* There’s talk of bankruptcy in East St. Louis. With property tax revenues down and gaming proceeds from the local riverboat tanking, the city is facing a $5 million budget shortfall and is having a rough time meeting its payroll…
Two councilmen said the city may be looking at filing for bankruptcy after the fire and police pension boards rejected the city’s request to borrow about $1.5 million from the two boards, and the bargaining units within the police and fire departments are crying foul over contract violations. […]
“Our backs are against the wall,” [Councilmen Roy Mosley] said. “The police bargaining unit doesn’t want to negotiate with us. The firemen have worked with us and I thank them for doing that. We can’t pay what we don’t have. We’re not trying to take any money from anybody. We just don’t have any money to pay the union contracts that were negotiated when the city had money, and that’s the bottom line.”
Mosley said the city has had to pay out large chunks of money in lawsuits to, and because of, several police officers. […]
He said, however, that “Eighty percent of the city’s budget is the police and fire departments.”
Marion also said, “If you cut everybody out of the budget, it wouldn’t be nearly enough to close the $5 million budget gap the city has.”
I’ll have more on New Jersey’s budget situation next week because I just haven’t had much time to study it, but one of the proposals by the state’s new governor is to forbid all local governments from getting in over their heads by limiting their lee-way in future contract negotiations…
[Gov. Chris Christie] also is calling for new handcuffs on towns and school districts as they bargain with unions, to prohibit towns from awarding contracts with pay increases, including benefits, of more than 2.5 percent.
One seriously doubts that’ll happen here, and it probably won’t even happen in New Jersey. Still, it’s an idea that I don’t ever remember seeing before.
* Gov. Christie mentioned Illinois in his budget address, by the way. After I wrote a column about Christie, I ended up (temporarily, at least) on his press release list, so somebody out there apparently saw it. Here’s what Christie said in his address…
…Many of our fellow states are resorting to the techniques and tricks that have gotten New Jersey into so much trouble in the past.
In Illinois, they are raising income taxes and increasing borrowing to solve this problem. Sound familiar? Like New Jersey, they will see taxpayers leave and revenues fall. We have already been there and feel the sting of that failed policy today.
* As I reported to subscribers yesterday, the House Republicans submitted a long list of budget ideas to Gov. Quinn this week. The Southtown Star does a story today..
House Republican lawmakers have sent Gov. Pat Quinn recommendations on how state government might look to cut spending in the state’s current financial crisis.
The four-page letter, signed by 46 House Republicans, urges Quinn to look at fiscal reforms, Medicaid changes and job creation.
While there’s not an exact dollar amount specified in terms of proposed savings, the letter identifies how more than $5.3 billion could be used differently.
Sounds like a lot of money, right? There’s a big catch…
House GOP lawmakers proposed, among other things, that Quinn look to eliminate General Assembly scholarships, abolish the lieutenant governor’s office, impose a freeze on state hiring and salary increases and redirect $5 billion earmarked for capital projects for operations.
As I’ve already told subscribers, redirecting $5 billion of the capital plan to state operations simply cannot be done with the current revenue situation. Plus, lots of members didn’t even know that item was on the list. Oops.
OK, so now they’re down to about $300 million in savings. Much of that comes from postponing funding for high-speed rail.
Illinois Issues Statehouse bureau chief Jamey Dunn has a partial list over at Illinoize. Some of the ideas aren’t bad at all, but this is no real solution.
* Since the top item on this post deals with unions, let’s throw this one in here. As our videos showed yesterday, Republican gubernatorial nominee Bill Brady was bashed on the union issue…
Speaking at a gathering of the Illinois Brotherhood of Electrical Workers, Quinn told the pro-union crowd that Brady owned a construction company that only hired non-union workers, and Madigan said the Republican senator from Bloomington would work “to spread that gospel all over the state of Illinois.”
“We’re not going to have a middle class if we allow a lot of anti-labor, anti-union operators to get in politics and tear to shreds fundamental things we all agree on,” Quinn said. “He doesn’t believe in the minimum wage. He wants to abolish it.”
The Brady campaign responded…
Jerry Clarke, campaign manager for Brady, issued a statement in response: “We’re not going to have a middle class if we continue the job-killing policies and insider politics of the Blagojevich-Quinn administration.”
* Related…
* A first step in cutting pensions: Finally, a bill to create a two-tier state pension system isn’t dead on arrival in the state Legislature. On Wednesday, a bill to provide significantly lower benefits for newly hired employees in two of five state pension systems, the ones covering legislators and judges, passed a House committee. The bill’s sponsor, Rep. Kevin McCarthy, expects the bill to pass the full House this week. No other major pension reform bill has gotten that far in the last two years.
