Details were few and far between following a meeting Saturday between Gov. JB Prtizker and Mayor Lori Lightfoot on the heels of a report that she would ask the state to take over the city’s pension funds.
The meeting was “productive” and the two leaders discussed “shared challenges and opportunities” that covered “a wide range of issues,” according to similar statements provided by each office.
Crain’s Chicago Business reported Friday that Lightfoot would ask the governor to combine Chicago’s pension funds, which are currently underfunded by $28 billion, with those of municipalities across the state.
As subscribers already know, Lightfoot’s people have been floating all of these ideas since May.
* From the governor’s office…
The governor and mayor had another productive conversation that covered a wide range of issues. The governor looks forward to continuing to work together on the problems facing the state and the city.
* Mayor Lightfoot’s spokesperson…
Today, Mayor Lightfoot and Governor Pritzker had a very productive meeting to discuss the shared challenges and opportunities facing our city and state. The Governor is an important partner and champion for the City of Chicago and we look forward to continuing to work together to strengthen our communities throughout Chicago
I’m thinking the city didn’t get what it wanted.
* Also, Mayor Lightfoot’s people finally answer my question about whether the mayor still supports the governor’s graduated income tax proposal in the wake of oblique threats to tank it if the city doesn’t get the money it wants from the state…
Hi Rich, sorry I thought I hit send on this. Yes, the Mayor still supports this proposal. Thx!
The Northwest Side game of political thrones continues as Robert Martwick switches from the 19th Illinois House District seat to the 10th Illinois Senate District chair while Rosemont mayor Brad Stephens will likely be the new representative of the 20th House District.
Furthermore, 45th Ward Democratic committeeman and former alderman John Arena reportedly is being considered as Martwick’s possible replacement for the state representative job, and Stephens is in line to replace the recently retired state Representative Michael McAuliffe.
Martwick replaces state Senator John Mulroe, who was recently appointed a Cook County judge.
Martwick was sworn in as a new senator during a June 28 ceremony at the Roden Library, 6083 N. Northwest Hwy., after he secured most of the weighted vote from the area’s Democratic committeemen.
Although several candidates seeking the position made their pitch before committeemen voted, the Journal learned the contest really came down to Martwick, who is also Chicago’s 38th Ward Democratic committeeman, and Tim Heneghan (Chicago D-41st). […]
Heneghan said at the start of Friday’s meeting: “I know most of you were invited for a swearing in, but there is a process.” He then turned the gavel over to the committeeman with the next most weighted vote, 45th Ward Democratic Committeeman John Arena, who ran the remainder of the meeting. Heneghan later told the Journal he turned the meeting over to Arena because he felt it was “a sham.” […]
In the end, Maine Township Democratic Committeeman Laura Murphy and Heneghan said Barrett Pedersen, Laura Murphy and 29th Ward Committeeman Chris Taliaferrio were ready to stand behind Heneghan, but 39th Ward Committeeman Robert Murphy was convinced to change his vote to support Martwick, which was enough to tip the scales in Martwick’s favor.
Heneghan said once he knew he did not have enough support, he removed himself from consideration and released his supporters from their obligation to vote for him. Heneghan said he voted for another candidate and Murphy said she abstained.
* Meanwhile, it was smooth sailing in the 20th House District. Tribune…
Local Republican leaders met Saturday to name Rosemont Mayor Brad Stephens to a House seat vacated by Michael McAuliffe, who had been the lone GOP state lawmaker from Chicago. McAuliffe retired June 17 after 23 years in the legislature. His father, Roger McAuliffe, held the seat for 23 years before that. Stephens, the son of longtime Rosemont Mayor Donald Stephens, was sworn in by Mulroe. […]
Stephens, who will represent roughly the western half of Martwick’s Senate district, said he already has good working relationships with the new senator and other lawmakers.
“Over the past 12 years as the mayor, I’ve made several trips to the Capitol to forge relationships with members on both sides of the aisle,” Stephens said. He said believes he’ll be able to find common ground on some issues with the Democrats who control the legislature. […]
Stephens said he also plans to seek a full term in 2020, but Democrats will likely have their eyes on the seat as well. Though McAuliffe ran unopposed last year, his reelection race against Democrat Merry Marwig in 2016 was one of the most expensive state legislative campaigns in the country.
