Best and Worst Run States in America

A must read article that discusses the best and worst run state in America. To generate these rankings, they analyzed the level of: debt, unemployment rate, quality of government services, standard of living, crime, educational outcomes, etc.To view the ranking and detailed analysis of your state, click on the following link. Not surprisingly, California and Illinois were at the bottom of the list.

Because economic and social questions involve a multitude of interrelated factors, in which cause, effect and correlation are not always clear, its challenging to determine the more relevant causes of a state's general welfare.But, in general (with some exceptions): the states that fared the best were: low population, northern states with relatively homogeneous (white) populations and fiscally conservative governments. Worth noting is that 8 out of the 10 states were red. Conversely, the states that fared the poorest were (for the most part): southern, ethnically diverse, fiscally imprudent and had experienced the brunt of the rupture of the real estate bubble. I believe that 6 out of the 10 states were solidly blue.

I am inclined to believe that a good portion of a state's general welfare is the product of its people. But, again, it's challenging to determine where people, policy and uncontrollable factors start and end. For example, to what extent are Vermont's impressive (and West Virginia's poor) educational outcomes a result of the predominant culture and values of its people and to what extent have the people been shaped by good (and bad) policies? Comparing these two homogeneous states is already a complex and contentious matter, while exploring the role (if any) that demographic change played in California's notable decline treads upon dangerous taboos that few are willing to discuss.


Best and Worst Run States in America

By Douglas A. McIntyre, Michael B. Sauter, Charles B. Stockdale, Ashley C. Allen | 24/7 Wall St – Fri, Dec 2, 2011 2:00 PM EST

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How well run are America’s 50 states? The answer depends a lot on where you live.

For the second year, 24/7 Wall St. has reviewed data on financial health, standard of living and government services by state to determine how well each state is managed. Based on this data, 24/7 Wall St. ranked the 50 states from the best to worst run. The best-run state is Wyoming. The worst-run state is California.

Comparing the 50 states can be a challenge because they are so different. Some states have abundant natural resources while others rely on service or innovation. State populations also can be more rural or more urban. Some had booming industries that are waning or that have disappeared altogether. Border states with large immigrant communities have populations that are growing rapidly. Many states in the Northeast are not growing at all. All of these factors affect the finances and the living conditions in a state.

Despite these differences, states can do a great deal to control their fate. Well-run states have a great deal in common with well-run corporations. Books are kept balanced. Investment is prudent. Debt is sustainable. Innovation is prized. Workers are well-chosen and well-trained. Executives, including elected and appointed officials, are retained based on merit and not politics.

To determine how well -- or how poorly -- a state is run, 24/7 Wall St. weighed each state’s financial health based on factors including credit score and debt. We also evaluated how a state uses its resources to provide its residents with high living standards, reviewing dimensions such as health insurance, employment rate, low crime and a good education. We considered hundreds of data sets and chose what we considered to be the 10 most important measurements of financial and government management.

This year, as a new component of our analysis, 24/7 Wall St. obtained additional budget data for each state. Examining the state’s revenue and expenditures, and what each government opted to spend money on, allowed us to determine if a state overspent limited resources, failed to devote funds to an urgent need of its citizens or spent a great deal of money but with poor results. While we did not use expenditures or revenue in our ranking, these numbers reflect how a state is managed. Together with other budget data, living standards and government services, it provided a complete picture of the management of each state. A fuller accounting of our methodology can be found at the end of the article.

The 24/7 Wall St. Best and Worst Run States is meant to be an analysis that will focus the debate about state management and financial operations. The analysis should also serve to empower and inform citizens who want who want to better understand the impact government decisions have on each state.

Best Run States: 

1. Wyoming
State debt per capita: $2,452 (18th lowest)
Pct. without health insurance: 14.9% (21st highest)
Pct. below poverty line: 10.3% (7th lowest)
Unemployment: 5.8% (6th lowest)

Wyoming comes in first place in 24/7 Wall St.’s Best Run States for the second year in a row. The state has high marks in many categories including high school graduation rate. A whopping 92.3% of state residents age 25 or older have at least a high school diploma — the highest rate in the country. The state also has the fourth lowest rate of violent crimes and the sixth lowest unemployment rate. Wyoming has the smallest population of any state in the country.

2. Nebraska
State debt per capita: $1,407 (4th lowest)
Pct. without health insurance: 11.5% (14th lowest)
Pct. below poverty line: 11.9% (tied for 14th lowest)
Unemployment: 4.2% (2nd lowest)

The state of Nebraska had the 21st lowest revenue per capita in the country in 2009 yet managed to spend more per capita that year than all but seven states. The state has the fourth lowest debt per capita, and it is one of 13 states with a perfect AAA credit rating. Besides being financially sound, Nebraska also has an unemployment rate of 4.2%, the second lowest rate in the country. The state also has relatively low poverty, high graduation rates and the seventh lowest rate of foreclosures last month.

3. North Dakota
State debt per capita: $2,721 (20th lowest)
Pct. without health insurance: 9.8% (9th lowest)
Pct. below poverty line: 12.3% (17th lowest)
Unemployment:  3.5% (the lowest)

One of the best measures of North Dakota’s success is its unemployment rate of 3.5% — the lowest in the country and one that has n0t been above 5% in over 20 years. While the state has relied on a stable agriculture sector to keep unemployment low, the booming oil industry has created a $1 billion surplus in the past three years. From 2009 to 2011 Montana was the only other state to report a surplus, according to the Center on Budget and Policy Priorities.

4. Minnesota
State debt per capita: $1,790 (8th lowest)
Pct. without health insurance: 9.1% (4th lowest)
Pct. below poverty line: 11.0% (10th lowest)
Unemployment: 6.9% (14th lowest)

Minnesota moved up in the ranking from fifth to fourth due to its improvement in several categories, including violent crime rate and health insurance coverage. In 2010, just 9.1% of state residents were without health insurance coverage — the fourth best rate in the country. The state also continues to excel in the areas it did last year. Some 91.5% of the state’s adult population has graduated high school — the second highest percentage in the country. The state also has the eighth lowest debt per capita.

5. Iowa
State debt per capita: $2,117 (13th lowest)
Pct. without health insurance: 9.3% (6th lowest)
Pct. below poverty line: 11.9% (tied for 14th lowest)
Unemployment: 6% (8th lowest)

Iowa’s greatest assets are its rates of educated and insured residents. Some 90.6% of residents 25 years and older have at least a high school diploma and only 9.3% of residents do not have health insurance. These are among the best rates in the country. Iowa also has an exceptionally lowunemployment rate and the highest credit rating available, demonstrating its healthy economy.

