Illinois Deep in Debt, Doesn't Pay Bills

ucfgrad93

macrumors P6
Original poster
Aug 17, 2007
17,543
8,166
Colorado
MSNBC.com said:
Paralyzed by the worst deficit in its history, the state has fallen months behind in paying what it owes to businesses and organizations, pushing some of them to the edge of bankruptcy.

Illinois isn't bothering with the formality of issuing IOUs, as California did last year. It simply doesn't pay.

Plenty of states face major deficits as the recession continues. They're cutting services or raising taxes or expanding gambling to close the gap. But Illinois is taking the extra step of ignoring bills.

Right now, $4.4 billion worth of bills, some dating back to October, are sitting in the Illinois comptroller's office waiting to be paid someday.

A supplier refused to sell bullets to the Department of Corrections unless it got paid in advance. Legislators have gotten eviction notices for their district offices because the state wasn't paying rent. One legislator said he had to use campaign funds to pay the telephone bill after service was cut off at his office.

The practice of simply putting off payments became commonplace under ex-Gov. Rod Blagojevich, who liked to spend but adamantly opposed a tax increase to help cover costs. Before he was arrested and kicked out of office, Blagojevich's toxic relationship with legislators essentially paralyzed government, so bills just piled up.
http://www.msnbc.msn.com/id/37136518/ns/us_news-life//

It is just going to get worse if local & state governments (Federal government as well) can't get their spending under control.
 

obeygiant

macrumors 601
Jan 14, 2002
4,003
3,776
totally cool
And this...

(AP) Two lawmakers say violence has become so rampant in Chicago that the National Guard must be called in to help.

State Democratic Reps. John Fritchey and LaShawn Ford made a public plea to Gov. Pat Quinn on Sunday to deploy troops.

The request comes amid a recent surge in violent crime, including a night last week that saw seven people killed and 18 wounded, mostly by gunfire.

Fritchey says Chicago has had 113 homicide victims this year. He says the police department has done a commendable job, but its resources are stretched thin.

Chicago Police Supt. Jody Weis says he appreciates the lawmakers' frustration and willingness to help, but doubts the National Guard is the best answer.
cbsnews
 

citizenzen

macrumors 65816
Mar 22, 2010
1,433
11,628
It is just going to get worse if local & state governments (Federal government as well) can't get their spending under control.
Raise taxes.

From the Christian Science Monitor...

Best move for cash-strapped states? Raise progressive taxes.

All but a handful of states have seen their revenues plunge since the great recession hit like a tsunami in 2008. State lawmakers have repeatedly slashed their budgets to address the massive shortfalls. But cutting to get out of fiscal crisis is tantamount to digging to get out of a crater.

Budget cuts deepen the recession and stifle recovery by immediately putting people out of work, reducing public and private investment, and abandoning residents in their hour of need. The long-term economic consequences are also damaging, including lost productivity, a less-skilled workforce, and reduced competitiveness.

The key to the twin goals of budget repair and economic recovery is significantly increasing progressive taxes.
 

Cursor

macrumors 6502
Jul 17, 2002
321
22
Raise taxes.

From the Christian Science Monitor...

Best move for cash-strapped states? Raise progressive taxes.

All but a handful of states have seen their revenues plunge since the great recession hit like a tsunami in 2008. State lawmakers have repeatedly slashed their budgets to address the massive shortfalls. But cutting to get out of fiscal crisis is tantamount to digging to get out of a crater.

Budget cuts deepen the recession and stifle recovery by immediately putting people out of work, reducing public and private investment, and abandoning residents in their hour of need. The long-term economic consequences are also damaging, including lost productivity, a less-skilled workforce, and reduced competitiveness.

The key to the twin goals of budget repair and economic recovery is significantly increasing progressive taxes.
You can't raise taxes on a population that is out of work. It'll just make things worse. Illinois has a unemployment rate of 11.7%, probably much higher when you factor in long-term unemployed and people that took temporary part-time jobs. The state problem, as is many states's problems is that they are getting lower tax revenue, because so many people are unemployed. How would an out-of-work person keep up with higher taxes? It would cause massive revolts along the lines of Greece, and probably worse.

The answer is to cut all the crap out of state budgets, move illegals off of health-care, prison and benefit packages and start generating jobs.