“We will do whatever it takes to win,” Stephens said.
[Rep. Tim Butler, R-Springfield] also said the measure appeared to give Democratic districts more money than Republican districts. He said everybody pays the same taxes and the infrastructure money should be distributed evenly.
“I would encourage the Democrats to reevaluate that as we roll through this,” Butler said. “This is a six-year plan. We have the opportunity to correct that and I think that’s something that we should do.”
Prtizker dismissed concerns that a disproportionate amount of capital dollars would be distributed to Democratic districts. He said Republican districts are getting billions in infrastructure spending.
First of all, what Rep. Butler is referring to are member initiatives, not the broader capital plan itself. The article doesn’t differentiate. As we’ve discussed before, Democrats did get more money than Republicans for member initiatives, but we’re talking about a difference of a few million bucks each in the context of a $45 billion capital plan.
The fact is that a majority of the money from the infrastructure bill goes to Downstate Illinois. As you know, the many roads, the miles of roads all across the state, the bridges, the significant investment necessary, it’s in mostly Downstate Illinois.
Although there are Democrats in this area and across Downstate Illinois, most of that is represented by Republican Representatives and Senators. And I’m very much in favor of fairness here. I want to make sure we’re making the investments that are necessary.
Universities around the state are mostly, almost entirely in districts represented by Republicans. And that’s where hundreds of millions of dollars, in fact billions when you add it all up, are going. So, the money is getting distributed I think very fairly across the state.
* Looks like the governor got lucky with his timing. The Motor Fuel Tax will increase by 19 cents a gallon on Monday…
Lower gas prices are contributing to record travel. With today’s national average of $2.61, gas prices are 23 cents lower than last summer. AAA does not expect the increased gas tax in Illinois, set to take effect on July 1, to have an impact on holiday travel volumes.
“Gas prices are, on average, 20 cents cheaper than Memorial Day weekend,” said Nick Jarmusz with AAA. “More so, summer gas prices are poised to continue dropping even lower in the coming weeks.”
* But, as is usual with these things, person in the street interviews abound right now on TV stations everywhere. WSIL…
Lucy Rushing manages the 4-Way Quik Shop in DeSoto.
She said this tax increase is going to make it hard to keep their gas prices competitive.
“I have people who will literally stand up here (the counter) and count pennies to pay for gas, so it’s going got impact everybody,” Rushing said.
Pritzker expects this increase to generate around $1.2 billion in revenue, but Rushing is worried about her bottom line.
“People who get gas are more likely to come into the store and buy other things,” Rushing said. […]
Rushing said tobacco is one of their best sellers.
Loss of tobacco sales is probably not a great argument, but I get where she’s coming from.
Residents said they will have to change their daily routine just to stay ahead, especially rideshare drivers that have to fill up daily for their jobs.
“It’s going to hurt, you’re looking at an extra 100 dollars a month basically if you round it out,” said rideshare driver Mahalia Evans.
“My profits are going to end up slashed, so, the way I’m gonna combat it is just like I said, head out to Indiana where it’s a lot more reasonable and more workable. I’m just going to do that,” said rideshare driver Patrick Vital.
Illinois residents routinely cross borders for cheaper gas and cigarettes already, [Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association] said. In May, the Illinois Department of Transportation closed the Bayview Bridge over the Mississippi River near Quincy due to flooding.
“Sales volumes on the Illinois side went up 100% while the bridge was closed, then went back down when the bridge reopened,” he said. “There is evidence all over the state” of consumers near the border seeking better deals in neighboring states, Fleischli said.
How often do we as a group of citizens complain about nothing being accomplished at upper governmental levels? Here, finally, is an example of a problem being identified and a solution presented.
We can’t spend our time yelling “do something about these issues” and then when a solution is found, yell “wait, not that.” Likewise, we can’t avoid doing something because of previous discretions from previous promises.
One, raising the gas tax 19 cents a gallon will provide the needed money to fix our infrastructure, including roads and bridges. Without these resources we would not have the needed money.
Two, the bill also provides millions of dollars to fix our deteriorating facilities around Central Illinois and the State of Illinois. This will include facilities at Illinois Central College, Bradley University, some Peoria Public Schools facilities to name a few.
