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* There is a definite cost to piling up debt…
While Illinois continues its biggest borrowing spree in recent years, it is paying a steep premium for loans because of its failure to significantly address its financial crisis, observers say.
In peddling another $900 million in Build America capital projects bonds on Wednesday, Illinois could face interest costs of about $9 million a year more than if the state were in better financial shape. The extra costs would total about $225 million over the life of the bonds.
The annual hit may not seem like a huge sum compared with the state’s $25 billion budget. But it’s more than Gov. Pat Quinn’s $8 million in cuts to the Department of Natural Resources, for example, or his $8 million in cuts for veterans programs.
And while I sometimes disagree with Laurence Msall, he’s on target here…
“The financial uncertainty of the state and the continued failure of the General Assembly and the governor to address the problem are having very negative consequences for the business climate,” said Laurence Msall, president of the nonpartisan Civic Federation. “Businesses are not willing to invest in a state when they cannot predict the long-term tax policy and fiscal conditions.”
Businesses want stability. Illinois’ government is completely in doubt at the moment. Because Bill Brady isn’t the best candidate the GOP could’ve fielded, nobody really knows what will happen in November. And that means nobody knows what will happen after that in Springfield. The impeachment and removal of Rod Blagojevich has put everything on hold because the current governor has no public mandate for his budget proposals. Nobody voted for higher taxes last time, except maybe that ten percent who cast their ballots for Rich Whitney. More from Miles White, chairman of Abbott Park, Illinois-based Abbott Laboratories…
To address its budget crisis, state officials need to cut spending, especially by finding ways to reduce their commitment to employee pensions, said White, the Abbott chairman. Even if a commitment to cutting spending is demonstrated, they may still need to raise taxes to help eliminate the deficit, he said.
It’s not that they’re wholly opposed to tax hikes, it’s that they want to know what the heck they can expect to see.
* And I’ve been wondering a whole lot lately whether this sort of thinking is just wishful fantasy…
“You can’t afford to decimate the social safety net or fire all the two-year teachers,” meaning the most recent recruits, said Vaught in a phone interview. “You have to use strategic borrowing until times get better.”
But what if things don’t get better for a few or more years? Can we afford to keep this base spending at these levels and pay off the accumulated debt when things turn around? I’ve heartily fought this goofy “Illinois is Greece” comparison, but without a much faster turnaround than anyone is predicting, this spending is simply not sustainable.
I think what we need to do soon is come up with a list of programs that could be cut or should be preserved and ask all gubernatorial candidates whether they’d be in favor of cutting any or all of them and why. Maybe that’s too detailed for campaigns to deal with, but we need to do something here, so let’s put our heads together today and talk about this.
* Meanwhile, Bill Brady had an actual idea this week…
In answering a question, Brady said he would support shifting social welfare funding to business training in low income neighborhoods.
Thoughts?
* Related and a roundup…
* John Cullerton: Senate Dems have provided Quinn new budget tools
* Lending crisis may hit libraries - Funding cuts put interlibrary loans at risk
* Brady heats up local Tea Party: “We can only bring jobs back to the state by sustained revenue growth through deregulation and lower taxes, not by additional burdens on our citizens and businesses.”
* River Forest plans sales tax referendum in November
* Don’t kill the messenger: Don’t blame the schools. Don’t blame City Hall. Don’t blame the County or the cops. The elimination of programs, the layoff of staff, the decisions not to replace or repair, all falls at the feet of our State Legislature and Governor Pat Quinn. It really is that simple.
* Legislators: Crisis has brewed for years
* Harlem Township to get its share of motor fuel tax
* Quinn’s plan for Asian carp: Send them to China
* Quinn: Send Asian carp back to Asia
* Company to get grant for selling Asian carp
* Is 30 million pounds a lot of carp? Yes: The upside? Creation of 180 new jobs. Export revenues for Illinois. And fewer carp. To be precise, 30 million fewer pounds of carp by the end of 2011.