6. Utah
State debt per capita: $2,274 (15th lowest)
Pct. without health insurance: 15.3% (20th highest)
Pct. below poverty line: 11.5% (12th lowest)
Unemployment: 7.4% (17th lowest)

Utah kept the same rank it had in our last survey. The state has the fifth-lowest violent crime rate in the country, as well as the seventh-highest graduation rate in the country. However, Utah had one of the higher foreclosure rates in the country in October, and 15.3% of the population — an above-average rate — is without health insurance.

7. Vermont
State debt per capita: $5,514 (9th highest)
Pct. without health insurance: 8% (3rd lowest)
Pct. below poverty line: 11.7% (13th lowest)
Unemployment: 5.8% (5th lowest)

Vermont does extremely well in a number of areas considered for this list. Residents are highly educated. It has the second lowest rate of violent crime in the country. It has the third lowest percentage of uninsured residents. However, the state has saddled its citizens with debt. Vermont’s debt per capita is more than $5,500, which is the ninth highest in the country.

8. Virginia
State debt per capita: $3,100 (22nd lowest)
Pct. without health insurance: 13.1% (20th lowest)
Pct. below poverty line: 10.7% (8th lowest)
Unemployment: 6.5% (10th lowest)

Virginia is the highest-ranked state in the southern U.S., largely because it does not suffer from many of the problems that plague the rest of the South. The state has a median income of $60,674, the eighth-highest in the country, as well as a poverty rate of 10.7%, which is the eighth lowest. The state also has the sixth-lowest violent crime rate in the country, with just 213 incidents taking place in 2010 for every 100,000 people.

9. Kansas
State debt per capita: $2,086 (10th lowest)
Pct. without health insurance: 13.9% (24th lowest)
Pct. below poverty line: 12.8% (tied for 21st lowest)
Unemployment: 6.7% (12th lowest)

Kansas has the 10th-lowest state debt per capita in the country. However, the state’s ranking may change as its debt grows. According to The Hutchinson News, borrowing by school districts has increased over 800% since 1990. Kansas has a relatively low unemployment rate of 6.7% compared to the national rate of 9.1%.

10. South Dakota
State debt per capita: $4,485 (12th highest)
Pct. without health insurance: 12.4% (18th lowest)
Pct. below poverty line: 13.8% (25th highest)
Unemployment: 4.6% (3rd lowest)

South Dakota rounds out our list of the 10 best-run states in the country. While the state is slightly below average in median income and poverty, otherwise things are going quite well in the state. South Dakota has the third-lowest unemployment rate in the country. It is also one of the few states to truly avoid the worst parts of the housing crisis. Just one in 4,352 homes was foreclosed in October — the fourth lowest rate in the country.

Worst Run States:
50. California
State debt per capita: $3,660 (21st highest)
Pct. without health insurance: 18.5% (8th highest)
Pct. below poverty line: 14.5% (tied for 21st highest)
Unemployment: 11.9% (2nd highest)

California has moved down one slot on from last year to earn the title of the worst-run state in the country. In the fiscal year 2009, the state spent $430 billion, roughly 14% of all the money spent by states in that year. Compared to its revenue, the state spent too much — California had the 10th lowest revenue per person, and spent the 15th most per person. California is the only state in the country to be rated A-, the lowest rating ever given to a state by S&P. Despite the huge amount the state spends each year, conditions remain poor. California has the second-lowest percentage of adults with a high school diploma in the country, the second-highest foreclosure rate and is tied for the second highest unemployment rate in the U.S.

49. Illinois
State debt per capita: $4,424 (13th highest)
Pct. without health insurance: 13.8% (23rd lowest)
Pct. below poverty line: 13.1% (25th lowest)
Unemployment: 10% (10th highest)

Illinois has fallen from 43rd last year to the overall second-worst run state in the country. The state performs poorly in most categories, but is worst when it comes to its credit rating. Illinois has a credit rating of A+, the second worst given to any state, behind only California. The state has been on credit watch since 2008 because of budget shortfalls and legal challenges against then-governor Rod Blagojevich.

48. Michigan
State debt per capita: $2,963 (21st lowest)
Pct. without health insurance: 12.4% (18th lowest)
Pct. below poverty line: 15.7% (15th highest)
Unemployment: 11.1% (3rd highest)

Michigan has arguably suffered more than any state in post-industrial America. The state is one of just four with a credit rating of AA-, although its debt per capita is actually below average. The state ranks among the worst in the country for violent crime, unemployment, foreclosures and home price decline.

47. Arizona
State debt per capita: $1,882 (9th lowest)
Pct. without health insurance: 16.9% (16th highest)
Pct. below poverty line: 16.3% (tied for 13th highest)
Unemployment: 9.1% (18th highest)

Arizona’s housing market was one of the worst hit in the country during the housing crisis. Home values have dropped 28.6% since 2006, the fourth worst rate in the country. In October 2011, one in every 259 housing units were foreclosed upon, which was the third worst rate that month in the U.S. Arizona also has one of the lowest credit scores in the country after its downgrade to AA- in 2009.

46. Nevada
State debt per capita: $1,690 (6th lowest)
Pct. without health insurance: 22.6% (2nd highest)
Pct. below poverty line: 13.0% (24th lowest)
Unemployment: 13.4% (the highest)

Nevada has dropped five places in our rankings. This drop is due primarily to its credit downgrade this year from AA+ to AA. Surprisingly, the state has one of the lowest debts per capita in the country, at just $1,690 per person. However, it has other financial woes that make it a long-term risk. Nevada properties declined 44.5% in value between 2006 and 2010, the worst decline in the country. In October alone, one in every 180 homes was foreclosed upon, easily the worst rate in the country. The state also has the second lowest percentage of residents covered by health insuranceand the highest unemployment rate in the country.

45. South Carolina
State debt per capita: $3,379 (24th highest)
Pct. without health insurance: 17.5% (13th highest)
Pct. below poverty line: 17.1% (8th highest)
Unemployment: 11% (4th highest)

Fiscally speaking, South Carolina is relatively sound. It takes in the 27th most in revenue per capita and spends the 24th most in total expenditures per capita. Its state debt per capita is slightly below average. However, the state has the eighth highest poverty rate and the fourth highestunemployment rate. It also has the fifth highest rate of violent crime, with 597.7 crime committed per 100,000 people. This is actually an improvement from last year when the state’s violent crime rate was 731 per 100,000 -- the worst in the country.