Third, the incredible number of jobs for engineers, architects, building contractors, road contractors and building trades workers will be substantial for many, many years.
Fourth, the economic development opportunities for our communities all across Illinois through the rehabilitation of roads, bridges and facilities will increase economic development and growth, new businesses and new jobs.
The gas tax increase and $45 billion infrastructure plan drew bipartisan support in both houses, including from Republican state Rep. Margo McDermed of Mokena.
“The capital plan does contain additional sources of revenue, but it is necessary long-term sustainable funding that will help us avoid the peaks and valleys of intermittent funding, which leads to starts and stops on projects our communities are counting on,” McDermed said in a news release. “Further, people who drive on our roads every day are paying for it, they just don’t realize it.”
Surrounded by lawmakers of both parties and representatives from the business community and labor movement, Governor JB Pritzker signed Rebuild Illinois into law, the most robust capital plan in Illinois history and the first in nearly a decade.
The historic plan was passed with vast bipartisan supermajorities and will make $45 billion worth of investments in roads, bridges, railways, universities, early childhood centers and state facilities like the crime lab and veterans’ homes over the next six years, creating and supporting an estimated 540,000 jobs over the life of the plan and revitalizing local economies across the state.
“With this historic $45 billion capital plan, we’re fixing decades-long problems, creating good jobs, improving communities for the next generation – and doing it together, across party lines,” said Gov. JB Pritzker. “The Rebuild Illinois plan transforms our state’s approach to transportation infrastructure, finally treating our roads, bridges, and railways like 21st century investments and not relics of the past. We’re also making critical investments in our higher education institutions, our crime lab and veterans’ homes, early childhood centers, and expanding broadband access to communities across Illinois. With these investments, we’re creating and supporting hundreds of thousands of new jobs in our state. This is more than an infrastructure plan. This is a job creation plan the likes of which our state has never seen.”
* Illinois Manufacturers Association…
Manufacturers need a modern infrastructure system to compete in today’s global economy and this capital infrastructure program builds a bridge to the future. We applaud Gov. JB Pritzker and lawmakers for making this game-changing investment in our infrastructure that improves Illinois’ economic competitiveness,” said Mark Denzler, president & CEO of the Illinois Manufacturers’ Association. “Infrastructure creates jobs and allows for safer families, faster commutes and the efficient movement of people and products around the world. Rebuild Illinois also funds important career and technical education programs to help address the skills gap and workforce challenge facing manufacturers across Illinois.
House Bill 62
Rebuild Illinois makes critical investments in infrastructure across the following areas, many of which will be subject to a rigorous process for determining projects and providing grants:
Transportation: $33.2 billion
Over $14 billion for new roads in bridges:
$10.4 billion for state roads and bridges
$3.9 billion for local governments to rebuild their roads and bridges
Nearly $11 billion for IDOT’s Multi-Year Plan for roads and bridges
$4.7 billion for mass transit, including the RTA (CTA, Metra and Pace)
$1 billion for passenger rail, including Amtrak and other inter-city rail projects
$558 million for aeronautics
$492 million for the Chicago Region Environmental and Transportation Efficiency Program (CREATE)
$312 million for grade crossing protection
$150 million for ports
$679 million for other transportation projects
Education: $3.5 billion
$2.9 billion for higher education, including deferred maintenance and new projects at public universities, private universities and community colleges
$415 million for preK-12 school maintenance
$111 million for early childhood education
State Facilities: $4.4 billion
$4 billion for deferred maintenance and new projects at state facilities, such as the decrepit state crime lab
$350 million for the State Capitol
Environment/Conservation: $1 billion
$867 million for environmental, conservation and recreation projects, including:
$290 million for hazardous waste
$110 million for water revolving fund
$100 million for unsewered communities
$92 million for ecosystem restoration
$75 million for park and recreational facility construction
$40 million for well plugging
$35 million for land acquisition
$31 million for flood mitigation
$29 million for Illinois green infrastructure grants
$23 million for Open Space Land Acquisition and Development
$22 million for dam and waterway projects
$20 million for conservation reserve enhancement
$140 million for renewable energy projects, including solar and energy efficiency upgrades at state facilities and transportation electrification in low-income communities
Broadband Deployment: $420 million
$400 million for statewide broadband expansion
$20 million for Illinois Century Network
Healthcare and Human Services: $465 million
$200 million for affordable housing
$200 million for hospital and healthcare transformation
$50 million for community health centers
$15 million for human services grant program
Economic and Community Development: $1.8 billion
$594 million for community development
$425 million for economic development
$401 million for public infrastructure
$112 million for education and scientific facilities
$75 million for economically depressed areas
$51 million for museums
$50 million for libraries
$50 million for emerging technology enterprises
$50 million for the arts
$25 million for an apprenticeship program
$15 million for Minority Owned Business Program
Senate Bill 1939
SB 1939 provides revenues to fund the horizontal projects in the Rebuild Illinois capital plan.
