Illinois...a sad State of affairs

[brant]

George F. Will
Opinion Writer
Working up a tax storm in Illinois

By George F. Will, Published: April 29
Tim Storm, an Illinois businessman until a few weeks ago, is now a Wisconsin businessman. Herewith a story about how states can reduce revenue by trying to increase them and about the economic benefits of federalism.

Storm, 42, is founder and chief executive of FatWallet.com. The company, until recently one of about 9,000 Illinois “affiliates” of Amazon.com, directs online shoppers to online retailers, which often pay affiliates commissions for referrals that result in sales. Storm’s company, which has 54 employees, used to be located in Rockton, Ill., but now is five miles up the road in Beloit, Wis.

One reason online sales are brisk is that the retailers are not required to collect state sales taxes. In 1992, the U.S. Supreme Court held that such taxes must be collected only by companies that have a “substantial nexus” — basically, a brick-and-mortar presence — in the state. Under this rule, Amazon collects sales taxes in only five states.

Illinois, comprehensively misgoverned and ravenous for revenue, has enacted what has come to be called an “Amazon tax.” It requires Amazon and other online retailers to collect the state’s sales tax. Amazon and many other retailers responded by severing their connections with their Illinois affiliates.

Storm responded by relocating to Beloit. No one knows how many other Illinois affiliates of the thousands of online retailers — transactions with Amazon are less than 1 percent of FatWallet’s business — will lose revenue, pay less in taxes, cut jobs or leave the state. When Texas sent Amazon a bill for $269 million because of the “nexus” of its Dallas warehouse, Amazon decided to close the warehouse.

Hoping to turn the states’ budget crises to their advantage, Wal-Mart, Target and other large retailers are funding a coalition called Alliance for Main Street Fairness to lobby for measures — perhaps federal legislation — to require Amazon and other online retailers to collect sales taxes. This supposedly would serve fairness by leveling the playing field.

Most online retailers would, however, retain the advantages of convenience — shoppers do not need to drive to the store — and the price advantages of not having to pay the cost of brick-and-mortar stores. But the stores have the competitive advantage of local loyalties and customers being able to handle merchandise.

Besides, Main Street stores pay sales taxes to support local police, fire and rescue, sewage, schools and other services. If Amazon’s Seattle headquarters catches fire, will Champaign, Ill., firefighters extinguish it? And as Boston Globe columnist Jeff Jacoby notes, “A Pennsylvania tobacco shop doesn’t collect Ohio sales taxes whenever it sells a humidor to a visitor from Ohio.”

Federalism — which serves the ability of businesses to move to greener pastures — puts state and local politicians under pressure, but that is where they should be, lest they treat businesses as hostages that can be abused. According to the Tax Foundation, Illinois has not only the fourth-highest combined national-local corporate income tax in the nation but also in the industrialized world. In Peoria, Doug Oberhelman, chief executive of Caterpillar, has told Illinois Gov. Pat Quinn that he is being “wined and dined” by other governors and their representatives encouraging Caterpillar to invest in their states.

It recently picked Muncie, Ind., for a major manufacturing plant. Says Indiana Gov. Mitch Daniels of his neighboring state, “It’s like living next door to ‘The Simpsons’ — you know, the dysfunctional family down the block.”

A study by the Illinois Policy Institute, a market-oriented think tank, concludes that between 1991 and 2009, Illinois lost more than 1.2 million residents — more than one every 10 minutes — to other states. Between 1995 and 2007, the total net income leaving Illinois was $23.5 billion. The five states receiving most refugees from Illinois were Florida, Indiana, Wisconsin, Arizona and Texas. Two are Illinois’ neighbors, three have warm weather, two — Florida and Texas — have no income tax. In January, a lame-duck session of Illinois’ legislature — including 18 Democrats who were defeated in November — raised the personal income tax 67 percent and the corporate tax almost 50 percent. This and the increase — from 3 percent to 5 percent — in the tax on small businesses make Illinois, as the Wall Street Journal says, “one of the most expensive places in the world to conduct business.”

Tim Storm’s presence in Beloit demonstrates how American federalism gives force to a familiar axiom: Businesses go where they are welcome and stay where they are well-treated.

