Today ( Thursday ) heard interview with Comptroller of state. She said that she may have to pull all payments of amounts owed to various creditors. That is if the legislature and governor cannot pass a budget by tomorrow evening. State has had no budget for two years Has Amtrak been carrying the state so far ? If so can they continue doing so ? We know the consequences if Amtrak can no longer carry the state.
Illinois is now more than $250 Billion in arrears with just pension fund payments and that is without the state budget deficit. Every rating agency in the United States is about to rate their current bonds as junk bonds. They have no other choice then another massive tax increase and this time it will be property taxes which is sure to have some voter backlash.
My property taxes have increased 20% in the last 2-3 years and still, financially as far as state taxes go…I am happy. 
The state’s finances have been a mess for years because both parties skipped funding pensions to balance budgets. It became far worse with the current governor’s election in 2014. He won’t work with either party in the legislature, won’t submit a budget unless they pass his union-busting law. Former GOP governors despise him. Some school districts won’t open in the fall.
Good luck Quad Cities train.
What to do with a broken Illinois: Dissolve the Land of Lincoln
A Chicago Tribune columnist has proposed a modest soluton to the Illinois problem. Somebody take Chicago, please.
The article includes a map of what goes to surronding states. Iowa extends eastward.
If implemented, there will be no Cornbelt Rocket to the Mississippi River. The State of Iowa has wanted no part of funding the Cornbelt Rocket. For that matter, funding for the Zephyrs to Quincy would doubtless be axed.
Don’t get me started about John Kass. He expects politics to be squeaky clean and seems to stand somewhere to the right of the Republican party. It’s also hard to take a columnist seriously who each month presents an “award” to a politico who he publicly flips off (actually a Greek gesture that means the same thing).
Start Sat night No More Powerball or Mega Million Lottery in State until they get budget.[:(]
If this thread doesn’t stay on track, it will be deleted.
The track is political. The entire future of the proposed Quad Cities train and the existing State-supported services are threatened/intertwined with the political impasse in Springfield. A bipartisan temporary fix is possibly coming soon.
There are more oblicgations to be paid than revenue coming in. Passenger rail service is likely to be one the first items cut.
The courts will get involved. Do you make medicaid payments, or Amtrak payments. Do you pay bond interest, or pay Amtrak.
Assume Illinois gets its fiscal house in order. Will there still be money to pay for passenger rail. If so, to where? It is doubtful there will be a Cornbelt Rocket to Moline for a long time, if at all.
I don’t think they will cut the Amtrak trains or Metra trains.
I think the State will go as far as it can with austerity and either cut the pension obligation or ask for a Federal bailout. I don’t think the Treasury Dept will let a State go insolvent, especially with like 12 other states in the same boat as illinois (yup, California is on the list). Though we’ll have to wait and see. It would be the domino theory revisited if they did and it would cause a massive crisis in the state bond market that might spread financial contagion…so there is risk if Treasury does nothing here. That is my question will the Feds intervene financially or let financial nature take it’s course?
My guess is they intervene. I wish they would let the state sink though because each time the Feds intervene in cases like this…they reward the political behavior that led to this point.
When a train is government subsidized, it is a political issue. The feds may well let Illinois sink. As Illinois goes under, the first thrown overboard is likely to be state subsidized intercity passenger trains.
The real contest maybe METRA communter services. I am not knowledgeable on how METRA is funded. The retention of commuter service will be arguably more importan that trains to St. Louis, Quincy and Carbondale.
A man may walk on Mars before the Cornbelt Rocket returns to Moline.
When the City of Detroit was teetering on bankruptcy, the State of Michigan bailed them out some, and a federal judge encouraged the debtors to negotiate lower payments, including city retirees who agreed to reduced pensions. The city avoided full bankruptcy. Nevertheless, during the campaign, then-candidate Trump said he would have just let Detroit go bankrupt. This may give some indication of how the feds would deal with a state in financial crisis.
As we are reminded again and again, what folks say on the campaign trail is usually not the same as what they do in office when faced with the repercussions of their actions. If Illinois collapses, so do California and New York state (all three are in the same boat). Which also happen to be among the three largest states on the electoral map.
If Trump can dramattically grow the Economy the next few years the issues above will be not as great because the returns on the lower amount of money invested will be above average and makeup for some of the principal missing from the unfunded pensions. So that “Hail Mary” play if it comes about will give all three states some breathing room. Agree though that unfortunately all three states are in the hole so badly they will have to cut pensions of existing and future pensioners to make up for lost time as well as dramattically raise taxes.
We are also unfortunately paying for lost years of Economic growth because some in government listened to the bozo Economists that insisted 1 to 1.5% growth is the new normal. When you listen to people like that for 10-12 years it really sucks out a lot of potential value and compounding from your 401k plan, retirement pension, retirement savings, etc. Causing otherwise sane people to openly question if stock plans are worth it. We can never get those lost returns back…which is sad as wel
Your statement does not correspond with reality, never that low, except in Drumpf’s tweets. Starting in 2010, the GDP growth rates were: 2.5%, 1.6%, 2.2%, 1.7%, 2.4%, 2.6% and 1.6% = average 2.1%.
Exactly the plan, politically when you establish a low benchmark like 1 to 1.5% you can point to the above as an outstanding success.
What about Air, Waterways, expressways, rural roads, rural telephone, rural electricity, agriculture, mining, etc ? Don’t just paint rail !
These are national GDP changes, as per the Bureau of Economic Analysis, adjusted for 2009 constant dollars, which takes out inflation. They are the real growth rates as opposed to the nominal growth rates, which were noticeably higher.
Thank you! What would the nominal growth rates be, although I’m sure CMStPnP won’t admit his error even then.
So who are those “Bozo economists” CMStPnP? Citation?
According to the BEA numbers, which can be downloaded from the U.S. Commerce Department, Bureau of Economic Analysis, the nominal growth rates between 2010 and 2016 ranged from a high of 4.2 in 2014 to a low of 3.0 in 2016. By my spreadsheet calculations the mean was 3.7 and the standard deviation was .4.