Rauner as Governor (Chicago, Hampshire, Henry: rent, lawyers, home)

[almost3am]

Originally Posted by NealIRC

T
Here's a new question for your guys: 4 years ago Quinn won the governorship, and the other Republic candidate lost. Does anybody remember why he lost and how does Rauner compare to that guy? Something about Rauner must obviously appeal to the Republicans of non-Cook County Illinois that the previous Republican candidate 4 years ago couldn't win. (If we just compared those 2 candidates I mean.).

One thing I can say about Brady is that his social views turned a lot of people off. I think that is where Rauner went right, where he barely talked about these things.

[MSchemist80]

Originally Posted by LeotheOrangeCat

States are not permitted to file bankruptcy, so there is no forum in which the obligations of the state may be restructed.

There is going to have to be. Obviously when the excrement really starts hitting the fan the Feds and Illinois are going to have to make some sort of bailout deal like the one between the EU and Greece. Right now Illinois cannot continue on without something radical happening. Either they will have to raise taxes to the levels as California with a graduated income tax topping out ~11% which will cause people and businesses to flee in droves or there will need to be major restructuring.

Right now Illinois is ploughing forward with bonds and delaying payments on its bills. That won't last forever. Illinois' bond rating is continually falling causing interest rates to go up on them.

[LeotheOrangeCat]

Originally Posted by MSchemist80

There is going to have to be. Obviously when the excrement really starts hitting the fan the Feds and Illinois are going to have to make some sort of bailout deal like the one between the EU and Greece. Right now Illinois cannot continue on without something radical happening. Either they will have to raise taxes to the levels as California with a graduated income tax topping out ~11% which will cause people and businesses to flee in droves or there will need to be major restructuring.

Right now Illinois is ploughing forward with bonds and delaying payments on its bills. That won't last forever. Illinois' bond rating is continually falling causing interest rates to go up on them.

I am just stating there isn't one now. Probably the easiest fix is to amend the bankruptcy code to allow states to file. I don't think you'll see the Federal government providing any funds. Other states would not accept it.

When are the first big IL pension funds projected to actually run out of money?

[nearnorth]

Originally Posted by NealIRC

And you can probable take this up a notch. If every criminal in Chicago, gang member, felon, drug dealer, people on welfare, section 8 housing, in the mental health clinics, etc. If all those people vote, Rauner would have no chance.

Hell, do they try to get people in county jail and prisons to vote? What percent of those people voted?

Cook County makes up 40% of Illinois by population.

Illinois doesn't allow felons to vote until they have completed serving their terms.

State Felon Voting Laws - Felon Voting - ProCon.org

[Attrill]

Originally Posted by LeotheOrangeCat

I am just stating there isn't one now. Probably the easiest fix is to amend the bankruptcy code to allow states to file.

That is never going to happen - and it would be unconstitutional if a law was passed.

The entire concept of states going bankrupt was a hare-brained idea Newt Gingrich started tossing around a few years back in a desperate attempt to figure out how states could become deadbeats and not pay their bills. He completely ignored basic reality. Things like the fact that no state would ever want to declare bankruptcy because it would kill their ability to issue bonds, completely crippling the state. The fact that no court would ever allow a state to enter bankruptcy until they'd sold off all assets (state parks, state colleges/universities, all state roads, and so on). A court could also demand that a state do everything it could to raise more money, and when you consider that many states have a higher income tax rate (Iowa's top rate is almost 9%) it is clear that Illinois would end up with rates close to double what they are now before it could avoid any obligations (and having the same rates as Iowa would put us in pretty good fiscal shape).

The constitutionality of a state declaring bankruptcy is also dubious, at best. The Contracts Clause of the US constitution means that the Supreme Court would need to step in, and most likely a Constitutional Amendment would need to be passed - not just a law. Whatever the Supreme Court would decide, it would be years between the time a state declared bankruptcy and they're actually being able to do it.

It is also politically impossible to do. After Gingrich brought up the idea bond traders freaked out and the bond markets went into an upheaval. All politicians, regardless of party, instantly distanced themselves from the idea and it died. That was just from some random talk, not from any organized attempt to draft legislation. There are a few nuts who write opinion pieces on it now and then, but it's a complete fantasy.

So no, no state will ever declare bankruptcy. I'm also certain that Rauner sides with bond traders and is not considering it at all.

[chet everett]

Rare time that I agree with Attrill --no precedent for an entire attempting to use bankruptcy to address debt problem. What there is a precedent for a LARGE governmental unit turning to the Feds to backstop their funding. That is basically what NYC did in 1975...

https://www.library.ca.gov/crb/95/notes/v3n1.pdf

The Federal Financial Control Board literally loomed over NY debt for 20 years -- nobody wants that, but the alternative of defaulting on bonds is worse!

Rauner has the right people that will understand what such actions would do to those that have invested in Chicago or Illinois through the bond market and can get Madigan on the same page with just a few key points -- like how no Federal prosecutor would tolerate the kind of shameless lack of prohibitions against state elected officials from doing business against the interest of the state with private clients!

[lenniel]

I find it funny that people are worried about Rauner LOWERING taxes and how that will impact the state. Obviously these are union employees worried about their pensions (which is fine and self serving, I would also if I were in that situation).
But the question remains, what was Quinn going to do about it? Nothing! Maybe lie again about 'temporary' taxes or something like that but essentially, you were going to get more of the same thing, which is nothing.

Give Rauner a chance to see what he can do.

[nearnorth]

Originally Posted by lenniel

I find it funny that people are worried about Rauner LOWERING taxes and how that will impact the state.

Yeah, how silly of them to think that an entity that is heavily in debt shouldn't cut revenue.

[MSchemist80]

People are already fleeing the state due to taxes. Businesses while most large ones aren't fleeing yet they are not expanding in this state. People are being bankrupted by property taxes, higher sales taxes, and now higher income taxes. Neither people nor businesses will tolerate the kind of taxation necessary to maintain the current spending on payroll, pensions, and inefficient redundant governing bodies and school districts.

If there is not some sort of managed bailout deal Illinois will become so unattractive a place to live and do business that the entire state will start to degenerate into a Detroit or North Chicago with abandoned businesses and foreclosed homes.

[awestover89]

Originally Posted by MSchemist80

People are already fleeing the state due to taxes. Businesses while most large ones aren't fleeing yet they are not expanding in this state. People are being bankrupted by property taxes, higher sales taxes, and now higher income taxes. Neither people nor businesses will tolerate the kind of taxation necessary to maintain the current spending on payroll, pensions, and inefficient redundant governing bodies and school districts.

I think this is the big issue. Under Quinn our expenses skyrocketed somewhere around 25%, even with the increase in tax revenue that was supposed to be a temporary solution that Quinn then wanted to make permanent. I'm not suggesting Rauner immediately drop the tax rate, but the increase really did nothing to help our situation. There are too many other places with more reasonable taxes that are drawing businesses that we have to cut special deals to get large companies to come to Illinois. We need to reign in our spending, and bring taxes down to a more reasonable level to draw in more potential growth. I'm not sure if Rauner is the right guy who will be able/willing to make the changes necessary for Illinois, but I had also lost all confidence in Quinn.