Illinois Politicians Banking On Federal Bailout To Avoid Bankruptcy
Illinois Politicians Banking On Federal Bailout to cover the billions of dollars in pension debt:
- Illinois has been struggling with its finances for the past two decades
- The main reason why Illinois is in a major financial crisis is due to its pension debts
- The state has one of the highest tax rates in the Nation
- Illinois has the second-highest property tax rate in the country
- Only New Jersey has property taxes than Illinois
- However, there were talks of increasing property taxes in Illinois prior to the coronavirus pandemic hit the state
- Many Illinoisans were hopeful when J.B. Pritzker got elected governor in 2018
- J.B. Pritzker, the heir to the Hyatt Hotel fortune is a billionaire and belongs to one of the wealthiest families in American
Due to his background and wealth, most Illinoisans thought he was the man for the job of being Illinois’s Chief Executive.
Illinoisans Questioning J.B. Pritzker’s Competency And Experience
Many Illinoisans were impressed with the way President Donald Trump won the Presidency and ran the country to success.
- Unfortunately, J.B. Pritzker is no Donald Trump
- It has been a disaster for Illinois since the day J.B. Pritzker took office
- Many Illinoisans had voter remorse
- Pritzker’s poll numbers have been rapidly deteriorating since taking office
- Pritzker and lawmakers have been raising taxes on over 20 items
- Pritzker proposed doubling Illinois gas tax
- It seems the governor has no business experience
- Besides raising taxes, the governor is also increasing spending
- Illinois’ debt is getting worse since he took office
- Pritzker gave all Illinois lawmakers raises
To add more financial damage, Pritzker approved raises of $261 million dollars to high-level state employees.
Raising Taxes Forces Taxpayers To Flee To Other Lower-Taxed States
Pritzker is a huge proponent in changing the current flat tax system to a progressive income tax system:
- The governor has been lobbying strongly for a progressive income tax system
- Illinois voters will need to vote in changing the Illinois tax system on the November 2020 general election
- Pritzker is advocating that lower and middle-class wage earners’ income tax will go down while the higher income earners’ state income taxes will be increasing
- Many critics are calling Pritzker a liar and that the governor is misrepresenting explaining the progressive income tax system
- With increasing taxes at all levels, more and more Illinoisans are leaving the state to other lower-taxed states like Indiana
In this BREAKING NEWS article, we will discuss and cover Illinois Politicians Banking On Federal Bailout To Avoid Bankruptcy.
Illinois Politicians Banking On Federal Bailout And Trying To Capitalize On The Coronavirus Pandemic
The coronavirus pandemic has crashed the U.S. economy.
- The country has been shut down for the past two months
- President Trump has been very proactive throughout the coronavirus pandemic economic crisis and has approved trillions of dollars to help the economy from further damage by the pandemic
- All states have taken major financial hits due to the pandemic
- However, there are a few states like Illinois that had major financial issues prior to the pandemic
- The Trump Administration is planning in helping states who have taken a major financial toll due to the coronavirus pandemic crisis
- However, Illinois politicians are trying to pull a fast one
- J.B. Pritzker announced that Illinois had a balanced budget prior to the pandemic and needs the Federal Government to bail out the state in many areas such as the pension deficit
- This is a blatant lie by the governor. Illinois Politicians Banking On Federal Bailout is no breaking news
- For years, Illinois politicians have been lobbying the federal government for its financial irresponsibilities
- Governor Pritzker, House Speaker Michael Madigan, and other Democratic lawmakers have long been banking on a government bailout way before the COVID-19 pandemic
Now the governor is seeing a chance to take advantage of the coronavirus pandemic to get billions of funds to balance Illinois budget.
Illinois In A Desperate Situation Due To Financial Irresponsibility
It is not how much you take in but what is more important is how much you spend. Illinois has been financially responsible for almost two decades. Prior to the pandemic, many Republican-led states have enjoyed all-time record revenues and growth for their state. Indiana, which borders Illinois, has billions in surplus and has enjoyed major growth. A large number of Illinoisans move to Indiana due to its low taxes. However, Illinois has been accumulating more and more debts while other states have been raking in billions in surplus. The combination of corruption, mismanagement, and incompetence all contributed to the financial demise of the state of Illinois. Now, politicians are trying to pull a fast one.
