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* Another day older and deeper in debt…
Illinois is poised to fork over a record amount of late penalties and interest payments this year to pay off vendors who are waiting months to be paid what they are owed from the state. […]
All told, the price tag for being a deadbeat state this year will be an estimated $60 million that won’t be spent on anything other than borrowing or penalties.
“It’s getting to be a huge number,” said Dan Long, executive director of the General Assembly’s Commission on Government Forecasting and Accountability, which compiled a recent report on late penalties.
* There are no surprises in this new report on the state’s fiscal condition. The only real news is Illinois’ ranking…
Illinois is one of the 10 most financially troubled states in the country, a new report says, warning that it struggles with many of the problems that led to “economic disaster” in California.
The report, “Beyond California: States in Fiscal Peril,” portrays Illinois and eight other states as facing fiscal hardships that are just as tough as California’s, which at one point this year was making payments with IOUs.
Authors of the report, issued by the Pew Center on the States, cited Illinois for “its lack of fiscal discipline to balance its state budget.” They noted that Illinois’ $13.2 billion budget gap for fiscal year 2010 was among the top three in the country.
“Officials have used all sorts of short-term approaches to address the budget gaps, but two of the most significant and consequential are to put off paying bills and skimp on the state’s annual pension payments,” the report said.
* Rankings…
State / Change In Revenue / Budget Gap / Grade
California -16.2% 49.3% D-plus
Arizona -16.5% 41.1% C-plus
Florida -11.5% 22.8% B-minus
Illinois -10.9% 47.3% C-minus
Michigan -16.5% 12% C-plus
Nevada +1.5% 37.8% C-plus
New Jersey -15.8% 29.9% C-minus
Oregon -19% 14.5% C-plus
Rhode Island -12.5% 19.2% D-plus
Wisconsin -11.2% 23.2% C-plus
Report home page… complete report… executive summary… press release.
* SIU may have trouble making payroll next month…
With $115 million in missed payments from the state as of Nov. 1, Southern Illinois University President Glenn Poshard is calling for faculty and staff to chill out on spending.
In fact, the situation at Southern is so tight, payroll after this month is iffy, according to university spokesman David Gross.
In a memo to faculty and staff at Southern Illinois University at Carbondale, Poshard urged everyone to slow or halt expenditures not related to salary. The goal, he said, was to protect the university’s ability to meet payroll. […]
“We haven’t been paid anything since July 1 by the state,” Poshard said. “It’s a very difficult time, and we’re doing the best we can to survive.”
* One of the problems mentioned in that Pew study above was how Illinois has constantly used temporary, one-off budget fixes. The state is now applying those fixes to the RTA, so the Tribune is spot on with today’s editorial…
When we heard that Gov. Pat Quinn was hunkered down with transit officials, trying to solve their budget woes, our first thought was uh oh. When a guy with no money comes to the table insisting that riders shouldn’t pay more and seniors shouldn’t pay anything, you know what’s coming next: money from heaven.
Sure enough, Quinn has hatched a plan that sounds painfully familiar: We’ll borrow our way out of a tough decision!
The Regional Transit Authority will issue bonds for $166 million worth of capital projects in the next two years, freeing up federal dollars to feed the Chicago Transit Authority’s operating budget.
The state will pay the debt service on the bonds for at least two years, estimated to be $15.3 million. The Illinois Department of Transportation, meanwhile, will chip in $17 million to help Pace provide door-to-door paratransit service. In return, the transit agencies agreed not to raise fares in 2010 or 2011. […]
Quinn’s plan addresses only the fare hikes. That means CTA riders can hang onto their change, but a lot of them will still have to wait half an hour for the bus and ride while standing because service will be cut. And the RTA will be another $166 million in debt, plus interest. And don’t forget, seniors ride for free!
Not to mention 1,100 layoffs during a deep recession.
More…
Asked if he was kicking the can down the road at a time when the state has scant dollars, Quinn called the move prudent given that many riders are facing tough economic times and can’t afford higher fares.
“We brought people together to come up with a fiscally responsible plan. The voters will like this,” he said. “This is exactly what we have to do in an emergency.”
