Illinois Republicans

State Of Illinois’ Unpaid Bills Could Spike To $15 Billion By July

Bad news about the State of Illinois’ finances keeps rolling in. Monique Garcia reported on the website of the Chicago Tribune this morning:

The state has a record stack of unpaid bills that’s expected to hit $15 billion by July if nothing is done, and it must fork over interest when it’s late paying them. Putting a hard dollar figure on those interest costs is difficult, however…

The potential price tag is high enough that Senate leaders from both parties are pushing a plan to borrow billions of dollars to help whittle down the bill backlog and limit interest payments…

Under the plan being pushed by Democratic and Republican leaders in the Senate, Illinois would borrow $7 billion over seven years to pay down the bill backlog and bring the payment cycle closer to 30 days…

(Editor’s note: Bold added for emphasis)

The Tribune article comes after Governor Bruce Rauner pointed out in his State of the State address last Wednesday:

We haven’t had a full year budget of some kind in a year-and-a-half- and we haven’t had a state budget that is truly balanced in decades. We have more than $11 billion in unpaid bills, a $130 billion unfunded pension liability, and the worst credit rating in the nation. We have the 5th highest overall tax burden and one of the lowest rates of job creation of any state

(Editor’s note: Bold added for emphasis)

Garcia’s piece took a close look at the interest payments associated with the bill backlog debacle, which you can read about here on the Tribune site.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Share

Tags: , , , , , , , , , , , , , , ,

Monday, January 30th, 2017 Borrowing, Business, Credit, Debt Crisis, Fiscal Policy, Government, Political Parties, Spending, Taxes Comments Off on State Of Illinois’ Unpaid Bills Could Spike To $15 Billion By July

Amended Illinois Tax Hike Plan To Hit Taxpayers, Businesses, And Employment?

Back on January 16 I published a post on Survival And Prosperity entitled “Illinois ‘Grand Bargain’ Legislation Includes 32 Percent Personal Income Tax Hike.” I started the piece with:

Illinois taxpayers may get hit with a significant income tax hike pretty soon…

Yesterday morning, I learned the potential “hit” could be a “combination of punches” directred at taxpayers, businesses, and employment.

From the Greg Hinz On Politics blog on the website of Crain’s Chicago Business:

There’s still no word on when lawmakers are going to vote on it, but an amended tax-hike plan has been introduced in the state capital.

It’s a doozy, with an even higher income tax, a limited service tax and a sort of minimum tax on business. But the soda pop levy is gone, as are a couple of those corporate loophole closings that business groups didn’t like…

The highlights:

The Individual income tax would go to 4.99 percent from the current 3.75 percent, and the corporate income tax to 7 percent from 5.25 percent. Combined, that would pull in about an additional $5 billion a year.

A new “business opportunity tax” ranging from a fee of $225 to $15,000 a year would be imposed, based on payroll. The intent is to make sure that all companies pay something, whether they are profitable or not. The state’s net on this is an estimated $750 million a year.

However, the research and development tax credit would be made permanent and the manufacturers purchase and graphics arts credits would be combined, as some businesses wanted.

A service tax—extension of the sales tax—would be imposed on certain items including repair and maintenance of personal property, use of amusement services including gyms, landscaping, laundry and dry-cleaning, and storage of personal goods such as cars and property. This would pull in a projected $400 million a year.

The telecom excise tax would be extended to cable and satellite services.

Both Radogno and Cullerton are said to have negotiated and support the above, pending action on the rest of the package…

Hinz does a good job summarizing the proposed expanded revenue grab. At this point, I want to go back to that bit about a new “business opportunity tax.” From the actual legislation for the so-called “Business Opportunity Tax Act”:

Section 1-10. Tax imposed.
(a) Beginning on July 1, 2017, a tax is hereby imposed upon each qualified business for the privilege of doing business in the State.
(b) The tax under subsection (a) shall be imposed in the following amounts:
(1) if the taxpayer’s total Illinois payroll for the taxable year is less than $100,000, then then annual tax is $225;
(2) if the taxpayer’s total Illinois payroll for the taxable year is $100,000 or more but less than $250,000, then the annual tax is $750;
(3) if the taxpayer’s total Illinois payroll for the taxable year is $250,000 or more but less than $500,000, then the annual tax is $3,750;
(4) if the taxpayer’s total Illinois payroll for the taxable year is $500,000 or more but less than $1,500,000, then the annual tax is $7,500; and
(5) if the taxpayer’s total Illinois payroll for the taxable year is $1,500,000 or more, then the annual tax is $15,000…

I can see a number of existing and prospective Illinois business owners having concerns with the proposed “Business Opportunity Tax Act.”

First, Illinois already has poor business reputation. For example, early last year Chief Executive magazine asked 513 CEOs to rank states they are familiar with on the friendliness of their tax and regulatory regime, workforce quality, and living environment. The “Land of Lincoln” came in as the 48th worst state in this annual survey, beaten only by New York and California in that order. The “Business Opportunity Tax Act” has the real potential of increasing the perception that Illinois is business-unfriendly.

