* Looks like we’re in no “danger” of getting a verdict until Monday at the earliest…
Jurors at former Illinois Gov. Rod Blagojevich’s corruption retrial have finished their fifth day of deliberations without a verdict.
The jurors headed home Thursday, hours after they sent a note to the judge. A court official at the federal court in Chicago says the jurors will resume on Monday.
Friday is my wife’s birthday, so posting will be light.
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Senate Democrats will recede
Thursday, Jun 16, 2011 - Posted by Rich Miller
* From the Senate President…
“The state’s construction program should continue uninterrupted. The Senate intends to return to the Capitol on Wednesday to fully fund the construction program for the full 12-month period.
There are still major structural deficiencies in the House budget that will become clear in the months ahead. I look forward to having the opportunity to address issues such as the underfunding of education and social service commitments.”
The Senate is scheduled to return to regular session at noon on Wednesday, June 22.
Translation: The Senate Democrats have backed off their attempt to attach budgetary add-ons to the capital/road bill. The drama appears to be over. Subscribers can learn lots more by clicking here.
…Adding… The House Speaker has already directed his members to return next Wednesday and his spokesman said that nothing has changed so far.
…Adding More… The decision couldn’t have come too soon. Illinois’ unemployment rate rose for the first time in 15 months…
Illinois employers added 8,200 new jobs in May but the state’s unemployment rate inched up to 8.9 percent from 8.7 percent in April as more 9,800 people joined the ranks of job seekers, the Illinois Department of Employment Security reported Thursday. […]
Since the recovery began, Illinois has experienced 1.9 percent job growth versus 1.4 percent nationally. But the May statistics indicate that while the state continues to add new jobs, the rate of growth is slowing. The three-month moving average of monthly job additions slipped to 6,600 in May from 15,400 in March. The agency also revised April’s reported increase of 9,900 new jobs down to 9,100.
That could help explain the uptick in the state’s unemployment rate, which derives from a separate survey. But an agency spokesman said the increase may also owe to other seasonal and cyclical factors and wasn’t entirely unexpected.
He said May tends to produce a surge in the number of people looking for jobs because students and workers whose jobs are tied to the school year begin to enter the workforce. Also, at this point in the economic cycle people who lost their jobs during the recession and became too discouraged to look for a new one may be reentering the market, which increases the percentage of unemployed, but may actually reflect increased optimism.
…Adding still more… From the governor’s office…
In a decision that is critical to Illinois’ continued economic recovery, the four legislative caucuses have agreed to the Governor’s proposal to pass a 12-month capital appropriations bill next week, and in the fall discuss reallocation of funding within the $33.2 billion state budget based on the priorities of the Senate Democrats.
This agreement will ensure that the state’s biggest jobs program continues, creating thousands of jobs building roads and repairing bridges throughout our state, and boosting our economic recovery.
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Blagojevich jury has a question
Thursday, Jun 16, 2011 - Posted by Rich Miller
* The media kinda freaked out a little today when Rod Blagojevich trial attorneys were called back to the federal courthouse. Turns out, the jury had a question…
In a written note to U.S. District Judge James Zagel, jurors said they wanted clarification on a paragraph of page 28 of their legal instructions that spell out four elements needed to prove wire fraud.
In the third of those four elements, the government must prove beyond a reasonable doubt that “the scheme to defraud involved a materially false and fraudulent pretense, representation, promise or concealment.” […]
The word “materiality” is defined in the instructions, leading the judge to speculate the jury might want more information on the part of the instruction that includes the terms “pretense, representation, promise or concealment.”
Zagel said the lawyers may have to do some legal research on the issue before answering the jury’s question.
* More…
There are 10 counts of wire fraud and they are the first 10 of the indictment. Nine relate to the senate seat charges, and one relates to the alleged shakedown of Children’s Memorial Hospital.
Attorneys and the judge said they will tell jurors to read further into the jury instructions, as there is some clarification there, and said they will ask the jury to be more specific about where their confusion lies.
There was no indication early Thursday afternoon that the jury wanted to meet Friday, which could indicate they aren’t very close to a verdict.
