* The full speech is here. Press release…
Mayor Lori E. Lightfoot today addressed residents on the state of the City, the City’s finances and the projected 2020 budget deficit during a live primetime speech delivered at Harold Washington Library. In an unprecedented act of transparency before the official City budget address in October, the Mayor appeared before residents to provide an overview of the city’s current financial state, including: a historic $838 million gap projected for 2020, measures taken to date to address the City’s long-term and short-term financial obligations, and the work remaining to put Chicago on track for a balanced and sustainable financial future.
During the speech, Mayor Lightfoot outlined her vision for strengthening the City by building stronger and safer communities, expanding access to education and vital services, and creating opportunities for working families – starting first by working to create structural reforms within City government that will contribute to Chicago’s long-term financial stability. Importantly, her reforms strive to make Chicago work for working-class families and create a model of good governance. These reforms include: fines and fees reforms, passing the Fair Workweek and an Ethics ordinance, and ensuring that Chicago remains a welcoming City.
“Today I am shining a light on Chicago’s current financial conditions. I want residents to know the full extent of the City’s finances and the path we plan to take to address our long-standing fiscal challenges,” said Mayor Lightfoot. “The 2020 Corporate Fund budget shortfall will be $838 million. And while I recognize this is a steep hill to climb, I am committing to residents that, together, we will do the hard work of finding sustainable solutions that will lead our city to long-term financial stability.”
In the address, the Mayor outlined her administration’s efforts to identify over $100 million in savings and efficiencies over the first 100 days and the work that remains to balance next year’s budget. These efficiencies include the elimination of $1.4 billion in short term borrowing, a review of departmental use of overtime and absenteeism, and implementation of a citywide hiring freeze allowing the city to work with departments to identify additional efficiencies in the coming weeks.
The City has begun to make progress in addressing its costs for 2020 and beyond by implementing structural reforms that drive down costs and improve financial stability, including: a complete overhaul of the $100 million workers’ compensation program, which is expected to reduce claims costs and improve services for workers; release of a new healthcare RFP to revisit competitive costs for the $471 million-a-year program; changes to refinance old debt for better rates; and the creation of the first citywide enterprise risk management system, led by Chief Risk Officer Tamika Puckett, which will seek to cut down on the high cost of legal settlements.
And within weeks of taking office, Mayor Lightfoot secured legislative approvals to authorize a casino in Chicago, which would generate a dedicated revenue source to finance underfunded police and fire pensions. The administration is now committed to working with State legislators on the taxation structure to ensure a Chicago casino will represent a structural solution for long-term sustainability.
The 2020 budget forecast reveals that The Corporate Fund, or the City’s operating fund, represented more than $3.8 billion, or more than 34 percent of the City’s $10.67 billion budget in 2019. This forecast reveals that in 2020, the pension, personnel and healthcare costs that make up a significant part of the Corporate Fund expenses will comprise 70 percent of the budget shortfall, while debt and legal settlement costs make up an additional 22 percent of the structural deficit.
As part of the annual budgeting process, the City is utilizing a zero-based budgeting method, where departments formulate 2020 budget proposals to request funding for programs and services in support of their core mission. New investments will be balanced with department savings, reforms and operational efficiencies in an effort to streamline existing processes and uphold a high quality of services for residents across all neighborhoods.
* More…
…Adding… From her speech…
We are exploring revenue options to address rampant congestion that solves the problems of traffic, pollution and other issues, while simultaneously bringing in a fair source of funding.
And…
*** UPDATE *** Emily Bittner in the governor’s office…
The governor is committed to creating an environment in the state where all cities can thrive, because Illinois succeeds when its cities succeed. In the weeks ahead, as Chicago pursues assistance from the legislature, it will be important for the mayor to reach out to leaders and lawmakers across the state and across the aisle to build a coalition for her ideas. The governor looks forward to working with these stakeholders as the General Assembly weighs all these ideas carefully.
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* Press release…
Today, the Seventh U.S. Circuit Court of Appeals announced its decision in the case Wilson v. Cook County, et al. handing the Cook County State’s Attorney’s Office (CCSAO) a big win in their ongoing fight to protect residents from gun violence. The Illinois State Rifle Association backed a challenge to a long-standing Cook County ordinance banning the possession, use, or sale of assault weapons and large capacity magazines, claiming the regulation violated the Second Amendment. The CCSAO’s Civil Actions Bureau beat back the challenge, arguing that the ordinance furthered a substantial government interest in protecting Cook County residents from the threat of mass casualty posed by semi-automatic assault weapons and related accessories.