44. Kentucky
State debt per capita: $3,107 (23rd lowest)
Pct. without health insurance: 15.3% (20th highest)
Pct. below poverty line: 18.2% (4th highest)
Unemployment: 9.7% (13th highest)

Last year, 24/7 Wall St. named Kentucky the worst-run state in the country. The state saw slight improvements in the percentage of its population with high school diplomas and poverty rate. Violent crime dropped significantly -- now the 10th-lowest rate in the country, compared to the 17th-lowest last year. Despite these improvements, Kentucky remains one of the poorest states in the country, ranking among the five worst for median income and poverty rate. It is also one of just four states to be awarded an unfavorable AA- credit rating, the third worst score awarded to any state.

43. Rhode Island
State debt per capita: $8,716 (3rd highest)
Pct. without health insurance: 12.2% (16th lowest)
Pct. below poverty line: 12.8% (tied for 21st lowest)
Unemployment: 10.5% (7th highest)

Rhode Island has many positive attributes, including low violent crime rate and a relatively lowpoverty rate. However, the state’s spending is exceptionally high, and it has accumulated $8,716 in debt per capita. Nearly 20% of expenditures are for public education, yet compared with other states it has the 10th lowest percentage of adults who have graduated from high school.

42. Louisiana
State debt per capita: $3,914 (17th highest)
Pct. without health insurance: 17.8% (10th highest)
Pct. below poverty line: 17.8% (5th highest)
Unemployment: 6.9% (13th lowest)

Louisiana remains in our bottom 10 again this year, although it has improved since last year, primarily because of decreases in unemployment and violent crime rate. In all, however, the state ranks poorly in most of the metrics we considered. Louisiana has the fifth-highest poverty rate in the country, the 10th-highest percentage of residents without health insurance coverage and the fifth lowest percentage of adults with a high school diploma.

41. New Mexico
State debt per capita: $4,004 (16th highest)
Pct. without health insurance: 19.6% (6th highest)
Pct. below poverty line: 18.7% (12th highest)
Unemployment: 6.6% (11th lowest)

New Mexico has a relatively low unemployment rate of 6.6% compared with the national average of 9.1%. This is down from 8.6% one year ago. Other statistics are not as promising. At 18.7%, the state has the second highest poverty rate in the country. Worst still, almost 20% of New Mexicans do not have health insurance. The state also has the highest rate of violent crime in the country.

Methodology

24/7 Wall St. considered data from a number of sources, including Standard & Poor’s, the Bureau of Labor and Statistics, the U.S. Census Bureau, the Tax Foundation, Realty Trac, The Federal Bureau of Investigation and the National Conference of State Legislators. The Bureau of Labor Statistics provided unemployment data, Credit rating agency Standard & Poor’s provided credit ratings for all 50 states.  The Tax Foundation provided state debt per capita for the fiscal year 2009. The FBI’s Uniform Crime Report provided violent crime rates by state. Realty Trac provided foreclosure rates. A significant amount of the data we used came from the U.S. Census Bureau’s American Community Survey. Data from ACS included percentage below the poverty line, high school completion for those 25 and older, median household income, percentage of the population without health insurance and the change in occupied home values from 2006 to 2010. These are the values we used in our survey.  Once we reviewed the sources and compiled the final metrics, we ranked each state based on its performance in all the categories.

Illinois Debt Crisis / Why No Protests?

Wisconsin has been beset by major protests and a campaign to recall their governor, yet Illinois has remained virtually free from protests. This is puzzling, because according to Report on Illinois Debt, we are in far worse fiscal shape than Wisconsin. In fact our per capita debt level is three times greater than Wisconsin's. Illinois has the dubious record of: having the worst credit rating, the most underfunded pension system and the third worst business climate of all the states of the union and $8 billion in unpaid bills! This has resulted in a net exodus of businesses, tax payers and jobs. Chicago alone owes $63 billion and when we calculate the total debt and unfunded liabilities of the cities, counties and state, we are on par with Greece and Portugal! And unless dramatic measures are taken, we will continue down the classic debt spiral path, in which an ever greater portion of our budget will go towards servicing our debt, prompting weary lenders to raise their interest rates. Ultimately I believe that this dire situation has not promoted protests for two reasons: At least in the short run, vocal special interests, such as Illinois's public sector unions benefit from the status quo. And the simple narrative of good (public unions and students) vs bad (Wisconsin's Governor Scott Walker) are much easier to comprehend for the economically illiterate than issues of unfunded liabilities and capital outflows. 

Beneath The Veil Of The Immigration Debate

During the debate on SB 1070, Arizona's controversial immigration law, its more sophisticated critics argued that it was a flawed means to address illegal immigration. They voiced concerns that it could lead to racial profiling that would adversely effect Americans citizens and legal immigrants. Whether this would have come to fruition is uncertain, but as someone who strongly supports civil liberties, I recognize that this is a legitimate concern. Opponents of this law also questioned its constitutionality, arguing that Arizona was usurping the federal government's role as the sole author and enforcer of immigration law. While I was not completely convinced about the veracity of their argument, I respect those who seek to adhere to the letter and spirit of the constitution. Ultimately, I decided to give the critics of this and other tough enforcement measures the benefit of the doubt and assume that they understood the importance of immigration control and rule of law, but were simply concerned about the means used to achieve these ends. But, a closer look at some recent events cast some serious doubt on this premise. I am lead to believe that beneath the veil of nuanced policy debates lies a deeper divide in which one side fundamentally opposes the basic enforcement of existing immigration laws and the other seeks its realization.

Not surprisingly, the first and most blatant example occurred in our very own political cesspool, the State of Illinois. In 2008, Illinois became the only state to pass a law banning the use of E-Verify, which is "a free (and voluntary) program run by the United States government that compares information (veracity of a social security number) from an employee's Employment Eligibility Verification Form I-9 to data from U.S. government records. If the information matches, that employee is eligible to work in the United States. If there's a mismatch, E-Verify alerts the employer and the employee is allowed to work while he or she resolves the problem; they must contact the appropriate agency to resolve the mismatch within eight federal government work days from the referral date." Agreeing with the federal government, the US District Court overturned the Illinois law and now employers can voluntarily participate in this program. In 2009, the US Senate and House dropped a requirement that companies receiving stimulus funds must use E-Verify. And recently Luis Gutierrez (D-IL) warned President Obama that if a proposed bill for the expansion of this program passsed, he would lose Latino votes in the 2012 election.

Thus we see that the opponents of E-Verify fear it NOT because they believe it is ineffective and would lead to racial profiling, but rather because it does work. In other words, its opponents seek to block the enforcement of existing immigration laws. While Mr. Gutierrez's pursuit of immigration reform is legitimate, blocking the enforcement of existing laws erodes the rule of law and has an element of third world corruption.

