SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Illinois’ debt burden

Friday, Aug 30, 2013

* From Reboot Illinois

Back in 1981, Illinois reported $164 million in debt service “interest” expense. By 2012, Illinois’ accumulating debt led to a reported $1.6 billion in interest expense — about 900% higher than in 1981, despite a 95% decline in general interest rates! To boot, Illinois has had a longstanding ‘balanced budget’ requirement in the state constitution, which theoretically constrained state borrowing.

In 1981, Illinois reported $8.4 billion in total liabilities. By 2012, that amount had risen to over $100 billion. And that is just the amount reported by the state under current government accounting standards. These standards have long allowed states to accumulate massive off-balance sheet liabilities for retirement programs for government employees. Truth in Accounting estimates these obligations totaled over $120 billion in Illinois as of fiscal year-end 2011 – an amount about equal to the state’s total reported liabilities.

$164 million in interest expenses in 1981 would be equal to $421 million in today’s dollars, and $8.4 billion in total liabilities in 1981 is equal to $22 billion in 2013 money, so the percentage increases aren’t quite as dramatic as claimed.

Still, that’s a whole lot of debt.

Discuss.

- Posted by Rich Miller        


21 Comments
  1. - Anonymous - Friday, Aug 30, 13 @ 10:26 am:

    When it doubt, vote “No,” is still the best advice.


  2. - Keep Calm and Carry On - Friday, Aug 30, 13 @ 10:27 am:

    According to these numbers, that means our interest expense is increasing roughly 4 times faster than inflation. Should be $421 million but is $1.6 billion.

    And our total liabilities are increasing roughly 5 times faster than inflation. Should be $22 billion but is over $100 billion.

    I would have settled for 2-3 times faster than inflation or even something crazy like a balanced budgets that increase in accordance with inflation but hey, this is Illinois. When it comes to taking on debt, why settle? Go big or go home. /s


  3. - thechampaignlife - Friday, Aug 30, 13 @ 10:31 am:

    ===despite a 95% decline in general interest rates===

    How does the math work on that? Assuming rates are currently 5%, wouldn’t a 95% decline in rates mean that rates used to be 100%? Or have I not had enough caffeine this morning and am totally messing up the numbers?


  4. - SO IL M - Friday, Aug 30, 13 @ 10:41 am:

    Cloward Piven


  5. - Anonymous - Friday, Aug 30, 13 @ 10:59 am:

    Our democratic politicians and poor fiscal mismanagement! They only hear the words spend, tax, and borrow!


  6. - walkinfool - Friday, Aug 30, 13 @ 11:08 am:

    The data provided to Reboot, is from the Truth In Accounting group, which has long advocated reforming our accounting practices to better reflect liability and risk. Their advocated standards would be considered extreme and unnecessary by most in the private sector — not to say we shouldn’t have higher standards for government.

    I don’t believe the accounting standards used in 1981 for reporting “total liability” numbers for the state are the same as those used in 2012. Current standards call for more capture of liabilities that used to be off book.

    I could be wrong, but these comparisons might be apples to oranges. I’d look to JBT, or Ralph Martire to confirm these are fair comparisons.


  7. - walkinfool - Friday, Aug 30, 13 @ 11:10 am:

    Rich’s “still that’s a whole lot of debt” is certainly true, no matter my quibbling above.


  8. - Rod - Friday, Aug 30, 13 @ 11:24 am:

    The article from Reboot Illinois really wasn’t all that deep, clearly to examine this issue in debt would have required a much more detailed article which does not mean there is not a legitimate issue here. It should also be noted at the bottom of the article this appears: “The legislators continue to ignore the debt they’re building for us while protecting their political fortunes. - Chicago Tribune columnist John Kass”

    Reboot Illinois by the way is not a not for profit entity its a limited liability company.
    Reboot’s offices offices are actually located in the offices of ARAGON GLOBAL MANAGEMENT LLC 180 N Stetson Ave, suite 5350 Chicago, Illinois 60601. Aragon is a hedge fund run by Anne Dias-Griffin and she is the wife of Kenneth C. Griffin founder and CEO of Citadel LLC. Citadel’s group of hedge funds rank amongst the largest and most successful hedge funds in the world, and Griffin has earned several billion dollars during his tenure at the company. As of 2012, he has an estimated net worth of $3 billion.

