As Gov. Roy Cooper and his acolytes complain that the newly enacted N.C. state budget lacks “vision,” perhaps now is a good time to remind ourselves that budget prudence exercised since 2011 has helped North Carolina avoid the fate of the Prairie State. Elizabeth Campbell and John McCormick report for Bloomberg Businessweek.
Two years ago, Illinois’s budget impasse meant that the state’s lottery winners had to wait for months to get their winnings. Now, with $15 billion in unpaid bills, Illinois is on the brink of being unable to even sell Powerball tickets. For the third year in a row, the state is poised to begin its fiscal year on July 1 with no state budget and billions of dollars in the red. If that happens, S&P Global Ratings says Illinois will probably lose its investment-grade status and become the first U.S. state on record to have its general obligation debt rated as junk. Illinois is already the worst-rated state at BBB-, S&P’s lowest investment-grade rating. The state owes at least $800 million in interest and late fees on its unpaid bills. Any further downgrade will make it more expensive the next time the state needs to sell bonds.
