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This just in…

Tuesday, Jul 8, 2008 - Posted by Rich Miller

* 1:15 pm - Nobody is completely sure whether this is true or not, so the lead-in is more than a little misleading

On the eve of the General Assemby’s special session in Springfield, two prominent Illinoisans who helped draft a 31 billion dollar capital spending plan are pleading for its passage.

WBBM’s Regine Schlesinger reports that otherwise, Illinois stands to lose 9-billion dollars in federal money.

The story (which gets the size of the capital bill wrong) appears to be based solely on a press release sent out by the governor’s office late this morning…

…[Hastert and Poshard] stressed that further delays in passage of a comprehensive capital bill could jeopardize nearly $9 billion in federal funds dedicated to infrastructure projects in the state.

Over the past two weeks, several members of Congress have warned about the accelerated depletion of the federal Highway Trust Fund, which contains matching funds for statewide infrastructure enhancements. Due to the recent decrease in federal gas tax revenues, current projections estimate that the fund will empty in 2009 with a $1-3 billion deficit.

At an April 2 Surface Transportation Hearing, Congressman John Olver, Chairman of the House Appropriations Transportation, Housing and Urban Development Subcommittee said, “…the most immediate challenge the Congress will face is the solvency of the Highway Trust Fund. The Highway Trust fund will go broke in fiscal year 2009 and the future viability of federal transportation financing is in doubt.”

The question I’ve been asking without receiving a satisfactory response lately is if the money isn’t going to be in the Highway Trust Fund anyway, how does Illinois get its share even if the General Assembly approves a funding bill tomorrow?

* 3:14 pm -
From a press release…

11th Congressional District candidate Marty Ozinga announced Wednesday that his campaign had raised over $800,000 in the 2nd Quarter of 2008, his first fundraising quarter as a candidate.

As a demonstration of his commitment to the campaign, Ozinga donated $70,000 to his own cause in early April, pushing his total receipts for the quarter over $870,000. […]

Ozinga was overwhelmed by the strong showing of grassroots support. He received about 1,000 contributions, and nearly 60% of them were for $250 or less.

Well under 10% of Ozinga’s total came from PACs. By contrast, nearly half of his opponent’s total through March 2008 has come from PACs.

Ozinga is running against Democratic state Sen. Debbie Halvorson. The Dems had already penciled this one in as a win, but she looks to be in for a big rumble.

  48 Comments      


Question of the day

Tuesday, Jul 8, 2008 - Posted by Rich Miller

* The setup, from a column by Suburban Life Publications news editor Jerry Moore

State Rep. Bob Biggins, R-41st District, of Elmhurst is the latest elected official caught in a legal quandary. He was charged May 28 with driving under the influence, improper lane use and not having proof of insurance.

After his arrest, Biggins released a statement: “I made a serious lapse in judgment and sincerely apologize to my family and those I represent who may be disappointed today. I take full responsibility for my actions and will face any and all legal consequences.” […]

This creates a conflict of interest for lawmakers in Biggins’ position. In their official capacity, they help maintain social order by enacting laws to keep people safe. But as the focus of criminal charges, they undermine people’s trust in government. How can we have faith in the legislative system when those we put in charge of it can’t seem to follow their rules?

If Biggins was driving while drunk, he should resign his seat in the Illinois House of Representatives.

* The question: Do you agree with Moore’s logic that legislators who drive while intoxicated should resign their House or Senate seats? Explain, and try to stay on topic, please. This isn’t necessarily about Biggins’ particular situation or about any other legislator on your hate list. Thanks.

  104 Comments      


Brown: Is Reyes in the clear?

Tuesday, Jul 8, 2008 - Posted by Rich Miller

* Lots of people have called for HDO founder Victor Reyes’ head, but that may not happen. To his credit, Mark Brown - who used his column for years to excoriate Reyes and the HDO - takes a look at the future

The highest-ranking HDO leader indicted was former Streets and Sanitation Commissioner Al Sanchez, who ran a political street army of perhaps 100 patronage workers for HDO. […]

Defense lawyer Tom Breen, who represents both [Victor Reyes] and Sanchez but represented Reyes first, says he would not have taken Sanchez as a client if he “thought there was any chance of any charges being brought against Victor Reyes.”

