State Rep. Ron Sandack (R-Downers Grove) and co-sponsor Jeanne Ives (R-Wheaton) have filed House Bill 298, which, if passed, will let Illinois municipalities file for bankruptcy.
Sandack said he aims to bring the security of the bankruptcy code to municipalities.
The idea came to Sandack as the state endures financial difficulties, Sandack said. Because of these struggles, local municipalities may have to make do with less financial assistance from state coffers.
“There’s a strong possibility that aid that usually comes from the state to towns and cities may no longer be flowing like it has in the past,” Sandack said. “And there may be other instances where municipalities are kind of left out on their own.”
Sandack said that because Chapter 9 already exists at the federal level, and towns might be on their own, they should be granted all of the tools necessary to fend for themselves. Sandack said he thinks this won’t overextend the financial bankruptcy system, but will allow municipalities to have more financial freedom, which will benefit the public.
“The benefit is that it permits villages who need a structured reorganization in a central place to reorganize their financial affairs,” Sandack said.
Currently, no municipalities in DuPage County are facing the prospect of bankruptcy, Sandack said.