Job numbers, tax receipts look bad
Wednesday, Oct 10, 2007 - Posted by Rich Miller
* I wrote about this development in this morning’s Capitol Fax, but now I see that the Tribune blog also covered it, so here it is…
It’s not usually a good sign when the words “disturbing” and “unemployment” are linked together in a report about Illinois, but there they are in a legislative commission’s review of the state’s economy.
“Particularly disturbing is the sharp deterioration in Illinois’ unemployment situation in recent months,” according to the state’s bipartisan Commission on Government Forecasting and Accountability. “After recording a lower unemployment rate than that of the nation during the second half of 2006, Illinois’ unemployment rate has jumped up and now well exceeds the national rate.”
Citing a U.S. Department of Labor report released last month, the commission notes nine states registered “significant” unemployment rate increases from a year earlier. The largest of these occurred in Illinois, where unemployment rose from 4.4 percent in August 2006 to 5.4 percent last August. The national rate stayed basically the same, dropping from 4.7 percent to 4.6 percent during the same time frame.
The report says if the employment trends in Illinois continue, that’s not a good sign for the state’s treasury. At least that’s the drift from the commission’s viewpoint; or in economist speak, the state’s sales and income tax revenues will be “undoubtedly negatively” affected.
There’s more to be concerned about in that report than just the unemployment numbers. You can download the entire report by clicking here.
* Meanwhile, we linked to Bernie’s Sunday column yesterday, but it deserves another visit in light of the above report. It’s a bit confusing, but Bernie appears to be saying that the Blagojevich administration is vastly overinflating both the number of jobs that the capital projects bill will create and the quality of those jobs. Here are a few excerpts, with all emphasis added…
(E)conomists who use multipliers for job estimates say it’s better to talk about supporting jobs, not creating them, because some people who will work on those projects already have jobs. And job totals can’t be limited to a single state, because materials bought for projects can come from other states or countries. The governor also talked about “good-paying” jobs, but economists said low-wage spin-off jobs are included in their estimates. […]
On Chicago radio station WBBM-AM’s “At Issue” show Sept. 30, Blagojevich described the proposal as a “public works program that will create 700,000 good-paying jobs. …” Later in the show, taking a shot at House Speaker Michael Madigan, D-Chicago, Blagojevich said, “I can’t imagine why he would oppose a publicly owned Chicago casino that would do all of these things, like build schools and create 700,000 jobs.”
Even I don’t think the governor meant to say one casino would do all that. But he was saying the casino expansion plan would do that, and he shouldn’t be using the term “create.”
The casino plan projects road spending of $15.625 billion, and the multiplier of that gets to 625,000 jobs.
Expect the Blagojevich administration to spin the Commission on Government Forecasting and Accountability’s jobs report to his advantage. He’ll be right that Illinois certainly needs the employment (the actual number of jobs created in the past year has not grown at all), but if the recent and distant past are any guides, he’ll likely greatly overdo the rhetoric.
* And on a somewhat related front…
A Republican state senator Tuesday accused Democratic Gov. Rod Blagojevich of holding up health-care projects in Illinois because he hasn’t appointed members to an oversight board.
Sen. Bill Brady, R-Bloomington, said the Health Facilities Planning Board has been unable to meet because two seats are vacant and one member has been ill. The result is that dozens of potential medical construction projects and equipment purchases have been unable to move forward.
The five-member board is appointed by the governor. Three members must be present for it to conduct business.
“He’s neglected to deal with a system that would have allowed tens of millions of dollars to be invested in health-care facilities throughout the state by not filling the vacancies on the planning board,” said Brady, considered a possible candidate for governor in 2010. […]
But because of the lack of a quorum, the board hasn’t been able to meet since late July. Spokeswoman Melaney Arnold said 60 projects are awaiting action.
- VanillaMan - Wednesday, Oct 10, 07 @ 9:22 am:
The numbers are not surprising.
Why would businesses come here?
Why would businesses stay here?
They don’t need Illinois when the economy is far better in other states.
As long as we have anti-business politicians believing that somehow businesses have their feet nailed to the floor and can be villified at will, you will be reading more of these reports.
- He makes Ryan Look like a Saint - Wednesday, Oct 10, 07 @ 9:24 am:
It is going to get worse. This administration is not business friendly. Even worse I think the Governor actually believes the lies he is telling!
