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Don’t look now…

Wednesday, Feb 13, 2008

* The news is bleak

A week before Gov. Rod Blagojevich is scheduled to lay out his budget plans for the new year, the official who controls the state checkbook is warning of big financial problems.

State Comptroller Dan Hynes released a report Monday saying the state is carrying a large deficit and could face more trouble with an economic recession perhaps on its way.

* More

State Comptroller Dan Hynes says a $750 million hole in this year’s budget needs to be filled even as Gov. Rod Blagojevich’s administration prepares a budget for next year that could have a significant deficit. Hynes said the state is entering an “extraordinarily challenging period” because it failed to prepare for an economic downturn as it struggles to pay a backlog of bills.

“We still have a serious budget deficit,” Hynes told the Chicago Tribune’s editorial board on Monday.

* More

“I don’t think there’s any more latitude in terms of pushing [Medicaid] bills off,” Hynes told the Sun-Times’ editorial board. “Providers are starting to say ‘We’ve had enough.’ They’re starting to walk away.”

* The governor claims there’s a $750 million revenue shortfall. That would mean almost half of the projected $1.6 billion in “growth” has vanished since the state budget was written. And that doesn’t include the $200 million or so in lost revenue for next fiscal year from under-performing state investments, or the rapidly shrinking cash from casinos.

* The governor has a plan, sort of

To fill the current hole, the governor’s aides said they hoped lawmakers would consider eliminating a series of tax breaks for corporations and sweep money from a variety of special funds with balances that have been tapped in prior years under Blagojevich.

* But, he provided no specifics and those ideas have been rejected in the past. Which bring us to the usual buck-passing

[Blagojevich spokeswoman Abby Ottenhoff] said lawmakers approved a budget last year based on “inflated” predictions of how much money the state would take in. If the state’s coming up short, Ottenhoff says, lawmakers this year will have to act to find that money.

* Here are some additional budget stories to ponder…

* Fiscal policies need to change to make Illinois more attractive to businesses

* How Springfield can rebuild trust

* Hynes: Illinois budget hole needs filling

* Bad news for state government finances

- Posted by Rich Miller        

27 Comments
  1. - Lets Get Serious - Wednesday, Feb 13, 08 @ 9:47 am:

    The Dan Hynes for governor tour continues. . .

    Didn’t he learn anything when he got trounced during the Senate race? Has no one told him that establishing a “rainy day” fund doesn’t make him a fiscal anything?

    If — as Rich detailed in the Fax this morning — the alternatives to Blago are the uninspired Hynes and Vallas, well maybe the GOP’s future isn’t as bleak as what was laid out in morning shorts.

    Can people stop running for 2010 and start REALLY talking about what plagues this state?


  2. - VanillaMan - Wednesday, Feb 13, 08 @ 10:10 am:

    This is an election year, so this bad news will be papered over by every means possible. No one wants a repeat of last year, except Blagojevich who will use this fiscal crisis and rub salt into it until he sees political gains.

    The GA learned that it is better to work around Blagojevich than work with him, and now that he has alienated most of the legislators and voters in Illinois, and the path around him was established last autumn, the GA will quickly work around Blagojevich within reasonable time, pass a budget, ignor the Governor, and move on.

    Blagojevich is the crazy uncle in the basement, and the GA will pretend that he doesn’t exist this year. Blagojevich will rant like the Phantom of the Opera down there, but he won’t find many opponents interested in humoring him into a fight.

    That is so 2007!


  3. - Siyotanka - Wednesday, Feb 13, 08 @ 10:21 am:

    Budgets are like potholes…during periods of cold and freeze (recession) the potholes (budget shortfalls) appear out of nowhere, and like the solution to fill the holes are usually temporary, so are the budget shortfall fixes. One should fix the entire road and repave it. This will require cooperation among all parties and some innovative new ideas for revenues…(read) not the same old…same old, etc.


  4. - Odyssey 2010 - Wednesday, Feb 13, 08 @ 10:22 am:

    Prediction for 2008-

    This is the year Giannoulias really establishes himself as the man.

    Following up on a truly impressive first year, the financial whiz kid and Obama protege will have the chance to go beyond crying about state finance (a la Dan Hynes) and put forth some ideas. And once he puts forth those ideas (and both Blago and Madigan work to shoot them down) Giannoulias becomes the “Change” with substance candidate for 2010.


  5. - GoBearsss - Wednesday, Feb 13, 08 @ 10:48 am:

    A grand story of two estimates -

    OMB projected one revenue growth for this year

    House Dems projects a different, higher, revenue growth for this year that magically accounted for all the stuff they wanted to spend money on.

    Guess which one was more accurate?


