Unlike Wis. and Ohio, Illinois, the Democrat 'Deadbeat State,' Gets Little Media Attention
Sometimes it's really hard to understand why certain events get heavy national press coverage while others which are arguably at least as significant and serious get little if any notice. This is one of them. Scott Walker, who solved a $3 billion projected deficit in Wisconsin, is a media and leftist (but I repeat myself) arch-villain because much of the balancing was done by adjusting public-sector employee contributions towards health and pension benefits to more closely but still more generously resemble what's seen in the private sector, and by reducing public-sector employees' ability to restore them to their formerly out-of-control levels through collective bargaining. Ditto for John Kasich in Ohio, where the projected deficit was $8 billion.
Meanwhile, the state of Illinois defers billions of dollars of payments to vendors by four or more months because, despite 67% and 46% increases in personal and business income taxes, respectively, it still doesn't have the money to come even close to staying current. Yet virtually all we've seen from the national press on the problem is one Associated Press story conveniently filed on a Saturday. Here are key paragraphs from the report by Christopher Wills (bolds are mine throughout this post):
Story Continues Below Ad ↓Deadbeat state: Ill. owes billions in unpaid bills
Drowning in deficits, Illinois has turned to a deliberate policy of not paying billions of dollars in bills for months at a time, creating a cycle of hardship and sacrifice for residents and businesses helping the state carry out some of the most important government tasks.
Once intended as a stop-gap, the months-long delay in paying bills has now become a regular part of the state's budget management, forcing businesses and charity groups to borrow money, cut jobs and services and take on personal debt. Getting paid can be such a confusing process that it requires begging the state for money and sometimes has more to do with knowing the right people than being next in line.
As of early last month, the state owed on 166,000 unpaid bills worth a breathtaking $5 billion, with nearly half of that amount more than a month overdue and hundreds of bills dating back to 2010, according to an Associated Press analysis of state documents.
The true backlog is even higher because some bills have not yet been approved for payment and officially added to the tally. This includes the Illinois health care agency, which says it is sitting on about $1.9 billion in bills from Medicaid providers because there's no money to pay it.
... The unpaid bills range from a few pennies to nearly $25 million. In early September, for example, Illinois owed $55,000 to a small-town farm supply business for gasoline, $1,000 to a charity that provides used clothing to the poor, $810,000 to a child-nutrition program.
... Illinois leaders join in bemoaning the crisis but haven't been able to find a solution.
"God, how much more can our people take?" said Comptroller Judy Baar Topinka, a veteran politician responsible for trying to pay a seemingly infinite stack of bills with the finite amount of money approved by legislators and the governor.
(Former Governor Rod) Blagojevich's replacement, Democrat Pat Quinn, raised income taxes and trimmed spending, but that money was gobbled up by other needs, primarily rising pension costs. Under budget agreements with legislative leaders, all Democrats, bills continued to go unpaid.
As noted above, the tax increases were incredibly steep -- yet nothing changed with vendor payments. Ohio and Wisconsin balanced their budgets without raising taxes -- and their governors are really, really, really bad guys.
As a reminder, the people of Illinois were specifically told that the vendor payment problem would be solved by the latest round of tax increases:
“We have just come through the worst economic crisis in our lifetime…and we have not paid our bills,” Senate President John Cullerton, D-Chicago, told lawmakers shortly before the vote. “We are going to have to cut…even with this tax. We’re going to have to spend less money then we have in the last two years. And it’s going to be tough. But we are going to have our bills paid.”
Obviously, that hasn't happened, and there is no realistic prospect that it will happen. Givebacks subsequent to the tax increases by the state's public-sector unions were almost non-existent. At the time of the tax increases, Governor Quinn thought he could prove that his state's way of "fixing" things would be as effective as Wisconsin and Ohio and would cause less pain for everyone. How's that workin' out for you now, buddy?
