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* Former Gov. Jim Edgar echoes what many of us said over and over last spring: Not nearly enough emphasis was being placed on the budget mess because of the intense fight over ethics…
“To me the big issue was not ethics, it was finance,” Edgar said.
I asked if he meant campaign finance, and he said no, government finance. He said lawmakers, pressured by the media, missed a unique opportunity to actually do something about the state’s crippled economy and sinking budget.
“Last year I think the media blew it,” Edgar said. “Last year was a huge disappointment. I thought something positive might happen, not ethics, just making government function again. And it didn’t happen. Last year nothing happened. It was just a huge disappointment.”
It’s not right to completely blame the media for the failures. The leaders could’ve found a way to end the ethics debate far earlier, instead of allowing it to shove aside the budget until after the end of May - when a three-fifths majority was required to pass anything.
Still, I can’t argue too much with him. Edgar’s conclusion was that last spring was “one of the worst sessions, if not the worst session I’ve ever seen.” True dat.
* Speaking of the budget, let’s revisit the Chicago Tribune editorial board’s budget cutting proposals. Greg Hinz obtained some revealing quotes this week…
Civic Committee President R. Eden Martin told me that it is true, as the editorial posited, that trimming state employee benefits via later retirement and other shifts would save roughly $20 billion in coming decades, allowing the state to trim its annual pension payment by $2.1 billion.
But, Mr. Martin added, Illinois’ unfunded pension liability was most recently estimated at around $80 billion, so cutting $20 billion still would leave a $60-billion hole. The cut suggested by the Trib “doesn’t save that kind of money,” he said.
In other words, Illinois still would have to do something else to close the hole — like raise taxes.
There’s more to it than that, as subscribers know, but I can’t fault the Trib for not tackling the entire unfunded issue all at once. This is a crisis that simply cannot be solved today.
More…
At the Civic Federation, President Laurence Msall agreed that cutting most state operating expenditures 7.2% to 2007 levels would indeed save $2.5 billion a year. But extending those cuts to grade and high schools — and applying them to state aid to municipalities, as the Trib proposed — would be extremely painful and politically difficult, he added, placing pressure on local governments to raise their property taxes.
Those proposed cuts to local governments were described this way in the Tribune’s editorial…
This subsidy gives municipalities a free ride: A dollar from Springfield is a dollar they don’t have to conserve, or fight citizens to raise in local taxes.
That’s some pretty harsh language, particularly in an era when revenues are drying up and more people are in need of more services. Here’s a roundup of related municipal revenue stories for today alone…
* Gurnee eyes hike in phone tax; Increase to 6 percent would give $650,000 boost
* [Gurnee] Mayor blames previous fiscal decisions for tight village budget
* [Waukegan] Mayor warns of more layoffs
* Carpentersville trustees forgo public works addition
* Mayor: Belvidere ‘struggling’ with budget for FY2011
* State owes Oneida $21,000
* Union members challenge layoffs at CWLP
* Carbondale looks to cut energy costs
* County officials taking 35 percent pay cuts on state-mandated duties
* Illinois libraries waiting for state to pay up
Putting pressure on municipalities to trim costs is a laudable goal, but the Tribune seems to be on board with the idea that government ought to be practically strangled to death.
Thankfully, though, the Tribune isn’t making their editorial a must-do for legislators, which would mean precisely the sort of thundering editorials that Edgar complained about above…
The Tribune’s John McCormick, who wrote the editorial, noted that the piece was titled “A no-tax-hike option,” and stated in its second paragraph that, “We haven’t voted yes or no on this.” In other words, he said, it was just a discussion starter.
It has certainly started a discussion. I’ll give them that.
posted by Rich Miller
Wednesday, Mar 3, 10 @ 8:56 am
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The Tribune - like many Republicans - would like nothing more than to strangle government - at all levels - to death and then point to its failure as proof of their belief.
Comment by Stuck with Sen. CPA Wednesday, Mar 3, 10 @ 9:03 am
Maybe if we cut the Tribune’s ad revenue they will learn to conserve the money I think should be conserved.
Oh, wait, we kinda tried that. The company cut journalists, not executive bonuses.
Comment by Carl Nyberg Wednesday, Mar 3, 10 @ 9:06 am
“Last year I think the media blew it,” Edgar said. “Last year was a huge disappointment. I thought something positive might happen, not ethics, just making government function again. And it didn’t happen. Last year nothing happened. It was just a huge disappointment.”
Where in the Illinois State Constitution does it read that it is the media’s responsibility to make state legislators address public issues?
