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* If you thought that Bruce Rauner would use a budget confab to discuss any of his plans, you were silly…
| Illinoisans eager to find out how their next governor will attack the state’s budget problems are in for a wait.
Republican Gov.-elect Bruce Rauner said Tuesday he has no plans to provide details about his proposed financial fix until after he is sworn in on Jan. 12.
It could be an even longer wait after that. His first budget address of his four-year-term as chief executive isn’t scheduled until Feb. 18.
That leaves issues like the Jan. 1 rollback of the temporary income tax increase and a need by various state agencies for an additional $760 million in limbo.
“We’re not discussing any recommendations we’re making,” Rauner told reporters after a speaking engagement in the capital city.
* But he did say that he found another hole…
He said that state agencies plan to submit at least $760 million in supplemental budget requests just to get them through the current fiscal year that ends June 30.
“Some of the department heads tell us they were told to submit a low budget figure, spend what they wanted and that it would be dealt with after the election,” he said, calling that approach “fundamentally dishonest.”
“I can’t find a really balanced budget as I look back over the years in Illinois,” he said. “If they are spending more than they have budgeted, that will result in more unpaid bills. We’re over $5 billion now and climbing.”
* More…
“That means they want to spend a lot more than budget. And what we’ve learned is these department heads were told to submit some low number in the budget, the budget doesn’t really mean anything, put in a low number, spend how you want to spend don’t worry about your budget and then we’ll deal with it after the election. Come on, for 760 million dollars,” said Rauner.
* But this is probably a better explanation…
The Winnetka businessman said agencies have been spending faster than they should instead of making their budgets last a full year.
“This is just them saying, ‘We’ve been spending at a much higher rate than what we put in our budget, the original budget, and now we want more money,’” Rauner said.
He said he’ll be willing to take the heat for short-term troubles but didn’t detail whether he’d deny agencies’ requests for more money.
“Real big change always causes anxiety,” Rauner said. “There’s going to be a lot of pushback on it, but that’s OK.”
posted by Rich Miller
Wednesday, Dec 17, 14 @ 8:36 am
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There really wasn’t a hole to “find” because everybody knew the hole was there when the budget was passed. It was acknowledged that agencies were not given enough money to make it through the year.
Comment by Demoralized Wednesday, Dec 17, 14 @ 8:45 am
can you spell “Thompson”?
Comment by facts are stubborn things Wednesday, Dec 17, 14 @ 8:56 am
I’m sure if Rauner looked a little harder he would find that until this fiscal there had been a run of balanced budgets that allowed for the backlog of bills to be reduced by billions.
Whatever. On Jan. 12, he owns it. That’s what he signed up for, whether he understands that or not.
Comment by Wordslinger Wednesday, Dec 17, 14 @ 8:59 am
I don’t think the problem is that Rauner doesn’t understand the issue he’s confronted with, it’s the reality that he doesn’t have a plan.
Comment by pundent Wednesday, Dec 17, 14 @ 9:01 am
I get the EXCUSE for waiting till after inauguration but afterwards I sure hope that the media starts to make this guy accountable for what he promised he was going to do as unrealistic as it was. First and foremost an open and transparent government seems to be a problem for him already - what a surprise(snark). His blame game and deflection techniques are about the only transparent issue this guy has displayed thus far (very similar from what we’ve learned during the campaign about his business career - blame others and claim ignorance). Jeesh!
NOTE TO RAUNER: Leaders lead they don’t blame others…you wanted the job big guy…so just get the job done and stop being a cry baby!
Comment by 2 Cents... Wednesday, Dec 17, 14 @ 9:08 am
The one thing I looked forward to from the Rauner administration was details outlining his proposals. Specifically, I’d like to see him take a stand, which means no matter what there will be winners and losers. The budget mess is so significant that there’s no way to avoid controversy. Hearing his lack of famiarity with a supplemental appropriation was disturbing.
Comment by AC Wednesday, Dec 17, 14 @ 9:08 am
Demoralized nailed it. Of course Rauner has to do his schtick.
Comment by Norseman Wednesday, Dec 17, 14 @ 9:09 am
$760 million supplemental re
Comment by Anonymous Wednesday, Dec 17, 14 @ 9:10 am
$760 million supplemental request/$35billlion budget six months into the fiscal year…that doesn’t seem outrageous.
Comment by anon Wednesday, Dec 17, 14 @ 9:12 am
Actually, I do think Rauner has a plan. It will be painful and will hurt a lot of folks but…we are talking about a lot of years of spending abuse, from both sides.
Let’s hope he can put together a strong team to deal with our overspending crisis. Whatever the plan is it will need to be carried forward through several election cycles. Not certain if Illinois special interests can manage that?
Comment by Sunshine Wednesday, Dec 17, 14 @ 9:17 am
Not to mention the lack-of-revenue abuse, huh, Sunshine?
Comment by PublicServant Wednesday, Dec 17, 14 @ 9:26 am
@Sunshine, your claims of “years of spending abuse” and an “overspending crisis” are ridiculous and false. Try with facts not phone talking points next time.
Here are the facts which I posted here less than two weeks ago. Apparently I will need to c&p them regularly.
- As Rich reported, Illinois spending as a percentage of state GDP is the 10th lowest in the country: https://capitolfax.com/2014/12/01/indiana-booster-resorts-to-red-baiting/
- State spending is down 28.9% since 2000: http://www.ctbaonline.org/sites/default/files/reports/ctbaonline.org/node/add/repository-report/1390515899/IB_2014.01.23_State%20Spending.pdf
- Illinois has the nation’s second fewest state employees per resident.
Comment by Reality Check Wednesday, Dec 17, 14 @ 9:29 am
PS a good point. We need to create more jobs, to improve our tax base, along with the rest of the country. As I see it, we will need a tax increase as part of the difficult solution, with tight controls on how the new revenue is spent.
