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Report: New biz-backed IE group hopes to spend $5 million on legislative races

Monday, Jun 16, 2014 - Posted by Rich Miller

* Ty Fahner is behind this new group, but Fahner hasn’t proved to be much of a fundraiser. Ron Gidwitz knows how to raise money and he’s the group’s treasurer. IMA honcho Greg Baise is also involved

Top Illinois business officials have formed an “independent expenditure” group that intends to spend millions of dollars this fall backing General Assembly candidates who favor pension and budget reform and more charter schools. […]

The spending cannot legally be coordinated with campaign decisions made by legislative leaders and individual candidates. But such groups have few limits on how much money they can raise or spend and have been extremely effective nationally as well as in Illinois, where such spending helped state Sen. Kirk Dillard almost unseat Bruce Rauner in the March GOP gubernatorial primary. […]

Mr. Fahner would say only that the group will raise “a reasonably large amount” for the fall campaigns — well above the several hundred thousands of dollars that has been raised by another political action committee, We Mean Business, which directly donates to political campaigns.

Other sources said the group hopes to hit the $5 million figure — enough, if reached, to offset much of the spending from labor unions on the other side of key issues.

Bruce Rauner is supposedly not involved.

  27 Comments      


Question of the day

Monday, Jun 16, 2014 - Posted by Rich Miller

* Old news from mid-May, but we didn’t really take full advantage of it here

Governor Pat Quinn today officially started the planning for Illinois’ 200th birthday in 2018, a year-long celebration that will engage residents and communities throughout the state and leave a lasting legacy for future generations. The Governor signed an Executive Order to create the 2018 Illinois Bicentennial Commission, a grass-roots organization that will plan a celebration that is meaningful to every resident and spur history-based tourism.

“Ever since becoming a state on December 3, 1818, Illinois has been a crossroads, a microcosm and a breadbasket for our nation,” Governor Quinn said. “We have cultivated such leaders as Presidents Lincoln, Grant, Reagan and Obama. The Bicentennial is an opportunity to remind everyone of our rich heritage and pave the way to a bright future.”

“This is a once-in-a-lifetime opportunity to celebrate Illinois’ rich heritage,” Illinois Historic Preservation Agency (IHPA) Board Chair Sunny Fischer said. “The Illinois Historic Preservation Agency will do everything it can to help the Bicentennial Commission get people talking, learning, traveling and exploring 200 years of Illinois history.”


* The Question
: Illinois bicentennial slogans?

  132 Comments      


Today’s number: 28 percent

Monday, Jun 16, 2014 - Posted by Rich Miller

* From the Center for Tax and Budget Accountability

In real terms, Illinois has been significantly cutting its investment in services over the last 15 years.

In fact, in FY2015, spending on the core services of education, healthcare, human services, and public safety - which collectively account for $9 out of every $10 in General Fund service spending - will be 28 percent less than in FY2000 after adjusting for inflation. [Emphasis added.]

Why? Mainly because the state has been paying its pension obligations and the Edgar payment ramp has kicked into high gear.

Also, notice that “healthcare” is included on Martire’s list. Total healthcare costs are growing a net 0.8 percent this coming fiscal year. A bit less griping about Medicaid by the screamers would be appreciated.

  33 Comments      


Today’s most excellent rant

Monday, Jun 16, 2014 - Posted by Rich Miller

* Mike Flannery went off on the General Assembly recently for its “grotesque irresponsibility” when passing a new state budget. Some of what he said…

“I can’t recall seeing as irresponsible budget as was just approved… You’d think that the whole General Assembly was on medical marijuana when they were passing this thing. It’s grotesquely out of balance… They emptied their whole dirty bag of tricks to make it look balanced.”

Yep, yep and yep.

* Watch the video clip

We’ve given Bruce Rauner a very hard time over the past few days for his stupid chicken stunt, but what the GA did was all too real, not some campaign gimmick.

The full interview is here.

