Pat Quinn – JamesBosco.com

IL Public Pension Debt at $133 Billion

Ten U.S. states have public pension liabilities that are at least as big as their annual revenues, according to a Moody’s Investors Service report released on Thursday that found the Illinois pension bill was equal to 241 percent of its revenues. …

According to Moody’s, Illinois has the largest net pension liability in the country, $133 billion, equal to $10,340 per person in the state. The liability is equal to 19.8 percent of the state’s gross domestic product.

via Reuters.

It’s worth nothing that the $133 billion owed for the pensions does NOT include the over $45B in state issued bonds or over $8B in unpaid bills sitting on the Treasurer’s desk. (Source.)

The reality is every man, woman, and child in Illinois owes the state at least $14,400.

Every man, woman, and child in the U.S. owes the G $53,400.

So if you live in Illinois add up your net worth and subtract $67,800. Of course, if your a taxpayer you actually owe about 2x this amount… but that’s another story.

SEC Hits Illinois with Securities Fraud Charges

Illinois broke federal securities laws in misstating the true health of the state’s depleted pension funds when going out onto the bond market between 2005 and early 2009, the Securities and Exchange Commission announced Monday. …

The finding of securities fraud doesn’t subject the state to any fines or penalties but amounts to a warning to potential investors about the state’s past financial misdeeds.

The action focuses mostly on misstatements made during impeached ex-Gov. Rod Blagojevich’s administration, though Gov. Pat Quinn’s administration wasn’t spared entirely in the federal order.

“Municipal investors are no less entitled to truthful risk disclosures than other investors,” said George S. Canellos, Acting Director of the SEC’s Division of Enforcement in a prepared statement.

“Time after time, Illinois failed to inform its bond investors about the risk to its financial condition posed by the structural underfunding of its pension system,” Canellos said.

via Sun-Times Politics.

Wow!! So, the article says (twice) that there are no fines or penalties that go with this… But what the article doesn’t say is that the State is now subject to a civil suit by bond-holders.

Q: Where was Lisa Madigan while this was happening?

Just curious.

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.

Illinois Unemployment at 9.1%

Unemployment across Illinois rose to 9.1 percent in August, the third straight month of increases in the state, the Illinois Department of Employment Security said Thursday. …

Unemployment in July was 8.9 percent. Increases in the unemployment rate in June, July and August followed nine months of slow but steady declines. The federal government said earlier this month that the national unemployment rate dropped from 8.3 percent to 8.1, but the decrease was thought to primarily be driven by people dropping off unemployment rolls because they stopped looking for work.

via Crain’s Chicago Business.

Not a good sign.

It’s time for Madigan, Rahm, Quinn, and the rest of the cabal to stop lining their own pockets and start balancing budgets and becoming a little more business friendly.

Do anti-business people understand that no businesses = no taxpayers. No taxpayers = no tax revenue. No tax revenue = no government jobs or services?

Government in and of itself creates nothing of value. It’s all done with other people’s money. What about that is so hard to understand?

Google and the Merchandise Mart

Good News!!

Crain’s Chicago Business reports: Google is in talks to lease some 500,000 square feet in the Merchandise Mart, sources say. The deal would include a rooftop deck. The Internet search giant, looking to move employees from the Libertyville headquarters of its recently acquired Motorola Mobility, has an office for tech workers near the Mart.

via Chicago Tribune.com.

Chicago is ripe for a tech explosion. Of course we have a serious debt problem in this city, and state. That will make some companies too scarred to move/expand here. But if we can get that under control Chicago can become a major player in the tech space.

If Rahm and Quinn can get our pension issues under control companies will relocate here from California. Our taxes in Illinois are way too high and complicated — a/k/a suck — but the situation is far worse in California. It’s freakishly expensive to do business there.

This could just be the beginning of hope. Now we just need to fix race relations, balance the budget, improve our schools, hire more police, find a State’s Attorney who will actually ask that criminals be placed in prison, find an Attorney General who’s not related to the most corrupt politician in the state, and fix an aging infrastructure.

Raise Taxes — Lose Revenue

The current taxes on a pack of cigarettes in Chicago include $2 from Cook County, 98 cents from Illinois and 68 cents from the city. If Quinn signs the latest increase, the taxes in Chicago will be $4.66 per pack, compared with 99 cents in East Chicago.

