Illinois Looks To End Budget Year $8 Billion In The Hole

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.”
Jones added:

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.

Sources:

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.

Tags: , , , , , , , , , , ,

No comments yet.

Leave a comment



Survival And Prosperity
Christopher E. Hill, Editor
Est. 2010, Chicagoland, USA

Successor to Boom2Bust.com
"The Most Hated Blog On Wall Street" (Memorial Day 2007-2010)

Please Rate this Blog HERE

Limited Time Offers

Via Banner Ads Below (navigate to vendor home page if necessary); Updated 9/3/15:
ANY CHARACTER HERE
>Airsoft Megastore Free Shipping On All Orders (no code required)
ANY CHARACTER HERE
>BGASC On Sale Now 1 Oz. SilverTowne Eagle Silver Bar; 5 Oz. Monarch Silver Bar; 100 Oz. Asahi Silver Bar
ANY CHARACTER HERE
>BUDK 25% Off Sale ($39 min. order; code needed)
ANY CHARACTER HERE
>BulletSafe Bulletproof Baseball Cap $119 Pre-Order Price; Ballistic Plate Only $169
ANY CHARACTER HERE
>CHIEF 20% Off Rainwear Thru 9/30 (code needed); Free 5.11 Tactical Boot Knife With Boot Purchase Thru 10/1
ANY CHARACTER HERE
>Food Insurance Free Emergency Supplies With Long-Term Meal Plan; Save Up To 43% On Freeze-Dried Seasoned Ground Turkey Pieces
ANY CHARACTER HERE
>Nitro-Pak Labor Dale Sale Save Up To 40% Off Thru 9/7
ANY CHARACTER HERE
>Pyramyd Air Labor Day Sale Discounts/Coupon Savings Up To 50% Off
ANY CHARACTER HERE
>Tractor Supply Co. Labor Day Sale (Too Many Savings To List!); Free UPS Ship To Store
NEW! Advertising Disclosure HERE
ANY CHARACTER HERE
Buy Gold And Silver Coins BGASC Review Coming Soon
ANY CHARACTER HERE
Free UPS ship to store on all Tractor Supply Company orders! Shop now! Tractor Supply Co. Review Coming Soon
ANY CHARACTER HERE
Nitro-Pak--The Emergency Preparedness Leader Nitro-Pak Reviewed HERE
ANY CHARACTER HERE
MyPatriotSupply.com Reviewed HERE
ANY CHARACTER HERE
Food Insurance Reviewed HERE
BullionVault BullionVault.com Reviewed HERE
ANY CHARACTER HERE
CHIEF Supply Reviewed HERE
ANY CHARACTER HERE
BulletSafe Reviewed HERE
ANY CHARACTER HERE
BUDK bowie knife BUDK Reviewed HERE
ANY CHARACTER HERE
Pyramyd Air is your one-stop shop for everything airgun related. PyramydAir.com Reviewed HERE
ANY CHARACTER HERE
Airsoft Megastore Reviewed HERE
ANY CHARACTER HERE
Survival Titles Save 20% Paladin Press Reviewed HERE
 

Categories

Archives

Prepper Website
  • Observation, Theory About Greek Bank Safe Deposit Box Restrictions

    Continuing “Greek Week” on Offshore Safe Deposit Boxes, Greek state television has announced Greek banks will remain closed for the remainder of this week. Both Reuters and the Associated Press have reported cash withdrawals from Greek bank safe deposit boxes have been prohibited. Reuters ran its story Sunday while the Associated Press revealed Monday: No […] ...
  • Safe Deposit Boxes In Private Vaults See ‘Huge Increase In Demand’ By Wealthy Greeks

    While pouring over the latest news of Greece’s sovereign debt crisis tonight, I spotted the following snippet on the Daily Mail (UK) website. Nick Fagge reported Wednesday: Safety-box deposit firms have reported a huge increase in demand with wealthy Greeks storing their cash and other valuables anywhere other than their bank… (Editor’s note: Bold added […] ...
  • Confusion Over Accessing Cash In Greek Bank Safe Deposit Boxes

    Yesterday, I blogged about a Reuters piece from Sunday which said cash withdrawals from Greek bank safe deposit boxes were now prohibited. Monday, the Associated Press reported that accessing currency from these containers might be left to the legislative process. From the Fox News website: There was confusion Sunday night over the fate of bank […] ...
  • Cash Withdrawals From Greek Bank Safe Deposit Boxes Forbidden

    Something tells me confidence in bank safe deposit boxes is going to plummet as word of the following gets out. Reuters’ Lefteris Papadimas and George Georgiopoulos reported Sunday: Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place, a deputy finance minister told Greek television […] ...
  • Happy Independence Day!

    Just wanted to wish readers of Offshore Safe Deposit Boxes a happy Independence Day. Christopher E. Hill Editor ...