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* Reuters…
Several U.S. states studied by S&P Global Ratings are ill-equipped to deal with an economic recession, hampered by the slow rebound in U.S. economic growth after the damage wrought by the Great Recession.
Fiscal imbalances, slower state tax revenue growth and increased spending on social services have contributed to a challenging economic landscape, as real GDP has only increased at 2.1 percent per year since 2009, S&P said in a report issued on Tuesday. […]
To determine states’ fiscal capacity to withstand the first year of a hypothetical recession, S&P sampled 10 states, the report said. The study found that a collective revenue shortfall would eclipse the states’ combined budget reserves by $5.4 billion.
Of the 10 states studied, several have budget reserves that equal less than half of “potential revenue underperformance” in the first year of a moderate-intensity recession. These include Illinois, Pennsylvania, New Jersey and Connecticut.
Illinois (BBB+/Negative)
Already the lowest rated of the 50 states, Illinois’ revenue and expenditure volatility is moderate relative to other states in our sample; however, the state’s weakened fiscal position, limited financial flexibility, and political gridlock leave it susceptible to the most severe fiscal stress in the event of a recession. Despite seven years of a national economic expansion, Illinois is still operating at a significant structural imbalance and continues to contend with a large and growing backlog of payables. Decision making has been severely hampered by top leadership’s political intransigence and deeply polarized views on how to address the state’s current structural imbalance. It nonetheless adds to existing fiscal pressures at a time when the state is at risk of approaching service level insolvency, which could more fundamentally jeopardize its creditworthiness.
For fiscal 2016, we estimate the state’s structural imbalance was over $4 billion. In the absence of a fully enacted budget the state operated under a de-facto budget that led to unchecked spending based on continuing appropriations, consent decrees, judicial ruling, and appropriations enacted. In addition to its lingering structural budget gap, which opened up following the expiration of the temporary tax increases on Dec. 31, 2014, the state has a large and growing backlog of unpaid bills. We expect the bill backlog to range between $9 billion and $10 billion, close to one-third of the expenditures at 2016 fiscal year-end. The recently agreed upon stopgap budget depletes the remaining $275 million left in its reserves.
In our simulation, the state’s three largest sources of revenue–income, corporate and sales taxes–would experience moderate declines in the first year of a recession. We estimate that these general tax revenues would decline 3.4% from the prior fiscal year. Based on the governor’s fiscal 2017 estimated revenues, and assuming no changes to the tax structure, these revenues would decline by $1.29 billion, or 5.5% from the estimate, adding to the state’s already sizeable structural misalignment. On the expenditure side, a recession would place additional pressure on an already Illinois overstrained social support network. Unemployment, already well above the national average, would increase further, especially if issues such as Brexit negatively affects large employers in the state, such as Caterpillar, which has significant operations in the United Kingdom. Falling incomes and rising unemployment would correspond with rising Medicaid caseloads and translate into a $282 million, or 2%, increase on the state’s projected Medicaid spending.
Faced with falling revenues and rising expenditures, the state would be left with very few options. Typically, states would rely on at least some portion of their reserves to either delay or mitigate the blow of necessary revenue raising and austerity measures. In the absence of reserves, Illinois would have to either raise revenues or reduce expenditures, or both. Given the current structural imbalance, tax increases or spending reductions would have to be more draconian to cover the current budget gap plus the newly opened recessionary one. The tax rate decline in 2015 suggests there is some capacity to increase revenues, although taxpayer tolerance for increases might be less when including increases imposed at the local level; say, Chicago, for example. Reducing expenditures would also prove challenging given its high and rising level of fixed costs, including debt and pension expenses, especially in absence of a budget. Reductions to education, in addition to likely facing political resistance, would place increased pressure on entities that are already struggling, such as Chicago public schools and the state’s community colleges. As fiscal 2016 demonstrated, in the absence of a budget, most of the state’s spending will likely continue unchecked based on continuing appropriations, consent decrees, and court-ordered spending.
Even with some room to make adjustments, it is unlikely that Illinois would react to a recession in a timely manner. The state has historically been unable to make difficult and politically unpopular revenue and expenditure decisions necessary to restore balance to its operations and has allowed deficits and payables to accumulate. Illinois is required to adopt a balanced budget, but is not required to maintain balance throughout the year. In our view, this ability to end the year out of balance and carry forward deficits is likely one of the most significant weaknesses in the state’s government framework. Decision making is further complicated by a high level of consensus required to adopt legislation that become effective immediately and political gridlock. The state requires a simple majority to enact immediately effective laws from January 1 through May 31, but a three-fifths majority during the remainder of the year. Despite operating for a full year without a comprehensive budget, growing payables, increased social pressure, and 2016 being an election year, the state was only able to adopt a stopgap measure that funds six months of continued spending deferring action on its structural budget gap until next year.
