Question of the day
Wednesday, May 10, 2017 - Posted by Rich Miller
* The Chicago Tribune published an editorial about the recent trade union endorsements of Pritzker…
An important point: The unions endorsing Pritzker are private-sector trade unions — unlike some public-sector unions, they tend to be reasonable in their contract demands for wages and benefits. Nearly 20 trade unions struck collective bargaining agreements with Rauner after he took office.
Much of Rauner’s criticism of unions has been aimed at Illinois’ public employee unions, whose demands create great burdens on public finances. Taxpayers are on the hook for these union members’ pay, health care packages and pensions.
Trade union members understand the distinction. Most of them don’t have Cadillac benefits or pensions.
We can’t say what sold the union leaders on Pritzker. We don’t know many of his policy positions. It’s early in the race. Five other Democrats so far say they’re running. Maybe the trade union bosses just think Pritzker can win.
Well, Pritzker did win the support of 14 union leadership teams. We’re not sure their rank-and-file members will agree.
One of Gov. Rauner’s top priorities has been ridding the state of its prevailing wage laws, or at least watering them down. The governor even demanded that prevailing wage language be removed from the Exelon bill last year before he’d agree to sign it. Rauner is no less hostile to the trades than he is to the publics.
* However, going back at least to Ronald Reagan’s 1984 reelection over the heavily union-endorsed Walter Mondale, there’s been a disconnect between union members and their union leaders. So, the Trib is right that these endorsements don’t necessarily guarantee that union members will vote for Pritzker. The goal here, though, is to shove Kennedy out of the race.
* The Question: What do you think Democratic gubernatorial candidates should say and do to win over the hearts and minds of rank and file union members?
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HB 40 clears Senate
Wednesday, May 10, 2017 - Posted by Rich Miller
* From Planned Parenthood…
Today, the Illinois Senate passed HB40 (33-22), ensuring access to safe and legal abortion in Illinois. The legislation repeals dangerous “trigger” language which states that Illinois would revert back to law criminalizing abortion if the U.S. Supreme Court decision on Roe v. Wade were overturned. With President Donald Trump’s promise to appoint anti-women’s health justices to the Supreme Court, Illinois cannot risk turning back the clock on reproductive rights.
In addition, HB40 removes discriminatory restrictions on Medicaid and state employee health insurance programs by allowing coverage for all pregnancy-related care, including abortion. This legislation respects that every woman should be able to make her own decisions about pregnancy even if she has insurance through state government.
“Every woman – no matter where she lives, how much money she makes, or how she gets her health care coverage – should have access to affordable and comprehensive health care so she can make personal health decisions based on what is best for her and her family,” said Jennifer Welch, President & CEO of Planned Parenthood of Illinois.
HB40 passed the Illinois House in April, and now will be sent to Governor Bruce Rauner for his consideration.
“Governor Rauner should carefully consider what the best policy is for all Illinois women and sign HB 40 into law,” urged Welch. “When it comes to the most important decisions in life, like whether to become a parent, it is vital that a woman is able to consider all the options available to her. It is not the government’s place to interfere with her decision by withholding access to abortion.”
Discuss.
…Adding… Tribune…
On the other side, Sen. Dale Righter, R-Mattoon, said lawmakers are “scraping and clawing” a budget together. He said saying Illinois can’t afford to spend money it doesn’t have on providing abortions. Righter also contended removing language from Illinois law that says life begins at conception would create other problems, such as trying to prosecute someone who attacks a mother and in kills a unborn child in the process.
State Sen. Jil Tracy, R-Quincy, said it was “ironic” legislators were considering the bill on a day when they were also honoring children who grew up in the state’s foster care system. Many were on hand to shadow lawmakers for the day.
Tracy said she has long opposed abortion, saying she previously had worked as an attorney to place children with families, including those who were the result of incest. She said those children often went on to become productive citizens of society who brought great joy to the families they ended up with, later noting that one of her own daughters is adopted.
