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Post by macrockett on Feb 24, 2010 19:49:20 GMT -6
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Post by macrockett on Feb 24, 2010 19:51:22 GMT -6
Politicians can't sugarcoat Illinois' dire straits
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February 24, 2010
BY CAROL MARIN Sun-Times Columnist
When Laurence Msall walked into the state Capitol in Springfield on Tuesday morning, I figured it would be like the skunk showing up at the garden party.
Accurate?
"Yep," Msall said by cell phone. "I was greeted with 'Are you here to raise my taxes?' "
Msall, 48, is the head of a Chicago's Civic Federation, a venerable, nonpartisan, pro-business, pretty conservative outfit that keeps tabs on government and how it handles our money.
Before this job, he worked for Republican Governors Jim Edgar and George Ryan doing economic development.
So, in plain English, Msall cannot be written off as a left-leaning, tax-and-spend liberal.
That's what made his mission all the more meaningful.
And the politicians/lawmakers down in Springfield were acutely aware of the Civic Federation's doomsday report issued Monday. In it, Msall's group said flatly that Illinois is financially heading over a cliff. That we must cut more than $2 billion from the state budget, reduce pensions and benefits for new state workers and raise the income tax.
At that, we'll still be in the hole by a couple of billion. But at least we can salvage our bond rating and borrowing power to live to fight another day.
The Civic Federation is not alone in telling politicians they have to face up to the terrible mess they've made of this state. The Center for Tax and Budget Accountability has issued its own warnings. So has the Civic Committee of the Commercial Club.
How bad is it getting?
As Msall was driving Downstate, he said, "I heard on the radio about Oswego cutting 80 school district employees."
That would be the school district represented by House Republican leader Tom Cross.
Republicans are loath to raise taxes, especially in an election year. Democrats are loath to cut employee pensions and benefits.
But there is no time to delay a massive dose of tough medicine.
"You might be able to get by for another six months," Msall said.
"But you might not."
Still, people in Illinois are not sure they're buying this doomsday descriptor despite the non-political fiscal experts who are delivering it.
Why not?
"Government doesn't touch people," said David Yepsen, matter-of-factly.
Yepsen is the head of the Paul Simon Public Policy Institute at Southern Illinois University. For 36 years before that, he was a legendary political reporter and columnist for the Des Moines Register.
"Most people are not using health care for the poor, do not have kids in school, don't go to a courthouse very often, aren't in prison or work as a prison guard . . . so most people don't see this, and it doesn't touch them," Yepsen said. "Secondarily, the leaders in this state have no credibility."
Polling by the Simon Institute bears out the sad fact that unlike the citizens of other states, Illinois residents feel they get more value from the feds far away in Washington than they do from their homegrown state and local governments.
There is, Yepsen said, "a real intersection between ethics and this budget mess. There are few states where people are more down on their politicians."
Other states have done better.
Iowa, for instance, Yepsen notes, has swallowed a bitter pill and cut spending 10 percent across the board.
But in Illinois, we've deferred our problems until it's almost too late. Like in Downstate Alexander County, for instance, where all the squad cars were recently repossessed, and 75 percent of the sheriff's department was laid off. Imagine.
Every day lawmakers wait, every day they keep behaving like politicians instead of leaders, it only puts us ever closer to the edge of the cliff.
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Illinois enters a state of insolvency and headed for possible government collapse
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Post by doctorwho on Feb 24, 2010 19:56:43 GMT -6
this doc is an excellent read and it's not like I don't agree with most of what they have in here- but I have to say - these two items will just make Illinois more unaffordable to live in - attract workers and companies to... The state income tax rate should be increased from 3% to 5 % for individuals and 4.8% to 6.4% for corporations. This increase is expected to raise about $6.0 billion in new revenues.
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The State should repeal the income tax exemption for federally taxed portions of retirement and Social Security income. This step is expected to raise $1.6 billion at the personal income tax rate of 5%.Until someone shows me they will actually manage the money I will oppose ANY future tax increases |
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Post by macrockett on Feb 24, 2010 19:59:08 GMT -6
'Doomsday is here for the state of Illinois'
It will take a massive tax increase -- and $2 billion more in cuts -- to reach solvency, group says
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February 22, 2010
BY DAVE McKINNEY Sun-Times Springfield Bureau Chief
SPRINGFIELD -- To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state's unionized work force, a nonpartisan government watchdog contends.
In a new analysis of Illinois' "horrific" finances, the Civic Federation lays out the painful choices awaiting Gov. Quinn and the Legislature as they stare down an epic $12.8 billion budget deficit that has choked the flow of state cash to public universities and schools, transit systems and social-service agencies to the point of economic collapse.
