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Budget debate - Rauschenberger responds to Filan

Wednesday, Aug 30, 2006

Within hours of Judy Baar Topinka releasing her budget plan last week, Gov. Blagojevich’s budget director, John Filan, was claiming that Topinka’s proposal would produce $5.7 billion annual deficits.

So, I offered Topinka’s budget point person, Sen. Steve Rauschenberger, an opportunity to respond to Filan’s claims. This is Rauschenberger’s full response. All emphasis is in the original. Topinka’s original proposal is here, and Filan’s response is here. Both are pdf files.

Thank you for the opportunity to respond to John Filan’s release on Judy Baar Topinka’s Financial plan.

Let’s look at the numbers one at a time.

Under proposed new spending.

Education $2.05 billion. It appears Filan has taken Topinka’s cumulative increase of $8.2 billion and divided by four years. For complicated reasons, that method doesn’t accurately represent the average increased spending per year. In addition, our 8.2 billion figure included teacher pensions, which he appears to double count below.

School Construction Debt Service $270 million. This appears to be an attempt to assign a debt service figure to Judy’s $3 billion school construction plan. This would be close to the level where debt service tops out, so they have picked the highest year to place in his table. I believe this figure is a shade high, but in the neighborhood. If this represents a “top-out” debt service figure, it would be applicable to perhaps FY12 or FY13 when the six year program is in full swing.

Funding Pension System at 1995 Plan $627 million. This might be John Filan’s estimate of the FY08 increase in pension payments. If that is the assumption, then he is close for an All Funds (including Federally Funded, University Income Funded, etc. employees) figure. Judy’s financial plan is a GRF plan, and the first year GRF increase is closer to $520 million.

Rehiring State Employees $150 million. Judy’s plan calls for rehiring 400 prison guards over 4 years. The funding for that initiative tops out at $16 million in FY11 if you assume $40,000.00 per guard per year. Filan’s figure would represent $375,000.00 per guard per year.

Pay Raises for Merit Comp Employees $33 million. Judy’s plan is silent on this issue (maybe John is feeling guilty and suggesting it), but she does believe pay raises for merit comp employees are important, if affordable.

Energy Plan $60 million. No one I know has any idea where this figure comes from.

Higher Education $100 million. This represents the incremental increase in higher education funding in the first year, FY08.

Local Property Tax Reimbursement $1.2 Billion. This is the total that will be spent on property tax relief in FY09.

John Filan appears to add these cherry-picked numbers from different fiscal years, and adds them up to call them “New Spending”.

Under Budget Cuts he lists only:

Cutting Healthcare to “Kids and Seniors” ($725 million). He appears to have taken the $2.9 billion four year cumulative spending difference between Topinka’s Medicaid plan and Blagojevich’s Medicaid plan, and divided by four. Unfortunately, Medicaid math does not work this way and this number is useless.

Filan fails to acknowledge the other budget savings proposed by Topinka’s financial plan including the elimination of pork spending and clout contracts and politically connected jobs.

Under New Revenue Filan lists:

Chicago Casino ($850 one-time, $250 annual per year starting in Year 2). Perhaps $850 million one-time is a reasonable estimate of the auction value of a 3000 position Chicago license… but in Judy’s financial plan they used a conservative estimate of $650 million. For the record Judy’s plan DOES NOT budget one-time revenues for the operating budget. She specifically reserves this resource for one-time spending needs, therefore the number should not even be on Filan’s chart.

As to operating revenue, John Filan is apparently assuming that a 3000 position casino in the heart of Chicago will yield $250 million in gaming taxes. According to the estimate by the Commission on Government Forecasting and Accountability, the 1200 position riverboat in Elgin will generate almost $200 million this year. The financial plan’s estimate of $600 million per year is much closer to Mayor Daley’s own estimate of three years ago.

Additional positions at existing casinos $350 million. Filan’s own revenue estimates assume the 9 operating riverboat licenses will bring in $700 million this year. He seems to be arguing that allowing existing riverboats to expand up to 150% of there gaming positions (from 1200 to 3000) will yeild a revenue increase of just 50%… he is way to low.

Filan’s rebutal fails to acknowledge the new Federal revenue that would be realized by the implementation of the Medicaid Block Grant.

Under lost revenue as defined in Filan’s response.

Economic Development Plan (from Tax Credits) $1.5 Billion. No one I know (except perhaps John Filan) has any idea where this number comes from or what it ties to.

Restore Corporate Fees/Eliminate Chargebacks $408 million. Judy’s plan calls for the elimination of fund sweeps, but does not call for the elimination of Chargebacks. I do not know where he gets this number from.