“I cannot imagine a world without her,” Tracy said. “So yes, I am a strong advocate for life.”‘
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More J3 sleaze
Wednesday, May 10, 2017 - Posted by Rich Miller
* Reuters…
U.S. prosecutors say that a billionaire real estate developer from Macau accused of paying bribes to a former United Nations General Assembly president also gave gifts to former U.S. Representative Jesse Jackson Jr., according to court papers.
In papers filed this week in Manhattan federal court, prosecutors said the developer, Ng Lap Seng, made gifts to a U.S. representative in return for introductions to U.S. officials and business people.
The prosecutors have not claimed that the gifts were illegal or identified the representative by name. But Ng’s lawyers in a motion on Monday said it was Jackson, an eight-term member of the U.S. House of Representatives for Illinois, and the son of civil rights leader Jesse Jackson Sr.
John Collette, a lawyer for Jackson, declined to comment.
* Sun-Times…
The Chicago Sun-Times reported last month that the former Democratic congressman in 2015 was trying to enter into a cooperation deal with Southern District of New York prosecutors after telling them of “potential violations of law by him and others” in an unspecified case, according to a letter obtained by the newspaper.
The new court filing by Seng’s lawyers details prosecutors’ allegations that Seng paid Jackson both before and after Jackson was in Congress — and channeled money through his wife Sandi Jackson as part of a consulting agreement.
According to the May 1 filing, prosecutors were planning to introduce into evidence that “starting in or about 2009, the defendant [Seng] agreed to and did provide gifts and payments, including cash, a watch, theater tickets, hotel rooms, and meals, to a certain United States representative . . . in return for the representative agreeing to introduce the defendant to other United States officials and businesspeople in the United States.
“After the representative left Congress, the defendant agreed to and did continue to make payments to the representative, including by providing cash and directing payments to the representative’s wife, purportedly as part of a consultancy agreement.”
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Cherry-picking “right to work” numbers
Wednesday, May 10, 2017 - Posted by Rich Miller
* From the Illinois Policy Institute…
Indiana is a Right-to-Work state – it’s also home to union growth five times greater than neighboring Illinois, where forced-unionism is still the law of the land.
One of the most common criticisms of Right-to-Work laws is that they make it harder for workers to form unions and collectively bargain. But if this is true, then why is union membership growing so much more rapidly in Indiana than in Illinois?
The short answer? Jobs growth and population growth.
Right to Work doesn’t hurt unions – it just gives workers a choice.
* From Frank Manzo at the Illinois Economic Policy Institute…
Rich,
In case a recent Illinois Policy article on “right-to-work” and union membership gets (or has been) sent to your inbox, I have outlined why it is a flawed policy analysis in the article below.
Article: Union Membership Declined in “Right-to-Work” States and Increased in Collective-Bargaining States Last Year
It would be nice to not have to respond to articles with such absurd and baseless conclusions in 2017. But unfortunately, it’s become a small part of my job.
Just wanted to let you know that we had a response.
Onward to more productive uses of my time
* From that report…
The movement to implement “right-to-work” (RTW) legislation has accelerated over recent years. Indiana, Michigan, Wisconsin, and West Virginia recently become “right-to-work” states. Missouri and Kentucky followed in 2017. Today, 28 states have “right-to-work” laws.
One of the main policy changes contributing to the decline of unionization across the United States is the ratification of “right-to-work” legislation. From 2015 to 2016, union membership in RTW states declined by over 293,000 members. Union membership declined in 20 of the 26 states (77%) with RTW laws.
Indiana was just one of those six states.
* Back to the report…
Conversely, in fair-share collective bargaining (CB) states, overall union membership improved by about 56,000 members. Union membership declined in only 9 of the 25 CB states (36%)– which includes the District of Columbia– and increased in 16 CB states (64%) over the year.
However, Illinois lost nearly 35,000 members, one of 9 CB states to experience a decline. After netting Illinois out to compare the state to every other state, all other CB states gained approximately 91,000 union members over the year.
The bottom line: “Right to work” does not necessarily increase union membership, economic growth does. And Illinois is in really, really bad economic shape.
