Illinois Democrats Choose More Decline and So Hike Taxes

Illinois Democrats, with the help of a few weak-kneed Republicans pressured and duped into joining them, just overrode the Republican governor’s veto to push through a massive, permanent income tax hike (for individuals, a 32% increase up to a shade shy of 5%).  Not many years ago, Democrats passed a temporary four-year massive (67% for individuals) income tax hike that they said would right the foundering ship that is Illinois finances.  To no one’s surprise, after the period of higher taxes Illinois was in a deeper financial hole than it was before all that additional tax revenue because the state’s profligate spending was never reduced.  Illinois doesn’t have a revenue problem, it has a spending problem.  The Democrat party formula is to spend recklessly on their constituency groups, and when the financial meltdown inevitable occurs pressure enough dim-witted Republicans into supporting a tax hike (Think of the kids!  What about the schools!); then repeat the cycle all over again. 

In the last 10-15 year, Illinois’ spending has zoomed while its population has shrunk.  Big dollars go to Medicaid and other social services that keeps dependents voting Democrat, and big dollars also go to current and retired government workers.  Illinois state workers are the highest paid, adjusted for cost-of-living, of any state in the nation, even before generous retirement benefits kick in.  (In 2016, there were 17,638 retired state and local workers whose annual pensions were over $99,000, with 15 over $348,000!)  And Illinois has far more units of government than any other state, and all of those townships and forest preserve districts and library boards and water reclamation districts have employees and expenses.  After all that spending, there’s not much cash left over for services for the regular people, otherwise known as the taxpayers.            

And those taxpayers are voting with their feet, as Illinois and Cook County (home of Chicago) lead the nation in population loss.  The Illinois tax base is eroding fast, and yet the Democrats have chosen to raise taxes rather than cut spending.  Higher taxes without spending reform will just accelerate the population exodus and the state’s financial decline. 

I have no sense of what the ultimate resolution will be for Illinois, which is arguably already in the direst financial straits of all the states even before this tax hike.  Like the City of Chicago and the Chicago Public Schools System, Illinois is functionally bankrupt.  I blame chronic, excessive spending that increasingly benefits Democrat party constituencies rather than state residents as a whole, combined with chronic underfunding of pensions that appear overly-generous and based on increasingly over-market salaries.  Throw in the usual fraud and abuse, like pension-spiking, to the mix.  Although the nominal rate of the Illinois state income tax may seem not particularly high even at 5%, given the very high property and other taxes some analysts say Illinois residents have the highest overall tax burden in the United States.  Overspending and mal-spending continue seemingly unabated, and real pension reform remains a pipedream.

Increasingly, the political divide in Illinois is between those who benefit from the state and local government spending largesse, like current public employees, government pensioners, and welfare recipients, and those who foot the bill.  While the beneficiaries feed at the trough the bill-payers are getting fleeced, and increasingly they’re leaving for better pastures. 

R Balsamo 

Illinois State Workers, the Highest Paid in America. And the Happiest? – Not

So today I drove over to the state Dept of Motor Vehicles to get a new license plate sticker for my car.  My current sticker was expired – two months ago, which I noticed just the other day.  In the past, the Illinois Secretary of State sent out reminder post cards about the need to renew one’s 12-month plate sticker.  But due to a budget crisis in Illinois, as I now have learned, the Secretary of State is no longer does that.  One more thing to keep track of. 

Quite coincidentally, just this morning I read a brief report from the Illinois Policy Institute, a good-government watchdog organization.  Here’s a part of that message:

For years, Illinois taxpayers haven't been represented at the bargaining table between Illinois' largest government union and the state.  Illinois' former governors cared more about appeasing the American Federation of State, County and Municipal Employees than protecting the taxpayers the governors were supposed to represent.  That's how AFSCME workers have become some the highest-compensated state workers in the nation.

    

AFSCME wants to remove the governor from contract negotiations because union officials know [Gov.] Rauner will not agree to [their] outrageous demands.  Union leaders are demanding $3 billion in additional salary and benefits for union members in a new contract.  They're seeking four-year raises ranging from 11.5 to 29 percent, overtime after 37.5 hours of work per week, five weeks of vacation and enhanced health care coverage.  Those additional demands would come on top of the costly benefits that AFSCME workers already receive.

Here are four facts about [Illinois] state-worker compensation the union doesn’t want taxpayers to know:

1. Illinois state workers are the highest-paid state workers in the country [when compensation is adjusted for the cost of living]

2. AFSCME workers receive Cadillac health care benefits

3. Most state workers receive free retiree health insurance

4. Career state retirees on average receive $1.6 million in pension benefits. [O]ver half of state workers end up retiring in their 50s.

State of Illinois workers should be the happiest on earth.  Every Illinois state government facility should be filled with beaming, cheerful workers that would put Disney World, the erstwhile “Happiest Place on Earth,” to shame.  But for some reason, when at the Illinois DMV today it was clear I wasn’t at Disney World.

By the way, the State of Illinois is functionally bankrupt, as are the City of Chicago and the Chicago Public School System, all long-controlled by Democrats and all of which are kept afloat through financial chicanery and legerdemain.  But, as the saying goes, they have all finally run out of other people’s money, and the slight-of-hand isn’t working any longer.  But don’t try to tell that to the Democrat government worker unions.

The Twilight of Chicago and the Democrat Model of Government

The days of reckoning draw near for the effectively bankrupt City of Chicago, after more than 50 years of financial corruption by the ruling Democrat Party.  Two baleful news items about the city hit the wires today.

First, the Illinois Supreme Court today declared unconstitutional, under the state constitution, a plan by the desperate Chicago Democrat mayor to reduce some public employee pension payments.  The major driver of Chicago’s financial disaster is the massive annual payment required to fund the current pension plan for retired and active employees.  The mayor’s plan runs afoul of the public employees pension protection provision of the Illinois constitution, says the high court, a provision snuck in by Democrats when the state constitution was rewritten in 1970.  Now those generous pensions – far better than those in the private sector, aggrandized by various abuses such as the notorious and common practices of “pension spiking” and “double dipping,” and underfunded for years by the Democrats themselves who spent the money on other stuff for themselves – have bankrupted the city (as well as the state and many of its cities and other units of government).  To raise cash, Chicago Democrats last year enacted a massive property tax hike, and after today more such increases are likely to follow as the Democrat takers squeeze more and more cash from the producers.  But a greedy parasite that kills the host off which it lives ultimately causes its own death as well.  Chicago and Illinois Democrats have been doing that in slow motion, having learned nothing from the smoldering ruins of the Democrat Party paradise of Detroit. 

