Ill. House GOP on Budget

With time running out, Democrats resort to old tax and spend playbook. Rather than work together to pass a true balanced budget, Democrats are going back to their old tax and spend playbook.

Every time Republicans asked during negotiations that greater reforms be included, Democrats pulled back and said they’ve gone as far as they can.

In truth, Democrats were merely running out the clock in order to pass their $5.4 billion tax hike.

Contrary to previous public comments by Democrat leaders, the General Assembly hasn’t passed a balanced budget in 15 years. In fact, their decade-and-a-half of failed leadership controlling both Chambers is why Illinois is facing this fiscal crisis.

The budget Democrats are advancing, like their previous budgets, is not balanced. This budget will not address the crisis facing our state. This budget puts the burden on Illinois taxpayers. This budget is about headlines, not helping the people of Illinois. This budget is reckless and irresponsible.

Enough with the gimmicks. Enough with the budget sleight of hand.

We are close on a real budget, close on worker’s comp reform, which will make Illinois competitive again.

We need property tax relief as well. Property taxes are crushing Illinois homeowners and businesses. The residents of Illinois want, and deserve, meaningful property tax relief.

House Republicans stand with taxpayers and homeowners in ensuring any final budget agreement is fair.

We can get consensus on a true balanced budget, with property tax relief, which will put Illinois on a responsible path forward.

Lack of budget leads to impending crisis in Illinois debt market. Market prices this week for Illinois-issued securities, including but not limited to general obligation debt, indicated a significant belief among market traders that Illinois’ credit status could continue to decline in the near future. This week, the interest rate paid by Illinois taxpayers to lenders willing to purchase 10-year Illinois General Obligation (G.O.) bonds rose to 4.43%, 245 basis points above the interest rates demanded by lenders to units of the U.S. private sector that are rated triple-A (AAA).

The three largest credit-rating agencies currently rank Illinois G.O. debt at the equivalent of BBB with a negative outlook, only two notches about “junk bond” territory. Implementation of the “negative outlook” posted by Fitch Ratings and its brethren credit measurement firms could lead to Illinois’ G.O. debt being cut to BBB-, the lowest rank available for investment-grade securities, and then to the junk-bond-level BB+. The fact that Illinois taxpayers this week were paying interest rates more than double the 1.98% market rates charged against AAA borrowers indicated a significant belief in credit markets that this was a serious possibility facing the State of Illinois. Market analysts have told clients of key lending coordinator Citigroup that the 4.43% interest rate currently being paid by Illinois and its taxpayers already anticipates, or “prices in,” a further cut in the Illinois G.O. credit rating from BBB to BBB-.

Illinois’ decade-and-a-half of structural deficits are strongly implicated in the current Illinois credit rate crisis, which also affects many private-sector entities in Illinois, including entities that are involuntary creditors of the State due to the $14.5 billion backlog of unpaid bills.

Also affected are units of the Illinois public sector. A wide variety of entities, including State of Illinois public universities, are depending upon funding from the State. Many Illinois public universities have seen cuts in their credit ratings in recent months that track the cuts imposed on Illinois. Credit ratings of units of Illinois local government and public school districts are also seen as being at risk from Illinois’ current budget impasse.

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