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* Perhaps the most idiotic newspaper editorial of the entire year…
But a recent report illustrates, one again, that Illinois does not have a revenue problem.
The report by the Pew Charitable Trusts looked at the revenue situation for every state, compared to the period before the Great Recession. Illinois was second in the nation to North Dakota in having the highest increase in state revenue growth since the recession hit.
North Dakota’s growth has been fueled by an oil boom that has brought billions of dollars to that state. Illinois’ growth was fueled by a 2011 income tax increase that hampered job growth.
Despite the massive increase in state revenues, Illinois’ budget situation didn’t significantly improve. More money in the state coffers has not resulted in a significant reduction of the state’s day-to-day debt.
It has not resulted in fiscal strength. In fact, the General Assembly had to approve several fund transfers to allow the state to make it through the current fiscal year.
In simple terms, the additional taxes paid by Illinois residents were not used to improve the state’s financial situation.
Where to begin.
Most of the 2011 TEMPORARY INCOME TAX HIKE revenues went to make pension payments that the state had skipped or skimped on for years.
The day-to-day debt was significantly reduced until THE TEMPORARY INCOME TAX HIKE MOSTLY EXPIRED, and now it’s on the upswing.
The fund transfers were necessary this fiscal year because THE TEMPORARY INCOME TAX HIKE MOSTLY EXPIRED.
The state’s fiscal condition was definitely improving, the required pension payments were being made, Medicaid was reformed, other significant budget cuts were made and then THE TEMPORARY INCOME TAX HIKE MOSTLY EXPIRED.
* And then they admit it…
Of course, the 2011 tax increase has expired and that is the cause of the current budget issues. But many other states, including those surrounding Illinois, are flourishing with decreases or much smaller increases in revenue since the Great Recession.
Illinoisans received the largest income tax cut in state history when THE TEMPORARY INCOME TAX HIKE MOSTLY EXPIRED. We are the only state in the country to have recently reduced income taxes by so much. And yet, pension obligations are still on the rise, as are costs for Medicaid, education, public safety, etc. So, we most certainly do have a revenue problem here because our revenues are obviously not meeting basic spending necessities.
This is not an absolution of the Democrats’ horrible FY 15 budget. That thing was as irresponsible as it gets. The Democrats most definitely should’ve done a much better job of preparing for the possible expiration.
But the reason Gov. Rauner and the legislative leaders used fund transfers to patch most of the 15 hole instead of making massive cuts is because THE TEMPORARY INCOME TAX HIKE MOSTLY EXPIRED and the state needed to find a temporary, one-time revenue fix until the FY 16 budget could be addressed.
posted by Rich Miller
Tuesday, Apr 14, 15 @ 10:42 am
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“Pantagraph!” I guessed, as soon as I saw the words “most idiotic newspaper editorial.” Sure enough.
It’s tough to beat the Trib’s edit-page inanities, but hats-off to Bloomington for bringing it, and consistently.
Comment by Linus Tuesday, Apr 14, 15 @ 10:47 am
That is idiotic.
Comment by A guy Tuesday, Apr 14, 15 @ 10:50 am
There is a huge difference between taxing revenue from new product and raising taxing revenue from existing product. North Dakota found a gold mine in the form of oil. Illinois just squeezed more money from the current turnip.
Not remotely similar.
Comment by VanillaMan Tuesday, Apr 14, 15 @ 10:54 am
Didn’t the Paragraph used to run Doonesbury on the Op-Ed page because it was too political for the comics? They aren’t the only paper that does it, but that’s always a red flag in my book.
Ah, McLean County: wide lawns and narrow minds.
Comment by 47th Ward Tuesday, Apr 14, 15 @ 10:56 am
It’s only April. The Southern still has time to play catch up.
Comment by Jorge Tuesday, Apr 14, 15 @ 11:00 am
I would like to add that the Illinois unemployment rate dropped significantly in the last year or so, proving that the income tax increase was not the job killer some said it would be. The tax increase did some real good in this state. I would gladly pay a little more to help turn this state around, but I’m in the minority.
Comment by Grandson of Man Tuesday, Apr 14, 15 @ 11:03 am
Hilarious. Someone tell their board our oil well dried up then maybe they will get it.
