While I loved spending a few days back home in Chicago this week, it was depressing to see how decades of mismanagement of the city and the State continue to take a toll on citizens and businesses. The latest absurdity is the announcement by the Illinois lottery that anyone who wins more than $600 will simply get an IOU for their winnings due to a lack of cash. Yet, the state is still encouraging citizens to play the lottery.
Illinois politicians spent decades destroying the economic well-being of the state. Among other things, politicians (including many still in office) yielded to demands for higher and higher public pension plans that ultimately bankrupted the state and city treasuries. They simply kicked the can down the road: grabbing political donations and votes from powerful unions while giving little thought to the economic implications. Now there is a budget impasse that has stopped payment not just on lottery payments but such things as wrongful conviction awards. Springfield is fighting over how to make tough decisions on the budget after decades of reckless spending.
Chicago has been particularly crippled by corrupt and wasteful policies of the Dailey Administration and later politicians, as with the disastrous give-away of the parking meter business in the city and its creation of speed traps for citizens. (for a column, click here). The Illinois Supreme Court recently refused to allow politicians to negate the prior pension agreements. These politicians have left the citizens with the worst-in-the-nation unfunded public pension liability of nearly $105 billion.
In the meantime, the city and county continue to tax businesses and citizens to record levels. Chicago next year will have the highest sales tax rate of any major U.S. city and a ridiculous rate of 10.25 percent on Jan. 1. Mayor Raum Emanuel will add to that tax the largest property tax hike in modern Chicago history. I spoke with friends with businesses in the city who are discussing closing their businesses due to the over-taxation and how the city is forcing payment for every possible element of their businesses from lettering on windows to having simple awnings. Just as the solution for years was to pander for votes with ever increasing pension plans and irresponsible city contracts, it is now a matter of simply taxing citizens for every possible purchase and pleasure.
Ironically, the City has been run with the economic integrity of a lottery system. Of course, it is a lottery system where most citizens lose and even the winners receive only an IOU.