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Illinois government deadlocked, shutdown a possibility

Illinois government deadlocked, shutdown a possibility

Never go full “Greece”

Illinois’ new budget year starts tomorrow, and unless Republicans and Democrats can come to an agreement on fiscal policy, the state will kick things off without the ability to pay the bills.

Illinois has a reputation for being largely rural, yet bafflingly Democratic. The Chicago machine—not those languishing in my old stomping grounds in the capitol of Springfield—runs things, but for the first time in over a decade, a solidly Democratic legislature is dealing with a Republican governor.

Bruce Rauner has spent his time bucking the trends that have run Illinois into the ground, but Democrats have, in turn, bucked his pro-business agenda and are demanding a massive tax increase to make up for a $4 billion dollar shortfall.

The AP has the back story:

The back-and-forth is the latest in a months-long fight between Rauner and majority Democrats over how to resolve Illinois’ massive financial problems and — more recently — who will take the blame if state government begins grinding to a halt and critical services are cut off.

The two sides have been deadlocked over how to eliminate a deficit that’s the largest of any state in the U.S. Illinois already is billions behind in paying its bills and has the nation’s worst-funded state pensions, with a more than $100 billion shortfall.

Without a new budget in place by the Wednesday start of the new fiscal year, some 65,000 employees face the prospect of missing paychecks starting in mid-July. That raised fears workers would stay home and some government operations would cease.

Gov. Bruce Rauner worked to alleviate those concerns, saying in a memo sent to state workers and provided to The Associated Press that “State employees will be paid for their work.”

“I will do everything within my power,” he continued. “Our lawyers are working hard to ensure that all employees will be paid on their scheduled pay dates.”

Rauner has been in talks with Democrats in an attempt to figure out a way to keep current employees on the payroll in the event of a shutdown; Dems appeared to be on board with that, but Democratic Attorney General Lisa Madigan torpedoed the plan, citing a decades-old court opinion stating that cutting checks without an approved fiscal plan in place violates the Illinois Constitution.

(This situation is a double-up on pressure from the blue side of the aisle. Madigan’s father, Mike Madigan, currently serves in Democratic leadership in the IL House. Welcome to the Land of Lincoln, people.)

Today, representatives from 15 government agencies that report to Rauner are testifying in the House about what procedures will be put into place in the event of a shutdown. Rauner has already vetoed one Democrat-backed bill, and it doesn’t look like he’s willing to cave at the 11th hour to a plan that raises taxes and maintains entitlement spending.

As union and other progressive activists prepare their talking points, Illinois officials are preparing for the worst. We’ll keep you updated on the situation.

H/t Marathon Pundit

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Comments

Not A Member of Any Organized Political | June 30, 2015 at 1:49 pm

The Ill state and Chicago were morally bankrupt before becoming money banrupt.

The assoNY Jesus would not let this happen.

He’d suspend arithmetic. Because compassion…

Don’t mess with our IL TRS checks. How I hate to hear the retirement we spent 40 years earning, is an “entitlement”, as if it were food stamps, social services, etc.

    Barry in reply to MrE. | June 30, 2015 at 2:13 pm

    Frankly, you earned nothing. The money is not there. You voted for politicians that wrote you an IOU, and you believed them, regardless of clear evidence to the contrary.

    There is no money to pay you.

      MrE in reply to Barry. | June 30, 2015 at 2:28 pm

      You are aware that teachers PAY INTO the IL TRS system in lieu of SS?

        Immolate in reply to MrE. | June 30, 2015 at 2:47 pm

        So what was wrong with Social Security?

        n.n in reply to MrE. | June 30, 2015 at 3:38 pm

        I thought that all employers and employees were required to pay into Social Security and other entitlement funds. In fact, that compulsory “shared responsibility” is the basis for sustaining the “safety net”, notwithstanding supplementary arrangements made with private capital.

          Ragspierre in reply to n.n. | June 30, 2015 at 3:47 pm

          Nope. There was an “opt-out”. Look up Galveston County, Texas for a very good example of how well people could do outside of Social Insecurity.

          n.n in reply to n.n. | June 30, 2015 at 4:02 pm

          Ragspierre:

          I am not suggesting that the Social Security model is the best or only model, but rather observing that the premise for its fiscal viability is the uniform participation of corporate entities and their employees.

