L Supreme Court Justice Charles Freeman came out and said the Rahm Emanuel opinion would be released this afternoon.
* 5:06 pm - The Supremes have reversed the appellate court ruling. Emanuel is on the ballot.Click here to read the opinion.
* From the opinion…
Before proceeding to the merits, we wish to emphasize that, until
just a few days ago, the governing law on this question had been
settled in this State for going on 150 years. In Smith v. People ex rel.
Frisbie, 44 Ill. 16 (1867), this court was faced with a question
remarkably similar to that which is before us today. Smith, a longtime
resident of Illinois, had been appointed a circuit judge by the governor
of Illinois, and a quo warranto action was brought to remove Smith
from that office on the grounds that he had not been an Illinois
resident “for at least five years next preceding *** his appointment,”
as the Illinois Constitution then required. In support of their action,
the objectors pointed to the fact that Smith had moved with his family
to Tennessee for eight months during the relevant five-year residency
period.
In concluding that Smith’s eight-month sojourn to Tennessee did
not result in an abandonment of his established Illinois residency, this
court explained that, once established, “residence is lost *** by a
union of intention and acts” and that “the intention in many cases will
be inferred from the surrounding circumstances.” Smith, 44 Ill. at 24.
More…
Thus, from April 1867 through January 24 of this year, the
principles governing the question before us were settled. Things
changed, however, when the appellate court below issued its decision
and announced that it was no longer bound by any of the law cited
above, including this court’s decision in Smith, but was instead free to
craft its own original standard for determining a candidate’s residency.
… Thus, our review of the appellate court’s
decision in this case begins not where it should, with an assessment of
whether the court accurately applied established Illinois law to the
particular facts, but with an assessment of whether the appellate court
was justified in tossing out 150 years of settled residency law in favor
of its own preferred standard. We emphatically hold that it was not.
The Smith principles control this case, plain and simple. With the
sole exception of the prescribed time period, the provision at issue in
Smith is identical to one the issue at here.
* This opinion is a true beatdown of the appellate court decision. For instance…
All of that said, and putting aside the appellate court’s conclusion
that Smith is not binding in this case, the appellate court’s residency
analysis remains fundamentally flawed. This is because, even under
traditional principles of statutory analysis, the inevitable conclusion is
that the residency analysis conducted by the hearing officer, the
Board, and the circuit court was proper.
Major point…
Indeed, once a person has established
residence, he or she can be physically absent from that residence for
months or even years without having abandoned it
More beatdown…
[The appellate court’s] reasons for departing from over 100 years of settled
residency law are hardly compelling and deserve only brief attention.
More…
Although adopting a previously unheard-of test for
residency that would have applied to all future municipal elections, the
court made no attempt to explain what its standard means. The only
hint given by the appellate court is that, whatever its standard means,
this candidate did not satisfy it. The appellate court never explained
what it meant by “actually reside” or “actually live.” Indeed, as its
discussion of section 3.1–10–5(d) reflects, the entire appellate court
opinion can be read as nothing more than an extended exercise in
question begging, in which the appellate court sets forth the question
to be answered as what it means to “reside” (No. 1–11–0033, slip op.
at 11), and concludes that it means to have “actually resided” (No.
1–11–0033, slip op. at 21).
The difficulty of applying such a standard is immediately apparent.
For instance, consider a Chicago resident who owns a second home
in Florida and typically spends a month there every winter. Where is
that person “actually living” or “actually residing” during the month
when he or she is at the second home? Is such a person ineligible for
municipal office unless he or she sleeps at the Chicago house every
night for the year preceding the election? Is there a time limit with this
test? Would a week at the second home be short enough but two
months be too long? What about a Chicago resident whose job
requires him to spend extended periods of time out of the country
every year? Where is such a person “actually living” or “actually
residing” when out of the country? Assuming without deciding that
the appellate court was correct that the government service exception
does not apply to candidates, consider the example of Representatives
in Congress who often spend 4-5 days a week in Washington. If a
Representative from a Chicago congressional district owns a
condominium in Washington, where is that representative “actually
living” or “actually residing” when Congress is in session? Under the
majority’s test, would the candidate have been ineligible to run for
mayor even during the time he was serving in Congress? The same
confusion would arise with respect to State Representatives or State
Senators who must spend considerable amounts of time in Springfield.
* Emanuel’s intent…
This is a situation in which, not only did the candidate testify that
his intent was not to abandon his Chicago residence, his acts fully
support and confirm that intent. […]
The objectors claim that, once a person rents out a residence, he
or she has abandoned it as a matter of law. This is obviously incorrect,
as it is directly contrary to Smith. Indeed, Smith makes clear that
rental is merely one factor to consider in determining abandonment
(Smith, 44 Ill. at 24), and the terms of the rental and the circumstances
surrounding it must be considered.
* Conclusion…
So there will be no mistake, let us be entirely clear. This court’s
decision is based on the following and only on the following: (1) what
it means to be a resident for election purposes was clearly established
long ago, and Illinois law has been consistent on the matter since at
least the 19th Century; (2) the novel standard adopted by the appellate
court majority is without any foundation in Illinois law; (3) the
Board’s factual findings were not against the manifest weight of the
evidence; and (4) the Board’s decision was not clearly erroneous. [Bolding added]
* There were no dissents. Two justices (Freeman and Burke) concurred in the result but not the reasoning.
* As you might expect, this is very bad news for Illinois’ credit rating, at least with Moody’s…
Moody’s Investors Service has begun to recalculate the states’ debt burdens in a way that includes unfunded pensions, something states and others have ardently resisted until now.
States do not now show their pension obligations — funded or not — on their audited financial statements. The board that issues accounting rules does not require them to. And while it has been working on possible changes to the pension accounting rules, investors have grown increasingly nervous about municipal bonds.