Demonstrating its usual lack of class, the wire service which so often fails to identify a person's political party affiliation in circumstances involving Democrats involved in crime or scandal chose to run an accompanying photo not of Quinn but of Ms. Topinka, and made sure to tag her as a Republican -- as if the state's comptroller has power to do anything about the decrepit situation the state's Democratic governor and legislature have handed her.
Do you think the mess in Illinois would remain so relatively invisible if the state decided to wait 90 days or so to pay its employees so that vendors and employee alike would be on an equal footing? How is seriously delaying payments to independent contractors, consultants, small and large businesses, and small or large not-for-profits any different? It's really not. So why is it getting so little attention? Why should I not believe that the reason has a lot to do with Quinn's and the legislative majority's political party, and the fact that tax-and-spend is really working out to be tax-and-bankrupt?
Cross-posted at BizzyBlog.com.
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Comments
rats are still gorging themselves while the house burns
Submitted by MidAmerica on Sat, 10/15/2011 - 10:46pm.
I can't tell you for how long the state has made late payments not just to legitimate vendors who really need their money but also places like nursing homes and schools who are months behind in receiving payments. One of the last cuts I heard about was cutting funding for mentally handicapped people.
This in a state that sells every tax increase as a tax being "for the kids".
Re:Detroit
Submitted by deniser55 on Sun, 10/16/2011 - 9:33pm.
Soon those rats will be selling city property to pay their pensions, while those poor kids go to hell, unless it's their kids.
Tom...you're killing me.
Submitted by NeoKong on Sat, 10/15/2011 - 10:59pm.
"Sometimes it's really hard to understand why certain events get heavy national press coverage while others which are arguably at least as significant and serious get little if any notice."
I had to read that twice to decide if you were serious.
all those chickens
Submitted by Rackie on Sat, 10/15/2011 - 11:29pm.
coming home to roost
I know some physicians in Illinois. They purged Medicaid....
Submitted by drsamherman on Sun, 10/16/2011 - 12:57am.
...patients over two years ago after the state delayed payment for their services over six months. Yes we do have a professional obligation to treat, but that does not mean we have to do provide services to the point of penury. Rendering a professional service means you remit the bills on a timely basis. Illinois has not done that so the state can explain to Medicaid patients why so many physicians are telling the state to go to hell.
Don't these people realize
Submitted by deniser55 on Sun, 10/16/2011 - 9:40pm.
Don't these people realize that they are being fleeced by their elected officials and the public/ private union leaders, many of which are triple dipping on pension funds. Not to mention their Cadillac health care benefits for life, while the people who depend on a small SS check upon retirement, get smaller ans smaller checks each month and their health care rationed, needed medications denied or replaced with another brand each month. These people and the rules all need to be thrown out and honest people need to be put into office which will bring us back to the constitution of our founding.
Progressive, Deadbeat State
Submitted by OldmanRick on Sun, 10/16/2011 - 6:28am.
What the IL, Chicago styled, corrupt politicos are hoping for is an Obama bailout, where the productive states pay off the progressive states' bills. Several of the current unicorn states besides IL include NY, CA, and Michigan. Notice closely that these states are hotbeds of progressivism run by socialist dims who like nothing more than spending money they don't have.
They are spending tax payer
Submitted by deniser55 on Sun, 10/16/2011 - 9:45pm.
They are spending tax payer money that isn't their to spend because they are stealing it from the future. While our children get poorer their children will be the next generation of elite and our children/grandchildren will be enslaved by them. Their turn up their noses at the crying masses while they enjoy their vacations in the Vineyard or their world travels on our children's hard labor.
Casade failure
Submitted by oldfart on Sun, 10/16/2011 - 7:24am.
If Illinois does not start paying their bills it will end up in a fiscal casade failure. More businesses will fail and people will begin leaving the state trying to find work. Another alternative will be the expansion of the 'underground' economy where transactions are conducted in cash. All of this will further bring about an increasing loss of revenue. A cycle that feeds on itself.
Don't worry about the US Govt running out of money. A few major states, New York, Illinois and California moving to defacto default will cause more serious problems. For the population on the street.