          Frankly, I’m surprised that the Federal Government would permit an alternative. It not only undermines their authority, but it undermines the viability of their financial models. This is part of the reason they are running trillion dollar deficits. Perhaps a small part, but each exception is cumulative.

          Subotai Bahadur in reply to n.n. | June 30, 2015 at 5:25 pm

          Just for the record, as a retired Peace Officer, I get my pension from the Public Employees Retirement Assn. We paid in twice what the employee share of SSA was, and the state paid in 1/2 of what they would pay under SSA as percentages. But they actually invested the money.

          And our pension plan is listed as fiscally viable for long past my lifetime.

          However, I paid in and qualified for a full benefit under SSA years before I went to work for the government. I only get 1/3 of the SSA benefit because I have a state pension.

          Lesson #1: It is possible to have a fiscally sound pension plan, but you have to invest in something other than politicians’ IOU’s.

          Lesson #2: SSA will rip you off if they get a chance.

          4fun in reply to n.n. | June 30, 2015 at 6:36 pm

          Subotai Bahadur
          Lesson #1: It is possible to have a fiscally sound pension plan, but you have to invest in something other than politicians’ IOU’s.

          Lesson #2: SSA will rip you off if they get a chance.

          Lesson #3 When the population votes in tax and spenders consistently, the Greece effect comes into play.
          I’ll bet there are a lot of retirees in Greece right now that believed in Lesson #1.
          When government gets ar big as we have, they’ll do anything for revenue. Check out the huge fines against corporations. Guess which parts of the economy actually makes money to pay shareholders of which retirement funds own huge chunks. Where will your retirement advisers suggest you invest next? Government doesn’t make money nor pay dividends from EARNED income. They tax existing or expected earnings.
          ————
          Michael Haz
          You should hope they don’t bring their voting patterns with them.
          I’ve noticed liberals, for the most part, hate living in diverse neighborhoods. When an area they’ve ruined with their tax and spend nonsense goes to pot, they move out to a richer area and whine about how the selfishness of said area is and that they need progressive ideas.
          Liberals are like shampoo, tax, spend, repeat.

          n.n in reply to n.n. | June 30, 2015 at 8:35 pm

          4fun:

          Greece spent, but did not tax. They lived off debt financed through external parties. Greece enjoyed the wealth (i.e. tangible goods). The producers enjoyed a virtual economy. Greece may default or request to negotiate a settlement that will limit the creditors’ conversion.

          Actually, that’s one advantage in America’s favor. I believe that most of the federal debt is held by Americans, not foreign investors and entities. Unfortunately, there is a wealth deficit. Fortunately, that deficit is financed with American currency. Unfortunately, our competitors are working to change that equation. Expanding wars surreptitiously and especially provoking a confrontation with Russia and allies were probably bad ideas.

        Barry in reply to MrE. | June 30, 2015 at 8:56 pm

        “You are aware that teachers PAY INTO the IL TRS system in lieu of SS?”

        Ponzi schemes. An IOU, what is what you have “earned” is worthless, therefore you earned nothing.

        I have no doubt SS will end up much the same way.

          Midwest Rhino in reply to Barry. | June 30, 2015 at 10:54 pm

          They funded these corrupt politicians with a quid pro quo golden deal. They knew for decades it was not funded as required by law, even passed an extra law that it would have to be paid even though not funded. They should convict for bribing officials … or use RICO law … it was always a dirty deal and they just let it go on forever.

          There are good public servants but there is dead weight too, that could never be fired, get to retire earlier than the rest of us. Now the state is $100B + in the hole and they act like they found out yesterday.

          Their union mob applied leverage, that is exactly what the union dues were for. There is no innocence.

          As I see it.

        Estragon in reply to MrE. | June 30, 2015 at 11:35 pm

        You do realize the amounts you paid in do not justify the amounts you receive, don’t you? That no serious pension plan is so lopsidedly structured in funding, right?

        Oh- and you do understand the Democrats who’ve controlled Illinois for most of the last half century or so never paid in the money they told you they would, right?

        So you think current taxpayers should be on the hook because you were too stupid to pay attention?

      Chem_Geek in reply to Barry. | June 30, 2015 at 4:38 pm

      “Frankly, you earned nothing.”

      Pure Republican Capitalism, right there folks. “Pay the workers what they have earned, what they were promised? Heaven forbid! That would cost me money!”

        Ragspierre in reply to Chem_Geek. | June 30, 2015 at 4:55 pm

        “If you like your plan, you can keep your plan”.