Comment by Former Merit Comp Slave Tuesday, Apr 14, 15 @ 11:05 am
Shouldn’t have your research done by high school interns.
Comment by Aldyth Tuesday, Apr 14, 15 @ 11:06 am
Ah, but there is dissent. Read the comment posted by a Pantagraph reader in response to this editorial.
Comment by Anon221 Tuesday, Apr 14, 15 @ 11:08 am
Pension payments were being paid in full for the first time in years, the backlog of bills was reduced by billions and spending was cut significantly.
The Bloomies obviously want to return to the good old days of borrowing from the pension funds and state vendors (with interest) through late payments.
Comment by Wordslinger Tuesday, Apr 14, 15 @ 11:09 am
I too would be willing to pay more, but only if the General Assembly and Governor curb spending. It seems we give them more to help and they find other things to spend it on. They just don’t get it or don’t care. I think the second sorry to say.
Comment by Union Man Tuesday, Apr 14, 15 @ 11:09 am
The Stevenson family used to own that newspaper. One member of that family was a governor, a candidate twice for president of the United States and a spectacular voice of strength and reason during the Cuban missile crisis.
Sheesh.
Comment by Wallinger Dickus Tuesday, Apr 14, 15 @ 11:11 am
**Only if the General Assembly and Governor curb spending. **
They have SIGNIFICANTLY curbed spending over the last five years. This is an undeniable fact.
The main reason that spending has increased is because of pension payments that couldn’t be avoided.
Comment by AlabamaShake Tuesday, Apr 14, 15 @ 11:13 am
I went to school in Bloomington 25 years ago and the paper was all AP articles back then anyway. I still consider the Pantagraph’s editorial a nice run for a mid-major, but The Tribune an Sun-Times are the power conference in this state and in the bracket for most idiotic editorial, one of them will run away with the prize at the end of the year. I’m awfully fond of the way the Tibune praises Rauner for the very things it attacked Garcia for.
Comment by Carhartt Representative Tuesday, Apr 14, 15 @ 11:24 am
The Pantagraph’s editorial page is now controlled by the Decatur editor. Stevenson would be appalled.
Comment by Gracie Tuesday, Apr 14, 15 @ 11:27 am
I’m with Union Man on this one. Unless you put in ironclad agreements to not siphon off every time you want to spend more money, no more tax.
Comment by Anonymous Tuesday, Apr 14, 15 @ 11:27 am
Decatur Herald & Review also ran same editorial.
Comment by sparky791 Tuesday, Apr 14, 15 @ 11:37 am
Illinois will roar again, but we need higher taxes. Revenue from other sources should also be a priority. State Retirement income tax, a 50 cent/gal tax while gas is low, service tax. A blend of things would work. We need to tap every source of money that we can.
Comment by BlameBruceRauner Tuesday, Apr 14, 15 @ 11:46 am
The year is still young…there will be worse.
Comment by Jake From Elwood Tuesday, Apr 14, 15 @ 11:54 am
IPI distributed the Pew study story via email on April 8th. Guess it took the Pantagraph 5 days to slightly re-write it and print it.
When I read the IPI story, I just shook my head; as Rich points out, there were so many misstatements and mis-characterizations I couldn’t even work up the outrage to respond to it.
Comment by RNUG Tuesday, Apr 14, 15 @ 12:03 pm
“It’s all good this time, they put in “ironclads agreements”!”
“Oh, that’s a huge relief. I was afraid this was gonna be like that time Joanna Galloway STRENUOUSLY Objected…”
Comment by Shark Sandwich Tuesday, Apr 14, 15 @ 12:03 pm
Shamefully, editorial boards do less research than their sports reporters in many instances.
Comment by Shemp Tuesday, Apr 14, 15 @ 12:03 pm
Two quickies:
First, how did the income tax increase hurt job creation? If you track illinois jobless numbers over a 30 year period you will see we have always had slower job growth, BUT we gave much higher quality of jobs and life.
