There's no question Illinois' current fiscal state is dismal, and complicated. In his budget address last week, Governor Pat Quinn tried to explain how completely the state's finances are screwed up.
IPR reporters Alex Keefe and Niala Boodhoo went on a quest to translate state finances into plain English:
AL: Ahh, the fiscal house
NIALA: Yes, the fiscal house.
AL: But maybe the fiscal house can illustrate an important point.
NIALA: That the governor needs new speechwriters?
AL: No - really. What if Illinois were a fiscal household - like a family with a budget. What kind of a family would we be?
NIALA: Uh Okay.
AL: I think this can work. But first, we're gonna need to get married.
(LOVE AND MARRIAGE MUSIC)
NIALA: Wait, what?!?
AL: Yeah, so I am Mister Illinois, and you can be the lovely Missus Illinois.
NIALA: All right, all right, husband -so how much money do you make? What’s our income?
AL: Well, with tax revenue and fees and such, we're set to make about 34 billion dollars this year.
NIALA: Oh, that's so not a public radio salary. Great! But what about our expenses?
AL: Well we've gotta pay for schools and roads and state workers and stuff, so that all money's pretty much accounted for.
NIALA: Oh. I guess I'm taking charge of our finances, right. Ok, so you need to tell me about what's in our savings, and our bills.
AL: Yeah. About that. I think we should go talk to the person in charge of our bank account.
NIALA: Oh let me grab my calculator. Where are we going?
AL: Judy Baar Topinka. She’s writes the checks.
TOPINKA: They always ask, if I control the airplanes? I'm not the air traffic controller.
NIALA: No, She's the COMPTROLLER for the state of Illinois. So she pays the bills. Which we were about to find out, are way overdue.
AL What kind of bills are we as the state of Illinois facing?
TOPINKA: Well, I think everybody understands their electric bill.
Al: How much is that?
Topinka: That's uh $20,778,226.11.
Our water bill! (fade under)
Al: Throw in overdue medical bills, and money we owe to schools - and the total... (SOUND OF ADDING MACHINE) it's about $9 billion dollars. And those are just the bills that are overdue.
Niala:There's no savings? Like we don't have a savings account somewhere, like a rainy day fund?
Topinka: Oh that was emptied years ago. Legislature wanted money, they went to the rainy day fund, they got rid of it.
AL: Topinka says, as Mister and Missus Illinois, we've also been pretty terrible about saving for retirement. We have at least about a-hundred billion dollars in unfunded pension obligations. That's the amount we should have been saving for state workers but instead, we spent it.
Niala: So how would you describe our current fiscal state?
Topinka: Dire, dire. You're a risk. You’re like dealing with Greece, they can't get their act together, you can't get your act together.
Niala: (sigh audibly). This is really bad.
Al: I think we have to talk to somebody else.
Martire: I'm Ralph Martire, I'm executive director of the bipartisan Center for Tax and Budget Accountability.
Al: And actually, Martire says we, as Mister and Missus Illinois, aren't exactly living in the lap of luxury.
Martire: You are at best lower middle income class, probably a cut below that if you what you're able to put on the table in the way of services.
Al: He says if we look at how much we spend on core expenses, stuff like public safety, education, social services, we rank in the bottom ten out of the 50 states.
Niala: Yeah, and I guess cutting those services isn't as easy as giving up our date night at Gibson’s.
Al: So his solution isn't to spend less, it's to make more.
Niala: Martire says the problem is Illinois doesn't bring in nearly enough tax revenue. And it hasn't. For decades.
Martire: And I do mean decades, at least four or five possibly six decades. Our tax system which isn't designed to work in a modern economy, hasn't.
Al: All right, Illinois has a pretty complicated household budget to balance, I mean cutting services would hurt people, and raising taxes doesn't seem popular. Are you sure we can't just borrow a teensy little bit more money?
Niala: Uh, have you looked at our credit report lately? Our score is in the toilet.
Al: I'm sure if we just talk to them maybe we can work something out.
phone ringing, Fitch Ratings, this is Karen.
Al: Karen! This is Mr. and Mrs. Illinois.
Karen: Good morning!
Al: We need your help.
Niala: Karen Krop is senior director, public finance for Fitch, one of the three agencies that rates Illinois’ credit. What they say about Illinois is the equivalent of a credit score.
Al: And it's not good. Illinois has received 13 downgrades over the last decade. That makes it even more expensive for us to borrow money, so expensive, the state actually canceled a bond offering recently.
Niala: And the people who are saddling us with these downgrades are people like Karen.
Al: Do you not like us, like as a family?
KROP: (laughs) It's nothing personal. Illinois' behavior, management behavior, over the last couple of years, has led us to lower the rating, because the problems haven't been solved in a comprehensive long term way.
Niala: At this point, we were both tired of being Mr. and Mrs. Illinois.
Al: So, we can't like, escape to Tijuana.
Karen: No, the state of Illinois in real life cannot run away. So the state of Illinois will have to step up and find a solution.
Al: If we were a normal family, I'm pretty sure would be heading toward bankruptcy court right now.
Niala: Uh, and divorce court.
Al: But states can't do that. Illinois is legally bound to pay its debts.
Niala: Everyone we talked to agreed on this: we do have to do something. Right now, Karen and Fitch have, us, the entire state, on a negative watch. That means actually she is watching, waiting, for the state do something. And if we do nothing?
Al: Illinois will almost certainly get downgraded again. Making our fiscal house even more of a tinderbox.
I'm Missus Illinois, Niala Boodhoo. And I'm Mr. Illinois, Alex Keefe
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