Last week I went into detail regarding the dire condition of the State of Illinois’s finances and why they were likely to end up as the first U.S. state to declare bankruptcy.As recent developments show apparently the government of Illinois decided on slow death instead of a quick suicide.
Let’s revisit the grim details again:
Forbes ranked Illinois as 46th for tax burden in 2016
State and local tax burden is 11 percent.
Effective state tax rate ($50,000 taxable income): 3.75 %
Highest tax bracket: flat
Rate at highest tax bracket: 3.75% of federally adjusted gross income
Moody’s recently downgraded the credit rating to its lowest investment grade rating, the lowest of any state and other financial credit rating companies have followed along, with a ‘junk bond’ rating imminent.
And Illinois currently has $251 billion in unfunded pension obligations, and a backlog of unpaid bills worth $15 billion.
Illinois got into this situation because for years they have followed the failed Blue State model of taxing and spending other people’s money. Literally thousands of residents and businesses have fled to the lower taxed and more business friendly states of Indiana and Wisconsin. Governor Bruce Rauner a Republican, has been unable to accomplish anything because the State’s general assembly is dominated by Democrats led by House Speaker Michael Madigan, who has obstructed all attempts at real reform. Illinois has been run without a budget for 3 years as unpaid debts and obligations have piled up, and stop gap temporary arrangements have been used instead because Democrat Speaker Madigan and his good friends the public employee unions haven’t allowed anything else.
With the state facing bankruptcy, Governor Rauner called an emergency session of the General Assembly in a last ditch attempt to stave off the Grim Reaper. And in response, a bi-partisan majority passed a $36.5 billion budget plan authored by the Democrats.
It calls for slashing spending, cutting public employee pensions and lowering taxes in an effort to create more economic growth and attract business to Illinois.
Hah hah, fooled you! This is a budget authored by Democrats, who hold a majority in the assembly, remember? This new ‘budget’ calls for nothing of the kind. Illinois decided on slow death,at least their state government did.
Instead, it calls for a humongous $5 billion tax increase and for a lot more spending. Especially for public employee union benefits, public schools, universities, social service groups, and other Democrat Party supporting groups latched on to the teat of government funds
Illinois Democrat legislators, as usual, have shown absolutely no desire to confront the state’s finances or the death watch on the states’ unfunded pension liabilities, nor are they interested in anything to make the business climate more attractive. Instead, they doubled down on more spending and higher taxes…again.
The real laugher is that this isn’t even a budget, not yet anyway. Yes, it passed the Illinois House 90-25, with 23 Republican votes.But it still has to be read a third time and passed. After which, the Illinois Senate needs to approve it and Governor Rauner has to sign it.
Meanwhile. Democrat Speaker Madigan sent begging letters to credit rating agencies, which had let the state know they they would downgrade the state’s bonds to “junk” level on July 1 if there was no budget. He asked the agencies to “temporarily withhold judgment and allow legislators time to negotiate a bipartisan, balanced budget.”
Like that’s going to happen! Oh, something might get passed, but it won’t be a balanced budget. No, Illinois decided on a slow death instead.
I confess to being surprised that 23 Republicans voted for this, or that Governor Rauner would sign it. Why take a bite of this particular crap sandwich and share the blame?
Now, some Assembly Republicans were smart enough to realize this, criticizing their GOP colleagues for voting for this travesty,calling the budget’ a disaster and suggesting that for Illinois taxpayers, it’s literally time to pick up and leave.
Of course, that’s already happening, and if said crap sandwich passes through the bowels of the State of Illinois’s government and gets instituted, the current river of taxpayers and businesses fleeing Illinois will turn into a flood.
What we’re seeing here, of course, is the beginning of a trend. We’re seeing the blue state model collapse as they run out of other people’s money to purloin. Connecticut, New Jersey, and California aren’t all that far behind Illinois.
Rob Miller writes for Joshuapundit. His articles have appeared in The Jerusalem Post, The Washington Examiner, American Thinker, The Los Angeles Times, The Atlanta Journal-Constitution, The San Francisco Chronicle, Real Clear Politics, The Times Of Israel, Breitbart.Com and other publications.