Tag: John Cullerton

Illinois Credit — Worst in the Nation

Illinois fell to the bottom of all 50 states in the rankings of a major credit ratings agency Friday following the failure of Gov. Pat Quinn and lawmakers to fix the state’s hemorrhaging pension system during this month’s lame-duck session.

Standard & Poor’s Ratings Service downgraded Illinois in what is the latest fallout over the $96.8 billion debt to five state pension systems. The New York rating firm’s ranking signaled taxpayers may pay tens of millions of dollars more in interest when the state borrows money for roads and other projects.

“It’s absolutely bad news for taxpayers,” said Dan Rutherford, the Republican state treasurer.

Illinois received its bottom-of-the-pack ranking when it fell from an “A” rating to “A-minus.”

via Chicago Tribune.

Well there you have it.  The Machine, the Illinois combine has driven us straight into the gutter.  The cost of the billions and billions of debt is going up and up.  The taxpayers are stuck with the bill.

It’s old news but I’d like to review this for the record.  I have only three (3) Republicans that represent me.  Every single other elected official that represents me is a Democrat.

Alderman Bob Fioretti – D
Mayor Rahm Emanuel – D
Chicago City Clerk – D
Cook County Clerk of Courts – D
Cook County Treasurer – D
Cook County Assessor – D
Cook County Recorder of Deeds – D
Cook County States Attorney (DA) – D
Cook County Board Member – D
Cook County Board President – D
IL House Seat, Derrick Smith (Current under indictment) – D
IL Senate Seat, Patricia Van Pelt – D
IL Governor, Pat Quinn – D
IL Lt. Governor, Sheila Simon – D
IL Attorney General, Lisa (I won’t investigate my father) Madigan – D
IL Comptroller, Judy Baar Topinka – R
IL Treasurer, Dan Rutherford – R
IL Sec. of State, Jesse White – D
US House, Danny Davis – D
US Senate, Mark Kirk – R
US Senate, Dick Durbin – D
US President, Barack Obama – D

What is that?  3 of 22?  If you just take the State folks it’s 2 of 17.  2 of 17.  That’s 11.76% of my elected persons are not Democrats.

So let me ask you, if I was looking to blame someone for the mess that we’re in where would be a good place to start?

IL Finances Heading to Social Unrest

“I think it’s going to reach a point where there’s either social disorder or bankruptcy before people will act,” he said.

via Crain’s Chicago Business.

Ya, that sounds about right.

But let’s back-up a little.  This is a quote from a story about how back the finances are in Illinois.

A Blue Ribbon Panel put together a report which was released this morning.  It’s damning in the extreme.  The whole report can be found here.

I’ll write more about this later… I have to catch a plane.

$2M in Unemployment to Inmates

More than 1,100 people have collected nearly $2 million in unemployment benefits while they were in county jails or state prisons, including $43,000 that went to a person in the Cook County Jail, a state agency said Tuesday.

Now they may face state or federal criminal fraud charges as well as having to repay what they shouldn’t have taken in the first place, said Greg Rivara, spokesman for the Illinois Department of Employment Security.

In Cook County alone, there were 296 inmates tied to $722,689 in wrongful payments. In Will County, 21 inmates collected $85,159. Lake County was another leader with 20 inmates collecting $84,533, the agency said.

via Chicago Tribune.

WT…?!  You couldn’t make this stuff up.

#1. Where are the two wonder-twins of justice in this?  Nothing from Lisa Madigan or Anita Alvarez?  Why?  Where have they been?
#2.  Who the hell is running this agency?  Jail and prison records are actually a matter of public record.  You’re telling me no one ever bothered to cross-check the payouts against another public record?

#3.  It kinda makes you wonder how much fraud is really going on in the system.  After all, The Machine has their corrupt friends running all these agencies there is really no limit to how much might be missing.

Certainly not last… This is just another fine example as to why any service run by the government is doomed to ultimately doomed to fail.  People are incentivized to cheat the system.  But government employees are also incentivized to get as many people as possible into the system so they can justify their jobs and get more jobs and thus become more politically powerful.  As such, no one is watching the money.
The government that works the least is most often the government that works best.

