Tax increase keeps state government in Cuckooland

Opinion: Columns

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Jack Crowe

Well I was wrong. I said Mike Madigan would never support a tax increase. He did. As a result the state of Illinois' bankruptcy has probably been put off for another four years. And just in time.

In addition to the $8 billion that Illinois still owes to its non-bank creditors — including schools, hospitals and other not-for-profits — the interest rate on Illinois' borrowed money is skyrocketing. Illinois was something like the seventh riskiest market in the world in which to loan money based on the pricing it was getting. That puts us in the same breath as Greece, Ireland and Portugal. So with the tax increase everything is cool, right?

No. Unlike New York or California where new governors Cuomo and Brown are proposing draconian budget cuts to go along with steep tax hikes, in Illinois we only get the tax increase. In fact, our Legislature and governor are crowing that they will only increase spending during the coming years by 2 percent annually. In Illinois, that passes for miserliness. And why does no one in Illinois have the nerve to shrink the size of our government in the midst of our fiscal crisis? A cynic would say that in Illinois the politicians favor state employees over the taxpayers they serve. Others have argued that Illinois government is already about as efficient as it can be, and any further cuts would get to the bone. Once the hearty laughter stops, let's examine that premise.

Apparently, there are consultants out there who have data proving that the state employee headcount in Illinois is not too out-of-whack with our population compared to other states. But remember, this is Illinois. The headcount argument ignores that it is way more expensive to pay for our state employees than it is in most other states. I would not be surprised if an Illinois state employee, on average, costs twice what some other states pay. By laws promulgated by the Legislature, we have one of the most generous state pension plans going. You have all seen the reports about retirees making more than $8,000 a month following their government service. That costs money. And that doesn't include the sick days and other little perks that, by law, get converted to cash when state employees retire.

The headcount argument ignores that those headcount statistics are changing as we speak. Other responsible states are in the process of reducing the number of employees. Not us. It also ignores a more fundamental issue of public policy. Illinois should only have the number of state employees that it can reasonably afford. The Legislature and recent governors porked up on state spending during the go-go years, but are unwilling to cut back now that the good times have ended.

So I supported the state tax increase. But to have done so without even taking a stab at reducing spending means that the state pension fund is still on its way to bankruptcy (it will run out of money in eight years), the $8 billion in old state bills will not be paid anytime soon, and our state government is no longer in Springfield, but in Cuckooland.

Jack Crowe is a third-generation Oak Parker. He cycles with the Lake and Harlem group and works at the Christo Rey Network of high schools.

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OPRF Drugs  

Posted: January 24th, 2011 6:39 AM

GAME morning blues!?! It is nice to read these boards sometimes. Mr. Harmon needs to work solutions, by bringing all local gov entities together for synergy on issues. Not everything has to cost - and besides so many local groups are trying to do many of the same things - separately. Besides, Sen. Harmon is supposed to be working for Us in OP. What is he doing to help us solve local issues????


Posted: January 24th, 2011 6:06 AM

@Charles we agree! This last two years have been full of deep salary cuts and layoffs, and personally have had this occur. Yet the State stands by, does not debate this TAX increase in the OPEN, waits until after the election, and slips it by at 1 am, the very morning when new people are sworn in. Is this being open and personally Honest - think not Sen. Harmon.

Charles from Oak Park  

Posted: January 24th, 2011 12:11 AM

The only thing Sen. Harmon et'al are guilty of is sitting on their hands for the past 18 months while people lost their jobs so they could keep there's until after this election. How many people were affected last year as our elected legislators chose to do nothing as Illinois burned?

Charles from Oak Park  

Posted: January 24th, 2011 12:09 AM

"we only get the tax increase." Really Jack? Perhaps you've spent too much time biking in cold weather to notice but if you were/are an entity funded by the State of Illinois you've been cut and in some cases to the "Draconian" level. It's funny to read all the people bellyaching for more cuts when they A. offer no real grounded suggestions for cuts and B. are likely not one of the people who've had salary cuts or job loss the past two years due to the cuts.


Posted: January 23rd, 2011 7:54 PM

Sen Harmon thus far has shown that he supports growing government - and his Leadership role (self serving). Only listening to the voters when he is running for re election - and needs the votes.


Posted: January 23rd, 2011 1:21 PM

Last time I looked, C.L., state workers are consumers just like everyone else. Firing state workers will increase the overal unemployment rate, which will reduce consumption, which will shrink the economy, which will reduce tax revenues. At least that should be taken into account before cavalierly suggesting that a lot of state workers should be fired.


Posted: January 23rd, 2011 12:54 PM

@DJ - at this point it is NOT about the unemployment Rate of STATE workers, which is now very LOW - 2-3%. It is about living within the means, getting back to reality. This STATE is Broke. The latest TAX increase is already spent - 0 in the Bank. This State needs to cut costs NOW.


Posted: January 23rd, 2011 12:20 PM

And how do you think laying off thousands of state workers will affect the unemployment rate or consumer demand for goods and services, i.e., the economy?

john murtagh from oak park  

Posted: January 20th, 2011 11:36 PM

Great analysis Jack, couldn't agree with you more. Our state government is acting gutless at exactly the wrong time.

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