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* Earlier this year, US Sen. Mark Kirk came up with a novel theory about Illinois finances during a Senate committee hearing…
“As Greece has ruined the bond market of Europe, so could Illinois and California ruin the bond market of the United States,” Kirk said.
* But Ben Bernanke appeared to dismiss Kirk’s idea…
“We watch those (states) very carefully,” said Ben Bernanke, chairman of the Board of Governors of the Federal Reserve. “We also look at exposures of banks and other institutions to those states. We don’t see any immediate risk there.”
* This morning, Kirk released a report on Illinois finances that was somewhat accurate, but also out of date and, like his Greek theory, needlessly alarmist. For instance…
Illinois owes $8.3 billion in unpaid bills. That’s 10 times higher than the level in 2002.
Um, no. That number is way out of date. This is from a September report issued by the Illinois comptroller…
(T)he state ended fiscal year 2011 on June 30 with nearly $4 billion in unpaid bills dating back to January. When lapse period spending is included, the end-of-fiscal-year payment deficit balloons to $5.1 billion, which will be paid with fiscal year 2012 revenues.
* More from Kirk’s report…
Indeed, the State has put itself in a classic “debt spiral.” It borrows to cover deficit spending, so credit ratings fall and interest rates rise. Taxes go up but tax receipts still fall short because businesses aren’t growing and taxpayers are moving to other states. So, as if it were paying off a mortgage loan with a credit card, the government starts the cycle all over again by borrowing more and paying higher interest for the privilege.
Actually, there’s no new borrowing built into this fiscal year’s plan. And tax receipts are definitely not falling short since the tax hike.
* And even major budget players like Senate Appropriations Committee II Chairman Dan Kotowski are against more borrowing…
In the meantime, if the governor asks the General Assembly to borrow more money in the upcoming veto session, Kotowski said he would vote no.
“I wouldn’t support borrowing,” he said.
* Look, there’s no doubt that Illinois’ finances are not yet in order. Far from it. But as I’ve said time and again, it took the state decades to get into this mess, we cannot expect to get out of it in one year. It would certainly help if Gov. Pat Quinn were more committed to this goal, because the General Assembly can’t continue to do this on its own. And I’m not optimistic that the budget trend will remain. But Sen. Kirk should probably try using some updated numbers the next time he talks about his home state’s fiscal problems and avoid crying “Wolf.”
Also, the Tribune might wanna check Kirk’s numbers before it allows itself to be used like it was today.
* Chris Wills of the AP Tweeted another problem with Kirk’s report…
No specific recommendations.
* Related…
* A civil war is brewing inside the most influential conservative group in Congress: The Republican Study Committee, which has long served as the conservative policy nerve center for the House GOP, has been beset by infighting and disputes over the group’s mission… Alabama Reps. Jo Bonner and Martha Roby have dropped out of the group, as has Louisiana Rep. Bill Cassidy. At least one other, Illinois Rep. Adam Kinzinger, is in the process of leaving, according to a source familiar with his thinking. Bonner, who met with Jordan privately before he dropped out, said he’ll “be damned if I am going to sit by and watch our members fight against each other.” Roby, Cassidy and Kinzinger refused to comment on their departures. “There’s a bit of an überconservative environment that’s going on, and we can’t continue to shoot ourselves in the foot or have what I call a circular firing squad,” said Florida Rep. Allen West, a freshman member of the RSC who is remaining in the group.
* Jacksonville Developmental Center hearing moved to larger site: An Oct. 24 meeting of the legislative Commission on Government Forecasting and Accountability to hear testimony about the state’s plans to close the Jacksonville Developmental Center has been moved to the Bruner Recreation Center on the Illinois College campus.
* Mother Warns of Danger If Mental Health Facilities Are Closed: In 2008, Barb Carlson’s daughter, Jennifer, and three of her friends were killed when a woman diagnosed with schizophrenia set her Chicago apartment building on fire. A Cook County judge found Mary Smith not guilty by reason of insanity. During the trial, Smith’s family said they tried to get her help, but no one would take her. Carlson fears if Singer closes it’s a tragedy that could happen again. “I think he needs to consider the ramifications that this is going to cause” says Carlson. “I heard there is no plan in place to put people once they shut these facilities down. I can see down the road if we’re not careful the same thing is going to happen again.”
posted by Rich Miller
Tuesday, Oct 11, 11 @ 12:15 pm
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Kirk got his financial data from Morgan Fairchild.. er, Stanley. Yeah, that’s it.