Second, if my understanding of the legislation is correct, the larger the payroll an Illinois business has, the more taxes they will pay. Consider the following. If I’m an Illinois business owner with a payroll just shy of $250K who would like to bring on more staff, I may be dissuaded from doing so to avoid forking over an additional $3,000 to the state (unless I’m convinced the hiring would offset the $3K hit). And how might employee raises be impacted once payrolls start approaching a higher tax bracket? The proposed “Business Opportunity Tax Act” may not be too terrific for Illinois employment.

Third, readers of this blog may know that I am in the process of rolling out a research business focusing on specialized asset protection. It’s been my intention to launch in the Chicago area. Lately, however, I’ve been thninking of opening up shop in southeast Wisconsin (where my family has a residence) due to the direction Illinois looks to be heading with taxes and its treatment of the business community. The passage of the “Business Opportunity Tax Act” could be the straw that breaks the camel’s back. I wonder how many other prospective Illinois business owners might be in the same boat?

Stay tuned…

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Hinz, Greg. “New, wider tax plan rolls out in Springfield.” Greg Hinz On Politics. 24 Jan. 2017. (http://www.chicagobusiness.com/article/20170124/BLOGS02/170129931/springfield-lawmakers-roll-out-new-wider-tax-hike-plan). 26 Jan. 2017.

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,

Thursday, January 26th, 2017 Business, Employment, Fiscal Policy, Government, Political Parties, Taxes Comments Off on Amended Illinois Tax Hike Plan To Hit Taxpayers, Businesses, And Employment?

Illinois ‘Grand Bargain’ Legislation Includes 32 Percent Personal Income Tax Hike

Illinois taxpayers may get hit with a significant income tax hike pretty soon. John O’Connor of the Associated Press reported Sunday on The State Journal-Register website:

If last week’s action is any indication, the Democratic and Republican leaders of the Illinois Senate are serious about attempting to bust the state’s 18-month budget deadlock – quickly…

Promising to act on a package by month’s end, they introduced 13 measures Wednesday that included non-budget-related sweeteners for both sides. By Thursday, they had been rapidly assigned public committee hearings…

Here’s a look at other major pieces of the legislation some in the Capitol have nicknamed the “grand bargain”:

* Income tax increase: The personal income tax would jump from 3.75 percent to 4.95 percent, a plan to generate $4.1 billion a year. With spending cuts, Democrats argue, that could eliminate what the governor’s office estimates will be a $5.3 billion deficit on the June 30 end of the fiscal year…

(Editor’s note: Bold added for emphasis)

The proposed 32 percent income tax hike is not a sure thing, as O’Connor noted:

The outstanding question is if a Senate-approved deal would ultimately pass muster with Democratic House Speaker Michael Madigan, who has refused to entertain Rauner’s pro-business agenda as part of budget talks…

Six years ago, the 3 percent personal income tax rate jumped to 5 percent until 2015, when the rate rolled back to the current 3.75 percent.

Like I just suggested to Chicago taxpayers in the previous post, Illinois taxpayers might want to take heed of what’s potentially coming down the pipeline.

Other pieces of legislation include $7 billion more borrowing to pay off overdue bills (now at $10.7 billion), which you can read about on the The State Journal-Register site here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Share

Tags: , , , , , , , , , , , , , , , ,

Monday, January 16th, 2017 Borrowing, Debt Crisis, Fiscal Policy, Government, Income, Political Parties, Taxes Comments Off on Illinois ‘Grand Bargain’ Legislation Includes 32 Percent Personal Income Tax Hike

Donald Trump Inheriting A ‘Poisoned Chalice’?

I’ve had this suspicion for some time now that whoever won the 2016 U.S. presidential election is very likely inheriting a “poisoned chalice.”

When I launched Boom2Bust.com, “The Most Hated Blog On Wall Street,” on Memorial Day weekend 2007, I started warning readers of a coming U.S. financial collapse.

After moving on to Survival And Prosperity in 2010, I came to believe the economy/larger financial system had already entered a long, drawn-out descent before the eventual crash.

That downward trajectory would be punctuated by crises like what reared its ugly head in the autumn of 2008.

Financial types were quick to label the recession at the end of last decade as the “Great Recession.”

This “nattering nabob of negativity” thinks it’s only a matter of time before a “Greater Recession” strikes, fueled by Washington and the Fed “kicking the can down the road” and having too few bullets left when that “road” inevitably runs out.

President-elect Trump is also aware of the possibility of such economic upheaval.

Bob Woodward and Robert Costa reported on The Washington Post website back on April 2, 2016:

Donald Trump said in an interview that economic conditions are so perilous that the country is headed for a “very massive recession” and that “it’s a terrible time right now” to invest in the stock market, embracing a distinctly gloomy view of the economy that counters mainstream economic forecasts…

Trump has for months contended that the U.S. economy is in trouble because of what he sees as an overvalued stock market, but his view has grown more pessimistic of late and he is now bearish on investing, to the point of warning Americans against doing so.

