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* 29 states have increased taxes and fees this year alone. Click the pic for a larger image..
* Meanwhile, Illinois continues to drown in red ink. From the Tribune…
All the providers want is what the state owes them, but as Illinois faces a $4.6 billion backlog in bills and no money to pay them, most often what they get is just enough to survive. Enough to meet the next payroll, keep the doors open for one more month and make payments on loans keeping them afloat as they wait for the state to make good.
“Every day is a triage situation,” said comptroller spokeswoman Carol Knowles. “There is a limited pot of money.”
And the situation isn’t getting any better. Knowles said the state has bills dating as far back as seven months and the backlog is likely to “worsen during the next several months.” Gov. Pat Quinn’s budget director, David Vaught, has acknowledged the state will end the year where it started — owing nearly $6 billion in unpaid bills.
And it’s having a ripple effect on employment…
The Chicago-based nonprofit [A Safe Haven] has had to cut services and lay off workers
* Rep. David Miller, the Democrats’ comptroller nominee, outlined his proposal to deal with the problem if he’s elected…
Miller, a dentist from Lynwood, told the Tribune editorial board he would examine the backlog and move those owed money up in the line if they were about to go out of business and provide a unique service in the region, such as the only health clinic in a Chicago neighborhood or downstate Illinois county.
But Judy Baar Topinka didn’t approve of the plan…
“You can’t just group them into little sections of the state. That is social engineering, and that is unfair,” said Topinka, who lost a bid for governor against Democrat Rod Blagojevich in 2006.
Her idea…
Topinka said she would aim to provide more consistency in how the bills are paid so providers could count on them, even if they are months late. She said she would target human service providers to be up first after the state’s payroll and loan repayments are made under state law.
“You start with getting at those who are dealing with our most vulnerable citizens and try and give them something — if nothing else — predictability,” Topinka said.
Frankly, I think Miller’s idea is superior. And not just because he’s my cousin.
* More carnage…
More than 100,000 Illinoisans hoping for Monetary Award Program grants to help pay for college have been denied since funds ran out April 19. […]
Of the applicants denied a MAP grant, more than 70 percent indicated a community college as their school of choice.
Newly released U.S. Census Bureau figures show the percentage of Illinois children with health insurance grew between 2008 and 2009. But about 5 percent of Illinois children were still uninsured last year.
The national average is 9 percent. But if the Republicans win control and make good on their promise to severely roll back Medicaid coverage, we could see that number creep up.
Thoughts?
posted by Rich Miller
Tuesday, Sep 28, 10 @ 12:38 pm
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I will be curious to see what the GOP actualy doeswith its power. Its one thing to talk a good game, it another to carry it forward when you want to be re-elected.
It alos depeds on how many positions fall to the conservatives, there is a lot in play at present which could result in a lot of infighting within the GOP.
Comment by Ghost Tuesday, Sep 28, 10 @ 12:47 pm
Which is all just a way of saying once the General Opposition Party is no longer the opposition, things should get interesting for them.
Comment by Ghost Tuesday, Sep 28, 10 @ 12:47 pm
It’s about time, Rich, you announced your inherit bias towards David Miller! With that close family connection, we will all be watching for any more bias! (heavy snark)
Comment by Oswego Willy Tuesday, Sep 28, 10 @ 12:55 pm
Another headline….21 states don’t raise taxes or fees!!
Comment by Doug Tuesday, Sep 28, 10 @ 12:55 pm
I think Miller’s approach could open up a big can of worms for the state. It could open folks up for saying that X is getting money sooner than Y because of some factor that is not set in stone.
That can lead to all sorts of issues. If you take Millers approach there would have to be very hard and fast rules.
If you just said everyone is going to get paid X months in arrears it might make planning for those who are looking for the money easier.
Comment by OneMan Tuesday, Sep 28, 10 @ 12:59 pm
I see no reason to trust springfield with any more money or any democrat in illinois with anything. Free rides for seniors was a total unnecessary waste of money that no other state in the country does.