An even more controversial is Secure Communities, "an American deportation program that relies on partnership between federal, state, and local law enforcement agencies." Participating states and localities share data of incarcerated individuals to determine their legality and facilitate the deportation of the most serious offenders. In this program, agencies are not asked to siphon limited time and resources to track down illegal immigrants (rather than serious criminals), but to cross reference the status of those they have apprehended for other violations. Primarily due to the efforts of Governor Quinn and Luis Gutierrez Illinois was the first state to withdraw from this program and was subsequently followed by Massachusetts, New York and several municipalities. Theis opposition is based on the allegation that a significant portion of those deported were either charged with a misdemeanor or no crime at all. During a no confidence vote against their appointed directors, Union of Immigration and Custom Enforcement disputed this claim as a wilful misrepresentation of the data. Either way, it's clear that Governor Quinn and his allies are opposed to the enforcement of existing immigration laws. Granted, on an emotional level I do find it deeply disconcerting to see the prosecution and deportation of individuals who are not serious criminal offenders, but the basic tenants of the rule of law dictates that we cannot selectively choose which laws we do or do not enforce. Until comprehensive immigration reform is enacted, Secure Communities must remain a vital bridge between federal and local law enforcement agencies.

Admittedly the argument that states should focus its limited resources on serious crime rather than harassing undocumented immigrants is appealing, however at a closer look it becomes apparent that this is an act of sophistry that bears no semblance to the modus operandus of state, local and federal authorities. First, they would never make the argument that we should cease enforcing the multitude of other burdensome rules and regulations, because of the presence of serious crime. No Chicago or Illinois politician has ever adcocated that we cease penalizing small businesses that do not comply with required licenses, permits and procedures, because we should be focusing our resources on murderers and rapists. Although the police department's priority is to prosecute dangerous criminals, a police officer will not think twice about heavily fining someone for parking a work truck on certain residential streets. I can think of no other federal law that Illinois's state and local officials opt out of, so clearly their considerations are political and not one of good governance.

But what of the claim that these laws should not be enforced because they impose undue hardships on good, hard working immigrants and their families? This line of argumentation is compelling, because each year, deportations ruin the lives of countless individuals and tear families apart. But, is this also not the case for the enforcement of 1001 other laws that few bother to question? Have they ever called for the non-enforcement of any other law or ordinance becauase its violators are "good and hard working"? If I am unwilling or unable to pay taxes, will the government not impose great hardships on my family and I, by seizing my assets, imprisoning me and separating me from my loved ones? Why do Quinn and Gutierrez not demonstrate similar sympathy for the countless families who are torn apart, who are economically ruined by imprisonment of the father or mother for the "crime" of smoking marijuana? If they are so concerned about imposing undue hardships on "otherwise hard working and law abiding families" and "siphoning time and resources away from the prosecution of more serious crimes," why do they aid and abet the more senseless aspects of the federal government's war on drugs? The answer is simple: their selective application of the law is driven by political, not economic or humanistic concerns. Specifically, they do not want to alienate the perceived interests and desires of a growing component of the democratic party: Latino Voters. The reason I use the qualifier perceived, is because unlike Quinn and Gutierrez, I have faith that the majority of my Hispanic neighbors are good, patriotic citizens whose focus is the economic and social welfare of all Americans, not narrow ethno-identity politics. And even though those of good conscience cannot help but be moved by the plight of undocumented immigrants, more than anyone, those who have left Latin America are painfully aware of economic, social and political cost that the erosion of the rule of law imposes on all, lessons we hope that more American politicians will heed.

The Source of Corporate Welfare or Why Governor Quinn Stinks!

Pictured Above: Governor Quinn consulting with his economic advisor.

When Governor Quinn made Illinois even less attractive to businesses, by substantially raising taxes, predictably more employers started moving out. Rather than address this issue by making across the board tax and regulatory reform, that equally apply to all employers, Quinn offered $100 million in selective subsidies (i.e. corporate welfare) to Motorola and will presumably do so when other major firms threaten to leave. Even companies that do not intend on relocating will be able to leverage the state. Fundamentally, this means that the tax burden will be shifted towards companies and individuals who are not politically connected. Truly Governor Quinn you stink!

$100 million keeps Motorola Mobility in Illinois

Illinois boosts tax incentives in 10-year deal to keep smartphone company in Libertyville

May 06, 2011

By Kathy Bergen and Wailin Wong, Tribune reporters

Gov. Pat Quinn put up more than $100 million in financial incentives to persuade smartphone company Motorola Mobility to keep its corporate headquarters in Libertyville — the largest package he has offered a company to date and a signal of how badly the state wants to hold on to high-tech jobs

To persuade the maker of mobile devices and cable TV set-top boxes to stay, rather than move to California or Texas, state lawmakers sweetened terms of its tax-credit incentive program as it has for automakers, including Mitsubishi, and truck- and engine-manufacturers, including Navistar International Corp.

Navistar landed a $64.7 million package last year to keep its headquarters in Illinois, the second-largest deal during Quinn's tenure.

The Illinois packages are among a rash of retention deals cropping up nationwide as the economic malaise keeps unemployment at painful levels.

Motorola Mobility's tax-credit package comes in at $10 million annually over the next 10 years, assuming it meets job retention and investment goals. The company also will receive $1.25 million in job-training funds and a $3 million large-business development grant to assist with capital expenses.

The deal, announced Friday, breaks down to about $34,750 for each of the 3,000 jobs Motorola Mobility has agreed to retain, considerably more than the $15,000 to $20,000 per job that is more typical when the state awards tax credits to keep or attract businesses.

"These are higher skilled, higher paying jobs than most projects," said a spokeswoman for the state's Department of Commerce and Economic Opportunity.

Motorola Mobility, one of two companies that previously formed Motorola Inc., pledged to spend more than $500 million on research and development over the next three years, essentially what the company already had planned to spend.

But there is potential to grow that amount, some of which might have gone elsewhere if Motorola Mobility had relocated, Chief Executive Sanjay Jha said.
The company's decision was announced amid much fanfare at Motorola Mobility Holdings Inc.'s Libertyville offices. Employees and senior executives wore red T-shirts emblazoned with "Motorola Mobility Illinois" and packed an auditorium to see Quinn sign the legislation enhancing its tax-credit package.

"We don't want folks to leave," Quinn said. "We want them to stay and grow with great companies like Motorola."

The legislation Quinn signed also applies to some companies in the cable TV, wireless telecommunications and computing fields, as well as to makers of inner tubes and tires. The latter could indicate other deals may be in the works.

Laurence Msall, president of the Civic Federation, a tax policy group, called the deal a prudent investment for the fiscally struggling state. "The best way for the state to stabilize its finances is to grow its economic strength," he said.

As to the richness of the deal, economic development expert George Ranney said, "Yeah, it's a concern, but these are pretty good jobs." Ranney is president of Metropolis Strategies, a business-backed policy organization.

