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Friday, Jun 10, 2016 - Posted by Rich Miller

* Yep

You learn to live like an animal in the jungle where we play

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ComEd/Exelon: $1 Billion Guaranteed Profits On $2.4 Billion In Programs

Friday, Jun 10, 2016 - Posted by Advertising Department

[The following is a paid advertisement.]

 While Exelon’s $2.6 BILLION nuke bailout “reeks” as the Quad City Times editorialized, perhaps even more outrageous is that ComEd/Exelon’s so-called “Next Generation Energy Plan” GUARANTEES more than $1 billion in profits on program spending of just $2.4 billion for the first 10 years

Instead of passing-through expenses with no mark-up for programs like energy efficiency, which has been done for years, NGEP forces ratepayers to borrow from ComEd and then pay guaranteed profits with no risk.  It’s like a massive statewide predatory lending scheme. 

  • Energy Efficiency: ComEd earns $804 million in guaranteed profits over ten years (NGEP presentation p12).

  • Solar Rebate: ComEd earns $113 million in guaranteed profits over ten years (NGEP presentation p17). If a person or business invests their own money in solar panels, ComEd receives guaranteed profits on part of that investment.
  • Microgrids: ComEd earns $106 million in guaranteed profits over ten years (applied rate of return from other programs to Microgrid spending).

 In total, ComEd/Exelon’s bailout bill is a $7.74 BILLION RATE HIKE over ten years. 

 

ENOUGH IS ENOUGH. 
JUST SAY NO TO THE COMED/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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Rauner vetoes $3.9 billion for social services, higher ed

Friday, Jun 10, 2016 - Posted by Rich Miller

* Veto message…

To the Honorable Members of
The Illinois Senate,
99th General Assembly:

The State has gone too long without a balanced budget. State vendors and service providers have gone too long without payment. We need real solutions to our fiscal problems, not unfunded, empty promises. So today I return Senate Bill 2046 and implore the General Assembly to pass a complete, balanced budget for Fiscal Years 2016 and 2017.

The Constitution requires the General Assembly to pass a balanced budget, but the General Assembly continues to abdicate that responsibility.

A balanced budget is not just a constitutional requirement or the right thing to do for taxpayers; it is the only possible way to manage State government over the long-term. Unlike the federal government, the State is unable to sustain deficit spending over multiple years without significantly impairing its operations. Case-in-point: the State is suffering from a cash-flow crisis from years of deficit spending, leading to a current bill backlog of more than $7 billion. The State is months or even years late in paying vendors and service providers, particularly from general funds.

Without a balanced budget, an appropriation is just an unfunded, empty promise – a check written from an over-drawn bank account.

Social service agencies and providers need real funding, not empty promises. Social services are being squeezed out by State debt and pension obligations, personnel costs, and other mandated spending. The only way to ensure that social services are fully funded is to pass a balanced budget, where spending is in line with revenues.

Senate Bill 2046 is an empty promise. The bill purports to appropriate $3.89 billion, including more than $3 billion in general funds that the State does not have, for higher education and social service providers, but provides no source of funding. Students, universities, community colleges, social service agencies, and our most vulnerable residents need real solutions and real funding, which Senate Bill 2046 does not provide.

Therefore, pursuant to Section 9(b) of Article IV of the Illinois Constitution of 1970, I hereby return Senate Bill 2046, entitled “AN ACT concerning appropriations”, with the foregoing objections, vetoed in its entirety.

Sincerely,

Bruce Rauner
GOVERNOR

* The bill passed the Senate with a strong veto-proof majority. It only received 65 votes in the House, which is six shy of an override. Three Democrats were absent. I suppose the Democrats will now try to flip one or two of their own votes and hope that a college-town Republican or two will cave. But that hasn’t worked in the past.

…Adding… Illinois AFL-CIO President Michael Carrigan…

“Gov. Rauner has shown, once again, that he puts politics above people. His veto keeps vital services like education, mental health services, addiction treatment, and grants for low-income college students from desperately-needed funding. His veto of SB 2046 prolongs and exacerbates the pain he created in the first place by forcing the budget crisis. He says one thing, does another, and then blames everyone else. Rauner is playing political games and people are getting hurt.”

…Adding More… SEIU Healthcare Illinois President Keith Kelleher…

“The governor’s veto of Senate Bill 2046 is more evidence this governor wishes to continue the hostage situation he has caused in Illinois. He has spent recent days blaming everyone but himself for holding up a budget until he gets his union-busting demands that have nothing to do with saving taxpayer dollars and everything to do with weakening rights and protections for Illinois’ working families and driving down wages and benefits for ALL workers.

“The governor needs to stop the blame game and do what’s right. We have seen too many suffer for his misplaced priorities.”

…Adding Still More… Statement from John Patterson, spokesman for Illinois Senate President John J. Cullerton…

“It’s disappointing that the governor chose to veto the entire proposal. The governor’s veto underscores the need for immediate action on the balanced, bipartisan emergency budget for human service providers that has been on his desk for nearly a month. His administration identified the dollars. Nearly $700 million in overdue payments could go to businesses as soon as he signs it.”

“Despite today’s veto, the Senate President remains optimistic that the governor will do the right thing and sign the balanced, bipartisan emergency budget for human service businesses. We would encourage him to do so quickly. These businesses, their employees, clients and families have waited long enough.”

  65 Comments      


Campaigning like children

Friday, Jun 10, 2016 - Posted by Rich Miller

* From a Democratic Party of Illinois e-mail entitled “Why Do Republican Senators Keep ‘Joking’ About The President’s Death?”

SHOT: Republican Senator David Perdue Jokes About Praying For Obama’s Death [Daily Beast, 6/10/16]

CHASER: Republican Mark Kirk Jokes He Supports A “Shoot-On-Sight” Order For Obama. [Politico, 6/18/08]

BOTTOM LINE: No Matter What These Republican Senators Think, These Jokes Aren’t Funny.

Um, actually, no.

Click the link provided and it’s clear that Kirk made what was then a fairly common mistake. He wasn’t joking about killing the guy.

* From Progress Illinois at the time

Since Barack Obama stepped onto the national stage, public officials from John Ashcroft to Ted Kennedy to Mitt Romney have mistakenly referred to him as “Osama.” Today, Mark Kirk added himself to this illustrious list. However, I think it goes without saying that he picked a most inopportune context.

Listen to Kirk express his support for a policy “where if we see Obama there’s a shoot-on-sight order”

Obviously, Kirk meant to say “Osama.” But geez … talk about a gaffe.

* The audio…

* The transcript

DON WADE: In fact, yesterday in a conference call, Barack Obama’s advisers were asked, “If Osama bin Laden were caught, should he get to challenge his detention in U.S. courts?” And the advisers said that — should that right to challenge detention that they get at Gitmo based on the Supreme Court ruling, should that be applied to bin Laden? — and Obama’s advisers said, “Yes.”

KIRK: Yeah, and I would much rather have a policy where if we see Obama there’s a shoot-on-sight order.

DON WADE: Well, okay. I’m with you, but I don’t know whether that’s going to make 67 — well it might –

ROMA: I don’t think Osama bin Laden — no one ever sights him.

* The Kirk apology at the time

“On Wednesday, I misspoke when talking with a local Chicago radio program regarding the current presidential campaign of Sen. Barack Obama as well as the status of our anti-terrorism efforts against Osama bin Laden. During the course of this conversation, I mistakenly referred to ‘Osama’ as ‘Obama.’ After being alerted to my mistake, I apologized to Sen. Obama for my misstatement and will take extra care to make sure I do not make such a mistake again.”

…Adding… IL GOP Chairman Tim Schneider…

“The Democratic Party of Illinois attack on Senator Kirk is baseless and reprehensible. They should immediately apologize and retract the statement. Politics is a tough business, but there’s no place in politics for insinuations of the sort that the DPI made today.”

