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* Borrowing our way into a worse mess…
[Gov. Pat Quinn] proposes passing a budget to keep government operating and allow time to study ways to cut Medicaid spending and other costs. Then officials could decide in November whether to cut spending, raise taxes or neither.
Legislative leaders seemed inclined to support some variation on that plan.
This version would include billions of dollars of financial gimmicks and one-time sources of revenue: borrowing about $3.5 billion to help pay annual pension costs, using about $1.1 billion worth of vaguely defined “inter-fund borrowing'’ and leaving about $3.2 billion in bills unpaid.
The hole next year is gonna be huge, man.
And some legislators are angry about it…
[Rep. Jack Franks, D-Morengo], who is considering running for governor, blasted Quinn for wanting to borrow money rather than make meaningful cuts to balance the budget. The $1 billion in cuts unveiled by Quinn last week do not go far enough and are being made far too late, Franks said.
“I’m red hot about this,” Franks said. “What he’s doing is abdicating his position as governor. This way, he doesn’t have to make the tough decisions.”
Not everyone was upset…
“[Borrowing is] not a good policy move but it may be be our only option. So, if that’s put before us then we’ll have to weigh it out,” said Rep. Mike Bost, (R)-Murphysboro.
More…
Senate Minority Leader Christine Radogno, R-Lemont, acknowledged the budget would not be balanced. But she defended it as the only way to offer some stability to the people and groups who depend on state government.
“We are at a drop-dead date where we have to adopt a budget. There are no good alternatives,” Radogno said. “This is, I think, the best of a number of bad alternatives.”
* Franks was also sharply critical of his colleagues after a caucus meeting yesterday…
House Democrat Jack Franks of Morengo says a closed door caucus yesterday shows lawmakers don’t want to make the necessary cuts to balance the budget.
FRANKS: Everyone is so worried about who they might offend and what interest group that might get offended. You wouldn’t believe some of the things I was hearing in that caucus. People were worried about their furlough days and how its going to affect their pensions. And I was like, come on. Don’t you guys get it? We are in an absolute crisis here and we need to start cutting.
Amazing what some legislators are worried about at a time like this, isn’t it?
* This is not a sure thing yet…
While numbers vary, one estimate by a House Democrat is that the new budget deal could result in service providers receiving about a 13 percent cut, as opposed to a 50 percent cut, as previously approved. The governor vetoed that measure (SB 1197).
So instead of the so-called 50 percent budget for human services, providers would get about 87 percent of what they received in state support last fiscal year.
Or it could be less. Nobody really knows for sure.
More…
[House GOP Leader Tom Cross] said predictions of doom for those [social service] agencies are exaggerated. The leaders also advised Quinn to “tone down the rhetoric” about the effect the new budget will have on social service agencies, Cross said.
“I think the approach a month ago was an attempt to scare legislators into a tax increase,” Cross said. “I didn’t think that was a good approach. I think, at the end of the day, things will not be nearly as severe as the governor portrayed six weeks ago.”
* Meanwhile…
Thousands of state workers are in danger of missing paychecks today unless the governor and legislators reach quick agreement on a budget.
A first round of 5,000 to 6,000 direct deposits and checks are slated to be delayed today and thousands more by the end of the month, said a spokeswoman for Illinois Comptroller Dan Hynes. Hynes maintains his office lost its authority to fund payrolls when the state’s new fiscal year began without a budget on July 1.
“Unless there is an appropriation passed and signed, or there’s a court order, payroll can’t move forward,” Carol Knowles said Tuesday.
The union representing 40,000 state workers filed just such a lawsuit on Tuesday in St. Clair County Circuit Court.
From the Illinois Credit Union League…
Credit Union 1 and about 5 other credit unions will be offering zero interest loans to state employees that miss paychecks. The specifics will vary for each credit union. People should contact their local credit union or go to www.iculleague.org or illinois.gov for a listing of participating credit unions.
