Date: Thursday, 3-Sep-2015 14:07:18
This article was written by Tyler Durden and originally published at Zero Hedge.
Editor’s Comment: You know things are bad when
they stop paying lottery winners – whose winnings represent a small
amount of the total cash hauled in by people spending extra in hopes of
winning. But in Chicago, pensions have been swindled and traded against
the debt, leveraged on the market
and held by the state only in a theoretical location that may or may
not make it to the desperate pockets of retirees.
The game is rigged, and the State of Illinois is
only one of the worst places leading the way in budget crises across
the country and globe so deep that an emergency resolution is all but
guaranteed. Who will get their share of money from investments and
savings accounts mismanaged by these crumbling entities? The answer is
basically a game of musical chairs, and many are likely to be left
standing and out of luck, while the taxpayers everywhere will be dealt
further crippling costs to support governments who are less responsible
than the average citizen.
Pardon the pun, but there is obviously no pot of gold at the end of this dark rainbow.
Illinois Pays Lottery Winners In IOUs After $30K/Month Budget “Guru” Fails To Produce Deal
by Tyler Durden
Much as Brazil is the poster child for the great
EM unwind unfolding across emerging economies from LatAm to AsiaPac,
Illinois is in many ways the mascot for America’s state and local
government fiscal crisis.
Although well documented before, the state’s
financial troubles were thrown into sharp relief in May when, on the
heels of a state Supreme Court ruling that struck down a pension reform
bid, Moody’s downgraded the city of Chicago to junk.
Since then, there’s been quite a bit written
about the state’s pension problem and indeed, Reuters ran a special
report earlier this month that outlined the labyrinthine, incestuous
character of the state’s various state and local governments.
On Friday, in the latest sign that Illinois’
budget crisis has deepened, Governor Bruce Rauner apparently fired
“superstar” budget guru and Laffer disciple Donna Arduin who had been
making some $30,000 a month as an economic consultant.
And while Illinois apparently found the cash to
fork over six figures to Arduin for just four months of “work”, the
budget stalemate means hard times for Illinoisans – including,
apparently, lottery winners. The Chicago Tribune has more:
After years of struggling financially, Susan
Rick thought things were looking up when her boyfriend won $250,000 from
the Illinois Lottery last month. She could stop working seven days a
week, maybe fix up the house and take a trip to Minnesota to visit her
daughter.
But because Illinois lawmakers have not passed a
budget, she and her boyfriend, Danny Chasteen, got an IOU from the
lottery instead.
“For the first time, we were finally gonna get a
break,” said Rick, who lives in Oglesby. “And now the Illinois Lottery
has kind of messed everything up.”
Under state law, the state comptroller must cut the checks for lottery winnings of more than $25,000.
And lottery officials said that because
lawmakers have yet to pass a budget, the comptroller’s office does not
have legal authority to release the funds.
Prizes of $25,000 or less will still be paid at
lottery claim centers across the state, and people who win $600 or less
can cash in their ticket at the place where they bought it.
But the bigger winners? Out of luck, for now.
While lottery officials could not immediately
say how many winners’ payments were delayed or provide the total amount
of those payoffs, the agency’s website
lists multiple press releases for winners since the current fiscal year
began July 1. Including Chasteen, those winners represent millions of
dollars in prizes.
“The lottery is a state agency like many others,
and we’re obviously affected by the budget situation,” Illinois Lottery
spokesman Steve Rossi said. “Since the legal authority is not there for
the comptroller to disburse payments, those payments are delayed.”
Generally speaking, this just serves to
underscore the extent to which gross fiscal mismanagement along with the
perceived inviolability of pension “implicit contracts” is pushing
Illinois further into the financial abyss, but what’s particularly
interesting about the suspension of lottery payouts is that the state is
now effectively in default to its own citizens, something which, if the
situation were reversed, would not be tolerated, and on that note, we
give the last word to Rick (quoted above) and also to State Rep. Jack
Franks:
Rick: “You know what’s funny? If we owed the
state money, they’d come take it and they don’t care whether we have a
roof over our head. Our budget wouldn’t be a factor. You can’t say (to
the state), ‘Can you wait until I get my budget under control?'”
Franks: “Our government is committing a fraud on
the taxpayers, because we’re holding ourselves out as selling a good,
and we’re not — we’re not selling anything. The lottery is a contract: I
pay my money, and if I win, you’re obligated to pay me and you have to
pay me timely. It doesn’t say if you have money or when you have money.”
This article was written by Tyler Durden and originally published at Zero Hedge.
