I've been thinking about the current Illinois situation, state income taxes, politics, Questions, Inc. (my personal corporation); corporate annual reports, and eternal vigilance.
Last Friday, I was doing one of the many State of Illinois forms that, as a CPA, I should be used to filing. I had gotten the form almost a month ago via snail mail. It was due by today, March 1, or there would be a penalty of $1 per month of lateness. I knew I could file it on-line for an extra $3.50 charge based upon last year's filing and it would only take a couple of minutes before I logged in the necessary info and clicked "enter/send".
No Biggie "
What I forgot was that I was dealing with the "broke(n)" State of Illinois. This was a huge mistake!
You see, while Illinois may not be "THE" most broke(n) state in the union right now, it is certainly right up there with California, Michigan, New York, and Florida. Right now all but four or five states are in deficit situations. Illinois has roughly $118 billion in unpaid bills presently. Since the state is on a cash basis of accounting and the Illinois constitution requires a "balanced budget" when the cash in the treasury has run out, the Land of Lincoln doesn't pay its bills. The "unbooked" accounts payable grow, and there is the appearance that all is well is Springfield.
AU CONTRAIRE MON AMI!!!
We have known that our state is as buoyant as the S.S. Titanic since former Governor Ryan (a Republican) kept the locals happy by pushing for a lot of "member initiatives," monies, and grants for the local communities This was basically money that Illinois didn't have, but (what the heck) the state legislature was only too happy to approve the spending; besides it took the pressure off of putting Ryan on trial and sending him to the clink (until after his term was up at least). Ryan is now in jail and his indicted successor, Rod Blagojevich (a Democrat), is awaiting his debut on Donald Trump's TV show, The Apprentice. Rod was already impeached. He will come to trial for his financial escapades in the Fall of 2010. Ah yes" Illinois politics!
Illinois has one of the lowest state income taxes in the nation. The rate hasn't gone up since (then) Governor Ogilvie (a Republican) instituted it in the early 1970s. It is basically a flat 3%. Now with the wolves at the door, increasing the tax rates is once again under consideration. Those pushing the income tax rate increase to 5% or 5.5% (basically the Democrats) say it is only a 2-2.5% increase. Those opposing the tax increase (basically the Republicans) say this is a 0.666% to 0.833% increase. Both groups are correct: it is just a matter of how you "fondle" the numbers. This is an election year so the bipartisan solution is to wait until after the election to stick it to us here. Meanwhile, there are the fees.