"Doomsday is here for the State of Illinois," said Laurence Msall, the organization's president.
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. Medicaid programs and elementary and secondary schools would be spared from those cuts to avoid sacrificing federal stimulus dollars, Msall said.
"This is an economically reasonable approach to a horrific situation," he said.
But AFSCME Council 31, state government's largest union, has shown no interest in having its members -- who have accepted furloughs and deferred pay increases -- pay more toward their pensions and health care or in establishing what is known as a two-tier pension system where new employees would receive a less-generous retirement package than existing workers.
"Since this proposal to slash $2 billion exempts education and health care, it would mean reducing human services and public safety," AFSCME spokesman Anders Lindall said. "We think that's reckless, especially in a recession that's driving demand for public services up, not down."
The Civic Federation's recommendations would enable the state to pay down the $12.8 billion deficit by more than $10 billion by June 2011, but $2.1 billion in red ink would carry over for at least another year under the group's plan.
The report's release comes as Quinn prepares to launch an online site Wednesday to begin soliciting public input on what should be included or left out of his fiscal 2011 budget proposal, which he'll unveil March 10.
Quinn's office declined comment on the Civic Federation report but expressed interest in "working with the group during the upcoming budget debate."
Ground Zero in that debate is the Illinois House. Speaker Michael Madigan has insisted that his GOP rivals sign on to any tax increases and has begun calling them "dropouts" for what he regards as their inflexibility on finding new revenue.
"I don't do predictions," Madigan spokesman Steve Brown said, when asked about the Civic Federation plan and the chances any of it might pass. "I think the speaker has supported a cigarette tax increase. I think Democrats supported starting down the road to a two-tier pension system, but the 'dropouts' have done nothing."
House Minority Leader Tom Cross (R-Oswego) has taken a tax increase off the table, instead pressing for budget cuts and pension reforms and noting the state's fiscal crisis bloomed under seven years of Democratic-crafted budgets that Republicans didn't vote for.
Told of the Civic Federation's recommendations, Cross spokeswoman Sara Wojcicki withheld judgment on the report but offered no signs that Republicans are prepared to move off the dime on any tax increases this spring: "I'm not sure much has changed."
Msall, with the Civic Federation, said that if lawmakers leave Springfield without getting out of the state's budgetary black hole, everyone in Illinois will suffer.
"It's not sustainable to continue to ignore your vendors. It's not sustainable to ask your schools, local governments and homes for the developmentally disabled to go out to the market to borrow" because the state isn't fulfilling its funding promises, Msall said. "A failure to effectively address this crisis in a comprehensive form will result in not only lost opportunities but in greater pain."
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Post by macrockett on Feb 24, 2010 20:04:55 GMT -6
Governments are drowning in red ink, and it's time to act Comments February 22, 2010 At every level of government, Illinois is maxed out. No money for state pensions. No money for trains. No money for libraries. No money for garbage pickup. And, worst of all, no future for our children -- not if we indefensibly continue to borrow billions of dollars and sell off long-term revenue generators, such as Chicago's parking meters, for short-term stopgap gain. The crisis is greatest for the State of Illinois, which is staring in the face of a whopping two-year budget deficit of nearly $13 billion. But no level of government in our state -- from tiny school districts to small towns to Chicago's City Hall -- is free of worry. Governments across Illinois are drowning in red ink. With tax revenues in the gutter and promised state payments delayed, schools, municipalities, libraries and social services agencies are turning down the thermostat, turning away clients and furloughing employees. But at every turn, all efforts to cut costs and increase revenues have been stymied by self-serving politicians, entrenched interest groups and, so often, inflexible unions. Beginning today, in an ongoing public service series titled "Maxed Out," the Chicago Sun-Times -- in both its news and editorial pages -- will report on and analyze this alarming economic free fall. Today, we report on the Civic Federation's new prescription for solving the crisis, and in an editorial on Page 24 we explain why a state income tax hike cannot be avoided. What is our aim? To offer the best solutions. And to build the public and bipartisan political consensus necessary to carry out those solutions. For more than a year now, the Sun-Times editorial page has argued for much of what the Civic Federation has called for today: • Reforms to the state's employee pension system. • Cuts in Medicaid spending. • Cuts in state and local spending overall. • And, yes, a hefty increase in the state's income tax. Spending cuts alone won't come close to fixing this mess. Our state's financial troubles, dry and boring as the subject may seem upon first blush, may be the local news story of the year, one that none of us can afford to ignore. To read back stories and editorials and to comment, go to www.suntimes.com. |
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Post by macrockett on Feb 24, 2010 20:06:31 GMT -6