Moody’s new approach may now turn the tide in favor of more disclosure. The ratings agency said that in the future, it will add states’ unfunded pension obligations together with the value of their bonds, and consider the totals when rating their credit. The new approach will be more comparable to how the agency rates corporate debt and sovereign debt. Moody’s did not indicate whether states’ credit ratings may rise or fall. […]
In the past, Moody’s looked at a state’s level of bonded debt alone when assessing its creditworthiness. Pensions were considered “soft debt” and were considered separately from the bonds, using a different method.
“A more standard analysis would view both of these as liabilities that need to be paid and put stress on your operating budgets,” said Robert Kurtter, managing director for public finance at Moody’s.
Moody’s presentation of combined debt and pension figures as part of a more integrated view of states’ total obligations follows a period of rapid growth in unfunded pension liabilities.
“Pension underfunding has been driven by weaker-than-expected investment results, previous benefit enhancements, and, in some states, failure to pay the annual required contribution to the pension fund,” says Hampton. “Demographic factors — including the retirement of Baby Boom-generation state employees and beneficiaries’ increasing life expectancy — are also adding to liabilities.”
Moody’s says that the evaluation of current and projected pension liabilities is an important area of focus in its rating reviews. For some states, such as Illinois, which is rated A1 and has a negative outlook, large and growing debt and pension burdens have already contributed to rating changes.
As I’ve said before, when New York says “Jump!” Illinois, with its huge bonded indebtedness, has no choice but to ask “How high?” If I had to bet, it would say we’ll see more pension reform stuff soon, including forcing government employees to pay lots more into the system.
* This Politico article pretty much sums up how disgusted I am with DC politics…
Sen. Mark Kirk (R-Ill.) had been a member of the “most exclusive club” for about two weeks when he pulled the equivalent of spiking a football on the decorous Senate floor, reveling in the GOP’s defeat of a catch-all $1.1 trillion spending bill riddled with earmarks.
“As the most junior people, for those who don’t understand what just happened, did we just win?” Kirk inquired, feigning ignorance for dramatic effect, at the end of one of the Senate’s final debates in December. […]
“I think his whole demeanor wasn’t that appropriate,” Sen. Mark Begich (D-Alaska) told POLITICO after chiding Kirk on the Senate floor. “I saw what he said, and I thought, ‘I’m going to say something.’ And I thought that that was the politics that people are fed up with. So he has to be very careful.”
Among Republicans who privately complained about the episode, one called it “amateurish.”
Yeah, lock him up and throw away the key.
What a freaking crock.
I’d like to send them Rickey Hendon for a few days. His electric blue suit with matching shoes and attitude might finally shake that place up a bit.
There was a time in the French royal court when one had to speak in rhyme to be respected. DC is pretty much the same way. They have their own little world out there and it makes little real sense to anyone outside of it.
…Adding… Hilariously enough, somebody in Illinois actually fell for this contrived silliness…
Remember the scene from Animal House, in which Otter is trying to persuade the Deltas to pledge the sad-sack Flounder?
When Otter was a freshman, he says, “I myself was so obnoxious the seniors beat me up once a week.”
That’s the kind of start Mark Kirk is getting off to in the U.S. Senate. Here in Illinois, we’ve always known he was a self-aggrandizing pipsqueak — remember those triumphant little hops every time he scored a point in a debate against Alexi Giannoulias? Now, his new co-workers are finding out, too.
* His “inappropriate” behavior didn’t hurt Kirk with his committee assignments. The freshman just snagged seats on Appropriations; Banking, Housing and Urban Affairs; Health, Education, Labor, & Pensions; and the Special Committee on Aging. Not bad at all.
* We received a phone call this week from a car salesman in Libertyville. Apparently, somebody had applied for a car loan on the Internet in my wife’s name. The loan was never approved, but the salesman said he knew who the culprit was. However, the salesman adamantly refused to tell us the dastardly fool’s name over the phone, because of various privacy laws.
Needless to say, this greatly puzzled me. They know who a criminal is, but they won’t give us the name? And they didn’t report him to the coppers? What the heck?
So, I called the attorney general’s office. To my amazement, there is no law requiring merchants to report even blatantly obvious attempts at identity theft. The car dealer was also within his rights not to release any information over the phone, according to the AG’s office. Lisa Madigan’s office tried to be helpful, sending us two several-page forms to fill out which they would then mail to the car dealer and he would then mail them the details, which they’d then forward to us. My wife decided that she’d just make the long trek from Springfield to Libertyville herself today and get the information. Whether the cops or anyone else will do something about it is another matter entirely.
* The Question: Have you or a close loved one ever been the victim of identity theft? If so, did you find existing laws adequate? Explain.
There was one fellow who would have defeated Daley in a one-on-one race, reform Ald. Scott Waguespack, 32nd. Waguespack terrified City Hall by actually speaking up against the cost of corruption. He began criticizing that terrible parking meter deal. He promised that if elected mayor, he’d hire IRS agents to conduct forensic audits of every department going back 20 years.
Almost immediately, Daley stepped down. Then the usual suspects — those who’d never dare challenge the mayor — crawled out of the bush and made like change agents. In such a crowded field, poor Waguespack was forced to withdraw.
OK, if Waguespack was such a great candidate, wouldn’t he have stood out in this big crowd? After all, he had an enormous campaign bank account balance of $33,260.63 at the end of last year. Surely, those billions would’ve allowed him to stomp Daley as well as dominate the big field.
Also, do you have any idea how long a 20-year forensic audit would take? Probably 20 years [/snark]. Daley’s cronies would’ve all passed away to that great patronage hiring hall in the sky by then.