[brant]

For the past 80 years my family has owned and operated a successful printing business in Chicago. My Grandfather started it in the early days of the depression and somehow kept it going. Though the years this company has been very successful and has survived though some very hard times. Despite the current depression these last few years have been very good in terms of sales and the volume sold.
However last week we did something I never thought would happen in my. lifetime. We sold our company. We are getting out while the getting is good. Illinois current business climate is well documented and this played a major part. Also the taxes are sure to rise considerably particularly if Obama is reelected which will very likely happen baring a miracle. The politicians as we all know are more concerned about their own power and pockets then to keep Illinois employed.
We moved to WE some 12 years ago to take advantage of the superior special needs programs. Since that time I have seen state cuts whittle away aides, secretaries and other areas. I blindly supported the building of MV and later realized to my horror what I had supported and the money that has been needlessly lost.
I will stay until my two WV kids graduated in two years then I will kiss the Land of Lincoln good by forever. It is all so tragic. But is so terrible is this economy never needed to happen had it not been for greed and corruption by our elected officials. God help the people of this state.

[brant]

And as far as District 204 is concerned the last SB meeting left me confident that debt will continue to rise and more programs and schools will be cut with the majority in power. CB is too impressed with his own power and to me was almost like a dictator at the last meeting. LP showed herself to be no more then an "attack dog" which is how Doc put it I believe. CP and SR know little about finance and I doubt if the majority has any idea the current state of the economy and are blindly following CBs inflated ego. Thank you to DD, CV and MR. You are fighting to save our district and not drive it down.
Finally I remember CB assuring teachers that WV would not be closed down. I am predicting CB will propose WV close within 4 or 5 years. Then again I will not have to worry about it.

[doctorwho]

May 10, 2011 9:02:14 GMT -6 brant said:

For the past 80 years my family has owned and operated a successful printing business in Chicago. My Grandfather started it in the early days of the depression and somehow kept it going. Though the years this company has been very successful and has survived though some very hard times. Despite the current depression these last few years have been very good in terms of sales and the volume sold.
However last week we did something I never thought would happen in my. lifetime. We sold our company. We are getting out while the getting is good. Illinois current business climate is well documented and this played a major part. Also the taxes are sure to rise considerably particularly if Obama is reelected which will very likely happen baring a miracle. The politicians as we all know are more concerned about their own power and pockets then to keep Illinois employed.
We moved to WE some 12 years ago to take advantage of the superior special needs programs. Since that time I have seen state cuts whittle away aides, secretaries and other areas. I blindly supported the building of MV and later realized to my horror what I had supported and the money that has been needlessly lost.
I will stay until my two WV kids graduated in two years then I will kiss the Land of Lincoln good by forever. It is all so tragic. But is so terrible is this economy never needed to happen had it not been for greed and corruption by our elected officials. God help the people of this state.

I will be right behind you ( or just in front of you) two years from now Brant. I am sick of paying for entitlements given away by our Governor and Madigan run Springfield group - to spendthrift SB's run by M2 and CB and the like --and outrageous taxes with basically zeroin return.

the brain drain on this state is also evident-- one day soon all that will be left will be those resistant to moving and those looking for an entitlement.

Of course just like now with Sears- Quinn will underwrite huge concessions by raising more taxes on you and I -- he can't keep them here otherwise because the business and living climate suck.

Even places like Massachusetts- the liberal bastion of the NE are looking are REAL pension reforms etc.-- not the goof we have- ..

I am counting the days until I am gone and can start a new life without giving away so much of my hard earned income..and getting crap in return

[doctorwho]

May 10, 2011 9:02:14 GMT -6 brant said:

For the past 80 years my family has owned and operated a successful printing business in Chicago. My Grandfather started it in the early days of the depression and somehow kept it going. Though the years this company has been very successful and has survived though some very hard times. Despite the current depression these last few years have been very good in terms of sales and the volume sold.
However last week we did something I never thought would happen in my. lifetime. We sold our company. We are getting out while the getting is good. Illinois current business climate is well documented and this played a major part. Also the taxes are sure to rise considerably particularly if Obama is reelected which will very likely happen baring a miracle. The politicians as we all know are more concerned about their own power and pockets then to keep Illinois employed.
We moved to WE some 12 years ago to take advantage of the superior special needs programs. Since that time I have seen state cuts whittle away aides, secretaries and other areas. I blindly supported the building of MV and later realized to my horror what I had supported and the money that has been needlessly lost.
I will stay until my two WV kids graduated in two years then I will kiss the Land of Lincoln good by forever. It is all so tragic. But is so terrible is this economy never needed to happen had it not been for greed and corruption by our elected officials. God help the people of this state.

sorry to hear about the business brant -I truly feel for everyone involved because family owned entities are very special....

