New York, June 13, 2017 — Summary Rating Rationale
Moody’s Investors Service has downgraded the Regional Transportation Authority’s outstanding general obligation bonds, which are backed by a pledge of regional sales tax revenues, to A2 from Aa3, affecting about $2.2 billion of outstanding debt. The outlook remains negative.
The downgrade factors in the repercussions of an extended political impasse in the Illinois General Assembly over how to balance the state’s budget. After two years of failed negotiations, and operating with substantial budget deficits, the state has allowed a backlog of bill payments to reach record levels, putting pressure on many public- and private-sector entities awaiting state payments, including the RTA.
Payment deferrals have led RTA to rely on short-term borrowings that have created biennial refinancing requirements. This practice, while manageable, is only one measure of RTA’s potential stress stemming from the continuing financial erosion of its two largest related governments - the State of Illinois (Baa3 negative) and the City of Chicago (Ba1 negative). Over the long term, pressures to provide funding for constitutionally guaranteed state and local pension plans are increasingly apt to harm RTA’s economic base, eroding its ability to generate funding to support transit system capital investment and operating needs. Although these factors are outside the RTA’s control, they will pose increasingly serious challenges, offsetting the otherwise strong credit profile of the authority’s sales-tax revenue debt.
After the downgrade, the RTA sales tax bond rating remains higher than the general obligation debt of either Chicago or the state. The rating differentials (of five and four notches, respectively) between the authority and these related governments are supported by legal and practical insulation of pledged regional sales tax revenues. It also reflects RTA’s sufficient debt service coverage from the sales taxes and the authority’s role in overseeing transit in a region that relies heavily on maintaining its far-reaching, high-capacity public transportation system. At the same time, fiscal pressures of the local and state governments will make the city and state more inclined to take adverse actions, such as shifting operating expense burdens onto the transit agencies when possible, and the prospects for state capital funding support will be diminished. The lower rating is consistent with RTA’s exposure to the state, which collects its regional sales tax and also provides matching payments for those revenues.
Rating Outlook
The negative outlook incorporates the State of Illinois’ continuing credit deterioration, which threatens to keep exacerbating ongoing aid payment delays in coming months, without an agreement to bring the state’s revenues and expenditures into closer alignment. It also factors in the Chicago area’s economic vulnerability to overlapping public pension liabilities, which may necessitate sizable tax increases that erode resources that could otherwise be used to address the transit system’s deferred capital investment needs.
Factors that Could Lead to an Upgrade
More dependable flow of state aid funds, reducing the need for short-term borrowings
Mitigation of pension funding pressures affecting related state and local governments
Improved bondholder protections, such as a more stringent additional bonds test
Factors that Could Lead to a Downgrade
Substantial increase in length of state aid payment delays
Weakening sales tax revenue performance and reduction in debt service coverage
Deteriorating liquidity position and lack of market access
There is no shortage of ambitious politicians angling to become the next governor of Illinois. Ten months before the March 2018 Democratic primary, the list of contestants still grows.
Last week, two more jumped into the already-crowded field: State Rep. Scott Drury of Highland Park, and Chicago activist Tio Hardiman, who challenged Gov. Pat Quinn in the 2014 primary.
The field also includes Evanston State Sen. Daniel Biss; Bob Daiber, a regional school superintendent from Madison County; two wealthy businessmen, Chris Kennedy and J.B. Pritzker; 47th Ward Ald. Ameya Pawar, and Skokie small business owner Alex Paterakis.
They are all eager to thwart Republican Gov. Bruce Rauner’s reelection plans.
Nine candidates, in all. All men. Where are the women?
In Illinois’ nearly 200 years, the governor’s office has been held exclusively by men.
Sure, women have made political strides in Illinois, occupying nearly every top job, from U.S. senator to attorney general to comptroller. Yet only two — Democrat Dawn Clark Netsch and Republican Judy Baar Topinka — have been nominated for governor by their parties.
* The Question: Do you think a woman may yet announce for governor? If so, who? If not, why not?
