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For the umpteenth time, Madigan urges focus on budget

Thursday, Oct 22, 2015 - Posted by Rich Miller

* Press release…

House Speaker Michael J. Madigan issued the following statement after Moody’s Investor Services downgraded Illinois’ credit Thursday. The downgrade comes just three days after Fitch Ratings issued a downgrade of its own to the state’s credit rating:

“Two credit downgrades in the same week are certainly nothing to claim victory over and nothing to ignore. These downgrades will have direct consequences on state taxpayers. The interest rate on future debt repayment will be higher, costing taxpayers more for the foreseeable future.

“Yet despite the Fitch Ratings downgrade Monday, Governor Rauner has insisted on moving ahead with his agenda, which would damage middle-class families’ standard of living and drive down wages, despite the clear lack of support for his agenda from Democrats and Republicans alike.

“With its own credit downgrade Thursday, Moody’s made it very clear that what the state needs to do is focus on eliminating our budget deficit, creating a long-term plan to fund the state’s pensions and reducing the state’s bill backlog.

“We all want economic growth, more business investment and more good-paying jobs for hard-working families in every part of Illinois. That is not in question. These priorities can be achieved through a state budget that takes a balanced approach with some spending cuts and some new revenue, not by slashing services and programs that families count on.

“The biggest issue facing Illinois is the state budget deficit. Two credit downgrades in less than a week have driven home that important fact. So I urge the governor, again, to put aside his agenda that Democrats and Republicans alike oppose - an agenda that will hurt middle-class and struggling families - and instead focus on a budget that helps all Illinoisans.”

…Adding… From the governor’s office…

Hi, Rich –

The report is another confirmation that years of unbalanced budgets, deficit spending and mismanagement have damaged Illinois’ fiscal health and major, structural reforms are needed to restore it. This is more proof that instead of blocking all reforms and passing a broken budget that was $4 billion in the hole, the Super Majority in charge of the legislature should partner with the governor to enact real reforms that will grow jobs and free up more resources to balance the budget.

All the best,

Lyndsey

Um, the downgrade focused pretty exclusively on actions (or lack thereof) during calendar year 2015.

  74 Comments      


A commenter retires

Thursday, Oct 22, 2015 - Posted by Rich Miller

* From the commenter known as “DuPage Dan”…

Mr Miller,

I am closing my nearly 26 years as a state employee. Today is my last day working at the Guardianship and Advocacy Commission.

While I may visit the blog from time to time, it is unlikely I will be posting since I am also leaving the state and traveling much over the next several years.

I appreciate this venue, and all the hard work you put into it. I may not be on the same “side” as you are but I appreciate having a monitored forum to see what other folks believe and say. There are few venues where this can occur, as you well know.

Take care, sir and all the best for you in this great state.

Daniel McNeil

What a classy way to go out.

Thanks, man. Have a great retirement.

  55 Comments      


Illinois Policy Institute poll: Everybody is unpopular and nobody has a clear mandate

Thursday, Oct 22, 2015 - Posted by Rich Miller

* From the Illinois Policy Institute

Today, Illinois Policy Action released the results of a new statewide poll conducted this week by Ogden & Fry. The poll found that likely Illinois voters are frustrated with the General Assembly budget gridlock and their elected officials – but they blame state politicians and Illinois House Speaker Mike Madigan the most, as opposed to Illinois Gov. Bruce Rauner. The poll also found that nearly half of likely voters would have an unfavorable view of elected officials who raise taxes to balance the budget.

Illinois has been without a state budget for more than 100 days. Lawmakers sent Rauner a budget that was unbalanced by nearly $4 billion, so he vetoed almost all of it. Rauner has said he would like to see the state make significant economic reforms before considering raising taxes. State politicians, specifically those under the leadership of Speaker Madigan, have refused to pass such reforms.

“The poll results are clear: Illinoisans are frustrated by the budget stalemate, and they’re frustrated with politicians who are holding the budget hostage in opposition to much-needed economic reforms,” said John Tillman, CEO of Illinois Policy Action. “For many years, lawmakers relied on tax hikes, borrowing and accounting gimmicks to pass unbalanced budgets, and voters see where that dysfunction has led the state. That’s why voters don’t want politicians to raise taxes to balance the budget, and they are putting more blame on Madigan and other members of the General Assembly than the newly elected governor. With these poll results out in the open, politicians now have a choice whose side they’ll take.”

