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Patchwork quilt budget puts off problems until next year

Tuesday, May 27, 2014

* Way back in late March, I did a couple of analyses of the budget outlook for subscribers and concluded that a bunch of cash appeared to have been squirreled away. It was impossible to say for sure just how much was available, but it looked to me like it was maybe around a billion dollars or more.

I wasn’t attempting to make the case that the state’s fiscal problems aren’t real, just that the GA could probably limp through this next fiscal year and then essentially kick the can down the road until after the November election. The problems are real for FY2015, but they get much, much more difficult in FY2016, when the full impact of the tax hike expiration will become apparent.

Anyway, kicking the can appears to be what the Democratic leaders have now agreed to do

House Speaker Michael Madigan on Monday declared an extension of the 2011 temporary income tax increase dead for the spring and said House Democrats are preparing a “middle-of-the-road budget” that eases up on spending cuts that were part of a failed budget blueprint last week.

Madigan informed his 71-member House Democratic caucus that he was taking the income-tax extension favored by Gov. Pat Quinn off the table and shifting budgetary strategy as state lawmakers enter their final week before a scheduled Saturday adjournment.

“We’re proceeding under the expectation that the income-tax increase will not be extended,” Madigan told reporters after a Monday committee hearing at the Statehouse. […]

Madigan said the new spending plan that he expects to emerge soon will be a hybrid of the so-called failed “doomsday” budget that mustered only five House votes last Friday and an earlier, more-generous package of 73 spending bills that passed the week before on the assumption the income-tax extension would pass.

* More

Budget makers will look to borrowing built-up money in special funds and spending adjustments to develop a “middle-of-the-road” fiscal outline – between the doomsday scenario and one that increased spending by $3 billion with the continued escalated income tax.

* More

Madigan said the new budget will be based on a revenue estimate adopted in the House earlier this year that set $34.5 billion as the target. That projection will be increased by $189 million because of revised estimates for next year since the original estimate was set.

Quinn had said “savage” cuts would have to be made to education if the tax hike was allowed to expire. Madigan, though, said the plan is to give elementary and secondary education the same amount they received this year.

“It will be held flat,” Madigan said. “We’re always interested in providing more help for education, but at the same time we’re required to live within the revenue estimates that are available.”

He added that “pension payments will be made.” […]

Asked if the budget under development might results in layoffs and closures, Madigan said, “Those are matters for the agencies and the institutions to decide.”

* Raw MJM video

- Posted by Rich Miller        


88 Comments
  1. - Formerly Known As... - Tuesday, May 27, 14 @ 9:13 am:

    Profiles in courage. /s


  2. - Shemp - Tuesday, May 27, 14 @ 9:13 am:

    This may be elementary on my part, but how was the State setting aside funds when the tax increase was there specifically to pay down the backlog of bills?


  3. - Just Observing - Tuesday, May 27, 14 @ 9:14 am:

    Does anyone actually believe the raiding of special funds will ever be paid back.


  4. - wordslinger - Tuesday, May 27, 14 @ 9:15 am:

    The no-tax crowd should be happy. Kicking the can down the road — that never caused any problems before.


  5. - Wally - Tuesday, May 27, 14 @ 9:20 am:

    Economic growth comes from people having money in their pockets and spending it and businesses adding employees, not from government collecting more $ and wasting it.


  6. - DuPage - Tuesday, May 27, 14 @ 9:22 am:

    What about the money for higher education? What about the hundreds of millions they still owe the universities and community colleges from a year ago?


  7. - Demoralized - Tuesday, May 27, 14 @ 9:23 am:

    @Wally:

    That doesn’t solve the current problems in the budget. It’s a nice talking point but does little to help right now.


  8. - Grandson of Man - Tuesday, May 27, 14 @ 9:24 am:

    We can’t have things both ways. How can we have adequate funding in the future and fiscal recovery without making a painful choice to keep the tax increase? It’s too bad that we can’t stay on the current path of fiscal recovery.

    I wonder if this could help Quinn. Passing the tax increase would have been unpopular, but now without it, Quinn can try to make a case that he wants to have adequate revenue for school funding and social programs. It’s one way he may be able to bring out Democratic base voters.


  9. - wordslinger - Tuesday, May 27, 14 @ 9:24 am:

    Gee Wally, first day of summer school over already?

    Econ 101 gets a little more complicated on the second day.

    That Somalia must be an economic juggernaut, what with the no taxes or government regulation.

