Illinois...a sad State of affairs

[southsidesignmaker]

Big Mac,

Great video info, anyone who has time please consider listening, ( www.cnbc.com/id/15840232?video=1525078229&play=1 ) .

My concern is if Illinois or other large states such as California started to default, what would the repercussions be for the market at large?

Again Big Mac great info.

[macrockett]

To a certain extent SSSM I believe some of this is already priced into the market, i.e., many believe that at some point the Federal govt will have to bail out certain States. The question is, just how much? I'm sure it will send a shock wave though.

As I have said for some time I believe the gorilla (really the godzilla) in the room is the pensions liability when the actuarial forecasts of 8.5% are not achieved. There are very few days that go by where someone in the financial news does not hone in on how ridiculous the projections are. I will be adding a few more in the Teachers...link later.

[macrockett]

realclearpolitics.blogs.time.com/

October 6th, 2010
Brady Maintains Lead Over Quinn in Illinois
Posted by Kyle Adams | Email This | Permalink | Email Author

Republican state Senator Bill Brady leads Democratic Gov. Pat Quinn by eight points in the race for the Illinois governorship, according to a new poll from Rasmussen Reports.

The 46 percent to 38 percent advantage for Brady is the largest in a string of recent polls that have shown the race tightening. A Chicago Tribune/WGN-TV poll released October 1 showed Quinn with a one point advantage, and a Suffolk University poll released October 4 had Quinn ahead by six. Brady led by 13 points, 50 percent to 37 percent, in the last Rasmussen Reports poll, which was conducted on September 12. He leads by two points in the RCP Average.

Both candidates have struggled to enthuse voters in a state burdened by a crushing budget deficit and close to 10 percent unemployment. Brady has blasted Quinn for the state of the economy and the state's finances in his ads while Quinn has criticized Brady on social issues such as gun control. Only 39 percent of voters have a favorable opinion of Quinn, whose job approval rating sits at 37 percent. Voters are split on Brady, with an equal 46 percent holding favorable and unfavorable views.

While he has faced some criticism for not offering sufficient details of his plans for the state, Brady has managed to solidify support among his base and leads among nonaffiliated voters. He earns the support of 91 percent of Republicans while Quinn garners the support of only 61 percent of Democrats. Among nonaffiliated voters, Brady leads 53-30.

The Rasmussen Reports poll was conducted October 4 among 500 likely Illinois voters. It has a margin of error of 4.5 percent.

[macrockett]

Illinois Finds Itself In a Pickle

Comptroller Sees Possible $15B Gap

Wednesday, October 6, 2010

By Yvette Shields


Report: Illinois Ends FY 2010 in a Bad Place - July 8, 2010

CHICAGO — In a stark illustration of Illinois’ deteriorating balance sheet, the state ended the first quarter of fiscal 2011 with $5.5 billion in overdue bills and faces a possible structural deficit of at least $15 billion in the next fiscal year if no action is taken, Comptroller Dan Hynes warned in his quarterly report.

The state closed out fiscal 2010 on June 30 owing $4.7 billion in bills. Another $1.7 billion of bills incurred in fiscal 2010 were submitted by an Aug. 30 deadline to bring the total level of fiscal 2010 bills to $6.4 billion. That figure represents 23% of fiscal 2010 general fund revenue.

“Nearly $6.4 billion of fiscal year 2011 revenues will be utilized for fiscal year 2010 bills,” Hynes wrote in the report, available at www.ioc.state.il.us/ioc-pdf/CQ_October_2010.pdf

The comptroller’s office has now received $3.5 billion in fiscal 2011 spending authorizations. At the close of September the state carried a backlog of $5.5 billion in unpaid bills, up from $2.9 billion last year.

The oldest bills date back to March and about $2 billion of overdue invoices represent fiscal 2010 liabilities. Illinois has until Dec. 31 to pay fiscal 2010 bills under emergency budget legislation Gov. Pat Quinn signed earlier this year.

The state’s record delays in paying its obligations have damaged the ratings of state universities and the Regional Transportation Authority. They have also left local school districts, social services providers, and others that rely on state funds scrambling to cover shortfalls.

Illinois has failed to keep pace with its bills as revenues remain sluggish and debt service comes due on the short-term debt and pension-related borrowing that helped prop up recent budgets amid the General Assembly’s refusal to agree to Quinn’s tax hikes and his refusal to make deeper spending cuts.

The Democratic governor faces a tough re-election battle against Republican state Sen. Bill Brady of Bloomington. Some seats in the legislature also are up for re-election next month.

