Businesses fighting businesses
Tuesday, Mar 24, 2015 - Posted by Rich Miller
* These B2B fights are never easy, but the Tribune has a solid story today about a legislative hearing on prohibiting floor prices for contact lenses and whether to prohibit lens manufacturers from refusing to sell to retailers which fail to comply with manufacturers’ demands…
Contact lens manufacturers began instituting price minimums more than a year ago, arguing that they would lower prices for consumers and encourage them to work with their eye doctors to find the right fit. But opponents say the price floors bar retailers from offering discounts on the products.
According to the article, just four manufacturing companies control 97 percent of sales.
* Retailers are crying foul…
Low-cost outlets such as Costco, Wal-Mart and 1-800-Contacts say nonnegotiable, minimum prices prevent retailers from selling lenses as cheaply as they’d like and, in some cases, drive up prices.
For example, a 30-day supply of Johnson & Johnson’s daily Acuvue Moist lenses that in 2014 cost $21.88 at Sam’s Club now sells for $33. At 1-800-Contacts, the same box cost $29.99 last year. This year it’s $33.00, according to data provided by 1-800-Contacts.
* But…
Eric Anderson of Northwestern University’s Kellogg School of Management, said many industries have pricing policies in place. Manufacturers of durable goods — refrigerators and coffee makers, for example — often set minimum prices so higher-end stores can compete with Amazon and Wal-Mart.
“If they don’t have a pricing policy for electronics, retailers will just stop selling the product,” Anderson said. “As a consumer, if you want to go see a television before you buy it — good luck. You won’t be able to go to Best Buy and see a television.”
Discuss.
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Question of the day
Tuesday, Mar 24, 2015 - Posted by Rich Miller
* I know, I know, it’s just a bill and it won’t even be called for a vote this year…
Wisconsin and Virginia have begun conversations about privatizing flagship public universities. Now, Illinois is about to have the discussion. Bloomington Republican State Senator Bill Brady has introduced a bill to privatize Illinois’ public universities over six years. […]
Brady says he doubts he’ll call his bill this year but wants public debate on the measure.
* More from Brady…
“What is really the genesis of this bill is that when I was the Republican nominee for governor, I obviously spent time with university presidents, public and private, and really found two things that we’re really trying to solve here,” he said. “One is that the public universities told me how burdened they were by regulations from the Legislature, as compared to their private counterparts. My personal position is that we really ought to look at this because it may be the only way some of our universities thrive. I’m not saying survive, but thrive. We need to give them tools that would allow them to do a lot of things they just aren’t equipped to do now. […]
“It’s a discussion. A lot of people would probably be afraid to talk about what I’m suggesting here,” said Brady, a 22-year member of the General Assembly and graduate of Illinois Wesleyan University in Bloomington. “And my point is that someone’s got to be willing to say, ‘Let’s talk about it. Is there a way that this can be a win-win?’
“I’d like to elevate the discussion and what I’d like to find out is: How much do the regulations on the state universities weigh on those universities? Are they worth it? When we invest money in grants to Illinois residents, how do we hold them accountable? And is this a way that some of our universities that aren’t necessarily thriving — and by that, I believe they’re losing enrollment — do they need their own private board eventually and maybe they can raise more outside private money. And so that’s what this is all about.” […]
“I don’t pretend that my bill is the answer. I think it elevates the discussion. It could be the answer. I didn’t draft it with the idea that it didn’t make sense,” said Brady, whose Senate district includes part of Normal, the home of Illinois State University. “Having represented a campus for almost 20 years, I think I know a lot about what goes on in higher ed, so I think I bring a background in this. But I’m not suggesting that this answers every question that needs to be answered.”
Lucky for us, we can have a “discussion” right here.
* The Question: Should the state consider privatizing any of its universities? Take the poll and then explain your answer in comments, please.
picture polls
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*** UPDATED x1 *** More union-related stuff
Tuesday, Mar 24, 2015 - Posted by Rich Miller
* Somebody brought up this very same point over drinks last night…
Unions contend that Rauner is deliberately choking their resources in an attempt to weaken their position as they head into negotiations for a new employment contract, which is supposed to take effect July 1.
