* Gov. Pat Quinn was asked today to respond to New Jersey Gov. Chris Christie’s new advertising campaign in Illinois urging businesses to relocate to the Garden State.
“He was advertising before November 2nd for my opponent and nobody listened to him then and I don’t know why anybody would listen to him,” Quinn said, adding “This is a guy whose business climate is rated 48th in the nation.”
Quinn also said of Christie, “New Jersey’s way of balancing the budget is not to pay their pension payment, not to deliver on property tax relief that was promised, to fire teachers… I don’t need that kind of advice from that guy.”
Um, OK, what about that property tax relief, governor? Didn’t you promise that last year? Also, lots of Illinois teachers lost their jobs last year.
* State Treasurer Dan Rutherford showed his bipartisan chops during a CNBC interview earlier today. The hosts appeared to think the Republican would gush all over their budgetary hero Chris Christie (who has barely touched his deficit) and toe the DC party line on bankruptcy for the states. Rutherford, however, appeared to surprise them. He didn’t overtly praise Christie and he completely ruled out that silly bankruptcy proposal. He also refused to run down his own state, despite plenty of CNBC baiting. Must watch…
* Our last video is also a must-see. Tom Jaconetty talks to the Chicago Bar Association Election Law Committee about what ballot challenges are really all about. Jaconetty is working with Burt Odelson to kick Rahm Emanuel off the ballot. He’s brutally honest…
Sorry for the video quality on that one.
*** UPDATE *** The Illinois Policy Institute wants to repeal the income tax in its entirety…
* 1:21 pm - From a summation of the latest Supreme Court order that has just been filed on the Rahm Emanuel residency case…
The petition to leave for appeal is allowed. The Court will review it on an expedited basis. The court will be using the briefs filed by the parties in the appellate court. No additional briefs will be filed in the Supreme Court and there will be no oral argument.
Some folks are screaming that the state should put its newly adopted recall amendment to good use and recall Gov. Pat Quinn.
It underscores one of the concerns people have about recall, namely that it could be used to oust someone just because they made an unpopular decision. Trying to avoid that is one reason the recall process now part of the state constitution is as convoluted as it is.
If you don’t like the income tax hike or that Quinn acceded to a much higher one than he talked about during the election, fine. Politics involves disagreements. But Quinn knows the state is in severe financial difficulty and took the steps, however unpopular, he thought best to deal with it.
Recall was aimed at dealing with the Rod Blagojeviches of the state. Whatever else you think of Quinn, he isn’t another Blagojevich.
* The Question: Agree or disagree? And, as always, make sure to explain yourself.
* At least one of my readers was surprised this morning that Sheila Simon would speak out on this issue in public…
Lt. Gov. Sheila Simon has added her voice to the chorus of political leaders who are urging Gov. Pat Quinn to sign legislation ending the death penalty in Illinois.
In a letter she sent to Quinn on Monday, Simon points out that she spent four years as an assistant state’s attorney in southern Illinois’ Jackson County, and feels that she did a good job in that post. But she also says that our criminal justice system, even when operating at its best, is still imperfect.
My initial reaction was that this orchestrated at the very top levels. Turns out, I was correct…
In an interview Monday night, Simon said she shared her views recently with Quinn, and he asked her to put them in writing.
So, she writes the letter and then shares it with the media. It suggests that Quinn is leaning in favor of signing this bill and maybe wants to gin up at least the appearance of a groundswell of support.
* But the apparent careful stagecraft isn’t going down well in at least one of the trenches…
A DuPage County judge said it’s “grossly irresponsible” for Gov. Pat Quinn to remain silent on whether he’ll sign legislation that would abolish the state’s death penalty.
Circuit Judge John Kinsella made a plea from the bench Monday for Quinn to end the uncertainty over Illinois’ death penalty.
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“He’s got to tell us if he’s going to sign the bill and make it law,” Kinsella said.