  6. - The Doc - Wednesday, Feb 13, 08 @ 10:56 am:

    Rich, do you hear of any rumblings from the GA as to how the state’s fiscal crisis can be remedied? IMO, an overhaul of the income tax system would appear to be the most viable, but since it’s an election year, a recession looms, and the GA can’t agree on anything, this would appear to be a long shot, at best.


  7. - Bill S. Preston, Esq. - Wednesday, Feb 13, 08 @ 11:20 am:

    I realize that this may be Hynes’ idea of a start to a 2010 run, but this isn’t a great way to do it. I like the guy and all, and since someone explained to me what the Comptroller does, I think he’s been doing as well as anyone could in a position that doesn’t really do anything.

    This is my problem with him - he whines a lot. Like, a LOT. He’s like the younger sibling who is always telling on someone in order to get attention. I didn’t read his interview thoroughly, but did he set forth any proposals or come up with any ideas on how not to be in the red - you know, other than ’stop spending’? That’s his problem - he’s always pointing the finger and never offering solutions - and that shows a lack of leadership on his part. He may run for governor, but he’ll never make it all the way.


  8. - Angry Chicagoan - Wednesday, Feb 13, 08 @ 11:40 am:

    But treasurers are supposed to whine. They’re the money guys. It’s expected of them. The ones who don’t are the ones who turn out to be running sham operations like Enron.


  9. - Angry Chicagoan - Wednesday, Feb 13, 08 @ 11:40 am:

    Excuse me — comptrollers are supposed to whine.


  10. - What can I say? - Wednesday, Feb 13, 08 @ 11:45 am:

    To GoBearsss: I’m a repub, but at least the house dems were working with some type of estimate. The gov just starts programs with no funding available and has the gall to blame the house and senate (except Emil) for the problems. Abby, please get a conscience and get away from the guy before he throws you under the bus.


  11. - Bill S. Preston, Esq. - Wednesday, Feb 13, 08 @ 12:08 pm:

    I’m saying he should whine AND do something about it. Or is that just asking too much of someone?


  12. - North of I-80 - Wednesday, Feb 13, 08 @ 12:08 pm:

    Mismanage most of the running of state govt, want to give everyone free state-paid health care but can’t pay for even basic capital plan? Tax business [close loopholes = raise taxes] and drive more of it away from the state. If unchecked, we’ll be like Michigan instead of FL.


  13. - RMW Stanford - Wednesday, Feb 13, 08 @ 12:40 pm:

    Looks like it will be another “fun” year for the budget where nothing will probably get accomplished. Richard Greene has a number of good points in it, if they are not careful Governor Blagojevich and the rest of the State Government are going cause, continue causing, a lot of damage to the state’s economy and slower job and economic growth will just worsen the Illinois Fiscal health. We need to quite relying on things like casinos for the budget, and we need to be willing to do things like cut or control spending in down years. I just hope that the Governor doesn’t try and resurrected the GRT or some equal bad tax.


  14. - Budget Watcher - Wednesday, Feb 13, 08 @ 1:33 pm:

    GoBearsss,

    The House and Senate leadership knew exactly what they were doing by using the unrealistic revenue assumptions. They dug the Governor a hole and now they’ll stand around waiting to see how he climbs out of it. Look, neither Madigan or Jones is likely to lose much, if anything, in the upcoming General, so they don’t really have to answer for this problem. The Governor? Well, it just another one of a string of problems he’ll have to face this year and next, and it puts him in a very weak position entering into the Spring session. Tjis was all calculated.


  15. - Captain America - Wednesday, Feb 13, 08 @ 2:32 pm:

    I’m not sure why Dan Hynes is catching all this grief from various bloggers for simply doing his job as State Comptroller. I will concede that Dan isn’t particularly charismatic, but he is an excellent public official. I’m certain he would be an outstanding, albeit technocratic, Governor. Hynes really understands the nuts and bolts of government far better than the current occupant of the office.

    We’re paying a high price for choosing style over substance in the 2002 guberatorial election. Vallas would have been a much better choice, But I’m not certain I view him as politically viable as a gubernatorial candidate after an extended absence. On the other hand, I think he’d be an excellent candidate for Mayor!


  16. - Just a student... - Wednesday, Feb 13, 08 @ 3:12 pm:

    CA- There’s a difference between knowing the system and working the system. And I mean ‘working the system’ in the positive, benefit-the-people, sort of way. Working the system takes some charisma which, as you pointed out, Hynes sorely lacks.


