Courtesy of Mish.
Still No Illinois Budget Deal
The NFIB reports Still No Illinois Budget Deal.
No budget deal. Not even a one-month budget deal. Could a long summer turn into a long fall?
While Illinois has certainly had its share of extended sessions over the years, this one feels different. Normally the legislative leaders would be meeting daily, or at least weekly, to determine where they could find common ground with the governor.
Unfortunately, this time the “meetings” seem to be conducted in front of the press, with both sides unwilling to step across the proverbial line in the sand.
And, at the sake of over simplifying, Gov. Bruce Rauner has said he will “deal” with the Democrats on a tax hike if he gets his economic reform package. Democrats have said “no way” to his reforms and are now challenging him to hit the restart button and send them a new, balanced budget.
NFIB/Illinois is solidly in Rauner’s corner because he is fighting for many of the issues our members have been clamoring for: real workers’ compensation reform, changes in the prevailing wage laws, lawsuit reform and others. Illinois can’t, once again, increase costs for small businesses without giving them some relief.
S&P Downgrades Chicago Convention Center Bonds by 7 Notches
Thanks to the budget impasse in Illinois, debt repayments on convention center bonds were not made, placing the bonds in technical default. As a result, S&P Downgrades Chicago Convention Center Bonds by 7 Notches.
Illinois' ongoing budget battle led Standard & Poor's Ratings Services and Fitch Ratings on Wednesday to drop the rating on more than $3 billion of bonds issued for an expansion of Chicago's McCormick Place convention center.
Without a state budget for the fiscal year that started July 1, the Metropolitan Pier and Exposition Authority, which issued the bonds, informed bondholders on Monday that no tax revenue has been appropriated and that a $20.8 million monthly debt service deposit was not sent to the bond trustee last month.
S&P downgraded the bonds by seven notches to BBB-plus from AAA. Analyst John Sugden said the rating will remain at BBB-plus and on a watch list for another possible downgrade despite the legislation. Fitch said it downgraded the bonds to BBB-plus, from AA-minus.
In secondary market trading on Wednesday, the spread for some of the authority's bonds over Municipal Market Data's benchmark triple-A yield scale jumped to 136 basis points from 88 basis points on July 28. That involved $5 million of bonds due in 2028, according to MMD.
One Step Above Junk
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