  34 Comments      


Oh, for crying out loud

Monday, Jun 16, 2014 - Posted by Rich Miller

* Kurt Erickson says the Executive Mansion’s basement flooded

Just a week after we reported the roof on the Governor’s Mansion was leaking into the third-floor bedrooms, we confirmed the basement was flooded.

Despite the mansion being an 1855-era historical treasure, Quinn has made no clear indication he wants to properly maintain the place.

Here’s one theory on why he won’t spend the money: After complaining last year about the $50 million spent to restore one wing of the Capitol, Quinn has painted himself into a corner when it comes to fixing the house he lives in during his occasional forays outside of Chicago.

But it’s not like the administration is against repairing roofs in general.

In May, state officials opened bids to repair the Howlett office building, located in between the Capitol and the Mansion. Taxpayers will pay about $400,000 for workers to repair the ornate ceiling.

Taxpayers also are on the hook for about $115,000 to replace roofs on buildings at Illinois Beach State Park.

And, bidding is underway for roofing work at Wayne Fitzgerell State Park in Southern Illinois. The work is expected to cost under $150,000.

Either raise the money from private sources or find some state money to fix the darned thing. Sheesh.

  33 Comments      


We’re Number One! - Oh, wait…

Monday, Jun 16, 2014 - Posted by Rich Miller

* From July 12, 2013

Fleishman-Hillard, a unit of New York-based Omnicom Group Inc., apparently beat out a dozen other bidders to market the online exchange where Illinois consumers and small businesses will shop for health insurance this fall.

The Illinois Department of Insurance filed a notice of intent today to award the $35 million federally funded contract to Fleishman-Hillard, according to a state procurement website.

* October 08, 2013

The Quinn administration could have alleviated confusion by launching a simple education campaign at least six months ago to give consumers a heads up the exchange would be coming.

“This is a really complicated topic,” said Sue Fogel, chairwoman of the marketing department at DePaul University. “It does the program no good at all to be launched in the middle of chaos.”

But an extensive PR blitz didn’t begin until a few days before the Oct. 1 debut of the online marketplace, dubbed Get Covered Illinois. That same day, the exchange previewed its first television ad, saying that radio spots and online digital ads would come later.

* Fast-forward to Friday

President Barack Obama’s home state agreed to spend $33 million in federal money promoting his health care law, hiring a high-priced public relations firm for work that initially was mocked and spending far more per enrollee on television ads than any other large state.

After getting a late start and facing intense pressure to avoid more embarrassment for the much-maligned law, Illinois officials last summer inked the most lavish contract in the history of FleishmanHillard’s Chicago office. The goal was getting uninsured residents to sign up for coverage.

More than 90 people, including executives from the firm and its subcontractors, billed at least $270 an hour for salary and overhead during the first 4 months.

The hourly amount far exceeded the contracts other states signed for similar work. Colorado paid its ad agency $120 per hour, for example. In Connecticut, a similar contract had rates topping out at $175 an hour.

* And

A key subcontractor working on the campaign to promote President Barack Obama’s health care law in his home state is a Chicago political strategy consulting firm owned by three former aides to powerful Illinois Democrats. The three political strategists — Mike Noonan, Victor Reyes and Maze Jackson — are among the individuals whose billing rate of $282 an hour is raising questions about whether Illinois did enough to rein in taxpayer costs within a $33 million contract funded by a federal grant. The hourly rates were first reported this week by The Associated Press.

Their firm, Compass Public Affairs, could take assignments directly from Democratic Gov. Pat Quinn’s administration under a special provision of its subcontract. Compass was part of a team assembled by the main contractor, the Chicago office of public relations agency FleishmanHillard.

The contract was pretty small in comparison to the overall program, about $250,000. But that billing rate is quite high.

  10 Comments      


A look at Madigan’s law firm

Monday, Jun 16, 2014 - Posted by Rich Miller

* The Sun-Times takes a look at House Speaker Michael Madigan’s law firm’s property tax work for an offshoot of Mesirow Financial Services, which put up a skyscraper, then sold it

After appealing to Houlihan and the Cook County Board of Review, Madigan got the building’s market value pegged at $31.3 million. That saved Stein’s company $1.7 million in property taxes for 2010.

