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*** UPDATED x1 *** Afternoon Must-Watch Videos: Quinn fires back at Chris Christie, Rutherford stands up for Illinois and Jaconetty tells it like it is

Tuesday, Jan 25, 2011

* Gov. Pat Quinn was asked today to respond to New Jersey Gov. Chris Christie’s new advertising campaign in Illinois urging businesses to relocate to the Garden State.

“He was advertising before November 2nd for my opponent and nobody listened to him then and I don’t know why anybody would listen to him,” Quinn said, adding “This is a guy whose business climate is rated 48th in the nation.”



Quinn also said of Christie, “New Jersey’s way of balancing the budget is not to pay their pension payment, not to deliver on property tax relief that was promised, to fire teachers… I don’t need that kind of advice from that guy.”

Um, OK, what about that property tax relief, governor? Didn’t you promise that last year? Also, lots of Illinois teachers lost their jobs last year.

Thanks to for the video.

* State Treasurer Dan Rutherford showed his bipartisan chops during a CNBC interview earlier today. The hosts appeared to think the Republican would gush all over their budgetary hero Chris Christie (who has barely touched his deficit) and toe the DC party line on bankruptcy for the states. Rutherford, however, appeared to surprise them. He didn’t overtly praise Christie and he completely ruled out that silly bankruptcy proposal. He also refused to run down his own state, despite plenty of CNBC baiting. Must watch

* Our last video is also a must-see. Tom Jaconetty talks to the Chicago Bar Association Election Law Committee about what ballot challenges are really all about. Jaconetty is working with Burt Odelson to kick Rahm Emanuel off the ballot. He’s brutally honest

Sorry for the video quality on that one.

*** UPDATE *** The Illinois Policy Institute wants to repeal the income tax in its entirety

- Posted by Rich Miller   43 Comments      

This just in… Supremes allow leave for expedited appeal - No oral arguments, no new briefs

Tuesday, Jan 25, 2011

* 1:21 pm - From a summation of the latest Supreme Court order that has just been filed on the Rahm Emanuel residency case…

The petition to leave for appeal is allowed. The Court will review it on an expedited basis. The court will be using the briefs filed by the parties in the appellate court. No additional briefs will be filed in the Supreme Court and there will be no oral argument.

They’re obviously moving as fast as they can.

* You can read the order for yourself by clicking here.

- Posted by Rich Miller   100 Comments      

Question of the day

Tuesday, Jan 25, 2011

* The setup, from Doug Finke

Some folks are screaming that the state should put its newly adopted recall amendment to good use and recall Gov. Pat Quinn.

It underscores one of the concerns people have about recall, namely that it could be used to oust someone just because they made an unpopular decision. Trying to avoid that is one reason the recall process now part of the state constitution is as convoluted as it is.

If you don’t like the income tax hike or that Quinn acceded to a much higher one than he talked about during the election, fine. Politics involves disagreements. But Quinn knows the state is in severe financial difficulty and took the steps, however unpopular, he thought best to deal with it.

Recall was aimed at dealing with the Rod Blagojeviches of the state. Whatever else you think of Quinn, he isn’t another Blagojevich.

* The Question: Agree or disagree? And, as always, make sure to explain yourself.

- Posted by Rich Miller   35 Comments      

Setting the stage while dealing with the fallout

Tuesday, Jan 25, 2011

* At least one of my readers was surprised this morning that Sheila Simon would speak out on this issue in public

Lt. Gov. Sheila Simon has added her voice to the chorus of political leaders who are urging Gov. Pat Quinn to sign legislation ending the death penalty in Illinois.

In a letter she sent to Quinn on Monday, Simon points out that she spent four years as an assistant state’s attorney in southern Illinois’ Jackson County, and feels that she did a good job in that post. But she also says that our criminal justice system, even when operating at its best, is still imperfect.

My initial reaction was that this orchestrated at the very top levels. Turns out, I was correct

In an interview Monday night, Simon said she shared her views recently with Quinn, and he asked her to put them in writing.

So, she writes the letter and then shares it with the media. It suggests that Quinn is leaning in favor of signing this bill and maybe wants to gin up at least the appearance of a groundswell of support.

* But the apparent careful stagecraft isn’t going down well in at least one of the trenches

A DuPage County judge said it’s “grossly irresponsible” for Gov. Pat Quinn to remain silent on whether he’ll sign legislation that would abolish the state’s death penalty.

Circuit Judge John Kinsella made a plea from the bench Monday for Quinn to end the uncertainty over Illinois’ death penalty.

“He’s got to tell us if he’s going to sign the bill and make it law,” Kinsella said.

The judge’s remarks came as he scheduled a May trial for an Addison man accused of killing his mother and a prostitute five years ago. Gary Schuning, 28, may face the death penalty if he is convicted of the Feb. 26, 2006, double-stabbing.

I don’t blame Quinn for taking his time on this one, considering the seriousness of the issue, but I can empathize with Judge Kinsella. There are lots of people out there waiting on this very important decision. While the governor should take some time here, he can’t ignore the urgency of the matter.

…Adding… From Zorn in comments…

I’d just like to point out that John Kinsella was the lead prosecutor of Rolando Cruz in Cruz’s third trial for the murder of Jeanine Nicarico and was trying to put Cruz to death for that crime. Of course later it turns out that, d’oh!, Cruz was innocent. Brian Dugan and Brian Dugan alone killed that girl.

Good point.

* Meanwhile, the furor over the highly active lame duck session (which produced the death penalty abolition, the civil unions bill and the tax hike) will probably take years to subside

In her first official act since her January appointment, state Rep. Pam Roth, R-Morris, introduced a bill Monday that would prohibit former lawmakers from taking a new state job for up to two years after they leave office, a bill aimed directly at her Democratic predecessor.

But Roth denied the bill was in direct response to former state Rep. Careen Gordon, who drew criticism for supporting a controversial tax increase and then being appointed to a state job by Gov. Pat Quinn just days later. Quinn appointed Gordon on Jan. 14 to the Illinois Prisoner Review Board, a job which comes with a 12 percent pay hike for Gordon, who was defeated by Sue Rezin in last November’s election.