“I think we’re sitting on an economic bubble. A financial bubble,” Trump said. He made clear that he was not specifying a sector of the economy but the economy at large and asserted that more bullish forecasts were based on skewed employment numbers and an inflated stock market.

“First of all, we’re not at 5 percent unemployment. We’re at a number that’s probably into the twenties if you look at the real number,” Trump said. “That was a number that was devised, statistically devised to make politicians- and, in particular, presidents — look good. And I wouldn’t be getting the kind of massive crowds that I’m getting if the number was a real number.”

(Editor’s note: Bold added for emphasis)

Yet Trump, as President-elect of the United States, chooses to accept the potential “poisoned chalice,” from which he might be forced to drink from during his tenure in the Oval Office as the current economic expansion grows long in the tooth.

Consider the following from Jeffrey Sparshott in The Wall Street Journal’s Real Time Economics blog this morning:

Donald Trump is poised to inherit one of the longest-lived economic expansions since the World War II era. Barring any sudden shock or sudden acceleration, the president-elect will also take office during the weakest

The economy has been growing for more than seven years, ranking the expansion the fourth-longest since 1949 (when quarterly data became available). If economic expansion continues through Mr. Trump’s first term, it will be the longest.

While gross domestic product, a broad measure of economic of output, is advancing, it’s been at the slowest rate on record for an expansion

(Editor’s note: Bold added for emphasis)

I’d like to think Donald Trump and the Republicans could turn this ship around and avert economic disaster.

I, for one, would only be too happy to be proven wrong about my prediction of a “Greater Recession” and eventual collapse.

But I fear the damage may already be done.

So much so that the incoming White House might want to level with the American people about what might be in store for them from an economic standpoint.

Otherwise, the public will have less of a fighting chance of weathering the financial storm should it hit.

Not to mention opponents of a Trump administration will try hard to pin the blame on them for a painful event previous administrations played a big part in creating.

One need only look at Illinois where Republican Governor Bruce Rauner (only 22 months in office) is facing the same baseless charges for decades of mismanagement perpetrated by those across the political aisle.

President-elect Trump has his work cut out for him as the economy is concerned. The billionaire businessman seems to be up for the challenge, and America will know soon enough if he can pull off yet another amazing feat.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Costa, Robert and Woodward, Bob. “In a revealing interview, Trump predicts a ‘massive recession’ but intends to eliminate the national debt in 8 years.” The Washington Post. 2 Apr. 2016. (https://www.washingtonpost.com/politics/in-turmoil-or-triumph-donald-trump-stands-alone/2016/04/02/8c0619b6-f8d6-11e5-a3ce-f06b5ba21f33_story.html?hpid=hp_hp-top-table-main_trumppresidency-7pm%3Ahomepage%2Fstory). 11 Nov. 2016.

Sparshott, Jeffrey. “The U.S. Economy President Donald Trump Will Inherit, in 11 Charts.” Real Time Economics. 11 Nov. 2016. (http://blogs.wsj.com/economics/2016/11/11/the-u-s-economy-president-donald-trump-will-inherit-in-11-charts/). 11 Nov. 2016.

Share

Tags: , , , , , , , , , , , , , ,

Friday, November 11th, 2016 Bubbles, Employment, Federal Reserve, Fiscal Policy, GDP, Government, Investing, Monetary Policy, Political Parties, Preparedness, Recession, Recovery, Stocks Comments Off on Donald Trump Inheriting A ‘Poisoned Chalice’?

Illinois On Pace To Run $5 Billion Deficit

“Gaze upon the Illinois landscape today and things may seem OK. Schools opened last week, the roads are getting repaired, the state fair was held, the University of Illinois begins a new academic year tomorrow, the state government’s even paying its bills.

Enjoy this period of normality. It isn’t going to last much longer…”

-Tom Kacich, reporter/columnist at The News-Gazette (Champaign-Urbana), August 23, 2015

More bad news about Illinois’ fiscal health. Natasha Korecki reported on the Chicago Sun-Times website Monday:

Illinois is paying its bills – by court mandate — since Illinois lawmakers and Gov. Bruce Rauner were unable to reach a budget agreement. Rauner vetoed a Democrat-authored financial plan in June, saying it was out of balance by some $4 billion. The new fiscal year came and went July 1 without a new plan in place. Both sides say they’re willing to negotiate, but remain locked into their positions. Rauner wants a series of changes to benefit businesses and weaken unions in Illinois. Democrats oppose the proposals and say they shouldn’t be attached to a budget…

A recent analysis by Senate Democrats indicates that because of various contracts, decrees and court orders compelling spending, the state had already committed 90 percent of its revenues and was on pace to be $5 billion in the hole

(Editor’s note: Bold added for emphasis)

Kacich added from my old stomping grounds:

In May the Democrats who control the Legislature approved a budget that called for spending about $36.5 billion.

Republican Gov. Bruce Rauner vetoed it, calling it “unconstitutional” and “unbalanced.”

You want to see unbalanced?

Even without a constitutional budget in place, the state is still spending money, and eventually it could rise to a level of spending greater than the budget the Democrats sent him in May.

