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Big budget problems, no cooperation and a huge hole on the horizon

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Illinois

* Ryan Keith has a pretty good roundup of the budget problems faced by the state..

State senators didn’t take any budget action last week. Lawmakers don’t predict major breakthroughs when both the House and Senate return Wednesday for the second week of the fall veto session. They’re working on other priorities, such as electing new leaders and handling bills left unresolved this summer.

But while they dither, the budget appears to be collapsing, and the Governor Who Cried Wolf far too many times is finding it harder to convince people that the situation is as bad as it may be…

Some even question whether the governor is exaggerating cuts now to turn the tables on legislators.

“I think there’s a lot of people who have been suspicious of that since day one,” said Sen. John Sullivan, D-Rushville.

Part of the problem is the guv closed a bunch of state parks to save just $2 million. That’s essentially a rounding error on a rounding error. None of the governor’s own pet projects were cut. The really big stuff, like Medicaid expansion, was untouched. Others must feel pain. Not him.

* And more bad budget news could be coming if Attorney General Lisa Madigan sticks her nose into the 10th casino auction…

Illinois Attorney General Lisa Madigan has concerns about a new casino proposal in Rosemont. Several years ago, Madigan linked the village’s bid for a casino with organized crime.

The infamous Emerald Casino in Rosemont never was built. But now, its license is up for grabs. And once again, Rosemont is one of three towns where it could land. Robyn Ziegler is a spokesperson for the attorney general.

Ziegler: The attorney general has raised extensive concerns about Rosemont in the past, and as the Illinois Gaming Board scrutinizes the bids, the attorney general expects that they will, in the most transparent way possible, fully explain to the public how they’re addressing those concerns.

Internal Gaming Board documents at the time showed that investigators were almost as worried about a casino in neighboring Des Plains, because the Rosemont guys could almost walk over to the other site and get their fingers in the pie. But AG Madigan has never uttered a peep about that site. Her detractors say Madigan worked hard against Rosemont and stayed silent about Des Plaines because Neil Bluhm, the Des Plaines boat developer wannabe, is also a big campaign contributor.

If the Gaming Board chooses the Rosemont site (the developers are willing to pay far more money than anyone else) and AG Madigan intervenes, that $435 million being offered up for the site will probably not make it into the budget in time for the end of this fiscal year, causing even more pain.

* State and city budgets falling fast

* Horse racing’s big windfall

* SJ-R Opinion: Lawmakers ought to take Hynes’ advice

* From The Vault: State’s backlog of unpaid bills an old woe

posted by Rich Miller
Monday, Nov 17, 08 @ 9:15 am

Comments

The problems with the budget are an exit wound from a .44 Magnum. For the past several years, the governor and GA have patched it up with bandaids (selling assets, bonding, and pension skim). Now the hole is public, and the patient has lost too much blood.

If they had stiched it up at first, it would have hurt but might have healed by now. Bad fiscal policy just makes the bleeding worse and the recovery outlook more bleak.

Comment by Fan of the Game Monday, Nov 17, 08 @ 9:26 am
So they all get together this week and NOTHING will be accomplished!? So what else is new? Do these politicians EVER work?! When does this end? Does this mean they will be working more this month?

Comment by Confused 2B Monday, Nov 17, 08 @ 9:27 am
Could Blago also be exaggerating the cuts because he wants to maximize the possibility of getting plenty of federal aid after Obama is sworn in and the new Dem Congress is sworn in.

Perhaps that is assuming too much, but I believe that the possibility of substantial federal aid is real–after all, from a political standpoint, it is hard to talk about bailing out poorly run auto companies, greedy insurance companies and banks and similar entities but leave your local and state governments starving. And Obama has all but promised that aid to states is coming and that it is a priority.

More importantly for the individual taxpayer, we should encourage our local leaders not to even think about any type of tax increase until the amount of federal aid is known. We have to manage our own shrinking budgets too, and we shouldn’t pay twice to fill the pockets of pols and “campaign contributors.” They’ll get enough of whatever falls off the federal truck.