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Mark Brown on Botterman
Wednesday, May 10, 2017 - Posted by Rich Miller
* Mark Brown went out to Wheeling to attend the Patrick S. Botterman Leadership Award ceremony. Brown published a column today in tribute to the late campaign guru…
While success in politics is usually measured by winning, Botterman’s signature campaign may be one he lost — managing John Schmidt’s 2002 run against Lisa Madigan for the Democratic nomination for attorney general.
In that contest, House Speaker Mike Madigan moved heaven and earth on his daughter’s behalf, and it took nerve for Botterman to stand his ground in what could have been career suicide.
The standard career path for a young person in Illinois Democratic politics is to work a campaign on behalf of one of Madigan’s candidates for the Illinois House, then parlay that into a job and work their way up through future campaigns.
Many of the political operatives produced in this manner become quite skillful, which is one of the reasons Madigan has survived so long.
The problem from my viewpoint is that all these talented young political workers are then on Madigan’s side of the Democratic Party, which makes it harder for candidates of a more independent bent to succeed.
That’s why there’s something to be said for Wheeling Democrats recognizing good young political talent developed mostly outside the party’s normal channels.
Thoughts?
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Mendoza worker is on city’s “do not hire” list
Wednesday, May 10, 2017 - Posted by Rich Miller
* Sun-Times…
State Comptroller Susana Mendoza on Tuesday told an Illinois Senate committee she was unaware that one of her employees is listed on the city of Chicago’s do-not-hire list. […]
Patrick Haynes is a former 42nd Ward Department of Streets and Sanitation superintendent who resigned in lieu of being discharged on July 30, 2013, according to Haynes’ termination records obtained by the Sun-Times. He’s now employed with the comptroller’s office, listed as “staff administration” and is paid $70,000 a year, according to the comptroller’s website.
Asked about Haynes at one of the Senate’s budgeting committees’ hearings, Mendoza said Haynes “has a great deal of experience working for the City of Chicago, both in the Department of Planning and Development, also as a ward superintendent in the city of Chicago, I believe, for the 42nd Ward which is downtown Chicago.” Mendoza called him “my hire.” […]
State Sen. Chapin Rose, a Rauner ally, asked Mendoza whether she knew Haynes resigned in lieu of discharge.
“He resigned, but I’m not sure what you mean in lieu of discharge. Those are political appointees. I’m not sure you are aware how that works in the City of Chicago,” Mendoza said. “He’s also a former fireman and he is serving as a prevailing wage officer with our department as well. So his credentials are pretty impeccable.” […]
“I think there were some politics involved in that but there’s not a single issue of bad performance that you’ll find with Mr. Haynes,” Mendoza said.
If you click here, you’ll see all the talking points the Republicans used in the hearing. And those talking points didn’t just write themselves.
* From the comptroller’s office…
“Pat Haynes is a highly decorated Chicago Firefighter, serving in the line of duty for 14 years. He also worked for the Department of Planning, generating significant revenue for the City of Chicago. Governor Rauner and his surrogates should be ashamed for attacking a decorated firefighter on this day of all days when we recognize the firefighters who have died in the line of duty. We respect Pat Haynes’ decision to resign as ward superintendent when he found himself caught in a political tussle between an alderman and the mayor’s office.
The Comptroller will not take personnel advice from a governor who clouted 30 patronage hires into his administration from the previous Comptroller’s office and continues to employ: a DCFS director who botched a child neglect investigation in which a little girl died recently on his watch; an agency director who’s spent more than $200,000 of taxpayer money on vanity memberships; and a deputy governor who is getting paid $138,000 a year to hand out saplings at toll way plazas, essentially campaigning on the taxpayers’ dime.”
The fact remains that the guy is on the city’s do not hire list. That’s a problem no matter how he got on it.
* The other problem is that the SGOP questions overshadowed Mendoza’s testimony yesterday…
Presenting her FY 2018 budget proposal Tuesday, Illinois Comptroller Susana Mendoza offered the lowest request for an appropriation level for the Illinois State Comptroller’s Office in 20 years.