The Republican grievance over Chicago centers around language in the formula that would essentially fold the city into the rest of the state. Chicago Public Schools, one of the largest districts in the country, has long acted as a separate creature when it comes to state money for schools: It’s responsible for items the state covers for all other districts such as teacher pension costs and debt service payments.
Instead, CPS has been getting a unique state payment known as the “block grant.” Officials from Chicago have long argued their standalone finances are far more than what the state gives them, but Republicans say the city has done a terrible job of management.
The Democratic formula tries to change all that by establishing a uniform mechanism for all districts. What was formerly the block grant would be folded into Chicago’s total state aid and counted toward the district’s need. But Rauner said that’s special treatment and siphoning money that should be going downstate, along with the contention of a need for new money.
Manar said that’s entirely wrong. “The block grant is gone in this bill. In exchange, we cover a piece of the pension cost — not their full pension cost — a piece.” The legislation would include $215 million to go to Chicago’s suffering teacher pension system.
Purvis and Rauner say the state should not be doing that on top of including the block grant money in the new formula. “They got the block grants, but I think everyone agrees they should get one or the other,” Purvis said.
Hmm. I thought the governor was OK with both as long as he got pension reform. A Senate Democratic official put it this way today: “That was the deal he was for before he was against it.”
* Anyway, that brings us to our deep dive. At my request, Fix the Formula Illinois & Funding Illinois’ Future Coalition, which includes the Illinois Association of School Administrators and the Illinois Association of School Business Officials among others, sent me this…
SB1 ends the special Chicago Block Grants going forward, and the dollar value of those grants last year are incorporated into Chicago’s base funding under SB1. In other words, Chicago students keep their prior year funding just like all other students keep their funding from the prior year. That’s pre-existing funding Chicago students get to keep, not new money.
However, because this pre-existing funding is included in Chicago’s base under SB1, it moves CPS closer to its Adequacy Target. That means a reduction in the amount of formula funding CPS shares in when new state funding for schools is distributed under the new Evidence Based Model.
As you know, the state pays the pension costs for all districts but Chicago Public Schools. Resolving this lack of pension parity under current law is crucial to getting school funding right in Illinois. To accomplish this, SB1 covers the “normal cost” of teacher pensions. Normal cost is the actual employer contribution required to cover the future pension benefits teachers are earning in a single year. For CPS that’s $220 million. For the rest of the school districts in the state it’s $900 million for normal pension costs, according to the Center for Tax and Budget Accountability. The amount the state contributes for CPS’ normal cost under SB1 doesn’t grow in the future. Moreover, if in the future other districts become required to pay their own pension costs, they would be handled the same way. CPS’ pension bill goes directly to them while the bill for every other district gets sent to the state. That doesn’t change.
The same is true for legacy (unfunded liability) costs. CPS is the only district that must pay its own legacy pensions costs. That means CPS has to use a portion of its local property tax dollars to cover this pension legacy cost. Obviously, CPS can’t spend the same tax dollar twice, so the local revenue it has to spend on pensions is not available to spend on students and just 86 cents on the dollar can go to the classroom. The formula in SB1 accounts for this by reducing Chicago’s local capacity target—that is the amount of local tax resources CPS is able to use to fund schools. It doesn’t give Chicago these dollars, but recognizes it must use a portion of local property tax resources to pay the required unfunded liability for its pension system.
Many districts moved across funding tiers as changes were made following the initial introduction of SB1 and similar legislation in HB2808. For example, many low-wealth downstate districts that started in Tier 1 moved to Tier 2 in one of the amendments. After a series of changes, many of these districts ended up back in Tier 1, as did CPS, as dollars were added to the tier to account for lower adequacy. That is part of the process of refining a bill as complex as school funding reform. In the end the formula helps those districts it intends—districts with more low-income students or low property wealth, whether in Chicago or elsewhere in the state.
After all is said and done, CPS would receive $70 million from the $350 million new funding modeled in the formula, or 20%, proportionate to the number of Chicago students. This is less per pupil than districts with similar low-income populations and somewhat more than districts with similar property value. Which makes perfect sense given CPS serves a greater percentage of low-income students than do most districts with similar property wealth available to tax, but has more property wealth than most districts that serve a similar proportion of low income children.
