Quinn to Lay off Thousands (IL)

[pintobean]

http://www.nbcchicago.com/blogs/ward-room/Quinn-to-Lay-off-Thousands-129290828.html?dr

A decision made by Gov. Pat Quinn may leave thousands of state workers without a job by the end of the week.

The cuts are coming in the face of a budget deficit that doesn't leave enough money to pay the workers, the governor says. Quinn also plans to close a prison, juvenile detention center and homes for the mentally ill.

If no cuts are made, several agencies will run out of money by spring, Quinn says. "We can't spend money we don't have," Quinn said Tuesday.

The state's largest government employee union, AFSCME, promises to sue if the layoffs are made, much like they did over blocked pay raises

more at link

[Yo_Mama]

1. Well, states can't print money...

And Illinois has had budget problems for a while now.
http://illinois.statehousenewsonline.com/6646/illinois-50-out-of-50-in-2010-for-state-deficit-2/

Illinois did raise income taxes, but it is not enough. Obviously the weaker national economy doesn't help the fiscally troubled states like CA, IL & NJ.

Edit - if the claim that Illinois has 140 billion in unfunded retirement obligations is true, their pain has just begun. You can't make up that type of shortfall just from tax increases, so they will both have to raise taxes, cut spending and modify their obligations to retirees to make it work.

[pintobean]

3. Unemployment and underemployment are killing revenues.

We need to get out of this jobs depression.

[Yo_Mama]

5. You're right

Revenues go up all by themselves when jobs are increased, but there is a limit as to how much you can increase taxes without killing jobs.

The answer to Illinois' problems is to increase private jobs in relationship to public jobs - by definition, government jobs are a net drain on the economy. Here is where our national woes come in - it's very hard to accomplish that task in the current setting.

[pintobean]

7. Yo, Yo_Mama

The dumpster dwelling cavemen are very interested in this thread. It's probably as intriguing as watching paint dry.
Say hello!

:hi: :hi: :hi: :hi:

[Yo_Mama]

8. ??? n/t

[dkf]

2. They already increased taxes too.

http://chicago.cbslocal.com/2011/01/12/illinois-lawmakers-approve-66-tax-hike/

[Yo_Mama]

6. I know

An effective corporate income tax rate of 9.5% doesn't leave a lot of room for hikes, and that increase in the personal income tax rate is probably hurting Illinois' economy. I'm not saying that it wasn't necessary, but obviously once you get to that point your further taxation options are limited.

I talked to some people I know in the area earlier in the year, and they said property taxes were going up too.

If the median household is paying out 1K to 2K more in taxes this year, it stands to reason that you can't do the same thing again next year to bring revenue up. It also hurts the economy and tends to bring down private job creation. The state may have the money and spend it, but the money the households don't have shows up as drops in revenue for stores, car dealerships and service businesses, to name a few.

Also some of the temporary fixes for this year aren't fixes - not paying Medicaid reimbursements just builds up the bill and is quite dangerous for those on Medicaid:
http://sunshinereview.org/index.php/Illinois_state_budget

[MerryBlooms]

4. Yep, we're in serious trouble -

http://abclocal.go.com/wls/story?section=news/local/illinois&id=8326527

http://will.illinois.edu/news/spotstory/legislation-to-raise-electric-rates-heads-to-gov.-quinns-desk/

http://articles.chicagotribune.com/2011-06-15/news/ct-met-cps-board-raises-0616-20110615_1_chicago-teachers-union-ctu-cafeteria-workers