Others came to a similar conclusion when federal prosecutors raised no objection to Breen taking Sanchez’s case. Often under those circumstances, they will complain about a conflict of interest.

That’s a very good point. The feds never batted an eye about Breen’s representation. Onward…

Reyes left city employment in 2002, and it’s possible the statute of limitations has run out on any potential case against him, although Breen won’t make that assertion.

It’s not only possible that the statutes of limitation have expired, it’s probable.

…Adding… The Tribune has reported that Reyes left his city job in 2000. [Hat tip to a commenter]

More…

Some of us assumed Reyes did everything Sorich did and more, but obviously, the U.S. attorney’s office felt the evidence against him was weaker.

The difference between Reyes and Sorich is that Sorich altered records, falsified documents, etc. The patronage hiring was the same sort of thing, but the office under Reyes was far more careful about how they went about it.

Convincing the courts to make violations of the Shakman Decree a criminal offense was a whole lot simpler and cut and dried with Sorich because Sorich’s office got so sloppy. Now that the appellate court has upheld Sorich’s conviction, further prosecutions will be much easier. But, as Brown noted above, the statute of limitations has likely expired on Reyes.

I know that this post will make some heads explode, particularly among those who repeatedly blame “The evil Combine” for putting the “ill” in Illinois, but it may be time to face reality.

  22 Comments      


These days, always look for the harshest political angle

Tuesday, Jul 8, 2008 - Posted by Rich Miller

* The reason for this funding holdup isn’t too difficult to figure out

Two years after getting a campaign-year promise of cash from Gov. Rod Blagojevich, Carterville schools have finally received the money.

Blagojevich promised $1.9 million in state money to help repair Carterville High School in Southern Illinois.

But until recently, the district had received less than half of that amount, leaving officials to borrow money to fix the school.

Superintendent Tim Bleyer said he was “pretty worried” at times the district wouldn’t ever get the money. But it finally arrived last week.

“It is a relief,” Bleyer said.

When dealing with Blagojevich, one should always look first at the most crass political explanation possible. Carterville is represented in the House by Democratic Rep. John Bradley. a longtime Blagojevich nemesis.

That may not be the complete explanation, but it’s close enough. And it’s yet another reason why so many legislators refuse to trust the governor with the $34 billion capital plan. They know they’ll be jumping through endless politial hoops to get their project funding released, no matter how solemn or public the promises were.

It is interesting that they’re releasing the project money now, however. Bradley is under intense local fire for opposing the capital bill. This takes some heat off of him. The explanation for the reversal may have far more to do with Sen. Gary Forby’s reelection this fall than the Bradley grudge.

* And this piece shows how things are going in the House these days…

Southern Illinois University School of Medicine officials had hoped to open the SimmonsCooper Cancer Institute this summer.

But the Springfield facility — where a ribbon-cutting and dedication ceremony will take place Thursday — looks as if it won’t begin serving patients until late fall or early next year because the $895,000 needed to heat, cool, light and maintain the institute in its first year was cut from the state budget proposed for fiscal 2009.

The money, along with funding for initiatives at three other universities, was slashed by the Democratic-controlled House in May, apparently because they were sponsored by Republicans, said David Gross, SIU’s executive director for governmental and public affairs.

Last year, Speaker Madigan and Tom Cross were allies in the budget negotiations. Not so this year. Cross has broken with Madigan and his members voted against every version of the state budget that the House passed. So, the Repubs got cut. It’s mean and nasty all around, campers.

  24 Comments      


Not so much

Tuesday, Jul 8, 2008 - Posted by Rich Miller

* The common practice in American journalism is to report the highest number available. If death estimates at a natural disaster are 15-40, the headline is sure to read: “As many as 40 feared dead.”

The problem with this practice, however, is that after a while journalistic shorthand often kicks in and the biggest number becomes the only one used. This phenomenon partly explains why we only ever see the highest estimate of the Fiscal Year 2009 budget deficit.

Anyway, this AP story follows the pattern. Can you spot it?

In a state where the government plans to spend $59 billion this year, it’s not a lot of money. But taxpayers can expect to cough up at least $80,000 for this week’s special legislative session.

