* I’d recommend that you read both of these stories from beginning to end because there’s too much to post here. Let’s start with the Times…
For more than a year, the state elections board has sought records to show how former state Rep. Frank Mautino spent campaign money at a bank and gas station.
The answer on Thursday: The documents no longer exist.
During a two-hour hearing in Chicago, attorneys argued whether the Spring Valley Democrat’s spending of campaign money complied with state elections law. Mautino, now the state’s auditor general, was not present.
Mautino’s attorney, Sergio Acosta, contended the campaign treasurer followed state law as she read it. And when the committee dissolved in December 2015, the records “were not kept,” he said.
“She didn’t understand what was needed as part of reporting to the Board of Elections,” Acosta said during the hearing, which took place on the 14th floor of the downtown office building.
Attorney Jeffrey Schwab, however, pointed out state law required the campaign keep the last two years of records. In any case, he said, the expenditures violated the election code.
At issue was whether or not these expenses were allowed under the election code, which requires campaign spending be for campaign purposes only. By filing campaign disclosures listing the bank or the service stations as the vendor, it was impossible to know who the ultimate recipient of those services was.
“There is no evidence that is provided that these charges were for legitimate campaign or governmental purposes,” Schwab said. “Even if it was, the election code prohibits the way that they did it.”
In response, Acosta said that the hearing was to determine if the committee was “willfully” withholding the documentation. Citing Manu’s deposition, the way the spending had been done since 1999 had been the way Manu thought it was supposed to be done: if the check was written Spring Valley City Bank, Manu thought that was to be the vendor.
Acosta also brought into evidence a letter from 2012 from the state board of elections regarding a time Manu had filed a report listing the names of individuals. Instead, she was to list where the money went to, the business.
He also entered into evidence campaign disclosure forms from Grant Wehrli (R-Naperville) and Jeanne Ives (R-Wheaton) who filed similar expenses in a similar way. Wehrli and Ives both called for Mautino to step down as auditor general last year while the campaign spending issues were being sorted out.
Acosta also brought from Manu’s testimony the fact that Mautino had two accounts at Happy’s, and she testified that she paid the campaign account out of campaign funds and Mautino’s personal account from his private funds. He said no one from the committee intentionally violated the law, saying at no point to the state board inform the campaign that it was filing its forms incorrectly.
“The board itself has been inconsistent, the campaign regulations are unclear, and certainly to the extent that any violation is found at the end of these proceedings … there can be no questions with respect to these many years of reporting that Ms. Manu submitted, she believed she was not violating the law at all,” Acosta said.
Again, go read them both all the way through.
…Adding… Press release…
At a hearing in Chicago today before the State Board of Elections, Illinois’ embattled Auditor General Frank Mautino continued his refusal to answer questions concerning campaign expenses that have sparked criminal investigations at the Federal and State levels. State Representatives Jeanne Ives (R-Wheaton) and Grant Wehrli (R-Naperville) attended this morning’s hearing, and stressed that Mautino’s decision today to “plead the Fifth Amendment” to again avoid providing answers must result in his removal from office.
“Members of the General Assembly gave Auditor General Mautino five chances last year to provide us answers to questions surrounding the state and federal investigations into his campaign finances. He refused. The State Board of Elections gave him two deadlines to produce the required information. He refused. Today, he pleaded the Fifth Amendment, again refusing to answer questions,” Rep. Wehrli said. “We cannot have someone serving as the taxpayers’ top financial watchdog who refuses over and over again to answer questions about serious, possibly criminal problems with his own finances. Auditor General Mautino must be removed from office.”
“Auditor General Mautino has had more than a year to answer questions related to the allegations against him, yet today he again refused to come clean. It is time for him to do the right thing for the people of Illinois and resign. If he won’t, then the General Assembly must act to remove him from office. We cannot afford to have the state’s top auditor continue in office under the cloud of state and federal investigations into his misconduct,” Rep. Ives said.
Representatives Wehrli is sponsoring House Joint Resolution 9 to remove Frank Mautino from the office of Auditor General. The resolution will require a three-fifths majority vote in both chambers of the General Assembly for approval.
“Unethical behavior is not a partisan issue. All elected officials in Illinois must be held to the highest standard regardless of party. If he won’t do the honorable thing and resign, then Auditor General Mautino must be removed. I will be pushing for a hearing on HJR9 when we return to Springfield next week,” Wehrli said.
Sam Werkmeister, a father of two, nearly died six times last year.
He started taking pain pills to get through shifts at a restaurant. That led him to a full-blown addiction to opioids. After a relapse last summer, it took Werkmeister six months to gather the courage to go back into treatment.
