Chicago Public School System Threatens Massive Tax Hikes Via “Backdoor” Bond Guarantee | MishTalk
. . . massive meaning 100%.
"The Chicago Public School (CPS) system is bankrupt in every way but the final declaration. That declaration is a foregone conclusion, and bondholders will take it on the chin.
CPS Treasurer Jennie Huang Bennett disagrees with my assessment. So does Matt Fabian, a partner at Concord, Mass.-based Municipal Market Analytics.
For her part, Bennett explained in a January online presentation that if the school district were unable to make a debt payment, “the taxes are then extended and collected for the benefit of bondholders.”
Fabian, Bennett, and others think “backdoor” tax guarantees hidden in bond offerings mean Chicago taxpayers will necessarily have to pony up if the school district defaults."
Progressives live in a straw-man world. In the real world, people whose tax rate inexorably rises towards 100% vote with their feet. Well, the wealthy, and the upper middle class. The lower middle, and lower classes who don't have the money are slowly crushed until leaving is less costly than staying. Then even they leave.
Last one out turn out the lights.
Fortunately not everyone in the state is clinically insane. "On January 20, the “B” word hit Chicago as Governor Proposed Bankruptcy for Chicago Public School System."
"This mess cannot be fixed with tax hikes or fairy dust from Springfield. There simply is no money.
Heck, solvency of the entire state is in question as Illinois IOUs Projected to Hit $10.5 Billion, $163 Billion Total Accumulated Liabilities.
Let’s stop pretending there is another solution for CPS, because there isn’t. A CPS bankruptcy looms.
The sooner Mayor Emanuel admits that, the better for him, the better for Chicago schools, the better for Illinois, and most importantly … the better for the kids!
In all this bickering, it seems we have forgotten about the kids and the taxpayers."
The state is a zombie. The City of Chicago is a zombie, the school district is a zombie. The only cure is bankruptcy, but not for the state, there is no hope for the state since there is no bankruptcy protection for the state. Frankly, the state of Illinois needs to evaluate every municipality, every school district, every bankruptcy possible political subunit for fiscal health, if they are healthy fine, if not, they all should be washed in the blood of the bankruptcy provisions. The state of Illinois will need to cram a boat load of financial insolvency down the throats of the municipal subunits in order to free up enough cash flow to become even remotely functional.
If this doesn't happen the entire state of Illinois will fiscally seize. This will look like Chernobyl, not a simple train wreck. Rauner seems to understand the existential possibilities, the progressives do not.