CHICAGO | Politics and Current Events

[left of center]

Originally Posted by moorhosj

Is this really how bankruptcy works? Would a judge allow the state to declare bankruptcy without even attempting to fix the problem through tax increases? Detroit was limited on how much they could tax by the state, Illinois has no such problem.

Still not sure why you are so insistent that bankruptcy would come before any constitutional change. You haven't provided a reason other than it "will not happen". It seems clear that an amendment would be more beneficial to more parties than a default.

Keep in mind that states legally cannot declare bankruptcy. Municipalities can, but *SURPRISE* Illinois's constitution has an amendment that prohibits that from occurring, except under special consideration from the legislature. (We really do have the constitution from hell...) But short other options, bankruptcy or not, its not like Illinois can just not default. If it doesn't have the funds for essential payments, then those payments aren't being made. Hell, the state is technically soft defaulting right now. There are hundreds of organizations that have been waiting months to be paid by the state.
Assuming a rising interest rate enviroment, and legislative breakdown on pushing through more tax hikes almost assures the state's failure to make essential payments (to pensioners and existing employees) in the next few years, and this will cause the federal government to get involved. The question is, do they help the state do what needs to be done to fix its constitution (axe the pension amendment), or do they punish the state economically by forcing the state to abide by its own laws and pushing through onerous taxes, thereby making an example out of us? Considering there are a dozen other states who have less than 50% of their pensions funded and could be coming up to the same fiscal cliff Illinois is already struggling to keep from fall off of, I fear that that it might lean towards the latter.

Originally Posted by Vlajos

And I voted for Rauner and will again.

Same here, on both counts.