Ogden & Fry conducted the statewide poll on Oct. 20 and 21. The same poll also was conducted in Cook County.

Here are some key findings from the statewide poll:

Do you approve or disapprove of the way Gov. Rauner is handling his job?

    Approve: 34.4 percent [Corrected number]
    Disapprove: 53.2 percent
    Undecided: 12.4 percent

Do you approve or disapprove of the way Speaker Madigan is handling his job?

    Approve: 19.9 percent
    Disapprove: 57.2 percent
    Undecided: 22.8 percent

Do you approve or disapprove of the job performance of the Illinois General Assembly?

    Approve: 9.8 percent
    Disapprove: 69.6 percent
    Undecided: 20.6 percent

How would you view the elected official who raised taxes to balance the budget?

    Favorably: 30.8 percent
    Unfavorably: 48.8 percent
    Undecided: 20.4 percent

* None of that is a surprise, except that Madigan’s disapproval rating is only a few points higher than Rauner’s. That’s a big surprise to me. It took Madigan 40+ years to rack up that disapproval rating. Rauner has apparently done it in less than a year.

* But, unsurprisingly, there’s more to the poll than the group reveals - mainly that there is no mandate for either side here.

“Illinois is in terrible financial shape. Should Gov. Rauner fix the political and economic issues that created the problems even if services to the needy are cut?”…

“The Illinois Constitution requires the State to have a balanced budget. The State Budget has not been balanced in over 10 years helping create today’s budget crisis. How would you view the elected official who cut services to balance the budget?”…

“In order to fix the budget, would you rather services be cut or pay more in taxes?”…

* And check this one out: “Are you or someone in your immediate family affected by the budget stalemate?”…

That’s a huge percentage of the population.

  84 Comments      


Moody’s downgrades Illinois

Thursday, Oct 22, 2015 - Posted by Rich Miller

* First Fitch, now Moody’s

Moody’s downgrades Illinois’ outstanding $27B of GO bonds to Baa1; outlook negative

Global Credit Research - 22 Oct 2015

About $33B of debt affected including subject-to-appropriation and sales-tax securities

New York, October 22, 2015 — Moody’s Investors Service has downgraded the State of Illinois’ $26.8 billion of general obligation bonds to Baa1 from A3, while also lowering ratings on the state’s sales-tax (Build Illinois) bonds to Baa1 from A3, and on the state’s subject to appropriation bonds (issued by the Metropolitan Pier and Exposition Authority and for the state’s Civic Center program) to Baa2 from Baa1. The outlook for all of these obligations remains negative.

SUMMARY RATING RATIONALE

The downgrades reflect weakening of the state’s financial position during 2015 and our expectation that an ongoing budget stalemate will lead to further deterioration. Structural budget imbalance, accounts payable, and other fiscal metrics are back-tracking, despite a favorable economic climate, leaving the state more vulnerable to the next economic downturn, barring unexpectedly strong and swift corrective actions. Any recurring measures ultimately enacted for the fiscal year that began July 1 will have a short time in which to offset the state’s approximately $6 billion (or 16%) general fund deficit caused in part by recent income tax cuts. Payment deferrals could drive the state’s balance of unpaid bills higher than the levels seen in late 2012, when the backlog approached $10 billion. Additionally, the partisan gridlock evident this year is impeding efforts to address the state’s unfunded liabilities for pensions and retiree health benefits. Despite the emergence of early speculative characteristics, Illinois’ credit is still supported by a diverse economy, legal provisions that ensure continued payment on debt even with no enacted budget, and a broad legal ability to adjust state revenues and spending.

OUTLOOK

The state’s negative outlook is consistent with the potential for additional credit weakening following this year’s extended budget impasse. Further deterioration in key measures, such as the state’s unfunded pension liabilities and amount of unpaid bills, would put pressure on the state’s GO and related ratings.

