‘Doomsday’ in Illinois

(9 am. – promoted by ek hornbeck)

  When it comes to state budget crisis, California gets most of the headlines. When it comes to states that are going bankrupt the quickest, Obama’s state of Illinois has taken the lead.

 “The state is in utter crisis,” said Representative Suzie Bassi. “We are next to bankruptcy. We have a $13bn hole in a $28bn budget.”

  The state has been paying bills with unfunded vouchers since October. A fifth of buses have stopped. Libraries, owed $400m (£263m), are closing one day a week. Schools are owed $725m. Unable to pay teachers, they are preparing mass lay-offs. “It’s a catastrophe”, said the Schools Superintedent.

  In Alexander County, the sheriff’s patrol cars have been repossessed; three-quarters of his officers are laid off; the local prison has refused to take county inmates until debts are paid.

 Collectively the states have a $156 Billion hole to fill this year. There will be a lot of pain to go around.

‘Doomsday is here for the state of Illinois’

 Last week a government watchdog group released a report of what must be done for Illinois to stay solvent.

 The Civic Federation recommends that the state income tax be increased from 3 percent to 5 percent for individuals, that retirees’ pension and Social Security checks be taxed for the first time at the same rate as workers’ paychecks, and the tax on cigarettes be raised by another $1 per pack. The group also favors getting rid of $181 million in corporate tax breaks.

  Those tax increases, which would generate more than $8 billion, should come only if the state first can persuade its unionized employees to pay more toward their pensions and health care, cut pension benefits for new workers and reduce overall spending by $2.1 billion to 2007 levels.

 The Republican candidate for governor is full of ideas on how to fix Illinois’ budget problems.

 “The governor is out in left field here. I mean, he’s completely out of line. People are struggling in Illinois,” Brady said, adding that “this is absolutely the wrong time to increase the tax rate.”

  But when he was asked in an interview in Springfield on Thursday how he would solve the problem, he acknowledged that “you can’t cut yourself out of $10 to $13 billion.”

  If you can’t balance the budget with cuts, and you refuse to raise new revenues, then how exactly do you do it?

  “We have to create a budget that’s reconciled, deconstruct it and reconstruct it, meeting our priorities, living within our means, but also providing a surplus so we can pay off the backlog of unpaid bills.”

 “Deconstruct and reconstruct”? Does Bill Brady know what those words mean? He’s talking about a surplus in a time that the budget can’t be balanced with tax hikes and spending cuts. In fact, Brady is talking about a $1 Billion tax cut.

  As for as I can tell, Brady’s response is the equivalent of, “Hey, look over there! What’s that?”

  The state employees have already accepted furloughs and suspension of raises because of the budget crisis of last year. It seems that the “overpaid state workers” have become the default scapegoat for all budget problems.

   Consider the Illinois public school teachers. The median wage of a public school teacher with a bachelor’s degree and 10 years of teaching experience is $50,628. While not poverty wages this is hardly “overpaid”. According to the census, that salary is less than the nationwide median wage for someone who works in the private sector and holds a bachelor’s degree.

  Despite that, state workers are being forced to pay up front for doctor’s visits. Brady’s plan is to cut pension benefits and payroll.

 While conservatives flog this issue, that all the problems can be laid on overpaid public school teachers, trash collectors, and policeman, there is virtually no evidence that this claim is true.

 Think about this logic:

  The Pentagon is missing trillions of dollars, billions of dollars go missing in Iraq, Wall Street banks, after wrecking the economy, reward themselves billions in bonuses directly out of taxpayer bailout funds, but the real criminals here are public school teachers who “greedily” accept a middle-class paycheck.

  What sort of messed-up values are they teaching conservatives these days?

  Some studies of federal employees show higher wages, but they usually fail to mention items like: federal workers are generally older, work full time, and their jobs require higher education degrees.

  It should be pointed out that federal wages have nothing to do with state and local governments.

  Illinois is far from being alone. New Jersey has a deficit of $11 Billion with a similar sized budget. The budget deficit is about a third of the overall budget.

  Meanwhile, California continues to lurch from one crisis to another. The first planned cuts to close the $20 Billion deficit have been proposed.

 In low-key votes, lawmakers slashed nearly $1 billion from the state’s prison system, chiefly from inmates’ medical care, and approved a $540 million reduction in state workers’ paychecks.

 Just $18 Billion more in cuts to go.


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  1. How’s about if all 50 states raise the progressive income tax rate in their own states so that millionaires and billionaires are paying a truly, 1970’s style, progressive tax rate on their income, so that their combined state and federal income tax is 90% at the topmost rate, along with reciprocal budget sharing agreements among the states for top income tax earners.

    I mean, if the federal government WON’T do it, there are vays….it wouldn’t work unless all the states did it (because all the rich mofos would relocate), but with the current budget environment and the fiscal pain among the states .. heh.

    • k9disc on March 2, 2010 at 13:59

    Have you checked out http://mirocommunity.org ?

    We need to get this kind of square business arguments out there.

    This is bullshit that nobody can articulate like the people I read here and in orange.

    Great essay, yet again…

  2. a state declare bankruptcy?

    I don’t see how, especially when it comes to CA being it provides something like 12% of the nations GDP alone, is the worlds 8th largest economy. A default would be catastrophic.

    Great essay G. Of course we need the state employees as scape goats … otherwise people might start looking at the State Capitols.  

  3. first, then take the remains and spend it on war. What’s left can go to the people if they behave. Hello central planning, stealth transfer of the people’s money to the priviledged through the Feds. The states are stuck shredding their benefits, workers and infrastructure. But the Federal Government just keeps on printing money for their buddies and driving the states that can’t print it over the cliff. I’m not sure this shit is fixable.

  4. in both LA and SF. I lived there during Jerry Brown’s governorship and though young and not too politically attuned I loved him. We moved to OR in the 90’s as the economy there only offered two skilled professionals a life as a working slave wage. Housing was so over the top expensive that we couldn’t even qualify for a loan to buy a house. Nobody who was a working stiff could afford to live where they worked it has been screwed up for a long time. The Democrats should run decent candidates not like the last guy and Grey Davis.      

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