Could Illinois file for bankruptcy? – FOX Illinois

by Rachel Droze, Fox Illinois

Its now been 719 days since the state has had a complete budget.

We are two days away from the start of a special session called by Gov. Bruce Rauner.

While many remain hopeful a deal can be brokered, some fear the state may soon reach its breaking point.

An American state has never filed bankruptcy, but in May, Puerto Rico sought what's essentially bankruptcy relief. This is the first time in history an American territory has done so.

Its leaving some to question if the state of Illinois could do the same.

Its now been 719 days since the state has had a complete budget.

According to the state comptroller's website, the bill backlog as of Friday is above $15.1 billion.

Under current law, Illinois cannot file for bankruptcy, but Congress could amend federal law to give Illinois this option.

"You would have to have Congress pass and the president sign an amendment to the federal bankruptcy law allowing states to declare bankruptcy," said Kent Redfield, a political science professor emeritus at the University of Springfield.

U.S. Rep. Rodney Davis, R-Illinois, said instead of this, hed like to see lawmakers work together toward a compromise.

"Come up with a solution because that's what I think we are going to try and do for our problems in Washington D.C., Davis said. That's a message I'm sending in Washington, and a message I continue to send to our leaders in Springfield and I hope they can come up with that compromise."

Bankruptcy could also potentially be unconstitutional.

"There is a provision in the U.S. Constitution, Article 1, Section 10, that prohibits states from impairing contracts, Redfield said. And then you'd probably get into a long court battle about exactly does that specifically apply to things like pensions, like bonds."

Redfield said even if bankruptcy is the route chosen in the future, the case would likely have to be decided in the Supreme Court.

He said the state would be better off raising taxes and cutting programs now, rather than dragging out a long court proceeding.

Tune into Newschannel 20 Tuesday to find out how state pensions would be impacted if the state were to go bankrupt.

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Could Illinois file for bankruptcy? - FOX Illinois

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