling into a serious problem for Illinois lawmakers, prompting some observers to wonder if the state might make history by becoming the first to go bankrupt. At the moment, it’s impossible for a state to file for bankruptcy protection, which is only afforded to counties and municipalities like Detroit.

 

Chapter 9 bankruptcy protection could be extended to states if Congress took up the issue, although Stanford Law School professor Michael McConnell noted in an article last year that he believed the precedents are iffy for extending the option to states. Nevertheless, Illinois is in a serious financial pickle, which is why radical options such as bankruptcy are being floated as potential solutions.

 

Ratings agency Moody’s Investor Service earlier this month downgraded Illinois’ general obligation bonds to its lowest investment grade rating, citing the state’s growing pile of unpaid bills and its mounting pension deficit. Illinois, by the way, has the lowest credit rating of any state. Lower ratings mean higher borrowing costs, since lenders view such borrowers as riskier bets.

 

“Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance, allowing a backlog of bills to approach $15 billion, or about 40 percent of the state’s operating budget,” the agency noted.

 

As noted by the Fiscal Times, Illinois is the only state that’s been operating without a balanced and complete budget for almost two years.

 

“We’re like a banana republic. We can’t manage our money,” Gov. Bruce Rauner said after the Illinois Legislature failed to produce a full 2017 budget earlier this month.

Two Big Questions

Based on the immensity of its pension obligations, the legal barriers to simply cutting benefits, and falling tax revenues, Illinois is a lock to default on some or all of its obligations in the next few years. That’s a problem for pensioners, state contractors and pretty much anyone who cares about local public services. In other words, life is going to get a lot harder for people living in the state, and especially for those living in double-bankrupt Chicago.

But the real impact will be felt farther afield, when everyone with money at risk starts asking who’s next – and finding a long list of likely suspects.

If Illinois defaults, how far behind can New Jersey, Kentucky, or Connecticut be? Not far, according to current trends. And if those states follow Illinois, what are Italian bonds worth? Not much.

 

The second big question is: How will stronger governments respond to the implosion of weaker ones? If the failed states are bailed out by the still-solvent, what does that do to the latters’ balance sheets? In some cases it decimates them.

The dilemma? Allowing failed states to default will rock the global banking system, but bailing them out replaces a debt bust with a currency crisis. In a priced-for-perfection world, either will lead to global asset repricing — in other words an epic bear market.

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yrad's picture

Democrats in action!!

therover's picture

Bullshit...POLITICIANS in action.

When you realize it's a one party system, you will see the light.

Ghost of PartysOver's picture

There was basically a one party system called the Establishment.  Then Trump showed up.  Hence the "Get Trump" movement.

bamawatson's picture

old old accurate writing (i believe, authored by richard reeves), Indispensible Enemies the Myth of the Two Party System

macholatte's picture

OT

I’ve been using Ghostery to block ads for a long time. It doesn’t work so good anymore.
Anybody have any suggestions?

 

pupton's picture

firefox bluehell works well for me, although I still see the ads between the story and the comments, so......

 

MalteseFalcon's picture

If IL needs a bailout, then IL should be put under federal control as was done to the South during Reconstruction.

State officers should be appointed by the Feds.

A tribunal should be convened to investigate and prosecute state and local officials, as indicated.

IL constitution should be rewritten.

The budget is to be balanced every year.

IL should not be allowed to participate in the electoral college during reconstruction.

IL should be referred to as the IL reconstruction district and not as a state of the union.

Just like after the "Civil War" reconstruction should be expected to last 10 years.

MalteseFalcon's picture

Oh, I placed my post in an AdBlock discussion by mistake.

My bad.

Great Deceivah's picture

Those ads are coming from INSIDE the zerohedge server, which is why they are not blocked by any ad blocker If you did manager to block them, you would blocl the entire site.

 

Try blocking http://zerohedge.com/news

that may block all the ads.

Mr.BlingBling's picture

Adblock Plus works for me when using Firefox on my PC.

But ZH is borderline unusable when using Safari on my iPad.  And it doesn't appear that the iPad version of Firfox allows add-ons such as Adblock or Ghostery.  Any suggestions for iPad users?

all-priced-in's picture

Adblock plus now has a version for iPhones -

 

I went from - I can't even read ZH on my iPhone because of the pop ups to I don't even see them -

 

It does leave some blank white space where ads use to be - but that is not that bad.

 

 

 They also now have one for iPads I assume it will work just as well as it does on the iPhone.

 

 

 

Mr.BlingBling's picture

THANK YOU, THANK YOU, THANK YOU!!!

lil dirtball's picture

Ad Block caved ... they now allow (((certain))) ads.

Better is uBlock Origin (Firefox).

a Smudge by any other name's picture

We take this moment from beating up on "the libs" to attack The Tylers' income base.

lil dirtball's picture

Fuck off with your concern trolling, ZHombie.

bloofer's picture

ZH will not enjoy any revenue from my seeing their ads, if the ads lock up my computer to where I can't read ZH at all--which is the actual situation. Without Adblock, it's pretty much impossible for me to even open any site on the Internet. The ads use up all my RAM.