OK, but what about the riders who need to get to work on time but their bus has been canceled because of budget cuts?
* Gov. Quinn defends himself…
QUINN: Every major government in the United States of America at the state or local level is under fiscal strain right now because of the economy. And so we have to manage this like never before, and I’ve done that. I think the people of Illinois know I know a lot about economics. As a matter of fact, I majored in economics at Georgetown University. And I’ve been the state treasurer. I’ve been commissioner, board of tax appeals. I’ve done a lot of economic things.
* Related…
* Study Says Illinois Is At Risk of Fiscal Calamity: The Pew Center on the States looked at 6 factors to determine a state’s financial shape, including foreclosure rates, unemployment numbers and state budget gaps. California scored the worst with a financial shortfall of about 49 percent of its total budget. Managing director Sue Urahn says Illinois isn’t doing so well either. It has the second highest budget gap.
* Think tank: Illinois budget among the worst in the nation
* Illinois among 10 states in financial peril
* Bond Buyer: Illinois Governor Eyes Debt Service Subsidy
* Illinois third highest state in foreclosure filings
* Illinois foreclosures spike in October: A state law that gives distressed homeowners an extra grace period to help avoid foreclosure may have created some pent-up foreclosure activity in the state. After the law went into effect in April, Illinois foreclosure activity decreased for three months before going up again, the RealtyTrac report said.
* Press release: Quinn spells out CTA deal
* No fare hikes for 2 years, but CTA will cut service
* CTA Deal Strictly ‘Short Term’
* Thumbs up to new expressway?
* Politicians, unions fight to save Howe
posted by Rich Miller
Thursday, Nov 12, 09 @ 9:55 am
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I have no confidence that the state government revenues crisis will be addressed after the primary, or even after the 2010 general election. The paramount issue in the minds of state officials is the 2012 redistricting, and even after that is politically resolved the legislators won’t want to face their 10 - 15% new voters having just voted for a sizable tax increase.
Politics over governing. The 2010 election is more about who will be capitan of the Titantic and which crew (legislators) will be in charge, as it crashes below the waves…
Comment by Capitol View Thursday, Nov 12, 09 @ 10:06 am
==The voters will like this,” he said==
And boom goes the dynamite. A kernel of honesty in an otherwise dishonest statement.
==QUINN: Every major government in the United States of America at the state or local level is under fiscal strain right now because of the economy. And so we have to manage this like never before, and I’ve done that. I think the people of Illinois know I know a lot about economics. As a matter of fact, I majored in economics at Georgetown University. And I’ve been the state treasurer. I’ve been commissioner, board of tax appeals. I’ve done a lot of economic things.==
Remove the name of the university, and this statement could have just as easily been attributed to Mayor Daley.
It’s too bad most recent Trib editorials have been embedded with misplaced righteous indignation, since this one does appear to hit the nail on the head.
Comment by The Doc Thursday, Nov 12, 09 @ 10:10 am
You know a 60+ year old man is a real expert when he has to point to his undergraduate degree as a credential.
Comment by Altgeld's Ghost Thursday, Nov 12, 09 @ 10:22 am
Wow - I really agree with the Tribune’s editorial today:
“When a [EDITORIAL BOARD] with no money comes to the table insisting that [TAXPAYERS] shouldn’t pay more and seniors shouldn’t pay anything, you know what’s coming next: money from heaven”
Comment by George Thursday, Nov 12, 09 @ 10:26 am
I am curious as to why SIU is having problems connected with delayed state payments but we haven’t heard that the other state universities
are in the same straits. Have all the u’s been paid nothing since July 1–or only SIU.
Or could it be that SIU doesn’t manage its budget and finances as well as the others?
We need to be cautious about assuming that every entity that gets state funding and has budget problems would be in great shape if state budget problems did not exist.
Comment by cassandra Thursday, Nov 12, 09 @ 10:26 am
But they are managing this like they have before…..kicking the can a few months/years forward hoping for the miracle that will never come. Now Pat Quinn has become the kicker-in-chief. I used to respect him quite a bit, but am sorely disappointed.
