June 18, 2017
IL comptroller warns of 'massive fiscal crisis' by end of the month
On May 31, the Illinois legislature adjourned for their summer break without passing a state budget. There is nothing unusual about this. The state House and Senate are solidly in Democratic control while the Republicans control the state house with Governor, Bruce Rauner and for three long years, the politicians in Springfieild have been unable to agree on a budget. This has led to a fiscal mess that the state comptroller, Susana Mendoza is now referring to as a "massive crisis."
Comptroller Susana Mendoza must prioritize what gets paid as Illinois nears its third year without a state budget.A mix of state law, court orders and pressure from credit rating agencies requires some items be paid first. Those include debt and pension payments, state worker paychecks and some school funding.Mendoza says a recent court order regarding money owed for Medicaid bills means mandated payments will eat up 100 percent of Illinois' monthly revenue.There would be no money left for so-called "discretionary" spending - a category that in Illinois includes school buses, domestic violence shelters and some ambulance services.
Illinois is in a fiscal death spiral. Their bond rating is one step above junk status. And the list of consequences for the state's failure to pass a budget is a tale of woe that no state or territory - not even Puerto Rico's current bankruptcy - can match.
- If there is no state budget by June 30, 2017, the Illinois Department of Transportation announced that they would be forced to halt all state projects that could cost 30,000 jobs.
- The Illinois Lottery faces threats of removal from the Powerball and Mega Millions if there is no budget by June 30, 2017.
- Illinois owes school districts more than $1.1 billion in categorical payments for special education, transportation, bilingual and early childhood services.
- Illinois’ backlog of unpaid bills stood at record $14.5 billion as of May 31, according to Comptroller Susana Mendoza.
- The state’s Medicaid managed care organizations are owed $2 billion.
- Centerstone, a non-profit behavioral health organization that helps 16,000 clients in southern Illinois and the metro-east region, has shuttered offices and cut services amid the budget impasse, affecting 700 clients and 39 staff members throughout the state.
- The Wells Center, a drug treatment facility in downstate Jacksonville that has been operating for 50 years, was forced to shut down operations because of the budget impasse.
- Illinois’ unpaid bill backlog could hit $25 billion by FY 2019 if the state continues without a budget.
- Students and parents are looking to out-of-state colleges due to the unstable climate within Illinois’ higher education system.
- More than 1,500 employees have been laid off at public universities and community colleges throughout the state.
There is much, much more. Editor Lifson wrote today of two scandals at Illinois schools that reveal a culture of mismanagement. You pile the huge shortfall in funds that Illinois colleges are facing after June 30 if no budget is passed and you have the possibility that some schools will have to furlough students and lay off faculty.
How much longer can this intolerable situation continue? The two sides are blaming each other for the budget impasse but it's hard to see how both Democrats and Republicans aren't both to blame. Rauner's austerity budget - which includes property tax relief - is a political toxic waste dump that even many Republicans can't stomach. Meanwhile, the Democrats have proposed a fantasy budget. The numbers being used by Dems are divorced from reality and would result in an even more destructive fiscal situation.
I think both sides are secretly hoping Washington will be forced to intervene and bail them out, although Dems and Republicans claim they desire no such thing. But if the fiscal crisis tips to catastrophe and the poor, the elderly, and other marginal residents begin to suffer the consequences of gridlock, the calls for help from Washington may be hard to ignore.
"The union’s endorsement of Pritzker sets up
the 2018 Illinois election to be a showdown
between two major party candidates who are
not merely representatives of the financial
aristocracy, but are themselves members of
the highest layer of that elite. Pritzker’s
speedy endorsement by the AFL-CIO, 10
months before the 2018 primaries, is only the
latest example of the bankruptcy of the
unions and their prostration before the
Illinois unions endorse billionaire J.B. Pritzker for governor
By Kristina Betinis and Alexander Fangmann
12 June 2017
12 June 2017
On June 6, the Illinois AFL-CIO, the state-level union umbrella organization, voted to endorse billionaire J.B. (Jay) Pritzker as the Democratic Party candidate for governor in the 2018 elections.
Pritzker is an heir to the Hyatt Hotels fortune and a tech industry venture capitalist worth an estimated $3.5 billion. He announced his candidacy in April. Once referred to as “Chicago’s second mayor” by Chicago magazine, Pritzker is intimately involved with the development of Democratic Mayor Rahm Emanuel’s policies.