The tremendous hurdles blocking major legislation means that this stuff mostly happens in clumps. It’s no coincidence that the GA has approved just one permanent income tax increase since the tax was first established under Gov. Ogilvie in 1969.

Thoughts on the bill?

- Posted by Rich Miller   25 Comments      

This just in… Supreme Court allows partial stay of Emanuel appellate ruling - Emanuel “narcissistic and flippant” says Odelson

Tuesday, Jan 25, 2011

* 11:57 pm - From the Illinois Supreme Court

“It is ordered that the emergency motion by petitioner Rahm Emanuel for stay pending appeal is allowed in part.

“The appellate court decision is stayed. The Board of Elections is directed that if any ballots are printed while this Court is considering the case the ballots should include the name of petitioner Rahm Emanuel as a candidate for the mayor of City of Chicago.

“That part of the motion requesting expedited consideration of the petition for leave to appeal remains pending.”

I posted Emanuel’s petition for stay yesterday, but click here to read it if you missed it the first time around.

…Adding… With a hat tip to a commenter

Rahm Emanuel is narcissistic and flippant, according to the lawyers opposing the former White House chief of staff’s request for injunctive relief from the city’s plan to print ballots without his name on it.

“The petitioner narcissistically asks this court to value his non fundamental right to be a candidate for mayor over the fundamental voting rights of potentially thousands of voters,” writes attorney Burton Odelson in a brief opposing Emanuel’s effort to have the ballot’s include his name regardless of the ultimate outcome regarding his eligibility to be a candidate. […]

But Odelson argues the actual effect could lead to disenfranchisement should Emanuel ultimately be deemed ineligible because many voters may not be aware of the court ruling and vote for the former Obama aide anyway.

“The petitioners flippant attitude to the disenfranchisement of potentially thousands of voters is disingenuous,” wrote Odelson.

The full Odelson response in all its glory is here.

- Posted by Rich Miller   50 Comments      

Is bankruptcy off the table?

Tuesday, Jan 25, 2011

* A welcomed development

House Majority Leader Eric Cantor said Monday that he opposes changing the law to allow fiscally pressed states to seek bankruptcy protection, an idea that has been raised by some conservatives.

Speaking to reporters, Cantor (R-Va.) also said state governments should not expect Washington to solve their fiscal problems. States have the ability to balance their books by cutting spending, raising taxes or renegotiating agreements with labor unions, he said.

While the feds should’ve given more money to states via the stimulus bill, they shouldn’t compound the problem now by allowing states to declare bankruptcy (if they even can, which is debatable).

The municipal bond market has been built on the notion that states have to pay off their bondholders. A bankruptcy option would mean the entire market would have to be rebuilt and restructured. Chaos would surely result. Imagine trying to sell a 20-year infrastructure bond when the buyers know the states could just declare bankruptcy at any moment and absolve themselves from the debt. Yes, there is that risk with corporate bonds, but the market was built with that in mind. Not so with munis.

* One reason this is being pushed is to allow states to break union contracts. But a state can pass a law to outlaw collective bargaining for public employees. It won’t kill off current union contracts, but it would preclude further contracts. That’s under discussion in Wisconsin right now.

* Another reason given is that states could perhaps get out of their pension obligations

Kirk says the only legal options available now for states such as Illinois are default – which could be devastating – or a federal bailout.

“Between a bailout, which has no possibility of passing in the House, and a default, which means suddenly, the state treasury runs out of money to pay for anything, is there something that allows a state work out its debt situation?” Kirk said.

Bankruptcy would allow the state to restructure its pension system so that it may preserve benefits for existing employees.

Strangely enough, he said that after Illinois approved a tax hike. Apparently, he doesn’t see that as an option, nor does he see severe budget cutting as an option.

New Jersey, which didn’t really cut anything despite promises to the contrary, is planning to skip its pension payment for the second year in a row. Texas will skip most of its payment in the coming year. But federal bankruptcy judges could force draconian cuts or maybe even a tax hike. One never knows.

* And that’s really the heart of the matter here. Conservatives screamed bloody murder for decades about federal judicial takeovers of school districts. Now they want to hand over entire state budgets to unelected judges? Really?

There are those on the Left who believe that what’s really going on here is that the people behind this bankruptcy push want to save newly elected Republican governors from the political nightmare of having to make the hard choices on their promised cuts. That would be typical DC, and it would be just like DC to ignore decades of hard and fast positions in order to score a short-term political gain.

* Bob Dole once said this about Newt Gingrich…

“You hear Gingrich’s staff has these five file cabinets, four big ones and one little tiny one. Number one is `Newt’s Ideas.’ Number two, `Newt’s Ideas.’ Number three, number four–`Newt’s Ideas.’ The little one is `Newt’s Good Ideas.’”

Gingrich has been pushing this state bankruptcy idea for months. It certainly doesn’t belong in the little cabinet.

- Posted by Rich Miller   34 Comments      

*** UPDATED x1 - Teamsters support Emanuel *** Semantics war in Emanuel case

Tuesday, Jan 25, 2011

* The Tribune’s editorial blasting the appellate court ruling on Rahm Emanuel’s residency was full of a whole lotta bluster, but it did include one interesting factoid

[Dissenting Appellate Justice Bertina E. Lampkin] accused the majority of ignoring case law that clearly supported Emanuel’s argument —including a significant case in which Hoffman prevailed.

From Justice Lampkin’s dissent

The majority completely ignores Dillavou, a recent Fourth District case that addressed candidate residency, even though Walsh, on which Justice Hoffman previously concurred, favorably cited Dillavou and discussed it at length. […]

Of particular relevance to the case before this court, Dillavou quotes the language of Clark and Kreitz, which provides that, once established, a residence will not be lost by an individual’s absence from that residence unless the individual demonstrates such an intent.

