The View from Right Field

Illinois Faces Hard Choices – But the Solution Is Simple

In his inaugural speech, new Illinois Governor J.B. Pritzker said that Illinois must make “hard choices” and that “[o]ur abdication of responsibility must end.”  I agree.  But while the problems Illinois faces may be hard, the solution to those problems is quite simple.  As I have said before, for too many years (many more than just four), Illinois has spent more money and promised more money to its employees in pensions than it was willing to collect in taxes.  What Illinois now must do is tax more than it spends – until it catches up.

While the solution is simple, the politics is hard.  Are Governor Pritzker and the members of the legislature willing to tax more than they spend, by increasing taxes and/or cutting spending, until Illinois pays its bills and fund its pensions?  And are they willing to explain to the people of Illinois that cutting spending will hurt and that increased taxes can’t just come from somebody else; that everybody is going to have to pay more?

More importantly, though, are the citizens of Illinois willing to support politicians who are willing to tell them truth and do what is necessary to make Illinois something other than a national joke for financial mismanagement?

A Few More Comments on the Stupid Shutdown

A few comments on the federal government shutdown, though I am not sure they add all that much to what I wrote back on January 3.  In any case, it is all the news, so here goes.

1. As I understand the shutdown, it boils down to this:  President Trump thinks that it is better to have a government shutdown than it is to not build the wall he wants to build.  The Democrats in Congress, on the other hand, think it is better to have a government shutdown than it is to let President Trump build the wall he wants to build.  Or, at least, that is how they are acting.

Illinois Gets a New Governor. And Keeps the Same Legislative Leaders.

Last week I asked who would cause Illinois Governor-elect J.B. Pritzker more problems, his supporters or his opponents.  My guess was that it would be his supporters.  Well, Governor-elect Pritzker takes office on Monday, and he will find out over the next few months.  In any case, this week, the new legislature was sworn in, and the same old legislative leaders were re-elected.  In the Senate, Senate President John Cullerton had some nice things to say to outgoing Republican Governor Bruce Rauner:

“We may have had our differences, from time to time, but you took on a challenge when others merely complain from the sidelines.  Thank you, and I wish you and your family the best.”

Standard Chicago Political Practice Gets Indicted – Again

The big story in Chicago, other than the Bears (until yesterday, unfortunately, is the indictment of long-time Chicago alderman Edward Burke,¹ chairman of the City Council Finance Committee (he has now said he will step down as chairman), among other things.²  Alderman Burke was charged with attempted extortion for using his position as alderman to get business for his private law firm from a company wanting to renovate a Burger King restaurant in his ward and needing permits, etc.  A few comments:

1. If Alderman Burke did what is alleged, that is just stupid.  The company involved here apparently owns 100+ Burger King franchises.  This is a big company that very possibly has obligations under the Foreign Corrupt Practices Act.³  If it is covered, it will have policies and controls in place to comply with it.  Trying to extort money from companies like that is dumb.

Who Is Going to Cause More Problems for New Illinois Governor J.B. Pritzker? His Opponents – Or His Supporters?

The question for new Illinois Governor J.B. Pritzker is who is going to cause him more trouble in the upcoming legislative session: the people who supported him last November or those who didn’t.  While it may not be logical, I’m going to go with the former: the people who supported him. 

Lots of state programs, state agencies, and groups funded by the state have had a tough four years.  The fighting, during the last four years, between Republican Governor Bruce Rauner and the Democrats in the state legislature, especially House Speaker Michael Madigan, resulted in long periods with no budget and other periods with limited funding.  Many of the people affected by these cutbacks supported J.B. Pritzker last November, and now they are looking for him to deliver the things they supported him for.

Shutdowns and Walls. How Will It End?

Cutting through all of the tweets, press conferences, and claims of outrage, the current partial government shutdown boils down to a simple problem.  President Trump would rather have a partial government shutdown than approve spending bills that do not include money for his “wall.”  He has promised his supporters that he would build a wall.  It was one of the main themes of his campaign, and he hasn’t been able to get it done.  From his viewpoint, he needs to do it.  He promised.

Democrats, on the other hand, would rather have a partial government shutdown than approve money to build President Trump’s wall.  They have pretty much promised their supporters that they will never approve money for a wall.  They feel they need to keep their promise.  Plus, they don’t want to give President Trump the political victory of getting money for his wall.

State Solvency: Worst to First Just Takes 500 Miles and a U-Haul Trailer

The Mercatus Institute at George Mason University has once again ranked all 50 states according to their financial condition.  The most recent ratings were based on 2016 reports and considered:

• Cash solvency. Does a state have enough cash on hand to cover its short-term bills?
• Budget solvency. Can a state cover its fiscal year spending with revenues, or does it have a budget short-fall?
• Long-run solvency. Can a state meet its long-term spending commitments? Will there be enough money to cushion it from economic shocks or other long-term fiscal risks?
• Service-level solvency. How large a percentage of personal income are taxes, revenue, and spending? How much “fiscal slack” does a state have to increase spending if citizens demand more services?
• Trust fund solvency. How much debt does a state have? How large are its unfunded pension and healthcare liabilities?

Rahm Emanuel on How Cities Can Solve Our Problems. Huh?

In a column on the Brett Kavanaugh nomination last week (as everything was – and still is), Gerald F. Seib talked in The Wall Street Journal about the American people’s declining faith in the Supreme Court.  Of course, this only matches the lack of faith people already have in Congress and the President. 

However, while confidence in national institutions has fallen, Mr. Seib noted a Gallup poll last year that said 70% of Americans have confidence in local government to solve problems.  At this point, Mr. Seib goes a little bit off the tracks – by quoting Chicago Mayor Rahm Emanuel.  Obviously, Mr. Seib knows Mayor Emanuel from his time in Washington, and Mr. Seib knows that he is not running for re-election. 

Here’s a Deal for Illinois Pols: A Progressive Income Tax in Exchange for Real Pension Reform

Illinois Democrats (or at least many of them) say Illinois needs a progressive income tax.  Illinois Republicans (all three of them) say Illinois needs real pension reform.  Both of these ideas require an amendment to the Illinois Constitution to be approved.  So here is my Monty Hall-“Let’s Make a Deal” suggestion.

Instead of just one constitutional amendment, we pass two.  (The Illinois Supreme Court would never let you bundle the ideas together.)  One of them would permit a progressive income tax.  The other would allow the state legislature to adjust future pension accruals of current state employees.  I am not talking about cutting pension benefits already earned.  I am just suggesting that the legislature should have the right to adjust, i.e., reduce, pension benefits that current state employees earn in the future.  (The current state constitution provides that, once a person is hired, their pension scheme can never be reduced in the future, no matter how far they are from retirement.)

Instead of an Illinois "Brain Drain Tax," How About a Wall

Here is Scott Stantis’s cartoon in today’s Chicago Tribune on the “Illinois Exodus,” i.e., all the people leaving Illinois:

If the brain drain tax doesn’t work, here’s another idea: a wall.  Not like President Trump’s wall, however.  President Trump’s wall is designed to keep people out. 

Rather, a wall like the one they had in Berlin.  That was a wall to keep people in.  And think of all the jobs for people in the guard towers and in an Illinois Stasi, trying to figure out who might be trying to escape.