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Absurdity reigns while Illinois falls

Scorpio

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#1
Absurdity reigns while Illinois falls

Illinois House Speaker Michael Madigan answers questions along with Illinois Senate President John Cullerton on Tuesday in Springfield. (Justin L. Fowler/The State Journal-Register via AP)

Sun-Times Editorial Board
Tuesday in Springfield was 24 hours of absurdity.

Remember this day as people continue to leave Illinois, as businesses take a pass on setting up shop here, as social service organizations cut programs for the elderly and disabled, as the unemployment rate continues to soar above the national average, as public universities lose top talent.

Nothing anybody was peddling in the Legislature or governor’s office Tuesday even approached a real solution. Nothing offered up would even begin to bring financial certainty and stability to state finances, taxes and funding.

EDITORIAL

The Democratic leadership’s spending plan, first passed by the House last week, was $7 billion short on revenue. It was nothing but a political document, a way to put Gov. Bruce Rauner on the spot — sign this joke or you will be to blame when the schools don’t open — and he made clear he would never sign it.

But Rauner’s own solution was only marginally more responsible. Completely reversing a stand he took just last week, the governor now wanted the Legislature to approve a stopgap measure to fund the state through the end of year, pulling money out of old pants’ pockets and forgotten wallets — one-time tricks. He would fund the worthiest causes — homeless programs, state parks and domestic violence prevention programs — but only by raiding the state’s Rainy Day Fund and the like. His “bridge plan,” as he would be the first to agree, would do nothing to improve long-term government stability and predictability.

Rauner remains an inept rookie politician. He still thinks like a private equity guy, not like a governor. He understands how power works in private business — he who has the most money wins — but not in politics. And he continues to treat the great city of Chicago, truly the beating heart of a healthy Illinois, like a corporate subsidiary to be shed if it fails to meet its quarterly earnings projections.

Case in point was the simplistic thinking behind Rauner’s veto last week of a bill that would have saved Chicago taxpayers $1 billion in the short-term by spreading out funding payments for police and fire pensions over a longer period of time. Rauner called that “kicking the can down the road,” which would be true if Mayor Rahm Emanuel had not just late year pushed through $755 million in tax and fee increases, including the largest property tax in modern Chicago history, precisely to partially solve the pension funding problem.

That’s not kicking the can down the road. That’s a mayor who knows that to now impose another $300 million tax hike could be devastating to the city.

Fortunately, even a few Republicans in the Illinois General Assembly couldn’t see the sense in kicking Chicago when it’s down — not when the city is doing its damnedest to get up — and voted Monday with the Democrats to override Rauner’s veto.

Rauner continues to insist on some degree of acceptance of his pro-business and anti-union “turnaround agenda” reforms before he’ll contemplate higher state taxes, though finding additional revenue ultimately is the only way a balanced state budget will be achieved. We sure wish we could divine Rauner’s bottom line on that.

And House Speaker Michael Madigan continues insist that Rauner’s reforms would only hurt the middle class. But we’d like to know Madigan’s real bottom line, too. Or is he determined not to budge even an inch, biding his time until after the November elections, putting raw politics ahead of what’s best for Illinois?

Meanwhile, Illinois continues its sad and unnecessary decline.

Follow the Editorial Board on Twitter: @csteditorials

# Illinois budget Gov. Bruce Rauner Springfield Illinois

http://chicago.suntimes.com/opinion/absurdity-reigns-while-illinois-falls/
 

andial

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#2
Isn't it really just a Chicago metro area problem dragging down the state much like NYC metro used to drag down NY state?
 

gringott

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Isn't it really just a Chicago metro area problem dragging down the state much like NYC metro used to drag down NY state?
State workers are everywhere. Chicago is just the biggest pimple getting ready to burst.
 

Uglytruth

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#5
Only 63 shootings over the holiday weekend in Chi-Congo. The natives are restless. Good thing you can't have guns in that cesspool or it would be a lot worse.
 

searcher

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#7
Illinois Lawmakers Override Bill Veto To Ease Chicago Pension Payments, Propose "Financial Transaction Tax"


by Tyler Durden - 8:05AM


In yet another twist in the Chicago pension saga, Illinois lawmakers voted to override a veto by Governor Bruce Rauner and allow the city to defer payments to fund pensions.

The Senate voted 39-19 and the House voted 72-43 in to overturn the veto, in what is seen as a stunning result in Chicago's bid to reduce payment amounts into public safety workers' pensions. At the heart of the matter is a 2010 state law was requiring Chicago to have its public safety workers' pensions 90 percent funded by 2040, and under that law Chicago's contribution would jump to nearly $834 million in 2016 from $290.4 million in 2015. The new legislation will now alter that law, and according to Reuters, reduce the 2016 payment to $619 million and allows for smaller increases through 2020, while pushing the timeline for police and fire funds to become 90 percent funded out to 2055. The police and fire funds are only 26 percent and 23 percent funded respectively.