* The original instructions in question…
Counts 1 through 10 of the indictment charge the defendant with wire fraud.
To sustain the charge of wire fraud, as charged in Counts 1 through 10, the government must prove the following propositions beyond a reasonable doubt: First, that the defendant knowingly devised or participated in a scheme to defraud the public of its right to the honest services of Rod Blagojevich or John Harris by demanding, soliciting, seeking, asking for, or agreeing to accept, a bribe in the manner described in the particular Count you are considering;
Second, that the defendant did so with the intent to defraud;
Third, that the scheme to defraud involved a materially false and fraudulent pretense, representation, promise, or concealment; and
Fourth, that for the purpose of carrying out the scheme or attempting to do so, the defendant used or caused the use of interstate wire communications to take place in the manner charged in the particular Count you are considering.
If you find from your consideration of all the evidence that each of these propositions has been proved beyond a reasonable doubt, you should find the defendant guilty of the particular count you are considering. If, on the other hand, you find from your consideration of all the evidence that any of these propositions has not been proved beyond a reasonable doubt, you should find the defendant not guilty of the particular count you are considering.
* Meanwhile…
Gov. Pat Quinn today signed a bill into law preventing state officials from putting their name or likeness on taxpayer funded signs.
The measure was a response to Gov. Rod Blagojevich’s decision years ago to plaster his name on nearly three dozen signs on the Illinois Tollway at what Quinn said was a cost of almost $500,000.
Lawmakers tried twice before to pass such a ban but failed. State law already banned such politician self-promotion in public service announcements and state-funded ads touting programs.
* From a press release…
“Government belongs to the people,” said Governor Quinn. “When state government gets the word out about a program or service that will help people, it should not be an excuse for officials to promote themselves.”
Senate Bill 1344 adds billboards and electronic billboards to an existing law that prohibits state elected officials from using their names, likenesses and voices in television, radio, newspaper and magazine advertisements purchased as part of state program awareness efforts.
Under current law, state officials are also barred from using their names and likenesses on bumper stickers, buttons, magnets and other promotional items.
The legislation was sponsored by State Senator Matt Murphy (R-Palatine) and State Representative Chris Nybo (R-Elmhurst). The bill overwhelmingly passed the General Assembly with bipartisan support. It takes effect immediately.
“This is a common sense measure that’s long overdue,” said Representative Nybo. “Taxpayers deserve to have their hard-earned money treated more responsibly by their representatives who are elected to serve the people, not their own personal interests.”
Today’s event took place at the Cermak Toll Plaza on the Tri-State Tollway, which previously displayed the name of Illinois’ former Governor.
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Question of the day
Thursday, Jun 16, 2011 - Posted by Rich Miller
* Gov. Pat Quinn was on CNBC this week and was asked this question…
You also said the tax increase is temporarily. Can you categorically say taxes come down in four years?
Quinn’s response…
It’s a temporary tax in order to pay off bills that had to be paid off. The fiscally responsible thing to do is pay your bills. I think that’s the only honest way to go. In Illinois, I believe honesty is the only policy. As governor, we’ve been able to show that.
He should’ve started by being honest about the tax hike, which was designed to (mostly) erase the structural deficit and fund a massive, longterm bond plan to pay off overdue bills.
* Yesterday, CME Group Executive Chairman Terry Duffy was on CNBC and was asked about Gov. Quinn’s promise that the tax hike would be temporary…
“I’ve never seen too many taxes that are temporary,” Duffy commented Wednesday.
Illinois has increased its income tax rate just three times in 40 years. One increase was allowed to expire, one was made permanent after a Republican actively campaigned for governor on behalf of making it permanent while his Democratic opponent was against permanency, and now this one.
* The Question: Do you think the General Assembly will pass a bill in four years that will be signed into law making the current income tax increase permanent? Or, will the tax increase sunset, either because the permanency legislation fails or because of a conscious decision to let it go away? Take the poll and then explain your answer in comments.
Also, stick to the question, please. Thanks.
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* According to the AP, 107 companies will lose state tax breaks worth (on paper) over $100 million in the next three years. The tax breaks are handed out over time, so this isn’t a one-time budget hit. And, sometimes, companies don’t even use their credits because they haven’t followed through on their promises for one reason or another...