Second, what surrounding state is prospering? Indianna is way below the median national income, and wages are in the decline as the state slips into poverty. Illinois is above the median income. So indianna may have a lot more sweat shops and poverty lelvel jobs. But are we really in a race to get rid of the middle class? Indianna is winning if that is the goal
Comment by Ghost Tuesday, Apr 14, 15 @ 12:08 pm
No matter how many ways it’s explained, or how many times it’s said, far too many people believe the tax increase went to additional wasteful spending, when it went to vendor and pension debt instead. I hear it from friends, coworkers, family, and here in the comments and it’s just plain wrong. Making the required pension payments, for the first time in a long time, was a huge step toward fiscal responsibility. So too was reducing the vendor backlog. Both should be considered to be meeting obligations, not increased spending, but many people don’t believe it, probably most people in the state think the tax increase went solely to new programs and wild, wasteful spending. Evidence to the contrary seems to be generally disregarded, and I believe this editorial is representative of what far too many in the state believe to be correct.
Comment by AC Tuesday, Apr 14, 15 @ 12:37 pm
The two years BEFORE the income tax increase (2009 and 2010) the State paid the entire pension payment by issuing pension obligation bonds - so NOTHING came out of the general fund budget for pension payments.
So - no problem making the budget balance without the income tax increase as long as you pay nothing at all to pensions. At least back to the 1970’s, the State has paid nothing or less than the actuarial required pension payment - and that sure hasn’t worked out well.
Comment by archimedes Tuesday, Apr 14, 15 @ 12:49 pm
I agree the state’s finances had improved a bit
bit look at the state cafr. This state has a
huge problem that will get much worse even
if they raise the income tax rate due to new
accounting standards which is not just dealing
with the cash side like this discussion.
Comment by David Tuesday, Apr 14, 15 @ 1:02 pm
Just curious, what was the backlog of bills at 12/31/10 and at 12/31/14? Anybody know?
Comment by anon Tuesday, Apr 14, 15 @ 1:31 pm
The editor is from Iowa. What do you expect? Pretty easy for him to get hornswoggled by the likes of IPI.
Comment by Gracie Tuesday, Apr 14, 15 @ 1:43 pm
= Just curious, what was the backlog of bills at 12/31/10 and at 12/31/14? Anybody know? =
General Funds payable at the end of the second quarter of fiscal year 2011 was around $6.4 billion. Tack on what agencies keep for “processing,” and you’re probably well over $8 billion.
It’s important to note that lapse period had just been extended to Dec. 31 to close out fiscal 10, and the state had just benefited from a few one-time revenues. (http://www.ledger.illinoiscomptroller.com/ledger/assets/File/CQJan2011.pdf)
General Funds payable in Q2 of Fiscal 15 was around $4.3 billion — $6.5 billion if you include unreported vouchers.
And then the tax hike expired…
Comment by Dirty Red Tuesday, Apr 14, 15 @ 2:18 pm
The State is still in a fiscal crisis. The spending has NOT been reduced significantly during the past four years, and we are still the victims of over eight years of unbalanced budgets. Does anyone really believe the legislative leadership is finally ready to truly address the problem now?
Comment by Anonymous Tuesday, Apr 14, 15 @ 2:38 pm
Once again, math is hard and logic is missing.
Comment by Demoralized Tuesday, Apr 14, 15 @ 3:00 pm
Didn’t the state raise between $25-$30 billion from the income tax hike over the 4 years? If so, Dirty Red, the state ended up reducing GF payables by $1.5 billion in the 4 years.
Comment by anon Tuesday, Apr 14, 15 @ 3:22 pm
The income tax hike was sold by democrats as temporary way to pay off bills and fix the structural deficit.
Obviously neither happened. Why should we believe them now without a bipartisan plan to reform government spending
Comment by Lucky Pierre Tuesday, Apr 14, 15 @ 3:30 pm
At it’s height, the backlog of bills was at $9.9 billion in November 2010. In November 2014 it was $5.5 billion. At the end of March it was $7.1 billion.
Comment by Juice Tuesday, Apr 14, 15 @ 3:42 pm
Illinois is exhibit A why Politicians can’t be trusted to run a pension program. If this was a private company they would all be in prison for fraud. Instead we reelect them. Promising people the moon works every time.
Comment by Lucky Pierre Tuesday, Apr 14, 15 @ 3:45 pm