Re-Open Corporate Loopholes $30 million. Topinka, I am sure would argue the characterization, but the number is close.

Lost Federal Revenue from Medicaid Cuts $775 million. Under Topinka’s financial plan, Medicaid is converted to a block grant. You cannot lose federal match under a block grant because the federal contribution is fixed and NOT subject to matching.

For fun, let’s assume that Filan missed the whole point on Judy’s Medicaid reform, how does he forecast a loss of $775 million in federal aid when he earlier asserted this same plan called for a $725 reduction in Medicaid spending?? If his number is right on the spending reduction of $725 million, the federal aid loss is 50% or $362.5 million; if his number on loss of federal aid is right at $775 million, the program spending must be reduced by $1.550 BILLION.

I realize John Filan was taking a vacation day when he worked up this response to Treasurer Topinka’s four year financial plan. I do not fault him for not completely understanding a rather complex series of financial documents developed over more than 10 weeks at first glance. I do believe he has a responsibility as both the Budget Director and as a Licensed Accountant to make every effort NOT to mislead people regardless of how rushed he is.

The response he has issued mixes permanent and one-time revenues, uses numbers from different fiscal years as if they can simply be summed. His response doesn’t document where any of his numbers come from. In short, I believe this response was designed to confuse the issues, not debate them. That is wrong for the Budget Director to do, wrong for an accountant to do. Using the cover of one’s official office to mislead the public and the press is wrong.

- State Senator Steve Rauschenberger

Director Filan’s office was e-mailed a copy of Rauschenberger’s statement yesterday afternoon and will be allowed an opportunity to respond here as early as tomorrow. I reserve the right to allow further responses.

- Posted by Rich Miller        

49 Comments
  1. - Anon - Wednesday, Aug 30, 06 @ 8:08 am:

    Why is the budget director who has never been able balance a state budget legally making campaign/political statements on state time anyway?

    I still don’t understand how Filan a.)can believe anything he says is credible; and b.) why no one questions the fact that he was able to draft his response to Topinka’s plan in so little time and while working on the taxpayers dime….

    Isn’t that considered political work on state time?


  2. - Another Republican Flip Flopper - Wednesday, Aug 30, 06 @ 8:16 am:

    Let’s keep a little perspective here, this is the guy who said that Topinka was so crooked that if he were to win the nomination for Lt. Governor and she won the nomination for Governor, he wouldn’t serve with her.

    He was more than happy to help bring Alan Keyes to Illinois, that tells you something about Rauschenberger and Topinka.


  3. - Rich Miller - Wednesday, Aug 30, 06 @ 8:27 am:

    ARFF and Anon, let’s try to stick to the actual policy debate instead of personal attacks. If you’re not up to the task, try another post.


  4. - roadkill - Wednesday, Aug 30, 06 @ 8:27 am:

    Rauschenberger proves once again he knows as much about the state budget as anyone around. One can only hope that he has the opportunity to move into the budget director’s office in January. He would be a superb addition to Judy’s cabinet.

    There are several accountants in my family, so I’m a little bit familiar with the ethical standards they’re supposed to follow. Based on his inability to balance a budget and his penchant for mixing apples and oranges when he tries to explain the mess he’s made, I would say Director Filan is an embarrassment to his profession.


  5. - Juice - Wednesday, Aug 30, 06 @ 8:44 am:

    rich, it seems a bit ambitious to ask us commenters to stick to the policy debate. Most of this stuff is smoke and mirrors and above our heads. If Rauschy is such an expert, where was he when his party was running up record deficits? This is a perfect opportunity to expose rauschy for exactly what he is — a pandering opportunist. First the “Turnaround team,” and now this Topinka pandering?


  6. - Juice - Wednesday, Aug 30, 06 @ 8:44 am:

    Pathetic


  7. - polish - Wednesday, Aug 30, 06 @ 8:50 am:

    Did State Senator Rauschenberger do the numbers, or his brother the accountant?


  8. - Justice - Wednesday, Aug 30, 06 @ 9:02 am:

    Don’t you find it interesting that when State Senator Rauschenberger gives a detailed and reasonable reply in response to a criticism by Filan of JBT’s budget, the responders can only attack the person and not the response’s line items. Do I smell fear? Me thinks so!! Roll’n Roll’n Roll’n, that bus keeps on Roll/n….., go hide!!