Dillavou is a case from the 3rd District, so the 1st is not bound to abide by its reasoning. However, Walsh v. County Officers Electoral Board of Cook County is a 1st District case and, as Justice Lampkin notes, Justice Hoffman concurred in its result. Walsh involved Rep. David McAfee, who rented a little studio apartment in his post-remap district. He never moved his family to the apartment.

* Perhaps the most important aspect of Justice Hoffman’s opinion was whether the phrase “resided in” meant the same thing regarding voters and candidates. He ruled they did not. A voter would be given far more leeway, but a candidate must actually live in the municipality. Hoffman did admit yesterday, though, that Walsh assumed “implicitly that the terms were synonymous.” From Lampkin’s dissent

In Walsh, [Justice Hoffman] agreed that physical presence and intent to remain at a place as a permanent home created a residence for purposes of candidacy. In Walsh, Justice Hoffman agreed that intent was a factual consideration and that Delk, which he now dismisses, supported his position.

The Supreme Court denied an appeal on the Walsh case, buttressing Justice Lampkin’s point.

And then there was this from the dissent…

Moreover. if the legislature had intended the phrase “has resided in” to mean “actually lived in” as the majority proposed, then the legislature surely would have chosen to use the more innocuous word live rather than the verb reside and the noun residence, which are charged with legal implications.”

* This is a pretty good summation of Justice Hoffman’s logical twists and turns

They plowed through 193 years of history only to find their answer in the words of the last person to amend the law, State Sen. Dave Luechtefeld (R-Okawville).

Hoffman wrote that an amendment Luechtefeld sponsored in 2007, allowing those returning from military duty to run for local office, undercut Emanuel’s argument.

He wrote that a clause in the amendment refers to a person becoming again a resident of a municipality.

“If the military service person must ‘again’ become a resident of the municipality, then it logically follows that the person lost his or her resident status at some time prior thereto,” Hoffman wrote.

* And the majority also came to its conclusion by ignoring a state Supreme Court case that Lampkin believes is highly important, and to a layman’s eyes, looks quite relevant to today’s situation…

The majority is wrong when it contends the Smith decision was “based solely on the officeholder’s intent to return.” To the contrary, the court, in reaching its determination, considered “all of the circumstances in evidence,” and not solely the prosecution’s failure to establish that the appellant never intended to abandon his Illinois residence. Specifically, the court considered the appellant’s frequent declarations that his move to Tennessee was only an experiment and he would return to Illinois if he found that he could not remain with satisfaction among the Tennesseans. Further, the appellant refused his partner’s request to vote in Tennessee for a particular candidate, saying he did not want to lose his Illinois citizenship. The appellant also refused to sell his Illinois law books, saying that he would probably return to Illinois and would need them in his practice.

Moreover, the appellant only rented his residence when he left Illinois.

Eerie, eh?

* So, why the flip-flop? Nobody really knows. There is plenty of dark speculation, however

The two Appellate Court judges responsible for tossing Rahm Emanuel from the ballot in February’s mayoral race both won their jobs after being anointed by a Chicago political power broker who openly supports an Emanuel opponent. […]

Longtime Appellate Court Judges Thomas E. Hoffman and Shelvin Louise Marie Hall — who on Monday ruled that Emanuel’s stay in Washington precludes him from running for mayor this year — were both judicial candidates slated for election by the Cook County Democratic Party judicial slating committee chaired by Ald. Edward Burke, 14th.

Burke, one of Chicago’s most powerful politicians, holds huge sway in the election of judges at every level, including the Illinois Supreme Court, where his wife, Anne, sits as a justice and where the Emanuel ballot question is now headed for a final decision.

*** UPDATE - 10:36 am *** Teamsters Joint Council 25 just announced its endorsement and continued support of Emanuel.

- Posted by Rich Miller   91 Comments      

*** UPDATED x1 - S&P removes IL from watch list *** Moody’s reaffirms negative outlook, reports SEC probe - TRS fights back - Christie gins it up

Tuesday, Jan 25, 2011

*** UPDATE *** Another spot of slightly good news. Illinois is off S&P’s watch list

Standard & Poor ’s Ratings Services on Tuesday removed Illinois from a watch list for a potential downgrade, citing the state’s action this month to raise taxes and cap spending.

“The CreditWatch removal reflects our view of the state’s recently enacted legislation that provides for structural budget solutions, which we believe will likely allow the state to begin to address its sizable accumulated budget deficit and could provide a foundation for structural budget balance in the future as well as improved liquidity,” said S&P credit analyst Robin Prunty in a statement.


S&P said Illinois is not out of the woods yet, however, as it affirmed an A-plus rating for the state’s general obligation bonds, while assigning a negative outlook to the rating

[ *** End Of Update *** ]

* Illinois continues to receive a “negative” outlook from Moody’s Investor Services, mainly because the state has not yet passed legislation to deal with its overdue debt

The outlook for the State of Illinois is negative, primarily reflecting uncertainty surrounding plans to address the state’s large balance of accounts payable.

But it did offer some significant rays of sunshine

Notwithstanding these sunset dates, the tax rate increases are an important first step in restoring fiscal stability, creating a window of several fiscal years in which the state can address structural challenges, such as rising pension expense. The next milestones will include the Governor’s budget proposal, expected February 16, and resolution of proposed measures to address an approximately $8 billion backlog of payables in coming months. […]

The [expenditure limitations] law, scheduled to remain in effect through fiscal 2015, therefore provides strong incentive for compliance. […]

In connection with fiscal legislation enacted in May 2010, the state has published its first multi-year financial plan, including revenues and expenditure projections through fiscal 2014. This represents implementation of a governance practice that, over time, may help produce strong operating results.

Statutory dedication of half a percentage point of the recent individual income tax increase [to pay of the bond for overdue bills] would mitigate impact on the state’s financial operations, however

* However, the Moody’s report also disclosed that the SEC is looking into how the state disclosed savings from last year’s pension system reforms

The Securities and Exchange Commission in September began a non-public inquiry into the state’s disclosure of potential savings from these [pension system] reforms. The state is cooperating. The inquiry itself does not indicate that a violation of federal securities law has occurred, according to current state disclosure statements.

