Moody’s states the obvious
Tuesday, May 3, 2016 - Posted by Rich Miller
* Tribune…
A national credit rating service is calling the emergency bridge funding measure for Illinois colleges and universities a “credit positive” move, but only for the short term.
The $600 million stopgap measure signed into law last week provides $356 million to public universities, $169 million to Monetary Award Program financial aid grants and $74 million to community colleges.
“The measure provides some breathing room, particularly for those with the thinnest liquidity and pressured student markets,” Moody’s said. But it also warned the higher education sector “will continue to confront longer-term funding pressures as the state remains unable to resolve its own severe budget issues and significant pension underfunding.”
Moody’s noted the money amounted to 29 percent or less of the state funding that Illinois’ largest public universities received in the 2015 budget year.
We need a real budget. Period.
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[The following is a paid advertisement.]
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[The following is a paid advertisement.]
Nuclear facilities produce more than half of the electricity in Illinois and they’re by far the most reliable source of energy we have. As a result, our state’s businesses know they can depend on the electrical grid round-the-clock for their energy needs.
This is a huge asset and a competitive advantage for Illinois businesses, as they are able to operate regardless of weather or the time of year to meet the demands of their customers. Consumers benefit from this too, as affordable, reasonably-priced energy allows them to purchase goods at a lower cost.
That is why it is so important to find a solution to our state’s current energy problems. A recent State of Illinois report found that if some of our nuclear plants were to close early, as they’re projected to do soon, our state would lose $1.2 billion in annual economic activity and nearly 4,200 jobs. Coupled with higher electricity rates, this would be a severe blow to Illinois’ businesses and consumers.
For Illinois’ businesses to thrive, we need to ensure that nuclear energy remains in our state’s energy future. I urge our state legislators to enact energy reform legislation that properly values the contributions of nuclear energy in our state.
Signed,
Omar Duque, President and CEO, Illinois Hispanic Chamber of Commerce
For additional information, read my op-ed that recently appeared in the State Journal-Register.
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* Makes sense…
To members of the Illinois General Assembly,
After reviewing HC0058 Sponsored by State Representative Jack Franks it is the considered opinion of MALDEF that his proposal would better protect interests of racial and language minorities covered under Section 2 of the Voting Rights Act. The language of HC0058 prioritizes minority voting rights over a number of criteria including respecting the geographic integrity of units of local government. These subordinate criteria must give way when these are in conflict with the goal of protecting minority voting rights. HC0058 (“Franks Bill”) states:
(a) Legislative Districts and Representative Districts shall each, in order of priority, be substantially equal in population; provide racial minorities and language minorities with the equal opportunity to participate in the political process and elect candidates of their choice; provide racial minorities and language minorities who constitute less than a voting-age majority of a District with an opportunity to substantially influence the outcome of an election; be contiguous; be compact; respect, to the extent practical, geographic integrity of units of local government; respect, to the extent practical, communities sharing common social or economic interests; and not discriminate against or in favor of any political party or individual.
By contrast the Independent Maps proposal does not prioritize minority voting rights and the mandatory language it uses sets up a conflict by requiring that “the redistricting plan shall respect the geographic integrity of units of local government.” This creates a new cause of action where any person of any race sitting in a city or town that was not completely within a given legislative district could have standing to sue to challenge the plan’s treatment of their unit of local government. Two Suburban Chicago legislative districts that currently elect Latinos, Districts 24 and 21, cross a number of city and town borders and under the Independent Maps proposal could be challenged on the basis that they do not “respect the geographic integrity of units of local government.” Under the Franks Bill, if Districts like 21 and 24 were challenged the sole fact that a unit of local government was not kept intact would not be a basis to challenge the map as the criteria is less important than minority voting rights and under the plain language is only required to the extent practical.
Another important way that HC0058 is better is that when it refers to discrimination on the basis of party affiliation it does not contemplate a lawsuit based on disparate impact or unintentional discrimination. HC0058 adds a requirement that a redistricting plan “not discriminate against or in favor of any political party or individual.” Placing this at the end of a list of criteria prioritized by importance and in which minority voting rights is near the beginning of the list better protects minority voting rights.
By contrast the Independent Maps language states:
The redistricting plan shall not either intentionally or unduly discriminate against or intentionally or unduly favor any political party, political group or particular person.
