* John Miller’s bio…
John serves in a strategic role as the co-head of fixed income for Nuveen Asset Management, responsible for the investment process and performance of the firm’s municipal fixed income group. He is also the lead manager of the High Yield Municipal Bond Strategy, the California High Yield Municipal Bond Strategy, and related institutional portfolios. In addition, he co-manages the All-American Municipal Bond Strategy and the Strategic Municipal Opportunities Strategy and oversees a number of closed-end funds.
* John Miller’s prediction via the Bond Buyer’s Illinois reporter…
Miller (no relation) was speaking during an investors panel at a Bond Buyer conference.
*** UPDATE *** Well, that’s a little comforting…
Headline slightly altered to reflect the new info.
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* Rep. Lindsay Parkhurst (R-Kankakee)…
“It is unthinkable, unconscionable, and unexplainable that the House failed to fulfill its constitutional duty to pass a balanced budget and glaringly failed to advance any budget at all. The majority speaker controls which bills are called, and the speaker called bills impacting catfish sold in restaurants and feral cats, but not the budget!”
Yet, Rep. Parkhurst voted for both the catfish bill and the feral cat bill.
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Could an SB 1 veto be overridden?
Thursday, Jun 8, 2017 - Posted by Rich Miller
* WTTW has a very good story about the ins and outs of SB 1, the education funding reform bill. The whole thing is worth a read, so go check it out. Here’s the end…
Rauner has said he’ll veto the bill as it stands, criticizing the amendment to Chicago Tonight last week, saying it “included hundreds of millions of dollars of extra special treatment to bail out Chicago Public Schools from their years of mismanagement.”
That means for the bill to pass, both the Senate and House would need to override Rauner’s veto. Martire believes SB1 has enough support for that to occur in the Senate.
But in the House, the bill would need 71 votes. And when it was approved last month, it received only 60 votes. Martire said four other Democratic representatives have expressed support SB1, but left Springfield before that vote.
Even with them in tow, it will take bipartisan support to reach that threshold and pass the bill.
“The goal is to get seven legislators, which requires some Republican support, on board for this bill,” he said. “And I think that’s a do-able thing, especially when you get to the heart of how the bill works.”
* Meanwhile, Advance Illinois, one of the education groups that is pushing for the bill’s passage, shared this in its weekly news roundup…
State Representative John Cavaletto recently expressed dissatisfaction with changes to SB1, saying he felt the recent alterations to the bill bail out Chicago schools and short changes schools in the local district. However, several local school administrators are in favor of and have even championed the new school funding formula. What is the root of the opposing views?
That article is here. His local superintendents are really unhappy with Cavaletto. Local school types don’t usually directly criticize their own legislators like they did.
* Related stuff sent along today by Advance Illinois…
* Letter: Illinois (almost) has a school funding formula that will help all students: In response to the editorial “Don’t dare applaud Illinois lawmakers,” the Tribune should applaud the General Assembly’s passage of school funding reform last week.
* Manar: It’s no ‘bailout.’ Rather, this school funding bill is good for every district in Illinois
* Poverty . . . An Equal Opportunity ‘Disrupter’ of Student Success: A University of Illinois at Chicago study released Tuesday analyzed shifts in achievement and other factors throughout Illinois during the No Child Left Behind era. The report shows that achievement gains in Chicago and achievement declines in much of central and southern Illinois now puts achievement in Chicago on par with most downstate districts.
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* Reuters…
Illinois general obligation bond prices plummeted and yields soared in the U.S. municipal market on Thursday, a day after a federal judge ordered the cash-strapped state to find more money to pay Medicaid providers.
Yields on bonds due in 2024 climbed to 5.15 percent in secondary market trading, according to Municipal Market Data, while Illinois’ so-called credit spread over MMD’s benchmark triple-A scale jumped to as much as 380 basis points.
“It’s a real meltdown today,” MMD analyst Randy Smolik said.
He added that spreads over the scale widened by as much as 100 basis points for some bonds issued by Illinois, which already had the widest spreads among the 50 states.
