* From Rachel Cortez, Vice President & Senior Credit Officer at Moody’s Investors Service…
“Yesterday, the Governor of Illinois vetoed a $215 million payment to help cover the pension costs for Chicago Public Schools (rated B3/negative outlook). If the veto holds, CPS’ deficit net cash position could stand at over $1 billion when its fiscal year ends in June 2017. While the funds from a possible veto override would be positive for CPS, there would still be insufficient funding to alleviate the school district’s severe liquidity issues.
“CPS remains dependent on cash flow borrowing and state assistance to sustain its operations, and its reserves are nearly depleted. While CPS can still take steps to address its fiscal situation, its financial position remains weak and could further deteriorate.”
* Meanwhile…
Hilarious. Dude vetoes $215 million over a few words at a press conference without so much as a phone call to verify intent and he asks people to tone down the rhetoric.
*** UPDATE *** Gov. Rauner’s full remarks…
- 47th Ward - Friday, Dec 2, 16 @ 1:12 pm:
===“Within the next two weeks, Deb Conroy must decide whether she will stand with the families in her district, or vote to bail out Chicago Public Schools with $215 million in taxpayer money. Conroy should make clear today where she stands.”===
After that barrage, now it’s time to tone down the rhetoric? Lol.
I bet I know what the Mayor thinks the Governor can do with his recommendation.
- JustRight - Friday, Dec 2, 16 @ 1:17 pm:
Rauner just won $3 billion in savings with the labor board’s ruling on the AFSCME union negotiations. I think Rauner has more room to talk on the subject. Rahm has only folded to billions in increases in CTU salaries, pensions and benefits… Rahm caused his own problems by folding on negotiations with the CTU and now he’s lecturing Rauner… lol
- wordslinger - Friday, Dec 2, 16 @ 1:19 pm:
Perhaps the GOP could send out a couple hundred emails:
“Will (legislator X) tell Emanuel to tone down the rhetoric.”
- Piece of Work - Friday, Dec 2, 16 @ 1:22 pm:
Dem rule for decades rearing its extremely ugly head
- T Sowell - Friday, Dec 2, 16 @ 1:30 pm:
Perhaps Moody’s and Rahmbo should look at the root causes of CPS liquidity problems, rather than blaming Rauner for his veto.
- nickname - Friday, Dec 2, 16 @ 1:35 pm:
he wants CPS to go bk so he can restructure.
day 1 rauner stuff.
- Anonymous - Friday, Dec 2, 16 @ 1:36 pm:
If it was anything like my first thought I’ll bet Rahm already toned it down from his original response.
- nickname - Friday, Dec 2, 16 @ 1:36 pm:
i wouldn’t doubt that rahm is privately unopposed^
- nickname - Friday, Dec 2, 16 @ 1:36 pm:
as long as he can blame it on the governor.
- West Sider - Friday, Dec 2, 16 @ 1:42 pm:
Attention: The beatings will continue until moral improves.
- justacitizen - Friday, Dec 2, 16 @ 1:52 pm:
President-elect Trump might tone down Emanuel’s rhetoric next month when he cuts funding because of Rahm’s sanctuary city stance.
- Sue - Friday, Dec 2, 16 @ 1:58 pm:
Just Right- your kidding right. Labor Board rules and right away the $$ falls into the State’s lap. Maybe you don’t know about the lawsuit the Union filed in Madison County.
- Lincoln Clay - Friday, Dec 2, 16 @ 2:02 pm:
Rahm made a conscious decision to sit on his hands (rhetorically speaking) in the fall of 2014, now he has to deal with the consequences of that decision like a big boy. For his sake, I hope the piles of cash the Gov helped him collect while at Wasserstein Perella make it easier for to him sleep at night.
- wordslinger - Friday, Dec 2, 16 @ 2:03 pm:
–President-elect Trump might tone down Emanuel’s rhetoric next month when he cuts funding because of Rahm’s sanctuary city stance.–
Sad as it may be to some, the gig is president, not dictator.
- hisgirlfriday - Friday, Dec 2, 16 @ 2:08 pm:
Tone down the rhetoric… or what?
Is Rauner gonna talk Ken Griffin to run against Rahm for mayor or what?
- Jocko - Friday, Dec 2, 16 @ 2:13 pm:
==Rauner just won $3 billion in savings==
Citation needed.