After learning of the court’s decision, Cook County State’s Attorney Kimberly Foxx reaffirmed her commitment to public safety in Cook County.
“Assault weapons and large capacity magazines are designed to kill in mass and have no business on our streets,” said State’s Attorney Kimberly Foxx. “Public safety is our top priority, and we were proud to defeat the gun lobby’s challenge in court. While we are pleased with today’s decision, we anticipate that this will be appealed to the Supreme Court. If it is, we will be ready.”
* From the decision…
Two Cook County residents appeal the dismissal of their complaint, which raises a Second Amendment challenge to Cook County’s ban on assault rifles and large-capacity magazines. Less than five years ago, we upheld a materially indistinguishable ordinance against a Second Amendment challenge. See Friedman v. City of Highland Park, 784 F.3d 406 (7th Cir. 2015). The district court dismissed the plaintiffs’ complaint on the basis of Friedman. We agree with the district court that Friedman is controlling. Because the plaintiffs have not come forward with a compelling reason to revisit our previous decision, we affirm the judgment of the district court.
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* Breaking news from the Bond Buyer’s Illinois reporter…
Background on the legal action is here, here, here and here.
This post will be updated.
*** UPDATE 1 *** Emily Bittner in the governor’s office…
The administration is pleased that the judge repudiated this sham lawsuit brought on by the same far-right actors whose pathological desire to bankrupt the state brought us four years of devastation under Bruce Rauner.
*** UPDATE 2 *** Comptroller Susana A. Mendoza…
We’re very pleased that Judge Jack Davis did the right thing and threw out this completely frivolous ‘political stump speech’ of a lawsuit. Now that it is clear that Illinois Policy Institute CEO John Tillman and the Warlander hedge fund filed this phony lawsuit just to try to sabotage Illinois’ credit rating for personal financial gain and headlines, anyone who has supported the IPI in the past should rethink their support. Under the new leadership of Governor Pritzker and the steady resolve and financial stewardship of the Comptroller’s Office, the state of Illinois is fixing its finances and the bond rating agencies are recognizing this.
*** UPDATE 3 *** Annie Thompson at the attorney general’s office…
As we stated in our written submissions and oral argument, the plaintiffs waited nearly two decades after the first bonds were issued and billions of dollars were paid into the pension funds, and then waited several years after the second bonds were issued and payments were made on the backlog of bills owed to the state’s service providers and other vendors. The delay alone demonstrates that the petition was always without merit. We are pleased with the court’s decision to deny the plaintiffs leave to file a taxpayer action that, according to the court, “resembles far more of a political stump speech than it does a legal pleading” that “would result in an unjustified interference with the application of public funds.”
*** UPDATE 4 *** The full order is here.
*** UPDATE 5 *** John Tillman…
“I strongly disagree with the Court’s decision, will appeal and am confident that I will prevail. It was premature for the Court to decide the case on the merits at the petition stage. Moreover, I disagree with the court’s conclusion that whether general obligation bonds have a specific purpose is a purely political question. The Illinois Supreme Court has ruled that the judiciary is in fact required to determine whether a challenged purpose is specific or not, and has done so on other occasions.”
John Tillman took on the lawsuit as an independent individual and concerned citizen. It is not an organizational initiative of the Illinois Policy Institiute.
*** UPDATE 6 *** Ted Hampton, Vice President and Senior Credit Officer of Moody’s…
The judge’s ruling today denying a lawsuit that sought to invalidate some of Illinois’ general obligation debt is positive for the state and in line with our view that the plaintiffs’ argument lacked merit. However, an appeal by the plaintiffs could still complicate the state’s near-term debt issuance plans.
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Question of the day
Thursday, Aug 29, 2019 - Posted by Rich Miller
* As we discussed earlier, the state has approved the first round of adult use cannabis licenses, including one in Effingham, the heart of Eastern Bloc country.
* The Question: Assuming that zoning is approved by the local government, what should be the motto of the new Effingham adult use dispensary?
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It’s time to come clean!