Blaming the media, or the voters, does not direct blame where blame should be directed. It belongs squarely with those elected and sworn into office to do the jobs they were elected and sworn to do.
Now we have our useless politicians and flunkeys blaming our newspapers for being useless and flunkeys?
Anyone who thinks our state government is not doing it’s job because of the Chicago Tribune needs to get their head examined.
Comment by VanillaMan Wednesday, Mar 3, 10 @ 9:07 am
First we strangle the gov’t. Then we can examine its’ head.
Hey, VM, since the bums gotta be voted out, and Brady isn’t someone you can vote for, who else? I can’t vote 3rd party, that’s a waste. I wrote in Vallas after he lost the primary but that, too, was a wasted vote. How do we vote out the incumbents without a viable candidate?
Comment by dupage dan Wednesday, Mar 3, 10 @ 9:14 am
== I can’t fault the Trib for not tackling the entire unfunded issue all at once.==
No, but we can fault them for suggesting that the problem can fixed without a tax increase. It’s irresponsible, and their continued rhetoric on this score actually makes it worse to fix the problem, because people buy into it, want to believe it, and then blame the few legislators who are willing to stand up and say that it needs to be done with taxes.
You’re right that they’ve started a discussion. I just don’t think it was the discussion they intended to start.
Comment by Don't Worry, Be Happy Wednesday, Mar 3, 10 @ 9:17 am
The Senate and Assembly leadership have an unbelievable phalanx of defense in retired elected officials, the media, and business. I can’t believe how much water they carry for the leadership.
I’m too new to this, but is this the way it has always been?
Comment by Brennan Wednesday, Mar 3, 10 @ 9:18 am
One more thing. I’m not sure that Edgar deserves his long time reputation as the fiscal master. It’s becoming clearer every year that the biggest problem we’re facing is the pension ramp up. This was Edgar’s baby, and in fact he go out of his fiscal crisis by basically deferring it all until now. We’re trying, in part, to pay the bills of his administration.
Comment by Don't Worry, Be Happy Wednesday, Mar 3, 10 @ 9:20 am
“Numbers” stories, like budgets, always get short shrift in the general press. Not sexy enough. Some of the print folks fight the good fight, but their editors for the most part are indifferent.
It’s absolutely the press’ responsibility to inform the public on these issues. Every journalistic professional society has a noble mission statement declaring just that.
As far as state government goes, that’s why the press gets office space under The Dome and reserved front row seats in each chamber.
Comment by wordslinger Wednesday, Mar 3, 10 @ 9:32 am
I the we’re all in this together department, the decline in private sector pensions, leaving vast numbers of citizens reliant on what they can save plus Social Security for their retirements, has no doubt eroded support for additional taxes to shore up public sector pensions among taxpayers. Everybody’s pension freeze diminishes mine, and so on.
Perhaps our political “leaders” should have paid a little more attention when the private sector
began eviscerating its pensions over the last decades.
Meanwhile, perhaps what governors across the country should be doing is pressuring the feds
to rescue state and local pension systems the way the did the banks. Some combo of loans and grants could do it. Although they’d probably be facing the same lack of enthusiasm from a national audience, it’s worth a try. And before a state pension system actually went under, I bet the feds would step in. But I don’t know how big a crisis it would take.
Comment by cassandra Wednesday, Mar 3, 10 @ 9:45 am
While I agree that it is the responsibility of the press to inform, the Governor and the leadership in the GA sets the agenda. The press allowed themselves to be distracted by political leaders unwilling to deal with the harsh realities of the fiscal crisis.
Comment by Pot calling kettle Wednesday, Mar 3, 10 @ 9:46 am
If the legislature fails to reform the Pension system to force new hires into contributory 401 K type plans,Perhaps it is time to look at imposing caps on how high an annual pension benefit can be paid to individual beneficiaries- given what the trib reported today on superintendant salaries, should the state be paying these folks 70 percent of final average compensation with three percent annual inflation raises. The pension plans shouldn’t be used to provide multi-million dollar retirement packages at the state’s expense
Comment by Sue Wednesday, Mar 3, 10 @ 9:54 am
Wait a second! Last spring’s session was even worse than the overtime in hell of 2007?