In our view, the state’s remaining options add uncertainty, are likely to come with an increased cost, and would further weaken the state’s creditworthiness. The state would likely manage its liquidity by continuing to accumulate either short-term or long-term payables, both of which are temporary measures that would further weaken the state’s fiscal position. Arguably, many of the state’s service providers are operating with weakened balance sheets after having to endure a full year with no or reduced payments. The ability, if not the willingness, to continue to provide services in exchange for deferred payment, albeit at a premium, could come into question during a recession, especially if payables continue to rise. As an alternative, the state could access the capital markets to issue deficit bonds. GO must be authorized by at least 60% of the General Assembly and there is a well-established priority for payment of debt. We would expect that if deficit bond financing were to be approved, it would come at a premium.
* S&P estimates Illinois’ Medicaid costs would rise from $7.8 billion to $7.954 billion, or 2 percent in a recession. The revenue shortfall would be $1.286 billion, with no reserves on hand to cushion the blow. Revenue would fall from $23.271 billion to $21.985 billion, or 5.5 percent. And the share of debt, pension payments and other post-employment benefits would rise from 28.8 percent of revenues to 30.0 percent.
posted by Rich Miller
Thursday, Aug 11, 16 @ 9:43 am
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A 5.5% tax rate might be optimistic.
Comment by thechampaignlife Thursday, Aug 11, 16 @ 9:49 am
“Even with some room to make adjustments, it is unlikely that Illinois would react to a recession in a timely manner. The state has historically been unable to make difficult and politically unpopular revenue and expenditure decisions necessary to restore balance to its operations and has allowed deficits and payables to accumulate.”
There you have it. Until our elected officials put the needs of the state as a whole above political self interests we’ll continue the death spiral.
Comment by Cubs in '16 Thursday, Aug 11, 16 @ 9:51 am
We’re in deep doo-doo.
Comment by Norseman Thursday, Aug 11, 16 @ 9:51 am
This confuses me. For a guy that was elected because of his business acumen — his “I’ve never failed” schtick — Rauner has essentially put the state in the worst position it has ever been in.
I mean, Rauner was supposed to bring everybody together to solve these problems. I thought that’s the whole point of his extensive business experience. Instead, he’s driven a wedge between … well, between everyone.
Totally confused.
Comment by Formerly Known as Frenchie M Thursday, Aug 11, 16 @ 9:56 am
===We would expect that if deficit bond financing were to be approved, it would come at a premium.===
Considering the states poor current credit rating with a negative outlook, the ‘premium’ on any deficit bonds would be outrageously high. This would be bad news for taxpayers.
Comment by Hit or Miss Thursday, Aug 11, 16 @ 9:56 am
We are broadside on to the wave and now have no way of dealing with the human suffering caused by job loss and recession. Our social service infrastructure is almost all gone. Not even kidding. When we roll we’re going to have nothing there to catch the “catchable” families. They’ll be trapped in the hull.
That’s what those big numbers mean to me.
Comment by Honeybear Thursday, Aug 11, 16 @ 9:57 am
S&P estimates Illinois’ Medicaid costs would rise from $7.8 billion to $7.954 billion, or 2 percent in a recession.
Amazing that in a recession, Medicaid spending would go up less than it does on a normal year-to-year basis.
Perhaps in the “non-recession” environment utopia that we have created we cover too many people?
Comment by BIG R. Ph. Thursday, Aug 11, 16 @ 10:00 am
Based on this assessment, maybe the Turnaround Agenda really means, “If you are planning on moving to Illinois, you may want to turn around and go back.”
Comment by Just Passing Through Thursday, Aug 11, 16 @ 10:02 am
It just gets better and better.
Comment by Stones Thursday, Aug 11, 16 @ 10:04 am
If only there were a way to tie term limits to balanced budgets.
Comment by City Zen Thursday, Aug 11, 16 @ 10:06 am
Just curious… when do we start seeing the return on letting the tax increase expire? Anyone got a timeline on how long it takes the 1% and our Governor to take the $750,000 he paid himself in insisting the tax increase expire, and pump that into the economy, creatin’ jobs and whatnot.
Comment by LeadingInDecatur Thursday, Aug 11, 16 @ 10:06 am
- Honeybear - Thursday, Aug 11, 16 @ 9:57 am: wrote…
=We are broadside on to the wave…=
Thanks Captain Madigan! Your steady hand at the tiller over the last 40 years has led us here. Your unending blindness to the negative results of the policies you orchestrated over the decades has killed a once great state.
How many minutes will it take for OW to defend Madigan and push the blame elsewhere is my fun question of the day! Start the clock.