[macrockett]

Good article Brant. Sorry to hear about the business. 80 years is a long time, but i certainly understand the decision. I have a business that i started 28 years ago, a service business. Many times I wish I had started somewhere else, like a sane State!

This article might shed some light on why Illinois is such a mess, other than the Politicians:

State accounting needs an overhaul

Over the next month, there will be no other issue on the minds of people working at the state Capitol than finding ways to help fill the state’s budget hole. During times like these, it is essential that every penny of taxpayer money is looked at closely to ensure it is being spent wisely and efficiently.

But as an audit recently found out, that’s a pretty daunting task when state agencies are using hundreds of different non-interfacing accounting systems to accomplish this goal.

The auditor general’s report found that state agencies were using at least 263 different accounting systems and only 16 percent of those systems are compliant with generally accepted accounting principles. Half of the systems are more than 10 years old, and many were installed about a half century ago, and it takes our state more than a year to compile a final spending report.

What does this mean for our state? The lack of centralized reporting systems harms our already-dismal bond rating and puts federal funds in serious jeopardy. The annual cost of maintaining our “archaic” systems was undeterminable, but most likely hovers around the $50 million mark, and for just 17 percent of systems, the cost of duplicative data entry was $11.3 million. That’s tens of millions of dollars being wasted every year because of our non-centralized, outdated accounting systems.

I was so appalled at these findings and concerned that untimely reporting could potentially lose us federal matching money or result in fines for late reporting, that I called together a special Senate hearing to discuss possible solutions with the comptroller’s office, the auditor general, the governor’s office and Central Management Services. At the hearing, the comptroller’s office and the governor’s office agreed to form a steering committee by May 4 to lay out a timeline to fix this problem.

The long-term savings achieved by upgrading these systems clearly won’t fill the $1.2 billion budget shortfall entirely, but it’s certainly a step in the right direction towards a more effective, leaner state government. I look forward to hearing the steering committee’s suggestions and I will continue to share updates with Illinois taxpayers until we get our fiscal house in order.

Linda Holmes

Illinois state senator

D-Aurora

[doctorwho]

May 10, 2011 13:42:01 GMT -6 macrockett said:

Good article Brant. Sorry to hear about the business. 80 years is a long time, but i certainly understand the decision. I have a business that i started 28 years ago, a service business. Many times I wish I had started somewhere else, like a sane State!

This article might shed some light on why Illinois is such a mess, other than the Politicians:

State accounting needs an overhaul

Over the next month, there will be no other issue on the minds of people working at the state Capitol than finding ways to help fill the state’s budget hole. During times like these, it is essential that every penny of taxpayer money is looked at closely to ensure it is being spent wisely and efficiently.

But as an audit recently found out, that’s a pretty daunting task when state agencies are using hundreds of different non-interfacing accounting systems to accomplish this goal.

The auditor general’s report found that state agencies were using at least 263 different accounting systems and only 16 percent of those systems are compliant with generally accepted accounting principles. Half of the systems are more than 10 years old, and many were installed about a half century ago, and it takes our state more than a year to compile a final spending report.

What does this mean for our state? The lack of centralized reporting systems harms our already-dismal bond rating and puts federal funds in serious jeopardy. The annual cost of maintaining our “archaic” systems was undeterminable, but most likely hovers around the $50 million mark, and for just 17 percent of systems, the cost of duplicative data entry was $11.3 million. That’s tens of millions of dollars being wasted every year because of our non-centralized, outdated accounting systems.

I was so appalled at these findings and concerned that untimely reporting could potentially lose us federal matching money or result in fines for late reporting, that I called together a special Senate hearing to discuss possible solutions with the comptroller’s office, the auditor general, the governor’s office and Central Management Services. At the hearing, the comptroller’s office and the governor’s office agreed to form a steering committee by May 4 to lay out a timeline to fix this problem.

The long-term savings achieved by upgrading these systems clearly won’t fill the $1.2 billion budget shortfall entirely, but it’s certainly a step in the right direction towards a more effective, leaner state government. I look forward to hearing the steering committee’s suggestions and I will continue to share updates with Illinois taxpayers until we get our fiscal house in order.

Linda Holmes

Illinois state senator

D-Aurora

but we'd actually have to hire competent people then and not someone's cousin for the acconting jobs-- that'll never fly in Illinois

[EagleDad]

Only in Illinois do we NEARLY DOUBLE INCOME TAX in a single year and in the same breath fret deeply over "finding ways to help fill the state’s budget hole."