The good news is the evidence-based formula in SB1 accomplishes its intended purpose of providing new funding in a manner that equitably accounts for both student demographics and population. Over 80% of new dollars go to districts with greater than 50% low income students, while 70% of new dollars go to districts with lower than median property wealth.
Chicago homeowners are about to get whacked with a 10 percent increase in their property taxes.
Owners of commercial properties will have to dig almost as deep. The average hike there is 9.3 percent.
Both pieces of news come in a summary from Cook County Clerk David Orr of the bills that’ll be in the mail soon. Orr’s office completes the process of calculating, or extending, each property owner’s bill.
The huge city hike has been expected, since both Chicago and Chicago Public Schools imposed multiyear property tax increases, mostly to pay for shortfalls in worker pension systems.
But this is likely to intensify a debate over the heavy reliance on the property tax system that has become a central issue in the race for governor.
Increases in the suburban portions of the county won’t be quite as steep as in Chicago proper, and in some cases, there will be a decline. According to Orr, the new average residential bills for 2016 will rise 6.5 percent in the north suburbs and 3.9 percent in the south suburbs.
The average city increase will be about $360.
* ILGOP…
“Today’s double-digit property tax hike is just another sign that Illinois’ property tax system is broken and corrupt, and the politicians and wealthy insiders who benefit from the system refuse to take responsibility. This is exactly why we need Governor Rauner’s property tax relief plan passed immediately. Let’s take the property tax system out of the hands of the Chicago political machine and give it back to the public.” – Illinois Republican Party Spokesman Steven Yaffe
Crain’s Chicago Business is reporting that Chicago property tax owners are “about to get whacked with a 10 percent increase in their property taxes.”
Democratic Leaders in the General Assembly, who make money off the property tax system, are blocking Governor Bruce Rauner’s property tax relief plan.
Rauner’s plan would freeze property taxes and give local voters more referendum power to lower property taxes.
…Adding… As a commenter notes, Gov. Rauner signed the bill that allowed Chicago to raise these taxes. Click here.
Gov. Bruce Rauner was back in Peoria last week, pushing another of the planks in his platform of reforms that he’s had little luck implementing since his election.
This time, the issue at hand was a property tax freeze the governor’s been pushing for two and a half years years without any success, though hovering over the whole discussion was the continued lack of a state budget.
Such a freeze was part of multiple versions of the “grand bargain” deal that members of both parties in the state Senate were crafting, though Rauner didn’t like the limited length of the freeze that were being discussed. He’s especially scathing about the two-year version that got called for a vote after the gov effectively pulled off GOP support from the legislation. […]
Asked about it, Rauner ignored the potential, saying that a two-year freeze is “not real” and that it guarantees rates will rise in years three, four, five and six. (You can ask yourselves whether that same thing would happen at the end of Rauner’s preferred four-year freeze.)
*** UPDATE *** I just totally unloaded on the person who sent me the original video because I specifically asked if there was anything else about the topic on the clip and was told in no uncertain terms that what I had been given was all that Kennedy said. Turns out, that wasn’t the case. Here’s the end of Kennedy’s answer…
Let’s balance our budget the way a great state balances its budget, and if we want to legalize marijuana for other reasons, then let’s do that.
So, he’s getting closer to actually coming right out and saying he’s OK with legalization, but he’s not quite there yet. More importantly, my apologies to the Kennedy campaign.
[ *** End Of Update *** ]
* Tracker footage from last night’s Democratic Women of Kendall County event…
* Transcript…
Audience question: Where do you stand on Illinois legalizing marijuana for recreational use and financial benefits for the state?
Chris Kennedy: I’d say this. We are not a failed state. We have a state government budget problem, that’s what we have. We don’t have an economic problem. Now Gov. Rauner is slowly making that state government budget problem become an economic problem. It doesn’t need to be that way. When Pat Quinn was governor, we had a slightly higher income tax, we had a balanced budget, we were paying our currently due payments under all pension programs, and we were paying down outstanding payables. That’s pretty much all you want out of your government right there. And we can do that again without a lot of harm at anybody in our state, and that’s what we should do. The idea that we should abandon that and instead pay for everything by legalizing marijuana because we don’t want to take on the hard work necessary to balance a budget in a modern state in America is ridiculous. Let’s separate those two issues. Let’s separate those two issues.