Comment by Cassandra Monday, Nov 17, 08 @ 9:32 am
Does the governor want to have his cake and eat it too?

Comment by Levois Monday, Nov 17, 08 @ 9:36 am
Why is Pat Fizgerald doing lisa Madigan’s job? She is only worried about Rosement and possible mob ties.

Comment by Wumpus Monday, Nov 17, 08 @ 9:37 am
Do these politicians ever work or just like to get together and socialize? Is it one big party down there?

Comment by Anonymous Monday, Nov 17, 08 @ 9:39 am
It will be pretty hard for the gaming board and rosemont (or anyone) to prove a negative e.g. “we’re not mobbed up”.

Comment by steve schnorf Monday, Nov 17, 08 @ 9:41 am
For a guy that will turn reformed junkies and their kids out on the street, and close our nature conservancies, he sure has a problem cutting unemployment or healthcare benefits. Come on Governor, you are accustomed to being the bad guy. Why don’t you just be the bad guy for saving the budget. Yeah, everyone is going to despise you, but they already do. So do the right thing, slash the budget to pieces.

Comment by Heartless Libertarian Monday, Nov 17, 08 @ 9:44 am
Just how many excuses are we supposed to hand over to these overpaid legislators to justify their refusal to make any legislative decisions?

Now we are expected to wait until a new Senate President is selected? What is the next excuse?

The entire freakin’ state is ran by the same party! What are they so politically afraid of? They have no GOP competition!

If the Illinois Democrats wanted to past their GRT tax right now - they probably could. If they wanted to pass an income tax right now, they probably could. If they wanted to cut any budget for any amount, they have the political ability to do that!

Yet they do nothing! And Illinoians seem to like this situation just fine.

We all know that someone has to get cut. We all know that someone has to pay more. We all know that someone’s budget has to take a hit. We all know that we are at the end of our rope!

Inaction at this point is worse than doing the wrong thing.

This is a very sad situation to be in. The Illinois Democratic Party has played chicken with Illinoians to the point where the wheels have gone over the cliff and we are falling in mid-air. Their refusal to do their jobs is now resulting in triage politics. It is every person for themselves and they are all scrambling like rats towards the lifeboats.

The Illinois Democrats didn’t care that a decision could have been made while we were still racing towards the cliff. They didn’t care that if they pulled together someone could have wrestled the steering wheel of governance from that lunatic governor they nominated and elected twice. They sat their in the back and pushed one another in front to absorb the crash they knew was coming to this state!

There is a shortage of courage in Illinois politics. There is a shortage of leadership in Illinois. Yet voters have also sloughed off any decisions by voting to keep these cowards in office. They also voted to ignor the constitutional convention lifeline offered only once every 20 years.

We have the government we deserve.

Comment by VanillaMan Monday, Nov 17, 08 @ 9:46 am
The state is a mirror of the Congress, or is it the other way around? The majority seems to be unwilling to do anything else than stay the course and the minority is impotent to put forth any constructive proposal.

In some way Illinois is reminiscent of a corporation/individual who has determined to declare bankruptcy, but is racking up expenditures at a record rate because they will get things they never have to pay for.

Comment by Plutocrat03 Monday, Nov 17, 08 @ 9:57 am
The voters did not hold them accountable for their inaction nor for corruption, nepotism, double-dealing, pension raiding and horrible financial management. What do you expect these guys to do? As long as they are getting along with the easy, why roll up their sleeves and do some tough work, make hard decisions and tell many people news they are not going to like to hear? As that great spiritual leader said, “OUR Chickeennnnnnns, are coming HOME…….to roost!”

Comment by Sam Monday, Nov 17, 08 @ 9:57 am
The truth of the matter is, the deeper the financial crisis turns out to be, the simpler — and more painful — the solutions will be.

There will be no getting around them. And they will be more painful because of the fiscal carelessness and recklessness that was demonstrated when times were flush.

Like Mr. Chekov said: “Any idiot can face a crisis, it is this day-to-day living that wears you out.”