“I was troubled when, earlier in the session, we saw agency directors unwilling to identify a single cut to their budgets before your appropriations committee,” Mendoza told members of the State Senate Appropriations II Committee. “I take the idea of shared sacrifice and accountability very seriously. I think it is the responsibility of every agency head, director and manager to identify whatever [General Revenue Fund] savings may exist. We’re prepared to lead that effort with the budget we present today.”
The savings will be accomplished through a combination of headcount management, operational savings, carpooling, stronger travel reimbursement policies and other cost-saving strategies.
* And up later today…
Illinois Comptroller Susana Mendoza will testify before a joint meeting of the House Human Services Committee and the House Human Services Appropriation Committee Wednesday at 2:30 p.m.
The issue is Governor Rauner’s plan to quickly push through a consolidation of the number of Managed Care Organizations handling Illinois Medicaid patients from 12 to 4. Mendoza asks why the largest procurement in the state’s history — $9 billion a year — is being exempted from the state procurement code, meaning it will not be subjected to oversight from an independent procurement officer or the legislature during an unprecedented fiscal crisis for the state. The Governor argues that culling the herd of MCOs will save the state money, but experience in other states suggests giving citizens fewer choices will actually drive up costs. The plan deserves more scrutiny.
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Fun with numbers
Wednesday, May 10, 2017 - Posted by Rich Miller
* Tribune…
Though people often focus on unemployment rates as a measure of economic health, another telling data point is how many people are so discouraged with the job search that they’re dropping out of the labor force altogether.
A newly released survey found good news: Fewer unemployed Americans are giving up looking for work. But that’s not the case in Illinois, where more people seem to be throwing up their hands.
A survey conducted by Harris Poll for Express Employment Professionals, a staffing agency, in March and April found 44 percent of jobless people in Illinois said they had completely given up looking for a job. That’s worse than the 41 percent who said the same last year and the 33 percent who said so in 2015.
Nationally, by contrast, 33 percent of jobless Americans in the recent survey said they’d stopped looking for work, an improvement from 40 percent last year.
“Economic and political factors unique to Illinois may be at play here,” Bob Funk, CEO of the staffing agency, said in a news release. Harris surveyed 1,500 jobless Americans, including 100 in Illinois.
Emphasis added because firm conclusions should never be drawn from a poll of 100 people.
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* Natasha with the scoop…
The Illinois AFL-CIO is preparing to endorse J.B. Pritzker for governor, three sources confirmed to POLITICO. It is a major coup for Pritzker, who formally joined the primary race just four-and-a-half weeks ago and is looking to coalesce Democratic support.
Two of the sources pegged the timing of the endorsement within the next month. It follows an all-out effort by Pritzker and supporters to secure the early labor commitment.
Last week, POLITICO first reported that 14 trade unions were lining up behind Pritzker. An endorsement by the AFL-CIO, which represents nearly 900,000 members and has 1,500 affiliates statewide, could present a considerable blow to opponent Chris Kennedy , who has said he hoped to fund his run through a combination of labor money and his own contributions. The sources said Democrats and labor groups who are eager to oust incumbent GOP Gov. Bruce Rauner from office are hoping to stave off a protracted, bruising Democratic primary.
Everybody thought back in December of 2001 that the Illinois AFL-CIO’s endorsement of Rod Blagojevich was early. If this nod does happen within the next month it would be without any precedent in a gubernatorial race.
* From Illinois AFL-CIO President Mike Carrigan…
“The Illinois AFL-CIO has made no decisions concerning endorsements in the Democratic Primary Election for Governor.
“While defeating Gov. Bruce Rauner – one of the most anti-worker governors in the country – is the top priority for 2018, the Illinois AFL-CIO has a process for vetting candidates that we are working through, including face-to-face meetings with candidates and issue surveys.
“Until there is widespread and significant support for one particular candidate across the diverse labor movement, we will continue to focus our work communicating with union households about Rauner’s attacks on union members and his destruction of the state by refusing to compromise on a budget solution.”
Despite this, it’s pretty obvious to everyone where this is headed.