Comment by Sunshine Wednesday, Dec 17, 14 @ 9:30 am
RC thanks for the heads up. We are in fact debt free, butterflies are everywhere, and bluebirds are singing in everyone’s yard and Illinois debt is an illusion?
Comment by Sunshine Wednesday, Dec 17, 14 @ 9:33 am
I’m happy to wait until January, even the end of January while he moves in, but after that, it’s bumbling not governance. And, as I’m sure he realizes, he doesn’t have much time. If he’s still bumbling in July, he’s a lame duck. A four-year lame duck. I can’t believe he took the job to fill that role.
Comment by Cassandra Wednesday, Dec 17, 14 @ 9:33 am
I guess it is ok to talk comptroller before taking office but not your budget crisis plans.
In reality there are only two answers to paying bills that you do not have revenue to address. Get more revenue or do not pay your bills. You can reduce expenditures and work on options but that $5 billion backlog was due while ago. We will see if he is different than his predecessors and keep his word.
Comment by JS Mill Wednesday, Dec 17, 14 @ 9:57 am
Left out of the print but included in the tweets was Rauner’s repeated suggestion that we could grow our way out of the deficit.
If he is serious about a supply side, trickle down, cut taxes to increase revenue approach, it will be a long spring session.
Comment by Juvenal Wednesday, Dec 17, 14 @ 10:04 am
Just some food for thought. Here are California’s income tax rates…. Are they overtaxed? Yes. Are Illinoisans undertaxed? Yes.
For single and married filing separately taxpayers:
1 percent on the first $7,582 of taxable income.
2 percent on taxable income between $7,583 and $17,976.
4 percent on taxable income between $17,977 and $28,371.
6 percent on taxable income between $28,372 and $39,384.
8 percent on taxable income between $39,385 and $49,774.
9.30 percent on taxable income between $49,775 and 254,250.
10.30 percent on taxable income between $254,251 and 305,100.
11.30 percent on taxable income between $305,101 and $508,500.
12.30 percent on taxable income of $508,501 and above.
A 1 percent surcharge, the Mental Health Services Tax, is collected on taxable incomes of $1 million or more, making California’s highest marginal rate 13.30 percent.
Comment by Ducky LaMoore Wednesday, Dec 17, 14 @ 10:11 am
I think Reality Check is missing the big picture. It’s not just State employee numbers but all the government jobs including teachers. If your point is the State should reduce payments to local units of government then I agree but a former State Representative told me that the State had not had sufficient income for its expenses for at least 20 years.
Comment by Bourbonrich Wednesday, Dec 17, 14 @ 10:12 am
Expect the budget address to be short and vague. Rauner will announce that his administration is still working on the budget. When pushed for answers at his presser, Rauner will say, “We’ll have a plan for that.”
Kidding aside, if Rauner and other politicians are realistic and compassionate about our budget, as Rauner said he wants for Illinois, it will be a good start.
Comment by Grandson of Man Wednesday, Dec 17, 14 @ 10:13 am
Grandson, Rauner doesn’t have that luxury. FY15 needs to be fixed immediately before he can even have a baseline for FY16.
Rauner is taking his honeymoon now. On Jan. 13, he will have no choice but to get to work in the sausage factory.
That’s a way different gig than campaigning.
Comment by Wordslinger Wednesday, Dec 17, 14 @ 10:20 am
At the risk of asking a question that already been covered….I keep seeing the $5 billion in unpaid bills and thinking “Wasn’t that number much higher a few years ago?” If not, what is the $9-$10 billion figure that I keep thinking of?
Comment by General Aubrey Wednesday, Dec 17, 14 @ 10:33 am
Not a new hole. The problem was known and discussed when the budget was passed. The budget alone was not the problem; the tacit or overt approval of spending above the budget was.
It was and is a bad choice: gambling on a different election outcome and a tax rate extension. Like a business planning for flat revenues in a clearly declining market. But not a surprise.
I am a little surprised it’s not $100M more.
In recent years budgets and performance have resulted in both increases and decreases in outstanding bills. These budgets were not all “unbalanced” by that standard.
So he’s a bit off and oversimplifying, but hopefully he’s still learning.
Comment by walker Wednesday, Dec 17, 14 @ 10:36 am
Rauner has himself in a corner now… This tact of trying to highlight the mess is all just talking… We are in a mess. We all know it. Nobody cares about the nuance or the reasons. That part he spelled out clearly for the votes. It’s a mess. These guys created it.. I am different. Well, if this is his way of trying to lower expectations. He has already failed. He has to come out with a strong actionable plan. Or, he is exactly what he demonized, A politician who will say anything to get elected… The cuts must be compassionate but cuts must come.
Comment by Walter Mitty Wednesday, Dec 17, 14 @ 10:36 am
What Rauner needs to do is be seen as successful. All this eye-rolling, faux outrage and woe-is-me statements on our budget is trying to set that bar defining success as low as possible.
I can’t recall a single new incoming governor who doesn’t do that.
The GA can sink him if they want. They can make this hard. It is in everyone’s best interest for the Democrats to avoid doing that. We just don’t need another governor who is shut out of the Dome. It might just be political beneficial for Madigan to sink Rauner, but I hope not. Rauner needs to cultivate a good bond with Madigan and Cullerton or the job won’t get done just because it needs to get done. Mr. Speaker has patience. He can continue doing what he’s been doing for another four years.
Comment by VanillaMan Wednesday, Dec 17, 14 @ 10:38 am
What Walk said.
After a few years of responsible behavior, the GA passed a chicken-stuff, election year FY15 budget, knowing full well it would have to be fixed in the second half.
Everyone, including Rauner, knew that at the time.
Quinn, who had offered up two balanced budgets depending on the tax surcharge status, was put in a box with two lousy choices: veto and call a number of likely futile special sessions, or hold his nose and sign it and get out on the campaign trail.
Politics being a zero-sum game, he took the second lousy choice and campaigned on maintaining revenues.