* Measure advances to raise retirement age for lawmakers, judges
* Bill targets pensions of judges, legislators
* Illinois budget crisis sharpens
* Sen. Hutchinson: “We haven’t been doing that for the last 25-30 years”
* Herald-Review: Solid budget will do more than games
* Budget expert calls Quinn tax proposal ‘insufficient’
* Con-fer-ence: An excuse to spend lavishly?: Southland school administrators and board members - many who are running financially strapped districts - dropped a bundle on meals, hotels and travel to an annual fall conference they insist makes them better leaders. Their big destination: downtown Chicago.
* Sneed: Dart, who is no stranger to controversy, is going to force inmates to wash their own prison uniforms . . . and eat breakfast at 4:30 a.m.!
* Dispute over Downstate horse track leads House to oust board
* Illinois House moves to fire the Illinois Racing Board
* Ending employee discounts at Illinois universities unlikely this year
- ok - Thursday, Mar 18, 10 @ 8:43 am:
That $5 billion in capital money they want to use isn’t just sitting in some bank account somewhere.
The state needs to issue bonds to get it.
So, essentially, the headline is that the Republicans just want to borrow $5 billion as their budget fix.
Weren’t they railing against borrowing just last week?
- wordslinger - Thursday, Mar 18, 10 @ 8:46 am:
Pretty weak effort from the House GOP on the budget.
- Pot calling kettle - Thursday, Mar 18, 10 @ 8:53 am:
So, they were cutting and cutting, and, before you know it, it was time to go out to dinner. “We could scour the budget for more efficiency OR we could cut high speed rail and make up the rest of the difference with capital funds.” And the rest is history.
- VanillaMan - Thursday, Mar 18, 10 @ 9:01 am:
[Gov. Chris Christie] also is calling for new handcuffs…
New York Times, sigh, typical bullcrap. God forbid someone try to handcuff or limit governments to avoid bankruptsies. Do these people even think anymore?
- VanillaMan - Thursday, Mar 18, 10 @ 9:02 am:
We need to study both California and New Jersey to see how they battle with their bankruptsies, so that we can better decide which way to go with ours.
- Secret Square - Thursday, Mar 18, 10 @ 9:06 am:
I thought governments couldn’t go bankrupt? Or is it only states that can’t (but local governments can)?
- ok - Thursday, Mar 18, 10 @ 9:06 am:
Apparently, VanillaMan, the answer is easy.
Just skip pension payments and borrow.
And the problem magically goes away.
- Reality - Thursday, Mar 18, 10 @ 9:07 am:
In order to file Chapter 9 bankruptcy the state has to have an enabling statute giving its political subdivisions the authority to file. Illinois does not have such a statute and therefore its municipalities cannot avail themselves of Chapter 9. It was tried several years by the Slocum Drainage District and the Court threw out the filing because Illinois does not allow its entities to file.
- Plutocrat03 - Thursday, Mar 18, 10 @ 9:07 am:
Corporations have been cutting costs for the last decade while increasing productivity while keeping their customers satisfied.
Why can’t government do the same?
It is always the easy path to cry poor because the pockets of the taxpayers are limitless. There are decades of bad management practices in place that people do not want to address.
- YoYo - Thursday, Mar 18, 10 @ 9:09 am:
So, essentially, the headline is that the Republicans just want to borrow $5 billion as their budget fix.”
The $5 billion has been approved, it is going to be spent. Plain and simple.
Do you want to spend it on dealing with the problem at hand?
- Rich Miller - Thursday, Mar 18, 10 @ 9:13 am:
===The $5 billion has been approved, it is going to be spent. Plain and simple.===
Not next year it won’t.
- Indeedy - Thursday, Mar 18, 10 @ 9:16 am:
Omg, Sen. Hutchinson’s speech was, was, was, I’m speechless. She said it perfectly. Brava!!
- Vote Quimby! - Thursday, Mar 18, 10 @ 9:19 am:
No talk of ESL councilmen giving up their “expense accounts”? Also, very brave of Rep. Eddie Jackson’s daughter (appointed to his ESL council post) to vote “present” on the budget….
- grand old partisan - Thursday, Mar 18, 10 @ 9:19 am:
I don’t know enough to judge the details of Christie’s proposal, but it certainly seems to be a good start. It’s time to reign in public employee unions. I say no raises at all for anyone who draws a salary from the government in any year that revenues from income taxes fall. Why do public employees think they should be immune from the same economic pain that the people paying their salaries are feeling??
- just sayin' - Thursday, Mar 18, 10 @ 9:37 am:
Show of hands. Who assumed East St. Louis was already bankrupt?
- Knome Sane - Thursday, Mar 18, 10 @ 9:56 am:
About 20 years ago, the General Assembly passed a law to put East St. Louis and the Village of Robbins in “receivership” and a recovery board of sorts was appointed in each respective jurisdiction to put those entities back on the path to recovery. Does that law still exist as an option for troubled communities? I forget what the plan was called but it was approximately 1989.
