Tuesday, January 21, 2014

Is Kirk Dillard the New "Bad Luck Brian"?

Greg Hinz in Crain's Chicago Business first commends Governor's Candidate Kirk Dillard for being the first to put forth 'even a partial tax plan', but then calls out his math skills.
But while I credit Mr. Dillard with being the first contender to put even a partial tax plan on the table, I have to ask if his math adds up.

...But you can't get something for nothing, even in the wonderful world of Illinois politics.

That $550 million a year that Mr. Dillard would repeal or dedicate to roads currently goes to the state's general treasury, which is treading water and only slowly catching up with billions in old IOUs. That cash drain could turn criticalif the "temporary" income-tax hike begins to expire, as is now scheduled, on Jan. 1.

Beyond that, issuing $1 billion a year in bonds costs something. So, under the usual finance rule of 10, a $100 million cash stream would not finance $1 billion in bonds but something less, perhaps only $900 million or so.

Given all that, why propose to have a state that can't pay its bills now spend even more and take in less?
Let's hope that Kirk Dillard turns this thing around and get a few things right.  As you guys know, we're rooting for him to come out of the 'Moderate Closet' soon!
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