* Illinois job plan stalls amid inaction
* State probes crooked cop’s pension
* New Ill. laws aimed at dishonest contractors
* State panel to look into Metra
* State Committee to Look into Metra Finances, Operations
* Bill would license agents for student athletes
* Illinois State Fair competitions dealine is near
* Gov. Quinn expands duties of livestock advisory board
posted by Rich Miller
Wednesday, Jul 14, 10 @ 11:48 am
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*In answering a question, Brady said he would support shifting social welfare funding to business training in low income neighborhoods.*
What does that even mean? I am sure the Tea Party folks loved it, because it plays to their assumptions that to use income supports is to be lazy. What “social welfare” spending would he cut? What is this “business training”? Would they do classes on how to start your own puppy gas chamber?
It is statements like this that show, once again, Brady just does not understand the complexity of the problems vulnerable people face.
Comment by Montrose Wednesday, Jul 14, 10 @ 12:00 pm
- Brady said he would support shifting social welfare funding to business training in low income neighborhoods. -
I think calling that an actual idea is giving it a whole lotta credit…
Comment by Small Town Liberal Wednesday, Jul 14, 10 @ 12:01 pm
This is why candidates should keep their comments to the ethereal, you know, like hope and change. Doesn’t matter what a candidate says, it is taken apart and ridiculed by the opposition. It makes no real sense to get specific no matter how much folk demand it. Just stick with the hopium. Plenty of time to get specific after you are sworn in.
Comment by dupage dan Wednesday, Jul 14, 10 @ 12:06 pm
Rich shoots, he SCORES!
This is an excellent concept:
“I think what we need to do soon is come up with a list of programs that could be cut or should be preserved and ask all gubernatorial candidates whether they’d be in favor of cutting any or all of them and why. Maybe that’s too detailed for campaigns to deal with, but we need to do something here, so let’s put our heads together today and talk about this.”
If a study were non-partisan (virtually impossible, but we can dream) and each program subjected to a rigorous cost-benefit analysis (which should be a rule for any initiative passed by the GA) we could start making our way to a solution to the financial woes of the state.
As a hard core conservative, and one predisposed to disagree with any tax increase, if the GA made REAL cuts to spending, implemented for at least a year and with continued efforts to keep cutting, I could support a temporary tax increase to close the deficit and reduce the debt. I would also like to see a “sunset” provision in any new tax that would take a 2/3 majority of the GA to continue.
I also believe in rainbows and unicorns.
Comment by Cincinnatus Wednesday, Jul 14, 10 @ 12:08 pm
Are the asian carp being exported or deported?
Comment by Excessively Rabid Wednesday, Jul 14, 10 @ 12:10 pm
*It makes no real sense to get specific no matter how much folk demand it. Just stick with the hopium.*
You do remember Obama has exceptionally detailed policy ideas and plan to go with the hope and change rhetoric, right?
If Brady had a clear message coupled with thoughtful substance to back it up, I would have much more respect for him. I would probably still disagree and criticize, but at least them it would be a substantive conversation.
Comment by Montrose Wednesday, Jul 14, 10 @ 12:11 pm
Is Brady planning to take the Meals on Wheels money that keeps granny in her home instead of assisted living and give it to a job training program?
Comment by Aldyth Wednesday, Jul 14, 10 @ 12:15 pm
Yeah, Obama “has” detailed policy ideas and plans. Just didn’t talk much about them during the campaign. And that’s what we’re in right now, a campaign. Basic campaign strategy 101, Don’t get specific, stay general. Frustrating for the pundits but gets results. Remember, those who voted for RB (not me, BTW) bought his campaign rhetoric twice without really looking at his background and resume. All they really knew is that he wasn’t a republican (like George Ryan) and that was enough for them. Kinda like now - people know Brady is not a democrat. Enough for them.
Comment by dupage dan Wednesday, Jul 14, 10 @ 12:17 pm
“You do remember Obama has exceptionally detailed policy ideas and plan to go with the hope and change rhetoric, right?”
Absolutely correct, but a vast majority of the independents either didn’t know them or believe that he would do them, or chose to ignore them in light of him being “the first mainstream African-American who is articulate and bright and clean and a nice-looking guy” (Don’t blame me, that’s Biden talking).