On Dec. 15, 2010, Stein’s company sold the building to Tishman Speyer for $385.4 million — a deal that Madigan’s firm says wiped out the equity that Mesirow and Jenner had in the skyscraper.

For each of the past four years, Madigan has filed challenges of the building’s estimated market value with Berrios, who succeeded Houlihan as county assessor in 2010.

Every year, Berrios has said the building is worth at least $330 million. And every year Madigan’s firm has gotten Berrios to slash that estimate, resulting in tax breaks that have averaged $5 million a year, county records show. Tishman Speyer passes along the tax bills to its tenants, so any cut benefits them.

The skyscraper “had essentially no rental income in 2009 and reduced rental income in subsequent years,” says Madigan’s partner, attorney Bud Getzendanner, who successfully argued for the cuts. […]

Getzendanner won’t say how much the firm has been paid for winning the cuts in property assessment that lowered the building’s taxes. Madigan told the Chicago Tribune four years ago that his firm charges clients an annual fee rather than take a percentage of the tax cuts.

Earlier this year, Getzendanner argued the building was worth no more than $260 million, though its net income hit $36.7 million last year, the highest since tenants first moved in. He noted that 10 percent of the building remained vacant.

Once again, Madigan’s firm got Berrios to cut the building’s estimated value, this time by 20 percent, then persuaded the Board of Review to lower it by another 2 percent.

At first blush, it looks like a fetcher game. The Assessor repeatedly over-estimates and then MJM swoops in to save the day.

But that probably can’t be because Madigan doesn’t take a cut of the tax reduction. He charges by the year.

* There have been tons of stories done on Madigan’s property tax business. I’m told the feds went through his books several years ago. They came up empty. Former GOP Rep. Maureen Murphy, an avowed Madigan enemy in the House, ran for the Board of Review back in the day with the specific goal of going after Madigan. Nothing ever materialized.

  6 Comments      


Worst. Rollout. Ever.

Monday, Jun 16, 2014 - Posted by Rich Miller

* My weekly syndicated newspaper column

“Today, I laid out more than $1 billion in structural reforms,” Republican gubernatorial candidate Bruce Rauner boasted to his supporters via a blast e-mail last week.

Baloney.

Rauner’s press conference to announce a billion dollars in alleged budget savings was an almost total farce.

Fully half of what Rauner said he could save – $500 million at the Department of Central Management Services – came with absolutely no details. Rauner did provide some annual totals for emergency and sole-source contracts, but he’d have to get rid of almost all of those, with all those government services they involve, to hit his goal. It’s a total sleight of hand with no actual basis in reality, but it gets him half way to his magic billion dollars, so it was included.

Another $250 million would come from implementing “Medicaid verification reform,” but those reforms are ongoing, although not to Rauner’s liking. The private company hired to root out ineligible Medicaid recipients started with the lowest of low hanging fruit. And even then, lots of people were restored to the Medicaid rolls after filling out the proper forms. So projecting a $250 million savings based on the initial work by that private contractor, before its actions were reversed, is a complete fantasy.

In other words, three-quarters of Rauner’s billion dollars is either magic money or already in the pipeline.

Part of what Rauner did last week was what every candidate does. He highlighted some press clippings about Quinn administration screwups, which he claims totaled $140 million.

But almost half that amount – $60 million – was overtime costs for prison workers. Rauner wants to hire more guards, but that would actually add state costs for things like training, more full-time salaries and benefits. Should there be more prison guards? Sure. But don’t pretend that it’ll save money.

Yet another $40 million in “wasteful spending” cited by Rauner was actually an upgrade of the state’s probation system, which has been badly neglected for years. Another $12 million was what Rauner called “Medicaid payments to deceased individuals.” Rauner’s former investment firm owned a bunch of nursing homes and hospitals, so he ought to know that Medicaid doesn’t make direct payments to patients, alive or dead. And while this was most definitely a Quinn administration screwup, the government has recovered most of the money that was sent to managed care providers, mainly hospitals.

