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Sound familiar?
Monday, May 17, 2010 - Posted by Rich Miller * New Jersey Gov. Chris Christie has won national plaudits for budget-cutting, but the main component of his spending reduction plan is skipping the state’s $3 billion pension payment. He needed to cut $11 billion to balance the budget, but cut far less than that, and made schools, property tax payers and local governments take the brunt of it. Up in Minnesota, Gov. Pawlenty and the Democratic legislature are working on a plan to “erase” its $3 billion budget deficit, according to the AP. But $2 billion - two-thirds of that so-called erasure - is actually a postponement of scheduled state education payments. Florida claimed to be facing a revenue shortfall of $3.2 billion, but its new budget actually increases spending by $4 billion. In California, none of the gubernatorial candidates has even a remotely realistic budget balancing plan, even though the state is currently facing a $19 billion deficit.
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- CircularFiringSquad - Monday, May 17, 10 @ 1:38 pm:
We dropped this in earlier, but it seems to fit in here
States’ Tax Collections Falter, Widening Budget Gaps
By AMY MERRICK
April tax collections are falling short of forecasts and even dropping below last year’s depressed levels in a number of states, complicating budget troubles and prompting some governors to dip into rainy-day funds.
Following several months of modest improvement, the weak April revenue numbers are disappointing for states that hoped for economic recovery soon.
Based on reports from more than a dozen states, the figures suggest the recession may have taken a heavier-than-expected toll on employment last year, cutting into income taxes.
The shortfalls also are punching fresh holes in state budgets. Widening state deficits could in turn put pressure on the federal government to issue new stimulus funding; a 2009 cash injection from Washington has helped shore up battered state finances, but much of that will dry up by the end of this year.
April is the biggest revenue month for many states because it is when they collect a large portion of income taxes. The month’s collections came up short of expectations in California by 26.4%, or $3.6 billion; in Pennsylvania by 11.8%, or $390.1 million; and in Kansas by 10.2%, or $65.3 million. More states will report in the next few weeks.
In some states—including a few where April tax collections fell short of forecasts—revenue actually increased slightly from the same month a year ago.
But even if the results topped last year’s, states that received lower-than-expected income in April still may need to reduce spending to balance budgets.
- George - Monday, May 17, 10 @ 1:40 pm:
And Christie was receiving national plaudits for his budget cutting, but no longer. his approval rating at home has plummeted to the low-30s in just 2 months.
- George - Monday, May 17, 10 @ 1:41 pm:
This story of Governor Gibbons in Nevada also has many similarities to a former Governor of Illinois.
- 47th Ward - Monday, May 17, 10 @ 1:45 pm:
Well, there’s always Mitch Daniels. Oh wait, didn’t he raise taxes?
Nevermind.
- John Bambenek - Monday, May 17, 10 @ 1:46 pm:
Politicians that will tell votes “if you don’t want to pay for it, you don’t get it” are rare. This isn’t a surprise.
- jonbtuba - Monday, May 17, 10 @ 1:57 pm:
Let this post stand as a reason why cuts alone are insufficient. Hopefully our education system will avoid the same fate.
- One of the 35 - Monday, May 17, 10 @ 1:58 pm:
Rich:
It’s a disease! Much worse than West nile Virus!
- wordslinger - Monday, May 17, 10 @ 1:58 pm:
Yeah, sorry, we’re not unique. What a blow to our collective self-esteem.
No magic beans for the states.
- Be honest - Monday, May 17, 10 @ 1:59 pm:
Just stop making promises you can’t afford. Be Honest.
- Siriusly - Monday, May 17, 10 @ 2:14 pm:
Yes, we’re not alone - but we are the best at being the worst. No state has a bigger deficit as a percentage of its GRF budget, I believe.
- Montrose - Monday, May 17, 10 @ 2:15 pm:
*Just stop making promises you can’t afford. Be Honest.*
I would add, just stop pretending the deficits will get fixed without new, significant revenue. Be honest.
- Pot calling kettle - Monday, May 17, 10 @ 2:27 pm:
It’s my understanding that if taxes are cut to zero, we will have an infinite revenue stream.
