Pat Quinn

The Chicago Tribune’s Ray Long, Monique Garcia and Bob Secter have a good report on Illinois Gov. Pat Quinn’s proposal to raise the state income tax rate from three percent to four percent (or as the paper more dramatically puts it: a 33 percent raise). Quinn is proposing this because on July 1, the deadline for the Illinois governor to sign a balanced budget, the state is expected to have a $13 billion deficit. That’s an astonishing deficit for a state government that spends about $26 billion a year.

Quinn, up for election this year, has predictably run into opposition from state Republican lawmakers also up for reelection. But even the Illinois Democratic Speaker of the House, Mike Madigan, (speaker of the house since 1983), says, “The people of America don’t want tax increases…they’re hurting.” The Tribune, though, outlines why Illinois needs to raise taxes. A proposed no-tax hike budget would, for example, result in 17,000 teachers getting laid off. (more…)

The Chicago Tribune’s Mary Owens has a good piece on one consequence of the recession — the lack of summer jobs for teenagers. Jobs that teens in Chicago, and elsewhere, used to get at fast food restaurants or retail stores either no longer exist or have been taken by college graduates or more experienced employees laid off from their previous jobs. Owens writes that the lack of teen jobs, “leaves the city susceptible to more gang violence, teen pregnancy and drug use — known consequences of idle teenagers.”

Ironically, the one part of the stimulus bill where the federal government directly created employment was a youth jobs program last summer. Chicago still has $17.3 million in federal stimulus money for summer youth jobs. But the money is only expected to reach a fraction of applicants. And those who get jobs will likely be working about 20 hours a week for minimum wage.

As I’ve reported, the summer jobs program was largely successful. But it didn’t do enough to help troubled teens — or alter a teen unemployment rate that stands at a record 26 percent.

In my piece on the ten-year U.S. Census as a jobs creator, I mentioned that the count determines billions of dollars in federal funding. The Chicago Tribune’s Oscar Avila has a more precise report of how much money is at stake — in 2008, Illinois received $19.1 billion in federal funds tied to Census figures. Chicago alone got $12.6 billion. The money is especially important for covering highway costs and Medicaid reimbursements.

Avila gets his information from a new Brookings Institution study — the study finds that the Census count will determine $500 billion in federal funding.

The New York Times’ Monica Davey has a report today on prisoner early release programs done by state governments that face budget deficits. The plans have mostly proved to be politically poisonous. Here in Illinois, Gov. Pat Quinn prematurely ended an early release plan when 50 of the 1,700 prisoners the Illinois Dept. of Corrections released proceeded to commit new violations. In fact, Quinn went so far to say that he wasn’t fully aware of the plan — claiming that the Dept. of Corrections went against his directives.

Early release programs may not be the best way to balance a state budget. But evidence that some early release prisoners have committed new violations needs to be put in context. (more…)

The New York Times’ Carl Hulse reports:

The Senate ended a politically charged impasse over unemployment pay on Tuesday night, voting to allow jobless Americans in danger of exhausting their benefits another month of aid.

The bipartisan 78 to 19 vote in favor of the extended compensation came after Senator Jim Bunning, Republican of Kentucky, dropped his objection to extending unemployment compensation in exchange for a largely symbolic vote on paying for the aid.

The measure, which now goes to President Obama, should also allow 2,000 federal workers furloughed from the Department of Transportation to return to work as early as Wednesday and construction to resume on dozens of highway projects. Senators now will begin debating in earnest a much broader bill that would extend the safety net programs through the end of the year.

Bunning’s toying with the lives of more than one million unemployed workers shows the hypocrisy of members of Congress that invoke the national deficit. (more…)

At midnight, the unemployment benefits for 1.1 million Americans expired, including 15,000 in Illinois. Mother Jones‘ James Ridgeway explains that the benefits have expired because once again the U.S. Senate is behaving more like an eccentric private club than representative body. Senate Majority Leader Harry Reid motioned for unanimous consent to extend unemployment and COBRA health insurance benefits 30 days. Everyone proceeded to consent — except Kentucky Republican Sen. Jim Bunning. Bunning says he wants the unemployment extension paid for with spending cuts or tax increases elsewhere. Bunning must have turned over a new leaf because he approved of the $636 billion defense spending bill that passed the Senate in December.