* Things might get a little awkward for Kennedy tonight…
Chris Kennedy will give the keynote at the Irish-American Labor Council (IALC) annual James Connolly dinner. IALC is a committee of the AFL-CIO, committed to improving and promoting social and community welfare in Chicago. The IALC is comprised of international unions, district councils, local labor unions, and business organizations throughout the Chicagoland area. Chris will be honored at the event along with John Manley.
* And this is one reason why organized labor is pushing Pritzker…
A source tells NBC 5 that Democrat JB Pritzker is spending $1.5 million for two weeks as his introductory TV ad called “Think Big” saturates TV markets across the state. As one Democratic strategist noted, “if he keeps this pace, he will spend $50 million on TV alone.”
That same source said the billionaire businessman has told others that “he’s prepared to spend $70 million on the primary alone.”
Compare that to 2014, when then-GOP candidate Bruce Rauner spent what was a record-breaking $65.3 million on his entire campaign – both the primary and the general elections.
Lots of unconfirmed rumors have Pritzker’s general election budget at $150 million. Whatever the case, it’s clear that Pritzker can fund himself, help out the rest of the ticket, and take the pressure off labor leaders to drain their unions’ bank accounts. Kennedy simply can’t make the same case.
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Madigan pot, meet Rauner kettle
Wednesday, May 10, 2017 - Posted by Rich Miller
* House Speaker Michael Madigan sat down for a 30-minute interview with WGN Radio’s Patti Vasquez yesterday. An excerpt…
“Just about everything [Gov. Bruce Rauner] does is poll-driven. They do multiple polls. They’re polling all of the time. And they predicate government decision-making almost exclusively on the polls.
“So, it’s easy to say ‘Let’s freeze the taxes across the board.’ It’s better to say ‘Let’s give some targeted real estate tax relief to people that really need it, without hurting school districts like Chicago. ”
There’s no doubt that Gov. Rauner relies heavily on polling. His people are in the field a lot. They won’t support reinstating a tax on food and beverages precisely because of that polling data (something like 75 percent of Illinoisans disapprove).
* But this criticism of Rauner comes from a man who has always carefully positioned all of his more politically vulnerable members with poll-friendly legislation. He regularly forces multiple roll calls on bills designed to put Republicans in a bad political light. This is no poll-averse dude, by any means.
Not to mention that Madigan’s House passed a permanent property tax freeze bill last year. And it wasn’t “targeted” at all. Why? Simple. It polls off the charts.
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* Finke has a story today about House Majority Leader Barbara Flynn Currie’s new pension bill…
A major component of the bill is to incorporate a plan put forward by Cullerton, D-Chicago, and also embraced by Republican Gov. Bruce Rauner. It would require those covered by the state-funded pension systems to make a choice: either continue to have future pay increases count toward their pensions and give up the automatic 3 percent compounded raises in their retirement benefits or keep the pension raises, but give up having future pay increases count toward retirement.
The idea is to work around the 2015 state Supreme Court ruling that lawmakers couldn’t unilaterally impose changes on pension benefits after someone signed up for them. The concept is to offer workers something in exchange. […]
Currie’s bill also would create an option for members of the pension systems to take a lump-sum buyout of their pension benefits. Various ideas for this have been floated the last two years but have never come to a vote in the House. Limitations have been part of those plans, such as not allowing people to cash in all of their state benefits and placing limits on the number of people who could participate each year.
In addition, Currie’s legislation requires that a 401(k)-style defined-contribution program be set up for some people in the pension systems, and it provides $215 million to help pay for Chicago teacher pensions. The bill also closes the General Assembly Retirement System to new members after a certain date.
* I asked our resident pension expert “RNUG” to take a look at the bill. He sent back a long and detailed examination. Click here to read it and then comment below.
*** UPDATE *** From House Republican Leader Jim Durkin…
“Apparently, House Democrats have come to the realization that pension reform is desperately needed in this state, bravo! So upon learning that they have filed language identical to the House Republican pension reform plan, House Bill 4027, introduced in March, we simply remind them that we are prepared to offer 26 votes, which is our pro-rata share of votes, to support a structured roll call on this issue. It is now up to the Speaker to determine whether or not he is serious about pension reform by providing the 34 votes necessary for passage or if this is just another typical end of session game,” said Durkin.