Lots of words.
And, may I ask, who are these people who say we should abandon the hard work of balancing a budget and “pay for everything by legalizing marijuana”?
* Brian Mackey is in Mt. Vernon today to watch the appellate hearing on the lower court’s ruling to pay state employees without an appropriation.
Background on the case is here. Justices Richard P. Goldenhersh, Melissa A. Chapman, and Judy Cates are hearing the oral arguments. Deputy Solicitor General Brett Legner is arguing for the attorney general, who wants the payments stopped. On the other side of the case are Steve Yokich for AFSCME and Kenton Skarin for the Rauner administration…
…Adding… Brian is also covering another lawsuit over the comptroller’s office. So, we’ll leave this on.
As we’ve all seen over the past several months, Gov. Bruce Rauner is adamantly refusing to provide any help whatsoever to Chicago, which is struggling mightily under the weight of years of fiscal misfeasance, until his Turnaround Agenda demands are met. A long-sought education funding reform bill, a 911 emergency call center fee, even a bill to allow the expedited sale of the Thompson Center have been hit with Rauner’s broad (and often false) brush of being a “Chicago bailout.”
* OK, now let’s take a look at these three issues one at a time. First, here’s the Chicago Tribune editorial board on the education funding reform bill that has passed both chambers…
Let’s get something straight: It’s not a bailout. CPS is teetering on bankruptcy. It is borrowing to pay off borrowing and faces a structural deficit so alarming that none of the proposals in Springfield to overhaul the statewide formula would funnel enough money to bail out CPS. Not even close.
That said, this proposal would put CPS on steadier footing while closing the gap between wealthy and poor districts from Rockford to Cairo. It should not be summarily dismissed simply because CPS gets help. Let’s all acknowledge CPS serves the largest number of low-income children in this state.
“I came to the conclusion that my constituents weren’t that concerned with the amount that the people of Chicago paid and if Chicago legislators were comfortable with that amount, fine,” Hays said. “But what I was not willing to do was go home and tell my own constituents that when you dial 911 and on the other end of the line it says that this has been disconnected and people ask, ‘Why did this happen?’ I was totally uncomfortable with saying that the mayor of Chicago and the governor are in a wrestling match over something peripheral to your 911 service.”
And if it’s a “bailout,” it’s a self-imposed one because the Chicago City Council has to approve that new fee before it can be implemented.
City Hall would be crazy to share control over what goes there. […]
Rauner also wanted the Legislature to grant him a say in what zoning changes would be allowed for any new development. This is necessary, the governor’s administration has argued, if he is to negotiate the best deal for the state, potentially bringing in an estimated $300 million.
Democrats did not yield to the governor last week, nor should they have. In this deal, the state is just another landlord. Zoning decisions are made by municipalities. And fees imposed for zoning changes are collected by the municipality for use by the municipality. City Hall expects to invest much of that money in more impoverished parts of town.
The governor should do what sellers do: Find a potential buyer and then negotiate with the city for whatever zoning changes the buyer might demand.
As I’ve also argued, this had nothing to do with a “bailout” and everything to do about control.
But Rauner has a stronger public hand. His pledge to stop any and all Chicago bailouts fits right in with attitudes of this state’s “white flight” suburbanites and city-hating Downstaters.
If the governor was accurately describing the above legislation as “Chicago bailouts,” I’d let it go. But he’s obviously not, so somebody needs to point out that he’s using politically expedient dog whistle language.
And, please, don’t tell me this isn’t racially and geographically divisive rhetoric. I grew up in a rural Downstate area. I also covered Pate Philip’s tenure for many years. This ain’t rocket science. It’s old style politics at its worst and was used to fire up the rubes since long before I was born.