*** UPDATE *** Press release…
With state bonds being downgraded twice last week and a federal court ordering Illinois to find money for Medicaid payments just yesterday, municipal bond analysts are shook over the state’s worsening fiscal crisis under Bruce Rauner’s failed leadership. One analyst was not mincing words about the tumult breaking out among investors, telling Reuters: “It’s a real meltdown today.”
This comes as the state has reached day 708 without a budget and the bill backlog is estimated to reach $16 billion by the end of the fiscal year on June 30. In the meantime, Rauner continues his media tour around the state to promote an agenda that even Republicans admit won’t help get our state back on track.
“It’s no surprise that our dire fiscal situation worsens each day under Bruce Rauner’s failed leadership,” said Pritzker campaign spokeswoman Jordan Abudayyeh. “While investors are panicked, Rauner remains unbothered as he tours the state to promote his teardown agenda that ultimately won’t solve our budget crisis. It’s clear Rauner’s priorities are with his special interest friends and wealthy corporations instead of the Illinoisans who will continue suffering because of his failures.”
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Caption contest!
Thursday, Jun 8, 2017 - Posted by Rich Miller
* Belleville News-Democrat…
Standing near his longtime girlfriend, Stacy Danes, and in front an American Flag, an Illinois flag and signs that read “Fire Madigan!” “Term Limts!” “Lower Taxes” and “More Jobs,” the current chairman of the St. Clair County Republican Committee launched his campaign for the General Assembly.
Douglas Jameson, 53, of Belleville, made his formal announcement Tuesday to seek the Republican nomination to run for state representative in the 113th House District. […]
“We need a balanced budget that does not increase taxes. We spend too much, we waste too much, we have too many levels of government in the state of Illinois,” Jameson said. “We need to take a comprehensive review of everything. If it’s not producing jobs or not adding revenue to the state, we need to examine that program for reduction or elimination.”
* Press release…
Yesterday, Jay Hoffman and Latoya Greenwood held a media event in downtown Belleville to highlight the plight of local social service organizations. The underlying message of not having an approved State budget and the ensuing devastation a lack of funding unleashes on our most vulnerable citizens is accurate, but the blame is misdirected.
“Jay Hoffman’s attempt to lay the blame for Illinois’ financial crisis at Governor Rauner’s feet would be laughable, if the situation wasn’t so perilous. This crisis is not 700 days in the making, but rather caused by 34 years of single party rule in the Illinois State House. Make no mistake, the $14 billion backlog of unpaid bills, over $230 billion in unfunded pension liabilities and lack of funding for vital state services has resulted from Mike Madigan’s reign as Speaker of the House. His leadership position has been enabled by the blind support of downstate legislators like Jay Hoffman.” — Doug Jameson
Jameson launched his campaign for the 113th Legislative District on Tuesday, June 6th with a pledge to help end Mike Madigan’s tenure as House Speaker. Jameson recognizes Illinois’ citizens are fed up with ‘business as usual’ in Speaker Madigan’s Springfield and he vows to channel the frustration of citizens in the 113th Legislative District.
“What are Speaker Madigan and Assistant Majority Leader Hoffman doing about the condition of our economy? Absolutely nothing! For over two years, they’ve ignored their constitutional obligation to pass a budget. This is nothing short of pure negligence!” — Doug Jameson
Jameson pledges an aggressive challenge to Jay Hoffman’s incumbency with a commitment to hold elected leaders accountable for their actions (or a lack thereof).
“The days of Jay Hoffman getting a free pass are over. It’s time to hold Jay accountable to the citizens he was elected to serve. We must not allow Jay another opportunity to elect Mike Madigan as Speaker.” — Doug Jameson
Trouble is, Hillary Clinton won this district last year 53-41. Tammy Duckworth prevailed 61-34. And Susana Mendoz won it 55-39.
* Let’s welcome him to the race against ol’ Punkin Haid, shall we? From the St. Clair County GOP website…
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* As I told subscribers the other day, Scott Drury has a built-in constituency of right-leaning pundits, editorial boards and talk radio hosts who all hate Speaker Madigan…
Thursday morning, Highwood State Representative and Gubernatorial candidate Scott Drury told “The Big John and Ray Show” that the tapes show Pritzker should not be Governor.
