33% Tax Hike Will Hit Illinois; Another Stiffed Illinois Vendor Stops Servicing State; Common Sense in Tucson and Delta Airlines

Illinois has a $13 billion and growing deficit. The current backlog of bills approaches $6 billion. The state has not paid some suppliers for seven months. In response some vendors have stopped doing business with the state.

Please consider Another vendor quits doing business with Illinois

Records show the Illinois Department of Corrections was forced to scramble this week when a vendor refused to deliver foam food trays to Menard Correctional Center because it hadn’t been paid. Industrial Soap Co., which holds the master contract for the foam trays, “will not deliver due to delinquent invoices,” prison officials noted.

The St. Louis-based vendor wouldn’t discuss the contract situation Tuesday, but records show the company is owed about $166,000 dating to last year.

In order to avoid gaps in meal service, state officials gave another company a $36,000 emergency contract to keep the foam trays in stock.

The trays are needed to serve meals to the 3,400 inmates because they have been mostly locked in their cells since mid-October due to rising violence in the maximum-security facility.

The state is facing a $13 billion deficit that could grow larger by next year. The current backlog of bills is listed by Comptroller Dan Hynes at nearly $5.6 billion. The state owes at least one vendor for services dating back to March.

Earlier this year, a company that provides ammunition to help train new guards stopped delivering bullets because it was owed money. Another company that supplies eyeglass lenses also stopped shipping the stock until it was paid.

33% Tax Hike Coming to Illinois

Illinois voters likely returned Governor Pat Quinn to office. Their reward will be a 33% tax hike, if Quinn gets his way.

The election is still undecided 2 days later. Quinn's lead is 16,000 or so out of over 3.6 million cast. Absentee ballots have yet to be counted. However, the math looks improbable for challenger Bill Brady.

The problem for Brady is he barely got 20% of the vote in a packed Republican primary. 80% of Republicans wanted someone else. Brady generated little enthusiasm, and none from me, except for one thing: He was not Quinn.

For most voters, that was not enough.

Chicago voted overwhelmingly for Quinn, 86% to 14% or so. His solution is to the mess is a proposal to raise state taxes by 33%.

Congratulations to Delta

The Star Tribune reports Delta attendants say 'no' to union

Flight attendants at Delta Air Lines narrowly rejected union representation in the first of three votes to organize the majority of employees at the world's second largest airline.

The results, announced shortly after the close of voting Wednesday, were 9,544 votes against the union, and 9,216 in favor of the Association of Flight Attendants (AFA) or other unions. The margin was 328 votes, or 1.7 percent.

AFA President Pat Friend said Delta's management ran "the largest anti-union campaign that this country has ever seen" and the union would challenge the fairness of the election and seek a revote. Delta rejected the union's claims as "ridiculous" and said it looked forward to integrating its workforce two years after the merger of mostly nonunion Delta and heavily unionized Northwest Airlines

If the result stands, it means that 7,200 former Northwest flight attendants, including 1,900 based in Minnesota, will no longer be represented by the union or be covered by their existing contract. Delta said it will announce a transition plan for those workers at a later date.

Common Sense in Tucson

Common sense ruled in Tucson where voters rejected a tax hike give away to public union workers. The Arizona Daily Star reports Tucson City Manager: 400 workers face layoff.

A day after a city sales tax hike was soundly rejected by voters, Tucson City Manager Mike Letcher and Mayor Bob Walkup announced an estimated 400 city workers could be laid off.

He said those layoffs will include police officers and firefighters if there is not enough attrition in those departments.

Both Walkup and Letcher said the public was clear that they wanted to see more cuts, and Letcher blamed the sales tax increase's failure on a national movement by voters who are demanding smaller government.

Voters are not necessarily demanding fewer workers, they simply want more for their money. Not a single city worker has to be laid off. All that has to happen is for the unions to lower salaries and pensions to meet the budget.

This is not the voters' fault, 100% of the blame for the layoffs go to the unions.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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