Mayor Daley let loose on the governor today, noting that he favors a tax swap and pointing out that the governor hasn’t yet guaranteed any property tax relief. But what got his dander up the most was the rhetoric used by the governor in his budget address…
“Business people are not fat cats. I object to saying that … The idea of trying to divide businesses out of this city and state is a serious mistake. Why? They don’t have to be here. They can go to Wisconsin. They can go Indiana. They can go to India. They can go to China. So, if you want to beat up businesses, go beat them up and when they leave, just wave to them and they’re going to wave back to you,†Daley said.
“I have a good working relationship [with business]. That doesn’t mean I [don’t] differ with business on issues. But I don’t have to publicly condemn them continually. I think it’s a mistake. There has to be a meeting of the minds in regards to education. I think the business community wants to improve education. But…you don’t have to go and beat them up.â€
And on the gross receipts tax…
“The idea is good. But, how does it effect real estate taxes? I’m gonna increase gross receipts. I’m gonna increase real estate taxes. I’m gonna increase all the other taxes. So, where’s the benefit to the public in the long-run? And how are people gonna pay that? Are they gonna pass this on to consumers? If business can pass it on to consumers, then you’re gonna hit the consumers twice,†he said. […]
[Asked] if he would favor an alternative to the Blagojevich plan, Daley said, “There’s a lot of alternatives down there already. Don’t worry. The income tax. A lot of things. At least people are willing to present a plan. That’s what we want. You have to educate our children. We don’t even have a full-day kindergarten in Illinois. We’re supposed to be progressive. We’re supposed to be a blue state. We are not progressive in education.â€
Did I just see Mike Madigan smile that Cheshire Cat grin of his?
It appears that the security camera requirement for Chicago businesses is running into opposition:
Chicago aldermen gave a cold reception Monday to a long-stalled proposal that would require all businesses in the city open late to install security cameras.
Ald. Ray Suarez had tinkered with the ordinance, which he first proposed more than a year ago, in hopes of gaining more support.
“We tried to amend certain parts where people had concerns,” said Suarez (31st). “This is not about punishing people or putting a burden on anybody. This is about safety.”
Opponents of the ordinance conceed the protection benefits from the cameras, but they are worried by the ever-growing reach of the government:
“I’m very concerned about the slippery slope we tread on when we talk about foregoing liberties for the sake of safety,” said Ald. Freddrenna Lyle (6th). “I think it is absolutely the wrong decision.” …
Ald. Tom Tunney (44th), owner of the popular Ann Sathers restaurants, said he thought the proposal was “overreaching.” …
Police and other city emergency departments said they favor the bill because it would help fight crime and response to disasters, while business groups testified in opposition.
This debate between “public security” and “freedom” seems to bear its head quite often with issues like this: seat belt laws, cell phone bans, smoking, HPV vaccine, on and on…
Question(s): On what side of these issues do you usually fall, security or liberty? Somewhere in the middle? What general principles should guide these government decisions?
Whatever might have been said about Alexi Giannoulias last year, he’s certainly getting off to a fine start as state treasurer. First it was cleaning up the Cellini hotel mess, now it’s a much better deal - and a bunch of new scholarships to boot - for the college savings program Bright Start.
Until recently, the $2.2 billion fund was managed by Baltimore-based Legg Mason, whose underperfoming funds placed the Illinois education savings program 48th out of 49 in a ranking of college savings programs, according to Savingforcollege.com, an independent analysis firm based in New York. Bright Start has been running for about seven years.
Following a competitive-bid process, the state signed a seven-year contract with Oppenheimer Funds Inc., headquartered in New York, which will lower existing fees and offer three times as many portfolio options for families, said state Treasurer Alexi Giannoulias.
For example, under the new program, families contributing $3,000 a year with an 8 percent rate of return will save a total of more than $5,000 in fees by the time their child is 18, according to Giannoulias’ office.
The transfer will occur over the next few months at no cost to the families or the state; Oppenheimer will absorb all transaction costs, Giannoulias added. […]
Also included in the contract with Oppenheimer is the formation of a $3.5 million scholarship fund for Illinois students. Giannoulias said his office would work over the next few months on the qualifications for the scholarship money, set to be around a total of $500,000 a year.
