|
 An impasse between the Republican governor and Democratic
lawmakers has left the fiscally shaky fifth-largest U.S. state
without a budget for the fiscal year that began July 1. But an
online investor presentation posted Dec. 30 for the Jan. 14 bond
sale gave a generally rosy assessment of Rauner's dealings with a
Democratic-led legislature.
Illinois Budget Director Tim Nuding emphasized actions taken to
patch a hole in the fiscal 2015 budget and provide some fiscal 2016
funding to local governments, lottery winners, federal grant
recipients and others.
"Another example of the legislature working together to solve
problems," he said, without discussing the factors blocking a budget
accord. Those involve Rauner's push for collective bargaining curbs,
legislative term limits and redistricting changes, and
business-friendly moves like making it harder for injured workers to
collect damages from their employers.
 Democratic legislative leaders contend the items are outside of the
budget process.
In a report on Thursday, Standard & Poor's said "ideologically
divisive policy initiatives" were impeding progress on tackling
Illinois' fiscal woes.
"Those are not going to directly affect the state's finances in this
immediate situation," said S&P analyst Gabriel Petek, referring to
some items on Rauner's agenda.
Despite Rauner's repeated contention that businesses are fleeing
Illinois, Kelly Hutchinson, the state's capital markets director,
gave a generally upbeat presentation on the state's economy, while
noting there is room for improvement. "Illinois continues to attract
businesses and has a high concentration of Fortune 500 companies,"
she said.
[to top of second column] |
The disclosure document for the general obligation bonds states that
Illinois' financial condition "has been materially adversely
affected by the budget impasse."
The document indicates the absence of a budget is expected to
increase significantly Illinois' chronic backlog of unpaid bills, a
gauge of the state's structural budget deficit. It also points to
last year's rollback of temporarily increased income tax rates,
which is expected to reduce revenue by as much as $5 billion
annually.
Other factors include the repayment of a $454 million interfund
borrowing by Dec. 31, 2016, a May Illinois Supreme Court ruling
voiding a law aimed at easing the state's huge $111 billion unfunded
pension liability, and the possibility that future downgrades of
Illinois' credit ratings could trigger expensive terminations of
interest rate swaps.
(Reporting by Karen Pierog, additional reporting by Dave McKinney;
Editing by Dan Grebler)
[© 2016 Thomson Reuters. All rights
reserved.]
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