Now that Obama is in office and people have seen the effects of his policies, independents are leaving him in droves and his approval ratings have tanked.
Comment by Cincinnatus Wednesday, Jul 14, 10 @ 12:18 pm
dupage dan - Oh cry me a river Dan. Brady is constantly calling out Quinn on every single action he takes, but offers zero plans for the actions he plans to take. So yes, when he makes a vague reference to what may be the genesis of an idea, he’s going to get ridiculed for it. Go give him a hug if you want, but stop whining here.
Comment by Small Town Liberal Wednesday, Jul 14, 10 @ 12:21 pm
Cincinnatus & DD-
As much as it pains me to admit it, you are right about avoiding specifics being the politically savvy thing to do. It is a good campaign move on Brady’s part.
I guess I am with Cincinnatus in believing in rainbows and unicorns in my hope that a campaign can be a conversation about substantive plans and ideas.
And, for the record, I am almost as frustrated with Quinn as I am with Brady on this point.
Comment by Montrose Wednesday, Jul 14, 10 @ 12:28 pm
Let’s keep this to Illinois, please.
Comment by Rich Miller Wednesday, Jul 14, 10 @ 12:33 pm
Brady just threw out some red meat for the full mooners. It means nothing. He’ll mealy-mouth it if pressed.
Comment by wordslinger Wednesday, Jul 14, 10 @ 12:40 pm
“In answering a question, Brady said he would support shifting social welfare funding to business training in low income neighborhoods.”
This “idea” is as meritorious and meaningful as supporting “less meanness and more niceness.”
– MrJM
Comment by MrJM Wednesday, Jul 14, 10 @ 12:41 pm
Wasn’t there a discussion of monetizing the Asian carp in this blog many months ago?
Perhaps someone in the Governor’s office read this blog and capitalized on this good idea.
Now if we harvest the fish to extinction, do we have to restock the rivers?
Actually I believe the harvest tonnage is way out of proportion as is the number of prospective jobs, but since it a private project any single job created will be an asset to the state.
Comment by plutocrat03 Wednesday, Jul 14, 10 @ 12:49 pm
Our future is not bright.
We have people in office right now running for re-election whose job it is to lead this state government in a manner that is sustainable. Our future is not bright because they have failed to do this.
Instead, they have repeatedly spent beyond our means and have bankrupted us. We can’t file bankruptsy, so we have to fix it. Common sense is clear. You don’t expect the people who broke our government’s back to know how to do anything else but break ours. No one wanted this. They would have prevented it if they could. Our current situation clearly demonstrates that they couldn’t even prevent our fiscal calamity, they obviously can’t fix it either.
So, what do you do? You vote for the people who are NOT in elected office to replace the failures.
So, our incumbents were entrusted with our votes to lead us towards a bright future without bankrupting us, and they have failed. That’s sad. If we vote to re-elect them, they can believe that their political careers don’t depend upon how badly they run our governments. They will have no incentives to fix our situation. They will have no voter mandate to fix our situation. They will do once again, what they have done before - sit on their hands except when fingerpointing at others when we get hit harder by our fiscal calamity.
We know what we have right now. They hope we are suckers that will vote them in again. This year we have to clearly demonstrate to them that there is a limit to how accepting we are of their perpetual mismanagement, failed leadership and bankrupting policies. That we hold them accountable.
We vote each and every one of them out of office November 2nd. Since their common sense is so lacking, and has been proved repeatedly to be so lacking, we cannot allow this suspension of reality to continue, by using our common sense.
We need a bright future, this is how we start again.
Comment by VanillaMan Wednesday, Jul 14, 10 @ 12:49 pm
Crushing state debt and unmet pension obligations are real long-term problems. The Wall Street Journal and Financial Times have written several series of articles pertaining to the poor performance of state, county and municipal bonding debt and the inability of some government entities to either repay or refinance said debt. If one major municipality - Detroit was discussed as the most realistic possibility - defaults on its bonds and declares bankruptcy, bond holders and traders may panic and call in their debts or they too could face financial ruin. When people in D.C. clamor about China “calling” our debt, that’s a real possibility. Voters should never dismiss the warning shots fired by such business and civic organizations over Illinois’ financial status, especially our bonding woes.
