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Friday, August 31, 2012

Illinois makes the news again!

An excerpt from the Wall Street Journal 8/30/2012. A huge tax increase and we are now worse off. Something is wrong here.   Ken Dillenburg


In recent years a wave of new reform Governors has washed over the Midwest, but it did skip a few states. Among them is Illinois, which now has the worst credit rating of any state besides California. Voters may want to pay attention.
On Tuesday, Standard & Poor's downgraded Illinois bonds to A from A-plus, with a continuing negative outlook. The credit rating agency singled out five years of budget deficits ranging from bad to worse to way worse. It now stands at $44 billion—another national record. S&P was also more troubled than the Springfield political class about $83 billion in unfunded pension liabilities. The legislature ended a special session on pension reform this week without, well, passing any reform.
S&P praised Democratic Governor Pat Quinn's "significant measures in the past two years to improve structural budget performance," meaning his 67% boost in personal income rates and raising the corporate tax to 9.5%. Credit raters never object to tax increases, even if they never solve the budget problem. But that's another story.
The tragedy is that Illinois is surrounded by states showing a better way. For example, all three major raters have been upgrading Ohio's ratings after years of chronic fiscal problems. Governor John Kasich hasn't imposed fearsome austerity—he simply streamlined the budget. Mr. Kasich and other GOP Governors have prominent speaking places at this week's Tampa convention. Will Mr. Quinn next week?