Illinois – Worst Financial Shape Ever

Bloomberg L.P., the big New York financial data firm, is holding its fall municipal-financing conference on Wednesday, and guess what the title is for the special panel on the Land of Lincoln?  Try Land of Entropy.  Yes, sports fans, the panel titled “Illinois Treading Water” is set for 1:45 p.m. and, according to a synopsis, not too much good will be said about our fine state.

“California debt is beating Illinois bonds by the most in three months as investors choosing between the two lowest rated U.S. states reward efforts to bolster the finances of the nation’s biggest pension in California,” it says.  But though they passed a version of pension reform in California, nothing good has happened here.

“Illinois lawmakers failed to advance any measures in a special session Aug. 17,” the synopsis says.  “Standard & Poor’s cut the state’s credit.”  And, at last check, “Illinois carried a backlog of about $8 billion in unpaid bills, not including pension obligations.

“More: Illinois’ ratio of pension assets to liabilities is “the lowest among U.S. states.”  It concludes, “What is the outlook for significant defaults in the state? How can Illinois get its fiscal house in order?”

via Crain’s Chicago Business.

Rahm, Michael Madigan, Pat Quinn, John Cullerton, and the rest of The Machine will go down in history as fiddling while Illinois burned.

Jimmy John’s Leaving Illinois, Florida Bound

Jimmy John Liautaud is moving part of the sandwich chain that bears his name to Florida next year, making good on a threat issued in 2011 after Illinois hiked its corporate tax rate.

The founder of Jimmy John’s Gourmet Sandwiches said during a Sept. 18 panel discussion in Chicago that he will relocate the company’s licensing division to Florida, where he plans to move in early 2013. Mr. Liautaud said in January 2011 that he applied for residency in Florida out of anger when Gov. Pat Quinn raised the corporate tax rate to 5 percent from 3 percent.

via Crain’s Chicago Business.

Ya see!!  This is what happens when you raise taxes.  It’s called the Laffer Curve and it’s a real phenomenon.  Illinois is in the down portion of the curve where when you raise taxes you get less income.  Can someone explain that to Gov. Quinn, Michael Madigan, John Cullerton, Rahm, and the rest of The Machine?

Raising taxes — especially on “the rich” — only shifts the actual tax burden further down into the middle class.

What we need is a wholesale rewrite of the tax code.  But that’s a much, much longer post.

Legislative Change Means $670 million More for Teachers’ Pensions

The state will have to come up with another $670 million for the teacher pension system in the next budget after a retirement fund panel crunched the numbers and adjusted its assumptions.

The Teachers’ Retirement System lowered what it expects from investments from 8.5 percent to 8 percent. The pension fund’s leadership also increased a variety of other assumptions, including how long it expects retired teachers to live. The fund covers teachers outside Chicago.  …

The state is paying $2.7 billion into the fund in its current budget. Without any adjustments, the state would have owed about $2.89 billion in the new budget year that begins next July 1.But the changes approved Friday increased that price tag to $3.37 billion. All told, the state will have to pay $670 million more than this year.

via Chicago Tribune.

Consider, we’re going to pay $3.3 billion into the teachers pensions and another $3 billion on debt service.  That’s $6 billion next year that could have gone to pay for services for the poor and the elderly but instead are going to the politically connected and union members (… I realize that’s redundant.)

But this may be the best line of all:

Senate President John Cullerton and House Speaker Michael Madigan, both Chicago Democrats, recently suggested that changes to the pension system would have to get done in January at the earliest. That’s a post-election period when more lame ducks are freer to take politically risky votes, and the bar to pass legislation with an immediate effective date drops from three-fifths to a simple majority.

Allow me to translate:  Fixing the pensions is going to be very unpopular and thankfully our experience is that voters have short memories.  We also don’t care how much more money this costs the state (after all, all the bond holders and the teachers unions are our buddies.) We’re also not sure that we can get all the Democrats to go along.  So we to avoid any embarrassment — and to make sure the unions make the campaign donations they promised before the election — we’re going to put this off until next year.

The Machine is like a casino… the house never loses.