The [appellate] court concluded that the words “resided in” in one election law mean something entirely different from the same words in a second election law. It did so even though neither the second law nor the Illinois Supreme Court has defined them differently.
The Supreme Court has for decades defined “residency”… to mean the place where you intend to make your permanent abode. If you leave your home for a temporary work assignment intending to return to your home, your residency does not change. The court has not interpreted the word to mean where you “live” or sleep each night. Emanuel obviously lived in Washington while serving as President Barack Obama’s chief of staff, but clearly he intended to return to his Chicago home. […]
Two Appellate Court judges agreed that Emanuel is a “resident” of Chicago under this definition, as he had not abandoned his permanent home and intended to return to it. The court therefore held — under the first law — that he can vote in the mayoral election.
But when the court returned to the very same words in the second law (a related law regarding candidates), it decided that “resided in” could mean something different because the laws were separate. And it decided that in this second law, the Legislature had used the word “reside” to mean two different things within the same sentence — and that one of those meanings equated “reside” with “live.” [Emphasis added.]
That appellate ruling is a total mess. Subscribers know more, but that was a pretty good look by David Hoffman.
Experts say a court never has ignored a candidate’s intent.
“We’ve all been working under this absolute presumption based on cases of the last 50 years that intent was really the key,” Dorf said. “But the appellate court got rid of intent.”
Edward Foley, a law professor at Ohio State University who heads the school’s election law program, said the court’s decision to disregard intent was striking.
“There is a general theme in election law that when in doubt, you err on the side of democracy,” he said. “If there is any doubt about the understanding of the statute, you interpret it so that you let the voters decide.”
Adlai Stevenson II was absent from Illinois for much of 1945-48, while serving as an American delegate to the United Nations in London and New York. Then, in 1948, he was elected governor — despite the Illinois Constitution’s requirement that a candidate for governor must have been “a resident of this State for the three years preceding his election.”
* Related…
* Will Emanuel ruling escape political taint?: Joseph Tybor, spokesman for the Supreme Court, said it would be unfair to imply the high court is tainted by politics simply because the constitution requires they be elected. “I challenge you to find one case, or two cases, in which a judicial decision was made because of improper political influence,” he said.
* Patricia Van Pelt Watkins’ Gritty and Inspiring Life Story: I think [Carol Moseley Braun has been] missing in action. I didn’t even know she still lived in Chicago. All the challenges we face in this city, and we haven’t heard anything from her.
Illinois remains 48th in job creation while it wallows in a $13 billion deficit.
OK, first of all, that $13 billion figure is outdated because of the income tax increase. I wish people would stop using it. But facts always get in the way of long-established memes when you’re dealing with the mainstream media.
“And so between me and Governor Quinn in Illinois, here’s the very simple difference: He’s raising taxes, I’m cutting them. And the promise I made to the business owners in Illinois is come to New Jersey, and for as long as I’m governor we’re not going to raise your taxes. If you stay in Illinois, you know for a certainty that Pat Quinn’s going to raise your taxes. Because what he’s done is made his bed with the public sector unions during the election campaign.”
Gov. Christie already did raise taxes. By getting rid of the state’s property tax rebate program, property taxes jumped almost 30 percent. And that doesn’t count the actual property tax increases to cover state cuts to education and local governments.
In several reports by national media, Illinois has been used as an example of a state that could use a bankruptcy option because of its billions-dollar deficit.
But there are constitutional hurdles that would be hard to overcome, according to Douglas Baird, a law professor at the University of Illinois at Chicago.
“A state may contract debt but, typically speaking, you can’t go to an Illinois court and sue the state of Illinois to collect the debt and you can’t go to federal court to sue a state and collect the debt because states have what’s called sovereign immunity,” Baird said.
Bankruptcy affords individuals and businesses a way to get out from under the debt they owe and, in some cases, reorganize that debt to remain in business. States don’t need that option because of sovereign immunity, Baird said.
“If you’re immune from suit, then you don’t need bankruptcy because your creditors can jump up and down but they’re not going to be able to do anything because they can’t seize your assets or do stuff like that anyway,” he said.
This immunity makes bankruptcy for states unnecessary, according to opponents of the plan.
Exactly. Move along.
* Meanwhile, the Chicago Tribune engaged in more than a little revisionist history…
Last March 24, the pols who run Illinois nearly ruptured multiple vertebrae by slapping themselves so enthusiastically on the back.
In one day they had rammed through the Illinois General Assembly a bill establishing scaled-down pension benefits for public employees — but only those hired in 2011 and later. This was the so-called major pension reform that had Gov. Pat Quinn and his budget director, David Vaught, bragging that they had saved taxpayers $200 billion over nearly 35 years. Why, they even estimated that Illinois could reduce $300 million to $1 billion from the state’s required pension contribution in the fiscal year that began July 1. House Speaker Michael Madigan and Senate President John Cullerton were thrilled too. Pension mess? Solved! Slap, slap.
Talk about hyperbole. Sheesh. Here’s what Illinois Chamber President Doug Whitley said as the pension reform bill was working its way through committee…
If you can’t watch the video, Whitley called the pension reform legislation “the biggest thing that I’ve seen around here in years.”
The foreclosure crisis is getting worse as high unemployment and lackluster job prospects force homeowners in an increasing number of U.S. metropolitan areas into dire financial straits. […]
In the Chicago-Naperville-Joliet metropolitan area, foreclosure activity rose 16 percent, while home repossessions climbed nearly 20 percent, RealtyTrac said.
Robertson was the lead author of a study published by Northwestern University Feinberg School of Medicine that found that doctors who study in Illinois are fleeing the state in droves. Robertson is chairman of the Department of Family and Community Medicine at Northwestern. […]
The study surveyed Illinois’ graduating residents and fellows, and sampled about 561 respondents, of a 1,738 total population size.
