The Bad News Digest

March 19, 2010

by Al Doyle

In the midst of a worldwide economic decline, looking for gloomy financial-related news is like searching for saltwater in the middle of the Atlantic. There's more than enough for everyone. Here are some of the lowlights from the past week.

At least five Illinois state senators are facing eviction from offices in their home districts because the state is months behind in paying rent from the accounts used by elected officials for business expenses.

Sen. Ira Silverstein of Chicago may have to leave his north side office due to months of unpaid rent.

"He said, 'Ira, I'm sorry. And what am I going to do? I can't argue with the man," Silverstein said as recalled an eviction-related conversation with his landlord.

Sen. Dan Kotlowski was $24,000 in arrears for his Park Ridge office lease. Kotlowski had to tap into campaign funds to avoid having his district office phone disconnected.

Fortunately for Sen. Mike Jacobs of East Moline, his landlord is a long-time family friend who patiently waited nine months for payment.

"It certainly putsus in the position of looking like deadbeats," Jacobs said.

The state hasn't paid Sen. John Jones' office rent for seven months. The Mount Vernon Republican has had to deal with calls that have nothing to do with his voting record.

"I've heard from collection agencies every month on the power bill and phone bill," Jones reports.

Sen. Dan Duffy of Barrington Hills is another lawmaker who has had to deal with the problems created by the state's huge deficit. In his case, Duffy was $10,000 in arrears for office rent. The senator sees the problem from afar broader perspective than his personal situation.

"When they can't pay the rent of a Senate office, there's no way they're going to be able to pay the hundreds of millions of dollars in bills they have back due," Duffy remarked. "It just shows what a tragic crisis we're in and how far out of hand this is." Estimates of this year's deficit in Illinois are as high as $13 billion.

Elgin Area School District U-46 - the second-largest school district in Illinois - sent layoff notices to more than 1000 teachers on March 15. This comes after 348 teachers were let go prior to the 2009-10 school year. The district wants to cut at least $29 million from its annual budget. Including potential reductions in support staff, the Elgin district may lay off a quarter of its employees.

Public school officials in Detroit and Kansas City are considering even more drastic measures. Preliminary plans call for closing dozens of schools in both cities, and up to half the schools in Kansas City could be eliminated.

Although the situation may change before the next school year begins, layoff notices were sent to 22,000 California teachers. That number represents 7.2 percent of the state's 307,000 teachers.

Retired municipal employees in Prichard, Alabama haven't received a pension check in six months. The city is in the early stages of the bankruptcy process.

Just how little demand is there for new construction and home building? The government's unemployment rate (very understated) in the building trades is 27.1 percent, and 64,000 construction jobs were lost in February.