I. Introduction Throughout the spring and summer of 2017, numerous articles appeared in local and national media outlets describing the escalating financial crisis in the State of Illinois. The main proximate cause of the looming budget disaster and its accompanying media attention was the high likelihood that the Republican Governor, Bruce Rauner, and the Democratically-controlled Illinois State Legislature, led by House Speaker Mike Madigan, would not reach an agreement on a state budget by the 30 June deadline for a third consecutive fiscal year . The immediate consequences of failing to enact a budget were far-reaching and included continuing detrimental impacts to social services, the state’s inability to pay its bills even to lottery …show more content…
To illustrate these tendencies, several macro-level trends and events in Illinois’ recent history warrant brief discussion. First, Thomas Walstrum, a business economist from the Federal Reserve Bank of Chicago, published a striking analysis in 2016 concerning Illinois’ fiscal situation that succinctly illustrated how the state’s current fiscal trajectory essentially began in the late 1980s. In his article, “The Illinois Budget Crisis in Context: A History of Poor Fiscal Performance,” he posits that the state could have been categorized as a low-expenditure, low-revenue state prior to the 1990s (Walstrum). Starting in the mid-1990s, however, his analysis shows that the state began consistently spending more than it took in in revenues, significantly outpacing the national average (see figs. 1-3). From the years 1994 to 2010, Illinois’s spending averaged 115.9% of its revenues compared with 105.7% for the typical U.S. state (see fig. 4). The main source of this increased spending was pension-related and since revenues continued to remain low, the state began accruing debt to cover these liabilities (Walstrum). This imbalance between revenues and expenditures indicates that Illinois’ budget has not really been balanced since this period in the 90s. In his analysis, Walstrum also treats the yearly change in pension liabilities as an expenditure, treating future payments as if they were being made right now. In doing so, he demonstrates that Illinois was actually a much higher expenditure state than commonly believed since it was merely deferring those expenditures in the form of pension fund payments well into the future
Many argue that Reagan “enacted irresponsible tax giveaways for the rich…[starving] the federal government of revenue [which] led to unprecedented deficits.” There is no doubt that “today’s budget deficits [can] impoverish our descendants.”1
A Democratic Party long ruled by moderates and conservatives succeeded in stunting what seemed like the natural growth of a successful Republican Party until the 1990s. Since then, various forces have contributed to the growth of the Republicans, and in the end, to an altering of the core membership of each party. Most recently, the state has seen the development of a dominant Republican Party that doesn't yet hold quite the dominion the Democrats enjoyed through most of the twentieth century. The Republican Party has certainly benefited from the defection of former Democrats, the arrival of Republicans and independents from out of state, and organizational difficulties in the Democratic Party. Thus, Republican officials dominate state government, and Democrats find themselves reduced, for the present, to the status of an embattled minority party seeking to recreate themselves among their voting and financial constituencies. This is showing that the newfound Republican dominance can be the beginning of a new strong party system, or if we are in a state of transition in which the terms of political competition are still in change. If it is a new party system, I don’t think it will be very durable or last too long for that matter. Now, it seems that Republican dominance of state government will
President Obama’s State of the Union Address and Governor Christie’s State of the State Address appear to compare and contrast to each other. The two speeches are similar in their rhetoric as during the introduction, both of them appealed to the people of their individual, separate governments. The two speeches were similar in specific topics that were covered by Obama and Christie. Obama and Christie highlighted the issues of education, job training, health care, job growth, the economy, and infrastructure investment. The two speeches not only outlined the successes and failures of the specific administration, but Obama and Christie also drew attention to specific individuals, whom were watching the address, for their part in the administration. Regardless, In both speeches, each speaker has stated that they plan to come back to their individual governments with acts, and bills, in the future to help plan a better tomorrow. Last of all, the two speeches were similar in their ways of drawing an applause from the audience. Obama and Christie both heaped praise upon the accomplis...
Allan and Davis mention the spike of college cost since 1995 has increased by 150 percent; student debt has increased 300 percent since 2003, and with education, second to the mortgage industry in the nation’s debt, America needs to redirect their attention to the future and focus on education (Allan n. pg). Budget cuts from national to state
Lockwood, Andrew. School Finance Reform in Michigan Proposal A: Retrospective. Lansing: Michigan Department of Treasury, 2002.
Stephen C. Goss has extensively written about the future financial status of the social security program for the Americans and for the whole world at large. He patently articulates that changes enacted in 1983 on Social Security are expected to bring dynamic revolution, such that the benefits and other compensations would be paid in full and on a timely basis until 2037. In 2037, trust fund reserves are expected to be virtually exhausted. After the reserves are used, continuing taxes will be vastly relied upon to pay 76% of the benefits. There will be need and the necessity for the Congress to deliberate on changes concerning the program. It is estimated that reduction of benefits by 13% or a sudden increase in payroll tax to 14.4% from 12.4% or a combination of these two strategies will lead to full payment of scheduled benefits for the next 75 years. In the article, Stephen Goss explicitly analyzes the financial state of the Social Security program. He fundamentally analyzes the aspects of solvency and sustainability. It also evaluates the effect of the social program on the federal budget. It is apparent that social benefits that Americans deserve will continue in the future with certain adjustments to be implemented by the congress and by the legislative bodies.