Increases the motor fuel tax, which is sent to lockbox that exclusively funds critical transportation projects across the state:
Raises the motor fuel tax per gallon from 19 cents to 38 cents on July 1, 2019 and indexes it to the Consumer Price Index. If the motor fuel tax had been indexed to inflation the last time it was raised, it would be 38 cents – another indication of Illinois’ long failure to invest in needed maintenance of roads and bridges.
Increases the special fuels tax (on diesel fuel, liquefied natural gas, or propane) by 5 cents per gallon. The current tax is 2.5 cents per gallon, in addition to the regular motor fuel tax. This increase will generate $78 million in new annual state revenue, which is dedicated to the Road Fund.
Creates the Transportation Renewal Fund to receive the increased motor fuel taxes.
The revenue realized from the 19-cent increase in the motor fuel tax in SB1939 will be split between three purposes: 48 percent will go to the State Construction Account Fund for use on state roads and bridges, 32 percent will go to units of local government through the motor fuel tax formula, and 20 percent will go to local transit districts.
Allows Cook County municipalities to impose an additional 3 cent local motor fuel tax.
Allows Lake and Will counties the same authority as DuPage, Kane and McHenry counties to impose a county motor fuel tax to be between 4 cents and 8 cents and indexes it to CPI.
This increase will result in an additional $400 million per year to local governments (municipalities and local road districts) for local roads and bridges, $250 million to transit districts, and $590 million to the state in FY20.
Title fees: Increases the title registration fee from $95 to $150 for regular title fees and $95 to $250 for mobile homes. Decreases the duplicate title fee from $95 to $50. Increases the salvage certificate fee from $4 to $20. Creates a new title fee for junk vehicles at $10. These increases are effective July 1, 2019 and will generate $146 million in new annual state revenue.
Vehicle registration fees: Increases the annual vehicle registration fee from $101 to $151 beginning with 2021 registrations and the electric vehicle registration fee from $34 every other year to match the registration fee for regular vehicles, plus $100 per year in lieu of motor fuel tax payment, effective January 1, 2020. Increases truck registration fees by $50 for vehicles 8,000 pounds and under and $100 for vehicles 8,001 pounds and over. Combined, these increases will result in $529 million in new annual state revenue.
Commercial distribution fee: Repeals the commercial distribution fee on July 1, 2020.
Sales tax shift: Beginning in FY22, one-fifth of the net 5% state sales tax on motor fuel purchases will shift per year from deposit into the General Funds to the Road Fund, with the full amount deposited into the Road Fund by FY26. This will result in $600 million annually at full implementation (shift of revenue only, not an increase).
Pedestrian and bicycle facilities: Sets aside $50 million in funding for pedestrian and bicycle facilities and the conversion of abandoned railroad corridors to trails.
Transportation Funding Protection Act: Creates this act, which requires local governments to use transportation revenues and fees for transportation purposes only.
House Bill 142
HB 142 provides $22.6 billion in additional bonding authority, which will allow the state to fund much needed improvements in infrastructure in every region of the state. HB 142 increases that authority to $60.8 billion.
HB 142 creates the Multi-modal Transportation Bond Fund, Transportation Renewal Fund, Regional Transportation Authority Capital Improvement Fund, Downstate Mass Transportation Capital Improvement Fund, and Rebuild Illinois Projects Fund.
GAMING EXPANSION OVERVIEW
Gaming expansion will lead to thousands of new jobs in communities across Illinois and greater economic opportunity for Chicago and northern, central and southern Illinois. It will provide the state and local governments with hundreds of millions of dollars in new revenue that will be dedicated to critical investments in infrastructure across the state, including affordable housing, hospitals, universities, and state facilities.