Comment by Levois Wednesday, Mar 3, 10 @ 9:54 am
Greater scrutiny needs to be given to the notion by many Republicans that part of the solution can be “simply” rolling back expenditures to some prior year’s level, e.g., FY 2007. With the overwhelming number of employees being unionized, the pay for those folks has gone up perhaps 12% or more over this time. And the new additions to the unions often received a sizable bump in salary as well. So rolling back appropriations to FY2007 levels will mean either getting a “giveback” from the union of 12-15% or eliminating 12-15% of staff. Given how understaffed many governmental functions are right now, cutting another 12-15% of employees would create chaos.
Comment by Anonymous Wednesday, Mar 3, 10 @ 9:54 am
There’s no doubt that the Trib and McCormick cooked the books in coming up with their “no-tax-option” and kudos to Greg Hinz for calling them and John McCormick out.
The Trib claimed the State could cut FY11 and FY12 pension funding by $2.1 billion, if all of the pension reforms they proposed were adopted, saving $20 billion. That claim was undocumented and the Civic Committee wanted no part of it.
The Trib further claimed the unfunded pension liability would be reduced to $75 billion. Taking that as a fact, the annual interest charge at the 8.5% actuarial assumption is about $6.4 billion.
Beyond interest, actuaries also include the Normal Cost of benefits being earned by current employees as well as amortizing the unfunded liability for benefits already earned, in deriving the “annual required contribution”, which is significantly more than required by the 1995 pension funding plan.
The State’s required contribution — under that infamous 1995 “Plan” of Edgar that pushed all the pain to the future including the last 3 fiscal years — is about $4.5 billion (GRF only), excluding Pension Obligation Bonds.
So the $4.5 required FY11 contribution is almost $2 billion LESS than the accrued interest — the $6.4 billion charged to the State — and the Trib wants to cut $2.1 billion from FY11’s required amount!
Bottom Line: Trib is proposing a pension holiday, tried to hide that fact by citing the Civic Committee (which wanted nothing to do with the bogus amounts claimed by the Trib), all in its argument that the State doesn’t need an income tax hike.
BTW, the Trib failed to note there IS a revenue problem. Between actual FY08 collections and the forecasted FY11 revenues, GRF is down by $3 BILLION.
BTW #2, the Trib’s hypocrisy is unbounded since when they had their own revenue problem, what did they do? They’ve doubled their prices in two years, declared Ch 11 bankruptcy, significantly reduced their news coverage, and went to a tabloid format. Source: Chicago Tribune’s Tower Ticker:
http://newsblogs.chicagotribune.com/towerticker/2010/01/chicago-tribune-to-increase-mondaythroughsaturday-newsstand-price-sundays-and-subscribers-unaffected.html
Comment by "Outing" the Trib Wednesday, Mar 3, 10 @ 9:56 am
Is it even possible to rollback personnel costs when the unions agree?
If health insurance companies are willing to accept payments at 2008 levels in 2010, I expect a bunch of private sector employers would like to take advantage of this too.
Comment by Carl Nyberg Wednesday, Mar 3, 10 @ 10:03 am
How do we vote out the incumbents without a viable candidate?
You, oh brilliant one, are asking the number one question of the 2010 election season. We are so screwed.
The Status Quo won last month. The Democrats needed to nominate new faces, and the Republicans needed to nominate old faces. The difference is that the Democrats are the Status Quo, while the GOP have been out of office so long, their Status Quo is no longer status, but experienced enough to do the jobs. The Party In Power can steer newbies until they get their experience and leadership legs, while the opposite exists for the GOP. The GOP has been out of power so long, it has no rudder to steer, so they needed to go with the closest folks they had to incumbants.
Illinois wants change, not lunacy. The nominated Democrats aren’t change, and the GOP nominees are loonies, (except for Kirk, and Topinka is an experienced loonie). So we are so screwed this Fall.
Pity Illinois. Yeah - Louisiana had Katrina, but at least in her aftermath, Louisianans got change from their failed Katrina-ear government. Yeah - New Jersey has a similar economic crisis, but New Jerseyans got change last November, and a serious budget crisis is being addressed.
Look at us. We got stuck with Ryan. Then Blagojevich. Then Burris. ON TOP of a bankrupted state government full of “leaders” unwilling to admit we are bankrupted. We are so screwed.
Comment by VanillaMan Wednesday, Mar 3, 10 @ 10:04 am
As much as I respect the process and admire many of its members, I think it’s time we think about voting out all incumbents in the November election.
