The Ghouls in Springfield

The editors of the Chicago Tribune have noticed that Gov. Pritzker and his pals in Illinois’s legislature are not letting the present crisis go to waste and are proceeding to beg for a bailout from the federal government using COVID-19 as a pretext:

It is not surprising an Illinois politician finally put in writing what economists and financial watchdogs have been warning for years: That elected officials who failed to take seriously decades of fiscal warning bells in this state eventually would seek a bailout from the federal government.

What is beyond galling is using the coronavirus as an excuse. But that’s what Illinois Senate President Don Harmon, D-Oak Park, did last week in a letter circulated among Illinois’ congressional delegation and obtained by The New York Times. Harmon requested more than $41.6 billion in bailout aid as part of the next coronavirus relief package, including $10 billion for Illinois pensions, due to economic collapse from the virus.

Even by this state’s low standards, asking federal taxpayers from California to North Carolina, from North Dakota to Texas — farmers, small business owners, teachers, nurses, bus drivers, bartenders — to help dig Illinois out of its pre-coronavirus, self-inflicted, financial hellhole is astonishingly brazen. Every member of Congress should carefully scrutinize pleas from states whose unbalanced budgets, embarrassing credit ratings and vastly underfunded pension systems predated virus outbreak.

“I realize I’ve asked for a lot, but this is an unprecedented situation, and we face the reality that there likely will be additional, unanticipated costs that could result in future requests for assistance,” Harmon, who has been in office since 2003, wrote in the letter.

SARS-CoV-2 did not create a fiscal crisis in Illinois. Illinois was already in the midst of a fiscal crisis before the virus existed. Illinois has the lowest credit rating of any state in the Union—teetering on the verge of junk status which would render the state unable to borrow at all. Its population is shrinking faster than any other state. Its tax base is eroding. Housing values in the city of Chicago have not recovered the values they had in 2006 and there is little prospect of their doing so. That has not stopped property taxes from rising. Property taxes are reaching confiscatory levels. Chicago’s retail sales tax is already the highest of any major city. City fees have risen just about as high as they can.

Under the circumstances asking for a bailout from the federal government is not merely brazen it is ghoulish. It is asking people suffering more greatly than we are from COVID-19 to bear the costs of decades of Illinois’s politicians’ misfeasance, nonfeasance, and malfeasance.

Illinois’s request should be rejected out of hand. The only conditions under which Illinois should receive money from the federal government are in exchange for some serious terms. There are many, many compelling reasons for that not the least of which is moral hazard.

I have read several proposals for such terms. Everything I have read so far punishes the innocent right along with the guilty while rewarding the guilty, will accomplish the opposite of what I presume their authors’ intent to be, or both.

For example, demanding that Illinois be split into two state—downstate and the Chicago environs—would actually reward Illinois’s incompetent political class while ruining downstate Illinois. The erstwhile Illinois would be given two additional senators along with a stack of cash. Converting the erstwhile Illinois to a territory and taking it into a sort of receivership would disenfranchise those who’ve been voting against Illinois’s prodigality right along with those who voted for it.

Here’s my modest proposal.

• Illinois’s state constitution should be amended to allow the state’s legislature to renegotiate pension agreements of state public employees.
• The state’s constitution should be amended to ban defined benefit pensions from being paid to any present state employee.
• Its constitution should be amended to prohibit paying any form of pension to elected officials, present or past.
• Its constitution should be amended to prohibit public employees’ unions in the state from lobbying officials or striking for pay.
• Its constitution should be amended to bar any present holder of statewide office or member of the state legislature from seeking re-election or holding statewide office or serving in its legislature in the future. That is similar to the provisions of the 14th Amendment and is completely appropriate under the circumstances.
• State payrolls should be cut until the state is in sound fiscal shape.
• A freeze on state taxes for at least five years.
• If, after five years of belt-tightening, the state continues to be unable to come into sound fiscal shape, only then will it be able to seek additional revenue via a gradated income tax.