NotApplicable's picture

uBlock is the best I've seen. I also run noscript.

bloofer's picture

You can configure Adblock to allow NO ads. I forget how you get there, but it tells on the installation page.

HalinCA's picture

Won't work on older iPads like mine ....   seems the older CPU can't handle the workload ...

ResistTemptation's picture

Do I still have time to buy another box of 30/30 for my "if I only could take one?"

Really great article ... really nice projections for a bad situation. Missed the one about how the people that planned their whole lives around having a pension are making lists of who did what. When the doctor says you got cancer ... well ... you know nobody likes to go alone.

seataka's picture

pensions are ALSO a conspiracy for silence

 

Kalashnikov545's picture

The day you need that 30/30, you'll regret not having an AK, AR, etc.....

The Ram's picture

Ah, this is the million dollar question for America.  What will the sheeple do when they find the US and state governments have flushed their savings and pension plans.  I am not sure, but I am very sure they will not sing 'Kum Baiai'.  I would buy that box of 30/30, but 30/30 is too much fire power for what you want.  You are not going to be killing deer.....unless you are hunting for food.  22 long rifle hollow points are all you need.  Not a lot of stopping power, but a head shot will be very effective and when the stuff starts, their will not be enough neuro surgeons practicing to extract 22 slinters from someone's cranium.

tripletail's picture

Try the Brave browser ( https://brave.com/ ). It has built-in ad-blocking.

The Ram's picture

Use the Opera browser.  It makes ZH much more functional, but beware that Youtube is not usuable on Opera, at least not for me and I have not been able to find a fix for it..  I have to switch to Firefox or some other browser to use Youtube.

YankeeClipper's picture

I use the Brave browser. It gets rid of all ads so far. I've been using it since it came out for 64 bit. You can also set cookie and script parameters.

HalinCA's picture

Thank you Thank you!  My iPad is usable again!

 

vega113's picture

Yeah, the Brave browser. It is a security focused browser based on Chromium. 

Juggernaut x2's picture

Trumptards are as delusional as Obamatards. 

OCnStiggs's picture

You are deluded. Your post confirms it.

Juggernaut x2's picture

Feel free to make a list Trump MAGA. Here's mine- still in Afghanistan, no wall, no tax reform, still in Syria, Fed still calling shots. Really no different from Hillary,  huh? He did take credit for opening some ducking coal mine and shoveled a bunch of taxpayer dollars at Carrier 

Zero_Ledge's picture

Anyone remember "label China a currency manipulator on day one" ?

And my personal favorite: Positive jobs reports were fake when they made Obama look good; now they are true if they make Trump look good.

 

Beam Me Up Scotty's picture

My personal favorite was : "If I become president, you will go to prison".

Hillary is still not in prison!!

lil dirtball's picture

Trump is a bald-faced liar and cheap-ass TV actor.

There, it needed to be said - and I said it.

Zero_Ledge's picture

He's also a cheap-faced actor and a bald-ass TV liar.

 

foodstampbarry's picture

The blame lies with congress, not Trump.

DAMIFIN0's picture

Lets all take a deep breath,  relax,  This Brave man has only been in office how long?  Strap yourself in and get behind our President, your in for a ride.  He's going 2 get our Soverenty back (manufacturing, (jobs for the People)) , that Clinton, Junior & Barry sold off on the cheap.   Go America!

Zero_Ledge's picture

"He's going 2 get our Soverenty back"

Yeah, you're probably right about that.  He will get our Soverenty back, whatever the fuck Soverenty is.

lil dirtball's picture

> Then Trump showed up.

L0l ... what a tool.

aloha_snakbar's picture

Same shit, different different pile. The illusion of a two party system is nothing more than a brilliantly conceived marketing plan to rope a dope as many sheeple as possible...

Secret Weapon's picture

I grew up there.  R or D, makes no difference.  They are all a bunch of shit head sociopaths.  Until we accurately diagnose the disease there  can be no cure.

silvercity's picture

All governments are a one party system. Government vs the people. Most people are stupid.

Haus-Targaryen's picture

I hope Ill defaults and services get cut to the bone.  

However, given the race-baiting, identity politics and kicking the can -- I predict this ends with materially higher state taxes and what businesses are left there will flee. 

Juggernaut x2's picture

Il could cut 50% of govt employees and no one would notice. IL has 7500 varying governing bodies- BS like townships that are just redundant bureaucracies that keep politicians' inbred kids employed- the next closest state is PA with 2500 and after that it drops off quickly.

a Smudge by any other name's picture

And it won't change the outcome. The Targaryen  is right: anybody who can get out is getting out. They follow the industry, the industrial base and finally the neighborhood mom and pop shop. What will be left is a very large and dangerous mess.

Omen IV's picture

The solution is the state constitutional change via referendum - clearly the taxes go to the moon without fundamental change - referendum to allow the pensions to be paid at 30 cents of whatever the original formula was setup or cancelled - usually the last three years compensation was rigged to get the pension payment up anyway or a special state tax on pensions at 65%.

this pension  overhang everywhere has no future for any state's viability as a place to live, if you own property or have an income - too easy to move the business if it is revenue related out of state

 

why would anyone vote to pay for government pensions out of their own pocket?