During a Senate hearing last week on an additional appropriation of $373 million for MAP grants for low-income college students — it passed and will go to the House for near-certain approval — Democratic legislators admitted the state is operating at a “spend rate” of 90 percent on a $38 billion budget

Anticipated revenue for the year, meanwhile, is the range of $32 billion, or $33 billion if the economy takes off.

Ugh…

(Editor’s note: Bold added for emphasis)

$36.5 billion was the proposed budget. It was vetoed. The state is currently operating at a 90 percent “spend rate” of a $38 billion budget. And anticipated revenue for the year is only $32-$33 billion.

Not good.

Kacich thinks a tax increase, “that may or may not be bigger than the one that was phased out on Jan. 1.,” is headed our way.

I think he’s right about that tax hike. And it’s something Illinoisans may want to take into account concerning their personal finances in the near future.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Kacich, Tom. “Tom Kacich: Enjoy the calm; the storm is on the way.” The News-Gazette. 23 Aug. 2015. (http://www.news-gazette.com/news/local/2015-08-23/tom-kacich-enjoy-calm-storm-way.html). 26 Aug. 2015.

Korecki, Natasha. “Comptroller: Illinois facing ‘severe cash shortage.’ Chicago Sun-Times. 24 Aug. 2015. (http://chicago.suntimes.com/news/7/71/903797/comptroller-illinois-facing-severe-cash-shortage). 26 Aug. 2015.

Share

Tags: , , , , , , , , ,

Wednesday, August 26th, 2015 Debt Crisis, Deficits, Fiscal Policy, Government, Political Parties, Spending, Taxes Comments Off on Illinois On Pace To Run $5 Billion Deficit

Illinois Tax Hikes Coming Warn Municipal Bond Fund Managers

Talk of rapidly-approaching tax hikes in the “Land of Lincoln” is growing. Reuters’ Nick Brown, Megan Davies, and Karen Pierog reported yesterday:

With no easy way to financially engineer or negotiate its way out of a budget and pensions crisis, Illinois is likely to dish out some unpleasant medicine to its residents in the next few years. And investors say that is most likely to come in the form of higher taxes.

Given the Democrats’ control of the state legislature and their opposition to many proposals for spending cuts, municipal bond fund managers see little alternative for Republican Governor Bruce Rauner other than eventually agreeing to hike taxes, such as raising the state’s income tax or broadening its sales tax base…

(Editor’s note: Bold added for emphasis)

Regular readers of Survival And Prosperity shouldn’t be surprised when the hikes (fees, fines, and taxes) arrive, as they’ve been discussed on this blog for quite some time now. The tragedy is that Springfield continues to waste time and resources on trivial matters while neglecting to tackle crucial issues like the well-publicized debt crisis. Monique Garcia and Kim Geiger reported on the latest nonsense preoccupying the politicians. From the Chicago Tribune website this afternoon:

Democratic Speaker Michael Madigan’s effort to ask voters to approve a measure to impose higher income taxes on millionaires failed in the House on Thursday, but provides the powerful Southwest Side politician ammunition to attack Republicans in next year’s legislative campaigns.

The proposal needed 71 “yes” votes to pass, but received just 68. But now there’s a roll call, and Madigan’s Illinois Democratic Party could send out mailers criticizing Republicans who voted against the idea. Democrats already have sent out attack ads against Republicans who did not vote in favor of a property tax freeze last week

(Editor’s note: Bold added for emphasis)

Games. Stupid political games as the state’s “financial reckoning day” fast approaches.

By the way, back on March 24 of last year I blogged about that push for a “millionaire’s tax” in Illinois. My prediction now is pretty much the same as it was a year ago:

Should Illinois Democrats jack up their income taxes, I suspect the number of Illinois millionaires right before the tax hike is implemented will plummet. Revenue will follow. Out-of-state vacation homes in Indiana and Wisconsin will be declared as primary residences.

The only difference being, I forgot to mention Michigan vacation homes.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Brown, Nick, Davies, Megan and Pierog. “As Illinois runs out of options in budget crisis, tax rises seen in the cards.” Reuters. 20 May 2015. (http://news.yahoo.com/illinois-runs-options-budget-crisis-tax-rises-seen-051616644.html). 21 May 2015.

Garcia, Monique and Geiger, Kim. “Madigan’s ‘millionaire tax’ question fails in House.” Chicago Tribune. 21 May 2015. (http://www.chicagotribune.com/news/local/politics/ct-rauner-warns-of-long-overtime-20150521-story.html). 21 May 2015.

Share

Tags: , , , , , , , , , , , , , , , , , ,

Friday, May 22nd, 2015 Debt Crisis, Fiscal Policy, Government, Political Parties, Socialism, Spending, Taxes, Wealth Comments Off on Illinois Tax Hikes Coming Warn Municipal Bond Fund Managers

Tax Hikes Coming As Illinois Public Pension Crisis ‘Fix’ Shot Down By State Supreme Court?