Massimo Ressa of Gustan Cho Associates said the following:
The biggest sin in Illinois politics is telling the truth. Illinois Senate President Don Harmon is a sinner. He wrote a letter to Illinois’ congressional delegation requesting a $44 billion bailout from the federal government. That letter leaked. And he was roundly rebuked by pundits and politicians for saying the quiet part loud. He was telling the truth. Gov. J.B. Pritzker, House Speaker Mike Madigan, and other Illinois leaders were banking on a federal bailout long before COVID-19. Illinois has not balanced a state budget in 20 years. Leaders refuse pension reform to reduce the debts driving those deficits. To buy time and keep political backlash to a minimum, they have borrowed money with bookie-like abandon and slashed social services that lack sufficient political clout to keep their doors open. That borrowed money funded the most corrupt government in the nation, with nearly 900 public corruption convictions in Illinois since 2000, close to one per week. Illinoisans now shoulder one of the highest state and local tax burdens in the nation. But paying off the state’s debts would require another 50% hike in the income tax. Many local governments, crushed under the weight of pension obligations, were on the brink of insolvency prior to the pandemic. The state itself was teetering one notch above a junk credit rating. If it tips over, it could be frozen out of the credit market altogether and become functionally insolvent. Illinois’ pre-coronavirus rainy day fund was enough to fund mere minutes of state spending. And its $7 billion unpaid bill backlog was climbing despite record tax receipts.
Governor J.B. Pritzker is clueless about fixing the financial crisis in Illinois. The only solution Pritzker has is raising taxes and proposing new taxes. Pritzker does not seem to be concerned with the mass exodus of Illinoisans to other states. Most companies do not have an interest in moving to Illinois due to the massive taxes of the state. Besides raising taxes, Pritzker is making very little effort in reducing spending. He has given pay raises to Illinois lawmakers. He has also given a $261 million raise to high-level state workers.
Highest Taxed State In The Nation
Raising taxes is one thing. Raising and creating new taxes may create increased revenues. However, in order to get ahead, you need to decreased spending. Pritzker is increasing spending including wage increases to lawmakers and state employees during times of financial crisis. Illinois is one of the highest taxed states in the nation. Illinois politicians keep on increasing property taxes. High property taxes means lower property values. High taxes are forcing many Illinoisans to flee the state to other lower-taxed states. States will billions of surplus are lower-taxed states. Lower taxed states are attracting individuals and businesses to their states. Pritzker is not realizing how the state’s high taxes are a major problem in the out-migration of individual taxpayers and businesses. To add fuel to the fire, Pritzker is proposing changing the state’s flat tax to a progressive tax system that voters will decide upon in November 2020.
Dale Elenteny of Gustan Cho Associates said the following:
Prior to the virus, his administration floated hare-brained schemes like shorting the pension funds, moving state assets on paper into the pension funds to make them appear better funded, and issuing more debt.
Illinois Politicians Banking On Federal Bailout To Fix Their Nearly Bankrupt Pension System
Illinois Democrat State Senate President Harmon requested $44 billion dollars from the federal government for Illinois due to the coronavirus economic impact. Out of the $44 billion, $10 billion was allocated to bail Illinois from its financially mismanaged pension system. The pension shortfall was created by state lawmakers. $9.6 billion would go to local governments. Just $1 billion would go to aid for the poor. Nikki Haley, Mitch McConnell, Donald Trump, and others made statements that it is ridiculous for the federal government to bail a few states like Illinois that has been mismanaging finances. They added it is not fair for American taxpayers and financially responsible states to bail financially irresponsible states managed by incompetent governors and lawmakers. Governor Pritzker demanded “unencumbered” federal dollars. What this means is federal dollars with no strings attached. Pritzker and Illinois Democrats want to please the powerful labor unions of Illinois by keeping the broken pension system intact and are not open to pension reform.
Gustan Cho Associates said the following:
Our elected officials are trying to use this crisis to bail out their bad decisions. And we don’t need a bailout of the politicians. We need reform for the people of Illinois. We’re financially bankrupt, we’re morally bankrupt, we’re ethically bankrupt … I hope Washington, D.C. decides that if they’re going to send us money, they’re going to send us reform as well. Because the average Illinoisan is struggling. A bailout will ensure more pain in Illinois. Leaders won’t learn their lesson. If the federal government does dump money into state and local governments, it must ensure consumer protections like sound pension accounting, real balanced budget requirements, and a healthy rainy day fund.
Whether the federal government bails out the state of Illinois, pension reform is necessary. Say the federal government will bail out Illinois’s financial mismanagement. You need to clean house. Incompetent politicians from the governor, Speaker Madigan, and countless incompetent politicians need to go. Public corruption in Illinois is costing taxpayers over $500 million per year. Many politicians are running for office for selfish reasons to benefit themselves, families, and friends. Not because they want to help the citizens of the state of Illinois.
This is a developing story. Gustan Cho Associates will keep our viewers updated on developments in the coming days and weeks.
May 4, 2020 - 7 min read