Comment by wordslinger Monday, Nov 17, 08 @ 10:06 am
It seems like they all want their cake and eat it! I REALLY hope they can wrap up this budget and get to REAL work this week! That’s what they are paid and ELECTED to do!

Comment by Confused 2B Monday, Nov 17, 08 @ 10:08 am
==Does the governor want to have his cake and eat it too? ==

No, Levois, he wants to have his cake and eat yours.

Comment by Anon Monday, Nov 17, 08 @ 10:15 am
new casino proposal in Rosemont.

So, we are officially abandoning the idea that they ought to be located in depressed areas, to help them out? I can throw a dart at a map of Cook county and find a much better and deserving place than Rosemont.

Comment by Pat collins Monday, Nov 17, 08 @ 10:23 am
I say everyone send cakes to Springfield this week and put ideas inside each one-maybe that would help!

Comment by Confused 2B Monday, Nov 17, 08 @ 10:24 am
===So, we are officially abandoning the idea that they ought to be located in depressed areas===

The statute creating the license, under George Ryan’s tenure long ago, rescinded that requirement.

Comment by Rich Miller Monday, Nov 17, 08 @ 10:25 am
Rosemont is where it will be-so stop wasting suggestions or even time on this one!

Comment by Anonymous Monday, Nov 17, 08 @ 10:26 am
VM. So you want the GA to act, decisively and quickly? That makes sense. But exactly what is it you want them to do? Remember, be specific..no “take action to solve this problem” bs.

Comment by steve schnorf Monday, Nov 17, 08 @ 10:27 am
First…
Do a work-around on Blagojevich while impeaching him.

Then a total budget freeze!
Prioritize so that the bills owed are paid.
No budgetary growth for any programs.
No salary increases for legislative, judicial or executive salaried staff. No salary increases for state officials.
No new hires.
No new outside contractor.
Remove Cook County property tax caps for residential properties worth more than $300,000.
Half the number of Chicago TIFF districts.
Consolidate all Illinois townships into county governments, eliminating this layer of government.
Halt construction on any new government buildings or relocating.
Close two prisons.

Then next week…

Comment by VanillaMan Monday, Nov 17, 08 @ 10:43 am
VM, You are awesome. You have a great way with words, and I wish I had that talent. I look forward to reading what you post on this site.

Thank You

Comment by Boscobud Monday, Nov 17, 08 @ 10:44 am
Not so easy VMan. close 2 prisons and no new hires? Where are you going to send the prisoners and even with all the mandatory overtime workers now are doing, will there be enough guards in each newly imposed upon prisons to handle the increase of prisioners and crowding it would entail? Freeze the budget? In the current one prison closure, money is still needed to be spent to get the recieving prisons ready. So how does this this fraction of your suggested ’solutions’ solve things?

Comment by Princess Monday, Nov 17, 08 @ 10:54 am
All this and Emil’s probably the prime candidate for Obama’s seat.

I, for one, look forward to more mess. We voted these folks in, so we bear the responsibility for the continued dysfunction.

Comment by Macbeth Monday, Nov 17, 08 @ 10:57 am
OK - then.
Close one prison and make everyone sleep in shifts.

Comment by VanillaMan Monday, Nov 17, 08 @ 10:57 am
Someone has to break in Rezko’s undies!

Comment by VanillaMan Monday, Nov 17, 08 @ 10:58 am
BEFORE the election, I was desperately hoping that the legislature would get off its collective keester and do something to prevent the catastrophe that is now starting to unfold. But then the so-called voters of this state re-elected every darned one of these hacks and gave them another 20-year pass to continue their feckless ways. So bring on the catastrophe! Illinois has got it coming, and I hope it is a dandy.

Comment by Skirmisher Monday, Nov 17, 08 @ 11:19 am
Still waiting for the state to tax ALL internet sales, not just those from IL firms. There seem to be some potential revenue sources out there that are just off limits. My guess is that there is also a lot of spending on the farms that should be taxed but is being hidden as production related expenses which are tax exempt. But, good luck getting any representative or senator to go after these! Too many sacred cows in Illinois.

