For almost two years, the state of Illinois has operated without a complete and balanced budget, and the situation is getting close to a doomsday scenario. Believe it or not, the bills and pension obligations are continuing to pile up and the state is now on the verge of bankruptcy.
This financial meltdown is so incredibly deep that not even the lottery is safe. In fact, a top financial official warned that a hundred percent of the state’s monthly revenue will definitely be eaten up by the court-ordered payments.
Given this situation, Illinois Republican Gov. Bruce Rauner is now calling for a special session of the Democrat-led General Assembly in order to pass what he hopes could be the first full budget package in more than two years. However, the state will literally lose the lottery and much more if the budget fails.
Illinois’ lotto needs a payment from the legislature every year, and the current appropriation expires in nine days. This means they will have no authority to pay any prizes. In anticipation of a terrible budget deadlock, the state is planning to halt Powerball and Mega Millions sales. Regarding this issue, Illinois’ Lottery Acting Director Greg Smith said that he is really disappointed at the legislature’s inability to pass a budget.
For almost three years, the Fiscal Times reported that Illinois had been forced to conduct business under court-ordered spending. They have essentially been using stop-gap measures while running up a colossal deficit.
Apparently, the state now has a pile of unpaid bills totaling almost $15 billion, which represent 40 percent of Illinois’ total operating budget. What’s even worse is that it is quite possible that these bills won’t going to be paid anytime soon.
Most of the current financial issues can be attributed to the huge gridlock between Rauner and the Democratic-controlled state legislature. While liberals keep pushing for more government spending, the Republican governor is fighting for a more balanced budget.
Believe it or not, the late budget –which proposed a $7 billion deficit- was demolished by the state Senate after Rauner threatened to veto it. Given this situation, the governor admitted that the state was in an unimaginable condition and claimed, “We can’t manage our money.”
Nevertheless, the financial mayhem goes all the way back to 2011 when Illinois´ budget crisis was first exposed. In that year, Democratic Gov. Pat Quinn and the Democratic-controlled state legislature had to enact a huge tax increase in order to address a looming deficit of more than $12 billion.
Apparently, that amounted to a third of the entire $35 billion general fund budget. While Quinn’s mandate ended in 2014, nothing has changed since then. Lamentably, as more bills go unpaid, the outlook for the state is becoming even worse.
Multiple agencies and programs that are dependent on state aid are now in danger of losing funding. This includes hospitals, schools, universities, and even the police, which could face serious cutbacks because of this financial meltdown.
Rauner’s special sessions will start today and the state is again operating on a series of stop-gap spending packages.
Considering that Illinois’ financial issues were also caused by the state’s poorly funded pension system, they have been downgraded to the lowest credit rating of any state in America. That rating could take an even bigger cut if the state doesn’t achieve some kind of budget by July 1. Right now, the state has $130 billion in unfunded pension obligations and a huge backlog of unpaid bills.
Naturally, the combination of these elements now has several analysts talking about the state having to file for bankruptcy. The big issue here is that it’s impossible for any state to file for bankruptcy protection unless Congress gets involved.
Illinois facing bankruptcy , run by total Democratic Party. Wake up Democrats vote Republican, Think about your kids and grandkids future 😂😳
While Democrats senators Dick Durbin and Tammy Duckworth declined to comment whether they would consider getting involved in introducing any kind of measure to allow the state bankruptcy, Rauner said that Republicans have a plan to remedy the financial inferno.
He stated that conservatives in the General Assembly have laid out a compromise budget that he can sign. This plan incorporates reforms like term limits, property tax relief, and spending caps.
While Governor Rauner inherited a financial mayhem from the Democrats, he now needs to do whatever he can to avoid Illinois sinking into even more trouble.