Tag: Illinois

Illinois Airs Plan on Deficit

Seth Anderson1 Comment

It is a bit of a problem: Illinois is not exactly flush with cash, and either services have to be cut, or taxes raised. Neither is politically viable, but ignoring the deficit is not good long-term strategy. Of course, just like in Washington, D.C., deferring decisions until later is a bi-partisan sport.

Radical reinventions

Illinois Gov. Pat Quinn has proposed cutting spending and raising taxes to deal with one of the biggest state budget crises in the nation, but his plan will likely be unpopular with some voters and lawmakers during a tough election year.

Illinois’s deficit through mid-2011 is estimated at $11 billion to $13 billion—close to 50% of the expected $26.7 billion in available revenue for the coming fiscal year, which begins July 1. That is among the worst such percentages among states. Health-care and social-service agencies routinely wait three months or more for the state to pay its bills.

The state pension system also is the worst-funded in the U.S. Illinois borrowed nearly $3.5 billion last year to make its annual pension payment. State auditors estimate that the pension systems are underfunded by $62 billion.

Warning residents that the state faces a fiscal crisis, Mr. Quinn’s office on Wednesday posted his proposals, along with preliminary budget figures, on a state Web site. He isn’t set to deliver his formal budget speech—which kicks off the legislative process—until March 10. Law

[Click to continue reading Illinois Airs Plan on Deficit – WSJ.com]

Division Street Bridge

and even cutting the obvious fat from the budget is not enough

The problem is that Illinois needs billions, not millions, of dollars in increased revenue, lowered spending or both. Many citizen suggestions are prohibited by state or federal law, or make no meaningful dent in the deficit.

In fact, Mr. Quinn’s proposed cuts and revenue increases, if passed, wouldn’t fully resolve the deficit. The governor also wants the state to borrow more and to request more federal assistance. States have been using federal stimulus money to prop up their budgets, particularly in education and health care, but that funding is set to largely disappear by the end of the year.

One of these days the accounting trickery will have to end, both in Illinois, and other similarly strapped for cash states, and on the federal level. But not this year presumedly.

Mr. Quinn and research groups that have analyzed Illinois’s budget say the state consistently spends more than it collects in revenue. For years, lawmakers and governors have relied on borrowing and one-time accounting moves to make up the difference.

but as James O’Shea reports in the NYT:

With a fiscal crisis looming in Illinois, some influential people concerned about the dismal condition of the state’s finances are proposing that lawmakers increase the individual income tax rate by two-thirds and the corporate rate by one-third.

Taxes are a hot political issue. Illinois has the lowest income tax rate of the 41 states that tax wage income, so the low rate on income makes the tax a juicy target during a tough budget fight. But since governments also impose taxes on sales, property and other transactions, getting a handle on where Illinois stands is not simple.

[Click to continue reading Chicago News Cooperative – Looking to Taxes as Solution to a Crisis – NYTimes.com]

Reading Around on June 17th through June 18th

swanksalot0 comment

A few interesting links collected June 17th through June 18th:

  • Raw Story » Bachmann rebels, refuses to fill out next year’s census – The Minnesota Republican said she would only fill out the basic census information about the number of people living in the household, but would not fill out the rest of the form, the Washington Times reports.

    Under current statutes, that means Bachmann plans to break the law and could face a $5,000 fine.

    The claim that ACORN will be “in charge” of the census is the latest allegation by a politician who has developed a reputation for disseminating right-wing conspiracy theories. Most recently, Bachmann declared that President Obama is running a “gangster government” because of the GM bailout.

  • Health insurers refuse to limit rescission of coverage – Los Angeles Times – Late in the hearing, Stupak, the committee chairman, put the executives on the spot. Stupak asked each of them whether he would at least commit his company to immediately stop rescissions except where they could show “intentional fraud.”

    The answer from all three executives:

    “No.”

    Assholes

  • Blago at Second City: The Bizarre Happenings of Illinois’ #1 Criminal : The Core Junction – “In a truly bizarre moment, Rod Blagojevich made a guest appearance at The Second City, Chicago’s famed comedy club, on Saturday Night. After being prepped backstage, Blagojevich surprised the audience and started the show by entering the stage with his hands in a crucifix-like pose.”

    photo credit: swanksalot

Blagojevich Country

Impeachment in Illinois

Seth Anderson3 Comments

There has been some calls for impeachment proceedings to remove Governor Blah-blah1 – we hadn’t decided if we supported that or not, even though we think Gov Blah Blah is doing a horrible job. However, the contrast between two news stories published today:

The confusing controversy over Gov. Rod Blagojevich’s decision to give $1 million in state assistance following the Pilgrim Baptist Church fire has a new twist—the founder of the private Chicago school that got the money is contradicting the governor’s statement about what happened.

Blagojevich has maintained that he wanted the money to help the historic church but bureaucratic mistakes sent it to the school.

In her first interview since the controversy over the money erupted this spring, Elmira Mayes, the founder of the family-run Loop Lab School, said Blagojevich personally promised her the money.

Mayes said the governor visited the fire site and talked with her as she was sifting through debris from her burned-out school, which had rented space from the church. She did not recall the governor’s exact words but “he told me he would help build the school and give $1 million.”

Mayes’ account raises fresh questions about the Blagojevich administration’s efforts to clean up their boss’ campaign promise gone awry. Blagojevich has since pledged a second million dollars to the church and ordered a review of whether the state should recover the money given to the school.

[From Governor contradicted on $1 million ‘mistake’ — chicagotribune.com]

and

The stumbling U.S. economy is forcing states to slash spending and cut jobs in order to close a projected $40 billion shortfall in the current fiscal year.

That gap — identified Wednesday in a survey by the National Conference of State Legislatures — is more than triple the size of the previous year’s. It is the result of broad economic weakness at the state and local levels that could cause pain throughout this year and into 2010. Sales-tax collections, for example, have been hurt by the housing slump and high gasoline prices, which are prompting cutbacks in consumer spending. Personal income-tax collections have been hit by rising unemployment, while corporate income-tax collections have been eroded by falling profits.

“We expect it to get worse before it gets better,” said Corina Eckl, fiscal-program director of the National Conference of State Legislatures. The conference’s new report describes the shortfalls states face in their budgeting process for the current fiscal year, which began in July.

[From States Slammed by Tax Shortfalls – WSJ.com] [non-WSJ subscribers use this link]

is just too great. Gov Blah Blah squanders cash, can’t explain how or why, and yet Illinois is deeply in the red, cutting various social programs, considering tax increases. I don’t think Gov Blah Blah is even having any fun being governor, he should just resign, move back to Lincoln Park, and become a lobbyist.

Footnotes:
  1. as we call Gov. Rod Blagojevich [↩]