Capitol Fax.com - Your Illinois News Radar » 2011

Thursday, Sep 15, 2011 - Posted by Rich Miller

* Apparently, they have no fact-checking requirements at the New York Times…

Facing a budget deficit exceeding $11 billion, the State of Illinois in recent weeks has begun challenging the property tax exemptions of some of its best-known hospitals, saying they should pay more because they are not providing enough charity care.

Wow. So many problems in just one lede.

I asked the reporter how he came up with the $11 billion number and the reply came back: “the state.” Well, whichever person at “the state” said this was completely wrong. Because of the income tax hike, the structural deficit is down to about a billion or so, although the state is struggling to pay off something like half that $11 billion amount in overdue bills.

Also, even if the $11 billion figure was correct, and it’s not, what the heck do property taxes have to do with the state budget? There are no state-levied property taxes. Those are local taxes. There is no push to strip income or sales tax exemptions. It’s all about local taxation.

The rationale given for this push is also incorrect because the state actually started ramping up its property tax exemption challenges after it won a big court case last year.

The rest of the NYT story is pretty good, but that lede is just bizarrely off kilter.

* Meanwhile, this amount of money to pay for the China trade mission doesn’t bother me all that much…

The Democratic governor and his fellow travelers will pay their own way to China, but the trip is expected to run taxpayers about $133,000 for associated costs such as meeting space.

The cost comes at a time when Quinn has proposed mass layoffs and state facility closures due to a lack of money.

Expand economy = more money from taxes = less need for state layoffs and closed facilities. And considering that this trip will likely increase exports, that $100K is money well spent…

Besides Navteq Corp. President and CEO Lawrence Kaplan, the group includes mid-level executives from three large Illinois companies—Archer Daniels Midland Co., United Continental Holdings Inc. and Navistar International Corp.—plus five execs from smaller, privately held firms. Others on the mission include elected officials such as Rockford’s mayor, Lawrence J. Morrissey.

Mr. Quinn expects to preside over the signing of agricultural and telecommunications contracts worth “hundreds of millions of dollars” for Illinois exporters, according to a statement released by his office on Thursday. He also plans to sign agreements for future business exchanges in biotechnology, clean energy and education. […]

While Indiana’s governor or lieutenant governor has visited China or Japan nearly every year for the past decade, this is the first China trade mission by an Illinois governor since former Gov. Jim Edgar went in 1996, when Illinois exports to China were about a sixth of what they are now.

“It’s a very good, positive thing that Gov. Quinn is going to China,” Mr. Ingraham said. “Having the governor go is a real door opener for your state. The Japanese and Chinese really appreciate your top person going.”

More…

China is the third largest export destination for Illinois products, totaling $3.4 billion in sales last year. Products exported include machinery, electronics and agricultural goods.

*** UPDATE *** Big doings on this trip…

Archer Daniels Midland Co. is poised to sign an agreement to sell 180,000 metric tons of soybeans to a Chinese food and supplement manufacturer.

The Decatur-based company announced the pending deal Thursday on the eve of the start of an eight day trade mission to China headed by Illinois Gov. Pat Quinn.

ADM said the agreement with Jiusan Oils and Grains Industries Group Co. Ltd. is part of an effort to boost the company’s ability to serve growing Chinese demand for crops. China is the world’s No. 1 importer of soybeans.

[ *** End Of Update *** ]

* And Mike Riopell at the Daily Herald took a look today at the latest gaming revenues analysis from the Commission on Government Forecasting and Accountability and highlighted this analysis of why casino gaming receipts are down…

These factors include the struggling economy, increased competition from other states, and the effects of the graduated tax structure.

However, the numbers continue to suggest that the biggest contributor to the drop in Illinois casino revenues is the indoor smoking ban. Since the indoor smoking ban began in January 2008, adjusted gross receipts for Illinois riverboats have fallen a combined 30.7% from pre-smoking ban levels.

Yikes.

31 Comments

Loaded and flawed rhetoric

Thursday, Sep 15, 2011 - Posted by Rich Miller

* From WLS AM…

A lot of reaction Wednesday morning to Congresswoman Jan Schakowsky’s interview with Don Wade and Roma.

Schakowsky said that Americans don’t deserve to keep all of their money because we need taxes to support our society.

The WLS headline is: “Schakowsky: Americans don’t deserve to keep all of their money.”

* You have to, uh, wade through a whole lot of DC talking point goofiness from both sides, but this exchange occurred near the end of the interview…

Don Wade: Out of every dollar that I earn, how much do you think that I deserve to keep?