[southsidesignmaker]

EagleDad,

The budget hole you speak of is Illinois's big BLACK HOLE. The $$$$ in your wallet cannot escape the gravitational pull of the ignorant policy makers. Many may consider fleeing before one's complete net worth and sense of self worth are sucked away.

[macrockett]

www.treasurer.il.gov/

www.treasurer.il.gov/news/PR05232011PositionPaperonDebt.pdf


video.cnbc.com/gallery/?video=3000023314 cnbc video

www.chicagotribune.com/news/opinion/editorials/ct-edit-legis-20110525,0,6020211.story
chicagotribune.com

Your share: $42,000

5:10 PM CDT, May 25, 2011
Advertisement

You used to be able to lead a long life without ever knowing the name of an Illinois state treasurer. Now, though, you owe considerable gratitude to the current treasurer, a Republican first-termer named Dan Rutherford. This week, he blew a very loud whistle. In so doing, he made it harder for Illinois lawmakers and Gov. Pat Quinn to sink you even deeper in debt.

Rutherford first calculated that the pols who run Illinois have amassed nearly $200 billion in debt. That includes some $45 billion in bond debt, $8 billion in unpaid bills and $140 billion in unfunded pension and health care benefits for public employees. Every household in Illinois owes $42,000. Don't get us started on your share of the debts run up by your profligate local and federal governments.

With all that debt squeezing spending on schools and other priorities, Quinn now wants legislators to, yes, authorize still more billions in borrowing to pay the state's bills. Why? Because (a) Quinn cannot bring himself to propose a budget that would spend only what Illinois collects in revenues and (b) Quinn also cannot bring himself to campaign for the more economical pension system that Illinois desperately needs.

To that Rutherford, bless him, retorts:

"You can't borrow any more money. If I need to send letters to the rating companies to tell them the treasurer of Illinois is opposed to more borrowing, I'm going to do that. If it means I have to get ahold of the bond houses to let them know that, 'I agree with you, we are a major risk, and I am the finance officer of this state,' I intend to do those kinds of things if that's what it's going to take to keep Illinois from going into further debt. …

"Borrowing is an addiction. … Illinois. Cannot. Borrow. Any. More. Money."

That's what Rutherford said Monday at a news conference. Legally, he can't block long-term borrowing binges. His resolve, though, makes him stand out in Springfield. Many legislators of both parties are hoping to escape their spring session Tuesday without slashing state spending or reforming a pension system headed for implosion. Some of them instead would take the timid route and keep on borrowing billions.

You'll recall that on the night they jammed a 2-percentage-point income tax increase through the General Assembly, Quinn's fellow Democrats essentially assured all of us that more borrowing wouldn't be necessary: The new $7 billion a year would cover the state's back bills.

Senate President John Cullerton: "The purpose of this bill is to raise enough money so that we can continue to pay our pensions without borrowing the money. To pay off our debt. To have enough money to pay the interest on that debt. And, for the first time ever, establish caps on how much we can appropriate. ... We have just come through the worst economic crisis in our lifetimes. And we have not paid our bills."

And House Majority Leader Barbara Flynn Currie: "Remember, the point of this income tax increase is not to expand programs, not to do brand-new things in Illinois state government. It is only intended to pay our old bills and deal with the structural deficit."

Maybe Quinn and his allies were hoping the rapture would rescue them from the consequences of all the debt they have shoved onto taxpayers. If that was the plan, sorry about your luck. What's crucial now, in the last days of this session, is to restrict spending and block more borrowing. That means:

•Republicans and Democrats need to grow spines and tell the public employees unions now pressuring them that if the pension system isn't reformed now, the prospect that the system goes broke only increases.

•Legislators need to slash Quinn's proposed spending for the fiscal year that starts July 1 — and dedicate any unexpected revenues to paying down old bills.

•Someone has to remind Quinn that, on Feb. 16, his top two aides admitted that it's far cheaper for the state to cover late-payment penalties on old bills ($60 million a year) than to pay interest on the additional $8.75 billion that Quinn wants to borrow ($540 million a year).

We often write that it's shameful for deadbeat Illinois not to pay its bills. But remember, the only reason Illinois has any overdue bills is that lawmakers spent more money — and promised public employees far more in retirement benefits — than state revenues justify.

The way out of this morass is to cut spending and reform the pension system so it serves both taxpayers and public employees.