www.suntimes.com/news/commentary/2061996,CST-EDT-edit22.article# Only big tax increase can dig out Illinois Comments February 22, 2010 The respected Civic Federation put it on the line today: Illinois desperately needs a major income tax increase to clean up the financial mess it's in. That's called leadership. Now let's see if our elected officials in Springfield, from both political parties, finally are prepared to step up and lead as well. Or will they continue to skulk about in denial, displaying zero political courage, while our state circles the drain? Because nothing short of a significant tax increase -- no changes in pension plans, no cuts in Medicaid -- could even begin to wipe out our state's projected $12.8 billion budget deficit. We must, to be sure, cut spending. We must rein in employee pensions. We must as a state begin to live within our means. And the Civic Federation calls for all that, too -- before the state's tax man sticks out his hand for another dime. The federation wants to see at least $2.5 billion in cuts before any revenue increases. But without a tax increase, we're kidding ourselves. We will continue to kick our problems down the road, burdening future generations, borrowing billions of dollars more and pushing off pension payments to another day, like a bunch of deadbeats. And, really, how's life in the long run for your average deadbeat? While there's much to praise in the Civic Federation's recommendations today, it's regrettable that they insist on a full $2.5 billion in cuts before there can be any tax increase. The cuts can be achieved, the federation contends, by rolling back the state's General Fund spending to fiscal year 2007 levels, excluding spending for Medicaid and schools. This, unfortunately, puts the burden for spending cuts squarely on important social services, such as care for seniors, abused and neglected children and the mentally and physically disabled. If the federation really thinks that's the way to go, it should spell out and stand behind each and every painful cut they'd like to see. We favor spending cuts, too, but not if they become an insurmountable precondition to a tax increase. The Civic Federation has acknowledged the need for a tax increase in the past, but never before one of this magnitude. In its report released today, "A Fiscal Rehabilitation Plan for the State of Illinois," the federation calls for increasing the income tax from the current 3 percent to 5 percent for individuals, and from the current 4.8 percent to 6.2 percent for corporations. That same tax increase has been advocated since 2004 by another civic watchdog group, the Center for Tax and Budget Accountability. Allow us to soften the sticker shock of such a tax increase by putting it in context: Illinois' 3 percent rate is among the lowest in the country. In Iowa, it's 8.98 percent. In Wisconsin, it's 6.75 percent. As a percentage of personal income, the overall tax burden in Illinois -- all state and local taxes and fees -- is among the lowest in the country, 41st out of all the states. The federation, among several other proposals, also is calling for a two-tiered pension system for state employees, with new employees making larger contributions and getting reduced benefits. That, as we've said before, is only fair in these less-than-flush times, though the unions loudly disagree. Nobody likes higher taxes, especially at this time of year when we're all filing our tax returns. But the State of Illinois is maxed out. There is no other option.
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Post by macrockett on Feb 24, 2010 20:09:03 GMT -6
Gov. Quinn starts Web site for state budget advice Comments February 24, 2010 ASSOCIATED PRESS SPRINGFIELD — Gov. Pat Quinn wants Illinoisans to tell him what to do about the state’s whopping $13 billion deficit. Quinn’s budget office launched a Web site Wednesday that lets people get a close-up look at the state’s finances. A video message from Quinn’s budget director David Vaught asks voters if the state should cut money for education to give more to health care. Or should money be cut from both education and health care, so it can be spent on new road construction? Quinn also wants to know if people want to raise taxes and by how much. The Web site comes as the Democratic governor is under pressure to detail how he’ll fix the state’s finances in his March 10 budget address to lawmakers. Quinn has said the state must make cuts, borrow money, rely on federal dollars and come up with more revenue. Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. www2.illinois.gov/budget/Pages/default.aspx |
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Post by macrockett on Feb 24, 2010 20:14:58 GMT -6
February 24, 2010
Quinn looking at $2 billion in budget cuts
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Posted by Bob Secter and Monique Garcia at 5:30 a.m.; last updated at 4:05 p.m.
The state’s chronic budget woes will force more than $2 billion in spending cuts by this summer, including $922 million for elementary and secondary schools, unless taxes are hiked or a new round of federal stimulus aid rides to the rescue, the Quinn administration said today.
The bad news predictions from David Vaught, Gov. Pat Quinn’s budget director, also included a nearly $400 million drop in spending in the budget year for higher education, another nearly $400 million drop in spending on human services programs, and a $69 million cut for public safety programs.
Vaught said only health care programs would be immune from broad cuts, and that is only because of rules which would financially penalize the state if spending was cut.
"This is a budgetary crisis of huge magnitude and it's going to take a lot of work to get out the hole," Vaught said.