Other economic development experts took issue with the package.
Typically, the Economic Development for a Growing Economy, or EDGE, tax-credit program allows companies to use the credits against their state corporate income tax liability. But many companies pay no such taxes, partly due to difficult economic times and partly because an earlier revision in the tax structure slashed bills for multinational corporations.

Motorola Mobility's federal and state income tax liability represented less than 1 percent of its revenue in 2010, and it had no liability in 2009, according to estimates in company filings.

Under the legislation signed by Quinn on Friday, the company now has the option to use the credits against withheld employee income tax liability. In essence, the company can retain state employee income tax withholdings, said Warren Ribley, director of the Illinois Department of Commerce and Economic Opportunity.

Greg LeRoy, executive director of Good Jobs First, a nonprofit that researches economic development subsidies, called the diversion of personal income tax revenue "an insidious recent development." About a dozen states have some form of it, and a couple more are debating the issue, he said.It is "like companies grabbing into employees' pockets," said LeRoy, adding that it also represents a new encroachment into state revenue streams.

"Shame on Motorola and other companies for asking for such big subsidies when they know governments are strapped," he said.
wawong@tribune.com

Addiction Intervention For Illinois

Illinois, we, your family and friends have gathered here to confront you about your addiction to government spending. It is hurting you and the people around you. By every definition, your have a behavioral addiction:

"a recurring compulsion condition whereby a person engages in a specific activity despite harmful consequences to the person's health, mental state, or social life.[4][5] Behavioral addiction is considered harmful or deviant if it results in negative consequences for the person addicted and those with whom they associate."

I know that you keep saying that you can stop anytime, but for years, you have been spending way beyond your means to the point were you have billions in unpaid bills, billions in debt and even more in unfunded liabilities, yet you are unable to make serious budget cuts. You blame this on everyone but yourself, you blame this on "revenue issues," when Illinois has among the highest tax burden in the country. Enough is enough! We are going to cut you off until you are ready to face your problems!

Illinois Is On 'Verge Of Financial Disaster,' State Treasurer Says

llinois is "on the verge of a financial disaster" as payments on the state's debt have skyrocketed, Treasurer Dan Rutherford said on Monday.

Illinois faces an estimated $45 billion in principal and interest payments on its outstanding debt over the next 25 years, up nearly four-fold from the $12 billion owed in 2002, according to a position paper from the Republican treasurer, who took office in January.

Adding to the state's debt burden is $140 billion in unfunded pension and retiree health-care liabilities and $8 billion of currently unpaid bills, the paper said.

"Every household in Illinois is responsible for the repayment of $10,000 to reimburse our bondholders in the coming years," Rutherford said in a statement, adding that unpaid bills and pension and health-care liabilities would boost that total to $42,000 per household.

Illinois' widening structural deficit, huge unfunded pension liability, inability to pay the state's bills on time, cascading bond ratings and its propensity to borrow its way out of financial problems have made the state a major worry in the $2.9 trillion U.S. municipal bond market.

"We need to cut our spending and break our unsustainable borrowing cycle before we realize a further financial disaster," Rutherford said.

Even with a big income tax rate hike passed in January, Illinois is still spending about $5 billion more a year than it receives in revenue, according to the position paper, which also said the state's low bond ratings have resulted in higher borrowing costs compared with other states.

Governor Pat Quinn has been pushing the legislature for anywhere from $2 billion to $8.75 billion of bond authority to pay off bills and other obligations incurred this fiscal year.

His office said in a statement on Monday that this plan is not new borrowing, but a restructuring of debt the state owes to vendors and service providers who have been waiting months for payments.

"Governor Quinn is 100 percent committed to making good on all bills due and feels restructuring debt the state already owes at attractive rates is the least costly option for taxpayers in order to address this bill backlog," the statement said.

Copyright 2011 Thomson Reuters. Click for Restrictions.

Why Protests In Wisconsin, But Not In Illinois?

In the last few months we have seen fierce protests in Wisconsin against Governor Walker, but none against Governor Patt Quinn of Illinois. While I am not particularly fond of Walker and his reforms, unlike Quinn he has not left Wisconsin in a deplorable fiscal state, with billions in unpaid bills and one of the worst credit ratings in the country. So, how do we explain this? I believe this is because the vast majority of people are not willing to protest on behalf of broad public interests. There are few direct incentives to march against policies that broadly harm general public welfare. Most people only indirectly feel the cost of Quinn's mismanagement and will not put 2 + 2 together when businesses start fleeing Illinois because of the governor's terrible policies. As unwise and nepotistic as the $100,000,000 tax break that Quinn offered Motorola is, it only comes to a few dollars from the wallet of each tax payer. This may anger many people, but not sufficiently to motivate them to march. In contrast, (for good or for bad) Walker's reforms directly hit the members of well organized special interests, providing them with sufficient personal incentives to protest. And as long as Quinn doesn't challenge public unions and other special interests, he can continue pushing Illinois to the brink of bankruptcy without inspiring a single protest.

 Illinois deep in debt, doesn’t pay bills

Crisis pushes businesses, organizations to edge of bankruptcy

Seth Perlman / Associated Press Writer

5/13/2010

SPRINGFIELD, Ill. — For 35 years, frail senior citizens in southern Illinois could turn to the Shawnee Development Council for help cleaning the house, buying groceries or any of the chores that make the difference between living at home or moving to an institution.

No more. The council shut down the program Thursday because of a budget crisis created by the state of Illinois' failure to pay its bills.

Paralyzed by the worst deficit in its history, the state has fallen months behind in paying what it owes to businesses and organizations, pushing some of them to the edge of bankruptcy.

Illinois isn't bothering with the formality of issuing IOUs, as California did last year. It simply doesn't pay.

Plenty of states face major deficits as the recession continues. They're cutting services or raising taxes or expanding gambling to close the gap. But Illinois is taking the extra step of ignoring bills.

Right now, $4.4 billion worth of bills, some dating back to October, are sitting in the Illinois comptroller's office waiting to be paid someday.

Shawnee Development, for instance, is waiting on about $380,000 in back payments, officials say. That amounts to one-quarter of the council's budget for senior care in seven southern counties. "It makes me mad as heck," said Georgia Smith, a 66-year-old volunteer at the agency. Seniors, she said, "are used to paying our bills, paying our way."

Prisons refused bullets

Illinois' deadbeat reputation has created some embarrassing situations.

A supplier refused to sell bullets to the Department of Corrections unless it got paid in advance. Legislators have gotten eviction notices for their district offices because the state wasn't paying rent. One legislator said he had to use campaign funds to pay the telephone bill after service was cut off at his office.

