“A lot of businesses are going to struggle, especially those that are smaller with little cash on hand, and it’s going to trickle down to every person that works for them,” Ted told Terry Martin of the Illinois Channel on Friday. “We don’t know how long it’s going to last but it’s going to cause big, big stress. The question now is, does it create a recession?” 

Ted discussed the impact of the Coronavirus on Illinois and Chicago’s budgets, the effect of the market crash on Illinois’ already crisis-level pension funds, and how these recent events make the push for a progressive tax all the more foolhardy.

Some highlights from the discussion:

“When you look at a budget like Illinois’, about $21 billion dollars comes from personal income taxes. Well, with a whole bunch of people out of work for two, three, or four months you can bet that income taxes are going to take a hit. If it’s a 10 percent hit, you’re talking about a $2 billion shortfall. There’s also $8 billion in sales taxes the state relies on. A 10 percent hit there means another $800 million gap. That’s a $3 billion hole on what’s already a $2-3 billion shortfall.”

“Moody’s has come out and said there are two states unprepared for recession: Illinois and New Jersey, and two cities unprepared: Chicago and Detroit.”

“Bad companies that have bad credit ratings, some of them will be rated junk because of what’s happening to the economy. You have to wonder how the agencies are looking at near-junk Illinois under a stress scenario like this.”

“When it comes to Illinois, the last decade has hidden all the cracks that exist here. The booming stock markets, the national economy, those really helped Illinois hide from its problems. Now they’re going to be exposed. And the question is, do we have the leadership that will say we’re going to take our medicine and do the right things? Or are they going to kick the can down the road again?”

Read more about the impact of the coronavirus on Illinois:

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Poor Taxpayer
7 months ago

A simple calculation based on Moody’s state and local retirement debts puts the shadow mortgage each Illinois household is on the hook for at $90,000.
Or get a U Haul and owe nothing. Never look back.
Let all the cops, teachers and firemen pay the increased taxes.

Poor Taxpayer
7 months ago

The best day of your life is the day you load the U Haul and Kiss Illinois Good Bye.
DOA, not hope. The Greed of Cops, Firemen and Teachers have destroyed Illinois.
They all live in luxury homes in Florida and are laughing their asses off at you morons that stayed.

Freddy
7 months ago

Teachers in Chicago and around the state will get 2 weeks off minimum with pay. Will they use sick pay and personal days or will those be saved for pension spikes? Considering this is a national medical emergency sick time should be used first. But taxpayers have unlimited money so it really doesn’t matter.

Riverbender
7 months ago
Reply to  Freddy

The way it was explained to me is that the teachers will be preparing take home packets for the students making it, from what I was told, a continuing teaching event so the teachers will be paid and the Districts will get their funding. I should add the schools in my area will be handing out daily food rations at the schools. With the food stamps and WIC issues I have often wondered why meals are furnished without cutting the allotments. How much food do these people need?

Db
7 months ago

Everyone in Illinois, please write to President Trump via The White House Home page. We have had enough of the crooks running this state into the ground! We have had enough of them putting us in danger with their sanctuary city policies! We have had enough going bankrupt trying to pay these high property taxes! Drain the swamp! Write to the President and tell him how you feel about what’s going on in Illinois! This CAN NOT continue! Governor Pritzker must be Impeached to save the homeowners of Illinois!!!!

The Truth Hurts
7 months ago
Reply to  Db

Why would Gov Pritzker be impeached? He said he would seek a bill to implement a progressive tax. That bill was passed and he signed it and now the people of Illinois will decide on it. He said he would make marijuana legal. He made that happen. He said he would legalize sports gambling. Done. He said he would increase spending. Done. Why would he be impeached? It sounds like you don’t like his policies. If that’s the case then you should vote for a different candidate during the next election. Have we really reached a point where anytime “our”… Read more »

Platinum Goose
7 months ago

“Why would Gov Pritzker be impeached?” One word – toilets. Although what he did seems to be the character of our Illinois politicians.

debtsor
7 months ago

I supposed they could impeach Fat Slob for, uh, abuse of power, or, uh, obstruction of the legislature, or some other nebulous and partisan reasons. It’s not as if it hasn’t happened before!