The judge’s remarks came as he scheduled a May trial for an Addison man accused of killing his mother and a prostitute five years ago. Gary Schuning, 28, may face the death penalty if he is convicted of the Feb. 26, 2006, double-stabbing.
I don’t blame Quinn for taking his time on this one, considering the seriousness of the issue, but I can empathize with Judge Kinsella. There are lots of people out there waiting on this very important decision. While the governor should take some time here, he can’t ignore the urgency of the matter.
…Adding… From Zorn in comments…
I’d just like to point out that John Kinsella was the lead prosecutor of Rolando Cruz in Cruz’s third trial for the murder of Jeanine Nicarico and was trying to put Cruz to death for that crime. Of course later it turns out that, d’oh!, Cruz was innocent. Brian Dugan and Brian Dugan alone killed that girl.
Good point.
* Meanwhile, the furor over the highly active lame duck session (which produced the death penalty abolition, the civil unions bill and the tax hike) will probably take years to subside…
In her first official act since her January appointment, state Rep. Pam Roth, R-Morris, introduced a bill Monday that would prohibit former lawmakers from taking a new state job for up to two years after they leave office, a bill aimed directly at her Democratic predecessor.
But Roth denied the bill was in direct response to former state Rep. Careen Gordon, who drew criticism for supporting a controversial tax increase and then being appointed to a state job by Gov. Pat Quinn just days later. Quinn appointed Gordon on Jan. 14 to the Illinois Prisoner Review Board, a job which comes with a 12 percent pay hike for Gordon, who was defeated by Sue Rezin in last November’s election.
The tremendous hurdles blocking major legislation means that this stuff mostly happens in clumps. It’s no coincidence that the GA has approved just one permanent income tax increase since the tax was first established under Gov. Ogilvie in 1969.
“It is ordered that the emergency motion by petitioner Rahm Emanuel for stay pending appeal is allowed in part.
“The appellate court decision is stayed. The Board of Elections is directed that if any ballots are printed while this Court is considering the case the ballots should include the name of petitioner Rahm Emanuel as a candidate for the mayor of City of Chicago.
“That part of the motion requesting expedited consideration of the petition for leave to appeal remains pending.”
I posted Emanuel’s petition for stay yesterday, but click here to read it if you missed it the first time around.
Rahm Emanuel is narcissistic and flippant, according to the lawyers opposing the former White House chief of staff’s request for injunctive relief from the city’s plan to print ballots without his name on it.
“The petitioner narcissistically asks this court to value his non fundamental right to be a candidate for mayor over the fundamental voting rights of potentially thousands of voters,” writes attorney Burton Odelson in a brief opposing Emanuel’s effort to have the ballot’s include his name regardless of the ultimate outcome regarding his eligibility to be a candidate. […]
But Odelson argues the actual effect could lead to disenfranchisement should Emanuel ultimately be deemed ineligible because many voters may not be aware of the court ruling and vote for the former Obama aide anyway.
“The petitioners flippant attitude to the disenfranchisement of potentially thousands of voters is disingenuous,” wrote Odelson.
The full Odelson response in all its glory is here.
House Majority Leader Eric Cantor said Monday that he opposes changing the law to allow fiscally pressed states to seek bankruptcy protection, an idea that has been raised by some conservatives.
Speaking to reporters, Cantor (R-Va.) also said state governments should not expect Washington to solve their fiscal problems. States have the ability to balance their books by cutting spending, raising taxes or renegotiating agreements with labor unions, he said.
While the feds should’ve given more money to states via the stimulus bill, they shouldn’t compound the problem now by allowing states to declare bankruptcy (if they even can, which is debatable).
The municipal bond market has been built on the notion that states have to pay off their bondholders. A bankruptcy option would mean the entire market would have to be rebuilt and restructured. Chaos would surely result. Imagine trying to sell a 20-year infrastructure bond when the buyers know the states could just declare bankruptcy at any moment and absolve themselves from the debt. Yes, there is that risk with corporate bonds, but the market was built with that in mind. Not so with munis.