The practice of simply putting off payments became commonplace under ex-Gov. Rod Blagojevich, who liked to spend but adamantly opposed a tax increase to help cover costs. Before he was arrested and kicked out of office, Blagojevich's toxic relationship with legislators essentially paralyzed government, so bills just piled up.

The strategy also may have been helped along by Illinois' "anything goes" political culture. When voters believe government decisions hinge on campaign contributions and shady deals, they're less likely to expect responsible fiscal practices.

..Some schools have tried to shame Illinois into paying by posting signs announcing how much the state owes. The website IllinoisIsBroke.com details the state's financial mess. Associations hold rallies and write letters to the editor.

$6 billion in unpaid bills

The state still remains months behind.

Illinois is on track to end the current fiscal year with about $6 billion in unpaid bills. Budget proposals for the coming year — when the state faces a $13 billion deficit — assume the same thing will happen again.

The state owes money for all kinds of services provided in its name, such as medical care for the needy, home care for the elderly and disabled and day care for the working poor.

State government promises to reimburse all those organizations for at least part of their costs.When the state doesn't pay its bills, they're stuck trying to figure out how to make ends meet.

Most have spent their reserves and cut corners wherever they can, laying off employees, cutting back hours, requiring workers to take furloughs.

Recovery Resources, a substance-abuse treatment center in Quincy, is waiting for $200,000 from the state, which provides about two-thirds of the center's annual budget.

The center has cut 10 jobs over the past two years, said executive director Ron Howell. It shut down its services for adolescent addicts. People who call for help now wait three to four weeks for an appointment.
'This has numbed us'

"The situation, for us, has been almost normalized, and that's the scary part," Howell said. "If I'm not screaming on the edge of self-destruction, it's because this has numbed us."

Many agencies have borrowed money to keep the doors open, but service providers say that's getting harder to do — banks are more reluctant to lend money on a promise that the state will pay up someday.

"We have had members whose banks have told them it is the creditworthiness of the state of Illinois that is their primary concern," said Janet Stover, executive director of the Illinois Association of Rehabilitation Facilities.

State leaders have no plan to catch up on the bills anytime soon, not with a $13 billion deficit to tackle. The Pew Center on the States said last year that in percentage terms, Illinois' deficit is nearly as big as the gap in California, the gold standard for states in crisis.

Call for tax increase

Democratic Gov. Pat Quinn has called for an income tax increase, but any money from that would be allocated to other areas, not paying routine bills. Republicans want to tackle the deficit through spending cuts, which would also mean letting old bills go unpaid.

It's likely that no dramatic movement in either direction will take place until after the November elections.

Illinois government owes about $2.5 million to Sparc, a Springfield organization for people with developmental disabilities, said chief executive officer Carlissa Puckett.

Sparc has borrowed up to $1.1 million through a line of credit. Turning away clients would be the last resort, she said.

Puckett sounds matter-of-fact as she discusses scrimping on paper and pencils. "Why cry if nobody is going to listen to you?" Puckett said. "We're going to keep our head up and figure out how to make it work."

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Governor Quinn Issues Order 66

Governor Quinn (D - IL) has raised income taxes by 66% (from 3% to 5%) and corporate taxes by 68.5% (from 4.8% to 7%). I take a minority position among conservatives: in light of the $15 Billion deficit that Illinois faces, this was a necessary step. However, I do not look at this as a "brave act of fiscal responsibility" on the part of Illinois politicians, because their gross fiscal irresponsibility is what put us in this impasse in the first place. And before Mr. Quinn "feeds the beast" with even more of the fruits of labor of Illinois families and businesses, the proper course of action would have been to first enact major budget cuts, as well as political and pension reforms. If we are lucky, we will keep the businesses that we currently have, but rest assured, no sane businessman would choose to relocate to the high tax and spend state of Illinois.

To those who are not nerdy enough to be familiar with "Order 66," it is a reference to Star Wars.

http://latimesblogs.latimes.com/washington/2011/01/pat-quinn-illinois-tax-hikes.html

http://www.csmonitor.com/USA/2011/0113/Illinois-tax-hike-Will-businesses-flee-to-Wisconsin

Illinois is Broke

I have heard progressives weave compelling arguments about why we need to maintain or even expand the size and scope of government. But in the end, a good kick in the ass from financial reality trumps any argument they can make. For more details check out this organization:

http://www.illinoisisbroke.com/

Illinois Pension Liability Worst In Nation

In order to wake up my progressive friends who don't realize that excessive spending and entitlements are driving us to the brink of economic ruin, I have been forced to turn to a liberal source: the Huffington Post.

Illinois' Pension Liability Worst In Nation, Could Sink State Economy

02-18-10 02:17 PM

A new report by the Pew Center on the States shows Illinois facing the largest unfunded pension liability in the country.

Nationwide, 84 percent of pension liabilities for state employees are funded--that is, states have set aside 84 percent of the money they've promised their retirees. This, the report says, is good news; anything above 80 percent is considered responsible by economists.

As of 2008, Illinois' pension liability was only 54 percent funded, the worst figure in the nation. And new estimates put that figure below 50 percent.

Part of the problem is that, under indicted ex-governor Rod Blagojevich, Illinois borrowed against the money it expected to earn from its pension fund. But the recession has undercut those earnings; the fund now earns 3.8 percent, as opposed to the anticipated 8.5 percent.

The state has resorted to borrowing and accounting tricks to duck its obligations, the report says. But Pew Center managing director Susan Urahn warns that the mounting liabilities "could have significant consequences -- higher taxes, less money for public services and lower state bond ratings."

Though it is worst in the nation, Illinois is hardly alone. Only two states, New York and Florida, had fully funded pension liabilities; 19 states were listed by the report as meriting "serious concern" in the area.

A new report by the Pew Center on the States shows Illinois facing the largest unfunded pension liability in the country.

Nationwide, 84 percent of pension liabilities for state employees are funded--that is, states have set aside 84 percent of the money they've promised their retirees. This, the report says, is good news; anything above 80 percent is considered responsible by economists.

As of 2008, Illinois' pension liability was only 54 percent funded, the worst figure in the nation. And new estimates put that figure below 50 percent.

Part of the problem is that, under indicted ex-governor Rod Blagojevich, Illinois borrowed against the money it expected to earn from its pension fund. But the recession has undercut those earnings; the fund now earns 3.8 percent, as opposed to the anticipated 8.5 percent.

The state has resorted to borrowing and accounting tricks to duck its obligations, the report says. But Pew Center managing director Susan Urahn warns that the mounting liabilities "could have significant consequences -- higher taxes, less money for public services and lower state bond ratings."

Though it is worst in the nation, Illinois is hardly alone. Only two states, New York and Florida, had fully funded pension liabilities; 19 states were listed by the report as meriting "serious concern" in the area.

http://www.huffingtonpost.com/2010/02/18/illinois-pension-liabilit_n_467693.html

Hey Governor Quinn!