Second news item – the top headline today at the website of the now ultraliberal, Democrat-friendly Chicago Tribune:  “Chicago area sees greatest population loss of any major U.S. city, region in 2015.”  Just one more piece of evidence that Democrats have yet to realize that many tax-paying citizens and businesses can simply move away when they have had enough.   More and more workers are work-at-home and thus can live anywhere, and retirees can also pack up and leave for states with less corruption and lower taxes.  And all that is happening.        

The lesson that Democrat takers have yet to learn is that they must control their greed and corruption, since the producers, the people who work to support them in their corrupt excesses, can move away, and a city left with only Democrats trying to live off each other soon collapses. 

R Balsamo

Democrat Chicago Public Schools Running Out of “Other People’s Money”

The patronage-rich, administrator-dense Chicago Public School System, run for generations by the Democrat Party and effectively bankrupt like so many states and cities long-controlled by that same gang, is fast running out of "other people's money." 

Now it says (link) it will eliminate well over one thousand current teachers to be able to continue to pay generous benefits to the ever-growing ranks of retired teachers.  "But what about the children!!!," to echo the standard liberal refrain whenever a Republican proposes just the slightest cut in even the rate of growth of government spending.

All this reminds me of the old joke that General Motors is a retirement and social welfare organization that funds itself by financing the purchase of pricey motor vehicles that it poorly manufactures.  Likewise, the Chicago Public School System seems to be a generous retirement and social welfare organization that funds itself by lavishly administering an inefficiently-run day care operation for children that requires ever-increasing funding by foolish taxpayers and even more foolish lenders.  Take a look at the kids' test scores if you dare, although to be fair the schools have no control over the often dismal home life of the students and the dangerous, toxic gangsta/ho culture in which many are immersed.

R Balsamo

Related post:

Illinois Whistles Past the Fiscal Graveyard

Illinois Whistles Past the Fiscal Graveyard

The state of Illinois is functionally bankrupt from humongous annual pension payments to retired former employees, most of them Democrats.  A recent Illinois Supreme Court decision has just invalidated the Illinois pension reform law, weak as it was, that helped address the financial crisis.  The basis of the court’s decision was a provision in the state constitution, inserted when the document was revised in 1970, that purportedly explicitly protects every state employee’s pension plan as of the day that employee was hired.  Note to self:  vigorously oppose any future effort to rewrite any constitution because of this issue or that, because while everyone is concentrating on the headline issues somewhere in the background insiders will be inserting language that benefits them and shafts the public overall.

Illinois is broke.  Democrats of course want to raise taxes to cover the financial hole, but that’s just been tried and didn’t work.  Illinois just had a portion of a temporary income tax hike expire.  Illinois has a flat income tax, and the increase was from 3% to 5% for individuals, a 66% hike, that ran for three or four years.  Despite bringing in a ton of additional cash, and despite the bulk of that cash going to state pension funds (I have read as much as 90%), at the end of the period of the tax hike I have read that the pension shortfall is greater than it was before the tax hike, meaning that the pension deficit is increasing faster than the additional money raised via the tax hike.  The temporary hike was supposed to make things much better, but it did not. 

The tax rate for individuals has now dropped to 3.75%, which is still higher than the 3% it was a few years ago.  The state is in, as the saying goes, deep doo doo, and of course some local units of government like the City of Chicago and the Chicago Public School System may be in even worse shape. 

Some argue that the problem started with a "rich" and ultimately unaffordable formula for determining the amount of pension, aggravated by a fair amount of Illinois-style corruption such as double and triple dipping, pension spiking, and adding many non-governmental union employees to the pension system.  The unaffordability was hidden for years by financial legerdemain, while some of the money that should have been put to the pension fund was spent elsewhere to make the politicians look better at the moment to their constituencies.  Here's one old clipping I have related to the mess:  "From 1998 through 2008, despite revenue that has gone up by many billions, [Illinois] spending has skyrocketed: per capita state expenditures after inflation have climbed almost 47% while the state population has grown only 4%."  At some point the financial chicanery could not be hidden anymore, even from the accounting firms.

Most state politicians have resisted real reform such as moving government employees off a defined benefit plan to a defined contribution plan, the kind almost all private businesses have today.  For them, "Illinois ain't ready for reform," to borrow a phrase. 

The total state and local tax burden in Illinois is on the high side as states go, and I have read the highest among the surrounding (and competing) states.  Although the income tax may be relatively low (although some states have none), local property taxes and sales taxes are relatively high.

The process some high-tax and functionally-bankrupt states are beginning to experience is conceptually similar to the downward death spiral of an old health insurance plan when, through bad underwriting and pricing, its prices become too high to attract healthy customers and at the same time drive away healthy current enrollees, leaving behind the costly sick ones as an ever increasing percentage of covered lives.  Of course, the implications, intermediate- to long-term, for the municipal bond market are the dark clouds on the horizon.  In some places like Detroit, they have already blown in.

Truly and honestly fixing this problem without changing spending would require a massive tax hike, one that would substantially harm the competitiveness of the state, whose economic growth may already be behind such neighbors as Wisconsin and Indiana, and one that would cause I think most tax-paying retirees and many businesses to flee the state.  One tough alternative so crazy it just might work:  truly and substantially cutting state spending.  But that would mean cutting spending to the core base of the Democrat Party – government workers and welfare recipients, which is not likely to happen. 

So the state slowly slouches toward bankruptcy, while tax-paying retirees and business owners set their sights on Indiana, Tennessee, or Florida.  Many have already left, and many more are sure to follow.  Illinois' financial death spiral may have already begun.

Yeats comes easily to mind:

       Turning and turning in the widening gyre

       The falcon cannot hear the falconer;
       Things fall apart; the centre cannot hold;
       Mere anarchy is loosed upon the world,
       [….]
       And what rough beast, its hour come round at last,
       Slouches towards Bethlehem to be born?