So, out of $140 million in “waste” touted by Rauner, at least $112 million isn’t actually waste or has been or will be recovered.

Add the $500 million magic money savings from CMS, plus the highly doubtful $250 million savings in Medicaid plus the $112 million in “waste” that isn’t actually waste and he had $862 million in savings that aren’t really there – out of the billion dollars he said he had identified.

Oh, but there’s more.

I’ll even be charitable and give Rauner all of his savings on questionable capital projects. But these aren’t annual cash savings. The state takes out long-term loans for construction projects and Rauner pointed to some projects totaling about $11.5 million. Yes, many of those projects are goofy. No argument there. Spending an eye-popping $10 million to rehab a decrepit private theater in Chicago is a justifiable target for critics. But cutting out that project won’t save $10 million a year. It’ll save maybe a tenth of that.

And, heck, grant him his idea to move legislators to a 401(k) plan, which is probably unconstitutional, but he claims it will save $60 million – over 30 years. Annualize that out and it’s a $2 million annual savings.

I won’t even point out that Rauner counted some savings twice. OK, I did point it out, but I won’t put it in the final tally. He wants a 10 percent cut in constitutional offices and General Assembly spending, which he says will save $40 million. But he also wants to merge the offices of the comptroller and treasurer, which he says will save $12 million.

The bottom line is that out of a $36 billion or so state budget, Rauner successfully and accurately identified maybe $70 million in overspending per year – or less than 0.2 percent of the budget.

Hey, I’m not knocking $70 million. Every little bit helps. But when you advertise a billion dollars in savings and your provable savings add up to only about 7 percent of that, pardon me if I’m not exactly inspired.

“We need to stop the false choice of dangerous cuts to government services or higher taxes,” Rauner claimed last week.

What we need, Bruce, is a serious conversation.

* Lots of folks jumped on Rauner’s case…

* Paul Merrion: Rauner offers few specifics to challenge Quinn on Illinois budget: “He says he has a plan, and this isn’t a plan. It’s not even an introduction to a plan,” says former GOP state Rep. Jim Nowlan, a retired professor of political science at the University of Illinois at Urbana-Champaign’s Institute of Government and Public Affairs. “It’s a mistake because it’s going to be ridiculed.”

* Doug Finke: Rauner budget is definitely, um, something - Well, people demanded budget information from Bruce Rauner, and last week he finally came out with something. Just what it was depends on your perspective.

* Kurt Erickson: One of his ideas is to sell off most of the state’s fleet of airplanes. He says we shouldn’t be paying thousands of dollars to fly people when they can drive between Springfield and Chicago for $65 one way. That figure seemed odd. According to our calculations, the state employee mileage reimbursement for driving between the Capitol and the main state office building in Chicago is about $114 one way. Rauner spokesman Mike Schrimpf said the figure was based on a lower mileage reimbursement rate used by members of the General Assembly. That’s fine, but that doesn’t account for the various attorneys, legislative liaisons, agency directors and others who must trek between the two cities to do the state’s business.

* Mark Brown: Rauner should be red-faced over meager reform ‘Blueprint’: I found it fairly dumbfounding on Thursday when Rauner, with three caged chickens at his side, completely laid an egg with his first attempt to show there’s some substance behind the slick campaign that won the Republican primary.

* Carol Marin: Bruce Rauner’s game of chicken: You don’t found and grow a private equity enterprise like GTCR. — the “R” stood for Rauner — without a granular understanding of how to make money in the most sophisticated ways possible. And so it is amazing — if not disheartening — to read the mere pamphlet that the Rauner campaign took more than a year to produce. It’s a brochure, not a plan. And specifics? It’s just the same old campaign trope.

* Matt Dietrich: Rauner’s budget plan is mighty thin gruel: But for a candidate who has promised innovation that will “shake up Springfield,” this was beyond disappointing.