In a statement, Quinn said the report shows the need for legislative support for his plans to address the budget crisis by “putting people back to work, reducing the budget by more than $3 billion, seeking assistance from the federal government, utilizing responsible borrowing, and raising revenues.” Quinn’s finance team estimates the deficit at $13 billion.

Individual income taxes for the first three months of the fiscal year increased by 2.6%, or $49 million, and corporate income taxes grew by 2.6%, or $24 million. The report cautioned that the individual income-tax growth rate was bolstered by a change in funding levels in a refund account; absent that change the growth rate was only 1.5%.

Sales taxes dipped slightly. All other tax collections were up 3.8% or $27 million.

The state’s balance sheet benefitted from several one-shot infusions of cash. Illinois issued $1.3 billion of cash-flow certificates in July and borrowed $263 million from surpluses in non-general fund accounts. The budget relies on $1 billion in such transfers.

To retire the fiscal 2010 bills by the end of the year, Hynes warned that the state must complete its up to $1.75 billion tobacco bond sale because the budget relies on at least $1.2 billion from the deal. Illinois recently named a finance team for the transaction. The state also must make additional interfund transfers and collect additional revenue from a tax amnesty program.

“A significant failure of any of these sources will place remaining fiscal year 2010 obligations in jeopardy,” Hynes warned. “This would create a scenario in which unsatisfied payees could be forced to seek legal and judicial remedies to obtain payments in amounts unprecedented in the state’s history.”

The comptroller said barring any major changes, the state’s liquidity crisis will continue through the fiscal year and Illinois could end the year with an even larger bill backlog of $8 billion as additional debt service comes due. That number could rise if no action is taken to address a $3.7 billion pension payment.

Quinn is hopeful lawmakers will agree after the election to issue bonds to cover the fiscal 2011 payment.

However, Hynes warned: “The structural imbalance in the current budget, combined with higher debt service costs and the loss of federal stimulus revenues, creates the very real possibility that the governor and General Assembly will face a working deficit of $15 billion or more when the fiscal year 2012 budget is crafted early next year.”

The state’s ongoing struggles and liquidity and budget crisis have driven a round of rating downgrades. Moody’s Investors Service last month warned Illinois that its A1 general obligation rating is at risk of a downgrade due to escalating strains from massive pension obligations, reliance on one-times revenues, and an increasing debt load amid a fragile economic recovery.

Moody’s revised its outlook on the state’s $25 billion of GOs and other related debt to negative from stable. A downgrade would give Illinois the distinction of holding the lowest Moody’s rating among states. California is the only other state currently rated at A1.

Fitch Ratings assigns an A and a negative outlook to the state’s GO debt and Standard & Poor’s rates the credit A-plus, but has it on negative watch.



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[EagleDad]

Dear Comptroller, I have a suggestion to help out the state budget.

You the Comptroller, and the State Treasurer both go into a room.

One of the two of you comes out. The one that doesn't and all of their staff is let go - forever.

We do not need a State Comptroller AND a State Treasurer. It is silly and stupid.

Work it out.

[macrockett]

I decided to put this just released Pew report here since it directly discusses the sad state of affairs in Illinois (along with 4 other states) but it could just as easily go under the Teachers, Unions...thread or the Economics thread. These three threads are intertwined to say the least.

Bottom line, our State is seriously flawed and the biggest albatross is the pension and opeb benefit promises along with the actuarial assumptions. The same is true in many other states as well.

Here's the Pew Report: www.pewcenteronthestates.org/uploadedFiles/PCS_PPIC.pdf?n=4566

[macrockett]

Republicans took state legislatures in record numbers this year:

The GOP is now at its highest point in statehouses since 1928. Read more on state legislative races. Learn more about what voters decided on ballot measures from around the nation. All the latest election information is on our StateVote 2010 site.

www.ncsl.org/

Not in Illinois...where it has been held by Dems since 1988 except for 2 years.

www.chicagotribune.com/news/local/ct-elect-legislature-20101102,0,817562.story
chicagotribune.com
Democrats poised to retain power in Illinois legislature
They'll likely keep more than 60 seats in House but lose supermajority in Senate

By Ray Long, Tribune reporters

11:27 PM CDT, November 2, 2010
Advertisement

Speaker Michael Madigan's troops fought off several strong Republican challenges around the state, and the veteran leader from the Southwest Side held on to the House majority Tuesday night.