  9 Comments      


Question of the day

Friday, Jun 10, 2016 - Posted by Rich Miller

* And here it is…

Gov. Bruce Rauner Announces Staff Transitions

Richard Goldberg Named Chief of Staff

CHICAGO - Governor Bruce Rauner announced today that Mike Zolnierowicz will transition from the Administration at the end of June. Richard Goldberg will be promoted to Chief of Staff.

“Z is a tremendous leader and a great Chief of Staff. He has done an amazing job leading our team through some very difficult circumstances,” Gov. Rauner said. “I am grateful that he will remain a close ally and adviser. I look forward to continuing to work with Z in the months and years ahead.”

Effective July 1, Richard Goldberg will assume the role of Chief of Staff.

“No one will work harder to fix the State than Richard. He is extremely smart, loyal and relentless,” Rauner said. “Richard has my full support and trust. I know he will do a great job in his role.” […]

About Richard Goldberg

Rich Goldberg currently serves as Deputy Chief of Staff for Legislative Affairs and Strategic Initiatives in the Governor’s Office. Previously, Rich served as Deputy Chief of Staff to U.S. Senator Mark Kirk of Illinois. A former National Security Fellow at the Foundation for the Defense of Democracies and a former Congressional Scholar at the Foreign Policy Initiative, Rich also serves our country as a Navy Reserve intelligence officer holding the rank of Lieutenant. In 2011, he deployed to Afghanistan as the senior intelligence officer for Electronic Attack Squadron 209 where he helped plan more than 200 air combat operations. For his service at home and overseas, Rich has been awarded two Joint Service Commendation Medals, a Joint Service Achievement Medal, a Navy Achievement Medal, the Afghan Campaign and NATO Medals, and other various decorations. Raised in Skokie, Rich attended Solomon Schechter Day School and Ida Crown Jewish Academy before earning a Bachelor of Science in Journalism from Northwestern University. He is also completing a Master’s in Public Policy and Administration at Northwestern.

* Our new overlord…

* The Question: Caption?

…Adding… Heh…


Harmon is the guy who coined the phrase “grass bowl” when describing Goldberg.

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Environmental group rails at AG Madigan, environmentalists

Friday, Jun 10, 2016 - Posted by Rich Miller

* I received this press release yesterday from a group calling itself Environmental Progress Illinois…

Over the last few months we’ve seen growing recognition by Democratic political leaders that efforts to close nuclear plants prematurely are disastrous for the climate. Hillary Clinton said efforts to prematurely retire nuclear plants “put ideology ahead of science and would make it harder and more costly to build a clean energy future.” Energy Secretary Ernie Moniz said, “We’re supposed to be adding zero-carbon energy sources not subtracting them.” And Senator Cory Booker endorsed extending the nuclear the same subsidy wind energy receives: “I know the challenges global warming [presents]… We’ve got to support the existing fleet.”

But while a growing number of Democrats have come to see the importance of fair and equal treatment of clean energy sources to solve climate change, a handful of elected officials remain ideologically opposed to nuclear power — even as they advocate subsidies for wind and solar.

Case in point is Illinois Attorney General Lisa Madigan. Last month Madigan helped kill efforts in the Illinois legislature to support two nuclear plants that are suffering from being excluded from federal subsidies and the Illinois state Renewable Portfolio Standard — both of which Madigan supports. “This proposal would force consumers to pay more only to boost the companies’ profits further,” said Madigan.

Democratic legislators in Springfield were spooked by Madigan’s comments, and the bill died. Days later, Exelon announced it would close the two plants, which would be replaced by natural gas that would increase carbon emissions the equivalent of adding two million cars to the road.

And yet, Madigan has long advocated subsidies for wind and solar and has enjoys a close relationship relationship with wind and solar advocates — some of whom are supported by the very same natural gas, wind and solar corporations that would benefit from the legislation she endorses.

Last August, Madigan advocated for for “clean jobs” legislation that includes large subsidies for wind and and solar — subsidies that would be paid for by higher rates paid by Illinois ratepayers. The so-called “clean jobs” coalition members includes the Environmental Law and Policy Center, which accepts money from natural gas company Invenergy, as well as solar and wind companies that stand to benefit from the closure of Illinois nuclear plants.

And last February, Madigan joined a conference call on the clean power plan that was arranged by the Sierra Club — an organization working to shut down nuclear plants in Illinois and California and replace them with natural gas and renewables. In 2012, the Sierra Club was forced to admit that it secretly took $26 million from natural gas interests. Recently, the Sierra Club has been urging its members to buy solar panels from Sungevity, which turns around and gives $1,000 per homeowner signed up to the Sierra Club.

Notably, if Quad and Clinton are closed, the increased emissions will be one-third of total emissions Illinois is supposed to reduce under the Clean Power Plan.
Madigan needs to address the inconsistency of her position by making a clear statement about why she can justify subsidies for solar and wind but not for nuclear. If she’s ideologically anti-nuclear, as she appears to be, then she needs to explain why. If she’s not, then she needs to explain her double standard. The 2,000 Clinton and Quad workers at risk of being laid off, and the people of Illinois more broadly, deserve an explanation.

I was a bit surprised to find out this group is backed by a couple of Pritzker family members. So the whacks at Madigan, the Sierra Club and the pretty widely respected ELPC were interesting.

* I asked the AG’s office for comment…

We have consistently supported the development of clean energy as a way to reduce carbon emissions and grow our economy. But we’ve also always argued that as the state takes steps to comply with the Clean Power Plan, we must ensure that consumers are treated fairly.

The claim that Exelon’s “nuclear plants … are suffering from being excluded from” subsidies is false. So is the allegation that supporting the development of wind and solar technology while resisting a profitable company’s demand for a state bailout is a “double standard.”

Exelon’s nuclear plants have benefitted from two rounds of Illinois subsidies already. First, Illinois electricity ratepayers paid all of the construction costs for the Illinois nuclear plants. Illinois consumers then paid again when Exelon and others convinced Illinois lawmakers to create a competitive market for electricity and consumers were charged for additional costs associated with the transition to a deregulated supply market. Exelon’s current bailout demand would amount to a third round of subsidies for these plants.

Supporting emerging energy technology – in this case the development of wind and solar technology through the renewable energy portfolio standard – is nothing new. Nuclear power received much greater support when the plants were being developed.

We do not want to see the loss of any Illinois jobs. But the notion that the only way to preserve jobs is to boost Exelon’s profits is false – and ignores Exelon’s and ComEd’s role in creating the current regulatory structure. When electricity costs were higher, Exelon and ComEd pushed for a competitive market for electricity generation, without state regulation. As a result, beginning in 2005, Exelon Generation has posted profits every year, at times over 30 percent a year. But now that natural gas and progress on energy efficiency efforts have driven down electricity prices, Exelon is claiming that some individual plants are not profitable and demanding that Illinois increase consumer charges to protect it from the competitive market.

Notably, Exelon is not offering to pay back the subsidies if the plants once again generate profits. And its supporters never mention that Exelon is a profitable company that could choose to use the company’s profits to preserve the two plants that Illinois consumers have already paid for. What is more, at the same time Exelon has asked Illinois lawmakers for a subsidy, it has successfully encouraged federal ratemaking officials to increase capacity charges, resulting in an additional $264 million in Illinois revenue for this year alone.

Finally, while we are not advocating for nuclear plant closures, it’s false to claim that lost nuclear generation would necessarily be replaced going forward by Illinois gas and coal plants. It is important to remember that Illinois is a net exporter of electricity, and if Illinois nuclear plants are needed to maintain a reliable source of electricity, then federal operators of the power grid will work to prevent their closure. In addition, wind and solar are cost competitive with gas and coal and are only getting cheaper. Encouraging renewables and energy efficiency will allow Illinois to meet our Clean Power Plan obligations cost effectively and without putting ratepayers on the hook to further pad the bottom line of a profitable company.

There are two points in there to think more about. The first is the long history of subsidizing Exelon’s nuke plants. And second is that we produce lots more electricity in this state than we consume.

  23 Comments      


It’s just a bill…

Friday, Jun 10, 2016 - Posted by Rich Miller

* After reading this story, I wasn’t sure about what the problem was

Governor Bruce Rauner is reviewing a new bill that would punish tow truck drivers who pull up behind disabled vehicles to solicit business.

