If there’s really a date that matters to Ill. budget, it’s Tuesday. Not Saturday!

Happy Fiscal New Year, Illinois.

As far as the business entity otherwise known as Illinois state government is concerned, 2018 begins Saturday. We’re now beginning a third year of operations without a budget plan in place for the state.

THERE WERE MANY who were figuring that meant this was the point in time by which our officials would have to put aside their petty partisan political differences and do something to ensure that state government meets its obligations for the future.

Of course, the General Assembly quit by mid-day on Friday – with little public attempt to even pretend it was trying to pass something, anything, that could be construed as a budget.

Our legislators will return to work on Saturday – and not just because Gov. Bruce Rauner issued an order telling them to do so.

It was Illinois House Speaker Michael Madigan, D-Chicago, who said early Friday that legislators would continue to work until something was approved that could be sent to Rauner for his final approval.

IN FACT, HE then made a point of sending letters to the heads of the bond rating agencies such as Moody’s and Standard & Poor’s; asking them not to rush into any action to reclassify the financial status of Illinois government.

There have been hints that if the state didn’t act by Friday and actually allowed a third fiscal year to begin without a budget, they’d go ahead and knock Illinois down to the lowest status possible.

That of “junk bond status.”

 

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Which would put it as a part of the legacy of Rauner’s gubernatorial term that Illinois plunged as low as it could go – although I’m sure Rauner fully intends to place blame on Madigan for this situation. Reports indicate television advertising spots making such an accusation are already prepared, but that Rauner is holding off on paying money to air them in coming days to see what happens.

WHAT CAME DOWN on Friday was the faintest glimmer of hope. The two sides of state government don’t have an agreement on a state government budget. But they have some sense of agreement on procedural measures that would lead to a budget agreement.

The Illinois House on Friday morning went so far as to take an overwhelming vote of support, with a final vote of approval to come at a later date. Which is what Madigan alluded to in telling the bond rating agencies that something will happen soon.

Of course, nothing really happens until that final vote is taken. Then the matter would have to go over to the Illinois Senate for consideration. Even then, a single “no” could strike the whole thing down. That “no” being the veto power of Rauner himself.

Which is why Tuesday may be the significant date. If nothing happens by then, it’s likely that nothing will happen at all and we probably should prepare for the worst.

THE SIGNIFICANCE OF Tuesday being that it is Independence Day. Never underestimate the significance to a legislator of wanting to march in whatever local parade is being scheduled for their home community.

I have no doubt these people want to go home for the summer on Sunday or Monday. They want to make their local public appearance on Tuesday and use their events to celebrate both U.S. independence AND a state budget.

Legislators want to feed their egos from their local voters by telling them how they personally influenced the whole process. Some may want to believe that it was somehow brand-new Illinois Senate Minority Leader William Brady, R-Bloomington, (remember his failed 2010 bid for governor against Pat Quinn?) who impacted the action. That may be total exaggeration on their parts, but it is something they want to do.

They want to be a part of the fireworks back home, not lingering on at the Statehouse in Springfield while fireworks of a different sort go off from the electorate peeved that we’re now in Year Three without a state budget in place.

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Chicago finances; what a mess! Who's got a big-enough mop to clean up?

I’m not about to predict what solution our political people will ultimately come up with to resolve the financial problems our governments face these days.

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In fact, I wouldn’t be shocked to learn that our officials don’t really have a clue – other than the cheap, old rhetoric they usually fall back on – as to how to resolve the problems we’re confronted with.

I CAN’T HELP but wonder if Rahm Emanuel, as he prepares to take the oath of office on Monday to serve another four-year term, is now secretly regretting that he won the municipal election runoff held last month.

He could be drifting off into the next phase of his life right about now, rather than having to have his name forevermore attached to whatever solution people try to implement. If it goes wrong, he’ll forevermore get the blame!

Which is kind of funny, since we were fed all that campaign rhetoric just a few weeks ago about how the concept of Jesus Garcia as mayor of Chicago would be an ultimate disaster! All kinds of horrible things would happen to the city if we didn’t let Rahm have a second term as mayor.

When you think about it, bad things have happened regardless. Our credit rating was reduced literally to junk by the Moody’s Investors Service. While Standard & Poor’s didn’t take the same exact action, they also downgraded the bond ratings that determine how much interest we’re going to have to repay on our debt.

WILL CHICAGO BE literally reduced to only being able to borrow money from those shifty guys who make their money off the “vig” from their loans – as in they charge exorbitant interest because their “customers” are incapable of getting a traditional loan?

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Or would even the loan sharks refuse to do business with city government because we’re too bad a risk and there’s no fingers or kneecaps to break.