The companies that made deals that expire between 2012 and 2014 promised to keep more than 12,000 jobs in Illinois and create another more than 10,000 positions. In some cases, according to state records, those companies haven’t used the tax credits. Whitley and others said the most likely reasons are that the company didn’t add jobs as intended, or the company didn’t have profits to use the tax credit against.
Deals that expire next year include $34.7 million in tax breaks that J.P. Morgan Chase used after agreeing to keep 2,247 jobs at locations in Chicago, Elgin and Elk Grove Village, and $6.72 million in breaks provided to the Robert Bosch Tool Corp. after that company agreed not to move 444 jobs from a facility in Mount Prospect.
Deere & Company has used $7.28 million in tax credits as part of a deal expiring in 2013 that requires the company to keep 350 jobs in place and create 30 more at facilities in Moline, East Moline and Silvis.
In 2014, a deal with audio electronic maker Shure Inc. is set to expire. The company has cashed in $7.28 million in tax credits after agreeing to keep its headquarters and 570 jobs in state, in Niles, rather than look elsewhere. Also that year, a state deal with Abbot Laboratories to keep 260 jobs in Des Plaines and create another 50 expires.
* In related news, the Illinois Times has a story today about a group called Make Wall Street Pay Illinois…
MWSP points to a 49 percent surge in profit for Illinois-based companies during 2010, adding that the top five publicly traded corporations in the state made $19.7 billion in profit last year. That profit should translate to more revenue for the state, MWSP says, but that’s not likely.
The group points to a depreciation tax break for corporations that cost the state $600 million last year, saying Illinois needs to decouple from similar federal tax breaks that cost the state money.
“Large corporations in Illinois are raking in massive profits while the state struggles to make ends meet,” MWSP says, explaining that a temporary federal tax break for businesses in 2012 means companies can depreciate capital expenditures all at once instead of parceling them out over time. That will cost Illinois an estimated $600 million because the state’s corporate income tax is based on how much federal tax a corporation pays.
MWSP also claims that two large national banks operating in Illinois have greatly reduced their loans to small businesses, hampering business development. From 2007 to 2010, Bank of America reduced small business loans in Illinois by 97 percent, while JP Morgan Chase reduced the same loans by 70 percent, according to data from the U.S. Small Business Administration, which tracks the loans. MWSP says that decline has had “a dramatic effect on unemployment in Illinois,” citing the loss of 371,000 jobs in Illinois since 2008.
* MWSP’s state legislative agenda didn’t go so well this spring…
House Bill 1109, which would allow municipal governments to put liens on vacant properties owned by banks for failure to maintain the properties, died in committee. House Bill 1810 would have allowed the state to charge banks a $500 fee for each home foreclosure to go toward foreclosure counseling, but that bill also died in committee. The General Assembly did create a Foreclosure Prevention Program Fund to be supported by revenues from a major gambling expansion.
Thoughts?
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Jaffe’s storm creation method
Thursday, Jun 16, 2011 - Posted by Rich Miller
* We talked about this yesterday, but it’s worth going over again…
The state’s top gambling regulator blasted the large gambling expansion lawmakers approved last month, saying it was not well thought out and would erode oversight.
Illinois Gaming Board Chairman Aaron Jaffe criticized the way the proposal made its way through the General Assembly in the waning days of session, saying the bill is too big and too technical to have been approved in just two days. He also questioned efforts since then to re-shape the bill to avoid a possible veto from Gov. Pat Quinn, saying those conversations should have taken place before a vote, not after.
“You can’t make perfume out of a pile of garbage,” Jaffe said.
“I realize that the state is in financial trouble, if gaming is the way that our leaders want to go, so be it. But they should do it in a fashion other than the way they did this particular bill,” he added. “It’s chock-full of items, that in my opinion, would never pass on their own.”
* If you listen to the raw audio of the meeting, you’ll hear Chairman Jaffe say some other things that mostly went unreported.
For instance, Jaffe criticized the General Assembly on several points, and offered up some suggestions, including “Make sure that other legitimate businesses are not cannibalized.”
