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[Space-time continuum altered, bumped up for visibility and comments opened.]
* I told subscribers about a “Scared Straight” doomsday scenario Friday morning…
Illinois Governor Pat Quinn is threatening a “doomsday” budget if lawmakers don’t pass an income tax hike. The governor says the new revenue is needed to fill the state’s $11.6-billion deficit.
QUINN: We are going to let people know what the consequences are if we don’t do this plan. A doomsday budget is very, very dangerous for our state. It will harm our state. It will harm people, very vulnerable people in our state. And I don’t want to ever have a doomsday budget.
More…
Democrats in the House have asked the governor’s budget office to draft an alternative budget that would provide a snapshot of how the state spending plan would look if there is no new revenue stream flowing into state coffers.
The exercise is designed to show skeptical lawmakers that a failure to raise taxes could result in a budget that cuts state spending by about a 25 percent. […]
Republicans are calling the so-called “doomsday” budget scenario little more than a stunt by Democrats because most lawmakers already understand the state’s budget situation is bleak.
And Gov. Quinn may be getting just a tad ahead of himself…
Gov. Pat Quinn celebrated his 100th day in office on Friday by declaring he’s got the backing of the General Assembly’s top two Democrats for his proposal to raise state income taxes to help erase the state’s record budget deficit.
But aides to Senate President John Cullerton and House Speaker Michael Madigan, both Chicago Democrats, cautioned that supporting the concept of higher taxes doesn’t necessarily mean they endorse Quinn’s plan to hike the income tax rate by 50 percent, accompanied by an increase in the personal exemption.
Asked by reporters if he was on the same page as Madigan when it came to the tax-hike proposal, Quinn said, “Oh yes, and the president of the Senate.”
*** UPDATE *** The Civic Federation has released a report this morning bashing the governor’s budget and his capital plan. You can read the full report by clicking here. The brief summary…
The Civic Federation does not support the proposed operating budget because it raises taxes without fixing the state’s structural deficit. If significant pension and employee healthcare reforms are implemented, the Federation could support a smaller income tax increase targeted at reducing the state’s existing obligations in the areas of Medicaid and pensions. The Civic Federation opposes the $26 billion proposed Illinois Jobs Now! capital plan because it is not tied to a comprehensive planning process and is unaffordable now and in the future. The analysis commends Governor Quinn for proposing bold changes to the state’s pension systems.
More…
The Civic Federation also denounced Quinn’s personal exemptions on his income tax increase, which would set the rate at 4.5 percent from 3 percent.
Msall said a 1 percent income tax increase and a 1.6 corporate income tax increase would generate about $3.6 billion, a little more than Quinn’s proposal.
“The state is in a financial crisis that will not be solved by a partial pension holiday or a gimmick or modest changes in state spending,” Msall said. “You have to dramatically and painfully reduce spending.”
More…
In fact, the report said that if an income tax is approved — albeit less than the 50 percent increase sought by Quinn — it should be used reduce the state’s backlog of overdue bills and cut its pension debt.
“The state’s unfunded pension obligations are major contributors to Illinois’ growing budget deficit,” said federation president Laurence Msall in a written statement. “Shorting the state’s pension contribution while raising taxes to address the state’s structural deficit crisis is illogical and counterproductive.”
* Editorials…
* First, fix Springfield
* Quinn must deal with $82 billion state pension liability
posted by Rich Miller
Monday, May 11, 09 @ 9:20 am
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==Space-time continuum altered,== So perhaps Old Pat Quinn and your Mike Madigan meet in an ice cave?
If you haven’t seen the new Star Trek, sorry you will not get this
Comment by OneMan Monday, May 11, 09 @ 9:30 am
—–
[Space-time continuum altered,]
—–
This is very good news for the Proft gubernatorial campaign.
Comment by dan l Monday, May 11, 09 @ 9:34 am
Sorry, I got a life.
Comment by VanillaMan Monday, May 11, 09 @ 9:39 am
I’m sure Filan and Ostro are experts at shifting, so by designating revenues from an income tax increase for, say, pensions and Medicaid they aren’t changing anything really. Some funds now designated to pay for pensions and Medicaid would simply be shifted to other, less obvious budget items such as hiring even more highly paid patronage employees or plumping up all those no-bid contracts for “campaign contributors.”
Ditto school funding increases. Shifting is a huge problem when you have a corrupt government whose incumbents, bureaucrats and pols are primarily interested in furthering their financial and political futures. And since shifting is not transparent, it’s hard for citizens to catch ‘em at it. Increasingly, nobody represents the middle class taxpayer in Illinois.
Comment by Anonymous Monday, May 11, 09 @ 9:41 am
Aren’t these essentially all positions meant for compromise? You need to define the extremes before negotiating the specifics, no?
Surely Quinn will compromise on his tax hike — perhaps accepting additional reforms.
I’m always bothered by this shrill rhetoric as a way of staking out the positions. But I guess that’s politics.
Comment by Macbeth Monday, May 11, 09 @ 9:42 am
He may compromise, but if the budget deficit is as high as he claims, he also needs to show where he is going to make up the money.
For example, the teacher’s added pension points, which he gave up really fast…where will he make that up? He hasn’t said.
This could reasonably lead one to wonder if he and Filan and Ostro are exaggerating the deficit.
If it’s that easy to get him to back off maybe the need isn’t there.
Comment by Cassandra Monday, May 11, 09 @ 9:47 am
The Doomsday Scenario should have been put out at the beginning. It’s just common sense to start the process by showing “here’s what we can do under the status quo, keeping in mind we’re going to get on a reasonable payment cycle to our vendors.”