The Illinois AFL-CIO is the lead plaintiff in most of the cases, so they’re handling the money end. But AFSCME is named in the governor’s federal case and it has long had the Chicago firm of Cornfield & Feldman on retainer. They’re probably not cheap.
But an AFSCME spokesman avoided talking about short-term union finances today and focused instead on the long term, saying, in part, “The array of Rauner attacks seems clearly intended to wipe out the labor movement in Illinois, and not just in the public sector… Everybody understands what this is really about.”
* Meanwhile, the Illinois Policy Institute has become an issue in a Chicago aldermanic race. From a press release…
Alderman Mary O’Connor of the 41st Ward called on her opponent Anthony Napolitano to return campaign contributions from a right-wing, “dark money” organization with ties to the Illinois Policy Institute. Today, the Liberty Justice Center, an IPI backed law firm, filed a motion in court to bust unions in Illinois through the denial of collecting “fair share” dues. Napolitano has received thousands of dollars from the IPI’s sister organization, the Illinois Opportunity Project.
“41st ward families are sick and tired of the never-ending assault on unions who give working people a collective voice, and they deserve better than a candidate who takes money from the right-wing organizations pushing that very agenda. Anthony should immediately return the money he received from the extremist groups supporting his campaign, and denounce their union-busting efforts. They have no place in the 41st ward,” said O’Connor.
O’Connor, who was endorsed by the Chicago Federation of Labor, has fought for working people as Alderman the past four years in office through policies such as water and sewer reconstruction, a program that has put numerous union members to work rebuilding Chicago’s aging infrastructure. Her efforts have earned her the support of 9 labor organizations in her campaign for reelection.
Napolitano has taken thousands of dollars from organizations tied to the anti-union efforts of the Illinois Policy Institute and the Rauner administration.
* The totals aren’t much, just $3k from the Policy Institute’s political arm and $1k from the 43rd Ward GOP…
43rd Ward Republican Committeeman Chris Cleveland: “If Bruce Wins This Election, Then We Republicans Will Have a Mandate, A Very Big One, To Take on the Unions.” According to post by Chris Cleveland on 43rdwardrepublicans.com, “Bruce Rauner has made standing up to government unions the centerpiece of his campaign. He’ll follow through on it. And that, in my opinion, makes him the right choice for governor. I like Bill Brady, really I do. But now, a week out, neither he nor Dan Rutherford are serious contenders for the nomination. It’s time to make a choice, Rauner or Dillard. It’s an easy one. If Bruce wins this election, then we Republicans will have a mandate, a very big one, to take on the unions. We can go after them on the pension problem they created. We can go after them on failing schools. We can go after them on wild overspending. We can go after them on corruption. Imagine having a mandate, here in Illinois, to do what Scott Walker did in Wisconsin. Bruce will have it. The Rauner campaign didn’t write this. I did. And I mean it. Seriously, if you haven’t yet voted, please vote for Bruce Rauner. It’s time.”
* Despite that, Napolitano is getting even bigger bucks from firefighters and police unions.
The New York Times had an interesting story the other day about this very topic…
In recent weeks, Gov. Bruce Rauner of Illinois has traveled the state promoting his proposal for more than $2 billion in cuts to pensions for public employees. All public employees, that is, except police officers and firefighters.
“Those who put their lives on the line in service to our state deserve to be treated differently,” Mr. Rauner said in his February budget address to the state legislature.
By announcing the exemption, Mr. Rauner was following the lead of other Republican governors in the Midwest who have imposed unwelcome changes on state and local employees in the name of saving money and improving services.
In 2011, Gov. Scott Walker of Wisconsin introduced a bill that would roll back collective bargaining rights for government workers and require them to contribute more toward their own pensions and health coverage. He excluded police officers and firefighters from the legislation, known as Act 10, which he signed the following month.
