Could Illinois be the first state to file for bankruptcy?

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.

I don't think that the government should bail out bankrupt pensions or
states. The voters got what they voted for.

how did they ever get like this?

Pensions and corrupt liberal politicians will do it every time and hoping Obama would bail them out.
They should charge tolls on all roads leaving the state, make em a lot of money now.

The pure stupidity of people is just amazing.

Governments can't go bankrupt because their income is tax based.
Thus, there can't be credit on taxes that have not been collected.
If there is then it is a scam.
If a government can't pay for their expenditures they must shut down, do away with or trim the excess to fall within their collected tax funds.

If the people of that state want everything, they should pay more taxes to cover it.
If they don't want to pay more taxes, they shouldn't implement things they can't pay for. DUH!

Its not like they don't know how much money there is available. They are spending last years tax money right now. Money that was already collected.
If you have $100 in a box you can't spend $101. Its NOT THERE.

I say start cutting the excess, starting with the salaries of the people that can't budget the state's money. Ask the people what they want to do away with, I'll bet that would be a surprise.

the state had no budget for two years...they just spent and spent...a republican became governor then the liberals started a political war...they're at a point where all construction will halt, schools have already ran out of funding...powerball even left the state...and on and on...it's a mess

In the uk we for example have a conservative government but local governments (council ) might be labour or liberal and vice versa.
So they over spend so the government looks bad, the media loves it as it's blamed on under funding.
We have had cuts in expenditures but that's the way it is.
As you say tom. If you only have 100 then you can't spend 101
The present government is trying to borrowing down, if the lefties were in then that would go through the roof!

Here's more if interested.

http://www.illinoispolicy.org/state-of-illinois-pension-debt-jumps-to-130-billion/

Time for Illinois to become a state for legalized marijuana.

No.

Can't due to sovereignty and article 1 of the constitution.

They can be considered insolvent or something though.

At most it's jut going to be a big show for a while, IMO.

Then they'll do some Enron accounting tricks, maybe find some magic money hiding somewhere, negotiate some "haircuts," give the appearance of "doing something" against opposition one side vs. the other, then something shiny in the media will come up to draw peoples attentions away, and it will go back to kicking the can down the road.

Just like the last time an Illinois "state bankruptcy" issue happened, just like with the start of "the great recession," just like the start of bailouts and QE.

Insolvent and bankrupt is the same

Not really. Insolvent is the inability to pay. Bankruptcy is a legal action

And I thought I was being so clever, dam Google
But maybe your 'bankrupt 'if you can't pay and you can file for bankruptcy?

Rofl forget google. I am just a smart cookie

The free dictionary. com?

Hello, is there anyone in there?
Knock knock?

Sorry, always wanted to say that, I saw it the other day!
We can call it anything at the end of the day it's not a good thing is it?

Illinois Poorly handling of money! And crooked politians! Junk credit rating! Sad! .

But nope they won't file bankruptcy!!! Yet

We had a similar thing in Liverpool years ago, derick Hatton I think his name was, a leftie obviously!
There are demonstrations in London today, against cuts, signs saying 'tories out ' (conservative )
We only had elections a couple of weeks ago! So basically they are protesting against democracy!

Yea, there will probably be no "bankruptcy", instead it will
be a bailout....and you know who pays for that.

Doubt there will be a bailout. I think repubs tried to pass a "no bailouts for states" resolution a while ago. There's nothing in the constitution that actually gives power to the federal government to offer bailouts, even to states. But who in washington really gives a crap about what the constitution says unless it can be used against their opponent.
I was wrong about the "haircuts."
It looks like they're going to try and tax their way out of their mess.
That's just what farmers and assembly line workers need and are capable of absorbing.