Thursday, Aug 29, 2019 - Posted by Rich Miller
* While I was on vacation, Center Square published a story about my questions to the governor’s office about the Confederate Railroad stuff. For whatever reason, they decided to FOIA my text conversations. Not all of their requests were granted.
So now Center Square is asking the Illinois Attorney General’s Public Access Counselor to force disclosure of an off the record exchange between myself and the governor’s Deputy Chief of Staff for Communications Emily Bittner.
For a self-described news organization to FOIA a reporter’s off the record remarks and then appeal the denial to the attorney general is downright reprehensible.
But in the interest of avoiding any legal fight which could set a precedent, I asked Bittner yesterday if she would lift her off the record restriction so I could publish the exchange here. She consented.
* The great mystery is now solved…
Oh my gosh that’s so fascinating!!! Congratulations, Center Square! I’m totally busted!
* Some other stuff was redacted for whatever reason. I had called Bittner about something else and she didn’t pick up, so I texted her…
Scintillating!
* The Hill mangled both my name and the name of my publication in an article about the controversy…
The removal comes after blogger Rich Hill last month asked readers on his site, Capital Fax, whether they thought the band was an appropriate choice to feature in the fair’s lineup.
Bittner sent me the link, which the governor’s office redacted from the FOIA…
Heh.
* And here’s a bit of needling from me about a surprising editorial…
So there you have it. I think that’s everything.
Sheesh.
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Pritzker has hairline fracture
Thursday, Aug 29, 2019 - Posted by Rich Miller
* Sun-Times…
Sneed has learned Gov. J.B. Pritzker has a hairline fracture to his left femur.
The upshot: He is under doctor’s orders to rest and recover for the next four to six weeks.
Sneed is also told the governor, who does not know how the fracture occurred, is in “good spirits” and will find it difficult to take it easy. […]
His recovery will require some bedrest, but he plans to go into his office in Chicago. He won’t be going to Springfield anytime soon. The fall veto session is not until later this fall.
I’ve been hearing that he’s complained about a sore knee. It’s one reason he decided to ride and not walk in the Du Quoin State Fair parade. But he walked the entire length of the Illinois State Fair parade and walked all over the fairgrounds and did a bunch of public appearances which required him to stand. He must’ve been miserable.
Anyway, best of luck for a quick recovery. And, dude, obey your doctors.
…Adding… From the governor’s office…
* Governor Pritzker has a hairline fracture to his left femur, so under doctors’ orders, he will be resting and recovering for the next four to six weeks. Governor Pritzker is in good spirits and will be receiving frequent daily updates from his staff and agency heads, and he will be fully engaged in conducting the business of the state.
* Governor Pritzker received this injury some time ago, but it became significantly worse in recent weeks as he attended numerous public events where he stood or walked significant distances. This includes attending and walking around both state fairs.
* This won’t require surgery.
* The Governor is not certain what caused the injury, but he has been experiencing knee pain for several weeks.
* Aside from this injury, the Governor is in good physical health.
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Facebook revises its political ad rules
Thursday, Aug 29, 2019 - Posted by Rich Miller
* Axios…
Experts estimate that well over $1 billion will be spent on digital ads this campaign cycle, with the majority going to Facebook and Google. For context, that’s about as much as analysts expect to be spent on local cable television ads this cycle.
* AP…
Facebook is tightening its rules around political advertising ahead of the 2020 U.S. presidential election, acknowledging previous misuse. But it’s not clear if it will be enough to stop bad actors from abusing its system.
The changes include a tightened verification process that will require anyone wanting to run ads pertaining to elections, politics or big social issues like guns and immigration to confirm their identity and prove they are in the U.S. Beginning in mid-September, such advertisers confirm their group’s identity using their organization’s tax identification number or other government ID.
The verified group name will be listed on the “paid for by” disclaimers that disclose the backers of ads. Facebook says it will verify this information against government records and will note in the disclaimer for confirmed ads that they’re placed by a “confirmed organization.” […]
Advertisers who don’t have tax ID numbers, government websites or registrations with the Federal Election Commission will still be able to post ads by providing an address, verifiable phone number, business email and website. These advertisers won’t get a “confirmed” designation. Previously, only a U.S. address was required. But it’s not inconceivable that bad actors will find a way to spoof phone numbers and email addresses.