“Those tapes are very disturbing and I don’t think we know close to enough about the back story to those tapes. One of the biggest problems I saw in those tapes is that Pritzker clearly comes up with the idea on his own that he wants to be the Treasurer. Sure that’s fine. But later in the tapes he starts talking about how they’re going to pull the wool over the public’s eyes and make it look like the head of the Board of Trade and the Mercantile Exchange how the idea came from them. So you have Pritzker on tape already scheming with a corrupt Governor about how they’re going to make one fact look like it was different and that’s not the type of person we need running our state.”
Drury is a former Assistant U.S. Attorney. He is also one of the few Democrats to publicly oppose powerful Illinois Democratic House Speaker Michael Madigan. He told WLS that while he does not have the money of Pritzker, Democratic Candidate Chris Kennedy, or Governor Bruce Rauner, he can still win.
“What we all know is that money can’t buy character, money can’t buy judgement. Money can’t buy a good message. There is no one in this race until now, who has the scars that I have from actually fighting for the people of Illinois and giving people a voice. We’re gonna return Illinois to the people.”
We’re gonna see a whole lot more free publicity like this. Bet on it.
*** UPDATE *** Jim Dey got into the act, too…
Readers may recall previous stories in this space about Democratic state Rep. Scott Drury, the only member of House Speaker Michael Madigan’s caucus who wouldn’t back Madigan for another term running the House.
For that, Drury has been effectively banished from the club by Speaker Madigan. As persona non grata, Drury, among other things, lost a prestigious committee assignment.
This week, a Democrat in Drury’s suburban Chicago district announced he’ll challenge Drury for re-election in the March primary. That’s generally how Madigan rids himself of independent-minded Democrats.
But Drury had an announcement of his own — he’s entering the primary race for governor. Those who like Madigan, he said, should back one of his opponents, and those who don’t should vote for him.
“I like those odds,” Drury was quoted as saying.
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Rauner sends out another fundraising letter
Thursday, Jun 8, 2017 - Posted by Rich Miller
* The front…
There’s that phrase again. “Without any tax increases.”
But, yeah, he so wants a deal.
I think this is basically the same letter he sent out before, but I didn’t have the full letter back then, so let’s take a closer look at it today.
It may seem odd that a man who contributed $50 million to his own campaign and received another $20 million from a buddy would be sending out these fundraising appeals, but raising money helps people feel like they’ve invested in a candidate, which makes them more supportive. Also, even if they don’t contribute, he can still get his message out.
* I’ve cropped the letter a bit to make it more easily readable here…
So, “many times” he’s been the only one standing against “job-killing, taxpayer-crushing policies”? That may be news to some Republican legislators, and even some Democrats.
The bill backlog is solely the fault of Democrats?
And please tell me which of the “nearly every liberal newspaper” are demanding that Rauner “capitulate” to Madigan. A bit Trumpian there, if you ask me.
Governor, I’d truly love to see some of those “problem-solving leadership skills” you boast of.
Also, you may have made “record” promises to education, but the state can’t pay for them. It’s currently $1.1 billion behind on school grant payments, with no resolution in sight.
Two attacks on the media in one fundraising letter. Sweet.
Also, he was a financial planner for families?
But, yes, he most certainly did follow through on his pledge to shake up Springfield. It’s pretty much broken from all the shaking.
And that page is all you really need to know about Rauner 2018.
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Yep. Things are going just great
Thursday, Jun 8, 2017 - Posted by Rich Miller
* From the Illinois Policy Institute’s news service…
“My chief of staff is meeting with the chiefs of staff of all the legislative leaders right now, trying to move this forward to get a balanced budget,” Rauner said. “We are working seven days a week. We will never give up, but the issue is we’ve got to change the system.” […]
Steve Brown, spokesman for House Speaker Mike Madigan, D-Chicago, said there were no developments at the meeting. When there are, Brown said, Madigan will call lawmakers back to Springfield. […]
Rauner said the Democrat majority is purposefully not sending an agreed-upon and balanced budget because they’re trying to damage him politically.