Comment by Big Muddy Thursday, Aug 11, 16 @ 10:07 am
===spending would go up less than it does on a normal===
It’s in addition. You read it wrong.
Comment by Rich Miller Thursday, Aug 11, 16 @ 10:09 am
We needed a Jerry Brown or a Mark Dayton and instead got a Bruce Rauner. The fault lies with both parties. We needed someone much better than Quinn, yet what does it say when Quinn was much better for the state than Rauner? We were paying our bills under Quinn.
Comment by Grandson of Man Thursday, Aug 11, 16 @ 10:12 am
if they would restore the previous tax rate they could stop the increase debt and work us toward a better future. then work on work comp reform and a long term financial solution to the money borrowed from pensions
Comment by Ghost Thursday, Aug 11, 16 @ 10:13 am
The health, the fiscal health of Illinois is being held hostage and crippled by someone who just can’t count to 60 and 30…
… and all the damage from poor fiscal decisions of the past are being exaserbated because not recognizing that they problems need to be corrected now, and not made fodder, continues to put Illinois in peril… let alone if a recession happens.
Crain’s said it best. “By any measure… Illinois is worse… since Rauner… ”
My point?
We all need to read McKinney, accept that, but then mine foward.
Move forward, move on. Illinois needs leadership, not leveraging.
Comment by Oswego Willy Thursday, Aug 11, 16 @ 10:13 am
Sad. But this is just the pure and predictable mathematical effect of pols– who were more interested in their own power and re-election than in serving the public at large–cumulatively kicking the can for decades.
Comment by Responsa Thursday, Aug 11, 16 @ 10:14 am
What we need is a turnaround agenda.
A road map for getting out of this mess.
Comment by Formerly Known as Frenchie M Thursday, Aug 11, 16 @ 10:16 am
===How many minutes will it take for OW to defend Madigan and push the blame elsewhere is my fun question of the day! Start the clock.===
Read McKinney, get back to the class. McKinney is THE single work that comprehensively covers what “went wrong”
Rich Miller, here, is THE place covered, and covering the real time effects like no other place. It’s not even close.
Such a victim. - Big Muddy -
How about you wait until I actually commrnt so you look less foolish.
Comment by Oswego Willy Thursday, Aug 11, 16 @ 10:17 am
Bruce is here to burn it down and we’re all along for the ride.
Comment by El Conquistador Thursday, Aug 11, 16 @ 10:17 am
So as early as 2018 and very likely by 2019 this ship is gonna sink. Question is, who among us is ready to go down with it….?
Comment by JDuc Thursday, Aug 11, 16 @ 10:18 am
Not so great news considering that most experts agree that we are due for a recession in the next couple years. The report in the second link does a good job of laying out why IMO.
For an article that’s a little easier to read that outlines similar macro-economic concerns you can check out this one from CNN Money: http://money.cnn.com/2016/06/19/news/economy/donald-trump-hillary-clinton-recession/
Comment by Chicago_Downstater Thursday, Aug 11, 16 @ 10:19 am
For some sectors of our Illinois community, I don’t think they have to wait for a recession to hit. Rauner’s governin’ style has hastened that along.
Check out this week’s Illinois Issues later today. It’s not posted on their site yet, but WGLT had a preview on NPR this morning. Sarah did a look at how EIU and WIU’s communities are faring under the impasse and “bridge”.
Comment by Anon221 Thursday, Aug 11, 16 @ 10:20 am
Remember, too, that in today’s column by Geoge Will about Rauner Rauner said that the problem with the state is that it’s run for the “benefit of its employees.”
The obvious move — and I’m surprised Rauner hasn’t mentioned this — is to simply get rid of the state’s employees.
There. Problem solved.
Comment by Frenchie M Thursday, Aug 11, 16 @ 10:21 am
==Just curious… when do we start seeing the return on letting the tax increase expire?==
I saw it immediately. It allowed my wife and I to invest a decent amount into my kids’ college savings plans, something I was not able to do during the tax hike. Is that OK?
Comment by City Zen Thursday, Aug 11, 16 @ 10:24 am
In today’s current 24 hour Internet, Facebook, Twitter soundbite, fingepointing polarizing political playground, I don’t see this getting fixed. Until someone emulates John McCain and says’ the other political side is not evil, they just disagree with us’, we are not getting any improvement. I’m sick of it, and ready to vote 3rd party for every office. We have gotten the results we should have expected when we play the games I mention in my first sentence.
Comment by Thoughts Matter Thursday, Aug 11, 16 @ 10:26 am
If you think the state will be bad in a recession wait til you see the munis.
Wait til you see Chicago’s budget blow up as pension liabilities that are already being underfunded/are unfundable get worse at the same time that tax revenues go down.