WHAT COULD MAKE THE RATING GO UP

- Implementation of a realistic plan to provide long-term funding for pension obligations

- Progress in reducing payment backlog and adoption of legal framework to prevent renewed build-up of unpaid bills

- Expectation of sustainable, structural budget balance

WHAT COULD MAKE THE RATING GO DOWN

- Persistent and growing structural imbalance that leads to reduced liquidity and growing payment backlog

- Continued growth in unfunded pension liabilities and indications of unwillingness to allocate sufficient resources to retiree benefits

OBLIGOR PROFILE

Illinois is the fifth most-populous state in the US, with estimated 2014 population of 12.88 million. Almost three quarters of its residents live in and around Chicago (Ba1 negative), the nation’s third-largest city. The state is comparatively wealthy and economically diverse, with personal income per capita equal to 103.5% of the nation.

* The Bond Buyer was prescient this week

Investors should brace for further deterioration of Illinois’ already battered bond ratings after this week’s Fitch Ratings downgrade prompted state leaders to further dig their heels in over the state budget impasse, market participants said Tuesday. […]

“I don’t know how much more patience the rating agencies will have. The state is going down a path that is going to be difficult to recover from,” said James Colby, senior municipal strategist at Van Eck Global.

  58 Comments      


Question of the day

Thursday, Oct 22, 2015 - Posted by Rich Miller

* The governor spoke to school kids this week

Another student asked what tasks he has to perform.

Gov. Rauner told the students he meets with world leaders, attends funerals for fallen officers and firefighters, and signs bills into law.

* The Question: Can you also describe the governor’s job duties?

  116 Comments      


More ideas, more demands

Thursday, Oct 22, 2015 - Posted by Rich Miller

* The sentiment is nice, but it’s not like there is a particular “logistics” problem with getting the four tops in the same room as the governor. But, hey, if it moves the ball forward, I’m fine with it…

We are calling for a meeting between the governor and the four Illinois legislative leaders to discuss solutions for the current prolonged budget impasse threatening our state.

This inaction is unprecedented and unacceptable to Illinois voters.

The Illinois Campaign for Political Reform along with Illinois Public Interest Research Group and our other nonpartisan reform organizations want to help.

We are ready to facilitate the logistics of a meeting in either Chicago or Springfield but believe that it must occur prior to Nov. 15 due to the urgent need for resolution on this issue.

After more than 100 days of this stalemate, the consequences have become clear. Illinois residents in serious need are unable to receive important government services, and many non-profit organizations are unable to continue critically important work tied to state grants. Illinois’ state universities and community colleges may not be able to operate in the next semester of this academic year, leaving many students unable to graduate on time.

The consequences are too great.

We cannot let this situation continue.

While leadership may not align on some core principles, we believe it is necessary for them to meet together, work through these issues and agree on a budget.

Now is the time to act, before the consequences become even more dire.

We extend this offer with sincere concern for the citizens and the state of Illinois.

    Susan Garrett, board chair, Illinois Campaign for Political Reform
    Mary Kubasak, president, League of Women Voters of Illinois
    Hoy McConnell, executive director, Business and Professional People for the Public Interest
    Maryam Judar, executive director, Citizen Advocacy Center
    George Ranney, chair, CHANGE Illinois
    Andy Shaw, president and CEO, Better Government Association

* I checked with the comptroller’s office and there’s no change in her belief that economic reforms must come if taxes are to rise to pay for all this…

Comptroller Leslie Geissler Munger on Thursday toured the Community Crisis Center in Elgin and discussed the impact the state’s budget impasse is having on domestic violence providers and other nonprofits in Illinois.

Without a budget in place, the state is legally not able to pay domestic service providers for work they have done since July 1. As a result, some centers have had to dig deep into their cash reserves, others have had to lay off workers and cut services, and others have closed their doors. Thousands of victims of domestic violence are going unserved.

“Ironically, October is National Domestic Violence Awareness Month,” Munger said. “The best way to acknowledge and honor the efforts of our domestic violence providers this month is to pass a balanced budget so they can continue providing critical services to women and children in need.”

* And legalized kidnapping? Hmm

One Illinois State Senator is trying to re-cast John Hughes’ Cult ‘80s classic “The Breakfast Club” with the state’s political leaders.