The projections were part of a sketchy preliminary budget released by the Administration today in advance of Quinn’s March 10 budget address which will lay out a more detailed spending plan for the state for the budget year beginning July 1.
The sneak peak at budget assumptions was part of an effort to underscore the perilous nature of the state’s fiscal position and lay the groundwork for some bitter medicine that taxpayers, state workers and political leaders seeking re-election will be asked to swallow in coming months.
Vaught said Quinn’s bad-news preliminary budget did not factor in any potential tax increases, but the budget director strongly suggested that Quinn would soon put such ideas on the table.
Last year, the governor initially proposed a 50 percent hike in the state income tax to ease fiscal troubles that were already evident at that time. The idea went nowhere, but Vaught said Quinn’s support for the concept “has not wavered.”
Even factoring in the cuts, Quinn’s office is predicting that the state will rack up nearly $11.5 billion in unpaid bills by the end of June 2011 if the status quo remains.
Given the education cuts, school districts could be forced to lay off scores of teachers.
"It'll be very tough," Vaught said. "The districts have until April 1 to give their layoff notices, you know, they're going to tighten their belts and face up to this. Then they're going to have to help us find a solution, we don't just want to have a message of pain and lack of feeling here in the ramifications of these cuts, but what we want people to do besides feeling the pain and understanding the reality is help us find a solution."
Quinn posted budget information on a state Web site, budget.illinois.gov. In a message on the site, Vaught asked voters what their preferences are.
"Would you cut money from education and give more money to health care? Or would you reduce spending to both and spend more on new road construction. Would you raise taxes and by how much?" Vaught says in the short message.
Quinn is scheduled to speak at an event tonight at a downtown hotel.
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Post by macrockett on Feb 24, 2010 20:21:35 GMT -6
chicagotribune.com
Illinois stuck in a ‘historic, epic’ budget crisis
Talk of major tax increases coupled with draconian spending cuts is building in Springfield
By Bob Secter, Tribune reporter
5:56 PM CST, February 23, 2010
Illinois government is staring down the barrel of an explosive financial mess, and perhaps nothing frames the danger better than two big numbers.
The first is $26 billion, the grand total that lawmakers have allotted this year for the meat of what the state does: funding education, health care, child welfare, public safety and the machinery of government itself.
The second number is $13 billion, the total of red ink in the state's main checking account that, by law, has to be erased — at least on paper — before a penny can be set aside for day-to-day operations in the fiscal year, which begins July 1.
In short, the deficit is half as big as the core of the state budget.
To experts, that is an astoundingly scary ratio that ranks Illinois as one of the nation's worst fiscal basket cases — if not the worst. The budget deficit in Illinois is almost as big as the one facing California, a financially beleaguered state that has triple Illinois' population, according to the Center on Budget and Policy Priorities, a liberal Washington-based think tank.
"This is historic, it is epic," said Laurence Msall, president of the watchdog Civic Federation. "It is impossible to overstate the level of peril."
Signs of distress are bleeding out to schools, transit agencies and social service providers, all of which complain that it is getting hard to make ends meet because the state is chronically late with promised cash. Meanwhile, the state's credit ratings are tanking, making it ever more expensive to borrow to make ends meet.
Any resolution will almost surely require sacrifice from taxpayers and state workers as well as political courage from elected officials, a commodity always in short supply but especially so in an election year.
Talk of major tax increases coupled with draconian spending cuts is building in Springfield. Despite the seeming urgency, it is not clear whether it will come to anything more than just talk.
This time last year, the budget outlook was already plenty bleak, yet Gov. Pat Quinn and lawmakers ultimately avoided tough fixes. Delay only added billions of dollars more to the projected deficit.
Illinois is hardly the only state reeling from the recession. But a long and bipartisan history of wishing financial problems away has rendered state government here particularly vulnerable.
Budget pressures began to mount in Illinois long before the economic downturn. But the fashionable response from political leaders was to avoid talk of tax increases or significant spending cuts and instead vow elimination of "waste, fraud and abuse," as if those items appeared in a line in the budget that could simply be cut out.
Now, the state's fiscal woes have grown so deep that solid solutions defy such glib answers.
Consider this: The head count of state workers is 20 percent smaller than it was a decade ago. If the state payroll was magically purged of every single employee, the annual salary savings would amount to $4 billion, less than one-third of what is needed right now to dig out of the deficit hole.
"Any elected official or candidate who says you can solve this without a tax increase is either incredibly math-impaired or intentionally deceiving voters," said Ralph Martire, executive director of the Center for Tax and Budget Accountability, another Illinois budget watchdog.