On the state level, the first responder unions are not falling for the rhetoric. But this Chicago thing is an interesting little twist.
*** UPDATE *** With a hat tip to a commenter…
Rauner told WAND’s Doug Wolfe on Monday cities can offset the losses if a series of his reforms are enacted by the Illinois legislature. Among those would be giving municipalities more control over negotiating with police and fire unions. And, giving cities more control over police and fire pensions.
“If local governments can control what gets collectively bargained, who has to join a union or not in the local government, that frees up a significant amount of money as well,” Rauner stated. “They (police & fire) work for the local taxpayers, the local citizens. And there should be more control, local control of those pension issues.”
The commenter notes…
So just like right to work, he isn’t for it, but leave it up to someone else to do the dirty work.
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Why Illinois Needs The Low Carbon Portfolio Standard
Tuesday, Mar 24, 2015 - Posted by Advertising Department
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* I had to meet some folks downtown last night, so I didn’t see this Rauner administration response to both the Illinois Policy Institute’s attempt to intervene on the governor’s side in his federal fair share court case and to yesterday’s federal court decision denying the governor’s attempt to have a state suit filed by unions moved to the federal bench. From Lance Trover…
“The unions are clearly attempting to avoid allowing the federal courts to decide this issue, but the governor’s lawsuit continues in the Northern District, where it was encouraging to see state employees file today to intervene in support of their First Amendment rights.”
Discuss.
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Rauner orders grant refunded to state
Tuesday, Mar 24, 2015 - Posted by Rich Miller
* Sun-Times…
Gov. Bruce Rauner on Monday ordered a clout-heavy Chicago TV and movie studio to give back a $10 million state grant that his predecessor, Pat Quinn, had awarded to the studio’s owners to buy land that isn’t for sale.
The Rauner administration’s action came one day after the Chicago Sun-Times revealed that owners of six of the seven properties listed in the grant say they have no plans to sell their land to Cinespace Chicago Film Studios or anybody else. There’s no indication the seventh property is for sale, either.
Quinn’s administration, the Sun-Times also found, awarded the $10 million without any appraisals to justify the projected purchase prices listed by the studio’s owners.
Additionally, the former governor’s Department of Commerce and Economic opportunity had nothing to show that Cinespace had pending contracts to buy any of the properties — or even had been in negotiations to buy them, according to documents obtained under the Illinois Freedom of Information Act.
* We can talk about the value of these sorts of grants or even this particular grant, but there is some context here…
The former [Pat Quinn] aide, speaking only on the condition of anonymity, notes that the $10 million grant expires on June 30 and that Cinespace would have to repay any of the money it hasn’t spent.
The aide says it’s common practice for the state to write lump-sum grant checks to businesses like Cinespace that bring jobs to Illinois — particularly when the grants involve buying land.
“To get these deals done, you have to have liquidity,” the aide says. “There was quite a bit of due diligence and discussion, which is totally in keeping with these types of grants.” […]
Under the grant, Cinespace is required to put in twice as much of its own money as it spends from the state grant. That’s to go toward land acquisition and rehabilitation, as well as free rent for college film programs, including those at DePaul University and Columbia College Chicago.
Cinespace is a family-owned business run by former real estate developer Alex Pissios. It has used the millions of dollars it’s gotten from the state to turn what once was a Ryerson steel mill in North Lawndale into what the company touts as the biggest film studio east of Los Angeles.
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State budgets and personal budgets
Tuesday, Mar 24, 2015 - Posted by Rich Miller
* Madeline Doubek…
Since Gov. Bruce Rauner proposed slashing spending so that it matches actual annual revenues, it seems all we hear about are the worst-case scenarios that would result as every group in Illinois fights to keep what they’ve been getting. And those worst-case scenarios sound pretty rough. […]
We know it will be painful and there might be some negative consequences from some of the cuts. It scares me, for instance, to think about having to cut help for young adults who’ve aged out of the foster system and who never have been dealt a decent hand in their short lives. But these are the conversations that must be had.