The primary reason for the exodus was overall practice opportunities; however, the medical malpractice liability environment was a major consideration, the study stated.
Sixty-seven percent of the study’s participants cited the medical malpractice liability environment in Illinois as a reason for leaving the state. There are no caps to the amount of money for which a physician can be sued, Robertson said.
* Related…
* Edgar: State needed a tax hike: Saying that Democrats have likely “used up all of their courage,” Edgar, who was governor from 1990 to 1998, said more efforts to cut spending and put the state on a “fiscal diet” will have to come from both sides of the aisle, along with cooperation from the governor’s office.
* State lawmakers grilled over income tax in Kane County: “You guys are one of hundreds of organizations that are screaming that we haven’t paid you,” said Chapa LaVia, of Aurora. “You’re just as important as our kids … as our veterans … just as important as all our vendors who haven’t gotten paid.”
* New-home sales in 2010 fall to lowest in 47 years: For December, sales rose in all parts of the country except the Northeast, which saw a 5 percent decline. Sales surged 71.9 percent in the West and were up 3.2 percent in the Midwest and 1.8 percent in the South.
* Blackhawks owner Rocky Wirtz filed the lawsuit which resulted in the capital bill’s demise yesterday at he hands of the appellate court. At least one union is now talking boycott…
Blackhawks owner Rocky Wirtz might face a backlash now that the lawsuit he filed has indirectly put tens of thousands of construction jobs in jeopardy. […]
The lawsuit that led to Wednesday’s ruling was filed by Wirtz, whose family owns the Chicago Blackhawks. The foundation of their financial fortune is Wirtz Beverage Illinois, a distributor of alcoholic beverages. Used to getting their way in Springfield, the Wirtz family was infuriated when the legislature ignored their objections to the liquor tax.
Chicago labor leaders were not happy about the construction jobs that will vanish if the capital projects don’t go through. Jim Sweeney, President of Local 150 International Union of Operating Engineers, said his members might boycott Wirtz family businesses including the Blackhawks.
First of all, there was nothing “indirect” about it. That lawsuit led directly to the current calamity. Also, secondary union boycotts are illegal, although this might not be viewed as such.
Lawmakers are, of course, free to disassemble their Frankenbill and pass the measures separately, as they should have done in the first place. Good luck with that. In the year and a half since they pulled this stunt, we’ve had the sort of public airing we didn’t get in the beginning, and it’s clear Illinois residents don’t want those new bridges and buildings badly enough to welcome video poker to their neighborhoods.
More than 70 communities already have voted not to allow the machines. All four major candidates for mayor of Chicago want to leave the city’s ban on video gambling in place. We’ve elected some new lawmakers, and set old and new on notice: This doesn’t fly. Wednesday’s ruling should be the end of it.
* As I explained to subscribers this morning, it won’t be easy passing another funding bill. The Sun-Times has more on that…
If Wednesday’s decision is not overturned, Gov. Quinn will face an unexpectedly difficult and financially uncertain spring legislative session that many observers had expected to be relatively tame. Now, after passage of the politically unpopular income-tax hike, he could be faced with scaling back the construction plan or persuading re-enactment of the stricken tax and fee increases, borrowing and video poker that has been rejected by dozens of communities.
“For those who supported this most recent tax increase and then went home and heard from their constituents, what will your reaction be to another vote on fee and tax increases, which were part of the original capital proposal?” said Sen. Matt Murphy (R-Palatine), who said it is not a certainty that Republicans in a new Legislature will agree to the same framework as before on a construction package. “We’re in a different time.”
The prospect of having to go back to the Legislature and win backing again for billions of dollars in construction borrowing is further complicated by Gov. Quinn’s push for a separate $8.75 billion borrowing package he had intended to seek this spring to whittle down the state’s backlog of unpaid bills.
“You’d like to think at a certain point we’d collectively achieve borrowing fatigue. I know I’m there personally,” Murphy said. “This is just a sticky wicket.”
State Rep. Dan Brady, R-Bloomington, said he was disappointed with the court’s ruling on a measure he called a “jobs bill.”
“When you now say that the funding in the legislation itself is unconstitutional, you put a choke hold on those jobs and the state and the economy,” Brady said. “This whole jobs bill … was directed to stimulate the economic engine of the state of Illinois and put people back to work in this high unemployment time.”
“Regardless of my feelings on what the Legislature did to fund the capital bill, what’s concerning is that we haven’t had one in such a long time. The infrastructure in our state is terrible. My immediate concern is that it’s addressed,” said Peoria Mayor Jim Ardis.
“My initial concern would be the impact that this ruling would have on all the capital projects that have been identified and planned and, most notably, with the Peoria Riverfront Museum,” said Peoria County Administrator Patrick Urich. “The state has identified $5 million for part of this project and I’m concerned what’s going to happen with that.” […]
District 150 Treasurer Dave Kinney said he hoped the ruling would not have any effect on the money expected to go to the school district.
If it does, though, “I would think that our first step would be to meet with the PBC and architects involved … and put a temporary halt to the projects until we can sort out what the priorities would be,” Kinney said. “We were anticipating bids to go out on both projects in April or May, so right now there isn’t an obligation to one project or the other from the standpoint of having hired contractors. Hopefully, since we have been on a (Capital Development Board) list for quite some time, there will be minimal impact. Obviously, we will need to find out as soon as possible what that link might be.”
* Except for video poker, most people have forgotten what was used to fund the capital program. The SJ-R has a handy list…
* Legalizing video poker in places like bars and social clubs, raising an estimated $375 million.