Brokest Illinois Dems Go On Spending Spree On Themselves

In the Utopia called Illinois, controlled for generations by Democrats and the occasional Democrat-like Republican, something has gone wrong with the model -- it's the brokest state with the lowest credit rating in the brokest country in the world.  Its debt is staggering.

But hell, what's the use of being a liberal Democrat if you can't spend like one.  The Illinois Senate and House, both controlled by Democrats with super-majorities, and the Democrat Illinois governor have just all enacted a new spending bill of about $1.6 billion that the state doesn't have, no doubt all going to Dem constituencies and Dem donors.  Illinois voters sure like Democrats.

That's new Democrat spending of $1.6 billion, after just having fallen further behind in 2012 on state employee pension obligations despite a recent 67% hike in the state personal income tax and an almost 50% hike in the state corporate income tax.  

The Chicago Tribune says (link) the "Republicans decried the measure as including ill-timed, pork barrel money."  So what else is new. 

From a commentator to the Trib article:

$10,000 to the Life Center Church of Deliverance for infrastructure; $28,461 to the Chabad Living Room (?)for infrastructure improvements; $528,000 for Wings Program to buy a building; $225,000 to Fulfilling Our Responsibility Unto Mankind for infrastructure improvements; $100,000 to the Uhlich Children's Advantage Network to buy a building; $1 million to the Children's Museum Foundation to buy a building; $115,000 to the Illinois Basketball Hall of Fame. The list goes on and on. Don't these people know that Illinois is broke? That Illinois owes billions of dollars to doctors, pharmacies and others providing services to residents? Owes billions of dollars to its delinquent pension funds, aka its employees? WTF?

Not for nothing is Chicago's unofficial motto (with outstretched palm) "Where's mine?" as in "Where's my share of the loot?"  Something that can't go on forever won't, and the end to this graft and madness will not be pretty.

John M Greco

Obama's Ultimate Agenda

Orwellian was the very word that occurred to me when I read how, in his Second Inaugural Address, Obama used the language of America's founding principles in which to couch his socialist, collectivist true agenda, as a kind of misdirection confidence game to fool the rubes, the masses who need governing by wise elites.  For Obama, the Constitutional limitations on government power must be subverted.

The meaning of Obama's speech has been covered by many, of course; some particularly worthwhile analyses are here, here, here, and here.  Now, at National Review Online Michael Auslin has posted a particularly trenchant commentary (link), excerpted here, that to me gets at the root of the matter:

Perhaps the keynote of Obama’s second inaugural address, the Magna Carta of the new liberalism, is this line: “Preserving our individual freedom ultimately requires collective action.”  The line was certainly banal, as well as Orwellian. But it would be a mistake to ignore it as a rhetorical weapon. What Obama hopes to achieve, above and beyond his policy goals, is to move American society to a point where he won’t even have to give lip service to concepts such as “individual freedom,” at least when talking about his statist agenda. Today, he must still use such traditional American concepts, must still appeal to what one hopes is deeply rooted in our national psyche....  While he was certainly more unbound in his second inaugural, ... one can see where he is still constrained, perhaps by an understanding (distasteful to him, no doubt) as to how far he can push without stirring some deeper unease among even those sympathetic to his less far-reaching goals. 

But this is clearly a gambit to shift the country’s political philosophy ... by utilizing the vital role of rhetoric. Changing how we talk is a prerequisite to changing how we think, shaping reality through our words. Over the next four years, how far will Obama, with the support of the media, universities, and popular culture, have succeeding in changing forever our national rhetoric, where the liberal statist conception of the American collectivity supplants our timeless appeal to individual freedom? 

[Obama’s] thrust to more subtly shift how we think of ourselves and our relation to the state is a necessary ingredient for softening current and future opposition to the expansion of government and the dependency society. Even more insidiously, it is a bid to redefine the American character, from which all else flows.

John M Greco

Tough Times in Democrat Utopia Illinois – How’d That Happen? And When's the Rally?

The breakdown of the Democrat Party social model continues apace, and the day of reckoning draws ever near. 

Illinois has just been recognized as the brokest state in the Union, with the worst credit rating of all.  In Chicago, a city with some of the strictest anti-gun regulations in the country, gun violence continues to set new records (link).  No more Second City! 

Illinois should be a liberal paradise after a generation of almost complete control by Democrats and the occasional liberal Democrat-like Republican.  That’s Democrat-like as in fiscal irresponsibility, social license, and corruption. 

The latest skirmish just broke out in Chicago’s Hyde Park neighborhood, home to the private University of Chicago, which has just opened an expensive, new hospital sans a trauma unit.  Even the ultraliberals now in control there understand that shouldering most of the burden on the South Side for caring for gang banger shooting victims is a sure path to bankruptcy, especially since the Democrat-controlled state is beyond broke and can’t even make timely payments on Medicaid claims, the rates for which are of course paltry compared to private insurance. 

Democrats know just what to do, what they’ve been doing for decades about all the serious problems that are much of their own making – hold a protest (link).  But now they’re just protesting against themselves, their own social model, but are too dim to realize it.  Touchingly, a sweet little old white lady from the neighborhood complains that the lack of a trauma center affects not just bullet-ridden black gang bangers but people like her, perhaps though not able to realize that there are likely 25 insurance-less gang banger cases for every one with a patient like herself, who is by the way as a Hyde Parker statistically highly likely to be a lifelong Democrat voter.  Fifty years of destructive liberal social policies and attitudes and excuses have ruined cities and communities, and the money is gone, long gone, and it’s just smoke and mirrors now.  Chicago’s new top cop, a fellow named McCarthy new mayor Emanuel found somewhere on the East Coast, blames (link) racism and Sarah Palin for the escalating gun violence (I kid you not); not mentioned were liberal policies.  Doctors will tell you that effective treatment requires the correct diagnosis, but then these Democrats aren't brain surgeons.  Next up, no doubt – a rally! (link)

John M Greco             

Will Illinois Dems Snooker Repubs on Pension Reform? Don't Answer That

Despite a recent 67% hike in the personal income tax flat rate and an almost 50% increase in the corporate income tax rate, Illinois is sinking deeper in debt because the increased revenues are not keeping up with ever-increasing pension payments.  For years, Illinois Democrat politicians, abetted by the occasional Republican, have rewarded their state employee party supporters with salary and benefit packages that are not only higher than the private sector but unaffordable.  For years, in a state that has been dominated by Democrats for generations, Democrat pols have used fiscal chicanery and massive borrowing to hide the debt and delay the day of reckoning.  But that day is just about here.

