Crain has given Illinois taxpayers a fearful look forward.
[Illinois] meet classic definitions of insolvency: Its liabilities far exceed its assets, and it's not generating enough cash to pay its bills. Private companies in similar circumstances often shut down or file for bankruptcy protection.
Legal experts say the protections of the federal bankruptcy code are available to cities and counties but not states.
At some point, unpaid vendors will stop bidding on state contracts, investors will refuse to buy Illinois bonds and state employees will get paid in scrip, as California did last year.
"The crisis will come when you see state institutions shutting down because they can't pay their employees,"
State tax receipts from July through December last year were running more than $1 billion behind 2008,
But California was forced to seek a federal guarantee for its borrowing last year when credit dried up. It didn't get the guarantee, and state officials are now seeking a $6.9-billion federal bailout.