The Illinois pols regardless of their party affiliation seem to have an aversion to sound financial practices. Remember when Fitzgerald (Illinois Senate at the time) warned about deceptive State accounting practices? Did anyone listen?
Comment by Plutocrat03 Thursday, Nov 12, 09 @ 10:26 am
===but we haven’t heard that the other state universities are in the same straits.===
U of I said the same thing last week.
Comment by Rich Miller Thursday, Nov 12, 09 @ 10:36 am
I am curious as to why SIU is having problems connected with delayed state payments but we haven’t heard that the other state universities
are in the same straits. Have all the u’s been paid nothing since July 1–or only SIU.
The U of I has said publicly that they are owed $417 million in delayed State payments. The Governor hasn’t done the Capitol Bill bonds for Construction or Deferred maintenance at the college’s so the College budgets are having problems.
Comment by Dnstateanon Thursday, Nov 12, 09 @ 10:41 am
I can’t stand these quick fixes like the CTA just received. Just like the GA and the GOvernor did not address the budget debacle last year. Be honest, raise taxes/layoff/combo of the two, and balance the budget. Borrowing doesn’t work.
Comment by Jimmy Joe Thursday, Nov 12, 09 @ 10:59 am
“OK, but what about the riders who need to get to work on time but their bus has been canceled because of budget cuts?”
That’s absolutely right, Rich. I’m one of those folks, living on a bus line that is targeted for cancellation every time the CTA outlines projected service cuts. I use that bus twice a day to get to/from work.
I’ll resist the maniacal urge to put this in all-caps: People. Get real. We absolutely cannot stave-off massive cuts in transportation, education, health care and social services, public safety - you name it - without a general tax increase.
It can’t be done. Not when the projected deficit for next year is in the neighborhood of 13 billion dollars. Which is double the size of the budget for the entire State Board of Education.
Comment by Linus Thursday, Nov 12, 09 @ 11:02 am
for all intents and purposes Quinn is a career politician. whether styled as a reformer or activist or elected official, the common denominator throughout his adult working life has been politics.
given the decisions that he has made as governor, particularly with respect to state and cta fiscal matters, he may not want to tout his political office/fiscal management and economics background so hard. it may only cause people to legitmately question the quality of his decisions as governor, and wonder why the decisions haven’t been better or likely to produce the best results in the state’s interests.
Comment by Will County Woman Thursday, Nov 12, 09 @ 11:03 am
One of many ill-effects of the irresponsible and inhumane existing budget (which continues to dig the hole of debt deeper and deeper into an abyss): State employees and retirees are being referred to collections agencies because the state and Cigna are not paying med providers for up to NINE months. State employees and retirees are paying for this insurance every month. And they are working hard every day running the state. And the state and insurance company are not paying our bills.
Why won’t the legislators and governor do their jobs to raise revenue and run the state responsibly, instead of running it into the depths of the abyss.
Comment by concerned citizen Thursday, Nov 12, 09 @ 11:07 am
linus, i agree that massive cuts are inevitable. i also don’t understand why quinn, who still presumably wants a 50 percent tax increase to help a cash-strapped illinois during a deep recession, took issue with the cash-strapped cta’s proposal to increase fares.
chances are very likely that in two years time the cta will be all doom and gloom again and talking fare hikes. so other than delay the inevitable (and worse) i fail to see how the cta bailout was truly in anyone’s interest, let alone the state’s.
Comment by Will County Woman Thursday, Nov 12, 09 @ 11:09 am
WCW,
all due respect your ideas are REGRESSIVE taxes, and further burden those least able to pay. It also causes most harm to an economy b/c when money is in the hands of lower-earners, much much more is spent than if it’s in the hands of upper-earners. It is time IL raises its taxes on those MOST able to pay (progressive taxes), as the other large-populations states do. Flat tax of 3% isn’t working and is 40 years obsolete.
Comment by concerned citizen Thursday, Nov 12, 09 @ 11:16 am
The Pew Center study real story is 48 —FORTY EIGHT — states had lower revenues last year over this year…17 other state scored in the “20s”…..25 states including IL lost 10% or more revenue.