Per the Wall Street Journal (link) on January 7:

Illinois is wrestling with a $95 billion pension gap that has left it neck-and-neck with California for the worst state credit rating in the country. The Democrat-controlled legislature has been stalled over how to reverse its failure over decades to adequately fund pensions for state workers.... Several states are struggling to right their pension funds, which have been battered by lackluster investment returns, increases in benefits paid out and chronic underfunding. But Illinois stands out as the worst, with only 45% of assets needed to meet future obligations based on 2010 data....

After the Democrat governor and the state House and Senate, both with Democrat super-majorities, failed once again to enact some kind, any kind, of reform, the governor came up with a bold new plan.  A "bipartisan" commission appointed by the super-majority Democrats and the rump band of surviving Republicans that would come up with binding changes.  That's right -- pawn the whole mess off to a committee that Dems would give, for once, equal representation to Republicans so the latter can take equal heat for cuts to the over-generous pension benefits.  Do Democrats possibly think that Illinois Republicans could be stupid enough to fall for such a transparent ploy?  ... Don't answer that question.

From the Chicago Tribune (link) yesterday:

The Illinois House adjourned this afternoon without even voting on Democratic Gov. Pat Quinn's desperation pension reform plan. Quinn threw his support behind a bill that would set up a commission to decide how to fix Illinois' financially failing government worker retirement systems. Conventional efforts to craft a compromise on pension changes have gone nowhere during the lame-duck session. The new measure filed today would set up an eight-member commission appointed by the four legislative leaders. The panel would issue a report on pension system changes that would become law unless the General Assembly voted to overturn it.

One way or another, pensions will be reduced, though I feel for honest retirees.  But public employees vote heavily Democratic, so in some large sense it's their own fault, to say nothing of the rampant abuse like final-year salary spiking that guarantees by formula a higher, undeserved pension.  What is unsustainable will end, and what can't last forever won't.

John M Greco

Microcosm of a Romney Loss – Obama Won In Republican Chicago-suburban DuPage County, & Abortion Looms Large

DuPage County sits west of Chicago’s Cook, and is historically Republican with mostly middle to upper middle class suburbs.  It is often the Illinois county with the highest Republican raw vote totals in the state.  And in November 2012 Obama won there in what should have been Romney territory.  Yes, Romney’s national vote was almost that of Obama’s, but his weakness in a typically Republican suburb of a large northern city serves as a microcosm of why he lost.

DuPage County voters historically have been fiscally conservative and socially liberal.  And, like the rest of America, has changing demographics – Democrat-voting emigrants from Chicago and Cook County are moving in,  attracted by the more successful Republican-run communities (yet after they arrive they continue to vote for the same Democrat party responsible for the mess from which they’ve fled (link) – go figure that one.

In Illinois in 2012, a weak, liberal Democrat incumbent governor was challenged by a fiscally conservative Republican, a state senator and an experienced campaigner with a warm persona.  He was, though, pro-life.  Then, as now, Illinois was a financial mess, and voters in DuPage County strongly backed the two Republican candidates running for the state financial control offices – controller and treasurer.  The Republican candidate for controller, Judy Barr Topinka, was a well-known politician strongly liberal on social issues.  She pulled the highest Republican vote total in DuPage County and won the state election.  But Republicans in DuPage County split their vote.  The pro-life Republican candidate for governor, Bill Brady, received about 25,000 votes less than Topinka in the county, but lost statewide by only about 19,000 votes (link).  Had Republican voters in DuPage County given Brady as much support as they gave Topinka, Brady would have been elected.  One big difference between Brady and Topinka – abortion, an issue neither would be able to significantly impact in the positions they were running for.

And there have been downstream results.  With control of both state legislative chambers and the governorship, Democrats redrew the state Congressional map to strongly favor their side.  Under the new map, four incumbent Illinois Republican Congressmen just lost (Biggert, Schilling, Dold, and Walsh).  

The national economy is a mess, and Romney ran almost entirely on that issue.  It wasn’t enough.  Obama countered with a scare campaign about abortion and birth control pills.  Enough people must still blame Bush for the economy and must fear Republicans on social issues – even in DuPage County.

For years Illinois Republicans have been ravaged by an internecine war over abortion and social issues.  Some Illinois Republicans have savaged moderately pro-choice Republican candidates, only to repeatedly hand victory to  Democrats who are radical on the issue.  Republican anti-abortion zealots have compromised their party’s electoral success, ceding political dominance in the state to the Illinois Democrat party which supports and protects late term abortions, partial birth abortions, and infanticide after live birth botched abortions (link).  Rigid anti-abortion Illinois social conservatives have fought fiscal conservatives over the morning-after pill and have gotten legal infanticide instead.  Time for them to wake up to reality of what they have sown, form a coalition with fiscal, non-social conservatives, and win some elections.    

John M Greco

Illinois Democrats Define Deviancy Down (Some More)

The once great state of Illinois has been run for two generations by Democrats and a few Democrat-All-But-In-Name Republicans (notably former tax-and-spend governors Thompson, Edgar, and Ryan).  It has one of the worst business climates among the states, one of the largest budget deficits and overall debt, and has the largest unfunded public employee pension system in the country.  In a recent ten year period, while the state population grew about 4%, state spending grew over 40%, mostly on government employees and Medicaid recipients -- what amount to the two largest Democrat party constituencies. 

To address their decade-long spending orgy, Democrats, with their huge majorities in both houses of the state legislature and the governor's chair, recently pushed through massive tax hikes -- 67% on individuals and almost 50% on businesses.  And yet, the Republican state comptroller (yes, a Republican, albeit a fiscally liberal one, elected last fall) informed us (link) recently that state Democrats, rather than use that increased revenue to pay down the state debt, are spending it on themselves.

Now comes an assortment of news items that show us that just when we think Illinois Democrats couldn't get any worse, they do:

>> With the big corporate tax hike in place, they now have a real nice squeeze racket going (link), whereby big companies visit state Democrat pols to apply for special tax breaks, which are unavailable to mid- and small-sized business, in exchange for ...?  Well, they don't tell us what the quo is for the quid, but we know it's something.  That's the scam -- the Dems hike corporate taxes and then hand out special exemptions when they feel like it, just like Obama, Reid, and Pelosi are doing with exemptions from Obamacare for Democrat-supporting companies and unions.

