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* Illinois Policy Institute…
A Truth in Accounting report argued state authorities should have used billions in federal aid to pay down interest on existing pension debt rather than save it for a rainy day. Experts warn this could lead to more state borrowing.
Um, what?
The governor’s office pointed to this Federal Register passage from the US Treasury Department…
For all recipients except Tribal governments, funds may not be used for deposits into a pension fund. […]
Subsection 602(c)(2)(B) of the Social Security Act provides that ‘‘[n]o State or territory may use funds made available under this section for deposit into any pension fund.’’ Similarly, subsection 603(c)(2) of the Social Security Act provides that ‘‘[n]o metropolitan city, nonentitlement unit of local government, or county may use funds made available under this section for deposit into any pension fund.’’
For purposes of this restriction on pension deposits, the interim final rule defined deposit to mean ‘‘an extraordinary payment of an accrued, unfunded liability.’’
* From the reported cited by the IPI…
On the heels of credit rating upgrades, Illinois has sold $1.6 billion worth of bonds to fund a pension buyout program and construction projects. As the Chicago Tribune reported, Gov. J.B. Pritzker touted the upgrades lauding Democratic leaders for their work “to make sure that we’re back in good fiscal order, that the state is building its fiscal foundations for the road ahead.” But as Hetty Chang of Moody has stated, ratings are not “public policy report cards, although politicians may use them as such.” Credit ratings do not focus on the overall financial condition of the state; they focus on the likelihood of bonds being paid.
And if the state is in such “good fiscal order,” then why did it need to borrow money?
You don’t spend cash to buy a house, and you don’t spend cash to fix a bridge, build a transit line or fund a pension buyout program, which would’ve put more immediate pressure on the state budget for no good reason.
* And Jordan Abudayyeh pointed to some past instances when IPI denounced the state for its essentially non-existent rainy day fund…
I’ll just leave these here. https://t.co/bl7pLP7bGc pic.twitter.com/IYlRYtpVf8
— Jordan Abudayyeh (@JordanAbudayyeh) August 24, 2022
The state also kicked in $500 million for extra pension payments on top of what the state was obligated to pay by statute.
…Adding… When Senate President Don Harmon asked for a federal bailout of its pension funds, IPI and others freaked out…
* IPI: Why Congress should reject Illinois’ $44 billion bailout request
* Wirepoints: Illinois Senate Democrats Seek Massive Federal Bailout for State, Going Far Beyond Coronavirus Impact
* Sun-Times: GOP Illinois congressmen blister state senate Democrats for using COVID-19 coronavirus as excuse for pension bailout request
posted by Rich Miller
Wednesday, Aug 24, 22 @ 10:06 am
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–And if the state is in such “good fiscal order,” then why did it need to borrow money–
oh my. This says everything in so few words about exactly who IPI is targeting as an audience. And more specifically, what they think of that audiences level of education.
Comment by TheInvisibleMan Wednesday, Aug 24, 22 @ 10:11 am
Ever looked at an IPI suggestion for a state budget? Do so. You’ll get a great inside look at their “knowledge” of state finances.
Comment by Demoralized Wednesday, Aug 24, 22 @ 10:14 am
= And if the state is in such “good fiscal order,” then why did it need to borrow money? =
That right there is about the dumbest thing an educated person (or a think tank) could ever say. Dumb is as dumb shows itself to be. Maybe they should ask Trump why he borrows money. Just dumb.
Comment by H-W Wednesday, Aug 24, 22 @ 10:17 am
I guess conservatives don’t use mortgages, car loans, or credit cards. Probably don’t trust banks either and stuff their cash in mattresses.
Comment by Big Dipper Wednesday, Aug 24, 22 @ 10:18 am
You don’t spend cash to buy a house. Wish someone would have told me. What I wish I wouldn’t have done is spend money on kids college education.
Comment by Blue Dog Wednesday, Aug 24, 22 @ 10:18 am
Said it now multiple times, still rings true.
The worst resume possible is one with IPI and Rauner as the experiences in governing and working around government.
This is center cut filet;
===You don’t spend cash to buy a house, and you don’t spend cash to fix a bridge, build a transit line or fund a pension buyout program, which would’ve put more immediate pressure on the state budget for no good reason.===
There is ZERO political spin, belief, “lean”… this is ball game and honesty to understanding what it means to be fiscally sound.
The target audience is the handful of folks who write 6+ figure checks… and the in-law uncles so angry and upset they can’t explain it rationally why they feel that way… as they send $100 dollars with handwritten notes… “keep fighting”
It’s a grift, but a gift… a gift of reminder.
