Topinka: Bankruptcy For Illinois A Bad Idea
SPRINGFIELD, Ill. (CBS) -- Illinois Comptroller Judy Baar Topinka says the state should not even think about bankruptcy.
The Republican is adding her voice to those who say bankruptcy for states would be a bad idea. She sent a letter to Congress calling the idea misguided at best."
Congress is holding hearings on whether states should be allowed to escape debt and old bills by declaring bankruptcy.
Supporters argue it would be a useful option for states swamped with debt and might give them leverage in negotiating employee benefits.
But in a letter released Monday, Topinka said bankruptcy threatens to create financial uncertainty.
She called it "little more than an easy way out, and said it would "result in increased borrowing costs, reduced access to financial markets and suspended or downgraded credit ratings," Crain's Chicago Business reported.
She also said it would halt public works projects and hurt business recruitment.
Topinka says further that it would simply be wrong for states not to pay their debts.
(TM and © Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)