>> After all the drama over the state's de facto bankruptcy, upon peeling back the obfuscation and trickery, the Illinois Policy Institute finds (link) Illinois Democrats continue to spend like drunken sailors (link).  I may be going out on a limb here, but I'm thinking that all those dollars, as before, will mostly go to Democrat constituencies.

>> Today, the Chicago Tribune reports (link) that the state Democrats have been holding up distribution of charity dollars donated, some as far back as 2009, by state income tax payers at the time of their tax filing and "borrowing" those dollars for regular state spending.
 
>> And finally, there's a touching personal-interest story (link) in today's Tribune that involves a dedicated public servant, a lifelong Democrat politician and former Democrat candidate for governor, who in his later years has been serving, no doubt tirelessly, as president of one of Illinois' public universities, one of the many lucrative sinecures that are rewarded, like spots at Fannie Mae and Goldman Sachs, to Democrats leaving elected office. This man, the President of Southern Illinois University, is the proud grandfather of a young woman who has just been awarded one of a handful of special, all-expenses paid university "Presidential" scholarships at a school she is excited to attend.  What school would that be, you wonder?  Why, her grandfather's, of course!  After all, this is Illinois, and as the late Democrat Chicago Mayor Richard J Daley said, roughly, when caught in a similar situation, if a man can't help his family, he should help strangers?

John M Greco

Duped Illinois Taxpayers "Assumed" Massive Tax Hike Money Would Pay Off Bills, But Instead It Paid Off Public Employees

" 'I think the public assumed...that the money would be used to pay off our unpaid bills and make us fiscally sound.... That money is gone. It's spent' on state pension payments and Medicaid, she said."

The "she" is Illinois Comptroller Judy Baar Topinka, a Republican who, per the Wall Street Journal (link), "warned [today] that the state is on track to end its fiscal year June 30 with $8.3 billion in unpaid obligations." 

I have commented before on the precarious state of Illinois' finances.  It is worst among states in unfunded public employee pension liabilities, and it has one of the worst business environments.  Democrats, aided and abetted by some Republicans, have created this mess over many years.

This year, Democrats, who hold the governor's office and have solid control of both chambers of the state legislature, enacted massive income tax hikes of 67% on individuals and 45% on corporations, along with what to many were token and largely symbolic spending cuts.

But it's still not good enough to fill the seemingly bottomless pit that is the state's public employee pension obligations.  Private workers who pay for state government took a hit during the Great Recession, but not public workers.  But a day of reckoning may not be far off.

John M Greco

Related Posts:
Illinois Now Worst Among States in Risk of Default on Debt. And Illinois Voters Like It That Way. We’re Number One!

Wisconsin = Ground Zero in the Escalating Struggle Between Hard-Pressed Taxpayers & Coddled Public Workers

Wisconsin has become ground zero in the escalating struggle between private-sector taxpayers and the government workers who live large off their labors.

Study after study in recent years has shown that public sector workers not only have higher job-specific wages than their private counter-parts but have much richer benefit packages as well, including pensions that private sector taxpayers can only dream about.

States and local governments are struggling mightily in the wake of the Great Recession, and some are functionally bankrupt. The largest single driver of this crisis is well known -- wages and benefits to public workers, who are usually represented by a union.

The new Republican governor of Wisconsin, Scott Walker, supported by a Republican majority in both houses of the state legislature, is finally standing up for the people who actually foot the bill for the largesse extended to government employees. He is proposing that benefits for state workers begin to come in line with those of the private workers who pay the bills.

Most private workers, the taxpayers, pay a big piece of their health care insurance costs, while I read that Wisconsin public workers, not unlike their counterparts across the country, pay little to nothing for theirs. Karl Rove states on the Hannity show that in Wisconsin “virtually every state employee pays zero” into his/her retirement plan. Meanwhile, in Illinois, a state with worse finances than Wisconsin, the number of retired public workers with pensions over $100k per year is skyrocketing. This is grossly unfair and unsustainable.

Unionized teachers are now mobbing and agitating in Madison, the state capitol, replete with ugly, violent imagery and revolting disrespect for the environment (Ann Althouse posts:  link; link; link).

President Obama, now lying (link) in speeches about cuts in his new federal budget plan, is calling this attempt by Wisconsin taxpayers to save their state from destruction “an assault on the unions.” In Illinois, Democrat Gov. Pat Quinn, who made his name posing as a taxpayer advocate (falsely, in retrospect), is proposing, for the state with arguably the worst finances in the country, I kid you not, a budget for the next fiscal year with increased spending and borrowing (link), even after a recent 67% hike in the personal income tax rate. Denial ain’t just a river in Egypt.

This struggle needs to come to a head, and the sooner the better for our country. It can’t go on any longer. Either the taxpayers who foot the bill or the public workers who live off their labors will be in control. With one we recover and go forward, with one we devolve into bankruptcy and chaos.

John M Greco

Related Post:
Wisconsin Public Unions vs Taxpayers -- Dispatches from the Front

Illinois 2010 Election Results – For Republicans, A Tale of Two Electorates

For Illinois Republicans, last month’s election results were a mixed bag and showed an electorate very schizoid about the two major parties.

First the good news – Republicans won the Senate seat (Mark Kirk), picked up 4 House seats, and held the one Kirk vacated to run for Senate. In Congressional Districts 8, 11, and 14, all of which begin in the Chicago suburbs and extend well into the state, Republicans Walsh, Kinzinger, and Hultgen recaptured long-held seats that had been recently lost to Democrats from inattention, sloth, ideological drift, and incompetence. In addition, Republican Schilling bumped off bumbling Democrat incumbent Hare, a protégé of the late ultraliberal Congressman Evans, in the 17th district along the Mississippi River, and Republican Dold kept Kirk’s old north suburban congressional seat in party hands. Republicans will now hold 11 of the state’s 19 congressional seats. Seven of the 8 Democrat-held districts are in Chicagoland.