“They want chaos. They want mayhem,” Rauner said. “They’re happy to hurt whoever they need to hurt. […]
Brown dismissed Rauner’s comments as “incompetent babble.”
Sigh.
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Easier said than done
Thursday, Jun 8, 2017 - Posted by Rich Miller
* WTAX…
Schools will be able to open in the fall, even though the governor has called the school finance restructuring bill a Chicago bailout, and even though the House did not call a Senate-passed budget bill.
Rauner toured Poplar Grove, Moline, and Peoria to visit homeowners frustrated by property taxes. In the cases of Poplar Grove is near the Wisconsin state line, and Moline is across the Mississippi River from Iowa.
In Peoria, a reporter asked Rauner about the possibility of school not opening in the fall.
As he left, the governor said, “We won’t let that happen.” He did not elaborate.
He’s against a stopgap budget, so that means he has to find a way to come up with a real budget deal by the end of this month.
Odds?
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* Press release…
Today, Illinois’ constitutional officers and other top elected officials are calling on Governor Bruce Rauner to join the United States Climate Alliance following President Donald Trump’s decision to withdraw from the Paris climate agreement.
“As governor, your decisions affect life within our borders and in the world at large, and many people throughout our state are looking for your leadership on this issue. To date, we have not heard your stand on this issue. We encourage you to join your peers from California, New York and Washington and lead in combating global warming, drought, stronger storms and other catastrophes that would decimate Illinois’ economy from Southern and Central Illinois farms to Chicago’s lakefront.”
The call to action came via a letter sent to Governor Rauner today outlining the benefits of joining this state and local government initiative. Illinois is the fifth-largest economy in the country.
California Gov. Jerry Brown, Washington Gov. Jay Inslee, New York Gov. Andrew Cuomo, Connecticut Gov. Daniel P. Malloy, Delaware Gov. John Carney, Massachusetts Gov. Charlie Baker, Minnesota Gov. Mark Dayton, Oregon Gov. Kate Brown, Puerto Rico Gov. Ricardo Rosselló, Rhode Island Gov. Gina M. Raimondo, Vermont Gov. Phil Scott and Virginia Gov. Terry McAuliffe have already joined the United States Climate Alliance.
In addition to the 12 Governors, 19 attorneys general, including Attorney General Lisa Madigan, numerous mayors, college and university leaders, and businesses across the country have joined the United States Climate Alliance in pledging support for a continuing commitment to fight climate change under the Paris Agreement as part of the “We Are Still In” Coalition.
The release was signed by Secretary of State Jesse White, Attorney General Lisa Madigan, Comptroller Susana Mendoza, Treasurer Michael Frerichs, Senate President John Cullerton and House Speaker Michael Madigan, along with these legislators…
Illinois State Senators:
Sen. Scott Bennett, Sen. Jennifer Bertino-Tarrant, Sen. Melinda Bush, Sen. Tom Cullerton, Sen. Linda Holmes, Sen. Mattie Hunter, Sen. Toi Hutchinson, Sen. David Koehler, Sen. Terry Link, Sen. Iris Martinez, Sen. Julie Morrison, Sen. Laura Murphy, Sen. Ira Silverstein, Sen. Heather Steans, Sen. Patricia Van Pelt
Illinois State Representatives:
Rep. Carol Ammons, Rep. Jaime Andrade, Rep. Kelly Burke, Rep. Kelly Cassidy, Rep. Linda Chapa LaVia, Rep. Deb Conroy, Rep. Barbara Flynn Currie, Rep. John D’Amico, Rep. Marcus Evans, Rep. Sara Feigenholtz, Rep. Laura Fine, Rep. Robyn Gabel, Rep. Will Guzzardi, Rep. Greg Harris, Rep. Stephanie Kifowit, Rep. Lou Lang, Rep. Camille Lilly, Rep. Natalie Manley, Rep. Rob Martwick, Rep. Rita Mayfield, Rep. Christian Mitchell, Rep. Michelle Mussman, Rep. Carol Sente, Rep. Silvana Tabares, Rep. Ann Williams, Rep. Sam Yingling
Bennett and Ammons are the only Downstaters on that list, but they represent Champaign-Urbana, which isn’t your usual Downstate town.
