President Obama’s fiscal year 2015 budget proposes to increase taxes on individuals by over $820 billion and on businesses by about $500 billion, for a total of over $1.3 trillion in new taxes over the next ten years....
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Illinois Treasurer Criticizes Plan to Borrow $4 Billion to Pay Past-Due Bills
From Fox Illinois:
In January 2011, Illinois lawmakers promised to use part of a 67-percent personal income tax hike to pay down old bills — bills that amounted to $8.5 billion. Today, as they consider borrowing $4 billion — again to pay down old bills — the backlog stands at more than $9 billion.
As of Wednesday, there were 196,141 unpaid bills at the comptroller’s office, amounting to $6.9 billion. Add to that the bills that haven’t been sent to the comptroller yet, including $1 billion in Medicaid payments and $1.4 billion in employee health insurance payments.[…]
It’s a structural issue, said state Treasurer Judy Baar Topinka. “This is not hard to understand. If you keep doing the same thing over and over and over again, you get the same result,” she said.
The legislature had been expected to consider the $4 billion borrowing plan, but that’s now been pushed off until January. In many ways, Illinois is the state most in fiscal trouble: it has never really cut spending after revenue growth fell off during the recession, instead vainly hoping that the good times would return. (In fact, total state spending has grown from $45.1 billion in FY 2011 to $53.4 billion in FY 2012 to $57.4 billion for FY 2013.) Instead, they’ve been piling up unpaid bills when they didn’t have the cash. If states could be forced into bankruptcy status, Illinois probably would have been by now. However, if they sold more bonds Illinois would likely find many willing buyers: the state is paying just a 3.62 percent interest rate on an April offering. (Better than Greek government bonds, for now.)
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