* Turning over day-to-day management of the lottery to a private firm and allowing the sale of lottery tickets online, $150 million.
* Increasing the tax on alcohol, $114 million.
* Extending the sales tax to previously exempt items such as candy, non-carbonated beverages, and health and beauty products, $150 million.
* Increasing vehicle fees, $331 million. Vehicle registration and driver’s license fees increased $20. Titles and commercial licenses went up by $30.
Rep. Jack Franks, a Marengo Democrat, wants to take the chances for state pensions away from all future lawmakers.
Franks has filed legislation that would keep all members of the Illinois General Assembly taking office in 2013 and after out of the state pension system in an effort to save money.
But what about Franks’ own legislative pension?…
He said Tuesday that the law doesn’t allow the state to take away benefits that any state employees, including lawmakers, have already earned.
True, but he could vow to return the cash, minus what he’s already put into the system. Actually, he could just simply cash out rather than accept pension payments.
State Sen. Ron Sandack, R-Downers Grove, has added his name to a list of legislators who will not be offering any legislative scholarships this year because the state’s broke. […]
State Rep. Jim Durkin, R-Western Springs, who eliminated the scholarships from his district last year, said attempts have been made in the past to eliminate the program but were always shot down in the Senate. […]
Sen. Kirk W. Dillard, R-Westmont, said he has supported bills to eliminate the scholarships for the past two years as well and will not be awarding in the future.
* 12:30 pm - An appellate court has struck down the state’s capital construction program and all of its funding sources, claiming the legislation violated the constitution’s “Single Subject Rule.” Read the opinion by clicking here. A lawyer friend summarizes…
The unanimous court held that Public Act 96-34 (Video Poker, Capital Spending Accountability Law, Capital Projects Fund, taxes on beverages, candy, grooming and hygiene products, privatizing the Lottery, U of I study on effects of study of Lottery on families, increase in truck fees, and liquor tax increase) violated the single subject rule of the Illinois Constitution.
Public Acts 96-35 (clarifying changes to Public Act 96-34 and changes to River Edge Redevelopment Zone Act, Vehicle Code rental car provisions, an urban weatherization program, Gaming Board peace officers provisions, and CDB provisions), Public Act 96-36 (trailer bill amending Public Act 96-34), and Public Act 96-37 (appropriations for Capitol Projects) all fall since they by their terms were contingent on Public Act 96-34.
Public Act 96-38 was also nullified. That was the tax hike on candy and some trailer language on the video poker bill.
* This has to be, without a doubt, the biggest appellate court ruling on Illinois policy in decades. Everything, and I mean everything has to be redone if the capital projects are to be saved.
Oy.
* 12:42 pm - So much for that new $5 billion capital construction bond the state is about to sell. There’s no longer a funding source and the program itself is now declared unconstitutional. The Lottery privatization deal was just finalized, but that’s now out the window as well, pending appeal.
A state appeals court Wednesday struck down Illinois’ $31 billion capital construction program, asserting that the legislation that authorized it was unconstitutional. The ruling invalidates the revenue streams for the borrowing that has funded the construction program, meaning that video poker, privatization of the lottery and higher liquor taxes are now on hold. The case was brought by W. Rockwell Wirtz, owner of the Chicago Blackhawks, and his liquor distributorship, Wirtz Beverage Illinois. The court found that the legislation that was the basis for the construction program violated the state Constitution’s single-subject requirement.
A spokesman for Illinois House Speaker Michael Madigan estimated that the ruling eliminated at least 40 percent of the funding sources devoted to the state’s giant capital construction program.
*** 2:22 pm *** From Gov. Pat Quinn’s office …
The administration intends to appeal the appellate court’s decision and to seek an immediate stay from the Illinois Supreme Court.
The Illinois Jobs Now! capital program is an important part of Governor Quinn’s plan to put Illinois back to work. Capital bill projects are putting thousands of people to work in every corner of the state, while supporting local businesses, improving our infrastructure and increasing energy efficiency.
While the administration’s request for a stay is pending with the Illinois Supreme Court, capital projects already in progress will continue as scheduled. We would expect the Supreme Court to rule on the request for a stay in the very near future.
* 12:57 pm - I meant to tell you about this earlier and forgot. Amanda Vinicky of Illinois Public Radio has the scoop…
Despite claims their nominations had expired, dozens of the Governor’s appointments to state agencies and commissions still stand.
Attorney General Lisa Madigan has sided with Governor Pat Quinn in a dispute between the administration and the Senate President’s office … a dispute that had temporarily put in limbo whether a major state agency, the State Police, still had a director.
In the ruling … Madigan says a governor’s nominations DO carry over into the next legislative session.
The Senate President had claimed 38 pending nominations … including that of the State Police Director Jonathon Monken … expired earlier this month because Senators hadn’t acted on them before adjourning. The President’s office claimed there wasn’t even the legal authority to keeping paying what it referred to as “former” nominees.
But Madigan’s opinion says the constitution is clear. And she backs it up with statements by the constitution’s authors. She says the Senate has 60 legislative days to act on nominees, and that clock carries over between Senates. After 60 days, an appointment’s automatic.
Which means the Senate’s time to act on Monken is just about up. He’s a controversial pick to head state troopers as he has no police background.
* 1:01 pm - Cullerton response…
Based on our concern that key state personnel would be making decisions and being paid with no legal authority, we alerted the Comptroller on the matter.
Our opinion was based on 40 years of precedent followed by the attorney general’s office, six prior governors, and 21 prior General Assemblies regarding executive appointments. We are assessing how this impacts the legislative process, but we will comply with the opinion.
We intend to schedule executive appointment committee hearings for each of the nominees in question when the Senate reconvenes next week.