Last year, federal stimulus spending and a heavy dose of borrowing helped state officials skate around tough budget choices. But now the stimulus money is about to dry up, and the loans must be repaid.
Adding to the challenge is a steep decline in sales and income tax revenue, off nearly $1 billion from what was projected last summer.
The total budget for the current year stands near $55 billion, but about half of that is dedicated for items like road and building programs or earmarked federal funds that lawmakers have little leeway to divert or chop.
The only significant wiggle room resides in the other half of the budget, known as the general funds, which are tapped to pay for most common government operations. And whatever flex there is in the general funds, there's certainly not close to $13 billion worth — an amount equal to what is being spent this year on the State Board of Education as well as the departments of Human Services, Children and Family Services and Public Health combined.
More than $7 billion of the $26 billion in general funds appropriations this year is earmarked for elementary and secondary schools. Any cuts would only increase pressure on local property taxes, which already bear the brunt of public school funding and, as taxes go, are probably more unpopular than the income or sales tax.
Another $8 billion was earmarked for public health care programs including Medicaid, the safety net for the poor that is often a target of criticism from the right. Federal stimulus aid that Illinois is now getting to help stave off financial disaster comes with strings that forbid any rollback in benefits to Medicaid recipients.
Without a tax hike, the Civic Federation estimates, just four key spending items — schools, Medicaid, deficit reduction and debt service on loans the state must repay — will eat through 80 percent of the cash available to pay for all general state programs.
Experts have long warned that the financial reckoning in Illinois was coming, pointing to what they call an inherent "structural deficit" in the state budget. That's a fancy way of saying that revenues collected by the state through taxes, fees and other sources were clearly insufficient in the long run to pay for all the programs and benefits that state officials had put into place.
Rather than confront the imbalance head-on, standard practice in Springfield has been to resort to a combination of fiscal tricks. Revenue projections are unrealistically rosy, money is borrowed with full repayment pushed off years into the future, and multibillion-dollar backlogs of unpaid bills are allowed to fester.
The system was already primed for calamity when the steep recession that began in 2008 knocked it over the edge.
Perhaps the most chronic headache involves pensions. For decades, elected officials have shorted promised contributions to the state's public employee retirement funds. As a result, Illinois by far has the worst-funded pension systems in the nation.
It would be a tall order for the state to totally dig its way out of the hole in one year's budget. But playing catch-up is extremely expensive, and it grows more expensive the longer it takes. Because the state was so short of cash, it borrowed $3.5 billion to meet this year's pension obligations. Next year, debt service on that loan will cost $800 million. And that's in addition to more than $4 billion in pension obligations that the state will be on the hook for in fiscal 2011.
As Msall sees it, Illinois is in such poor financial shape that it risks getting to the point where it can no longer make loan payments or meet state aid commitments to schools.
If that happens, he says, "Illinois' ability to borrow will be eliminated and the state will come to a screeching halt."
bsecter@tribune.com
Copyright © 2010, Chicago Tribune
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Post by asmodeus on Feb 24, 2010 20:24:55 GMT -6
BULLSHIT
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Post by macrockett on Feb 24, 2010 20:29:45 GMT -6
www.chicagotribune.com/news/local/northnorthwest/ct-met-teacher-layoff-0223-20100222,0,5322021.story chicagotribune.com School districts ax teachers, blame state for financial meltdown Illinois hasn’t paid the current school year’s education bills in months By Lisa Black, Tribune reporter February 23, 2010 Chicago-area school districts already struggling with multimillion-dollar budget deficits are warning of mass teacher layoffs and deep program cuts for the coming school year — an impending crisis they blame on the recession and the state's chronic financial woes. The state hasn't paid the current school year's education bills in months, despite $3 billion in federal stimulus funding provided over the last two years. "The state fiscal crisis we are in is absolutely unprecedented," said Mary Fergus, spokeswoman for the Illinois State Board of Education. In addition to teaching positions, school districts already have chopped or postponed pool hours, athletic teams and textbook purchases. Others plan to cut band programs, increase class sizes, reduce field trips and use fewer substitute teachers. A snapshot of some troubled districts: •Maine Township High School District 207 in Park Ridge has approved the elimination of 75 teaching and 62 nonteaching jobs. Plainfield Community Consolidated School District 202 has discussed cutting up to 160 full-time jobs next year and eliminating the fifth-grade band program. The Chicago Public Schools system faces a budget deficit as high as $900 million for next year, up from about $475 million this year, officials say. The district has laid off more than 500 employees and expects to lay off another 500 this school year. So far, the layoffs have not hit the classroom. Elgin-based School District U-46, the state's second-largest district, has cut 348 jobs — mostly nonteaching — for the current school year. It also closed five swimming pools and canceled the athletic "B" teams. The district predicted a $15 million budget deficit next school year, on top of the $50 million deficit carried over from this year. Naperville's Indian Prairie School District 204 is considering up to $13 million in cuts, including a layoff of non-tenured teachers, increasing registration fees and delaying new textbook