Stating that the plan won’t intentionally “or” unduly favor a political party, group or person, sets up “intentionally” and “unduly” as separate, and distinct forms of discrimination. This allows what is essentially an effects test (or disparate impact) to creep into (ultimately) a court’s assessment about whether a plan “unduly discriminates” even if it does not “intentionally” discriminate.
Historically effects tests have been limited to cases where a protected class cannot show discriminatory intent but can show a discriminatory impact or effect – like under Title VII. These effects tests exist because for the most part people and institutions don’t state that they intend to discriminate against members of protected classes but often adopt policies that do so in effect, and where intentional discrimination may be difficult if not impossible to prove. The language in the Independent Maps amendment puts political discrimination on par with race discrimination. In the voting rights context, Section 2 of the Voting Rights Act actually requires a showing of discriminatory effect plus a finding under the totality of the circumstances that a map discriminates – this is a higher standard than that arguably required to show political discrimination under the Independent Maps language.
Finally, the Franks bill decouples State Senate Districts from State Representative districts by striking the requirement that two representative districts be nestled within one senate district […]
In Illinois, this measure would likely give more flexibility to the map drawers to create majority minority districts when doing so would otherwise be complicated by the nesting requirement.
Very truly yours,
Jorge Sánchez
Senior Litigator MALDEF
Midwest Regional Office
Rep. Franks’ proposal passed the House today by a vote of 105-7.
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Open thread
Tuesday, May 3, 2016 - Posted by Rich Miller
* I have to go give a speech at noon, so blogging will be light for awhile. So, talk amongst yourselves. Be kind to each other and please keep it state-related. Thanks!
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Lead, follow or get the heck out of the way
Tuesday, May 3, 2016 - Posted by Rich Miller
* This intransigence by the governor needs to end…
Republican Gov. Bruce Rauner came under fire Monday as the doctors, nurses and patients on a state panel that recommends whether to expand Illinois’ medical marijuana test program complained their suggestions are routinely ignored.
The Medical Cannabis Advisory Board suggested that 10 previously recommended ailments receive approval, as well two new ones: Type 1 diabetes and panic disorder.
As some at a hearing celebrated the diabetes recommendation, board member and pediatrician Dr. Nestor Ramirez cautioned the crowd to “wait for what the governor says.” […]
Rauner’s Illinois Department of Public Health has rejected the board’s past recommendations. The governor, who inherited the medical marijuana program, has been reluctant to broaden access, instead calling for further study of the drug’s benefits and risks.
Ugh.
* More…
Board chairwoman Leslie Mendoza Temple, who is a primary care doctor, said it’s hard to get top quality research on medical cannabis because it’s an illegal drug. She said the Rauner administration’s standards on approving the conditions are too strict.
“Pharmaceutical medications often have randomized controlled trials, so if we put medical cannabis research requirements at that level, of FDA drug approval status, we’re never going to get there,” she said.
The governor’s office has said not enough time has passed to fully evaluate it. […]
A decision by Rauner is expected by July. The pilot program started in 2013, but sales didn’t start until late last year.
Don’t hold your breath.
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Daley’s tinfoil hat
Tuesday, May 3, 2016 - Posted by Rich Miller
* Tribune…
When Dennis FitzSimons described how the Independent Map coalition would need to take a truck to the State Board of Elections to deliver their nearly 600,000 petition signatures, Bill Daley had some advice.
“I think you ought to get a decoy truck,” said the former White House chief of staff and brother and son of two Chicago mayors.
“I wouldn’t be so open about how we’re going to get these petitions (delivered) because, over the years, I’ve been around and strange things happen with petitions that look like they’re going to make a change,” Daley said.
FitzSimons is the chairman of the Independent Map drive, which is attempting to put on the November ballot a proposed state constitutional amendment asking voters to remove some of the partisanship in the way legislative districts are drawn.
That conspiracy theory neatly and succinctly sums up how the monied elite feel about Speaker Madigan. In their minds, he’ll do anything, even hijack a truck, to win.
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30-day pause in Lucas lawsuit
Tuesday, May 3, 2016 - Posted by Rich Miller
* Tribune…
Friends of the Parks has suspended its lawsuit against the proposed Lucas Museum on Chicago’s lakefront, the group announced Tuesday.