- VanillaMan - Wednesday, Oct 10, 07 @ 9:24 am:
The Health Facilities Planning Board is more proof that this administration can’t even caretake, let alone plan and lead.
- zatoichi - Wednesday, Oct 10, 07 @ 9:29 am:
Seems the issue is what is “good paying” and how long does it last? If good paying is $30,000 a year that’s $21B for the 700,000 jobs that will “be created”. That’s one year. If the capital plan is $25B and more that one year is needed there is not enough money for year two+. What happens to those jobs when the capital plan is completed? If the plan total is $25B that leaves $4B for concrete, steel, and materials. Price that stuff lately?
- Anonymous - Wednesday, Oct 10, 07 @ 9:29 am:
I guess that the Blago admin has already put the spin on Brady by saying that they’re working on it, but “it takes a considerable amount of time with this board because of very strong conflict-of-interest language”. Hmmm…I didn’t know that such language slowed Blago in any way…
- Greg - Wednesday, Oct 10, 07 @ 9:32 am:
I think the critical attraction to Illinois for most high-profit businesses (the ones that really pump the tax revenue to the state, like hedge funds) is the state’s relatively low income tax rate. Obviously it is higher than 0% states, but many business can’t for whatever reason locate in those states, and will settle for 3%.
So I think VM’s exodus would come if and when the legislature fooled around with the income tax rate (or of course the GRT.)
Also I noticed that I share a nickname with a Greg with a hyperlink. If the lack of a hyperlink isn’t sufficiently distinctive, I’d be happy to change mine. Maybe I’ll make it VanillaMan, but with a hyperlink.
- DC - Wednesday, Oct 10, 07 @ 9:43 am:
Brady is right, but it’s not just the Health Facilities Planning Board: the Governor has shown disdain and disinterest in utilizing (and appointing members to) boards and commissions. Edgar was nearly masterful in leveraging those organizations to support strategic policy directions. It’s truly ironic that Governor Chuckie would be loathe to also use the boards and commissions as a way to appoint like-minded people and develop a strong network. The excuse that it takes time is total hogwash — TOTAL HOGWASH. If his patronage office honestly does not have a list of potentials and alternates for all of the boards and commissions, then it would seemingly indicate one of two things: complete incompetence or complete lack of respect for the work and mission of the boards and commissions themselves. The latter would require a higher level of intellect and strategic thinking than a self-professed C student could possibly muster. Thus, it must be complete incompetence and, arguably, a dereliction of duties.
- Cassandra - Wednesday, Oct 10, 07 @ 10:23 am:
Maybe we’re better off without at least some of those medical projects which supposedly being held up. Certainly, we don’t need lots of new hospitals and while expanding existing hospitals is fun for wealthy hospital execs, wealthy pols, and Hospital Board socialites, they contribute little to improved health.
The key to improved health incomes is prevention, prevention, prevention, not more hospital beds.
But prevention doesn’t provide millions in cash to corrupt pols and the hospital industry.
- Levois - Wednesday, Oct 10, 07 @ 10:24 am:
Wasn’t there talk about disbanding that health planning board?
- Moderate REpub - Wednesday, Oct 10, 07 @ 10:35 am:
Cassandra - Wednesday, Oct 10, 07 @ 10:23 am:
Maybe we’re better off without at least some of those medical projects which supposedly being held up. Certainly, we don’t need lots of new hospitals and while expanding existing hospitals is fun for wealthy hospital execs, wealthy pols, and Hospital Board socialites, they contribute little to improved health.
The key to improved health incomes is prevention, prevention, prevention, not more hospital beds.
But prevention doesn’t provide millions in cash to corrupt pols and the hospital industry.
What is wrong with you? Illinois has a shortage of beds. The commission does not dole out dollars just to hospitals, but it is its prime function. HFPB helps rural areas with heath care access. I can not think of a better need to get behind, especially for you Cassandra, who seems to love every social expansion (especially heath care) our king dreams up. Are you not still in favor of Blago free health care? This Board helps people access the care you think should be a right of all Illinois. And what do you mean medical projects which “supposedly” being held up? THEY HAVE BEEN HELD UP because the Gov can’t even do simple adminstrative things like make appts. Its an embarrasment.
