The Briefing Room
General Category => Economy/Business => Topic started by: Frank Cannon on February 07, 2019, 01:57:13 pm
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https://www.zerohedge.com/news/2019-02-07/moodys-warns-illinois-governor-new-taxes-will-make-residents-flee (https://www.zerohedge.com/news/2019-02-07/moodys-warns-illinois-governor-new-taxes-will-make-residents-flee)
(https://www.zerohedge.com/s3/files/inline-images/Illinois-3rd-biggest-net-loser-of-residents-since-2013.png?itok=-tZ4wnjH)
New Illinois Gov. J.B. Pritzker got a warning of sorts from Moody’s ahead of the governor’s first budget address. The rating agency’s most recent report highlighted the usual crises Pritzker must tackle: ballooning pension debts and chronic budget deficits. Moody’s rates Illinois just one notch above junk largely due to the state’s finances and malgovernance.
Moody’s says new revenue likely will be required to achieve stability, as you’d expect, because rating agencies love higher taxes. But for the first time, the agency has included outmigration among its top-three credit concerns. That matters because Pritzker’s number one prescription to “fix†Illinois is tax hikes, something that’s sure to accelerate Illinois’ out-migration trend and further erode the state’s tax base.
Moody’s calls it a “conundrum†for Illinois. From their report:
“… the population loss and relatively sluggish employment trends suggest a degree of economic vulnerability that poses a conundrum: revenue growth from existing sources will be too tepid to offset escalating fixed costs, while new taxes could threaten to increase the outflow of residents.â€
These new comments are significant because Moody’s has long considered tax hikes a budget-balancing option for the state. That’s not surprising since Moody’s priority is the well-being of bondholders, not taxpayers. The agency’s ratings reflect the likelihood that bondholders get repaid – and tax hikes make repayment more likely.
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I love it when our constitutional republic is displayed for all to see.
But I think it is a trick to make things look so bad in Illinois that even the illegals decide not to go there.
Never underestimate the diabolical nature of the libs.
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California, New York, and Illinois have huge unfunded pension obligations and will become Greece at some point and will need to be bailed out. These states also have some of the highest tax burdens. I give Coumo some credit for at least acknowledging the reality of NY budget issues and the folly of raising taxes again to solve it. Newsom is way out in outer space on CA budget issues
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What will happen:
Illinois will raise taxes anyway. They really don't have a choice at this point.
Result: More taxpayers will flee.
Result: Illinois will raise taxes on those who remain.
Result: Even more taxpayers will flee.
Result: Illinois will raise taxes again on those who remain.
Repeat this until the last taxpayer leaves.
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Newsom is way out in outer space on CA budget issues
He will display his hubris unrestrained.....until the next Tech bust, which is going to come soon.
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What will happen:
Illinois will raise taxes anyway. They really don't have a choice at this point.
Result: More taxpayers will flee.
Result: Illinois will raise taxes on those who remain.
Result: Even more taxpayers will flee.
Result: Illinois will raise taxes again on those who remain.
Repeat this until the last taxpayer leaves.
I caught some of the new governor’s campaign commercials and he was promising taxes and health care for all and college for all.
Now, hello reality verses campaign rhetoric
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California, New York, and Illinois have huge unfunded pension obligations and will become Greece at some point and will need to be bailed out. These states also have some of the highest tax burdens. I give Coumo some credit for at least acknowledging the reality of NY budget issues and the folly of raising taxes again to solve it. Newsom is way out in outer space on CA budget issues
Who is doing the bailing? Other states?
The feds are already in the hole for more than any state can possibly be.