Governors, as Rauner will find out, are faced with lousy choices all the time. The easy stuff gets taken care of at lower pay grades.
Comment by Wordslinger Wednesday, Dec 17, 14 @ 10:52 am
For those saying we need a tax increase we already have one. The permanent income tax rate is 3%. This year the state will collect 3.75%.
The fix will need to come now from the spending side.
Comment by Very Fed Up Wednesday, Dec 17, 14 @ 10:57 am
=== The permanent income tax rate is 3%. ===
Exactly why we find ourselves with this debt crisis now. You’re dreaming if you think we can cut our way out of the current hole.
Comment by PublicServant Wednesday, Dec 17, 14 @ 11:02 am
- General Aubrey - Wednesday, Dec 17, 14 @ 10:33 am:
Yes, it was. Some of the 2% income tax increase was used to attack the backlog, just like osme of it was used to maintain services while paying the “full” (ramp defined) pension fund payments.
Now, who knows? But Rauner has a plan …
Comment by RNUG Wednesday, Dec 17, 14 @ 11:04 am
What is the deduction on income in California. It must be more the. 2,000 per person.
Comment by Anonymous Wednesday, Dec 17, 14 @ 11:12 am
With current structure it is definitely impossible to cut our way out of the hole no doubt about it.
Major structural reforms are needed. Asking the public who in many cases do not have even 401K matching to pay more in taxes supporting people who can in many cases retire in their 50’s with fully guaranteed pensions must as will stop.
Comment by Very Fed Up Wednesday, Dec 17, 14 @ 11:13 am
Reality Check,
Great response in regards to the myths pushed by certain interest groups and individuals, many of whom have done quite well financially in Illinois. The have little reason to make up falsehoods about the amount of Illinois’ taxes and spending, but they do anyway, to push their agendas or for other negative and undesirable reasons.
Imagine that. People who are very wealthy or well-off are upset about Illinois taxes and spending, as if they were ever hurt. They have perhaps the least justification to complain.
Ducky LaMoore,
Thanks for providing info on California’s income tax. As Wordslinger often points out, state governments/governors have little or nothing to do with economic growth (or else Blagojevich would have been an economic genius). That being said, California has higher income taxes than Illinois and beat Illinois in recent job growth, which further blows up the narrative that taxes must be necessarily cut to spur economic growth.
Wordslinger,
Yes the Rauner honeymoon will end soon, and we have a big budget hole to fill for FY 15, something like nearly $2 billion, I think.
Comment by Grandson of Man Wednesday, Dec 17, 14 @ 11:14 am
- Ducky LaMoore - Wednesday, Dec 17, 14 @ 10:11 am:
What is California’s Standard Deduction and Exempions?
Comment by Anonymous Wednesday, Dec 17, 14 @ 11:15 am
VFU, the ILSC is about to tell you that’s not an option. Any more ideas?
Comment by PublicServant Wednesday, Dec 17, 14 @ 11:16 am
Very Fed Up,
Who retires in their 50’s? Do you have a source for that “fact”?
Comment by Try-4-Truth Wednesday, Dec 17, 14 @ 11:21 am
Illinois has revenue problem much more than a spending problem. The regressive 3% rate with no retirement taxed and no services taxed will not make it for a modern economy.
Comment by independent Wednesday, Dec 17, 14 @ 11:25 am
Try 4 Truth… almost every teacher and school administrator retires in their 50’s….
Comment by Walter Mitty Wednesday, Dec 17, 14 @ 11:30 am
Are you kidding me? I’m married to a teacher. Try again.
Comment by Try-4-Truth Wednesday, Dec 17, 14 @ 11:44 am
Adding… cite your source Mr. Mitty. Please pay close attention:
YOU CAN’T JUST SAY THINGS. YOU MUST HAVE SOME PROOF.
Comment by Try-4-Truth Wednesday, Dec 17, 14 @ 11:45 am
According to their annual financial report, the average age for a TRS retiree who retired in FY13 was 61. It was 59 as recently as FY09, but even that means half of the retirees were age 60+.
Comment by Katiedid Wednesday, Dec 17, 14 @ 11:49 am
- Try-4-Truth - Wednesday, Dec 17, 14 @ 11:21 am:
Actually, there are a number of scenarios that allow for State (and local) employees to retire in the 50’s, albiet often at less than their “full” pension amount. What you get when depends on clearly defined formulas.
At the State level, “Public Safety” staff have a more generous formula (2.2, but with doubled contribution rate) and some of those positions actually require retirement in their 50’s.
At the State level, “Normal” staff have the standard (1.67) formula but even under that you can retire in your 50’s IF you start young enough AND accept a reduced pension. For example, under the “Rule of 85″, if you start right out of high school at age 20, you would accummulate 33 years by age 53 and meet the rule (33 + 53 = 86). “Full” pension under the 1.67 formula is 75% which takes 45 years to earn. In this early retirement example, the received pension only would be 55.11% (33rs * 1.67). So you could retire at age 53 IF you accept a pension that is reduced about 25%.
Finally, at the State level, you have the GA system which does allow for earlier retirement but they also pay quite a bit higher contributions.
But most State employees don’t start until they complete college (23 - 26 depending on degree), so they tend to work until age 60 or higher.
The one large amount of people who did retire from the State in their 50’s were the result of the misguided 2002 ERI offering. We can debate the merits of that cost shift, but it allowed people as young as age 50 to retire under the rationale of “cost savings”. That was a one time event that has not been repeated, so in terms of State retirement, it was an anomoly.
I can’t speak in detail to the TRS and SURS systems.
And to those calling for reforming the pensions, that already occured when “Tier 2″ was created: longer service, higher contributions, and lowered benefits are all part of that “reform”.
Full disclosure: I took advantage of the 2002 ERI at age 50. I would have been an idiot to not do so because I had a lot of service time since I started straight out of high school and worked full time while going to college.