The nonprofit group, which has blocked the push by “Star Wars” creator George Lucas and Mayor Rahm Emanuel to build an arts museum near Soldier Field, said in a news release that the stay “gives all parties the opportunity to have a more direct and productive dialogue to reach a potential solution about a museum site.”
It said it has informed U.S. District Court Judge John Darrah of its decision but added that it could restart its lawsuit, if necessary. City officials asked the group to halt its lawsuit and the group said it agreed “because the city is now prioritizing another site” for the museum.
The suspension is only for 30 days.
* The Sun-Times has more, including the list of demands…
* Active and serious investigation of other possible non-lakefront sites that include the Michael Reese Hospital site acquired by former Mayor Richard M. Daley as the site of an Olympic Village before Chicago’s first-round flame-out in the 2016 Olympics sweepstakes, an 18th Street site across from the Soldier Field site, and the marshalling yards for trucks and recreational vehicles west of McCormick Place.
* A “strong grasp of the impact” the Lucas museum would have on “jobs, particularly for South Side residents, tourism and the economic in general, taxes and other costs to Chicago residents and educational benefits.”
* “Clear specifics” about any proposed site and plan that promises to generate the most viability and create more park space for residents and visitors.
The Chicago Sun-Times reported exclusively in mid-April that Emanuel has shifted his focus from Soldier Field’s south parking lot to the site of McCormick Place East to avoid a protracted legal battle over the Soldier Field site and satisfy Lucas’ demand to get moving on the legacy project.
Emanuel’s plan calls for tearing down the above-ground portion of McCormick Place East, building the museum on a portion of the site that includes Arie Crown Theater and replacing the lost convention space by building a $500 million McCormick Place expansion over Martin Luther King Drive.
Any deal would have to be approved by the GA and the governor.
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Brady amendment kills lite guv proposal
Tuesday, May 3, 2016 - Posted by Rich Miller
* Petrella…
Also scheduled for a hearing Tuesday [in the Senate] is the House’s lieutenant governor amendment. Despite voting against the previous version, Sen. Bill Brady, R-Bloomington, is sponsoring the House version.
Brady said he plans to propose changing the line of succession the amendment would establish, having a vacancy in the governor’s office filled by the highest-ranking official of the same party rather than by the attorney general, who might be of the opposite party.
That would address a major concern for Republicans who voted against the Senate version, he said, but it would mean the amendment won’t make it to the November ballot.
* The Tribune editorial board is not happy with this Brady development and addressed a missive to the Senate sponsor…
Your amendment changes the succession order to the next highest-ranking official of the governor’s political party: attorney general, secretary of state, comptroller, treasurer, and then majority or minority leader in the Senate and House — someone who is of the same political stripe as the outgoing governor. That is, your amendment would keep the office of governor in the same political party.
But if you demand those changes, voters won’t have the chance to weigh in on this proposed constitutional amendment. They have been waiting decades. Literally. Various proposals to eliminate the office of lieutenant governor have swirled around Springfield since the 1970s. […]
Senator, you co-sponsored the exact same bill in 2013 that would give the attorney general line-of-succession powers should the governor be unable to serve.
Now, all of a sudden, that’s a problem for you.
Don’t block the one chance voters have in November to eliminate an unnecessary state office. None of us has forgotten that you ran as the Republican gubernatorial nominee in 2010 promising to shrink government.
A whole lot of ink has been used up by editorial boards on this mainly symbolic constitutional amendment. Most are upset that Rauner and the Senate Republicans have flip-flopped. And I suppose they believe that if legislators can’t even eliminate this office then shrinking other governments would be out of the question. Maybe, but I doubt it.
But with all the real carnage out there, I find it kinda ridiculous that so much “outrage” is expressed on something that doesn’t really matter either way. I mean, the Tribune did not ever express one bit of concern when the governor submitted grossly unbalanced budgets two years in a row, but they’re somehow all fired up about a million or two bucks a year?
Weird.
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* Bloomberg on the impasse…
Rape crisis centers, owed about $5 million, are depleting reserves, leaving positions unfilled and creating waiting lists for victims of sexual assault. Homeless shelters haven’t gotten state aid this year, which is also jeopardizing matching funds from the federal government, according to the Chicago Coalition for the Homeless.