    What’s the point of a comment like that here?


  10. - Anonymous - Tuesday, May 27, 14 @ 9:27 am:

    we need a Kick The Can Hall Of Fame.


  11. - PublicServant - Tuesday, May 27, 14 @ 9:30 am:

    ===I did a couple of analyses of the budget outlook for subscribers and concluded that a bunch of cash appeared to have been squirreled away. It was impossible to say for sure just how much was available, but it looked to me like it was maybe around a billion dollars or more.===

    Here’s hoping the pension plaintiffs do the math too, Rich. If the state can squirrel a billion away during a financial crisis sufficient for the state to use police power to invalidate certain contracts and its own constitution, we should have the pension backlog paid off in a jiffy, build the Obama library, and pay for those new doors at the capitol to boot.


  12. - Dirty Red - Tuesday, May 27, 14 @ 9:32 am:

    Interesting that the Speaker would rather talk about the budget with the press instead of his Lincoln Museum move.


  13. - Oswego Willy - Tuesday, May 27, 14 @ 9:33 am:

    If i am the Rauner Crew, and if that Crew is concerned about possibly governing in FY16, are you applauding the non-permanency of the Income Tax, and, in the same thought, troubled at the reality of funding of Education or other “musts” Rauner points to that will not be cut, or increased, given the kicking of the can, and how Rauner looks at FY16 as a candidate and if/when Rauner gets the Big Chair.

    Are they “happily disappointed”?

    Are they “cheering disapprovingly”?

    We won’t know, that Crew doesn’t have a message on “repeat” to respond… yet.

    I would like to hear it, but…


  14. - Formerly Known As... - Tuesday, May 27, 14 @ 9:34 am:

    As a member of the media correctly noted to Eddie Arruza on Friday’s Chicago Tonight

    “And who is the genius in the Democratic Party who decided this should expire on January 1 2015, while you are budgeting right in the middle of campaign season?”


  15. - Louis G. Atsaves - Tuesday, May 27, 14 @ 9:35 am:

    How badly will this proposed budget be hit if the Illinois Supreme Court kicks out the “pension reforms” that were enacted last year?


  16. - Demoralized - Tuesday, May 27, 14 @ 9:36 am:

    @Louis:

    It won’t. I don’t think they have assumed anything related to that law in any of the budget scenarios.


  17. - Dee Lay - Tuesday, May 27, 14 @ 9:39 am:

    OW -
    If I’m Rauner or his crew I’m not worried about governing - I’m worried about winning and how to leverage this situation.

    Rauner’s plan for dealing with economic situation: We have a blue ribbon advisory committee that is working on something that I can tell you about really soon. In the meantime, our present Governor is destroying Illinois and I’m here to shake up Springfield.


  18. - Anonymous - Tuesday, May 27, 14 @ 9:44 am:

    The “middle-of-the-road budget” as outlined by the Speaker looks like a good political move to me in an election year. In the long term, however, it will probably require higher taxes and/or deeper budget cuts in future years. Kicking the can down the road yet again looks to be expensive in the long term.


  19. - Wensicia - Tuesday, May 27, 14 @ 9:44 am:

    How soon will the “kick the can down the road” robocalls start by Team Rauner?


  20. - Toure's Latte - Tuesday, May 27, 14 @ 9:47 am:

    ==Budget makers will look to borrowing built-up money in special funds==

    That worked out really well in the past. /s


  21. - Oswego Willy - Tuesday, May 27, 14 @ 9:49 am:

    - Dee Lay -,

    This patchwork quilt of a budget, versus Rauner’s Crew stance and RoboCalls about the permanency of the Income Tax and the rhetoric of lower taxes and more funding, plays directly into a weak point that saying nothing about the fiscal now, and how a Rauner Administration will approach FY16, is…the campaign and running the campaign too.

    If they decide the Dopey “Blue Ribbon” Committee road they are trying to “Sell” now with the “best in Business” advising, the Rauner Crew will find that tough sledding, and those kind of Dopey moves motivate Unions, motivate activists, and the Dems would love to really hitch the “Mitt Romney” style of running the state like a failed business.

    You can sit on the ball as long as you can, and even be effective campaigning, but FY16 is real. “Running” and. “Governing”, two different animals. With the out front RoboCalls on the Income Tax permanency, they will be asked more pointed fiscal questions now, and in the future.


  22. - Linus - Tuesday, May 27, 14 @ 9:50 am:

    Compare and contrast: The Speaker’s (a) frequent and relatively lengthy media availabilities over the past year with (b) his rare and terse availabilities in sessions past.


