Question of the day
Thursday, Aug 6, 2015 - Posted by Rich Miller
* From the angle, it looks like he was standing in front of the Senate press box. And for our purposes, you can ignore the caption on this tweet…
* The Question: Caption?
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Today’s number: $241,939
Thursday, Aug 6, 2015 - Posted by Rich Miller
* Food for thought…
Natalie Davila, former research director for the Illinois Revenue Department, explains in an article in Tax Facts, a publication of the Taxpayers’ Federation of Illinois: In 2012, 1 in 4 Illinois tax returns claimed a retirement income exemption to avoid paying taxes. Altogether, those exemptions cost the state $2.3 billion — money that could pay down Illinois’ pension debt, or help it catch up on the billions in unpaid bills, or fund those human and other services that are getting squeezed out of the budget by the cost of paying interest and principal on the state’s crushing indebtedness.
While the number of residents filing returns overall has actually declined slightly from 2007 to 2012, the number of people claiming a retirement income exemption has increased by 9 percent. While declared income of all residents grew during that time in the single digits, the value of retirement exemptions grew by 36 percent. In other words, the retirement exemption is eating an ever-increasing chunk of the state budget.
As for the “granny tax,” the amazing fact is that most people claiming the retirement income exemption are younger than 65, according to data Davila obtained from the Revenue Department. Overall, some 60 percent of taxpayers claiming a retirement exemption haven’t even reached “retirement age.” It’s even truer for those whose adjusted gross income exceeded $1 million. About 70 percent of the millionaires who claimed the exemption were actually under 65. Their exemption averaged $241,939.
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* From the governor’s press conference…
The governor apparently got a phone call from Mayor Emanuel last night giving him a heads up that the House Democrats were going to add $200 million for CPS pension payments to the federal funding appropriations bill.
The Rauner team then notified the Republican legislative leaders and everybody has a thumbs down on the bill.
A spokesman for the House Speaker said he wasn’t aware of any such plans. A source close to Madigan says there’s been no final decision. Madigan said yesterday that he would amend the bill, but indicated it would only include suggestions (from agencies and the governor’s office) for federal funding lines missing in the Senate’s bill.
They really need to keep that bill as clean as possible.
*** UPDATE *** Steve Brown just called and said he asked the Speaker about this rumor and Madigan said he didn’t know anything about it. “That’s news to us.”
Everybody needs to just calm the heck down and take a breath before firing at each other.
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NCSL tells feds to butt out of state pot laws
Thursday, Aug 6, 2015 - Posted by Rich Miller
* From a press release…
The National Conference of State Legislatures (NCSL) approved a resolution Thursday urging the federal government to allow states to determine their own marijuana policies. For a resolution to pass, it must be supported by a majority of participating legislators in each of 75% of the states represented at the conference’s general business meeting.
The preamble to the resolution, introduced by New Hampshire State Rep. Renny Cushing, notes that “states are increasingly serving as laboratories for democracy by adopting a variety of policies regarding marijuana and hemp,” and it highlights the fact that “the federal government cannot force a state to criminalize cultivating, possessing, or distributing marijuana or hemp — whether for medical, recreational, industrial, or other uses — because doing so would constitute unconstitutional commandeering.”
The resolution states:
NOW, THEREFORE, BE IT RESOLVED that the National Conference of State Legislatures believes that federal laws, including the Controlled Substances Act, should be amended to explicitly allow states to set their own marijuana and hemp policies without federal interference and urges the administration not to undermine state marijuana and hemp policies.
BE IT FURTHER RESOLVED that the National Conference of State Legislatures recognizes that its members have differing views on how to treat marijuana and hemp in their states and believes that states and localities should be able to set whatever marijuana and hemp policies work best to improve the public safety, health, and economic development of their communities.
The full resolution can be found online at http://www.ncsl.org/documents/standcomm/sclaw/Marijuana_Policies_Federal_Interference.pdf.
“State lawmakers just sent a message to Congress that could not be any clearer,” said Karen O’Keefe, director of state policies for the Marijuana Policy Project, which tracks marijuana policy in all 50 states and lobbies in state legislatures throughout the country. “It’s time to end the federal prohibition of marijuana and let the states decide what policies work best for them.
