‘Doomsday’ in Illinois

(9 am. – promoted by ek hornbeck)

  When it comes to state budget crisis, California gets most of the headlines. When it comes to states that are going bankrupt the quickest, Obama’s state of Illinois has taken the lead.

 “The state is in utter crisis,” said Representative Suzie Bassi. “We are next to bankruptcy. We have a $13bn hole in a $28bn budget.”

  The state has been paying bills with unfunded vouchers since October. A fifth of buses have stopped. Libraries, owed $400m (£263m), are closing one day a week. Schools are owed $725m. Unable to pay teachers, they are preparing mass lay-offs. “It’s a catastrophe”, said the Schools Superintedent.

  In Alexander County, the sheriff’s patrol cars have been repossessed; three-quarters of his officers are laid off; the local prison has refused to take county inmates until debts are paid.

 Collectively the states have a $156 Billion hole to fill this year. There will be a lot of pain to go around.

‘Doomsday is here for the state of Illinois’

 Last week a government watchdog group released a report of what must be done for Illinois to stay solvent.

 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.

 The Republican candidate for governor is full of ideas on how to fix Illinois’ budget problems.

 “The governor is out in left field here. I mean, he’s completely out of line. People are struggling in Illinois,” Brady said, adding that “this is absolutely the wrong time to increase the tax rate.”

  But when he was asked in an interview in Springfield on Thursday how he would solve the problem, he acknowledged that “you can’t cut yourself out of $10 to $13 billion.”

  If you can’t balance the budget with cuts, and you refuse to raise new revenues, then how exactly do you do it?

  “We have to create a budget that’s reconciled, deconstruct it and reconstruct it, meeting our priorities, living within our means, but also providing a surplus so we can pay off the backlog of unpaid bills.”

 “Deconstruct and reconstruct”? Does Bill Brady know what those words mean? He’s talking about a surplus in a time that the budget can’t be balanced with tax hikes and spending cuts. In fact, Brady is talking about a $1 Billion tax cut.

  As for as I can tell, Brady’s response is the equivalent of, “Hey, look over there! What’s that?”

  The state employees have already accepted furloughs and suspension of raises because of the budget crisis of last year. It seems that the “overpaid state workers” have become the default scapegoat for all budget problems.

   Consider the Illinois public school teachers. The median wage of a public school teacher with a bachelor’s degree and 10 years of teaching experience is $50,628. While not poverty wages this is hardly “overpaid”. According to the census, that salary is less than the nationwide median wage for someone who works in the private sector and holds a bachelor’s degree.

  Despite that, state workers are being forced to pay up front for doctor’s visits. Brady’s plan is to cut pension benefits and payroll.

 While conservatives flog this issue, that all the problems can be laid on overpaid public school teachers, trash collectors, and policeman, there is virtually no evidence that this claim is true.

 Think about this logic:

  The Pentagon is missing trillions of dollars, billions of dollars go missing in Iraq, Wall Street banks, after wrecking the economy, reward themselves billions in bonuses directly out of taxpayer bailout funds, but the real criminals here are public school teachers who “greedily” accept a middle-class paycheck.

  What sort of messed-up values are they teaching conservatives these days?

  Some studies of federal employees show higher wages, but they usually fail to mention items like: federal workers are generally older, work full time, and their jobs require higher education degrees.

  It should be pointed out that federal wages have nothing to do with state and local governments.

  Illinois is far from being alone. New Jersey has a deficit of $11 Billion with a similar sized budget. The budget deficit is about a third of the overall budget.

  Meanwhile, California continues to lurch from one crisis to another. The first planned cuts to close the $20 Billion deficit have been proposed.

 In low-key votes, lawmakers slashed nearly $1 billion from the state’s prison system, chiefly from inmates’ medical care, and approved a $540 million reduction in state workers’ paychecks.

 Just $18 Billion more in cuts to go.