First hand knowledge
Submitted by GeneralAl on Sun, 10/16/2011 - 8:23am.
Unfortunately. I reside in the Land of Stinkin'. Quinn won election last year by garnering 110% [I'm not kidding!] of the vote in some Cook [Better said Crook!] County precints. He scared many voters, including Republicans, by threatening to cut aid for special needs and handicapped. He won and guess where the cuts were made? Democrats always accuse and demonize Republicans for things they eventually do but STUPID voters still take the bait.
Something that is not pointed out in this article is the 8 billion dollar loan Illinois has outstanding. Quinnoccio wanted to refinance the financing to obtain more time to pay. That sure sounds like the average deadbeat debtor who ends up in foreclosure.
Oh yeah, those tax increases, besides giving all state workers an 8% pay increase, were used to hire a number of consultants for a few million dollars plus the Mighty Quinn gave 80 of his staff members 20 to 30% pay increases. His reasoning, they deserve a raise as much as anyone in the private sector. By the way, as DimQuinn was raising my taxes, my little company where I work part time had awarded me a small increase. Quinn not only took that, but a little bit more of what I was getting to begin with. Its so nice to know that I not only pay for lazy deadbeat welfare recipients [Not all, but many!], I also pay for worthless political appointees of a lying, two-faced, DEMOCRAT governor! Bring Back Blogojevich [Sorry for the spelling Rod!]!
"Old Soldiers never die, they just fade away"!
Rod was stealing you blind
Submitted by deniser55 on Sun, 10/16/2011 - 9:50pm.
Rod was stealing you blind too! Wonder what would happen if an honest fiscal conservative was elected in that state for the next four elections? The answer is the PUBLIC UNION wages and benefits, they elect those who will give them the raises and benefits.
Selective taxation
Submitted by canuck on Sun, 10/16/2011 - 9:29am.
Note that IL has granted exemptions to some of the big employers in order to keep them from leaving the State. CAT is at the top of that list as they are especially portable and have very high labor costs relative to what they could obtain in the South. Many of their employees would follow them if they relocated to a right to work state further eroding the IL tax base. Once the NLRB is emasculated on January 1st they will be free to move without threat of a Boeing type lawsuit as only two commissioners will be available to vote.
Any move to bail them out will have to be made quickly as they probably suspect Barry Hussein will not be re-elected and they have no chance of a bailout from the current house. BH will have to find some "diversion dollars" to help out....watch for any unspent funds be sent to Chicago and Springfield.
Barry and his campaign
Submitted by deniser55 on Sun, 10/16/2011 - 9:56pm.
Barry and his campaign managers are already aggravating the college and high school students to vote. They need the brain damaged immature voters and the lock step black voter to sweep him back into office. He's a radical, when will people start to see that. I'm hoping that voters who don't pay attention until late in the campaign season are paying attention earlier, because if they aren't, they are easily swayed by this deceiver-in-chief.
Counting on Obama
Submitted by ohio granny on Sun, 10/16/2011 - 3:32pm.
Illinois is counting on their buddy in the White House to bail them out. Why should they balance their budget by cutting the money that goes to the union goons? They expect the rest of the country to bail their crooked @sses out. Ohio and Wisconsin have done what was needed and will continue to do so, but don't expect the taxpayers of Ohio and Wisconsin to bail out Illinois. Live within your means or pay the price.
While it's annoying that the
Submitted by Rusty Shackleford on Sun, 10/16/2011 - 3:35pm.
While it's annoying that the press is doing its job in protecting the Democrat Party's agenda, I have to place some anger on conservatives on this one as well. With all of the class warfare the Left has been whipping up from everyone from Obama to the degenerate Fleabaggers, every prominent conservative should mention this at any and every opportunity. Every candidate in the presidental debates should mention this in the answer to any question involving economic policy. It should be mentioned every single time.
Every conservative commentator should mention and remention this because this isn't even well known in conservative circles. I know Neal Boortz mentions this occasionally (as he does a couple other states that have had the same results: I think they are Oregon and Connecticut) but even that's not enough.