  23. - dupage dan - Tuesday, May 27, 14 @ 9:50 am:

    Where is the outrage? How many people knew about this secret stash? We have yet again been played for chumps and most folks here are content to parse the comments of folks who are grappling (albeit crudely) with the implications of yet another Il gov’t stunt.

    Wow - just wow. A billion bucks squirreled away. With all the known financial issues the state is facing. Hard to wrap my mind around that. Do the Il Supremes take note of this when they respond to the weak gov’t argument that there is a fiscal crisis threatening to destroy Illinois? Is anyone else paying attention? Anybody?


  24. - Bill White - Tuesday, May 27, 14 @ 9:51 am:

    == The “middle-of-the-road budget” as outlined by the Speaker looks like a good political move to me in an election year. In the long term, however, it will probably require higher taxes and/or deeper budget cuts in future years. Kicking the can down the road yet again looks to be expensive in the long term. ==

    Well yes, but Madigan/Cullerton/Quinn needs 60 and if they can’t get 60, a another path must be chosen.

    Why the IL Dem mushrooms in the IL House think they will be politically “safer” with budgetary chaos is something that eludes me. But that apparently is what enough of them think.

    ===

    I am consoled by the realization that if Bruce Rauner does win, he truly will be the barking dog that caught the bus.

    Okay Bruce, now what?


  25. - Anon - Tuesday, May 27, 14 @ 9:51 am:

    This way Democrats aren’t taking the political blame for raising taxes to facilitate the Rauner campaign and the Rauner administration. Let the anti-tax Republican figure out how to deal with the loss of $4 billion in FY 16 while increasing education funding and infrastructure spending, as he promises, without raising taxes.


  26. - Oswego Willy - Tuesday, May 27, 14 @ 9:51 am:

    ===– Wensicia -

    How soon will the “kick the can down the road” robocalls start by Team Rauner?===

    What do they say, they are “happily disappointed” or “cheering disapprovingly”?


  27. - Steve - Tuesday, May 27, 14 @ 9:53 am:

    Yeah! We still have money for the Obama Library because it is such a priority for us Democrats. The excitement is building for an ObamaCare exchange run by the state of Illinois, we’ve got the money, we’ll do a great job! Trust us. We aren’t motivated by the profit incentive . Look how well the VA and the Post Office is run. We’ve got the money.


  28. - Anon - Tuesday, May 27, 14 @ 9:53 am:

    A rainy day fund is a prudent financial practice that should be commended, not excoriated.


  29. - VanillaMan - Tuesday, May 27, 14 @ 9:54 am:

    No one is happy with this, so that proves that this is the only thing that could have been done right now.

    The income tax increase was supposed to be temporary because there was an understanding that the tax increase would have hurt Illinoisans and hurt the careers of the careerists under the Dome. It was also believed that the state’s economy would rebound enough so that there would be other sources of dough for the politicos.

    What we have here has been a state leader-lead admission that our state economy has not rebounded sufficiently to offset the income tax increase. The prognosticators among the politically powerful ended up being wrong. Our economy has not rebounded. Having the income tax increase expire threw everything into the kind of stark relief only mathematics forces upon our ruling class today.

    Whatever fiscal state policies put into place since Madigan, his ducklings and his governors have put into place since taking power - has flopped. While other states have been able to cobble together some kind of shelter from our national wreck of an economy, our Illinois leaders have failed.

    Perhaps Illinois has spoiled its state leaders after a century of business success, but that century is obviously over and it was the job of our political leaders to recognize that, and deal with it. They couldn’t.

    Our current nightmare of a budget, after a decade of nightmares is a sign that our current political leadership is out of ideas, and has been out of ideas for a hell of a long time. Expecting the economic cavalry to arrive in time to pay our bonds and loans used to work - but that doesn’t anymore. We need state leaders who know this, not a bunch of old incumbents still thinking that the world’s tallest building is named after a department store in the Loop.

    Get with it! It is 2014, and we have leadership that can’t get beyond 1974. As we flounder, other states eat our seed corn and move one with a chuckle.

    This budget is what happens when we’re dead in the water - still. Time for new elected blood across the state, from City Hall to the Mansion.


  30. - Oswego Willy - Tuesday, May 27, 14 @ 9:57 am:

    Obama Library, ObamaCare, VA, Post Office…

    Um, - Steve -, we are talking about Illinois and her budget and fiscal house. The Fox News National talking points here, add nothing to this discussion, but good on you, hitting all of them in one breath.