* Related…
* Hunting, fishing fees could rise in Illinois: The increases were approved by a House committee 8-2 Tuesday with support from both Republicans and Democrats
* Belleville judge to hear Illinois state workers’ pay case today
* Video poker may be legal, but many hurdles lie ahead
* Capital plan to bring projects, jobs to Southland
* Stratton won’t go away without trouble, expense
* Welcome news on Stratton Building
* Metro-east lawmakers say $31 billion in capital projects will help state
* Capital bill seen as long overdue
* Schools, researchers aided by construction bill
posted by Rich Miller
Wednesday, Jul 15, 09 @ 8:33 am
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This “wing it until mid year” gambit of the government and legislature is just terrible budget practice. In Quinn’s position, I wouldn’t proceed with this until I had Madigan’s signature in blood on a promise to backfill the revenue by a set target date. They should be up there at 12:01am on January 1 2010 passing it.
And I think that realistically it’s going to be even harder to get this problem resolved down the road; the economy is not going to recovery quickly and Madigan, at his age, is not about to get over his political risk aversion.
Comment by Angry Chicagoan Wednesday, Jul 15, 09 @ 8:44 am
Quinn is more about Pat Quinn than the people of Illinois. The only reason he’s governor, is by default.
This is a guy who stood by for 6+ years watching Rod Blagojevich’s and company corrupt way and bankrupting our state and said nothing, not even a peep.
His legacy won’t be pretty either.
Comment by Nine Lives Wednesday, Jul 15, 09 @ 8:50 am
Will somebody please tell Jack Franks to shut up?
Seriously, Frank’s is exhibit “A” when trying to understand the problems in the General Assembly.
When faced with a monumental, and very real, crisis, we need more people interested in solving problems, and far less demogouges.
When Jack has the stones to actually endorse $6 billion in specific cuts, then maybe I will cut him some slack, until then he’s nothing but hot air.
Comment by ILPundit Wednesday, Jul 15, 09 @ 8:51 am
The pressure of some state employees not receiving their paychecks on time should be enough to force a settlement in this budget impasse.
Comment by Stones Wednesday, Jul 15, 09 @ 8:53 am
I thought there was a long-standing Jack Franks quote moratorium on this site?
If not, please ensure it is reinstated.
Comment by George Wednesday, Jul 15, 09 @ 8:53 am
I don’t know what’s going on outside the Thompson Center this morning, but when I waslked past some interns(?) were removing all sorts of tables, chairs, and tents from an Illinois Lottery truck.
I just thought that was surreal. “Hey, you state workers aren’t getting paid today…why not take a chance? Have a ball!”
Comment by Concerned Observer Wednesday, Jul 15, 09 @ 9:01 am
Franks is off his rocker.
He chides his colleagues for failing to “make the necessary cuts” yet consistently fails to address how cuts would affect at-risk children, veterans, the disabled, and the elderly–the most vulnerable of Illinoisans whom we have a legal and moral obligation to. 1+1 doesn’t equal $9 billion, Jack. Wake up.
Comment by Obamarama Wednesday, Jul 15, 09 @ 9:05 am
“inter-fund borrowing”?
I guess this means fund sweeps, no? Probably also intra-fund borrowing within each agency that receives funds designated for specific projects. I assume this would help to keep essential administrative staffs afloat while starving project implementation. Really a morale killer for project staffers.
A reckoning delayed but a longer and harder fall eventually for all. To what end? Political viability?
Comment by vole Wednesday, Jul 15, 09 @ 9:08 am
If you raise the price of a fishing license again I expect you to keep all of the money within DNR.
Comment by OneMan Wednesday, Jul 15, 09 @ 9:13 am
Bambie,
Get the lawsuit ready, dude!
Comment by Bill Wednesday, Jul 15, 09 @ 9:15 am
So I didn’t get paid today. A pox on all their houses.
Comment by Friggin' Angry Wednesday, Jul 15, 09 @ 9:27 am
are the 2,800 layoff’s still for certain?
Comment by Anonymous Wednesday, Jul 15, 09 @ 9:28 am
===
I just thought that was surreal. “Hey, you state workers aren’t getting paid today…why not take a chance? Have a ball!”