Comment by vole Monday, Nov 17, 08 @ 11:21 am
Blago could take heed of Mayor Daley, who is reducing headcount and avoiding some layoffs by offering financial retirement incentives to unionized employees and to non-union as well.

We know that Illinois state government, despite the 2002 early retirement initiative, is still awash in employees aged fifty five and older who are taking advantage of the lifetime job security
and low-key working environment offered by the modern Illinois civil service to stay on and on. But even some of those folks, especially the ones already eligible for retirement, might respond to financial incentives (combined with their pensions and free retiree health care) to depart. It’s worth a try…especially if the alternative is to lay off frontline staff. A few million in retirement incentives in exchange for savings of many more millions, plus the opportunity to replace elderly civil service employees with younger folks entering the job market or raising young families.

Comment by Cassandra Monday, Nov 17, 08 @ 11:27 am
I think we should tax the churches. They bring in a large amount of money on Saturdays and Sundays masses.

That would be so low. But not surprising.

Comment by Boscobud Monday, Nov 17, 08 @ 11:27 am
First vole, there is a federal law banning the taxation of internet sales except in states that passed the tax before the federal bill. Second, how much money are you going to spend harassing farmers who wrote-off a dinner with the family as a business expense? To get $2 in tax money, you are going to spend $20. It is like that in any business, not just farming. You could go around auditing like crazy, the only things you will accomplish are spending more money and angering constituents.

Comment by Heartless Libertarian Monday, Nov 17, 08 @ 11:29 am
My father who has his own business bought a boat two years ago and his accountant told him he can right it off as a business expense. All he has to do is take pictures of him with clients on the boat and use that as proof. He didn’t do that but I wonder how many of those big yachts on Lake Michigan do that? I think we would be amazed.

Comment by Boscobud Monday, Nov 17, 08 @ 11:51 am
Steve Schnorf how about we do away with your former stomping grounds - CMS. Since Blago they have screwed up everything they have touched.

Comment by Leave a light on George Monday, Nov 17, 08 @ 11:54 am
Heartless:
Isn’t it time to change that federal law exempting internet sales? This was intended to help get the industry off the ground. Now, well established, it is just a drain and is very unfair to those in state merchants who are forced to charge sales tax in this environment. How about a fair playing field?

Per farm related expenses, I wasn’t talking about the nickle and dime stuff. I am referring to stuff like CRP expenditures such as seed seed that are not production related and are liable to state sales taxes but are rarely charged by vendors to their farm clients. These expense are mostly cost shared by the feds. The state has lost millions of dollars in revenues from this and similar tax laws that are not enforced.

Comment by vole Monday, Nov 17, 08 @ 12:14 pm
I have never worked for any company where expenses did not increase every year. Supplies go up, electricity goes up, those raises for pesky employees who want to pay their own bills go up, insurance goes up. Yeah, you do everything you can to control costs, but year after year they rise. At the same time if you do not increase the revenue to reach a profit level, you simply will no longer exist.

Does it come as a complete surprise that costs of state government have gone up? Inflation and Martire’s structural deficit concept marches on. Freeze state spending all you want. Drop 50% of current state employees. Outsource all the departments. Do you really think it will change? Concrete for roads will cost more. Medicaid payments to medical and non-medical providers will cost more or they will simply stop providing. Then who provides? What cost will really go down over the long haul? Costs will shift and on paper it will look good.

If you need to provide 100 things and two years ago you could pay for 97 of those. This year you can pay for 95. Next year you can only pay for 93, but you still have to provide 100. What do you cut and not pay for? Seems Illinois is facing the exact same issues as GM, Dell, Linen and Things, Starbucks, and Citicorp. After you chop expenses to the bone (and maybe a limb), where do you get the revenue to keeping paying for the 93 things you still have to maintain.

Comment by zatoichi Monday, Nov 17, 08 @ 12:30 pm
===Isn’t it time to change that federal law exempting internet sales? This was intended to help get the industry off the ground. Now, well established, it is just a drain===

On whom is it a drain? While I agree that the business playing ground should be level, I don’t perceive NOT taxing me as a drain.