Lawmakers will return to Springfield Wednesday and Thursday at the beck of Gov. Rod Blagojevich, who says they sent him a fiscal blueprint in which expenditures exceed revenues by $2 billion.

Like anyone on business, Illinois’ 118 representatives and 59 senators are entitled to reimbursement for their expenses.

It’s $129 per day for lodging and meals, for a total of $45,400.

And for hopping in the car and crossing the flat prairie to the capital, each gets 50.5 cents per mile. They’ll drive 60,260 miles and get $30,400 in taxpayer reimbursements, according to an analysis by The Associated Press.

The AP’s estimate assumes that all legislators will show up for the special session. Not gonna happen. Last year, several newspapers published daily cost estimates of the interminable overtime session which were based on perfect attendance. The number was far too high because attendance was never close to perfection.

* Now, on to the session itself. Finke has a pretty good roundup of opinion on why this week’s special session should be short

THE COMING ELECTION: “The fact that there’s an election (Nov. 4) I think guarantees that they are going to do something and get out of town,” said Kent Redfield, a political scientist at the University of Illinois at Springfield. “The perception is that the mess of state government is the Democrats’ fault. It’s harder to make the case that more Democrats are better if there is a story day after day that there is no budget.” The issue cuts the same for Senate Democrats as House Democrats, Redfield said, giving Blagojevich no way to play one chamber against the other. […]

PAY RAISES: The House rejected 11 percent pay raises recommended by the Compensation Review Board, but the Senate hasn’t acted yet. Under the complicated rules of legislative pay raises, if the Senate meets in session four more days without rejecting the raises, they go into effect automatically. Senate President Emil Jones, D-Chicago, is believed to want the raise but not have it take effect until after the November election. […]

WEAKENED GOVERNOR/IMPEACHMENT: After Blagojevich called this week’s special session. Rep. Jack Franks, D-Woodstock, renewed his call for the House to investigate whether Blagojevich should be impeached. That call will grow louder if lawmakers are stuck in Springfield for another extended summer stay.

Redfield said the conviction of Blagojevich friend and fundraiser Antoin “Tony” Rezko and ongoing federal investigations into the administration leaves Blagojevich politically weaker than he was a year ago.

* And this is from Illinois Public Radio

For the Governor, it’s a no win situation. If he signs the budget as passed, the state will have major money problems in coming months. Make the cuts, and he’s the bad guy once again. But the Governor sees another way out. He wants the House to pass plans that would bring in revenue from leasing the state’s lottery and shifting other money from dedicated accounts. But few expect the House will go along.

I doubt anybody thinks that the House will “go along,” even in the hermetically sealed governor’s bunker. If they do think that, then they’re more delusional than I imagined.

* Related…

* Special session by the numbers

* Per diem plans

  26 Comments      


The smell of death at Gatehouse and Lee?

Tuesday, Jul 8, 2008 - Posted by Rich Miller

* There’s very bad news for some newspaper chains with Illinois properties

Stock in one-time Wall Street darling GateHouse Media Inc. fell to an all-time low following a 14.1% price tumble Monday.

There were no announcements, regulatory filings, or analyst notes that might explain the drop of 35 cents to GateHouse’s (NYSE: GHS) close of $2.12. Coming into Monday’s session, the once high-flying stock had a 52-week trading range of $2.32 to $19.10. […]

Lee Enterprises Inc. (NYSE: LEE) closed at $3.15, off 11 cents, or 3.37. Its previous trading range had been $3.19 to $21.48.

* Gatehouse owns the State Journal-Register, the Rockford Register Star, the Peoria Journal Star and a whole bunch of other Illinois papers. Lee owns the St. Louis Post-Dispatch, Bloomington Pantagraph, the Southern Illinoisan and the Decatur Herald & Review, among others.

Advertising is tanking, partly due to the economy and the changing tastes of consumers as everything moves online and the slow-to-respond newspaper industry attempts to stay relevant. The skyrocketing cost of newsprint also has to be having an impact…

The price of paper stock, a daily publisher’s second-biggest expense after labor, has climbed 26 percent to a 12-year high of $700 a metric ton since October, pushed upwards by supplier consolidation rather than demand.