Madigan spokesman Steve Brown said it appeared late Tuesday that the Democrats would keep more than the minimum 60 seats to remain in charge of the House and join Senate Democrats in retaining "proven leadership" in both chambers.

"That's the best way to deal with the state's problems," Brown said.

Senate President John Cullerton, D- Chicago, went into the night confident he would maintain control of his chamber as well, despite several competitive races, but the unresolved question was whether he could keep a veto-proof majority when the new legislature takes office in January.

"I'm ecstatic that the Senate will have an overwhelming number of Democrats going into the next session," said Cullerton, buoyed by early returns showing most close races cutting his way.

Illinois Democrats prepped to stave off an anti-incumbent mood and energized voters seeking to elect more Republicans nationally to fight the policies of President Barack Obama. The president sought to minimize his party's midterm losses in Springfield and Washington with rallies at the University of Chicago and elsewhere in recent days.

Going into the night, Madigan held a 70-48 Democratic edge, Cullerton a 37-22 Senate majority over Republican leader Christine Radogno's team.

Radogno said her count showed she had picked up at least the net two seats necessary to deny Cullerton the 36-vote supermajority that can override a governor's veto.

House Minority Leader Tom Cross, R-Oswego, needed 12 seats to reach 60 but conceded through an aide that he fell short by several seats. A Cross spokeswoman estimated they had picked up about six seats, with two still undetermined.

Madigan was poised to retain the firm grip on the House he has led for all but two years since 1983, a record reign that comes with sweeping power and influence, allowing him to block or pass nearly any bill at will.

Control of the General Assembly is a major issue in normal years because it plays a critical role in determining the state's social and fiscal agenda. But the stakes were even higher this year because lawmakers, working off census results, will attempt to draw legislative boundaries that could tilt districts toward one party or another.

Competitive Chicago-area races included Democratic Daniel Biss of Evanston running ahead for an open seat against Republican Hamilton Chang with 84 percent of the precincts counted; Rep. Kevin McCarthy, D-Orland Park, was leading against Republican Jeffrey Junkas of Tinley Park with 89 percent of the precincts counted; Rep. Keith Farnham, D-Elgin, was battling former Rep. Ruth Munson, an Elgin Republican whose spokesman said the race was too close to call; Rep. Fred Crespo, D-Hoffman Estates, was leading Republican Billie Roth of Streamwood with three-quarters of the precincts counted.

An open seat in Schaumburg had Democrat Michelle Mussman in a close battle with Republican Ryan Higgins. Rep. Carol Sente, D-Vernon Hills, was leading Republican Dan Sugrue of Green Oaks with 94 percent of precincts counted. In Arlington Heights, Democratic Rep. Mark Walker was behind former Rep. David Harris with more than 88 percent of the precincts tallied.

In two races with about half the precincts counted, Rep. Careen Gordon, D-Morris, was trailing Sue Rezin, a Morris Republican; and Rep. Lisa Dugan, D-Bradley, was leading two challengers, Republican Nick Been of Manhattan and Green Party candidate George Ochsenfeld, of Monee.

Several Downstate races still had many votes to be tabulated, including a tight race involving Republican Dwight Kay of Glen Carbon battling Rep. Jay Hoffman, the Collinsville Democrat who was ex- Gov. Rod Blagojevich's House floor leader.

On the Northwest Side, appointed Sen. John Mulroe, D-Chicago, had a strong lead, saying it "sounds like a victory to me," over Republican Ald. Brian Doherty, 41st. A Radogno spokesman conceded the race.

Up north, Sen. Michael Bond of Grayslake was trailing Republican Suzi Schmidt, the Lake County board chairwoman from Lake Villa, in unofficial but complete returns. In Elgin, Democratic Sen. Michael Noland was locked in a tight race with former Sen. Steve Rauschenberger, a Republican. Down south, Sen. Toi Hutchinson, D-Olympia Fields, was leading Republican Adam Baumgartner of Monee with three-quarters of the precincts counted, and Sen. A.J. Wilhelmi, D-Joliet, was running ahead of Republican Cedra Crenshaw, a tea party darling from Bolingbrook.

In Rockford, Republican Sen. Dave Syverson was locked in a battle with Democrat Marla Wilson.

[e-mail]

[e-mail]

Copyright © 2010, Chicago Tribune

[macrockett]

All around us States changed the party in power. Michigan, Indiana, Iowa, Minnesota and Wisconsin. But not Illinois. The goat is not only at Wrigley, it has cast itself over the whole State.