Often, a car is towed away, even before police arrive to take an accident report.

A bill passed by the General Assembly would make it a felony — with prison time — for a tow truck driver who stops at an accident scene without being called by the car’s owner.

* But when reading the full story at the Tribune, I realized that this happened to my car once after an accident in Chicago a few years ago

“This is a major step forward as we attempt to put limitations on the rogue tow operators that have plagued many areas of the state,” Joe Wehrle, chief executive of Des Plaines-based nonprofit National Insurance Crime Bureau, said in a statement. “Motorists should not be subject to predatory towing practices that result in outrageous charges and tactics, such as holding cars hostage in salvage yards until the owner or their insurance company pay what amounts to a ransom to get the vehicle returned.”

Yep. Holding my car hostage is a good way to describe what they did. It was ridiculous and I couldn’t believe it was legal.

So, hopefully, this bill will be signed into law and then accomplish what it’s supposed to do.

* In other news

A proposal introduced this week would ban daily fantasy sports in Illinois.

State Rep. Scott Drury, a Highwood Democrat who has been a vocal opponent of a plan to legalize and regulate the games, sponsored a measure that would make operating games such a crime. Seasonlong fantasy contests would remain legal.

The debate over fantasy sports betting sites, such as those operated by FanDuel and DraftKings, has raged on for months. An industry-supported measure was making progress in the General Assembly, but opposition from casinos and other gambling interests and an allegation of unethical behavior by a lobbyist plagued the proposal and stalled it at the end of the spring legislative session. Drury says he’s concerned regulations aren’t tough enough.

“There’s been no real willingness from the industry to abide by regulations,” Drury said.

* Meanwhile

Expect the governor’s office to be sent about 400 pieces of legislation in the coming days and weeks. Right now there are only eleven bills on his desk. […]

Senate President John Cullerton’s spokesman, John Patterson, said lawmakers are managing the workload to avoid flooding the governor’s desk all at once. Patterson also said they send bills they consider priorities, including two that would increase state pay for home and child care workers to $15 an hour.

“We look at things that are trying to identify a lot of our priorities, things that would help working families,” Patterson said. […]

[State Rep. Jeanne Ives, R-Wheaton] said her government transparency bill is also a priority: “[T]here’s currently an injunction against a school board that wanted to delete closed session minutes that my bill is specifically written for so that a newly elected trustee can have access to closed session minutes.”

That Illinois Policy Institute radio network article was posted a couple of days ago. There are now 34 bills on Rauner’s desk.

* Related…

* Deadline Extended for Numerous Bills: House Speaker Michael Madigan, D-Chicago, extended the deadline to June 30 for more than 80 House and Senate bills. Madigan spokesman Steve Brown said it’s normal practice by the legislature to extend deadlines. Among the bills are appropriations for higher education, the auditor general’s operations and more.

* A look at bills Illinois lawmakers passed this session

  9 Comments      


Haven’t had an Oscar the Puppy pic in a while

Friday, Jun 10, 2016 - Posted by Rich Miller

* As I mentioned yesterday, my brother Devin and his daughter Isabel are visiting. We all went out for a long dinner last night and they’re heading to the Lincoln Museum today.

From Devin’s Facebook page: “Oscar makes for a great alarm clock for waking up sleepy daughters.” Heh…

I asked Izzie how she slept. “Not long enough,” she replied.

  13 Comments      


No summer school scheduled for CPS yet, while funding/progress is debated

Friday, Jun 10, 2016 - Posted by Rich Miller

* NBC 5

Chicago Public Schools can’t yet say if there will be a summer school program. In the past, thousands of students have participated. But for this summer, the current website doesn’t list any dates or details.

Oy. More kids in harm’s way.

* According to CPS, last summer’s program cost $16 million

While the city looks to state lawmakers, the new head of the Principals Association Troy LaRaviere blames irresponsible spending.

“We have almost 40 percent more schools and only two percent more students,” LaRaviere said. “Who does that? Who spends money that recklessly?”

* But did all those new schools (charter and otherwise) provide the competitive push that neighborhood schools needed? The Trib thinks so

A scant 16 years ago, Chicago Public Schools students were just as likely to drop out of high school as they were to graduate. Half finished, half didn’t. An appalling coin flip.

Today an astonishing turnaround gains steam: Almost 3 in 4 CPS students graduate, and that number is projected to rise, according to a new study from the University of Chicago Consortium on School Research. And, no, these higher rates are not the result of setting the academic bar lower, the study says.

CPS has boosted graduation rates for students of all races and income levels. That’s more than a measure of success at elite and charter schools. Neighborhood schools are now close to matching the traditionally higher graduation rates at charter schools. In other words, competition works for CPS. Big time. […]

For years, graduation rates at neighborhood schools lagged charters by 10 percentage points or more. But the neighborhood schools — non-charter and non-selective enrollment schools as defined by the consortium study — have closed that gap. Critics have long complained that charters siphon off the best students, leaving neighborhood high schools to languish. But the consortium research suggests the opposite: Innovative charter competition spurs all schools to work harder and smarter, to educate students better.

The full report is here.

It would be nice to hear the governor acknowledge this very real progress.

  10 Comments      


Because… Madigan!

Friday, Jun 10, 2016 - Posted by Rich Miller

* Yet another silly press release from the ILGOP

Gary Forby Says Legislature Has “Nothing to Do”
Waiting on Orders from Mike Madigan

Despite no budget and no funding for schools or prison, Senator Gary Forby yesterday said that the legislature has nothing to do and essentially admitted he is waiting on orders from Speaker Mike Madigan.

In response to a question about Mike Madigan canceling Wednesday’s planned House session, Forby responded “I think he [Madigan] thought we’d have something to do, but you know, we don’t have anything to do.” (45 sec)

“People are suffering right now in Illinois. Parents are rightly worried that summer school programs will be canceled and that schools may not open in time in the fall. Our prisons need funding to ensure that they continue to operate. It is outrageous that Gary Forby is waiting on orders from Mike Madigan to do anything about this. Republicans have proposed two bills to fund schools, government services, and prisons. Gary Forby should get back to work and vote on them.” - Illinois Republican Party Spokesman Steven Yaffe

* First of all, can somebody please tell me how Forby’s quote means he’s waiting on orders from Madigan? Anybody? Bueller?

Secondly, I listened to Forby’s interview. Here’s what he actually said

“I think he thought we’d have something to do, but you know, we don’t have anything to do. President Cullerton said ‘I’m not going to call you back until the leaders get together and come up something.’”

Forby went on to say that he believed neither Madigan nor Rauner want a budget before January.

And as far as “getting back to work,” Forby also said he’s in Springfield three days per week for bipartisan working group meetings. But he said the progress is so slow that it could be January before they do anything.

* Basically, this is just an attempt to pair the name “Forby” with the name “Madigan.” It doesn’t actually have to make sense, as long as they put those two names together and post it on the Interwebtubes for all to Google, or plant it in a “friendly” media outlet and then use it in a mailer.

  17 Comments      


Brinksmanship over operations

Friday, Jun 10, 2016 - Posted by Rich Miller

* As we’ve discussed before, the governor is accusing Speaker Madigan of creating a crisis in order to leverage a budget deal (and a resulting tax hike). Madigan’s path to this crisis is withholding approval of any appropriations to fund government operations. So, when Team Rauner claimed that the human services stop gap bill had “drafting errors” because the legislation didn’t appropriate any money to administer programs, the HDems countered by saying they had done it deliberately.

The bill overwhelmingly passed both chambers and Madigan wants Gov. Rauner to sign it

Madigan said of a bill that is sitting on Rauner’s desk and would provide a stopgap measure to fund social services. “He refuses to sign that bill because he continues seeking a state of crisis in Illinois.”

Rauner on Wednesday defended his decision not to sign that bill, saying it doesn’t have “essential services in it.”

“That bill is designed to still create a government crisis,” Rauner said.