  31. - wordslinger - Tuesday, May 27, 14 @ 10:00 am:

    DD, don’t go too nuts. $1 billion is less than 3% of GRF. It’s real money, but it’s not a cure for what ails you.


  32. - Jack Handy - Tuesday, May 27, 14 @ 10:01 am:

    The can will become a barrel will become a silo will become the Hilton.


  33. - Anonymous - Tuesday, May 27, 14 @ 10:01 am:

    @WALLY i agree completely. i am sick and tired of the state wasting my money on prison guards, school teachers, universities and community colleges, state troopers, state parks, snow plows, food inspectors and don’t get me started on the ridiculousness that is providing kids with healthcare and the thugs trying to keep our air and water clean enough to live in. state government is NOTHING but waste and we’d all be better off living in the free state of WALLY


  34. - Robo - Tuesday, May 27, 14 @ 10:01 am:

    No tax increase is the anvil that Rauner’s hammer will fall on to crush AFSCME.


  35. - Wensicia - Tuesday, May 27, 14 @ 10:02 am:

    OW — How about “estactically ashamed”?


  36. - Anyone Remember - Tuesday, May 27, 14 @ 10:03 am:

    Any word on what Wall Street (raters of our bonds) think of all this?


  37. - Wensicia - Tuesday, May 27, 14 @ 10:05 am:

    Sorry “Ecstatically ashamed”


  38. - Oswego Willy - Tuesday, May 27, 14 @ 10:07 am:

    === - Wensicia -

    OW — How about “estactically ashamed”?===

    I really live that, but if I were Rauner’s Crew I would stick that one in my back pocket for when Rauner shuts down state government. I can see your gem used like this;

    “Governor Rauner, this is day 6 of the Illinois Government Shutdown, your thoughts?”

    “Well, I am ecstatically ashamed it came to this.”

    How delicious!


  39. - Wallinger Dickus - Tuesday, May 27, 14 @ 10:10 am:

    A rainy day fund is a prudent financial practice that should be commended, not excoriated. — Anon.

    Not at all true. A rainy day fund for your family is a smart plan. For government it represents taxing above the necessary level.

    Just as government can’t and shouldn’t be run like a business, it also follows a different budget model than a family.


  40. - Barney - Tuesday, May 27, 14 @ 10:13 am:

    Right now, this looks like an ok move, but long-term it is a political disaster. People like Quinn and Frerichs will be forced to discuss the tax hike for the next 5 months all the reminding voters they supported a tax hike. People still don’t believe it will be done and Rauner, etc will be telling people to watch out for a lame duck session surprise. The only people this helps were MJM targets who didn’t vote for it or voted no. Quinn now has the narrative of a guy who can’t get anything done and the Dems in total must continue to deal with the label that they can’t govern.


  41. - Cassiopeia - Tuesday, May 27, 14 @ 10:15 am:

    I don’t see why Rauner needs to say a thing while the Democrats are proving what horrible leaders that they are. It’s time to retire them all.


  42. - VanillaMan - Tuesday, May 27, 14 @ 10:15 am:

    Economic growth comes from people having money in their pockets and spending it and businesses adding employees, not from government collecting more $ and wasting it.

    You are correct, but right now that is like telling us that we need to fight this fire by having everyone decades ago store rainwater in barrels.

    Then there are folks here educated in the olden days of Keynesian economics who believe what they were taught at university and still think Milton Friedman is a capitalist tool.

    So please, you are right - and not right now, please.


  43. - Bill White - Tuesday, May 27, 14 @ 10:24 am:

    Actually, VMan, we are in the mess we are in (state and federal) precisely because Keynesian economics is being ignored.

    Evolution actually happened

    Humans adding CO2 to the atmosphere at prodigious rates changes climates and acidifies oceans

    In terms of basic macro-economics a dollar spent is a dollar spent, whether it is spent by a public school teacher paid with tax dollars or a charter school teacher paid with tuition dollars.


  44. - Bill White - Tuesday, May 27, 14 @ 10:25 am:

    Evolution actually happened, and continues to happen, in real time.


  45. - Bill White - Tuesday, May 27, 14 @ 10:27 am:

    More facts

    As a percentage of GDP, federal taxation is the lowest its been since before WW2; and

    Among the urban states, total IL state and local taxation is below average - yes there are rural states that tax less - but those states do not have large cities.