Indy
7 months ago
Reply to  Db

Or or here’s a practical & easy solution to the soaring taxes.
Move to Indiana

Poor Taxpayer
7 months ago
Reply to  Indy

Poor people of Indiana that get the Democrats from Illinois. What Destroyed Illinois is the Democrats and they never change.
Move to a zero income tax state and enjoy the fruits of your labor.
I am a multi millionaire just on the tax savings over the last 40 years.
It really does add up over a lifetime of saving and investing.
Illinois greedy cops, teachers and firemen have robbed the honest working taxpayer of their retirement.

Db
7 months ago

I’m horribly disappointed with the governor. We need property tax freezes and to lower our property tax. We can not afford more taxes. He is causing more people to flee the state with his threats of more taxes. We need to overturn this Governor. He is not for the people and he doesn’t understand middle class people whatsoever. He is a billionaire causing so much undue stress on the people of Illinois!

s and p 500
7 months ago

John Moorlach had an excellent interview on Alpha about Calif’s problems. As he pointed out, rich people don’t sell their stocks during a bear market which means they also aren’t paying capital gains taxes.

https://www.alpha-week.com/realvision/golden-state-pension-trainwreck-coming

EX-IL Resident
7 months ago
Reply to  s and p 500

Very Informative Interview . Thanks for posting . Taped before the market downturn…should get real interesting for the usual suspect states like IL

s and p 500
7 months ago
Reply to  EX-IL Resident

Moorlach also appears in a great you-tube vid “When Money Talks The Truth is Silent” – OC Bankruptcy – 10 Years”. Like he says, when you make a bet on interest rates, they never go the way you want them to,

s and p 500
7 months ago

Taxpayers are also starting to say “no”. Prop 13.2 flopped in Calif. last week.

https://calmatters.org/education/2020/03/california-prop-13-school-bond-defeated/

EX-IL Resident
7 months ago

Excellent interview Ted !!! pension Ponzi scheme is going to get real real soon in IL

Governor of Alderaan
7 months ago

To quote Warren Buffet, when the tide goes out you find out who’s been swimming naked. And we’re about to get a full view of Illinois’ cheeks

Bob Out of Here
7 months ago

Except JB has your cheeks firmly in his sights. What is always left out is the fact fat boy is willing to amend the constitution, but he fails to put the tax brackets, rates and deductions into the amendment. That would mean they’d have to amend it again if they wanted to raise taxes.

Rick
7 months ago

Does the pension diminishment clause protect the pensioners from market forces and acts of God? I would think to interpret it that broadly is wrong. Because nobody here would be “acting” with the “intent” to diminish the pensions, which was the original purpose of the clause to prevent anyone from intentionally raiding the pension by laws or management. When an act of God comes along they should not be protected, there is no intent.

James
7 months ago
Reply to  Rick

Rick, that seems to be a strong argument! The other side of the coin is that in every situation”s… h…….” from time historically, wise people know it and prepaare for it as much as is reasonably possible. That’s where it goes awry in IL government. IL state budgets always are exist as balanced only “on a wing and a prayer.” So, does stupidity and political pressure brought on career polliticians allow them to disregard any clause in the Illinois Constitution that simply has a lower priority to them than others when it comes to their continuing electability? I’d guess that’s… Read more »

Governor of Alderaan
7 months ago
Reply to  Rick

The pension diminishment clause protects the greed-crazed pensioners from market forces, acts of God, and it supersedes the laws of math and physics. The Supreme Court could cite the pension diminishment clause to make 1+1=5, control prices, and abolish gravity

James
7 months ago

And we all know where that leads, don’t we, Gov.? The clock is already close to midnight for the 2015 IL Supreme Court’s ruling turning down any public pension diminishment for current employees and retirees. Practical considerations say that will be amended one way or another.