* One reason this is being pushed is to allow states to break union contracts. But a state can pass a law to outlaw collective bargaining for public employees. It won’t kill off current union contracts, but it would preclude further contracts. That’s under discussion in Wisconsin right now.
* Another reason given is that states could perhaps get out of their pension obligations…
Kirk says the only legal options available now for states such as Illinois are default – which could be devastating – or a federal bailout.
“Between a bailout, which has no possibility of passing in the House, and a default, which means suddenly, the state treasury runs out of money to pay for anything, is there something that allows a state work out its debt situation?” Kirk said.
Bankruptcy would allow the state to restructure its pension system so that it may preserve benefits for existing employees.
Strangely enough, he said that after Illinois approved a tax hike. Apparently, he doesn’t see that as an option, nor does he see severe budget cutting as an option.
New Jersey, which didn’t really cut anything despite promises to the contrary, is planning to skip its pension payment for the second year in a row. Texas will skip most of its payment in the coming year. But federal bankruptcy judges could force draconian cuts or maybe even a tax hike. One never knows.
* And that’s really the heart of the matter here. Conservatives screamed bloody murder for decades about federal judicial takeovers of school districts. Now they want to hand over entire state budgets to unelected judges? Really?
There are those on the Left who believe that what’s really going on here is that the people behind this bankruptcy push want to save newly elected Republican governors from the political nightmare of having to make the hard choices on their promised cuts. That would be typical DC, and it would be just like DC to ignore decades of hard and fast positions in order to score a short-term political gain.
* Bob Dole once said this about Newt Gingrich…
“You hear Gingrich’s staff has these five file cabinets, four big ones and one little tiny one. Number one is `Newt’s Ideas.’ Number two, `Newt’s Ideas.’ Number three, number four–`Newt’s Ideas.’ The little one is `Newt’s Good Ideas.’”
Gingrich has been pushing this state bankruptcy idea for months. It certainly doesn’t belong in the little cabinet.
* The Tribune’s editorial blasting the appellate court ruling on Rahm Emanuel’s residency was full of a whole lotta bluster, but it did include one interesting factoid…
[Dissenting Appellate Justice Bertina E. Lampkin] accused the majority of ignoring case law that clearly supported Emanuel’s argument —including a significant case in which Hoffman prevailed.
The majority completely ignores Dillavou, a recent Fourth District case that addressed candidate residency, even though Walsh, on which Justice Hoffman previously concurred, favorably cited Dillavou and discussed it at length. […]
Of particular relevance to the case before this court, Dillavou quotes the language of Clark and Kreitz, which provides that, once established, a residence will not be lost by an individual’s absence from that residence unless the individual demonstrates such an intent.
Dillavou is a case from the 3rd District, so the 1st is not bound to abide by its reasoning. However, Walsh v. County Officers Electoral Board of Cook County is a 1st District case and, as Justice Lampkin notes, Justice Hoffman concurred in its result. Walsh involved Rep. David McAfee, who rented a little studio apartment in his post-remap district. He never moved his family to the apartment.
* Perhaps the most important aspect of Justice Hoffman’s opinion was whether the phrase “resided in” meant the same thing regarding voters and candidates. He ruled they did not. A voter would be given far more leeway, but a candidate must actually live in the municipality. Hoffman did admit yesterday, though, that Walsh assumed “implicitly that the terms were synonymous.” From Lampkin’s dissent…
In Walsh, [Justice Hoffman] agreed that physical presence and intent to remain at a place as a permanent home created a residence for purposes of candidacy. In Walsh, Justice Hoffman agreed that intent was a factual consideration and that Delk, which he now dismisses, supported his position.
The Supreme Court denied an appeal on the Walsh case, buttressing Justice Lampkin’s point.
And then there was this from the dissent…
Moreover. if the legislature had intended the phrase “has resided in” to mean “actually lived in” as the majority proposed, then the legislature surely would have chosen to use the more innocuous word live rather than the verb reside and the noun residence, which are charged with legal implications.”