Comment by Fan of the Game Monday, Nov 17, 08 @ 12:31 pm
Fan,
Most definitely a drain on state tax revenues considering that you might have purchased the same items in state and been charged state sales tax. Also, correct me if I am wrong here, but isn’t there a state law requiring citizens of Illinois to report purchases made out of state and to pay the state sales taxes on these items? On anything other than purchases like cars or boats that must be licensed in Illinois, there is practically no way for the state to enforce this.

Comment by vole Monday, Nov 17, 08 @ 12:42 pm
zatoichi: I disagree with your premise that there is not a lot that the state can cut. I believe very honest and open efficacy and performance auditing would reveal a great deal of waste. There are some production functions that can best be served by the private sector. There are some state agencies that just can’t seem to trim out the dead wood from the productive stock. Some departments need beefing up and some just need to be dropped. Some unqualified patronage hires need to be fired and replaced with qualified professionals. This definitely is no short term fix, but unfortunately, by non selective default mode, a lot of good stuff is going to be weeded out with the chaff in the near term.

Comment by vole Monday, Nov 17, 08 @ 12:51 pm
vole - You’re right, it is a law. The form and instructions are on this PDF form:

http://www.revenue.state.il.us/taxforms/Sales/st44.pdf

I’ve heard Illinois is losing a billion dollars a year by not collecting internet sales tax. Does anyone know if that’s true?

Comment by Cheswick Monday, Nov 17, 08 @ 2:10 pm
Cheswick-

Probably true, but what about IL companies that are profiting from internet sales to out-of-state customers…they are making profits and paying employees, much of which gets spent here. It’s not an easy question to answer.

Comment by Six Degrees of Separation Monday, Nov 17, 08 @ 2:28 pm
vole-

In a highly unionized work force, with a state government that is friendly to unions, it is somewhat difficult to cut staff, and nearly impossible to fire the less-than-stellar performer. Other than a change of government philosophy via the ballot box, how do you propose to cut the fat?

Comment by Six Degrees of Separation Monday, Nov 17, 08 @ 2:32 pm
===with a state government that is friendly to unions===

Ask Henry Bayer about that statement.

Comment by Rich Miller Monday, Nov 17, 08 @ 2:34 pm
I don’t think the federal government proscribes sales taxes on internet sales at all. My recollection is it disallows charging taxes on the internet usage itself, similar to the state and local taxes we now pay on our phone bills.

VM, your suggestions are exactly the sorts of things that need to be done (though I don’t know why you threw in Chicago, Cook County, and townships. Those would have a minimal and possibly negative impact on state spending or revenues).

Princess, you’re right, the cuts are going to be painful and are going to have a negative effect on the services the state provides.

And, vole, there are always some waste and expenses that can be cut, but after the past several years, with 20% of the workforce already gone, its not realistic to think our current financial problems can be dealt with by cutting unnecessary spending, unless we define state parks, Medicaid, public education, etc as unnecessay spending.

Comment by steve schnorf Monday, Nov 17, 08 @ 2:37 pm
Steve, not just painful, especially when it comes to DOC, but dangerous. Not just painful when it comes to DCFS, but dangerous to the children and families that so needs that frontline. Safety should not be painful. And the cuts always come from the bottom.

State union friendly? Geez, six, is it happy hour already?

Comment by Princess Monday, Nov 17, 08 @ 2:56 pm
Rich,

For all of Henry Bayer’s bellyaching, and rightful concern about facility closures, they recently got a pretty good contract in today’s labor climate:

http://www.afscme31.org/article
Detail.asp?objectID=1296&keyword=contract

Comment by Six Degrees of Separation Monday, Nov 17, 08 @ 4:22 pm
Rich, I’ve been blogging here for a very, very long time as Anonymous–and even made the Sun-Times as Anonymous when a few CapFax bloggers (who is he is?) were quoted. Couldn’t we ask the new Anonymous to adopt another name?

Comment by Ahem...The REAL Anonymous Tuesday, Nov 18, 08 @ 12:24 am