A Bull Market for Illinois Insiders
By: Adam Andrzejewski
January 2, 2010
In early December, I had dinner with a sitting Illinois state senator at a swanky Chicago steak joint. It’s a bull market for the Illinois political class- the place was swarming with lobbyists, political figures, elected officials and media folks- plus the Chicago Blackhawks. I witnessed a stunning night of expensive party dining while the finances of Illinois burn.
Springfield has spent over a half trillion dollars over the past ten years. Where has it gone?
Between 2008 and 2010, the Illinois budget’s red ink ran from $1.5 billion to $15 billion. The long-term liabilities increased from $106 billion to some estimates of over $200 billion. Illinois leads in juvenile violent crime, 3rd highest in gambling, 7th highest in property taxes, but 36th in education and 48th in job growth. Just this year, private employers with state contracts were forced to lay off over 20,000 workers. Contracted to serve Illinoisans with real needs, the employers did the work, have yet to be paid, and face bankruptcy. Illinois owes them $5 billion in unpaid bills.
Yet, it’s a bull market for the insiders, political fat cats, and connected contractors.
The crony capitalists dug up their political deals. In October, the Governor proudly announced the State of Illinois gave Groupon- one of the world’s fastest growing companies- a $3.5 million incentive package. Only one month later, Google offered to buy Groupon for $6 billion and Groupon turned them down. Why is the State of Illinois offering a private company $3.5 million, when they are so well off that they turned their back on a offer of $6 billion two months later?
The politicians are paid like political rock stars- leading the country in high pay- ranked 5th highest out of 50 states. Over the past three years, the state legislature hiked their own pay three times- for an 18% increase. Again this year, the politicians got their piece- perked to the tune of tens of millions with benefits like air-shuttle service from Chicago to Springfield. Illinois owns and operates an air fleet of 16 planes.
The public unions got their “no cut” ironclad agreement. In September 2010, the “Quinn Deal” gave public unions an 8.25% pay increase and a guarantee of no layoffs. While 55% of Illinoisans have lost their jobs or have taken a pay cut, public employees received pay hikes and guaranteed employment complete with gold plated perks and pensions.
The connected contractors pig out on the public largess. 18 months ago, Illinois passed the largest capital plan in state history and the largest in the nation. Loaded with pork-barrel spending and fueled by increased taxes, fees, video gambling, and $19 billion of additional borrowing, “Illinois Jobs Now” has a price tag of $31 billion (triple the size of George Ryan’s “Illinois FIRST” capital plan). Done ad hoc without a long-term capital plan, Springfield tacked on an additional $3 billion “Jump Start” capital plan and then this year added more projects: a $2.87 billion Illiana Expressway, a $200 million hotel expansion of McCormick Place, and a $387 million “star-bonds” backed shopping mall in Marian.
Real people suffer when a state systematically serves the connected insiders.
Private companies contracted by the state to serve people with real needs are going bankrupt. According to Illinois Partners for Human Services, nearly two million people receive service from state contracted private service providers. These vendors deliver over 75% of the human services care in Illinois. With no certain schedule of payment and over $5 billion in unpaid bills, estimates of over 20,000 employees have been laid off and hundreds of thousands of Illinoisans aren’t receiving the care they need.
Who are the victims? It’s people that can’t take care of themselves. These are people with real needs representing the true and limited purpose of government. Nonpayment effects seniors in state aided retirement homes and nursing homes, the poor and elderly receiving care from doctors and hospitals, the physically and mentally disabled, kids in day care centers, victims of violence in battered women’s shelters, etc.
It’s the Illinois Culture of Corruption that has come home to roost with a heavy human cost. A culture in which the Springfield patronage spending cabal (politicians, connected contractors, public unions) is compensated, on-time and in-full. Those who face real needs but lack political power are paid last, if at all. Illinois government has plenty of money. Lacking in principled leadership and political courage, the practice of “Springfield politics” has brought a moral shame on Illinois.
This disgrace has to end. For The Good of Illinois.