* This is a pretty good summation of Justice Hoffman’s logical twists and turns…
They plowed through 193 years of history only to find their answer in the words of the last person to amend the law, State Sen. Dave Luechtefeld (R-Okawville).
Hoffman wrote that an amendment Luechtefeld sponsored in 2007, allowing those returning from military duty to run for local office, undercut Emanuel’s argument.
He wrote that a clause in the amendment refers to a person becoming again a resident of a municipality.
“If the military service person must ‘again’ become a resident of the municipality, then it logically follows that the person lost his or her resident status at some time prior thereto,” Hoffman wrote.
* And the majority also came to its conclusion by ignoring a state Supreme Court case that Lampkin believes is highly important, and to a layman’s eyes, looks quite relevant to today’s situation…
The majority is wrong when it contends the Smith decision was “based solely on the officeholder’s intent to return.” To the contrary, the court, in reaching its determination, considered “all of the circumstances in evidence,” and not solely the prosecution’s failure to establish that the appellant never intended to abandon his Illinois residence. Specifically, the court considered the appellant’s frequent declarations that his move to Tennessee was only an experiment and he would return to Illinois if he found that he could not remain with satisfaction among the Tennesseans. Further, the appellant refused his partner’s request to vote in Tennessee for a particular candidate, saying he did not want to lose his Illinois citizenship. The appellant also refused to sell his Illinois law books, saying that he would probably return to Illinois and would need them in his practice.
Moreover, the appellant only rented his residence when he left Illinois.
The two Appellate Court judges responsible for tossing Rahm Emanuel from the ballot in February’s mayoral race both won their jobs after being anointed by a Chicago political power broker who openly supports an Emanuel opponent. […]
Longtime Appellate Court Judges Thomas E. Hoffman and Shelvin Louise Marie Hall — who on Monday ruled that Emanuel’s stay in Washington precludes him from running for mayor this year — were both judicial candidates slated for election by the Cook County Democratic Party judicial slating committee chaired by Ald. Edward Burke, 14th.
Burke, one of Chicago’s most powerful politicians, holds huge sway in the election of judges at every level, including the Illinois Supreme Court, where his wife, Anne, sits as a justice and where the Emanuel ballot question is now headed for a final decision.
*** UPDATE - 10:36 am *** Teamsters Joint Council 25 just announced its endorsement and continued support of Emanuel.
*** UPDATE *** Another spot of slightly good news. Illinois is off S&P’s watch list…
Standard & Poor ’s Ratings Services on Tuesday removed Illinois from a watch list for a potential downgrade, citing the state’s action this month to raise taxes and cap spending.
“The CreditWatch removal reflects our view of the state’s recently enacted legislation that provides for structural budget solutions, which we believe will likely allow the state to begin to address its sizable accumulated budget deficit and could provide a foundation for structural budget balance in the future as well as improved liquidity,” said S&P credit analyst Robin Prunty in a statement.
S&P said Illinois is not out of the woods yet, however, as it affirmed an A-plus rating for the state’s general obligation bonds, while assigning a negative outlook to the rating
[ *** End Of Update *** ]
* Illinois continues to receive a “negative” outlook from Moody’s Investor Services, mainly because the state has not yet passed legislation to deal with its overdue debt…
The outlook for the State of Illinois is negative, primarily reflecting uncertainty surrounding plans to address the state’s large balance of accounts payable.
But it did offer some significant rays of sunshine…
Notwithstanding these sunset dates, the tax rate increases are an important first step in restoring fiscal stability, creating a window of several fiscal years in which the state can address structural challenges, such as rising pension expense. The next milestones will include the Governor’s budget proposal, expected February 16, and resolution of proposed measures to address an approximately $8 billion backlog of payables in coming months. […]
The [expenditure limitations] law, scheduled to remain in effect through fiscal 2015, therefore provides strong incentive for compliance. […]
In connection with fiscal legislation enacted in May 2010, the state has published its first multi-year financial plan, including revenues and expenditure projections through fiscal 2014. This represents implementation of a governance practice that, over time, may help produce strong operating results.