“It’s called carfentanil, and it’s really cheap,” he said, as he sat on a worn couch in the Granite City group home he shares with a half dozen other men. “It destroyed my life.”
The roommates share a pledge to stay sober as they work to recover from their addictions: alcohol, prescription drugs or heroin. But the continuing budget crisis in Illinois will make that kind of treatment harder to come by as the state’s network of providers is strained. As a result, people seeking addiction treatment face longer wait times. […]
The Arch House, a low-level treatment facility for men staying sober in Granite City, has a waiting list that is six to 10 weeks long. But a third of the center’s 21 beds are empty — a pretty common occurrence in Illinois.
The Illinois Department of Employment Security (IDES) announced today that the unemployment rate declined -0.5 percentage points to 4.9 percent in March and nonfarm payrolls decreased by -8,900 jobs over-the-month, based on preliminary data proved by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. February job growth was revised down to show an increase of +14,800 jobs rather than the preliminary estimate of +25,600 jobs. March’s monthly payroll gain kept over-the-year job growth well below the national average. The March drop coupled with February’s downward revised gain means that Illinois remains -19,600 jobs short of reaching its prior peak employment reached in September 2000.
“Illinois payrolls weakened in March, just like they did for the nation,” said IDES Director Jeff Mays. “The usual pattern is that Illinois weakens more than the nation but grows less than the national average when both are on the upswing. This persistent lag in job growth explains why it took 10 years to push the unemployment rate below 5 percent.”
“Our state has the potential to be the most competitive in the nation,” said Illinois Department of Commerce & Economic Opportunity Director Sean McCarthy. “To expand opportunities and good paying jobs, we need to make common sense reforms that will give businesses the confidence to grow and thrive in Illinois.”
In March, the three industry sectors with the largest gains in employment were: Leisure and Hospitality (+4,200); Other Services (+1,300); and Trade, Transportation and Utilities (+900). The largest payroll declines were in the following sectors: Construction (-7,100); Professional and Business Services (-3,600); and Government (-1,900).
Over-the-year, nonfarm payroll employment increased by +25,500 jobs with the largest gains in these industry sectors in March: Education and Health Services (+15,900); Financial Activities (+8,900); and Leisure and Hospitality (+7,100). Industry sectors with the largest over-the-year declines include: Manufacturing (-6,500); Construction (-4,900); and Government (-3,800). The +0.4 percent over-the-year gain in Illinois is about one-third as strong as the +1.5 percent gain posted by the nation in March.
The state’s unemployment rate is +0.4 percentage points higher than the national unemployment rate reported for March 2017, which decreased to 4.5 percent. The Illinois unemployment rate is down -1.2 percentage points from a year ago when it was 6.1 percent. At 4.9 percent, the Illinois jobless rate stands at its lowest level since June 2007, after having decreased for two consecutive months.
The number of unemployed workers decreased -8.4 percent from the prior month to 322,800, down -19.1 percent over the same month for the prior year. This brings the number of unemployed workers to its lowest level since May 2007.The labor force decreased -0.1 percent over-the-month and declined by -0.6 percent in March over the prior year. The unemployment rate identifies those individuals who are out of work and are seeking employment. An individual who exhausts or is ineligible for benefits is still reflected in the unemployment rate if they actively seek work.
You watch, we are gonna win this case and there’s not going to be forced unionism in state government, local government and school districts any more.
That was a big applause line.
* A bit later, Gov. Rauner talked about the local “right to work” federal lawsuit filed by Lincolnshire that is being handled for free by the Illinois Policy Institute. He doesn’t often talk about this topic in public, but the suit would allow local governments to establish their own “right to work zones”…
If we win that case, we are gonna be a free market, free enterprise state with true open competition in our manufacturing sector and transportation sector and it’s gonna boom and I’m gonna recruit hundreds of companies to the state of Illinois.
As the czar of Colorado’s marijuana program, Barbara Brohl says she is neither pro- nor anti-pot.
But she believes the legal market for the drug is eating into the black market, funding drug abuse treatment and prevention and providing a safer product.
The roughly $200 million in tax revenue from more than $1 billion in sales last year funds all that, she says, plus provides $40 million for schools.
Brohl spoke Wednesday to a panel of Illinois lawmakers considering a proposal to make marijuana use legal in the state. While sponsors say the bill won’t get a vote this legislative session, they’re beginning a series of hearings on how to craft the law.
It’s legal for people over 21 in Colorado to possess up to an ounce of marijuana, which is readily available in dedicated shops throughout the state.