“A majority of Americans support making marijuana legal for adults and even more think states should be able to establish their own marijuana laws without federal intrusion,” O’Keefe said. “This resolution is a strong indication that legislators throughout the nation are not just hearing from but listening to their constituents when it comes to marijuana policy.”
Twenty-three states, the District of Columbia, and Guam have adopted laws that allow seriously ill patients to use medical marijuana if their doctors recommend it, and four states — Alaska, Colorado, Oregon, and Washington — have adopted laws that make marijuana legal for adults and regulate it similarly to alcohol. Marijuana possession, cultivation, and sales are illegal under federal law, but the Department of Justice has indicated that it will not allocate resources toward enforcing federal marijuana laws in cases involving individuals or businesses that are acting in compliance with state laws.
Discuss.
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IllinoisGO launches direct mail program
Thursday, Aug 6, 2015 - Posted by Rich Miller
* I told subscribers about this development earlier today. The stuff in the following piece about Emanuel somehow being behind these mailers seems pretty implausible to me. But, aside from that, have a look…
This week Democratic lawmakers across the City of Chicago have been hit with direct mail brochures criticizing them for their “failure” to help Chicago school students and linked them to budget impasse in Springfield.
A “Democratic” Super PAC – IllinoisGO – is the paid sponsor of the mail pieces and is politically aligned with Governor Bruce Rauner, which is led by an ex-aide to Chicago Mayor Rahm Emanuel, Greg Goldner.
At a press conference in Springfield on Wednesday, Madigan called out Goldner by name not once but twice regarding the mail pieces, one of which also landed in Madigan’s district.
“The language, the tone, and the message are remarkably similar to Governor Rauner’s message and this was done by Greg Goldner,” said Madigan, flashing copies of the mailers to reporters. “These mailers are similar to those mailers done throughout the City of Chicago; they were done by Greg Goldner, and the language was remarkably similar to the message that comes out of the governor and the governor’s office.”
Madigan linked Goldner to Rauner. “In my judgment, these two people have come together,” Madigan said.
A sample mailer is here. Subscribers have the complete target list.
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Madigan’s snarky retort
Thursday, Aug 6, 2015 - Posted by Rich Miller
* During his press conference yesterday, Speaker Madigan accidentally knocked off his microphone’s wind cover, repeatedly teased me for looking tired (the firefighters threw a great impromptu party the night before) and skipped his usual opening speech about “acting in moderation, not in the extreme.” But he did get off some pretty good zingers. For example…
Jordan Abudayyeh: “Governor Rauner is handing out pink slips to 171 workers. Is this going to increase the pressure to get a budget done so that more people don’t lose their jobs?”
Mike Madigan: “Why is he doing that?”
Jordan Abudayyeh: “He claims there’s not money, that’s how he’s going to manage the budget deficit.”
Mike Madigan: “Is he going to not pay those high price consultants he’s outsourcing?”
Take that, Goldberg.
Smooches.
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Congratulations Exelon!
Thursday, Aug 6, 2015 - Posted by Advertising Department
[The following is a paid advertisement.]
Exelon made $638 million in profits in the 2nd quarter of 2015.
That’s an increase of 22.2% from 2014 - adding up to more than $1.3 BILLION in profit for Exelon so far this year. But Exelon says Illinois legislators should help the company make more. Exelon wants to increase costs on struggling families, businesses and government at a time when human services are being slashed and the state is facing a $6 billion budget deficit.
Yet Exelon is demanding a $1.6 BILLION bailout from struggling family, business and government ratepayers including more than $20 million from Chicago and CPS. Maybe Exelon should be bailing out the State of Illinois and City of Chicago instead of the other way around!
Just Say NO to the Exelon Bailout
BEST Coalition is a 501C4 nonprofit group of dozens of business, consumer and government groups, as well as large and small businesses. Visit www.noexelonbailout.com.
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Could be an interesting Governor’s Day
Thursday, Aug 6, 2015 - Posted by Rich Miller
* So, when I first heard him say this, I was a little puzzled, but thought it was a good sign that the Senate President didn’t force yet another confrontation with the governor this week…
Senate President John Cullerton, D-Chicago, said Tuesday he wants to study the legislation before bringing it up for a vote.
