spending cuts

Wisconsin Cuts Taxes While Illinois Looks To Make 2011 ‘Temporary’ Tax Hikes Permanent

Throughout the years, I’ve known/met a number of Illinois residents who can’t stand Wisconsin. Mostly from the Chicago area, they equate Wisconsin and its residents as being unsophisticated clowns.

I wonder if they haven’t noticed by now that the only circus around is in the “Land of Lincoln.”

While Illinois falls deeper into an economic abyss (public pension fix my butt), Wisconsin seems to have gotten their finances under control and look to be on the path to prosperity.

So much so they’re cutting taxes. Again.

Patrick Marley and Jason Stein reported on the Milwaukee Journal Sentinel website Monday afternoon:

Lowering taxes for the third time in less than a year, Gov. Scott Walker signed his $541 million tax cut bill in a ceremony Monday at a farm in Cecil as he travels through central and northern Wisconsin touting it.

Speaking at Horsens Homestead Farms, about 35 miles northwest of Green Bay, Walker called it a great day for Wisconsin taxpayers and a sign of the state’s shifting financial fortunes in recent years.

“Now, instead of billion dollar budget deficits, we have a surplus — and today that money is on its way to the workers, parents, seniors, property owners, veterans, job creators and others. You deserve to keep as much of your hard-earned money as possible — because after all, it is your money,” Walker said.

With growing tax collections now expected to give the state a $1 billion budget surplus in June 2015, Walker’s tax proposal will cut property and income taxes for families and businesses, and zero out all income taxes for manufacturers in the state.

Though the state’s tax revenue is increasing, GOP lawmakers and Walker are trimming state spending slightly for the next three years rather than increasing it

(Editor’s note: Italics added for emphasis)

Meanwhile, across the Cheddar Curtain in Illinois there’s this on the website of The State Journal-Register (Springfield). Doug Finke reported Friday:

Hundreds of employees would be laid off, state facilities would be closed and thousands of prison inmates released without supervision, state agency directors told senators Friday during a hearing to gauge the effect of possibly severe spending cuts next year.

During a more than three-hour joint hearing of the two Senate Appropriations committees, agency after agency warned of drastic consequences should they be forced to cut their current budgets by 20 percent.

“There would be extreme consequences for the economy across Illinois,” warned Ben Winick of Gov. Pat Quinn’s budget office. “Over a dozen state facilities would have to close. Thousands of state employees would have to be laid off.”

The hearing occurred just days before Quinn is scheduled to finally deliver his budget outline for the fiscal year that starts July 1…

Translated? Illinois residents, this is what will happen if you don’t support making the Democrat-led temporary 67 percent personal income tax hike and 46 percent corporate income tax hike implemented in January 2011 permanent next year.

I hear Governor Quinn will be delivering his budget plan tomorrow.

Instead of ridiculing Wisconsin, us FIBs (F***ing Illinois Bastards as we’re known by up there) might want to start emulating our neighbors to the north in certain respects before we completely destroy Illinois.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

Sources:

Marley, Patrick and Stein, Jacob. “Scott Walker signs tax cut legislation.” Milwaukee Journal Sentinel. 24 Mar. 2014. (http://www.jsonline.com/news/statepolitics/scott-walker-set-to-sign-tax-cut-legislation-b99231851z1-251936261.html). 24 Mar. 2014.

Finke, Doug. “State agencies outline cuts if forced to make 20% reductions.” The State Journal-Register. 21 Mar. 2014. (http://www.sj-r.com/article/20140321/NEWS/140329821). 24 Mar. 2014.

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Illinois’ Total Unfunded Liabilities: $275 Billion

The following bit about Illinois’ total unfunded liabilities from a January 28 Investor’s Business Daily editorial was so depressing to read that I originally planned to blog about it much earlier this morning- but needed to step away. From the IBD website:

A recent release by the Illinois Policy Institute shows this [$96.8 billion unfunded debt to five state pension systems] is only the tip of the iceberg and when you add in other liabilities such as $54 billion in unfunded liabilities for retiree health insurance and $15 billion in pension bonds that Gov. Pat Quinn and his immediate predecessor, former Gov. Rod Blagojevich, issued to avoid pension reform, Illinois’ total unfunded liabilities amount to $275 billion, or $58,000 in debt for each and every household in the state.

(Editor’s note: Italics added for emphasis)

So what’s it going to be, Illinois? Since a booming economy seems unlikely to return anytime soon, will the Democrat-dominated Illinois General Assembly finally enact significant spending cuts? Raise fees and taxes through the roof? Throw public sector retirees “under the bus?”

They’re going to have to do something real quick.

Or watch the whole thing unravel.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

Source:

“Obama’s Illinois Downgrade Makes It America’s Greece.” Investor’s Business Daily. 28 Jan. 2013. (http://news.investors.com/ibd-editorials/012813-642237-credit-downgrade-illinois-standard-poors-worst.htm). 31 Jan. 2013.