Hey Governor Quinn, Illinois's debt rating was just downgraded and we now have the second lowest rating in the country! This will mean higher interest rates when Illinois seeks a loan to plug its huge deficit. Now go put on your dunce hat and write 100 times on the blackboard "deficit spending is for dunces!" and "I will not tax and spend Illinois into oblivion!"

Moody's downgrades Illinois debt ratings

CHICAGO (Reuters) - Moody's Investors Service on Tuesday downgraded Illinois' general obligation bond rating to A2 from A1, citing the state's financial woes stemming from the U.S. recession.

Moody's cut other Illinois ratings, affecting about $24 billion of outstanding debt, including the state's Build Illinois sales tax revenue bonds, also cut to A2 from A1.

The downgrade gave Illinois the second lowest U.S. state rating from Moody's, with California having the lowest at Baa1, a Moody's spokesman said.

Moody's said Illinois has yet to take action to tackle a structural budget gap of more than $11 billion, equal to about 35 percent of its expenditures.

"The downgrades are the result of high structural imbalances and little time to effect modifications to the budget in the current fiscal year, which ends June 30, 2010, as well as evidence of significant weakening in the state's 2009 results," Moody's said in a statement.

With an 11 percent jobless rate in October, Illinois was among half a dozen U.S. states with double digit unemployment.

Other states, such as California and Michigan have also suffered debt rating downgrades this year as the recession and unemployment punched holes in their budgets.

Moody's revised the outlook for Illinois' GO and related ratings to negative, "reflecting the continuing likelihood of large structural budget deficits, growing negative year-end fund balances, strained operating fund liquidity and mounting pressure from pension and retiree health benefit obligations."

Moody's put the state on review for a potential downgrade shortly after Illinois enacted its fiscal 2010 budget in July.

UNPAID BILLS

Other rating agencies took action on Illinois' GO rating this summer. Standard & Poor's Ratings Services rates Illinois AA-minus with a negative outlook it gave the state in August. Fitch Ratings dropped Illinois' rating two notches to A in July, citing the state's "large structural budget deficit."

With Illinois facing a growing backlog of unpaid bills, Governor Pat Quinn has proposed a $500 million cash-flow borrowing, which would add to the $2.25 billion in outstanding short-term borrowing the state must pay off in June.

A spokesman for Quinn did not immediately respond to a request for comment on the downgrades.

Illinois has slated a nearly $155 million Build Illinois competitive sale for Thursday, followed by a $375 million negotiated sale through Cabrera Capital Markets next week.

Ahead of the $530 million sale of Build Illinois bonds, S&P affirmed an AAA rating, while Fitch affirmed an AA rating based on strong debt service coverage provided by the sales tax.

http://www.reuters.com/article/idUSTRE5B74SF20091208

Pat Quinn Saves The Day!

Governor Pat Quinn saves the day with the appointment of a statewide director of diversity!

Through diversity, Patt Quinn will improve the cost and quality of government construction contracts, while curbing clout and corruption! And of course a diversity czar will improve the lives of impoverished minorities and not just further enrich politically connected contractors!

Illinois hires first diversity director

Tuesday, November 10, 2009
Illinois Gov. Pat Quinn has named Darryl Harris the state’s first director of diversity enhancement.


In this new position, Harris will work to improve statewide opportunities for minority and women-owned businesses, especially in construction programs.
Harris previously served as the deputy director of operations for the Capital Development Board, the construction management arm of state government. While there, Harris oversaw the development and implementation of more than $3 billion in capital projects.


http://stlouis.bizjournals.com/stlouis/stories/2009/11/09/daily29.html

Why Chicago, Cook County & Illinois Are Going Broke (part III)

Private sector unions are disciplined by market forces. They are forced to see a balance between their desire to maximize the wages and welfare of their members, while not eroding the cost effectiveness and competitiveness of the company. Accordingly, many private sector unions acquiesced to layoffs, wages cuts and restructuring to weather hard economic times. On the other hand public sector unions have largely remained impervious to the recession, resisting any efforts to trim the ranks of bloated government bureaucracies. In fact, as the public experiences record job losses, the number of government workers and their compensation continues to grow. The inevitable result will be increased taxation and debt, something that the public can scarcely afford, least of all during a major recession. I am hoping that more pro-labor progressive will be able to draw a sharp distinction between private and public sector unions.


Vallejo Con Dios: Why Public Sector Unionism Is a Bad Deal for Taxpayers and Representative Government



by Don Bellante, David Denholm and Ivan G. Osorio

Rates of unionization in the United States today are at historic lows and are unlikely to rebound. However, there is one sector in which organized labor is growing in strength: government. This has severe implications for the future of public finances for state and local governments across the nation, and for the nature of organized labor itself.

High rates of unionization in the public sector have led to very high labor costs in the form of generous collective bargaining contracts. Now state and local governments are under increasing financial pressure, as a worsening national economy has led to decreased revenues for states and municipalities—many of which remain locked into the generous contracts negotiated in more flush times. Thus, as businesses retrench, governments find themselves in a financial straitjacket. In addition, as government unions grow stronger relative to private-sector unions, their prevalence erodes the moderating influence of the market on the demands that unions make of employers.

Now, as an economic downturn threatens state and local government revenues, officials who want to keep their fiscal situations under control would do well to look skeptically at public-sector bargaining—especially since the existing political checks on it have proven ineffective. Public officials should eschew public-sector bargaining when possible, or at the very least, seek to limit its scope.

As keepers of the public purse, legislators and local council members have an obligation to protect taxpayers' interests. By granting monopoly power to labor unions over the supply of government labor, elected officials undermine their duty to taxpayers, because this puts unions in a privileged position to extract political goods in the form of high pay and benefits that are much higher than anything comparable in the private sector.

This paper shows how the unionization of government employees creates a powerful, permanent constituency for bigger government— one that is motivated, well-funded, and organized. It also makes some recommendations as to how to check this constituency's growing power—an effort that promises to be an uphill struggle.

http://www.cato.org/pub_display.php?pub_id=10569

Why Chicago, Cook County & Illinois Are Going Broke (part II)

In Illinois unfunded liabilities for pensions have soared past $95 billion dollars. A major factor in this frightening deficit is the role of public sector unions. Before I continue, I must emphasize that I draw a sharp distinction between private and public sector unions.

Private sector unions involve a dynamic interplay between owners and workers in which both parties are forced to contend with market forces and fiscal realities. Historically, when a company was profitable and a labor market was tight, companies and unions were able to reach accords that resulted in higher wages and benefits. And as markets and profits contracted, unions are forced to concede to economic realities and agree to wage cuts and layoffs, as recently seen with auto marker unions. Ultimately the auto market unions realized that if they did not agree to painful concessions the companies would continue hemorrhaging with the end result of a total loss of employment and income for all workers.