    Mr, Griffen in 2012, he said he was a Reagan Republican. He also said that “This belief that a larger government is what creates prosperity, that a larger government is what creates good: is wrong.” In 2012, Griffin, and his wife Anne, has given $150,000 to Restore Our Future (Romney Super PAC), $560,000 to the Republican Governors Association, $300,000 to American Crossroads, and $1.5 million to Americans for Prosperity.[30] Overall, Griffin has donated more than $2 million to date to the Super PACs American Crossroads and Restore Our Future.

    While the journalist Madeleine Doubek is the CEO of Reboot the organization seems more complex in its political relationships than it first appears

    As Rich would put it- just saying.


  9. - Keep Calm and Carry On - Friday, Aug 30, 13 @ 11:41 am:

    We can shoot the messenger if we’d like.

    It still doesn’t change the numbers or facts behind the message. Fact is, “that’s a whole lot of debt.”


  10. - RonOglesby - Friday, Aug 30, 13 @ 11:47 am:

    Until our elected reps start to actually make choices (we can’t pay for all of this) debt will continue to grow. Its painful, but as my parents told me: “money does not just grow on trees”


  11. - Downstater - Friday, Aug 30, 13 @ 11:48 am:

    Politicians in Illinois have been on a spending, taxing, and pension/health care enhancement binge for the last 20 years. Many of the player(politicians) responsible for this mess are still around. No, it’s time for them to get sober and take the 12 step pledge. Will they? Most will just continue to drink the Kool aid.


  12. - Mr.Big Trouble - Friday, Aug 30, 13 @ 11:50 am:

    Dare we think where we would be if rates had risen or remained the same during that period?? Would Illinios have been a ward of the federal government??


  13. - RNUG - Friday, Aug 30, 13 @ 11:54 am:

    Downstater @ 11:48 am:

    Actually, they’ve just been on a spending spree … and borrowing from the pension payments, the education funding, private companies doign business with the State, and the finanacial sector to pay for it all.


  14. - A guy... - Friday, Aug 30, 13 @ 12:03 pm:

    Rich, it’s dramatic enough for me.


  15. - Ghost - Friday, Aug 30, 13 @ 12:19 pm:

    mixing apples and oranges

    Back then they counted the retirement debt based upon the actual annula cost of sending payments to the retirees.

    The 100 Billions number of today is the cost of fudning the individual retiree accounts to generate the money to pay those employees when they retire. if you follow the same count only the out the door cost we owe a lot less then 100 billion. We just keep changing accounting methods to give the most dramatic result.


  16. - Demoralized - Friday, Aug 30, 13 @ 1:01 pm:

    ==Our democratic politicians and poor fiscal mismanagement!==

    Well, considering that there were Republican governors for 23 of those years since 1981 I think your assertion is bogus. Only neophytes think this is the fault of one party or the other. They’ve all spent just the same.


  17. - Anyone Remember? - Friday, Aug 30, 13 @ 1:05 pm:

    walkinfool

    Correct - Other Post Employment Benefits (OPEB) wasn’t even a part of financial reporting until the mid Blago era.


  18. - Anon. - Friday, Aug 30, 13 @ 2:29 pm:

    ==By 2012, that amount had risen to over $100 billion.==

    And we owe the pension funds $100 billion or so. Why aren’t squeezy, the governor and the Civic Federation screaming that we have to reneg on our bond obligations because the debt service is squeezing the life out of our state?


  19. - Anon. - Friday, Aug 30, 13 @ 2:32 pm:

    ==Back then they counted the retirement debt based upon the actual annula cost of sending payments to the retirees.==

    We still do. That’s what the comment about how retirement obligations are “off balance sheet” means — this $100 billion does not include the unfunded pension obligations.


  20. - cicero - Friday, Aug 30, 13 @ 8:05 pm:

    Here’s some serious questions I wish Doubek and company had addressed:

    When the state borrows to fund capital projects, is that a bad thing? If so, then both parties are responsible because capital bills always have bipartisan majorities.

    If debt already exists, is it better to borrow to pay debts than not to pay them?