But state races were a different story. In the five races for state-wide offices (candidates for governor and lt. governor run together, so voters cast only one vote for a pair of candidates), Republicans won only two, for Treasurer and Comptroller, both open Democrat seats. Incumbent Democrats won the races for Governor, Attorney General, and Secretary of State. But it wasn’t all name recognition. Republican Bill Brady, in the governor’s race, had reasonable name recognition in Republican suburban DuPage County from previous races, yet received about 17,000 votes less than Republican Dan Rutherford, unknown in the Chicago area, running for state Treasurer. In DuPage County alone, Brady received about 25,000 votes less than Republican Judy Barr Topinka in her run for her old spot as controller; Brady lost to Democrat incumbent Pat Quinn by only about 19,000 votes in the whole state. Many Republican voters split their votes.

The Brady-Quinn race illustrates the electoral challenge for Republicans in Illinois. Using the unofficial results that are available the day after the election, with 99%+ precincts reporting, Republican Brady won 99 counties versus only 3 for Quinn, but still lost because his margins of victory in all those counties could not overcome his poor showing (about 29%) in just one of the 102 – heavily Democratic Cook County. Kirk also won 99 of 102 counties, but ran just a few percentage points better than Brady in Cook County and everywhere else, and that was enough to win his Senate race.

In the state legislature races, Republicans gained some seats in both the Senate and House, but failed to take either from the Democrats, who held large majorities going in to the election.

So Illinois voters, faced with a state functionally bankrupt and run in recent years completely by Democrats, re-elected Democrats to most of the same state offices and state legislature seats, while throwing out 4 incumbent Democrat US congressmen. Hard to figure.

John M Greco


Related Posts:
Observations on the 2010 Illinois Primary Results
Illinois Republicans: Slip, Slidin’ Away

Illinois Now Worst Among States in Risk of Default on Debt. And Illinois Voters Like It That Way. We’re Number One!

Illinois has long had the distinction of being the state with one of the, if not the, most precarious financial positions. The formula has been simple: overspend, tax, overspend, tax, overspend, borrow, overspend, borrow, overspend, borrow. At some point, and this may be the point, the state cannot borrow enough anymore.

One of the statistics that sticks in my head is this: In a recent 10 year period, Illinois’ population is roughly flat while “spending per person, after inflation, is up almost 47% (link).” Unsustainable, of course.

Where has all the money gone? Pensions to government workers, including teachers, in a system where the pension payment is set by a formula that disproportionately weights the last year’s salary, which, of course, is artificially bumped up to astronomical levels by the politicians and their union compatriots to jack up the lifetime retiree monthly pension payments. And who pays for all this? The shrinking Illinois taxpayers.

Says (link) the Chicago Tribune to the Land of Lincoln: “You've bizarrely promised your workers some $80 billion more in pension payouts than you can afford. What's more, you've promised them additional billions that you don't have for their health care after they retire.”

And then there’s Medicaid – here’s the essence: “Medicaid spending eats up 30 percent of Illinois’s budgetary pie…. Between 2003 and 2008, [Illinois’] Medicaid enrollment grew at an average rate of 7.8 percent a year while Illinois's population only grew 0.5 percent" (link). Sheesh.

Writes Amy Merrick in the Wall Street Journal (link): “Illinois's deficit through mid-2011 is estimated at $11 billion to $13 billion—close to 50% of the expected $26.7 billion in available revenue for the coming fiscal year…. That is among the worst such percentages among states…. The state pension system also is the worst-funded in the U.S. … State auditors estimate that the pension systems are underfunded by $62 billion…. Required pension contributions, including interest payments, have nearly quadrupled in the past 10 years.”

Now, in today’s Wall Street Journal, Steven Malanga writes (link) that in June 2010, based on cost of default “insurance” for holders of debt, “Illinois surpassed California as the worst credit risk among U.S. states, [and] was at greater risk of default than Iraq.” Great.

And how did Illinois voters respond this month to this historic crisis? They opted for the ostrich maneuver, re-electing the sitting Illinois Democrat governor whose plan is to cut spending a bit and raise taxes a lot, and re-elected a majority of Democrats to the Illinois House and Senate, the former presided over, seemingly forever, by a Democrat Speaker named Madigan whom many regard as the most powerful politician in Illinois and who probably more than anyone else has overseen this debt debacle.

What happened to hope and change?

John M Greco


Related Posts:

Illinois Wins a Silver Medal in Fiscal Irresponsibility, Narrowly Missing a Gold, But Beats Out New Yorkers

Illinois’ Unnecessary Budget Crisis & Irresponsible Solutions

Illinois' New Governor Proposes a 50% Tax Hike To Close Budget Gap Caused By Years of Reckless Overspending

Of Ponzi Schemes, Social Security, & State Budgets – What’s The Dif? And, Illinois in Trouble

The Blagojevich Verdict & On Prosecutor Fitzgerald’s Competence & Character

The jury in the federal corruption trial in Chicago of former Illinois governor Rod Blagojevich, Democrat, just returned only one verdict on 24 felony counts – guilty of lying to the FBI (link). A hung jury on all other counts, and another failure from prosecutor Patrick Fitzgerald. After hearing all Fitzgerald’s team had to offer, a seemingly strong case based on what the public has heard and on commentary from legal pundits, the jury couldn’t agree that any underlying crime had been committed. All Fitzgerald was able to secure was a conviction on one count of lying to the FBI during its investigation.

Perhaps we can add incompetent to what we already know about Fitzgerald – that he’s immoral and a disgrace to law enforcement and the legal profession. To begin with, he's already been in hot water for egregious and unethical public comments about this case pre-trial (see link below).

But more importantly, there's his behavior in the now notorious Plame case. Not long ago, he was appointed special prosecutor by the bumbling George W. Bush to investigate the alleged outing by someone in his Administration of the alleged covert CIA employee Valerie Plame, who, along with her now-disgraced husband, was very liberal and very anti-Bush. Very soon in his work, Fitzgerald ascertained that the leak was not illegal and that it was by Bush Administration officials Colin Powell and his lackey Richard Armitage, made presumably out of pique against Bush, with whom they had fallen out. Knowing there was no crime as well as the identities of the real leakers, Fitzgerald nevertheless kept that silent from the world and proceeded to pursue, ostensibly about the leak, Bush Administration officials Karl Rove and Scooter Libby, whom he knew were innocent of wrongdoing. Why? Well, Rove and Vice President Cheney, Libby’s boss, were targets of ultraliberal Bush haters and Fitzgerald was ready to oblige with some politically-inspired mischief. In a perjury trap set-up, he was able to gin up enough discrepancy between recollections under oath to secure an indictment only against Scooter Libby and to bamboozle a jury into finding him guilty of perjury, under extremely questionable facts, but could not convince the jury of any underlying crime. Only later have we learned of Fitzgerald’s dishonesty and of Powell’s and Armitage’s perfidy. Investor’s Business Daily called Fitzgerald’s behavior “From top to bottom, … one of the most disgraceful abuses of prosecutorial power in this country’s history.” That's Fitzgerald's legacy.