Jaffe didn’t specify whether these “legitimate businesses” were other casinos or whether they were restaurants, nightclubs, etc. near the new casinos. Either way, that sentiment does seem outside his purview.
* “I would like to know how these areas were selected and why they have come to life at this particular time,” Jaffe said about the bill’s site-specific language, adding “This board spent months finding the proper place for the tenth license.”
He’s right about that, but the General Assembly has picked sites in the past. They chose Rosemont, but the gaming board declined to site a casino there, claiming mob influence. Instead, they put the casino next door in Des Plaines, even though an internal report I obtained years ago warned that there would be little difference in problems by placing a casino in that town. By the way, the process to open that casino has taken more than a decade, not just months.
But the General Assembly also designated East St. Louis as a riverboat host many years ago. The chairman may have forgotten that.
And I’m not sure whether the chairman reads the newspapers, but Rockford, Danville the south suburbs (not site specific) and Park City have all been in the running for a casino for years, if not decades. This was no evil, underhanded ploy.
* “This bill was passed in two days,” Jaffe said, adding “They don’t follow parliamentary procedures as they should.”
Actually, the bill took about 20 years to pass. You run the bill when you have the votes, and that’s what they did. And, as far as I can tell, parliamentary procedures were followed.
* The chairman also seemed to be confused about the governor’s amendatory veto powers. He said the AV is only supposed to be used for “tweaks,” and that if they do a major AV, “I think we can only be assured that there will be another court case.”
First of all, the governor’s AV powers are extraordinary in this state. Secondly, the idea is not to do an AV, but to pass a trailer bill.
* Jaffe also said the General Assembly should make sure to “minimize social ills.” That’s not a bad idea at all, but I’m not sure how this is Jaffe’s business.
* That’s not to say that Chairman Jaffe didn’t make some good points. For instance…
Jaffe said the staff of the Gaming Board, which now numbers 210 people, would have to “double in size” in order to do an adequate job of policing the state’s expansive gambling industry, and no funding exists to permit that possibility.
He also said the drafters of the bill crafted it in a way that would lead to inevitable turf battles between the Gaming Board, the Illinois Racing Board and new boards that would be created to oversee casino gambling in Chicago and at the Illinois State Fairgrounds.
The board should have more oversight funds. And the complicated new board structure may, indeed, cause some problems, although some believe he’s just trying to protect his own turf.
* Even so, this rebuke by Lou Lang is a bit much…
“I have grave concerns about [Jaffe’s] comments. It’s clear he’s gone way beyond the borders of his job as a regulator,” [sponsoring Rep. Lou Lang] said Wednesday. “If he wants to go back and be a legislator, he ought to run for the Legislature. If he wants to postulate on the constitutionality of a bill, he ought to go back to being a judge. But he’s neither of those things.”
Jaffe does have a duty to blow the whistle when he thinks he sees something untoward. Not everything is his business, so he should confine it to his role. If he’d just made his points without going into all the extraneous sideshow, I’d have an easier time backing him up. But that wouldn’t have generated nearly as much media coverage. The guy knows what he’s doing. Give him credit for that.
* Meanwhile, as subscribers already know, Lang, Sen. Terry Link and other top legislators are meeting with the governor today to discuss the gaming bill…
Link said he is open to talking with Quinn if the governor has any suggestions on how to downsize the measure. But said the casino set to go in his district near Waukegan would have to remain.
House sponsor Lou Lang (D-16th) will also be in on talks with Quinn.
“To the extent that I can accommodate the governor, I’m willing to listen to him. Willing to hear what he wants to do. But I’m not willing to state upfront that I’m prepared to shrink the bill down,” Lang said.
However, Lang said he won’t accept substantial changes.
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Quinn appoints Weems to CMS
Thursday, Jun 16, 2011 - Posted by Rich Miller
* From a press release…
Governor Quinn today appointed Malcolm Weems as director of the Illinois Department of Central Management Services (CMS). Today’s action is the latest in a series of appointments the Governor is making as he continues to fulfill his commitment to creating jobs, fostering economic development and increasing efficiency and accountability in all areas of state government.