The way the media works is that issues like this are buried, and they are only addressed when conservative outlets expose it to such a degree that the media must come in to do damage control. Since we aren't even at the damage control stage we know that this is a fact that few people know about! We must get this issue exposed to the point where the media is worried enough that they must step in to do some damage control.
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Bill Maher: The Joy Behar of HBO.
Paul Krugman: The Joy Behar of The New York Times.
Really each and every
Submitted by deniser55 on Sun, 10/16/2011 - 10:00pm.
Really each and every presidential candidate should be hammering away at Obama every chance they get, they are more worried about their own political interests. If they were smart?????They would be using this time to also weaken him for the one who will win the general election. They should also spend their time hammering him during the debates instead of each other because it's only giving the democrats ammo and the media will be looping all of it during the general election.
I work for the state every
Submitted by wouldubelieveit on Sun, 10/16/2011 - 9:21pm.
I work for the state every person live in Illinois Right now is 70,000 in debt to the state and the asses keep on sending and steeling no good men to stop them
Illinois
Submitted by Mobydubido on Mon, 10/17/2011 - 10:02am.
the St. Louis Post-Dispatch ran a story this morning on how Illinois deferred payments are killing vendors state wide.
Tax rate increase does NOT = Tax revenue increase
Submitted by Great Debater on Mon, 10/17/2011 - 10:32am.
When will those on the left (ever?) learn that increasing tax rates does NOT necessarily increase tax revenues (certainly not long term ... say, in even just 5 years after those being taxed have adjusted)? Two examples:
1) Someone selling hotcakes on a street corner. He sets the price of his hotcakes to balance profit margin with sales volume in order to maximize his total profits. Set price too high, and demand falls and he loses money. Set price too low, and his profit margin falls and he loses money. So, increasing prices beyond what his market can bear will actually lower his profits and cause his customers to go to another vendor. Now, if you replace the words "price" with "tax rate," "sales volume" with "tax base," "profits" with "tax revenues," and "another vendor" with "another city / state / country," the formula applies directly to taxes.
2) Say a hypothetical city can't (or won't) say "no" to its teachers', police', firefighters', or other unions. So, to meet the terms of its additional contractual obligations, it needs more tax revenue. So, they raise their property tax rates. People start to leave and the tax base goes down, causing tax revenues to actually go down, too. So, the city raises tax rates again. More people leave, and .... well, you see where this goes. Eventually, the state has to take over the city's finances and re-do all the city's contracts and other obligations. The city finds itself both billed as one of the "10 Worst Places to Live in America" and one of the "Worst Places for Businesses and Careers in America." Oh, the city wasn't "hypothetical," it was Waterbury, CT in the late 1990's & early 2000's.
How Do You Solve A Problem Like Illinois
Submitted by Avitar on Mon, 10/17/2011 - 11:31am.
Breaking Illinois up between Wisconsin, Iowa Missouri and Indiana won't help that Illinois voters have elected five or is it now six Governors who have ended up in prison. Chicago has been the most corrupt city government ever since prohibition.
The country may need to declare Illinois unincorporated federal territory for a while.
Have you seen California?
Submitted by AdrianVance on Mon, 10/17/2011 - 1:40pm.
Those states are pikers compared to California and now Jerry Brown is off on new spending kicks! These people are totally insane! Stop the world....
The Two Minute Conservative at http://adrianvance.blogspot.com has political analysis, science and humor. Now in the top 3% on Kindle.
Let's hope these poor souls wake up and ditch IL.
Submitted by russedav on Mon, 10/17/2011 - 7:10pm.
Let's hope these poor souls wake up and ditch IL. I wonder why they haven't been sued for breach of contract. Wouldn't a lawyer love that? Or do the ABA Dem whores disallow that for fellow Dem states? But Wisconsin voters miraculously woke up, so anything's possible, even in clueless IL where I lived for a few years.