Reverse Robin Hood
Wednesday, Aug 14, 2013 - Posted by Rich Miller
* As the Tribune reported not long ago, some of Chicago’s greatest cultural institutions are struggling now because the wealthy people who run their boards of directors botched their finances…
The turn of the millennium was a heady time for many Chicago cultural institutions. Cheap loans, high investment returns and swelling endowments spawned a slew of new attractions along the lakefront and around downtown.
The Art Institute built its Modern Wing. The Adler Planetarium expanded. The Goodman Theatre constructed a new home in the recently re-energized theater district. New exhibits sprang up at the Field Museum and the Museum of Science and Industry. The Chicago History Museum underwent a gut rehab.
Cultural institutions were joining in the economic bonanza sweeping the country and, as with for-profit companies and individual homeowners, some would pay dearly for taking financial risks.
Encouraged by boards that included some of Chicago’s most influential corporate leaders, many museums and arts organizations decided to leverage their gains by borrowing tens of millions of dollars to fund expansions, renovations and other big-ticket projects. […]
“The recession blew a lot of people’s projections and plans,” said Carroll Joynes, co-founder of the University of Chicago’s Cultural Policy Center. “But the plans would have been unrealistic in many cases and freighted with not very good risk assessment, even if the economy had kept humming.”
* The Field Museum was especially hard hit…
The museum’s financial problems stem from a decision over a decade ago to issue $90 million in bonds for construction projects that included a subterranean storage center for much of its collection. The museum’s board assumed it could raise enough money through a capital campaign to keep the museum on solid footing.
But when that didn’t happen, it had to begin dipping into its endowment. Finally, in December, the museum announced that it would cut $5 million from its budget — $3 million of that from the science program — and would try to raise its endowment by $100 million.
* So, partly in reaction to this, the General Assembly passed a bill that would allow museums and aquariums to reduce the number of required free admission days by half, from 52 down to 26.
The bill passed with strong majorities in both chambers, but Gov. Pat Quinn vetoed it yesterday…
“Many Illinois families can only visit these museums on the 52 days that they are currently open to residents free of charge,” the governor wrote in a letter to lawmakers that explains his veto.
“Limiting the number of days our aquariums and museums are available free of cost would disproportionately limit access to our lower-income families,” he said. “I cannot support any legislation that seeks to reduce exposure to the vast educational resources on display at our museums, particularly for those in our state that are most vulnerable.”
While the problems at the museums and other cultural institutions are certainly severe, cutting free days to make up for the financing mistakes of society’s elite is just plain wrong. It is the sort of template that has been used ever since the great crash. Rich people screw up, poor people gotta give up.
The veto is vintage Pat Quinn. And he makes some solid points.
The veto has a political advantage as well. Sen. Kwame Raoul, a potential Quinn primary challenger, was a co-sponsor of the legislation.
Heh.
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Blackburn drops out, endorses Simon
Wednesday, Aug 14, 2013 - Posted by Rich Miller
* Democrat Duffy Blackburn used his speech today at the Democratic County Chairman’s event to announce that he is “suspending” his comptroller campaign. “I wholeheartedly endorse Sheila Simon,” he told the attendees.
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* Natasha Korecki is live-Tweeting the Jesse Jackson, Jr. sentencing hearing. She’s doing a great job and this is a must-watch…
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Caption contest!
Wednesday, Aug 14, 2013 - Posted by Rich Miller
* From a friend who is at this morning’s Democratic County Chairmen’s brunch. If you can’t read the t-shirts, they say “Kwame Raoul, Democrat for Illinois”…
Our previous caption contest winners should expect to gather at the Miller tent at about 2:30 today. Send me an e-mail for confirmation.
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Zuke nuked
Wednesday, Aug 14, 2013 - Posted by Rich Miller
* An inspector general’s hiring investigation, downgraded university credit ratings, and a possible new challenger emerging. Not a great day for Gov. Pat Quinn.