Comment by Pepper Brooks Thursday, Aug 11, 16 @ 10:26 am
Big Muddy,
Rauner and Rauner alone destroyed the social service infrastructure of our state, not Madigan. So when you lose your job or your company goes down and those people who relied on you look to you, you keep on blaming Madigan, I’m sure they’ll find comfort in your words of wisdom.
Thousands of jobs lost.
Over a million effected by the loss of social services.
All to try, but failed to destroy labor.
That is tragedy and it’s only going to get worse.
Comment by Honeybear Thursday, Aug 11, 16 @ 10:27 am
10 minutes. That was quicker than I expected.
Those that fail to see the fingerprints all over Illinois financial condition of one Mike Madigan are the foolish ones. He has had iron-fisted control of the Il House for decades. Policy is set there, with 60 votes, and it all leads back there. Blame others all you want but that is just a distraction from where, when and by whom all policy has been set that led us here.
Comment by Big Muddy Thursday, Aug 11, 16 @ 10:32 am
So, let’s see, the Democrats will win in 2018 and fix everything.
Leaving aside how they might do that (and also maintain a comfortable tax environment for Illinois’ upper income residents, an important goal for both major Illinois parties), are we sure they want to. Well, Pat Quinn does, it seems. But when you are in a fiscal train wreck, being the party in charge of the gov’s office and both parties carries a certain level of risk.
Maybe that’s why potential Dem gubernatorial candidates seem a tad ambivalent. If they win, no more evil mogul to blame for everything. And the evil mogul does have his uses.
Comment by Cassandra Thursday, Aug 11, 16 @ 10:34 am
Honeybear,
Sooner or later you run out of other people’s money. Illinois has not had a balanced budget in forever. Rauner has some culpability no doubt but Illinois finances were sinking fast well before he became Governor.
Comment by Big Muddy Thursday, Aug 11, 16 @ 10:35 am
–It allowed my wife and I to invest a decent amount into my kids’ college savings plans, something I was not able to do during the tax hike. Is that OK?–
That’s excellent! What an upstanding citizen you are!
The homeless of Springfield approve.
The unemployed social workers of LSSI and Catholic Charities endorse your move.
Those reliant on the services of Lessie Bates Davis in East St. Louis when informally surveyed at the “Aid Office” all thought this was a great thing you did for your children.
Oh, and how could I forget the Autism and Addiction folks. They thought it was fantastic. They were speechless at your financial prowess.
Everybody agrees that you did the right thing with the money that would have gone to the state.
s/
I’m going back to something.
Malignant callousness
Born of privilege
Comment by Honeybear Thursday, Aug 11, 16 @ 10:36 am
That’s nicely said - Honeybear -.
My hope, though, is that Rauner, Raunerites, Republicans, and Democrats will realize the hand of chicken has ended and the Raunerites and Non-Raunerites crashed into each other making things worse, even as Governors Own.
“What do we need to do to fix this that isn’t involving hostage-taking and leveraging for things that are, right now, impossible to pass?”
Anyone in the two branches of governing involved in this that isn’t thinking like this… is doing it wrong.
Comment by Oswego Willy Thursday, Aug 11, 16 @ 10:37 am
- Big Muddy -
Governors are never passive passengers to governing.
Otherwise “Pat Quinn failed” never would’ve resonated.
Also, you didn’t read McKinney. How do I know? McKinney gives ZERO quarter to Madigan, Edgar, even Thompson.
Keep up, you’re looking foolish.
Comment by Oswego Willy Thursday, Aug 11, 16 @ 10:40 am
Those that say Rauner wants to destroy the state are as naïve as those that believe Madigan wants to do so, as well.
The fact is that our system, created by both D’s & R’s, is not working. We enjoy some of the greatest resources, best location, and most diverse industries of any state in the union - and yet, it’s completely screwed up.
The solution will not come from simply one side (more taxes!) or the other (reduce spending!). Rather, the solution will come from both sides giving in.
Comment by Downstate Thursday, Aug 11, 16 @ 10:44 am
Oh how foolish of me! I fail to blame only the current Governor for the mess we are in! I must be new to reviewing financials to not take a historical look at the current condition! Your right OW and Honeybear, it’s all Rauner’s fault. All this financial hardship we find ourselves in WAS created overnight and no one who has been tending the shop over the last 40 years has any responsibility in this whatsoever.
“McKinney is THE single source for what went wrong”
Only a fool takes a single source as gospel. I bet the Mayor of Harvey would like you to believe what he says is the truth about Harvey’s finances. Or I bet Mautino would love for you to only take his word for what “actually” happened.
geesh.