…Adding… Koehler also signed. I missed his name. Oops.
…Adding More… Rep. Juliana Stratton (D-Chicago) was not listed, but should have been.
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No guts, no glory
Thursday, Jun 8, 2017 - Posted by Rich Miller
* From David W. Tretter, president of the Federation of Independent Illinois Colleges and Universities and a leader of the Illinois Coalition to Invest in Higher Education…
Until the trend in funding for higher education is reversed, the promise of a better Illinois is an illusion. A state without a plan is a state with a very dim future.
* From a “Call to action” sent to University of Illinois alumni from President Tim Killeen…
We are going into another fiscal year with no state budget, and University of Illinois supporters have stepped up to ask how they can directly express their concerns to elected officials in Springfield, including one who pointed to the power that the University community holds as advocates. “Please, keep in mind that you have a network the size of which rivals a small army,” he wrote, alluding to our 80,000 students, 25,000 employees and 700,000 alumni around the world.
Our global network also has an outlet to let their voices be heard—through Illinois Connection, a grassroots advocacy organization that has grown to more than 15,000 members since it was founded by the University of Illinois Alumni Association.
By visiting the Illinois Connection website, you will be linked to contact information for the governor and your local legislators, allowing you to share your stories about what the University of Illinois means to you and its key role in driving progress for our state. For state and University employees, it is best practice to use your personal phone or email and to contact elected officials outside working hours or during scheduled breaks.
We encourage you to join our chorus, urging approval of state budgets to fund our public universities for both fiscal 2016 and 2017. Your voices matter. You are voters, not just advocates, and each of you can speak first-hand to the value of higher education—the difference it has made in your life and how it fosters the 21st century workforce and discovery that will move Illinois forward.
Notice anything missing in both pieces? Not a single mention about the need for more state revenue and/or big cuts in spending for other governmental programs. They want more money, they just don’t have the guts to say what that really means.
I understand their reticence. It’s not easy standing up in favor of a tax hike or huge cuts to somebody else. But it’s even more difficult to vote in the General Assembly for tax hikes/cuts when some of the prime beneficiaries of that increased available revenue are too afraid to give legislators even a tiny bit of political cover.
Get in the game or stay on the sidelines.
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* From our favorite, always calm, never over the top editorial board…
“… Drury sees it as essentially a two-way race: those with demonstrated loyalties to the Madigan Machine versus him — the only candidate with a proven record of standing up to Illinois’ most powerful politicians … ‘I like those odds,’ said Drury.”
— News release announcing Democratic state Rep. Scott Drury’s run for governor of Illinois, June 6, 2017.
Life just got more complicated for every Democrat running to be governor of Illinois, or to serve in its legislature. A third Democrat seeking the governorship has publicly criticized Michael Madigan, the head of the state party and House speaker throughout Illinois’ precipitous decline into debt and dysfunction. For Scott Drury, a former federal prosecutor from north suburban Highwood, rebelling against Madigan’s grip looks to be the key plank of his platform.
Madigan, arguably the state’s least popular politician, was destined to be a drag on Democrats. Just as Gov. Bruce Rauner, Madigan’s competition for that “least popular” crown, appears destined to be a drag on Republicans.
Each is routinely blamed for the fall from prosperity of a state that’s losing employers and other taxpaying citizens to rival states. Yes, it’s more plausible to blame a pol now in his 47th year in Springfield for this long-running debacle — especially when his top priority is clinging to his power — than it is to blame a governor in his third year. But for many Illinoisans, especially families dolefully watching sons and daughters take their futures elsewhere, blame is top of mind.
