Black People : State of Illinois Going Bankrupt?

Discussion in 'Black People Open Forum' started by Kemetstry, Jul 3, 2010.

  1. Kemetstry

    Kemetstry going above and beyond PREMIUM MEMBER

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    by MICHAEL POWELL

    updated 7/3/2010 11:30:18 AM ET
    Share Print Font: + - CHICAGO — Even by the standards of this deficit-ridden state, Illinois’s comptroller, Daniel W. Hynes, faces an ugly balance sheet. Precisely how ugly becomes clear when he beckons you into his office to examine his daily briefing memo.

    He picks the papers off his desk and points to a figure in red: $5.01 billion.

    “This is what the state owes right now to schools, rehabilitation centers, child care, the state university — and it’s getting worse every single day,” he says in his downtown office.

    Mr. Hynes shakes his head. “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.”

    For the last few years, California stood more or less unchallenged as a symbol of the fiscal collapse of states during the recession.

    Now Illinois has shouldered to the fore, as its dysfunctional political class refuses to pay the state’s bills and refuses to take the painful steps — cuts and tax increases — to close a deficit of at least $12 billion, equal to nearly half the state’s budget.

    Insolvency looms
    Then there is the spectacularly mismanaged pension system, which is at least 50 percent underfunded and, analysts warn, could push Illinois into insolvency if the economy fails to pick up.

    States cannot go bankrupt, technically, but signs of fiscal crackup are easy to see. Legislators left the capital this month without deciding how to pay 26 percent of the state budget.

    The governor proposes to borrow $3.5 billion to cover a year’s worth of pension payments, a step that would cost about $1 billion in interest. And every major rating agency has downgraded the state; Illinois now pays millions of dollars more to insure its debt than any other state in the nation.

    “Their pension is the most underfunded in the nation,” said Karen S. Krop, a senior director at Fitch Ratings. “They have not made significant cuts or raised revenues. There’s no state out there like this. They can’t grow their way out of this.”

    As the recession has swept over states and cities, it has laid bare economic weakness and shoddy fiscal practices. Only an infusion of federal stimulus money allowed many states to avert deep layoffs last year.

    'A very tough decade'
    The federal dollars are nearly spent. Last month, local governments nationwide shed more than 20,000 jobs. Should the largest struggling states — like California, New York or Illinois — lay off tens of thousands more in coming months, or default on payments, the reverberations could badly damage a weakened economy and push housing prices down still further.

    “You’re not seeing these states bounce back, and that could be a big drag on the national economy,” said Susan K. Urahn of the Pew Center on the States. “It could be a very tough decade.”

    Click here for related content Court: Gov. can put Calif. workers on $7.25 an hour California begins fiscal year with no budget Broker offers to buy Illinois' debts Illinois is broke, and can’t pay its bills In Illinois, the fiscal pain is radiating downward.

    From suburban Elgin to Chicago to Rockford to Peoria, school districts have fired thousands of teachers, curtailed kindergarten and electives, drained pools and cut after-school clubs. Drug, family and mental health counseling centers have slashed their work forces and borrowed money to stave off insolvency.

    In Beardstown, a small city deep in the western marshes, Ann Johnson plans to shut her century-old pharmacy. Because of late state payments, she could not afford to keep a 10-day supply of drugs.

    Burials threatened
    In Chicago, a funeral home owner wonders whether he can afford to bury the impoverished, as the state has fallen six months behind on its charity payments, $1,103 a funeral.

    In Peoria — where the city faced a $14.5 million gap this year and could face an additional $10 million budget hole next year — Virginia Holwell, a trainer of child welfare caseworkers, lost her job when the state cut payments to her agency.

    She sits in her living room high above the Illinois River and calculates the months of savings left before the bank forecloses on her house.

    States cannot go bankrupt, technically, but signs of fiscal crackup are easy to see. Legislators left the capital this month without deciding how to pay 26 percent of the state budget.

    The governor proposes to borrow $3.5 billion to cover a year’s worth of pension payments, a step that would cost about $1 billion in interest. And every major rating agency has downgraded the state; Illinois now pays millions of dollars more to insure its debt than any other state in the nation.

    “Their pension is the most underfunded in the nation,” said Karen S. Krop, a senior director at Fitch Ratings. “They have not made significant cuts or raised revenues. There’s no state out there like this. They can’t grow their way out of this.”

    As the recession has swept over states and cities, it has laid bare economic weakness and shoddy fiscal practices. Only an infusion of federal stimulus money allowed many states to avert deep layoffs last year.

