Illinois facing possible default on loan payments

From the State Comptroller's Office

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Accordingly, I must communicate to you at this time the full extent of our dire fiscal straits and the potential disruptions that we face in addressing even our most critical core responsibilities going forward into the new fiscal year. My Office has very serious concerns that, in the coming weeks, the State of Illinois will no longer be able to guarantee timely and predictable payments in a number of areas that we have to date managed (albeit with extreme difficulty) despite an unpaid bill backlog in excess of $15 billion and growing rapidly.

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We are effectively hemorrhaging money as the state’s spending obligations have exceeded receipts by an average of over $600 million per month over the past year.

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Later she goes on to try to tamp the fear back down...

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For the record, however, and as a message to the financial markets, please know that debt service payments will not be delayed or diminished going forward and I will use every statutory avenue or available resource to meet that commitment. It is a necessary pledge in order to attempt to avoid further damage to our already stressed credit ratings and to make possible the additional debt financing that we all know will be required to achieve some measure of stability going forward.

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Anyone paying attention understands that's just boiler-plate CYA rhetoric because when you're a state and you're deficit spending over a half billion PER MONTH there's little chance things get reined in enough to divert you from the fiscal cliff that's coming. Just saying you're going to make paying the core debt payments a priority means you're looking seriously at having to make the choice of what gets paid and what doesn't and there's just no good way to spin that.

Pay attention, DC.