Unable To Pay Bills, Illinois Sends "Dear Contractor" Letter Telling Firms To Halt Road Work On July 1

Authored by Mike Shedlock via MishTalk.com,

The state of Illinois has not passed a budget for close to three years.

Arguably it’s just as well because Illinois budgets for decades have been nothing but a moth-eaten collection of lies, one time deficits repeated endlessly, and financial wizardry statements designed to disguise Illinois’ real problems: failure to rein in spending coupled with a very business unfriendly environment.

As Illinois’ bond rating careens towards junk, Illinois Unpaid Bills Jumped to $14.3 Billion. Today, the state told contractors to halt roadwork other than that required for safety.

Dear Contractor

I do not have a link, but here is the letter in image form.

This does not raise much alarm in Illinois has these kinds of letters went out last year as well. It’s simply business as usual in Illinois.

My IDOT contact, who wishes to be left unnamed, reports …

Hello Mish

 

Last year when they did this the extra work bill to the state cost millions of taxpayer dollars. At the last minute, the shutdown was averted but not until the shutdown measures were employed and thus extra cost was due to contractors and consultants.

 

Look out for the Road Builders Association to come out with an estimate of what it will cost this time around after the letter today.

 

Last year, the supplier for paper and toilet paper had not been paid and thus various offices were reportedly cut off of supply. IDOT employees were going to have to work from home due to the potential unsanitary conditions.

Five Illinois Universities Rated Junk

Yesterday, the Illinois Policy Institute reported MOODY’S DOWNGRADES 7 ILLINOIS UNIVERSITIES, 5 ARE JUNK.

Everybody wants to blame the downgrades on the state’s current budget impasse. The stalemate of nearly two years has led to cuts in state appropriations to Illinois universities. But the universities’ financial difficulties started before the state’s budget gridlock and are largely of their own making. Illinois colleges and universities have long overspent on bloated bureaucracies and expensive compensation and benefits, prioritizing administrators over students.

 

For years, university and college officials across the state have hiked tuition to pay for administrative hiring sprees, generous executive compensation and out-of-control pensions. Their spending priorities distorted university finances long before the budget impasse began.

 

The number of administrators in Illinois’ universities grew by nearly a third (31.1 percent) between 2004 and 2010. At the same time, faculty only increased 1.8 percent, and the number of students only grew 2.3 percent.

Illinois Tuition Fees

Retirement Costs Soars

Blame Who?

It is easy to blame Governor Rauner, but he is last on my list. Illinois has been in trouble for decades. The state’s only solution has been to tax, and tax, and tax.

That is precisely the same position as Chicago Mayor Rahn Emanuel.

The result is easy to predict.

Illinois’ Economic Growth is Worse than During the Great Depression

Illinois’ total state economic activity has increased by only 4 percent since 2007, which is lower than the U.S.’ 10 percent GDP growth during the worst decade of the Great Depression according to the Illinois Policy Institute.

Illinois Employment

Feed Me

Illinois Debt Backlog

It took $31.6 billion of new tax revenue to reduce the backlog of bills by $1.3 billion. But the complete picture is much worse as Illinois’ pension debt rose more than $25B from 2010 through 2015.

Failed State

  1. On June 4, 2017, Politico reported How Illinois became America’s failed state.
  2. The Heratige Foundation beat Politico to the idea by a mile with its September 28, 2015 analysis Illinois: The Anatomy of a Failed Liberal State.
  3. The Chicago Tribune is behind the times with its January 3, 2017 analysis, Illinois in danger of becoming a failed state.

Illinois is not in danger of becoming a failed state, it is a failed state. I have been talking about this for years.

Five Desperately Needed Reforms

  1. Municipal bankruptcy legislation
  2. Pension reform
  3. Right-to-Work legislation
  4. End of prevailing wage laws
  5. Workers’ compensation reform

Number one on my list of Illinois reforms is bankruptcy legislation. It is the only hope for numerous Illinois cities whose hands are also tied by union-sponsored prevailing wage laws.

Despite massive gains in the stock market since 2009, Illinois pension plans have gotten deeper and deeper into the hole.

Even a modest pullback in the stock market will sink numerous Illinois pension plans. I expect much worse than a modest pullback.

Tax hikes are not the answer. Reform is the answer, and bankruptcy reform is at the top of the list.

Required Pension Contributions to Double or Triple

Inquiring minds will also wish to consider Required Pension Contributions of California Cities Will Double in Five Years says Policy Institute: Quadruple is More Likely.

The same fate or worse faces Illinois.

Madigan Sponsored Problem 

The problem is on Speaker Madigan’s side. He insists on tax hikes first and reforms second.

Governor Rauner has held out and I support that policy. Once the governor agrees to tax hikes, no reforms will ever take place.

Illinois is Bankrupt

Illinois is essentially bankrupt. Unfortunately, there is no provision for states to declare bankruptcy.

States can default, however, and default is an easy prediction for Illinois’ public union pensions.