Related Posts at Critical Thoughts:
As Prosecutor Fitzgerald Pursues Blagojevich, Who Watches Fitzgerald?

Blagojevich Files Motion To Remove Fitzgerald, Citing Inappropriate Comments; Fitz Is a "Repeat Offender"

John M Greco

Illinois Wins a Silver Medal in Fiscal Irresponsibility, Narrowly Missing a Gold, But Beats Out New Yorkers

Cynical fans of Illinois politics, a popular spectator sport, will feel chagrined at hearing that their home state just missed out to California for a gold medal in fiscal irresponsibility.

Thomas Donlan, in an editorial comment (link) on the woeful state of state finances in today’s Barron’s Magazine, offers, from a Pew Center report, comparative state data on an interesting metric of state insolvency: compared to the state’s amount of “spending necessary to continue all services and give expected salary and benefit increases,” what is that state’s projected revenue shortfall [for I presume this fiscal year]? California takes the gold medal at a 49% shortfall, but the hardy Illinoisans, led by the big spending pols from the Second City, grabbed the Silver medal in a close second place finish with 47%. Arizona, surprisingly at least to me, placed with 41%, and those big-shot easterners from New York and New Jersey were relative pikers at 32% and 29% respectively. It isn’t easy designing a spending plan twice the size of your income, but Illinois pols managed to do it and outshine New York in the process. Kudos.

And just the other day we received more data on just how much government workers cost us taxpayers. For years it was an accepted truth that government workers were paid less than their private sector counterparts in return for less threat of job loss from layoffs and a solid, if not better, retirement package. And we now know that this is no longer true, and hasn’t been for a while. USA Today just released a report (link), based on its own detailed analysis of federal data, on how much more federal workers make relative to the private sector: they make more in wages, more in benefits, and have a much better retirement deal, all with practically no threat of workforce downsizing. Anyone surprised? State and local workers also have higher total benefit packages than private workers in comparable jobs.

In response to my post (link) the other day on the wreak that is the Illinois state balance sheet, friend and reader The Good Doctor, a political independent, comments:

Mr. Greco and I agree. [T]here [sh]ould be no support for any politician who is not working to cut spending, including cutting the "off limits" existing pension programs for current employees. Yes, of course they will say it is impossible because you have to change laws, but what kind of government says to citizens that we are going to tax you more for [excessive] incomes for [retirees]? [T]he greater-than-private-sector salaries and benefits have not resulted in more efficiency or productivity [in state government], so what do we have for [the gold-plated state benefit packages]? My belief is, and one could probably argue from data, that productivity is hurt by such a give away.

I agree that these politicians (of all stripes) have ruined government finances to the detriment of all except those who receive the largess and who get the votes. In other words, not the citizens of the state.

John M Greco

Illinois’ Unnecessary Budget Crisis & Irresponsible Solutions

Illinois is said by all to have one of the most serious budget crises of all the states, with a balance sheet deficit between $11.5 and $13 billion relative to an annual budget (read spending plan) of about $28 million (WSJ; WSJ; Dennis Byrne; Dennis Byrne). The politicians’ technique is simple. First, recklessly spend borrowed money you’re not sure you can ever pay back on Democrat special interest groups (i.e., unionized government and education employees, with their way-beyond-private-sector salaries and pension plans, and the poor on Medicaid). Then, when revenue and budget trickery fail, declare a crisis. Then, while making superficial and largely symbolic spending cuts that don’t touch the major spending categories linked to those interest groups, declare any cuts to those special groups “off limits” and enact symbolic spending cuts to highly visible functions like state park hours. Then, in ponderous tones echoed by the liberal media, declare that a tax hike is the only answer to fix the Illinois budget.

We’ve seen this kabuki theater routine when the state income tax was first passed and then when the rate was raised from 2.5% to 3%. Each time politicians assured Illinois taxpayers that the extra revenue would fix things for good. Of course, all that extra tax revenue did was reset the cycle – spend, spend, borrow, and tax; repeat cycle in perpetuity.

Here are just a few astounding facts about Illinois’ finances I’ve gathered from my clippings:

* From 1998 through 2008, despite revenue that has gone up by many billions, spending has skyrocketed: per capita state expenditures after inflation have climbed almost 47% while the state population has grown only 4%.
* Medicaid is almost 30% of the current spending plan. Note, however, that since 2000 the state's Medicaid rolls have gone up 59% while the state’s population has grown only about 4% (link).
* Illinois has the most underfunded public pension plan of all the states, with a deficit that some say is now approaching $50 billion. Note, however: According to a recent Cato Institute report, state and local employees in the U.S. earn $1.45 for every dollar private workers earn; state workers get $2.18 in health benefits for every one dollar private-sector counterparts receive; public-sector workers receive $6.95 in defined-benefit pension benefits for ever dollar given to private-sector workers. And, to add insult to injury, “some states allow workers to retire early, begin to collect a pension, and then go back to work for the state at their old job, earning a salary as well as a pension” (link). This is now unaffordable and unconscionable.

Of course, it is widely reported that Illinois already has a requirement to balance its budget each year. But each year the politicians dissemble and through budget trickery of dubious ethicality spend way more than available revenues in violation of the law but yet are never held accountable. This must change. Carefully thought-out proposals have been advanced (Illinois Policy Institute; Illinois Policy Institute; Chicago Tribune) without the tax increases touted by Democrats.

From my view, there should be no increases in taxes or other fees, which would just reset the pernicious cycle perpetrated for a generation by Democrats aided and abetted by some Republicans. There should be serious cuts in the spending plan to reverse a decade of unwarranted and irresponsible increases, with no area of spending off-limits. Illinois spendaholic politicians have ruined this state’s finances to buy crass political power through what amounts to bribery of segments of the electorate, and giving them more taxes to misspend won’t do the state's productive taxpayers any good.

