Latest Post | Last 10 Posts | Archives
Previous Post: They did it to themselves
Next Post: Brady vs. Quinn and a new Claypool theory
Posted in:
* A recent Tribune editorial repeated a blatant falsehood…
Three weeks ago in this space, we offered “A no-tax-hike option,” a list of financial proposals for Medicaid, education, pensions, capital improvements, subsidies to local governments, privatizing internal services, selling surplus assets and so forth. The minimum $6.4 billion in annual savings would eliminate the state’s budget shortfall — in truth, it has accumulated over several years, not just one — in two years. In year three, Illinois would turn a surplus.
What they’re doing is saying, “OK, we have a $12.8 billion deficit, so cut that in half one year and those cuts will wipe out the remaining deficit in the second year.”
That doesn’t make any sense.
The governor’s proposed FY 2011 budget slashes appropriated spending by $3.2 billion over what was actually spent in FY 2009, and almost two billion under the current fiscal year. But, pension contributions will rise by $1.4 billion over FY09 and a whopping $3.9 billion over the current fiscal year (the state borrowed rather than digging into revenues to make much of the payment this FY). Debt service (including pension bond debt service) and other required-by-law payments (entitlements, worker pay and health insurance, etc.) increases by about a billion dollars over FY09 and $710 million over the current fiscal year.
Total all that up and you’ve got an operating deficit of $4.7 billion - and that includes all the governor’s hugely unpopular proposed cuts to schools, local governments, human services, etc.
However, even with this, the state still can’t pay past due bills totaling about $6.3 billion.
Now, back out all the governor’s proposed cuts and substitute them with the Tribune’s proposed cuts and pretty much all of that $6.3 billion in unpaid bills will still remain.
What the Tribune purports to do (and some of their alleged cuts aren’t really cuts - like reducing capital spending that’s already been spent or that can’t be transferred out of the Road Fund for operating expenses) is match revenues to spending and eliminate the structural deficit.
That’s a very good, laudable idea, but then they count the savings twice. If state spending is reduced to around $27 billion or so (about where the Trib’s target is), we still have to spend that $27 billion the following year with pretty much the same revenues coming in the door. There’s no huge pile of “extra” money to pay off that bill backlog in a year. It just doesn’t exist.
Not to mention that fixed costs like wages, health insurance, transportation and pension payments will continue to rise above that $27 billion.
So, while the Tribune’s proposal slows the state down from digging the hole ever deeper, it does nothing to get us out of the hole that’s already been dug. This two-year “solution” relies on magic beans.
* In that same editorial, the Tribune also threatened Democratic members who toe the Madigan/Cullerton line…
Parents of schoolchildren, university students, families of people who rely on health, disability and other social services: If your current legislature won’t reform how Illinois spends money, you have a choice. You can re-elect lawmakers who, for two decades, have grown state obligations at twice the rate of inflation. Or you can mobilize en masse and elect a responsive new legislature.
Because if Madigan and Cullerton, with those 72 years in Springfield, continue to fail at responding boldly to this epic moment, you need to curtail their clout.
Strange, but when the Tribune made Democratic primary endorsements, it backed the incumbent Democrats or preferred Democrats almost half the time. Now that we get to the general election, it’s all about beating incumbent Democrats.
* Related…
* Illinois House takes small ‘first step’ on pensions
* State House OKs change in pension benefits
* House approves less lucrative legislative pensions
* House OKs pension measure
* Illinois Budget Deficit Could Hurt Odds of Winning Federal Money
* Erickson: GOP tries to cut it both ways
* Cuts to Illinois State Police budget could be deep
* Taxpayers fed up with spendthrifts
* Finke: Giving up furniture a good thing
* State’s ‘day of reckoning’ arrives in force
* Illinois’ public schools hit by ‘double whammy’ of economic pain: The Illinois comptroller’s office has a $4.3 billion backlog of bills that haven’t been paid, and some of those date back as far as Sept. 1, spokesman Alan Henry said.
* Roundtable: Education Funding
* School districts suffer while state funds lag, but severity may vary
* Schools will suffer because Illinois has no money
* Southland teachers face mass layoffs
* Schools prepare for worst: Districts across metro-east cutting budgets, programs, staff
* McCaleb: No future in using reserves to offset deficits
* Delayed revenues cause Kane problems
* Bloomington council prepares Plan B for funding shortfall
* [Pekin] Budget vote Monday
* Wearing their hearts on their backs
* [Fox River Grove] eyes water rate increase
* State behind on $135K in payments for DeWitt Co. workers
* [Waukegan] eyes furloughs, layoffs, ‘rainy day funds’
* [Park City] Aldermen take 8.3% salary cut
posted by Rich Miller
Monday, Mar 22, 10 @ 11:06 am
Sorry, comments are closed at this time.