Comment by Team Sleep Wednesday, Jul 14, 10 @ 12:51 pm
VanillaMan is right, as usual. I formerly believed that term limits would deny us of experienced leaders that we need in government. Over the past few years, I began to realize that there are more qualified people to serve in government than there are available positions. I am getting closer to William F. Buckley’s thoughts that he would rather be ruled by the first 535 names in the phone book than Congress.
The time has come: TERM LIMITS NOW.
Comment by Cincinnatus Wednesday, Jul 14, 10 @ 1:05 pm
Rich says: “I think what we need to do soon is come up with a list of programs that could be cut or should be preserved.”
I quite agree. And although it will take an enormous amount of effort — and many years to implement — let’s talk about it a bit today.
Let’s begin by considering Illinois demographics in the broadest of brushstrokes. Our population is creeping up, but not by much. Were it not for immigration, we’d be a net outflow state. We’re also steadily graying: young adults in particular seem to be moving away.
Accordingly, consider — as the tiniest of sketches — higher education.
If the population of traditionally college-aged young people is static or even seems likely to shrink — then can we really afford all of our public universities going forward?
In other words — has the time come to (gasp!) slim down or even (gasp! gag!) mothball one or more of our universities?
There’s a subset to this, too. Can we continue to afford some of the programs our universities offer?
For example, we have three public law schools — U of I, SIU, and NIU. And we have a glut of unemployed lawyers. Has the time finally come to slim down to just U of I for public law?
(Full disclosure: I’m an NIU law graduate. And I remain very grateful for the tip-top legal education I received there. Personally, I’d hate to see the place close. But I’m counting beans today, not wallowing in sentiment.)
Ditto medical schools. U of I has four campuses and additional satellites. SIU has two campuses.
They do wonderful work. They are cherished assets of their host communities. But — but — but — can we afford them all?
So how do we make these horribly difficult — and, I freely admit, politically dead-on-arrival (at least for the present) — public policy choices?
We have to develop assessment and implementation mechanisms where we carefully evaluate our public needs — and then collectively/figuratively hold hands and jump.
Remember the military base closure commissions? The Pentagon has gone through several permutations with these. The blue ribbon types come in and do the meticulous analysis, and then Congress goes with a straight up-or-down vote on a recommended list. There is pain, there is inequity, there is dysfunction, there is dislocation — but the bases get closed in stages, and life goes on.
So back to the higher ed example. The GA establishes something akin to a base closure commission. There’s analysis. There are hearings. A set of recommendations is presented. And ideally (ideally!) the members of the General Assembly hold hands and jump — excruciatingly painful as that surely will be.
I could go on with other examples — but you get my drift.
Yes, the time has come. Call it — “Rightsizing Illinois”.
Full disclosure (continued): I’m on the November ballot as the Green Party candidate for state treasurer.
Comment by Scott Summers Wednesday, Jul 14, 10 @ 1:16 pm
==and one predisposed to disagree with any tax increase==
That statement is why your ideas and proposals should not be taken seriously.
Comment by The Doc Wednesday, Jul 14, 10 @ 1:44 pm
I like the idea of presenting gouped budget areas (social services, prisons, police) together with their federal match, revenue generating abilities etc and asking the current caidates what they would cut.
I also like the CA professors idea of lalowing States to borrw from the fed treasury aainst future federal match dollars. Thus we do not increase the over all defficit and we can dig ourselves out now. It means the state will have to fill in those smaller holes in future years, but the savings for not having to service more debt, getting better rates on curent bonds etc would more then offset the negative. it would also require il To run tight budgets.
Comment by Ghost Wednesday, Jul 14, 10 @ 1:44 pm
STL,
I fail to see anything in my post that passes for whining. Got your glasses on?
Maybe your self-righteousness got the better of you.
Comment by dupage dan Wednesday, Jul 14, 10 @ 1:52 pm
- Doesn’t matter what a candidate says, it is taken apart and ridiculed by the opposition. -
Poor Bill Brady can’t say anything without people making fun of him, thats whining.