The measure, approved by both the Illinois House and Senate would have authorized spending about $450 million from a human services fund, and another $250 million from special funds to be spent on items such as foreclosure prevention, and affordable housing.

* Along those lines, Illinois Department of Corrections Director John Baldwin recently penned an op-ed about his agency’s rapidly approaching crisis

Without a budget, the Corrections Department will be hard pressed to continue with critical reforms that improve operations and outcomes, increase safety, and enhance programs aimed at helping offenders be successful once they return to communities across this state. Furthermore, we will be severely challenged to meet our legal obligation to provide constitutionally adequate care to the men and women in our custody who have been diagnosed with mental illness.

Lack of a balanced budget or stopgap budget will impact the department’s ability to feed offenders, keep the lights on, run water and fulfill other day-to-day duties. Our vendors, including many mom-and-pop businesses, that provide food supplies, fire equipment examination services, building repair parts and maintenance services, depend on our payments. These local businesses will continue to suffer without payment and will eventually have to pull their services. That could cripple the department in a matter of days.

As subscribers know, the Rauner administration has been trying to pry loose a stopgap for DOC and some other agencies since April. No luck so far.

I figure a federal judge will probably have to step in if DOC can’t feed its prisoners, or if water, sewer or lights are shut off.

  27 Comments      


A look at a non-budget future

Friday, Jun 10, 2016 - Posted by Rich Miller

* Let’s revisit Comptroller Munger’s press release from yesterday so that we can take a quick look at what could be ahead if there is no new budget

While court orders, consent decrees and statutory authorization of some payments will continue, Munger noted that $23 billion in existing spending for schools, 911 call centers, domestic violence shelters, federally-funded social and human services and higher education will stop next month without new legislation. In addition, businesses and organizations that have signed contracts and provided services to the state this year face the very real possibility of having to go to Court to be paid in the absence of a stopgap budget. […]

Compounding Illinois’ challenges, Munger noted businesses that have provided goods and services to the state in good faith in the current fiscal year will continue to go unpaid without legislation in Springfield. Typically, unpaid vendors would go before the Court of Claims to compel payment, but without an appropriation that Court is not an option. As a result, the state faces the possibility of a wave of costly lawsuits.

* The 82 social service providers which sued the state for not honoring their contracts have a court hearing next month

Attorneys this week set a July hearing for the lawsuit, which Diana Rauner’s group joined weeks after it was first filed.

* I asked the attorney general’s office yesterday what happens to the St. Clair County court order regarding state employee pay when the new fiscal year begins…

The order reads: “…the court finds that this order authorizing payment is applicable to all other state employees [in addition to union members] at their normal rates of pay until further order of this court.”

So, until the court revisits this topic, workers will continue to be paid after June 30th.

* But lots of other things won’t get any funding if there is no budget deal by the end of the fiscal year. Back to the Munger release

Munger highlighted four budget bills that were passed by the General Assembly and signed by the Governor that will sunset in the new fiscal year. The legislation authorized spending that included:

    * $13.7 billion for K-12 education
    * $3.1 billion that funded local governments, 911 call centers, domestic violence shelters, lottery winners and other programs and services
    * $5.4 billion in federal spending including the Low Income Energy Assistance Program, child nutrition programs, HIV prevention and home-delivered meals for seniors
    * $600 million for colleges, universities and MAP grants

Discuss.

  42 Comments      


*** UPDATED x1 - Or not *** Lucas museum deal could be in the works

Friday, Jun 10, 2016 - Posted by Rich Miller

* Greg Hinz

Faced with a revolt on its board and a deal with the city to add hundreds of acres of new park spaces, leaders of Friends of the Parks are offering to drop the civic group’s opposition to locating the proposed Lucas Museum of Narrative Art on the lakefront.

The action could keep the $700 million prize here and not in San Francisco or Los Angeles, where museum patron George Lucas has threatened to move it. But the facility still could face obstacles.

Friends is expected to address the situation today, but I’m told there was a contentious meeting two days ago when the group’s attorney, Thomas Geoghegan, warned that the group could lose its case in court, and its board voted 12-4 to seek a negotiated settlement.

According to a source with first-hand knowledge, though group Executive Director Juanita Irizarry and Chair Lauren Moltz felt otherwise, a majority of the board is interested in negotiating a deal in which it drops its court case, which so far has blocked the museum, if the Emanuel administration agrees to provide more park space elsewhere. If the group loses the city’s request for an order of mandamus in the 7th U.S. Circuit Court of Appeals, it would lose its leverage to achieve even that.

Thoughts?

*** UPDATE ***  Tribune

“Contrary to recent reports, our board remains fully united on the preservation of our lakefront and ensuring that the public trust doctrine is not ignored,” Friends of the Parks Board President Lauren Moltz and Executive Director Juanita Irizarry said in a statement. “We do believe that the Lucas Museum has a place in Chicago for all to enjoy, but not at the expense of one of our most precious public resources. We have always said we were open to discussions. Anything else you hear is rumor and speculation. We are not dropping the lawsuit.” […]

“We’re absolutely continuing our lawsuit, and we have no plans to drop it,” said Tom Geoghegan, the group’s lawyer. “We think we have a good case.”

Geoghegan also said the group remains opposed to the city’s alternate plans to build the museum on the site of the McCormick Place East convention center.

  43 Comments      


New Jersey pension ruling won’t impact Illinois

Friday, Jun 10, 2016 - Posted by Rich Miller

* From Senate Democratic spokesman John Patterson…

Rich,

Yesterday, the New Jersey Supreme Court ruled that the state can freeze retirees’ cost-of-living adjustments.

    The New Jersey Supreme Court ruled on Thursday that retired public employees do not have a contractual right to receive increasing cost-of-living adjustments, a decision that is expected to save the state billions of dollars.

    Governor Chris Christie’s administration suspended the COLA payments, which are tied to inflation, as part of reforms in 2011 aimed at curtailing the ballooning cost of public pensions.

I asked our pension expert Eric Madiar to weigh in.

The short answer is that the Illinois Constitution is different than the New Jersey Constitution.

Here’s Eric’s summary:

    The New Jersey court held that because of the New Jersey Constitution the legislature lacked the power to create a binding contractually enforceable pension right. The creation of such a right was tantamount to taking on state debt in violation of the state constitution. The court stated that the legislature can only take on state debt and commit itself to the needed appropriations to fund that debt with voter approval. Since that did not occur when the pension right was passed, it was not a binding promise when the legislature enacted it.

…Adding… More from Patterson…

Eric re-read the opinion this morning and offers this addendum noting that the New Jersey court looked at what the Illinois court had done and drew a distinction between the two constitutions.

    The New Jersey Supreme Court held that COLAs are not protected pension benefits and are distinct from the pension annuity that a retiree is entitled to receive under New Jersey pension law. The New Jersey court focused on the lack of clear and unmistakable statutory language conferring COLA increases as a protected pension benefit. This is unlike what occurred in Illinois where the Illinois Supreme Court found that COLAs are part of the protected benefits that cannot be unilaterally changed. Indeed, in footnote 7 of the decision, the New Jersey Supreme Court notes how the statutory system regarding COLAs in Illinois is different from New Jersey.

  43 Comments      


*** UPDATED x1 *** Z moves to campaigns, Goldberg moves up to chief

Friday, Jun 10, 2016 - Posted by Rich Miller

* Subscribers were told about this late last night. It’s been brewing for weeks

Rauner chief of staff Mike Zolnierowicz will vacate his government position by July 1 and act as the chief party political strategist as Republicans look to gain legislative seats and emerge from their superminority status in both chambers. The decision is expected to be announced today.