These folks just haven’t cut taxes enough to achieve the dream.
- Be honest - Monday, May 17, 10 @ 2:28 pm:
Yes. Agreed. But you can not tax your way to making these pensions affordable. It is unfair to ask tax payers to pay for pensions that don’t exist in the real world.
- Yellow Dog Democrat - Monday, May 17, 10 @ 2:34 pm:
=== It is unfair to ask tax payers to pay for pensions that don’t exist in the real world. ===
And its unwise to undermine our state pension system without recognizing that a better pension is the trade-off for lower wages.
The average teacher in Illinois earns a salary of only $61K…that’s with an average of 12.5 years of professional experience and 50% with Master’s degrees.
Public sector doctors, lawyers, nurses, engineers…pick your profession, they’d all make more in the private sector.
- Be honest - Monday, May 17, 10 @ 2:41 pm:
Maybe that’s a good way to go.
- Mary, Sterling - Monday, May 17, 10 @ 2:43 pm:
Yellow: so are teachers part of a trade(unionists) or professionals?
Well, at any rate, the poor dears are not going to be able to collect those big pensions in IL in the future. Nor are they going to be able to retire at 55. All with no accountability.
We’re flat broke, and you can’t raise taxes enough to cover our unfunded ‘obligations’.
Suck it up, Teach: tough times are coming for you. Join the club.
- Pot calling kettle - Monday, May 17, 10 @ 2:50 pm:
==It is unfair to ask tax payers to pay for pensions that don’t exist in the real world. ==
In the real world, employers MUST PAY 6% for social security. When the State pays 6%, we can talk about what’s fair.
- George - Monday, May 17, 10 @ 2:57 pm:
Pot is right.
The state could always reduce its pension benefits, and then be forced into paying social security for those teachers.
Which would, *cough*, costs us more.
- Obamas' Puppy - Monday, May 17, 10 @ 3:09 pm:
Hey “Be Honest” go teach in an inner city classroom and tell me how great your salary and pensions are. Should we just privatize? Wal - Mart education for gangbangers? That is the way to teach our kids - right? What a revolution in education. “Be Honest” get real.
- Logical Thinker - Monday, May 17, 10 @ 3:09 pm:
Fine.
Get the teachers over to the social security system and you’re right that it would cost more in the short-term. However, long-term, the state would shed the legacy costs associated with the pension which would save far more.
Additionally, it would put everyone in the same bucket as it relates to social security and therefore, more sensitive to the problems that program is going to have long-term.
Look, there are no magic beans and no cure-all solutions. We’re in for some very tough times ahead as we try to reboot and reset the broken systems of the past. The first step is to get everyone on the same page/field which gives everyone the same perspective on how to best start solving the problems.
- Rod - Monday, May 17, 10 @ 3:10 pm:
Really Rich I thought the article about CA was perfect. It is just like IL none of our candidates have a realistic plan for the budget either. Gov. Quinn, knows full well there will be no income tax increase, yet that is repeated over and over again as the solution.
Brady in his new TV ad says “We have to tighten our belts to survive. I know we will succeed. As long as we have a blue print.” The only blue print the Senator seems to have is his call to “fumigate state agencies.”
One candidate reduces state employees to cockroachs and the other wants to tax everything. The future of IL is so bright we all need to put on our sun glasses.
- Anonymous - Monday, May 17, 10 @ 3:11 pm:
Pot, I think you missed the point. If taxes are cut to negative numbers, and everyone gets a refund, than Illinois’ state revenue growth will skyrocket, right?
- Responsa - Monday, May 17, 10 @ 3:18 pm:
Mort Zuckerman touches on the third rail–and what the states in deepest fiscal doodoo have in common.
http://www.usnews.com/articles/opinion/mzuckerman/2010/05/14/the-crippling-price-of-public-employee-unions.html?PageNr=1
- VanillaMan - Monday, May 17, 10 @ 3:19 pm:
Unlike the other states facing budget problems, Illinois has a corruption problem, remember? It is in the news, and has been in the news for a long time. So, you try to solve this budget problem with a group of public officials viewed by many Illinoisans as being corrupted beyond repair. Illinois is in worse shape than the other states facing fiscal calamity, except California.