  46. - Formerly Known As... - Tuesday, May 27, 14 @ 10:27 am:

    Would anyone like to revisit last week’s discussion?

    The one in which some so loudly mocked others for doubting the initial “doomsday” cuts were more a scare tactic and negotiating stance than a true and necessary option of last resort?


  47. - Pete - Tuesday, May 27, 14 @ 10:29 am:

    Is it possible that this is a purely political move to keep control of the house?

    Feels a liitle like a bait and trap.

    Madigan wants to Hike tax, Rauner goes after the house mushrooms, Madigan pulls back to protect the mushrooms… then…

    Madigan goes on the offensive pushing Rauner back. While Rauner is playing def., Magigan has a mushroom rally and passes the tax hike.

    The question is when and what will be the attack on Rauner? I expect as the IL GOP poster boy goes so goes the mushroom challengers. There is a house seat up this election and the only thing off the top of my head that I can recall about the race is that GOP committeeman is organizing a fundraiser with ‘C’ rated TV personalities.


  48. - wordslinger - Tuesday, May 27, 14 @ 10:29 am:

    VMan, I wonder what you think you’re talking about when you try to relate Keynes and Friedman to the state budget.


  49. - Rich Miller - Tuesday, May 27, 14 @ 10:32 am:

    === While Rauner is playing def., Magigan has a mushroom rally and passes the tax hike.===

    You’re overthinking it. If PQ wins, it’ll be seen as a referendum on the tax hike. If Rauner wins, he’ll be on his own.


  50. - Grandson of Man - Tuesday, May 27, 14 @ 10:33 am:

    “I don’t see why Rauner needs to say a thing while the Democrats are proving what horrible leaders that they are.”

    Horrible leaders how? They tried to extend the tax increase, but the votes were not there. They passed a tax increase that is helping the state. They passed pension reform twice. They had to repeatedly step on their allies to get some of this stuff done. Isn’t that what so many people want, a government that will go against special interests for the better good?

    It’s easy to throw stones without having any plans. I would like to see folks being less reactionary and more proactive. Let’s see some plans.

    Some are salivating over Rauner, but he’s done nothing. His campaign so far has been terrible–first vicious attacks and then fluff and no plans.


  51. - DuPage - Tuesday, May 27, 14 @ 10:35 am:

    That “used tire disposal fee” is probably the type of fund they are raiding. Decades ago before recyclers developed ways to recycle used tires, it might have been a good idea. Now, not so much.
    It would be good if they would publish exactly what “special” funds are accumulating, and why. Some funds may be needed for their intended purpose. Other ones may not.


  52. - VanillaMan - Tuesday, May 27, 14 @ 10:36 am:

    When this income tax increase was passed, the supporters didn’t expect the painful budget situation back then to continue. Supporters didn’t think there would be as much blow-back opposition to the increase as there was.

    So we have the supporters of the tax increase doubling down during this election year in hopes that the penalty of continuing it could be spun as “politically courageous”. What Madigan and Quinn didn’t expect was that the whole situation looked more akin to a caught-cheating spouse promising to end an affair, then promising to end it at a later date because it was so badly needed.

    The limit seems to have been reached. No one should be surprised. A decade of playing with the books, borrowing from anyone with money, putting out bonds with Portuguese-quality ratings, and jailing governors, seemed to have lost all humor and charm among voters.

    This has resulted in a Rauner. Instead of trying something different, the political power players just kept hoping their GOP opposition would be an Amish-like guy from Bloomington who snuffs puppies. Even today there are political operatives throughout Illinois telling anyone who will listen that government will get worse if we don’t keep feeding it our wages.

    You beat a Rauner with government successes. Voters don’t want to hear that they need to pay more. They don’t want to hear that their government is broke. They don’t want to hear that another governor needs to go to jail. So, there ain’t been no successes. So stop insulting the folks who are no longer buying the old baloney that Illinois is in a tough patch, but will magically be back if taxes were high enough.

    Votes will go to Rauner if Quinn and Madigan look like they don’t know what they are doing. This budget cements that bad image.

    The legislators have decided that they are safer abandoning Madigan’s ship than going down with it.