    Is borrowing a worse alternative than raising taxes so revenues exist to pay bills without borrowing?


  21. - Matt Dietrich/Reboot Illinois - Thursday, Sep 12, 13 @ 3:18 pm:

    Cicero: Borrowing to fund capital projects is a normal function of state government. It’s a bad thing when that borrowing is not properly matched with revenue, as is looking like the case with the last capital bill in 2009 (which is only now becoming an issue because of the hue and cry over the expensive doors on the Capitol). I’ve got more at http://rebootillinois.com/?opinion=5501

    It’s better to live within your means, identify your needs and pay for them.

    Truth In Accounting doesn’t sugar coat its findings, which are based on numbers, not ideology. Bottom line: Illinois has created a disaster with its budgeting and borrowing.

    Glad to see this simple graphic generated some discussion.


Sorry, comments for this post are now closed.


* AFSCME wants apology from IDOC for blaming workers in inmate assault
* Rauner claims he's spending "all my time" on reforms, not campaigns
* Daley whines about Emanuel, but poll results indicate he's wrong
* Reporters focus on stroke angle, Dems hit race angle
* Maybe a phone call might help?
* *** UPDATED x1 *** Legislator wants to stop Pokémon Go from leading players to protected sites
* SUBSCRIBERS ONLY - New cable TV buys
* Another big budget hit coming?
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............
<


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

  
* ZUK forums show off leaked Hasselblad Moto Mod
* Deutsche Telekom to Offer Subscribers Six Months of Apple Music for Free
* Microsoft Word Flow 2.0 has Bing-powered GIF search, contact and business lookup
* Honor 8 officially launches in Europe
* Windows 10 Mobile transition slow, but happening with OS share at 14 percent
* Galaxy Note 7 ships in Germany a week ahead of schedule
* Pokémon Go is boosting competitor in-app purchase revenue, too

* White Sox roll past Phillies with Rodon at wheel
* Rodon unlocks backdoor in commanding win
* Rodon rolls on as White Sox pound Phillies
* White Sox roll past Phillies with Rodon at wheel
* Collins among top prospect performers Tuesday
* Rodon rolls on as White Sox pound Phillies
* Pipeline preview: Adams featured in duel of the day

...............


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress

Loading


* Forby: Attack on Pontiac guards a direct result.....
* Rauner's office warns teachers' pension change .....
* Illinois Gun Bill Takes Aim at Traffickers Who .....
* Rauner's office warns pension change could be '.....
* Illinois officials: Pension change could be 'de.....
* Governor's office warns pension change could be.....
* Illinois officials: Pension change could be 'de.....
* Rauner's office warns pension change could be '.....
* Rauner vetoes bill that would limit state from .....
* Illinois officials: Pension change could be 'de.....


* House explodes in central Illinois, sends couple into yard
* Police seeking vehicle connected to Illinois killings
* Police seeking vehicle connected to Illinois killings
* Prosecutor wants McCullough case perjury claim investigated
* Summit focuses on coordinating efforts to fight drug abuse
* East St. Louis closes jail after sanitation complaint
* Islamic scholar has deadline to accept sex abuse plea deal
* Possible suspect questioned in Chicago fire that killed 4
* 28 students to get police escort due to oil pipeline protest
* Illinois graduating seniors have slight ACT score increase

* Rauner's office warns teachers' pension change could be 'devastating'
* Rauner signs bill to punish trafficking guns into Illinois
* Rauner to sign bill to clamp down on gun trafficking
* Gov. Rauner signs bills to assist juvenile, other offenders
* Gov. Rauner signs package of criminal justice legislation
* Tax on feminine hygiene products repealed in Illinois
* Gay rights setback seen in Illinois Supreme Court ruling
* New Illinois law addresses financial exploitation of elderly
* Democrats at Illinois State Fair taunt GOP's Trump reluctance
* Democrats taunt GOP's Trump reluctance

* The ugliest power market in the U.S. is about to get a makeover
* Rauner's office warns pension change could be 'devastating'
* Uber fights to keep drivers freelance, but offers a retirement option
* Uber fights to keep drivers freelance but offers a retirement option
* Clinton win could pressure GOP to heal, not repeal, Obamacare


