Bill pushes for possible municipal bankruptcies in Illinois

The Chicago Tribune reports:

Stressed by pension debt, other financial issues and the possibility losing a chunk of their state aid, some Illinois cities want the option to file for bankruptcy. They've found an ally in a Republican lawmaker, who's proposed legislation to allow municipalities to follow in the footsteps of Detroit and other cities in restructuring debt and paying back creditors. Opponents, however, say there are less drastic, intermediate steps than the "dangerous" path of bankruptcy.

One thing is clear, Rockford Mayor Larry Morrissey told senators earlier this month: "If history has proven anything in this state, delay, deferral and denial are not solutions."

Twelve states authorize cities to file Chapter 9 bankruptcy filings, according to the National Conference of State Legislatures, and another 12 grant conditional ability to file. Twenty-six states either don't have Chapter 9 authorization or prohibit it.

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