Bunning’s obstruction sucks for people collecting unemployment — and also stinks for state officials who administer unemployment benefits. In many states, unemployment insurance funds have already run dry, or are about to. As Ridgeway notes, only federally-funded benefits has prevented many of the long-term unemployed from destitution. At best, the Senate will actually pass the extensions in the next couple of days. But that still means states will have had to go through the process of taking off and then putting people back on benefits.

Gov. Pat Quinn

The Wall Street Journal’s Amy Merrick has a good piece on the budget deficit facing Illinois. The state faces a $13 billion deficit, an astounding figure since the state’s annual budget is about $26 billion. One way that Gov. Pat Quinn is trying to “solve” the deficit is citizen involvement:

In the Web posting, the governor’s office encouraged residents to offer their own budget fixes. “We want them to be engaged in the budget process,” said Kelly Kraft, a spokeswoman for the governor’s office of management and budget. (more…)

The Energy Dept. inspector general has done a pretty damning report on the the Energy-funded home weatherization program, writes the New York Times’ Matthew L. Wald and Leslie Kaufman. The stimulus bill gave the weatherization program $5 billion to improve the insulation of low-income resident’s homes — the program’s 2008 allocation was just $450 million. Yet only eight percent of this $5 billion (in other words, about $450 million) has been spent as the states that administer the program simply haven’t hired the workers needed to do the home insulation.

The key reason behind the lack of hires seems to be the budget deficits faced by most states:

[T]he report said action was hobbled by bureaucratic delays and by the recession itself, as spending cuts resulting from the economic downturn forced states to trim personnel expenses.

Many states either furloughed the state employees who would administer such programs or instituted hiring freezes that prevented state offices from processing additional work — even though the federal government would have paid the additional salaries, the report found.

So even, though, the federal government would eventually pay for the weatherization, the state’s no longer have the institutional capacity to hire people. This is another example of why a possible stimulus/jobs creations bill needs to prioritize giving money to the states, which, unlike the federal government, can generally not do deficit spending. Also, the weatherization program should be changed to give some money upfront to states, instead of doing reimbursements.

The Chicago Tribune’s Lisa Black reports that school districts across Illinois are facing multi-million dollar deficits and will have to lay off hundreds of employees. Districts can get no relief from the state — which Black notes has a $13 billion deficit in a budget that is $28 billion a year. The state and districts have already burned through their $3 billion allocation of stimulus cash.

And it doesn’t appear that more federal money is coming soon. The New York Times‘ Carl Hulse crows about the bipartisan nature of a new jobs bill that passed the Senate yesterday. But the $15 billion package includes nothing for state fiscal stability. An optimistic take is that this jobs bill will trigger a series of subsequent bills, including one that reduces the number of layoffs and program cuts in school districts across the country.

The Wall Street Journal’s Jess Bravin has an interesting piece about the Supreme Court reviewing the handgun ban in Chicago and Oak Park, Illinois and how those in favor and opposed to the gun ban don’t split along traditional liberal-conservative lines.

Regardless, of whether these municipal handgun bans are constitutional, they are limited as a crime deterrent. Following the 1982 handgun ban in Chicago, the city’s homicide rate — including murder by gun — skyrocketed. In the last fifteen years, murders by guns have decreased. These crime trends are largely attributed to police work and social factors like the varying violence of the drug trade — and less by the availability of guns. As I reported on a bit this past summer, guns have been consistently available for Chicagoans through neighboring cities, Indiana and in gun trafficking networks that often stretch down to Mississippi. So while overturning the Chicago handgun ban might be a legal landmark, it’s not clear what, if any effect, it would have on crime in the city.