  9. - zatoichi - Wednesday, Aug 30, 06 @ 9:03 am:

    The trouble here is that each group will be showing how they have the correct set of data and that most other ideas simply miss the mark. The State budget is extremely complicated and it takes people like Rauschenberger to understand the details. The average schmoe goes “Huh?” and usually leaves the details to the calculator crowd. If I had to pick though I would lean toward Rauschenberger as the Head Calculator because over the years he has consistently shown he knows the Budget details on almost any topic far better than most people, including Filan. I would love to see a Filan-Rauschenberger budget debate. Probably too boring for most media, but the numbers would be flying. JBT and Steve may not like each other, but they seem very willing to work together to win this election. Not a real surprise as election time comes closer. Trouble remains, how do you tell who really has a good grasp of all this stuff? The biggest issue remains the “What’s in it for me” mentality. Budget/smudget. Is more money coming to my schools/water district/ball park/social service agency/health care providers/county roads/pension plan, are bills being paid on time,and can we afford it?


  10. - Truthful James - Wednesday, Aug 30, 06 @ 9:09 am:

    Juice et al

    ad hominem, ad nauseum.

    Rich spent some time loading up this item so we might be able do do some evaluations. Mr. Filan has been promised an opprtunity to respond.

    Whoever is elected in November will ahve to guide us through a 2007-2008 recession. Look at what is happening in the housing and the lending markets today.

    The Bush tax cuts plus a truckload of long term debt have given the present Governor the cream off the top and the legistature the wherewithal for a huge amout of pork.

    Look at the numbers

    The latest data from the housing markets suggests not only a downturn in the economy as a whole in 2007, but a full blooded recession. That means, less income, thus lowered income taxes collected; a slowdown in the rate of growth of sales, thus sales taxes collected.

    The slowdown is clear to anyone driving along major streets as a plethora of for sale signs have appeared.

    These numbers are frightening.
    “…
    32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000;
    43% of first-time home buyers in 2005 put no money down;
    15.2% of 2005 buyers owe at least 10% more than their home is worth (negative equity);
    10% of all home owners with mortgages have no equity in their homes (zero equity);
    $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007. …”

    Large builders are reporting that the unsold housing stock is the largest in at least forty years. House prices are expected to decline more than five percent in Illinois, more on the left and right coast.

    The re-mortgage game has been a great source of cash in the retail and service sector. This has about played out.

    Past spending could be covered by the huge increases in sales and income tax collections — the results of the Bush tax cuts. That growth had given pork new life. However, that flow will accelerate no longer and might even slow.

    The end of what I call the lending bubble will have repercussions across the Illinois economy. No more will homeowners be able to stimulate retail sales through refinancing their house. This has implications for the commercial real estate market as well. Tenants will not be able to absorb higher rents and participation in ever increasing real estate taxes, lowering owner margins.

    The State is running $9.2 Billion budget deficit and the pork that made this possible.

    Local property taxpayers are going to be squeezed in 2007, given the increases in valuation which will slow only after the Counties are in recession. Frugality should be the byword here as well.

    Property owners would be well advised to trim their leverage, as a yachtsman would trim his sails during a storm.

    The fall in the housing market in the past has antedated a recession by 20 months. It is hard to judge when conditions changed, because of Fed interference in the short term (and thus the variable rate market. The Christmas season results will show us where we are along this path. I expect 2007 to be a recession year, extending into the national election year 2008. Every segment of the economy is in a worsening deficit position. These problems extend into Western Europe as well.

    This may be the one time when the politician telling the truth has a chance to win. People are uncertain, and I submit scared.

    Thus, Illinois candidates would do well to emphasize frugality, cutting back spending which has soared in Illinois. Unfortunately, both parties still believe that they can buy votes by spending more. The present Administration in Springfield has used a combination of huge bond issues and the extra revenue received because the Bush tax cuts released spending money into the economy. That door will be closed in the recession.


  11. - Interested - Wednesday, Aug 30, 06 @ 9:29 am:

    Truthful, one question about your “sky is falling” theory:

    Couldn’t the number of all interest loans and higher level of debt be at least partially due to the incredibly low interest rates we’ve seen the last few years? I personally did something I never thought I would do and took out a six-year loan on a vehicle because it was ZERO percent financing. How many others did the same thing?

    I’m of the opinion that since 9/11, we’ve seen the hugely-inflated stock market correct and solidify itself, making it much stronger than it was in the years leading up to 9/11 and less likely to crash the way it did.

    The housing market has been chugging along at a rate that has not likely been seen since immediate post-WWII if ever. I’m not sure all of the historical models will hold in this new landscape.

    One thing is certain. The state cannot continue to borrow and spend and delay payments to vendors - especially the medical community. That shortsightedness will certainly come to roost soon.


  12. - (618) Democrat - Wednesday, Aug 30, 06 @ 9:36 am:

    Fist of all this is a complete flip flop by Topinka. We shouldn’t be funding our schools with gambeling money. This is Illinois not Las Vegas, OK.