When times were booming (artificially), states increased their budgets massively. Well, now that a bust has happened, states need to reign it all back in. Increasing taxes is not the answer.
 

LethalWolfe

macrumors G3
Jan 11, 2002
9,366
119
Los Angeles
It is just going to get worse if local & state governments (Federal government as well) can't get their spending under control.
And all that we need to do to solve world hunger is make sure everyone gets enough food. As always, the devil is in the details. ;)

For example, many believe that the passage of CA's Prop 13 back in the 70's is what paved the way for many of the state's short comings today by limiting property taxes and requiring a 2/3 majority in both legislative houses to up taxes at the state level. And due to other Prop's in CA some programs are basically guaranteed X amount of money each year, as I understand it, which means that lawmakers are severely handcuffed when trying to balance the budget.


Lethal
 

Cursor

macrumors 6502
Jul 17, 2002
321
22
Doesn't Chicago have a gun ban law? How is it possible that people are getting killed by gun violence if there is a gun ban?

Seriously, the thing that would help the most would be to strike down the ban. It would wipe out a lot of the violence almost overnight. The only thing gun ban laws do is take guns away from law-abiding citizens, and the gun-related violence in Chicago illustrates that.

How do ordinary citizens protect themselves if the criminals have guns, but law-abiding citizens don't? The police aren't the answer, because cops can't be on the scene instantly and almost never are.
 

PlaceofDis

macrumors Core
Jan 6, 2004
19,232
4
Doesn't Chicago have a gun ban law? How is it possible that people are getting killed by gun violence if there is a gun ban?

Seriously, the thing that would help the most would be to strike down the ban. It would wipe out a lot of the violence almost overnight. The only thing gun ban laws do is take guns away from law-abiding citizens, and the gun-related violence in Chicago illustrates that.

How do ordinary citizens protect themselves if the criminals have guns, but law-abiding citizens don't? The police aren't the answer, because cops can't be on the scene instantly and almost never are.
the gun violence in chicago is due, in large part, to gang violence. and while bystanders are often times victims, i don't see how allowing MORE guns will solve the issue. the police are spread thin and can only do so much.

about the IL budget. our current Gov., who i don't have a lot of love for, has said that he wants to raise the income tax to help pay for the programs. while it is a burden, it is something that i do think needs to be done. but as others have pointed out, a lot of this has to do with the high unemployment rate. in reality, this state is ****ing corrupt, and nothing will change as the politicians continue to line their pockets. the amount of money some of these people make while doing nothing at all is astounding. the IL government needs to cut out the fat.
 

leekohler

macrumors G5
Dec 22, 2004
14,162
19
Chicago, Illinois
This will be repeated in just about every large state. The answer is a combination of painful spending cuts and painful tax rises.
Exactly, but most improtantly, rooting out corruption. That is our biggest problem.

With the exception of the crime,,,, sounds like California.
This cracks me up. Any violent crime that occurs happens in isolated areas that most people never even go to. It's not as if the whole city is some bloodbath. And that whole national guard thing was Daley being the dramatic wanna-be king he is- and more likely a reaction to Chicago's stupid gun ban being federally challenged.

the gun violence in chicago is due, in large part, to gang violence. and while bystanders are often times victims, i don't see how allowing MORE guns will solve the issue. the police are spread thin and can only do so much.
Sorry- he's right. When guns are illegal, the only people who will have them are criminals. And criminals can be assured that no one will be able to resist them because law-abiding citizens won't have any. It's literally like shooting fish in a barrel. Gun bans, like the drug war, DO NOT WORK. They only make criminals' lives easier.
 

SactoGuy18

macrumors 68030
Sep 11, 2006
2,737
242
Sacramento, CA USA
In the end, the solution may have to come down to this:



And no, I'm not kidding, either.

Between:

1) Spending US$350 BILLION per year in income tax compliance costs.
2) Americans putting nearly US$2 TRILLION into the illegal cash-only underground economy as an income tax avoidance measure.
3) Americans sending nearly US$13 TRILLION in liquid assets to offshore financial centers beyond US borders as an income tax avoidance measure.
4) American businesses outsourcing millions of jobs as an income tax avoidance measure.

Small wonder why we are in such bad economic shape. We need to MASSIVELY overhaul or even do away with our income tax system (including repealing the 16th Amendment to the US Constitution) so it encourages American citizens and businesses to keep their savings, capital investments, and as many jobs in the USA as possible, mostly because we no longer tax the process of earning money. And that's what the FairTax proposal (it's an actual bill in Congress--H.R. 25/S. 296) will do.