Chicago mayor Rahm Emanuel had argued that if Governor Bruce Rauner's veto wasn't overturned, a $300 million property tax hike for city property owners would have had to taken place, something Emanuel had branded the "Rauner Tax". Rauner had called the bill a "terrible policy" and said in a statement that the measure would end up costing Chicago taxpayers $18.6 billion over time.

Confirming how tense in the state are, House speaker Michael Madigan told reporters after the vote "I think it was interesting the governor had nothing to say about the override. I was raised not to cause embarrassment for people so I didn't raise it."

In context, as we discussed previously, the unfunded liabilities for Illinois were head and shoulders above other cities and will eventually need to lead to higher tax increases as part of any workable solution that is able to be put together - if any. Raising debt will also be more difficult after Moody's downgrading of Chicago to Ba1.



With millionaires fleeing Chicago as it is and decreasing the tax base, lawmakers know that more than just a property tax is going to have to take place to solve these stunning deficits. Operating without a budget for 11 months and poised to end the fiscal year on June 30 with a $6.2 billion shortfall to add to a stack of unpaid bills in the amount of $6.8 billion, lawmakers are revisiting an old idea: a tax on trading.

A bill is in its early stages that would target trades on the CME, CBOE, and other markets based in the state according Bloomberg reports. The proposal would impose a tax of $1 per contract for transactions where an agriculture product is the underlying commodity, and $2 per contract for everything else including futures and options. The bill exempts trades in retirement accounts and those involving a mutual fund.

At a hearing last Thursday in Springfield, CME Group Executive Chairman Terry Duffy said a financial transaction tax would be a disaster for the state's economy.

From Bloomberg

Speaking at the event, CME Group Inc. Executive Chairman Terry Duffy said a financial transaction tax would be a disaster for the state’s economy. His Chicago-based company, which owns the Chicago Mercantile Exchange, handles futures contracts linked to everything from key stock indexes to agricultural commodities and interest rates.

“CME Group and our colleagues in the industry are engines of job creation and economic opportunity for the state,” Duffy said at an Illinois House Revenue and Finance Committee hearing. “If a financial transaction tax is enacted in Illinois, our customers will leave our markets, and we will be forced to consider alternatives to remain competitive in our global industry.”

The bill does have a bit of support, as Richard Whitney, an attorney from Carbondale, Illinois spoke on the behalf of a state alliance supporting the bill saying that a "speculation tax" would help resolve the state's budget deficit.

“The single most dramatic, single-bullet solution would be what is sometimes called a financial transactions tax, or more specifically I think what we’re talking about here, a speculation sales tax,” Whitney said at the hearing.

* * *

What comes of the latest "single-bullet solution" plan to solve decade's worth of complete fiscal irresponsibility and bloated entitlements is unknown, but CME Group's Terry Duffy revealed what the response would be for the CME if such a tax was passed:

"This is an 800 percent increase on the traders that trade on our exchange today. Would they move their business? Absolutely. If we need to leave Illinois because of any irrational decisions coming out of the state legislature that could affect our business, we have 29 data centers to choose from."


http://www.zerohedge.com/news/2016-...ase-chicago-pension-payments-propose-financia
 

edsl48

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#10
I live in a small Illinois town and it too is as bad as Chicago in relative terms. OUr police and fireman pension funds are millions of dollars underfunded yet the populace and politicians jump on plans for new dog parks, splash pools and very expensive paved bike trails. Bringing the subject up gets one branded as an old skinflint that is against progress as the entitlement minded citizenry vote in the politicians wit the biggest giveaway programs. Our schools are on a financial warning list yet we have astroturf fields, sports centers and a new high school swimming pool is on the way not to mention plans for a new ice rink so we can have an ice hockey team.
So to answer the question is it just Chicago; no it is not. The whole state is full of entitlement minded individuals who haven't got a clue as to what is on the horizon regarding future real estate tax bills and the debt they are passing to their children.
 
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TAEZZAR

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#11
I live in a small Illinois town and it too is as bad as Chicago in relative terms. OUr police and fireman pension funds are millions of dollars underfunded yet the populace and politicians jump on plans for new dog parks, splash pools and very expensive paved bike trails. Bringing the subject up gets one branded as an old skinflint that is against progress as the entitlement minded citizenry vote in the politicians wit the biggest giveaway programs. Our schools are on a financial warning list yet we have astroturf fields, sports centers and a new high school swimming pool is on the way not to mention plans for a new ice rink so we can have an ice hockey team.
So to answer the question is it just Chicago; no it is not. The whole state is full of entitlement minded individuals who haven't got a clue as to what is on the horizon regarding future real estate tax bills and the debt they are passing to their children.
Orygun is no different, PERS (public employee retirement system) is our biggest single state expense.
All of the states will soon face the problem of paying the bill & the slugs will revolt.
 

andial

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State workers are everywhere. Chicago is just the biggest pimple getting ready to burst.
If it weren't for 911 funds and all the extra money coming from Washington going to NY for rain storms and terror threats to fund it's pensions it would be worse than Chicago.
 

southfork

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#13
Gota love those government unions right, truth be told its probably 3x worse than they admit, and they reelected deadfish emmanuel, some people deserve what they get. The chicago way right.
 