I don’t usually hand out praise, but I can'’t say enough positive things about Giannoulias right now. He’s vastly exceeding expectations so far, and the reports that I get from inside the office are that he’s running a highly professional show and resisting entreaties from political types to install their people.
As I’ve told you before, the attorney general is investigating whether Ameren improperly pushed its substantial discount for all-electric homes and businesses on consumers long after it knew that the break was being eliminated. The company denies it…
Leigh Morris, a spokesman for Ameren, said the electric utility had quit more than a decade ago promoting its all-electric discount, although it remained in existence until Jan. 2, when new higher rates took effect.
But some customers say otherwise…
But other AmerenIP customers interviewed by the News-Democrat contend that as recently as last year the utility had tried to encourage them to buy houses with all-electric heat, while keeping quiet about the discount’s impending termination. […]
“We met with Ameren and we said, ‘What is the most economical way to go?” Nuelle said. “And they said, ‘We have a special discounted rate for all-electric buildings. It’s going to save you this much money per kilowatt hour.’ Well, we went with it.”
But since the new electric rates went into effect in January, along with the end of the all-electric discounted rate, the building’s power bill jumped to $6,900 in February from $2,800 the previous February, Nuelle said.
Read the whole thing.
There’s lots more Ameren coverage from late yesterday - Moody’s downgrading its credit rating and Ameren getting approval for and then yanking a rate relief plan - down below. Just click here if you don’t feel like scrolling.
* My syndicated column this week was about the governor’s amazingly quick turnabout on property tax relief.
Gov. Rod Blagojevich proposed no direct property tax relief during his annual budget address at the Statehouse last week, but he told me in an exclusive interview afterward that he would back the idea if a crucial Senate Democrat demanded it.
* Cheryle Jackson, who was the governor’s press secretary until recently, didn’t have very kind words for the governor’s gross receipts tax during an interview with the Chicago Defender…
Chicago Urban League President Cheryle Jackson told the Defender that she likes what Blagojevich is trying to do, but she doesn’t agree with the taxation of businesses, which would include some small businesses. […]
“The number one creator of jobs in the Black community is Black businesses. Black business owners are the most important factor in creating jobs in the Black community. The Chicago Urban League’s main priority is to help Black businesses grow.”
“What this legislation does is penalizes the very thing that is the answer to economic development and job creation in the Black community,” Jackson continued. “It penalizes and discourages the very thing that is going to increase more jobs and increase more development in the Black community.”
Jackson would like the governor focus on a plan such as property tax relief, which she said would bring more economic development and money for education to African American communities.
* A story in the SJ-R yesterday reported on how Indiana got rid of its gross receipts tax. But buried way down was this…
Illinois business leaders predict a gross-receipts tax will lead to lost jobs and hurt economic activity. However, Indiana officials admit it’s difficult to document that getting rid of the tax has led to job growth and increased economic activity.
The Citizens for Tax Justice study found Boeing did not pay income taxes to any state during two of the three years studied, 2001 to 2003. During the two years in which Boeing did not pay state corporate income taxes, the company turned a combined profit of $3.1 billion, McIntyre said.
Other profitable Illinois-based corporations such as Caterpillar, Tribune Co., Sears and Sara Lee successfully avoided paying any state’s corporate income taxes during at least one year of the period studied by Citizens for Tax Justice.
Although tax returns for companies, as well as individuals, are private, the institute was able to determine whether companies were able to avoid state taxes by analyzing documents publicly traded companies must file with the Securities Exchange Commission.
Is it any wonder why the Trib flip-flopped on the GRT?
* The Daily Herald has a brief story about the new ad that Gov. Blagojevich appears in on behalf of his tax hike.
* Insurance giant Aon has some kind words for the governor’s health insurance plan.
Aon applauds Governor Rod Blagojevich’s efforts to craft a health care plan that would provide affordable coverage options to the uninsured and underinsured, and address catastrophic illness and injury. Aon’s own Health Care Trend survey warns about the impact of double-digit health care rate increases.
A Champaign attorney argues the University of Illinois violated state law by doing away with the Chief Illiniwek mascot and filed a lawsuit Monday to save the American Indian mascot.
In his lawsuit, John Gadau cites a 1996 state statute in which the General Assembly declared ‘’Chief Illiniwek is, and may remain, the honored symbol'’ of the university.
When university board of trustees Chairman Lawrence Eppley in February announced the end of the chief’s performances at sports events, Gadau argues, Eppley and the board of trustees violated that statute.
