Fellow Illinoisan Mike “Mish” Shedlock has written a diatribe on Illinois’s financial condition. It opens by quoting a letter the state has sent out to roadwork contractors that opens “Dear Contractor” and instructs all contractors to cease work on Illinois roads July 1 because the state can’t pay them. His post opens:
The state of Illinois has not passed a budget for close to three years.
Arguably it’s just as well because Illinois budgets for decades have been nothing but a moth-eaten collection of lies, one time deficits repeated endlessly, and financial wizardry statements designed to disguise Illinois’ real problems: failure to rein in spending coupled with a very business unfriendly environment.
As Illinois’ bond rating careens towards junk, Illinois Unpaid Bills Jumped to $14.3 Billion. Today, the state told contractors to halt roadwork other that required for safety.
He goes on to note that the bonds issued by five of Illinois state institutions of higher learning have junk ratings, that tuition at these institutions and public pensions are soaring, and that Illinois has the worst personal income growth of any of the states.
In a few weeks we’ll get our property tax bills and they are expected to jump, following a substantial jump last year. I had planned to live in my Chicago home until I died but, frankly, I know I won’t be able to afford a 10% increase in my property taxes every year. I don’t know who could but if I can’t the list of those who will be forced to leave Chicago because of its taxes will be large.
Moody’s and S&P have made their views on Illinois’s need to reform clear by downgrading Illinois’s and Chicago’s credit rating repeatedly. Unlike voters here they have the power to make their voices heard.
Mish’ full essay is here:
http://www.zerohedge.com/news/2017-06-15/unable-pay-bills-illinois-sends-dear-contractor-letter-telling-firms-halt-road-work-
Note the comment about the Democrats favorite solution: taxes. The situation appears to be intractable. Condolences to my former neighbors, but I bet the Teachers union howls for comp increases and I bet voters leave Democrats in control.
But it’s 84 and sunny here………
If you think that you will get out, you need to do it now. Otherwise, you will not be able to find a buyer for your house. I think @Icepick could provide more details about owning a house in a rapidly declining area.
I’m unconcerned about selling just about being able to afford living there. Our neighborhood is probably Chicago’s best. Houses don’t stay on the market long here and I’d be surprised if that changed soon.
What does change are the types and income levels of the people who live in the neighborhood.
TB, the damnedest thing is happening – property values are inflating so fast down here even houses in my neighborhood are seeing values bump. One a few houses up the street went for $140,000 in March.
Of course, that means houses where ever else we’d like to live have also shot up, so we’re still stuck. But I haven’t seen anything like this since 2004 to 2006. And we all know how that turned out!
Im thinking of selling anyway, even though i wont get anywhere near $140k for mine. Ive already had guns pointed at me three times this year, there was a home invasion with a violent conclusion at 10:45 in the morning basically right up the street earlier this year, and two shooting incidents two houses up the street this year. And today I found a spent 9mm hollow point bullet on the roof of my house. Woo hoo!
The question is, which is worse, the lack of physical security if we stay here, or the lack of financial security if we move elsewhere? Lose financial security and then the physical security is also lost. It’s a quandary.
@Icepick
If property values are rising, get out as fast as you can. If I am not mistaken, you are in that location because your mother waited too long.
I know it would suck, but you could rent an apartment or house. I am not sure if the house is paid off or not, but if you still have a monthly mortgage + taxes + home owner’s insurance + flood insurance, you could find something lower than what you are paying now.
I realize that it is easier said than done, but when the prices revert, it will go fast.
I wish you, your wife, and daughter well.
I own the house free and clear. We do pay home owner’s insurance, but in a pinch could let that slid. That property taxes are less than $400 a year. For rent, this place simply cannot be beat. In just about eveery other way, however ….
Seriously, owning is a giant stress reliever. I know I’ll have a roof over my head.
Forgot to mention: Mom’s situation was a little different. She was nearing 80 when we urged her to sell. She could have lived comfortably off the proceeds for the rest of her life. (In fact, she would have.) I’m not quite 50 yet. The proceeds would run out much to soon, unless were very inlucky!