  53. - Conservative Republican - Tuesday, May 27, 14 @ 10:38 am:

    “Patchwork quilt budget puts off problems until next year”

    Don’t tell me anyone is surprised by this “dog bites man” news…


  54. - Mason born - Tuesday, May 27, 14 @ 10:38 am:

    So we use the middle of the road approach. Get through the Election and depending on who wins make it permanent in the lame duck or dump it in Bruceys lap to wach the fun. If your Rauner maybe you should rethink the whole thing and call Dillard. Due to unspecified health issues BR has to drop out Mr. Dillard will be taking over. Bruce if you don’t have an ulcer now 2016 will give you one the size of Chicago. Winning this thing may be the best example of careful what you wish for.


  55. - VanillaMan - Tuesday, May 27, 14 @ 10:40 am:

    Evolution actually happened, and continues to happen, in real time.

    Yet, somehow has skipped over you politically.


  56. - Soccertease - Tuesday, May 27, 14 @ 10:42 am:

    Isn’t the individual income tax going to ‘expire’ at 3.75%-It was 3.0% before the temporary income tax hike, wasn’t it? Fund sweeps, fund borrowing-at least we’re kicking the can down the middle of the road.


  57. - Rod - Tuesday, May 27, 14 @ 10:44 am:

    I am unclear why the current budget proposal constitutes kicking the can down the road, the cuts that will be required for Human Services, and likely also for public safety or corrections will likely be significant. Those cuts are not being kicked down any road. As the Speaker indicated in the video that Rich linked K-12 education will be flat funded and pensions obligations will be paid, so even with the additional revenues being estimated and raiding of special funds bad cuts will happen.

    Michele Saddler the DHS Secretary will yet again be forced to make a series of extremely bad choices that will inevitably hurt some people. If I were Saddler I would resign, her job is truly a miserable one and very depressing indeed. The Speaker in his response to to the questions about layoffs and facility closures, passed the buck to Saddler. She is not a magician, and because of federal matching funds and legal mandates she has real limitations on how she can spread out cuts. The screaming started yesterday with activists getting arrested over the anticipated cuts, Sec Saddler will take the beating as Governor Quinn and the Speaker pass the buck to her.


  58. - Pete - Tuesday, May 27, 14 @ 10:48 am:

    You’re overthinking it. If PQ wins, it’ll be seen as a referendum on the tax hike. If Rauner wins, he’ll be on his own.
    ______________________________________

    If I’m Mike Madigan, I could care less about the budget and who is Governor. I only care about have a Democratic Majority of Seats in the IL House. Allowing Rauner (robocall rauner) to use the income tax and budget as a tool to put those seats at risk, is something that I expect the speaker to notice. Transistioning from Ryan to Blago was more difficult than from Blago to Quinn. A transistion from Quinn to Rauner might put more focus back on Chicago.

    Much of Quinn’s campaign has been focused on road projects throughout the state. He appears to have lost some of the southside pastors. Will we see Pat Quinn attending Sunday Services leading up to the Nov. Election?


  59. - Wally - Tuesday, May 27, 14 @ 10:52 am:

    Anon 10:01am———-What are the solutions to rev up the economic engine in Illinois if the tax increase remains? To stop the exodus of individuals and businesses?


  60. - wordslinger - Tuesday, May 27, 14 @ 10:56 am:

    –What are the solutions to rev up the economic engine in Illinois if the tax increase remains? To stop the exodus of individuals and businesses?–

    What in the world are you talking about?

    Are you under the impression that there is a centrally planned economy headquartered in Springfield, and it somehow controls all economic activity within the state’s artificial borders?

    Where does this simple-minded stuff come from?


  61. - Formerly Known As... - Tuesday, May 27, 14 @ 10:56 am:

    @Soccertease - that is correct. We will already be paying more in personal income taxes even if the “temporary” tax increase is allowed to expire. The only question now is, how much more?

    == That “used tire disposal fee” is probably the type of fund they are raiding. ==

    @DuPage - “Fund sweeps” and “borrowing” from special funds were a point of major contention during the Blago years, most famously during the 2008 budget process. The more things change, the more they stay the same.


  62. - Walter Mitty - Tuesday, May 27, 14 @ 11:08 am:

    I think everyone is over thinking it… I can care less what Rauner thinks on May 27th with legislators who created the mess are in session… There is a super majority … If patchwork and Madigan say’s cuts will be up to agencies… Remember today public unions… You can eat cake….


  63. - Anonymous - Tuesday, May 27, 14 @ 11:19 am:

    If there is no continuation of the ‘temporary’ income tax increase at its current level and a ‘kicking the can down the road’ budget, how will the bond rating houses react? Should Illinois tax payers expect yet another cut in the states bond rating (and the associated increase in the interest rate on its debt)?