If things have to be cut, so be it.
Comment by shore Tuesday, Sep 28, 10 @ 1:01 pm
Some very interesting state numbers here. Blows a lot of theories out of the water.
For example, why did the states that raised taxes and fees experience revenue growth? According to some prominent folks, you raise revenues by cutting taxes.
Why does the great state of Texas, this month’s friendly economic pinup, have virtually zero revenue growth and a $4.5 billion deficit? Doesn’t their allegedly business-friendly climate lead to more revenues?
There are many more such examples, if you care to look.
Comment by wordslinger Tuesday, Sep 28, 10 @ 1:05 pm
I think Miller’s idea is excellent! As for children with health insurance, this is a no-brainer. The more children who receive consistent medical care when their young, the fewer health problems they may develop as they age.
Comment by Wensicia Tuesday, Sep 28, 10 @ 1:06 pm
Shore…huh?
Free rides for seniors was singularly a Blago initiative - not the GA.
And what, precisely, should be cut?
As always, thanks for your invaluable contributions.
Comment by The Doc Tuesday, Sep 28, 10 @ 1:09 pm
In our discussions of the state budget, we never hear anyone suggest that the reason there is a budget deficit is that we are spending in excess of our revenues. It appears that it is further assumed that every program currently funded remain in existence in perpetuity. Sorry folks, we can drain individuals of all of their money via taxes, and we would still have a structural deficit, and if we were to ever run a surplus, the politicians would increase spending to eliminate every dollar of the surplus.
I no longer care who is individually hurt because of a spending cut. Realize this: unless spending is brought under control, and government just plain does less than it is trying to now do, we will never see this state become anything other than the laughingstock it now is.
Cut Spending. Period.
Comment by Cincinnatus Tuesday, Sep 28, 10 @ 1:15 pm
–no longer care who is individually hurt because of a spending cut. Realize this: unless spending is brought under control, and government just plain does less than it is trying to now do, we will never see this state become anything other than the laughingstock it now is.–
So it’s better that people get hurt as long as we’re not a “laughingstock?”
Hmm, you’re going to have to define what a laughingstock is and why that takes precedence.
Whatever your plan is, devote a half page of paper with revenues and expenditures and let’s have a look.
Comment by wordslinger Tuesday, Sep 28, 10 @ 1:26 pm
Did a lot of Democratic legislators vote against free senior rides….or even advocate publicly against them?
I don’t find the “oh, that was just Blago,” excuse all that persuasive although I’m hearing it a lot. Understandable, but not persuasive.
Yo, Democrats. It wasn’t a third “Blago” party running the state these past 8 years. It was you.
Comment by cassandra Tuesday, Sep 28, 10 @ 1:26 pm
- we never hear anyone suggest that the reason there is a budget deficit is that we are spending in excess of our revenues. -
Hey, genius, no one has to suggest that because there would be no other way to have a deficit. I mean, what scenario would lead to a deficit other than spending more than you bring in? Maybe if someone robbed the government at gunpoint? The debate is over what to cut and how to increase revenue.
Comment by Small Town Liberal Tuesday, Sep 28, 10 @ 1:36 pm
wordslinger,
10% across the board with 20% reduction of personnel costs. Eliminate unions from public sector, stop “fair wage” contracting.
Comment by Cincinnatus Tuesday, Sep 28, 10 @ 1:37 pm
=== Sorry folks, we can drain individuals of all of their money via taxes, and we would still have a structural deficit, ====
Do you have the number ons on that? In 2002 Il had a total personal income of 549 Billion So we would have no structural deficit if we consumed 100% of income.
BTW for the anti IL crowd, IL is ranked 5 in the United States for personal income.
Since you underlying assumption that the structural deficit exceeds income is wrong, it appears your entire argument is without foundation.