Comment by RNUG Wednesday, Dec 17, 14 @ 11:50 am
Try 4 Truth…Please do a search..The google is a good thing… Tier 1 Trs… I usually don’t feed trolls…
35 years of service Age: 55*
* If you are eligible to receive a retirement annuity of at least
74.6 percent of the final average salary and will reach age 55
between July 1 and Dec. 31, we consider you to have attained age
55 on the preceding June 1.
Comment by Walter Mitty Wednesday, Dec 17, 14 @ 11:51 am
Very Fed Up: “The fix will now need to come from the spending side.”
Just too simple.
I would agree with the statement: “The fix will have to include continued cuts to discretionary state spending.”
Those would not close the entire gap, under any reasonable scenario. It might be a stretch to claim “We could lay them all off, and still be behind,” but that does reflect how big the numbers are.
As you surely know, significant cuts to discretionary spending in the State Budget have already been taken. Less controllable costs (e.g. Federally-required or court-imposed spending), past due bill payments, debt service on bonds, and required pension contributions have all been rising. We’ve seen how hard it is to try to change these significantly.
Comment by walker Wednesday, Dec 17, 14 @ 11:52 am
Very Fed Up: Sorry, I missed your later comment, which fleshed out your ideas.
Comment by walker Wednesday, Dec 17, 14 @ 11:54 am
Look at the Tier 1 member guide… As many folks I know…55-58 they retire… They have the 35 years in…If they stay for extra years, depending on position, it almost costs them money…
Comment by Walter Mitty Wednesday, Dec 17, 14 @ 11:55 am
“Who retires in their 50’s?…….”
Try 4 Truth; - I know many SURS annuitants who retired in their 50s. One of them retired in 1983 and several in the early 1990s.
Comment by CapnCrunch Wednesday, Dec 17, 14 @ 11:55 am
- Walter Mitty - Wednesday, Dec 17, 14 @ 11:55 am:
Actually, it doesn’t cost them money until they reach 44 years and 10 months of service (75/1.67).
Comment by RNUG Wednesday, Dec 17, 14 @ 11:58 am
Try 4 Truth… As I have said many times here… I have 20 years of service in TRS… I advocate for radical change in some way…Protect retired folks or those 10 years away… I would rather be hurt now and can still earn…Than find out the money is gone when it’s my time… Because, anyplace else TRS is called a Ponzi scheme. Just wait til the Tier 2 folks wake up and realize they pay as much as me and get half the benefit…
Comment by Walter Mitty Wednesday, Dec 17, 14 @ 11:58 am
RNUG… Thanks… I think I am more used to seeing the last 3 years folks signing up to do as many extra stipends as possible! But you are correct. Thanks for that..
Comment by Walter Mitty Wednesday, Dec 17, 14 @ 12:00 pm
The Governor-elect’s experience is in buying and then fixing broken companies. Anyone who has seen this done might well compare it to sausage making. A common thread in the commentary here is that the new Governor has no plan. It is more accurate to express that no plan has been unveiled. A better bet is that a smart ivy-league guy who fixes broken comapanies has an (unannounced) plan. An even better bet is that that plan is likely to ruffle many feathers in the political class, a newsman’s dream. So, stand by and stay tuned for what promises to be a very interesting ride.
Comment by Keyser Soze Wednesday, Dec 17, 14 @ 12:39 pm
@Keyser:
The problem with that analogy is that somebody buying a company can come in and make changes by fiat. That can’t happen in state government. Government ain’t a company and you can’t treat it like one.
Comment by Demoralized Wednesday, Dec 17, 14 @ 12:44 pm
Keyser, can you give an example of one company Rauner bought and “fixed?”
He didn’t offer any examples during the campaign, not while spending tens of millions on TV spots. When asked directly for an example during a debate by Charles Thomas, he could not offer one.
It doesn’t matter now, of course, but revisionist history should wait a few years at least, not a few weeks.
Comment by Wordslinger Wednesday, Dec 17, 14 @ 1:14 pm
== A common thread in the commentary here is that the new Governor has no plan. It is more accurate to express that no plan has been unveiled. == So, stand by and stay tuned for what promises to be a very interesting ride. ==
That seems much more likely than the idea a guy successful enough to make hundreds of millions of dollars and then win the Governorship of Illinois as a Republican has no clue of where to begin.
Comment by Formerly Known As... Wednesday, Dec 17, 14 @ 1:27 pm
===- Illinois has the nation’s second fewest state employees per resident.===
This is very true. It is also true that Illinois has the largest number of units of local government in the US. The people who are on state payrolls in other states are often on the payrolls of thousands of the 7000 or so units of local government in Illinois.
Comment by Hit or Miss Wednesday, Dec 17, 14 @ 1:32 pm
= ===- Illinois has the nation’s second fewest state employees per resident.===
This is very true. It is also true that Illinois has the largest number of units of local government in the US. The people who are on state payrolls in other states are often on the payrolls of thousands of the 7000 or so units of local government in Illinois. =
Many of the ~7000 units of local government are townships, fire protection and library districts, and other special districts. In other states, it’s likely that these functions are handled at the county or municipal level, not by the state. The only type of local government in Illinois that other states might operate at the state level (as far as I can think of) would be community colleges, since these are regional in nature. I believe the comparison of state employees per capita is fairly representative of Illinois’ situation.
Comment by cover Wednesday, Dec 17, 14 @ 1:52 pm
Bourbonric
In 1988 the Deputy Director of Bureau of the Budget said Illinois had a structural deficit at that point. (Illinois Business Review, Volume 45, Number 3, pages 9-13 - no, it’s not available online, but it was discussed in Illinois Issues http://www.lib.niu.edu/1988/ii880812.html .)
All “good” years since have been as a result of one-time windfalls, underfunding pensions, etc.
Comment by Anyone Remember Wednesday, Dec 17, 14 @ 1:57 pm
“We’re not discussing any recommendations we’re making,” Rauner told reporters after a speaking engagement in the capital city.
