Susoni note: One thing that is not mentioned (in the second snip) is the vast amount of pension funds being paid out to government workers who voted it for themselves.
Sent in to us from reader Anna, TY!:
https://illinoiscomptroller.gov/news-portal/comptroller-mendoza-reaches-out-to-state-leadership/#.WVE-Mun_pPZ
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As Illinois’ Chief Fiscal and Accountability Officer, my Office is responsible for managing the state’s financial accounts as well as providing the public and the state’s elected leadership with objective and timely data concerning the state’s difficult fiscal condition. As you are quite aware, I have been very vocal regarding these issues and the budgetary impasse since assuming office six months ago; however we are now reaching a new phase of crisis.
Accordingly, I must communicate to you at this time the full extent of our dire fiscal straits and the potential disruptions that we face in addressing even our most critical core responsibilities going forward into the new fiscal year. My Office has very serious concerns that, in the coming weeks, the State of Illinois will no longer be able to guarantee timely and predictable payments in a number of areas that we have to date managed (albeit with extreme difficulty) despite an unpaid bill backlog in excess of $15 billion and growing rapidly.
State’s spending obligations have exceeded receipts by an average of over $600 million per month over the past year.
My cause for alarm is rooted in the increasing deficit spending combined with new and ongoing cash management demands stemming from decisions from state and federal courts, the latest being the class action lawsuit filed by advocates representing the Medicaid service population served by the state’s Managed Care Organizations (MCOs). As of June 15, the MCOs, and their provider networks, are owed a total of more than $2.8 billion in overdue bills at the Comptroller’s Office. There is no question that these obligations should be paid in a more timely manner and that the payment delays caused by the state’s financial condition negatively impact the state’s healthcare infrastructure. We are currently in court directed discussions to reach a workable and responsive payment schedule going forward, but any acceleration of the timing of those payments under the current circumstances will almost certainly affect the scheduling of other payments, regardless of other competing court orders and Illinois statutory mandates.
Currently, more than 90 percent of Illinois’ monthly spending is directed toward core functions of state government mandated by court orders, consent decrees, or state law including continuing appropriations. These include certain Medicaid programs, debt service, payroll, K-12 General State Aid and state pension contributions
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Now folks, you can call this a "one off" if you wish.
It's not.
It is also not a surprise where the problem is centered. It's in health care.
I've only been yelling about this since the 1990s, when I saw the impact on my firm's balance sheet and cash flow statement on a year-over-year basis for a few years running. You don't need to see it for more than a couple of years to grasp the gravity of the problem if you have a brain and are not politically poisoned to wave it off.
Anyone with a $3 WalMart calculator can figure it out, given 5 minutes and an IQ greater than their shoe size. You merely need to run the exponential series out 5, 10, 20 years and what happens becomes obvious.
At ~9% expansion the rule of 72 gives you a close-enough approximation: Costs double every 8 years; in 24 years you spend eight times as much money as you did originally.
There isn't 8x as much money and you can't raise it.
You can't increase taxes by 800%. You can't expand the economy by 800% over 24 years; at a 3% GDP expansion rate (which we haven't had in the last two decades for any sort of time period, I remind you) the economic output expands by 200%. This means that you'd have to quadruple taxes compared against economic output, and if you try to do that GDP will collapse because you will consume all of the expansion in economic output and then some.
There is only one answer to this problem and that is to take the entire medical system, which is where the entire problem resides, and dismantle it. Prosecute every single hospital administrator, owner of an imaging center, drug company executive and physician that has ever, even once, stuck his head in a hospital room and then billed someone $1,000 for a "drive by" consultation -- or anything like it, such as charging $90,000 for a drug here that's $2,000 in another nation, or billing one person $100,000 for a procedure where another is billed $5,000 or $10,000.
Bankrupt them all by imprisoning every last ******ned one of these people and fining their firms out of existence using the 100+ year old and still valid body of law found in 15 United States Code, Chapter 1.
After all, a D8 beats the destruction of our cities and state governments, along with 100+ million dead Americans, which is exactly where we're headed over the next couple of decades if we don't cut this crap out right now.
Go ahead and believe if you wish that "owning" property in one of these cities -- any of them -- is real. Go right ahead. You have a nice piece of land and house there. It's maybe worth what -- $500,000? If it carries a property tax levy of $12,500 a year you paid for it again in 40 years but got nothing of value for the money spent the second time.
By the way, how do you afford that $12,500 property tax bill on a middle-class -- or even upper middle-class income, say $80,000 or $100,000 a year? You can't.
It would be bad enough if it stopped there but it won't. My former house near Chicago has seen its property tax levy double in 10 years time. What makes you think yours won't have the same thing happen? It not only will it has; I've seen it on other properties I've been watching including property my family members own in such places.