and technology purchases. To help deal with the problem, school officials have faced angry parents and teachers at budget workshops and even tried more unusual tactics — such as asking residents to vote on line-item cuts and posting signs that announce how much the state owes the district in unpaid bills. In all, the state owes Illinois districts $725 million for this school year, with the oldest unpaid voucher dating to October. Most school officials face mid-March deadlines to approve budget reductions for the coming school year, because the law requires them to notify teachers 60 days before the school year ends if their jobs will be eliminated. But with the state months behind in some payments to the districts — and uncertainty about how much state aid will be available next year — officials say they are forced to prepare for a worst-case scenario. As often happens, if additional state funding arrives by late summer, districts may rehire some teachers who were laid off, officials said. But they warn that the financial picture looks unusually bleak for the next school year. School districts are likely to see decreases in state aid over the coming year, said Rep. Suzi Bassi, R-Palatine, who serves on an education appropriations committee, referring to the $6,119-per-pupil payments in general state aid to districts. The amount is adjusted according to a formula based on a school district's property wealth. "This is across the board. It is not just education," she said. "The state is in utter crisis. We are right next to bankruptcy. We have a $13 billion hole in a $28 billion budget." Besides declining property values, the growth of many school tax levies is limited by a cap of 5 percent or the consumer price index, whichever is less. This year's index fell to 0.1 percent — much less than the growth of key costs, including energy, health care and previously ratified labor contracts, officials said. David Holm, assistant superintendent for business at Indian Prairie School District 204, said that six months ago, he was more concerned about the low index because "that basically means no increase in that revenue source," he said. "Right now, (the bigger concern) is the state of Illinois and their financial situation going into next year," Holm said. "The potential this year is that districts will nonrenew (teacher contracts) in a much larger number because of the possibility we have to make those cuts," he said. Chicago schools spokeswoman Monique Bond said the district was not prepared to outline its plan for the upcoming budget year, but indicated that job cuts likely will affect all aspects of the school system. "Revenue is down, costs are up and there is no relief from the state," said Bond. "That means there are no guarantees and everything is on the table." At Maine Township based in Park Ridge, critics questioned why school officials do not dip deeper into the district's reserve, an $86 million account that helps the district cover bills between twice-yearly "paychecks" from the state and maintain a good credit score. "A few years ago, we had a $115 million reserve," said Cathy Creagh, an English teacher at Maine East High School. "We went from that to… such dire straits we have to slash 70 teachers and have 30 retirees? … There are a million other things you can consider." Also facing duress, Plainfield Community Consolidated School District 202 delivered a plea to parents during a meeting this month: Contact your legislators. The district, which has 29,300 students but is still growing by 400 new students annually, also imposed fee increases. "The point here … is this is not a District 202 issue, it is not a suburban issue, it is not a Chicago issue. This is a problem that is exacerbated by the way Illinois funds its public schools," district spokesman Tom Hernandez said. The problem is caused by the bad economy, the collapsed housing market and the way Illinois relies on property taxes, said Hernandez, adding that the state is $12 million behind in payments to the district. "It's been a perfect storm and particularly for a district like ours," he said. Michael Jacoby, executive director of the Illinois Association of School Business Officials, based at Northern Illinois University in DeKalb, said that what people often don't understand is that salaries make up the largest part of a school district's budget. "Eighty percent of what a district spends is on people," Jacoby said. "Cutting supplies or taking a copy machine out of a school — they are low-hanging fruit but really won't balance the budget. People are the thing you need to remove to balance the budget." Admittedly, that can cause pain. Kerry Kelly, an Elgin mother of four, said that District U-46 last year cut the teacher aides from her first-grader's dual-language classroom at Channing Elementary School. "I think, ‘How can they cut any more?' " she said. "We withstood so many teacher layoffs. It seems impossible that they can cut more. It is so depressing." Tribune reporter Azam Ahmed contributed to this report. lblack@tribune.com Copyright © 2010, Chicago Tribune
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Post by macrockett on Feb 24, 2010 20:31:00 GMT -6
www.chicagotribune.com/news/local/ct-met-daley-cullerton-tax-20100222,0,1061297.story chicagotribune.com Richard Daley, Senate chief call for income tax hike, spending cuts to fill budget hole Mayor emphasizes cuts should come before tax hike By Monique Garcia and Hal Dardick, Tribune reporters 6:27 PM CST, February 22, 2010 Click here to find out more! Illinois Senate President John Cullerton said Monday that both an income tax increase and budget cuts are needed to erase an estimated $13 billion state budget hole, while Mayor Richard Daley emphasized that cuts should come before the state asks taxpayers for more money. Both Chicago Democrats were responding to a report by the Civic Federation of Chicago calling for a combination of cost-cutting and tax increases to bail out state government. "You just can't increase taxes and say, ‘That's the answer,' " Daley told reporters. "That's not the total answer. If you think that is, you're kidding yourself." Although he had yet to read the group's report, Daley said he knew it called for deep spending cuts. "You have to