* And it’s not new to Rauner, either. From a column I wrote almost exactly one year ago today…
Having spent much of my white male life downstate, I can vouch for the effectiveness of these attacks. Yes, some downstaters realize they’re being pandered to, but many still love it. Finally, they say, we have a governor who’s saying what we’ve been thinking. […]
Even so, deliberately creating this much division is flat-out wrong. Stop it.
“He understands that there are divisions between Chicago and the rest of the state. There’ve always been. But he exploits that by saying things like Chicago teachers are virtually illiterate, or calling Chicago Public Schools prisons or referring to our schools using corporate terms like a bailout,” Pawar said.
“I mean, it is code words to prey on people’s fears about what they might think about Chicago. It’s embedded in race and class. What he does is racist. It is racist. There is no doubt about it, except he’s a lot less bombastic and nasty about it. But the code words are there,” he said.
The governor’s camp pushed back.
“The Rauners are proud to have personally supported Chicago schools and contributed substantial resources to improving education in the city for many years,” spokeswoman Kirsten Kukowski said in a statement. “As governor, Bruce continues to work towards funding reform that is fair to the entire state.”
What a lame push-back.
Look, Rauner has accomplished some things on criminal justice reform (including signing the bail reform bill last week) that no racist would ever do. He’s for automatic voter registration, for crying out loud.
I think that Rauner is simply a very accomplished political opportunist who claims he’s for “the people” while employing all sorts of tactics to win the media cycle, including tactics used by racists and those who would divide this state for their own personal political gains.
But it does need to stop. No political gain justifies this crud.
*** UPDATE *** Pawar is now coming right out and saying it…
ILGOP Releases Digital Ad “Illinois Deserves Better Than This”
Ad Highlights Mike Madigan’s Tax Hike Agenda, Refusal to Pass A Budget
After Democrats in the General Assembly again refused to pass any budget, the Illinois Republican Party released digital ads highlighting their failure and inability to stand up for the hardworking taxpayers of the state.
Instead of compromising and working with Republicans to get a truly balanced budget with the reforms needed to fix our state, Mike Madigan’s muppets in Springfield only want to pass a massive tax hike without structural change.
That’s not the path to getting our state back on track. We’ve got to stop just sticking it to taxpayers in Illinois.
In response to toilet-gate and the Blago tapes, boss Democrats engineered an early endorsement of Pritzker by labor leaders of the Illinois AFL-CIO to demonstrate J.B.’s strength.
A Kennedy being squeezed by Cook County Democrats and organized labor in Illinois?
Richard J. Daley is rolling over in his grave.
Now there’s another problem for Democrats: the exhaustive analysis of Cook County property taxes by the Chicago Tribune’s Jason Grotto. It shows that under Cook County Assessor Joe Berrios, a Boss Madigan ally, property assessments in Cook County are riddled with errors. According to the Tribune, lower-priced homes were overvalued, while higher-priced homes were undervalued.
Minorities won’t like that. Without minorities, Boss Madigan can’t rule and take advantage of all those Pritzker bucks. And so, Kennedy hit at Madigan’s weak spot.
The Tribune story, Kennedy said, “demonstrates there is enormous prejudice in the system, the system is rigged against the poor, and that is probably a de facto violation of the Civil Rights Act because people of color are so disproportionately punished by the system and disproportionately paying much higher taxes.”
On the other hand, I think Berrios has some points in his favor, too. For instance, the main map the Tribune displayed to summarize its findings showed that while the poor, black West Side on average is overassessed, so is the white Northwest Side and most of northwest suburban Cook.
Here’s that map. Dark red means the properties were overvalued by at least 10 percent, light red is overvalued by less than 10 percent…
The full Kennedy interview is here. That’s quite a play-in Kass has.
*** UPDATE *** From Assessor Joe Berrios…
Mr. Kennedy’s comments stem from Chicago Tribune stories based on faulty sales ratio studies not done by assessment professionals and not including all properties, countywide.
I grew up in Cabrini Green, am the first minority to become Assessor and was the legislature’s first Hispanic-American. I won’t allow unfair assessments to cause minorities to pay more than they should.
