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State budgets and personal budgets

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Since Gov. Bruce Rauner proposed slashing spending so that it matches actual annual revenues, it seems all we hear about are the worst-case scenarios that would result as every group in Illinois fights to keep what they’ve been getting. And those worst-case scenarios sound pretty rough. […]

We know it will be painful and there might be some negative consequences from some of the cuts. It scares me, for instance, to think about having to cut help for young adults who’ve aged out of the foster system and who never have been dealt a decent hand in their short lives. But these are the conversations that must be had.

Illinois expects to collect $32 billion in tax revenue. Rauner proposes to cut more than $6 billion to deal with the deficit and spend $31.5 billion. It really would be painful if I had to cut my spending by 20 percent, but there was a time once when I had to find a way to cut 10 percent. Staycations happened rather than vacations. There were far fewer dinners out and drinks with friends after work.

I don’t kid myself. I know there are plenty of us in Illinois who cut all that and much more during the Great Recession. They’ve never recovered from it.

But now it’s up to all of us to figure out what we want to afford. What we’re willing to pay for and what we’re not willing to fund. What can we live without?

* OK, first of all, Gov. Rauner did not match spending with revenues. His budget plan is loaded with billions in phony savings.

And even with those magical mystery savings, he still had to do things like toss kids off ventilators. So, while most people might want to compare their own personal situations to the budget, being forced to take a “staycation” or buying fewer glasses of wine is quite a bit different than telling parentless kids who are wards of the state that DCFS will no longer be their parents and they’ll be completely on their own once they turn 18.

…Adding… From comments…

We need to cut, yes, but we need to cut things that would be described as those little luxuries she mentions cutting out of her personal budget. I didn’t see her mention cutting utilities, groceries, medical care out of her personal budget.

That’s exactly right.

* Also, not a word about revenues? Sheesh.

To compare my own family history to state budgeting, when I was a kid and my parents found themselves struggling financially (they had five boys) my dad would go out and get another job. He often worked three jobs when I was young. Did they also take out some loans to get through particularly tough times? Yep. Did my dad buy some cars (and an old tractor), fix them up and sell them for profits? Yep. Why? Because they recognized their need for more revenues. But did they also constantly watch their spending? Heck yes they did. Whew, did they ever.

* From a Senate Democratic press release…

Rockford resident and Illinois State University student Lauretta Schaefer testified in the Illinois Senate Appropriations I Committee yesterday about the effects Governor Rauner’s budget would have on the Department of Children and Family Services.

Schaefer receives a scholarship from DCFS that allows her to attend college - something she knew she couldn’t do otherwise.

“When I was 14 my adopted parents showed me the DCFS scholarship, and I knew that was my ticket to higher education. Without the scholarship, I wouldn’t be able to attend college. Even with it, I still work two jobs to make ends meet,” said Schaefer.

Under the proposed budget, DCFS’s budget faces a nearly $150 million cut. A majority of the cuts will eliminate services for DCFS youth who are 18 years or older.

Senator Steve Stadelman (D-Rockford) who sits on the Appropriations I Committee had concerns about the proposed cuts.

“Many of these children have no parents and no support system to fall back on once they reach the age of 18. As a parent of four, I know my children will still call me for help and advice once they reach 18. These children don’t have that safety net. If we cut these programs, these young adults will have no one to fall back on. We need to keep these programs to help these kids break the cycle of poverty, to grow up and become productive members of our society,” said Stadelman.

It’s truly worth your time to listen to her testimony…

Click to listen

posted by Rich Miller
Tuesday, Mar 24, 15 @ 9:25 am

Comments

It always drives me nuts when people try to equate a government budget with their home budget. It’s not even remotely close to the same. When you claim such nonsense you show your ignorance of government budgets.

Comment by Demoralized Tuesday, Mar 24, 15 @ 9:37 am
Ms Schaefer sounds like a wonderful young person. Good for her for testifying.