Comment by Gregor Tuesday, Oct 11, 11 @ 12:19 pm
===No specific recommendations===
Typical of Illinois Republicans. Also, maybe Kirk should tell us what he plans to do with the jobs bill today, you know, one of the things he was elected to do. Last I checked, he was Senator Kirk, not Governor Kirk.
And assuming Senator Kirk falls in line with McConnell and votes to torpedo Obama’s jobs bill, what’s his plan for putting Americans back to work? It’s nice that he’s concerned about Illinois’ finances (but not concerned enough to offer any recommendations), but he should be focused on what’s happening in DC, not in Springfield.
Comment by 47th Ward Tuesday, Oct 11, 11 @ 12:25 pm
The smart vote is no on the Senate Jobs Bill, but that is more of a national issue than a State one.
The big problem for the State of Illinois is how to cut the overhead costs while maintaining essential services. Cutting townships as well as combining many of the taxing bodies would be a start.
Comment by Plutocrat03 Tuesday, Oct 11, 11 @ 12:44 pm
I think Kirk formed his “sovereign debt advisory board” just because it sounds real cool, and he gets to wear a crown.
Today’s Trib story was a pathetic, unquestioning puff piece. Geez, sometimes those guys don’t even phone it in — they just run the press release.
Kirk’s “sovereign debt advisory board” discovered that a lower credit rating translates to higher interest rates. What’s the next revelation, the sun comes up in the east?
I’m surprised Kirk didn’t mention that the mindless debt ceiling “crisis” manufactured by the deep thinkers in his caucus was the deciding factor in S&Ps downgrading of U.S. debt.
You know, something he could have lent his voice to and influenced in the U.S. Senate, where he serves.
Comment by wordslinger Tuesday, Oct 11, 11 @ 12:52 pm
Has Kirk ever let the facts get into the way of a good Grandstanding?
“My numbers may, or may not, be right, but they are, in fact, numbers, and that can not be disputed that they are, in fact … numbers”
Comment by Oswego Willy Tuesday, Oct 11, 11 @ 12:53 pm
OW, that was one of your funnier posts ever.
Comment by Rich Miller Tuesday, Oct 11, 11 @ 12:58 pm
I’m glad to see that our new Senator is first and foremost concerning himself with the problems he has no responsibility for fixing. Of course, we could sure use a few Senators to tackle the pretty severe nationwide unemployment problem, or address the poorly constructed trade deals that are making it worse, or tackle reforming the tax code, but those are a lot of difficult issues, and even worse, those are difficult issues that Sen. Kirk is responsible for. Better distract from the lousy job you’re doing by talking about how your state government is also doing a lousy doing. Keep punching down, Senator; you’re truly an inspirational leader.
Comment by 44 Tuesday, Oct 11, 11 @ 12:59 pm
I think you’re taking the report too seriously. This is about scoring points with the tea party to protect his right flank. Nothing more.
Comment by Shore Tuesday, Oct 11, 11 @ 12:59 pm
Shore, the man has a six year term. If he has to stoop to this crud less than a year into that term, he’s being incredibly goofy.
Comment by Rich Miller Tuesday, Oct 11, 11 @ 1:01 pm
“I don’t have any facts to back this up, but …” Herman Cain
Comment by RetiredStateEmployee Tuesday, Oct 11, 11 @ 1:04 pm
Thanks, Rich …appreciate it.
Comment by Oswego Willy Tuesday, Oct 11, 11 @ 1:04 pm
Shore, give us a heads-up when we should start taking Kirk seriously.
Comment by wordslinger Tuesday, Oct 11, 11 @ 1:05 pm
No One ever listens to CommandoMakeItUp anymore, but it is good that he continues to add to the legacy.
Comment by CircularFiringSquad Tuesday, Oct 11, 11 @ 1:07 pm
Classic Rich Miller…pick on a Republican who had the temerity to call out this state for what it is…disfunction junction. Keep on giving free passes (”well, technically it’s ONLY 4 billion”) to MJM et al.
Comment by Smitty Tuesday, Oct 11, 11 @ 1:20 pm
Smitty, bite me. You apparently aren’t around here much.