    Topinka wouldn’t be able to do any of this without legislative approval.Wouldn’t you need to change the Illinois School code for two years that allows schools to levey taxes? Wouldn’t that take power away for our local school boards and give more power to the state? Wouldn’t the law need to be changed to allow land based casinos? Wouldn’t casino owners have to be willing to build on to put 3000 new slot machines in?


  13. - grand old partisan - Wednesday, Aug 30, 06 @ 9:51 am:

    (618), that is not what she said.

    What she actually said was “we shouldn’t be building on top of gambling in this state, or expanding gambling in this state.” She never said “We shouldn’t be funding our schools with gambeling (sic) money.” That would be ridiculous. What do you think the lottery is?

    She is talking about expanding the revenue producing potential of the current gambling system. There will be no more licenses handed out, and no gaming in location where it does not exist already (except for the 10th license location). Contrast that with Rod’s ‘keno’ idea to have gambling beamed into every bar and tavern in the state.

    The whole “flip flop” attack is nothing more than a distraction from the fact that Rod’s plan is to sell a long-term asset for a short term profit, while Topinka’s expands the value of a long-term asset. And you don’t have to be a budget expert to figure out which is a better idea.


  14. - Juice - Wednesday, Aug 30, 06 @ 10:05 am:

    GOP, you fail to mention that she touts her plan as a non expansion of gambling. However, how is 3000 additional positions at every casino not an expansion. She is lying to try to raise money from the business community and to show a revenue source to pay for all the state employee pay raises so she can seal the deal with AFSCME. This is pathetic pandering from the accordian girl.


  15. - I ain't your scout - Wednesday, Aug 30, 06 @ 10:08 am:

    Rich - your posting here is very interesting. Good use of a blog. Congrats.


  16. - Bill - Wednesday, Aug 30, 06 @ 10:10 am:

    618Dem,
    Excellent questions! Everyone assumes that just because Judy and Republicrat Daley say that they want a land based casino, that the legislature will just fall in line and approve what they have rejected several times in the past. If by some strange chance Judy is elected, hold on to your wallets. Expect giant tax increases to pay for this incredible spending plan. If she can’t get an income tax and sales tax increase passed, local units of government will be forced to raise income taxes even more than they now have.
    The governor has, at least, tried to cut the cost of gov’t by cutting the number of state employees during his first term. After months of crying that we can’t afford this and we can’t afford that, now Judy says we can afford all of the spending called for in her plan. Will the feds all of a sudden agree to block grants after years of rejecting them just because Judy is governor?
    My guess is no.
    As for Rauschy, he is soon to be unemployed and will probably do anything, including selling out his soon to be former constituients, to try and find a job.
    Maybe they might find something for him in Filan’s office after the election.


  17. - grand old partisan - Wednesday, Aug 30, 06 @ 10:37 am:

    Bill,

    He’s also found another neat way to cut the cost of government: just stop paying the bills!

    Something tells me that if the choice is between tax increases and a casino in Chicago, the legislature will come around. And if they don’t, then who’s fault is that? Can you really blame the executive for raising taxes if the legislature has made that the only option for balancing the budget?

    Besides, Judy’s plan could only lead to tax increases IF the (Democratically controlled) legislature sabotages it. Rod’s plan – if successful, mind you – pretty much guarantees that taxes will be increase in 20 years, save for the discovery of a magic new source of revenue or a decision to just stop funding education.


  18. - Bill - Wednesday, Aug 30, 06 @ 10:51 am:

    GOP,
    I’m pretty sure that taxes will be increased greatly 20 years from now no matter who is governor for the next four.
    I can’t argue with Judy’s spending plan, though. It is just awfully funny watching Raucshy try to defend it.


  19. - Truthful James - Wednesday, Aug 30, 06 @ 10:52 am:

    Interested:

    The amount of interest you did not pay with a 0% loan was added either into the price of the vehicle or subtracted from dealer profit or a combination of both. In theory you could have lowered the price you paid for the car.

    FYI, Mr. Car Dealer does not keep the note you signed. He sells it to a credit corp at a discount in which he gets only the present value of that note, not at 0% but at the market interest rate.

    Vehicles are depreciating assets. Buy new, drive around the block and it becomes used and the value is less than you paid for it. In fact, on long term car financings it is not unusual during the first two or more years of a five year loan to have the principal amount of the loan be greater than its value in the marketplace.

    That means that even if you wanted to refi the car to get some cash to buy, say, a big HDTV you wouldn’t have the equity to do it. Thus now with houses.