On Monday, a pack of Marlboros at a 7-Eleven on North Wells Street in downtown Chicago ran $9.69, before the state tax increase. At a 7-Eleven on Hohman Avenue in Hammond, the same smokes went for $6.20. …

“The cigarette tax increase passed the Senate last week. Quinn has said the hike is necessary to generate about $350 million for the Medicaid program. …

In 2006, the Cook County tax doubled to $2 per pack. …

But even as taxes on cigarettes climbed, the revenue in Cook County dropped. In 2006, the county garnered more than $200 million in cigarette taxes. That number plummeted to $131 million in 2010, according to annual reports.

Let’s stop here for a second and think about that. In 2006 the Cook County Government DOUBLED the cigarette tax in order to RAISE REVENUE. What was the result? Revenue fell by a third!!

Legislators and experts agree some drop-off can be expected as tax increases price people out of the market or alter smoker behavior. The percentage of U.S. adults who smoke declined from nearly 21 percent to 19.3 percent between 2005 and 2010, according to the Centers for Disease Control and Prevention. …

So during roughly the same period smokers (albeit nationally) kicked the habit to the tune of 8%. But Cook County revenue off by 34.5%.

Cook County Sheriff Tom Dart has said he thought most of the revenue dip was due to fraud.

Dart and County Board President Toni Preckwinkle joined forces in September to add more staff to the county’s Revenue Department to investigate fraud claims. Within three weeks, investigators seized more than $353,000 in unstamped cigarettes and imposed more than $400,000 in fines, Dart said. …

Well Mr. Dart, if your own statement is true then you completely suck at your job. Your missing $69 million and you find $400,000. You’ve located 0.58% of the missing money. Less that one percent.

So what’s really happening here? We know that the double the tax, yet revenues off by a third, only 8% quit, and Tom Dart can’t find the missing money. So where’s the money?

Larry DeBoer, professor of agricultural economics at Purdue University, noted that Indiana benefits as taxes spike in neighboring states.”There’s no doubt that commerce goes back and forth across the borders,” DeBoer said. “If Illinois increases its tax by $1, we’ll realize about $10 million more in cigarette tax revenue.”

via Chicago Tribune.

Aaaah. There’s the money!

In Illinois we’re governed by complete morons. The Laffer Curve is a real thing. People will change their behavior to engage in tax avoidance. In this case is primarily involves not buying cigarettes in the City and County but in the collar counties and in Indiana.

More to the point, wouldn’t you think that when you double the tax and see revenue falling and falling and falling that someone would have stood-up and said, “Maybe we should roll-back that tax before we lose any more money?” But not in this county.

Stupid Quinn and his ilk are going to keep raising taxes until there’s no one left to tax.

lllinois Moves Toward Insolvency

We’re now making national news:

After trying to tax Illinois to governmental solvency and economic dynamism, Pat Quinn, a Democrat who has been governor since 2009, now says “our rendezvous with reality has arrived.” …

Illinois was more heavily taxed than the five contiguous states (Indiana, Kentucky, Missouri, Iowa, Wisconsin) even before January 2011, when Quinn got a lame duck Legislature (its successor has fewer Democrats) to raise corporate taxes 30 percent (from 7.3 percent to 9.5 percent), giving Illinois one of the highest state corporate taxes, and the fourth highest combination of national and local corporate taxation in the industrialized world. Since 2009, Quinn has spent more than $500 million in corporate welfare to bribe companies not to flee the tax environment he has created.

Quinn raised personal income taxes 67 percent (from 3 percent to 5 percent), adding about $1,040 to the tax burden of a family of four earning $60,000. Illinois’ unemployment rate increased faster than any other state’s in 2011. Its pension system is the nation’s most underfunded, and the state has floated bond issues to finance pension contributions. Quinn’s recent flirtation with realism — a plan to raise the retirement age to 67 and cap pension cost-of-living adjustments — is less significant than the continuing unrealistic expectation that some Illinois’ pension investments will grow 8.5 percent annually. Although the state Constitution mandates balancing the budget, this is almost meaningless while the state sells bonds to pay for operating expenses (in just 10 years the state’s bonded debt has increased from $9.4 billion to $30 billion), underfunds pensions and other liabilities, and makes vendors wait (they are owed $5.6 billion).