Comments

Offthebeach nuubee Thu, 06/15/2017 - 11:51 Permalink

repair and maintenance of existing roads doesn't justify a lot of civil engineers.  Civil engineers stuff,staff and control any state's Dept of Transportation,  Highways, ect.   They must protect their jobs first and foremost,  so money will be spent on new projects, rather than maintenance or repairs.   This is why you can drive hours on Soviet/Nazi war zone war roads, and then come along some useless modification that makes sure thr state engineers have 'projects' to " manage". 

In reply to by nuubee

Rabbi Chaim Cohen grasha87 Thu, 06/15/2017 - 16:22 Permalink

Thanks for hijacking the thread with irrelevant posts, but this blogger (you?) seems to jump to a lot of conclusions in his analysis of a book that I doubt he even finished reading. Right away he fails to adequately understand the impact of when Rickards differentiates between the value of free markets and the problems introduced by global trade when there is a gross disparity in trade surplus. Then he jumps into a myopic examination trying to disprove facts about US industrial output that have never been disputed by any reputable entity. That's when I stopped reading.

Seek first to understand.

In reply to by grasha87

Tall Tom shovelhead Thu, 06/15/2017 - 16:44 Permalink

  Well they can always use Currency as Toliet Paper. It serves Two Purposes in that way. It can be spent afterwards. Perhaps to pay taxes? One must be efficient in deeez troublin' times ahead. I wonder why dem people refuse dem Stinkin' Lincolns... Do you know where your cash has been? Do you really want to know? Folks. It is bad. But its gonna get worse. Just don't take any Stinkin' Lincolns....or dem Rankin' Franklins...

In reply to by shovelhead

Rabbi Chaim Cohen Stuck on Zero Thu, 06/15/2017 - 11:33 Permalink

Bury yourselves in regulations, poison yourself with rife government corruption, tie your hands with public sector union workers everywhere, bankrupt yourselves with entitlement programs and ponzi pensions out the wazoo, and disarm yourselves and what do you get Chicago?

Economic and civil death from a ten-thousand papercuts. What's worse is trying to come back from this. I don't think they will ever learn the lessons they need to learn. They have had 60 unbroken years of Liberal Democrat leadership and a perma-slide into decay to show for it. No chance that they will get a clue anytime soon.

In reply to by Stuck on Zero

chubbar Rabbi Chaim Cohen Thu, 06/15/2017 - 16:07 Permalink

You are correct. Sadly, the democrats simply are unable to understand why they are in deep shit. I'm wondering how high these fuckers think they can raise taxes before there is a public mutiny. Even dems like to have some disposable income left over after taxes and those are sky high right now. Property and sales taxes will be first to rise, along with the easy ones like hotel taxes, etc (which when they get high enough will keep the tourists out of the state). They aren't going to cover a 15 billion deficit very easily.I guess the can kicking is about to end. If they want a budget someone is finally going to have to make the hard choices they are being paid to make. The question is whether they have run out of other peoples money or not.

In reply to by Rabbi Chaim Cohen

Shinebama chubbar Fri, 06/16/2017 - 08:06 Permalink

I wake up every morning, hoping to see Madigan had a coronary during the night and is dead. Until he's gone, there is no chance for any kind of change. I'm meeting with a realtor on Saturday to see about selling my condo, because the market here will go in the toilet when the automatic property tax increases start in 2020 to pay for police pensions.As far as Rauner's "property tax freeze" goes, SB14 specifically exempts pension levies from any freeze. So look for pension levies if his bill ever passes.

In reply to by chubbar

selling_air Stuck on Zero Thu, 06/15/2017 - 15:22 Permalink

A citizen here in the land of stinkin!To your point, there was actually a report that came out that said Illinois created net 1 manufacturing job since the year 2000. 17 years and 1 manufacturing job more in 2017 than there was in 2000. The report indicated an increase in surrounding states (even liberal Wisconsin) to the tune of 10,000 more. Indiana was like 30,000. Iowa was like 17,000. Fucking Iowa (We're probably moving there).I'm 29 years old, and the state has been going down hill since I was born here in 1987. You should google Michael J. Madigan if you haven't heard of him. He's been speaker of the house my entire life, technically since 1983.Illinois sucks balls today because of the state's democratic party. The democratic party has a stronghold on Chicago and suburbs. The other 98% of the state would love to change shit, but the retards in Chiraq keep voting for the same dumbass politicians. My wife's a teacher, I'm in healthcare marketing. I love my state for a lot of reasons, but think it's about time to pack it up. Anyway, google Michael Madigan, if you care to.

In reply to by Stuck on Zero

Spine of Ruprecht Looney Thu, 06/15/2017 - 10:32 Permalink

Bidets.  Too late to install new bidets, but I'd like a try at fixing their TP problem: 1)  Make the Womyns' restrooms unisex.  Poo and pee in the Womyns' restroom.2)  Squeek over to the former Moens' restroom, now called the Bidet room, and wash in the urinals. If my idea gets enough down votes, I will consider moving to Illinois to start my political career.