Colorado, she said, has three main marijuana guide posts when it come to policy making: preventing the distribution of marijuana to minors, preventing the involvement of criminal enterprises and preventing the diversion of legalized marijuana to other states.
Under the recreational law, Illinois residents could possess up to an ounce of pot and five plants. Nonresidents could possess half an ounce. The bill would impose a $50 per ounce tax on pot at the wholesale level, while sales to the public would be subject to the state’s 6.25 percent sales tax.
Businesses producing marijuana for sale would be bound by labeling requirements and marketing restrictions.
The revenue from marijuana sales would be earmarked for schools as well as treatment and education programs about the dangers of marijuana, alcohol and tobacco.
“Getting this out of the illegal market, taking some of those dealers off our streets, restricting access by youth, these are all really good reasons to do it, over and above the financial benefit,” said State Rep. Kelly Cassidy (IL-14), co-sponsor.
And the financial benefit could be huge: according to estimates, up to $700 million dollars in tax money if marijuana was legal in the state.
Legal marijuana is heavily taxed: There’s a 28% tax in Colorado and a 37% tax In Washington. In Oregon, the tax ranges between 17% and 20%, depending on the city and county. Growers, processors, retailers and buyers all pay taxes. Medical marijuana tends to be cheaper than recreational because it is taxed at a lower rate. In the past year, Colorado has received nearly $200 million in tax revenue from over $1 billion in marijuana sales. […]
“They shouldn’t be going to make illegal narcotics legal just to balance the budget,” said Chief Tom Weitzel, Riverside Police.
Well, they should also make it legal because people are sick and tired of the state locking people up in steel cages for using a plant.
A former Drug Enforcement Administrator predicted legalization here would cause 75 additional marijuana-related highway deaths each year.
“Terrible idea! It’s a disaster waiting to happen in Illinois. It’s gonna increase damage to youth. It’s gonna increase highway accidents and fatalities,” said Peter Bensinger, former director of the DEA.
An official from Colorado claimed legalization did not bring a big increase in the number of regular users.
“We have a healthy kids Colorado survey. We’re not seeing an increase or a change in youth use or even really adult use. There are some differences up and down throughout the years. But it’s not statistically significant,” said Barbara Brohl of the Colorado Department of Revenue.
As the nearly two-year-long budget stalemate leaves Illinois with little revenue, Steans and Cassidy said they see their bills as a way to create a new source of revenue for the state that would provide funding for schools and drug prevention and treatment programs.
“The numbers speak for themselves,” Steans said. “Taxing legalized recreational marijuana would have a huge impact on the state both in the form of new revenue and in job creation. Last year alone, 18,000 jobs were created in Colorado due to the marijuana industry.”
The News-Democrat recently surveyed state representatives and senators from the metro-east, asking where they stand on the issue. Only three of them provided replies.
▪ Sen. Paul Schimpf, R-Waterloo: “I am still undecided on the issue. I am carefully considering both sides of the argument.”
▪ Sen. Kyle McCarter, R-Lebanon: “Medical marijuana, owned by lobbyists, became decriminalization last year, and now it’s legalizing pot for recreation under the guise of a budget solution. I will not lead Illinois on this radical path to exchange good sense and morality for pain, suffering and corruption.”
▪ Sen. Bill Haine, D-Alton: “Legalizing marijuana for recreational use is not something we should pursue at this time. The medical marijuana program is still unfolding and we need to fine-tune it before we can take the next step. I also don’t think this is where our time and energy needs to be spent right now. We need to be negotiating with the governor to get a balanced budget.”
Gov. Bruce Rauner (R) is ready to spend millions to win reelection, but he might have a wealthy opponent in the general in either venture capitalist J.B. Pritzker (D) — who just injected $7 million into his nascent campaign — or businessman Chris Kennedy (D), a scion of Robert Kennedy. Pritzker and Kennedy seem to be the Democratic favorites, but there could be a very crowded field. Rauner has a weak approval rating, so he will be vulnerable in Democratic-leaning Illinois. Toss-up
* Asked on Twitter why Illinois wasn’t “lean Democratic,” one of the author’s responded…
Rauner is going to have a hard time but I think it's a little early/premature to call a sitting governor a clear underdog https://t.co/8J48I9shTb
“Or are we gonna stay under the thumb of a group of corrupt, career politicians who’ve been dragging our state down the drain for decades? Corruption, cronyism, patronage, deficit spending, higher taxes, job losses, poorly funded schools. Are we gonna stay on this track we’ve been on for years? […]
“There’s only one thing holding us back and that’s corrupt Democrats down in Springfield controlling our government for their own benefit.”
The man is not going to be easy to defeat.