This weekend Illinoisans heard about the Friday ruling by the Illinois Supreme Court on a law that was celebrated by many as a big step in resolving the state’s well-publicized public pension crisis. Rick Pearson and Kim Geiger reported on the Chicago Tribune website Friday:

The Illinois Supreme Court on Friday unanimously ruled unconstitutional a landmark state pension law that aimed to scale back government worker benefits to erase a massive $105 billion retirement system debt…

At issue was a December 2013 state law signed by then-Democratic Gov. Pat Quinn that stopped automatic, compounded yearly cost-of-living increases for retirees, extended retirement ages for current state workers and limited the amount of salary used to calculate pension benefits.

Employee unions sued, arguing that the state constitution holds that pension benefits amount to a contractual agreement and once they’re bestowed, they cannot be “diminished or impaired.” A circuit court judge in Springfield agreed with that assessment in November. State government appealed that decision to the Illinois Supreme Court, arguing that economic necessity forced curbing retirement benefits.

On Friday the justices rejected that argument, saying the law clearly violated what’s known as the pension protection clause in the 1970 Illinois Constitution…

(Editor’s note: Bold added for emphasis)

Can’t say I was too surprised to hear that ruling handed down.

As for the ramifications on Main Street? Pearson and Geiger added:

The ruling means Republican Gov. Bruce Rauner and the Democrat-controlled General Assembly will have to come up with a new solution after justices appeared to offer little in the way of wiggle room beyond paying what’s owed, which likely would require a tax increase. Coming up with a way to bridge a budget gap of more than $6 billion already was going to be difficult with little more than three weeks before a scheduled May 31 adjournment, and now the pension mess has been added to the mix.

Rauner, who argued during last year’s campaign that the law was unconstitutional and didn’t go far enough to reduce the pension debt, said the court ruling only reinforces his approach of getting voters to approve a constitutional amendment that “would allow the state to move forward on common-sense pension reforms.”

(Editor’s note: Bold added for emphasis)

“A constitutional amendment”

I’m not so sure how that would work out. Consider what Natasha Korecki reported over on the Chicago Sun-Times website Friday:

But it was unclear how such an amendment would help solve the crisis. It arguably could not bring savings because, according to the court ruling, a new law cannot retroactively affect those who are already in the system, said Charles N. Wheeler III, Director of the Public Affairs Reporting program at the University of Illinois at Springfield…

“Likely would require a tax increase”

I suspect- as Survival And Prosperity has been warning for some time now- that Illinoisans will soon be hit with significantly-higher taxes as a consequence of those $6 billion state budget and $105 public pension gaps. Korecki added:

An Illinois Supreme Court ruling that struck down a pension reform law on Friday could have just opened the door even wider to the prospect of deep cuts to services and new taxes for Illinois residents.

With only three weeks left until lawmakers have to pass a balanced budget, legislators now have even more political cover to raise taxes and cut spending following the high court’s decision that it was unconstitutional for the state to pare back promised pension benefits for state employees…

“This ensures that however we resolve this, the citizens of Illinois will be paying more for less service from the state of Illinois,” Kent Redfield, professor emeritus of the University of Illinois at Springfield, said of Friday’s ruling. “I think that’s an inevitable outcome from this.”

(Editor’s note: Bold added for emphasis)

“Less government services. Higher fees, fines, and taxes.”

Something I’ve kept warning about on this blog, with regular observers of Springfield now talking it about these days (if they weren’t already).

I wonder to what extent Illinoisans have prepared/are preparing for such a scenario? I’ll be talking more about this later.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Pearson, Rick and Geiger, Kim. “Illinois Supreme Court rules landmark pension law unconstitutional.” Chicago Tribune. 8 May 2015. (http://www.chicagotribune.com/news/local/politics/ct-illinois-pension-law-court-ruling-20150508-story.html#page=1). 11 May 2015.

Korecki, Natasha. “State Supreme Court pension ruling provides political cover to cut more, tax more.” Chicago Sun-Times. 8 May 2015. (http://chicago.suntimes.com/politics/7/71/590030/state-supreme-court-pension-ruling-provides-political-cover-cut-tax). 11 May 2015.

Share

Tags: , , , , , , , , , , , , , , , , , , , , , ,

Monday, May 11th, 2015 Debt Crisis, Deficits, Entitlements, Fiscal Policy, Government, Legal, Main Street, Political Parties, Taxes Comments Off on Tax Hikes Coming As Illinois Public Pension Crisis ‘Fix’ Shot Down By State Supreme Court?

Bill Introduced To Permit Illinois Municipalities To File For Bankruptcy

Since I started blogging about a U.S. financial crash back on Memorial Day Weekend 2007, I’ve believed one casualty will be municipal government. Particularly in Illinois. So imagine my non-surprise when I spotted an article on the Chicago Tribune website a couple of days ago about proposed legislation at the state level granting Illinois towns the authority to file for bankruptcy. Nick Swedberg of the Associated Press wrote on March 26:

Stressed by pension debt, other financial issues and the possibility losing a chunk of their state aid, some Illinois cities want the option to file for bankruptcy. They’ve found an ally in a Republican lawmaker, who’s proposed legislation to allow municipalities to follow in the footsteps of Detroit and other cities in restructuring debt and paying back creditors…

Rep. Ron Sandack is sponsoring legislation that would grant authority for communities to file for bankruptcy under Chapter 9 of the federal code. The Downers Grove Republican says it’s a “measure of last resort,” especially with Gov. Bruce Rauner’s proposal in next year’s budget to cut in half the local governments’ share of state income taxes by 50 percent.