“The leadership and expertise Malcolm Weems has shown in helping my administration confront the most serious fiscal crisis in our state’s history make him perfectly-suited for this new role,” said Governor Quinn. “His experience will be invaluable as he leads the agency charged with finding savings and efficiencies throughout state government. I thank James Sledge for his years of dedicated service to the people of Illinois.”
Weems has served as chief of staff in the Governor’s Office of Management and Budget since 2009. He has also served as the agency’s associate director and as chief operations officer of procurement for CMS. Weems previously served as a finance manager for the Chicago Park district and is a member of the Governor’s Anti-Violence Commission.
“The Department of Central Management Services plays a critical role as the state continues to confront our fiscal challenges and looks to improve our minority contracting and hiring,” said Weems. “I look forward to utilizing my experience at the Office of Management and Budget to address these challenges and make our state government more efficient and effective.”
Weems is one of the few young, rising stars in this administration.
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Thoughts on next week’s session
Thursday, Jun 16, 2011 - Posted by Rich Miller
* First of all, despite what you may be reading, the session beginning next Wednesday will not cost taxpayers $50,000 a day…
The median family income for a Freeport family is around $47,000 a year according to the 2010 U.S. Census. That compares to the U.S. median for a family of four at $50,006.
One day of special session for the Illinois General Assembly would cost Illinois’ beleaguered taxpayers $50,000.
Nonetheless, Gov. Pat Quinn this past week said he will call a special session this summer to address Illinois’ $31 billion statewide construction plan.
The governor will not actually be calling a “special session,” which would require that members receive their per diem checks. Per diem can’t be disbursed for regular session days after the end of May, and that’s what next week’s session will be. The two chamber leaders are calling their members back to town, so the taxpayers won’t be on the hook for that extra cost.
* Speaking of money, as I told you on Monday, the General Assembly has not yet passed a legislative furlough plan…
The Senate introduced a 12-day furlough plan, but never passed it. The House passed an identical proposal, but it’s still sitting in the Senate awaiting action.
Because this won’t be a special session, the General Assembly won’t be limited to what it can and cannot do. Members could take up that furlough plan, but there is opposition in the Senate. The media has completely ignored this failure to approve another furlough plan, so legislators may just ignore it.
* Now, onto the budget. The Senate Democrats were clearly hoping that Quinn would ally with them over their additional budgetary spending tacked onto the capital/road bill. As subscribers knew, the SDems also unveiled a plan a few days ago to extend the capital/road plan for just six months, so that the budget could be renegotiated in January. But Quinn wouldn’t go along with either plan…
“In his meeting with the legislative leaders, the governor was clear [in] his push for a 12-month capital budget with no conditions,” Matsoff said. “He also said that the leaders should come back in the fall when they could have discussions about reallocating some elements of the budget based on the Senate Democrats’ priorities — staying within the $33.2 billion” budget.
Yesterday’s meeting was a huge blow to the Senate Dems. They’re teleconferencing today to decide what to do. If they refuse to give in, we’re in for a nasty summer session.
* After some initial hesitation, the Republicans have decided that Quinn is right and that the state can’t fund construction projects after the end of the fiscal year and will have to start shutting down projects on Monday…
Cross says lawmakers are now on the fast-track to reach an agreement to keep the projects, which provide some 52,000 jobs, alive. He’s hesitantly setting aside his reservations about the governor’s claim that he can’t authorize spending beyond the end of the month to keep the projects running.
“The governor has a lot of authority in this arena and he’s taken the position he doesn’t have the authority, and I’ll take him at his word,” Cross said.
Agreeing with the governor simply puts more pressure on the recalcitrant Senate Democrats.
* Related…
* VIDEO: HGOP Leader Cross on capital, budget, etc.
* VIDEO: SGOP Leader Radogno on capital, budget, etc.
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Caption contest!
Thursday, Jun 16, 2011 - Posted by Rich Miller
* We’ve never done one of these on Big Jim, so let’s give this a try. The former governor is holding a rare duck decoy, which he bought last year at an auction for $100,625. I kid you not…
Winner gets a free ticket to the July 25th White Sox game.
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