Do those things and Dan Rutherford's wise words will be one prophecy (of sorts) that comes true:

"Borrowing is an addiction. … Illinois. Cannot. Borrow. Any. More. Money."

Copyright © 2011, Chicago Tribune

[macrockett]

illinoispolicy.org/uploads/files/May2011PollResults.pdf Illinois going in wrong direction

illinoispolicy.org/blog/blog.asp?ArticleSource=4129 Poll on pension reform

Poll: Illinois Voters Want Pension Reform
Share |

5/25/2011

Download a pdf of this report and chart here.

The state’s pension system demands more money than Illinois government can afford. Major tax hikes will be needed unless the benefit system for government employees is reformed – despite the fact that a record income tax increase in January is primarily being used to keep the pension funds afloat.

Lawmakers have a choice: reform pension benefits or hike taxes. The people of Illinois—despite misleading and robust media campaigns against fixing the pension problem—clearly favor pension reform. This is consistent with similar polling from January, when lawmakers were debating Illinois’s record tax hike.

The Illinois Policy Institute commissioned a statewide poll of 500 likely voters, conducted by Pulse Opinion Research. The random sample was representative of Illinois, as indicated by their 60 percent approval rating of President Barack Obama. By an almost 3-to-1 margin, voters believe that reforming pension benefits is the appropriate way to deal with Illinois’s pension funding crisis.


See all of the Illinois Policy Institute's recent research on public employee pensions.

[doctorwho]

May 25, 2011 20:46:45 GMT -6 macrockett said:

illinoispolicy.org/uploads/files/May2011PollResults.pdf Illinois going in wrong direction

illinoispolicy.org/blog/blog.asp?ArticleSource=4129 Poll on pension reform

Poll: Illinois Voters Want Pension Reform
Share |

5/25/2011

Download a pdf of this report and chart here.

The state’s pension system demands more money than Illinois government can afford. Major tax hikes will be needed unless the benefit system for government employees is reformed – despite the fact that a record income tax increase in January is primarily being used to keep the pension funds afloat.

Lawmakers have a choice: reform pension benefits or hike taxes. The people of Illinois—despite misleading and robust media campaigns against fixing the pension problem—clearly favor pension reform. This is consistent with similar polling from January, when lawmakers were debating Illinois’s record tax hike.

The Illinois Policy Institute commissioned a statewide poll of 500 likely voters, conducted by Pulse Opinion Research. The random sample was representative of Illinois, as indicated by their 60 percent approval rating of President Barack Obama. By an almost 3-to-1 margin, voters believe that reforming pension benefits is the appropriate way to deal with Illinois’s pension funding crisis.


See all of the Illinois Policy Institute's recent research on public employee pensions.

using the 60% approval split it may be representative of Illinois voters but the 3-1 margin would be even higher at an even split-- so is very telltale-- it is the ONLY way to address this.

[macrockett]

illinoispolicy.org/blog/blog.asp?ArticleSource=4168

6/6/2011

by Mark Cavers

Today, the Associated Press reports that Governor Quinn has made another controversial appointment with his move to put former Representative Michael Smith on the Illinois Education Labor Relations Board, complete with a salary of almost $100,000. Prior to voters' decision to remove him from office last fall, Smith was a vocal advocate for Governor Quinn's 67% tax hike on middle class families and his final act as a representative was to vote for Quinn's tax increase. The Governor's appointment of Smith comes on the heels of his controversial attempt to appoint former Representative Careen Gordon, another tax hike supporter, to the Illinois Prisoner Review Board. After that move failed, he appointed Gordon to a $86,000 position in the State Department of Financial and Professional Regulation.

If the Senate approves Smith's appointment, what exactly will we be paying him for? Last month, Kevin McDermott ran a story on the Illinois Education Labor Relations Board in the St. Louis Post-Dispatch. In it he highlighted the $94,000 salaries that each member of the board receives for a single one to two hour meeting each month. (See Below) Other members of the board have included: the spouse of a state Senator, an ex-lobbyist, an ex-gubernatorial aide, and an ex-legislative staffer.

The Governor's appointments have faced a great deal of scrutiny and a number of his suggestions have come under fire for the appearance of repaying political allies with high paying government jobs. What do you think? Is the Governor playing politics with appointments? Leave your thoughts below.