In reply to by Looney

Endgame Napoleon Looney Thu, 06/15/2017 - 11:45 Permalink

Here is the way you deal with horrible bathroom working conditions, not just in state jobs, but also in many private-sector jobs, like the $10--$12/hr jobs for licensed agents or, as many employers prefer, unlicensed salespeople with womb-based income from welfare/taxfare, spouses or exes that covers their major household bills, making the low pay acceptable.

You hold it all day.

You do not go to the bathroom unless you can find a decent one at lunch, whereupon, if you order a caffeinated beverage, you need to just drink a little of it, especially if nothing has exited your birth canal.

Because, unless your womb is productive, you cannot leave work at 2:30 to pick up baby, as stated, or to do your grocery shopping and beat the traffic, letting grandbaby-fever grandma pick up baby.

You, childless employee, have to stay past closing time oftentimes. waiting on the customers who pour through the doors and answering ten times as many phone calls so that paying customers get service, new business sales get closed, and existing accounts are retained.

Not that you will be rewarded for this hard work, not even when you meet the quotas every month while many of these mom-clique, back-watching absentee workers don't.

Because, mommas are always (or almost always) in charge, including many absentee-momma managers and a few absentee-daddy managers. They "need" the money. They have kids to feed, although the government will feed and house them and their kids if they can't. The government will not feed or shelter you as a childless worker.

In reply to by Looney

Yog Soggoth Looney Thu, 06/15/2017 - 21:31 Permalink

Illinois is mostly farmland. Corn subsidies aside, they view Chicago at the blight. CONFIRMED by Experts! Voting Machines in Maryland, Illinois ...     BREAKING: Mass Voter Fraud Discovered in Illinois | The ...    Think about it for a second. Farmer produces food for foodstamp consumers. In order for him to pay for the rising cost of everything he has to go with the system. Buck the system you lose the farm. Springfield is just a spring board to Chicago where the mercantile price increase is set by certain groups. Pack of cigarettes 13.75$ at the corner store three years ago and 20$ out of the machine at the dive bar. Bet you didn't know that Chicago was 6000 miles from Tennessee where the growers sell it to pay their property taxes in the average of 100$ or less.

In reply to by Looney

Endgame Napoleon GunnerySgtHartman Thu, 06/15/2017 - 12:09 Permalink

In one of my many $10.40/hour temp jobs, I graded standardized tests from the state of Illinois, and the writing skills of the school children were abysmal. The byzantine and somewhat goofy rules designed by state education officials do not measure basic literacy.

As for the proliferation of superfluous and highly paid college administrators, that is a nation-wide phenomenon. It is one of the big reasons why tuition is no longer affordable. Administrators went forward and multiplied, as directed by the Education Gods.

The teachers make far less than the administrators, not that colllege teachers are underpaid when they are permanent faculty members.

Universities are now hiring a lot of part-time staff, trying to keep their money for excess administrators and things like athletics programs and posh amenities to try to attract more [paying] students. They always say the athletics budget is separate, but whatever. It sounds like fake accounting to me.

Universities have a lot of rules about who can teach; everyone has to have a PhD. In practical, hands-on fields, like subjects that used to be in "polytechnics," they used to hire more people as full-time faculty who had experience in the field and just master's degrees.

In reply to by GunnerySgtHartman

DocBerg Endgame Napoleon Thu, 06/15/2017 - 12:23 Permalink

I'm retired from an Illinoiis state university.  Fortunately, I also worked in municipal management in several downstate cities.  So, I knew all about the pension follies.  So, when I unexpectedly returned to my alma mater as a lowly adjunct instructor, I knew to take the self-managed plan option from the State Universities Retirement System.  I managed to stay employed long enough to be vested, so the state had to pay its share into my retirement account by federal law, and now get money deposited each month from TIAA-CREF. I have state dental insurance as a retiree, and every month I get a bill from them, and every month I send them a check for $11.00.  One would think that this benighted state could still tap my checking account for the $11.00 like they did for some years, but now they send me a letter, and that probably costs them about half of my premium to process, then they have to process my check.  I sent them a letter this time around asking them why they could not just tap my checking account like so many businesses do, and suggesting that sending expensive letters to me each month is probably a reason why this benighted state is insolvent. I eagerly await their reply...

In reply to by Endgame Napoleon

83_vf_1100_c Kprime Thu, 06/15/2017 - 13:40 Permalink

Jealous much? The guy entered into a contract. Presumably he worked long enough to satisfy the agreement and was rewarded with a pension as part of the deal.  Said contract will default when the State of Illinois goes tits up and his check will stop.My Dad used to piss people off when he bragged about being a triple dipper. A check for Army retirement. A check for NC state disability retirement.  A check from Soc Sec. He lived out his last 20 yrs quite comfortably.

In reply to by Kprime