Can you imagine what would happen to the US economy if we can bring back US$15 trillion in liquid assets to the legal US financial system, no longer spend US$350 billion per year to comply with income tax laws, and bring back millions and millions of outsourced jobs?

The problems with see in state governments (as noted by the problems in Illinois originally mentioned) and the Federal government in general is caused by Americans no longer investing in the USA because of the very existence of the current income tax structure. Drastically simplifying it or doing away with it altogether will go a LONG way in real economic recovery in the long run.
 

leekohler

macrumors G5
Dec 22, 2004
14,162
19
Chicago, Illinois
In the end, the solution may have to come down to this:



And no, I'm not kidding, either.

Between:

1) Spending US$350 BILLION per year in income tax compliance costs.
2) Americans putting nearly US$2 TRILLION into the illegal cash-only underground economy as an income tax avoidance measure.
3) Americans sending nearly US$13 TRILLION in liquid assets to offshore financial centers beyond US borders as an income tax avoidance measure.
4) American businesses outsourcing millions of jobs as an income tax avoidance measure.

Small wonder why we are in such bad economic shape. We need to MASSIVELY overhaul or even do away with our income tax system (including repealing the 16th Amendment to the US Constitution) so it encourages American citizens and businesses to keep their savings, capital investments, and as many jobs in the USA as possible, mostly because we no longer tax the process of earning money. And that's what the FairTax proposal (it's an actual bill in Congress--H.R. 25/S. 296) will do.

Can you imagine what would happen to the US economy if we can bring back US$15 trillion in liquid assets to the legal US financial system, no longer spend US$350 billion per year to comply with income tax laws, and bring back millions and millions of outsourced jobs?

The problems with see in state governments (as noted by the problems in Illinois originally mentioned) and the Federal government in general is caused by Americans no longer investing in the USA because of the very existence of the current income tax structure. Drastically simplifying it or doing away with it altogether will go a LONG way in real economic recovery in the long run.
1. Agreed that the tax system needs to be simplified
2. That's illegal and should be prosecuted
3. Again- that should be illegal, and also an example of why "trickle down" doesn't work.
4. Come on. The reason jobs are outsourced is cheap labor, nothing more. We have one of the lowest tax rates in the world. What makes us unable to compete is mainly that our benefits structure is screwed up. The cost of health care benefits alone is killing our corporations and causing more outsourcing than taxes ever could.
 

mcrain

macrumors 68000
Feb 8, 2002
1,768
11
Illinois
You can't raise taxes on a population that is out of work. It'll just make things worse. Illinois has a unemployment rate of 11.7%, probably much higher when you factor in long-term unemployed and people that took temporary part-time jobs. The state problem, as is many states's problems is that they are getting lower tax revenue, because so many people are unemployed.

The answer is to cut all the crap out of state budgets, move illegals off of health-care, prison and benefit packages and start generating jobs.
Illinois has slashed from its government programs. Not a little, a lot. The number of employees has dropped drastically. I worked here at the end of the Ryan administration, and the comparison of staff from then to now is about 60-70% (just a guess). Cutting spending has gotten us here, but now it is probably time for the State to bite the bullet and raise taxes.

As for whether that will hurt the economy, I point you to historical evidence that shows that when a progressive tax rate is increased, jobs are created and the economy increases. (I linked to this in another thread).

And no, I'm not kidding, either.
I wish you were. Sigh, here we go again.

We need to MASSIVELY overhaul or even do away with our income tax system (including repealing the 16th Amendment to the US Constitution) so it encourages American citizens and businesses to keep their savings, capital investments, and as many jobs in the USA as possible, mostly because we no longer tax the process of earning money. And that's what the FairTax proposal (it's an actual bill in Congress--H.R. 25/S. 296) will do.
The fair tax proposal, in the form proposed for this country, is massively unfair, and massively regressive in nature. In Europe, where there are similar taxes (VAT, etc.), that regressive nature is offset by the huge amount of services provided by the government for the poor (see socialist health care).