But,Governor-elect Rauner, when will you discuss recommendations? When will you unveil your plan to “shake up” Springfield?
Comment by NewwestsuburbanGop'er Wednesday, Dec 17, 14 @ 2:02 pm
I agree with Hit or Miss and that’s what Reality Check missed but not sure we are still have the largest number of units of government. Illinois still has way too many even if it’s not number 1.
Comment by Bourbonrich Wednesday, Dec 17, 14 @ 2:04 pm
The number of units of local governments is irrelevant to my point, which was that @Sunshine’s claim that Illinois state government has an “overspending crisis” is demonstrably false.
Comment by Reality Check Wednesday, Dec 17, 14 @ 2:08 pm
Not all pensions are earned at the same rate - e.g. - state employee pension of 1.67% smaller - Rauner and staff will need to study medicaid and other “entitlement spending” - that is what controls much of the states budget
Comment by Yatzi Wednesday, Dec 17, 14 @ 2:13 pm
Well I’m willing to wait Rauner out here. Whatever he does to shake things up, he’ll be shaking up the Republican caucus’ first. Madigan and Cullerton will make sure of that. Rauner wants to balance the budget by deep cuts…no problem. Lets get those Republican votes lined up, and then Madigan and Cullerton will see what they can do on their side. If Bruce wants to raise taxes, rinse and repeat.
As Word says, he owns it now. Let’s see some of that businessman magic now.
Comment by PublicServant Wednesday, Dec 17, 14 @ 2:21 pm
Anxiously awaiting Rauner’s plan to do everything he promised. Should be fun.
Comment by sparky791 Wednesday, Dec 17, 14 @ 2:43 pm
@fantasy reality check
=As Rich reported, Illinois spending as a percentage of state GDP is the 10th lowest in the country=
As bourbonrich noted, this isn’t due to low spending in Illinois, it’s because the state has made provision for revenues for items like education to be directly collected from taxpayers without a “pass through” from Springfield. Ilinois allows the highest precentage of locally collected rvenus form state statutes (real estate) taxes in the nation.
Add up all state and local spending per GDP in Illinois, and the state fares much more poorly. Also, if you include the amounts that AREN’T being spent, ut are increasing obligations and liabilities to Illinoios taxpayers, the comparisons of Illinois spending with the nation are worsened.
To put forth what you did frames you as one of two things, ignorant of the basis for your arguments or dishonest with the information you presented. Which is it?
Comment by Arizona Bob Wednesday, Dec 17, 14 @ 3:18 pm
Arizona Bob 3:18 pm
>> Ilinois allows the highest percentage of locally collected revenues from state statutes (real estate) taxes in the nation. Add up all state and local spending per GDP in Illinois, and the state fares much more poorly.
It’s an interesting argument, but OK, where are the stats on that (support for your “much more poorly” claim)? Who has compiled that study?
Comment by ZC Wednesday, Dec 17, 14 @ 3:24 pm
Poor Rauner, duped as a venture capitalist, and now hoodwinked into taking a job as governor when he was unaware of just how bad the state’s finances are. I think folks need to stop being so tough on the future governor. He didn’t create this mess. His biggest failure so far has been to trust the corrupt politicians (that he told us not to trust during the campaign) to tell him the whole truth. Leave Bruce alone!
Comment by AC Wednesday, Dec 17, 14 @ 3:36 pm
@ZC
I don’t think anyone has thoroughly studied it, but the NEA in its annual “Estimates and Rankings” report has some pretty good info regarding state revenues and expenditures, at least that relating to education. I’ll try to take a look at that tonite.
The report does identify, however, that Illinois has the lowest DIRECT state grants to education, but among the highest revenues resulting from state statutory revenues for schools through the power for schools to levy local real estate taxes.
This difference alone, considering that IIRC Illinois has the 14th highest spending per pupil amongst the states, has to put Illinois way up on the list when all spending is bundled and included.
Comment by Arizona Bob Wednesday, Dec 17, 14 @ 3:38 pm
@AC
C’mon, AC, I don’t see any Rauner whining here, and I’m not a fan. He’s playing poker. Deals are being made, trades offs are on the table and “sacred cows” are being readied for slaughter.
He’s holding his cards close to his vest. Learn to play pocker and you’ll understand politics much better.
Comment by Arizona Bob Wednesday, Dec 17, 14 @ 3:42 pm
Bob, any way you parse it, Illinois total tax burden, state and local combined, is just a tiny notch above “Average” on any graph showing all 50 states’ tax burden
Comment by steve schnorf Wednesday, Dec 17, 14 @ 3:43 pm
Arizona Bob - I actually do play poker so my understanding of politics may be enhanced.
Are you suggesting that Rauner is actually doing things with Cullerton and Madigan that his predecessor wasn’t? And the reason for them to slaugher these “sacred cows” for Rauner’s benefit is?
I think you’re bluffing. You can either fold now or wait until I call you to show your cards.
Comment by pundent Wednesday, Dec 17, 14 @ 4:06 pm
I’m well aware that manufactured outrage over the state budget is part of Rauner’s strategy, but I don’t think managing expectations like a traditional politician is shaking up Springfield. He may not sound whiny, but he is trying, almost too hard, to deflect blame for any future failure. If Bruce Rauner was truly shocked by the magnitude of the state budget shortfall, and the need for a supplemental appropriation, then this state is doomed.
Comment by AC Wednesday, Dec 17, 14 @ 4:19 pm
==What is the deduction on income in California. It must be more the. 2,000 per person.==
Not easy to say. California allows a credit of $106 (a direct reduction in tax, rather than a reduction in income) for the taxpayer and $326 for each dependent. For a taxpayer in the 1% bracket, the $106 credit is the same as allowing a $10,600 exemption. For someone in the top 13.3% bracket, it’s the same as a $797 exemption. But, just to confuse things, they also allow a standard deduction of $3906 for a single person. These amounts are from the 2013 return form.