“I’m trying to learn as much as I can about the positions that have been taken so far on that,” Cullerton said. “I met with AFSCME yesterday. I’m going to meet with some labor lawyers to see if I can understand what the significance is of that bill.”
Under the legislation, the measure would bar employees from going on strike or Rauner from imposing a lockout. It would allow an independent arbitrator to be appointed to resolve the talks in the event of an impasse.
Rauner vetoed the measure. He said it is unconstitutional and would put the fate of the contract talks in the hands of someone who does not have to answer to voters.
Wait.
He didn’t understand the bill when it first passed?
I kinda find that hard to believe. But, again, avoiding another confrontation this week could be a good sign, no matter where you are on that particular bill.
* I may have been wrong, however…
House Speaker Michael Madigan, a Chicago Democrat, said his party has enough support to override Rauner.
The Senate could try Aug. 19, the same day as Republicans’ day at the Illinois State Fair.
Oof.
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* Sun-Times…
Rauner on Wednesday said he wants no more “special deals” for Chicago, a day after the Illinois Senate passed a property tax freeze bill that would also pick up $200 million in pension costs for Chicago Public Schools.
“Chicago shouldn’t be getting special deals. All communities should be treated the same,” Rauner said.
The governor said legislators should not be “cherry picking” what they want in terms of school funding.
“We should treat the people of Illinois equitably and fairly and stop giving special deals for Chicago,” he said. “Illinois should not be a dictatorship from Chicago.”
* Tribune…
Despite his strong words against giving Chicago favorable treatment, Rauner has supported efforts to do so in the past. In June, the governor backed a plan that would have allowed CPS to delay making a massive $634 million pension payment by several weeks. That plan stalled in the House, and Rauner floated an alternative idea to give CPS an upfront payment of $450 million in grant money that’s normally distributed over the course of the year.
All he was doing was attempting to “win” the day’s news cycle with a populist, base-feeding cheap shot at the city.
The campaign is over. It’s time to start governing, governor.
*** UPDATE 1 *** Doubling down in the city?…
What: Governor Holds Media Briefing Regarding Property Tax Legislation and Chicago Public Schools
Where: James R. Thompson Center – 16th Floor
100 W. Randolph, Chicago
Date: Thursday, August 6, 2015
Time: 2:00 p.m.
*** UPDATE 2 *** From the governor’s press conference…
So, either Claypool is lying or Rauner misunderstood?
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Hiding the ball
Thursday, Aug 6, 2015 - Posted by Rich Miller
* Once again the Chicago Tribune editorial board backs Gov. Bruce Rauner’s Turnaround Agenda without discussing any of the truly unpopular aspects of it…
Gov. Bruce Rauner wants local governments empowered to decide what topics will, or won’t, be subject to collective bargaining with their employees. To see why that admittedly dramatic proposal could help Chicago and its school system stave off financial disaster, return with us to … 1981.
How long ago was that? Well, Prince Charles married Diana, Princess of Wales. The U.S. encountered its first five known cases of AIDS. And Ronald Reagan entered the White House. Oh — 1981 also was the year that Chicago Public Schools agreed to pay not only the employer’s share of pension contributions, but 77 percent of its employees’ shares too. What could possibly go wrong with that?
Because labor negotiations start with the old contract as the bargaining basis for the new, CPS’ “pension pick-up” has endured for 34 years — even as the district’s finances imploded. Suggest that CPS should pay its share of pension costs and that teachers should pay theirs, as Mayor Rahm Emanuel and schools CEO Forrest Claypool have ventured, and you’re accused of “attacking teachers,” as the Chicago Teachers Union asserted Wednesday.
Chicago, the Chicago Public Schools and many other local governments and school districts in Illinois face a precarious financial situation. But they’re supposed to find their way out without revising the costly provisions of local government contracts that have survived generations of public officials. Gov. Bruce Rauner says, correctly, that copying these provisions from contract to contract creates a one-way ratchet by which decisions made decades ago cannot, in effect, be altered. Unions refuse.