===
This is called working. It’s what state workers do. No one’s not getting paid. What, if they’d been sitting around lollygagging you’d be posting here with something like: “Hey, see — there’s the problem. I saw it with my own eyes. There’s something going on at the Thompson Center, and what do you think I see? A bunch of lottery workers sitting around! Figures, how? I mean, when is Quinn gonna get rid of all those Blagojevich hacks?”
The credit unions will step in as they did a couple years ago when there was a possible disruption.
Comment by Macbeth Wednesday, Jul 15, 09 @ 9:29 am
My sister had an office in the Stratton building 15 years ago, and it was gawd awful falling down butt ugly then…
Comment by Anonymous Coward Wednesday, Jul 15, 09 @ 9:30 am
With the GA raiding various state funds to avoid doing their jobs, what happens when the well runs dry?
Comment by dupage dan Wednesday, Jul 15, 09 @ 9:30 am
AFter all this time, this is the result: borrowing for annual expenses, intra-fund gimmicks and putting off paying bills (AKA borrowing from your vendors).
There are no good choices in these tough times, but we seem to have included as many bad ones as possible. A half-baked plan and employees getting paid late to boot.
We’ll do it all again in a few months.
Comment by wordslinger Wednesday, Jul 15, 09 @ 9:31 am
Well, I suppose that the vendors aren’t in much of a position to complain, in this economy. It’s not like most can afford to shut down their businesses and go elsewhere, or they would have done so already. Spare me the tales of vendors staying on to help the people of Illinois. They are staying on because it pays better than leaving.
Comment by Cassandra Wednesday, Jul 15, 09 @ 9:40 am
Check this out…
UofI Springfield gets close to 200 grand for construction of a “supercomputing applications facility” - but they don’t have a supercomputer.
http://is.gd/1zN1r
Comment by Anonymous Coward Wednesday, Jul 15, 09 @ 9:44 am
I am very disappointed in Tom Cross’s remarks. I’ve written him on the damage alrady being done to the human services sector, and all I get back are form responses.
Rich has made reference to ProgressIllinois, the SEIU web site where nonprofits are reporting their closures, their staff layoffs, and clients no longer able to be served. Many more have shut down and have no one to report for them.
Tom Cross is a better man than this. He has been captured by his right wing members, due to his frequent caucus meetings. Very sad for direct service providers, and sad for Tom.
I fear that the 90% or 87% of FY 09 line items in human services may spread far enough, because so many individual groups have shut down and will not reopen. Add catch-up payments of past due reimbursements, and perhaps many of the surviving providers can limp through until the end of the calendar year.
But why should providers ever trust the State of Illinois again? Better to reject state contracts, and simply accept local area clients on a full fee or sliding fee basis, and reject state agency referrals from all across the metro area. Illinois state government is a terrible organization to do buisiness with. And if the courts mandate that state agency clients be served, let the state duplicate the local private sector providers - even if it costs twice the money to do so, as Steve Schnorf and other knowledgeable persons have asserted.
Comment by Capitol View Wednesday, Jul 15, 09 @ 9:52 am
I do not know how, in good faith, our leaders went to the “All Star Game”, while people are not getting paid. The state’s attorney, in many counties, prosecutes employers who do not pay their employees under the Wage Claim Act. How is it that the State of Illinois is above the law? How can the State not pay their employees and yet our legislators are screwing aroung in Springfield. Enough with the gamesmanship, the political moves of Mike Madigan, etc. Pass a budget, and do what needs to be done and not worry who will “look good” or how someone will “look weak”. The Voters are not going to put up with this amount of bull for too much longer. Everyone thought it was Blago’s fault, now they will begin to see that Blago was just part of the problem.
Comment by SLICK Wednesday, Jul 15, 09 @ 9:52 am
They’re worried about their pensions? These people are truly gutless wonders. But how many of them will be looking for work after the next election? My guess is not many. They’ve been in Springfield since January and all we get is some sort of hacked together escape plan. And we get to pay for them to be back in Springfield later to come up with what probably will be another Rube Goldberg budget. Man alive these people REALLY take the cake.
