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* The New York Times engaged in gross hyperbole over the weekend…
…but many analysts, liberal and conservative, warn of a potentially far grimmer reckoning — Greece by Lake Michigan. Borrowing costs are rising, nonprofits that depend on taxpayer money are dropping contracts, and the state’s pension costs and unpaid bills balloon each month.
That’s what’s known as lazy journalism.
The state is suffering through a fiscal crisis, no doubt about it. But one of those vaunted New York Times editors that I always read about should’ve demanded that this reporter reveal the names of those “liberal analysts” who are making that “Greece” comparison. Also, the state’s borrowing costs are predicted to rise (although strong interest from foreign buyers could mitigate the price increase), but haven’t really risen yet.
The “Little Tribune” editorial writers at the Daily Herald were quick to pounce, of course…
This is Illinois, which the New York Times over the weekend dubbed “Greece by Lake Michigan.”
* Things are undoubtedly horrific, but let’s take a look at some facts.
A recent report from the Illinois Commission on Government Forecasting and Accountability shows Illinois is ranked 9th in the nation per capita on its outstanding debt. That’s high, but far from the highest.
As for total state expenditures, Illinois ranked 21st in the nation per capita. K-12 state and local spending is ranked at 22nd per capita. State and local spending on public welfare programs was 30th in the nation on a per capita basis. All of those are below the national average.
And there’s plenty of room for future revenue increases, if the populace decides to go with a Democratic governor this fall…
Illinois ranked 7th in the nation in the amount collected from state government individual income taxes in 2009 with a total amount of $9.2 billion. On a per-capita basis, Illinois ranked 31st. Illinois’ per-capita rate of $711 was below the national average of $801 and well below the 1st ranked state in this category, New York, at $1,885 per capita. Illinois has had a flat personal income tax rate of 3.0% since it was
increased from 2.5% in July 1993. Of the seven states with a flat income tax (most have graduated rates) Illinois’ has the lowest rate. […]In 2009, Illinois ranked 9th in the amount of sales tax revenue collected with a total of $7.5 billion. California collected the most, generating $29.0 billion. On a per-capita basis, Illinois ranked 37th in the nation with a value of $579 per capita. As shown in Chart 9, in the Midwest Region, only Missouri (42nd) was ranked lower than Illinois.
*** UPDATE *** What a stupidly irresponsible thing to do…
Illinois Gov. Pat Quinn has handed out raises topping 20 percent to his staff at a time when he’s promising $1.4 billion in spending cuts because of the fiscal crisis. An Associated Press analysis of documents shows Quinn has given 43 salary increases averaging 11.4 percent since he became governor.
They include a $24,000 bump to the man overseeing state spending. Budget Director David Vaught got a 20 percent raise — to $144,000 — when he was promoted in October.
* Related and a roundup…
* Cuts can’t go as deep as needed
* What’s up (or down) with state spending
* Scary budgeting of Illinois’ governors
* ‘For our final act, a budget of pixie dust’
* Our View: Quinn’s budget provides no real help or answers
* Some alarmed, others relieved by state budget cuts
* Employees’ Union Wants More Workers After Budget Cuts
* All universities must seek ways to reduce costs
* Budget cuts still leave Illinoisans with questions
* Mending Medicaid
* Cary District 26 mulls tax increase
* Suburban schools settle on model for wind farm
* Turf war threatening student achievement
posted by Rich Miller
Tuesday, Jul 6, 10 @ 11:40 am
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NYT does this stuff all the time, especially in its international reporting. They should called out for it more often.
Comment by Niles Township Tuesday, Jul 6, 10 @ 11:50 am
Rich, thanks for pointing out the hyperbole. Much of the press’s breathless rhetoric about a ‘totally corrupt’, ‘totally disfunctional’ government that has ‘totally bankrupted’ the state serves no purpose but as some form of therapy for the sayer and to feed outsize cynicism among the electorate. You’d think the NYT would hold itself to a higher standard.
Comment by Quizzical Tuesday, Jul 6, 10 @ 11:54 am
I believe it was the NY Times that coined the phrase Beruit By Lake when the Fast Eddie-Harold Washington skrimishes were going on
So this is not even clever by East Coast standards
It is still a better read than the slop from the Trib.