Previous Post: They did it to themselves
Next Post: Brady vs. Quinn and a new Claypool theory
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
The answer is clear, the fault isn’t with Springfield that for over a decade knowingly spent more money then they had, the fault is the taxpayers who didn’t send enough money to Springfield.
The obvious answer is to raise taxes so the legislature can continue to spend more than we have and simply come back in 5 or so years for another tax increase.
1% isn’t going to cut it either. We need to raise the personal income tax to at least 7% (this time) to make sure we cover all the spending caused by those reckless taxpayers.
Comment by John Bambenek Monday, Mar 22, 10 @ 11:10 am
That doesn’t make any sense.
—————-
Since when did the Tribune have to make sense in its writing?
Comment by Niles Township Monday, Mar 22, 10 @ 11:16 am
lol
OK, true. But they’re supposed to be the state’s leading newspaper, so you’d think they would at least try to understand this stuff.
Comment by Rich Miller Monday, Mar 22, 10 @ 11:18 am
@John
For the past decade, state government basically did EXACTLY what the vast majority of voters wanted:
1) Spend more money on education, health care, roads/infrastructure, human services, AND
2) Not raise taxes.
Everyone is looking for some complex explanation for how we got into a $13 Billion budget hole, but its really that simple…now that a recession has hit and tax revenues are shrinking instead of growing, we can’t meet the growing costs of programs that the voters want.
And lawmakers and the Governor are struggling to find a solution because faced with a choice of:
1) Cutting education, health care, human services and infrastructure, OR
2) Raising taxes
Voters don’t really like either of the only two options available. When the voters start to reconcile themselves, so will the impasse at the Capitol.
Comment by Yellow Dog Democrat Monday, Mar 22, 10 @ 11:18 am
The editorial ran on the first page of the entire newspaper and continued on the entire editorial length of that section. They are seriously angry. they also were not too pleased with health care last night from reading their paper this morning. Will be interesting to see if they are serious enough to start meteing out punishment with their candidate endorsements later this year by holding democrats they have backed before accountable for the state of the state. Until I see that-particularly targeting north shore democrats-I won’t believe this is anything more than buyers remorse.
Comment by shore Monday, Mar 22, 10 @ 11:21 am
== @John
For the past decade, state government basically did EXACTLY what the vast majority of voters wanted:
1) Spend more money on education, health care, roads/infrastructure, human services, AND
2) Not raise taxes. ==
YDD,
There is a reason my kids don’t have a puppy and have bedtimes. Leadership says sometimes you have to say no and do things that are unpopular but necessary.
Big old failure on that account in Springfield.
Comment by OneMan Monday, Mar 22, 10 @ 11:33 am
I’ll agree with some of the above analysis as it applies to Blagojevich’s efforts to expand health care coverage without paying for it. Some of us voters did try to make an issue of this, not because we were against the expanded coverage, but because it was not being paid for. And some of us mostly democratic voters voted for Topinka in the last election because we could foresee the train coming down the tracks. So, I guess what I am trying to say it that general statements about blaming all of this on the voters wanting more than they can pay for just don’t stick.
Comment by vole Monday, Mar 22, 10 @ 11:37 am
YDD, I certainly hope the Speaker is going to come up with better spin than that. He has alredy tried to blame the GOP for legislative inaction on the issue, which got a chuckle. Now its blame the voters for the fiscal situation, so we can get a belly laugh?
What is truly frightening is that no leader of either party will face up to the coming realities of the fiscal situation, and how much hardship is about to hit Illinois.
Comment by Bubs Monday, Mar 22, 10 @ 11:40 am
Tribune editorial writer (Magic Beans) is smoking hopium pipe. Please pass it around the campfire.
Comment by Agent 99 Monday, Mar 22, 10 @ 11:44 am
“I’ll agree with some of the above analysis as it applies to Blagojevich’s efforts to expand health care coverage”
Well, now that Obama has done what Blago always wanted to do (become president and make a name for himself with healthcare), what is the Medicaid coverage expansion in the federal healthcare plan likely to mean for Illinois? Will it make our budget deficit worse, better, or leave it about the same? Or is it too soon to tell?
Comment by Secret Square Monday, Mar 22, 10 @ 11:50 am
===Will it make our budget deficit worse, better, or leave it about the same?===
No impact for three years. Then Illinois picks up 5 percent of the new enrollees for another three years.
There will be an impact, but not gigantic.
Comment by Rich Miller Monday, Mar 22, 10 @ 11:53 am
Rich,
Your frustration is due to your insistence on approaching this problem like an adult. You only compound things by demanding that budget numbers correspond to elementary arithmetic.
Don’t you see that your course of action can only end in tears?
Comment by MrJM Monday, Mar 22, 10 @ 11:55 am
So, while the Tribune’s proposal slows the state down from digging the hole ever deeper, it does nothing to get us out of the hole that’s already been dug.