“It’s just giving time and space to do things right,” he said…

Swedberg added later in the piece:

Municipal bankruptcies are rare, NCSL data shows. Of 37 local government filings since 2010, only 8 were cities, with the majority filed by utilities and special districts.

Detroit filed for the nation’s largest municipal bankruptcy in July 2013, looking to restructure $12 billion of debt…

It’s true. Municipal bankruptcies haven’t happened too often. But keep in mind what Eric Weiner wrote on the NPR website back on February 28, 2008:

For most of U.S. history, cities and towns were not eligible for bankruptcy protection. But during the Great Depression, more than 2,000 municipalities defaulted on their debt, and they pleaded with President Roosevelt for a federal bailout. “All they got was sympathy,” reported Time magazine in 1933. Instead, Roosevelt pushed through changes to the bankruptcy laws that allows towns and cities to file for bankruptcy. They even got their own section of the bankruptcy code: Chapter Nine…

(Editor’s note: Bold added for emphasis)

There’s also this from Robert Slavin on The Bond Buyer website back on January 14:

For the municipal bond industry, 2015 marks the midpoint in what may turn out to be the decade of the bankruptcy.

Four of the five largest municipal bankruptcy filings in United States history have been made in roughly the last three years, a trend analysts attribute to the aftereffects of the 2008 credit crisis and Great Recession, as well as changing attitudes about debt.

“The crash of 2008 and five years of stagnation preceded by years of escalating wages, pensions and Other Post-Employment Benefits set the stage for our recent Chapter 9 filings,” said Arent Fox partner David Dubrow.

Chapter 9 municipal bankruptcy was adopted in 1937 but had been rarely used, particularly by large governments. However, since November 2011 San Bernardino, Calif., Stockton, Calif., Jefferson County, Ala., and Detroit have filed four of the five largest bankruptcies as measured by total obligations.

(Editor’s note: Bold added for emphasis)

Could the specter of Meredith Whitney, the “Diva Of Doom,” be returning to take revenge on the municipal bond industry?

I’m not surprised Illinois municipalities would be interested in House Bill 298. From Patrick Rehkamp and Andrew Schroedter on the website of the Chicago-based Better Government Association back on December 6, 2014:

Reasons for filing vary but often include troubled public development projects, unanticipated hefty legal judgments against a taxpayer-backed entity, or massive pension and bond debt payments that leave a municipality cash-strapped and unable to cover operating costs of employee salaries, vendor payments and other expenses.

(Editor’s note: Bold added for emphasis)

The public pension crisis in Chicago and Illinois has been well-publicized for some time now. And while such entitlements are supposedly protected by a provision in the 1970 Illinois Constitution, the BGA noted in their piece:

In Illinois, public employee pensions are guaranteed by the state constitution. But in the Detroit and Stockton, California bankruptcy cases, federal judges have ruled that pension benefits can be adjusted, the same as other debts, despite a constitutional guarantee.

(Editor’s note: Bold added for emphasis)

You can track the progress of HB 298 on the Illinois General Assembly website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Swedberg, Nick. “Bill pushes for possible municipal bankruptcies in Illinois.” Associated Press. 29 Mar. 2015. (http://www.chicagotribune.com/news/sns-bc-il–closer-look-bankruptcy-20150329-story.html). 3 Apr. 2015.

Weiner, Eric. “What Happens When City Hall Goes Bankrupt?” NPR. 28 Feb. 2008. (http://www.npr.org/templates/story/story.php?storyId=60740288). 3 Apr. 2015.

Slavin, Robert. “Why So Many Big Bankruptcies?” The Bond Buyer. 14 Jan. 2015. (http://www.bondbuyer.com/news/markets-buy-side/why-so-many-big-bankruptcies-1069539-1.html). 3 Apr. 2015.

Rehkamp, Patrick and Schroedter, Andrew. “Next Up: Illinois Municipal Bankruptcy?” Better Government Association. 16 Dec. 2014. (http://www.bettergov.org/next_up_illinois_municipal_bankruptcy/). 4 Apr. 2015.