Illinois is one of the most corrupt States in America, if not the most. One example:

www.stltoday.com/news/local/govt-and-politics/article_ef2781a0-4e74-5831-bc8f-6ea572e5720f.html

STLtoday.com
Illinois pays board members big money

BY KEVIN McDERMOTT [e-mail] > 217-782-491 | Posted: Sunday, May 22, 2011 11:55 am

SPRINGFIELD, Ill. • The March 17 monthly meeting of the Illinois Educational Labor Relations Board began at 10 a.m. in Springfield.

The board members approved the minutes of the previous month's meeting. They discussed labor disputes from several school districts. They issued orders in several cases. They heard staff reports. They moved the date of the next monthly meeting. They took six votes (all unanimous), including the adjournment vote, which came at 11:16 a.m.

Their effective pay for that 76-minute meeting was about $7,800 each.

Four of the board members are paid $93,926 a year, with the chairwoman getting $104,358 for a job that generally entails one meeting per month, usually for one to two hours. Relevant documents are sent to board members' homes ahead of time. A full-time staff member gives them recommendations at the meeting. Most of the votes are unanimous. Some board members don't even travel to all the meetings, instead listening in by phone.

How do you get a gig like that? Technically, you just have to be appointed by the governor and confirmed by the state Senate. But the members of the educational labor board aren't what you'd call typical citizens.

One is married to a state senator. One is an ex-Springfield lobbyist. One is an ex-legislative staffer. One is an ex-gubernatorial aide.

The board is one of more than 320 in the state's executive branch, where unelected appointees preside over governmental decisions from utility rates to pollution control to property tax appeals. Some 30 of the boards offer payment for members ranging from a few hundred dollars per meeting to five or six figures a year, records show. Salaried board members also get state pensions.

A Post-Dispatch analysis of records found that the boards that pay the most are stacked with politically connected appointees. They are paid - often paid well - for duties that many times appear to be no more time-consuming than attending a dozen meetings a year.

"They make five or six figures for meeting once a month. Common people wouldn't even know how to apply for a job like that," says state Sen. Dan Duffy, R-Barrington, who has made a crusade out of challenging the state's vast array of boards and commissions.

"It's just another way for the politically connected to make money from the taxpayers," says Duffy. "They're rubber stamps. Some of them are duplicative. It's the cushiest job in government, and I can't figure out what they do."

Among the newspaper's findings:

• Political connections are prevalent among the top-paying boards and commissions. The state Human Rights Commission includes Diane Viverito, daughter of former state Sen. Louis Viverito, D-Burbank; Rozanne Ronen, sister of former state Sen. Carol Ronen, D-Chicago; Marylee Freeman, wife of Illinois Supreme Court Justice Charles Freeman; Marti Baricevic, wife of former St. Clair County Board Chairman John Baricevic; and as of last month, Terry Cosgrove, head of the powerful abortion-rights lobbying group Personal PAC, which spent more than $1.3 million in the 2010 state elections.

• The number of state boards and commissions has proliferated, despite vows by politicians to trim them. In 2003, Gov. Rod Blagojevich decried that 15 commissions paid their members, and he vowed to slash that number to four. Today, that number is around 30.

• Some of the boards appear to duplicate responsibilities handled by other parts of state government or each other. The four members of the Illinois Miners' Examining Board, for example, get annual stipends of $12,906 to certify coal miners, while each of the six members of the State Mining Board gets $15,651 to do essentially the same thing for mine managers.

• Some of the boards, such as the Educational Labor Relations Board, require specific expertise and prohibit outside employment. But on several other boards, those restrictions don't apply, allowing appointees with no special training to make mid-five-figure second salaries for what amounts to a few days' worth of work per year.

• Some board seats have been left perpetually unfilled, with no apparent ill effects. In one case, a politically connected, highly paid member of the state's Prisoner Review Board stopped attending meetings or doing any other work for 17 months - but wasn't removed and replaced until his absences were reported in the media last year.

• Even unpaid boards and commissions can rack up significant expenses. A state audit two years ago questioned the expenditure of $98,000 by the unpaid Amistad Commission (designed to promote awareness of the slave trade) for a catered event for fewer than 300 teachers. A state spokesman last week said the commission has expired since then, but it's still on the official list - and a $300,000 appropriation is tucked within a state budget bill that was moving through the Legislature last week.

Other states have boards with paid members, including Missouri. Gov. Jay Nixon's administration lists about 230 boards and commissions on its official website, about 100 fewer than the Illinois has.

Missouri's board salaries are slightly lower than Illinois board salaries. Missouri's Industrial Relations Commission members are paid $105,069 annually, compared to $117,043 for members of the Illinois Commerce Commission. Missouri's Board of Probation and Parole members make $83,094, while their counterparts on the Illinois Prisoners Review Board make $85,886.

