The Arc of Illinois

June 14, 2010

Leaders in The Arc:

After talking to the Governors office Friday, it looks like the Governor will unveil his new budget the last week in June. We also have no word just yet when the Senate will return to vote on the borrowing bill to complete the state budget!

Make sure you keep those pennies flowing!

Editorial follows on the lack of leadership in the Capitol!

Tony Paulauski

The Arc of Illinois

708-464-1832

State finances founder as 'leaders' fail

By the H&R Editorial Staff | Posted: Sunday, June 13, 2010 5:00 am

THE TRIAL of Rod Blagojevich humming in the background provides no relief from the constant reminders that the state of Illinois is in a financial mess of historic proportions. If it were a corporation, it might well be named Enron.

Blagojevich has his own troubles, but there is no doubt he is a major reason the state is in such a financial mess. With his example of leadership which was, shall we say, nonexistent, it would have been logical to conclude that his successors and the General Assembly would have quickly gotten down to the business of making Illinois solvent.

With a deficit that is $13 billion and growing, the assumption is that our leaders would be trying to lead. If you thought that, you would be wrong. The Blagojevich era has yet to produce much in the way of lessons for the post-Blagojevich era. Here's some of the head-scratching stuff that has been going on since the first of June.

Gov. Pat Quinn said on June 2 that unlike lawmakers, he's willing to make tough decisions to cut spending. It's June 13 and we are still waiting to see what these tough decisions are. The governor has not left himself much room to operate. "We are going to have to make cuts across the board," the Democrat said. Quinn followed that statement by saying he hopes to avoid deep cuts to human services, health care, public safety and especially education - which make up the lion's share of the state budget.

Quinn's opponent for governor, state Sen. Bill Brady, R-Bloomington, hasn't been any more specific. Brady has been consistent in saying he will not raise taxes, but he also has been vague about what cuts he would make, if elected. He has only said he would trim spending by 10 percent.

As Moody's lowered Illinois' bond rating from Aa3 to A1, the candidates blamed each other for the financial mess. Moody's got it right, though, when it blamed Illinois officials for not coming up with a lasting solution to the state's financial problems.

If that weren't bad enough, debt brokers are ready to swoop in. A Georgia company, Alpharetta Industries, is hoping to profit from Illinois' failure to pay its bills on time by arranging for vendors to sell their overdue paper at a discount. Sellers would get most of the money owed to them now. The buyers would collect the full amount from the state later and get a cut of the action as the middleman. Alpharetta already has some willing customers.

So as the governor, the legislators and both political parties show no willingness to lead, Illinois' bond rating is dropping in proportion to the escalation of its debt.

Our leaders could do worse than listen to the ideas of Stephen Moore, a senior economics writer for the Wall Street Journal. Moore was in Decatur last week, speaking to a new group called the Citizens for Responsible Government.

Moore, who doesn't have much confidence in either political party, had some pretty simple advice for governments at all levels. Moore proposes a cut of 15 percent to 20 percent across the board for every government agency, and then he would freeze spending until revenue catches up.

Moore could have been talking about Illinois' leaders when he said, "They're spending money like it's Monopoly money."

While we are not prepared to endorse Moore's proposals, they at least are among an array of concrete steps that could be taken toward filling a deep budget hole. In one brief appearance in Illinois, Moore has shown more leadership than any of the people in Springfield who are responsible for this unholy financial quagmire.