Taking his place as chief of staff is Richard Goldberg, a deputy governor of legislative affairs who in the past has had a rocky relationship with rank-and-file Democrats. Goldberg, however, has been part of recent leaders’ meetings and budget discussions […]

Zolnierowicz’s change is another sign that the two sides are gearing up for an all out war this November, as Republicans look to pick up seats and keep Illinois House Speaker Mike Madigan from expanding his already substantive power base. The odds are with the Democrats in November, given Illinois’ makeup and election year voter tendencies typically favor Dems. However, Rauner has already dispensed $5 million to the Illinois Republican Party, in an effort to snag seats from Madigan’s majority. […]

Zolnierowicz is not expected to return to his government post after the November elections, instead looking toward Rauner’s reelection campaign.

The legislative Democrats have a worthy campaign foe and the Prince of Snarkness is now chief of staff.

Interesting times.

*** UPDATE ***   Greg Hinz says Governor Rauner is girding for war with his choice of Richard Goldberg as chief of staff

Rauner aides declined to speak on the record before the announcement but say Goldberg is being unfairly slammed.

“Goldberg has been involved in budget discussions from the beginning, trying to find creative solutions to difficult issues,” said one senior Rauner hand. And, as chief of staff, his role will be different from that of lobbyist, that source added.

But another conceded that, with Springfield stalemated, there is no reason not to play hardball. […]

“After 18 months, Democrats have no intention of working things out,” my source said. “The speaker wants to hold schools hostage to get a higher tax rate.”

  104 Comments      


Protected: SUBSCRIBERS ONLY - Today’s edition of Capitol Fax (use all CAPS in password)

Friday, Jun 10, 2016 - Posted by Rich Miller

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S&P also lowers Illinois’ ratings

Thursday, Jun 9, 2016 - Posted by Rich Miller

* Oy

S&P Global Ratings downgraded Illinois’s ratings a notch, citing the state’s weakened financial management and budget position, while rival Fitch Ratings placed the state’s ratings under review for a potential downgrade.

S&P lowered the ratings on Illinois’s general-obligation bonds to triple-B-plus from double-A-minus. The new rating is three levels above junk territory and carries a negative outlook.

S&P said that the state’s continuing lack of a budget plan has left Illinois “with unmanaged spending under a de facto budget, potentially for a second year, and that is adding to the state’s sizable liabilities.”

Fitch, meanwhile, also placed the state’s $550 million bond issue that is expected to sell June 16 on ratings watch negative and rated it at triple-B-plus, or three notches above junk territory. Fitch says it expects to make a decision on the rating with six months, based on the progress of the state’s budget process.

I’m hoping nobody feels the need to revise their numerous press releases from the Moody’s downgrade. My brother and my niece are coming over soon.

  21 Comments      


“Not an oppo dump”

Thursday, Jun 9, 2016 - Posted by Rich Miller

* From a pal in the Kirk campaign…

I’m not sending this to you as an oppo dump, just providing background context. Duckworth continues to double down on the Trump stuff…saying we were silent too long, yadda yadda…but she never once denounced Blagojevich. In fact, she endorsed him while he was under investigation and then defended him after he hired her.

* My reply…

Ten years ago?

* His response…

When has she ever broken from her party? Nearly every Dem dumped on Rod…but not her. Yet they keep dumping on us for SCOTUS and now Trump.

Good point. Kirk has broken with his national party twice in recent weeks.

* So, here’s the “not an oppo dump,” um, dump…

In June 2006, US Attorney’s Office Announced An Investigation Into Blagojevich’s Administration For Hiring Fraud

In 2006 It Was Revealed US Attorney’s Office Was Investigating The Blagojevich Administration For “Endemic Hiring Fraud.” “The inspector general’s findings take on added significance after Friday’s disclosure that U.S. Atty. Patrick Fitzgerald is looking into allegations of “endemic hiring fraud” within Blagojevich’s administration.” (Ray Long, Rick Pearson And John Chase, “Watchdog rips state hiring,” Chicago Tribune, 7/2/06)

An IG Report Released In July 2006 Found The Blagojevich Administration Was Subverting Veterans Preference Hiring Laws

Blagojevich’s Patronage Office “Played A Key Role” In “Subverting State Laws That Give Veterans A Preference.” The report said Blagojevich’s patronage office–known formally as the governor’s Office of Intergovernmental Affairs–played a key role with compliant agency officials in subverting state laws that give veterans a preference in getting state employment and ban political considerations in hiring for most state jobs. (Ray Long, Rick Pearson And John Chase, “Watchdog rips state hiring,” Chicago Tribune, 7/2/06)

The Report Revealed “A Concerted Effort To Subvert The Laws Including Veterans’ Preference.” “Evidence shows non-compliance with state hiring laws,” the inspector general wrote. “In fact, it reveals a concerted effort to subvert the laws including veterans’ preference and the hiring process” for jobs protected under a 1990 U.S. Supreme Court ruling known as the Rutan decision. (Ray Long, Rick Pearson And John Chase, “Watchdog rips state hiring,” Chicago Tribune, 7/2/06)

In August 2006, Duckworth Said She Would Support Blagojevich’s Re-Election

In An August 2006 Letter To Then-Opponent Peter Roskam, Duckworth Said She Would Support Blagojevich’s Reelection Campaign. In a letter back to Roskam, Duckworth says she supports Blagojevich’s re-election. “But that does not mean that I give him, or anyone else, a pass on ethical behavior,” she said in the letter. “Should he or his administration be proven to have engaged in illegal or unethical actions, they should suffer the consequences.” (John Patterson, “Roskam asks Duckworth if she backs Blagojevich,” Chicago Daily Herald,” 8/4/06)

In November 2006, Blagojevich Appointed Duckworth As Director Of The IDVA

November 21, 2006 – Governor Rod Blagojevich Appointed Duckworth To Run The Illinois Department Of VeteransAffairs. (Lynn Sweet, “Gov Picks Duckworth For Veterans Affairs,” Chicago Sun-Times, 11/21/06)

As IDVA Director, Duckworth Touted Blagojevich’s Commitment To Hiring Veterans

On One Of Her First Days On The Job, Duckworth Said “Governor Blagojevich Is Committed To Ensuring That Veterans Can Put Their Many Skills To Use Serving The Citizens Of Illinois…” “‘Governor Blagojevich is committed to ensuring that veterans can put their many skills to use serving the citizens of Illinois, and I applaud IDOT for making this extra effort to reach out to find qualified veterans to fill these very demanding and important jobs,’ said IDVA Acting Director Tammy Duckworth. ‘There are many great career opportunities for veterans in state government, and this is one that many veterans are extremely well-suited for.’” (Illinois Department Of Transportation, “State Seeks Veterans To Fill Illinois Department Of Transportation Highway, Emergency Traffic Patrol Posts In Cook County,”Press Release, 1/2/07)

​Infractions Doubled at IDVA Under Duckworth’s Tenure​

The Auditor General Reported Twice As Many Findings For The Audit Ending In June 2008 Than The Previous Audit. (Illinois Auditor General, “Compliance Examination: State Of Illinois Department Of Veterans’ Affairs,” For The Two Years Ended June 30, 2008, p.4)

Illinois Attorney General Lisa Madigan Is Representing Duckworth. “Illinois Attorney General Lisa Madigan’s office is representing Duckworth, and has filed to have the case dismissed.” (Monique Garcia and Duaa Eldeib, “Walsh, Duckworth Skirmish Over Lawsuit,” Chicago Tribune, 10/11/12)

  29 Comments      


ComEd/Exelon: $1 Billion Guaranteed Profits On $2.4 Billion In Programs

Thursday, Jun 9, 2016 - Posted by Advertising Department

[The following is a paid advertisement.]

 While Exelon’s $2.6 BILLION nuke bailout “reeks” as the Quad City Times editorialized, perhaps even more outrageous is that ComEd/Exelon’s so-called “Next Generation Energy Plan” GUARANTEES more than $1 billion in profits on program spending of just $2.4 billion for the first 10 years

Instead of passing-through expenses with no mark-up for programs like energy efficiency, which has been done for years, NGEP forces ratepayers to borrow from ComEd and then pay guaranteed profits with no risk.  It’s like a massive statewide predatory lending scheme. 

  • Energy Efficiency: ComEd earns $804 million in guaranteed profits over ten years (NGEP presentation p12).