Comment by Big Muddy Thursday, Aug 11, 16 @ 10:52 am
===All this financial hardship we find ourselves in WAS created overnight===
Don’t argue like a child. The man is the governor. We haven’t had a real budget since he was sworn in.
Comment by Rich Miller Thursday, Aug 11, 16 @ 10:53 am
- Big Muddy -
I read your comment.
Good luck. OW
Comment by Oswego Willy Thursday, Aug 11, 16 @ 10:55 am
Illinois Issues- worth a read and a listen
http://nprillinois.org/post/illinois-issues-crash-course-economics#stream/0
Comment by Anon221 Thursday, Aug 11, 16 @ 10:56 am
–It allowed my wife and I to invest a decent amount into my kids’ college savings plans, something I was not able to do during the tax hike. Is that OK?–
Sure, that’s ok… Like if you made $100,000 last year, and you were able to save, what, 2,000 on you state tax bill… And you invested that in a savings plan for your kids college…that’s great…for you… Although I don’t think your two thousand dollars will get you much, maybe one class.
and if the net result is that your kids won’t get to use it at EIU, WIU, or CSU, I guess that’s…OK, too.
And all it cost for you and me to get the 2,000 (well, more like 1,000 for some of us) was denying MAP grants, rolling up higher Ed, and decimating social services.
I guess that’s… OK
Comment by leadingindecatur Thursday, Aug 11, 16 @ 11:04 am
Honeybear - you forgot to add that the hull is sprung, hatches are stove in, cargo has shifted, masts carried away, cannons are loose, the rudder has shorn off, and the pumps can’t keep up with the flooding. Meanwhile, the captain is looking for his strawberries.
OW - don’t feed the troll.
Comment by Huh? Thursday, Aug 11, 16 @ 11:04 am
Hey if you don’t like Madigan, why don’t you move so you can vote against him? What about your own representative?
Comment by Rabid Thursday, Aug 11, 16 @ 11:05 am
=The homeless of Springfield approve.
The unemployed social workers of LSSI and Catholic Charities endorse your move.
Those reliant on the services of Lessie Bates Davis in East St. Louis when informally surveyed at the “Aid Office” all thought this was a great thing you did for your children.=
Do they approve of your early retirement and generous pension? Or you making considerably more than people with the same job title right across the Mississippi? It’s greedy for a private citizen to want low taxes but we can’t ever talk about how good state employees have it.
Comment by Robert the 1st Thursday, Aug 11, 16 @ 11:07 am
Did Illinois ever come out of the last recession? According to article in today’s WSJ our housing market is still 30 percent below the 2007 peak in prices. One of the worst markets in the US.
Comment by Sue Thursday, Aug 11, 16 @ 11:08 am
Illinois missed the expansion of the 2000s too. We had Felon Ryan and Felon Blagojevich to deal with instead. The Democrats were busy renominating and reelecting him while destroying Judy Barr Topinka. Michael Madigan was co-chair of Blagojevich’s campaign while trying to contain the damage being inflicted on everyone.
Then we got Quinn. Then things got even worse.
Rauner deliberately chose to sink Illinois so he can turn it into Kansas or Idaho. He fights. We don’t need a fighter.
We need a governor.
The Obama years has seen the worse “growth” ever. We didn’t really recover, we flat-lined. Illinois didn’t get its act together in time to stop the bleeding while our economy was in its coma.
Now this?
One of our felonious governors looks pretty good compared to who we have now in Office. Who’d thought things would be so bad?
Comment by VanillaMan Thursday, Aug 11, 16 @ 11:08 am
Sorry. 20 percent
Comment by Sue Thursday, Aug 11, 16 @ 11:08 am
===no one who has been tending the shop over the last 40 years has any responsibility in this whatsoever===
Okay, say Madigan is gone tomorrow. Does that make the backlog of bills and pensions suddenly disappear? No. Stop trying to place blame and start working on a solution.
In economics, we call it a sunk cost. Sure, you wasted $30k on a new car which depreciated $8k as soon as you drove off the lot. But now that you have the car, is it better to sell it for $22k or keep it? Forget the $8k, it is already gone.
Who cares what got us here? What matters is what you do going forward. 60/30 votes, that is what you need.
Comment by thechampaignlife Thursday, Aug 11, 16 @ 11:18 am
Honeybear @10:36: +10. Thank you for spelling it out for our “betters.”
Comment by Crispy Thursday, Aug 11, 16 @ 11:18 am
>Totally confused.
That is because you are confusing what Rauner stated intentions are with the intent of his actions. He is squeezing the beast by daily digging the state into an ever-deepening financial hole. He is destroying the human service and higher education systems. This is to give him the leverage he needs to destroy organized labor. There’s lots of other destruction plus smoke and mirrors on top of it to effectively distract from a very simple, straightforward and brilliantly-executed plan.