The state says the probe doesn’t indicate that laws were violated, but that’s pretty much ignored in the coverage

The Securities and Exchange Commission has launched an inquiry into public statements by Illinois officials about the state’s underfunded pension fund, the state’s governor’s office confirmed Monday night.

The Illinois inquiry is focused on public statements concerning an overhaul measure passed in 2010 meant to help shore up the retirement system, said the governor’s spokeswoman, Kelly Kraft.

“We are fully cooperating” with the inquiry, said Ms. Kraft in an interview. “We feel our disclosure was always accurate and complete.” […]

An issue being examined is whether Illinois was taking future savings and treating them as current reductions in the cost of the pension fund, said Robert Kurtter, a managing director in the public finance division at Moody’s Investors Service, who said his firm spoke with Illinois officials about the inquiry. One of the measures that Illinois took to save costs was to raise the retirement age for newly hired Illinois workers. Mr. Kurtter mentioned the inquiry in a report released Monday evening.

Gov. Pat Quinn specifically said last year that the state would not draw down on the program’s long-term savings for immediate use. This is definitely an interesting turn of events.

* Meanwhile, the Teachers Retirement System has taken aim at Jonathon Rauh, an associate professor of finance at Northwestern University, who predicted with much fanfare that TRS would run out of money by 2018. From the pension system

Rauh makes his predictions based on a set of facts of his choosing, and financial experts point out that he chooses a set of facts to ensure that he comes up with the conclusion he wants.

    * For instance, he greatly underestimates the investment income pension systems will create in the future. He uses an unrealistic rate of return of about 2 percent on investments, which deliberately shorts all future income for TRS.
    * The agency’s target rate of return is 8.5 percent. In the last year, the agency’s actual rate of return was 12.9 percent. Over the last 25 years it is 8.6 percent and over 28 years it is 9.4 percent. […]

Rauh’s prediction will only come true if TRS does not earn another dime in investment income or receive any state contribution over the next eight years. That scenario is not only unlikely, it is impossible. His prediction is wrong.

* New Jersey was investigated by the SEC last year for failing to properly disclose the true health of two pension systems. It settled the case without admitting wrongdoing. But this SEC probe of both states probably won’t be mentioned in the coverage of Gov. Chris Christie’s latest push

The governor is launching an ad campaign encouraging businesses in Illinois to relocate to the Garden State. An official announcement from the Christie administration is planned for Tuesday, when ads will start appearing in newspapers and on radio stations in major Illinois cities like Chicago and Springfield.

Print and radio ads reiterate Christie’s commitment not to raise taxes. The ads follow substantial tax increases recently enacted in Illinois — and a promise from Christie earlier this month that he would reach out to Illinois businesses personally and invite them to relocate here. […]

[The tax hike] makes Illinois’ business tax rate higher than New Jersey’s 9 percent for businesses with incomes over $100,000. But its personal income tax rate remains lower: New Jersey’s rate is 6.37 percent for couples earning more than $150,000 a year and 8.7 percent for those earning more than $500,000 a year. […]

The ads follow a personal appeal from Lt. Gov. Kim Guadagno, who sent letters to 553 Illinois-based companies large and small that will be affected by the tax increases.

- Posted by Rich Miller   39 Comments      

This just in… Emanuel files emergency motion

Monday, Jan 24, 2011

* 6:00 pm - Rahm Emanuel’s attorneys have filed an emergency motion with the Illinois Supreme Court for a stay pending appeal. Read it by clicking here.

It begins…

The Appellate Court’s decision involves one of the most far-reaching election law rulings ever to be issued by an Illinois court, not only because of its implications for the current Chicago mayoral election but also for its unprecedented restriction on the ability of individual to
participate in every future municipal election in this State.


the Appellate court’s decision that Emanuel abandoned his Chicago residence when he lived temporarily in Washington, D.C. while serving as the President’s Chief of Staff is directly contrary to this Court’s long-standing precedents. As the dissenting Justice stated, without mincing words, the majority below created a “completely new standard” that shows “a careless disregard for the law shortly before an election for the office of mayor in a major city.”

* From Zorn

In a conference call with reporters this afternoon,[Board of Election Chairman Langdon Neal] said it will cost “hundreds of thousands of dollars” to print the 2 million paper ballots the the Board of Elections Commissioners is ordering from Lake County Press in Waukegan. He said plates and being made this evening, and the “ink will hit the paper” tomorrow morning.

Early voting begins a week from today but will use electronic voting machines that can still be reprogrammed. He declined to speculate exactly what would happen if the Illinois Supreme Court reinstates Emanuel on the ballot other than to say “we’ll make adjustments…we’ll cross that bridge when we come to it.”

He said there is no precedent in Illinois for delaying the date of an election due to uncertainties such as this.

- Posted by Rich Miller   67 Comments      

The dude doesn’t reside

Monday, Jan 24, 2011

* Greg Hinz has some useful react

[Election law attorney Andy Raucci] said it is quite possible, maybe even likely, that the high court will agree with the Appellate Court.

“There are all sorts of court precedents that say you can impose higher standards,” Mr. Raucci said. “I have felt from the beginning that the odds of him losing increased as the case went higher up in the courts, farther away from the newspaper editorial boards.”

Burt Odelson, the attorney who brought the successful challenge to Mr. Emanuel’s residency, thinks there’s a real possibility the high court won’t even take the case.

The Supreme Court generally steps in when lower courts have conflicting rulings, he said. That’s not true here, he continued. “The law is the law.”

* Could Emanuel run as a write-in? Yes. Could he serve? Maybe not

On the one hand, there is no legal process to stop Emanuel from running a write-in campaign, according Ken Menzel, a legal counsel with the Illinois State Board of Elections.

“We don’t have a challenge process for write-in candidates in Illinois,” he explained. “You can’t prevent a person from being a write-in candidate.” […]

On the other hand — and more importantly — the state residency statute in question in the case decided today governs eligibility to hold public office, not eligibility to be on a ballot.

“The basis of the challenge is the allegation he’s not eligible for office,” Menzel said.