Jan Schakowsky: What is really your question here? Do you think you should not contribute to firefighters…

DW: No. It’s a very simple question. Out of every dollar that I earn, how much do you think that I deserve to keep?

JS: No, it is not a simple question. I think…

DW: Very simple.

JS: I’ll put it this way. You don’t deserve to keep all of it. And it’s not a question of deserving. Because what government is, is those things that we decide to do together. And there are many things that we decide to do together like have our national security, like have police and fire.

DW: OK, national security, police, fire, got it…

JS: What about the people that work at the National Institute of Health who are looking for a cure for cancer? Do you think we ought to do that together? Those are real jobs and those are things that you help pay for and I think that’s a good thing.

DW: OK, so let me ask again. Out of every dollar I earn, how much do you think that I deserve to keep?

JS: I’m not going to give you a percentage, I don’t know what your income is.

DW: Well, what does my income got to do, I’m just asking you how much…

JS: I think you need to pay your fair share, in order to do the things that we’ve decided are national priorities.

DW: So, wait, hold on, who’s deciding what my fair share is?

And that’s when I had to stop listening.

Don Wade is apparently too dense to understand that tossing around a fun little talking point over and over again doesn’t actually mean anything. and also cannot fathom that tax rates are set by duly elected officials. And Schakowsky apparently lacks the self awareness to realize that appearing on that show means she’ll get punked and made to look stupid because she doesn’t have what it takes to defend her ideals in a coherent manner on morning radio (I deleted all her “ums” because otherwise this post would’ve been as unreadable as her radio appearance was unlistenable).

Question: Out of every dollar I earn, how much do you think that I deserve to keep?

Answer: Absolutely every penny that you’re entitled to keep as a law-abiding citizen of a republican democracy. And if you think you deserve to keep more, then by all means you should vigorously participate in the governance of your country. That’s what America is really all about.

Jan Schakowsky believes some people and some corporations should get to keep less. There’s no shame in saying that, and she should’ve just come right out and said it, for crying out loud. But if the above conversation is how the Democrats intend to compete next year, they’re in a huge world of hurt.

* Speaking of rhetoric, RedState’s Stephen DeMaura, completely demolishes Amazon’s anti-tax argument from the right…

Amazon.com, the biggest dog in the online retailer market, has created confusion by co-opting conservative language to position itself as a victim of allegedly greedy politicians who just want to raise taxes on good American businesses to pay for bigger government. Rather the opposite is true. The true victims are the local businesses who do not have the favorable tax status that Amazon has long enjoyed. Take, for example, Amazon’s response to a recent California law demanding it collect sales taxes at the point of purchase, just like thousands of Main Street retailers are required to do. It immediately challenged the state legislature and the governor by threatening to spend tens of millions of dollars on a ballot referendum to avoid collecting hundreds of millions in sales taxes.

The result? Amazon sees record revenues with its preferred tax status while small and community-oriented Main Street retailers foot their bill and struggle to stay alive.

But the story Amazon has been telling is fictitious. And its use of conservative nomenclature to do it has been cynical. The fact that Amazon relented and has agreed to begin collecting sales taxes in California beginning next year proves it.

California legislators threatened Amazon by pushing the same legislation that Illinois passed. The company fought back hard, but in the end agreed to a compromise and the company will begin collecting California sales taxes next year. Illinois should revisit this issue. We’ve lost at least two companies that are Amazon affiliates because Amazon refused to do business with affiliates based here after Illinois passed similar legislation. California became the tipping point. Perhaps a compromise can now be reached in Illinois.

68 Comments

Question of the day

Thursday, Sep 15, 2011 - Posted by Rich Miller

* After waiting months to pay off his own bet to Wisconsin’s governor, Gov. Pat Quinn now wants a former governor to pay off his bet…

Illinois governor Pat Quinn is still waiting on the former governor of Pennsylvania, Ed Rendell, to fulfill a bet the two placed on the Stanley Cup finals between the Chicago Blackhawks and Philadelphia Flyers in 2010.

The loser of the bet was to travel to the other’s state, wear a jersey of the winning team and work at a local food bank. The Hawks beat the Flyers in six games in June 2010 to snap a 49-year Stanley Cup drought.

“I had to do a similar thing in Wisconsin when the Bears lost to the Green Bay Packers in the playoffs last season,” Quinn quipped on Wednesday morning at the opening of ESPNChicago’s new street-level studios. “I went up there and wore a Packers jersey, though I had (a) Gayle Sayers jersey on underneath. I think Governor Rendell needs to do the same here.”

