I caught the following last night on the “Clout Street” section of the Chicago Tribune website:
Topinka: State will be $8 billion in hole
Illinois Comptroller Judy Baar Topinka today said the state will end the budget year $8 billion “in the red” unless changes are made.
“The prescription for our financial recovery is simple: stop spending more than we bring in,” said Topinka, a Republican. “But sadly, that still has not occurred.”
Democratic Gov. Pat Quinn’s administration agreed with Topinka’s calculation.
But apparently not the prescription. Recent events demonstrate that Democratic-controlled Illinois is stuck on tax-and-spend mode. I wrote back on January 15:
Well, it’s official. Residents and businesses in Illinois have been hit with massive tax hikes as the state suffers from serious financial woes. From the Chicago Tribune’s Ray Long this afternoon:
Gov. Pat Quinn today signed a major income tax increase the Legislature passed earlier this week.
The Democratic governor’s signature on the legislation means the 67 percent increase in the personal income tax increase takes effect immediately. Corporate income taxes also rose 46 percent.
The legislation that was pushed through by Democratic lawmakers, who have controlled Illinois state government since 2003, hikes the 3 percent personal income tax rate to 5 percent until 2015, when the rate is supposed to drop to 3.75 percent. However, the last time income tax rates in the “Land of Lincoln” went up in 1989, politician also claimed it was as a temporary increase to combat a financial “rough patch.” But the rates never came down and by 1993 were designated permanent. Until now, that is.
In an attempt to gain more support among Democrats (no Republicans in the Illniois House or Senate backed the legislation), the measure calls for lowering the personal income tax rate in 2025 to 3.25 percent…
For businesses, the 4.8 percent corporate income tax jumps to 7 percent until 2015, when it would drop to 5.25 percent. In 2025, the corporate rate is then supposed to fall back down to 4.8 percent.
Disturbingly, these tax hikes were implemented without meaningful streamlining of government operations. I added in that January post:
Critics of the hikes argue that they were implemented without any sweeping cuts or reform. They also point out a number of other deficiencies in the legislation. For example, allowances have been made for spending to actually increase in the coming years. According to the Chicago Tribune, the spending ceiling in each of the next four budget years is $36.8 billion in the 2012 budget year, $37.5 billion in 2013, $38.3 billion in 2014 and $39 billion in 2015.
And if one is to take Governor Quinn at his word, don’t expect him to sign off on any significant spending cutbacks any time soon. Bloomberg’s Tim Jones wrote on April 1:
For governors cutting education and health care and going after public-sector employees to balance budgets, here’s a message from Illinois Governor Pat Quinn: You’re wrong. Not mistaken, not misinformed.
“Just plain wrong,” said Quinn, 62, during a March 22 interview in his Chicago office. “I don’t buy into all these radical cuts in government as a way to make life better for ordinary, everyday people.”
Don’t cut, says Quinn. Build instead, he says, referring to the $5.6 billion spent in the past two fiscal years for 3,240 miles of road repair and upgrading 472 bridges.
Or borrow. Or, at least try to. Ray Long wrote in his “Clout Street” piece last night:
But the administration firmly stated that borrowing money at low-interest rates to help pay down a mounting backlog of overdue bills is “paramount to stabilizing the budget.”
Quinn has sought to borrow $8.75 billion, a figure that many lawmakers are reluctant to support.
Considering that the state of Illinois currently has a a backlog of more than $8 billion in unpaid bills, pensions underfunded by more than $80 billion, and retiree health care liabilities totaling $40 billion (Bloomberg data), I can’t say I’m too optimistic about the state of Illinois effectively resolving this crisis without hitting up Illinois taxpayers for much more of their hard-earned cash.
Long, Ray. “Topinka: State will be $8 billion in hole.” Chicago Tribune. 27 Apr. 2011. (http://newsblogs.chicagotribune.com/clout_st/2011/04/topinka-state-will-be-8-billion-in-hole-.html). 28 Apr. 2011.
Jones, Tim. “Illinois’s Quinn Says Budget-Cutting Governors Wrong.” Bloomberg. 1 Apr. 2011. (http://www.bloomberg.com/news/2011-03-30/illinois-s-quinn-says-budget-cutting-governors-have-it-wrong.html). 28 Apr. 2011.
No comments yet.
Leave a comment
Christopher E. Hill, Editor
7,633 Unique Visitors 11/13
339,902 Unique Visitors
Please Rate this Blog HERE
- ‘Earthquake Lady’ Warns ‘Imagine America Without Los Angeles’
- Chicago Aldermen Push For Styrofoam, Polystyrene Food Container Ban
- Solar Scientist: July 2012 Coronal Mass Ejection And 1859 Carrington Event Show Need To Prepare
- Project Prepper, Part 23: Removing That Military Surplus Smell
- Chicago-Area Forest Preserves: Use With Caution
- Is This What A Prepper Expo Is Really Like?
- Chicago-Area Winter Survival Training Camp Planned For This Weekend
- RedEye: Chicago Passes 400 Murder Mark
- Peter Schiff Predicts Effect On Consumers When Bond, Stock, And Real Estate Bubbles Pop
- Repeal Of Illinois ‘Temporary’ Income Tax Hikes Questioned
- Chad Fulton on Gun Registration Often Leads To Confiscation, As New Yorkers Find Out Once More
- Rob Dawg on 15 Fukushima-Style Nuclear Power Plants Located In New Madrid Fault Zone
- Rob Dawg on Peter Schiff Predicts More QE In 2014 Will Prevent Stock Bear Market
- Editor on Cyber Monday Sales That Might Interest You
- Rob Dawg on Cyber Monday Sales That Might Interest You
- The Man on ‘Mancow’ Moves Family Out Of ‘Unlivable’ Chicago
- Editor on Illinois State Police Gun Ranges Open To Deer Hunters November 16 For Test-Firing Shotguns
- Editor on Time To Bug Out?
- Miranda Horton on Illinois State Police Gun Ranges Open To Deer Hunters November 16 For Test-Firing Shotguns
- Ivan on Time To Bug Out?