Your argument that we must cut because we can not afford assumes we can not afford. We can afford, you are just advocating that we do not spend money in support of govt. Of course one of the primary purposes of our govt is to maintain order and support the markets. Criminals, drug problems, unregualted industry it turns are are bad for a thriving capitalist economy.
We can afford our current govt, the question is what do you think we should or should not be providing.
Also consider that one of the biggest drians on the economy is the lack of the States spending which drives the economy during down times and delays recovery.
Comment by Ghost Tuesday, Sep 28, 10 @ 1:44 pm
===Why does the great state of Texas, this month’s friendly economic pinup, have virtually zero revenue growth and a $4.5 billion deficit? Doesn’t their allegedly business-friendly climate lead to more revenues?===
I thought that was bogus until I looked it up.
Yes, it’s bogus. Texas is actually facing an $18 billion budget deficit.
Yikes.
So much for that model.
Comment by Rich Miller Tuesday, Sep 28, 10 @ 1:48 pm
Cincinnatus, I agree. Unions need to be eliminated from the public sector.
Comment by anon Tuesday, Sep 28, 10 @ 1:51 pm
Rich, I was going from this WSJ chart that has $4.6B.
http://s.wsj.net/public/resources/documents/st_STATEBUDGET100414_20100414.html
Comment by wordslinger Tuesday, Sep 28, 10 @ 1:52 pm
And you’ll break those contracts how?
Comment by Rich Miller Tuesday, Sep 28, 10 @ 1:53 pm
Cincy, those are barely talking points. Putting together a budget is a big deal. You have to drill a lot deeper on both sides of the ledger to have an informed opinion.
Comment by wordslinger Tuesday, Sep 28, 10 @ 1:54 pm
===Another headline….21 states don’t raise taxes or fees!! ===
Except many of those 21 did last year.
Or the year before.
Comment by Rich Miller Tuesday, Sep 28, 10 @ 1:55 pm
So if your a poorly run non profit that that is wholly dependent on the state to survive you should get money owed before a better run non profit that has been waiting longer to be paid. Maybe we should move these non profits ahead of State officers and legislatures in terms of getting paid. Maybe we would learn to budget better if the Gov and state legislatures were the last to get paid.
Comment by fed up Tuesday, Sep 28, 10 @ 1:57 pm
Labor unions and state employees appear to be the GOP’s new welfare moms for the 2010s.
Comment by ZC Tuesday, Sep 28, 10 @ 1:59 pm
===before a better run non profit that has been waiting longer to be paid===
If the better run nonprofit is providing the same sort of service as others in its area, I can easily see why a nonprofit that is the sole source for the service in an area ought to get its money first.
Comment by Rich Miller Tuesday, Sep 28, 10 @ 2:05 pm
ZC,
Remember that Clinton signed Welfare Reform, and there was a significant decrease in welfare moms. Maybe the same would hold true if the union influence in government were reduced using similar reforms.
wordslinger,
No kidding, putting together a budget is a big deal. It surprises me that Brady is often criticized for not presenting a detail budget to the voters, who would want to wade through such a thing at election time. Plus it is unrealistic to expect Brady to put such a thing together without a staff of department heads in place to do the actual grunt work.
That said, a 10-15% budget cut bogey would be my first priority. I would also task the department heads to see which contract obligations would need negotiation/elimination to cut an additional 10% from the budget. If the GA doesn’t support the proposals after trying to get them on board, fine. That’s what the veto pen is for.
Specific programs? How about AllKids? We still paying for illegals and people from out of state? Gone. Bus rides for seniors, either means tested or gone. I could go on for hours about specific programs that I think should meet the axe.
Which gubernatorial candidate is most likely to restrain Brady. Right now, we have Brady’s rhetoric against Quinn’s pandering performance. Choose one.
Comment by Cincinnatus Tuesday, Sep 28, 10 @ 2:10 pm
===and there was a significant decrease in welfare moms===
Because they put a limit on how many quarters you could collect the payments.