The finding that Emanuel failed to meet the state’s strict residency requirement, if not reversed, means a write-in campaign would begin in environment of uncertainty as to whether Emanuel could assume office, were he to win.

* The Hotline looks at the future

But Chico has even more to gain from today’s ruling in the immediate future, said Chicago political consultant Eric Adelstein. Chico finished third overall in the Tribune poll and is the leading Hispanic candidate in the race. But Emanuel was carrying a plurality of the Hispanic vote in the survey with 30 percent, with the rest of that bloc divided between Chico and City Clerk Miguel del Valle, who most experts give little chance in the race.

“It’s likely to be Braun and Chico,” said Dick Simpson, a former alderman and the head of the political science department at the University of Illinois Chicago.

Under that scenario, the key question would be who wins the support of white voters, among whom Emanuel had enjoyed a commanding lead. If the Tribune poll is any guide, Chico has a huge advantage over Braun in this demographic. He finished second to Emanuel among whites with 25 percent, while Braun received just 7 percent of support among that group. Perhaps even more troubling for Braun, half of white voters view her unfavorably, according to the poll.

And Chico has other factors working in his favor. “He has more money and a heavier ad campaign,” Simpson said.

* And the Sun-Times has already published an editorial

The truest words issued by an Illinois Appellate Court Justice on Monday were these:

Striking Rahm Emanuel’s name from the ballot for mayor of Chicago unfairly “disenfranchises … every voter in Chicago who would consider voting for him.”

Unfortunately, Justice Bertina E. Lampkin wrote those words in a dissent of the court’s majority opinion, which did indeed rule Emanuel off the ballot. […]

Inexplicably, however, the Appellate Court majority also declined Monday to certify this case for immediate review by the Supreme Court, apparently not deeming it a matter of great enough importance.

Now Emanuel’s lawyers must petition the high court themselves, a time-consuming process, while the clock ticks.

* Roundup…

* Mayoral ballot to print without Emanuel

* Candidates React to Rahm News

* With Rahm Tossed, Del Valle Gets Top Spot on Ballot

* ‘We will prevail,’ Emanuel says after court boots him off ballot

- Posted by Rich Miller   42 Comments      

Report: Liautaud bought Florida house in June

Monday, Jan 24, 2011

* Did Jimmy John’s founder James Liautaud really make an abrupt decision to pull his family out of Illinois and move to Florida after the income tax hike passed? Maybe not

A check of public records indicates that an LLC with Jimmy John Liautaud’s last name bought a $4 million home at Key Largo’s Ocean Reef Club in June. […]

[A] check of property records in Monroe County found the $4 million purchase by Liautaud Development Group LLC of Champaign at Ocean Reef on June 1. In September, a permit was issued to allow some demolition work on the house.

The Ocean Reef Club club is mighty swanky, with its own private airport, two golf courses, and a private school. I looked at a vacation rental last year for about two seconds online before I figured I couldn’t afford it.

Treasurer Dan Rutherford is a friend of Liautaud’s and told WLS last week that the businessman was upset at Illinois for a variety of reasons, including our minimum wage. Liautaud has been a major contributor to Republicans here, nationally and in Arizona, where a $10,000 Liautaud Development Group check got involved in a court case involving the always controversial Maricopa County Sheriff.

- Posted by Rich Miller   59 Comments      

*** UPDATED x1 - Kasper won’t ask for Burke recusal *** Question of the day

Monday, Jan 24, 2011

* Yeah, it’s late, but there’s a lot going on.

* The Question: Should Illinois Supreme Court Justice Anne Burke recuse herself from any appeal by Rahm Emanuel since her husband is (albeit unofficially) supporting Gery Chico for mayor? Explain.

*** UPDATE - 3:27 pm *** Emanuel attorney Mike Kasper just called to chat. Among other things, Kasper said he will definitely not ask Justice Burke to recuse herself.

- Posted by Rich Miller   65 Comments      

This just in… Emanuel off ballot - Opinion posted online - Emanuel plans rally - Watch Emanuel presser live - Board of Elections response

Monday, Jan 24, 2011

* 12:02 pm - From ABC7

The Illinois Appellate Court ruled Monday that Rahm Emanuel is not a resident of Chicago and is therefore not qualified to run for mayor.

The court reversed a lower court’s decision Monday. Emanuel is expected to appeal

* Chicago News Cooperative

“We conclude that the candidate neither meets the the municipal code’s requirement that he have ‘resided’ in Chicago for the year preceding the election in which he seeks to participate nor falls within any exception to the requirement.”

* The vote was 2-1 against Emanuel

Appellate judges Thomas Hoffman and Shelvin Louise Marie Hall ruled against Emanuel. Justice Bertina Lampkin voted in favor of keeping President Obama’s former chief of staff on the Feb. 22 ballot.

* Download and read the opinion by clicking here.

* From the opinion…

Based on the foregoing analysis, we conclude that, under subsection 3.1-10-5(a) of the Municipal Code, a candidate must meet not only the Election Code’s voter residency standard, but also must have actually resided within the municipality for one year prior to the election, a qualification that the candidate unquestionably does not satisfy. Because the candidate does not satisfy that standard, he may be eligible for inclusion on the ballot only if he is somehow exempt from the Municipal Code’s “reside in” requirement.


We agree with the candidate that his service constituted “business of the United States” and thus that this exception applies to him. We disagree, however, with his position that the exception saves his candidacy. In our view, the exception embodied by section 3-2 of the Election Code applies only to voter residency requirements, not to candidate residency requirements.

And more…

…our supreme court has explained unequivocally that “it is elemental that domicile and residence are not synonymous.”

* From Justice Lampkin’s dissent

To the extent the majority addresses the long-held principle that a party’s intention when he leaves or acquires his residence largely controls the determination of whether he has abandoned the residence, the majority distorts this principle (see discussion of Smith below). Then, the majority simply reads the principle out of its analysis, choosing instead to adopt a completely new standard.

