Illinois is the 'Venezuela of the Midwest'

Jazz wrote earlier in the week about the dreadful financial crisis in the state of Illinois. The deadline for a budget deal is July 1st which makes tomorrow the last day for lawmakers to try to arrive at the state’s first budget agreement in three years. From CNN Money:

After decades of historic mismanagement, Illinois is now grappling with $15 billion of unpaid bills and an unthinkable quarter-trillion dollars owed to public employees when they retire.

The budget crisis has forced Illinois to jack up property taxes so high that people are leaving in droves. Illinois may soon have to take the unprecedented step of cutting off sales of lottery tickets because the state won’t be able to pay winners.

It will get worse if lawmakers can’t reach a budget compromise by Friday. This would be the third year in a row that America’s fifth-largest state has failed to pass a constitutionally required budget…

Rather than dealing with the problem, Illinois continued to reward the state’s powerful unions with more generous benefits.

Ted Dabrowski of the Illinois Policy Institute points out that the budget crisis creates a spiral of higher taxes that push more people out of the state. That cuts state revenues and makes it harder for the state to deal with the mounting debt. From U.S. News and World Report:

Demographics aren’t exactly on the state’s side to bring in more government revenues. Temporary tax increases to help cover debt and pension payments expired at the end of 2014, and the number of workers employed throughout the state in May – contributing income taxes to the state’s coffers – was more than 125,000 smaller than it was 10 years ago.

 “Illinois has shrunk three years in a row. We used to have 26 representatives in Congress. We’re predicted to have 16 in a couple of years. That’s what’s happening to the population,” says Ted Dabrowski, vice president of policy and a spokesman at the Illinois Policy Institute.

The Chicago Tribune ran an editorial today pointing out the outrageous attempt at blame-shifting being carried out by Democratic House Speaker Michael Madigan. Madigan is demanding that Republicans provide half the votes for a package of tax cuts he will propose to deal with the crisis that happened on his long watch:

Every budget that over-spent and over-borrowed since 1983, with the exception of those in 1995 and 1996, advanced through the House with Madigan’s blessing. He was speaker. During at least the last five years, House Republicans didn’t play along with the Democratic budgets.

Many of those budgets balanced, if that’s the word, thanks to borrowing, also known as running up taxpayers’ debts. Some budgets balanced because of grossly inflated tax projections. Some budgets balanced because lawmakers skipped full pension payments. Some budgets brimmed with hidden pork projects. In fact, some budgets from 2003 to 2015 when Democrats controlled all three branches of lawmaking were crafted by Madigan’s own staff. During that time, the unfunded pension liabilities in the state’s five funds more than doubled.

Concurrently, Madigan tightened House rules that allow him to dictate who runs House committees; whether committees are allowed to meet; how bills get assigned to committees; whether bills get out of committees; whether they get a vote on the House floor.

And now he wants 30 Republicans, in the minority for all but two years of his tightfisted reign, to equally share blame for this state’s financial crisis.

U.S. News notes that some have taken to calling Illinois the “Venezuela of the Midwest” and that seems like a fairly apt comparison. As in Venezuela, it was mostly left-leaning politicians who have had a supermajority in the state for many years offering generous giveaways. That combined with a refusal to make necessary adjustments when it became obvious the state had a problem has led to this looming disaster. Also as in Venezuela, leaders are trying, unfairly, to blame the crisis they created on the opposition party. There’s no quick fix for this kind of fiscal quagmire. At some point, you simply run out of other people’s money. Illinois reaches that point tomorrow.