    When the market increased values every year on real property, you could climb aboard and if 28%your income supported the monthlies — principal, interest, property tax escrow and insurance — you could refi to your heart’s desire and take out money to buy HDTV, pay college tuitions, fly to Tahiti, buy a car.

    You had to keep your loan to value ratio at 80% or less or buy private mortgage insurance. You also had the privilege of appealing tax assessments which said your home was worth more, even though you were borrowing against that increased value which you would not acknowledge to the County

    But the steam calliope has slowed. And we are sliding down the razor blade of life.


  20. - Bill - Wednesday, Aug 30, 06 @ 10:57 am:

    “…the razor blade of life…”
    Geez,Truthful lighten up!
    It will all be okay when President Blagojevich and Secretary of the Treasury Filan take office in 2009.


  21. - (618) Democrat - Wednesday, Aug 30, 06 @ 11:13 am:

    GOP:

    I never said that Topinka said anything. That was my post and what I said. On the “flip flop” thing, it is not an attack, it is pointing out the truth, Topinka flip floped and you can hear it in her own words in a TV ad, it leaves no doubt in anyones minds.


  22. - blueinaredstate - Wednesday, Aug 30, 06 @ 12:03 pm:

    A previous poster brings up what is one of the most important but least discussed aspects of JBT’s plan–converting Medicaid to a block grant. Sen. Rauschenberger’s response seems to indicate that the plan is that the federal government will continue providing the same amount of money, even though the state may cut (or reduce the growth in) Medicaid expenditures. While that might be a great idea, how likely is that to happen? I’m not aware of any authority in the federal Medicaid program that would allow this to occur. I believe the press release earlier this month said this would save $2.9 billion–with a B. That’s a big part of her plan, and it’s really iffy–with an I.


  23. - Budget Watcher - Wednesday, Aug 30, 06 @ 12:38 pm:

    For those who think block grants for Medicaid are unlikely, you should refer to the foundation work the Topinka camp did with Daley and the casino plan. You can be sure that, as with Daley, there have already been some talks with the feds about the likelihood of securing block grant funding and those talks were probably encouraging. Hence the inclusion of block grant funding in the plan.

    This dueling Filan & Rauschenberger business is kind of funny. One-sided in terms of competence and accuracy, but humorous nevertheless.


  24. - Scoop - Wednesday, Aug 30, 06 @ 12:46 pm:

    I have a question of the day…”are people surprised Filan has stayed on this long with the blago team?”


  25. - Truthful James - Wednesday, Aug 30, 06 @ 12:50 pm:

    cheez, Bill, I thought that ’sliding down the razor blade of life’ was deliciously humorous and succinct. Not meant to be malicious, sorry.


  26. - just watching - Wednesday, Aug 30, 06 @ 1:39 pm:

    I know for a fact that MONTHS of research went into this proposal, much more than any actual budget Blago ever passed.


  27. - Captain America - Wednesday, Aug 30, 06 @ 2:54 pm:

    I don’t pretend to be a fiscal expert. I agree that Illinois has serious fiscal problems, and that the Governor has contributed to the State’s precarious fiscal situation, which he inherited from a Republican governor. I deplore the governor’s pledge not to raise income taxes, since the state has a significant structural deficit. I think it’s dead wrong for the state not to pay its bills to service providers in a timely fashion - deferring and delaying payments has been a longstandng practice in Illinois as long as I can remember.

    I do know sometning about health care. And I am absolutely opposed to Topinka’s support for block-granting Medicaid.We need to be expanding access to health care services, not restricting coverage, given the rising numbers of the uninsured.

    Topinka’s approach to boosting education spending and “cutting” health care seems like robbing Peter to pay Paul. We need to increase education funding and preserve/enhance health care access. Illinois is a relatively wealthy state, yet it never funds health,education, and human services adequately. There must be some fiscally responsible way to do so.

    I respect Rauschenberger’s fiscal expertise. I can’t compete with him. But I prefer Democratic priorities. I’d Like to see a alternative analysis by somenone like Ralph Martire.

    I don’t gamble, but I like the idea of a Chicago casino, primarily because the state and the city are desperate for revenue. It might also enhance the city’s competitive position as a convention destination. I also think the casino contract should be rebid periodically rather than awarding it in perpetuity.


  28. - capitol view - Wednesday, Aug 30, 06 @ 3:08 pm:

    and as usual, neither candidate is responding to the continuing, destructive rate structure for human services providers. To show their concern for human servcies without increasing funding, the General Assembly and the past two administrations have been loading up the “accountability paperwork” - most of which is probably going to empty desks at DHS.