John M Greco

Related Post:

Illinois' New Governor Proposes a 50% Tax Hike To Close Budget Gap Caused By Years of Reckless Overspending

Observations on the 2010 Illinois Primary Results

Ballots in hand have now been tallied from yesterday’s Illinois primary elections.

* Although overall turnout was low by primary standards, the percentage of Republican ballots requested was relatively high. I read that sometimes the Republican percentage can be as low as about 33%, but yesterday, using tallied votes in the governor’s race with 98% of precincts reported, the Republican percentage was about 46%. Yes, still fewer ballots than those voted by Democrats, but a considerable improvement. This result bodes well for the fall election.

* The Republican nominee for the Obama/Burris Senate seat is five-term Rep. Mark Kirk, 50, from Chicago’s tony North Shore suburban 10th Congressional District. A reserve Naval intelligence officer with a very good reputation in Washington, he bills himself as a fiscal conservative and social moderate, and is strong on national defense. Despite some waffling (for example, he voted for the “cap and trade” carbon tax bill that eventually went nowhere and whose reason for existence is now discredited), he looks strong against the young (33 yo), inexperienced one-term state treasurer Alexi Giannoulias, the Democrat primary winner with 39% of the vote who’s under fire for some in-office performance issues as well as for his earlier activities as a senior executive of his family’s politically-connected but failing Chicago bank.

* In the 6-man Republican primary for governor, State Senators Bill Brady and Kirk Dillard are in a race still too close to call – Brady leads by about 400 votes, at 20.3%, with all votes in-hand counted but with, according to WGN TV News, over 10,000 absentee votes still outstanding, about 8,000 of which are from Cook County. Most of the Cook County ballots should be Democrat, and most of the rest are likely Republican. Assuming the 10,000+ number is roughly accurate, assume 3,500 Republican absentee ballots are outstanding and that 2,000 will be received. With a 400 vote margin, Brady's lead looks hard to overcome unless Dillard has a significantly disproportionate showing. Such ballots need to have been postmarked by Feb. 1 and need to be received soon, meaning we won’t have a winner declared for a few weeks; a recount could delay the final determination even further.

Brady is a fiscally-conservative downstate businessman who’s already being attacked by the liberal media as holding “extreme views”, as two different TV commentators phrased it yesterday, for his anti-abortion and pro-gun rights (conceal and carry) positions. Dillard is from west suburban DuPage County, strong Republican territory, whose history on fiscal conservatism is questioned by some, and he notoriously participated in a 2008 Democrat primary campaign commercial for his state Senate pal Barack Obama, widely seen as a de facto endorsement, which has hurt him much among Republicans. Conservatives looking for a fresh face split their vote in the crowded 6 man race between Adam Andrzejewski and Dan Proft; combined the two carried over 22% of the votes, enough to win. Third place finisher Andy McKenna, Chicago businessman and former state party chairman, is about 8,000 votes behind Brady and almost certainly can’t catch up through the absentee ballots. Whoever wins the nomination will be in a tough race with the very erudite, bright, and affable Democrat incumbent governor Pat Quinn, who himself just barely survived a rancorous primary challenge.

* In the Chicago collar counties there are three traditionally Republican Congressional seats held by Democrats. In the far southwest suburban 11th District, Republican Reserve Air Force Captain Adam Kinzinger looks solid against first-term Democrat Debbie Halvorsen. In the far western suburban 14th District, Republican State Senator Randall Hultgren beat back a challenge from political rookie Ethan Hastert, son of former Speaker Denny Hastert, who had held the seat for a long time; he will face Democrat Bill Foster, who in 2008 won both the special election to replace Hastert (after his mid-term retirement) and the regular election against the same weak Republican opponent. Hultgren looks much stronger in a Republican year. Finally, in the northwest suburban 8th District, Republican political newcomer Joe Walsh won the nomination to challenge three-term Democrat Melissa Bean, who has positioned herself as a centrist; this race will be tough. I think the Republicans have a very good chance to pick up two of the three seats.

* In the north suburban 10th Congressional District, political newcomer Robert Dold won the Republican primary to face Democrat Dan Seals in the fall election to replace Mark Kirk. This race could go either way.

For the Illinois federal races, if I had to bet now, I think in the fall Kirk wins the Senate seat and Republicans have a net gain of two Congressional seats (which would raise their share from 7 to 9 of the 19 Illinois seats).


Related Posts:

Illinois Republicans: Slip, Slidin’ Away


John M Greco

Chicago’s Bid to Host Olympics Eliminated in First Round Vote; Obama & Chicago Democrats Look Like Pikers

Obama, Daley, and their gang of Chicago pols and celebrities could not win a vote that wasn’t pre-arranged through back-room deals and strong arm tactics. In the Olympics vote in Denmark, the Democrats of Chicago weren’t up against honest but milquetoast local Republicans, they were up against accomplished wheelers and dealers from all over the globe and came up looking like pikers.

Of course, had Acorn been there to stuff the ballot box on the front end with fraudulent votes and had the Chicago Democrats been able to run the selective, rigged vote count of which some Democrats are so fond (see Florida, 2000; Minnesota, 2008 [link]), the outcome surely would have been different.

UPDATE: Rich Lowry at National Review Online's The Corner Blog posts a comment from a reader: "Top Ten Reasons Chicago Didn't Get the Olympics" (link). I especially like these:

10. Dead people can't vote at IOC meetings
7. The impediment is Israel still building settlements.
4. This isn't about the number of Olympics "lost", it's about the number of Olympics "saved" or "created".
3. Clearly not enough wise Latina judges on the committee
1. It's George Bush's fault.

Then also at The Corner Mark Steyn posts this (link):

Re that Number One on your Top Ten list, here's how the Olympians see it: "I'm still in a state of shock. I can't believe we couldn't get past the first round. I still thought the (Chicago) bid overall was the best," said three-time Olympic gold medalist swimmer Ambrose "Rowdy" Gaines. "Maybe there is some hangover from politics, from the last eight years," Gaines said.

As the saying goes, you can't make this stuff up.

John M Greco