- 47th Ward - Friday, Dec 2, 16 @ 2:13 pm:
===President-elect Trump might tone down Emanuel’s rhetoric next month when he cuts funding because of Rahm’s sanctuary city stance.===
What makes you think the President-elect plans to keep any of his campaign promises? I mean, judging from his early moves, I wouldn’t hold my breath waiting for him to take on Wall Street or “drain the swamp.”
Caveat emptor. Lol.
- Jack Jackson - Friday, Dec 2, 16 @ 2:28 pm:
Until Pate Philip, Lee Daniels, the Republicans they controlled, and Mayor Daley changed the funding formula for Chicago Teachers Pension Fund in the mid 1990s, teachers’ retirements in Chicago were 100% funded.
Let’s hope the future remembers Governor Rauner for his role in destroying state universities and so much more.
- Deft Wing - Friday, Dec 2, 16 @ 2:31 pm:
Come on, you have to admit that expressing a “strong recommendation” about toning down the rhetoric is at least funny.
Totally hypocritical, but funny.
- A guy - Friday, Dec 2, 16 @ 2:33 pm:
The taste of your own medicine is a bitter experience.
- Sue - Friday, Dec 2, 16 @ 2:50 pm:
Maybe Rahm and his council need to rethink the Trump Street sign decision. They might need some help (maybe the Clinton Foundation will bail out CPS). LOL
- Carhartt Representative - Friday, Dec 2, 16 @ 2:59 pm:
==Rahm has only folded to billions in increases in CTU salaries, pensions and benefits… Rahm caused his own problems by folding on negotiations with the CTU and now he’s lecturing Rauner… lol==
Two years of pay raise and then like 2% for two years. I’m pretty sure that adds up to trillions, not billions.
- Oswego Willy - Friday, Dec 2, 16 @ 3:25 pm:
Rauner lacks in governing, and understanding the governing…
His quotes and recklessness point to the lacking.
- Jack Jackson - Friday, Dec 2, 16 @ 3:44 pm:
According to a May 21st, 2016 Crain’s article, the number of millionaires in Illinois has grown 5.2% since 2014, up to 280,265 individuals.
Illinois Flat tax: 3.75%
Wisconsin Income tax - highest rate: 7.65%
Iowa Income Tax - highest rate - 8.98%
Minnesota Income Tax - highest rate - 9.85%
If Gov. Rauner paid 3.75 % of the $188 millioin he earned last year, he paid the state %7,050,000 in state income taxes, rather than the $16,882,400 he might have paid in Wisconsin.
This demonstrates why Illinois can’t pay its teachers a reasonable middle class wage and a fair, dignified retirement.
- Jack Jackson - Friday, Dec 2, 16 @ 3:46 pm:
Ooops. My mistake. The &16,882,400 figure came from applying the Iowa rate of 8.89%, not Wisconsin’s.
- Jack Jackson - Friday, Dec 2, 16 @ 3:48 pm:
http://www.chicagobusiness.com/article/20160521/ISSUE01/160529986/were-rich-illinois-has-more-millionaires-than-ever
Crain’s article - Illinois’ growing wealthy class.
- Rod - Friday, Dec 2, 16 @ 3:48 pm:
The critical part of the Moody’s Investors statement is that even if the House overrides the veto the $215 million “would still be insufficient funding to alleviate the school district’s severe liquidity issues.” That is a correct analysis to put it simply. Moreover, SB 2822 which can be read as amended and vetoed at http://www.ilga.gov/legislation/99/SB/PDF/09900SB2822ham003.pdf is not what is called a continuing appropriation bill.
That means it provides the Public School Teachers’ Pension and Retirement Fund of Chicago a onetime payment of $215 million for FY 17. That payment is also part of the State’s very limited obligation for payments to the Fund under 40 ILCS 5/17-127 which is only by law an amount equal to 0.544% of the Fund’s total teacher payroll. Last year that payment was $12.1 million (FY 16 payment as listed on CTPF website). This big fight over the $215 million veto is crazy, because it’s sort of like CPS begging for a one year bail out every year into the indefinite future.
By the way, why does anyone think any Republican member of the House would break with the Governor over SB 2822? Why would anyone believe Jack Franks would run back to Springfield to vote to override this, or for that matter even Ken Dunkin who has a kid in CPS. Is Ken more likely to get a job offer from the Speaker and the Mayor or from the Governor and his allies?