Comment by Deep South Wednesday, Jul 15, 09 @ 9:52 am
Yikes — that comment about legislators and furlough days and pensions is quite offensive. I assumed legislators were above this.
Besides, I thought the whole point of furloughs was that they *don’t* impact your base salary. You simply don’t get paid for your furlough days — but that your state base remains the same. My understanding was that this was so that any wage increases aren’t impacted.
Am I misunderstanding this? (Or are the legislative folks misunderstanding the point of furlough days?)
Comment by Macbeth Wednesday, Jul 15, 09 @ 10:02 am
Rich - thanks again for your outstanding blogging on the budget crisis. If all we had to rely were the mainstream media outlets, we barely know there was a crisis to begin with.
Comment by southerner Wednesday, Jul 15, 09 @ 10:03 am
Franks - where is your list of cuts?
Bost - HB 174 - best option
Radogno - a balanced budget is in your job description
Cross - tell the exaggeration story to the people losing jobs and services already
Comment by collar observer Wednesday, Jul 15, 09 @ 10:08 am
If Bost and Radogno both admit we need to borrow money. In this case, borrowing means we cannot cut anymore, but we don’t have the revenue to pay for what we are doing.
Rep. Bost and Sen. Radongno need to take the next step and admit that we need to increase taxes. Borrowing just puts off the tax increase and increases the amout that will need to be imposed.
Comment by Pot calling kettle Wednesday, Jul 15, 09 @ 10:16 am
Macbeth, you’re a jerk.
I wasn’t complaining about the Lottery employees setting up. I was pointing out that the state can’t get its house together and pay the people who earned their checks, but is advertising an opportunity for those workers to use the money they don’t have to buy a lottery ticket and MAYBE make more cash.
I thought it was a funny little contradiction. Apparently, you didn’t, and that’s fine. But not everything anyone says is an attack on state workers, okay?
Comment by Concerned Observer Wednesday, Jul 15, 09 @ 10:16 am
I find it difficult to believe the bond market is going to jump at the chance to buy $3.5 billion in notes from a state that is far from a balanced budget this year and without a doubt going to go over the cliff next year when the bills come due.
Comment by Bluefish Wednesday, Jul 15, 09 @ 10:16 am
Hey Cassandra aren’t you thrilled that some of the thousands of state employees you love to deride aren’t getting paid today, those lazy louts…I’m sure there’s an extra spring in your footsteps today…
IL Pundit: ditto for me…
Comment by Anonymous45 Wednesday, Jul 15, 09 @ 10:19 am
[Gov. Pat Quinn proposes passing a budget to keep government operating}
Now is the time for all good men (and women) to come to the aid of their state {sic}. What this eaderless vacuum in Illinois so desperately needs is a serious infusion of anarchy. Instead of continuing down this patchwork road of keeeping government running, what we really need is for the non-public safety oriented operations of state government to simply come to a screaching halt.
In order to solve this problem; I believe what will be necessary is for all state workers other than police and corrections workers, to either simply reject coming to work; or if they have already done so, that they pack everything up, and turn off the computers and lights, and simply go home until their is a satisfactory solution adopted and enacteed.
Until this type of action occurs, I am afraid that instead, they will just find a way to keep government operating, which appears to be the worst possible thing for all of us.
Comment by Quinn T. Sential Wednesday, Jul 15, 09 @ 10:37 am
===
Macbeth, you’re a jerk.
===
Yep. Deal with it.
Comment by Macbeth Wednesday, Jul 15, 09 @ 10:39 am
Rich,
Did anyone notice that in the Capital Plan there is over $1,000,000 for building improvements for Howe Development Center (pg 81& pg 82)? Did I miss something? Did Governor decided to keep that nightmare place open or did he not read the Capital Plan?