Through gaming expansion, Illinois will join 14 other states in legalizing sports betting while expanding other new opportunities for gaming, including the authorization of six new casinos that will create thousands of construction jobs and full-time, permanent jobs for Illinoisans and encourage project labor agreements. Gaming expansion will ensure Illinois remains competitive among Midwest states.
Senate Bill 690
SB 690 legalizes sports wagering, expands gaming, and provides for the vertical revenues in the Rebuild Illinois Capital plan.
Legalization of sports wagering: Illinois is joining 14 other states, including Indiana and Iowa, in legalizing sports betting, allowing all casinos, racetracks, and sports venues that hold 17,000 people or more a brick-and-mortar license to operate a sportsbook. All licensees will be allowed to go online immediately upon being licensed by the Illinois Gaming Board. For the first 18 months after the first licensee is operating, all accounts must be set up at a licensed gaming facility. Within 540 days of the first license being awarded, the Gaming Board can accept applications for one of three online sports wagering operator licenses. Official league data will be allowed, betting on Illinois college teams will be banned, and a lottery sports wagering pilot program will be created. SB 690 also imposes a 15% tax on adjusted sports wagering receipts for each month, with an additional 2% tax for wagers in Cook County.
The Illinois Lottery will be granted a master license that will allow lottery sports betting terminals in 2,500 retail locations in the first year and 2,500 in the second year across the state. This license is for 4 years and must be competitively selected.
Sports betting is estimated to generate approximately $58-102 million annually, which will be dedicated to much-needed infrastructure projects across the state, including universities, affordable housing, and hospitals.
Sports Wagering Disparity Study and Supplier Diversity: The Illinois Gaming Board must conduct a study of the online sports wagering industry and market to determine whether to implement additional measures aimed at promoting diversity. The Board will evaluate race and gender-neutral programs or other methods that may be used to address the needs of minority and women applicants and minority-owned and women-owned businesses seeking to participate in the sports wagering industry. The study must be conducted by December 31, 2019 and published by March 1, 2020.
To ensure supplier diversity efforts are made, the bill requires all licenses under the Sports Wagering act to submit an annual report beginning April 15, 2020 on all procurement goals and actual spending for female-owned, minority-owned, veteran-owned, and small business enterprises in the in the previous calendar year to the Gaming Board. The Gaming board and all licensees must hold an annual, public workshop starting in 2020 on the state of supplier diversity.
Authorization of licenses for land-based casinos: SB 690 authorizes licenses for six new casinos – in Chicago, Waukegan, Rockford, the South Suburbs, Williamson County (Walker’s Bluff), and Danville – and authorizes revenue-sharing with local municipalities. New casinos will be allowed up to 2,000 positions immediately, except for Walker’s Bluff, which is capped at 1,200, and the City of Chicago, which will be allowed up to 4,000 positions, including slots at Midway and O’Hare Airports. Horse tracks will be allowed 1,200 positions, and Fairmount 900 positions. Each of these casinos will be privately owned, and the Illinois Gaming Board will have oversight. SB 690 also implements a new tax structure for table games.
City of Chicago’s share of casino proceeds includes an additional privilege tax of 33% of AGR and will be dedicated to their police and fire pension funds, which are among the pressures driving escalating property taxes in Illinois. SB 690 also requires a feasibility study to be conducted by the Illinois Gaming Board.
Municipalities will play a significant role in shaping the establishment of new casinos across the state. In order to secure a license, the corporate authority of the municipality or the county board in which the riverboat or casino will be located must certify that the applicant negotiated in good faith and that mutual agreement was reached on the permanent location of the riverboat or casino, the temporary location of the riverboat or casino, the percentage of revenues that will be shared with the municipality or county, if any, and on any zoning, licensing, public health , or other issues that are within the jurisdiction of the municipality or county. Applicants must also submit documents, resolutions or ordinances, and letters of support from the governing body of the municipality or county where the licensee will be located.
Casinos will create thousands of construction jobs and full-time, permanent jobs, including an estimated 4,000 jobs in Chicago, over 1,500 in Rockford, nearly 2,000 in Walker’s Bluff, and 1,000 in Danville.