“The whole social services safety net is starting to wear away,” Bob Gilligan, executive director of the Catholic Conference of Illinois told lawmakers last week. The state owes Catholic Charities of Chicago $18 million. “Once it goes, it’s virtually impossible to rebuild.”
Illinois bonds aren’t in danger of defaulting because state law mandates monthly transfers to ensure that semi-annual debt payments are made. But the the turmoil hasn’t gone unnoticed: Investors are demanding an extra 1.8 percentage points to hold Illinois’s 10-year debt, the most among the 20 states tracked by Bloomberg and up from as little as 1.1 percentage point two years ago.
“Bondholders pay attention to distress in social services for the borrower,” said Adam Buchanan, senior vice president of sales and trading at Ziegler, a broker-dealer in Chicago. “It’s a signal of weakness of potentially greater problems in the future.”
No question, the pre-Rauner status quo was bad. But the current status quo is much worse at the moment.
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* Dan Petrella…
Although they wouldn’t name any names, Democratic Reps. Lou Lang of Skokie and Christian Mitchell of Chicago said at a Statehouse news conference Monday that they think some Republicans will support their plan to introduce a graduated state income tax.
“This is an issue whose time has come,” said Mitchell, who is sponsoring the amendment. “I believe that this is going to pass with bipartisan support.” […]
Emily Miller of Voices for Illinois Children, an advocacy group that’s backing the amendment and a companion bill from Lang that would cut taxes for more than 99 percent of taxpayers while raising rates on the wealthiest Illinoisans, said she expects the House to vote Tuesday to approve the amendment.
“This does have some very promising bipartisan support,” she said, adding that the group has been working with members of both parties.
They’ll likely need at least three GOP votes in the House to overcome expected Democratic opposition. But they could need more. And Gov. Rauner is dead set against the proposal.
* Illinois is one of just eight states with a flat income tax among the 43 states which tax incomes. But not everybody thinks Rep. Lang’s companion bill, with its 9.75 percent top rate, is a good idea, including those who support the concept of a graduated income tax…
In general, it’s a good idea to consider when the state is short on revenue, [Don Fullerton, a tax policy expert and the associate director of the Institute of Government and Public Affairs at the University of Illinois] said, adding that a graduated system eases the burden on lower-income taxpayers while drawing in more revenue from those who have more disposable income.
That said, Fullerton thinks the upper end of Lang’s proposal may be asking too much.
Kim Rueben, senior fellow at the Urban-Brookings Tax Policy Center in Washington, agrees on both counts.
“Having a graduated income tax makes sense, but I would think that you don’t necessarily want to immediately go to one of the most graduated income taxes that we see in the country,” Rueben said. […]
Rueben said it might make more sense to have a smaller increase at the top of the scale and also raise rates on individuals earning between $100,000 and $500,000.
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More bad news for Exelon
Tuesday, May 3, 2016 - Posted by Rich Miller
* Steve Daniels…
Exelon’s board got a stern rebuke from company shareholders, who voted overwhelmingly to oppose how much the company paid CEO Chris Crane last year.
The 62 percent vote against the Chicago-based electricity giant’s 2015 compensation package in an advisory “say on pay” vote is the largest margin so far this year against any company’s pay, according to proxy advisory firm Institutional Shareholder Services. Exelon disclosed the results of the shareholder vote late on April 29. […]
In its report, ISS cited relatively easy goals Exelon set for Crane in order to earn the nearly $16 million in cash, stock and other rewards he received last year.
“Exelon’s stock performance lagged many of its peers over the last three- to five-year periods,” ISS said in a March 29 report. “However, nearly every component of CEO pay increased during FY2015 and incentive awards, both long and short, were earned at above-target levels and based on nearly flat or lowered performance goals.”
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Civic Federation rips Rauner budget proposal
Tuesday, May 3, 2016 - Posted by Rich Miller
* Tribune…
Gov. Rauner’s latest budget proposal is at least $3.5 billion out of balance, according to a new analysis released Tuesday by the Civic Federation, a government finance watchdog group.
The report found Rauner’s budget plan “does not fully account for the actual cost of essential state services and is based on projected savings that are unlikely to be realized.”