Comment by Rich Miller Tuesday, Oct 11, 11 @ 1:22 pm
as i noted during the campaign, kirk is an intellectual lightweight. sure, he’s good at grandstanding, but let’s not take it too seriously. he couldn’t pass a substantial piece of legislation if it were handed to him (which lobbyists are more than happy to do!) or chair a major committee — but at least he’s pretty. we knew we were getting another carol moseley braun when we elected him, so it’s really hard to expect too much.
not that we shouldn’t continue to mock him! he *is* in the senate, so we may as well be entertained by his stupidity…
Comment by bored now Tuesday, Oct 11, 11 @ 1:31 pm
Also, Smitty, it would help your case a bit more if your IP address didn’t show you were posting from Tribune Tower.
LOL
Comment by Rich Miller Tuesday, Oct 11, 11 @ 1:41 pm
–Also, Smitty, it would help your case a bit more if your IP address didn’t show you were posting from Tribune Tower.–
So the dude who wrote “disfunction junction” is a Tribbie? That explains a lot.
Comment by wordslinger Tuesday, Oct 11, 11 @ 1:43 pm
Probably the shoe shine guy
Comment by CircularFiringSquad Tuesday, Oct 11, 11 @ 1:44 pm
Kirk has the knack of appearing well-informed and moderate while he states falsehoods, and votes with the extremists. I count him among the truly gifted politicians.
Comment by walkinfool Tuesday, Oct 11, 11 @ 1:45 pm
Someone had better check whether he truly is the “Guardian of the Sweet Tooth of our Nation”–and if so, quickly switch the focus–again–to that important responsibility until all of this nasty stuff about numbers (who said there’d be math?) blows over.
Comment by Anonymous Tuesday, Oct 11, 11 @ 1:46 pm
1. one of the key sections of the kirk playbook is the go local agenda where he takes on issues which are generally not in his job description (things that city council members or state legislators or below would focus on) but which are politically useful particularly when you are a republican in blue suburbs. 7 years ago it was I think keeping porn out of libraries or something which plays well with moms and kids, background checks on coaches for local sports. Now it’s this.
2. You posted the politico story about how now members of the conservative group of the house gop are getting threatened with primaries for not being conservative enough. He was in the moderate caucus. He needs stuff like this.
3.Bored, he was on appropriations, it takes 30 years minimum to become chairman of that committee and he was in for 10. He would have been chairman of a subcommittee had he stuck in the house.
Comment by Shore Tuesday, Oct 11, 11 @ 1:48 pm
“This is about scoring points with the tea party to protect his right flank. Nothing more. ”
“He needs stuff like this.”
shore, do you ever listen to yourself? So you’re saying that “fibbing” is acceptable because in Kirk’s mind, there’s a valid reason for it, i.e., his popularity v. being honest while representing the State?
(People should have paid more attention to him in high school, I guess.)
Comment by Anonymous Tuesday, Oct 11, 11 @ 1:52 pm
Wow! A drive-By by a Tribbie! Hilarious.
Comment by NoNameNIck Tuesday, Oct 11, 11 @ 1:54 pm
Highly-paid communications people simply building upon today’s theme. I believe it started with the “stealthy” drive-bys near the Candy Desk–and a promise not to disclose who, what, when, or where.
Honor.
Comment by Anonymous Tuesday, Oct 11, 11 @ 1:59 pm
Shore, you may wish to talk to your friend. kirk had no chance of being the subcommittee chair on the appropriations committee. none. he was waaaaaay too liberal for the republican caucus, even as he pretends to be a conservative.
not that i think he had any interest in remaining in the house. the guy’s in the lower third of the rudman equation — he barely has a clue as to why he’s there (in congress)!
Comment by bored now Tuesday, Oct 11, 11 @ 2:04 pm
We might as well weave in the WTTW “backstage” dressing room photos to keep the Lovitz “Acting!” theme going, too. Let’s face it, putting on make-up before you speak obviously causes alot of confusion as to whether truth or drama are required once on stage.
Comment by Anonymous Tuesday, Oct 11, 11 @ 2:08 pm
Ben Bernanke - Mark Kirk - Dick Durbin
Please tell me there is a Door #4, because if the above is all we’ve got - we’re in big trouble.
IMO, the problem in the future here in IL isn’t going to be the State, it’s going to be the locals. Get a rate sheet for all your tax districts in your County (source: County Clerk Tax Extension) and check out the current year tax rates (amount charged per $100 of value).
Get the rate sheets for each tax district for this year and the two previous years. Check out the increases in the tax rates.
Then, figure in what the impact will be on those tax rates when the taxable value starts to turn downward (say, decreasing by 5 to 7 percent per year) for each of the next 3-4 years. Those rates (particularly in PTELL counties/districts) is going to increase, probably at least by the amount of the decrease in valuation. Value goes down, tax rate goes up.