More from the stinging dissent…

Since the majority could not meddle with the Board’s fact findings or its ruling based on the proper application of the manifest weight and clearly erroneous standards, the majority attacks the Board’s ruling from another angle. Specifically, the majority promulgates a new and undefined standard for determining candidate residency requirements despite the plethora of clear, relevant and well-established precedent that has been used by our circuit courts and election boards for decades.


Nothing in the text or context of these statutes distinguishes “has resided in” as used to define a “qualified elector” from “has resided in” as used to define the length of time a candidate must have been resident in order to run for office. Moreover, if the legislature had intended the phrase “has resided in” to mean actually lived in, as the majority proposes, then the legislature surely would have chosen to use the more innocuous word live rather than the verb reside and the noun residence, which are charged with legal implications. […]

The majority attempts to support its creation of a completely new candidate residency standard with an exhaustive (or, rather, exhausting) discussion of section 3.1-10-5(d) of the Municipal Code regarding the military exception. The candidate here was not in the military and did not attempt to claim an exemption under section 3.1-10-5(d). Nevertheless, while the majority spends five pages of its opinion on a subsection of the Municipal Code that has no applicability to the present case, the majority does not write a single sentence explaining how it defines “actually resided in.” It is patently clear that the majority fails to even attempt to define its newly discovered standard because it is a figment of the majority’s imagination.

How many days may a person stay away from his home before the majority would decide he no longer “actually resides” in it? Would the majority have us pick a number out of a hat? A standard which cannot be defined cannot be applied. If the majority had picked even an rbitrary number of days that voters need not sleep in their own beds before they violated this new arbitrary standard, then at least we would be able to apply this new standard. Should a court consider just the number of days a voter or candidate is absent or are there other relevant factors under the new standard?

Apparently, only the majority knows but, for some reason, fails to share it with those charged to abide by it if they want to be a candidate for municipal office.

The majority’s promulgation of a new undefined standard cuts off the various boards of elections and circuit courts of this State from over 100 years of precedent. […]

The majority’s decision disenfranchises not just this particular candidate, but every voter in Chicago who would consider voting for him. Well-settled law does not countenance such a result. […]

An opinion of such wide-ranging import and not based on established law but, rather, on the whims of two judges, should not be allowed to stand.

* 12:49 pm - Statement from Gery Chico spokesperson Brooke Anderson…

“From day one, Gery Chico’s campaign has been about putting Chicagoans back to work, making our neighborhoods safer and giving our children the education they deserve.

“Today’s news is a surprise but it will not impact how we run our campaign. Gery will continue to work for every vote and lay out his plans to take Chicago in a whole new direction.”

Emanuel will make a public statement at 1:30 this afternoon.

* 12:52 pm - From the Emanuel campaign’s Twitter feed

Today at 5: meet at the Chicago BOE to rally for Rahm’s right 2 b on the ballot and let Chicagoans choose. Dearborn/Washington, 5 pm

* Officially, he’s off the ballot right now, but Emanuel’s attorneys will likely ask for a stay

The Board of Elections has not yet printed up the ballot.

Odelson said Board of Elections attorney Jim Scanlon told him that as of this moment, Emanuel’s name would stay off the ballot.

Emanuel’s attorneys will likely ask for a “stay” of the order today or Tuesday. If that is granted, Emanuel’s name could go back on the ballot.

Early voting starts a week from today.

* 1:22 pm - The Huffington Post breathlessly reports that Emanuel’s campaign website is down. Well, it works for me.

* 1:32pm - CBS2 is covering the Rahm Emanuel announcement live right now. Click here.

“Fundamentally, when the president asked me to serve the country as his chief of staff, that counts as serving your country. I have no doubt that we will, in the end prevail at this effort… Nothing’s ever easy. This is just one turn in the road.”

Emanuel said the “dissent opinion is pretty strong.” Said the circuit court and the city elections board back him up. Said his attorneys would ask for a stay to get his name back on the ballot.

Asked if he thought politics was involved in this decision, Emanuel deflected.

CBS2 has terminated its live stream. WBBM Radio is still streaming audio.

OK, now WBBM has terminated.

* 2:08 pm - Stating the obvious…

“We’re going to press with one less candidate for mayor.”

- Langdon D. Neal, Chairman, Board of Election Commissioners for the City of Chicago

- Posted by Rich Miller   166 Comments      

Fitch upgrades Illinois outlook

Monday, Jan 24, 2011

* The tax hike is having a positive effect on the state’s bond ratings

The tax increase approved by Democrats in Springfield has had one positive effect; Fitch Ratings has raised the rating on state bonds from negative to stable. […]

The service said the increase will help stabilize the state’s finances.


The ratings agency said following several years during which the state was unwilling to take action to restructure its budget, the tax increase and enacted spending limits close “a significant portion of the structural gap in the state’s budget through fiscal 2014.”

Fitch added that because the tax increases are temporary, Illinois would need to find a more permanent solution to the mismatch between spending and revenues. Further, despite the significant increase in tax revenues, Illinois is expected to continue to rely on one-time revenues, including the expected use of debt financing for operations, in fiscal 2012.

Fitch said the state’s debt burden is “above average” and rising. Additional borrowing, meanwhile, is expected under the $31 billion capital plan.

The state’s general obligation bonds are currently rated at A, which is five notches into investment-grade territory. Illinois benefits from a large, diverse economy centered on the Chicago metropolitan area, which is the nation’s third largest and is a nationally important business and transportation center, according to Fitch.

Expect others to follow.

* The tax hike may have also brought some needed sanity to muni bond markets in general. If nothing else, a backlash is starting to play out over dire predictions of meltdown

Lyle Fitterer, the top manager of U.S. municipal-bond funds in the past decade, sides with Bill Gross and against Meredith Whitney in his view that fiscally strained states and cities will avoid widespread defaults.

“The baby has been thrown out with the bathwater,” said Fitterer, who runs the $2.3 billion Wells Fargo Advantage Municipal Bond Fund from Menomonee Falls, Wisconsin. “For every bad story there are hundreds of good ones.”