Deerfield Democrat Senator Julie Morrison filed legislation Tuesday that would essentially lock Illinois’ leaders into a room once every week until they learn to play nice with the people’s’ tax dollars. If passed, Senate Bill 2190 would make these weekly after-school detentions a public forum so all of Illinois can see how well it’s government is getting along.

  49 Comments      


On the other hand…

Thursday, Oct 22, 2015 - Posted by Rich Miller

* From commenter lake county democrat

What was Pat Quinn’s main goal when he came into office? Political reform. How far did he get with it? Nowhere - Madigan forced him to throw his own blue-ribbon commission under the bus and sign a warm puddle of next-to-nothing (I won’t say nothing because there was a soupcon of worth items in there). Now imagine if he had said “This state is messed up with corruption and I’m going to fix it, or you legislators are going to face the voters owning it. No budget gets passed without this reform.” Now imagine if Madigan had said “WE WON’T EVEN DISCUSS THOSE REFORMS - YOU WILL NOT HOLD THE BUDGET HOSTAGE.” I think there would have been immense pressure on Madigan to cave and at least agree to negotiate. I think there would have been stronger reforms passed as a result.

If you assume that 1) Rauner wants as many anti-union / pro-business goals as possible, 2) knows he won’t get everything he wants but 3) would rather force the Dems to take ownership rather than agree to something like Quinn did, his actions make sense. What other leverage does he have?

  82 Comments      


The roots of the impasse and how we got here

Thursday, Oct 22, 2015 - Posted by Rich Miller

* Illinois Issues

On September 18, 2012, the year before Bruce Rauner declared his candidacy for governor, he shared his vision for a crisis that could help reshape state government.

“In Illinois there’s been a long-time history of what I would call social service, social justice, a bigger role for government in the safety net than in many other states,” Rauner said at a tax policy conference sponsored by the George W. Bush Institute. “I think we can drive a wedge issue in the Democratic Party on that topic and bring the folks who say, ‘You know what? For our tax dollars, I’d rather help the disadvantaged, the handicapped, the elderly, the children in poverty. I’d rather have my tax dollars going to that than the SEIU or Af-scammy (AFSCME), who are out there for their own interests.’”

Three years later, Rauner says he’s “very unhappy” Illinois is without a budget. But he has followed through with his proposal that “the disadvantaged, the handicapped, the elderly, the children in poverty” be conscripted into his battle against organized labor. Domestic violence shelters are turning away victims. People with mental illness are losing access to treatment. Programs that make it less likely delinquent juveniles will become adult criminals are scaling back or closing. […]

All of this amounts to a selective government shutdown, and it appears to be the early result of Rauner realizing his vision. The plan imagined Democrats could be prodded into turning against unions. But a close examination of all the changes Rauner is demanding for labor in Illinois — and both the practical and political consequences of those changes — shows why Democrats have so far refused to relent, and why they say they never will. […]

In the run-up to the general election, on the other hand, Rauner was careful to mostly avoid union talk. “Pushing any specific labor regulation is not my priority at all,” he told Illinois Radio Network less than a month before voters went to the polls. Four months later, he unveiled the Turnaround Agenda. […]

Rauner, however, says his labor agenda “is not a partisan issue, it’s a good government issue.” At an appearance in Decatur last week, he discussed other topics, like selling the Thompson Center in Chicago and changes he wants for state pension plans. But he says labor is the core issue: “Are we going to be willing to modify how we handle collective bargaining inside government in Illinois or not? Are we going to take that on?” […]

“Crisis creates opportunity. Crisis creates leverage to change,” Rauner told the Chicago Tribune editorial board in April. “We’ve got to use that leverage of the crisis to force structural change.”

They missed one. Remember last year when he debated Pat Quinn at the Illinois Education Association?

Quinn also compared Rauner to Wisconsin Gov. Scott Walker, saying he wanted to bust unions.

“Limiting collective bargaining is not part of my agenda,” countered Rauner.