* Two Greater Grand Crossing stores robbed at gunpoint this month
* Windy City Bulls move closer to NBA Development League debut
* Pfizer on buying spree with AstraZeneca antibiotics deal
* Harry Belafonte hoping to lead a change with new festival
* Man shot in Washington Park
* Man shot to death in Englewood
* Italy earthquake kills at least 73, reduces towns to rubble
* 1 dead, 4 wounded in shootings early Wednesday
* Robert Reich: Why universal health care is inevitable in America
* Ford recalls over 88K vehicles due to stalling problem


* Who was the greatest Cubs catcher?
* At least 1 dead, 18 wounded after militants attack American University in Afghanistan
* Scavenged Oprah bricks a 'hot commodity' on Near West Side
* Starbucks iced coffee lawsuit dismissed with chiding from judge
* Idaho man uses Legos to re-create college football big plays
* Waukegan police: Apartments evacuated during drug-lab investigation
* Emanuel school board set to approve tax hikes for $5.4B budget
* July home sales plunge in Chicago, suburbs
* Explorer: No train or tunnel at search site for Nazi train
* Italy earthquake kills 120, injures hundreds: 'There's nothing left'


The widget AQL4JYGHIY powered by Feed Informer does not exist.


* Rauner's office warns teachers' pension change could be 'devastating'
* Michael Gerson: Cheap populism helps no one
* E.J. Dionne: Trump's sour Virginia cocktail
* Michael LeRoy: Map case shows courts' flaws
* Our View: Both parties need plans for Illinois, not rhetoric
* Catherine Rampell: Millennials aren’t buying homes. Good for them.
* Rauner signs bill to punish trafficking guns into Illinois
* Rauner to sign bill to clamp down on gun trafficking
* Gov. Rauner signs bills to assist juvenile, other offenders
* Kathleen Parker: A nice column about Trump


* PHOTOS: Volunteers tour Macon County Conservation District
* New state law will allow EMTs to inject epinephrine
* Murphysboro adopts new, Class P liquor license for pubs
* Islamic scholar has deadline to accept plea deal
* Tarter Source podcast: The wheels of time keep rolling at the Wheels O'Time Museum
* Three acts to see at River Roots Live: Luke Bell, The Stone Foxes and Guitar Army
* Murphysboro's last summer Sunset Concert is Thursday
* Lincoln Library expands with Masters papers
* Mother and daughter are masterminds behind Mossville's Hayloft Shops
* 08-24-16 Penny for Your Thoughts


* The Latest: Trump son defends not releasing tax returns
* Find your purpose in life by asking questions
* Carpentersville woman charged in sister's slaying wants new psychological evaluation
* Plays explore issues of substance abuse
* At least 120 reported dead as earthquake hits central Italy

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Police in Illinois to receive hundreds of ......
* Dick Durbin and Tammy Duckworth visiting C......

* U.S. Sen. Mark Kirk touts Illinois ahead o......
* US Sen. Mark Kirk touts Illinois ahead of ......
* Duckworth, Kirk to Participate in Roundtab......
* Duckworth, Kirk to Participate in Roundtab......

* Public Safety Workshop Tonight
* Hillary on the Clinton Foundation: The ends justify the means
* Chicagoans want higher taxes, poll reports
* How Elites Destroy Themselves
* Staver: Pastors, don't hide behind the IRS
* Illinois property taxes leave few options for financially-sound future
* Kirk wins gun control activist Gabby Gifford's support for re-election
* Juvenile-Justice Reformers: Lawyers For More IL Children A 'Good Start'
* Kirk Raises Eyebrows After Calling Obama 'Drug Dealer In Chief', Gets Gun Control Endorsement
* Schakowsky challenger gains Speaker Paul Ryan's endorsement


* Governor Rauner Signs Firearms Trafficking Bill to Help Protect Communities from Gun Violence
* Governor Rauner Takes Action towards Normalcy for Illinois Youth in Care
* State Announces September 1 Start of Low Income Energy Assistance Program Enrollment - LIHEAP, PIPP applications available for seniors, people with disabilities beginning September 1
* Governor Rauner Signs Bills to Further Reforms to Illinois’ Criminal Justice System
* Governor Signs Bill Creating Task Force to Combat Human Trafficking




      Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller