Illinois State budget—the deadbeat granny State
I’ve decided to continue this series on the Illinois budget. When finished, I plan a post or two on Arizona and its new law concerning illegal immigration within the State. Then, I’ll return to previously planned posts.
The following is from “The Illinois State Comptroller’s Quarterly,” Daniel W. Hynes, Comptroller, Edition 35, April 2010, page 1.
“Through the first three quarters of fiscal year 2010 (The State’s fiscal year runs from July 1, 2009 through June 30, 2010—my addition), the state’s cash flow position continued to deteriorate with the backlog of General Revenue Fund bills reaching historic levels. At the end of March, the volume of unpaid bills from the General Funds in the
Comptroller’s Office stood at $4.496 billion (outstanding bills that need to be paid of 4.496 BILLION DOLLARS!—my addition) while at this time last year payables totaled $3.401 billion. Just as significantly, the state has had to prioritize critical payments such as debt service and other obligations vital to the operating of state programs such as General State Aid to Education. The state has also had to accelerate large Medicaid disbursements in order to continue qualifying for increased federal stimulus funding revenues. As a result, the backlog includes unpaid transfers and vouchers from the first quarter of the fiscal year and those delays have become increasingly problematic. (The first quarter of the fiscal year, of course, is from July 1, 2009 through September 30, 2009. So the State is at least six months behind on the payment of some bills with only three months left in the fiscal year when the above was written. Expenditures are suppose to be paid in the same fiscal year in which the debt occurred—my addition.)
In March the state made the first payment of $506 million towards $2.25 billion in short-term borrowing loans that were issued to address fiscal year 2009 bills. The remaining $1.75 billion plus interest must be repaid by June 10th of this year, further exacerbating cash flow issues for the remainder of the fiscal year.” (This is the cost of borrowing to pay for programs that the State didn’t have enough revenue to support—spending more than the State is receiving. I don’t know how much the interest rate was or the length of the loan. However, the interest owed on a 2% simple loan of $2.25 billion for 6 months would be twenty-two million, five hundred thousand dollars [$22,500,000]. Can the State afford to pay millions of dollars in short term interest when it can’t even afford to pay its present legal obligations? Legal obligations because the State spends much more money than it collects and the State DOES IT DELIBERATELY!—my addition)
The following are from selected newspaper articles printed in the Peoria Journal Star:
1) Peoria Journal Star, 4/10/2010, page B1: “Unpaid state bills imperil programs”
“Peoria—When Springfield (the State Capital—my addition) doesn’t pay $5.5 billion worth of bills, people in Peoria suffer.
That’s the projected backlog by the end of June. Then, already struggling social service agencies face the prospect of additional cuts in the coming fiscal year.
‘This has been an ongoing issue for the last two or three years,’ said Gina Edwards, marketing director for the Heart of Illinois United Way.” (Of course, this organization is a nonprofit charitable organization. Why is the State “donating” money to charitable organizations? Is this part of its priority problem?—my addition)
“A similar scenario is unfolding at Easter Seals (another nonprofit charitable organization—my addition), which is owed $462,000 by the state, according to Jim Runyon, director of grants and governmental affairs. That’s roughly 7 percent of Easter Seals’ $6.5 million operating budget.
2) Peoria Journal Star, 5/06/2010, page B1: “State has failed in its obligation”
“Canton—Spoon River College voted Wednesday to issue $3.5 million in bonds that taxpayers will have to repay over the next several years, because the state remains behind in its payments to the school.”
3) Peoria Journal Star, 5/06/2010, page B5: “State has failed in its obligation”
“It’s hard not to be disappointed to have to take this action,’ college President Robert Ritschel said. ‘It’s a strong indicator that the state has failed in its obligation to provide support to community colleges.’
“Maguire (Spoon River College Trustee Dave Maguire—my addition) also said the college is receiving only 75 percent of the funding it should be getting from the state.
‘It’s a cash-flow problem,’ he said. (The State doesn’t have any cash to flow! The State spends more money than it receives in revenue and does it year after year after year!—my addition)
4) Peoria Journal Star, 5/15/2010, page B1: “Delinquent dollars difficult to deal with”
a) “Heartland Community Health Clinic has yet to see the money for a $157,000 grant that started last July.”
b) “Crittenton Centers is owed $215,000.” “At Crittenton Centers, some of the $215,000 in backlogged bills date to October. The agency just started to use a line of credit to make payroll.” (page B3)
c) “… the Human Service Center is short almost $4 million thanks to bills that haven’t been paid by the state of Illinois.”
5) Peoria Journal Star, 5/15/2010, page B3: “No IOUs, but no money either”
“Programs shut down, organizations near bankruptcy as Illinois ignores unpaid bills”
“A supplier refused to sell bullets to the Department of Corrections unless it got paid in advance. (Good for the supplier! Obviously, the owner(s) has learned that it’s not wise to trust the State of Illinois to pay its bills. Cash up front or no product provided. It’s the only logical way to deal with a deadbeat State which spends more than it collects year, after year, after year. What would you do as a business owner?—my addition) 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.” (Excuse me, but it is the legislature, not the governor, who allocates money. If he was illegally spending money for years then he should have been impeached and convicted sooner. Instead, he was re-nominated by the Democratic Party and reelected by the people of Illinois—my addition)
“Some schools have tried to shame Illinois into paying by posting signs announcing how much the state owes. (The State can’t pay money that it doesn’t have. The State doesn’t have because it spends more money than it collects and has been for years—my addition.) The website http://www.illinoisisbroke.com/ details the state’s financial mess. Associations hold rallies and write letters to the editor. (Most of these are from Associations who receive money from the State and, almost without exception, they want a tax increase rather than spending cuts because they still want to receive their cut of the pie. They actually encourage the “spend now, worry about revenue later” mentality now in play at the State General Assembly—my addition.)
The state still remains months behind.
Illinois is on track to end the current fiscal year with about $6 billion in unpaid bills. Budget proposals for the coming year—when the state faces a $13 billion deficit—assume the same thing will happen again. (The members of the State Legislature do not collectively have the political will to do the only fiscally responsible action—set priorities and then cut, cut, cut until the anticipated revenues equal the expenditures as required by the State Constitution—my addition.)
The state owes money for all kinds of services provided in its name, such as medical care for the elderly and disabled and day care for the working poor.”
“Many agencies have borrowed money to keep the doors open, but service providers say that’s getting harder to do—banks are more reluctant to lend money on a promise that the state will pay up someday.”
“State leaders have no plan to catch up on the bills anytime soon, not with a $13 billion deficit to tackle. The Pew Center on the States said last year that in percentage terms, Illinois’ deficit is nearly as big as the gap in California, the gold standard for states in crisis.” (Illinois—the State that gave Barack Hussein Obama to the nation. No wonder he is so good at spending money!!!—my addition)
6) Peoria Journal Star, 5/15/2010, page A4: “How much does Deadbeat Illinois owe you” (a Peoria Journal Star editorial—my addition)
“What’s your business? How much are you owed by the taxpayers of Illinois for duties already performed, or for goods and services already provided? How late is the state in paying you? What percentage impact are those late payments having on your overall budget? What are you doing to cope? Layoffs? Bankruptcies? Closings? Who are the human victims of the state’s failure to pony up? Any specific anecdotes? Feel free to make any additional comments.”
“But most folks with any sense of fairness appreciate the injustice of being stiffed, of effectively working for slave wages, of the kind of fiscal immorality on display here.” (All brought about because the State Legislature refuses to follow the Constitution of the State of Illinois and balance the budget. Instead it spends, spends, spends! As I’ve said, it’s easy to spend other people’s money! Irresponsibility thy name is the Illinois General Assembly!—my addition)
“We’re trying to educate citizens so that they know what’s at stake and so they can make better choices than they have in the past at the ballot box.” (And these same editorial writers have supported some of the biggest spenders in their election bids including State Representative Michael Smith of Canton and State Senator David Koehler of Peoria. I believe he lives in Peoria although his home office in my 2007-2008 “Illinois Handbook of Government” lists his office as being in Pekin—my addition.)