Gadau’s lawsuit, filed in Champaign County Circuit Court, asks a judge to nullify last month’s decision.
If the General Assembly had passed a law stating that the Chief “shall remain” the mascot, symbol, whatever, then Gadau would have a point. As it is, the statute means nothing. It is as symbolic as a goofy white boy dancing at halftime, or this lawsuit.
Meanwhile, the final end is near…
The University of Illinois Board of Trustees will consider two resolutions at its meeting Tuesday that offer very different paths for the future of Chief Illiniwek — one would formally retire the controversial symbol, while the other would renew the fight to keep it.
The first resolution, submitted by University President B. Joseph White for Tuesday’s meeting in Urbana, would formally ratify board chair Larry Eppley’s Feb. 16 decision to stop the controversial figure from performing at Illini sporting events.
The other resolution, which probably will not pass, would have the trustees join the lawsuit against the NCAA filed by two former mascots. The former mascots, by the way, want the university to give them the Chief trademark.
The University of Illinois swept aside the last vestiges of Chief Illiniwek Tuesday, voting to retire the mascot’s name, regalia and image.
The resolution lets Chancellor Richard Herman decide the details such as how and when the Chief Illiniwek name and image would stop being used and licensed to apparel makers and others.
The school would continue to call its sports teams the Fighting Illini under the resolution.
Trustee David Dorris offered the only dissent Tuesday among the 10 voting members.
“It will not be a burden on small businesses,” Batchelov said. “But what it will do is get the larger corporations who make from $1.5 million, and up, profit from their merchandise pay a fair share.”
“Our pension system needs help, obviously,†Giannoulias said Monday at a Statehouse news conference. “Health care for everybody would be great. I just, I want to make sure the GRT didn’t place too much of a burden on the consumers at some point. … I want to look at it a little more.â€
Cross joined fellow GOPs, State Sen. Dave Luechtefeld, Carbondale Mayor Brad Cole and 87th district Rep. Bill Mitchell in Carbondale Saturday to call on Blagojevich to start showing some leadership, stop expanding programs the state can’t pay for and end the tirade against businesses they fear will drive more jobs out of Illinois.
* Editorial: Better schools, more healthcare coverage with Blagojevich plan
If he can build public support and successfully steer it through the General Assembly, the people of Illinois could enjoy a healthier, more prosperous future, and the state could set an example for the rest of the nation.
A U.S. Postal Service audit ranks overnight mail delivery in the city as the worst in the nation. City and state lawmakers are calling for improvements.
* Mark Brown: Aldermen reconcile their Olympic dreams with reality
Over at the City Council on Monday, the aldermen were in a pickle. They were expected to give their support to a $500 million city financial guarantee for operating cost overruns for the 2016 Olympics, even though most of them hadn’t been told such a possibility existed until a few days ago.
* Tax money spent on west side aquatic center in Olympic plan?
* State Senator’s brother back at city job after fight
* Rolling Meadows and Arlington Heights weigh smoking ban effect; 1 to gauge sales-tax changes; other wants statewide prohibition
* Editorial: Public servants should be accessible to the public
* States shouldn’t tax military pay away from home
When it comes to taxing military pay, Illinois has it right - and other states should follow our example.
Illinois is among only five states that exclude military pay from state taxation.
* Bill aims to give cyclists more room on the road
The downgrade of the ratings of Ameren, Central llinois Public Service, CILCORP, Central Illinois Light, and Illinois Power is prompted by the passage of rate freeze legislation by both the Illinois House and by a committee of the Illinois Senate last week and the growing support for a rate freeze in both chambers.
December 15, 2005 - The agency said the downgrades reflect a difficult political and regulatory environment for electric utilities in Illinois, while the company is working on plans to buy power and to raise rates starting in 2007. […]
“The downgrade of parent company Ameren’s ratings reflects the importance of the Illinois utility businesses to its consolidated financial profile, particularly since the acquisition of Illinois Power last year,” the report said.
Moody’s said the ratings remain under review for possible further downgrade.