Comment by Earnest Thursday, Aug 11, 16 @ 11:24 am
===Do they approve of your early retirement and generous pension? Or you making considerably more than people with the same job title right across the Mississippi?===
Pesky constitution…
It’s there to protect state workers… from you.
You can apply for a state job, no one is stopping you…
Comment by Oswego Willy Thursday, Aug 11, 16 @ 11:27 am
Big Muddy:
When you want to make a coherent argument let us know. Last I checked Illinois laws aren’t passed by one person. Madigan shares plenty of the blame, but is not solely to blame and to suggest otherwise is just ridiculous. Some of you really need to grow up and stop arguing like 3 year olds.
Comment by Demoralized Thursday, Aug 11, 16 @ 11:28 am
==generous pension==
Always a victim.
Comment by Demoralized Thursday, Aug 11, 16 @ 11:30 am
Don’t think the constitution says state employees need to be paid more than in neighboring states. Think how much money we could redirect to social services and higher education if we reduced state wages. You know, just like raising taxes.
Comment by Robert the 1st Thursday, Aug 11, 16 @ 11:30 am
==That’s excellent! What an upstanding citizen you are! The homeless of Springfield approve.==
You may want to direct your angst towards retirees who pay zero state income taxes and had no issue watching all those services tank from the sidelines. I can assure you my family paid our more than our fair share in taxes.
==Although I don’t think your two thousand dollars will get you much, maybe one class.==
What will it and all those yearly contributions be in a dozen years? So only pensioners get the benefits of compounded interest? My apologies for not wanting my kids saddled with the same debt their parents are burdened with today.
==and if the net result is that your kids won’t get to use it at EIU, WIU, or CSU, I guess that’s…OK, too.==
Yep, plenty of other options across the USA. No need to confine them to any school in this state, let alone those choices.
Since when did sound financial planning become unjust enrichment?
Comment by City Zen Thursday, Aug 11, 16 @ 11:31 am
===Don’t think the constitution says state employees need to be paid more than in neighboring states. Think how much money we could redirect to social services and higher education if we reduced state wages. You know, just like raising taxes.===
If YOU want to take a 10% pay cut… and send it to me… to show you’re not a jealous soul, then I’ll know you’re all about what’s best for the state of Illinois.
Otherwise your jealousy is unbecoming.
Comment by Oswego Willy Thursday, Aug 11, 16 @ 11:34 am
==Don’t think the constitution says state employees need to be paid more than in neighboring states==
You sure seem to be obsessed with what other people make.
You may as well have said “that’s not fair!” Grow up.
Comment by Demoralized Thursday, Aug 11, 16 @ 11:36 am
Is Honeybear’s jealousy unbecoming when she’s mad at CityZen for saving a couple thousand in taxes to put towards his children’s future?
Comment by Robert the 1st Thursday, Aug 11, 16 @ 11:37 am
===I can assure you my family paid our more than our fair share in taxes.===
“I donated millions!” - Bruce Rauner.
LOL.
I have no idea what point you’re making - City Zen -, but you’re sounding like…
“Taxpayers”
… and everyone is a taxpayer, so what else ya got.
Comment by Oswego Willy Thursday, Aug 11, 16 @ 11:38 am
Robert-
There is a difference between wanting state employees to take a vow of poverty( which is what you want)!and wanting all taxpayers to support state programs to help the less fortunate ( which is what Honeybear wants). I, as a professional, get paid less than I would in the private sector. I took this job for the location, the health insurance, and yes, the eventual pension. I’m earning my pay here just like I did in the private sector.I’m willing to put on my appropriate amount of taxes to find the program’s my elected representatives approved for me. I have a family too. I paid college expenses for two kids ( one when I was a private sector employee). I have a mortgage too, and car payments, etc. I support my community too.
Comment by Thoughts Matter Thursday, Aug 11, 16 @ 11:47 am
What I have learned from this blog:
Honeybear loves the word privilege
Demoralized loves the word victim
OW loves the word owned
Comment by Warthog Thursday, Aug 11, 16 @ 11:50 am
Is this some sort of demented reverese “Cloward-Piven” strategy? Squeez until it chokes and then declare government is broken? Where is Glenn Beck with his blackboard?
If I’m not mistaken, with tax increase, the backlog of bills was going down, the deficit was decreasing (all slowly) and pension payments were being made before Rauner.
Comment by Dr X Thursday, Aug 11, 16 @ 11:54 am
Warthog, learning is good!