As for budgets, what would be comparable to the state giving a movie production studio $10M to buy land that is not for sale? /s

Comment by Formerly Known As... Tuesday, Mar 24, 15 @ 9:38 am
I came to say what Demoralized said. But Madeline Doubek isn’t ignorant. So what (or who) is behind such willfully misleading analysis?

Comment by South of Sherman Tuesday, Mar 24, 15 @ 9:40 am
Didn’t PQ just give $10M to a movie studio? Yeah, I can’t pay the electric bill because all my money is in my “gambling pocket”.

Comment by Weltschmerz Tuesday, Mar 24, 15 @ 9:44 am
I know many youth programs have already been cut nearly 50% since 2009, our schools are some of the lowest funded by the state and now new cuts are being proposed. It’s ironic that we continue with a small and regressive tax rate and that the Illinois tax burden is lower than ¾‘s of all states/ GDP. Yet the administration and elected leaders think its ok to cut services to the poor, disabled, traumatized so we don’t affect the people who can afford more taxes.

Comment by independent Tuesday, Mar 24, 15 @ 9:45 am
Illinois tax burden is lower than 3/4 of the states/GDP? I would love to see the source for that

Comment by Shoedoctor Tuesday, Mar 24, 15 @ 9:47 am
I always love these quaint comparisons of government budgets to family budgets. They make the process sound so easy peasy. In addition to the issues Rich mentioned, the decision-making dynamic is far more complex and difficult in the government setting. Madeline you’re not helping.

Comment by Norseman Tuesday, Mar 24, 15 @ 9:47 am
Demo, I generally agree with you as I often do. The numbers connected to our debt and responsibility are so mind-boggling that it’s difficult to make any rational comparison. Thus, you get poor ones. I think her overriding point here is that on a personal level there have been huge sacrifices and very difficult times for a lot of people who were sailing along just fine until their worlds suddenly crashed on them. They had no guarantees suddenly, and perhaps irrationally lashed out at people who did. When you’re caught in the eddy, rational thought isn’t at the tip of anyone’s tongue or the top of their heads. It’s all coming from a place of severe injury. The state has a myriad of obligations that are far beyond any household budget. There are no quick fixes and theoretically you have to get 14 million people to agree to a solution. A poor comparison to be sure, but one that regular folks can relate to.

Comment by A guy Tuesday, Mar 24, 15 @ 9:49 am
– I don’t kid myself.–

Dont kid yourself. When you say Rauner’s proposed spending and revenues balance, you’re definitely kidding yourself.

– So what (or who) is behind such a willfully misleading analysis.–

Who’s the boss? Griff pays the bills for that crew.

Comment by Wordslinger Tuesday, Mar 24, 15 @ 9:57 am
The fact that Rauner won’t consider any kind of new revenue makes his cuts the more onerous. If he had proposed some, then we could have a serious discussion - how much new revenue, how much to cut, what programs to cut, etc.

Now it’s up to the legislature. We’ll see if they’re up to the task.

Comment by Sir Reel Tuesday, Mar 24, 15 @ 9:57 am
Many families turn to the state for assistance when they fall upon hard times. If someone loses a job, they go to the state for unemployment insurance. Income drops far enough, someone comes for food stamps. Someone loses insurance, they come to the state for Medicaid, perhaps.And so on.

Families make decisions for themselves The state makes decisions for others- vulnerable youth, handicapped individuals, aged veterans, etc. Why does anyone take Doubek seriously?

Comment by Truthteller Tuesday, Mar 24, 15 @ 10:05 am
The difference between the state and personal budgets is that part of the state budget is meant to be the safety net for people who cannot survive and/or succeed on their personal budget - the old, the ill, the disabled…. in addition to the group pooling of citizens’ money for road projects, state disasters, etc.

We need to cut, yes, but we need to cut things that would be described as those little luxuries she mentions cutting out of her personal budget. I didn’t see her mention cutting utilities, groceries, medical care out of her personal budget.

Comment by mythoughtis Tuesday, Mar 24, 15 @ 10:08 am
I wrote to Dave Ramsey and he said the state needs to get a second job.

