Today, I am pleased to announce even more amazing budget progress in the state of Illinois.
First, let’s recap progress at the national level.
- On Tuesday, President Trump called all the Republican Senators to a meeting to resolve the Obamacare bill in the Senate.
- Ahead of the meeting, four Republican Senators were against the bill. At most, 2 Senators can vote against the bill or it will fail.
- After the roughly hour-long huddle in the East Room, Senator Mitch McConnell told reporters “We made good progress.”
- Following the meeting, seven Republican Senators were against the bill.
As amazing as that progress sounds, Illinois can beat it by a mile.
Progress Illinois Style
- Illinois has been without a budget for two years and its bonds, already the lowest in the nation, face a downgrade to junk.
- On June 15, Illinois Governor Bruce Rauner called a special 10-Day legislative session to finalize a budget.
- We are now in the eighth day of the special session.
- The Special Sessions Cost Illinois Taxpayers $50,000 a Day.
- The special sessions have lasted from 10 to 23 minutes at the longest.
- Progress was announced yesterday: My sources tell me that by an 84-0 vote, part of I-55 will be renamed the Obama Expressway.
Today, the Wall Street Journal reports Illinois Governor to Extend Session if Lawmakers Miss June 30 Budget Deadline.
On Tuesday Mr. Madigan unveiled a $36 billion budget proposal but didn’t spell out how much taxes would have to increase to get the state’s fiscal house in order.
If a budget isn’t passed by Friday, credit-rating firms have warned they will downgrade the state’s rating to junk.
Rauner Already Caved In
An even more amazing part of this reconciliation process is that Rauner has already caved in. On June 21, I commented Governor Rauner Screws Illinois.
In exchange for virtually nothing, the Governor agreed to a massive tax hike.
- Four-year tax hike to 4.95%, up from 3.75%
- Expansion of sales taxes
- New taxes on cable and satellite TV
- Four-year property tax freeze
- No right-to-work reform
- No collective bargaining reform
- No pension reform
- No workers’ compensation reform
- No spending cuts
- No term limits
- No gerrymandering reform
The alleged property tax freeze is only 4 years and it excludes Chicago, home rule districts, cities in trouble, etc. One can drive a truck trough the loopholes.
Yet, that was not enough for Madigan or the special session would not still be in session.
Rule of Nothing
This brings us to Mish’s Rule of Nothing proposed on June 22.
In any given political situation, the best outcome one can reasonably expect generally happens when politicians do nothing.
Implied corollary#1: When politicians attempt to fix any problem, they are highly likely to make matters worse.
Corollary #2: Politicians almost never do nothing. It’s why we have a messed up healthcare system, education system, public pension system, etc..
For whatever perverse reason, Rauner is willing to break every promise he has ever made on budgets, on taxes, on reforms.
Not only did Rauner cave in on everything he has stood for, by extending the special session he has shown willingness to toss more taxpayer red meat to Madigan and his progressives who have already bankrupted the state.
Hope Against Hope
Our only hope at this point is that Madigan asks for so much that Rauner regains his sanity.
Given that Powerball, Mega Millions to Halt Illinois Lottery Due to State’s Inability to Pay Winners on June 30, I rate the odds of sanity returning at under 10%.
On the off chance that sanity prevails, I once again outline what Illinois needs.
Five Desperately Needed Reforms
- Municipal bankruptcy legislation
- Pension reform
- Right-to-Work legislation
- End of prevailing wage laws
- Workers’ compensation reform
Bankruptcy, the ONLY Solution
Number one on my list of Illinois reforms is bankruptcy legislation. It is the only hope for numerous Illinois cities strapped with impossible-to-pay pension liabilities.
As part of any budget package, Rauner must demand municipal bankruptcy legislation. Bankruptcy is the only solution for Illinois that works.
The system is simply too broke to fix.
Illinois pension plans are going bust. Why is that? Did Illinois not tax enough?
For sure, Illinois did not fund the plans, but to fund them, the state would have had to raise taxes even more.
For discussion, please see Illinois Too Broke to Fix: Chicago Police Pension Fund Broke by 2021 at the Latest.
Supporting Evidence of Socialist Tax Hike Madness
- March 25, 2017: Cook County Illinois Suffers Largest Population Drop In Entire US
- July 14, 2016: Welcome to Illinois (Where Every 5 Minutes Someone Moves Out)
- April 4, 2017: Illinois Revenue Freefall: Fiscal Year-to-Date -8.1% and Worsening
- February 7, 2013: Platitudes, Promises, and the Failed Pro-Union Policies of Illinois Governor Pat Quinn
- June 14, 2017: Unable to Pay Bills, Illinois Sends “Dear Contractor” Letter Telling Firms to Halt Road Work on July 1
- May 18, 2016: Illinois State Workers, Highest Paid in Nation, Demand 11.5 to 29% Hikes
- August 31, 2011: Illinois Loses Most Jobs in Nation Following Tax Hikes.
- April 13, 2011: 35% of Illinois State Employees are on Workers’ Comp
- October 28, 2015: Chicago’s Sheep Dogs Approve Mayor’s Tax on Sheep; Quote of the Day “It’s Not a Piece of Art”
- February 13, 2016: “Bond Girl” Blasts Chicago Public School Bonds, Says “CPS Genuinely Insolvent”
- March 25, 2016: US Population Growth +0.79%, Illinois -0.17%, Illinois Second Worst to Coal Plagued West Virginia
- January 20, 2016: “B” Word Hits Chicago: Illinois Governor Proposes Bankruptcy for Chicago Public School System
- January 14, 2016: Illinois Too Big a Risk: GE Moves Corporate Headquarters to Boston, Bypassing Chicago Citing Litany of Issues
- June 23, 2017: Illinois Too Broke to Fix: Chicago Police Pension Fund Broke by 2021 at the Latest
Illinois is F*d up beyond repair and caving into demands from Madigan is exactly the wrong thing to do. Illinois truly deserves Junk status, and tax hikes will not solve the problem.
Mike “Mish” Shedlock