* I think a good case can be made to take pension payments out of the collective bargaining process. It would be a good first step to then phasing out the state pickup of school employer pension payments. But, as you’ll recall, that pension issue is just one small part of the governor’s actual proposal…
Prohibited subjects of bargaining.
(a) A public employer and a labor organization may not bargain over, and no collective bargaining agreement entered into, renewed, or extended on or after the effective date of
this amendatory Act of the 99th General Assembly may include,
provisions related to the following prohibited subjects of collective bargaining:
(1) Employee pensions, including the impact or
implementation of changes to employee pensions, including
the Employee Consideration Pension Transition Program as
set forth in Section 30 of the Personnel Code.
(2) Wages, including any form of compensation including salaries, overtime compensation, vacations,
holidays, and any fringe benefits, including the impact or
implementation of changes to the same; except nothing in
this Section 7.6 will prohibit the employer from electing
to bargain collectively over employer-provided health insurance.
(3) Hours of work, including work schedules, shift
schedules, overtime hours, compensatory time, and lunch periods, including the impact or implementation of changes
to the same.
(4) Matters of employee tenure, including the impact of
employee tenure or time in service on the employer’s
exercise of authority including, but not limited to, any
consideration the employer must give to the tenure of
employees adversely affected by the employer’s exercise of management’s right to conduct a layoff.
* While the Tribune editorial board is making it seem like the governor is a wholly reasonable and moderate man who is being unfairly blocked by an entirely unholy, unreasonable cabal of union thugs and “Democrat Party bosses,” the paper’s news side hasn’t bought in…
Gov. Bruce Rauner on Wednesday tried to use Chicago Public Schools’ money woes and lack of a new teacher contract as leverage, saying the state should not help the district pay for pension costs without also giving local governments across Illinois the ability to limit unions’ collective bargaining ability.
The first-year Republican governor’s criticism was directed at a proposal passed a day earlier by Senate Democrats that would freeze property taxes statewide and pick up roughly $200 million in CPS pension costs. Rauner said that while he supported the idea of a two-year tax freeze, he could not support the Senate measure because it doesn’t contain provisions to let towns and school districts determine what benefits were covered by collective bargaining.
* Not to mention that Rauner’s old pal and Tribune editorial board poster child Forrest Claypool doesn’t even want the legislation…
CPS CEO Forrest Claypool tried to distance himself shortly after from the governor’s remarks, issuing a statement that said “mixing labor issues” into the Senate proposal wouldn’t relieve the district’s financial pressures.
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Today’s must-read: “Paying for Justice”
Thursday, Aug 6, 2015 - Posted by Rich Miller
* Brian Mackey at Illinois Issues…
Last year, on November 4th, a McLean County judge handed down a sentence for drug possession. Two days in jail. Twenty-four months of probation. Thirty hours of community service. All typical for that kind of crime. The $500 base fine was also standard. Ultimately, however, the first-time offender will walk away paying — or owing — $3,165.50. That’s typical, too.
Like many other states, Illinois has tried to fund its criminal justice system through a series of fees and fines on the men and women who are caught up in it. Backers of this approach say it makes sense that criminals should defray the costs they impose on society. There are, however, a number of problems with the practice.
From a practical standpoint, the majority of people who encounter the criminal justice system are among the least affluent in American society. That makes collection a challenge. It can also lead to debt that makes the already difficult job of re-integrating offenders into society that much harder. For the McLean County individual, the $3,165.50 would take nearly 384 hours of work to pay off at Illinois’ minimum wage — nearly 10 weeks — and that’s not accounting for taxes, food, shelter, clothing and bus fare.