streamline government," said the mayor, who has cut some spending and raised taxes and fees to balance the city's precarious budget in recent years. "You have to look at priorities and figure out if there's waste, inefficiency and corruption, anything, because you have to look at that." Speaking at the City Club of Chicago, Cullerton said lawmakers and Democratic Gov. Pat Quinn should be prepared to make deep budget cuts in addition to a tax increase. He called on lawmakers in the House to vote on the plan passed by the Senate last year that would boost the state's personal income-tax rate to 5 percent from 3 percent. The House never considered the Senate plan and instead rejected a smaller, temporary tax hike. Republicans, who make up a minority in both chambers, have refused to endorse an income tax increase. Cullerton said the media should draw more attention to the state's budget problems to build public support for a tax hike. Cullerton also called for changing the state's underfunded pension system, which has become a major drag on the budget. "This has come to a head," Cullerton told reporters. "We've got to do it right away." He suggested the age at which retirees can receive maximum benefits be raised to align more with federal Social Security guidelines, and that those payments be lowered from the current maximum of $245,000 a year. Cullerton said those changes could result in a long-terms savings of $120 billion, but acknowledged they would not have an immediate impact. mcgarcia@tribune.com hdardick@tribune.com Copyright © 2010, Chicago Tribune
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Post by macrockett on Feb 24, 2010 20:32:18 GMT -6
www.chicagotribune.com/news/local/northnorthwest/ct-met-broke-agencies-0218-20100218,0,3365141.story chicagotribune.com Nonprofit groups hang by a thread waiting for state funds Much of Illinois’ $3.8 billion in unpaid bills is owed to organizations that help the most vulnerable By John Keilman, TRIBUNE REPORTER February 18, 2010 Click here to find out more! David Terrazino had tried everything he could think of to keep Youth Crossroads afloat, but with payday less than 24 hours away, all he could do was hope for a miracle — that the state of Illinois would actually pay its bills. The Berwyn organization, which counsels troubled young people, gets about half of its $700,000 budget from the state. But the state hadn't paid a dime in months, forcing the group to delay paying its own bills and exhaust its line of credit at a local bank. None of that had closed the gap, and Terrazino, Youth Crossroads' executive director, had reached the end of the line. Without a quick infusion of state cash, he and his 15 employees were not going to get paid. "Over the last year, it's just been a gut-wrenching nightmare," he said. "It's killing us." The state has $3.8 billion of unpaid bills, and much of that money is owed to the nonprofit groups that care for some of Illinois' most vulnerable residents: children, the poor, the mentally ill and the elderly. By law, the government is supposed to make good in 60 days or pay a small interest penalty. But that measure — which cost the state $31.2 million last year — hasn't caused payments to come any faster, some nonprofits say. "They could jack that (interest) rate up — the state still doesn't have the money," said Gina Guillemette of Chicago's Heartland Alliance, an anti-poverty group that was owed more than $4 million. That has caused organizations to search high and low for other sources of money. They've borrowed against their property, if they own any, and tapped the credit lines they have with their banks. Some have also have been slow to pay their own bills to landlords, utility companies and other vendors. Nonprofits often plead with the state agencies with whom they have contracts, but eventually all roads lead to the office of Illinois Comptroller Dan Hynes — keeper of the government checkbook. Spokeswoman Carol Knowles said some of the state's bills, such as debt payments and checks for state workers, get paid first. Without enough funds to pay the rest, the office has resorted to a triage system, trying to decide which nonprofit needs money immediately and which can wait. "We try to deal with emergency situations, but there are so many of them," she said. "We have to weigh the relative nature of all the emergencies in order to keep things going. It's a very difficult thing to do." Many groups say they've asked elected officials to exert pressure. Knowles said politics do not affect the comptroller's decisions, and while some nonprofit officials believe otherwise, they say such influence is waning in the face of the state's giant debt. "I just talked to a number of legislators, and what I'm hearing is that we shouldn't expect anything to happen any time soon — in fact, it's going to get worse," said Steven McCullough of Bethel New Life, a West Side social service agency that is owed $2.1 million. Youth Crossroads has been scrambling for state money for the last year. Terrazino said he gradually learned there was no use appealing to the Department of Human Services, the agency with which his group has a contract. He needed to go straight to the comptroller's office, which actually issues the checks. After weeks of phone calls, he faxed a "hardship letter" to the comptroller last month, one day before he was supposed to pay his employees. He asked for $48,400 — money the state owed for Youth Crossroads' services from July through October. "Without your immediate assistance to expedite payment of some of these funds, Youth Crossroads Inc. will be forced to close our doors and discontinue services to high-risk youth and their families as contracted," Terrazino wrote. He wasn't expecting much. But the next morning, his bookkeeper called him to a computer that displayed the group's bank account balance. The cash, for reasons Terrazino still doesn't understand, had arrived. Payday was saved. With the state money finally in the bank, Youth Crossroads should be in good shape until April. But Terrazino fully expects to go through this ordeal again, and the next time he might not be so lucky. "It'll be a roll of the dice," he said. "If and when doesn't work, I'll have to discover another method to plead our case."