Comment by Excessively Rabid Tuesday, Mar 24, 15 @ 10:13 am
I love the Red Herrings in this discussion about the 10 Million for the film studio. Based on what I have requivelantead about that incident, the family budget equivalent would be. Giving your child $1,000 to buy a car as long as they matched it with $2,000 of their own and used it to increase family income. If they couldn’t do that within 3 months the money would have to be repaid.

Comment by jimbo2 Tuesday, Mar 24, 15 @ 10:28 am
Independent, Truthteller and mythoughtis, agreed. Shoedoctor, here’s a link to a comparison of state income tax rates as of 2014. Note that this was made before Illinois’ income tax rolled back to the lower rate. We’re now among the lowest in the Midwest. (Indiana’s nominally lower, but they have a system where counties and municipalities can levy additional income taxes, so it’s not a really good comparison.) For a sense of where we stack up overall, notice that our rate is now lower than Alabama’s.

http://taxfoundation.org/blog/top-state-income-tax-rates-2014

As far as the family budget comparison goes, maybe this would be more apt: Dad says, “Sorry, kids, but you’ll have to go without supper for the foreseeable future, because I already gambled away the grocery money, I just quit my job (revenue source that was allowed to expire), and I’m not too enthused about finding another one (reluctance to add new revenues).” It’s not a perfect analogy, but maybe a little closer than just having to take staycations and give up wine.

Comment by CitizenJane Tuesday, Mar 24, 15 @ 10:29 am
===Based on what I have requivelantead===

The rest of your point is quite good. But what the heck was that word you were searching for?

lol

Comment by Rich Miller Tuesday, Mar 24, 15 @ 10:30 am
Ms. Doubek was a senior editor for the Daily Herald, and is indeed a smart and well-informed person.

Why she chose to ignore that part of Rauner’s proposed cuts is the 2.2B plug assigned to changing pensions, is beyond me. These cuts are are neither currently legal, nor achievable in the 2016 Budget time frame.

Comment by walker Tuesday, Mar 24, 15 @ 10:49 am
Rich
===Based on what I have requivelantead===

The rest of your point is quite good. But what the heck was that word you were searching for?

lol

I have no idea what happened (PEBKAC - Problem exists between keyboard and computer). somehow the word equivelant (which I used later) was inserted into the word read (which I intended). I need a better proofreader than myself.

Comment by jimbo2 Tuesday, Mar 24, 15 @ 10:53 am
Suspect Ms. Schaefer will be a success no matter how many wrongful roadblocks are tossed her way. Impressed with her presentation and logic.

Comment by x ace Tuesday, Mar 24, 15 @ 10:59 am
I think that people who partake in this state budget/personal budget comparison do so because they have an overarching view that government spending is generally wasteful or that those that benefit from government spending don’t try hard enough to make ends meet on their own. Rather than marginalizing the spending, they marginalize the cuts. For example, rather than marginalizing the spending (the friend that always complains about the person driving an Escalade while using food stamps) they always try to marginalize the cuts (its like having to take a staycation or cut back on eating out). Both examples are rooted in the same belief.

Comment by Hacksaw Jim Tuesday, Mar 24, 15 @ 11:09 am
The irony is that Doubek and other Rauner backers see themselves as compassionate. They can live with the “hard cases” that don’t hurt them personally for the greater good of not raising taxes.

Comment by nona Tuesday, Mar 24, 15 @ 11:30 am
Re: Walker @ 10:49

Is the “and” in your first sentence meant to be causal? You simply repeated the assertion that she’s smart and serious. Lots of editors are neither.
I ‘ll even endorse yor assertion that she may have once been a serious journalist, but now she’s a hack for corporate interests. Her analogy of a gov budget to a personal budget is meant for the easily duped. It appears in all seriousness in downstate letters to the editor as just plain ol’ good prairie common sense. Kinda like flat earthers who carry snowballs onto the US Senate floor to disprove climate change. US Senators are smart/serious people, right?