Comment by Anon. Wednesday, Dec 17, 14 @ 4:23 pm
@Arizona Bob:
Any way you look at it Illinois’ revenue structure isn’t sufficient to handle the government services being provided. While some like to focus on the expenditure side, the fact is that there is also a revenue problem. Unless you fix them both (raise revenue and cut spending) you aren’t going to solve this crisis. Those are the facts. Believe them or not. I don’t care.
Comment by Demoralized Wednesday, Dec 17, 14 @ 4:34 pm
Keyser Soze, Can’t speak to your first point but I think on the others you make some very good points.
Comment by Sunshine Wednesday, Dec 17, 14 @ 4:41 pm
Walter Mitty, @11:30AM. The average age of new retirees for fiscal year 2012-13 (latest CAFR, page 119) for TRS is 61 years old.
So - No, most TRS retirees are not in their 50’s
Comment by Anonymous Wednesday, Dec 17, 14 @ 4:54 pm
== our overspending crisis ==
IL ranks 50th in state workers per capita.
* IL ranks among the ten lowest-spending states.
* IL provides less funding percentagewise to its K-12 public schools than any state.
* The facts don’t matter to ideologues who start with the premise that IL is “overspending.”
Comment by anon Wednesday, Dec 17, 14 @ 4:59 pm
“our overspending crisis”
Yes, if we would only stop inspecting meat, ensuring scales are accurate, licensing physicians, and helping children in bad situations. All of those ’sacred’ cows…
Comment by How Ironic Wednesday, Dec 17, 14 @ 5:09 pm
== Rauner’s repeated suggestion that we could grow our way out of the deficit ==
This will be a great test of the GOP premise that tax cuts produce more revenue than higher tax rates. Of course we already had our answer from both the Reagan and Bush tax cuts.
== CA has a tax rate of 12.30% on incomes of $508,000+ ==
Not even the most liberal member of the IL General Assembly would propose a tax rate so high on the 1%. If any did, they would be denounced as Marxists bent on class warfare. BTW, did all the wealthy people move out of Beverly Hills and San Francisco?
== IL has way to many units of local government ==
What are the chances that Mr. Shake-Up-Springfield will propose abolishing townships? I guess right about zero. Maybe AZ Bob can convince Rauner to put the bloated local government sector on a strict diet. How about it, Bob?
Comment by anon Wednesday, Dec 17, 14 @ 5:41 pm
I don’t think the budget crisis is manufactured by any means. In my opinion it’s very real. The 2015 appropriation bills threw some ice-cold water on the budgetary progress we had been making in the past 3 or 4 years. Always remember rule #1: Stop Digging!
Comment by steve schnorf Wednesday, Dec 17, 14 @ 5:47 pm
@Yatzi2:13=state employee pension of 1.67% smaller=
I was told the 1.67% members were also in social security, which if true, would about equal out.
Comment by DuPage Wednesday, Dec 17, 14 @ 5:54 pm
Katiedid: ” the average age for a TRS retiree … was 59 as recently as FY09, but even that means half of the retirees were age 60+.”
No, it doesn’t mean that at all. We don’t know the distribution of the retirees’ ages based on the *average*. With an average of 61, it is *really* easy to have “most” in their 50s–3 58 year olds and one 70 year old have an average age of 61–thus, “three out of 4 retirees are in their 50s”.
Were the stat the *median* we would be closer to knowing–but what we would *know* is that, in FY09, over 50% of the retirees were under 60.
Comment by Chris Wednesday, Dec 17, 14 @ 6:11 pm
What you amateur actuaries should be concerned about is not when someone starts drawing a pension, but how long they draw it. I don’t want to dwell on this, though, or AZ Bob will advocate for annuitant death panels.
Comment by Arthur Andersen Wednesday, Dec 17, 14 @ 6:31 pm
Illinois ranks 26th among the 50 states in per pupil spending for public elementary and secondary education, using the NCES Geographic Cost of Education Index for 2011 (latest year shown). This takes into account regional cost differences as opposed to nominal cost.
Comment by Archimedes Wednesday, Dec 17, 14 @ 6:53 pm
=== I don’t think the budget crisis is manufactured by any means. ===
Not many here saying the crisis is manufactured, just that Rauner’s supposed surprise is manufactured.
Comment by Norseman Wednesday, Dec 17, 14 @ 6:54 pm
Reality - I am actually a fan of state services, but it’s not really fair to focus solely on the initial appropriations as set out in the governor’s budget. You do have to add in supplementals and overall spend.
Comment by Soccermom Wednesday, Dec 17, 14 @ 7:01 pm
- DuPage - Wednesday, Dec 17, 14 @ 5:54 pm:
Which retirees also receive Social Security depends …
Most of the SERS employees / retirees (1.67% formula currently) also participate in Social Security. Somewhere around 1971/1972 all new hires had to be “coordinated”, ie, on both the state plan and Social Security. Already employed at that time had a choice of remaining on the “uncoordinated” (state only) plan or the “coordinated” plan. Employees contributed to both plans; the state contributed their full required payment to SS and made some level of payment (depending on year) to the state pension funds. Note: even if “uncoordinated” employees had outside work or covered by a spouse, they usually didn’t receive a penny due to “government pension offset” rules.
Some categories of SERS, including law enforcement (2.2% formula currently), were not “coordinated”. In addition, members of JRS, GARS, TRS and some SURS were not “coordinated”. All of these groups’ employee contribution rate are at least double the 1.67% group’s contribution rate. Note: in some school districts, the “employee” contribution is paid by the school district (rather than the employee) as part of a contract deal to limit raises and other compensation. This is actually a good deal because it holds down the pensionable salary a bit.