I thought he was suppose to get a report from a consultant on June 30th and then make a decision? What is going on, does he not read things or does he lack the backbone to make decisions (afraid of losing more union jobs)?
Here’s a place to save some money in the budget $60,000,000 a year!
Comment by Bull7 Wednesday, Jul 15, 09 @ 10:41 am
Does anyone know when they might be voting on anything today?
Comment by Central IL Wednesday, Jul 15, 09 @ 10:46 am
So are they going to forget about the back log of bills and then start paying moving forward? Or pay the backlog and the stop paying for half a year? Casandra, it’s tougher than you think.
Comment by Quinn The Eskimo Wednesday, Jul 15, 09 @ 11:03 am
Central IL - The House goes in at 1pm and the Senate goes in at Noon.
I would assume voting would happen after that.
Comment by Nikoli Wednesday, Jul 15, 09 @ 11:04 am
LOL Macbeth…tryin’, my man. Tryin’.
Comment by Concerned Observer Wednesday, Jul 15, 09 @ 11:04 am
Nikoli - Thanks. I’ve been on the edge of my seat so I can stop refreshing the page over and over until after then! LOL
Comment by Central IL Wednesday, Jul 15, 09 @ 11:05 am
===
LOL Macbeth…tryin’, my man. Tryin’.
===
I admit — I was a little quick to post. Early in the morning.
Still — if the credit unions do what they were planning to do a couple years ago (which appears to be the case) — workers don’t have to worry about not getting paid. True, these checks will be delayed — and one has to make a visit to a CU — but the money will be there, one way or the other.
Comment by Macbeth Wednesday, Jul 15, 09 @ 11:11 am
I have seen so much fraud as a state worker and have eliminated it as much as possible over the years. I and a few others were some of the few who fought real hard to limit misappropriation of our precious public money. We succeeded in many instances by canceling cases. We used to have a property/resources worker who had computer programs that we don’t have; they enabled her to see who owned unreported resources such as income-producing property and who had other income.
The people committing the fraud (many clients) are not in the budget-cut picture. You want to cut spending on programs, then find ways to prevent fraud instead of messing around with workers, who have visible accountability, whose jobs and earnings are transparent. We need more resources to eliminate fraud. When my office’s resources worker retired, they closed her position. It’s a field day again for many people on public aid who get unreported income, sometimes in six or more figures per year.
Now Quinn et al. want to study Medicaid cuts before voting for an income tax increase. Where have they been all of these years? I’ll bet that none of the cuts will directly affect those who will get by fraudulently on taxpayer money.
We are hemorrhaging money on one end, with nearly-indiscriminate approval of public assistance, yet whenever there’s a budget problem, the accountable get the axe. There’s no end to this in sight.
Comment by Stoned Prophet Wednesday, Jul 15, 09 @ 11:11 am
“Share the sacrifice” We have been hearing that for months. I would suggest that the GA not accept ANY compensation for any session after May 31. The budget they are proposing and will probably adopt today is no improvement over where they were in May so all their meetings since then have been to build up their income. How arrogant can they be they they actually go into session for 90 seconds and then adjourn to a ball game while the Sate falls apart around them?
This scenerio is exactly the same position Little Mike put Blago in when they passed a partial budget and left all the cutting work up to the Governor. While Blago needed to be ousted evidently he wasn’t the budget problem, he’s gone and we got the same thing.
I am really tired of the rhetoric we are getting from all the members. I say to them to knock off the excuses and all the spin about why we are where we are. The bottomline is you bums don’t have any stones between all of you and you let Little Mikey dictate to you what to do. So get over yourselves.
Dump all the incumbants!! Remember in November!!
Comment by Irish Wednesday, Jul 15, 09 @ 11:26 am
This gets everybody through the primary and then it will be clear who the real targets are. They can use this “crisis” as an excuse to stiff providers and vendors and bury themselves and us into more debt. Just what Illinois doesn’t need right now. 60 votes will be pretty easy in May’10 especially with their 6 to 8 rhinos in tow. Nobody really cares what Quinn wants or says. He has made himself irrelevant. Franks will make a lot of noise and then decide to keep his seat for family reasons. I’m guessing that the democratic nominee for governor will not be Quinn, Hynes, and certainly not Franks. Its checkmate for the Ayatollah. Again. You read it here first.