…Adding… But…
What does seem safe to say is that Rauner is the most endangered GOV incumbent in 2018 now that Malloy retiring (tho many states are open) https://t.co/C6PhX4xx9f
[I accidentally closed comments on this post. They’re open now. Sorry!]
* Press release…
The Pew Charitable Trusts today released a new brief detailing state-by-state funding for retirement benefits promised to public workers. The brief, “The State Pension Funding Gap: 2015,” examines data from over 230 public sector retirement plans across the 50 states for fiscal year 2015, the most recent year for which complete data are available. It also provides a preliminary analysis of 2016 data.
The brief finds that gap between the total assets reported by state pension systems across the U.S. and the benefits promised to workers reached $1.1 trillion in fiscal year 2015, the most recent year for which complete data are available. That represents an increase of $157 billion, or 17 percent, from 2014. Investment returns that fell short of expectations proved to be the largest contributor to
the worsening fiscal position, with median overall returns of 3.6 percent.
It also finds that preliminary data for 2016 are also expected to reflect low returns. Based on returns averaging 1 percent for 2016, the pension liabilities are expected to increase by close to $200 billion and reach about $1.3 trillion. Market volatility will also have a significant impact on cost predictability in the near and long terms. Since the end of the Great Recession in 2009, overall median returns for public pension plans have ranged from 1 percent in 2016 to 21.5 percent in 2011. This volatility can be attributed in part to increased investment portfolio risk.
“Many states face significant challenges in meeting pension promises to workers,” said Greg Mennis, director of Pew’s public sector retirement project. “The continued volatility and low investment returns are a reminder that policymakers cannot count on investment returns to close the pension funding gap.”
The brief also looks at net amortization, a metric that can help state and local governments understand whether their funding policies are adequate to reduce pension debt. Net amortization serves as a benchmark to assess contribution policies and helps gauge whether payments to a pension plan are sufficient, both to pay for the cost of new benefits and to make progress on shrinking unfunded liabilities.
1. South Dakota (104.1%)
2. Wisconsin (98.3%)
3. New York (98.1%)
4. North Carolina (95.5%)
5. Tennessee (95.4%)
Five Lowest Pension Funded Ratios (2015)
1. New Jersey (37.5%)
2. Kentucky (37.8%)
3. Illinois (40.2%)
4. Connecticut (49.4%)
5. Pennsylvania (55.8%)
OK, so the total unfunded liability in 2015 for the entire country was $1.1 trillion. Now, look at the state-by-state data and you’ll see the total unfunded liability for Illinois that year was $111.55 billion. About 10 percent.
As mentioned above, Pew estimates that the national unfunded liability will grow to “about $1.3 trillion” when FY 2016 numbers are in. COGFA recently published the Illinois numbers and found total unfunded liability here to be $126.5 billion. Again, about 10 percent of the nation’s.
* If you click here and go to about the ten-minute mark, you’ll hear Gov. Rauner say this to a friendly GOP fundraiser audience last night…
The change is so tough, it’s so slow. And, boy, I’m getting the stuffing kicked out of me every day in the press if you haven’t noticed. Well, talk about bias. Oh my goodness, in the press. […]
Now, it’s a battle. It’s a battle, but we’re making changes. The press doesn’t talk about it, but we made big changes.
You know what I’m proudest of? We blocked Madigan’s $7 billion out of balance budget. He wanted way more spending… We blocked billions of dollars the Democrats wanted to spend beyond what we’re spending right now. And we blocked the Democrats’ massive income tax. Right there saving you billions of dollars by blocking ol’ Madigan’s bad behavior and that’s a big deal.
* Four points:
1) The dude gets pretty good media coverage, considering his lousy poll numbers. But, whatevs. Every politician complains about the media.
2) Blocking Madigan’s budget proposal almost a year ago is the action he’s the “proudest of?” Sure, the proposal was out of balance. Way out of balance. But our current bill payment backlog is $13.4 billion. At the time he blocked Madigan’s budget, the backlog was $7.7 billion.
3) Not having a budget isn’t saving anybody anything because those bills are going to have to be paid one day, so taxes are going to go up one way or another at one time or another.
4) That Madigan budget was defeated last year mainly because a large number of rank and file Senate Democrats refused to support it. Click here for the roll call.
Caterpillar will move its global headquarters from Peoria to north suburban Deerfield, choosing not to follow the path of other large companies that have relocated to Chicago.
It’s a decision steeped in irony: The equipment-maker’s future Deerfield home was only available because of another company’s decision to move to Chicago.