In addition to the practical considerations, the concept of fee-based criminal justice raises philosophical questions. If the plethora of costs are styled as “user fees,” who are the primary users of the criminal justice system? Who are its primary beneficiaries? The people being arrested, tried and convicted? Or the rest of us, who enjoy the protection the law provides? […]
For the McLean County offender, the aggregate comprises 33 separate line items. It includes the base felony fine of $500, $100 for the street value of the drugs, $350 for the traffic and criminal conviction surcharge, $250 for DNA analysis, $100 for the Illinois State Police crime lab, $172 for the violent crime victim assistance fund, $30 for the juvenile records expungement fine, $10 for the medical costs fund, $10 for drug court fees, $15 for the child advocacy center fee, $500 for the drug treatment assessment fund, $100 for the drug trauma fund, $5 for the drug spinal cord injury fee, $25 for police drug task forces, $20 for the prescription drug disposal fund, $30 for the state’s attorney, $22 for the sheriff, $15 for document storage, $9.50 for the copy or motion fee, $10 for probation operations and $600 for probation services — 24 months at $25 per month.
And new fees keep coming. This year, in the wake of outrage over police killings of unarmed black men in New York, South Carolina and Missouri, the Illinois General Assembly passed legislation to equip officers with body cameras. It would be funded by a 50 percent hike in the Traffic and Criminal Conviction Surcharge, a fee that, as its name implies, is imposed on everyone convicted of criminal and traffic offenses. Currently it’s a $10 upcharge on every $40 in fines, but that would increase to $15 under the body cam legislation. It would have been an addition $175 for the McLean County offender.
And, as Brian points out, we have a police body cam bill now partly because of the Ferguson incident. But studies have shown that a big reason for all the over-policing and high arrest and incarceration rates in St. Louis County is that local government budgets depend far too heavily on a whole bunch of fees and fines which the poor can’t pay, and because they can’t pay they wind up back in jail.
Go read the whole thing.
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The next pressure point?
Thursday, Aug 6, 2015 - Posted by Rich Miller
* MAP grants…
The budget quagmire has affected everything from the recruitment and retention of faculty to the Monetary Award Program, or MAP grants, for students.
“The MAP students are the first casualties of this budget impasse,” Applegate says. “And of course they’re the low-income students, the students that are the most vulnerable. Now some of our institutions, I know, plan to front the money for the students, in the hopes that they’ll eventually get paid. Not all of them can afford to do that.”
More than 125,000 students are eligible for MAP grants this year.
* From a July story…
Although payments for the Monetary Award Program don’t typically start until mid-August, the Illinois Student Assistance Commission said uncertainty over the budget could cause some colleges and universities to wait to credit students with grants.
“In some cases, this could lead a student to take out additional loans, drop some classes, and then even be unable to enroll in the next semester if there was still an unpaid balance on the student’s account,” said ISAC spokeswoman Lynne Baker. […]
And, at the community college level, she said some schools could hold a student’s federal Pell grant to cover the missing MAP money, leaving students without access to cash for immediate expenses.
* Mid-August is coming up fast. Some universities and community colleges will probably just agree to wait for the state money. But will all of them? And for how long?
Statehouse types are gonna feel some major heat from seriously irate parents if tens of thousands of college students can’t afford to go back to school.
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Smith’s contract to be renegotiated
Thursday, Aug 6, 2015 - Posted by Rich Miller
* SJ-R…
“So far, AFSCME has demanded a very big pay hike, pension benefits, health improvements, tough work rules,” Rauner said. “They have not made any concessions. We’ve compromised off of our initial proposals. So we’re stuck.”
* But check out what Dane Placko found when he looked at state school superintendent Tony Smith’s own employment contract…
The three and a half year deal starts at $225-thousand dollars, with three-percent raises each year.
Smith gets 35 days’ vacation, which is seven full weeks, but can bank 20 of those days each year and cash them in when he leaves. […]
And while all state employees are required to pay for part of their health insurance and pension, the Board agreed to pick up Smith’s employee contribution for both, a perk worth thousands of dollars a year.
Not to mention that sweet little deal that makes up for the loss of retirement income for being in the Tier Two pension system.
* The governor’s office denied all knowledge of Smith’s contract, and Rauner’s hand-picked school board chairman James Meeks is reluctantly backtracking…
“We’ll renegotiate (the contract), but it may end up costing us more money…I think it’s all much ado about nothing. The general assembly is bored. They should be more focused on getting a budget.”
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New York sends a harsh message to Springfield
Thursday, Aug 6, 2015 - Posted by Rich Miller
* Tribune…
he state budget stalemate led two Wall Street ratings agencies Wednesday to downgrade by several notches more than $3 billion in bonds issued by the agency that runs Navy Pier and McCormick Place.