  • Solar Rebate: ComEd earns $113 million in guaranteed profits over ten years (NGEP presentation p17). If a person or business invests their own money in solar panels, ComEd receives guaranteed profits on part of that investment.
  • Microgrids: ComEd earns $106 million in guaranteed profits over ten years (applied rate of return from other programs to Microgrid spending).

 In total, ComEd/Exelon’s bailout bill is a $7.74 BILLION RATE HIKE over ten years. 

 

ENOUGH IS ENOUGH. 
JUST SAY NO TO THE COMED/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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Madigan: “Rauner has created the crisis he so publicly sought”

Thursday, Jun 9, 2016 - Posted by Rich Miller

* Press release…

Madigan: Credit Downgrade Caused by Rauner’s Desire to Cause Crisis

SPRINGFIELD, Ill. – House Speaker Michael J. Madigan issued the following statement after Moody’s Investors Service downgraded Illinois’ credit rating Wednesday:

“Governor Rauner has created the crisis he so publicly sought. The crisis he wanted when, shortly after taking office, he said ‘Crisis creates opportunity. Crisis creates leverage … and we’ve got to use that leverage of the crisis…’

“It’s an outrage that we have gone nearly a year without a state budget. This downgrade is directly attributable to Governor Rauner’s reckless decision to hold the state hostage for more than a year and to create the crisis he desired. The governor’s own proposed budgets are billions of dollars out of balance, and, for almost a month, a bipartisan plan to provide emergency funding for human services providers and our most vulnerable has languished on Governor Rauner’s desk. He refuses to sign that bill because he continues seeking a state of crisis in Illinois.

“We are committed to continuing our negotiations with the governor on his agenda, but we won’t support an agenda that benefits the wealthy and corporations at the expense of middle-class families. The governor needs to work with legislators to pass a budget that ensures we continue to fund education, health care for the frail elderly and persons with disabilities, and other basic services that Illinois families rely on, rather than refusing to allow government to function in order to continue his manufactured crisis.”

Yes, it most certainly is an outrage that we still don’t have a budget. But, like Rauner, Madigan is no innocent bystander. Ain’t nobody’s hands clean here.

* And Madigan knows that Rauner wants some changes to that human services stopgap approp bill, but Madigan has so far not negotiated a trailer bill. Why? Because Rauner wants operating money and Madigan doesn’t want to approve any operations cash. Why? The only reason would be is that he wants to hasten a meltdown to bring Rauner crawling to the table.

This is why the governor says Madigan is trying to create a crisis and then wants to use that crisis to leverage a tax hike. But Madigan is simply doing what Rauner has been doing for over a year - using a budget crisis to leverage economic and other reforms. Heck, even the Illinois Chamber is no longer willing to wait for that Rauner game to play itself out.

* We have two powerful guys trying to leverage each other with crises. And that’s wreaking real havoc on real people.

  63 Comments      


It’s Munger’s turn to take a hit over Trump

Thursday, Jun 9, 2016 - Posted by Rich Miller

* Tina Sfondeles

Illinois Comptroller Leslie Geissler Munger — one of the state’s highest-ranking Republicans — isn’t attending the Republican National Convention in July, citing her duties in dealing with the state’s budget mess.

Munger confirmed on Thursday that the Cleveland convention isn’t on her schedule. And she wouldn’t comment on whether she supports Donald Trump, the presumptive Republican presidential nominee.

* React from Munger’s Democratic opponent, Susana Mendoza…

“Donald Trump’s comments were racist, sexist and un-American. If Leslie Munger won’t stand up to Trump, then her silence is a betrayal of our American values. Fact is if Munger won’t speak truth to Donald Trump, she won’t speak truth to those in power in Springfield who continue the mess that is state government.” -Susana Mendoza

I’m assuming Munger said what she said to avoid stepping on her fiscal message, but, man, that Trump sucks all the oxygen out of just about anything that goes near him.

  26 Comments      


Yep, just keep talking us up like that

Thursday, Jun 9, 2016 - Posted by Rich Miller

* The governor had this to say the other day about the now-shuttered Mitsubishi manufacturing plant

“Our administration has worked hard to find a buyer, another manufacturing firm that would come and take over that plant because they could virtually get it for free and there’s already trained people to work in it,” Rauner said. “Nobody is interested because of our regulations.”

* But

Mike O’Grady, Vice President with the McLean County Economic Development Center, said not so fast.

“We are cautiously optimistic,” O’Grady said. “Is it tomorrow? No. They are private, these are quiet conversations. These things don’t happen overnight.”

O’Grady told WJBC’s Scott Laughlin the EDC gets multiple calls every week from interested parties and in some cases, there have been follow up conversations.

  42 Comments      


Question of the day

Thursday, Jun 9, 2016 - Posted by Rich Miller

* From the twitters…


Bond debts are paid via continuing appropriations.

…Adding… From the comptroller’s spokesman…

Hi Rich,

The Comptroller’s statement that Paris tweeted was in the context of how irresponsible it is to be entering a second fiscal year without a budget. But to be clear, when she was asked point blank if she could see any scenario under which the state would default on a bond payment, she unequivocally said “no” – bond payments are a top priority and will always be made on time.

Thanks,

Rich Carter

* Treasurer Michael Frerichs

Illinois’ General Obligation debt remains a sound investment because the state’s constitution ensures that bond holders will be repaid. However, repeated downgrades weigh heavily on how individuals and investors perceive Illinois’ economic and political climate. Negative perceptions never are beneficial nor productive.

* The Question: Would you buy an Illinois bond? Take the poll and then explain your answer in comments, please.


survey tool

  61 Comments      


Gonna be a while

Thursday, Jun 9, 2016 - Posted by Rich Miller

* Riopell

State lawmakers and top elected officials have missed their last two paychecks as the Illinois budget war continues, and they might not get their April payment until July.

April was when Illinois Comptroller Leslie Munger decided to put legislative paychecks into the same long line for payment that everyone else waiting for payment in the state is standing in. […]

On Monday, Carter said Munger’s office had 53,752 vouchers awaiting payment in their office. The state pays them as it gets more money in.

By Wednesday, that number had risen to 74,852, and Illinois was on track to pay bills about 48 working days late, he said.

And if no real budget passes, then that wait’s gonna be a lot longer.

  21 Comments      


Not our biggest problem

Thursday, Jun 9, 2016 - Posted by Rich Miller

* The Tribune on yesterday’s Rauner presser

And as for the tone, the governor said all involved in the impasse “are adults” and “should be able to move it aside” and work toward a compromise.

“And anybody who says ‘Well, we can’t work together because you were mean to me yesterday,’ Oh, come on,” Rauner said. […]

Nodding to the November election that’s dominated most of the action in Springfield, Rauner said the sides can sling political barbs but still work toward a solution.

“We’re in election mode now,” Rauner said. “But we can chew gum and walk at the same time.”

As I’ve said before, too many Democrats act like delicate little flowers whenever Rauner runs his mouth.

* Would it help if he toned it down? Sure it would. He acts like public bullying will get people to the negotiating table. It’s like the Chicago Tribune editorial board is suddenly our governor. It drives me nuts whenever he goes on one of his patented rants. He most definitely does not appear gubernatorial when he rages like that. It’s unseemly.

And he can be thin-skinned himself. When Mayor Emanuel compared him to Donald Trump he compared Emanuel to Karen Lewis and said the mayor wasn’t being “helpful.” Yeah? Well calling the Senate President “corrupt” ain’t all that “helpful” either, dude. Live by the sword, and all that.

But, really, it’s not like the Democrats don’t do much of the same. Remember that big AFSCME rally when Senate President Cullerton said something along the lines of Rauner thinks you make too much money? Remember last year when Speaker Madigan compared Rauner to Blagojevich? How many House and Senate floor speeches have we heard excoriating the governor? And then there was Emanuel comparing him to Trump and saying it’s no wonder that his wife sued him. Lots of Dems cheered every time they heard those comments then cried in horror when Rauner made his own.

C’mon.