So, please do not try to fingerpoint at other states with similar fiscal challenges, because we have a boatload of political clowns voters do not respect, making things worse. Don’t point to other states that do not have the parade of gubernatorial perps that Illinois has, and claim we’re in the same boat.
Don’t even pretend Illinois is similar. Ask the “Tonight Show”, “Late Night”, the “Daily Show” and other popular talk shows if Illinois is merely selected from this list to laugh at. When opinionators claim we’re not much different than Minnesota, New Jersey, and Indiana - they are denying reality.
- Rich Miller - Monday, May 17, 10 @ 3:23 pm:
Vman, New Jersey doesn’t have a corruption problem? New York? C’mon.
- VanillaMan - Monday, May 17, 10 @ 3:34 pm:
Our corrupted officials are celebrities. Illinois to New Jersey is like comparing “Avatar” to “Revenge of the Mushroom People”.
- Rich Miller - Monday, May 17, 10 @ 3:35 pm:
Celebrities or not, there is a reality here that you are ignoring.
- Really?? - Monday, May 17, 10 @ 3:35 pm:
Governor Christie is making a career of attacking teachers in NJ to justify cutting their pensions. I think he would have been fine if he just limited himself to critcizing the union, but he is strongly going after teachers now. While people may not like unions, they do like teachers. Especially white, suburban parents with children in schools. He is really making a mess of things out there.
- Really?? - Monday, May 17, 10 @ 3:37 pm:
Just as an FYI, the former chairman of the New Jersey Senate Budget and Appropriations committee is currently in jail on corruption charges. As are the former vice-chair and another former member. So yes, NJ faces corruption.
- Judgment Day Is On The Way - Monday, May 17, 10 @ 3:47 pm:
“And Christie was receiving national plaudits for his budget cutting, but no longer. his approval rating at home has plummeted to the low-30s in just 2 months.”
Actually, Cristie is still getting the plaudits. And as to his approval ratings, sounds like he’s getting his approval ratings down to around Pat Quinn levels.
At least Cristie isn’t out there trying to hire cronies to be “Canoe/Kyacking Czars”.
And when and IF Christy has to go to the taxpayers asking for a tax increase, he’ll be believable, unlike what we have going on here.
- John Galt - Monday, May 17, 10 @ 3:59 pm:
YDD:
“And its unwise to undermine our state pension system without recognizing that a better pension is the trade-off for lower wages.
The average teacher in Illinois earns a salary of only $61K…that’s with an average of 12.5 years of professional experience and 50% with Master’s degrees.”
Very true, but to be fair, teachers work about 10 months of the year. So pro-rated up to a full 12 months, that’s about $73K per year. And to a larger point, I think much of the “stability” comes from the much lower likelyhood that a person would actually get fired or “downsized” if they work for the government. Plus the whole retiring at age 55 thing…
A lot of this crisis is a combination of:
1) The corruption tax.
2) Politican’s inability to make the tough choices. To be fair, this is because despite what we say, we all want “stuff” the government provides without actually paying for it. When the occasional politican stands up and tells us this can’t happen, we un-elect them.
3) This has resulted in our addiction to “free stuff” or more precicely borrowing and leaving our kids with the tab. You could say unsustainable pension contracts are part of the cause. Or you could say this addiction lead the legislators to not fund the pension plan so as to use the money for more immediate gratification “free stuff” programs and thus the unsustainable pension system is merely a symptom of the problem. Either way you slice it, it’s our collective expectation that we get something for nothing (or $3 worth of benefits for only $1 worth of taxes).
- Bubs - Monday, May 17, 10 @ 4:11 pm:
Here’s the scary part: all those states pulling these crisis moves are in better financial shape than Illinois.
“Deferring” the pension payment is just a PARTIAL fix. Only about $10 billion more to go . . .
