April 17, 2021 07:05

More Debt via Putzker

He isn’t just destroying the Illinois economy. He’s vaporizing it:

  • Illinois has announced $2 billion more in additional borrowing from the Federal Reserve Bank’s Municipal Liquidity Facility (MLF). Gov. J.B. Pritzker has informed the Fed of the state’s intention to borrow the funds before the facility expires at the end of December. The facility was put in place by the CARES act as a backstop for governments hit by financial market disruptions due to COVID.

    While the presence of the Fed facility is credited with bringing stability to the municipal markets, the reality is only one state or city in the entire country has borrowed from the facility since its inception: the state of Illinois. All others have successfully raised billions from the traditional markets during the pandemic (New York’s Metropolitan Transit Authority is the only other government [entity] in the country to borrow from the MLF.)

    Illinois’ increased reliance on borrowing follows the public’s rejection of a $3.1 billion tax hike referendum on Nov. 3. More debt, in the absence of major spending reforms, means a junk rating is increasingly likely for Illinois. No state in modern history has ever been rated junk.

We’re still waiting for those “apinful cuts to government” that he promised. Borrowing more money isn’t a cut by any means, and we seriously have to question the sanity of lending more money to any state government that (A)can’t make cuts and (B) can’t control its spending.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top