Caterpillar will take over the former headquarters of premium spirits maker Beam Suntory, which announced plans last year to move its 450 employees and global headquarters to Chicago’s Merchandise Mart, joining corporations including McDonald’s, Motorola Solutions, Kraft Heinz, Wilson Sporting Goods and Conagra Brands that have recently moved or made plans to relocate downtown. Beam Suntory’s move will be completed by the end of June. […]
Most of Caterpillar’s 12,000 Peoria-area employees will not relocate. About 100 will move to the new Deerfield headquarters this year. By mid-2018, Caterpillar expects to have about 300 employees in Deerfield in corporate roles, including executives and other corporate employees in finance, accounting and communications, said spokeswoman Corrie Scott.
Incentives, while they were discussed, did not drive Caterpillar’s decision, said spokeswoman Corrie Scott. The Deerfield site will give employees who are relocating from Peoria as well as future recruits more housing and educational options, while still offering convenient access to the city via commuter rail, she said.
“To our minds, this is kind of the best of both worlds,” she said.
The national media has overstated the trend of corporations moving downtown to chase millennial workers, said John “Jack” Boyd, founder and principal of a namesake site selection firm in Princeton, N.J. Many of those workers are postponing a move to the suburbs, rather than rejecting it. Moreover, as more companies do move downtown, “at some point there’s inflationary cost pressures” that make the market less attractive.
“Suburbs in selected markets are doing very well, thank you, including Deerfield,” he said.
It’s impossible to examine state higher education finances in 2016 without separating the collapse in Illinois from a more nuanced picture across the rest of the country.
State and local support for higher education in Illinois plunged as the state’s lawmakers and governor were unable to reach a budget agreement and instead passed severely pared-down stopgap funding. Educational appropriations per full-time equivalent student in the state skidded 80 percent year over year, from $10,986 to $2,196. Enrollment in public institutions dropped by 11 percent, or 46,000 students.
That situation proved to be enough of an outlier that it weighed down several key markers in the 2016 State Higher Education Finance report from the State Higher Education Executive Officers association, which is being released today. The report annually offers an in-depth look at the breakdown of state and local funding, tuition revenue, enrollment, and degree completion across public higher education, a sector that enrolls roughly three-quarters of students in U.S. postsecondary education.
Include Illinois in the report’s key markers, and overall public support for higher education fell by 1.8 percent per full-time equivalent student in 2016, to $6,954, according to the report. Exclude Illinois, and overall support increased by 3.2 percent, to $7,116.
“It’s unsustainable. At some point the entire university system will collapse. They’re probably going to have to look for another university to go to, and it’s not going to be in Illinois,” she says.
Mendoza challenged teachers and administrators to not be quiet, to let their lawmakers and the governor know they want a state budget.
“There’s only so far that they can go without getting state funding, so maybe even if they don’t close their doors they’d have to eliminate a whole series of programs and even colleges within the university. We’ve already seen other universities do that,” she says.
* Gov. Rauner’s biggest problem with his threatened veto of HB40 - which would, among other things expand Medicaid and state employee health insurance coverage of abortion - is what he wrote on Personal PAC’s questionnaire in 2014…
“I dislike the Illinois law that restricts abortion coverage under the state Medicaid plan and state employees’ health insurance because I believe it unfairly restricts access based on income. I would support a legislative effort to reverse that law.”
But Rauner’s office last week said the governor doesn’t support the current bill because of “sharp divisions of opinion of taxpayer funding of abortion,” while offering that he’s “committed to protecting women’s reproductive rights under current Illinois law.”
The administration on Wednesday said the current law already covers abortions [in instances of rape, incest and life of the mother] and “goes above and beyond federal law by covering abortions to protect the health of the mother.” They noted that 17 states including Illinois allow taxpayer funds to pay for abortion beyond the federal guidelines.
And as pro-choice activists seek to blast the governor, his administration contends he has signed two bills protecting women’s reproductive rights — one mandating private insurance coverage for birth control and a right of conscience measure.
Rauner, too, has the support of Cardinal Blase Cupich, who on Wednesday thanked him for his stance.
…Adding… A pretty good insight from the comment section…
Not surprising, candidate Rauner knew he could gain votes from disillusioned Democrats with lip service to liberal positions.
Reelection Rauner knows that’s not going to happen again so he needs to shore up the base that will vote for him no matter what, conservatives. Didn’t his office say they support whatever polls well? And this polls well with his supporters.
It actually polls pretty well across the board, as Cardinal Cupich noted yesterday. So, this is a way of both shoring up his base and aligning himself with popular opinion.
…Adding More… Sen. Daniel Biss reacted yesterday on Twitter and I didn’t see it until today. Click here.