* Barron’s…
Ads that advocate for or against legislation or ballot initiatives will have the same vetting process as campaign ads.
The company also intends to bar ads that expressly discourage people from voting.
* CNN…
Last year, Vice News reported that it was able to take out [Facebook] ads in the name of Vice President Mike Pence, all 100 US senators and the Islamic State. In another high-profile instance from 2018, an attack ad targeting Virginia Democratic candidate for Congress Jennifer Wexton was shown by Facebook to have been paid for by a “freedom loving American Citizen exercising my natural law right, protected by the 1st Amendment and protected by the 2nd Amendment.” […]
But it’s not clear whether the new rules would prevent a group or person from simply registering as a company, getting a tax identification number and going forward with their advertisements without ever having to really tell Facebook users who they truly are and what their motivation is. In response to questions about the potential loopholes, Facebook told CNN Business the additional information will be vetted by a mix of automated and human reviewers and that it is working with governments and watchdogs to bolster election security. […]
The new rules will be put into effect in mid-September, and if an advertiser doesn’t provide the new information by mid-October, Facebook said, it will pause an organization’s ads.
* NY Times…
Disinformation experts said the social network was still far from fixing the damage caused by the false news and ad campaigns that had run on the platform.
“This is all much too little, much too late,” said Dipayan Ghosh, a fellow at the Shorenstein Center at Harvard and a former privacy and public policy adviser at Facebook. “We’ve seen incredible impacts coming from illegitimate political ads, including from seemingly legitimate actors. And companies, particularly Facebook, are not doing enough to protect the public and our democracy.”
He added that Facebook’s new verification policy amounted to “incremental baby steps forward.” That would “not particularly position us well in the lead-up to elections,” he said.
* Business Insider…
The corporate ownership disclosure laws are not as strong in the US, and in some states, it’s possible to create anonymous LLC’s without providing identity or much ownership information at all.
That’s not something Facebook can necessarily fix - but it is still a way for sketchy operations to run political advertisements on Facebook and provide little information about who they actually are.
“At a certain point, Facebook won’t be able to do any more verifications because the US allows secret LLCs,” Carroll told Business Insider. “At that point it’s up to Congress to require corporate ownership disclosures like we see in UK on Companies House.”
* Tech Crunch…
It will turn its attention to Pages, too, by requiring national candidates or elected officials to go through Page Publishing Authorization, to verify their Pages are using real accounts and are based the U.S. Facebook will then begin exposing more information about the Page, including the business or organization behind it.
* Related…
* Facebook Ad Prices Surge Due to Barrage by Democratic Presidential Hopefuls
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Wishful thinking
Thursday, Aug 29, 2019 - Posted by Rich Miller
* Sun-Times…
Michael Cornicelli, executive vice president of the Building Owners and Managers Association of Chicago, said he assumes any such tax [on high-end city properties at their sale] will cover commercial buildings and not just homes. “It’s a tax on business and employment in the city” that, coupled with a slowing economy and spikes in property tax assessments, “has alarm bells going off everywhere.”
Lightfoot will need to bargain to get anything through the legislature, Cornicelli said.
“My gut is that in order to get something like that, she’ll have to give something,” he said. His suggestion: allowing a referendum on a state constitutional amendment to let governments reduce employee pensions.
If she is bargaining with people like Cornicelli, then yes. But she has to get that through the Illinois General Assembly. And the odds of Democrats and the governor approving that tax hike in exchange for cutting pension benefits are not exactly high.
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* Press release…
The Illinois Department of Financial and Professional Regulation announced Thursday the first “Same Site” adult use cannabis licenses, which will allow an existing medical cannabis dispensary to obtain an adult use dispensing license. This license will permit the dispensary to begin adult use cannabis sales at that location starting January 1, 2020, provided the dispensary complies with local zoning rules or other local laws.
In addition to opening adult use dispensaries at the same site of their medical cannabis dispensaries, existing medical cannabis dispensaries are permitted under the law to open a second site for adult use sales at a different location.
