Illinois sells first $1.5 billion of bonds to pay overdue bills

From the St. Louis Post-Dispatch: Illinois on Tuesday sold the first $1.5 billion of a planned $6 billion of tax-exempt debt in the U.S. municipal market, with Bank of America Merrill Lynch winning $1 billion of general obligation bonds and J.P. Morgan Securities winning $500 million of bonds in competitive bidding. The state is scheduled to sell the remaining $4.5 billion of bonds through a team of underwriters next week. Proceeds are earmarked for paying off a huge pile of overdue bills from vendors and service providers.

Obamacare rates in Illinois could climb next year

Health insurers want to raise premiums next year for Illinois consumers who buy coverage through the Obamacare exchange — in many cases citing uncertainty surrounding the health care law as a reason for the proposed jumps.

Average rate increases for individual plans in Illinois could range from 5 percent to 43 percent depending on a number of factors, including the type of coverage, a consumer’s age and whether the person is a smoker. The proposed rate changes released Tuesday are the result of a complex series of calculations made by insurers and will likely be finalized in coming months.

The outcome of the rate-setting process has ramifications for a wide swath of the state’s population. Although most people in Illinois get coverage through employers or government programs such as Medicaid and Medicare, this year more than 350,000 Illinois residents enrolled in exchange plans.

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Lawmakers Quickly Adjourn 2nd Day of School Funding Session

Illinois legislators have adjourned a second day of a special session on school funding after just minutes.

The House and Senate met briefly Thursday, but didn’t take up any action.

Gov. Bruce Rauner summoned lawmakers with the task of resolving a fight over a new funding calculation. Both chambers have approved a plan, but the Senate has refused to send it to Rauner, who says he’ll rewrite it over objections to money that Chicago will get.

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Illinois Made, Illinois Proud: Macon Resources

One local organization is helping businesses with their manufacturing needs, while teaching their employees important developmental and social skills.

Macon Resources, Inc., located at 2121 Hubbard Avenue in Decatur, is a non-profit organization that provides services that helps promote the independence, growth, and self-worth of children and adults with disabilities.  Among the many services Macon Resources offers is job training and opportunities.

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Illinois, Hawaii linked by worrying levels of ‘flight’ from state

From Illinois News Network: What do Honolulu and Chicago have in common? For that matter, what do Hawaii and Illinois?

The policy director for a Hawaii-based think tank recently found a troubling connection between the two cities and states that are separated by more than 4,000 miles: They are among a minority experiencing a significant flight of residents.

“We were so fascinated to see that Illinois was one of the states experiencing this problem. On the surface, it seems like Honolulu and Chicago have nothing in common,” Malia Blom Hill, policy director for the Grassroots Institute of Hawaii, told Illinois News Network. “But, obviously, they share more than we realized.”

The observations began in response to reactions of former Hawaii residents to a video produced by the Institute, Hill told Illinois News Network in an email. The video focused on the island state’s population loss. After reading residents’ take on why they left Hawaii, however, the Institute decided to look more closely into other areas experiencing similar outmigration.

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Tax hike shakes up dynamics in 2018 Illinois governor race

From the Chicago Tribune: The template for the 2018 Illinois governor’s race had long been set — Republican Gov. Bruce Rauner linking House Speaker Michael Madigan to the Democratic nominees, while Democrats try to tie the governor to President Donald Trump.

Then Madigan and Democratic lawmakers led the override of Rauner’s vetoes of a major income tax increase and budget, ending a more than two-year impasse of historic proportions. Now, the dynamic has changed for the Republican chief executive as well as his potential Democratic challengers.

All re-election campaigns are a referendum on the officeholder, and Rauner’s will be no exception. But a powerful tool that Democrats had been using against him — contending the stalemate was a symbol of his failure to govern — could be a tougher sell to voters. Even if Rauner didn’t play a role in making it happen, state government is funded, some money has been restored to social service providers who have seen the safety net for Illinois’ most vulnerable torn to tatters, and the state plans to start whittling down a giant pile of unpaid bills.

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Lawmaker and Organizations Respond to House Budget Passage

From WJBD Radio: More reactions are coming in after the Illinois House of Representatives voted to approve a state budget that included an income tax increase.

State Representative Charlie Meier was one of the Republicans who voted in favor of the budget and the income tax increase. Meier sent out a statement Monday, saying he realizes a tax increase is not going to be popular, but called the state “penniless.” Meier cited the threat of Illinois’ credit rating being downgraded to “junk” status as one of the biggest factors in his decision to support the measure. Meier said junk ratings would make it nearly impossible for Illinois to borrow money when needed for running essential state services. Meier said he is still hopeful that a compromise will be worked out that provides property tax relief and tax relief, and encourages the governor to veto the bill if those compromises don’t occur. Meier called his ‘yes’ vote the “least bad” option available to him.

The President and CEO of the Illinois Manufacturers’ Association said that “adding a permanent tax hike without reducing pension costs, lowering property taxes, or enacting economic development reforms is a recipe for disaster.” Greg Baise acknowledged that Illinois needs a balanced budget, but says companies also need stability from taxes.

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Illinois is in deep trouble: What investors need to know

From Fox Business: Illinois is locked in a political stalemate, and in danger of becoming the first U.S. state to have its debt downgraded to junk status. S&P Global Inc. threatened to take that action if Gov. Bruce Rauner and Democratic Speaker of the House Michael Madigan can’t agree on a package of spending and taxes by the start of the next fiscal year on Saturday. Below is a breakdown of what this unprecedented event would mean for everyone from individual investors to large Wall Street money managers.

Who owns Illinois’s debt?

Much of Illinois’s $25 billion in outstanding general obligation debt is held by individual investors seeking a stable source of income, according to analysts’ estimates. But Wall Street is also exposed via mutual funds, hedge funds and insurers that purchased the state’s bonds. Money management giant Vanguard Group has $1.2 billion spread across seven mutual funds. It is the biggest holder among all mutual-fund firms that had a total of $4.5 billion in Illinois bonds as of the first quarter of 2017, according to research firm Morningstar.

What would a downgrade do to those investments?

Not much, say analysts. They predict prices would drop only a few cents in the event of a junk downgrade. Currently the state’s general obligation bonds are trading at nearly 100 cents on the dollar. Junk bonds don’t usually trade at par, but state general obligation debt is considered safer because states have broad power to tax and lack the legal ability to declare bankruptcy.

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Slow Start to Illinois Session Called to Solve Budget Fight

From US News: The first day of a costly special legislative session aimed at solving Illinois’ unprecedented budget crisis got off to a slow start with both the House and Senate adjourning quickly Wednesday without making any substantive progress.

Instead, Democrats and Republicans used news conferences and floor speeches to say they were ready to compromise and blame the other party for the gridlock that could stretch into a third year if lawmakers don’t approve a budget by July 1.

Republicans touted their own budget, which caps spending at $36 billion and includes reforms GOP Gov. Bruce Rauner wants such as term limits and government consolidation, along with a temporary income tax increase. But House Republican Leader Jim Durkin brushed aside questions raised by House Democrats.

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