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* I called around yesterday to find out why a provision about possibly seeking federal backing of state pension debt was slipped into a bond offering last week and was told that it never should’ve been included and that it got by the folks who monitor such things. Whether that’s true or not, it’s proving to be an embarrassment…
The No. 4 House Republican in Congress Tuesday shot down Gov. Quinn’s trial balloon of possibly seeking federal help to ease the state’s crushing $86 billion pension shortfall.
Quinn floated the idea in the fine print of his 2012 budget proposal last week, but U.S. Rep. Peter Roskam (R-Ill.) began laughing Tuesday when asked about the chances of a federal pension bailout for Illinois and other states with retirement systems that are financially underwater.
“There is no appetite in the House for a federal guarantee for a state pension obligation. None. It’s a non-starter,” said Roskam, the U.S. House’s chief deputy whip and highest-ranking Republican in Illinois’ congressional delegation. […]
“Notwithstanding any media reports to the contrary, the state of Illinois has no current plans to request a federal guarantee on any of its bonds or pension debt,” said Kelly Kraft, a spokeswoman for Quinn’s Office of Management and Budget.
“To date, we have not requested any guarantee,” she said in a prepared statement.
And they never will request it, unless DC does a complete 180. What a stupid move.
* I mentioned this numbers problem with Gov. Pat Quinn’s boasts last week on the Illinois Lawmakers TV program after the governor’s budget address…
Gov. Pat Quinn often boasts that Illinois leads the Midwest in job growth. He made the claim at least twice last week and said in his budget address that Illinois is enjoying “an impressive recovery.”
What he doesn’t say is that by another measure, Illinois ranked eighth out of 12 Midwestern states for job growth last year.
The Democratic governor sticks to raw numbers when he discusses jobs. He says, correctly, that Illinois added 46,300 jobs in 2010, more than any other state in the region.
But Illinois also is the largest state, so it might be expected to see bigger job swings. Another way to measure is by looking at the number of jobs compared to the population.
Illinois ranked fourth in the nation for job growth last year. But factor in population, and it ranked 24th - the middle of the pack.
* One of the big problems with Gov. Quinn’s elimination of all non-Medicaid funding for substance abuse treatment programs is that defendants without serious criminal records can often avoid prison by entering a treatment program. Quite often, those people are young, male and poor. Those folks don’t qualify for Medicaid. So, they’ll end up behind bars and learn how to be better criminals. Great…
According to The Illinois Alcohol and Drug Dependence Association, the measure means 80 percent of patients will lose substance-abuse services. It also will mean lost jobs.
An estimated 55,000 people will have their substance-abuse treatments ended, about 32,000 of them under age 21.
“It’s been one crisis after another the last three years,” Ron Howell, executive director of Recovery Resources, said. “We’ll just have to wait until the smoke clears.”
* Ralph Martire looks at the new statutory spending caps and what they mean…
Most items under the cap are hard costs, like debt service and pension contributions, over which neither the governor nor General Assembly have any discretion. Those hard costs increased by more than $1 billion from last year, meaning something had to give. The governor chose [to cut] social services, the circuit breaker and Medicaid reimbursement rates. If he didn’t, he would have had to cut education and public safety. In other words, no good choices were available.
* And the Rockford Register Star swings and misses…
Compared with Illinois’ finances, Wisconsin is on easy street, but you wouldn’t know it from the approaches the governors of these states are taking.
Illinois’ money woes are the worst in the nation, according to a study by the National Conference of State Legislatures. Illinois is at least $13 billion in debt and can’t pay its bills in a timely manner. Add in the worst unfunded pension liability in the country and you get a truly bleak picture.
Wisconsin is not well off, but its hole is not nearly as deep. Yet, from the way Wisconsin Gov. Scott Walker and Illinois Gov. Pat Quinn are acting, you’d expect the reverse to be true.
Walker is acting with a sense of urgency to fill a projected $3.6 billion budget hole. Wisconsin has a biennium budget process, which means the budget hole is a two-year one.
That NCSL study was conducted before the tax hike, so Illinois’ budget deficit is considerably smaller now. Also, the highly respected National Journal took a look at Wisconsin Gov. Scott Walker’s budget proposal and found it needlessly focuses on the controversial stuff…
Wisconsin Gov. Scott Walker has sparked massive protests by proposing to curtail public-employee unions and give his administration the power to cut back health care and sell state public utilities through no-bid contracts.
But while Walker argues that his budget-repair legislation must be passed soon to avoid job cuts, the most controversial parts of his bill would have no immediate effect.
The state’s entire budget shortfall for this year — the reason that Walker has said he must push through immediate cuts — would be covered by the governor’s relatively uncontroversial proposal to restructure the state’s debt.