Why would you continue to back a party that has been in power all but 2 of the last 22 years. All but two. Yet Illinois, if not last in terms of fiscal responsibility, is right there. Worse, the unions vote two to one for Quinn. Why?

ncsl.typepad.com/the_thicket/

November 03, 2010
GOP Gains Legislative Seats

By Tim Storey

(Updated at 9:45 am MDT)

Republicans are on track to add over 500 seats, surpassing 1994 gains, and bringing them close to their 1928 high water mark. This number could go even higher. This could give the GOP a dramatic advantage in the redistricting cycle that will start in just a few short months. The census bureau will deliver data to legislatures in early February.

All legislative chamber switches in the 2010 election are going from a Democratic majority to a new Republican majority. That includes an historic win in the Minnesota Senate where Republicans will be in the majority for the first time ever. In addition, Republicans now control the Alabama Legislature for the first time since reconstruction and the North Carolina General Assembly for the first time since 1870. As of now, Republicans appear to have added at least 19 chambers, and that number could grow. The GOP gained 20 chambers in the 1994 election, and it’s not out of the question that they will reach that milepost again this year with control of several chambers still up in the air.

Across the country, Republicans now control 55 chambers, Democrats have 38 and one is tied.

Chamber switches thus far:
Alabama - House and Senate
Colorado- House
Indiana - House
Iowa - House
Maine – House and Senate
Michigan - House
Minnesota - House and Senate
Montana - House
New Hampshire - House and Senate
North Carolina - House and Senate
Ohio - House
Pennsylvania - House
Wisconsin - Assembly and Senate

The GOP flexed their muscle in all regions of the country. In the south, Republicans now control 18 of the 28 legislative chambers and a majority of all southern legislative seats for the first time since reconstruction. Prior to the election, each party held 14 southern chambers, and just 20 years ago, there were no legislative chambers in the south held by the GOP. In the midwest, Democrats now control only 38 percent of the region's legislative seats--their lowest point since 1956.

Four chambers are still undecided:

-New York - Senate
-Oregon - House and Senate
-Washington – Senate

[macrockett]

www.chicagotribune.com/news/opinion/editorials/ct-edit-pension-1104-20101103,0,3016903.story
chicagotribune.com
Your pension, Senator?

5:30 PM CDT, November 3, 2010

Illinoisans voted their anger Tuesday — although not enough Illinoisans and not enough anger. We'll see as soon as Thursday whether state Senate Democrats who dodged the national rebuke of their party, or who face a primary election in 16 months, were watching the returns. If so, they'll join Senate Republicans in rejecting Gov. Pat Quinn's quest for another $4 billion in pension borrowing.

Here's why the election outcome should kill this proposal for still more taxpayer debt:

Quinn's lead in the governor's race leaves challenger Bill Brady searching for the Lost County of Atlantis, where everyone voted Republican. But if the GOP didn't oust the incumbent Democrat in this state, it did seize a coveted trophy: the U.S. Senate seat that President Barack Obama occupied but failed to hold for his party. Republican shifts in four U.S. House districts give the Illinois delegation 11 Republicans and eight Democrats, assuming the apparent defeat of Rep. Melissa Bean. Republicans also kept Mark Kirk's House seat which, national Democrats had touted as one of their likeliest pickups.

Republican gains were muted beneath the Statehouse dome. The GOP took the treasurer's and comptroller's offices. Republican gains of six House and two Senate seats weaken the Democratic majorities, but leave House Speaker Michael Madigan and Senate President John Cullerton in full ownership of the legislature and all its works.

With a governor who doesn't buck them, Madigan and Cullerton can continue to do whatever they want, such as burying ethics reforms and perpetuating their economic plan of "Splurge. Borrow. Repeat." The Senate's consideration this week of the added $4 billion in borrowing is a first test. The proposal passed the House last spring but flopped in the Senate, with Republicans solidly opposed and some Democrats holding out for a big tax increase instead.

Cullerton is convening the Senate post-election at Quinn's urging. To craft serious budget cuts? To map education reforms? To craft a jobs-friendly tax policy? Nope, to borrow more. Didn't voters nationwide just discourage the Democratic-led explosion of public debt that Quinn wants to aggravate?

Remember, legislators are beneficiaries of the generous state pensions that you as a taxpayer support. (Say, did you ever have a part-time job that paid a fat lifetime pension? Neither did we.)

Before they vote on more borrowing, we hope the senators publicly disclose their self-interests: Their projected pension payouts currently stand at … what? Senators, that transparency might help the rest of us understand why you aren't instead working toward the only real remedy for the pension monster: a reduction in future benefits earned by current employees, lawmakers included.