On the other hands, public sector unions do not enjoy this dynamic interplay for a multitude of reasons:

1. Private companies have tremendous incentives to minimize expenses (worker compensation) because the money in question is their own. On the other hand, politicians and bureaucrats have little or no incentives to control expenses because they are spending the public's money. The end result is a pension plan with billions of dollars in unfunded liabilities.

2. If a private company is inefficient and unprofitable, both owners and workers face a threat to their livelihood, which forces them to function within the boundaries of economic reality. On the other hand public sector workers face little or no consequences when a government bureaucracy offers horrendous service while simultaneous costing the public billions of dollars.

3. Poor performing companies in competitive markets will be castigated by diminished profits and by going out of business. Politicians can be voted out of office. But, to remove public sector bureaucrats is virtually impossible.

Budget catastrophe escalates while law makers watch

November 13, 2009

While the Tribune was right to emphasize the Minority Report of the Pension Modernization Task Force ("Just send your $7,000," Nov. 8), even that report understates the full extent of the calamity now at hand. That report showed that unfunded liabilities of the five pensions that the state guaranties total $95 billion – roughly $7,000 for every person in Illinois. In fact, the broader problem is over twice that size:

Illinois has over 600 other municipal pensions with at least $62 billion in unfunded liabilities, aside from the five pensions guaranteed by the state,. Those pensions are generally ignored and were not part of the task force report. Their deficits are reported biannually by the Illinois Department of Insurance and the reports are on their website. That $62 billion deficit figure is from the 2007 report – before the markets tanked – so the 2009 report will likely be much worse.

Retired state workers also get state-paid health care, which has also been mostly ignored. That's another $40 billion unfunded liability, based on an earlier study by the Civic Committee of the Commercial Club of Chicago, and $2 billion more per year is required just to cover the growth in this liability.

Add these two items to the $95 billion state-guarantied pension debt and you get $197 billion, which is roughly $15,000 for every person, or $60,000 for every family of four in Illinois. Most families don't have resources to pay off a debt that size and shifting an even higher burden to everybody else would spark a genuine tax revolt.

Keep in mind that the unfunded pension liabilities are worsening at the rate of $8 billion per year just on the five state-guarantied funds, according to the Civic Committee. That's in addition to annual budget deficits being incurred in brazen violation of the Illinois Constitution's balanced budget requirement, which are now projected at roughly $14 billion. Add on that $2 billion per year needed to stay even on retiree healthcare, and the real annual shortfall is roughly $24 billion.

Governor Quinn's proposed tax increase would raise $3 billion per year; Dan Hyne's proposal, $5.5 billion, so neither plan gets remotely close to funding the budget deficits or stopping further bleeding on pensions and health care. The already-accumulated deficits of $60,000 per family are on top of all that and have no chance of being whittled down. Nobody has proposed any solution or scenario that begins to address all this.Illinois is hopelessly insolvent.





-- Mark Glennon, Wilmette

Why Chicago, Cook County & Illinois Are Going Broke (part I)

Robert Dugan, a Daley crony will now collect a yearly pension check totalling $92,208. This particular case is jarring because of the issues of nepotism and corruption, but beyond that the larger, looming issue of the over $62 billion in unfunded liabilities that Illinois pensions face. Clearly no one is as careless with money as a politician or bureaucrat spending the money of the public on other politicians and bureaucrats.

Brother of Daley pal quits CTA job

Robert Degnan stands to collect two government pensions

June 17, 2009

BY FRAN SPIELMAN City Hall Reporter/fspielman@suntimes.com

The brother of one of Mayor Daley's closest friends in politics has quit the $116,000-a-year CTA job created just for him, paving the way for Robert Degnan to simultaneously collect two government pensions.

In 2002, Degnan retired as the city's $115,260-a-year Fleet Management commissioner to accept a $95,000-a-year job at the CTA.

By jumping through an early retirement window, Degnan got a lump-sum bonus of 10 percent of his annual city salary. He was also free to collect both a city pension and a CTA paycheck.

His May 31 retirement from the CTA means Degnan can now collect two local government pensions. His annual retirement check from the city amounts to roughly $92,208 or 80 percent of Degnan's highest city salary. After just seven years on the CTA job, he'll collect a $10,997-a-year CTA pension.

Robert Degnan is the brother of Tim Degnan, the Bridgeport buddy of Daley who preceded Victor Reyes as director of the mayor's Office of Intergovernmental Affairs.

Civic Federation President Laurence Msall said Robert Degnan's double-pension is particularly galling at a time when under-funded city pensions threaten to saddle future generations of Chicagoans with a debt they cannot handle.

"It's a shining example of why the city's pension system -- and all other local government systems authorized by the General Assmbly -- need to be reformed and structured to what is economically reasonable for taxpayers, rather than insiders who are able to manipulate the system," Msall said.

Robert Degnan could not be reached. He told CTA spokeswoman Noelle Gaffney that he'd been comtemplating retirement for some time to become a part-time consultant.

"In 2008, he went to eight funerals and six were for people younger than him. It made him evaluate how he was spending his time," Gaffney said.

In a court filing during the 2006 trial that culminated in the conviction of Daley's former patronage chief, Robert Sorich, federal prosecutors named Tim Degnan as one of several former mayoral aides who could be linked to a conspiracy to rig city hiring and promotions in favor of the Hispanic Democratic Organization and other pro-Daley armies of political workers.

Tim Degnan was never charged with wrongdoing.

Robert Degnan was appointed Fleet Management commissioner after his predecessor, Rick Santella, was accused of steering city business to perennial city trucking contractor Michael Tadin.

In almost four years at the helm of Fleet Management, Degnan ushered in reforms that saved the city money and expanded his own vehicle empire.

He signed an $11 million contract with NAPA Auto Parts that reduced the opportunity for theft by eliminating the need for City Hall to maintain vast inventories of parts. The NAPA contract was renewed last month -- for $190 million over five years.

City Hall eliminated the Chicago Fire Department's scandal-plagued repair shop and folded its responsibilities into Fleet Management. And contracts were signed with the CTA, Chicago Park District, the Chicago Housing Authority and City Colleges that called for Fleet Management to repair their vehicles.

At the CTA, Degnan served as general manager of systems maintenance support, maintaining and upgrading a 650-vehicle "non-revenue" fleet that included everything from snowplows and garbage trucks to service vehicles and construction equipment.

http://www.chicagobusiness.com/cgi-bin/news.pl?id=19655&seenIt=1