P.s. Capt Fax don’t forget the stunning Gatehouse pension opus that omits the notion that big salary hikes or dopey investment decision by Uncle Harry’s bank may have contributed to the pension deficits.
Comment by Reddbyrd Tuesday, Jul 6, 10 @ 11:58 am
Well a bit of defense for the NYT…
Hynes saying…
If the guy controlling the state’s checkbook is no longer willing to give letters promising payment, that’s significant.
Also the Times does point out the relative low cost of state government and the low state tax burden.
The issue I think they are trying to highlight is that we don’t seem willing or able to do anything about it.
Also when they report stuff like this
are they wrong?
Is she wrong?
I think the point they were trying to make is that we don’t seem to be doing anything to speak of to solve the problem.
Comment by OneMan Tuesday, Jul 6, 10 @ 12:05 pm
As the author of the hyperbole, I’ll second that last comment. I made it very–extremely–clear that Illinois was not in a fiscal cul de sac. It has a way out–it can raise taxes and/or cut spending. I also made clear that cutting likely would not suffice. Revenue–that is a tax hike–strikes me as an inevitability.
That’s all in there, with use of reasonably clear nouns and verbs.
At the same time, the political class in Illinois most certainly is dysfunctional. (And I speak as a lifelong resident of another state–New York–that is often synonymous for good reason with dysfunctional.
Marginal costs on lending are rising. The pension debt is unsustainable (mind you, I’m not knocking the pensions provided to state workers–I’m all in favor of pensions but it seems wise to fund them, no?). And, if you talk to bankers and investment counselors, they are keeping a most wary eye on the state.
I like Illinois–great state although I sure as hell hope the Knicks steal away LeBron. You may quibble with Greece by Lake Michigan, but the fiscal conditions there should scare any citizen. (And again, NY, glass house, yes yes … ).
Best
Michael Powell
Comment by Michael Powell Tuesday, Jul 6, 10 @ 12:22 pm
Hey, Michael, who are the liberals who are saying that Illinois is another Greece? That isn’t just a quibble, it’s an outright challenge.
Comment by Rich Miller Tuesday, Jul 6, 10 @ 12:26 pm
I read Powell’s piece on Sunday, and I don’t think the situation is overexaggerated. My wife has a TRS pension and I don’t think there will be any money there when she retires in 20 years…
Comment by Vote Quimby! Tuesday, Jul 6, 10 @ 12:26 pm
What makes Illinois like Greece isn’t so much the numbers. What makes Illinois like Greece is that it won’t solve its own problems. Every day it looks like an intervention from the outside is necessary.
And as far as per capita state taxation being “low”, that, of course, overlooks not only our high property tax rates but the massive number of units of local government that exceeds every other state in the union.
There are solutions, no one is implementing them. That’s the problem.
Comment by John Bambenek Tuesday, Jul 6, 10 @ 12:26 pm
Over the past couple of decades, we’ve become the Liz Taylor of US States. Lots of history, glamour, riches, fame, glitz, sexiness, both fact and fiction. Now, she and we are both getting stories written about each and every sickness, how far we have fallen from our peak, how bloated, overweight or malnourished we appear, how close to death we are, and how our neighbor Michael Jackson was found dead after being euthanized by a crackpot doctor.
Well, except for the Michael Jackson part, Illinois is just not getting as much respect as we used to get!
So rumors of our death have credibility to New Yorkers searching for sicker celebrities than they.
Comment by VanillaMan Tuesday, Jul 6, 10 @ 12:27 pm
Wow! The NYT is irresponsible! That is a laugh. How far off the mark is the Illinois Greece comparison? As far as I can tell the majority of the article is right on the money. But you soundbite two sentences and call them irresponsible? Illinois politicos are the irresponsible party.
Comment by Moving to Oklahoma Tuesday, Jul 6, 10 @ 12:29 pm
Blah, blah. New Jersey skips its pension payment and barely a word is written. We’re not the only ones deferring our problems. Is it right? No. We’ve established that many times. But this Greece thing is just plain goofy and I’ve teed off on others for using it and I’ll do it again.