…

Peterson, a professor of government at Harvard, and Nadler, a doctoral candidate also at Harvard, say collective bargaining rights for government employees pose “a dramatically new challenge to the viability” of American federalism. They cite studies demonstrating that investors’ perceptions of risk of default are correlated with the rate of unionization among government employees. Higher percentages of government employees who are unionized, and larger Democratic shares of state legislative seats, correlate with increases in state borrowing costs.At least 12 percent of Americans change their residences each year, often moving to more hospitable economic environments. In a system of competitive federalism, Peterson and Nadler write, “If states and localities attempt in a serious way to tax the rich and give to the poor, the rich will depart while the poor will be attracted.” And government revenues and expenditures vary inversely.

via Boston Herald.

Illinois may fail before California. Businesses are fleeing. Residents are fleeing. Illinois is shrinking, dying.

For all of the Democrats efforts to “help” the poor, how will the poor be helped when Illinois becomes nothing more than one big Detroit? The rich will all leave — they have the means to do so. Those left I guess will feed on each other.

I need to make sure history get written correctly. The suffering of the poor that is coming is blood on the hands of Richie Daley, Michael Madigan, Lisa Madigan, Rod Blagojevich, George Ryan, Pat Quinn, Rahm Emanual, Jesse White, Danny Davis, Jesse Jackson, Todd Stroger, John Daley, and the rest of the Illinois combine… the Machine.

Derrick Smith Must Resign or Be Expelled — Dems Own It

The Democratic party was silent prior to the election of State Rep Derrick Smith on the issue of his resigning or getting off the ticket for allegedly accepting a $7000 cash bribe from an undercover FBI agent posing as a daycare center owner in exchange for a $50000 grant.

The silence of the Democrats is now over as they are calling for the resignation of Derrick Smith in unanimity, as if from a chorus, they are signing the same song, “Get out!”

Illinois House Speaker Michael Madigan and Minority Leader Robert Cross found an issue they can agree as they named members to a committee to investigate the charges and to call on Smith to “Get out!”

via Examiner.com.

Silent?! The Dems weren’t silent:

The growing pressure on Democratic state Rep. Derrick Smith contrasts with the silence from party leaders who avoided such criticism in the days after the arrest, when it might have affected his primary race.

Some, including U.S. Rep. Danny Davis and Ald. Walter Burnett, 27th, encouraged voters to support Smith to ensure the West Side seat stays in Democratic hands. But that changed the day after his easy victory over Tom Swiss, a former Cook County Republican Party official.

Now Democratic leaders are moving to oust Smith and pick a replacement to run in the November general election.

Davis said that while he asked voters to cast their ballots for Smith, it was about ensuring the seat stayed in Democrat control and was not a show of support for Smith. Davis said Smith should not appear on the November ballot given the ethical cloud he now faces.

“I was glad to see Derrick win the election, but I think in reality one can say that Democrats won the election,” Davis said. “I don’t think they were necessarily voting for Derrick, but I think they were saying ‘Democrat, Democrat, Democrat.'” …

Quinn likewise refused to call for Smith’s resignation before the election, only to change his tune Wednesday while on a trade mission in Brussels.

“The governor believes Rep. Smith should resign” because the charges represent a “cloud hanging over” him, said Quinn spokeswoman Brooke Anderson.

House Speaker Michael Madigan poured more than $60,000 into the race before Smith’s arrest. Madigan has declined to comment on the situation.

via Chicago Tribune.

The Illinois Machine, made up of both Democrats and Republicans, is working overtime here. The Machine is controlled by Chicago Democrats — the GOP’ers in their mist are really just tolerated because they play along — and they own this.

Jesse White, Danny Davis, Michael Madigan, Lisa Madigan, Pat Quinn… what have you done for the poor folks whom you represent? Quinn’s new budget calls for cutting Medicaid spending by $2.7 billion next year. Well who’s that going to hurt Governor?

Last year this cabal doubled our income taxes. This year they want to kill Medicaid. How about stopping the corruption that costs our cities and state billions every year?

The whole lot-of-’em need to be kicked out to the street and have their pensions cancelled.