But that inconvenience doesn’t fall evenly on Rauner and Madigan. Rauner doesn’t yet have a Republican opponent. Madigan’s party has six major candidates for governor. And with one of them bragging about his proven independence from the state party boss, all of them will face ceaseless questions from now until the March 20 Illinois primary about their fealty, or opposition, to Madigan. After that comes a general election campaign in which Republicans will wrap Madigan around the Democratic nominee like a tattered green sash at a St. Patrick’s Day parade.
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* Second in the Tribune’s series…
Working with the Center for Municipal Finance at the University of Chicago’s Harris School of Public Policy, the Tribune examined appeals on more than 2.7 million residential parcels and found that, in every year from 2009 to 2015, the industry’s statistical measures of fairness got worse after the appeals process.
That inequity has placed a financial burden on those who can least afford to pay more, the U. of C. study found. On average, even after appeals, people who own homes in the bottom 25 percent of values paid nearly $500 more a year in property taxes than they would have if the system were fair, the research shows.
The reason: Wealthier neighborhoods appealed at much higher rates and regularly received significant assessment reductions even though homes in those areas were more likely to be undervalued. In poorer neighborhoods, homeowners not only are more likely to have their properties overvalued by the assessor, they are less likely to appeal. […]
As previously reported in this series, a Tribune analysis found that the county’s assessments have been riddled with errors. Berrios had a chance to improve the property tax system by implementing a new computer model that would produce more accurate assessments and reduce regressivity, or the tendency to overvalue low-priced homes and undervalue high-priced ones.
But he failed to do so — despite issuing a news release claiming he did.
…Adding… The full study is here.
*** UPDATE *** Press release…
The Cook County Assessor’s Office is again concerned about false statements, misleading claims and inaccurate information recently put forth about property assessment and taxes. Assessor Joseph Berrios has issued this statement:
“Having grown up in Cabrini Green and becoming the first minority ever to serve as Assessor, I would never allow this office to unfairly assess property and cause minorities to pay more taxes than they should.
It is important to respect all homeowners, especially those with homes at the lower end of the market. I have felt this way since I was the first Hispanic-American elected to County-wide office on the Board of Review and, before that, the first Hispanic-American to serve in the Illinois General Assembly.
The property assessment system is not ‘rigged,’ as a few have recently claimed. The appeal process is open and fair to all, contrary to the opinion of the Tribune. No one is required to use an attorney to appeal; in fact, the majority of appeals filed do not use attorneys. Still, the success rate for all appeals to my office is 50%.
We have done everything to encourage all people in Cook County to appeal their assessments. 77% of the community assessment and appeal seminars done by my office are in areas with lower-market homes.
The Tribune’s sales ratio study was not conducted by certified or otherwise experienced appraisal professionals.
In violation of industry standards, the Tribune included in its study countless non-fair-cash-value transactions such as estate sales, which drive down prices. But the Tribune didn’t even note their inclusion.
Court rulings state that sales ratio studies are not technical or scientific facts, but merely studies whose methodology and results are subject to interpretation.
The Tribune’s advocacy of the new Probit assessment model is in complete disagreement with internationally-recognized property assessment experts. Probit has proven highly unreliable.
This Office assesses property, not people. It does so accurately and practices equality.”
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*** UPDATED x1 *** A basic impasse primer
Thursday, Jun 8, 2017 - Posted by Rich Miller
* A good friend of mine, who isn’t directly involved in politics beyond the precinct level (he’s a GOP precinct committeeman), still does a fairly decent job of keeping up with things.
Moments ago, he asked me something I’ve heard time and time again. Where’s all the money being spent without a budget?
* From the Tribune…
In an affidavit filed with the court before the ruling, Assistant Comptroller Kevin Schoeben said that 90 percent of the money that comes into the state’s main checking account is being spent on a “core priority category” that includes paying down state debt and making pension contributions, in addition to spending on elementary and high schools, paying state employee salaries and sending money to local governments. Debt payments, pension contributions and distributions to local governments are required under state law. A state court order requires state employee salaries to be paid in full and on time. Spending on elementary and high schools was approved by lawmakers and Gov. Bruce Rauner last year, but even those payments are behind by more than $1 billion.