*** UPDATE 1 *** Statement from Lt. Gov. Pat Quinn…
“You reap what you sow,” said Lt. Gov. Pat Quinn. “Ameren’s shareholders and Illinois ratepayers should understand that they’re being asked to foot the bill for years of fumbling and bumbling by the utility company’s overpaid top executives.â€
*** UPDATE 2 *** One thing to remember about ratings agencies and utilities is that they sometimes work hand in hand to influence public policy. As this NY Times article showed, one agency allegedly assisted an Oregon utility in its quest for a rate hike…
The documents show that Standard & Poor’s solicited comment from the utility on a draft report and then made at least 48 changes that the utility sought before releasing its report on Sept. 25. Those changes included adding the words “uncertain regulatory environment†and a second crucial phrase supporting Portland G.E.’s request to shift all fuel-cost risks off its shareholders and onto customers. The utility then used the report as independent corroboration of its request to raise rates. […]
S.& P. said that there was nothing unusual about the revisions, which it said were made in light of new facts and in accord with the standards of the International Organization of Securities Commissions. […]
[Jason Eisdorfer, a lawyer with the Oregon Citizens Utility Board, a consumer group] said he disagreed with Standard & Poor’s assertion that most of the changes were factual, contending that they “seem to be an attempt to influence a commission decision.†“This was meddling in the rate-making process,†he added.
*** UPDATE 3 *** Citizens Utility Board executive Director Dave Kolata…
“Ameren had record profits under our old rate structure. This is part of a political strategy of bankruptcy blackmail… There’s been a massive transfer of wealth from consumers to generating companies… We certainly think that this type of approach is very unfortunate and we don’t think it’s justifiable.”
So do you think Ameren had anything to do with this rating change, I asked?
“I don’t know. It’s worth investigating… What I do know is Ameren is making windfall profits off this auction scheme… Trying to force one part of its business into bankruptcy is the wrong way to go and would be unfortunate if they moved in that direction.”
The Standard & Poor’s credit rating agency said it would immediately downgrade the credit ratings of Ameren Corp.’s three Illinois utilities to junk status if state lawmakers pass electric rate freeze legislation.
Credit downgrades can increase a utility company’s cost of borrowing and reduce access to capital, meaning consumers ultimately could pay even more for their electricity. […]
While some people have likened Ameren’s claims to fearmongering, Ameren Corp. spokesman Leigh Morris said Friday’s Standard & Poor’s bulletin shows the company was not making hollow threats.
“It confirms our ongoing concern that the credit ratings of the three Ameren Illinois utilities will be downgraded,†if the Legislature passes electric rate freeze legislation, Morris said.
*** UPDATE 5 *** Earlier today, the Illinois Commerce Commission approved Ameren’s consumer “relief” plan that has been all but completely rejected by the General Assembly as not nearly enough…
Ameren’s plan to give customers a one-time credit on their electric bills received approval from the Illinois Commerce Commission today.
The utility giant wants to spend 20 (M) million dollars on rebates for residential customers who use the most electricity. The proposal would also eliminate the interest customers currently pay to defer bill payments.
During hearings with state lawmakers this week, Ameren President and Chief Executive Officer Scott Cisel offered to give credits to customers who use more than 1,250 kilowatt hours of electricity each month. Generally speaking, the credits range from $40 to $300, and customers with electric heat are most likely to benefit.
Ameren spokesman Natalie Hemmer didn’t know how many residential customers would be eligible for the credit. But according to Cisel’s testimony, the average customer uses about 867 kilowatt hours each month, so many would likely not qualify.
*** UPDATE 7 *** Much of the company’s debt was downgraded to “Baa2,” but some was downgraded to “Ba3.” And the “Probability of Default Rating” for CILCORP is set at “Ba1.” Here’s an explanation of Moody’s ratings…
* Speculative Grade
Ba1, Ba2, Ba3 – speculative elements
B1, B2, B3 – lack characteristics of a desirable investment
Caa1, Caa2, Caa3 – bonds of poor standing
Ca – highly speculative
C – lowest rating, extremely poor prospects of attaining any real investment standing
Ameren spokesman Neal Johnson said Monday night that the company would be contacting the ICC Tuesday to inform them of the credit downgrade.
“This credit action triggers a most regrettable event in the history of the Ameren Illinois utilities,” spokesman Leigh Morris said in a statement.
“The Company’s next steps are being finalized.”
*** UPDATE 9 *** Well that didn’t last long. Ameren’s rate “relief” plan is now off the table…
Citing the state’s attempt to refreeze newly deregulated utility rates, a bond rating agency on Monday downgraded Ameren’s Illinois utilities to junk status.