Comment by Rich Miller Tuesday, Sep 28, 10 @ 2:16 pm
For Miller’s great plan: So if I ran a tight business operation and saved money for difficult times, I should not expect to get paid what I am owed. The money should first go to organizations who are essentially going out of business. What business school teaches this model?
Comment by zatoichi Tuesday, Sep 28, 10 @ 2:20 pm
zatoichi, this isn’t about business. It’s about providing human services. If you use a pure business model, you completely defeat the actual purpose.
Comment by Rich Miller Tuesday, Sep 28, 10 @ 2:22 pm
Still think the way to solve this is pay all the bills before you pay elected officals. Somehow I think our budget problem gets solved then.
Comment by fed up Tuesday, Sep 28, 10 @ 2:31 pm
“She Topinka) said she would target human service providers to be up first after the state’s payroll and loan repayments are made under state law.”
And this idea is not social engineering?
Comment by vole Tuesday, Sep 28, 10 @ 2:36 pm
And, Rich, your point is:
http://www.usatoday.com/news/nation/2006-07-17-welfare-reform-cover_x.htm
Comment by Cincinnatus Tuesday, Sep 28, 10 @ 2:36 pm
===Still think the way to solve this is pay all the bills before you pay elected officals===
How about, instead of getting raises, they take a cut in pay every year the deficit increases? Would that provide some motivation?
Comment by Wensicia Tuesday, Sep 28, 10 @ 2:39 pm
@Cinci:
The contract reduction option you mention is already being done as we speak. Other cuts have already taken place and continue to take place. Why is it that people believe that cuts have not been made yet. There have been MASSIVE cuts in state government. We have now reached the point where someone will have to decide what further cuts get made - which will be things like eliminating state agencies or major programs - or which revenues to raise. The answer must be a combination of both.
Comment by Demoralized Tuesday, Sep 28, 10 @ 2:39 pm
Demoralized,
The voters do not believe, and never will in this environment, that state government size has been cut to the bone. And I mean the real bone, not some inflated amount pandering to special interests on both the left and the right. Once that was done, and with some real transparency in place, the voters would allow a revenue increase, if necessary.
However, our “leaders” must convince the people that the spending has been wrung out, or they will never be convinced to accept tax increases. Spending first.
Comment by Cincinnatus Tuesday, Sep 28, 10 @ 2:51 pm
This is exactly about business, human services or not. That saying of No Margin = No Mission applies just as well in the non-profit world as the for-profit. There are many human service providers who diversified their services across other revenue streams or decided not to provide a service because the basic costs were not covered. They are not 95% funded by the state. They are not eligible for expedited payments because they saved. Other groups decided to put every dime back to helping people, which is a great ideal, but now when tough times come they do not have the money to cover their ongoing costs. Their funding comes 90%+ from one source that cannot pay the bill. They are getting expedited payments because they have no money left for cash flow. Utilities, salaries, food, and rent/mortgages still need to be paid regardless of the tax status. Closures (ODC in Bloomington and TriCounty in Jerseyville) are happening and more will come along with mergers. Just because an organization provides human services does mean they can ignore basic business models.
Comment by zatoichi Tuesday, Sep 28, 10 @ 2:55 pm
We out here in the weeds really do understand that Quinn said he was going to reduce spending. But we also hear about no-layoff agreements (twice!), free retiree health premiums challenged then preserved, substantial contractual pay increases for unionized state employees, no hiring freeze, hefty raises for governor’s office staff, and so on.
So, it’s reasonable for us to ask, massive cuts in what? where? And let’s preserve the distinction between cuts and delayed payments.
According to Quinn all delayed payments for FY
2012 will be made by the end of the year. He’s the guv, so we have to take his word for it. This means that nonprofits will get their fy 10 money late but they’ll get it. So will there be an actual cut and how much will it be. We won’t really know until the books close at the end of December, by the way. Convenient for the party in power.