- Rich Miller - Monday, May 17, 10 @ 4:15 pm:
===all those states pulling these crisis moves are in better financial shape than Illinois. ===
Um, no. NJ has a higher per capita deficit. California has the highest dollar deficit. Etc.
- Montrose - Monday, May 17, 10 @ 4:16 pm:
**Our corrupted officials are celebrities. Illinois to New Jersey is like comparing “Avatar” to “Revenge of the Mushroom People”.**
Just because our politicians engage in corruption with a certain flair, it does not mean our peers are utopias of transparency and honesty. We are just lucky enough to get a good floor show with our maleficence.
- SUE - Monday, May 17, 10 @ 4:47 pm:
For years we have heard that existing levels of pension accruals are constitutionally protected for existing employees- where are those opinions from the law firms which challenge these assumptions- if the pension funding levels for existing employees can be challenged lets get the issue in front of the legislature and have a meaningful debate
- Jake from Elwood - Monday, May 17, 10 @ 4:53 pm:
Every so often our CFB host gives us a national view of issues and shows us that Illinois, although screamingly dysfunctional, is not the only state where politicians doubletalk and common sense takes a walk.
Thanks for adding some perspective once in awhile.
- wordslinger - Monday, May 17, 10 @ 5:06 pm:
VMan’s correct, there’s a lot of corruption in Illinois. It all starts when you have someone on a government payroll not putting in a full day’s work.
- Rich Miller - Monday, May 17, 10 @ 5:10 pm:
Sue, passing a bill that you believe is unconstitutional is not exactly best practices.
- George - Monday, May 17, 10 @ 5:18 pm:
1) The corruption tax.
I remember when they tried to cut the corruption tax, and it went down 107-0.
- Retired Non-Union Guy - Monday, May 17, 10 @ 5:49 pm:
Rich, re NJ corruption vs IL … my former boss at the State came from NJ … when he came here, even with the NJ background, he didn’t understand IL politics and was shocked by it … and this guy’s dad used to have pols in his pocket back in NJ!
- wordslinger - Monday, May 17, 10 @ 6:04 pm:
In regards to the worst local corruption in the United States, without going too far out on a limb, I think it would be hard to top the Outfit’s influence in the Cook County courts
The Outfit had pull on the local, state and national levels, but it had a hammer in the 1st Ward, the Cook Countyl Democratic Party and the courts
As most of us learned in the Greylord prosecution, Marcy, D’Arco and Roti ran the courts across from the courts at Counselors Row for 30 years. Everyone knew what was going on. They didn’t even try to hide what they were doing.
Handsome Harry The Hitman Aleman died yesterday, the first American to be convicted in double jeopardy, courtesy of The Supremes.
Running the courts from across the street while you eat lunch, every day for 30 years? That’s power, and that’s unbelievable corruption.
- 47th Ward - Monday, May 17, 10 @ 7:11 pm:
Good memory Wordslinger,
I’m not sure “had” is the right way to describe the Outfit’s influence over judges in Cook County. Some might say “has” is better, and substitute a new ward in place of the old 1st ward. But that’s for another day.
And since Aleman’s first trial was fixed via the Outfit-connected judge, he was never in jeopardy. At least that’s the legal reasoning that resulted in his retrial and successful conviction. Aleman sure took a lot of secrets to his grave, but I suspect he’s answering for his life’s work right about now and there is no way to fix his current trial.
- wordslinger - Monday, May 17, 10 @ 7:25 pm:
I understand Harry didn’t truly face double jeopardy, but he got convicted in a second trial on the same charges he’d previously been acquitted, thanks to the Supremes. The great GOP hope, Jack O’Malley, took credit for that.
If you haven’t, read Cooley’s book. He’s a stone-cold, lifelong liar, but the stuff that’s corroborated is heavy. The stuff that’s not will curl your toes, especially if your last name is Burke.
- Moving to Oklahoma - Monday, May 17, 10 @ 7:27 pm:
Forensic Audit. Then if we need to raise taxes do so. Until the waste and corruption is eliminated or at least an effort to do so is put into place then the people of Illinois should not send another dime to springfield.