Comment by Norseman Thursday, Aug 11, 16 @ 12:02 pm
–Since when did sound financial planning become unjust enrichment?–
It didn’t. My spouse was a CFP. I myself took the series 7. (missed a single question too many) Financial planning is wonderful. I’d love to save for retirement, college for my children, etc.
Knowledge is not the problem. Cash flow is.
What your comment shows is both your privilege and your un-self-differentiated callousness.
oops, big words
Your comments show you’re selfish and don’t care about others.
There… do you understand now that I’ve put it bluntly?
Comment by Honeybear Thursday, Aug 11, 16 @ 12:26 pm
Honeybear- When AFSCME was demanding raises and overtime at 37.5 hours, was that not showing that they’re “selfish and don’t care about others?” Or is that only when other people are looking out for themselves and their families?
Comment by Robert the 1st Thursday, Aug 11, 16 @ 12:38 pm
–You may want to direct your angst towards retirees who pay zero state income taxes and had no issue watching all those services tank from the sidelines.–
Wow, that is actually a STUNNING example of a Strawman logical fallacy! Thank you! Just talking Sunday with a professor of philosophy at SIUE about logical fallacy education.
Anyway, yes retirees may have watched the tanking of social services but it was Rauner and Rauner alone who tanked them. Nice try.
Hey can you to an example of Post hoc ergo propter hoc? OR No True Scottsman?
Comment by Honeybear Thursday, Aug 11, 16 @ 12:45 pm
I’m not jealous at all. We have a modest 529 plan in place. What I object too is people who want to pay less in taxes when 1)paying less is NOT an option. 2) over a million people have lost services they need 3) thousands of jobs have been lost.
Increased revenue/taxes are not optional. The very article above made that point. We are going to roll and people are literally going to die.
Comment by Honeybear Thursday, Aug 11, 16 @ 12:59 pm
Honeybear - Don’t feed the troll.
For some reason the trolls are out in force today.
Bob the last - the 37.5 hour work day has been around for longer than I have worked for State. This is nothing new, so get over it.
Comment by Huh? Thursday, Aug 11, 16 @ 1:00 pm
No, that’s called contract negotiations and NOT our Last, Best, and Final offer. We weren’t done at the table. Rauner walked away and violated the tolling agreement.
Thank God you aren’t a negotiator. You’d give away the store then search your car seats for more to give to your opponent. Nice try again with the Strawman. It’s still a fallacy.
Comment by Honeybear Thursday, Aug 11, 16 @ 1:02 pm
=No, that’s called contract negotiations=
So trying to maintain a generous contract while social services are being slashed is fine but hoping to maintain lower tax rates is showing “privilege and un-self-differentiated callousness”
Yep, no double standard there.
Comment by Robert the 1st Thursday, Aug 11, 16 @ 1:18 pm
Robert the 1rst. Of course we’re trying to negotiate hard on our contract. Collective bargaining is kinda our thing. I do like that you’ve added an ad hominem to your Strawman. Nice. But again. We didn’t do the slashing. Rauner did. I fight every day to help folks whom Rauner is actively destroying. I’m good with my contribution to our state. I’m literally doing all I can AND I would absolutely be fine with paying substantially more in taxes. I know more than most how much that revenue is needed. The difference between you and me is that I HELP my state every day through my work and active participation in our democracy. I don’t know what you do for our state so I guess I shouldn’t say that but…whatever.
Comment by Honeybear Thursday, Aug 11, 16 @ 1:53 pm
=We didn’t do the slashing.=
Neither did City Zen, yet you attack his character for wanting a lower tax rate.
How is your negotiating hard to get more tax money somehow morally superior to City Zen not wanting to contribute more taxes?
Comment by Robert the 1st Thursday, Aug 11, 16 @ 2:04 pm
Robert:
Why are you constantly complaining about what someone else has? You do a pretty good job telling others what you think they should make and whether you think their benefits are too “generous”. How bout this. You tell us all what you do, what you make and what benefits you have and we’ll tell you if it’s fair or not.
Comment by Demoralized Thursday, Aug 11, 16 @ 2:23 pm
@Demoralized
=You do a pretty good job telling others what you think they should make and whether you think their benefits are too “generous”. How bout this. You tell us all what you do, what you make and what benefits you have and we’ll tell you if it’s fair or not.=
Robert has a RIGHT to complain when HE’S forced to pay for those “too generous benefits”, Dem. You not forced to pay my compensation under the law, nor Robert’s I’d wager. If we’re paying the bill, we have the right to question it and criticize it.
I understand your public employee mantra of “shut up and pay me”, but excuse us if we don’t….