Investors have pulled money from mutual funds that buy municipal bonds for 10 straight weeks, spooked by rising interest rates and warnings that defaults will escalate. Fitterer used the selloff to buy what he sees as bargains, including debt from Illinois and California, which have the lowest state credit rating from Moody’s Investors Service.

Smart move by Fitterer on buying Illinois.

* Meanwhile, the General Assembly slipped a little-noticed provision into a bill last week

In the same legislation that raised the debt ceiling, lawmakers included a provision that requires underwriters working with the state to disclose what bets they have made through credit default swaps against a potential state default. State House Speaker Michael Madigan, D-Chicago, modeled the requirements after action taken by California Treasurer Bill Lockyer.

Illinois has had the highest CDS rate among states. It has ranged in recent months from just under 300 basis points to more than 340 basis points.

Under the legislation that has been signed by Quinn, underwriters must disclose their cumulative notional volume of the state’s CDS positions and trades and their outstanding gross and net notional amount of Illinois CDS over the last three months.

Firms must disclose whether their “net position is short or long.” They must also disclose whether they have released any publicly available research or marketing reports that reference state CDS and submit the reports.

In other words, the state wants to know if its underwriters are also betting against it. They have until Friday to disclose their CDS bets.

- Posted by Rich Miller   15 Comments      

Stand for Children has wealthiest PAC in Illinois

Monday, Jan 24, 2011

* My weekly syndicated newspaper column is about the wealthiest PAC in Illinois

An out-of-state education reform group raised a whopping $2.8 million in the days leading up to historic state caps on campaign contributions.

All of the money raised by Stand for Children’s Illinois PAC came in five- or six-figure contributions from some very major Chicago-area business types. Members of the famed billionaire Pritzker family kicked in a total of $250,000 on Dec. 29, two days before the end of the old campaign finance system, which allowed for unlimited contributions to groups like Stand for Children’s PAC.

Ken Griffin, CEO of the Citadel Group, contributed $500,000 on Dec. 15. Griffin gave hundreds of thousands of dollars last year to Illinois House Republicans and GOP gubernatorial nominee Bill Brady’s campaign. Sam Zell, owner of Tribune Co., contributed $100,000 on Dec. 20. Members of the Henry Crown family kicked in $400,000. And Paul Finnegan, co-CEO of Madison Dearborn Partners LLC, contributed $500,000.

The group’s political action committee made history last year with the single largest non-leadership contribution in modern Illinois times — a $175,000 check to Republican state House candidate Ryan Higgins, who ended up losing his race. The PAC contributed a total of $610,000 during the fall campaign to legislative candidates in both parties.

That money did not go unnoticed at the Statehouse. During the post-election legislative session, House Speaker Michael Madigan tried to push through education reforms supported by Stand for Children which were deemed overtly hostile by the teachers unions. Among the reforms was an all-but-total ban on strikes by Chicago teachers. The teachers unions refused to contribute to Madigan and many of his candidates last year after Madigan pushed through public employee pension reforms.

The group’s December fundraising push left it with almost $2.9 million in the bank as of the end of 2010, when contributions to state PACs were capped at $10,000 for individuals and $20,000 for corporations per calendar year. None of the group’s $2.8 million in December contributions would have fallen under those caps.

To put this in perspective, the Illinois State Medical Society, which is one of the most powerful lobbying forces at the Statehouse, had $1.8 million in its political action committee account by the end of the year. The Illinois Hospital Association and the pro-choice juggernaut Personal PAC ended the year with about $1.4 million each. Stand for Children beat them all by a lot.

Jonah Edelman, Stand for Children’s national founder, said last week that the December contributions represented the “significant generosity of Illinoisans.” Edelman refused to say whether the group planned to spend the war chest in the coming campaign or use it as a long-term fund.

He did say his organization was now focused on passing the education reform bill that was backed by Madigan, Chicago Mayor Richard Daley, Chicago mayoral candidate Rahm Emanuel and others during the lame-duck session. Emanuel took in hundreds of thousands of dollars from Stand for Children’s contributors.

The group’s legislation ran into a brick wall in the Senate, where Sen. Kimberly Lightford, chairman of the Education Reform Committee, resisted a move to rush through any reforms and insisted that the teachers unions play a role in the negotiations.

Lightford has received high marks from both Stand for Children and the teachers unions for running fair-minded, well-organized meetings. One longtime teachers union lobbyist said this month that Lightford’s meetings were some of the best-run he’s attended during his entire career. Stand for Children’s legislative person comes from the Senate Democratic staff, so she has a long relationship with Lightford and offered up her own high praise. Another Lightford meeting is scheduled for this week.

It’s not that legislators and their leaders slavishly bow deeply to anybody with a fat wallet. But they most certainly take lots of notice when somebody comes out of nowhere and antes up with $2.9 million.

And Stand for Children’s lobbying stable includes some of the biggest contract lobbyists at the Statehouse. They’ve basically run the board, with heavy-hitting lobbyists tied to both parties and the Black and Latino caucuses.

Stand for Children has gone from nowhere to one of the biggest and potentially one of the more successful players in the building within just a few short months, all without attracting significant media attention. It’s truly an amazing story.

* And that isn’t the only big, new group in town

Taking advantage of what they perceive as a loophole in the state’s campaign finance disclosure laws, organizers of For a Better Chicago say they don’t have to tell us who donated the $855,000 that the group transferred into its newly formed political action committee on Dec. 29 and 30.

The money came in just under the deadline before a new state law took effect Jan. 1 that the group concedes will require it to disclose any future donors.

* Related…

* 43 races for alderman draw $5.6 million

* War chests of unopposed aldermen

* Mayoral candidates raced to raise funds before new state limits kicked in - About $1.2 million of contributions to Emanuel in late December would have violated law in January

* Rahm Emanuel’s $100,000 Club

* Emanuel Gets a Boost From Financial Sector

* Clayco chief gives $50,000 to Rahm’s mayoral bid

- Posted by Rich Miller   8 Comments      

Behind the tax hike hype

Monday, Jan 24, 2011

* I’ve said this before and I’ll say it again, most of the bluster from surrounding state governors since Illinois raised its income tax is just that. Bluster.