By contrast, the proposals that have kicked up a firestorm, especially his call to curtail the collective-bargaining rights of the state’s public-employees, wouldn’t save any money this year. [Emphasis added]
* Roundup…
* High yield may up demand for $3.7B Illinois bond: According to a term sheet, initial price talk for the longest maturity in the offering, dated 2019, is about 2.40 percentage points above comparable Treasurys, for a yield of about 5.85%. That is about 1.79 percentage point more than comparably rated nine-year debt from cigarette maker Philip Morris International Inc., which traded at 0.61 percentage point above Treasurys on Tuesday. It is also 0.05 percentage point tighter than the initial price target on the deal for that maturity.
* Family shelter in dire straits
* Charter school says its exempt from IL labor law: A Chicago charter school that received millions of dollars in public money is now arguing it is a private institution that does not have to follow an Illinois law giving public school workers the right to unionize.
* Ameren asks ICC for electric, gas delivery charge hikes
* Regional school chiefs plot strategy to fight extinction
* School leaders worry about mergers, bus cuts
* Proposed cuts worries local districts
* Unit 5 considering more staff cuts
* Higher car insurance minimums rejected by House committee
* IL panel weighing high school concussion rules
* Evanston leaders prepare for Springfield trip
* More electric cars give consumers options
* Wisconsin gov. warns of layoffs
posted by Rich Miller
Wednesday, Feb 23, 11 @ 10:34 am
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So the pension language in the bond offering “slipped by” Morgan Stanley, Goldman, Sachs & Co. and Loop Capital Markets — the joint book-running senior managers — eleven other underwriting firms, and, presumably, outside bond counsel as well as the administration’s own internal bond, pension and budget advisors.
Whoops.
Comment by wordslinger Wednesday, Feb 23, 11 @ 10:48 am
===“slipped by” Morgan Stanley, Goldman, Sachs & Co. and Loop Capital Markets===
No, it slipped by the administration.
Comment by Rich Miller Wednesday, Feb 23, 11 @ 10:59 am
“Also, the highly respected National Journal took a look at Wisconsin Gov. Scott Walker’s budget proposal and found it needlessly focuses on the controversial stuff…”
The WI governor may now be focussing on the the things and considering changes that Illinois should have looked at 10 years ago. While the proposed WI changes may not pay off in the first year, it may be that Walker is trying to prevent WI from being the basket case IL is, in which case it isn’t “needlessly” but essential. Illinois is a true leader in fiscal and governmental mismanagement, we have years of experience.
Of course, WI, OH, and IN can just go along with the status quo, and say, as many liberals imply, that the current baseline spending and methods of operation cannot be even tangentially considered for change since it is now perfect in every way, shape and form. No consideration of pension and healthcare funding changes for state workers (including the overpaid, double-dipping bastards in the GA and elsewhere in state and local government). No consideration of the people currently receiving state benefits.
Roughly one-quarter of Illinois residents receive some sort of Illinois government benefit, and that does not include the state workers. Our Medicaid benefits are more than those dictated by the Federal government. All Kids is abused by non-residents. But we cannot even consider fine tuning these programs because anyone doing so is called hateful, or uncaring.
Who represents the taxpayers of this state and of WI, IN and OH? Fleebagging legislators who give ultimatums, ignoring voters intents and shirk their duties? Pat Quinn, who “accidentally” pulls a fast one looking for Federal bailouts? Springfield Democrats who have controlled this state for years and now are presiding over financial collapse?
Flame away, dear readers.
Comment by Cincinnatus Wednesday, Feb 23, 11 @ 11:04 am
Cincinnatus - I would venture to say that 100% of Illinois residents receive some sort of benefit from Illinois government.
Comment by Go Wisconsin Dems Wednesday, Feb 23, 11 @ 11:12 am
Rich, I believe everyone who is part of the underwriting group, as well as administration people, sign off on a bond offering Official Statement. In other words, I don’t think it “slipped by” at all. It was meant to be in there.
Comment by wordslinger Wednesday, Feb 23, 11 @ 11:12 am
wordslinger,
Precisely.
Go Wisconsin Dems,
I should have said direct transfer payments since you seem intent on splitting hairs to avoid the real issue here.
Comment by Cincinnatus Wednesday, Feb 23, 11 @ 11:23 am
If you should have said that then why didn’t you?
What is the real issue? Your posts are generalizations with no facts or details and you are admittedly a right-winger. Therefore I don’t see a constructive conversation happening with you.
I was just trying to be more specific about an abstract statement of yours, that’s all.
Comment by Go Wisconsin Dems Wednesday, Feb 23, 11 @ 11:39 am
“The WI governor may now be focussing on the the things and considering changes that Illinois should have looked at 10 years ago. While the proposed WI changes may not pay off in the first year, it may be that Walker is trying to prevent WI from being the basket case IL is, in which case it isn’t “needlessly” but essential. Illinois is a true leader in fiscal and governmental mismanagement, we have years of experience.”
Illinois DID look at it 10 years ago, or at least sometime in the past. Wisconsin is trying to catch up to what Illinois has already has in place for years. Illinois government employees for years have paid pension and health benefits at the rates Walker is proposing.
“requiring government workers to contribute 5.8 percent of their pay to their pensions, much more than now; and requiring state employees to pay at least 12.6 percent of health care premiums (most pay about 6 percent now).”