Comment by Illinois Bob Thursday, Aug 11, 16 @ 2:41 pm
Demoralized- Put your money where your mouth is. Take your money and choose to do business with an entity that pays their janitors $70k/year, pays overtime after 37.5 hours, and has employees retiring in their 50s with lifetime health and generous pensions. You can’t because no such private company exists. No one, I mean no one would pay their ridiculous and noncompetitive prices. Why should we for state government?
Comment by Robert the 1st Thursday, Aug 11, 16 @ 2:47 pm
Bob:
Sure he has a right. If he wants to whine and complain about what other people make that’s fine. I think it’s sad. Unlike he (and you) I don’t feel the need to constantly whine and moan about what someone else makes.
Comment by Demoralized Thursday, Aug 11, 16 @ 2:51 pm
Robert:
Tell me this. Why do you feel the need to complain about what other people make? As I said, you want to have a discussion then tell us all what you do, what you make and what your benefits are so we can “judge” you the way you are judging others. Then we’ll have a conversation.
Comment by Demoralized Thursday, Aug 11, 16 @ 2:56 pm
I repeatedly asked Honeybear to share the union wage concessions and any other concessions a few weeks ago. I heard the info was at home, somewhere, and she would dig it out and share it.
We are all still waiting. Bluster!!
Comment by Anonymous Thursday, Aug 11, 16 @ 2:56 pm
–Robert has a RIGHT to complain when HE’S forced to pay for those “too generous benefits”, –
Just like I don’t like paying for 215 million in EDGE tax agreements. That’s corporate welfare. It doesn’t go to people in poverty, or to pay our state workforce, or help homeless people. It goes into the accounts of corporations who pay insane amounts to a very few executives. They say that they are bringing jobs. But yet there is no proof. It’s unaccounted for. Check it. What I object to is that 215 million for a handful of jobs is what you want and I as a loyal state worker should live paycheck to paycheck. Go ahead and twist yourself in knots trying to explain. No pumpkins if you want to spar with me on moral grounds you’ve got some stones.
Comment by Honeybear Thursday, Aug 11, 16 @ 3:37 pm
So many points to make.
1.The next recession will come. It is a question of when and not if.
2. Yes the muni’s will be hit hard. In 2008 the recession blew a $500 million hole in Chicago’s $6 billion budget.
3. For having regressive taxes, Illinois seems to have a tax structure that responds strongly to economic declines. Revenues drop more than economic activity.
4. Please try to separate the balance sheet problems (especially the unfunded liability) from the current cash flow problems. Madigan and others in power in the past are responsible for the balance sheet problem. Rauner is the major cause of the current cash flow problem. I put the cash flow problem on Rauner because Quinn would have fixed it with a tax increase.
5. If low taxes provide such a benefit to the state in terms of economic activity, then we must have outperformed the nation all those years when our taxes were low and our services high. I don’t remember it being that good. But then I don’t think the State tax rates are so high that they drive the State economy up or down a lot. Yes they have an impact, but it is swamped by other factors.
6. All the pension discussion focuses on State workers. I think that much of the pension liability is for teachers. And teachers are not direct State employees.
7. Yes the pension systems for state workers and teachers were too generous and not actuarially sound. Can only fix that going forward. Like buying a house just before the housing bubble burst, can’t magically reverse time.
8. One would think that impending doom would focus minds. It is not.
Comment by Last Bull Moose Thursday, Aug 11, 16 @ 3:47 pm
Dear Gloom and Doom:
We are not near a recession with the stock market
at or near an all time high.
Comment by Enviro Thursday, Aug 11, 16 @ 4:00 pm
Well, if any citizens’ minds are being focused by the state’s financial situation, it should be our political masters in the legislature, right. The folks we elect to study all this stuff on our behalf. And yet…once hardly gets a sense of impending doom from the state’s legislators. Rather the opposite, I would say. Politics as usual.
Comment by Cassandra Thursday, Aug 11, 16 @ 4:01 pm
I’m confused, is there still a ban on out-of-state travel? 20% of the IBHE staff are at a conference in Denver this week where the registration fee alone is $700.
Comment by Anonymous Thursday, Aug 11, 16 @ 4:23 pm
Dear Gloom and Doom:
We are not near a recession with the stock market
at or near an all time high.
Ummmm, oh never mind. You won’t listen anyway.
Comment by Honeybear Thursday, Aug 11, 16 @ 4:31 pm
==and 2016 being an election year,
the state was only able to adopt a stopgap measure…deferring action on its structural budget gap until next year.==
This is an election year.
This is what motivates the GA,
not the imaginary threat of a recession.
Comment by Enviro Thursday, Aug 11, 16 @ 5:23 pm
Enviro.
Glad to know recessions are imaginary.
I thought they were real with the timing uncertain.
My Professors must have been confused.
Comment by Last Bull Moose Thursday, Aug 11, 16 @ 6:18 pm