Those unlikely savings include reducing pension contributions by almost $750 million, largely by deferring payments, as well as cutting employee health insurance costs by $445 million. An additional $475 million in one-time savings would come from emptying the state’s rainy day fund and the sale of the James R. Thompson Center in Chicago, which requires legislative approval.
If that deficit is not addressed, the Civic Federation estimates the state’s backlog of unpaid bills could reach a new high of $12.8 billion by the end of the next fiscal year.
* Greg Hinz…
In a beyond-blistering report being issued today, the Chicago watchdog says the budget’s reported $3.5 billion deficit—a shortfall Rauner has suggested might be filled with spending cuts and perhaps some tax hikes—in fact is “more like $4.5 billion to $5 billion,” federation President Laurence Msall told me in a phone interview last evening.
* From the report…
The Civic Federation opposes Governor Rauner’s recommended FY2017 budget because it has an operating deficit of at least $3.5 billion and presents an insufficiently detailed plan for closing the gap. The $3.5 billion figure appears to be understated because it does not fully account for the actual cost of essential State services and is based on projected savings that are unlikely to be realized.
And how is this deficit understated? Read on…
The Civic Federation is concerned about the following aspects of the Governor recommended FY2017 budget:
* The General Funds budget has an operating deficit of at least $3.5 billion and an insufficiently detailed plan to close the gap between revenues and expenditures;
* After declining for the past three years, the State’s backlog of unpaid bills is expected to be significantly higher in FY2016 and FY2017 due largely to the phaseout of temporary income tax rate increases in the middle of FY2015;
* The State’s pension contributions are reduced by $748 million partly by deferring costs to future years;
* The proposal budgets a reduction of nearly one-fourth in group health insurance costs, with savings that depend on either a successful resolution to labor negotiations or the removal of health insurance from collective bargaining; and
* The Budget Stabilization Fund, the State’s only rainy day fund, is depleted to help balance the budget.
* The proposal to save nearly $198 million by moving seniors who are not eligible for Medicaid from the Community Care Program to a much less costly program could lead to increased institutionalization of elderly residents; and
* The use of one-time resources to pay for ongoing operating costs guarantees future deficits and continues the ongoing budget imbalance. These include fully depleting the Budget Stabilization Fund and the sale of the James R. Thompson Center and savings from not repaying FY2015 interfund borrowing.
* One big problem…
Because of the FY2016 budget impasse, the backlog of unpaid claims had grown to $2.9 billion by the end of February 2016 and was expected to increase by $200 million per month. Group health insurance is one of the main areas of government that has not received funding during the budget standoff. However, the costs of the program must be paid eventually due to State law and union contracts, and interest penalties will be paid at the same time.
* More…
The administration arrives at the $3.5 billion operating deficit for FY2017 by beginning with a maintenance budget that has a $6.6 billion shortfall. The Governor’s recommended FY2017 budget reduces the operating deficit to $3.5 billion through projected spending cuts of $2.6 billion and the use of $476 million in one-time revenues.
The $3.5 billion figure appears to significantly understate the shortfall because it does not fully account for the actual cost of essential State services and is based on projected savings that are unlikely to be realized. The administration has not released details about its proposed cuts to the Community Care Program, which seeks to keep elderly residents out of nursing homes, or any actuarial reviews of its proposal to save money on pension contributions. The recommended savings on overtime pay and group health insurance depend on changes that have so far been rejected by the State’s largest labor union.
The administration is also seeking to transform other areas of government, including streamlining the procurement process and modernizing the information technology system, according to the FY2017 budget document and the Governor’s State of the State speech in January 2016.
The Civic Federation supports efforts to increase the efficiency and effectiveness of government through major reforms. However, it is imprudent to base so many deficit-reduction measures on untested initiatives. Given the State’s dire financial plight and long history of fiscal mismanagement, the State cannot afford to ignore the discipline of budgetary balance. […]
The backlog of unpaid bills declined from $8.1 billion at the end of FY2012 to $5.2 billion at the end of FY2015. If additional appropriations are enacted with no additional revenues, the backlog is expected to reach $9.3 billion at the end of FY2016. It will remain at that level in FY2017 if the operating deficit in the proposed budget is closed. If the gap is not eliminated, the backlog could grow to $12.8 billion, or 37.5% of projected FY2018 revenues.
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