Their trash talk is mostly about domestic politics. Before Wisconsin Gov. Scott Walker was even sworn in he had turned down hundreds of millions in federal transportation aid and, as a consequence, lost a rail car manufacturer. For that, he was whacked hard by Gov. Pat Quinn, who vowed to recruit the manufacturer. Since bashing Illinois is a favorite pastime up in CheeseHeadLand, Walker is taking full advantage to help restore his reputation. Payback time.

But Wisconsin is also losing businesses to Chicago

Jim Rozell owns a hotel analytics company and plans to relocate from Glendale, Wisc., to Chicago by the end of the year. Hotel Compete currently has five employees, but Rozell said he will likely hire 10 more people once he comes to Illinois.

Rozell said he started planning the move before taxes went up Illinois, but hearing about it didn’t deter him.

“Initially one of my big deciding factors was that taxes were much lower (in Illinois). Even with your tax increase, it’s still lower than Wisconsin,” Rozell said.

Who would want to headquarter their company in the super boonies when they could put it where the real money is in Chicago?

* The same basic political formula is playing out in Indiana. Hoosier Gov. Mitch Daniels believes he’s running for president. For whatever reason, anything bad that happens in Illinois or Chicago is automatically seen by the Right as reflecting poorly on President Obama, even though he’s not responsible for 99.9 percent of it. It’s just another silly national politics game, and Daniels is quite understandably using it to his full advantage. And, of course, the Hoosiers hate us as much or more as the Cheeseheads. So, he’s also playing to the home fans.

* Will we lose businesses to Wisconsin and Indiana in the coming months? I’m sure we will, and they’ll make a big huge deal out of it. But not everyone who threatens to leave will do so

Troy Freeman, owner of design and marketing firm Dig-It-All Designs, said the possibility of leaving the state has “absolutely” crossed his mind.

“The tax (increase) hasn’t really hit us yet. We’re looking to see what the impact is,” Freeman said. “The tax thing isn’t as big an issue so much as the work climate.”

While he hasn’t made any serious movements toward relocation, Freeman said when he does business with out-of-state clients, he always asks them about the atmosphere in their states.

Dig-It-All Designs relies mostly on central Illinois clients. If they leave, they will be abandoning their client base. Don’t bet on it happening soon.

* Missouri is also getting into the act

The Missouri Chamber of Commerce and Industry’s website bluntly declares: “(We’re) looking at ways to position Missouri to take advantage of our neighboring state’s economic misfortune.”

But two can play at that game

Scrap metal recycler Becker Iron & Metal Inc. plans to move its headquarters from St. Louis to Venice, Ill.

The company’s move will help create at least 42 permanent Illinois jobs and support another 198 construction jobs as part of an overall $4 million investment in Madison County, Illinois Gov. Pat Quinn said Friday.

* Meanwhile, the Chicago Tribune headlined its post tax hike editorial “Goodbye Jobs,” but it supports what some say is a job-killing Amazon tax

Amazon has vowed to fight these measures, in part by cutting off its affiliates, which collect a share of the sales they send to the retailer. At least one,, has threatened to leave Illinois if Quinn signs the bill.

Quinn should sign anyway. That will encourage California and other states on the fence to follow through with similar legislation, which in turn will force online retailers to reconsider their scorched-earth threats. Pressure will mount for the federal solution we need.

No one here relishes the idea of a new business tax. On the surface, it sends the wrong message, especially from a state legislature with such a horrendous record of thwarting job creation.

But many Illinois businesses, including the Illinois Retail Merchants Association, want this law for simple fairness. They’re right. Amazon and its kin rack up hundreds of millions in sales from Illinois residents. Why should e-tailers get a price advantage over competing stores that are compelled by law to collect sales tax?

* Related…

* Plan would charge state retirees more for health care: The retirees are responsible for co-payments, even if nine out of 10 of them don’t pay premiums. The state’s costs rose more than 10 percent to hit $488.2 million in the last budget year, and that doesn’t even include dental and vision expenses. Some of the increase is attributed to workers who have left Illinois for warmer climates. The cost for their care can be higher because they can’t always get the group rate discounts of a managed-care plan when they move to another state.

* Worker’s compensation reform could delay borrowing

* State Bankruptcy Is a Bad Idea - Politicians already have the power to tame public unions without roiling municipal bond markets. They merely have to use it.

* Spending cap will ‘strangle’ state services

* Seeking permission to pollute - Dust has yet to settle on plan to build coal-to-gas plant on Southeast Side

* Former Governor Jim Edgar Weighs In On Income Tax Increase: Former Republican Governor Jim Edgar believes the recent income tax hike is a step in the right direction towards wiping out a 13-billion-dollar deficit.

* State corporate income tax hike to take uneven toll - Firms that make most of their money in Illinois will feel biggest hit

* Lawmakers question state inaction on construction proposals

* Editorial: The Davis file

- Posted by Rich Miller   20 Comments      

That one hurt

Monday, Jan 24, 2011

* All this talk about Cutler’s poor performance and early exit misses the real point: It’s pretty tough to win when your entire team (including coaches) sleep-stumbles through the first third of the game.

Play calling? Horrifyingly unimaginative.

Defense? Nonexistent.

Receivers? Not open.

Offensive line? Pathetic.

Special teams? Stopped.

Frankly, I would rather just forget yesterday even happened and go on with my life.


…Adding… Class move by Gov. Pat Quinn

Before the game, the governor hosted six veterans and military service members for lunch on the near South Side at Connie’s Pizza.

The service members praised Quinn for his work on behalf of veterans, and he responded in kind.

“I think the family of Illinois is united behind the Bears today, but I think it’s also important that we remember those who can’t be at this game. They can’t even be at home watching the game; they’re deployed in Iraq and Afghanistan and around the world,” Quinn said.

The governor said the Bears allowed him to buy two tickets for the game and he donated those to two service members at the luncheon.

- Posted by Rich Miller   48 Comments      

* Taxi industry suffers twin blows
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