Because that’s what is going to happen.
If you are currently at $6.00 per $100, not good, but not so bad. If you are at $8.00 per hundred (or higher), NOT GOOD.
And the really interesting question is to find out how much of each tax district’s tax rate is going for payment of principle and interest for bond issues. And let’s not forget that a whole lot of “Alternate Revenue Bonds” (being repaid by non property tax resources and fees) have a ‘kicker’ in that if the non property tax resources are insufficient to make payment, there’s a provision for additional property taxes to kick in.
This has the potential to get really, really ugly.
Comment by Judgment Day Tuesday, Oct 11, 11 @ 2:15 pm
Kirk actually has had a recommendation — of sorts — all along. It’s just not linked to his latest diatribe.
It is, in effect, this: “Illinois should stew in its own juice.”
Per his website: “Kirk Senate Resolution: No Bailout for States. …In a move aimed at protecting the nation’s federal credit rating, (emphasis added), U.S. Sen. Mark Kirk (R-Ill.) announced today (May 27, 2011) that he and 14 Republican Senators have introduced the No State Bailouts Resolution, S. Res. 188, which bans federal bailouts of financially struggling states like Illinois.” http://kirk.senate.gov/?p=press_release&id=209
Kirk doesn’t want to sully Washington’s sterling fiscal reputation by taking on the sins and omissions of hapless, feckless Illinois? That’s choice.
And what kind of deal is this? Kirk repeatedly turns his own state into a punching bag. What other U.S. Senator would ever do such a thing?
I never thought I’d say this, but — I — I — I think I miss Roland Burris.
Comment by Dooley Dudright Tuesday, Oct 11, 11 @ 2:23 pm
A significant message, that Illinois is deeply in debt and Quinn has ABSOLUTELY no stated plan on how to set Illinois on the right path, is drowned out by the messenger. Geesh…
Comment by Cincinnatus Tuesday, Oct 11, 11 @ 2:35 pm
So, Cinci, Kirk is not saying that “Illinois should stew in its own juice”?
Comment by Anonymous Tuesday, Oct 11, 11 @ 2:43 pm
I can actually see the $8.3 billion being right. I do not believe the comptrollers reported $4 billion covers HIRF, corporate income tax refunds and various other bills that are held at agencies. We probably still have around $7.1 billion in total unpaid late bills.
Comment by Ahoy Tuesday, Oct 11, 11 @ 2:51 pm
===and Quinn has ABSOLUTELY no stated plan===
Yes Cinci, no stated plan other than signing the income tax increase and begging the Republicans to let him borrow to pay past due bills, thus lowering the amount of interest we have to pay. No plan at all. Right.
Try to stay with us here in the real world Cinci. It’s not a game where you can make up your own facts and rules.
Comment by 47th Ward Tuesday, Oct 11, 11 @ 2:53 pm
Ahoy, the quote was “Illinois owes $8.3 billion in unpaid bills.” That’s not the case no matter how you work the numbers.
Comment by Rich Miller Tuesday, Oct 11, 11 @ 2:55 pm
Doesn’t the $8.3B number come from a recent report from Lawrence Msall?
Comment by steve schnorf Tuesday, Oct 11, 11 @ 3:38 pm
Yep. I went back and checked and the number comes from a recent Civic Federation report on the ‘12 budget enacted. I reread it, and I have a hard time arguing much with the number
Comment by steve schnorf Tuesday, Oct 11, 11 @ 3:51 pm
Schnorf, if true, that’s a projected number and it may or may not be accurate by the end of the fy. The amount of unpaid bills at the end of last FY was lower than widely expected. Also, the wording of the “study” is that we currently owe that amount, which is not the case.
Comment by Rich Miller Tuesday, Oct 11, 11 @ 3:54 pm
All in all, Rich, it’s the best, least skewed report I’ve seen from the CivicFed, and probably the best analysis I’ve seen of the ‘12 budget.
Comment by steve schnorf Tuesday, Oct 11, 11 @ 4:04 pm
What we currently owe fluctuates day to day; it’s entirely possible that we owe $8.3 billion in past due bills, especially if you add the true Medicaid payments, instead of using the goofy legislature’s logic that if we just make the payment due date longer, we don’t owe as much.
I do take exception with the report saying that the Governor wanted to use “high priced bonded debt” to pay off the past due bills. The projected bond rate was 3.5%. Who here considers that high priced bonded debt? Especially since some debts cost the state 1-2% interest a month and the average late payment is 6 months.