  64. - Anon - Tuesday, May 27, 14 @ 11:23 am:

    == how to stop the exodus of individuals ==
    Remember that pensions and Social Security are 100% tax exempt under the IL income tax. Retirees move because of weather, not high state taxes. There’s not much Springfield can do about that.

    ==our state economy has not rebounded sufficiently to offset the income tax increase. The prognosticators among the politically powerful ended up being wrong. ==

    Revenues are up from estimates earlier this year. Besides, what Democrat predicted the economy would grow sufficiently in four years to provide $7 billion in increased revenues?


  65. - east central - Tuesday, May 27, 14 @ 11:26 am:

    Quinn is on record for a permanent 5% rate. With the 5% rate in place for half the FY and with the funds that have been squirreled away, the fiscal pain is minimized the next few months.

    Is it not likely that Rauner campaigns as the candidate who will stop extension of the 5% rate and wins big?


  66. - CollegeStudent - Tuesday, May 27, 14 @ 11:28 am:

    ===Anon 10:01am———-What are the solutions to rev up the economic engine in Illinois if the tax increase remains? To stop the exodus of individuals and businesses? ===

    Making the economic situation in the state untenable for Walmart and other big box retailers would probably do more to stimulate entrepreneurship than a bevy of tax cuts.


  67. - wordslinger - Tuesday, May 27, 14 @ 11:29 am:

    –If there is no continuation of the ‘temporary’ income tax increase at its current level and a ‘kicking the can down the road’ budget how will the bond rating houses react? –

    Downgrade.


  68. - Anon - Tuesday, May 27, 14 @ 11:33 am:

    == No tax increase is the anvil that Rauner’s hammer will fall on to crush AFSCME.==

    Has Rauner taken the No-Tax-Increase Pledge? If so, I missed it. Some of his supporters may think he won’t raise taxes, but let me remind them of the last four Republican governors, all of whom raised taxes. If Rauner comes in with a $4 billion hole facing him in FY 2016, he can either slash spending — tho he promises to raise education and infrastructure funding — and not pay bills, or he can raise taxes. Anyone care to make a bet about whether he would raise taxes?


  69. - Cassandra - Tuesday, May 27, 14 @ 11:35 am:

    Too bad Rauner couldn’t have found that extra billion himself by setting his budgeteers–I hope he has some–to research state budget information. Then he could have told us about it as a harbinger of the savings a Rauner admin would bring. Another missed opportunity.


  70. - qcexaminer - Tuesday, May 27, 14 @ 11:46 am:

    I never thought I’d live to see the day Illinois Democrats were more afraid of taxpayers than the unions.


  71. - east central - Tuesday, May 27, 14 @ 11:55 am:

    A Governor Rauner would be able to claim that a series of tax rate extensions results from the pension case stay and subsequent rulings.

    He would probably also have a series of budget cost-cutting measures that will be rejected by the GA.

    Blame for tax rate extensions will be shifted to the courts and the Democrats.


  72. - archimedes - Tuesday, May 27, 14 @ 12:10 pm:

    Not sure anyone has said how big that can is that is getting kicked.

    If the Quinn five year budget blueprint is to be believed (and I think the revenue estimates did come from COGFA) - then we are looking at close to $5 billion revenue shortfall for FY16 compared to FY14.

    The patch gets you by for FY15, maybe, but the lack of the tax extension is $1.8B less revenue for FY15 compared to FY14, and $5B less revenue for FY16 compared to FY14.


  73. - Ghost - Tuesday, May 27, 14 @ 12:53 pm:

    === Wally - Tuesday, May 27, 14 @ 9:20 am:

    Economic growth comes from people having money in their pockets and spending it and businesses adding employees, not from government collecting more $ and wasting it===

    If only history and reality supported your theory.

    The US economy recovery from all of its economic crashes has been the result of governemtn spending and jobs. And all of the economic crashes have been caused by private buisness that were poorly regualted trying to put money into its pocket.

    governemnt regualtion and jobs have helped the economy, every time we shrink governemtn and reduce regulation we end up with a finacail crisis and collapse.


  74. - VanillaMan - Tuesday, May 27, 14 @ 1:03 pm:

    This will be addressed next year if Rauner is elected. A bipartisan government makes for easier tax increases.


  75. - Rich Miller - Tuesday, May 27, 14 @ 1:04 pm:

    === A bipartisan government makes for easier tax increases.===

    Illinois history is rich with examples of that very thing.


