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A dizzying tide of red ink

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Illinois

* My syndicated newspaper column takes a depressing look at a depressing situation…

Moments after members of the Illinois State Board of Education voted to cut the board’s budget by a net $180 million last week, an activist group, Voices for Illinois Children, sent out an urgent e-mail to supporters.

The group sketched out the pain the cuts would cause (the net cut actually disguises a $389 million reduction to individual program lines). A 33 percent cut to early childhood programs, for example, could mean the loss of preschool for 30,000 children.

“This budget immediately erases five years of progress in early learning,” the group’s interim president was quoted as saying in the e-mail. Voices has an interim president because its founding president now is Gov. Pat Quinn’s chief of staff. The group was ecstatic when Jerry Stermer took Quinn’s top job, but the champagne bottles are long empty.

The Voices e-mail also pointed out that Quinn was given $1.2 billion in discretionary spending authority by the General Assembly, which, the group noted, Quinn could use to close that education funding gap.

A different organization, Illinois Action for Children, sent out a blast e-mail shortly after Voices did.

“Governor Quinn has the power and the moral authority to reinstate this funding, and we are calling on him to do that before it is too late for children and families in Illinois,” the group’s president demanded.

They’ll all have to get in line. Social service providers already have been eyeing Quinn’s $1.2 billion cash stash to patch their own budget holes created by the Legislature.

And they’re not alone, either. The General Assembly allowed Quinn to use the money for pretty much anything, including operations, so the employee unions may demand a piece of that $1.2 billion to reduce the number of threatened layoffs.

Actually, once word gets around about this discretionary authority, Quinn might wake up one morning very soon and wish he didn’t have it. That line of demanders will be long, angry and probably not very sympathetic about the governor’s Solomonic dilemma.

But that little pot of gold pales in comparison to the cuts which still have to be made.

Gov. Quinn also was given the authority (which he’ll need) to set aside up to $1.1 billion in state spending to fund a “contingency reserve.” Almost every aspect of state spending was included in the provision - except for the General Assembly and every constitutional officer besides the governor, of course. That means cuts.

The new budget law also requires the governor to make at least another $1 billion in unspecified cuts. More pain. The actual deficit is somewhere around $5 billion, so those two reduction items will only make up one part of the governor’s budget management headache.

And then there’s the alarming problem of a rapidly emptied state unemployment insurance trust fund that nobody has really dealt with as of yet. Right now, the state is borrowing from the federal government to replenish the fund - and piling up more crushing debt in the process. That’s not gonna look good to the credit rating agencies, which are fixing to whack Illinois with yet another downgrade.

And then there’s next year’s budget deficit that the governor has to take into consideration when spending money this year.

A couple of days after it demanded Quinn spend part of that $1.2 billion stash on education, Voices for Illinois Children released a report showing next year’s budget deficit will be at least $10.3 billion. That’s about what I’ve been saying for weeks. One-time revenue gimmicks and the federal stimulus package this year added up to more than $5 billion. And new spending next year - pensions and debt payments on the borrowing this year -adds almost $2 billion more. Plus, the state is carrying over a deficit from last year that won’t be paid this year, so that $3.2 billion gets added to the total.

Is your head spinning yet from all this red ink? Mine certainly is.

Maybe Quinn ought to just take that $1.2 billion and put it in the bank and save it for next year.

* Related…

* New Yorker: Fifty Ways to Kill the Recovery: If you came up with a list of obstacles to economic recovery in this country, it would include all the usual suspects—our still weak banking system, falling house prices, overindebted consumers, cautious companies. But here are fifty culprits you might not have thought of: the states.

* Without agencies’ help, many face a harder future: During the last year, the program served more than 500 severely mentally ill clients just when they need it most: as they are re-entering the real world. The risk of returning to prisons and psychiatric hospitals is highest within the first 60 days of discharge, according to the Substance Abuse and Mental Health Services Administration. The non-profit Thresholds does not have the $1.2 million necessary for the program to stay afloat, said Tony Zipple, CEO of the agency, which serves Cook, McHenry and Kankakee Counties.

* Facing tide of red ink, state cuts services to the most vulnerable: Illinois might have a working budget in place, but there is a broader story behind the numbers: Real people are hurting. If they have not lost care, they worry the thin reed of stability provided by non-profit, community-based organizations will disappear without state support. Cuts at social service agencies are tearing holes into safety nets for the state’s most vulnerable residents.

* DeKalb Social Service Provider: I Have To “Pull The Plug”

* Charter school funding wiped out - Education budget cuts eliminate financial incentive for District 150

* Education advocates begrudge budget cuts - Early childhood program loses $400 million in funding

* Early education takes hit in budget

posted by Rich Miller
Monday, Jul 27, 09 @ 5:26 am

Comments

That discretionary spending really is a trick-bag for Quinn. It’s not nearly enough to make anyone happy, but it’s just enough to make a lot of people mad.

Comment by wordslinger Monday, Jul 27, 09 @ 8:03 am
So teh New Yourker article uses the population vs. mileage argument for more money going to urban road projects than rural road projects. But it fails to cite the other side of the coin that there are more miles of roads in rural areas than urban areas. And these “rural” roads are the same roads that commerce uses to get goods from one urban area to another.