Illinois expects to collect $32 billion in tax revenue. Rauner proposes to cut more than $6 billion to deal with the deficit and spend $31.5 billion. It really would be painful if I had to cut my spending by 20 percent, but there was a time once when I had to find a way to cut 10 percent. Staycations happened rather than vacations. There were far fewer dinners out and drinks with friends after work.
I don’t kid myself. I know there are plenty of us in Illinois who cut all that and much more during the Great Recession. They’ve never recovered from it.
But now it’s up to all of us to figure out what we want to afford. What we’re willing to pay for and what we’re not willing to fund. What can we live without?
* OK, first of all, Gov. Rauner did not match spending with revenues. His budget plan is loaded with billions in phony savings.
And even with those magical mystery savings, he still had to do things like toss kids off ventilators. So, while most people might want to compare their own personal situations to the budget, being forced to take a “staycation” or buying fewer glasses of wine is quite a bit different than telling parentless kids who are wards of the state that DCFS will no longer be their parents and they’ll be completely on their own once they turn 18.
…Adding… From comments…
We need to cut, yes, but we need to cut things that would be described as those little luxuries she mentions cutting out of her personal budget. I didn’t see her mention cutting utilities, groceries, medical care out of her personal budget.
That’s exactly right.
* Also, not a word about revenues? Sheesh.
To compare my own family history to state budgeting, when I was a kid and my parents found themselves struggling financially (they had five boys) my dad would go out and get another job. He often worked three jobs when I was young. Did they also take out some loans to get through particularly tough times? Yep. Did my dad buy some cars (and an old tractor), fix them up and sell them for profits? Yep. Why? Because they recognized their need for more revenues. But did they also constantly watch their spending? Heck yes they did. Whew, did they ever.
* From a Senate Democratic press release…
Rockford resident and Illinois State University student Lauretta Schaefer testified in the Illinois Senate Appropriations I Committee yesterday about the effects Governor Rauner’s budget would have on the Department of Children and Family Services.
Schaefer receives a scholarship from DCFS that allows her to attend college - something she knew she couldn’t do otherwise.
“When I was 14 my adopted parents showed me the DCFS scholarship, and I knew that was my ticket to higher education. Without the scholarship, I wouldn’t be able to attend college. Even with it, I still work two jobs to make ends meet,” said Schaefer.
Under the proposed budget, DCFS’s budget faces a nearly $150 million cut. A majority of the cuts will eliminate services for DCFS youth who are 18 years or older.
Senator Steve Stadelman (D-Rockford) who sits on the Appropriations I Committee had concerns about the proposed cuts.
“Many of these children have no parents and no support system to fall back on once they reach the age of 18. As a parent of four, I know my children will still call me for help and advice once they reach 18. These children don’t have that safety net. If we cut these programs, these young adults will have no one to fall back on. We need to keep these programs to help these kids break the cycle of poverty, to grow up and become productive members of our society,” said Stadelman.
It’s truly worth your time to listen to her testimony…
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Is the ILGO another DLC?
Tuesday, Mar 24, 2015 - Posted by Rich Miller
* Jim Dey writes about that new self described Democratic group Illinoisans for Growth and Opportunity, which claims to have $20 million for Democratic legislative races…
Perhaps a better comparison would be to the Democratic Leadership Council, the organization then-Arkansas Gov. Bill Clinton created in the late 1980s that was aimed at dragging the Democratic Party back from the political left to the more moderate center. Derided by the Rev. Jesse Jackson as “Democrats for the Leisure Class,” the DLC enjoyed vast success before folding.
“The DLC helped elect Bill Clinton to the presidency. That’s why people have to pay attention to the (ILGO),” said David Yepsen, who heads the Paul Simon Institute for Public Policy at Southern Illinois University in Carbondale.
The DLC did have a lot of political success, but it was constantly out there talking policy. And it folded because the rank and file grew tired of its corporatist rhetoric. The Democrats now talk a good populist game, which helps them be almost as corporatist as the DLC was. So far, we’re not getting much of anything from the ILGO except for vagaries about undefined principles.