I’ve decided to continue this series on the Illinois budget. When finished, I plan a post or two on Arizona and its new law concerning illegal immigration within the State. Then, I’ll return to previously planned posts.
The following is from “The Illinois State Comptroller’s Quarterly,” Daniel W. Hynes, Comptroller, Edition 35, April 2010, page 1.
“Through the first three quarters of fiscal year 2010 (The State’s fiscal year runs from July 1, 2009 through June 30, 2010—my addition), the state’s cash flow position continued to deteriorate with the backlog of General Revenue Fund bills reaching historic levels. At the end of March, the volume of unpaid bills from the General Funds in the
Comptroller’s Office stood at $4.496 billion (outstanding bills that need to be paid of 4.496 BILLION DOLLARS!—my addition) while at this time last year payables totaled $3.401 billion. Just as significantly, the state has had to prioritize critical payments such as debt service and other obligations vital to the operating of state programs such as General State Aid to Education. The state has also had to accelerate large Medicaid disbursements in order to continue qualifying for increased federal stimulus funding revenues. As a result, the backlog includes unpaid transfers and vouchers from the first quarter of the fiscal year and those delays have become increasingly problematic. (The first quarter of the fiscal year, of course, is from July 1, 2009 through September 30, 2009. So the State is at least six months behind on the payment of some bills with only three months left in the fiscal year when the above was written. Expenditures are suppose to be paid in the same fiscal year in which the debt occurred—my addition.)
In March the state made the first payment of $506 million towards $2.25 billion in short-term borrowing loans that were issued to address fiscal year 2009 bills. The remaining $1.75 billion plus interest must be repaid by June 10th of this year, further exacerbating cash flow issues for the remainder of the fiscal year.” (This is the cost of borrowing to pay for programs that the State didn’t have enough revenue to support—spending more than the State is receiving. I don’t know how much the interest rate was or the length of the loan. However, the interest owed on a 2% simple loan of $2.25 billion for 6 months would be twenty-two million, five hundred thousand dollars [$22,500,000]. Can the State afford to pay millions of dollars in short term interest when it can’t even afford to pay its present legal obligations? Legal obligations because the State spends much more money than it collects and the State DOES IT DELIBERATELY!—my addition)
The following are from selected newspaper articles printed in the Peoria Journal Star:
1) Peoria Journal Star, 4/10/2010, page B1: “Unpaid state bills imperil programs”
“Peoria—When Springfield (the State Capital—my addition) doesn’t pay $5.5 billion worth of bills, people in Peoria suffer.
That’s the projected backlog by the end of June. Then, already struggling social service agencies face the prospect of additional cuts in the coming fiscal year.
‘This has been an ongoing issue for the last two or three years,’ said Gina Edwards, marketing director for the Heart of Illinois United Way.” (Of course, this organization is a nonprofit charitable organization. Why is the State “donating” money to charitable organizations? Is this part of its priority problem?—my addition)
“A similar scenario is unfolding at Easter Seals (another nonprofit charitable organization—my addition), which is owed $462,000 by the state, according to Jim Runyon, director of grants and governmental affairs. That’s roughly 7 percent of Easter Seals’ $6.5 million operating budget.
2) Peoria Journal Star, 5/06/2010, page B1: “State has failed in its obligation”
“Canton—Spoon River College voted Wednesday to issue $3.5 million in bonds that taxpayers will have to repay over the next several years, because the state remains behind in its payments to the school.”
3) Peoria Journal Star, 5/06/2010, page B5: “State has failed in its obligation”
“It’s hard not to be disappointed to have to take this action,’ college President Robert Ritschel said. ‘It’s a strong indicator that the state has failed in its obligation to provide support to community colleges.’
“Maguire (Spoon River College Trustee Dave Maguire—my addition) also said the college is receiving only 75 percent of the funding it should be getting from the state.