Comment by Rich Miller Tuesday, Jul 6, 10 @ 12:35 pm
One more thing. Nowhere in this post do I say that things aren’t bad here. Nowhere.
But lazy journalistic shorthand should be called out. And that’s part of my job here.
Comment by Rich Miller Tuesday, Jul 6, 10 @ 12:37 pm
IL could never be Greece…despite the huge Grecian population, too many people here say “jy-rows”.
As for the NYT comparison, it was good for headlines.
Comment by Wumpus Tuesday, Jul 6, 10 @ 12:38 pm
Don’t forget that Illinois is a low-tax state.
Plenty of room to make up the shortfall.
Comment by Leroy Tuesday, Jul 6, 10 @ 12:45 pm
Rich Miller said,
“Blah, blah. New Jersey skips its pension payment and barely a word is written.”
Chris Christie submitted the first part of his pension reform package in March, and has committed to submitting a full-up reform package in the fall. Other than the pension funding, the NJ budget has been balanced, can we say the same for Illinois? If you take out the $3.7B pension shortfall, the Illinois budget is only $9.3B out of whack.
Comment by Cincinnatus Tuesday, Jul 6, 10 @ 12:49 pm
Blah, blah, blah?
Nice level of argumentation. In talking with Hynes, in talking with Martire, in talking with a number of people who would end up fallng somewhere to the left of center, the subject came up as to whether Illinois might become insolvent, default on debts, or find itself paying such high interest rates as to break the bank. Greece is a common rule of thumb–Now, of course, to some extent, it’s rhetorical. No two states, no two countries, are precisely alike. But the threat is very real.
I of course made most of the other points that you retail in your blogpost, so it’s harder to argue there, I suppose.
Oh, and by the by, we’ve been paying a lot of attention to the broken politics of New York and New Jersey. Here’s the headline of a piece I wrote back in March:
Dysfunction Displaces Work in Distracted Albany
http://www.nytimes.com/2010/03/06/nyregion/06albany.html
As you can see, dysfunction is going around. Meanwhile, Rich, take that chip off the shoulder or you’re going to need a chiropractor …
best
Michael Powell
Comment by Michael Powell Tuesday, Jul 6, 10 @ 12:52 pm
NYTimes pretty well summed up our situation. And this is not exactly a hyperbole free zone here either. Unfortunately, our leaders will need to be knocked over the head by a 2 X 4 vs. confronted with hyperbole to get the message. All our solutions always are caste in the future vs. getting the job done yesterday when it was needed. We do have some of the most irresponsible legislative and executive leadership among all states. We don’t need any numbers to rank that. Face it, Illinois government sucks.
Comment by Vole Tuesday, Jul 6, 10 @ 12:52 pm
So, did Hynes and Martire say that Illinois is Greece by the lake? Still waiting for your explanation.
And the “blah” stuff was aimed at other commenters, not you.
Comment by Rich Miller Tuesday, Jul 6, 10 @ 12:58 pm
While I’ll grant you “Greece by the Lake” is hyperbole, Rich, you’re the one who pointed out that our debt is now the 8th most expensive in the world to insure sandwiched between Iraq and Portugal (one of the European PIG debt countries).
So while we’re not Greece yet, given the demonstrated and repeated lack of political will, our situation seems pretty dire to me.
Comment by Chicago Cynic Tuesday, Jul 6, 10 @ 1:02 pm
Rich
You appear to be a literate dude. I know I am. I wrote quite clearly that the prospect came up in conversations with many people. I named two.
Many said, y’know, if we keep going this way, we’re going to end up like Greece.
If you have not heard the same analogies, then you really need to get outside more.
As for blah, that’s fine. I’m a fan of your blog, actually. And as a New Yorker, I view argumentation as the staff of life.
Michael
Comment by Michael Powell Tuesday, Jul 6, 10 @ 1:02 pm
Rich, I hope the 20% pay raises by Quinn don’t get lost in this post. Seems like Quinn is more like a leader of the governmental workers’ union than he is governor of the state. Does Quinn get it?
Comment by Vole Tuesday, Jul 6, 10 @ 1:14 pm
New Jersey skipped a pension payment, sure. Illinois has been shorting the pensions for decades and we’re already the worst funded pensions in the country. That’s the difference, Rich.