    Too many local providers are going out of business, but the State simply says that the local funding crisis that they have created are the cause. It is that the executive director was retiring, or that the facility was no longer up to code, etc. Bake sales can’t cover deficiencies in programs over $250,000, and United Way funding has also been stagnant most of the last decade. These are State referred and State program eligible wards and clients that community groups are serving, for the State.

    Major providers have been dropping the State contracts portions of their agencies just to avoid cannibalizing the rest of their services to meet the State generated deficit.

    There are two crises today in human services in Illinois — bills payments in a timely fashion, and rate sufficiency. Bills get paid in an erratic manner,but even when the dollars come theyare no where near enough to meet the actual cost of service delivered, in many program areas.

    Anyone on this blog old enough to remember the Grotberg Amendment? John Grotberg, while he was in the Senate prior to going to Congress, championed a statute that the State had to pay full and fair rates for youth services delivered to State eligible clients. Over the years, DCFS (and the OMB/or program OUT of Grotberg eligibilty.

    A crisis in community based providers is on the edge. And when it happens, statewide, the response from government officials will be” “why didn’t you tell us that things were this bad?” Well, we’ve been telling them for the past six years - no one wants to hear it.

    Call your local favorite community based provider, about the realities of contracting with Illinois State Government. They’ll give you an earful. And ask them, how much longer can they go, without the State reimbursement rate increasing. The response may surprise you.


  29. - frustrated GOP - Wednesday, Aug 30, 06 @ 3:46 pm:

    Captain America- You might agree with the Democrat priorities but someone has to pay for all of those services. Who is going to pay for it when business keep relocating out of State, doctors keep moving away because they can’t afford to work in the State, and the only medical and Pharmacy providers that can afford to do business in the State are very large organizaitons that can wait 120 days for payment? Get a grip. You may not like the system but you have to have investment and production to produce tax revenue to pay for those services.
    It seems pretty simple, get more people on private payrolls with benefits paying taxes and less on govt service.
    All this administration has done is grow the govt social service, slow the payments to medical provders, driving up costs, to balance it’s debt and increase load on private business.Oh and if you’re too small you’re out of business. It’s also restricted the economic engines of our university system by underfunding.
    Time to get off that horse, vote demcratic for your rep, but for God sakes dump the chump!


  30. - Ben - Wednesday, Aug 30, 06 @ 3:48 pm:

    Capitol View– get in line. You think it is just human service providers in crisis? How about every physician and dentist in the state that plays banker for the State. Pay them for the work they do at rates that at least cover costs before Blago adds more to AllKids (Medicaid).


  31. - Jaded - Wednesday, Aug 30, 06 @ 3:52 pm:

    Hey Bill, you said “local units of government will be forced to raise income taxes even more than they now have”
    Clearly you don’t know anything about taxes in Illinois. You find me one unit of local government in this state that has an income tax, and I will buy you a steak dinner (from the money I get from suing that unit of local government for violating the Illinois Constitution).

    You are partially right, however. A tax increase of some sort is imminent. Your idol Rod Moredebtovich has made absolutely certain of that. By the way, please tell me which year, specifically, GRod cut GRF spending, and then (when you can’t do that) please tell me the last year GRF spending was actually lower than the previous year, and who was Governor at the time (I’ll give you a hint, he is scheduled to be sentenced next week!)

    As for the Filan versus Rauschenberger debate, I am sure they are both spinning, but I’ll bet (no pun intended) the Rauschenberger numbers are closer to the truth. Filan has been living in his made up numbers world for so long, he wouldn’t know the truth if it kicked him right square in the adding machine!

    As for the gambling issue I am sick and tired of the right wingers crying about gambling expansion. It is here and it is here to stay, so lets make the most of it. If that means a casino in Chicago, Waukegan, Rockford, and Dolton, then so be it. For those of you who say this is not Las Vegas, you are right. Nevada has no state income tax!

    Finally, for those of you who think this stuff is over your head, I recommend going to the website for Commission on Government Forcasting and Accountability. They are bi-partisan and do a pretty good explanation of the budget in their annual summaries. I am not smart enough to know how to do a hotlink in my post, but they can be found under additional resources/support services on the GA website.


  32. - Rex - Wednesday, Aug 30, 06 @ 6:23 pm:

    I don’t believe Raushenberger would jeopardize his integrity by not giving an accurate analysis of Topinka’s plan. He looked at Topinka’s numbers and Filan’s numbers to give an honest calculation. I would trust his numbers over Filan’s numbers. Filan is playing puppet for the Gooberner. Look what a mess he has made of this state. I am all for Topinka’s plan. If it takes gambling to save my children from paying for the Gooberner’s freaking mess - then so be it.


