Gloom and doom and no relief in sight
Friday, Dec 4, 2009 - Posted by Rich Miller
* Yesterday, House Speaker Michael Madigan disclosed one reason why he isn’t thrilled about a tax hike right now…
“For those that think that tax increases are the answer, it’s a partial answer,” Madigan told an audience gathered for a panel discussion at the annual Illinois Legislative Latino Caucus Foundation meeting in Rosemont on Thursday. “Because you can raise the rate on the Illinois income tax, but if the economy is not performing you’re not going to get an increase in money out of the increase in rate.” […]
Madigan said while the public may be aware of the financial help provided to major banks under the federal stimulus package, many don’t know that institutions also borrowed from private lenders, and those loans come due next year. He said the banks may have a hard time making those payments, therefore there is a “major threat of further contraction” in the economy during the first part of 2010.
“Everybody should understand… we are in a very difficult economic situation,” Madigan said. “Not everybody in the country fully appreciates the gravity of the situation.”
The other reason, of course, is political. After the uproar over Todd Stroger’s tax hike, Madigan is loathe to touch a state increase.
* Meanwhile, Rome continues to burn. The state’s payments to community colleges will be delayed for months…
Yet, a cloud of uncertainty hangs over the state’s 39 community colleges, which could lose half their state funding this year, or roughly $148 million, despite seeing a 10 percent to 12 percent spike in student enrollment.
Colleges received the first of four quarterly disbursements from the state, due in August, just last week.
State officials confirmed the second funding installment originally scheduled for November could be delayed until May, which means the last two payments for the year would be pushed back until the 2010-2011 school year.
* And the Champaign News Gazette thinks the governor might be delaying capital program bond sales for political purposes…
If the bonds aren’t marketed until February or March, that means it likely won’t be until the second half of 2010 – probably long after the worst of the recession but much closer to gubernatorial Election Day – when any of the construction projects finally get under way.
Construction workers are out of work. Contractors are hungry for projects. The state’s economy is in miserable shape. Yet the state, according to Quinn, will wait a few more months to finally get the long-awaited capital bill rolling.
His only explanation for the delay is that he is relying “on the experts who run our budget department to pick the best time to get the best rate” for a bond sale.
Skeptics, whose voices are getting louder and louder as the state’s unemployment rate grows by the month, suggest that Quinn is most concerned not with putting people back to work “right now” but with election days in February and November. We hope the governor is prepared to prove those skeptics wrong.
* Related and other state stuff…
* Illinois Prepares $5.27 Billion in Pension and School Borrowing
* SIUC: No layoffs yet
* State Sen. James Meeks says higher state income tax will fix schools
* Ill. legislature’s Latino caucus conference held in Rosemont
* State uses eBay to sell items left in safe deposit boxes
* New law aims to crack down on gang members with guns
* Gang gun law: New statute mandates prison for gang members caught with loaded weapons
* Quinn signs gang gun law named after Chicago cop
* Quinn signs tougher gun law
* New Law Cracks Down On Gangs
- Loop Lady - Friday, Dec 4, 09 @ 10:25 am:
we are so screwed in this State…not even a tax increase is going to improve our fiscal health much…maybe I should move to…gasp…Indiana…
- WOW - Friday, Dec 4, 09 @ 10:31 am:
So did Lord Mike offer a suggestion or just give the mighty thumbs down to the tax increase.
- Anon - Friday, Dec 4, 09 @ 10:33 am:
Regarding budget issues: “and hits just keep on coming.”
- wordslinger - Friday, Dec 4, 09 @ 10:39 am:
–His only explanation for the delay is that he is relying “on the experts who run our budget department to pick the best time to get the best rate” for a bond sale.–
That’s a ludicrous argument. Interest rates are at their lowest in decades.
Besides, they’re long-term bonds. We’ve all heard of refinancing, right?
Quinn needs to be pressed about the delay. Again, these financings are as vanilla as can be. No heavy lifting involved.
- dupage dan - Friday, Dec 4, 09 @ 11:17 am:
Interesting, even the dem MJM agrees that raising taxes results in lower revenues.
I wonder what that means long term. With such a crushing financial mess the state faces and no new source of revenue, what happens next? There ain’t no way to reboot, is there?
- Responsa - Friday, Dec 4, 09 @ 12:08 pm:
My opinion is that anyone who may be trying to finesse capital program bond sale decisions around when they THINK the worst of the recession may be over is seriously nuts. (If the Champaign News Gazette is correct on this, I’m looking at you, PQ)
- The Doc - Friday, Dec 4, 09 @ 12:47 pm:
==Interesting, even the dem MJM agrees that raising taxes results in lower revenues==
That’s an interesting interpretation. Methinks the chess master is playing politics, as Rich stated, but believe what you want, I suppose.
In at least one sense, MJM’s statement is absurd on its face. Since a tax increase can’t completely eliminate the deficit, it should be avoided altogether? Of course, MJM doesn’t specifically say that, but it can be inferred.
A “partially” solved problem would help keep workers employed, social service agencies open, etc.
- Ghost - Friday, Dec 4, 09 @ 1:06 pm:
Il economy is going to crash when the hundred of small and local buisneses in the State close their doors due to lack of payment from the State for the goods and services provided. Hundreds more will be without services, increasing crime etc.
This is like watching the iceburg at a distance and wondering why the captain is refusing to alter course to avoid the collision.
You think IL economy is bad now, just wait.
- state employee - Friday, Dec 4, 09 @ 1:08 pm:
The insanity of MJM, PQ, IL legislators, continues.
- state employee - Friday, Dec 4, 09 @ 1:10 pm:
Ghost, I agree, and I’m part of the “crew.” I see the iceburg, and the “captain” and MJM WILL NOT LISTEN TO US.
- dupage dan - Friday, Dec 4, 09 @ 1:52 pm:
I am certainly not impressed with much that MJM says on most subjects. I do not trust anything he says. I believe he does not have the interests of anything beyond his voting bloc/majority position.
My post was a bit tongue in cheek but perhaps I didn’t make that clear enough.
- Bob - Friday, Dec 4, 09 @ 4:45 pm:
Due to overspending by Shawnee Community College’s current top administration and board, the five poorest counties in Illinois will be faced with the real possibility of losing the only higher education available in those counties. Between the addition of numerous high-paid consultants, outlandish events and parties, trips, and unnecessary high-end renovations, the college has depleted monetary reserves (that took the college years to accumulate) in just two years. The future is bleak for the college at best and without expected funding, the students and residents will suffer. And tax-payers should be incensed!