Comment by GA Watcher Wednesday, Mar 3, 10 @ 10:08 am
Put all the headlines in you want but none of this makes a bit of difference to the average person until it effects them personally. My unemployment, my school, my pension, my surgery, my park, the snow in my street, my rent, my property tax bill, my cigarettes, my family. Everything else is a stereotype of those people, crooked politicians, do nothing state workers, tax eaters, unions, left wing libs, right wing teaers, (add your own choice). Talk finance and watch most peoples eyes glaze over because it is simply too big to comprehend. Talk scandal, crime, fire, sports, it’s at a scale most people can follow and relate to. Media needs to get this to an understandable scale of how it will and does effect the average person in their hometown.
Comment by zatoichi Wednesday, Mar 3, 10 @ 10:10 am
Edgar is one of the culprits in the budget mess, along with subsequent governors and legislative leaders. They sweetened pension and health benefits without paying for them, leading to the current mess. The one constant in all those years of slowly bankrupting the state: House Speaker Michael Madigan.
Comment by Dem observer Wednesday, Mar 3, 10 @ 10:35 am
Rich, you seem to be be of the opinion that the state should not cut or eliminate revenue sharing with local governments. In my opinion, it is one of the first cuts that needs to be made. Local governments are not helpless. like the state, they are empowered to tax, and I kind of think that the taxing decisions and use of the resulting revenues should be made at the level of government closest to those who pay the tab and use the services. Is there some good argument for not letting the locals use their own taxing powers? The state’s interests would be best served, I think, by the state adequately funding those things that are the state’s, such as our state colleges and universities!
Comment by Skirmisher Wednesday, Mar 3, 10 @ 11:12 am
Skirmisher, your logic is circular. Universities, like local governments, can raise revenues on their own. So, using your own logic, universities should be cut first.
Comment by Rich Miller Wednesday, Mar 3, 10 @ 11:14 am
Rich,
Just how do universities raise money on their own? As far as I can tell, there’s two sources of income….state appropriations and tuition dollars.
Other than increasing enrollment, universities would seem to have very little independent control over their financial destinies.
Comment by Deep South Wednesday, Mar 3, 10 @ 11:20 am
DS, you answered your own question. Tuition.
Comment by Rich Miller Wednesday, Mar 3, 10 @ 11:21 am
I hope that George Ryan runs for office again to get this mess the state is in resolved. He is the last governor that could bring both sides together. I see no other person on the ballot that could come close.
Comment by reality Wednesday, Mar 3, 10 @ 12:12 pm
Blagojevic brought both sides together as well. LOL
Comment by Pot calling kettle Wednesday, Mar 3, 10 @ 12:29 pm
As we debate the underlying pink elephant in the room about the size of governemtn think of this:
the current finacial meltdown was largely caused by the banking industry which is unregualted and fought very hard, with the help of NcCain and others, to stay unregualted after the last financial meltdown.
We are where we are today because of our demand to limit govt role and keep it out of the market and private business.
Perhaps we shoudl consider that the market left o its own is not trustworthy of operating well and their needs to be a balance between govt, the provision of real and properly staffed supported regualtion, and over saturation.
We fear govt corruption and greed so much that we brought donw our entire economy by looking the other way while private individuals pursued their non-govt greed and corruption.
What govt is needed to protect an care for use is a better mantra then get rid of govt it wastes money. The Govt can nto come close to the wast and dmg caused by private banking, polluters, etc.
Comment by Ghost Wednesday, Mar 3, 10 @ 2:08 pm
Blago couldn’t bring two ends of a string together
Comment by reality Wednesday, Mar 3, 10 @ 4:40 pm
As Dad would say, Blagojevich couldn’t find his way out of a phone booth.
The pension problem started during the Thompson administration. The state of Illinois has been balancing the state budget out of our purses and wallets for the past 20 years. It was a conscious policy decision: http://news.illinois.edu/news/05/0418pension.html
I really don’t think the federal government should bail out the state. The state should do what it should’ve done 20 years ago: raise taxes.
RE: Illinois university budgets, how efficient are they? Does anyone know? Are layoffs the only measure available to them in meeting their budgets? What kind of economies of scale do they employ?
Comment by Emily Booth Wednesday, Mar 3, 10 @ 9:52 pm
@dont worry be happy-
you are so correct. Edgar played to the media more than anyone. When he brought his people from SOS to agencies under the Gov, they were like kids in a candy store with the higher salary levels and tried to run complicated Federal programs like the widget processing that is done at SOS. Most of them retired in the ERI in 2002, but some and the mentality remains embedded at some agnecies at lower levels, most recently the example of conducting surveillance in bars and monitoring tardiness instead of really dealing with financial issues in HFS.
Comment by really? Thursday, Mar 4, 10 @ 6:38 am