Illinois has long been the poster child for a dysfunctional state fiscal policy.
The state’s Republican governor, a formerly wealthy businessman, and the Democratic-controlled legislature have been perpetually locked in a race to the bottom as the Land of Lincoln has repeatedly flirted with near- bankruptcy and junk-bond level credit ratings.
Last week, the state marked the second full year in which Gov. Bruce Rauner and a combative Democratic legislature were unable to agree on a new operating budget.
The state Senate the week before rejected a House-passed budget measure premised on a $7 billion revenue shortfall after Rauner threatened to veto it.
Unlike city and county governments, states cannot legally declare bankruptcy as a means of shedding debt by forcing creditors, bondholders, and government retirees to absorb some of the loss.