Expansion of video gaming terminals (VGTs): This proposal protects small businesses and enables the state and local municipalities to gain much-needed capital revenue by raising the VGT tax by 3 percentage points, from 30% to 33%, in the first year and to 34% in the second year and beyond. The legislation also allows establishments to have up to six video gaming terminals, increases the maximum wager from $2 to $4, elevates the maximum cash award from $500 to $1,199, and authorizes an in-location progressive jackpot up to $10,000. Video gaming will be allowed on the Fairgrounds only during the Illinois State Fair and will be capped at 50 machines.
Expansion of gambling at horse tracks: SB 690 provides needed support to the Illinois horse racing industry, which will create jobs and keep the industry competitive. Fairmount will be able to increase their live racing dates to 100, up from 40.
Ethics: SB 690 makes administrative changes to the Illinois Gaming Board and Racing Board, including strengthening the ethics laws on members of the General Assembly, state employees, and members of the Gaming and Racing Boards, implementing a surcharge on the exchange of any gaming or racing licenses until 2027, and sourcing any non-resident gaming or racing winnings to Illinois if they are required to notify the IRS.
Parking garages: Introduces a 6% tax on daily and hourly garage parking and a 9% tax on monthly and annual garage parking. Parking garages are not currently taxed at the state level. This tax will generate $60 million in new annual state revenue.
Traded-in property exemption: Introduces a $10,000 cap per trade-in transaction on first division vehicles. Currently, traded-in property provides a sales tax exemption on the purchase of property up to the value of the property traded in. This cap will generate $40 million in new annual state revenue. Raises the documentary fee from $150 to $300 and indexes it to CPI, which may be imposed on buyers for the handling of closing documents of a sale of a motor vehicle.
Cigarettes: SB690 increases the per-pack cigarette tax by $1, from $1.98 to $2.98, effective July 1, 2019. This increase will generate $160 million in new annual state revenue.
Casino Gaming, Video Gaming, and Sports Wagering: Ongoing revenues from the gaming expansions included in SB 690 are estimated to total at least $350 million annually at full implementation and will support expected vertical capital debt service. Upfront revenues from license fees are scheduled to support pay-go capital costs.
Sales tax parity: SB690 includes mechanisms to increase compliance for “remote” online retailers collecting state sales tax beginning July 1, 2020. Annual estimates for increased state sales tax collections are $200 million.
Data Centers: SB 690 allows an exemption from sales and electricity taxes for data centers who have or plan to make a $250 million investment in Illinois. If a data center is seeking an exemption for the construction or rehabilitation of its structure, the data center must require all contractors and subcontractors to comply with the responsible bidder sections of the Illinois Procurement Code. SB 690 also creates 20% income tax credit against wages if the investment by the data center is in an underserved area. The bill requires an annual report to the Governor and the General Assembly on the tax credit’s outcome and effectiveness.
Capital diversity provisions: SB 690 creates the Illinois Works Jobs Program Act, which includes the Illinois Works Preapprenticeship Program and the Illinois Works Apprenticeship Initiative.
The goal of the Illinois Works Preapprenticeship Program is to create a network of community-based organizations throughout the State that will recruit, prescreen, and provide preapprenticeship skills training to create a qualified, diverse pipeline of workers who are prepared for careers in the construction and building trades. The Illinois Works Preapprenticeship Program will be funded by a $25 million transfer from the Rebuild Illinois Projects Fund.
For public works projects, the goal of the Illinois Works Apprenticeship Initiative is that apprentices will perform either 10% of the total labor hours actually worked in each prevailing wage classification or 10% of the estimated labor hours in each prevailing wage classification, whichever is less.
DCEO will create and administer the Illinois Works Bid Credit Program that will provide economic incentives, through bid credits, to encourage contractors and subcontractors to provide contracting and employment opportunities to historically underrepresented populations in the construction industry.
The Illinois Works Review Panel, which shall consist of members appointed by the Governor and General Assembly leaders, shall make recommendations to DCEO regarding its identification and evaluation of community-based organizations and annually report its evaluation of the Illinois Works Preapprenticeship Program and the Illinois Works Apprenticeship initiative.