I’m sorry that nonprofits are not getting their money in a timely manner. But I don’t want my taxes increased for the remainder of my Illinois
residency, could be decades because nonprofits aren’t getting paid in a timely manner this year. That’s not a good deal.
It’s still the same problem as last spring. Who sacrifices? Who pays? Where exactly are those cuts, not counting delays. And why is there so much money available for no-layoff agreements and plump raises for state employees (even plumper for the governor’s staff) in this financial desert.
Comment by cassandra Tuesday, Sep 28, 10 @ 2:59 pm
Sorry, I mean fy 2011
Comment by cassandra Tuesday, Sep 28, 10 @ 2:59 pm
===So, it’s reasonable for us to ask===
You are not part of that great unwashed, Cassandra. You’ve been here for a very long time. If you don’t know what’s going on by now, you are the densest person in history. Please, start speaking for yourself.
Comment by Rich Miller Tuesday, Sep 28, 10 @ 3:03 pm
What is this “the voters do not believe” bs. You know exactly what was cut. It doesn’t take more than a quick visit to budget.illinois.gov to find out. Do you want me to do the reading for you?
Let me ask you Cinci, if a random voter said to you that they would vote for Quinn and a tax increase only if he made cuts, would you tell them the truth or just ‘misremember wrong’ about the actual cuts Quinn has made?
Comment by late to the party Tuesday, Sep 28, 10 @ 3:09 pm
Back on the original question - a combination of both approaches is needed. Get the “we’re about to close our doors” grouped covered initially. Then come up with a plan that lets businesses know when they might start seeing payments. It’s basic budgeting. When they are foreclosing on your house, you forego paying the credit cards and get the mortgage company some money. You then come up with a plan to regularly pay your debtors *something* until the debt is paid. Does the state really need a Dave Ramsey course on Financial Peace?!?
Comment by Anonymous Tuesday, Sep 28, 10 @ 3:19 pm
I actually dont’ understand why you couldn’t combine Miller and Judy’s ideas. They both have a lot of merit and their not that differnt from each other that you couldn’t do a variation of both.
Comment by Ahoy Tuesday, Sep 28, 10 @ 3:31 pm
First of all, I’m going to call out the crap that is generally allowed to sit out there with no response.
*Free retiree health premiums - it is true that this benefit has been part of the discussion on reducing state spending; however, unless the union is going away this is not a realistic solution at this time; how about we focus on reality
*substantial contractual pay increases for union employees - nothing new has been added to the contract; the increases are part of the current 4 year contract and until it expires it is what it is
*no hiring freeze - this is just a lie; a hiring freeze does not necessarily mean not being able to backfill positions as they become vacant; with the exception of a few places (like correctional officers) there are no new positions being created
*extended lapse period - your lack of understanding is most evident here; this has nothing to do with party and everything to do with payments to vendors; the purpose is to make sure that vendors do not have to go through the lengthy court of claims process to get paid; it’s gonna take 6 months of extended lapse period to avoid that scenario
I can help it that the general public is stupid or blind or both. Reality is reality. Those who refuse to deal with reality have no business involving themselves in solutions.
Comment by Demoralized Tuesday, Sep 28, 10 @ 3:36 pm
Simple answer…cut spending
Comment by Sueann Tuesday, Sep 28, 10 @ 3:41 pm
That should be “I CAN’T help it . . . “
Comment by Demoralized Tuesday, Sep 28, 10 @ 3:45 pm
Sueann just provided an example of the people I speak of - those who refuse to deal in reality.
Please realize I am NOT suggesting we don’t continue to cut spending. That alone, though, will not solve the current crisis.
Comment by Demoralized Tuesday, Sep 28, 10 @ 3:50 pm
late to the party,
What significant cuts has Quinn made considering that we are still billions in the hole, and there is no plan to balance the budget during our lifetimes? If Quinn had any credibility on cuts, and the voter said your hypothetical statement, I’d say vote for Quinn, ASAP.