Rendell left office last year and contends it’s Quinn’s fault the bet was never paid off.

“There were two dates set and Governor Quinn canceled both of them for business reasons,” Rendell responded Wednesday afternoon. “However, if the governor is obsessed with me coming in, I will do so even though I am no longer governor and we are no longer Stanley Cup rivals.”

I know he was just joking, but Quinn canceled on Rendell twice and he still expects him to pay up? By the way, in case you’ve forgotten, the Blackhawks won the Stanley Cup about 15 months ago.

* The Question: Should Rendell keep his commitment? Why or why not?

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Protected: SUBSCRIBERS ONLY - Legislative campaign roundup

Thursday, Sep 15, 2011 - Posted by Rich Miller

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Madigan warns of political doom

Thursday, Sep 15, 2011 - Posted by Rich Miller

* I linked to this story before, but let’s flesh it out today. House Speaker Michael Madigan spoke to a DNC executive committee meeting in Chicago over the weekend…

…Madigan told the nation’s top Democratic leaders that the president’s proposed job-creation plan was important for the incumbent and the party heading into the 2012 elections.

“What’s important is that all of us, however possible in a public way, demonstrate our firm support for the president’s policy,” Madigan said. “It’s important for the nation. It’s important for the American people. It’s critical for the Democratic Party in the general election in 2012,” he said.

“Let’s think in terms of going to the polls today. We’d be in trouble. We’d be in serious trouble. So we have a window of opportunity between now and November 2012 to right the ship.”

The basic message here is that if Democrats don’t hang together then they will surely hang separately.

Heck, even if they do hang together there could still be big trouble if this economy doesn’t turn around soon.

* Whatever happens, Madigan was absolutely right about the peril of the moment. A few days after he spoke, the Democrats lost a New York special election in what had been a solidly Democratic congressional district. Nate Silver has some grim analysis for the party in a new post called “For Democrats, It’s 2010 All Over Again.” After admitting that this was just one election (along with three other specials since May) and pointing out several aggravating circumstances, Silver wrote…

Republicans have overperformed the [Partisan Voting Index] baseline by an average of 7 percentage points across the four races. That squares with what we saw in 2010, when Republicans won the popular vote for the House by an aggregate of 7 percentage points.

In other words, the four special elections, taken as a whole, suggest that Democrats may still be locked in a 2010-type political environment. Democrats might not lose many more seats in the House if that were the case, since most of their vulnerable targets have already been picked off, but it would limit their potential for any gains. And it could produce dire results for the Democrats in the U.S. Senate, where they have twice as many seats up for re-election.

It’s certainly possible to read too much into special elections to the House. Over the long run, they have had a statistically significant correlation to the outcome of the next general election. But the relationship is weak and frequently runs in the wrong direction, as it did in 2010.

* President Obama won’t do nearly as badly in Illinois as he will in other states. But he won a whole lot of areas last time that are now completely unobtainable. He and state Sen. Matt Murphy (R-Palatine) pulled about the same percentage of votes in Murphy’s Northwest suburban district. No way does that happen again. Also, Obama can forget about southern Illinois.

If things don’t radically change soon, Obama’s county map will look a lot more like Quinn 2010 than Obama 2008. And that means even with this new and much more partisan district map, legislative and congressional Democrats could still be in very big trouble here.

* Related…

* Press Release: Pollak lauds 2010 9th CD race as blazing trail for 2011 New York win

* Chuck Sweeny: George Gaulrapp plans heavy use of social media

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Still playing the victim

Thursday, Sep 15, 2011 - Posted by Rich Miller

* Congressman Joe Walsh’s new attorney is as adept at playing the victim card as her client. She released this press release about the Sun-Times story on yesterday’s child support court hearing…

Contrary to the erroneous Sun Times story, there was no order entered requiring Representative Walsh to appear on the next court date.

The next court date is a status proceeding not a hearing which was also erroneously reported by the Sun-Times.

The Court simply requested that both attorneys provide him with copies of their respective pleadings on the November 8th date after I asked for the ability to file new pleadings which I expect will fully set forth Rep. Walsh’s responses to the allegations of his former wife.

Pursuant to Illinois statutes the burden of proof now shifts to Rep Walsh upon the Rule issuing.

Mr. Walsh is very satisfied with the judge’s orders of today, as it will finally afford him the opportunity to present his case to the court.

Let’s take these point by point, shall we?