The Cook County Assessor’s office does base all valuation on all sale prices and market conditions over a three year period for similar homes in each neighborhood. The Assessor doesn’t set tax rates or levies. That is done by school districts, municipalities and other taxing bodies. Mr. Kennedy’s lack of knowledge of assessments may have caused his errors.
Gov. Bruce Rauner’s education adviser, Beth Purvis, said the governor supports 90 percent of the education funding reform bill that was passed by the legislature this spring, but would still veto it because it is too generous to Chicago Public Schools.
A key proponent of the bill, state Sen. Andy Manar, D-Bunker Hill, fired back at the governor’s office, saying, “Most rational people would take 90 percent and call it a win.”
Lawmakers filed a motion last week that will delay Senate Bill 1 from being formally transmitted to Rauner for his signature or veto, in hopes that tensions will eventually die down.
In an interview with The State Journal-Register last week, Purvis said she views the extension as allowing for “continued conversations” that can produce legislation the governor could support.
One major sticking point for Rauner, she said, is that the bill funnels $215 million into the Chicago Teachers Pension Fund this year, in addition to a $250 million block grant the Chicago school system receives.
Except the governor has said he could support that $215 million in exchange for pension reforms.
Mayor Rahm Emanuel has some political advice for Gov. Bruce Rauner: When you like 90 percent of a proposal, take yes for an answer. […]
Emanuel, who has burnished a deal-making reputation during his decades in government, suggested the school funding formula bill is close enough to what Rauner wants that the governor should sign it into law.
“Now look. I would like to get 100 percent all the time. I got three aldermen here. None of us get 100 percent of what we’re seeking. Ninety percent in public policy is a victory, and yet the governor is still issuing a veto threat when it meets the needs of the children of the state of Illinois 100 percent,” the mayor said.
Later, Emanuel contended “you cannot make perfection the enemy of progress. It explains why we don’t have a budget.”
*** UPDATE 1 *** Pritzker campaign…
Bruce Rauner is showing his true colors by planning to veto an education bill that he mostly supports. After talking up the issue for years and even convening his own task force, Rauner is cowardly abandoning the bill to make a political statement.
This is the epitome of failed leadership: getting 90% of the job done and still refusing to compromise. It’s clear that Bruce Rauner will never step up to the plate and lead our state. Real leadership is negotiating and compromising for the future of our state and our children — something Bruce Rauner refuses to do.
Rauner’s strategy is clear: it’s my way or the highway.
While Illinois has the least equitable school funding system in the country, Bruce Rauner is failing to solve the problem. And, under Rauner’s failed leadership, Illinois is breaking national records for not passing a budget for 713 days. Despite this fact and the incredible pain he is inflicting across the state, Rauner continues to put himself and his special interest allies above Illinois schoolchildren.
“While Bruce Rauner can try and bankrupt our state, he cannot bankrupt our people,” said Pritzker campaign spokeswoman Jordan Abudayyeh. “Rauner almost reached a compromise, but instead of doing what’s right, he cowardly retreated the moment he didn’t get his way. That’s not how compromise works. No one should be in government unless they truly care about our state and our families. Unlike Rauner, JB invests in people and in our communities. It’s abundantly clear that Rauner will always put politics above the people of our state.”
*** UPDATE 2 *** Biss campaign…
“This is yet another example of Bruce Rauner protecting his rich friends rather than fully funding schools in Chicago and hundreds of other low-income districts across Illinois — the same low-income districts that are hurt by our corrupt property tax racket. As governor I will fully fund all schools to give all kids the education they deserve, starting by making the millionaires and billionaires pay their fair share.”
As Illinois draws closer to entering a third year with no state budget, Illinois Senate President John J. Cullerton issued a statement reminding everyone that the Senate has actually passed a balanced budget. He urged Gov. Bruce Rauner and the Illinois House to take up and finish the work the Senate has done.
Statement from Illinois Senate President John J. Cullerton:
“I want to remind everyone that the Illinois Senate approved a balanced budget. Not just any budget, but the budget Governor Rauner introduced. We held spending to the exact level he wanted, kept the tax rate that he asked for, cut $3 billion in spending and ultimately eliminated the nearly $5 billion deficit in his proposed budget.