Unless the mayor literally has to serve as a surrogate for the city. In which case, perhaps he ought to make sure his health insurance is adequate for the pain he’ll suffer.

Now I’ll be the first to admit that I’m being a smart aleck. I’m making organized crime analogies over serious issues involving municipal finance.

BUT PERHAPS THAT is how the mayor himself is having to think of this issue these days. You almost have to have a sense of humor about the term “junk bonds” being applied to our city’s government.

As though the people who are most eager to spread this story have their own ideological hang-ups with regard to urban issues and large municipalities – particularly if they’re filled with people who aren’t exactly like themselves in every racial and ethnic way!

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How do we get out of this debt and get the bond-rating agencies to boost our standing back to a higher level? While wondering why it wasn’t the state government’s bond ratings that took the hit, instead of Chicago’s?

I do find some humor in those people who suggest that this is now the motivation to approve development of that city-owned casino that some Chicago officials have been dreaming about for years.

IT’S FUNNY BECAUSE the kind of money that such a casino would create as the city (and state) share of tax revenues is so piddly and insignificant compared to the billions of dollars that would need to be produced to truly put Chicago government on fine solid financial stats.

Even more ridiculous are those people who are talking of the state’s pension funding shortfall and who now want a state Constitutional amendment to make possible the very action that the General Assembly tried enacting – only to have it found unconstitutional.

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That would take so much time to get approved, and the whole while the financial situation would become worse and worse for city and state. This is the time for the radical solution – and not the pie in the sky fantasy!

All of which makes me wonder what will go through Emanuel’s mind as he takes his oath of office, with former President Bill Clinton watching. Dreaming of the day when he can be an ex-politico like William J. (and soon, Barack H., maybe they'll have periodic meetings at the future Obama Presidential Library and Museum) and can think high-minded thoughts about future officials trying to resolve the ongoing issues our government faces.

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The junk spreads!

It’s hard to know how seriously we should take the talk that Moody’s Investors Service went ahead and dinked the financial status of the Chicago Public Schools and the park district.

One day after Moody’s downgraded the status of city government’s bonds to junk status – implying that they are a bad financial risk for investors looking to make a buck – they took the same actions with the schools and the parks.

THEY’RE ALL JUNK. It probably is the first in a series of downgrades that will impact all governmental units in the area.

Big business interests will now be eager to treat all government entities in such a negative manner.

Which makes me think they’re engaging in their own partisan politicking – trying to force government into enacting measures of harm to labor interests and ones that likely would never have been considered otherwise.

The real question, in my mind, is if the Standard & Poor’s bond rating agency decides to follow suit. Will they downgrade their own ratings of our local government entities to show some sort of overall negative perception of how weak our financial status is.

OR WILL STANDARD & Poor’s keep its level the same? Indicating it might be a mere hang-up that Moody’s has with regards to Chicago.

Considering that the two entities usually react in similar ways, it would be likely that a Standard & Poor’s downgrade would be forthcoming. Which means it’s more a kneejerk reaction than anything else.

Of course, I have always felt that the bond ratings are not some hard-and-fast ranking that ought to be taken for granted. It’s almost like those baseball fans who think the batting average, a mere percentage carried out to the thousandth of a point, is an absolute indicator of how good a ballplayer truly is.

 

Nothing has truly changed between last week when the bond ratings were still of some sound standard, and this week when we’re supposedly worthless financially.

EVERYTHING IN CHICAGO remains the same. In fact, it is likely that things won’t get significantly better when our government officials do figure out some mathematical formula that enables the pension funding mechanisms to be resolved and our bond ratings will increase again.

I noticed that Mayor Rahm Emanuel went about saying on Wednesday that it was “irresponsible” for Moody’s to lower the bond ratings. Just as Chicago Teachers Union spokeswoman Stephanie Gadlin issued a statement calling such actions “reckless.”

Could it be that the bond rating fiasco is the common ground that can bring two otherwise-openly hostile sides together? I don’t know if this is the first step toward avoiding a teacher strike later this year.

But that could become the one positive that arises from all this mess.

OF COURSE, WITH the teachers’ union also saying it believes Emanuel and the big banks are in cahoots with each other to misrepresent the financial status of our governments, it’s probably not realistic to expect anything to bring the sides together.

Actually, I’m wondering how long it will be until Illinois government also has its bond ratings dinged down to junk status. Or is there a sense that business interests don’t want to do something to embarrass the political stature of Bruce Rauner – the governor of Republican persuasion who claims he wants to run the state like the investment banker he once was.

That would be blatantly partisan. I’d like to think such a thing would not happen.

 

But this kind of big-business trash-talk about junk bonds does have a certain stink of partisan politics about it; perhaps concocted by the same kind of partisans who are desperate to spew the nonsense that Chicago is the next Detroit.

 

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