Comment by Bill Wednesday, Jul 15, 09 @ 11:27 am
Based on the state’s financial philosophy, guess I should get another loan to pay off my mortgage, then borrow more money to pay off the loan. Makes sense right?
State employees not getting paid? What about the community services employees not getting paid or losing jobs because bills are not being paid. There are only 3-4 community employees for every state employee. The state employees must be more important since they seem to be the only ones who are usually talked about.
Comment by zatoichi Wednesday, Jul 15, 09 @ 11:40 am
zatoichi - slow down. the state employees are just what’s immediately happening now. service providers never get paid from the state on time. there’s usually a 3-6 month delay.
as for the event at the JRTC, it’s an ADA event. it’s been publicized all week and i do not believe it’s tied necessarily to the budget (or lack thereof).
Comment by I wish I were Mrs. Guillen Wednesday, Jul 15, 09 @ 11:56 am
Why don’t they change the deadline date for the budget to February. Then they would not have to worry about overtime sessions, special sessions, etc.! Common sense seems to have gone amuck in both houses!
Comment by Auntie Geo Wednesday, Jul 15, 09 @ 12:02 pm
Let’s see. Our state “family” budget is in a shambles. We can’t pay our doctor’s or utility bills,and our credit rating is dropping because we’re already overextended.
We could reduce spending, but then we’d have to tell our kids that they could no longer go to a $15,000 per year private school, buy Gucci, drive that new Mercedes, or keep putting in that $20,000 per year so that they can go to Harvard instead good old State U.
What WILL we do?
The FIRST thing we do before looking at our operating budget is to…..create a “capital plan” to build a new exercise room and theater on the house! We also redo all that landscaping.
It’ll only cost about a year’s income!
We’ll worry about cutting the spending later, and we wouldn’t DARE think of asking the kids to get a job or economize, could we?
This is the same logic that the GA and Guv are following with their unwillingness to cut unnecessary spending and live within our available means for medicare eligibility, “prevailing wage” waste in state construction, maintaining “golden” pension programs while refusing to require recipients to pay their fair share of the cost, and spending $31 billion in wasteful “pork” when we can’t pay our bills.
Perhaps the saddest thing is that the most of the bums responsible for this in the GA won’t even have an opponent in the primaries next spring, let alone having an opponent in the November election.
“We have met the enemy, and he is US!”
Freedom isn’t free, and most of us don’t have the cajones to pay the price of freedom.
When people believe the price of freedom and liberty is too high, they settle for tyrany.
Welcome to Illinois!
Comment by PalosParkBob Wednesday, Jul 15, 09 @ 12:08 pm
I say WALKOUT. If they don’t pay us. Then we can all claim it as a Furlough day.
Comment by He Makes Ryan Look Like a Saint Wednesday, Jul 15, 09 @ 12:18 pm
Pee-Pee Bob,
So I guess your point is we need to raise revenue to pay the “price of freedom”. Which tax increase do you prefer? Income, sales, sin, property, or a combination of all?
Maybe you should try to run for office again. Try to get your petitions right this time.
Comment by Bill Wednesday, Jul 15, 09 @ 12:22 pm
So the state borrowed $10 billion in 2003 to support its employee pensions, and now, a mere six years later, it will borrow another $3.5 billion for pensions. And there are around 600 public employee pension plans in Illinois, with most probably in the same dire shape as the state plans. Moody’s just dropped California’s bond rating to junk, in large part due to its employee pension plan obligations. Is there any doubt that these plans are sinking state and local government budgets throughout the US due to their unsustainable generosity? And as time goes on, aren’t they the number 1 issue that needs to be resolved in Illinois and its local governments?