Illinois would seem to have a greater incentive than most states to watch its dollars: The state recently imposed a 67 percent hike in its personal income tax rate to address a $13 billion budget deficit, is chronically late on bills, has an endangered credit rating and has made deep cuts in state services.

On taking office in 2009, Illinois Gov. Pat Quinn included the state's board-and-commission system among the areas of state government that needed cleaning up in the post-Blagojevich era, along with campaign finance, purchasing and lobbying reform.

Quinn has since taken credit for making "all of the state's boards and commissions more honest, transparent and accessible." Quinn signed into law a new requirement that board and commission members file statements of economic interest. He also established a website (http://appointments.illinois.gov/appointmentsListing.cfm) where the public can see the list of all 322 boards and commissions under the governor's office, including appointees and salaries.

But some say Quinn's most high-profile commission appointment so far indicates that those historic connections are still firmly in place.

In early April, Quinn fought for and won an appointment to the state's Human Rights Commission for Cosgrove, director of the Illinois abortion-rights organization Personal PAC and one of the most influential issues activists in the state.

Cosgrove's group raises money for abortion-rights politicians - generally Democrats - and in that capacity spent about $1.3 million in state politics in 2010, largely to the benefit of Quinn's Democratic Party.

"He is a passionate advocate for everyone's rights," Quinn said at the time, when Republicans accused him of using the appointment as a reward to a key political supporter. "I only look at people based on their qualifications."

Cosgrove didn't return calls seeking comment last week.

His Human Rights Commission appointment pays $46,960 for a position that generally entails a few hours' worth of meetings per month. Board members generally meet two days per month, once as a full board and again in smaller panels, to consider complaints filed with the state's Department of Human Rights. Members are allowed to keep their day jobs - as Cosgrove has at Personal PAC, according to staffers there.

As with many of the state's boards, the gathering of testimony, research, and initial rulings have already been handled by full-time staff, so the board members just have to vote on the issues. Board minutes show the twice-a-month meetings generally last fewer than two hours each and sometimes under an hour.

Different boards have different rules and schedules, but reviews of records indicated some common factors: Their meetings, often once or twice a month, tend to be short. Votes are most often unanimous. Most of what board members are expected to do is done alone, at home, reviewing the cases that will come before them for the votes.

At the Pollution Control Board, for example, members generally meet once or twice of a month to rule on environmental cases, including landfill siting and other issues that have already been through attorneys, hearing officers and staff.

Between those meetings, the appointed board members are expected to keep busy - generally at home - reviewing lengthy records of testimony and information for cases. The board members access the information online. The meetings themselves are short, consisting primarily of staff presentations and the board's votes, records show.

Pollution Control Board member Andrea Moore describes the meetings as "very perfunctory" but insisted that doesn't make it a part-time job. A former legislator, Moore and her three fellow board members earn $117,043 annually. The chair makes $121,040.

"You have a tremendous amount of work" reviewing cases, Moore said. "A big part of what you're doing is reading ... Some of the work is done at home. That doesn't mean it isn't being done."

At the Educational Labor Relations Board, members meet once a month to consider collective bargaining issues involving teachers and school districts. Chairwoman Lynne Sered said it's typical for members to work at home, reviewing the educational collective bargaining cases they will vote on during their monthly meeting.

"The office is the board member's home," Sered said. She said communication between board members between those monthly meetings is discouraged, as it could violate the state's Open Meetings Act.

Sered is a lawyer with extensive background in labor issues who has been on the board since 2000. Still, her elevation to the $104,358 chair's post last year might have been expected to create some controversy, because she is married to Democratic state Sen. Jeff Schoenberg of Evanston.

But Duffy, the Barrington senator, was the only opponent to Sered's appointment. In a debate that rankled fellow senators, Duffy said the appointment "smells of typical pay-to-play politics in Illinois," and he reminded his colleagues that salaried board posts come with state pensions. "They're going to be paid for life by taxpayers." Sered was confirmed with Duffy casting the sole dissenting vote.

Duffy has made a habit in the past few years opposing one proposed board appointment after another while pointing out whatever political connection the appointee has.

"When I started talking about this, people told me, off the record, ‘This is what the majority party does, gives spouses and supporters these positions,' " Duffy said last week. "I'm getting flack from all sides. It makes everyone uncomfortable when I stand up and point this stuff out."