* Brown is kinda down on the group…
Steve Brown, a spokesman for Democratic House Speaker Michael Madigan, said his boss “generally welcomes” those who want to become active in the Democratic Party. Beyond that, Brown said, he’s waiting for specifics.
“I don’t know much more than what I’ve read,” he said, describing the organization’s criticisms of Democratic leadership as “vague.” He predicted, however, that Democratic legislators are “not going to turn (their) backs” on traditional constituencies because “rich” people demand a shift in course.
“I’m not sure $20 million gets you very far any more,” said Brown, referring to the organization’s bankroll.
Um, $20 mil is still a lot of dough, Brownie. But, so far, Brown’s boss has been working with the governor. As I’ve said before, this may be more about intimidating the Senate President and his liberal caucus.
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* AP…
Lawmakers are scheduled to consider a new plan introduced by House Speaker Michael Madigan to end weeks of negotiations over plugging a $1.6 billion hole in this year’s state budget.
The Legislature faces a fast-approaching deadline to act as money runs out for subsidized childcare programs, prisons and court reporters.
The Chicago Democrat introduced the plan late Monday. It would authorize Republican Gov. Bruce Rauner to transfer $1.3 billion from other purposes, including parks and conservation. The rest would come from a 2.25 percent across-the-board budget cut. […]
Madigan’s spokesman declined to comment as did the governor’s office. Senate Democrats said they planned to review the “progress” with their caucus.
Subscribers know more, but the amendments are here and here. House Republican Leader Jim Durkin was added as a chief co-sponsor yesterday on both measures. Both measures are posted for hearings this morning in the House Executive Committee.
*** UPDATE 1 *** The fast tracking begins…
*** UPDATE 2 *** Subscribers were told about this earlier today…
*** UPDATE 3 *** Finke…
Rep. Barbara Flynn Currie, D-Chicago, said the cuts, including about a $150 million cut to education will be painful, but more than 80 percent of the budget hole is being filled by taking money from the special state funds. […]
To ease the impact of the education cuts, Gov. Bruce Rauner will be given discretion to use up to $97 million to aid districts that are facing severe financial problems because of the cuts.
“I think what we are looking at here are very serious problems that could result in the stoppage of education across the board,” Currie said.
Federal funds will not be touched as part of the plan. Also, Illinois hospitals agreed to a plan in which they pay to help leverage federal health care matching funds that are then returned to them.
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Fixing a city that still doesn’t work well
Tuesday, Mar 24, 2015 - Posted by Rich Miller
* Crain’s published an op-ed today that has some advice for whomever is elected Chicago’s mayor: Help small businesses start and grow. Here are a few of their suggestions, which are all pretty good..
Create easy-to-find checklists for license and permit applications. Entrepreneurs often have to spend hours waiting in City Hall only to be told they do not have all the paperwork they need to receive a license or permit.
Treat minor regulatory infractions with a friendly warning rather than a fine. Today, a first-time offense means a fine that runs in the hundreds of dollars, and often an administrative hearing that requires expensive legal support.
Reduce the administrative hearings that require businesses to spend money on legal representation. Chicago has an online system to deal with minor traffic violations like red-light tickets, but none for minor business violations. When business owners get a ticket, they must appear before the Department of Administrative Hearings and then sometimes appear again before the Department of Business Affairs, even when the ticket has been dismissed […]
Simplify signage and awning rules. Chicago should have a one-step online application for sign and awning permits. Today, the entire City Council votes on each signage request and on every awning that hangs over the public way. Furthermore, a bonded sign-erector is required to put up every sign.
Foster home businesses. Don’t outlaw the next Jeff Bezos. Let home businesses operate in garages so long as they don’t disturb the neighbors or impact the environment. Repeal the prohibition against home businesses hiring more than one employee, especially for remote employees. And end the restriction on selling homemade products outside of the home.
Make it quick to start up. It takes 32 days to start a professional-services business in Chicago. In Phoenix, an online system gets businesses through permitting and licensing in one day.
Discuss.
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