Both Standard & Poor’s Ratings Services and Fitch Ratings kept the debt ratings of bonds used to build facilities near McCormick Place three levels above junk status, but S&P also placed it on a negative watch and Fitch gave it a negative outlook.
Although the Metropolitan Pier and Exposition Authority has more than enough money to make bond payments, it did not make a required $20.8 million monthly payment July 20 to a trust account because of lack of state authorization, according to the ratings reports. Enough money must be in that account to make debt service payments that are due Dec. 15.
Senate lawmakers had hoped to avoid the downgrade, and a day earlier passed legislation that would allow McPier to make the debt payment in spite of the budget impasse that had held up those dollars. S&P was dismissive of that legislation, saying its passage would not affect the rating.
* Crain’s explains why S&P wasn’t impressed by the Senate bill…
S&P acknowledged McPier’s financial ability to make its next debt service payment on Dec. 15 and that the funds cannot be used for any other purpose without legislative action. But “we now believe this (payment) structure is vulnerable to (state budget) pressures as they play out in the state budget and appropriations process,” the agency said in a statement. “The rating action reflects our view that the bonds are in fact appropriation obligations of the state, rather than special tax bonds, and are now one notch below our current A-/Watch Negative general obligation rating on Illinois.”
The BBB+ rating remains investment grade and three notches above junk status, according to S&P’s rating scale.
McPier bondholders are not immediately in jeopardy of not getting paid, but the ratings downgrade is the latest ripple effect of the deadlock in Springfield.
* Reuters…
While the legislation would ensure bondholders get paid later this year, it won’t impact MPEA’s rating given that Standard & Poor’s now considers it an appropriation obligation, which limits the rating to one notch below the state.
Several buyside analysts that follow the MPEA credit said they believe applying that methodology more accurately reflects the risk.
“It’s an example of why it’s hard to trust some public ratings,” said one buyside analyst of Standard & Poor’s previous view. […]
“The previous AA-minus rating reflected Fitch Ratings’ assessment that the bonds were distanced from the general operating pressures of the state,” Fitch analysts wrote.
“This is no longer the case,” they wrote. “Therefore, the rating is limited to one notch below the GO rating of the State of Illinois.”
* More…
In secondary market trading on Wednesday, the spread for some of the authority’s bonds over Municipal Market Data’s benchmark triple-A yield scale jumped to 136 basis points from 88 basis points on July 28. That involved $5 million of bonds due in 2028, according to MMD.
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A few tiny cracks appear
Thursday, Aug 6, 2015 - Posted by Rich Miller
* Regarding the Illinois State Museum’s pending closure…
On Wednesday, three Republican members of COGFA voted to keep the facilities open: Rep. Raymond Poe of Springfield, Rep. Don Moffitt of Gilson, and Rep. Mike Unes of East Peoria.
Poe said after the hearing that lawmakers should consider putting more teeth into the state’s law covering facility closures so that the COGFA decisions are binding. […]
Moffitt said Rauner should use the COGFA vote as an opportunity to look for new approaches to keep the facility open.
“I think the idea would be he would postpone any actions (to close it). Back off, take a look, how can they bring more revenue to the state?” Moffitt said.
There are three House Republicans on COGFA and all three voted to keep the museum open.
* Over in the Senate, GOP Sen. Sam McCann, who represents Springfield, voted “Yes” on Sen. Andy Manar’s bill to keep the museum open.
* Also, yesterday, 9 Senate Republicans voted “Present” on a bill that would overturn the governor’s emergency rules that will slash childcare assistance admissions by 90 percent, including all three SGOP members of JCAR. One of those Republicans told me today he knew the bill was going to pass and didn’t want to be listed as voting against childcare, especially considering that Gov. Rauner may very well do yet another u-turn.
Smallish defections, for sure, but still somewhat notable.
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Today’s quotable
Thursday, Aug 6, 2015 - Posted by Rich Miller
* Umm… Huh?…
The [Chicago Teachers Union deemed] Rauner’s call for teachers to pay into their pensions “morally reprehensible.”
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