1) The Sun-Times never claimed that Walsh was ordered to appear at the next court date. In fact, just the opposite was reported…

But after Laura Walsh’s attorney said he didn’t think the congressman needed to appear at the next hearing, [Cook County Circuit Judge Raul Vega ] ultimately did not issue an order requiring the congressman to appear.

2) A “status proceeding” and a “hearing” are close enough for daily reporting, but whatever.

3) If Congressman Walsh is “very satisfied’ with the judge’s orders, then why did he fight so hard in court? What was the purpose of actively pursuing his ex by subpoenaing her employer to the point where she had to ask a judge to knock it off?

Walsh and his mouthpiece want to make the media the issue here. The issue, however, is Walsh.

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CEO’s golden parachute almost equals huge state incentive plan

Thursday, Sep 15, 2011 - Posted by Rich Miller

* Sanjay Jha’s golden parachute from Google is nearly the size of Illinois’ $100 million, ten year tax incentive deal agreed to earlier this year. Sheesh…

Motorola Mobility Chief Executive Sanjay Jha could get a $65.7 million payout related to the company’s deal to sell itself to Google for $12.5 billion.

The so-called golden parachute payment would include $13.2 million in cash and $52.4 million in equity related compensation, according to a filing with the Securities and Exchange Commission.

To celebrate this momentous occasion, feel free to caption this photo feature Jha and Gov. Pat Quinn…

* Meanwhile, the governor is preparing to leave for China tomorrow…

Quinn said an increase in exports will create more jobs in Illinois.

“I don’t think any state in the union that really wants to get more jobs should miss the opportunity to interact with other countries that either want to invest in our state or want to buy our goods and services. That’s part of the job of a governor nowadays, especially in the 21st century,” Quinn said.

Quinn said he plans to sign an agreement with China that would increase soybean exports. China, according to Quinn, is the third largest exporter for Illinois, behind Canada and Mexico.

The Governor also plans to visit Japan for a conference at the end of his trip to China. He is scheduled to return to Illinois on September 24.

At least our politics will calm down for a while.

* Finally, some heartening business news…

Venture capital investment in Illinois companies reached a record $1.45 billion last year and is on track to surpass that level in 2011, according to new data scheduled to be released Thursday by a group of four local organizations.

The numbers also show that $864.5 million has been invested during the first half of 2011. The lion’s share of investment, about $856 million, has flowed to the Chicago metropolitan area. […]

[Maura O’Hara, executive director of the Illinois Venture Capital Association] said the index should underpin the state’s efforts in drawing more investment activity from local and outside sources.

“Some of our political problems have not helped our image, but (with) the excitement over the last couple of years, particularly over Groupon, I’ve seen a lot of (venture capital firms) outside the state calling up and saying, ‘What’s going on in the state? Can you introduce me to some firms there?’” O’Hara said. “That’s not something that happened five years ago.”

* However…

Illinois home foreclosure activity rose 17.6 percent in August compared to the previous month.

A report released Thursday by Irvine, Calif.-based RealtyTrac shows Illinois with 12,493 foreclosure filings last month. Filings include default notices, auction-sale notices and bank repossessions.

The filings represent one in every 424 housing units in the state. That rate is almost 26 percent lower than in August of last year and eighth-highest nationally.

* Related…

* Woman’s dogged determination made lives better: So for four years, she lobbied and testified and twisted arms as forcefully as she could. With state Rep. Mary Flowers (D-Chicago) at her side to fight for the legislation, they succeeded in giving the people of Illinois the right to an impartial review of an insurer’s denial of medical treatment, including a 48-hour deadline in cases where a patient is critically ill. Gov. Pat Quinn signed the legislation last month. Why did this have to happen this way? Perhaps you didn’t know it, but before Polka’s crusade there was no law that required insurance companies to justify why they refused to pay for medical care or drugs ordered by a doctor — even if the patient would die without such care.

* Suit: State Farm covered up donations to justice who voted in its favor: Lawyers in a class-action case accuse insurance giant State Farm of defrauding the Illinois Supreme Court by covering up its support of the Republican candidate in the most expensive state judicial race in U.S. history.

* Quinn says McCormick Place union negotiations ‘going well’

* ComEd on outages: Maintenance isn’t the issue: “Right now a customer has to call us to tell us they have an outage. It’s ridiculous. The smart meters would automatically tell (the company) when somebody loses power,” McMahan said, explaining part of the reason the smart grid is needed.