‘It’s a cash-flow problem,’ he said. (The State doesn’t have any cash to flow! The State spends more money than it receives in revenue and does it year after year after year!—my addition)
4) Peoria Journal Star, 5/15/2010, page B1: “Delinquent dollars difficult to deal with”
a) “Heartland Community Health Clinic has yet to see the money for a $157,000 grant that started last July.”
b) “Crittenton Centers is owed $215,000.” “At Crittenton Centers, some of the $215,000 in backlogged bills date to October. The agency just started to use a line of credit to make payroll.” (page B3)
c) “… the Human Service Center is short almost $4 million thanks to bills that haven’t been paid by the state of Illinois.”
5) Peoria Journal Star, 5/15/2010, page B3: “No IOUs, but no money either”
“Programs shut down, organizations near bankruptcy as Illinois ignores unpaid bills”
“A supplier refused to sell bullets to the Department of Corrections unless it got paid in advance. (Good for the supplier! Obviously, the owner(s) has learned that it’s not wise to trust the State of Illinois to pay its bills. Cash up front or no product provided. It’s the only logical way to deal with a deadbeat State which spends more than it collects year, after year, after year. What would you do as a business owner?—my addition) 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.” (Excuse me, but it is the legislature, not the governor, who allocates money. If he was illegally spending money for years then he should have been impeached and convicted sooner. Instead, he was re-nominated by the Democratic Party and reelected by the people of Illinois—my addition)
“Some schools have tried to shame Illinois into paying by posting signs announcing how much the state owes. (The State can’t pay money that it doesn’t have. The State doesn’t have because it spends more money than it collects and has been for years—my addition.) The website http://www.illinoisisbroke.com/ details the state’s financial mess. Associations hold rallies and write letters to the editor. (Most of these are from Associations who receive money from the State and, almost without exception, they want a tax increase rather than spending cuts because they still want to receive their cut of the pie. They actually encourage the “spend now, worry about revenue later” mentality now in play at the State General Assembly—my addition.)
The state still remains months behind.
Illinois is on track to end the current fiscal year with about $6 billion in unpaid bills. Budget proposals for the coming year—when the state faces a $13 billion deficit—assume the same thing will happen again. (The members of the State Legislature do not collectively have the political will to do the only fiscally responsible action—set priorities and then cut, cut, cut until the anticipated revenues equal the expenditures as required by the State Constitution—my addition.)
The state owes money for all kinds of services provided in its name, such as medical care for the elderly and disabled and day care for the working poor.”
“Many agencies have borrowed money to keep the doors open, but service providers say that’s getting harder to do—banks are more reluctant to lend money on a promise that the state will pay up someday.”
“State leaders have no plan to catch up on the bills anytime soon, not with a $13 billion deficit to tackle. The Pew Center on the States said last year that in percentage terms, Illinois’ deficit is nearly as big as the gap in California, the gold standard for states in crisis.” (Illinois—the State that gave Barack Hussein Obama to the nation. No wonder he is so good at spending money!!!—my addition)
6) Peoria Journal Star, 5/15/2010, page A4: “How much does Deadbeat Illinois owe you” (a Peoria Journal Star editorial—my addition)
“What’s your business? How much are you owed by the taxpayers of Illinois for duties already performed, or for goods and services already provided? How late is the state in paying you? What percentage impact are those late payments having on your overall budget? What are you doing to cope? Layoffs? Bankruptcies? Closings? Who are the human victims of the state’s failure to pony up? Any specific anecdotes? Feel free to make any additional comments.”
“But most folks with any sense of fairness appreciate the injustice of being stiffed, of effectively working for slave wages, of the kind of fiscal immorality on display here.” (All brought about because the State Legislature refuses to follow the Constitution of the State of Illinois and balance the budget. Instead it spends, spends, spends! As I’ve said, it’s easy to spend other people’s money! Irresponsibility thy name is the Illinois General Assembly!—my addition)
“We’re trying to educate citizens so that they know what’s at stake and so they can make better choices than they have in the past at the ballot box.” (And these same editorial writers have supported some of the biggest spenders in their election bids including State Representative Michael Smith of Canton and State Senator David Koehler of Peoria. I believe he lives in Peoria although his home office in my 2007-2008 “Illinois Handbook of Government” lists his office as being in Pekin—my addition.)
posted by Christian Gunslinger at 4:57 AM
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