“The Senate has done its work. It’s up to Governor Rauner and the Illinois House to finish the job.
“Illinois has already gone two years without a budget, and Governor Rauner is dangerously close to extending that to three years. That is unacceptable. We need a bipartisan solution. With the May 31 deadline passed, it now requires Republican votes to get a balanced budget approved in the House. The governor needs to sit down with House Republicans, come to agreement on this balanced budget and then help make it the law.”
The SDems also included a breakdown of what their budget did. Click here for that.
As we’ve all seen over the past several months, Gov. Bruce Rauner is adamantly refusing to provide any help whatsoever to Chicago, which is struggling mightily under the weight of years of fiscal misfeasance, until his Turnaround Agenda demands are met. A long-sought education funding reform bill, a 911 emergency call center fee, even a bill to allow the expedited sale of the Thompson Center have been hit with Rauner’s broad (and often false) brush of being a “Chicago bailout.”
Rauner will never again get another “opportunity” like this one. The Democrats have historically protected Chicago and the city needs more help now than ever before. Going after the city is, by far, Rauner’s “best” leverage to force the Democrats to cut a deal with him.
The Democrats, particularly in the House, won’t budge, partly because their city-based and statewide union allies are demanding all-out war. Labor leaders see barely disguised anti-union agendas everywhere, particularly in the governor’s proposed property tax freeze, which they believe is designed to put so much long-term fiscal pressure on local governments that they’ll demand relief from their union contracts.
The unions have done pretty much everything that House Speaker Michael Madigan has asked them to, right up to and including endorsing a billionaire for governor, despite the fact that this particular billionaire’s family has a not so great relationship with unions at its massive Hyatt Hotel chain.
In return, Madigan has done pretty much everything that organized labor has asked him to do, including running multiple versions of a bill to weaken Rauner’s negotiating hand with AFSCME. And while the Senate Democrats were negotiating workers’ comp reform and a property tax freeze with the Republicans, Madigan put up a brick wall.
The Democrats’ position got a little stronger when the people who run the Chicago Public Schools figured out how to (barely) keep the doors open for the rest of the school year. Without an imminent early June crisis in their party’s traditional home base that could’ve forced their hand with Rauner, they could turn their attention to late June, when a budget has to be passed or the state will be whacked with junk bond status, K-12 schools may be forced to cancel fall classes, social services completely collapse and some of the “directional” universities have to consider becoming half the skeletons they already are.
But Rauner has a stronger public hand. His pledge to stop any and all Chicago bailouts fits right in with attitudes of this state’s “white flight” suburbanites and city-hating Downstaters.
More importantly, the governor’s constant demands for a property tax freeze put him on the side of the vast majority of Illinoisans.
Most Statehouse types believe that Rauner cares nothing at all about the very real and lasting damage this impasse of his is causing. In his prior business career, he’d regularly bust out companies and sell off their pieces if he wasn’t getting his way or if the companies weren’t performing up to his standards. This impasse doesn’t look all that much different.
Some even go further, including Comptroller Susana Mendoza, to claim destruction has been Rauner’s real plan all along. He never wanted a budget, they say. He deliberately set out to shrink government by killing it.
And Madigan is no bleeding heart liberal, either. He’s never been a big fan of the bureaucracy, having fought with AFSCME and the teachers’ unions countless times over the decades (but making up for the spats whenever it was beneficial to his position). His people have denied that the impasse is having any significant impact on the state’s economy. He’s even claimed to some of his members in private that social service providers weren’t as bad off as they’ve said. And a large number of universities are in Republican House districts.
And so, as it has been for two years now, we have a soulless irresistible force up against a heartless immovable object. They both have strong enough bases of support to have sustained them through this mess, even though the vast majority of the population can’t stand either one of them. They’ve done their best to prevent a complete catastrophe on their own side of the fence which could force capitulation. One is a kabillionaire who can bring limitless resources to the campaign playing field. The other has opened a new and expensive front with a billionaire candidate.
We could be heading for the biggest showdown in the history of Illinois at the end of the fiscal year on June 30th. We’ll either get a deal or our state will implode.