Comment by Captain Flume Monday, Jul 27, 09 @ 8:16 am
Human Sacrifice in Illinois Democratic Culture
From Vanillipedia

Human sacrifice is an aspect of modern Illinois Democrats, although the extent of the practice is debated by scholars. For example, Rich Miller’s CapitolFaxBlog, includes eye-witness accounts of the remains of sacrificial victims. In addition, there are a number of second-hand accounts of human sacrifices written by political reporters, told to them by native eye-witnesses.

Presently, scholars largely accept that human sacrifice was practiced in the Illinois Democratic Party as well as throughout Cook County Illinois, especially the city of Chicago. Since the late 1970s, excavations of the offerings in the Great Dome of Springfield, Chicago’s Thompson Center and other political sites have provided physical evidence of human sacrifice among the Democratic Party and primary voters.

“Under The Bus”

A wide number of interpretations of the Democrat’s practice of human sacrifice have been proposed by modern scholars, both with regards to its primary electoral and governing significance. For example, one theory that has been widely discredited is that the Democrat’s diet was lacking protein and that cannibalism of sacrificial victims was a necessary part of the their diet. Other theories link the practice to special socio-psychological factors or see it as a political tool of “borrowing the spine” of elected officials. During the Blagojevichian Era, (2003-2009), it appeared that “testicular virility” was the musky attraction which sent Blagojevich to his political grave. Oddly, today’s scholars believe it is possible that Blagojevich committed political suicide before he was sacrificed by the Democrats. Most Illinois scholars, however, see it as a part of the decade-long cultural tradition of human sacrifice in Democratic politics.

Human sacrifice among Illinois Democrats is a controversial topic. The discussion of human sacrifice is also tied with the classic conflict between annual budgets, the adoption of socialist political programs and market realities. Many political reporters tend to romanticize the description of human sacrifice while others tend to exaggerate it.

While officially, the Illinois Democratic Party shuns human sacrifices, current political pressures are mounting within the party, causing it to take another look at the practice in light of the Quinn Administration.

Comment by VanillaMan Monday, Jul 27, 09 @ 9:15 am
Agreed, wordslinger. And I fear that Quinn will try and spread those funds around in a futile attempt to placate everyone, consistent with his “share the pain” mantra. Perhaps the most painful but prudent decision would be to, as Rich indicated, invest the discretionary cash in savings, knowing 2010 is going to be a disaster as well. The interest income, while small potatoes, could save a few programs from the chopping block and/or stave off some service cuts. Which is better than nothing (although not much).

I don’t envy his position right now.

Comment by The Doc Monday, Jul 27, 09 @ 9:43 am
=== I don’t envy his position right now. ===

I still can’t decide if madigan put Quinn in a trick bag with the discretionary spending or was genuinely trying to give Quinn flexiblity tomeet the fiscal crisis.

I would like to see somone start pushing now for the tax increase which will be more sorely needed come january.

Comment by Ghost Monday, Jul 27, 09 @ 10:38 am
The Speaker may think that he’ll be treated like a hero for finally allowing a tax vote in January, but state government is now the biggest destroyer of the Illinois economy. Add up the state jobs being cut, the human services provider jobs lost through state budget cuts, and now the education cuts imposed by state government, and Illinois State Government is the biggest drag on the statewide economy.

After the May 30th, both parties are to blame for the current mess.

Republicans - you want to save jobs and get people working again? Go along with a tax restructuring now, or no later than the Veto Session. The FY 11 state budget starts out $11 billion in the hole, before we include built in inflation factors such as maintenance / construction costs and annual salary step increases.

Everybody, Ds and Rs - your run for public office to govern. So make the tough decisions and respect your post and your constitutional responsibilities. Letting everything fall apart is not a constructive option.

Comment by Capitol View Monday, Jul 27, 09 @ 11:39 am
I wish the Governor the best of luck on this, as his task won’t be easy. I agree with Doc that Quinn’s political aspirations and concerns will likely cause him to try to keep everybody happy.

Comment by Will County Woman Monday, Jul 27, 09 @ 12:57 pm
Agree with “Capital View” 100%. Well said.

Comment by state employee Monday, Jul 27, 09 @ 1:51 pm
Because of this fiasco which only gets worse even w/ Blago gone, I’ll only vote outside of the Dem and Repub parties for any statewide office, especially Governor.

Comment by state employee Monday, Jul 27, 09 @ 1:52 pm
=== I’ll only vote outside of the Dem and Repub parties for any statewide office, especially Governor. ====

I am not sure such a gesture is really to your benefit. right now there is no viable alternative canidate. It may be tough picking the lesser of two evils, but you are probably better off to pick an electable canidate who comes closest to your point of view, then to risk letting the worst canidate be elected.

Comment by Ghost Monday, Jul 27, 09 @ 3:24 pm
Ghost, as we all know, elections are never good vs evil. They always involve selecting the best (or least bad) candidate out of the real choices available. I couldn’t agree with you more.

I’ve never had much time for people who waste or fail to cast their ballots and then complain about government.

Comment by steve schnorf Monday, Jul 27, 09 @ 3:42 pm
===It’s not nearly enough to make anyone happy, but it’s just enough to make a lot of people mad.===

In other words, it is just enough rope for Quinn to hang himself politically. So many potential destinations for this money will be going after Quinn that he will be forced to disappoint some of them. Frankly, I don’t think he has the political dexterity to allocate all of this money to a conclusion in which he makes more friends than discontents.

Comment by Obamarama Monday, Jul 27, 09 @ 4:08 pm