Klarner, Carl E., Phillips, Justin H., and Muckler, Matt. “Overcoming Fiscal Gridlock: Institutions and Budget Bargaining.” Journal of Politics 74 (2012): 992-1009. EBSCO HOST
Mayor Mike Duggan has recently added his voice to the many others in regards to asking for state help for Detroit Public Schools. While he observed some schools that were properly maintained, he noted that conditions in some schools would “break your heart” including issues with heating and severe water damage that prevented children from using the gymnasium. Duggan’s tour came to a quick and early end, however. Many schools were closed in early January due to teacher sick-outs as a form of protest to what teachers call “deplorable conditions for them as well as students.” These protests are in direct response to the building conditions, pay cuts, and the recent plan by Governor Snyder. In addition, the school system is projected to run out of funds in April. Duggan encouraged the state to help fix Detroit schools. Of the districts ninety-seven s...
Every day in New York City, hundreds of people walk past a huge digital billboard with giant numbers across its face. Each person who walks past this billboard sees a slightly different arrangement of numbers, growing larger every second. This board is the National Debt Clock, representing the over 14 trillion dollars currently owed by the United States. While some people claim that the national debt is caused by the falling economy, most maintain that the debt itself causes the poor economy (Budget Deficits 2007). Rising debt leads to higher interest and investment rates, and cuts into our national savings. Ignoring the national debt leaves the major burden of paying it off to later generations, while meanwhile allowing our country’s economy to further drop and our dependency on other nations to rise.
Recent budget controversy in Congress and the media has once again brought to the forefront the pressing desire for fiscal responsibility in the United States Government. Although Congress came to a compromise over the budget in the proverbial eleventh hour, the extra attention afforded to the budget issue has reignited a lingering controversy: is the current system of transfer payment programs a financially viable one, or should these programs be recognized as an economic burden? As new waves of retirees stream into the system, it has once more become necessary to consider whether or not the U.S. Government can truly afford to keep the implicit promises it has made, and if the next generation to reach retirement age will see the benefits that it pays for current claimants to enjoy.
So what’s wrong with California now? The only problem is the tremendous amount of debt accumulated over the years. What makes people think that Arnold will be able to restore California? At one of his campaign tours around the state, people waited two hours to hear him s...
In the first article, “Hiding from Reality”, Bob Herbert talks about the reality of the state of the United States. He feels that America is in sad shape. Herbert states that from the economy, jobs, and public schools, the country is definitely in a decline. Herbert also feels that our country is in denial about how bad things really are. Unemployment rates are at their highest and that with our country going to war with no money to fund them, it is just another reason American’s are in a downward spiral. No one is sure if we can ever recover from the recession of 2009, and Herbert makes it very clear he doesn’t see an end to the suffering American’s are feeling anytime soon. Everyone from service employees, to state and local government agencies are feeling the effects of the recession. Every program and employee is feeling the cut backs. Taxes are being raised and employee’s benefits are being cut...
When states try to find ways to restrain from non-essential areas, unfunded federal mandates are at the top of the list. These mandates often force state and local governments to spend much more than necessary on everything from medical care to welfare to road building. A complex web of federal programs bind together the tree treasuries of the local, state, and federal government. As much as 25 percent of state budgets now comes from the federal government, and up to 60 percent of some state budgets is spent on joint federal-state programs.
The Chicago Public School District is the third largest school district in the United States educating around 400,000 students. Back in 1987 CPS was named “the worst in the nation”(). Moving its way up to the top, since then, CPS had completely rebuilt its structure, appointing leaders and reformed ideas. Now, with a deficit projected to be around $1 billion CPS is headed back in a downwards path, money being the biggest issue. The United States Federal Government already has financial issues of its own, which makes dealing with a CPS budget a problem within a problem. CPS, with a $6.6 billion FY2013 budget, is now taking a new strategy based upon a flawed “Student-Based Budgeting System”. The Board of Education is also struggling to solve the debt they have reached, and with their FY2014 plans this year’s budget book is argued to be “one of the most poorly written budgets”(). The way CPS is handling their budget is not benefiting the lives and education of students and is leaving CPS at a loss with giant financial issues.
NERSISYAN, Yeva and L. Randall Wray (2010). Deficit Hysteria Redux? Why We Should Stop Worrying About U.S. Government Deficits. Nova York: The Levy Economics Institute, Public Policy Brief, Nº. 111. http://www.levyinstitute.org/pubs/ppb_111.pdf.