Comment by RNUG Wednesday, Dec 17, 14 @ 7:10 pm
- Chris - Wednesday, Dec 17, 14 @ 6:11 pm:
You can dig the information out if you want to do the work. Go to the applicable fund web site, select the “Financial & Actuarial” section, select the latest “Comprehensive Annual Report”, and go to the “Statistical” section. For example, in SERS FY2013 end, page 64 gives you a distribution of “Current Age of Active Receiptants” grouped by 5 year spans. The GARS and JRS reports will have the identical information, since all three follow the same exact reporting format. It’s a bit tougher to dig informastion out of TRS & SURS, so I didn’t bother looking at those funds tonight.
For SERS, from just eyeballing it, the median looks to be in the 66 - 69 range, maybe about 67; the average is stated to be 69.
Comment by RNUG Wednesday, Dec 17, 14 @ 7:26 pm
Is the average SERS retirement age of 69 sufficient for our state employee bashers?
Comment by anon Wednesday, Dec 17, 14 @ 7:34 pm
- Soccermom - Wednesday, Dec 17, 14 @ 7:01 pm:
If the budget people at the agencies are doing their job properly and their request gets approved (or close to it because everyone pads a bit expecting to be cut), under normal conditions they shouldn’t need to go back for supplementals. Supplemental requests should only be needed for unexpected issues that arise outside the control of the agency, ie, disasters or national recession that increases service demand or something similar … but even the start of an Illinois recession used to be predictable far enough ahead (consistently lagged national) that you could actually partially plan and budget for it.
Comment by RNUG Wednesday, Dec 17, 14 @ 7:36 pm
@RNUG
Thank you taking the time to research the SERS data and posting it. Very helpful!
Comment by DuPage Grandma Wednesday, Dec 17, 14 @ 11:51 pm
@Archimedes
=Illinois ranks 26th among the 50 states in per pupil spending for public elementary and secondary education, using the NCES Geographic Cost of Education Index for 2011 (latest year shown). This takes into account regional cost differences as opposed to nominal cost=
NEA works on absolute spending, and I believe we’re in the top 15 states in per pupil spending in Illinois per the NEA rankings and estimates report for 2014. that report has more recent data, as late as the 2012-2013 year.
I’m always a bit suspicious of those “regionally adjusted” comparisons. Sometimes , like COLA they don’t give a true picture of costs of living for certain areas because of the items they rank, and how much they weight them.
Comment by Anonymous Thursday, Dec 18, 14 @ 12:11 am
@anon
=What are the chances that Mr. Shake-Up-Springfield will propose abolishing townships? I guess right about zero. Maybe AZ Bob can convince Rauner to put the bloated local government sector on a strict diet. How about it, Bob?=
I’d love to see him do it, but you need Madigan to buy in, and WAYYY too many of his township Dem committeeman get paychecks from Township government, especially in Cook County. Madigan won’t let that happen
Comment by Arizona Bob Thursday, Dec 18, 14 @ 12:15 am
@steve schnorf
=Bob, any way you parse it, Illinois total tax burden, state and local combined, is just a tiny notch above “Average” on any graph showing all 50 states’ tax burden=
I agree, Steve. The people are willing to pay a little more than average (except for schools, which through state statute is set up to virtually require more through the strike provisions of the Education Labor Relations Act) It was the job of the state legislature to control spending to that amount, but their giveaways without commensurate value all the way back to your bosses regime pretty mush ignored the will of the people for their own political gain.
THAT’S the problem, not the slightly above average taxation in Illinois.
Comment by Arizona Bob Thursday, Dec 18, 14 @ 12:22 am
@ pundent
=Are you suggesting that Rauner is actually doing things with Cullerton and Madigan that his predecessor wasn’t?=
Yep. He’s always been a far better “deal maker” than Quinn. He’s a much better position for common ground with Madigan rather than Quinn’s arrogance and buffoonery.
=And the reason for them to slaughter these “sacred cows” for Rauner’s benefit is?
It won’t be for Rauner’s benefit, it’ll be for Madigan’s and Cullerton’s. They understand that this train is heading off the cliff, and if REAL disaster strikes, their patronage power, which keeps them in office and control, disappears.
Rauner can kill the fatted calf as long as he doesn’t mess with MJMs rather small pork!
=I think you’re bluffing. You can either fold now or wait until I call you to show your cards.=
I’m not in the game, buddy. Rauner is. I expect he’ll be showing his cards sometime in February. Is it a winning hand? I guess we’ll see.
Comment by Arizona Bob Thursday, Dec 18, 14 @ 12:36 am
Bob - Using the NEA estimate of School Statistics 2014 report. Illinois spends $41 on public education per $1,000 of personal income. USA average is $40. Wisconsin, by the way, spends $45. Arizona is the ranked 50th at $30 per $1,000 of income. Absolute dollars, Illinois ranks 17th. Arizona ranks 50th.
Comment by Archimedes Thursday, Dec 18, 14 @ 6:17 am
Bob - forget Madigan and Cullerton. Is he going to get the Repubs to vote for a budget?
Comment by low level Thursday, Dec 18, 14 @ 6:39 am
@ archimedes
=Illinois spends $41 on public education per $1,000 of personal income=
That’s a terrible metric to use since it excludes revenues from corporate income, which is disproportionately higher than average for Illinois.
So what’s your point here Arch? Is it that we should spend more on education even if doesn’t produce better results for the students? The 17th place total per student shows we indeed are more than adequately funding K-12 education in Illinois. what’s your take on why the NAEP tests (probably the best measure of studedt outcomes) show Illinois’ performance rank is far lower than the that for the resources we give to publis education? do you think it’s good policy to be paying the 12th highest teacher salaries amongst states, disorportionately higher than our far above average spending per pupil? Also look at the spending per pupil compared to the national average IIRC, we’re spending about 18% more per student than the national average. Public education is much like a roach motel; the money goes in, but the results don’t come out. We hve more than adequate funding, especially in Chicago, to get the job done. The problem is with how ineffectively the excellent resources are spent do to the dysfunctional culture of K-12 public education in Illinois.