- Conservative Veteran - Thursday, Mar 18, 10 @ 10:02 am:
I agree with Grand Old Partisan. An Illinois state legislator is paid about $78,000, per year. I hope that some legislative candidates will promise that, if they win, they’ll support decreasing their salary to $55,000.
- Responsa - Thursday, Mar 18, 10 @ 10:10 am:
Sen. Hutchinson gives an impressive speech and connects. Her multitasking comment resonates. She will have a bright future in politics if she does not get beaten down by the old guard of her own party protecting their turf. I wish she, instead of Quinn were running for governor. She needs to give this speech over and over again every place she possibly can, after reworking it slightly in one important way: In addition to (fairly) calling out “the other side” to stand up and participate in discussing a reasonable revenue increase, she also needed with equal fervor to call out her own party for their ongoing failure to address and cut the size and bloat of our state government on their watch–while playing obvious theater with the education system. Yes, she mentioned it but not in the forceful way that is required or needed to solve our problems. Just as it will take a Republican governor to effect a needed tax increase it will take a brave Democrat to slay the sacred cows of the other side. Maybe Sen. Hutchinson is the one.
- bored now - Thursday, Mar 18, 10 @ 10:37 am:
sen. hutchinson is just one of the bright new democrats that are emerging on the scene, democrats who aren’t afraid to speak truth to power — even in their own party. unfortunately, illinois has so many problems, so many complicated issues that need to be addressed, that it’s shoulder to the wheel time. illinois’ democrats are offering a slew of candidates who are ready to get to it…
- Jake from Elwood - Thursday, Mar 18, 10 @ 10:46 am:
I can’t believe there is legal authority for police and fire pension funds to loan money to the underlying municipalities. Aren’t the pension funds underfunded enough that they should not exist to be a rainy day fund for the munis.
A couple of Metro-East towns have filed for Chapter 9 Bankruptcy. Washington Park did it just this year…so there apparently is a model for doing so.
- fedup dem - Thursday, Mar 18, 10 @ 10:58 am:
This latest flip-flop by Republican lawmakers on borrowing makes me want to rename the GOP the HOP (Hypocritical Old Party). But I guess this is what happens when the Tooth Fairy forgets to slip the $13 billion under the pillow of either Rep. Cross or Sen. Brady!
- Reality - Thursday, Mar 18, 10 @ 11:13 am:
Anyone can file for Bankruptcy Jake from Elwood. However, if the creditors want to dismiss the petition they will be able to do so. That’s what the Slocum Drainage District was all about. Anyone can file but will it hold up…that is the question. You can be bondholders or other creditors will squash this.
- The Mad Hatter - Thursday, Mar 18, 10 @ 11:51 am:
Last week I e-filed my Illinois taxes. Yesterday I received a refund check from the State of Illinois. While I’m amazed at the speed of the Department of Revenue, and flattered that the state considers me so important that it immediately refunded my money, I’m also puzzled. Isn’t Illinois broke? Aren’t there state reps and state senators who are being evicted from the offices in their districts because the state is late with their rent payments? Aren’t there hundreds of hospitals and thousands of doctors who have been waiting months and sometimes years to be reimbursed for their services? Aren’t there hundreds of social service agencies locking their doors because they can no longer operate due to lack of state funding? Aren’t school districts across the state laying off staff and closing schools because the state hasn’t paid them the money they’re owed? If all these things are true, how can the state think my income tax refund should be a higher priority? Who made that decision? Did anyone?
- Rich Miller - Thursday, Mar 18, 10 @ 11:52 am:
TMH, the state has a special refund fund specifically designed to avoid late refund payments.
- Loop Lady - Thursday, Mar 18, 10 @ 12:26 pm:
The DOR is way more efficient today than it was in 2003…additionally, more taxpayers are filing online, and checks can be deposited into taxpayer accounts instead of being mailed…less paper, less postage for both taxpayer and DOR, more sustainable state bureaucracy…Quinn has encouraged and lauded DOR’s efforts for about three years…and folks ask what has he done on this blog…pay attention DuPage Dan…
- former democrat - Thursday, Mar 18, 10 @ 8:05 pm:
Please “ok” you cant spin your way out of the mess your party of the super majority has brought to Illinois. Hey “ok” tell your boss MJM that retirement soon awaits.
- Cheswick - Thursday, Mar 18, 10 @ 10:12 pm:
Dearest Illinois Dept. of Revenue:
Starting with the 2010 IL-1040s, add a line where people (and businesses) can figure and pay their Illinois use tax. It’s self-explanatory, and too easy.
Love,
A. Friend
P.S. I can’t imagine why you haven’t already done this.