Note to readers from Mark Glennon re: Ukraine
May 6, 2026
18 Comments
Everybody needs a side hustle these days, and mine is Ukraine, where I am now.
-- Connecting the dots between our economy, government and business --
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If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Bankruptcy will never happen until the bond market loses confidence. As long as investors know the politicians will side with them instead of taxpayers. And know in confidence that the taxpayers are a solid collateral for their risk. This train will keep rolling. We are living on usary, when that stops only then will bankruptcy be considered. The powers that be represent the bond market now, not us.
first, who bought Illinois bonds and why. The interest rate does not come close to matching the risk. Second, at this point the best strategy to get things done is for the State to pay bills just to the limit of its cash flow meaning 3 to 6 billion of bills do not get paid whether its pensions, roads, social programs, education, welfare, and perhaps interest. Make it real crisis. But then we need a legislature up to something like this. I am tired of legislators pointing the finger at Madigan after their own failure to effect change. If the… Read more »
It’s your last paragraph that pensioners really don’t get. Instead of recognizing this, they call us “pension thieves.” Utterly shortsighted.
The reality? Most of the members of the legislature are as ignorant as the various Op-Ed Boards, some intentionally, about the pensions crisis, retiree health care crisis and, cumulatively, the financial crisis affecting. IL. So what to do? Pass a law mandating IL children be taught to write in cursive.
I don’t know what Rauner thinks the federal government can do about the state constitution.
If they try to allow for bankruptcy for states, there will be a constitutional battle royale all the way to the Supreme Court.
If Rauner wants this stuff taken care of, then: the Illinois state constitution needs to be amended. The federal govt can’t do that for him.
Mary Pat, I respectfully disagree with you on this. Amending the Illinois Constitution probably won’t work because it will be challenged under US constitutional principles. In any event, it would take many years to pass the amendment and litigate. Leading constitutional scholars, however, say Congress could extend the municipal bankruptcy concept to states themselves. The public across the country will eventually understand that not allowing bankruptcy for broke states like Illinois is costing them dearly and that they are effectively subsidizing pensions here. Illinois is a drag on the national economy, depressing its contribution to the federal tax base and… Read more »
Could Congress clarify Chapter 9 to permit retirement systems to file for bankruptcy alongside the state or municipality that sponsors those systems? The systems are for some purposes treated as political subdivisions independent of the sponsor but they have certain presumed contractual claims against the sponsor. Then perhaps the court could modify both the systems’ contracts with their members (providing appropriate haircuts to pension millionaires) as well as bring the municipality’s obligations into line with what can be afforded while also maintaining necessary services. While it has jurisdiction, the court could also modify union contracts. While Republicans control the government,… Read more »
But the pensions are automatically part of the bankruptcy of the sponsor, allowing cuts to benefits, as happened in Detroit. I thought you were going to ask if pensions could separately file as distinct entities. My understanding is that would be a longshot.
should also add that the supremacy clause in the US constitution would allow for federal law to trump state law.
I am not a lawyer, much less a constitutional one, but it seems to me there would be plenty of federal litigation should the U.S. Congress try this play as well.
If it doesn’t work in state constitution amendment, I don’t see it working via federal law.
The only plus is if it’s going to take years of litigation up to SCOTUS level, may as well have it determined for all states and not just Illinois.
Anyway, yes, I’m blogging this later tonight.
The reason the state amendment faces a serious challenge is the federal contracts clause and ex post facto clause. They are not, however, impediments to exercise of the express federal bankruptcy power. The issue is no different than for municipalities. Aside from those two top law firms I mentioned in the other article which think bankruptcy for states is constitutional, see what Prof Skeel at U Penn wrote: “constitutionality of bankruptcy-for-states is beyond serious dispute.” http://www.weeklystandard.com/give-states-a-way-to-go-bankrupt/article/518378 Yes, the option would be open to all states not just IL. And giving the states an option they don’t now have can’t seriously… Read more »
Bankruptcy is the only rational answer to save Illinois.
Federal judges are not bound to a State Constitution.
Congress would have to pass legislation allowing States to file bankruptcy, thereby reforming those ridiculous and obscene lottery sized pensions.
” The public across the country will eventually understand that not allowing bankruptcy for broke states like Illinois is costing them dearly”
Seems like the border states (migration destination states/ or states capturing growth) will benefit more than by keeping Illinois away from BK. The remaining states should eventually understand.
Rauner should be joining all the other governors with pension crises in Washington. The all-powerful Durbin should be working on this as well. It’s absurd for SJR to suggest we should not go to Washington for help. And SJR needs to figure out the difference between bi-partisan and capitulation. You know what a bi-partisan solution to RTW would be? Let local jurisdictions create temporary RTW zones to try out the idea on a small scale. If it works, keep going, if not, scrap it. In other words, what was attempted a couple years ago. That’s meeting in the middle, not… Read more »