IL has its big problems, but this is truly a national problem largely brought on by the fine GOP regulation of Wall Street and the other predatory players in the world of banking and finance.
Now let’s get on to the national/state solutions to recovery.
BTW could someone ask Steve Rauschenberger what he actually means when says the way out of the problem is by “taking on powerful interests in the areas of Medicaid, school funding and corrections policy.” (p49 Pew Study)
Comment by CircularFiringSquad Thursday, Nov 12, 09 @ 11:32 am
CC, i don’t entirely disagree with you in your first post. at this point raising taxes to some extent is inevitable.
however, i do want to see significant cuts starting at the executive level, as well as time limits for certain types of office holders (e.g., governor etc) and other meaningful reforms implemented first, before i can fully support the notion of increasing taxes especially during a recession. and, i have stated this many times on this blog before.
Comment by Will County Woman Thursday, Nov 12, 09 @ 11:37 am
Circular: Yep, it’s a national recession - and it’s made horrendously worse in specific states with lousy revenue systems (read: Illinois)!
Comment by Linus Thursday, Nov 12, 09 @ 11:38 am
Howe’s back in the news, and how!
sorry, gov. looks like you’ve got new troubles on an old front.
Comment by Will County Woman Thursday, Nov 12, 09 @ 11:44 am
What Rauschenberger actually means is that he’s a peasant, showing peasant behavior by attacking what he sees as the next lower class of peasant rather than going after the landlords.
Sure, the state’s employee compensation and pension system is messed up, but last I checked, it wasn’t soaring spending but collapsing revenue that was causing Illinois’ troubles. Maybe our antiquated tax system interacting with the recession is perhaps more to blame than traditional GOP bogeymen?
Comment by Angry Chicagoan Thursday, Nov 12, 09 @ 11:44 am
Oh, and before I forget — Quinn can’t produce any new capital funds for CTA and Metra, already shortchanged in the state’s capital bill, but at a time of increasing environmental degradation and oil shortage he’s quite happy to blow billions on an outer beltway to Indiana?
What 1950s TV show or make-believe world did they fish this guy out of, anyway?
Comment by Angry Chicagoan Thursday, Nov 12, 09 @ 11:47 am
If they do the Illiana highway venture as a toll road like the do for us in the northern half of the state, them the new pavement would cost the state nothing. The construction and operation are paid for by only the users of the new road and the reduced traffic on the old systems would be enjoyed for free to those users.
Is that a win win?
Comment by Plutocrat03 Thursday, Nov 12, 09 @ 12:09 pm
Kinda gives a whole new meaning to “I owe my soul to the company store.”
Comment by Secret Square Thursday, Nov 12, 09 @ 12:39 pm
Cassandra, The SIU budget is balanced, but it is predicated on getting their state funding on time. When half your revenues come from a single source (state apporps) and almost half the fiscal year is over w/out receiving any funds from that source, it creates a little cash flow problem. Kudos to SIU Pres. Glenn Poshard to stand up and finally start talking about the seriousness of this fiscal disaster.
Comment by University Budgets Thursday, Nov 12, 09 @ 12:52 pm
All of Illinois’ public universities are in the same boat as SIU and UofI. I mean, why would the state pay the other U’s but not these two? To suggest otherwise doesn’t make sense. Maybe some enterprising reporter could sniff this one down?
Comment by Deep South Thursday, Nov 12, 09 @ 1:04 pm
Illinois not only has a fiscal calamity, it has a governmental calamity - which exacerbates the situation enormously. Voters had little to no faith in their elected leaders before our budget tanked. Expecting voters to welcome any solutions from the people in office is too much to expect, regardless of the solutions.
We need to vote out enough incumbants in order to restore any faith and credibility among Illinois voters. Anything less than the appearance of a new dawn in Illinois government will only keep the budget problems from being addressed and accepted by taxpayers.