Comment by Small Town Liberal Wednesday, Jul 14, 10 @ 2:16 pm
- The Doc - Wednesday, Jul 14, 10 @ 1:44 pm:
==and one predisposed to disagree with any tax increase==
“That statement is why your ideas and proposals should not be taken seriously.”
I love the way you have picked that snippet out of a sentence that read:
“As a hard core conservative, and one predisposed to disagree with any tax increase, if the GA made REAL cuts to spending, implemented for at least a year and with continued efforts to keep cutting, I could support a temporary tax increase to close the deficit and reduce the debt. I would also like to see a “sunset” provision in any new tax that would take a 2/3 majority of the GA to continue.”
It is “serious minded” people like you that caused the problem we are in. Anyone who says that the problem with state government is ONLY the lack of revenue refuses to see the obvious problem associated with spending. Profligate spenders of your ilk (on both sides of the aisle) are the problem. People who cannot acknowledge and adapt to changing situations, like you, are the problem. People who never saw a spending program they didn’t like, like you are the problem.
Try opening your mind for a second and you may realize that if you take every dime of the “rich” in Illinois, there would still be budget problems.
And it’s people like you that refuse to even consider the opinions of others that stop any hope of compromise in the state. Of course, your superior knowledge of everything and everyone’s opinion make you the perfect choice to determine how to close the deficit. Unfortunately for all of us, you are probably unelectable for a million reasons.
Comment by Cincinnatus Wednesday, Jul 14, 10 @ 2:16 pm
STL,
You are simply wrong. You don’t seem to be able to read plain english. I was merely explaining that ANY statement made by ANY candidate is picked apart by the opposition. That is the job of the opposition. Any candidate wishing to avoid such would do well to avoid specifics. Are you so blind you can’t see plain strategy? No - apparently you would see something that isn’t there. That, sir, is the definition of a delusion.
Comment by DuPage Dan Wednesday, Jul 14, 10 @ 9:18 pm
What exactly is “Business Training”? Whose going to run it? Community colleges? How are the students going to be housed and fed? Where is the start up capital going to come from? I think this is Republican pablum, because to do it you would need a program… and Brady is agains government programs. But let’s try to envision this… bicycle cart vendors… Sam’s Club memberships… city licensing fees… cold drinks on hot days cheaper than stores… questionable food… sales tax collection… door-to-door sales… Amway…
OK - let’s just raise taxes a little and fund community colleges so they can do a better job at what they do… nawwwwww.
Comment by FDR Wednesday, Jul 14, 10 @ 11:56 pm
Scott Summers: UIC is jammed packed. It’s difficult to get the classes you need at the undergraduate level. The ladders to graduate studies are few and being cut one by one leaving Illinois residents behind. I don’t know about the law school job market, but if there are no jobs, why are people going to law school? And even if there are no jobs, isn’t it better to have people in school rather than say… pushing a vending cart? Why do all these non-public law schools continue to exist? I’m glad you when out on a limb and made a real suggestion, but I think you need to answer some of these questions. Also, I’m not so sure that closing universities doesn’t exacerbate the “graying of Illinois” rather than adapt to it. How do you gauge this?
Comment by FDR Thursday, Jul 15, 10 @ 12:14 am
If this is true:
“ABC News has reached out to a number of states about spending on stimulus signs and learned the state of Illinois has spent $650,000 on about 950 signs and Pennsylvania has spent $157,000 on 70 signs. Other states, like Virginia, Vermont, and Arizona do not sanction any signs.”
Then the future for Illinois is very bleak indeed! Other than Quinn hoping to get help for his campaign from Obama, why would Quinn authorize such frivilous spending during our state’s worst fiscal crisis?
Signs? We don’t need no stinkin’ signs!
;)
Comment by Will County Woman Thursday, Jul 15, 10 @ 7:45 am
WCW,
God, I don’t believe I am about to say this, but in Quinn’s defense, the signs were a requirement if you accepted Porkulus money.
Comment by Cincinnatus Thursday, Jul 15, 10 @ 9:03 am