* And even though Gov. Rauner told the Tribune editorial board what he planned to do back in April, that board continues to put the blame solely on the House Speaker

So if you think the Democrats are sincere about fixing their budget mess, think again. And catch this: Cook County Board President Toni Preckwinkle told us Wednesday that the county is waiting on $70 million from the state. When Preckwinkle talked to Madigan about the money this summer, he told her to not count on a budget resolution until 2016 … when the state runs out of money.

“I was surprised and disappointed,” Preckwinkle said.

Madigan’s spokesman didn’t get back to us to clarify. But Madigan’s plan is clear: Wait it out, refuse to budge, blame Rauner.

There’s no doubt in my mind that Madigan shares significant blame here. I would never suggest otherwise.

But the Tribune editorial board has its devil, so its members will see only what they want to see, even when the governor himself makes it plain as day. From today

“We’re going through some change, change is difficult, change causes pain. We believe very strongly that we’re going to go through some short term pain for some very long term gain,” Rauner said.

He dismissed suggestions that his refusal to back down could do more harm than good should he not eventually get his way, saying he’s been encouraged by business leaders to “stay the course.”

  42 Comments      


Emphasis added

Thursday, Oct 22, 2015 - Posted by Rich Miller

* This week’s column from Jim Nowlan, who served three Republican governors

Few businesses in their right minds would locate in Illinois right now, with its unstable and unpredictable fiscal and tax future.

* From last year

Republican candidate for governor Bruce Rauner issued the following statement regarding the news that Illinois’ unemployment rate was unchanged last month:

“Tragically, under Pat Quinn’s dismal leadership, Illinois continues to lag far behind our neighboring states and the rest of America. We will only get Illinoisans back on the job, when Pat Quinn loses his job.”

* The Illinois Policy Institute this week

Illinois only created 2,200 total jobs in the first nine months of 2015, whereas its neighbors have seen significantly higher jobs growth. Iowa has created six times as many jobs as Illinois between January 2015 and September 2015, and Missouri and Kentucky have each created seven times as many jobs as Illinois during the same period. Wisconsin residents have seen 12 times as many jobs created as have Illinoisans. Indiana created 18 times as many jobs as Illinois, and Michigan created 24 times as many jobs as Illinois between January 2015 and September 2015.

* From the campaign last year

In August of [2013], the Illinois jobless rate was 9.2 percent. Last month’s [2014] rate was 6.7 percent as state officials report the creation of 13,800 jobs, including 2,000 in manufacturing. […]

“We need to grow,” Rauner said. “I’ve been a business builder. I’ll grow our economy and we’ll fix our problems through growth.”

* From late August this year

A major financial supporter of Rauner is the Illinois Manufacturers’ Association. Greg Baise, the group’s president and CEO, said that regardless of the future political implications, both sides need to reach a compromise on the budget quickly.

“You can only go so far when you wake up every day and Mike Madigan has 71 votes and John Cullerton has 39 votes, and that’s not going to change until the next election,” Baise said.

“I applaud the governor for his ardent support of business reforms that the business community supports very strongly. But ultimately, we need to get a budget, a balanced budget, so our businesses — manufacturers included — understand that this state is finally getting its act together,” he said.

* Illinois Policy Institute this week

Illinois continued to shed jobs in September, as the state lost a total of 6,900 jobs, including 1,800 manufacturing jobs, according to new data from the Bureau of Labor Statistics, or BLS. Illinois has lost manufacturing jobs in eight of the nine months between January 2015 and September 2015, for a total loss of 12,500 manufacturing jobs during this time period.

* From last year

Rauner acknowledged in a statement that “it’s always good news when more Illinoisans are working,” but that didn’t stop him from calling the figures into question hours before they were even released. Speaking at a downtown job fair for veterans, Rauner said the data could be “misleading,” arguing the jobless rate may have dropped because many people have simply stopped looking for work. […]

According to the U.S. Department of Labor, 64.7 percent of the state’s population was employed in July 2014, down slightly than a year prior when that figure was 65.3 percent. Nationally, the labor force participation rate was 62.9, down from 63.4 during the same time period last year.

* From the Illinois Policy Institute this week

Worker dropout has driven Illinois’ labor-force participation rate to 38-year lows, dropping to 64.4 percent in September 2015 from 68.8 percent before the 2008 recession.