The Party in Power had it’s opportunity to make tough unpopular decisions to finance Illinois government, since 2003. They had six years of total political control. They had huge majorities of votes in the General Assembly, coupled with a monopoly in statewide public offices. The GOP went into a coma after Ryan and barely has a pulse even today. But even with all the power in state government, the Party in Power refused to address our festering economy, and instead, fought civil wars among themselves deadlocking any chance we had to address these problems.
Even during the last economic growth cycle, Illinois’ leadership failed to take a moment to repair the structural debts, declining job markets, failing schools, and cratering business growth. With their failure, they bumbled a real chance to lessen the nightmares we now face when the economic growth cycle ended in this Great Recession. Watching these same incumbants finger point at this recession as the cause of our current situation, is only further alienating voters who have a memory longer than one year.
So, unlike some of the states on this list, Illinois has the additional problem of having a government so untrusted and disliked after years of mismanagement and corruption, it has a bigger challenge than a gigantic fiscal problem.
We will not see this situation addressed with the same people in control, and we will not see acceptable solutions while these tarnished incumbants remain in power. The sooner they are booted out of office, the quicker we will see acceptance of whatever governmental solutions are offered to voters.
Comment by VanillaMan Thursday, Nov 12, 09 @ 1:17 pm
The Pew study at least might discourage those who claim there are economic Utopian states out there. It’s a big bowl of bad.
The economic news isn’t all bad. Goldman Sachs is doing quite well. They took their bailout money and invested in gold and other commodities.
Sound business practices, I guess.
Comment by wordslinger Thursday, Nov 12, 09 @ 1:18 pm
Matt Taibbi in his article in Rolling Stone about the reality of Goldman Sachs, “if the US economy is circling the drain, Goldman Sachs is the drain.” Don’t we all feel that every day.
Comment by concerned citizen Thursday, Nov 12, 09 @ 1:26 pm
It is one thing for the current situation to be a “big bowl of bad”, and it is another to be at the bottom of the bowl, fighting with California for worse.
We have been in that bowl for years.
Quinn and other incumbants fighting off their earned reputations as “Best of the Worse” are also defending themselves as mere victims of evil giants like [insert strawman organization here], but their excuses fall short of reality, don’t they?
As to evil Goldman Sachs, perhaps soon-to-be-former New Jersey Democratic Governor Jon Corzine will find new employment at the organization he once headed, you know, Goldman Sachs. It was shocking to see him fingerpoint as a victim of a fiscal environment he controlled from both a public and private side.
Fortunately for New Jersey, regardless of whatever solutions they come up with, voters will at least have more confidence in their new administration’s actions and start down the road to recovery. They are at least one year ahead of us.
Comment by VanillaMan Thursday, Nov 12, 09 @ 1:42 pm
I think Robert Cray put it best - the forecast calls for pain. We should adopt that as the state song of Illinois.
Comment by Angry Republican Thursday, Nov 12, 09 @ 1:44 pm
Quinn’s full of it. He is working to make a terrible financial situation soooo much worse so he can try to extort his tax increase out of the GA in the Spring. He’s got money for MAP. He’s got money for the CTA. HE’S GOT MONEY FOR EVERYONE. His problem is he has messed around so long that his tax increase “plan” will only yield about $three billion and he needs $13 billion and it gets exponentially worse the longer we go. What is he gonna do when Madigan calls his bluff and says NO! this Spring ?
Comment by Bill Thursday, Nov 12, 09 @ 2:56 pm
When you are a chief executor, like a governor or a president, doing nothing is actually doing something.
Quinn is playing for time. Instead of leading, he chooses to not make enemies. Quinn is hoping that the Great Recession of 2009 will not keep him from being elected in his own right in 2010.
The problem is that the longer he does nothing, the harder it will be for any economic cures to fix our fiscal problems. By doing nothing, he bets everything everyone has in order to keep what he has now. That isn’t leadership, that isn’t the reform we need, that isn’t the kind of politics Illinoisans expected from Quinn, and that isn’t right.
Quinn should be shown the door based on his do-nothing somethings over the past ten months. He has demonstrated a level of disingenuousness over this time period that warrants his immediate removal from the Office.