        You really are too stupid to live.

        Barry in reply to Chem_Geek. | June 30, 2015 at 8:53 pm

        You earn nothing when you accept an IOU from the government. I have little doubt that my SS payments will end up worthless, which is why I invested some of my income in a non-government plan.

        Funny, you label it “republican capitalism” when I point out that the democrat politicians that made you the promises will not, and can not live up to them. Let’s call it what it really is, crony ponzy scheme socialism that doesn’t work.

        Estragon in reply to Chem_Geek. | June 30, 2015 at 11:39 pm

        Because your crooked union paid crooked politicians to raise your benefits without funding them as required by law, you now think current taxpayers should make up the difference to you co-conspirators?

        Not an Illini taxpayer, but if I were, I would sooner see you set to set out to sea on a raft, with a day’s ration of food and water and a pat on the butt for luck.

    MouseTheLuckyDog in reply to MrE. | June 30, 2015 at 10:19 pm

    A born and bred Chicagoan.

    Please be honest. You got paid much better then you would have been paid in the private sector in the same job. You got a better pension then most people in the private sector. You probably got your job
    because you are politically connected.

    YOu sucked off the Illinois teat for a long time. Now it’s run dry. Tough shit.

A testament to the numerical illiteracy of politicians, public unions, and public workers. It’s no wonder they waited until reaching The White House in order to pass Obamacare.

llinois has a reputation for being largely rural, yet bafflingly Democratic.

I have two words for you….Cook County.
The rest of the state is solidly red.

    Midwest Rhino in reply to herm2416. | June 30, 2015 at 10:59 pm

    Three county Quinn they called the last governor, might have been four. They gerrymandered the other districts so there are other Democrats, cutting many cities in half to do it.

    Rauner won by 5%, but a lot of damage has been done over the decades.

The need (e.g. environmental stability) to meet government obligations, is part of the justification for inflated asset prices financed with progressive debt. Presumably, it also justifies the imperative to form “fair” trade deals in order to preserve the dollar’s status as a global reserve currency. I wonder if it’s possible to unwind the artificial economy without destroying the real economy.

Michael Haz | June 30, 2015 at 6:14 pm

I say this as a proud resident of Wisconsin: Raise the Illinois taxes sky-high, then double them again! Fund all of Illinois’ various deficits in one year! Do it!

As it is, the industrial/office park developments in Wisconsin within 30 miles or so of the Illinois border are exploding with (formerly) Illinois based companies, and with new facilities for companies like Amazon who looked at building in Illinois and didn’t. And the housing near the state border? Booming! Every Township, Village and City is seeing huge upticks in construction of new single family homes, condos, and apartments. Thank you, former Illinois residents!

That, plus I hate the Bears.

http://pjmedia.com/lifestyle/2013/08/03/theres-plenty-of-money-its-just-the-government-doesnt-have-it-congressman-keith-ellison/

‘There’s Plenty of Money, It’s Just the Government Doesn’t Have It’ — Congressman Keith Ellison

Yet.

Midwest Rhino | July 1, 2015 at 1:18 am

They had a deal worked out where they reduced the fixed COLA, but they went to court and lost so the state has to pay up. Rauner campaigned saying he would pay the pensions, not sure that will change but they at the very least have to change it going forward. iirc, the court even said they had to keep the promise for people working now, even newer hires. Not sure how that can be.

They need a voucher system maybe … fire a lot of people. Chicago public schools some of the worst schools in the nation, but some of highest paid … after the strike it went to $92K average plus those benefits. That was the strike right before the 2012 election.

Only showing fraud or racketeering could stop/reduce the payments I’d guess, but all Democrat appointed judges anyway I suppose. Another issue is they figured like 8.5% returns and that is surely closer to 5%. If they made any risky investments chasing yield, they could get hit hard pretty soon here.

Some teachers got big pay boosts last couple years, then retired at 55. Could hire two new teachers at same cost, and those high cost teachers got dumped into the retirement funding, saving the local school system, if I understand it correctly. Of course for the same money they could have been working, but then local schools would have had to fund it, so they used/abused they pension funds as an escape. So some go teach at the college or other job for ten years, while getting the pension. such a deal. Rest of us schmucks fund them, no such deals.

Madigan is “the boss” loyal to unions, but I’m sure there is no quid pro quo there. heh

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