Moore, the Pollution Control Board member, said those connections and the connections of former lawmakers like herself, shouldn't be disqualifying.

"You have a governor who appoints and you have a Senate that approves," she noted. She said it makes sense they would turn to people whose abilities have already been proven. "Should they be disqualified?"

Duffy introduced legislation in February that would bar the relatives of state officials from getting board or commission appointments. The legislation didn't even get a committee hearing.

Hannah Hess of the Post-Dispatch contributed to this report.

[macrockett]

Illinois. What a joy! Prior to the 67% increase in our income taxes, we were around $8 billion in arrears on our expenses. The income tax increase, approximately $6 billion, was used to fund the State's contribution for one year. How is the State otherwise? Still looking at $8 billion in arrears. And the Unfunded Pension liability for State employees? Growing...growing and growing.

Listen to IL State Treasurer on CNBC this A.M.

video.cnbc.com/gallery/?video=3000050325

[macrockett]

www.illinoisisbroke.com/newsitem.aspx?id=1531

E-News Park Forest
Kirk Releases Report On Illinois` Growing Debt Crisis
Wednesday, October 12, 2011

CHICAGO -With reports that the State of Illinois faces debt concerns greater than any other state, U.S. Senator Mark Kirk (R-Ill.) today published the Report on Illinois Debt, advising citizens on how much their state owes and the danger of its mounting debt. The report was prepared in consultation with Senator Kirk's Sovereign Debt Advisory Board, chaired by financial expert Henry Feinberg.

"If Illinois enters an unrecoverable debt spiral, there will be no federal bailout. Therefore, the people of Illinois need to know the dire financial position of our state and what we need to do to fix it ourselves," said Senator Kirk.

This report shows Illinois directly owes over $30 billion, on top of unpaid bills that increased ten times in ten years. The state's accumulated health and pension obligations total over $140 billion -- with less than 60% of these promises covered, representing the lowest percentage in the nation. Illinois has the worst credit rating of any state in America and ranks 48th out of 50 states in healthy business climate. By adding the debts owed to Illinois, Cook County and the City of Chicago, each Chicago household owes $78,000.

"Illinois is in a self-perpetuating, destructive cycle of debt resulting from increasingly mismatched revenue and obligations," said Henry Feinberg, Chairman of Senator Kirk's Sovereign Debt Advisory Board.

Illinois pays almost $3 billion annually for interest on the money it already borrowed. Spending on interest already totals four times the amount needed to erase the $700 million budget deficit of the Chicago Public School System. The debt picture is not improving because Illinois unemployment is rising. The state employed 190,000 more people in January, 2001, than it does today. For debts and unfunded liabilities, each person in Illinois owes twice as much to the state as people in Indiana, Iowa and Missouri and three times more than people in Wisconsin and Michigan.
Because Illinois has such a poor credit rating, local governments must pay higher interest rates than similar communities in better-run states. For example, Cook County School District 163 had to pay more in interest expenses than similar Midwestern creditors because it was in Illinois: $592,706 more than Brownsburg Redevelopment Authority, Indiana, $893,109 more than Waterloo, Iowa and $1,096,437 more than a school district in Randolph County, Missouri.

Prospects for repayment are difficult. Illinois lost over 190,000 jobs since January 2001. The City of Chicago lost over 200,000 people during the same period.

Lost population means the debts and unfunded liabilities must be repaid by taxpayers who remain in the state. If Illinois had the same population growth rate as Indiana, per household debt would be approximately $400 lower than it is today.

Illinois citizens face higher taxes and larger debts because so many of their fellow citizens have moved to other, more fiscally responsible states. The State lost over 85,000 net taxpayers between 1995 and 2007 to neighboring states. Taxpayer flight between 1995 and 2007 cost Illinois an estimated $2.4 billion in tax revenue.

While Illinois is an American state with substantially stronger institutions than Europe, its debt load per person is higher than for citizens in Spain, Portugal, Ireland or Greece.

While there are many solutions to this problem, knowledgeable Republican and Democratic state legislators joined the Civic Committee to focus on key pension reforms needed to improving the state's dismal record with borrowed money. Senator Kirk concluded, "The deteriorating credit rating of Illinois harms our state's ability to attract new jobs and higher incomes. To maintain the federal credit rating, Congress cannot bailout a few spendthrift states. Therefore, our state's leaders must focus on pension reform and other anti-spending measures to replicate the growing success of Indiana and other Midwestern states."