According to knowledgeable sources in Chicago and Springfield, after weeks of preliminary maneuvering [Chicago Mayor Lori Lightfoot] is pitching nothing less than a state takeover of the city’s cash-short pension funds, which under current law will require upward of $1 billion in new city tax hikes over the next three years to reach a path to full actuarial funding. Her proposal would consolidate city pension money with smaller downstate and suburban pension funds in a new statewide system. In some cases, those non-Chicago funds are even worse off than the city’s.
Insiders say Chicago might be willing to forgo some revenue it now gets from the state in exchange for relinquishing responsibility for the funds, which now are about $28 billion short of the assets they’ll eventually need to pay promised benefits. To pay the cost, Lightfoot reportedly supports state legislation to tax retirement income of better-off seniors—taxing income above $100,000 a year would net roughly $1 billion annually, according to the Civic Federation—or extending the sales tax to cover high-end services such as accounting and legal advice.
Some of the money also could come from proceeds of the governor’s proposed new graduated income tax. Gov. J.B. Pritzker estimated it will pull in an additional $3.4 billion a year and so far has allotted only $200 million to state pensions but nothing to local pensions.
It’s far from clear that Lightfoot’s proposal will fly with Pritzker. But Chicago’s new mayor has some strong arguments, including the fact that, without state help, Chicago will be forced to impose property tax hikes so large they could cripple the city’s and state’s economy.
Lightfoot also will be able to argue that, if she has to implement huge property tax increases, Chicagoans may not be wild about backing Pritzker’s vaunted graduated income tax proposal in a referendum in November 2020. The measure is favored to pass, but it’s no slam dunk, requiring 60 percent voter approval.
Regarding the state taking over the city’s pension liabilities, Pritzker said he hadn’t heard of that before and stressed that he wanted to improve the state’s credit rating “and so we’ve got to be careful about what we did in that regard, so that’s challenging,” which is a polite way of saying “No.”
The governor did say that he was interested in working with all cities on their financial issues.
Pritzker also said he did not hear the proposals from Lightfoot herself, but noted that they had talked several times and said he looked forward to working with her on various issues.
The governor didn’t mention this, but the state doesn’t subsidize any municipal retirement funds, so making an exception for Chicago would be a major first. The state did step in to help Chicago Public Schools with its pension payments in 2017, but the state has historically picked up almost the full pension tab for Downstate and suburban school districts, so that had precedent.
I asked the mayor’s press office today if Lightfoot still supports the “Fair Tax,” but never heard back.
* According to the article, the mayor also apparently wants to renegotiate the gaming bill to give the city a bigger share of the revenue pie beyond the one-third that the city is getting as well as lowering the overall taxation on the casino.
That would would be a big hit to the state’s infrastructure plan and I asked Sen. Terry Link (the Senate gaming sponsor) today what his reaction was. Link said the mayor had jumped the gun and should wait for the state-mandated study of the casino’s prospects. If the city would get shortchanged, then perhaps it could be addressed.
* I also asked the four legislative leaders for a response. Here’s Senate President John Cullerton’s spokesperson…
We have not had an opportunity to review it.
No briefing before the story surfaced? Not so good.
Speaker Madigan’s spokesman said his boss is prepared to work with the city on pension issues, but they’re looking for information on this plan before proceeding. In other words, Madigan wasn’t briefed, either.
* Senate GOP Leader Bill Brady’s spokesperson…
Leader Brady recognizes Chicago has a pension problem; but taxing retirement income will just drive taxpayers out of Illinois.
* House Republican Leader Jim Durkin is a personal friend of the mayor’s, and here’s his response…
We all know the pension issues facing taxpayers in Illinois. I appreciate the mayor’s willingness to discuss the problem and look forward to working with her in an effort to find a solution that benefits all Illinoisans.
* React from Sen. Andy Manar, who was at today’s presser…
Let me be clear, I am a vocal supporter of the Fair Tax to make sure the wealthy will finally pay their fair share. The Fair Tax will provide record funding for our schools and propriety tax relief for working families across Illinois. Any effort that deviates in a major way from these core principles will jeopardize our ability to achieve lasting reforms.
Gov. J.B. Pritzker and Mayor Lori Lightfoot tomorrow will hold their first lengthy sit-down since Lightfoot took office, and you can bet that at the top of the list is the mayor’s evolving campaign to get the state to help the city deal with its staggering pension problems.