He and many others in his family advise the Democratic Party nationally. Penny Pritzker, Jay’s sister, was most recently secretary of commerce under President Obama. Five of the Pritzkers are listed among Illinois’ 16 billionaires, and six more are billionaires residing outside the state.
The socio-economic situation in the state of Illinois leading up to the November 6, 2018 elections is dire. The state has been without a budget for two years, leaving its colleges, universities and vital health and social service agencies to spend down their reserves, take on debt and beg from the public in order to continue operating. Multiple credit downgrades have been issued by the ratings agencies. The budget impasse orchestrated by both big business parties continues to drag on, with the two sides unable to come to an agreement on how best to slash spending on state workers’ pensions, health benefits and workers compensation.
In the context of the economic downturn following the 2008 financial crisis, the state budget impasse has accelerated certain trends, including depopulation. Illinois is currently leading the nation in population loss, with more than 105,000 residents leaving in 2016. Cities are leading the demographic decline, but rural areas have been affected too, and some towns in the southern part of the state have lost 15 to 17 percent of their population in recent years. Where the state university system was once a big draw, a reported 16,000 Illinois high school students this year went to other states for college and university education.
The union’s endorsement of Pritzker sets up the 2018 Illinois election to be a showdown between two major party candidates who are not merely representatives of the financial aristocracy, but are themselves members of the highest layer of that elite. Pritzker’s speedy endorsement by the AFL-CIO, 10 months before the 2018 primaries, is only the latest example of the bankruptcy of the unions and their prostration before the financial elite.
The AFL-CIO’s endorsement of a billionaire venture capitalist to govern a state strained by the bipartisan budget impasse is a clear expression of its own pro-capitalist and anti-working class orientation. It supports reactionary measures to bolster the profits of the corporations at the expense of the working class. The claim that making corporate America richer will improve the lot of workers is the basis for the worthless promises made by Trump, whose entire cabinet is positioned to further enrich the capitalist class by destroying whatever remains of the gains workers made in the course of a century of bitter struggles.
That Illinois Democrats are choosing to run Pritzker following the defeat of former Democratic Governor Pat Quinn in the 2014 election, not to mention the presidential campaign debacle of Hillary Clinton, says a great deal about their disconnect from the needs and concerns of the state’s working class. The endorsement of a billionaire like Pritzker is largely based on the calculation that Rauner’s intransigence in maintaining the budget impasse is harming a wide swathe of business interests that rely on various forms of state spending.
According to a report published on CapitolFax.com, the executive board barely passed the resolution to endorse Pritzker. The proposal passed with 19 votes, the required minimum, with seven no votes, two abstentions and three unmarked ballots.
The Chicago Tribune reported that several unions, including the Service Employees International Union (SEIU), the Illinois Federation of Teachers and the American Federation of State, County and Municipal Employees (AFSCME), were apparently concerned about the early endorsement, very likely worried that the selection of a billionaire like Pritzker undermines their ability to get workers to turn out for the Democratic Party.
AFSCME Council 31 said it would reserve the right to withhold its own endorsement of Pritzker in the primary election. Chicago Teachers Union President Karen Lewis, speaking at a May 23 City Club of Chicago luncheon, sought to signal skepticism, asking, “Can one oligarch replace another oligarch?... What’s going to be different?”
Illinois AFL-CIO President Michael T. Carrigan defended the federation’s early endorsement of Pritzker, saying in his statement, “The board followed a process that included meeting with the candidates and evaluating issue questionnaires. An early endorsement is necessary in order to achieve our top priority in 2018--defeating Governor Bruce Rauner, whose anti-worker proposals and refusal to compromise on a budget are destroying Illinois.”
The reality is that the Democrats were destroying Illinois and attacking workers long before Rauner came on the scene. Under former Democratic Governor Pat Quinn, and with solid super-majorities in both houses of the Illinois General Assembly, spending on higher education and social services was slashed. A report from the Center for Tax and Budget Accountability shows that since the 2000, adjusted for inflation and population, spending on higher education has fallen 41 percent, spending on human services by 34 percent, and spending on health care by 22 percent.
Quinn narrowly lost the 2014 election to Rauner as a result of mass abstention by workers in response to Quinn’s role in attacking pensions. Quinn claimed to have been “put on earth” to cut pensions, and his administration introduced a widely mocked cartoon character called “Squeezy the Pension Python” to show how pensions were supposedly squeezing the state budget of funds needed for education and social services.
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