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Sunday, April 5th, 2015 Bankruptcy, Credit, Debt Crisis, Defaults, Depression, Entitlements, Government, Legal, Political Parties, Recession, Taxes Comments Off on Bill Introduced To Permit Illinois Municipalities To File For Bankruptcy

Illinois Gun Owners Descend On State Capital To Lobby Lawmakers

Yesterday was Illinois Gun Owner Lobby Day (IGOLD) down in Springfield. Nick Swedberg of the Associated Press reported last night:

Gun owners from across the state flooded the Illinois Capitol on Wednesday for an annual rally, and many spoke with lawmakers from their home districts about legislation to broaden gun rights…

I’ve blogged about this annual gun rights event before. From the Illinois State Rifle Association website:

Illinois Gun Owner Lobby Day (IGOLD) was started back in the early ‘90’s to put a face on Illinois gun owners. Up until that time the media had portrayed gun owners and those who believed in the Second Amendment as some knuckle dragging Neanderthal throw backs, barely worthy of being called humans. IGOLD helped change that although the mainstream media still labels gun owners that way, when they can get away with it.

The first ISRA Lobby Day was attended by about 200 people. Among those attending were four undercover policemen. In 2006, the ISRA joined with several other groups and ISRA Lobby Day became Illinois Gun Owner Lobby Day (IGOLD). The Illinois Gun Owners’ Lobby Day (IGOLD) has become the number one demonstration of citizens promoting gun owners’ rights in the United States – the Illinois State Rifle Association (ISRA) is its primary sponsor. The crowds have grown each year. In 2013, 8200 gun owners showed up to lobby their legislators and to become the face of all the gun owners in Illinois. Because of IGOLD and other ISRA activities, gun owners have increased in stature in Illinois…

I understand that this year IGOLD pushed for expanding gun rights in the state- particularly concealed-carry. Swedberg added:

Proposed legislation in the General Assembly would allow concealed carry in places prohibited under current law, such as bus stations, churches and bars…

The state’s top gun rights advocacy group is expected to meet with [Illinois Governor Bruce] Rauner this month, a meeting that previous Democratic governors only promised to have. The organization’s executive director said that’s a positive sign that the new administration will be more favorable to their cause than the last.

“It’s hard to deal with people who just shut you out,” Richard Pearson, head of the Illinois State Rifle Association, said.

Illinois gun owners should be grateful for ISRA and IGOLD. Because when the next mass shooting along the lines of Newtown comes along, their keeping the spotlight on gun rights will remind politicians across the “Land of Lincoln” they’ll have a battle on their hands attempting to implement knee-jerk ineffective and unconstitutional gun “control” laws.

For more information about the Illinois State Rifle Association, visit their website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Source:

Swedberg, Nick. “Gun owners rally for right to carry guns in more places.” Associated Press. 18 Mar. 2015. (http://www.chicagotribune.com/suburbs/daily-southtown/news/ct-sta-gun-rights-st-0319-20150318-story.html). 19 Mar. 2015.

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , ,

Thursday, March 19th, 2015 Crime, Firearms, Government, Gun Rights, Mainstream Media, Political Parties, Self-Defense Comments Off on Illinois Gun Owners Descend On State Capital To Lobby Lawmakers

Illinois Democrat Introduces Statewide Gun Registration, Ammo ‘Control’ Bill

“A list, record, or registry of legally owned firearms or law-abiding firearm owners is not a law enforcement tool and can become an instrument for profiling, harassing, or abusing law-abiding citizens based on their choice to own a firearm and exercise their Second Amendment right to keep and bear arms as guaranteed under the United States Constitution. Further, such a list, record, or registry has the potential to fall into the wrong hands and become a shopping list for thieves.”

-State of Florida Statutes, 790.335 Prohibition of registration of firearms; electronic records

The push for more gun “control” is on the march in the “Land of Lincoln.”

Last year around this time, State Representative Kelly Cassidy (D-Chicago) spearheaded statewide gun registration and ammunition “control” in Illinois with HB4715. Creating the “Firearms Registration Act,” the legislation eventually went nowhere.

This time around, State Senator Jacqueline Y. Collins (D-Chicago) is the torch-bearer of more gun and ammo “control” in the Midwestern state, filing the resurrected Firearms Registration Act legislation in the Senate (SB1413) on February 20. From a synopsis of the bill over on the Illinois General Assembly website:

Creates the Firearms Registration Act. Provides that every person in the State must register each firearm he or she owns or possesses in accordance with the Act. Provides that a person shall not purchase or possess ammunition within this State without having first obtained a registration certificate identifying a firearm that is suitable for use with that ammunition, or a receipt demonstrating that the person has applied to register a suitable firearm under the Act and that the application is pending. Provides that the Department of State Police must complete a background check of any person who applies for: (1) a registration certificate for a firearm that was lawfully owned or possessed on the effective date of the Act, was brought into the State by a new resident, or was acquired by operation of law upon the death of the former owner; or (2) a renewal of a registration certificate unless, within 12 months of the date the renewal application is submitted, the applicant passed a background check conducted by the Department in connection with the applicant’s acquisition of another firearm. Provides exceptions. Amends the Criminal Code of 2012. Provides that it is a Class 2 felony to sell or transfer ownership of a firearm to another person without complying with the registration requirement of the Firearms Registration Act.