*** UPDATE 2 *** Emily Bittner at the governor’s office…
Earlier this week, the Governor reached out to the Mayor to invite her to sit down together at the Thompson Center. They are meeting this weekend.
Some carefully chosen words there. Not hard to read between those lines.
*** UPDATE 3 *** So, is this meeting about the mayor’s pension proposal? Not necessarily, says Bittner…
The governor asked for the meeting earlier this week. The mayor is welcome to bring up any proposal she would like, but that is not why the governor requested the meeting.
* I’m heading to Gov. Pritzker’s Springfield capital bill signing event to ask him about an unrelated topic that we’ll discuss later this morning. So, keep it Illinois-centric and please be polite to each other. Thanks!
* Tim Timoney is a former Sangamon County Democratic Party Chairman and, aside from his local law practice and part ownership of a restaurant, he’s also Logan County’s chief public defender. Timoney is hoping to be appointed to a Sangamon County associate judgeship.
In August 2017, [Timoney] posted a story [on Facebook] about an off-duty Chicago fire lieutenant fatally shooting a teenage carjacker.
“I guess that punk learned his lesson,” Timoney wrote. “Concealed Carry: Reducing crime, one punk at a time.”
In December 2018, he posted a story about groups of youths, identified as mobs, attacking people on Chicago’s Magnificent Mile, with four people injured and one arrested.
“Sounds more like animals let out of their cages,” Timoney wrote. “We need to bring back law and order.”
When I contacted him about his Facebook posts, Timoney told me he was “offended by my opinions being criticized. I’m not a sitting judge.” He said people are entitled to their opinions, and his posts “just express the frustrations that many people have in today’s world.” […]
In a 2018 post about a few downstate lawmakers calling for Chicago to be the 51st state, Timoney posted thumbs-up and praying-hands emojis.
Lake County officials are moving ahead with plans to prohibit the expansion of video gambling in unincorporated areas.
The financial and administrative committee on Thursday recommended the full board ban new video gambling terminals at bars, restaurants and other gathering spots in the areas it oversees. […]
“I’m not anti-gambling, but … I think it’s appropriate to put a pause on new licenses at this moment in time,” said county board member Paul Frank, a Highland Park Democrat who leads the committee. […]
The Lake County Board initially banned the machines in unincorporated areas, but it reversed course in 2013. As of May 31, nearly 300 video gambling machines operated at 63 locations in unincorporated areas.
Last year, gamblers put nearly $181 million at risk in machines in unincorporated areas of the county, according to Illinois Gaming Board data. Those bets generated $43.2 million for Illinois and $14.6 million for the county.
Could be a lot of things going on there. Existing video gaming companies would always love to stop more competition from coming in. Sometimes an area can become saturated with gambling establishments. And Lake County is getting a new casino, which probably won’t want competition.
As a purist/CPA/accountant wonk, it seems reasonable that any elected official should be required to use state resources when conducting state business including state travel, security, etc. If the official(s) wants to reimburse the state by making contributions to the GRF - that’s great. Otherwise, this commingling of private/public money is not appropriate.
* Hannah Meisel at the Daily Line interviewed Rep. Kelly Cassidy, who sponsored several major pieces of legislation this year, including cannabis legalization and the Reproductive Health Act. The whole thing is definitely worth a read, but here’s an excerpt…
The last week of the General Assembly’s spring legislative session included many lengthy floor debates on legislation ranging from Cassidy’s two signature bills, to a change in firearm identification cards for gun owners, to a measure that will allow the question of a constitutional amendment for a graduated income tax on the November 2020 ballot.
By the time the House reached an overtime agreement on a package of budget, revenue, gaming and infrastructure bills late on Friday and Saturday, lawmakers kept saying how remarkable it was that those issues were so non-controversial in comparison.
Cassidy said it was a strange phenomenon that so much going on in the Capitol during the waning days of session seemed to come back to her and her cosponsors’ work on those two blockbuster bills. […]
For those moments, Cassidy says she hearkens back to the advice of Dave Sullivan, a former Republican senator and current statehouse lobbyist.
“He has a phrase that he uses that has become a bit of a mantra for me: ‘Watch the rollercoaster, don’t ride it,’” Cassidy said. “That’s a really important principle to keep in mind in May, because if you get on the rollercoaster, you’re not driving it.”