Statutory dedication of half a percentage point of the recent individual income tax increase [to pay of the bond for overdue bills] would mitigate impact on the state’s financial operations, however
* However, the Moody’s report also disclosed that the SEC is looking into how the state disclosed savings from last year’s pension system reforms…
The Securities and Exchange Commission in September began a non-public inquiry into the state’s disclosure of potential savings from these [pension system] reforms. The state is cooperating. The inquiry itself does not indicate that a violation of federal securities law has occurred, according to current state disclosure statements.
The state says the probe doesn’t indicate that laws were violated, but that’s pretty much ignored in the coverage…
The Securities and Exchange Commission has launched an inquiry into public statements by Illinois officials about the state’s underfunded pension fund, the state’s governor’s office confirmed Monday night.
The Illinois inquiry is focused on public statements concerning an overhaul measure passed in 2010 meant to help shore up the retirement system, said the governor’s spokeswoman, Kelly Kraft.
“We are fully cooperating” with the inquiry, said Ms. Kraft in an interview. “We feel our disclosure was always accurate and complete.” […]
An issue being examined is whether Illinois was taking future savings and treating them as current reductions in the cost of the pension fund, said Robert Kurtter, a managing director in the public finance division at Moody’s Investors Service, who said his firm spoke with Illinois officials about the inquiry. One of the measures that Illinois took to save costs was to raise the retirement age for newly hired Illinois workers. Mr. Kurtter mentioned the inquiry in a report released Monday evening.
Gov. Pat Quinn specifically said last year that the state would not draw down on the program’s long-term savings for immediate use. This is definitely an interesting turn of events.
* Meanwhile, the Teachers Retirement System has taken aim at Jonathon Rauh, an associate professor of finance at Northwestern University, who predicted with much fanfare that TRS would run out of money by 2018. From the pension system…
Rauh makes his predictions based on a set of facts of his choosing, and financial experts point out that he chooses a set of facts to ensure that he comes up with the conclusion he wants.
* For instance, he greatly underestimates the investment income pension systems will create in the future. He uses an unrealistic rate of return of about 2 percent on investments, which deliberately shorts all future income for TRS.
* The agency’s target rate of return is 8.5 percent. In the last year, the agency’s actual rate of return was 12.9 percent. Over the last 25 years it is 8.6 percent and over 28 years it is 9.4 percent. […]
Rauh’s prediction will only come true if TRS does not earn another dime in investment income or receive any state contribution over the next eight years. That scenario is not only unlikely, it is impossible. His prediction is wrong.
* New Jersey was investigated by the SEC last year for failing to properly disclose the true health of two pension systems. It settled the case without admitting wrongdoing. But this SEC probe of both states probably won’t be mentioned in the coverage of Gov. Chris Christie’s latest push…
The governor is launching an ad campaign encouraging businesses in Illinois to relocate to the Garden State. An official announcement from the Christie administration is planned for Tuesday, when ads will start appearing in newspapers and on radio stations in major Illinois cities like Chicago and Springfield.
Print and radio ads reiterate Christie’s commitment not to raise taxes. The ads follow substantial tax increases recently enacted in Illinois — and a promise from Christie earlier this month that he would reach out to Illinois businesses personally and invite them to relocate here. […]
[The tax hike] makes Illinois’ business tax rate higher than New Jersey’s 9 percent for businesses with incomes over $100,000. But its personal income tax rate remains lower: New Jersey’s rate is 6.37 percent for couples earning more than $150,000 a year and 8.7 percent for those earning more than $500,000 a year. […]
The ads follow a personal appeal from Lt. Gov. Kim Guadagno, who sent letters to 553 Illinois-based companies large and small that will be affected by the tax increases.
