Measure pushes bankruptcy option for Illinois cities

SPRINGFIELD (AP) — Some Illinois cities want the option to file for bankruptcy to help deal with pension debt, other financial issues.
 
They’ve found an ally in a Republican lawmaker who wants them follow in the footsteps of Detroit and other cities in restructuring debt.
 
Opponents, however, say there are less drastic, intermediate steps than the “dangerous” path of bankruptcy.
 
The legislation is sponsored by state Sen. Ron Sandack. The Republican from Downers Grove says the measure gives municipalities facing threats to a loss of state money the option to file for Chapter 9 bankruptcy.
 
Gov. Bruce Rauner has proposed cutting in half the share of state income tax local governments receive.
 
Experts say municipal bankruptcies are rare. The City of Detroit filed the largest local government filing in history two years ago.
 
The bill is HB298.