Oh, and this…
The widening mess that has enveloped the Chicago area’s public transit operators claimed another victim today, with the resignation of embattled Chicago Transit Authority board member Frank Zuccarelli.
In a letter to Gov. Pat Quinn, Mr. Zuccarelli said he’d agreed to be appointed to the board “with a singular purpose in mind — to be a strong advocate for meeting the mass transit needs of the residents of the south suburbs.”
But Mr. Zuccarelli’s decision to continue to bepaid $128,000 a year as the Thornton Township supervisor and to accept the $25,000-a-year CTA post became an immediate lightning rod after Metra and the Regional Transportation Authority officials resigned amid ethical controversies.
State law generally bans such double-dipping, but Mr. Zuccarelli profited from a loophole that exempts township posts.
* More…
Zuccarelli resigned in time to avoid attending Wednesday’s monthly CTA meeting.
Reacting to the resignation, William Daley delivered a blunt, two-sentence reply that, in its brevity, appeared designed not to add to the perception that he was engaging in any “political grandstanding” with his earlier call for Zuccarelli’s departure.
“Frank Zuccarelli had little choice but to do the honorable thing by resigning today,” Daley said. “It’s unfortunate that Gov. Quinn put him in this position in the first place.”
* Quinn’s response…
“I felt he would have brought an important perspective to the CTA Board, which has all too often left this region behind when it came to important transportation access issues. I accept Frank’s decision and will soon announce his replacement.”
…Adding… Commenter 47th Ward probably has this exactly right…
Zuccarelli is no dummy and easily saw the writing on the wall. He isn’t going to fault Quinn for this case of horrible timing. If anything, he’ll be aiming for a bigger plum if Quinn gets re-elected, so there is still plenty of motivation to go all out.
Yep.
* This story has given me a sense of déjà vu. Remember when Rod Blagojevich tried to appoint Sheila Simon to the Illinois Gaming Board back in 2005? Simon said she was surprised at the offer, but also said she wanted the job.
The problem was, Simon sat on the Carbondale city council at the time and state law prohibited a local official from being on the board. So, Blagojevich tried to change the law, but that failed.
In the end, Blagojevich ended up appointing Simon to the Illinois Arts Council.
Simon is no Zuccarelli for many reasons. But this isn’t the first time that a governor has tried to get around a law with an appointment.
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Zorn encourages Raoul to run
Wednesday, Aug 14, 2013 - Posted by Rich Miller
* Eric Zorn agrees with me that state Sen. Kwame Raoul has a legitimate path to victory if he seeks the Democratic gubernatorial nomination…
Raoul’s profile, record of accomplishment and available seed money make him a plausible foe for two candidates who aren’t generating much enthusiasm among Democratic base voters.
Labor, which is sorely disenchanted with Quinn and Daley, would likely form a core of support for Raoul, as would African-American voters and the same of bloc of white liberals who backed Obama — perhaps enough, all told, that he would win a three-way primary.
Working against him, if he chooses to run, will be his lack of experience as an executive — by day, he’s a partner at a LaSalle Street law firm — and as a big-time candidate — he’s never contended on the statewide stage.
His role in attempting to resolve the pension crisis could also backfire on his ambitions. The Tribune has editorialized against Raoul’s “exasperating … slow walk” of the process so far this summer, and if too little gets done in the end, he’ll end up lumped in with Quinn and the legislative leaders labeled as part of the problem, not part of the solution.
Raoul has been demurely declining to reveal his plans and saying that his sole focus right now is coming up with a pension reform bill. It’s exactly what he should be saying under the circumstances, and offers no clue as to what he might do after Labor Day, when the political season begins in earnest.
It’s his time, though. And the Caucus of Meh! is growing impatient.
Raoul’s State Fair event last night was packed. He’s not there yet, but he is seriously considering this thing.