Quinn might not be taking so much heat from unions on pensions if he’d shown the number of inevitable layoffs under status quo revenues.
Comment by wordslinger Monday, May 11, 09 @ 9:47 am
Wordslinger is right. Quinn needed to get out of the gate with this bleak picture of reality.
Comment by VanillaMan Monday, May 11, 09 @ 9:54 am
==VanillaMan - Monday, May 11, 09 @ 9:39 am:
Sorry, I got a life.==
Some would say commenting here disproves your argument…
Comment by OneMan Monday, May 11, 09 @ 10:02 am
==Some would say commenting here disproves your argument…==
But most of those are double-exempt workers who are sweating this morning…
Comment by Vote Quimby! Monday, May 11, 09 @ 10:13 am
Or those double exempt workers are getting themselves appointed into four year terms, which will give them at least four more years on the super gravy train that is Illinois state employment at the SPSA and above level. Four year terms at the higher levels are a huge disservice to Illinois taxpayers. During the four years, incumbents can only be fired for cause. Many are elderly lifers who are eligible for retirement but not interested in getting off that train.
And others are relatives and spouses of Democratic politicians taking advantage of a wonderful financial opportunity-great pay and benefits, no work.
Comment by Anonymous Monday, May 11, 09 @ 10:28 am
One of these days the Civic Federation will propose something that makes perfect sense and can be realisticly enacted into law. I suspect that day will come on the day after I inherit a billion dollars after taxes, buy my own tropical island and stock with a dozen supermodels to cater to my every wish. So don’t hold your breath waiting for it to happen, because it didn’t happen here with this plan, either!
Comment by fedup dem Monday, May 11, 09 @ 10:43 am
a Doomsday budget will produce a real doomsday for community based human services providers. Programs and whole organizations all around the state have already collapsed, and others are currently on the verge of collapsing.
Once programs and facilities close down, they don’t re-open. This is a terribly dangerous time for Illinois state government and the vulnerable families and individuals all across Illinois.
Comment by Capitol View Monday, May 11, 09 @ 11:00 am
CV, that’s what folks need to know.
Comment by wordslinger Monday, May 11, 09 @ 11:03 am
Doomsday for whom? Plumply rewarded state bureaucrats and politicians? State contractors? Middle class taxpayers? Six figure CEO’s of “nonprofits” that reap billions in taxpayer money?
Corporations? Six figure school administrators?
I think I know.
Comment by Anonymous Monday, May 11, 09 @ 12:17 pm
Anonymous at 12:17 -
The Department of Human Services delivers virtually no community based services. They are the department of eligibility determination and certification/quality control and reimbursements processing, for local mostly non-profits who actually deliver direct services to state clients.
DCFS “outsources” 2/3 of its caseload to local providers.
IDOA does no direct service — everything done for seniors in Illinois by this agency are done by local providers.
Yet state government funds many of these services made on its behalf to its client base at just 60-70% of the actual cost of providing those services, and then pays them late.
The process of annual Cost of Doing Business increases to keep up with inflation and the higher costs of transportation, insurance, and fringe benefits (where such fringe benefits exist)ended in the last budget crisis, the first year of the Edgar Administration. A few groups get “cherry picked” for annual increases most years, but employment and training programs, emergency shelters, immigrant resettlement groups, and many other groups are being brutalized by state government.
Many providers survive on their United Way allocations to offset state government underpayments, but this is not why donors contribute to United Way - to subsidize Illinois state government. And this year, United Way in Chicago warned their recipients to expect a 25 - 33% reduction in allocations, due to fund raising losses attributable to the poor economy.
Don’t worry about six figure non-profit CEOs. Most state grants and contracts provide nothing or nearly nothing for administration. They reimburse for direct services only, and poorly at that, so your tax dollars aren’t going towards their salaries as set by their boards of directors. And if you don’t think that a hospital CEO is worth $100,000 or more, I invite you to revisit the real world.
Comment by Capitol View Monday, May 11, 09 @ 2:46 pm
Capitol View is entirely correct.
Comment by Rich Miller Monday, May 11, 09 @ 2:54 pm
So, what exactly do those highly paid bureaucrats do at DHS. Overseeing the private sector seems to require a large number of really well paid administrators.
Comment by Cassandra Monday, May 11, 09 @ 3:40 pm
Thank you, Capitol View, for a really good post. I wish everyone in the state could read it, starting with our legislators. My daughter keeps telling me these things, but not so well as you have summarized the situation.
Comment by Skirmisher Monday, May 11, 09 @ 3:47 pm
{local mostly non-profits who actually deliver direct services to state clients.
DCFS “outsources” 2/3 of its caseload to local providers.
IDOA does no direct service — everything done for seniors in Illinois by this agency are done by local providers.
{Many providers survive on their United Way allocations to offset state government underpayments, but this is not why donors contribute to United Way - to subsidize Illinois state government.}
This is why many taxpayers however resent the level of taxation imposed upon them in order to fund a grossly inefficient and ineffective bureacracy whose sole existence is predicated upon taking the citizens money and making their charitable contribution decisions for them.
Comment by Quinn T. Sential Monday, May 11, 09 @ 9:19 pm
QTS; that’s demagogic crap. What the State is actually doing is buying services it would otherwise have to provide directly, and buying them at about 50 cents on the dollar
Comment by steve schnorf Monday, May 11, 09 @ 11:37 pm