Considering a worsening of the debt-driven management policies that put Illinois in this fix makes no sense. Senators, tell yourselves: Now is the time we stop spending what we don't have. The time we quit pretending a miraculous economic recovery will save us. The time we downsize.

Last winter, we identified more than $6 billion in potential spending cuts. There is simply no way to justify borrowing more billions when Illinois has no logical prospect of finding the money to repay. Last year's similar pension borrowing is a terrible drag on this year's budget — and now Quinn wants to double down?

Don't do that, Senators. Instead do the hard work of funding pension systems with the aggressive budget reforms you've thus far avoided. And don't forget to tell the rest of us how much we'll be paying you in retirement for your stewardship of … insolvent Illinois.

Copyright © 2010, Chicago Tribune

[macrockett]

Illinois has found yet another novel way to retain more revenue. Remember they already welch on paying vendors for services, now they apparently won't even refund over payments of income taxes made by businesses...

The Associated Press
Posted Apr 27, 2011 @ 11:42 AM

Illinois businesses waiting for long-overdue tax refunds aren't getting any good news from the state Capitol.

Illinois owes about $1 billion to roughly 36,000 businesses that overpaid their income taxes. Some have been waiting since 2008 to get their money.

Gov. Pat Quinn proposed borrowing money to pay the refunds, but legislators have shown little interest in that idea.

Budget proposals being considered by Democratic lawmakers would do little to chip away at the backlog.

Some companies are waiting not only for refunds but for payment on work they did for the state. The backlog to vendors and social service providers stands at about $4.5 billion.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed

[Arch]

And with many businesses hanging by a thread, the potential for ALL of their tax revenue to dry up completely is very high and will probably start accelerating.

The hard question that people are not answering in Springfield is just where has all this money gone...?

[asmodeus]

And now Quinn is literally blackmailing the cities to get his borrowing scheme passed:

www.chicagotribune.com/news/local/ct-met-quinn-borrowing-plan-20110428,0,2727322.story

[Arch]

Next he'll threaten split shifts and eliminating sports

[doctorwho]

Apr 29, 2011 13:11:45 GMT -6 asmodeus said:

And now Quinn is literally blackmailing the cities to get his borrowing scheme passed:

www.chicagotribune.com/news/local/ct-met-quinn-borrowing-plan-20110428,0,2727322.story

when it comes to screwing us all over - we'd be better off with Blago

[macrockett]

Crains Chicago

Illinois slides toward bottom of CEO business climate survey
Thursday, May 05, 2011

Illinois plunged nearly to the bottom of an annual list rating the best and worst states for business, as judged by the nation's chief executive officers.

The state was third-worst for business, according to Chief Executive magazine, which notes Illinois is "now in a death spiral," having dropped 40 places among the 50 states in the past five years. It fell three places from last year's ranking.

The 2011 "Best/Worst States for Business" ranking marks the seventh year for the survey. Texas has held the top spot and California last place for all seven years, the magazine said. Chief Executive is a bi-monthly magazine published by Chief Executive Group LLC of Greenwich, Conn.

A spokesman for the Illinois Department of Commerce and Economic Opportunity expressed skepticism of the results.

"Whoever was surveyed by this (magazine) has not been paying attention to the facts: Illinois' economy is showing strong signs of growth and leading the Midwest out of the recession," he said in a statement. "We remain committed to working as hard as possible to partner with the business community to build on this strong momentum and bring more jobs and opportunity to Illinois."

The 550 CEOs who participated were asked in an online survey to rate states on taxes and regulation, workforce quality and living environment. The survey was conducted between Jan. 14 and Feb. 1.

The top five states for business in 2011, according to the magazine:

1) Texas

2) North Carolina

3) Florida

4) Tennessee

5) Georgia

The five worst states:

46) Michigan

47) New Jersey

48) Illinois

49) New York

50) California

In January, Illinois Gov. Pat Quinn hiked the state's corporate income tax rate to 7% from 4.8% and the personal income tax rate to 5% from 3%. The move has prompted neighboring states to court Illinois companies, among them Caterpillar Inc.

Caterpillar caused a stir when CEO Doug Oberhelman wrote to Mr. Quinn with concerns that the direction Illinois "is headed in is not favorable to business."

Illinois performed more favorably in another publication's recent metric: the number of new plants and expansion projects. Site Selection magazine in March ranked Illinois No. 8 on its list and Chicago the top metropolitan area for major corporate investments, based on 2010 projects.