* So, it would be great if everyone would sheathe their swords for a while, but I don’t see that happening. Professionals work through problems even when under fire. They’re just gonna have to concentrate on doing that.

  40 Comments      


No longer worth the wait?

Thursday, Jun 9, 2016 - Posted by Rich Miller

* From an op-ed written by Illinois Chamber President Todd Maisch last October entitled “Illinois needs Rauner to hang tough,” with emphasis added

The real question is whether the status quo in Illinois is acceptable. To a large majority of our members—the people whom Illinoisans expect to create jobs and prosperity—the answer is an emphatic “No!”

The chamber recognizes that the current budget stalemate is causing real pain across our state. I’ve spoken with many businesses that are waiting on the state to pay them millions of dollars for goods and services already provided. Local governments are awaiting vital infrastructure funding; university students wonder if tuition grants are coming.

Four months is a long time to go without a budget. But it pales in comparison to a 12-year wait for state government to return to fiscal sanity, basic competency and a partnership with business that allows both to prosper. Those things are more than important. They are vital. They are also hard and worth the wait.

Hang in there, Governor.

* Well, it’s apparently no longer “worth the wait.” Maisch and others held a press conference today to warn about the consequences of not having a state budget…

Illinois is at risk of losing the 2016 road and infrastructure construction season due to the state’s budget impasse. That will result in an immediate loss of 25,000 middle class jobs and cost taxpayers an additional $3 million a day to keep motorists safe around closed construction sites, according to the Transportation for Illinois Coalition.

But, those costs simply scratch the surface. An absence of appropriations to maintain the 2016 construction season will carry consequences far into the future and impact programs well beyond the state’s transportation infrastructure.

Members of the Coalition, along with others concerned about the future of the state’s transportation infrastructure, are calling attention to the risk Illinois is facing, in the hopes of spurring both temporary and long-term solutions.

“Businesses want to choose Illinois in order to take advantage of our location, freight infrastructure, and transportation infrastructure. If Illinois continues to allow its infrastructure to decline it threatens every company shipping goods into or out of Illinois,” said Todd Maisch, president and CEO of the Illinois Chamber of Commerce and co-chairman of the Transportation for Illinois Coalition.

Um, OK. I concur. Businesses do want to take advantage of our location and infrastructure. But you’d never know that if you followed this Turnaround Agenda fight.

They focused today on the very real need for a temporary budget in order to keep the dollars flowing to projects. I happen to agree with them… now.

Hang in there, Todd.

  54 Comments      


Protected: SUBSCRIBERS ONLY - Supplement to today’s edition and some transition news

Thursday, Jun 9, 2016 - Posted by Rich Miller

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*** UPDATED x3 - ILGOP, Rauner blame Madigan *** State bond rating cut

Thursday, Jun 9, 2016 - Posted by Rich Miller

* Reuters

Moody’s Investors Service cut Illinois’ credit rating by one notch to Baa2 with a negative outlook on Wednesday, citing a political stalemate that has prevented the state from addressing its budget imbalance and big unfunded pension liability.

The downgrade to just two steps above the “junk” level affects about $26 billion of Illinois’ general obligation debt, as well as $2.75 billion of sales tax revenue bonds. […]

“The state’s structural budget gap equals at least 15 percent of general fund expenditures, if the state’s underfunding of pension contributions is included,” Moody’s said in a statement.

It added that without a budget plan to offset a revenue loss from 2015’s rollback of income tax rates, Illinois’ chronic backlog of unpaid bills could reach prior peak levels of about $10 billion in the coming months.

* From Moody’s

Moody’s Investors Service has downgraded the State of Illinois’ general obligation (GO) rating to Baa2 from Baa1, affecting approximately $26 billion of debt. In connection with this action, we have also downgraded the rating on bonds connected to the state’s GO credit. Build Illinois sales tax revenue bonds, of which $2.75 billion are outstanding, were also downgraded one notch to Baa2. Subject-to-appropriation bonds, primarily convention center expansion bonds sold by the state’s Metropolitan Pier and Exposition Authority ($2.7 billion outstanding), were downgraded to Baa3 from Baa2. We have assigned a Baa2 to the state’s planned issuance of $550 million of General Obligation Bonds, Series of June 2016, which are scheduled for a competitive sale on June 16. The outlook associated with all of these ratings remains negative.

The rating downgrade reflects continuing budget imbalance due to political gridlock that for more than a year has kept Illinois from addressing revenue lost due to income tax cuts that took effect in January 2015. The state’s structural budget gap equals at least 15% of general fund expenditures, if the state’s underfunding of pension contributions is included. If this gap continues into a significant portion of the coming fiscal year, it will put pressure on operating fund liquidity and add to an already sizable bill backlog. We project that the backlog will surpass prior peak levels (about $10 billion) in coming months, in the absence of a consensus on a budget that offsets the loss of revenue from the 2015 tax cuts. The potential for economic underperformance or unplanned liquidity demands heightens the risk of further financial weakening. Illinois benefits from a large and diverse economic base, legal provisions that ensure continued payment on debt even with no enacted budget, and powers common to US states, such as freedom to increase revenues or constrain spending. However, the long-running partisan standoff is impeding Illinois’ ability to exercise these powers or to make progress addressing unfunded retiree benefit liabilities that far exceed those of other states.

Rating Outlook

A negative outlook is consistent with the potential for additional credit weakening after an extended impasse that has left the state increasingly vulnerable to adverse revenue trends, unplanned liquidity demands, and increasingly underfunded retiree benefit plans.

Factors that Could Lead to an Upgrade

    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

    Enactment of recurring fiscal measures that support expectation of sustainable, structural balance

Factors that Could Lead to a Downgrade

    Persistent and growing structural imbalance that leads to reduced liquidity and continuing growth in payment backlog

    Failure to enact legislation providing for payment on subject-to-appropriation obligations

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

*** UPDATE 1 ***  Rauner administration…

“When the General Assembly adjourned without passing a balanced budget, the Administration warned the super majority in the legislature there would be consequences. This report underscores the need for real structural changes to repair the years of unbalanced budgets and deficit spending by the majority party on Illinois’ finances. Every rank-and-file Democrat who blindly followed the Speaker down this path is directly responsible for the downgrade.”

*** UPDATE 2 *** From the Illinois Republican Party…

“Mike Madigan caused this credit downgrade. He has been driving Illinois into a financial ditch for three decades and just led the charge to increase Illinois’ debt by another $7 billion. Governor Rauner has been pushing for reforms that would grow our economy, balance the budget, and save the pension system since Day One, but Mike Madigan has used every tool available to him to block financial reforms that will help this state. Mike Madigan owns this credit downgrade.” – Illinois Republican Party Spokesman Steven Yaffe

*** UPDATE 3 *** Press release…

Illinois State Treasurer Michael Frerichs today released the following statement after Moody’s decision to lower Illinois’ credit rating for the second time since the budget impasse.

“This credit downgrade is disappointing because it is avoidable,” said Frerichs. “Illinois remains a good investment, but the focus on non-budgetary items is driving up the cost of government. Higher interest rates when we borrow money mean fewer dollars for teachers, child care workers, and others who serve our most vulnerable.”

“I continue to urge Governor Rauner and the Illinois General Assembly to put their differences aside and get a budget in place before more people are hurt.”

Bonds are a tool the state uses to borrow money. The Treasurer’s Office receives and invests the proceeds of the bond sale. The lower a state’s credit rating, the higher the interest rate on the loan. Interest payments will easily exceed current investment yields.

Illinois’ General Obligation debt remains a sound investment because the state’s constitution ensures that bond holders will be repaid. However, repeated downgrades weigh heavily on how individuals and investors perceive Illinois’ economic and political climate. Negative perceptions never are beneficial nor productive.

  103 Comments      


Sandack gets blunt

Thursday, Jun 9, 2016 - Posted by Rich Miller

* Bernie Schoenburg asked Gov. Bruce Rauner yesterday about former Gov. Jim Edgar’s comments that the problem with the stalemate is that Rauner won’t agree to a budget without Turnaround Agenda reforms.