Comment by Cook County Commoner Wednesday, Jul 15, 09 @ 12:49 pm
CCC - If you have been following this issue on this Blog you would know that it is the fact that the State has not paid IT’S share of pension payments for over 19 years that has gotten us into this mess. The state employees have been paying their share for that whole time period. It is also a fact that the State has and continues to borrow heavily from the pension plan to operate State Government. So you might say that if we the state employees didn’t make our payments to those funds the rest of the State would not be able to borrow them to keep opeerating. We are subsidizing State Operation with our hard earned money.
Comment by Irish Wednesday, Jul 15, 09 @ 1:03 pm
Palos, you are way off base. Is the capital bill completely devoid of pork? No. That being said, you might want to take a look at the actual pieces of legislation that comprise the capital plan, read them, and keep in mind that capital improvements are way overdue in Illinois. Or is a functional/non-deteriorating infrastructure the “Gucci” in your analogy?
Comment by Obamarama Wednesday, Jul 15, 09 @ 1:11 pm
IWIW Mrs. Guillen:
=== service providers never get paid from the state on time. there’s usually a 3-6 month delay. ===
I’m unclear about your point. I hope it’s not “So what difference does it make if payment is delayed a fiscal year?”, because the current delay is already challenging. But a different fiscal year?
Cassandra seems more clearly satisfied with this “borrowing” plan. She must not work for a “vendor” or “provider”, or own such a businesses. There’s this little necessary thing in business called cash flow. Without it, you don’t move (Silly Cassandra), you go bankrupt. And newsflash…businesses in Illinois are having a really hard time. But perhaps you missed that issue of Crain’s.
If you own a big company, perhaps you have cash assets that you are glad to draw upon and skip reinvesting in your business this year. Like you did last year… as the economy went frightfully sour and opportunities for work and customers vanished almost overnight. Along with credit. If you are a small company, perhaps you have a line of credit upon which you can draw to make payroll and to pay your own “vendor” bills and loan payments. Is it right to make small businesses pay interest so that the State can “borrow” money from them for free?
There is a saying “Never lend more than you can afford to give.” Unfortunately, the state is not asking to borrow money from vendors and service providers, or how much they can afford to lend. Interesting approach. The state is simply planning to keep money it owes for its own use, paying as much as a year later for goods and services that were provided in good faith. What if your employer did that to you?
Comment by Keep Smiling Wednesday, Jul 15, 09 @ 3:12 pm
I’m always impressed at the fiscally sound suggestions by state employees and appalled at how fiscally incompetent most state legislators are. It’s always about them and getting their pork.
Comment by Emily Booth Wednesday, Jul 15, 09 @ 6:24 pm
– Moody’s just dropped California’s bond rating to junk, in large part due to its employee pension plan obligations. Is there any doubt that these plans are sinking state and local government budgets throughout the US due to their unsustainable generosity?–
Don’t worry about the bond markets, even with California. Demand is high because of tax-exemption, and if you live the state, double tax exemption. And the states always, always, pay.
Will you have to pay more juice? Yes. But it’s not because Moody’s or the other rating agencies are honest brokers, as we saw in the AAA subprime loan securities leveraged by 30 to 50 times; they play to the markets. Every state needs to borrow, so the juice goes up.
Pension obligations might be going the way of liability insurances for governments; an annual appropriation.
And by the way, state pensions are not overly generous, except for those who gamed the system.
Comment by wordslinger Wednesday, Jul 15, 09 @ 6:28 pm
We have Such Wonderful Legislators
in ILLINOIS
Please TELL ME Where are all the Wonderful
Voters who supported Gov. Rod
2 terms ??????
He and his followers are responsible
for RUNNING THIS STATE INTO THE GROUND !!!!
Tell me where IS JAY HOFFMAN NOW ?????
So SILENT / WONDER WHY ?????
Why no PRESS CONFERENCE TO ANNOUNCE
SOME WEIRD IMPROVEMENT / FOOLISH SPENDING
OF TAXPAYERS MONIES ????
Comment by grategul Wednesday, Jul 15, 09 @ 7:44 pm