* SJ-R editorial: Rauner’s blueprint falls a few billion short: In the end, what Rauner presented is 11 pages of populist talking points. Quinn has taken heat for floating plenty of populist ideas of his own through the years, but he also has had to deal with very real, very difficult issues during his time as governor. Fiscally conservative Rauner should take no pride in putting forth such superficial ideas.

* WSIL: Bruce Rauner Unveils Unspecific Reform Plans: “It’s pretty clear that he’s got to say more. If he’s not going to raise taxes, then I think he owes the people of Illinois some specifics about what he wants to cut. It’s not going to be pleasant, nobody’s going to like it, but it’s time people be told the truth,” says David Yepsen with the Paul Simon Public Policy Institute.

* WICS: Democrats and Republicans React to Rauner Budget Plan: “How does he plan to make up for the loss of $7 billion of revenue when the income tax expires at the end of the year?” [former Republican State Senator Larry Bomke] said.

* NBC5: Most amusingly, a Twitter parody account — dubbed The Rauner Chicken — has surfaced to mock Rauner’s poultry gimmick and all squawking thereof.

* Chuck Sweeny: Bruce Rauner’s 10-point plan: One thing Illinois has in abundance is fairy dust, enough to supply all the Disney theme parks.

No surprise, the Chicago Tribune editorial board was silent.

…Adding… More from that Paul Merrion piece

A spokesman for Mr. Rauner declines to discuss how the plan was developed. Some observers question whether the campaign, which didn’t have an in-house policy team until after the March primary, has the staff in place to produce more detailed proposals.

Lobbyists and interest groups recently have been talking to two new staffers: Aaron Winters, a former top aide to Illinois Sen. Mark Kirk, and David Wu, former Indiana Gov. Mitch Daniels’ policy director. Neither has any Illinois budget experience. The campaign also is relying on state legislators and their staffs.

Enphasis added for obvious reasons.

…Adding More… Oops. I forgot to post my own take from my Crain’s column

The poorly thought-out list of budget cuts that Mr. Rauner presented June 12 won’t stop him from being slammed for not proposing detailed tax and spending plans. But he can’t actually propose a “real” budget that doesn’t include tax hike revenues because he’d have to make gigantic cuts. And those cuts would alienate large swaths of Latinos, African-Americans and suburban women. So, he’ll probably propose a fake budget.

* Related…

* Closer Look: Prairie chickens an election issue

* Will Bruce Rauner Convince Illinois to Give Up on the Prairie Chicken?: The population has continued to struggle, most recently because of the 2012 drought. Even after the controversial prairie chicken translocation of 2014, the population is vanishingly small, though the importing of 200 more is planned through 2016.

* Laura Washington: Rauner’s rainbow pitch off target: Bruce Rauner wants to govern Illinois. He aspires to assemble a leadership team to run and represent a racially and ethnically diverse state. Yet, this hugely successful businessman could not find diversity in his own back yard.

  43 Comments      


Stop it, please

Monday, Jun 16, 2014 - Posted by Rich Miller

* From a Quinn campaign press release…

Lowering the Illinois minimum wage has been Rauner’s main policy platform thus far in the campaign.

Oh, come on. Rauner said one time that he wanted to lower the minimum wage and then totally retracted it, calling for an increase in the minimum wage under certain preconditions.

* And this isn’t a one-off thing, either. From a June 12th Quinn campaign press release…

After waiting 465 days to release any concrete budget or policy proposals, other than lowering the Illinois minimum wage, Bruce Rauner today unveiled a “blueprint”

* June 4th…

Today marks the 457th day since he entered the race that the vulture capitalist has failed to provide Illinois with a detailed budget blueprint. So far, Rauner’s only policy proposal has been to cut the Illinois minimum wage, which would hurt working families.

The examples are endless, but I don’t want to spend all day searching my e-mail in-box. Just trust me on this one.

* And it’s not only Quinn, either. From an Illinois Freedom PAC press release…

Rauner has voiced support for cutting the minimum wage

Look, I get that using somebody’s quote is perfectly legit. But saying he’s definitely for something when the overall record shows he’s not just isn’t cricket.