  33. - OAD - Wednesday, Aug 30, 06 @ 6:34 pm:

    Now THIS is a prize fight between accountants!!!


  34. - Rich Miller - Wednesday, Aug 30, 06 @ 6:57 pm:

    OAD, that was hilarious


  35. - Bill - Wednesday, Aug 30, 06 @ 7:29 pm:

    Jaded,
    Sorry, I meant property tax and the number of state employees is considerably lower than it ever was under Ryan.


  36. - HOPE FOR JUDY BARR - Wednesday, Aug 30, 06 @ 7:38 pm:

    To Bill 10:10am
    Upon your eyes,the head count is down because ERI that Ryan did at end of his term , how do you give Blago credit for that, also he said he was 5 B in hole because of Ryan , but yet gave the unions the largest salary increases in state history,and Filan says he has put more money towards state pensions, sure he includes the 4% up to 5.5% more that state employees contribute to their pensions than before, and he gave unions that 4 to 5.5% in salary increases to pay for it, and what did that also do, yes it increased their salary and as a result their pensions when they retire, but Blago won’t be around then.


  37. - (618) Democrat - Wednesday, Aug 30, 06 @ 7:46 pm:

    Rex:

    Raushenberger and integrity should never be used in the same sentence unless, has no, precedes integrity in the sentence.


  38. - Ghost Buster - Wednesday, Aug 30, 06 @ 8:20 pm:

    What good is a budget when the gov. can just pull a million bucks from his @#*@ and give it to a friend with a ball team in marion and have no acountabilty to the senate,house, or the voters of this state?


  39. - Anon - Wednesday, Aug 30, 06 @ 8:56 pm:

    Filan lost his credibility as an “accountant” when he tried to pass off his bogus savings initiatives. He’s a political hack - that’s it.

    If I had to trust either set of numbers, I’d bet on Rauschenberger, although I’m sure they’re both skewed.


  40. - Shallow Pharnyx - Wednesday, Aug 30, 06 @ 9:26 pm:

    I am sooo with Roadkill. I am a CPA and a registered Dem that has had the honor to sit in on approp hearings where Sen. Rauschenberger showed his extraordinary insight/knowledge of the state’s budget. The man asks the right questions (although he already knows the answers). I do not agree with most of his political leanings but he cuts to the heart of the matter and KNOWS what he is talking about fiscally!!

    Is he implying Filan is a CPA? I am; I thought Filan was an accountant but not a CPA. Can anyone shed light on this? I know he was a partner in an accounting/consulting firm but does he have his CPA? I don’t think so. I could be wrong, but it will make him look worse in my eyes if he is a CPA and has been messing with the State’s budget in such an unethical way.


  41. - Old Elephant - Wednesday, Aug 30, 06 @ 9:44 pm:

    I recently read an article that discussed how true conservatives were re-thinking the strategy of trying to cut government by cutting taxes. After watching the federal deficit skyrocket under Bush II, some conservatives are now arguing that deficit spending hides the true cost of government and fools taxpayers into thinking that government services are cheaper than they really are.

    The new conservative approach is to say: “let’s quit pretending that taxpayers can have their cake and eat it too — it’s time for government to pay its bills as it incurs them.”

    Why is this relevant? Because for the past four years, Rod Blagojevich has pretended that people in Illinois can have every imaginable service without having to pay any more for anything.

    When I read comments from Blagojevich supporters I don’t know whether to laugh or cry. Does anyone really think that we can provide Cadillac health care plans to everyone in the state without it costing any more money? Do people really believe there is no price to pay for handing out millions in goodies to campaign contributors?

    I am not a big fan of expanded gaming (and I believe it is an expansion), but at least Topinka and Rauschenberger are proposing a way to pay for program expansions. Certainly, an income tax hike would be more honest — but in the current political environment, that is simply not going to happen. (As a fiscal conservative, I don’t think it should happen. But, I do think leaders then need to have the courage to make the cuts needed to bring spending in line with revenues)

    Illinois cannot afford four more years of smoke and mirrors — my children and my future grandchildren don’t deserve that.

    I’ve noticed that more and more frequently the Democrat commenters on this site resort to name calling rather than logic (Yellow Dog Democrat being a frequent exception to that rule).

    My logic is simple:

    Topinka has come up with a concrete plan to pay for what she has proposed;

    Topinka has said she will take ownership of the property tax problem by making sure the piper comes around in the middle of her term to get paid;

    Topinka has the honesty to say we simply have to bring Medicaid costs under control (Fact: if Medicaid costs continue to rise at their current rate, they will absorb 80 percent of the ENTIRE General Funds budget within 20 years)

    Topinka is, by nature, something of a cheapskate. In Government, that is a good thing.