That move, in turn, prompted the embattled utility to pull back a $20 million give-back program aimed at easing the rate hike pain of customers.
Margaret Blackshere. Treasurer
Margaret Blackshere. Chairman
Kenneth C Robbins Chairman
Sheila Lyons Chairman
Blackshere is the former president of the Illinois AFL-CIO. Robbins is president of the Illinois Hospital Association. And that’s a misspelling for Sheila Lyons, it’s actually Sister Sheila Lyne, who is now president and CEO of Mercy Hospital.
A proposal to ban hundreds of models of popular sporting rifles and shotguns is raising the ire of gun owners across Illinois.
Sponsored by Senate President Emil Jones, SB16 prohibits the manufacture, sale and possession of a host of rifles and shotguns widely used for hunting and target shooting. Owners of affected firearms would have 90-days to surrender their property to the Illinois State Police or risk felony prosecution.
Besides the debate on the merits of the bill, the move calls into question the political tightrope that must always be walked with gun legislation in this state.
The press release continues, quoting ISRA-PVF spokeman Richard Pearson:
“If SB16 passes, many of those relationships will come to a screeching halt. Southern Illinois politics are in a state of change, with senate races getting closer all the time. If the senate Democrats who elected Emil Jones to the presidency cannot control him, then we’ll do what we can to take his majority away from him. No friend of Emil Jones is a friend of ours.”
Question(s): Is there any credibility to Pearson’s claims? How dangerous is the gun-control issue to downstate Democrats? How would you play this politically?
* Blagojevich says he is ready to do battle over tax proposals
Meanwhile, critics began chiming in with what has become a familiar refrain in the wake of Blagojevich policy speeches: That the populist governor isn’t happy unless he is setting up Hollywood stock villains to knock down.
“Government-run programs stymie innovation and flexibility,” he said. “This plan does not address quality of care, rising health care costs or how expansion of subsidized health care may disrupt the system for those who already have insurance.”
* Governor’s DCFS budget not getting good reveiws
* Governor enlists teachers for help with school plan
The governor received a rousing ovation and an endorsement for his plan, a much different response than he drew during the gubernatorial campaign when the IEA decided not to endorse any candidate.
* David Greising: GRT levy reaches too far: “A million in gross revenues doesn’t mean you’re a millionaire,” Applebaum said. “It makes you about a teacher’s salary.”
* Blagojevich’s plan for tax on business gets cool response from many in the state
“What if you’re a small business in Peoria or the surrounding area, and you have two lines of widgets that you sell, Widget Line A and Widget Line B, and you have $2 million in sales? What’s to prevent you from incorporating Widget Line A, incorporating Widget Line B and being under $1 million?”
* Firms fear big tax hike fallout: “What you tax us for today, we’ll charge you for tomorrow, maybe earlier,” said David Sykuta of the Illinois Petroleum Council.
* Editorial: Budget proposal is bold but leaves some questions
* Phil Kadner: Explaining balance between wasteful spending and higher taxes
Some readers tell me spending more money on the public schools will not solve the problems of education. They are right. But you’re certainly not going to solve any of the problems by doing nothing, while allowing property taxes to increase, school buildings to deteriorate and education programs to collapse.
* Governor pledges long battle with Ameren: Blagojevich said it’s his goal to see the rates frozen and then help negotiate a new plan with the utilities.
* Ameren’s credit rating would be downgraded to junk status if freeze passes
* Flider wants public comment time during ICC meetings
His administration has clamped down on sharing public information. It refuses to release government documents. It has defied the attorney general’s legal opinions and punished people suspected of cooperating with reporters.
When asked if they’re making a profit charging 50 cents a page for paper that costs less than a penny per page at Office Depot, Urich said, “I doubt we even break even.” Kinko’s charges 8 cents a page for black-and-white copies.
* Editorial: You have a right to know, Sunshine Week
The state borrows money and gives it to hospitals. The hospitals give it back to the state. The state gives it back to the hospitals. The exchange triggers federal reimbursement for state Medicaid expenses that would not otherwise occur.
* Blagojevich allies help state sell off student loans
* Giannoulias polishes off Bright Start with new manager and lower fees
However, some lawmakers and school officials are balking at the proposal. They argue such legislation would upset student calendars and waste one of five state-allotted institute days in an academic year.