I would also refer you to our original press release: http://www.ilhousegop.org/pension_reform
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“Right to Know” is Wrong for Illinois
Wednesday, May 10, 2017 - Posted by Advertising Department
[The following is a paid advertisement.]
In a recent interview with WGN Radio, Michael Reever of the Chicagoland Chamber of Commerce voiced the chamber’s opposition to HB 2774 & SB 1502:
“It’s going to actually require companies to maintain more information than is otherwise required and maintain that information in a more identifiable way, so now you as a person are linked with this information. If it gets breached, your information is now identifiable to you…”
“It’s not only about big businesses who have in some ways the financial resources and capabilities to actually fulfill the law, but it’s the small and medium sized businesses that are not going to have the in-house attorney or in-house IT person to do this…”
Listen to the full interview on why the “Right to Know” bills are bad for Illinois.
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The Sun-Times demands a budget
Wednesday, May 10, 2017 - Posted by Rich Miller
* Sun-Times editorial board…
We also understand that Rauner walked into a bad situation, and his only aim has been to do his darnedest to set our state right. Long before Rauner arrived in Springfield, Illinois was struggling with a weak economy, alarmingly underfunded pensions, a backlog of bills and a political dynamic that for too long has put one Chicago pol, House Speaker Mike Madigan, at the center of every major decision.
We’re just saying that passing a budget matters a whole lot more. If that was not obvious to Rauner in 2015, or even a year ago, it should be now.
Whatever pro-business gains Illinois might have made by reforming workers’ comp law, for example, have been overwhelmed by the damage done to our state’s public universities by the lack of a state budget since 2014.
Good point.
Gov. Rauner keeps saying that his reforms will spark an economic boom. It’s hard to see how that will happen considering the limited economic reforms that are on the table right now compared to the tax hikes and the cuts required to balance the budget.
But I will make one point in the governor’s favor. He is prepared to sign one of the largest tax hikes in Illinois history, if not the largest ever increase. He ought to get something for doing that.
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* As I told subscribers early this morning, Senate President Cullerton is pushing for a grand bargain vote today as early as noon. But efforts were underway to either prevent this vote from happening or to push the two sides closer together. So, stay tuned…
Meanwhile, senators worked behind the scenes Tuesday to try to find an agreement on a sweeping budget package that could be called for a vote this week. Efforts have focused on incorporating ideas backed by Republicans after the GOP dropped support for the legislation amid concerns from Rauner’s office that it was asking too much from taxpayers. […]
But one top Senate Democrat noted “significant barriers” remain, saying Rauner is pushing a property tax freeze that is “politically popular” but “bad policy” because it would harm local governments and schools that rely on the money the levies generate.
“We’re just not prepared to make those sorts of trades to do what we should all be doing, which is passing a budget,” said Sen. Don Harmon, D-Oak Park.
While Republican leader Radogno said good-faith negotiations were continuing, they tried to slow a push for a vote this week, saying more time was needed to hammer out an agreement.
* Radogno’s office released these statements late yesterday afternoon…
Senate Republican Leader Christine Radogno:
“Our talks are continuing. There are sincere good faith negotiations underway in the Senate on FY18 budget specifics and reforms critical to Illinois’ economy. Time is of the essence, but the devil is always in the details and the minutiae of complicated proposals. We are working through those now in an effort to advance the legislation as soon as possible.”
Deputy Senate Republican Leader Bill Brady:
“We’ve had serious daily conversations – many times several meetings a day. But our work is not complete. Given time, I think we can get there.”
Assistant Senate Republican Leader Chapin Rose:
“These are not easy discussions. But they are necessary in order to present a balanced budget to the Senate for consideration. We need to keep working. We should not proceed until we have an agreement.”
* But…
“We’ve been hearing ‘one more day, one more thing, one more week’ since January. And at some point we need to do it or not do it,” [Sen. Harmon] said.