  17. - Bill - Wednesday, Feb 13, 08 @ 3:20 pm:

    Vallas has run two school major systems into holes so deep that they may never recover and is now working on ruining what little is left of a third. Contracts that were awarded to friends of the mayor while Vallas was in charge were far more corrupt than anything Blagojevich is accused of doing. He would be the absolute worst choice for mayor and that includes the “current occupant”. He was run out of Illinois and Philadelphia. He’ll be run out of New Orleans before long.


  18. - Tollway Dan - Wednesday, Feb 13, 08 @ 4:33 pm:

    Sounds like a good reason to add another “FREE State Program” compliments of the soon to be indicted Governor of Illinois Blagojevich.


  19. - Concerned Voter - Wednesday, Feb 13, 08 @ 4:33 pm:

    “[Blagojevich spokeswoman Abby Ottenhoff] said lawmakers approved a budget last year based on “inflated” predictions of how much money the state would take in. If the state’s coming up short, Ottenhoff says, lawmakers this year will have to act to find that money.”

    Gee thanks Guv, I see as a leader you feel it’s the lawmakers who need to act to find that money. Now who helped to project those inflated predictions? Anyone from the guvs office put up there hands, Blago himself maybee?


  20. - Macbeth - Wednesday, Feb 13, 08 @ 4:34 pm:

    Whining? You’ve got to be kidding me.

    All the Blago supporters would crucify Hynes if *didn’t* whine. “Not Blago’s fault — it’s the comptroller.”

    And whining? Is that really what he’s doing? If he’s Captain Obvious — then Blagojevich is certainly Captain Obvlious.

    And about the death penalty –

    Do we really want Blagojevich making any kind of principled stand pro or con on the death penalty? Better he keeps himself far, far away from that debate. I shudder to think what a mess Blagojevich and his nutty inner-sanctum could make.


  21. - I.D.O.T. Bleachers - Wednesday, Feb 13, 08 @ 5:37 pm:

    Word is the Illinois Tollway will be raising tolls in the very near future. Say as soon as this year.
    Maybe Blagojevich and his nutty inner-sanctum could fall in one of the huge potholes scattered throughout Illinois.


  22. - zatoichi - Wednesday, Feb 13, 08 @ 5:56 pm:

    What is Hynes supposed to do? Cut checks that will bounce because there is not enough cash to cover them? It seems he is doing exactly what he should be doing..explaining the situation his office faces and telling the GA/Gov “you need to make some real choices, stop simply putting off hard decisions to tomorrow, and face reality.” It is what any CFO/CPA/bookkeeper does in any company everyday.


  23. - RJW - Wednesday, Feb 13, 08 @ 8:35 pm:

    I’m not sure what Bill is smoking when he speaks of Vallas. But, he is entitled to his opinion.

    On the matter at hand - the budget - does anyone think that the legislature (i.e. Madigan) put through a budget that is way out of balance on purpose? I think it’s a distinct possibility. I’m not much on conspiracy theories or anything, but that big hole in the budget makes it hard for Blagojevich to do his healthcare for all thing AND keep the rest of state government afloat. I’m hoping the Governor doesn’t come in with grand plans on Feb 20, but given his record that is like hoping the Bulls win a championship.

    Illinois needs a statesman Governor (which we don’t have) who is willing to bite the bullet and raise taxes AND eliminate some programs in order to get the budget back in balance. Yeah, it might be a 4 year term, but that’s what statesmen do - they put the good of the many ahead of the good of the few - or the one.


  24. - Bobby - Wednesday, Feb 13, 08 @ 8:47 pm:

    My God, can Dan come up with something new? What’s his solution to the problem?


  25. - Bill S. Preston, Esq. - Wednesday, Feb 13, 08 @ 8:50 pm:

    Macbeth & zatoichi-

    I didn’t say he wasn’t doing his job. He’s doing his job just fine, considering that he has zero power to do just about anything. I’m saying that if he’s planning on making the next step in his political career he should be offering more. Go above and beyond, you know?


  26. - Lets Get Serious - Wednesday, Feb 13, 08 @ 11:20 pm:

    Why do people keep talking about Vallas? Has there been some long standing miraculous transformation in the Chicago, Philadelphia or New Orleans school systems that nobody has reported yet? What is he going to run on?

    On the other hand, Odyssey 2010 raises an interesting scenario — if the kid (Giannoulias) really shows that he can bring some original thought to this annual mess we call a budget process, the Governor Alexi banter can start in earnest. Alexi (Obama) vs. Lisa (Hillary) and Mike (Bill) in 2010? (Hynes can be Kucinich, Vallas can be Gavel, and Rod. . .Ron Paul)


  27. - diane - Thursday, Feb 14, 08 @ 4:46 am:

    Hynes would do better focusing on solutions rather than trying to campaign for a job he will never get. He’s lucky to be elected to anything.


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