The comptroller’s office tries to spread the remaining 10 percent around.
* Back in 2015, the last time we had a kinda/sorta real budget after Gov. Rauner and the Democratic leaders agreed to a patch, which they called a fix, Illinois brought in $35.9 billion (plus some transfers) while spending $35.4 billion. Click here.
But because revenues collapsed after the 2011 income tax hike partially rolled back, the following fiscal year Illinois brought in just $31.9 billion (click here). And because the state didn’t have a real budget, it was obligated to spend $36.6 billion on “auto-pilot.” See above for that explanation.
This fiscal year, which ends in a few weeks, Illinois will bring in $31.97 billion in revenues while auto-pilot spending obligations will rise to $38.2 billion. (Click here.)
Next fiscal year, which starts on July 1st, Illinois is projected to bring in $32.16 billion and be obligated to spend $39.8 billion. (Click here.)
When Gov. Rauner took office, Illinois was paying almost all of its bills within 30 days. However, it was still way behind on paying for state employee group healthcare. That payment cycle is now about two years for some categories. (Click here.)
* Anyway, by the end of June, Illinois is projected to rack up another $6.2 billion in bill backlogs, which will bring the total to $15 billion. If this nonsense continues another year, that backlog will increase by another $7.7 billion and the total backlog will be $22.651 billion. (Click here.)
And who is owed this money? Here’s a good chart from April…
The average wait time to be paid by the state is now about 7 months. (Click here for a list of even more craziness deliberately caused by this impasse and click here for an historical chart of the backlog.)
* And that’s why the federal lawsuit over timely Medicaid payments (click here) is so critical. The state owes those folks $2 billion. But they demanded to be paid on time, the same as state workers, bond holders and government pension funds.
Failing that, they want a substantial amount of the money they’re owed and a federal judge agrees…
A federal judge Wednesday ordered Comptroller Susana Mendoza to make a “substantial” dent in a $2 billion backlog of bills owed to Medicaid providers in order to keep doctors and hospitals from cutting off care for the low-income families that rely on the program… The judge gave them until June 20 to reach a deal. She noted that the patients are not seeking immediate payment of the pile of unpaid bills, just payments that would be “sufficient to sustain the services to members of the classes.”
Except, as explained above, there is no money to do that. Illinois cannot print money like the federal government and borrowing for operating expenses is out of the question because we are literally one step above junk bond status.
* Any other questions?
*** UPDATE *** I didn’t notice that Mark Brown also tackled this very same question in the Sun-Times today. Click here to read it.
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* From the end of session…
“Please, members of the General Assembly in the majority, do not travel around the state holding sham hearings about a balanced budget,” Rauner said. “Don’t go through a process of just trying to create phony headlines.”
* From yesterday…
The Bureau of Labor Statistics says $100 in 2005 is worth $128 today. So, not all that far off from 32 percent. And, therefore, not exactly outrageous.
* But it gets even better…
Concrete reforms to Illinois’ “brutally high” property tax rates are needed to encourage growth in the Land of Lincoln, Gov. Bruce Rauner said during a visit to a Peoria real estate agent’s home Wednesday. […]
Rauner’s administration noted in a news release that the family’s property tax bill has increased by more than $1,900 — more than one-third — since they bought their North Peoria home in 2005, which is borne out by county tax records.
The bulk of that increase came in the first three years they owned the home, with the taxes on it having gone up just over $200 — about 3 percent — since the turn of the decade, according to those same county records.
A $200 increase in 7 years? Not exactly “brutal.” That’s way below the inflation rate.
* Look, there’s no doubt that Illinois property taxes are a real problem. You will not get an argument from me. I have written repeatedly that the Democrats need to stop battling this freeze idea just because they despise the man who’s pushing it.
And he did have some good examples of high property taxes while he’s been out on on the campaign trail taxpayer-financed trip. But it’s really difficult to take the man seriously when he makes a “brutally high” mountain out of a mole hill, and particularly when he warned the General Assembly against doing the very same thing.