As a local gov/IMRF guy, I paid 4.5% for IMRF pension and 20% of health care premium.
Comment by anon Wednesday, Feb 23, 11 @ 11:46 am
**Who represents the taxpayers of this state and of WI, IN and OH? **
YEA! Who’s representing the taxpayers while Governor Walker attempts to sell WI’s energy assets to anyone he wants, without taking bids? Or when Governor Walker is given the authority to make unilateral changes to medical programs in WI with essentially no legislative oversight?
Oh wait… that wasn’t what you were talking about?
Comment by dave Wednesday, Feb 23, 11 @ 11:50 am
I don’t know enough about Wisconsin to be sure, but the impression I’ve had is that their budget process involves all the departments submitting budget requests for the equivalent of hot and cold running caviar, and then they get a stiff dose of reality from the governor and legislature and normalcy breaks out again. They started the current biennium with a “$6 billion” “deficit”, but were set to end it with a surplus until Walker’s pay-to-play giveaways in the special session. Bearing in mind that they only had about $1 billion in federal stimulus funds, that’s a pretty impressive job of whittling down some pretty big requests. Now they’re heading into the current biennium with a “$3.6 billion deficit” even though revenue is growing at about four to five percent a year. Sounds to me like this is another case of departments putting in big-time requests they don’t seriously expect to be fulfilled. Any governor, I presume, and not just Walker, would be whittling those figures down to something sensible without too much pain.
Walker on the other hand is simply ginning up the purported “crisis” to further his pay-to-play agenda and take out personal vendettas on people.
Comment by Angry Chicagoan Wednesday, Feb 23, 11 @ 12:07 pm
Another Quinn statement another Quinn lie. It is to be expected now that Quinn isn’t telling the truth.
Comment by Fed up Wednesday, Feb 23, 11 @ 12:15 pm
I don’t think Chicago Math and Science Academy’s argument holds any water. They may be a private organization, but they run a public school which is what charters are supposed to be in IL. Note they do not run a private school that accepts vouchers, which would make their argument logical, but a public school. They don’t want to live under those rules, they can give their charter back to the city and let someone else run a school.
Comment by cermak_rd Wednesday, Feb 23, 11 @ 1:14 pm
Yeah, WI, you ain’t got no problems at all (when compared to Illinois). Why get your shorts in a bunch, anyway? You got plenty of room to let things slide until the stuff really hits the fan. Then you got something to worry about!
OK, so WI wants to prevent sinking as low as Illinois is right now and that’s wrong? I have many connections to WI and, generally speaking, they fear becoming another Illinois. The fear the corruption leaking over the border. Illinois is the bad example that our mothers warned us about. WI may be our northern nerd who listens to his mother. Kudos to them! To bad Illinois is the devils’ imp on the block.
Comment by dupage dan Wednesday, Feb 23, 11 @ 1:18 pm
–I have many connections to WI and, generally speaking, they fear becoming another Illinois. The fear the corruption leaking over the border. Illinois is the bad example that our mothers warned us about. WI may be our northern nerd who listens to his mother–
I’m sure Wisconsin Senate President Fitzgerald, his brother, Assembly Speaker Fitzgerald, and their father, recently appointed Wisconsin State Patrol Commander Fitzgerald (former Chicago cop, now making $105,000 grand a year hunting for Dem Senators) will do their best to keep Illinois-style politics of cronyism and nepotism out of God’s Own Country.
The Fitzgerald boys might want to take a look at that Walker/Koch Bros. deal outlined in “Forbes.”
Many of us have Wisconsin ties. My people, from Beloit, Stoughton, Janesville and Madison, have been in and out the Capitol for a week, rallying around the Gen. Hans Christian Heg statue (Norwegians, you see).
They “don’t fear becoming another Illinois.” They wish to remain a Wisconsin of LaFollette, and not of today’s GOP in the Old Confederacy.
Comment by wordslinger Wednesday, Feb 23, 11 @ 2:28 pm
sell the public owned utilities?
City water light and power has reguarly provided some of the lowest cost utility rates in the State. I shudder to imagine what would happen if it was sold to a for profit.
given the costs of utilties for most famlies, I would go the other way…build more public owned utilities
Comment by Ghost Wednesday, Feb 23, 11 @ 2:33 pm
@wordslinger — excellent.
Comment by Go Wisconsin Dems Wednesday, Feb 23, 11 @ 2:57 pm
For all his talk about jobs, Gov. Quinn seems to forget that all of the cuts he’s talking about to social services will result in massive job loss. I guess if it isn’t in a big corporation that makes lots of money the job losses don’t count.
Comment by Seriously??? Wednesday, Feb 23, 11 @ 3:01 pm
I think the pension funds should buy the pension bonds. The can sell other assets to purchase them since they will be low risk and default can’t happen.
Comment by Sam I am Wednesday, Feb 23, 11 @ 4:23 pm
wordslinger
Your paragraph about the Fitz clan is hilarious!
Comment by reformer Wednesday, Feb 23, 11 @ 7:11 pm