I don’t disagree with Harmon. The only question I have is “Is today the ’some point’ when something absolutely has to get done?”
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* Sun-Times…
The Chicago Public Schools actually need $596 million to keep schools open the rest of the school year, and not just the $129 million officials have publicly discussed, a top aide to Mayor Rahm Emanuel said Tuesday.
The larger figure takes into account delays in receiving block grants from the state, according to Carole Brown, Emanuel’s chief financial officer.
* WBEZ…
A spokesman for Illinois Comptroller Susana Mendoza said it is unlikely CPS will get that grant money before June 30. The state is six months behind on payments because of the budget impasse in Springfield.
The governor’s office responded with a statement saying that “CPS’ crisis is not due to the budget impasse, it’s due to decades of fiscal mismanagement. Any outstanding payments from the state lie with Comptroller Mendoza, and can be processed when her office chooses.” CPS, though, said the governor’s office only has approved $300 million of the $467 million in payments due to CPS.
* Mendoza’s spokesperson reacts to the governor’s office statement…
“Like the check bouncer who yells at his bank for bouncing a check from an account he himself emptied, the Governor disingenuously blames the Comptroller for not writing checks from state coffers that Governor Rauner emptied by failing his constitutional duty to propose a balanced budget,” Pallasch said.
Mendoza could probably make that CPS grant payment, but only if she does something like temporarily skip at least part of the next state pension payment (comptrollers have done this from time to time - but that money eventually has to be paid). And Downstate and suburban schools would probably be upset if she does because they’re also not getting their grant money. As we discussed last month, Illinois schools are owed about a billion dollars in grant cash because of the impasse.
* CPS’ predicament…
As of Tuesday, the teachers pension fund said CPS owed it about $716 million. The fund said it expects CPS to pay about $470 million of that tab by June 30, with the rest payable after a quarter-billion dollars in revenue arrives later in the summer from a new property tax devoted to teacher pensions.
Burbridge said the pension fund’s outlook changes if the city falls short on its payments for less predictable reasons, such as a lack of state aid.
* It’s so late in the school year that raising taxes wouldn’t bring much money into the CPS coffers. And any cuts made this late would have to be several times larger than they would’ve been had they been made at the start of the fiscal year because there is so little time left…
Other possibilities include: taking a “bridge” loan from tax-increment financing districts that might never be repaid; another round of borrowing; more cuts of school support staff; delayed payments to CPS vendors; and a request to the Chicago Teachers Pension Fund to delay part of the $721 million payment that’s due June 30.
A 60-day delay on the pension payment would solve some of the cash-flow issues since tax revenue typically rolls in by August.
* If Mendoza won’t delay state pension payments to help out CPS, then CPS might have to delay its own payment. The ratings agencies will certainly be furious, but the district already has junk bond status…
Brown on Tuesday acknowledged officials have discussed withholding the pension payment as they test ideas with bond rating agencies to see which would do the least additional harm to the district and the city’s already low bond ratings.
“It’s an option that we’ve talked about, but it’s not an option that anybody’s concluded is something that’s viable, or an option that anyone’s concluded is the preferred course of action,” she told the Tribune.
*** UPDATE *** Sun-Times…
On Wednesday, Emanuel was asked why he waited so long to reveal the magnitude of the problem from aldermen whose support he needs for a financial rescue that could put the city’s own shaky finances at risk.
“The bills kept climbing and growing and, in every aspect, they said they were gonna get current with it. … The state of Illinois is the largest deadbeat in the state of Illinois,” the mayor said.
“We’ve never shied away from doing what we need to do. And we paid our bills on time. … I will meet the challenge. We will work together and work through this issue. [But] it is adding insult to injury not only to be dead last in funding education, but then to be behind on your payments so dramatically that you’re affecting the ability of us to keep moving forward academically.”
After canceling two closed-door briefings with aldermen, Emanuel shed no new light on the rescue plan. He would only reiterate Brown’s statement that “everything is on the table” and that, even another tax increase or reinstating the head tax he proudly eliminated has not been ruled out.
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