You can play games if you’ve been relatively responsible over the years, when you were broke BEFORE the downturn every game brings you closer to the edge.
Comment by John Bambenek Tuesday, Jul 6, 10 @ 1:15 pm
===That’s the difference, Rich.===
Look at NJ’s pension system before commenting, please.
Comment by Rich Miller Tuesday, Jul 6, 10 @ 1:17 pm
Vole… good point; I could sure use a 20% raise to offset the cuts I have taken the last couple of years.
Comment by Wondering... Tuesday, Jul 6, 10 @ 1:19 pm
What’s awkward is that nowhere in the story is it mentioned that Hynes was Quinn’s opponent in the primary. Even if that had no impact on Hynes’ interview, it should still have been disclosed.
Comment by haverford Tuesday, Jul 6, 10 @ 1:22 pm
Considering that the NYT has been known to engage in “gross hyperbole” on other issues (particularly when conservatives, especially religious conservatives, are involved) it shouldn’t come as any surprise that they do so on the issue of Illinois finances.
Comment by Secret Square Tuesday, Jul 6, 10 @ 1:28 pm
Quinn handing out 20% raises when teachers are being asked to skip raises or be laid off is just another example of Quinn be unable to lead. What are the odds he flip flops again and next week no raise.
Comment by Fed up Tuesday, Jul 6, 10 @ 1:39 pm
20 percent raises? Hello Rich Whitney!
Comment by Deep South Tuesday, Jul 6, 10 @ 2:14 pm
Rich-
I just took a look at the Feb 2010 Pew report on pensions. Here’s what I saw. Illinois is 54% funded for pensions. New Jersey is 73%. In 1998, New Jersey’s pensions were 106% funded. We’ve never been above 100% as far as I know for quite some time.
New Jersey passed some reforms last year somewhat similar to ours.
But Illinois has to sell assets now to make pension payments, NJ isn’t there yet. They aren’t great by any strech, but there is a huge difference between 54% and 73%. New Jersey’s time is running out to fix their pensions. For Illinois, the time is here, sink or swim.
Comment by John Bambenek Tuesday, Jul 6, 10 @ 2:30 pm
20% salary hike for staff. PQ is doing Brady’s job for him. Hey, Brady, your donors want their money back - you won’t need it.
Comment by dupage dan Tuesday, Jul 6, 10 @ 2:39 pm
I like the old WSJs “Beirut by the Lake” much better. It captures the competing clans and sinister nature of Illinois government and politics.
Geez, were term papers due today? There’s some real long-form writing going on by some of the more easily startled contributors.
Comment by wordslinger Tuesday, Jul 6, 10 @ 2:49 pm
>And there’s plenty of room for future revenue increases, if the populace decides to go with a Democratic governor this fall.
What makes you think if Quinn gets reelected that the state house will pass a tax increase? They have shown no signs of wanting to do so.
Comment by Segatari Tuesday, Jul 6, 10 @ 2:58 pm
{As for total state expenditures, Illinois ranked 21st in the nation per capita. K-12 state and local spending is ranked at 22nd per capita. State and local spending on public welfare programs was 30th in the nation on a per capita basis. All of those are below the national average. }
What happens to your equation when you add in the required expenditures for the public pension benefit and debt obligations? Illinois has the largest outstanding public pension debt obligation of any mid-western state and ranks near the top nation wide.
Comment by Quinn T. Sential Tuesday, Jul 6, 10 @ 7:30 pm
I posted before reading all the comments; and tit for tat, and while I am a fan of the blog; I read the NYT article over the weekend, and I don’t find it to be too hyperbolic; even if the sources are not named in the article, or here.
The fact of the matter is that this state is INSOLVENT not to be confused with BANKRUPT, which is not an option.
Comment by Quinn T. Sential Tuesday, Jul 6, 10 @ 7:40 pm
Rich, why not CALL OUT the perpetrators of our state’s insolvecy, like Madigan and Cullerton , and quit being an apologist for the Illinois General Assembly. the NYT has nothing do do with our mess.Rigt on Powell.
Comment by Padraig Tuesday, Jul 6, 10 @ 8:10 pm