Recently by Joel Bowman: Budget Deficits, Pension Plans, and the Seeds of Rebellion
It’s time, Fellow Reckoner…time to announce the winner of this year’s “The-name-of-the-guy-who-came-up-with-the-idea-of-evolution-but-who’s-name-we-cannot-use-due-to-trademark-infringement-constraints-Award!”
Or, for short…
The winner of our inaugural Daily Reckoning Dodo Derby.
Let’s start where all good evolutionary tales start: at the beginning…
This year, 44 of America’s united states will deliver a combined 2012 budget shortfall of approximately $125 billion. They are broke, in other words, and determinedly bureaucratizing themselves ever closer to outright insolvency…the financial equivalent of the dinosaurs’ tar pit.
By way of honoring their commitment to financial evolution – that is, by rendering themselves extinct so that newer, more adaptive and innovative concepts of trade and freedom can take their place – we featured a handful of these states during recent Daily Reckoning musings.
First, in last weekend’s edition, we narrowed the field to ten finalists – California, Connecticut, Illinois, Louisiana, Massachusetts, Mississippi, New Jersey, New York, Ohio and Wisconsin.
Then, on Monday and Tuesday, we awarded special mentions to Connecticut and New Jersey for their commitment to wasteful state government spending. Next, we bestowed first and second runners-up honors on California and Massachusetts, respectively.
And now, today, it’s time to announce the winner of our shamelessly non-scientific, mostly tongue-in-cheek, change-the-name-halfway-through-the-competition competition.
But first, the stats…
Population: 12.88 million. Unemployed: 603,000. Food stamp recipients: 1.97 million. Total debt: $143 billion. Debt/GDP ratio: 22%…
And, here’s the kicker…
Total state debt per man woman and child – whether working or not: $11,138!
Yes, Fellow Reckoner, this year’s winning state, occasionally referred to as Land of Lincoln or The Prairie State, home of the president of the country with the largest total debt the world has ever seen, is…
Illinois.
Congratulations Illinois. Here are your residents:
“I think I’ll chime in,” begins our first Reckoner, kicking things off. “I live in Illinois and, like Wisconsin, our day of reckoning will be coming soon. Picking on the middle class will result in a mutiny of grand proportions.
“Start taking a look at the School Boards where they vote themselves raises and plum retirement benefits… The politicians and judges who get automatic raises each year or ever other year… The City Councils who bicker of not making enough… The special stipends these people get so they can hire family members… Raises and promotions for those who have contributed to the funds of those running for re-election… Get with the State Comptroller’s Office and investigate who gets what in payroll. Politicians SHOULD also increase their contribution to Health Care. Eliminate state positions that crossover and are duplicating waste and make sure that all building contracts come within budget. Reduce and/or eliminate nepotism within state offices.”
And here’s reckoner Bob, with a few specific tales of local waste…
“Here in Chicago IL, at Piotrowski Park, they demolished a nice playground area and replaced it with a greatly inferior playground. Then, in the field house, they installed an elevator that goes from the ground floor to the locker room one floor below, as if the stairs were not enough. Oh…and they tore out the field house reception area just so they could rebuild it. In the playing field, they tore out perfectly good water fountains just to replace them.”
Adds Reckoner Charles…
“I live in Illinois too, where instead of postponing two overpasses across the railroad tracks, they are going ahead with it. That would cut costs buy over $2,000,000 just by putting it off for a while. The overpasses are NOT needed. Just that some council person wants a few more votes.”
And this, from Reckoner John…
“Illinois has an interesting strategy for funding teacher salaries and retirement. Illinois schools and teacher salaries are funded by property taxes, but the taxes remain in the community where they are collected. There is no statewide distribution. The rich get richer…
“Then there are the pensions. The Illinois Taxpayers Union has lists of the top 100 educator pensions on a county-by-county basis. In Cook County, the top 100 pensions run from $238K to $146K annually. Pensions range from 60% to 120% of the average salary for the last four years of employment. These are for primary and secondary educators in suburban Cook County. An “educator” from the National Education Association is #2 on the list at $235K.
“The top 100 Community College educator pensions in Cook County have a slightly lower range – $208K–$102K. Guess who picks up the tab for pensions?”
And finally, an appropriately named Reckoner “Cost” sounds off…
“They are now going after the residents for online purchases made from retailers located outside the state with no in-state presence, but used/consumed within the state, to the tune of a 6.25% tax rate. Ludicrous. And they are offering amnesty going back to 2004 along with the option of using the estimated tax table if you don’t have records. The tables are heavily skewed to the State’s favor (assuming, for example, that if your gross income was $75–100K, you would have spent $1,000 online for such purchases.) Keep in mind, though, that this is the State that also lets residents voluntarily pay cigarette taxes for purchases made outside the State. Go Illinois!”
Go Illinois, indeed.
Thanks again to the hundreds of readers who wrote in from around the nation will tales of waste and incompetence at their individual state levels. And congratulations again to our finalists and, of course, this year’s winner.
Reprinted with permission from The Daily Reckoning.
Joel Bowman is managing editor of The Daily Reckoning. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world.