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Nouriel Roubini: ‘Highly-Likely Chance We’re Going To Go Over The Cliff’

Last time I mentioned Dr. Nouriel Roubini, a former Treasury official in the Clinton administration who correctly-called the 2008 global financial crisis, he was warning about a slowing U.S. economy. Well, the professor of economics at New York University and chairman of Roubini Global Economics appeared on Bloomberg Television’s Surveillance earlier today and discussed the looming “fiscal cliff,” the combination of tax hikes and spending cuts the U.S. faces on January 1 under current federal law. “Dr. Doom,” as the media sometimes refers to him as, warned viewers:

I think there’s a highly-likely chance we’re going to go over the cliff. If we do so, the market reaction is going to force the two sides to reach an agreement. But even if we reach an agreement, like I said- you’re going to have 1 to 2 percent drag on growth in an economy that’s barely growing.


“Roubini Says Fed Inflation Targeting Out the Window”
Bloomberg TV Video

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State Of Illinois’ Unpaid Bills Could Total $8.5 Billion By End Of June

We have an emergency, a fiscal emergency. Our state was careening toward bankruptcy, fiscal insolvency. Even in the last couple of months, the situation got seriously more dire. So the governor has to act at the moment. And that’s what I did.

-Illinois Governor Pat Quinn, January 12, 2011, in defense of signing off on a 67 percent personal income tax hike on Illinois residents (Chicago Tribune, January 12, 2011)

The fiscal emergency in Illinois remains.

So much so that the billions of dollars worth of unpaid bills Illinois state government is responsible for could soon exceed the $8 billion estimated back in January 2011, when massive personal and corporate income tax hikes went into effect in the “Land of Lincoln.” Monique Garcia wrote on the Chicago Tribune website yesterday:

Sixteen months ago, Democrats pushed through the largest income tax increase in Illinois history, an unpopular decision that was billed as a crucial step to put state government on the road to financial recovery.

Yet last week lawmakers made deep cuts in health care for the poor, and this week they face tough votes to raise the cigarette tax, strip away public worker pension benefits and slice spending on social services. Despite all that, the giant pile of unpaid bills that has loomed over state government for years is expected to keep growing…

Even if Medicaid cuts and pension reforms are put in place, the state’s unpaid bills are expected to total $8.5 billion come June 30. The new state budget isn’t expected to shave much off that tab. The pile of bills was an estimated $8 billion when the income tax hike was approved.

(Editor’s note: Italics added for emphasis)

Illinois taxpayers might be wondering how something like this could happen. Garcia explained:

Pension payments continue to increase dramatically each year. The same is true for health care costs as more people seek coverage during a down economy. And that stack of bills keeps rolling over from one year to the next partly because lawmakers declined to go along with Gov. Pat Quinn’s request to use some of the income tax windfall to borrow to pay it off.

The rising costs have created what Quinn calls a “squeeze” on the rest of the state budget.

It’s not only Illinois’ stack of unpaid bills that is growing. Garcia pointed out:

Meanwhile, the retirement system’s $83 billion unfunded liability continues to grow because of early retirement incentives, pension sweeteners and skipped payments orchestrated by Democrats and Republican.

(Editor’s note: Italics added for emphasis)

Thank you for bringing this to your readers’ attention, Chicago Tribune.

$8.5 billion. $83 billion. Like the former U.S. Senator from Illinois Everett Dirksen supposedly said:

A billion here, a billion there, and pretty soon you’re talking about real money.

Real money. Real fiscal crisis.

Source:

Garcia, Monique. “Record tax hike isn’t fixing Illinois’ problems.” Chicago Tribune. 28 May 2012. (http://articles.chicagotribune.com/2012-05-28/news/ct-met-illinois-budget-20120528_1_pension-payments-income-tax-tax-hike). 29 May. 2012.

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U.S. National Debt Soars Past $14 Trillion

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance the government’s reckless fiscal policies.

-Then-U.S. Senator Barack Obama, speaking on the Senate floor in 2006

I’m all for shooting for the stars. But this is just ridiculous. From the Associated Press today:

The United States just passed a dubious milestone: Government debt surged to an all-time high, passing $14 trillion – $45,300 for every person in the country.

That means Congress soon will have to lift the legal debt ceiling to give the almost maxed-out government an even higher credit limit or dramatically cut spending to stay under the current cap…

Remarkably, about half of today’s national debt was run up in the past six years. It soared from $7.6 trillion in January 2005 as President George W. Bush began his second term to $10.6 trillion the day President Obama was inaugurated and to $14.02 trillion now.

With a $1.7 trillion deficit in fiscal 2010 alone, and the government on track to spend $1.3 trillion more than it takes in this year, annual budget deficits are adding about $4 billion a day to the national debt. Put another way, the government is borrowing 41 cents for every dollar it spends.

In a letter to congressional leaders, U.S. Treasury Secretary Timothy Geithner said the $14.29 trillion debt limit could be reached as soon as March 31 and “most likely” by May 16. A showdown looks to be brewing over the issue, as Republicans in Congress informed President Obama and Democrats last week they won’t agree to raise the debt ceiling unless specific spending cuts are made.

Source:

“U.S. debt tops $14 trillion, nears ceiling.” Associated Press. 17 Jan. 2011. (http://www.washingtonpost.com/wp-dyn/content/article/2011/01/16/AR2011011604005.html). 17 Jan. 2011.

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Christopher E. Hill, Editor

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