jkeilman@tribune.com
Copyright © 2010, Chicago Tribune
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Post by macrockett on Feb 24, 2010 20:36:47 GMT -6
www.chicagotribune.com/news/local/ct-met-civic-federation-budget-0222-20100221,0,7296244.story chicagotribune.com Civic Federation calls on Illinois to raise income tax rate Watchdog calls tax proposal ‘distasteful’ but says there is no other way to right the state’s finances By Bob Secter, Tribune reporter 7:53 PM CST, February 21, 2010 Underscoring Illinois' bleak financial outlook, one of the state's most prominent tax watchdog groups says it's time to bite the bullet and raise the personal income tax rate by 66 percent. It's unclear how much traction the Civic Federation's tax hike push will get in Springfield, especially in an election year. Embracing tax increases is typically seen as the political kiss of death for officeholders. Even so, the business-oriented group's reluctant full leap onto the more-tax bandwagon is a sign of mounting pressure on Gov. Pat Quinn and lawmakers to avoid a repeat of what happened last year. That's when they cut a budget deal that papered over the financial mess in the short term but has now left state books in even worse shape. Historically averse to tax hikes, the federation said the budget situation has become so dire that it now supports increasing the state income tax rate for individuals from the current 3 percent to 5 percent. As part of a broad package of budget-balancing proposals, the organization also suggests bumping the corporate income tax rate from 4.8 percent to 6.2 percent and eliminating an expensive tax exemption for retirement and Social Security income. It also said spending on most programs outside of Medicaid and school aid should be rolled back to 2007 levels. Federation President Laurence Msall called the recommendations "painful and distasteful" but said dramatic steps are needed to save the state from years of financial mismanagement that has produced a record $13 billion deficit and threatens funding for an array of vital programs. "Illinois' financial crisis was not created by the great recession," Msall said. "It is a self-made crisis fed by a lack of responsibility." Last spring, Quinn briefly pushed a 50 percent increase in the income tax rate as the centerpiece of a deficit reduction package. He backed down after lawmakers balked at the notion of raising taxes or making more significant spending cuts. Since then, the deficit has only grown, and the state is experiencing increasing difficulty in paying its bills — including to school districts and transit agencies that are now warning that jobs and services are in peril. Though he declined to go into specifics, Quinn signaled last week that the new budget he's scheduled to unveil March 10 once again will include tax hike proposals. Unlike the federal government, the state must approve balanced budgets each year, but "balanced" more often than not has become a term of art. Year after year, state officials have been at their most creative making ever-bigger deficits disappear on paper but not in reality. Msall said his group's proposal, if adopted in full, would lop more than $10 billion off the deficit for budget year 2011. He also conceded that some of the red ink would have to be rolled into the following budget year before being erased in its entirety. It estimated the income tax hikes alone would raise $6 billion in new state revenue, while another $1.6 billion would be generated by requiring retirees for the first time to pay taxes on retirement income. Msall said the rescue plan is predicated on achieving more than $2 billion in savings through the spending rollbacks as well as a sweeping overhaul of state-run pension systems that would require employees to pay more for benefits and reduce benefits for new state workers. Public employee unions have long resisted such ideas. Other proposals include a $1-a-pack increase in cigarette taxes and an end to some business tax deductions and credits. bsecter@tribune.com Copyright © 2010, Chicago Tribune
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Post by doctorwho on Feb 24, 2010 20:44:26 GMT -6
I agree - who put this report together ... I want to see the facts behind this. We have some of the highest property tax rates in the country just to start with.. |
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