* After a meteoric rise and almost unprecedented expansion Gatehouse is slashing and burning almost everywhere, it seems. For instance, the mega chain has cut back some of its papers from six days a week to five and it’s done employee buyouts at the SJ-R and other papers. The company has a crushing longterm debt of more than $1.2 billion, yet it continues to pay out a generous dividend to stockholders - which may be the only attractive aspect of the stock…

GateHouse Media, Inc. (NYSE: GHS) announced [June 18, 2007] that its Board of Directors has declared a quarterly cash dividend on its common stock of $0.40 per share for the quarter ended June 30, 2007. The dividend is payable on July 16, 2007 to holders of record of GateHouse’s common stock on June 29, 2007. The newly announced dividend reflects an increase of 25% over the dividend at the time of the Company’s IPO and an increase of 8% over the prior quarter’s dividend.

* More

In its most recent quarter, GateHouse lost $27 million, double its loss of the same quarter a year earlier. GateHouse, which mainly has papers in small (often monopoly) markets, was not expected to be hit as hard as companies owning big metro dailies. But it piled up too much debt making too many acquisitions.

In a similar fix is Iowa-based Lee Enterprises, which was supposed to feast on its collection of smaller papers with little competition. (One exception is San Diego’s North County Times, a Lee paper with lots of competition.) But Lee piled up a lot of debt to buy a big paper, the St. Louis Post-Dispatch, along with too many smaller ones. In its most recent quarter, Lee lost $713 million. In the quarter a year earlier, it had made $11.2 million. A year ago, the stock was above $20; now it’s around $4. The dividend yield is above 17 percent. Obviously, that won’t remain. “Lee Enterprises’ financial health is poor,” says analyst Tom Corbett of Morningstar, a stock-rating firm. “Lee has assumed a substantial debt load from its earlier acquisitions, and the company is closing in on the upper limits of its debt covenants.” (That is a polite way of saying that it could default on its debt.)

I don’t know what the answer is, but it’s not what they’re doing now.

[H/T: Billy Dennis]

  56 Comments      


Morning Shorts

Tuesday, Jul 8, 2008 - Posted by Kevin Fanning

* Is Illinois lagging in technology growth?

For Illinois, the 21st place finish is the same the state received in the institute’s 2004 study. “We’re flatlining,” said Tom Churchwell, managing director of ARCH Development Partners, a venture capital firm in Chicago.

* Illinois to participate in new education program

* MetPier falling short

* Kirk Continues Torrid Fundraising Pace

Rep. Mark Kirk (R-Ill.), facing a highly-competitive re-election campaign, appears poised to again be one of the top Congressional fundraisers after announcing he raised $900,000 in the most recent fundraising quarter.

Kirk now has $2.85 million cash-on-hand – all of it which will be necessary to advertise in the expensive Chicago media market.

* 2006 rivals Rep. Mark Kirk and Dan Seals release campaign fundraising totals that hint at heated North Shore rematch

* The Cuba Syndrome: Mark Kirk and China/Cuba canard

* Schock’s dad testifies at tax-scheme trial

* 71-year-old campaign worker dies after walking Mundelein parade

* FEMA to aid Lake County flood victims

* Rain might halt Rock River’s retreat

* Smoking ban snuffs out cigarettes in stage play

* Ryan Keith to lead SJ-R Capitol bureau

* Amy Jacobson sues CBS 2 for airing bikini video

* Coen Brothers ‘Gospel’ Explored in New Book

Academy Award winners Joeland Ethan Coen are the subject of a new book to be published by Zondervan and written by award-winning Chicago Sun-Times columnist Cathleen Falsani.

* Aldermen rip Daley plan to license ‘expediters’

* City Council shies away from permit-expediter license idea

* City may let outside agencies rule on minority- or women-owned firms

Under the ordinance, the city’s chief procurement officer will be able to designate outside agencies, including the state and federal governments, as well as private groups, as a “certifying agency.” The city’s chief procurement officer would still be responsible for decisions that are made to certify, recertify or decertify.

* Illinois raking in millions from sale of personal data

  11 Comments      


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