The medical dispensaries who have applied for and received early approval adult use licenses to date are:
The Clinic Mundelein
1325 Armour Boulevard
Mundelein, IL 60060
3C Compassionate Care Center – Joliet
1627 Rock Creek Boulevard
Joliet, IL 60431
3C Compassionate Care Center – Naperville
1700 Quincy Ave. #103
Naperville, IL 60540
Salveo Health & Wellness Dispensary
3104 N. Main Street
Canton, IL 61520
The Clinic Effingham
1101 Ford Ave. Ste. C
Effingham, IL 62401
The Department anticipates receiving additional applications for early approval adult use licenses as municipalities adopt relevant zoning ordinances regarding adult use cannabis.
Starting January 1, 2020, the law permits Illinois residents to legally possess up to 30 grams of cannabis flower and up to 5 grams of cannabis concentrate. Registered patients in the medical cannabis pilot program may possess more than 30 grams of cannabis if it is grown and secured in their residence under certain conditions.
Naperville is still going back and forth about what to do about allowing adult use cannabis sales. Mundelein’s police chief has expressed some support.
But Effingham? In the heart of the Eastern Bloc? From May…
Effingham County Sheriff Dave Mahon and Effingham Police Chief Jason McFarland voiced concerns over a recently proposed Illinois bill calling for the legalization of recreational marijuana. […]
“I know the legislators are looking into this pretty hard, and it’s kind of on the fast track, which really scares me,” Mahon said. “I think that we kind of need to step back and look at what’s happened in other states before we just jump right in. Illinois has already decriminalized marijuana, and this proposal is meant to commercialize the industry and product with proven health and safety concerns.”
That’ll be interesting. Commerce or dogma?
* Related…
* Cannabis dispensary to locate in former Aldi in Galesburg: Ken Springer, KCAPED’s president, said that currently existing medical dispensary license holders are the only entities who can seek a recreational cannabis business license. The two closest medical dispensaries are in Milan and Canton.
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* Center Square…
Lawmakers said a recently enacted state law designed to limit severance packages for outgoing public university officials needs more teeth after questioning university officials this week.
The high-profile instance of former Western Illinois University President Jack Thomas getting two years of salary worth $570,000 to take a sabbatical and then come back to teach at the university for $200,000 a year drew ire from state Sen. Laura Murphy, D-Des Plaines, during a hearing Tuesday. […]
Murphy said she was upset Thomas was getting the equivalent of CEO pay to come back as a teacher despite a new law meant to limit severance pay to 20 weeks. […]
University officials said Thomas’ exit was a transition agreement, not a severance agreement. […]
“I believe that Dr. Thomas’ contract is grandfathered in,” [WIU General Counsel Elizabeth Duvall] said. “It was still an active contract when it was signed (in 2011) prior to some of the laws that you’re speaking to.”
* Public Radio…
In recent years, the Illinois General Assembly passed two laws to limit that practice. Senate Bills 3064 and 2159 both were intended to curb a public employee’s ability to receive an unduly large severance package.
State Sen. Bill Cunningham (D, Chicago) helped negotiate both bills. He reiterated their intent during Tuesday’s hearing.
“That intent is, if for whatever reason — and the reason really isn’t all that important — a university decides they want to change their president, that they not offer him or her a golden parachute,” he said. […]
“I think [it] seems pretty clear to anybody who’s paid any attention to this that the Board of Trustees at Western Illinois University sought a way around that law,” he told a panel that included WIU. “If we can’t rely on the board of universities to follow the spirit of the law, maybe we need to figure out a different governing structure.”
The board did indeed get around prohibitions in the current law. So perhaps the law should be revised, but it won’t be easy to tie their hands like that.
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CAFR finally released
Thursday, Aug 29, 2019 - Posted by Rich Miller
* Comptroller Susana Mendoza’s office…
The Comprehensive Annual Financial Report (CAFR) released today shows Illinois cut its general funds deficit by $6.849 billion — from a deficit of $14.612 billion in fiscal year 2017 to a deficit of $7.763 billion in fiscal year 2018. That is largely because of a refinancing of state debt from high-interest to low-interest repayment.
The state’s total assets were approximately $53.9 billion on June 30, 2018, a decrease of $400 million from June 30, 2017. The state’s total liabilities were approximately $248.1 billion on June 30, 2018, an increase of $33.3 billion from June 30, 2017. The state’s largest liability balances are the net pension liability of $133.6 billion and the other post-employment benefits liability of $55.2 billion.