Can you imagine what would happen to the US economy if we can bring back US$15 trillion in liquid assets to the legal US financial system, no longer spend US$350 billion per year to comply with income tax laws, and bring back millions and millions of outsourced jobs?
Where does that $15 trillion come from? $350 Billion? Where does that number come from? If you merely simplified the tax code and eliminated special interest tax breaks for the wealthy, you would save a huge amount too, and raise a huge amount as well.

Drastically simplifying it or doing away with it altogether will go a LONG way in real economic recovery in the long run.
I agree, we should go back to the way the tax code was a long time ago. Eliminate most or all of the deductions that are given to corporations, businesses, partnerships, and the wealthy. Eliminate the differentiation of different types of income: dividend = long term capital gain = inheiritence = gift = ordinary income. Oh, and go back to a much more progressive structure like we had for most of our history.
 

yg17

macrumors G5
Aug 1, 2004
14,888
2,480
St. Louis, MO
He is right about gangs. I just get tired of people thinking that the city is completely overrun with violent crime. It's not at all. It's a very small part where all this goes on.
It's like that with any big city unfortunately. A small area has a ton of crime, and the entire city gets a bad rap because of it. Statistically, St. Louis is one of the most dangerous cities in the country because of crime, but almost all the crime takes place in areas where, in my 24 years living here, I have never found a reason to go anywhere near, and I guarantee you anyone visiting the city has no reason to go to those areas either. And not once have I ever felt my life was in danger.
 

Rt&Dzine

macrumors 6502a
Oct 8, 2008
736
5
He is right about gangs. I just get tired of people thinking that the city is completely overrun with violent crime. It's not at all. It's a very small part where all this goes on.
You think the gun ban added to the gang violence?
 

abijnk

macrumors 68040
Oct 15, 2007
3,286
4
Los Angeles, CA
I just hope my mom doesn't lose her job. She works for the state, and my step-dad can't work in a strenuous job (due to health reasons), so they would be completely screwed. It's bad enough that she doesn't know month to month whether or not she will actually get a pay check for the work she is doing.
 

mcrain

macrumors 68000
Feb 8, 2002
1,768
11
Illinois
It's like that with any big city unfortunately. A small area has a ton of crime, and the entire city gets a bad rap because of it. Statistically, St. Louis is one of the most dangerous cities in the country because of crime, but almost all the crime takes place in areas where, in my 24 years living here, I have never found a reason to go anywhere near, and I guarantee you anyone visiting the city has no reason to go to those areas either. And not once have I ever felt my life was in danger.
You must not have been the Neon Disaster that is the Hollywood club.
 

leekohler

macrumors G5
Dec 22, 2004
14,162
19
Chicago, Illinois
Metra says chief improperly took $475,000 in vacation pay

This is the kind of corruption we're dealing with. Stories like this appear almost daily here. This is why we're in trouble- extreme corruption.

Longtime Metra executive Phil Pagano, who took his life last week, improperly took at least $475,000 in vacation pay and forged the agency chairwoman's signature on two memos, officials disclosed after meeting behind closed doors this morning.

The allegations are contained in a report drafted by special counsel James Sotos after a two-week investigation. It was released one week after Pagano walked in front of a Metra train. The Cook County state's attorney has already opened an investigation, and the attorney general's office said it, too, would begin an inquiry after hearing Sotos' report.

Metra's directors today are also expected to tighten the agency's internal practices and policies, at the recommendation of chairwoman Carole Doris.

The actions will include appointment of Metra's chief internal auditor, Eric Fernandez, as acting inspector general. Inspectors general act as internal watchdogs over public agencies.

Doris is also expected to name a committee of directors to review Metra's financial practices.

The board also will begin the search for candidates for the post of corporate compliance counsel. That person will hire outside auditors and perform other financial oversight.

Metra's board suspended Pagano with pay April 30 after Doris learned Pagano had obtained an unauthorized $56,000 "bonus" atop his $269,625 salary. Metra does not pay bonuses.

Sources had said Sotos' probe focused on whether Pagano used Doris' for 2010 and 2011.

Pagano had met with Sotos on May 5 and admitted to financial irregularities that included the vacation cash-out and advances from his retirement fund, sources said. He had made a similar confession to board members at a closed-door meeting April 30.

He expressed remorse but denied taking the money to pay for illegal or immoral activities. He said it was for family reasons.
http://www.chicagobreakingnews.com/2010/05/metra-to-get-report-on-pagano-probe.html