    One last point — I was around when Jim Edgar and the Republican legislators eliminated General Assistance and adopted Welfare reform. At the time, there were all sorts of doomsday predictions. Amazingly, none of the terrible things that were supposed to happen happened.


  42. - Shallow Pharnyx - Wednesday, Aug 30, 06 @ 9:44 pm:

    Bill- what planet do you live on?

    Scoop- My bet is Filan will leave this term even if Blago is re-elected. I think everything is in place for just such an exit.

    Cat America & Capital View- You seem like bloggers of reason, I may not agree with everything you say, but at least I take the time to read your LONG explanations.

    (618)- Obviously, you have never listened to the man!


  43. - anonymous again - Wednesday, Aug 30, 06 @ 9:50 pm:

    I think rottenburger way undddddereestimated how much(a correctional officer cost) when you ad benefits in for a correctional officer 40k dont work especially when you consider the salary alone of the layed off captain was around 65K each da it dont figure 500 times 65k equals 32mil then you can add another 5-7 mill for the benes and you wil say were not going to hire captains well them you have to quit crying about how needed they are and how they have been missed


  44. - Shallow Pharnyx - Wednesday, Aug 30, 06 @ 10:02 pm:

    9:50 PM
    Hablas Ingles?


  45. - Snidely Whiplash - Wednesday, Aug 30, 06 @ 10:07 pm:

    It’s hard to take seriously an “analysis” of a budget on that scale which was pumped out on one day of “vacation” time. Of course, Mr. Filan obviously has an ax to grind, as well. I don’t agree with Steve R. on most things, but as far as the State budget is concerned, I can’t think of anymore more knowledgeable than he is on that topic.


  46. - Anonymous - Wednesday, Aug 30, 06 @ 11:31 pm:

    After going through Steve’s response, I find it unsatisfying. I’m willing to put aside how Steve’s self-praised expertise on the budget, hasn’t really gotten us anywhere. George Ryan had terrible budgets when Steve was in leadership on the budget.

    But it’s more disturbing to hear Steve throwing mud at Filan, accusing him of trying to “mislead.” Let’s not forget Steve’s shilling for Topinka now, the candidate who led Republicans to believe in the primary that she was against an expansion of gambling. She’s still tried to say her plan isn’t an expansion. She’s just digging herself deeper in a lie.


  47. - Truthful James - Thursday, Aug 31, 06 @ 9:16 am:

    Ghost Buster

    Kets not be disengenuous (I love that word.) Both Emil and Mike knew exactly what they were doing when they passed the Appropriations Bills. They left unfilled buckets here and there for Blago to use when the other direct accounts were fully funded.

    It is the Taxpayer who got got the wool pulled over his eyes.


  48. - Squideshi - Thursday, Aug 31, 06 @ 10:06 am:

    We need to amend the state constitution to allow us to update our regressive flat-tax income system, with a progressive, bracketed system like the federal government. If we did this, we could raise the income tax percentage for the ultra-rich by a point or two and completely eliminate any defecit. Why should this 1% hold the other 99% hostage? Besides, this way the 99% will be able to keep more of their own money, which they will invest in the Illinois economny.


  49. - Truthful James - Thursday, Aug 31, 06 @ 10:46 am:

    Squideshi

    The whole idea of the graduated income tax was that there was a dimishing marginal utility for money. That’s generally true for apples, sometimes for other consumer goods. It may have been true when the only alternatives were to sock it away in a mattress or spend it on “display goods.”

    It ignored the wide development of investment in financial assets representing more or less risky underlying real assets. It ignored the fact as well that all money to pay for the financing of the real assets came from consumers purchasing products and services.

    As long as the costs of government did not grow faster than the assets in the private sector there was a balance. If you are a true Keynesian you must follow his dictum that deficits may be used to pump up the economy during a depression. However, in times of prosperity surpluses must be run to pay back the debt.

    Unfortunately, we can not trust either the Federal or the State government to do the right thing. Revenues occuring because of “prosperity” or the lowering of tax rates are seen by politicians as a reason to raise government spending and supply electoral insurance. Stewardship is out. Pork is in.

    That is where we are now. The Springfield Democrats and the Gingrich Republicans are no different in that regard. When a balanced Federal government budget loomed on the horizon, your representatives in Washington put away the budgetary knives and picked up the pitchforks for pork.

    If you think that fiscal discipline would magically appear because of a change from a single rate tax (it is not a flat tax, which implies everybody pays the same amount) to a graduated rate tax, you are, I am afraid, sadly mistaken.

    Pork expands to use the revenue available. New projects once funded never die.


Sorry, comments for this post are now closed.


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