(Editor’s note: Bold added for emphasis)

Before Illinois gun owners dismiss the chances of such legislation becoming law in the state, it should be noted that:

• 2014 was as an election year for state senators and representatives
• Illinois Democrats maintain a veto-proof supermajority in both chambers of the Illinois General Assembly in 2015- 71 Democrats to 46 Republicans in the House and 39 Democrats to 20 Republicans in the Senate
• A future mass shooting along the lines of Newtown or some other mass casualty event on American soil “featuring” firearms could be all it takes for the public to get behind the Firearms Registration Act

For more information about Illinois Senate Bill 1413 and to track its status, you can visit the Illinois General Assembly website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Share

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Sunday, March 1st, 2015 Ammunition, Crime, Essential Reading, Firearms, Government, Gun Rights, Hunting, Legal, Main Street, Political Parties, Self-Defense, Shooting Sports, Terrorism Comments Off on Illinois Democrat Introduces Statewide Gun Registration, Ammo ‘Control’ Bill
Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street"
(Memorial Day Weekend 2007-2010)

PLEASE RATE this blog HERE,
and PLEASE VOTE for the blog below:



Thank you very, very much!
Advertising Disclosure here. Ad captions last reviewed/updated 3/7/17.
ANY CHARACTER HERE
Freeze Dried Food FREE GIFT WITH PURCHASE; Free Shipping (domestic orders). Review coming soon.
ANY CHARACTER HERE
Family-Owned & Operated in Chicago Suburbs! SAVE 10% OFF ALL ITEMS (promo code- home page); Free Shipping (U.S. orders) & Returns. Review coming soon.
ANY CHARACTER HERE
Buy Gold And Silver Coins U.S. GOLD (BULLION) COIN/BAR SALE!; 90% Silver U.S. Dimes & Quarters Sale; Secondary Market Silver Sale (1 oz. coins, 10 oz., & 100 oz. bars); World Gold Bullion Coins/Bars also on sale; Free Shipping on U.S. orders $99 and up (only $5.95 below $99!). BGASC reviewed HERE.
ANY CHARACTER HERE
BullionVault World's Largest Online Investment Gold Service taking care of $2 billion for over 65,000 users from 175 countries. BullionVault.com reviewed HERE.
ANY CHARACTER HERE
FLASH SALE! 2-WEEK EMERGENCY FOOD SUPPLY $67; SAVE 15% OFF ALL CASE PACKS; Big Savings on "Deal Of The Day" page; Free Shipping on orders over $79. MyPatriotSupply.com reviewed HERE.
ANY CHARACTER HERE
bullet proof vestsWorld's First Bulletproof Baseball Cap only $129; Bulletproof Ceramic Plate (NIJ Level III Stand-Alone) only $169; Bulletproof Backpack/Messenger Bag Panel only $99. BulletSafe reviewed HERE.
ANY CHARACTER HERE
Survival Titles Save 20% SAVE 35% ON SELF-DEFENSE, COMBATIVES TITLES (promo code- home page); Discontinued Title Sale- Savings up to 75% Off Original Price. Paladin Press reviewed HERE.
ANY CHARACTER HERE
This project dedicated to St. Jude
Patron Saint of Desperate Situations



happyToSurvive

Categories

 

Archives

RSS Chris Hill’s Other Blog: Offshore Safe Deposit Boxes

  • List Of Offshore Private Vaults Updated
    The list of private, non-bank vaults outside the United States (offering safe deposit boxes/lockers at a minimum) located on this blog’s sister site- Offshore Private Vaults- has just been updated. Safe deposit facilities now open for business have been added under the following countries: -Hong Kong (Smart Secured Storage) -Liechtenstein (Liemeta AG, Triesen) -United Kingdom […]
  • Related Reading: The Telegraph Looks At Latest Security Technology In Bank, Private Vaults
    I’m back after several days spent on matters related to the research business (focus: specialized asset protection) I’m in the process of rolling out. Despite the “spring break,” I compiled a good deal of material to blog about in the near future. Getting back into the saddle then… “How to rob a bank” This headline […]
  • Next Degussa Numis Day To Take Place March 30, 31
    Rare numismatic coins often find their way into safe deposit boxes. And Degussa, a leading international player in the precious metals world which also offers safe deposit boxes (for customers) at branches in Germany, Singapore, Spain, and Switzerland, has posted information about the next Numis Day (first blogged about here) at their Geneva and Zurich […]
  • Related Reading: Switzerland, Canada, United Kingdom Top U.S. News & World Report’s 2017 ‘Best Countries’ Rankings
    Here’s an annual survey one might consider when selecting an offshore safe deposit box location. U.S. News & World Report just released its “Best Countries” rankings for 2017. Kevin Drew reported Tuesday morning on the American media company’s website: Switzerland is viewed as the No. 1 overall country, according to a survey of more than […]
  • Related Reading: London’s Sharps Pixley Spotlighted By The Spectator Magazine
    Monday evening I read an interesting article about London, England-based precious metals showroom/safe deposit box service Sharps Pixley (first blogged about here). Margareta Pagano wrote on the website of The Spectator (UK) this past weekend: When the going gets tough, the tough go shopping. And when the going is seriously tough- as it may be […]