    'A very tough decade'
    The federal dollars are nearly spent. Last month, local governments nationwide shed more than 20,000 jobs. Should the largest struggling states — like California, New York or Illinois — lay off tens of thousands more in coming months, or default on payments, the reverberations could badly damage a weakened economy and push housing prices down still further.

    “You’re not seeing these states bounce back, and that could be a big drag on the national economy,” said Susan K. Urahn of the Pew Center on the States. “It could be a very tough decade.”

    Click here for related content Court: Gov. can put Calif. workers on $7.25 an hour California begins fiscal year with no budget Broker offers to buy Illinois' debts Illinois is broke, and can’t pay its bills In Illinois, the fiscal pain is radiating downward.

    From suburban Elgin to Chicago to Rockford to Peoria, school districts have fired thousands of teachers, curtailed kindergarten and electives, drained pools and cut after-school clubs. Drug, family and mental health counseling centers have slashed their work forces and borrowed money to stave off insolvency.

    In Beardstown, a small city deep in the western marshes, Ann Johnson plans to shut her century-old pharmacy. Because of late state payments, she could not afford to keep a 10-day supply of drugs.

    Burials threatened
    In Chicago, a funeral home owner wonders whether he can afford to bury the impoverished, as the state has fallen six months behind on its charity payments, $1,103 a funeral.

    In Peoria — where the city faced a $14.5 million gap this year and could face an additional $10 million budget hole next year — Virginia Holwell, a trainer of child welfare caseworkers, lost her job when the state cut payments to her agency.

    She sits in her living room high above the Illinois River and calculates the months of savings left before the bank forecloses on her house.

    'I don't sleep much'
    On any given Monday morning, the agency’s chief administrative officer, John J. Troy, 61, has no idea how he is going to keep its doors open until Friday. He said the state had not come through with an expected $2.2 million, which is about six months of arrears. He has laid off and recalled employees three times in the last two years.

    “Two weeks ago, I had days to meet my $420,000 payroll and all I was looking at was a $200,000 line of credit from a bank,” recalled Mr. Troy. “I drove down to Springfield and said, ‘Hey, you owe us $3 million.’ They said: ‘Oh, that’s nothing. We owe another agency $10 million.’ ”

    “The fact of the matter is,” he added, “I don’t sleep much these days.”

    continued in actual article....



    :em0200:

     
  2. $$RICH$$

    $$RICH$$ Lyon King Admin. STAFF

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    This deeper then known , the state is indeed on hardship and everything in connection
    with the state is now closing / folding and crumbling which leaving families
    jobless/ homeless and depression is sinking in fast like a sponge.
     
  3. KWABENA

    KWABENA STAFF STAFF

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    Whoa! What's happening with all of the profit the city generates through Tourism and Attractions?

    KWABENA
     
  4. Kemetstry

    Kemetstry going above and beyond PREMIUM MEMBER

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    It seems like the state is already in bankruptcy and no one has the guts to declare it.













    :em0200:


     
  5. Kemetstry

    Kemetstry going above and beyond PREMIUM MEMBER

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    Chicago is probably 30% of the entire budget.

    I wonder how man other great lakes states are going thru this? In fact, it makes you wonder how states with not as much going for it as that are really fairing?














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  6. $$RICH$$

    $$RICH$$ Lyon King Admin. STAFF

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    Chicago payroll eats up lots of that ! the state not paying there bills and compromise to pay
    lot of that money is going to stuff the city don't need
    there are programs that help needed people pay bills but they yet to deliver the funds
    to the Gas and light and water company sending people in a frizzy just to name a few like daycares and so forth
     
  7. $$RICH$$

    $$RICH$$ Lyon King Admin. STAFF

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    your right no one want to hold up to it and say we our city is Financially in trouble with billions in debt.
    not the Mayor or Governor nobody ! and why????:10500:
     
  8. Kemetstry

    Kemetstry going above and beyond PREMIUM MEMBER

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    Can you imagine the political ramifications of presiding over the only state ever to go belly up???? That would be the only thing you would be known for. You could discover the cure for AIDS and cancer. You would still only be known for having your state go under. So unless someone forces the issue, it just wont happen














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  9. Clyde C Coger Jr

    Clyde C Coger Jr going above and beyond PREMIUM MEMBER

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    In the Spirit of Sankofa and Real Truth!




    Kemetstry,

    What source is this from, and how can I continue the actual article; in other words, will you or can you provide a link?

     
  10. $$RICH$$

    $$RICH$$ Lyon King Admin. STAFF

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    And to think 125,000 jobs was cut just in June alone , the city is fallin apart slowly
    and going deeper in debt
     
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