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The sky is very dark, but it’s not falling
Wednesday, Aug 14, 2013 - Posted by Rich Miller
* Joe Cahill at Crain’s warns his readers that Illinois and Chicago are about to become Detroit. He concludes…
One of these days, Illinois or Chicago will float a bond offering and find no takers. That’s when we become Detroit.
This is a common fantasy among a large group of folks. We’ve seen it expressed before just about every major state bond offering. The Associated Press fell for it the last time and was completely embarrassed (or should’ve been) after the sale turned out fine. Even Ty Fahner subscribes to this notion, saying in his March address to the Union League Club: “Nobody wants our paper.”
Yet, time after time, Illinois bond sales are way oversubscribed.
* The truth is, Illinois has incredibly strong laws dictating that bond payments are made first - before pension payments, before school payments, before anything. Bond buyers know this.
They also know that they’ll get a better return on their Illinois bond investments, partially because of the hysterical nonsense spewed by people like Fahner.
And if they’re paying attention they also know that the state has no invoices sitting in the hopper that are over 30 days old. They also know that our economy, which has big problems, is still far more diverse and vital than Detroit’s ever was. Yeah, it was a major boom town 50 years ago, but its over-reliance on automobile production doomed it.
* Look, we’ve got problems here. Big, huge, gut-wrenching problems. But comparing Illinois to Detroit is no more valid than the dire and widespread predictions a couple of years ago that we were the next Greece.
* Even so…
Moody’s Investors Service downgraded debt ratings on seven public Illinois universities, and warns more decreases could take place in the future.
The bond rating agency took the actions Friday, about two months after it warned it was reviewing all public universities in Illinois because of the state’s precarious financial situation. The state of Illinois’ debt was downgraded in early June.
In Friday’s downgrades, only Northern Illinois University maintained its debt rating.
The downgrades affect a combined $2.24 billion in debt, but most of that belongs to the University of Illinois.
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Report: IG probing IDOT hiring
Wednesday, Aug 14, 2013 - Posted by Rich Miller
* From a Better Government Association report…
* The state’s executive inspector general is investigating hiring irregularities, and has interviewed a number of former state government employees.
* Since 2003, IDOT officials routinely manipulated job descriptions as a means to get around court-ordered hiring rules.
* In many cases, once political hires were made, they did not fulfill the responsibilities in their job descriptions.
* The number of political hires at IDOT jumped by 63 percent in the last decade, while the number of highway road maintainers plummeted by nearly 800 posts.
More on the IG stuff…
The BGA learned that the state’s executive inspector general — the in-house government watchdog — has been investigating possible hiring abuses in the Quinn administration since at least last year, although it’s unclear whether wrongdoing has been confirmed. The inspector general’s office refused to comment. IDOT officials would say little because, they indicated, the investigation is ongoing. […]
Documents obtained by the BGA show some of those hired into political positions had little or no work history, including a bartender, a truck driver and a community college student.
All told, IDOT has hired more than 200 “staff assistants” since 2003, under the watch of both Blagojevich and Quinn. Records show that practice stopped late last year, apparently after the inspector general launched its investigation. [Emphasis added.]
Hmm.
* The governor does love his patronage, and he always has. From an invaluable 1980 Illinois Issues profile…
“[Qunn’s] only problem was that he loved power and was vicious in doling out patronage and taking it away. He is not politically naive. The stuff he says now doesn’t jive with the stuff he said then. He’s a guy you’d love to have a beer with and in charge of your own patronage, but he would not get the most Christian guy of the year award, by any means.”
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* Watch live video of today’s Illinois Democratic County Chairmen’s Association Governors Day Brunch via BlueRoomStream.com by clicking here. The show starts at 8:30. I’ll post a ScribbleLive feed soon.
Featured speakers include U.S. Senator Dick Durbin, Governor Pat Quinn, Bill Daley, Attorney General Lisa Madigan and Secretary of State Jesse White. The keynote speaker is US Sen. Tim Kaine.
Daley’s speech is probably the one to pay the most attention to.
…Adding… Here’s the ScribbleLive feed…
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