Comment by Scholar Athlete Tuesday, Mar 24, 15 @ 11:39 am
@jimbo2 - happens to all of us. fwiw, requivelantead is now the word of the day lol.

Comment by Formerly Known As... Tuesday, Mar 24, 15 @ 12:05 pm
I don’t have a problem with someone comparing personal/government budgets, but talk to me when your “tough times” don’t involve a lack of a vacation or not being able to have drinks with friends. With all due respect, those words demonstrate a lack of humanity and an understanding that while tightening your belt means being a little uncomfortable…tightening others means real human suffering. Politics and partisanship aside, I genuinely hope she and others get that.

Comment by A reasonable person... Tuesday, Mar 24, 15 @ 12:09 pm
Walker, the irony is that unless things have gone south fast at ReBoot, those times of personal sacrifice Ms Doubek refers to would have been at the Daily Herald. She apparently figured out she had a revenue problem at the Daily Herald so she went and found herself some more revenue at ReBoot.

Comment by Michelle Flaherty Tuesday, Mar 24, 15 @ 1:03 pm
All this talk of not addressing new revenue and other states’ tax rates, yet no mention of the giant revenue matzo ball hanging out there…Illinois does not tax retirement income. An entire, growing segment of the population 100% exempt from state income taxes. Yet elsewhere…

- Minnesota? Taxes all retirement income. A state pensioner retiring today would have an effective tax rate over 6% on his pension.
- Michigan? Taxes 401k and pensions but Social Security is exempt.

Perhaps in the family budget example, we can have gramps pay for dinner. He’s the only one left with any money.

Comment by nixit71 Tuesday, Mar 24, 15 @ 2:30 pm
a lot of these programs help reduce crime and drug problems which are far more costly on the enforcement side when you look at the cost of police, prosecutors and defenders, and prison.

Comment by Ghost Tuesday, Mar 24, 15 @ 2:38 pm
I know everyone will yell at me, but please go back to talking about taking kids off of ventilators. Because of family budget issues, I have an 18 year old trying to make it on her own while paying for college so its hard to feel too sorry for someone losing their DCFS scholarship. There will be lots of very sad stories that take priority over 18 year old college students.

Comment by Anonymous Tuesday, Mar 24, 15 @ 3:12 pm
Oh, Anonymous at 3:12 — I am not going to yell at you. I’m just going to remind you that your daughter is so privileged to have a caring parent. These DCFS scholarships are for children who have grown up “in the system,” and who have faced horrors that your children, and mind, wouldn’t want to imagine.

The DCFS scholarships provide a road out of poverty for a handful of kids who have demonstrated awe-inspiring resilience. I don’t begrudge them their scholarships — and I wish you and your daughter the best.

This shouldn’t be a contest over whose story is the saddest. The State budget needs to cover those in need and also provide smart investments in young people like Lauretta, so they have what they need to grow into productive and successful adults.

Comment by Soccermom Tuesday, Mar 24, 15 @ 4:06 pm
Anon,
These kids often have no families. Would your kid prefer a full tuition scholarship if it means not having a family? Sheesh, have some perspective.

Comment by Michelle Flaherty Tuesday, Mar 24, 15 @ 4:11 pm
Scholar Athlete: You write really well. Good to see on this blog.

My knowledge of Ms. Doubek’s capabilities comes from people who worked with her. That doesn’t mean we should agree with with whatever she writes. Just that we avoid ad hominem attacks.

As you wrote: comparing state and household budgets is a commonly abused fallacy. Economists deem it the “fallacy of composition” when using household economic principles to explain state or country economics.

Comment by walker Tuesday, Mar 24, 15 @ 5:53 pm
Michelle flaherty my perspective is intact. I feel sorry for ALL kids struggling not just the ones receiving state assistance. I know a 20 yr old confined to wheelchair because of spinal bidada

Comment by Anonymous Tuesday, Mar 24, 15 @ 7:41 pm