I’m not saying the report wasn’t hyperbole and lacking in solutions, I just think it’s entirely possible that we owe around $8 billion in late payments. And who could blame someone for thinking this, the Governor originally game out with an $8.75 billion borrowing package to pay off old bills.
In other news this kind of reminds me of the Senate Republicans budget press conference where they discuss all the ways to cut spending but then refuse to draft a bill or participate in the budget process. It’s always easier to hold press conferences and blame someone else. When you can do that, why do any work?
Comment by Ahoy Tuesday, Oct 11, 11 @ 4:13 pm
Every time I have carefully reviewed the numbers of the Civics, including once directly with Msall, they turn out to be misleading or just plain wrong. It’s too bad, because many of their concerns are valid, but their exagerated evidence destroys their credibility with those who actually decide the fiscal issues. They’d do better as critics if they were more conservative with their problem statements.
Of course the Trib always buys it without checking the details. Kirk probably just repeated what someone told him.
Comment by walkinfool Tuesday, Oct 11, 11 @ 4:17 pm
Look, even if you give Kirk the $8.3 billion thing, and I don’t, there are other very serious problems here, including the Kirk claim that borrowing to pay operations will increase (that’s a misinterpretation of increased bonding for capital, by the way) and that tax revenues are declining because of the tax hike (false, at least, so far).
Comment by Rich Miller Tuesday, Oct 11, 11 @ 4:24 pm
Not defending Kirk or anything he says, just the number as being a pretty decent one when you factor in, as they do, income tax refunds, under approp in Medicaid and group insurance.
Comment by steve schnorf Tuesday, Oct 11, 11 @ 4:30 pm
Just noticed that the on-line Trib article reports Kirk used the August 2010 Civic Federation numbers, for at least part of his report.
Comment by walkinfool Tuesday, Oct 11, 11 @ 4:38 pm
== there are other very serious problems here, including the Kirk claim that borrowing to pay operations will increase (that’s a misinterpretation of increased bonding for capital, by the way) and that tax revenues are declining because of the tax hike (false, at least, so far).==
Agreed!
Comment by Ahoy Tuesday, Oct 11, 11 @ 5:02 pm
47th,
Well, the state has not passed borrowing. So that’s where we are. Does Quinn have any other plan other than borrowing? I think not. We have not seen anything remotely resembling a plan from Quinn since at least January, if you call the plan to borrow in light of the fact he damn well knew he couldn’t get it through the Democratic controlled legislature (that way since 2003, btw), a plan. He is unwilling to and incapable of making any tough decisions on anything.
Comment by Cincinnatus Tuesday, Oct 11, 11 @ 5:07 pm
===Quinn has ABSOLUTELY no stated plan===
===Does Quinn have any other plan other than borrowing?===
Just admit you were wrong Cinci. Don’t change the subject. And I’m pretty sure it wasn’t the Democrats in the General Assembly who prevented Quinn from bonding out past due bills, because they tied the new income tax rate to debt service for that very bonding plan. So you’re still making up facts.
How short do you think our memories are?
Comment by 47th Ward Tuesday, Oct 11, 11 @ 5:16 pm
Kirk is and has been a policy lightweight from the beginning.
The media people in Illinois are so weak they fail to notice and/or fail to draw attention to Kirk’s consistently silly statements.
Comment by Carl Nyberg Tuesday, Oct 11, 11 @ 5:37 pm
==IMO, the problem in the future here in IL isn’t going to be the State, it’s going to be the locals.==
Yup, especially in the locales where EAV is not just falling with market values and where nobody could resist “cheap” debt, but also where foreclosures and already high taxation rates are causing depopulation that multiplies the burdens for those who cannot flee.
Comment by yinn Tuesday, Oct 11, 11 @ 5:40 pm
i don’t think any politician has any “plan” except to hope for economic recovery…
Comment by bored now Tuesday, Oct 11, 11 @ 6:29 pm
Kirk is the master of bad data. The graphs he used during his health care reform town halls were riddled with mistakes and intentionally misleading connections. But, remember when you’re dealing with Kirk, it’s always your fault if you misinterpreted his bad data or if he simply had to over-generalize so as to not muddle your sorry excuse for a brain. He’ll still probably get a lot of support for VP in 2012 or 2016 because people seem to prefer a gas bag who spouts easy lies than someone who gives the complex or difficult truth.
Comment by ebgill Thursday, Oct 13, 11 @ 9:56 pm