Uglytruth

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#14
I thought all the "big tobacco" obscene tax money was going to save all the kids, schools, pave roads & cure cancer.
Now it looks like I'm just supporting amature athletics & the facilities. The edumacation da kiz git is wertless to emploierz.
 

<SLV>

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#17
I'm so glad Scott Walker took on the public employee unions in Wisconsin. We no longer have a budget defecit, and employment is growing.
 

Aurumag

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Ensoniq

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Promises are easy, it's making the payments that are hard
 

Uglytruth

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#20
Anyone know what "agreement" they came to for Detroit? They are broke to but I think they figured out a way to kick the can farther down the road. I know pensions were a big part of that.
Detroit has the gull to run radio spots saying they are "coming back baby!"

The way to fix IL pension problem is simple. Buy them a cheap watch with poison on it so when they "retire" the get the cheap watch and really expire.
Great solution to the problem of those pesky retirees that pay into a system their whole lives and just live to darn long to collect their retirement.
Don't they know thief's in suits blew it all faster than they were paying into the "corrupt system"? It will also speed up the estate tax collection.
But remember no one in charge is ever at fault.
 

TAEZZAR

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Well, at least now I know it's not just us Californians who can go to hell. Chicagoans too!
I am a 3rd generation (ex) Californian. The little town I grew up in, went to hell, Orange County went to hell, So. Cal. went to hell.
So I went to Orygun, now I am in HELL !!!
 

the_shootist

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Well, at least now I know it's not just us Californians who can go to hell. Chicagoans too!
(Particularly Chicago) Illinois and (the whole of southern) California are two of the boat anchors that are dragging down what was once a great country. It is what it is my friend...nothing personal, just business
 

TAEZZAR

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#24
(Particularly Chicago) Illinois and (the whole of southern) California are two of the boat anchors that are dragging down what was once a great country. It is what it is my friend...nothing personal, just business
I watched SoCal go from staunch conservative to socialist/commie, in about 30 years, from the mid 60's to about the mid 90's.
We were invaded by rejects, losers, queers, misfits, welfare seekers & illegals. Now the roads are clogged & traffic moves at a snails pace.
We have to go down there on occasion & I hate it.
 

gringott

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I'm a Chicagoan born and raised, and I have lived in and also visited California over the years. Think I'm staying in Kentucky even with it's flaws.
 

Ensoniq

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#26
Obama has set the stage for civil war. I wonder which side will prevail,the anti gunners or supporters of the 2nd.

I've got my popcorn

Hillarious story today about a key black lives matter leader convicted of "lynching"

Was crying and wailing in court I don't want to go to jail

The spine isn't deep on this bunch
 

andial

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I watched SoCal go from staunch conservative to socialist/commie, in about 30 years, from the mid 60's to about the mid 90's.
We were invaded by rejects, losers, queers, misfits, welfare seekers & illegals. Now the roads are clogged & traffic moves at a snails pace.
We have to go down there on occasion & I hate it.
I moved to Orange County from 1978 to 1982 thought it was the best place on earth.
 

latemetal

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I'm so glad Scott Walker took on the public employee unions in Wisconsin. We no longer have a budget defecit, and employment is growing.
https://www.washingtonpost.com/news...-deficit-and-tax-cuts-fact-checker-biography/ The man is a liar...and for the pension fund, it was in great shape before the liar came along...
It’s worth noting the actuarial reports have shown the retirement system funding at 99 percent or greater not only during Walker's tenure, but dating back to 2003. Wisconsin's pension system has long been viewed as a national model.
 
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TAEZZAR

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I moved to Orange County from 1978 to 1982 thought it was the best place on earth.
Your were there while it was transitioning. It was far better with the orange trees, lima beans & corn fields.
In 1960/1, I studied architecture at Orange Coast College & our instructor, a small time developer, told us to buy land around the airport.
He said a big industrial boom was coming. I told my dad & said "I won't live long enough to see that airport area be worth a damn".
By 1966 it was well on its way & by 1978, when you got there, it was in full swing. Dad died in 1995, he ate his words.
Also, you were there at the beginning of the Reagan Era, everything was looking good in those days.
If it was so great, why were you there for only 4 years ? (sarc)
 

andial

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Your were there while it was transitioning. It was far better with the orange trees, lima beans & corn fields.

If it was so great, why were you there for only 4 years ? (sarc)
Had to go back home to work with family who needed help.