Comment by VanillaMan Thursday, Nov 12, 09 @ 3:47 pm
VM,
If you would simply post “throw the bums out!” instead of your essays you’ll save us all some time. How many different ways can you use 300 words to say the same thing?
Comment by 47th Ward Thursday, Nov 12, 09 @ 3:48 pm
Forgive me if I missed discussion on this tidbit yesterday from Quinn’s press secretary, aka Sneed….
Job market . . .
Sneed hears Gov. Quinn is going to appoint two new members to the CTA Board: John Bouman, president of the Sargent Shriver National Center on Poverty Law, and Katie McClain, the Chicago director of the William Jefferson Clinton Foundation.
Bouman and McClain have no transit experience so their qualification to serve on the CTA board is that they are FOQs (Friends of Quinn). Bouman is a friend and McClain a former Quinn staffer. Both are respected in their respective professions but they don’t have any transit experience. So much for reform Mr Guv. Keep those FOQ appointments coming!
Comment by Chi Gal Thursday, Nov 12, 09 @ 3:57 pm
VMan, as a “chief executor” (whatever that is), what would you have Quinn do?
What “economic cures” (whatever those are) do you suggest?
Comment by wordslinger Thursday, Nov 12, 09 @ 4:06 pm
“Sneed hears Gov. Quinn is going to appoint two new members to the CTA Board: John Bouman, president of the Sargent Shriver National Center on Poverty Law..”
NOT to be confused, of course, with Jon Bauman of TRS infamy or Jon “Bowzer” Bauman of Sha Na Na
Comment by Secret Square Thursday, Nov 12, 09 @ 4:13 pm
At least I no longer see people being surprised by news like this. Anyone who has watched at all knows it has been bad and getting worse for the better part of a decade now, and is going to get even worse in the next 12 months.
If we’re honest with ourselves we have to concede that of the major players, only Quinn, Hynes, and Cullerton have proposed real if in some cases only partial, as opposed to make-believe, solutions so far. Of course we need to cut; Quinn and Hynes acknowledge that, as I suspect does Cullerton. But we can’t cut our way out of this, and that means new revenues. Why are only these three elected officials, all Democrats, willing to tell us the truth on this?
I challenge anyone running for statewide office to show us a real budget, not bs “cut waste” crap, that is balanced in either 2011 or 2012, or even 2013 (you pick) without significant new revenues. You don’t have to bore down too deep, just give us the major categories. Here’s how much I think base revenue growth is going to be, here’s how much I’m willing to cut Medicaid, here’s how much public safety, here’s how much K-12, etc. We can bore down after you show us the general outline.
Why do you think that none of the obfuscators have shown us their balanced budgets that include no new revenues sources; because there is no such creature. Shame!
Comment by steve schnorf Thursday, Nov 12, 09 @ 5:18 pm
Great post steve schnorf.
Comment by Can't Say My Nickname Thursday, Nov 12, 09 @ 5:31 pm
Steve,
of course the republicans, at least the major players on that side, are just playing to their base on the no tax thing, right?
you honestly think dillard or brady or schillerstrom don’t understand that taxes need to be raised?
Comment by Will County Woman Thursday, Nov 12, 09 @ 7:16 pm
When I saw the list of the 10 states mentioned in the article, I couldn’t help but notice that outside of Arizona most (at least 6-7) of the other states are pretty commonly ranked high on the liberal side in economic ideology.
I reviewed several studies both private and academic (e.g. Columbia university) that ranked states on both an economic and social ideological scale. I was doing this research for something totally unrelated to this subject. I certainly cannot vouch for the validity of the rankings or the analysis that led to them.
Just found it interesting - not making a political argument because I don’t know enough facts yet to do so.
Comment by Nuance Thursday, Nov 12, 09 @ 9:04 pm
Secret, thanks so much for clearing that up for Rich’s readers. I’m certain many of them were terribly concerned that Gov. Quinn had apoointed me (or Bowzer) to the CTA Board.
Comment by Jon Bauman Friday, Nov 13, 09 @ 8:17 am