Anon @ 3:31 pm,
The state’s past obligations should be met, no question. Whatever they are owed should be paid. These organizations must be considered for possible future elimination, and those organizations must plan accordingly if they are wisely run. If you were running one, and there was a possibility of elimination via their programs going away or being slashed, and if you consider your mission vital, would you not get new revenue other than from the state, or at least consider closing your doors?
But of course, most of the posters here consider ALL programs running out of Springfield somehow sacrosanct and never subject to sunsetting, and in most cases sunshine.
Comment by Cincinnatus Tuesday, Sep 28, 10 @ 3:57 pm
Cinci, ask a Human Service provider what cuts Quinn has made. They have cut almost $750 MIL. from grants and services. Ask a local hospital if DHS is still paying them for the uninsured they show up at their doors?
Comment by Give Me A Break Tuesday, Sep 28, 10 @ 4:08 pm
Demoralized-
Negotiating with employee unions is part of the job of being a governor. So far it appears that taxpayers have not come out well when Quinn and Co are in charge of them. Contracts can be opened by mutual agreement. We’re not talking about eliminating retiree health benefits here.We’re talking about charging something for a valuable benefit In today’s economy and given looming retiree health costs, in Illinois and nationally, neither the Quinn govt or the union are being realistic here.
As to extended lapse periods, I don’t oppose them at all, but it would be useful to have the final data in order to judge Quinn’s austerity claims. The economy is going to recover after all. Tax receipts will go up. So will charitable
contributions. But income tax increases are very likely forever, especially in a blue state.
I know the raises are contractual. Nothing sneaky here. But Democrats negotiated the last two rather generous AFSCME contracts. More importantly, if Quinn wins, they’ll be negotiating the next one.
Hiring freezes have different operational meanings in real life, I know. There are hard freezes and less draconian ones. But a hard freeze is needed until the state can figure out how much money it is going to have over the next few years. True emergency exceptions can always be made.
A final note-efforts to portray those of us who are extremely leery of an income tax increase as a small group of crazy right wingers who don’t understand government may be misplaced. In Washington, it’s not just Republicans who are pushing to extend the middle class tax cuts. It’s the Democrats, who won a huge victory two years ago. The message from the ground seems to be, we can’t afford to pay any more. Most mainstream political leaders seem to agree.
Comment by cassandra Tuesday, Sep 28, 10 @ 4:50 pm
Cinci -
You’re a smart guy…Probably smarter than me. I shouldn’t have to do the research for you. You may not agree with all the cuts or even think they are enough. That’s fine. Just don’t ignore the facts.
Comment by late to the party Tuesday, Sep 28, 10 @ 5:04 pm
-late to the party-
Do you mean the Furlough Days that Quinn made non-union employees take? And then turned them into paid vacation days calling them unpaid furlough days, and giving his staff raises up to 20% to cover the lost wages for furlough days that they will be paid for anyway?
Or do you mean the cuts that SIU is making to staff, and student services, while spending tens of millions on a new stadium, and millions more on new buildings?
Or perhaps the failed MGT Push program that was to save incarceration costs, and failed hugely, resulting in the need to hire more Executive Staff to see what went wrong?
Comment by So IL M Tuesday, Sep 28, 10 @ 5:12 pm
Prioritizing one agency over another just opens up a whole ‘nuther realm of possibilities for favortism and pay to play. Besides, why should the landlord to a State office lose his/her building to foreclosure because the State is half a year behind on rent? Where do cities fall in the list? Cities are months behind and provide police, fire and EMS. Seems like maybe they should get paid first as they are basic services and police and firefighters are being laid off across the State due to late payments from the State. Well, unless you’re disabled then you’d better hope that your particular agency gets paid first. Picking and choosing by priority and overlap sounds right, but if put into practice, it seems that it would be terribly flawed.
Comment by Shemp Wednesday, Sep 29, 10 @ 4:22 am