Let’s stop digging first. This idea that we have to raise taxes isn’t justified since we are still digging. No new taxes while the people digging the holes put away their shovels.
And blaming voters for this is ridiculous. Every office holder spending money we didn’t have claims that “we” wanted them to spend that money we didn’t have. That excuse is a lie and a sham. It is like feeding yourself $1000 dinners each night, claiming you had to eat or you’d die.
We know better. We know that when someone has a pool of money that is not theirs, they will spend it frivolously because it is not theirs. This is a basic law of economics, something seemingly lost on most “intellectuals” leading public opinion today.
Stop digging. Then we’ll talk.
Comment by VanillaMan Monday, Mar 22, 10 @ 11:58 am
Yes, the Trib’s endorsement of candidates that it is now saying we should vote against is ludicrious.
Here’s another thing — part of the reason the state’s expenses keep growing is because we our economy had transitioned from good-paying manufacturing jobs with health benefits to low-paying service jobs with no benefits. If people in these service jobs were paid a living wage they wouldn’t need (or qualify for) government subsidized health care and other services. The Tribune fought this tooth and nail. I really wish they would think about the connection between the the low wages they champion and increases in government services.
Comment by Lakefront Liberal Monday, Mar 22, 10 @ 12:15 pm
You know that balanced budget clause in the constitution, I’m pretty sure that’s in there for a reason. Like you shouldn’t spend what you don’t have… but don’t get me started about the Illinois Constitution.
Prove to me that we’ll never be in this position again and then we’ll talk about tax increases.
For starters, please list the number of people who bought their state jobs with campaign donations to Blago that have been fired:
Please list the number of state contracts that have been rebid because they were awarded based on clout, not on the best value to the taxpayer:
Comment by John Bambenek Monday, Mar 22, 10 @ 12:17 pm
==For starters, please list the number of people who bought their state jobs with campaign donations to Blago that have been fired:
Please list the number of state contracts that have been rebid because they were awarded based on clout, not on the best value to the taxpayer==
John, please. The fundamental question remains the same for those who are dead-set against a tax increase - outline specific cuts that will reduce the budget imbalance sans a tax increase, or keep quiet. The remedies you mentioned above are absurd as a means to balance the budget. Move on.
Comment by The Doc Monday, Mar 22, 10 @ 12:31 pm
Rich - you forget the reduction in the gap of the Medicare Part D donut hole, which will free up some money being spent in Illinois Cares Rx.
Comment by George Monday, Mar 22, 10 @ 12:34 pm
No, I, nor many taxpayers, are not going to play this game.
Springfield has lost the faith and confidence of the voters for, among other things, spending unconstitutionally much more money than you had.
It’s not up to me to draw up a budget. Besides, the various agencies of the state still don’t know how many programs it runs, how many funds exist, or how much of Blagojevich’s corruption is enshrined in that budget.
But I’ll tell you what. I will support you guys doing an audit to find that information.
Then we’ll talk.
Comment by John Bambenek Monday, Mar 22, 10 @ 1:00 pm
Those who pay no attention to history are doomed to repeat it.
Circumstances are not exactly the same, but I vividly remember the Edgar years when we saw cuts and tax increases in order to pay for the Thompson years. During the Thompson era, we saw growth in state spending that went along swimmingly while the economy was in good shape. That changed, Thompson departed, and Edgar was left to clean up the mess.
All these years later, we have insufficient revenue to match the explosion of state spending. Much worse than last time and cleaning up this mess is going to require spending cuts, tax increases, and a whole lot of pain.
We didn’t learn back then that Illinois government can’t be trusted to spend responsibly. I wonder if we’ll learn it this time around.
Comment by Aldyth Monday, Mar 22, 10 @ 1:03 pm
If the Tribune is to have any credibility regarding this shift in their endorsement policy then at the very least Editorial Page Editor Bruce Dold and the rest of the members of the paper’s editorial board should resign and take jobs befitting their ability - like workers at a landfill!
Comment by fedup dem Monday, Mar 22, 10 @ 3:20 pm
John B., what are you saying, everyone’s lost but you?
The tea-partiers and yabbos pretend that there is a simple solution to every problem that doesn’t cost any money. As in Plato, they descend from the light to the dark. Yeah, buddy.
Anything worth doing takes times and money to get it done right.
Comment by wordslinger Monday, Mar 22, 10 @ 3:28 pm
“We can’t get there from here” or “We have more government than we can afford”. Aldyth had it right. After Gov. Edgar the state was writing checks it could not cash. Last one out turn out the lights. Stop and re-think the whole mess.
The talent is probably there but lacks the will to execute. Prepare and pass a two year budget and let’s go home.
Comment by Agent 99 Monday, Mar 22, 10 @ 7:36 pm
ws, there usually is a simple solution for every complex problem. Unfortunately, its usually wrong.
Comment by steve schnorf Monday, Mar 22, 10 @ 11:18 pm