  73 Comments      


Rauner throws brush-back pitch at GOP predecessors

Thursday, Oct 22, 2015 - Posted by Rich Miller

* Riopell

Facing criticism from two past Republican governors in recent days, Gov. Bruce Rauner pushed back Thursday, saying Illinois faces harder challenges than when Govs. Jim Thompson and Jim Edgar were in office.

“I don’t spend any time criticizing my fellow Republicans,” Rauner told reporters today. “I do not spend any time criticizing decisions made in the past that created the mess that we’re dealing with.”

…Adding… From comments…

Wasn’t he the guy who said something like a third of GA Republicans were corrupt, too?

Yep.

  51 Comments      


Nothing new here, move along

Thursday, Oct 22, 2015 - Posted by Rich Miller

* I’m not sure where this came from, but it’s not like it’s a new development…


Rauner backed off his so-called “right to work” push months ago when it apparently became obvious even to him that it was backfiring by firmly uniting organized labor.

* And, needless to say, dropping one idea of many that have absolutely zero chances of passage is neither negotiating nor compromising.

It would be like the Democrats saying they’ve dropped their plan to eliminate all restaurants, so now Rauner must compromise on their proposal to forbid the sale of cheeseburgers, and maybe, just maybe, they might be open to compromise by only banning double cheeseburgers with grilled onions. And then, and only then, will the Democrats give the governor the privilege of emptying all state prisons.

  33 Comments      


Facing the music

Thursday, Oct 22, 2015 - Posted by Rich Miller

* From the Queens, NY Times Newsweekly

Before the NLCS started, [New York State Sen. Joseph Addabbo] and his fellow Queens senators agreed to the wager with Illinois Senate President John Cullerton and his colleagues. Should the Mets win, the Illinois Senate will ship deep-dish Chicago-style pizza to the Queens senators; should the Cubs prevail, the Queens senators will send to the Illinois Senate thin-crust New Yorkstyle pizza.

The losing delegation must also congratulate the winning team on the floor of its Senate chambers, and the senators must wear the winning team’s apparel during a cleanup day within their districts. […]

“I hope that Senator Cullerton looks good in blue and orange, and I wish our counterparts in Chicago the best of luck in coming up with a creative way to keep the deep-dish pizza warm while on its way to Queens,” [said Addabbo].

Wrigley Field is in Cullerton’s district, but he’s more of a Sox fan. Still, that isn’t gonna be fun.

…Adding… LizPhairTax has already won the Internet today with this gem

Whatever Addabbo. We’ll get to it right after we pay the butter cow lady.

If you don’t get the joke, the as of yet unpaid Illinois State Fair “butter cow lady” lives in New York.

  21 Comments      


Laying the groundwork?

Thursday, Oct 22, 2015 - Posted by Rich Miller

* From Jane Michaels at Pioneer Press

Illinois Senate Republican Minority Leader Christine Radogno said a tax increase is inevitable, given the state’s woefully inadequate pension funding levels and a legal ruling against legislation to revamp pension obligations.

“We have to bite the bullet and pay it,” Radogno said. “The payments have to be made. That does put Illinois at a disadvantage.” […]

Radogno said lawmakers likely will consider hiking the state income tax or taxing retirement income, rather than increasing the state sales tax or instituting a tax on services.

Illinois is one of the few states, which doesn’t tax retirement income, she noted. Any plan would have to avoid encouraging retirees to join others who’ve moved because it’s cheaper to live in another state with lower taxes, she said.

Radogno said she wasn’t optimistic about an end to the state’s budget impasse in the near future. It’s possible Chicago representatives could force Democratic leaders to the negotiating table so a deal could be reached before January when only a simple majority is needed to take votes on difficult issues, such as raising taxes, she said.

The fact that she’s not only talking about an income tax hike, but also a tax on retirement income is quite significant.

Then again, we’re nowhere near to a vote on any of that right now.

  117 Comments      


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Thursday, Oct 22, 2015 - Posted by Rich Miller

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Good morning!

Thursday, Oct 22, 2015 - Posted by Rich Miller

* Right through the lightning and the thunder

To the dark side of the moon

  14 Comments      


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