Rauner dodged and weaved and refused to answer the question. Bernie persisted and finally Rep. Ron Sandack stepped in over Bernie’s objections and answered the question himself…

“I respect Gov. Edgar a lot. I was part of the Edgar Fellows. But, to be fair, his tenure and stance is distinctly different than the f**d up position we find ourselves in right now.”

Ouch.

But he’s not wrong on that point. Things are a heckuva lot worse now than they were back then.

* The exchange begins at the 21:40 mark of this BlueRoomStream.com video

  86 Comments      


*** UPDATED x2 *** Munger to hold 11 am press conference

Thursday, Jun 9, 2016 - Posted by Rich Miller

*** UPDATE 1 ***  WGN’s live stream is here.

*** UPDATE 2 *** Press release…

Comptroller Leslie Geissler Munger on Thursday warned that hardship caused by the state’s ongoing budget impasse will grow significantly if Illinois enters a new fiscal year on July 1 without further action in Springfield.

While court orders, consent decrees and statutory authorization of some payments will continue, Munger noted that $23 billion in existing spending for schools, 911 call centers, domestic violence shelters, federally-funded social and human services and higher education will stop next month without new legislation. In addition, businesses and organizations that have signed contracts and provided services to the state this year face the very real possibility of having to go to Court to be paid in the absence of a stopgap budget.

“Our social service network is being torn apart, our most vulnerable residents are losing critical services, our colleges and universities are on the verge of collapse, and businesses and organizations are being forced into mass layoffs that are leaving families with no way to meet their financial obligations,” Munger said. “All of this is happening because of the state’s failure to pass a budget. It’s unconscionable, it’s irresponsible and frankly, it violates our Constitution.”

Munger highlighted four budget bills that were passed by the General Assembly and signed by the Governor that will sunset in the new fiscal year. The legislation authorized spending that included:

    $13.7 billion for K-12 education
    $3.1 billion that funded local governments, 911 call centers, domestic violence shelters, lottery winners and other programs and services
    $5.4 billion in federal spending including the Low Income Energy Assistance Program, child nutrition programs, HIV prevention and home-delivered meals for seniors
    $600 million for colleges, universities and MAP grants

Compounding Illinois’ challenges, Munger noted businesses that have provided goods and services to the state in good faith in the current fiscal year will continue to go unpaid without legislation in Springfield. Typically, unpaid vendors would go before the Court of Claims to compel payment, but without an appropriation that Court is not an option. As a result, the state faces the possibility of a wave of costly lawsuits.

“The best thing Springfield can do is pass a balanced budget that addresses the holes in this year’s budget and allows for those who rely on government to plan for the year ahead, as is required by the State Constitution,” Munger said. “And at the very least, our state owes it to its taxpayers to pass funding that allows our schools to open, ensures vendors are paid for services already provided and keeps critical state government operations running.”

[ *** End Of Updates *** ]

* I’ll try to do a live feed if we get video or audio [ADDING: I have yet to find a live feed, but Munger is live-tweeting the presser, so click here]…

MUNGER TO DETAIL CONSEQUENCES OF CONTINUED IMPASSE

Comptroller to detail ramifications of further Springfield inaction

CHICAGO - Comptroller Leslie Geissler Munger will hold a news conference Thursday to discuss the ramifications of entering another fiscal year on July 1, 2016, without a budget. Munger will discuss potential payment changes in the new fiscal year and challenges involved in paying for services completed in the current year before taking questions from media at the James R. Thompson Center, 100 W. Randolph St.

SCHEDULE FOR THURSDAY, JUNE 9, 2016:

WHO: Illinois State Comptroller Leslie Geissler Munger

WHAT: News Conference on State Budget Impasse

WHEN: 11:00 a.m. Thursday, June 9

WHERE: Blue Room, 15th Floor
James R. Thompson Center

Predictions?

  34 Comments      


*** UPDATED x1 - School water tested positive for lead *** School tour derided as “stunt”

Thursday, Jun 9, 2016 - Posted by Rich Miller

* Press release

North Side legislators, educators to Rauner: Come see our neighborhood schools for reality check

Legislators invite Rauner to tour local elementary school, say his “crumbling prisons” comment, anti-Chicago rhetoric lay bare his disconnection from communities

WHO: North Side legislators Rep. Will Guzzardi, Rep. Ann Williams, Rep. Jaime Andrade and Rep. Rob Martwick, Brentano Math and Science Academy Principal Seth Lavin, local parents and community members

WHERE: Brentano Math and Science Academy, 2723 N Fairfield Ave Chicago, IL 60647

WHEN: TODAY, Thursday, June 9, 2016, 9:30AM

WHAT: North Side legislators, educators and public school parents will hold a press conference on Thursday morning to invite Gov. Bruce Rauner to tour Brentano Math and Science Academy, a highly regarded elementary school in Chicago’s Logan Square neighborhood. The group will underscore to the Governor the high quality of Chicago’s neighborhood schools and the detrimental impact of his divisive anti-Chicago rhetoric on the children and families he represents. The invitation comes days after Gov. Rauner made comments comparing Chicago public schools to “crumbling prisons.”

Members of the media will tour the facilities at Brentano, observing high-quality instruction and engaging programming in a school that serves predominantly low-income Latino families. Of note will be the contrast to the Governor’s description of schools that “have metal on the windows” and “police officers and security officers everywhere.”

* From the Illinois Republican Party

Reality Check: North Side Democrats Fake Concern Over Lack of Education Funding

Choose school tour stunt over making sure our schools actually open on time

“For those that claim to care about giving every child a quality education, it is stunningly hypocritical that Democratic State Reps. Will Guzzardi, Ann Williams, Jaime Andrade and Rob Martwick would spend this morning playing politics, rather than working in Springfield to pass a clean education bill. This is nothing but a political stunt to distract from the fact that House Democrats have failed to even vote on legislation to ensure that schools open on time in the fall. Instead of spending their morning conducting a politicized school tour, these representatives should get down to Springfield immediately and work across the aisle to pass a balanced, paid-for education bill.” – Illinois Republican Party Spokesman Steven Yaffe

Last month, Democratic State Reps. Will Guzzardi, Ann Williams, Jaime Andrade and Rob Martwick chose to bury education funding in a budget that was $7 billion out of balance. In doing so, they decided it was okay to hold our children hostage in order to force a massive tax hike on the people of Illinois.

Since, Mike Madigan and the Democrats in Springfield have completely ignored Republican legislation that would ensure that schools open on time in the fall.

This morning, these representatives will send a clear signal that they would rather spend their time engaging in political stunts than doing their jobs.

Yeah, Gov. Rauner always scrupulously avoids political stunts.

Right.

* Here’s the issue for me. Yesterday, Gov. Rauner was asked point blank by a reporter to name a single Chicago school to support his assertion that some are “crumbling prisons.” After all, he said he’d been to “dozens” of CPS schools. He even said he cried when he saw those horrid conditions, so they obviously made a lasting impression on him. How about a name?

It was a totally fair question. But Rauner completely dodged it.

So, yeah, that tour today may be a stunt, but if Rauner is going to make claims like that, he needs to name some names so CPS is pressured to fix these problems. Those legislators have a right to do what they’re doing.

*** UPDATE ***  Turns out, the water at Brentano Math and Science Academy just tested positive for lead

Twelve Chicago Public Schools have found elevated levels of lead in their water since testing began district-wide last month — one in every five of schools tested so far.

And test results haven’t come back yet for hundreds more schools. […]

The remaining 11 schools include: Beidler Elementary; Brentano Math and Science Academy; Budlong Elementary; Harvard Elementary; Esmond Elementary; Fernwood Elementary; Lasalle II Language Academy; Josephine Locke Elementary; Peirce School Of International Studies; Perez Elementary and Tanner Elementary.

So far, 58 schools have received results of the lead testing, which has included 15,853 samples of water sources as of June 7. Of the 3,044 samples with results so far, 70 have shown actionable levels of lead, roughly 2 percent.

Oops.

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