  50 Comments      


*** UPDATED x1 *** A post-Watergate record

Monday, Jun 16, 2014 - Posted by Rich Miller

* AP

A Chicago hedge fund CEO’s $2.5 million donation to the campaign of Republican candidate Bruce Rauner has been termed the largest single donation in an Illinois governor’s race in the post-Watergate era.

Campaign disclosure records show 45-year-old Citadel chief executive Ken Griffin has now given Rauner a total of $3.57 million, including $71,000 worth of in-kind contributions for the use of Griffin’s private jet. Griffin in the past has made campaign contributions to Chicago Mayor Rahm Emanuel, a Democrat, and Republican state Sen. Bill Brady.

“We need a leader with experience, passion, and the will to turn this state around,” Griffin said in a statement to Crain’s Chicago Business. “I support Bruce Rauner because he can get the job done.”

Kent Redfield, professor emeritus of political science at University of Illinois at Springfield, said the Griffin donation is the biggest in an Illinois governor’s race since the mid-1970s campaign finance reforms that followed the Watergate scandal.

* HuffPo says it’s the largest in any state

The $2.5 million contribution to Rauner’s campaign is the largest The Huffington Post could identify to a political campaign in recent history. A number of states have no campaign contribution limits, but none have seen a single contribution this large in two decades, according to state records. (Individuals and corporations have likely given larger contributions, when adjusted for inflation, in the past.)

*** UPDATE *** WJBC

“He does no business with the state whatsoever,” Rauner says. “He’s a completely financially independent guy. he just deeply cares about good government and good government reform. He needs no favors, no special deals. That’s why I love working with guys like Ken.” […]

“He’s a great education reformer and a great business policy reformer and that’s one of the reasons I have a lot of respect for him.”

When asked if Rauner would consider Griffin for a job in his administration. Rauner joked that someone making 400 million dollars a year doesn’t need a job.

Also, wise words from Yellow Dog Democrat in comments

Yes, this can should and will be a campaign issue.

But Griffin has a net worth of $2 or $3 BILLION.

He just wrote Harvard a check for $150 million…their biggest gift ever.

The dude gave the Art Institute $19 million because it happened to be where he and his wife had their first date.

You wanna know why he wrote such a big check instead of making installments?

$2.5 million IS an installment payment for Ken. We will likely see another $2.5 million from Ken in September and maybe a few more in late October.

Agreed.

  48 Comments      


How many niche voters make a majority?

Monday, Jun 16, 2014 - Posted by Rich Miller

* If you Google “GTCR” and “Niche” you get about 136,000 results. That was the inspiration for my Crain’s Chicago Business column

Republican gubernatorial candidate Bruce Rauner leads Gov. Pat Quinn in every poll. Prognosticator Nate Silver recently gave Mr. Rauner a 75 percent chance of victory.

But since Illinois is such a traditionally Democratic state, Mr. Rauner appears to be using a lesson he learned at his former private-equity firm as a road map to victory.

Under his leadership, Chicago-based GTCR LLC specialized in buying successful “niche” companies and then using their profits and expertise to expand in their respective industries.

Mr. Rauner followed this niche approach to win the GOP nomination. He started with his big-business pals, who in the past have been divided over candidates. But this time they were all with him, including those who previously had supported his opponents.

Because he’s pro-choice, Mr. Rauner had some trouble gaining traction with tea party groups, which still have some power, at least nationwide, as U.S. Rep. Eric Cantor learned to his dismay on June 10. But a new tea party chapter popped up in January in the southwest suburbs. Mr. Rauner has used that group’s kindness, along with his backing for term limits to push state legislators out of office, to eventually make some inroads.

All of that and much more combined to help him win a narrow victory in the March 20 primary.

Mr. Rauner is using the same strategy for Nov. 4.

Click here to read the rest.

  20 Comments      


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* Uber’s Local Partnership = Stress-Free Travel For Paratransit Riders
* Isabel’s afternoon roundup
* Let's help these kids! (Updated)
* Once again, a Chicago revenue idea would require state approval
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* Question of the day
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