* Justice Burke had some sharp words for those who say she should recuse herself from the Rahm Emanuel residency case because her powerful husband is backing Gery Chico…
Illinois Supreme Court Justice Anne Burke today rejected the notion that she should recuse herself from deciding on the residency case involving mayoral candidate Rahm Emanuel.
“Aren’t we beyond that? Women have minds of their own. We have spouses in every kind of business. Are we returning to the days of Myra Bradwell?” she said, referring to the Illinois suffragette who was initially denied the right to practice law because she was a woman. She went on to become the state’s first female lawyer. […]
As for Mr. Burke, she notes that she also worked for former Gov. Jim Edgar — a Republican stalwart. Her Democrat husband “didn’t like that much either,” she said.
* Meanwhile, a new poll from We Ask America has Emanuel above 50 percent for the first time, and shows that over 70 percent want him to stay on the ballot…
* John Kass, however, thinks the only people who want Emanuel to win are our corporate overlords and does his best today to undermine whatever decision is made by the Illinois Supreme Court…
Rahm has all that big money behind him, that Chicago corporate and business muscle, and more money from the coasts. They want Rahm, and it seems as if they’ll kick the law right in the behind to make him mayor. […]
Now the Illinois Supreme Court has ordered Rahm back on the ballot, pending its ruling. Cudgeling the court to get the political result you want is supremely practical. But it does come with some cost.
It reinforces in the mind of the people that in Chicago, election laws apply only to those without clout. And when you hope to bend the law to suit your politics, even if the politics are the right politics, there’s another cost.
You’re not talking about the rule of law anymore. You’re talking about feudalism. And that’s what Chicago politics is about.
Whatever. If the Supremes side with Emanuel the score would be 4-1 to keep him on the ballot (hearing officer, board of elections, trial court judge and Supremes vs. a bitterly divided appellate panel).
To arrive at their ruling, those two judges — Thomas Hoffman and Shelvin Louise Marie Hall — advanced a groundbreaking residency standard far more restrictive than the one courts have applied for more than a century. That’s right, a new rule, starting with Rahm Emanuel.
In doing so they disregarded several appellate cases that support Emanuel’s position, including one case in which Hoffman concurred. They also ignored a guiding principle of elections law interpretation: It is supposed to be construed with an eye toward allowing ballot access, not limiting it.
Having just tossed the front-runner off the ballot in the biggest city election in decades, they then refused to certify the case as worthy of expedited Supreme Court review. Fortunately, the high court recognized the emergency. The appeal is now fast-tracked.
But now we’re to believe that because he rented out his Chicago home he forfeited his residency — a distinction by the way that is never spelled out in the appellate court’s opinion.
The justices say Emanuel was indeed a legal Chicago resident for voting purposes, but they say he did not “reside in” the city for purposes of being a candidate.
It doesn’t add up to me, and that’s why I’m glad the Illinois Supreme Court agreed Tuesday to hear Emanuel’s appeal and to leave him on the ballot until they make a ruling.
Emanuel’s eligibility to be on the ballot is a question of law to be decided by the courts, not something to be put to a popular vote. But the long history here is that the courts have liberally interpreted what it means to be a resident.
* In other news, Gery Chico has a new TV ad. Rate it…
Script…
Woman: “My son Anthony was riding his bike home…when somebody took his life. He was a wonderful boy.”
Chico: “If we don’t fight back for moms and dads of kids who have lost kids to gang violence, we’re not going to be a great city anymore.”
Woman: “We need to work together to stop this.”
Chico: “These murderers, these punks are stealing our children and they’re stealing our communities. We’re going to add thousands of police to the force, we’re going to rebuild community policing, we’re going to take our neighborhoods back and we’re going to be a city that protects its own.”
So far, that’s the most forceful ad by anyone this season and it stands in sharp contrast to Emanuel’s boring, predictable spots. Like Pat Quinn eventually did, Emanuel might want to take a look at his young, bright Internet video guy for a bit of inspiration. This piece was made by Chris Ramirez, who’s just 20 years old, but has a great eye…
Mayoral hopeful Gery Chico said Tuesday he’s open to abolishing the residency requirement for city employees, arguing that Chicago’s middle-class tax base can survive without it.
Chico dropped the political bombshell as he accepted the endorsement of a Chicago Firefighters Union Local 2 that has long advocated allowing firefighters and paramedics to live outside Chicago.
The Fraternal Order of Police, which has also chafed at the residency rule, has also endorsed Chico. Together, the two unions represent nearly 25,000 active members and retirees. […]
After the state state Senate voted earlier this year to lift the residency requirement for teachers in the Chicago Public Schools, Daley lambasted the idea as the beginning of the end for Chicago’s middle class.
“Mr. Chico’s support for lifting the city’s residency requirement poses a direct threat to our city’s middle class. Our neighborhoods are maintained through a strong and reliable tax-base and lifting the residency requirement endangers this important resource.
* The Question: Do you agree or disagree with ending Chicago’s (or any city’s) residency requirement for public employees? Explain.
The trip coincides with advertisements that [Christie’s] administration began running Tuesday in publications including the Chicago Tribune and the State Journal-Register in Springfield, encouraging businesses to relocate and invest in New Jersey, Christie said. […]
“If [Gov. Pat Quinn] wants to tank his economy, that’s just fine,” Christie, a 48-year-old Republican, said in an interview at Bloomberg News headquarters in New York on Tuesday. “I’ll go and try to collect as many businesses as I can, and every job that I create, that I take from Illinois, which comes to New Jersey, will be a net plus for us.” […]
Christie characterized Quinn’s move to raise taxes as a “typical bait and switch” after the Illinois governor campaigned saying “he might raise taxes about half as much as he wound up doing.”