  76. - Oswego Willy - Tuesday, May 27, 14 @ 1:14 pm:

    ===Illinois history is rich with examples of that very thing.===

    I totally agree that history has numerous examples, but I guess my question then is;

    “If Rauner calls into districts maligning the idea of the income tax rate becoming permanent, and also is hinting that a gradual reduction is a better fit, are we all going to have to wait to see which Rauner policy will either mirror history, or make history?”


  77. - Formerpol - Tuesday, May 27, 14 @ 1:17 pm:

    A rainy day fund of $1 billion!? Use it; it’s pouring outside! So Madigan has admitted that all the gloom-and-doom over keeping the 25% income tax increase (and rolling back the 67% increase) was so much hooey and bombast. Put the DOC on hold, use the additional $1.8 billion in new revenue, and you’re good to go for a year.


  78. - A guy... - Tuesday, May 27, 14 @ 1:45 pm:

    Just when you think the can has hit the wall at the end of the road… Kick it again. Ugh!


  79. - Wally - Tuesday, May 27, 14 @ 1:46 pm:

    Ghost, like Reagan and the early 80’s? Is that what you are alluding to?


  80. - wordslinger - Tuesday, May 27, 14 @ 1:53 pm:

    Wally, in what world (Wally World?) did Reagan shrink government?

    There were tax cuts, followed by tax increases, and, throughout, unprecedented peacetime deficits covered through borrowing for ongoing operations.

    Is that what you’re advocating?


  81. - Anon - Tuesday, May 27, 14 @ 2:00 pm:

    == Illinois history is rich with examples of that very thing. ==

    Yet that history doesn’t inhibit our Republican friends from castigating Democrats as Big Taxers. Will the IPI and IR be happy if Rauner comes in and raises taxes?


  82. - Anon - Tuesday, May 27, 14 @ 2:02 pm:

    === A bipartisan government makes for easier tax increases.===

    Since that’s true, then why do anti-tax conservatives want to elect Rauner? Unless they want to make tax increases easier.


  83. - dupage dan - Tuesday, May 27, 14 @ 2:35 pm:

    === - wordslinger - Tuesday, May 27, 14 @ 10:00 am:

    DD, don’t go too nuts. $1 billion is less than 3% of GRF. It’s real money, but it’s not a cure for what ails you ===

    So, what does the state stand to lose when the temp tax increase lapses? So many folks are lamenting the loss of that revenue and you are suggesting that the hidden stash ain’t no big deal, it’s only a billion dollars. And making silly comments about sanity rounds out the dismissive attitude.

    Right, I get it.


  84. - VanillaMan - Tuesday, May 27, 14 @ 2:52 pm:

    A majority of voters don’t trust Democrats on taxes, this is partly a reason why we had a temporary income tax increase - Madigan knows it is a loser for him during an off-year election.

    But if a Republican proposes a tax increase, then voters are more accepting of it. A majority of voters believe that Republicans are anti-tax, so if they are proposing a tax, then it must be needed - so many of them reason.

    Illinois does better with a bipartisan government, than this one we currently have. Madigan’s success politically has come at our expense fiscally.

    So if you believe that we need a tax increase, vote for Rauner. A Quinn reelection would continue hobbling Illinois on this issue.

    A majority of voters trust one party on some issues, and the other party on other issues. A bipartisan government is the best of both worlds.


  85. - Oswego Willy - Tuesday, May 27, 14 @ 2:56 pm:

    ===So if you believe that we need a tax increase, vote for Rauner. A Quinn reelection would continue hobbling Illinois on this issue.===

    Through the “looking glass”?


  86. - wordslinger - Tuesday, May 27, 14 @ 3:10 pm:

    –So if you believe that we need a tax increase, vote for Rauner.–

    VMan, you’ve spun yourself silly. Take a cab home.


  87. - VanillaMan - Tuesday, May 27, 14 @ 3:40 pm:

    Don’t need to.
    If I can find where I parked my car, I think I still have the keys.


  88. - Formerly Known As... - Tuesday, May 27, 14 @ 7:02 pm:

    This is, quite eerily, the Blago budget approach.

    == The practice of sweeping funds began in 2003 with Rod Blagojevich. It allowed the state to gather unused money and place it in the general fund. The ante was upped in 2010 when the state began borrowing from the charitable donations. ==
    www.nbcchicago.com/news/politics/illinois-charitable-donation-126228818.html


Sorry, comments for this post are now closed.


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