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Thursday, August 28, 2008

More Illinois Budget Trouble

We posted the September issue of the Heartland Institute's "Budget & Tax News" earlier this week. If you didn't have a chance to read it, you may enjoy this article on the latest drama from Illinois...

Illinois Is Playing a Dangerous Game with its Broken Annual Budget Process
By: Sheila Weinberg
For the second year in a row the Illinois state government started its fiscal year, which began July 1, without an approved budget. Legislators passed a 2009 budget by the May 31, 2008 deadline, but the governor refused to sign it.

Lawmakers acknowledged the budget was about $2 billion out of whack, and on July 9 Gov. Rod Blagojevich (D) vetoed $1.4 billion in spending.

About one week later the governor called lawmakers back to boost taxes or fees to stave off the cuts, but House members instead restored $480 million of cuts. Senators took no action, so the cuts remain. So does the budget imbalance.

Unfortunately, the budget game the state's politicians are playing is far from harmless.

Ted Hampton, a Moody's bond rating agency assistant vice president, recently issued a press statement saying a state that repeatedly starts its fiscal year without a budget is viewed as having "political polarization." That could adversely affect bond ratings, cost taxpayers higher interest payments, and make it more difficult to place state bonds, he added.

Continue reading...

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