Christie said Quinn did it because “he got in bed with the public-sector unions in order to win election by half a point.”
According to the Sun-Times, Christie’s ads were paid for by taxpayers. No word yet on the cost. Here’s the radio ad if you haven’t heard it…
The print ad is here. Christie’s taxpayer-funded photo is prominently displayed in the state’s newspaper ad, which would be illegal under Illinois law if Quinn tried to do the same thing…
Caption?
* When Gov. Christie arrives, reporters need to keep in mind that in spite of his rhetoric to the contrary, he’s reduced his budget deficit by just $200 million.
* Also, while we’re on the topic, a Wisconsin company just announced that it’s opening a new plant in Illinois…
American Aluminum Extrusions Co. intends to open a plant at the former Warner Electric site, creating 130 jobs by 2013.
Village President Dave Krienke believes the Beloit, Wis.-based aluminum manufacturer would initially create 60 jobs and could have its first line running by July 1.
“We have a great opportunity here — this is a company that’s going to be a leader in its field, and I see growth in its operations for many years to come,” Krienke said Tuesday. “You know we need jobs and we need people working … to spend their money in our community. This could create a great economic incentive for Roscoe.”.
Illinois taxpayers donated more than $1.3 million to 10 nonprofit causes last year, but many charities have yet to see the money.
The Crisis Nursery of Champaign County is still waiting to get its share of $44,771 donated to a statewide Crisis Nursery Fund on 2009 tax returns. It’s supposed to get more than $6,300, said Executive Director Stephanie Record.
And Feeding Illinois, which oversees the state’s eight food banks, has not received the $100,246 given by taxpayers for hunger relief.
“We were supposed to get it in July,” Record said. “Like everything with the state, it was held up a little bit. That’s frustrating.”
* Roundup…
* Illinois customers now have four choices for electricity - More alternative suppliers enter the market
* Waukegan weighs proposed foster home: A proposal to transfer ownership of a foreclosed property on South Park Avenue to a Chicago-based agency that provides housing for foster children is scheduled to go back before aldermen next week after running into opposition late last year.
* Rockford schools to face painful budget solutions
* I told you last week that Comptroller Judy Baar Topinka had boasted that she could easily find $1 billion in painless cuts to the state budget that nobody would miss. I asked for the list, and I received it late yesterday…
· FISCAL OFFICE CONSOLIDATION ($12 million in savings): Combining the offices of Treasurer and Comptroller will save an estimated $12 million annually – and while we’re at it, let’s look at the Lt. Gov’s office and all the other unnecessary layers of government that exist in Illinois.
· UNIVERSAL PRESCHOOL ($100 million in savings): If we roll back this Blagojevich giveaway and require financially-able families to pay for preschool, the state would save an estimated $100 million.
· SENIORS RIDE FREE ($40 million in savings): The bill to eliminate free rides for financially-able seniors is currently on Governor Quinn’s desk – I hope he signs and saves $40 million for the state.
· LATE PAYMENT PENALTIES ($60 million in savings): The recently passed tax hike budget plan allows for 2-percent in annual growth. If we eliminate that extra spending and instead use the dollars to pay down our bill backlog, we would save the $60 million spent annually on late payment penalties.
· MEDICAID ELIGIBILITY ($480 million in savings): By moving Medicaid to a managed care system and making slight adjustments to eligibility requirements, we would save $480 million annually.
· FEDERAL TAX COLLECTION COOPERATION ($30 million in savings): The state is considering a tax collection cooperation plan with the federal government where we withhold refunds until each other’s delinquent taxes are collected. Maryland conducted a similar pilot program and collected $22 million – we estimate Illinois would get at least $30 million.
· CAPITAL PROJECTS ($30 million in savings): The state plans to spend $65 million on capital projects this year – if we scale that back to $35 million we would save the other $30 million.
· SENIOR HOME HEALTHCARE ($120 million in savings): By improving access to home health care for seniors, we would save on nursing home costs. We project it would save $120 million annually, and that number will go up as the population ages.
· MERCHANT SALES TAX PAYMENTS ($60 million in savings): Illinois allows retail merchants to retain a portion of the sales tax they collect (1.75%) throughout the year. By cutting that in half, we would save $60 million annually.
· ELIMINATE AMTRAK SUBSIDY ($26 million in savings): Illinois cannot afford to continue its subsidy to Amtrak – if that is eliminated, the state will save $26 million annually.
· ELIMINATE CAPITAL LITIGATION TRUST FUND ($20 million in savings): The General Assembly has voted to repeal the death penalty. If Gov. Quinn signs the legislation, the state would realize savings in the Capital Litigation Trust Fund.
* OK, first of all, Republicans love to attach big numbers to Medicaid savings without really explaining what they are, and half of Topinka’s billion dollars is saved via Medicaid. I asked for a breakdown, but haven’t received it yet. Also, kicking people off the Medicaid rolls would not be “painless” for those folks. And a widely hailed bipartisan Medicaid reform bill signed into law yesterday would save between $624 million to $774 million over five years. It’s not clear at the moment if any of those Topinka reforms overlap.
* The Amtrak subsidy is a favorite target of Republicans without a train station in their districts. Bill Brady had a station in Bloomington, and he was and is very pro-train. But to put this into perspective, I checked a few sources online and found one which has the cost of milling and resurfacing a four-lane rural interstate highway at about $1.2 million a mile. So, if this estimate is about on-target for Illinois, getting rid of the Amtrak subsidy is equal to repaving less than 22 miles of Interstate 55.
The suggestion of abolishing the Capital Litigation Trust Fund to realize savings is one brought up by fiscal conservatives who were mostly agnostic on the death penalty. It’s an interesting argument, but notice there’s no declaration of where she stands on the abolition bill.