* Village to ComEd: Amp up your service: [Downers Grove] has experienced 1,482 power outages since 2007. Equipment-related issues were the number one cause of these outages, according to the report.

* Coal-to-gas developer won’t lobby legislature: The developers of a coal-to-gas plant in Downstate Illinois say they will not lobby legislators to force the state’s utilities to purchase the synthetic gas their plant hopes to produce. Chicago-based Integrys Group, which owns utilities Peoples Gas and North Shore Gas, announced last week that they will not sign contracts to purchase the synthetic natural gas to be produced in Southeast Chicago by Leucadia National Corp. and by Power Holdings of Illinois in Downstate Jefferson County. In response to indications by Leucadia that it may lobby the legislature to force Integrys’ hand, Power Holdings — which has spent eight years lobbying for its project in Springfield — said it does not intend to follow that path.

* Environmental justice groups fight pollution problems on Southeast Side

* UAW extends Chrysler, GM contracts after missed deadline

* Verizon to expand 4G network to 5 Illinois markets

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*** UPDATED x1 *** 30 years to life?

Thursday, Sep 15, 2011 - Posted by Rich Miller

*** UPDATE *** From the US Attorney’s office…

“The government has not recommended a sentence publicly or privately, not withstanding news reports to the contrary. The government has submitted a calculation of the advisory sentencing guidelines, as it is required to do in all cases. The sentencing guideline formulas are established by the U.S. Sentencing Commission. The government submitted that calculation to the probation office as is standard practice and we will not comment on those calculations publicly.”

[ *** End Of Update *** ]

* Prosecutors say that Rod Blagojevich could get up to a life sentence in prison, according to Sun-Times sources…

Federal prosecutors argue Rod Blagojevich could serve 30 years to life in prison, sources say — a sentencing range that will be bitterly disputed by the former governor’s defense lawyers. […]

The range put forth by prosecutors is not set in stone, and their calculations sometimes differ from the amount of time they actually recommend that a judge give a defendant. […]

Before former Gov. George Ryan was sentenced for corruption in 2006, the U.S. Probation Office recommended a range of eight to ten years in prison. Prosecutors did not publicly disclose a sentencing range, but they argued Ryan should not receive less than ten years in prison. He wound up getting 6 ½ years. […]

In the prosecution’s calculations, the government says Blagojevich faces more time because he took the witness stand and allegedly obstructed justice, sources said. As governor, he was also leader of an enterprise, they will argue.

Blagojevich is scheduled to be sentenced October 6th, but that could be moved back.

* React…

Contacted by phone, Blagojevich’s attorney, Sheldon Sorosky, said a sentence that severe would be outrageous.

“The government’s recommendation is cruel and draconian. You would think he committed a murder or a rape,” he said.

Sorosky said his team will submit its own recommended sentencing guidlines that are much lower than 30 to life.

* While Soroski is probably right, keep in mind that defense lawyers and experts made these very same sorts of predictions about Bernie Madoff before he was given the maximum 150 years in prison…

Experts agree he probably won’t be spending three decades in jail.

“Thirty to life is never a sentence I’ve heard of in the context of public corruption. If that is taken literally, it would be unprecedented,” said Patrick Collins, former federal prosecutor. […]

The man who prosecuted Blagojevich’s predecessor says the government always tried to send a message at sentencing.

“In the George Ryan case, for example, when we did our calculations, we came up with 12 or 13 or 14 years. The judge gave him 6 and a 1/2. Not to say that is the ratio that will hold here, but everybody should understand this is the starting point. The government will clearly be on the aggressive side,” said Collins.

* How this works…

Both the defense and the prosecution make recommendations to the Probation Department, when it comes to a sentence.

The Probation Department, in turn, makes a recommendation to the judge. Judge Zagel considers everything from Blagojevich’s lack of financial gain to his home life. Sentencing is scheduled for October 6th.

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The Governor’s veto of SB 1652 is disappointing

Thursday, Sep 15, 2011 - Posted by Rich Miller

[The following is a paid advertisement.]

SB 1652 provides an array of benefits to Illinois. It is about jobs, economic development, environmental protections, consumer benefits, regulatory reform, and a modern infrastructure. It is supported by an extraordinary cross-section of business groups, labor unions, environmental organizations and more.

The legislation has undergone more than 40 major revisions based on input from various parties.

Without SB 1652 there is:

SB 1652 does not guarantee profits or automatic rates increases and does not strip the ICC’s authority.
Illinois customers want more than the status quo. We look forward to working with members of the General Assembly to help make grid modernization and economic growth a reality.

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