Here's One Record Illinois Doesn't Want to Attain: QuickTake Q&A
Nuveen's Miller Says Illinois Is in a Political Stalemate
Illinois may soon become the first state on record to have its bond rating cut to junk. Behind that financial trouble is an intractable political impasse and drama that’s been building for more than two years as Republican Governor Bruce Rauner and the Democrat-led legislature battle over how to close the state’s chronic budget deficits. Illinois over the past fiscal year spent over $6 billion more than it brought in, and public universities are reeling from the loss of state aid. S&P Global Ratings warned that the loss of its investment-grade rating is likely unless action came around the start of the new budget cycle on July 1.
No. States aren’t eligible to petition U.S. courts to escape from their debts, the way cities such as Detroit have. While Congress amended the law to allow for Puerto Rico to do so, any effort to extend that to states is extremely unlikely, would face intense opposition and may not pass constitutional muster. When the idea was raised in Congress after the last big recession, it was roundly opposed by governors and U.S. lawmakers from both parties who said it would rattle the bond market and punish even financially prudent governments. Some saw it as a tool to gut the pensions of public employees.