Regarding Arizona, we need to get better at education the kids. I’m working with some people of influence here to do things better for the students. FYI, our biggest problem is the way we teach ESL kids. The suburban kids do exceptionally well, and are ranked the equal or better to schools in comparable communities in Illinois. There are long waiting lists of quality educators for jobs here, so the pay isn’t an issue, just as if public school teachers were only paid the national average.
After having been in classrooms at many schools in Illinois, I can tell you the problem isn’t too low revenues, it’ the poor job done by school boards and administrations in investing the resources where they’ll benefit the students rather than the educrat bureaucracies.
Comment by Arizona Bob Thursday, Dec 18, 14 @ 7:52 am
Bob:
You have a habit of condemning the entire education system in Illinois using your experience in certain areas of the state. I can tell you that: (a) I received an excellent public education; (b) my kids are receiving a good public education; (c) money IS an issue in my kids district right now. But I don’t take that experience and say that’s the way it is statewide. So stop already with your constant dissing on public education in Illinois.
Comment by Demoralized Thursday, Dec 18, 14 @ 8:10 am
==If the budget people at the agencies are doing their job properly==
RNUG, with due respect, the budget people make budgets based on instructions they receive from the Governor’s office. The budget people can tell you what is actually needed but they don’t present a budget that isn’t approved by the Governor’s Office nor do they publicly state anything differently than what they are told to state. Please don’t condemn the budget people when it’s not their fault.
Comment by Demoralized Thursday, Dec 18, 14 @ 8:13 am
The age of the average retiree is a discussion not for what they are at the moment but what the average age is when they retire. The other question I have is how long the average retiree collects a pension.
Comment by Bourbonrich Thursday, Dec 18, 14 @ 8:16 am
@Dem
=So stop already with your constant dissing on public education in Illinois.=
I wish we could go into details about your schools so that we could debate the true “quality” of education your kids receive and whether the cost is fair and sustainable, but I won’t invade your privacy that way. If you want to identify them, then its game on.
I’m not saying that your school, or any other of the many schools in Illinois don’t have REAL money problems. In my experience,however, it’s the result of bad spending decisions and the power given to teacher’s unions in Springfield, as well as the local political patronage that drives most K-12 public system in Illinois.
Give me you school district and we can debate the issue during lunchtime.
Comment by Arizona Bob Thursday, Dec 18, 14 @ 8:23 am
==as well as the local political patronage==
And I always find this statement curious when it comes to schools. Not once in my life in any school district that I have been associated with has political patronage been an issue. Again, I don’t know what kind of hell hole districts you were a part of but whatever they were they have definitely given you a negative outlook on education. I really am sorry that you’ve had such crappy experiences. I haven’t so I can’t relate.
Comment by Demoralized Thursday, Dec 18, 14 @ 8:30 am
- Demoralized - Thursday, Dec 18, 14 @ 8:13 am:
When I did numbers, if it had my name on the report, it was accurate to the best of my ability, not what some management person told me they wanted to see. I always told them they could change the numbers to whatever they wanted, but take my name off the report if they changed it, and don’t call me to testify about the numbers if they changed the recommendations.
Comment by RNUG Thursday, Dec 18, 14 @ 8:55 am
This was an extremely interesting discussion so far. There is no question that at least the Illinois Department of Human Services was advised to expect a supplemental appropriation this fiscal year and not only by the Governor’s office. So Mr Rauner can begin his cuts by proposing a low ball supplemental spending bill, he can appear reasonable by arguing that the Quinn administration presented a dishonest budget that has to be supplemented. But the reality will be significant budget cuts wearing the clothes of supplemental spending.
A huge problem will be the K-12 budget, if it is kept whole the supplemental budget for the other agencies will have to be even lower. Mr. Rauner promised explicitly to fund k-12 education during the campaign. Democrats will be in a bad spot to oppose a low ball supplemental appropriations bill proposed by Rauner and push for a higher number. It won’t be just Jack Franks from the Democratic side opposing a higher supplemental appropriation either. Rauner is not a stupid man and the Democrats set the table for the cuts Rauner will implement.
Is it possible Governor Rauner will oppose any supplemental spending bill, that would be ideologically pure but politically stupid since a low ball supplemental appropriation provides great cover for the cuts and creates confusion among the human services lobbyists who are already gearing up to fight for a supplemental appropriations fight showing the potential,cuts without one.
Comment by Rod Thursday, Dec 18, 14 @ 8:55 am
@RNUG:
Budget people provide the numbers. It’s up to somebody else to decide whether they like those numbers or not. If they don’t then you do what they ask and make them understand the pitfalls of their choices. But after a decision is made you are expected to publicly support that position. That’s the job. It may be possible to do what you say in your world but the budget people wouldn’t have jobs if they did such a thing. While you may be able to afford to be high and mighty about things most can’t. Most do the job they are asked to do.
Comment by Demoralized Thursday, Dec 18, 14 @ 8:59 am
- anon - Wednesday, Dec 17, 14 @ 7:34 pm:
That’s the average age of the current receiptant, not the age they actually retired at.
Comment by RNUG Thursday, Dec 18, 14 @ 9:05 am
I do know of one area of discretionary spending (including dismantling a patronage army):
The downstate jobs program called “prisons”. No fiscal or public safety need to spend hundreds of millions of dollars to put pot smokers in “government mandated time-out”.
Comment by Del Clinkton Thursday, Dec 18, 14 @ 9:53 am
- Demoralized - Thursday, Dec 18, 14 @ 8:59 am:
I did it while I worked for the State.
Comment by RNUG Thursday, Dec 18, 14 @ 11:48 am
RNUG:
Good for you. Doesn’t work in the world I work in. I’d be fired. All I would ask is for a bit of respect of those that do the work and don’t throw them under the bus if a supplemental is needed because I guarantee you it’s not their fault. I respect you a great deal so don’t misunderstand this, but you are just plain wrong here.
Comment by Demoralized Thursday, Dec 18, 14 @ 1:18 pm