You can’t take IPI serious as an entity.
Comment by Oswego Willy Wednesday, Aug 24, 22 @ 10:19 am
Bruce Rauner let IPI types have a turn at running state government and finances.
It was an overwhelming disaster.
They don’t know what they are doing. They don’t know what they are talking about. They are fake institutions created solely for political propaganda through faux expert contradiction.
Comment by Michelle Flaherty Wednesday, Aug 24, 22 @ 10:21 am
IPI currently has so little to complain about, they are making up scary future scenarios.
My favorite are the latest claims that anything the Dems do in Springfield on any topic will force locals to greatly increase property taxes.
Scraping the bottom of their “go-to” barrel.
Comment by walker Wednesday, Aug 24, 22 @ 10:22 am
IPi is in it for the grift nothing more nothing less. They have to say something to keep getting donations and the wheel turning.
Comment by Frank talks Wednesday, Aug 24, 22 @ 10:22 am
With the fiscal situation stabilized and the ILGOP imploding, IPI’s usefulness is waning rapidly. These guys are gonna have to go find real jobs soon.
Or different Republican make-work jobs at least. Might be the only thing they’re qualified for.
Comment by vern Wednesday, Aug 24, 22 @ 10:38 am
The IPI is in the right wing propaganda business and will never stop being negative.
Its doubly bad for professional doomsayers because Illinois’ improvement has been brought in large part by Black and Brown Democrats.
Comment by Grandson of Man Wednesday, Aug 24, 22 @ 10:41 am
===pay down interest on existing pension debt===
Am I wrong to think that the state doesn’t pay interest on it’s pension debt? The pension funds aren’t negative, they are underfunded.
Comment by Ducky LaMoore Wednesday, Aug 24, 22 @ 10:49 am
— They don’t know what they are doing.—
They know exactly what they’re doing. Every utterance is a matter of situational ethics, principles, and policy.
They exist to stoke outrage, not knowledge.
Comment by King Louis XVI Wednesday, Aug 24, 22 @ 10:51 am
A conservative “think tank” advocating ignoring, and breaking federal law?
Must be big fans of Mike Madigan.
Comment by Flying Elvis'-Utah Chapter Wednesday, Aug 24, 22 @ 10:56 am
Rich delivered the money ball at the end of the post when he referenced past charges from MAGA that fed money would be used for pensions.
MAGA SOP: Darn them if they do; darn them if they don’t.
Comment by Norseman Wednesday, Aug 24, 22 @ 11:03 am
Dear IPI,
Economics is hard.
Sincerely,
The Fiscally Responsible
Comment by Alice Childress Wednesday, Aug 24, 22 @ 11:14 am
Not to pick on LP too much as we do but I’m guessing that even he is not silly enough to post on defending IPI this time.
@demoralized, I have read IPI suggestions for the state budget, especially when Rauner was gov. Useless.
Comment by Lurker Wednesday, Aug 24, 22 @ 11:25 am
Their lawyers are spending far too much time sending out those “I want to free ride” letters that no teachers sign and creating frivolous lawsuits on the Workers Rights Amendment that have “no reasonable grounds for filing suit” and “fail as a matter of law.”
Perhaps they should be reading these articles before they are posted and checking them for compliance with federal law instead?
Comment by IL4Ever Wednesday, Aug 24, 22 @ 11:36 am
“Truth in Accounting” - an even bigger oxymoron than “Military Intelligence” or “Organized Religion” …
Comment by Anyone Remember Wednesday, Aug 24, 22 @ 11:52 am
Spelunking for misery. IPI has to dive pretty deep to find something to be miserable about these days. But I’m sure they’ll keep trying.
Comment by 47th Ward Wednesday, Aug 24, 22 @ 12:26 pm
per wikipedia: “Truth in Accounting (TIA), formerly known as the Institute for Truth in Accounting, is an American think tank that promotes fiscal conservatism. . . . It partners with American Legislative Exchange Council, State Policy Network, Heartland Institute and other conservative think tanks.”
So one conservative group cities to another conservative group to write a story about their preferred conservative talking points.
Comment by Homebody Wednesday, Aug 24, 22 @ 12:30 pm
IPI…We strive every day to be consistently inconsistent
Comment by Under Influenced Wednesday, Aug 24, 22 @ 12:40 pm
Truth means nothing to these folks.
Comment by Siualum Wednesday, Aug 24, 22 @ 1:41 pm