Health and social services expenditures of $29.2 billion comprised the largest expenditure function for fiscal year 2018, decreasing by $1 billion from fiscal year 2017. The second-largest expenditures, education expenditures, including spending for elementary and secondary education as well as higher education, totaled $25.4 billion, an increase of $3 billion, or 14%, from fiscal year 2017.
The Illinois Office of Comptroller compiles the CAFR from reports submitted by individual state agencies that are required to be audited by the Auditor General’s Office. If any of those audits is not complete, the Office of Comptroller cannot publish the CAFR. Since December, the Office of Comptroller has been ready to publish the CAFR as soon as the remaining audits were completed.
A primary reason for delay in the release of the fiscal year 2018 CAFR was the need for the new administration to try to piece together data lost by an IT vendor working for the previous administration’s departments of Healthcare and Family Services and Human Services.
As the Illinois Office of Comptroller noted in a June 28, 2018, report, four months’ worth of long-term care eligibility findings in 2017 were missing. (see attached report)
Comptroller Susana Mendoza said the prior administration relied too heavily on third-party non-government contractors to perform sensitive data conversions without adequate monitoring controls from state agency officials.
“We should not expect outside consultants to perform critical government functions, especially regarding data involving eligibility determinations under the state’s Medicaid program serving the state’s most vulnerable citizens, without adequate controls to protect the state’s program and ultimately state taxpayers,” Comptroller Mendoza said.
In April, Comptroller Mendoza announced her office would institute new contract reporting requirements for IT vendor agreements of more than $5 million. The new Information Technology Milestone Report rules require state agencies to publish progress and performance updates on ongoing IT initiatives, precisely to avoid data losses like this.
In addition to the missing data the Auditor General’s Office encountered at the departments of Healthcare and Family Services and Human Services, late adjustments relating to receivables were required as a result of the audit of the Department of Employment Security.
Comptroller Mendoza agrees with a repeated finding by the Auditor General’s office that the state needs a coordinated financial reporting system. However, it is important to note that was not a primary reason for this year’s delay.
The attached report is here. The CAFR is here.
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Today’s number: $581 per pupil
Thursday, Aug 29, 2019 - Posted by Rich Miller
* Center Square…
Illinois’ 852 school districts spend almost twice the national average on “administrative costs,” according to U.S. Census Bureau data. School districts in Illinois spend $581 per pupil on school district administration on average, according to the Illinois Policy Institute. That’s more than double the national average of $230 per student.
“We’re spending more and getting less for our investment in our kids because too much of the money is siphoned away by these six-figure administrators,” Illinois Policy Institute Director of Budget and Tax Research Adam Schuster said. “If we spent the national average [on district-level administration costs] we would have saved $708 million last year.”
District-level administration refers to positions such superintendents, not principals.
This spending comes amid a decline in the number of public school students. From the 2017-2018 school year, total students had decreased by more than 2 percent since 2014, according to Illinois’ Report Card figures.
An April report from the Metropolitan Planning Council found that Illinois was the only state in America that spent more than $1 billion in total administrative costs in 2016. Metropolitan Planning Council Associate Adam Slade said one issue common to Illinois is that many school districts have only one school, meaning a district and school administrator essentially duplicate their work.
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* WBEZ…
Initial offers by Illinois’ attorney general to settle a dozen lawsuits linked to the state’s mishandling of fatal Legionnaires’ disease outbreaks at the Quincy veterans’ home have been so sparse, some families are calling them “insulting.”
During Kwame Raoul’s campaign to become the state’s top law enforcement official, the Democrat called the state’s mishandling of the outbreaks “unconscionable.” Fourteen people died after getting Legionnaires’ at the largest state-run veterans’ home.
Following a WBEZ investigation into the outbreaks, then-state Sen. Raoul voted last fall to raise damage caps on lawsuits against the state to $2 million, and to make that increase retroactive to apply to a dozen families who lost loved ones at the Illinois Veterans Home and had pending negligence cases against the state. […]
To date, however, the attorney general has only made settlement offers that range between $200,000 and $500,000, WBEZ has learned.
The plaintiffs, at least one of whom appeared in a JB Pritzker campaign ad, are hopping mad. Go read the rest for their react.
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*** LIVE COVERAGE ***
Thursday, Aug 29, 2019 - Posted by Rich Miller
* I had one issue after another this morning. I’m working to resolve everything and finish up the subscriber edition. In the meantime, follow along with ScribbleLive…
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