Also, good luck with that battle against the Illinois Retail Merchants Association on the sales tax collection fee. It’s been tried a dozen times at least and has always failed.
* Response from Gov. Pat Quinn’s budget office…
We appreciate Comptroller Topinka’s efforts to offer specific examples on how to further reduce state spending and we will take these suggestions into consideration. Governor Quinn has reduced appropriations by $3 billion since taking office and will continue to work with legislators to make further reductions to save taxpayers money. The Governor’s budget address will take place on February 16.
* Meanwhile, Kevin McDermott reports on new legislation introduced by the House Republicans…
Illinois House Republicans have already filed a bill to repeal the state’s new income tax hike, which was passed earlier this month in the final hours of the lame duck session of the last General Assembly.
The bill (HB175) doesn’t have the proverbial snowball’s chance in you-know-where of getting even a committee hearing, of course. Democrats still control the chamber and aren’t about to play games with the tax hike, which they barely squeezed into law in the first place.
Rolling back the tax hike isn’t ultimately the point of this bill. The point is so that co-sponsors like state Rep. Dwight Kay, R-Glen Carbon, can send press releases like the one we got this morning– “Kay Introduces Legislation to Repeal Tax Increase'’ –which doesn’t mention anywhere in it that he’s one of a couple dozen GOP co-sponsors of the thing. Which means there are likely a couple dozen press releases under those other lawmakers’ names, going out to their local papers, each one similarly claiming credit for spearheading this doomed expedition.
(In fairness to Kay and the Repubs, this is standard practice in Springfield, and no one’s better at it than Democratic House Speaker Michael Madigan.)
There is also not a single appropriations bill introduced by the Republicans to pay for this income tax hike rollback. Don’t expect one, either. Instead, expect lots of press release reprints like this one in the Carmi Times…
“…Sadly, the Chicago Democrats who passed the measure have no recognition or remorse for the severity of their actions on citizens struggling to make ends meet. Worse yet, it will not solve our long term structural deficit.”
* Nobody in Illinois really got to the bottom of what was going on with yesterday’s report about an SEC investigation of Illinois pension funds. This was typical…
Gov. Pat Quinn’s administration confirmed Tuesday that the federal Securities and Exchange Commission is conducting an inquiry into statements made by Illinois officials about prospective long-term savings from pension reforms passed last year.
Kelly Kraft, spokeswoman for Quinn’s budget office, said the SEC contacted the state in September regarding a “non-public inquiry” it was conducting regarding the financial effects of the reforms on the pension systems. The inquiry includes “communications relating to the potential savings or reduction in contributions by the state to the Illinois public pension systems,” Kraft said.
“We feel our disclosures are accurate and complete,” Kraft said. “In terms of what the SEC has told us, the non-public inquiry ‘should not be construed as an adverse reflection on any entity or individual involved, nor should it be interpreted as an indication by the Commission or its staff that any violations of the federal securities laws has occurred.’”
“They called, and I think nationwide they are probably looking at everything in light of what happened in New Jersey,” Quinn added. “So, you know, we want to make sure that we answer any and all questions. We’re totally confident that everything we do here is done in the right way and that’s the way it will always be.”
“We’ve never had a problem going into the market and getting plenty of bidders to lend money to Illinois, and I think that’ll be even more so in light of our most recent action,” Quinn said, referring to the income tax increase.
The S.E.C. contacted Illinois after an article appeared in The New York Times about an unusual actuarial technique the state had been using to save money by shrinking its annual pension contributions.
The method, enacted last year, is based on sharp cuts in benefits for state workers who have not yet been hired. Although the cuts will not produce an appreciable savings until far in the future, Illinois has begun funding its plans as if its current workers were already earning the smaller benefits of the future.
Earlier this year, Illinois said it had found a way to save billions of dollars. It would slash the pensions of workers it had not yet hired. The real-world savings would not materialize for decades, of course, but thanks to an actuarial trick, the state could start counting the savings this year and use it to help balance its budget.
Gov. Pat Quinn of Illinois approved a plan in April that seemed to help balance the budget, but it may imperil the pension fund.
Actuaries, including some who serve on the profession’s governing boards, got wind of what Illinois was doing and began to look more closely. Many thought Illinois was using an unorthodox maneuver to starve its pension fund of billions of dollars, while papering over a widening gap between what it owed and how much it had. Alarmed, they began looking for a way to discourage Illinois’s method before other states could adopt it.
They are too late. The maneuver, and techniques that have similar effects, are already in use in Rhode Island, Texas, Ohio, Arkansas and a number of other places, allowing those states to harvest savings today by imposing cuts on workers in the future.
More than 20 pages [in the current offering statement] are devoted to pension fund reporting in the $3.7 billion offering statement, more than double the section in past offering statements, including the one for the state’s $3.5 billion sale of GOs to fund its fiscal 2010 pension payments early last year.
The section underscores just how troubled the Illinois pension system remains. The unfunded liability rose to $75.7 billion in fiscal 2010 from $62.4 billion in fiscal 2009. That lowered the state pension system’s funded ratio to 45.4% from a 51% funded ratio that is among the worst in the nation.
Illinois shifted to a five-year smoothing model in fiscal 2009 that limits the impact of near-term investment losses and gains. The unfunded liability would stand at $85.6 [billion], for a funded ratio of just 38.3%, based on the fair market valuation that recognizes gains and losses annually.
The unfunded actuarially accrued liability “increased between fiscal 2009 and the end of fiscal 2010 primarily as a result of insufficient state contributions as compared to the actuarially required contribution,” or ARC, the state wrote in the offering statement. [Emphasis added]