- DC - Wednesday, Oct 10, 07 @ 10:42 am:
I respectfully disagree with Cassandra. Prevention keeps down health care costs, that is undisputable. What is also undisputable is that competition for services keeps prices down. If the Governor was truly opposed to some potential vote of the HFPB, clearly the people who the Governor appoints to that board would be having a discussion with the Governor’s office to ensure they understand their direction. It’s similar to a Committee Chairman calling a vote on a bill that the Speaker or Senate President clearly doesn’t want — it just doesn’t happen. My comments are not in support of the hospital administrators or those who may profit a little on the construction contracts, but philosphically, the HFPB is still a viable board and the Governor should take action to appoint members to conduct its work. If he’s opposed to the Board, then abolish it. Otherwise, Governor, do your job and quit speaking out of both sides of your mouth when it comes to supporting health care.
You can’t be in favor of providing more access to health care in one breath and, in another, purposefully ignore your responsibilities to a board responsible for expanding health care access to more people. Then again, this is a Governor that promises a Veterans Facility in a campaign and then vetoes the money 5 minutes before a deadline. This is a Governor that provides money for half a bridge soley on the basis of caucus affiliation. The goofiness goes on and on. Again, if the Governor isn’t going to use the HFPB, then he should abolish it, or better yet, maybe he could sell it or lease it to a private company too. There are few state assets that seem safe under this guy.
- Mr. W.T. Rush - Wednesday, Oct 10, 07 @ 11:19 am:
I think most people know the board members and staff have been very busy preparing for Stu’s trial. That does not leave much time to consider all those projects
- Fan of the Game - Wednesday, Oct 10, 07 @ 12:46 pm:
The unemploment figures are not surprising. The current administration seems intent on “businicide,” and the policies and posturing we see from the governor portend no end to that trend.
- Truthful James - Wednesday, Oct 10, 07 @ 1:10 pm:
The only sector that is booming is the Public Sector with high salaried jobs at the State, Cook County and City of Chicago level.
Welfare for political connected families is profitable — the oil that greases the machines.
For too long the people have looked the other way, but the sales and property and utility and amusement and all the rest of the taxes are what feeds their oppressive masters.
Government is absolutely out of control. Is their any rleative of Emil Jones, of Tod Stroger, of William Beavers and the rest of them who doesn’t hold a job of less than $50K — more if you add in government’s payments into the pension funds which they will draw.
Of course rhey need those jobs and the double dippers need their second jobs so that re-election campaigns can be won and all opposition can be squashed.
It would inded be sad if it were not so sick. Illinois is about to join Michigan as a state for new business to avoidbecause of the political plague, the infection which only high taxes and a corrupt ruling class can bring. Republic, what Republic? Wasn’t Illinois once called the Sucker State?
- Ivote - Wednesday, Oct 10, 07 @ 2:11 pm:
“DC” at 9:43 AM hit the nail on the head. Anyone who knows much about state goverment knows the Health Facilities Planning Board is not the only state board/commission the Governor has failed to fill. A legislative committee (Jack Frank’s State Government Administration Committee, or maybe Skip Saviano/John Fritchey’s Registration & Regulation Committee?) ought to study the hundreds and possibly over 1,000 positions on various boards/commissions that need to be filled. There are countless advisory groups to the Governor, various agencies and the legislature whose members’ terms have expired months–some YEARS–ago, and haven’t been filled. I’m not sure most of Blago’s cabinet directors have been reappointed after their initial two-year appointments expired. I’d suspect most are “acting” directors at this point. This Govenor is very very lazy, and instead of trying to tell the legislature what to do and when to meet, ought to be doing his own job first.
- pc - Wednesday, Oct 10, 07 @ 10:32 pm:
And yet, the “governor” doesn’t realize that he’s continuing to shortchange the one sector of the economy that generates the most jobs per dollar invested: mass transit. From the Fiscal Policy Institute, an NGO in New York: “Public spending on mass transit yields a high return on investment for New Yorkers. Because mass transit relies so heavily on labor, goods and services that are largely supplied locally within New York State, the IMPLAN input-output model indicates that spending on local mass transit has by far the highest economic multiplier among all industries. (This is remarkable particularly since the model does not capture in the transit multiplier the higher business productivity in other industries that mass transit makes possible.) Thus, dollar for dollar, spending on local mass transit produces a greater local economic benefit than public spending to subsidize financial activities, manufacturing, or any other leading NY ‘export-oriented’ economic sector…”
And yet the casino bill pours billions of dollars on road spending, a sector which relies heavily on imported oil, imported cars, and imported materials — while continuing to stiff both transit capital investments and operating funds.