U.S. States Face Biggest Cash Crisis Since the Great Depression – Wall Street Journal

Illinois, with the worst finances of any state, has been banking on billions in federal funding. Since the pandemic, Illinois’s total retirement and debt liabilities are on track to make up 45% of the state’s gross domestic product by June 2021, up from 35% in 2019, according to Moody’s Investors Service. Illinois was one of only two borrowers to tap loans offered from the Federal Reserve as part of the aid packages.
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Mike
5 years ago

State Debt (pensions, retiree healthcare, bonds, etc.) + State COVID-19 Lockdowns = Less revenue available to the state. Governor Pritzker’s solution? No restructuring of debt. Add more debt via a short term loan from the Federal Reserve (historic program). Continue lockdown policy. Increase spending on social justice initiatives and elsewhere. No collective bargaining agreement pay freezes. Promote a referendum to the state constitution to permit an adjustable state income tax. That in turn permits the General Assembly to create adjustable state income tax rates. The initial adjustable tax rates hike state income taxes on the wealthy. Sounds great to the… Read more »

Leaving Town
5 years ago
Reply to  Mike

You nailed it.

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