*** UPDATE *** Mayor Ardis is a Republican, by the way…
The governor says he’s willing to do a four-year freeze and allow people to control their property tax levy by voter referendum. But people like Peoria Mayor Jim Ardis say a property tax freeze doesn’t address the biggest issue.
“It polls really well. But the problem with it is, it doesn’t add a dime of revenue to the state revenue stream,” Ardis said. “It’s not going to anything to help them do anything to balance their budget, that is the worst one in the country.”
Ardis says the state might see new business growth if it could put as much emphasis on resolving the budget crisis as it is on property tax relief.
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[Bumped up to Thursday for visibility.]
* This puts the comptroller in a pretty darned tough spot, making her choose between violating state statutes, state judicial orders or federal court orders…
A Chicago federal judge has stopped short, so far, of ordering the state of Illinois to place a premium on paying the health insurance organizations, hospitals and others the $2 billion it is estimated the state owes under unpaid Medicaid bills.
However, on Wednesday, the judge said the position taken by the so-called managed care organizations is “reasonable” and indicated she did not similarly find it reasonable for the state to skimp on Medicaid payments while fully funding its monthly payroll and debt repayments.
“…Compliance with a state statute does not excuse failure to comply with a federal consent decree,” U.S. District Judge Joan Lefkow wrote in her June 7 order. “Although the court means no disrespect to the Comptroller, who faces an unenviable situation, it finds that minimally funding the obligations of the decrees while fully funding other obligations fails to comply not only with the consent decrees, but also with this court’s previous orders.”
For now, however, the judge ordered the state and the MCOs to continue negotiating over the next two weeks to reach a payment agreement.
Should they fail to strike an acceptable deal by June 20, however, she said either party could return to court for further proceedings.
* From the legal team representing the plaintiffs…
The court noted that Illinois chose to prioritize certain core priority payments—including pension payments, debt services, K-12 education, safety net medical providers, and state employee salaries—that are paid in full each month. The plaintiffs argued that then, only if the state has dollars left, would it make payments to Medicaid, imperiling the entire program by putting access to care, provider enrollment, managed care participation, and the solvency of Illinois’s health care safety net at risk.
The order came after a court hearing on June 6, 2017 when attorneys from the Sargent Shriver National Center on Poverty, Legal Council for Health Justice, and Goldberg Kohn returned to federal court to hold the State of Illinois accountable to reimburse medical providers statewide for Medicaid-funded care.
Some medical providers in Illinois have been delaying payment of salaries, taking out additional business loans, and facing closure or staff layoffs. Thomas Yates, executive director for Legal Council for Health Justice says, “This ruling reaffirms the importance of Medicaid to more than three million Illinois residents, the majority of whom are children, elderly, disabled, or members of low-wage working households, who rely on this program for essential medical care.”
Shriver Center president John Bouman warns, “We are now seeing the very real threat to the vital functions of government caused by the failure to produce a budget. The policy disputes now blocking the budget should be fought out on some other battlefield. Carrying out and paying for the vital functions should be the first priority of governing.”
* From the comptroller…
In accordance with Judge Lefkow’s ruling, our attorneys will continue discussions with attorneys for the plaintiffs.
The lack of a budget for the last two years has created a situation in which we now have more court-ordered and state-mandated payments than we have revenues to cover them.
The real solution to this crisis is a comprehensive budget plan passed by the General Assembly and signed by the Governor. Now.
*** UPDATE *** Pritzker campaign…
“Bruce Rauner is the governor of this state and the courts should not have to do his job for him,” said JB Pritzker. “It is Bruce Rauner’s constitutional duty to propose a balanced budget, but for the past three years he has consistently refused to do so. As Rauner holds this state hostage, the backlog of bills continues to grow and the fiscal crisis deepens. Courts are left with no choice but to pick winners and losers of state resources. In reality, all Illinoisans are losing under our failed governor. This is a manufactured crisis and the people of Illinois deserve so much better. It is time for a governor with courage, who will sit at the negotiating table, bring people together, and get our state a balanced budget.”
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