* ICYMI: Attorneys general, state officials sue over 2nd federal attempt to cut permanent housing funds. Sun-Times…

- On June 1, the U.S. Department of Housing and Urban Development tried for a second time to condition money for permanent housing, including shifting $1.3 billion in funding to temporary housing programs.
- Raoul and the coalition of state legal officials said the move, which they argue oversteps the Trump administration’s power and violates federal law, will once again risk housing for tens of thousands of people. In Illinois alone, $60 million in funding would be lost, according to the suit.
- Similar arguments made by Raoul and others have led to federal court decisions reinstating $2 billion in federal disaster relief funding, $2 billion for transportation and millions in public health research money.

* Gov. JB Pritzker has no public events scheduled today.

*** Isabel’s Top Picks ***

* Subscribers know more. Politico | When should an ethics report be public?: Questions are mounting about whether the ethics report that led former state Rep. Harry Benton to resign should be made public. […] About the report: The Legislative Inspector General has 30 days to submit its report to the Legislative Ethics Commission, which then has another 60 days to consider its findings and respond. The commission also has the authority to make available a public summary of the findings. It is required to make the findings public if it results in a suspension or termination, according to a person familiar with the state statute, who was granted anonymity due to a lack of authorization to discuss the matter publicly.

* Capitol News Illinois | Utility watchdog warns of rising water rates as regulators consider requests: Customers across Illinois could be facing higher water and sewage bills as the state’s largest private water utilities seek rate increases and permission to merge. Illinois American Water, the state’s largest private water utility, is seeking a $142 million rate increase, which would raise typical water costs for its 357,000 residential customers by around $14 per month. Typical wastewater customers would see an additional increase of around $28 per month.

*** Chicago ***

* Tribune | Mayor Brandon Johnson says aldermen’s provisions in budget $130 million short: “I want to say this clearly: There were other options,” Johnson said. “We did not need to cede to big money interests and fall back on the tired practice of balancing budgets on the backs of working people.” What’s less clear is how his administration will seek to fill that hole as the clock ticks toward the 2027 budget cycle — and an election that will see the mayor’s office and all 50 aldermanic seats on the ballot. The freshman mayor said he’s “working hard to avoid layoffs and cutting services” but made clear he will use his bully pulpit to blame aldermen should it come to that.

* Block Club | Council-Backed Budget Could Lead To $130 Million Shortfall This Year, Mayor Says: Johnson, however, has remained a frequent critic of the budget that got passed. On Tuesday, his administration released a mid-year budget report with preliminary revenue numbers and forecasts showing that some of the alternative budget revenue ideas weren’t panning out — which could lead to an at least $130 million budget hole this year. In particular, the mayor said his team has attempted to find a buyer for the city’s vehicular debt, but “to date, no buyer has been identified,” making a sale impossible. Alderpeople had estimated a debt sale could bring in about $90 million for the city coffers.

* Ald. Scott Waguespack | 29 Council members sought to get Chicago to live within its means: Yet when Mayor Brandon Johnson unveiled his fiscal year 2026 budget proposal, many members of the City Council were confronted with a troubling reality: They were being asked to approve a nearly $18 billion spending plan without significant efficiencies, without involvement in its development and without answers to basic fiscal questions. At the same time, Mayor Johnson pushed policies like the head tax on businesses to penalize employers for putting people to work and placing Chicago closer toward the end of a financial cliff. This approach lacked transparency while ignoring altogether the concept of trying to live within our means.

* Sun-Times | One of Mayor Brandon Johnson’s most ardent City Council adversaries won’t seek reelection in 2027: Ald. Marty Quinn (13th), who learned the game of Chicago politics at the feet of now-convicted former Illinois House Speaker Michael Madigan (D-Chicago), is calling it a career after 15 years in the City Council. Quinn, 51, told the Sun-Times that he has decided not to seek reelection in 2027. After 4,100 conversations in the last four years alone in the living rooms and at the front doors of his Southwest Side constituents, Quinn said he “left it all on the field” and no longer has the energy required to “manage from the front lines.” He said he cannot risk giving the demanding job less than it demands.

* Sun-Times | Chicago Public Media launching community website — chicago.com — in the fall: The site will include Chicago-area information, civic and cultural resources, community-sourced knowledge and opportunities for audience participation, the nonprofit said Wednesday. It will also curate headlines from the Sun-Times, WBEZ and other news sources. For independent journalism to “truly service the public … we should have digital infrastructure that is also steered by public media companies,” Chicago Public Media CEO Melissa Bell said. The news industry “has ceded a lot of distribution to places like Facebook and X, formerly known as Twitter, and I think that has done a disservice to centering civic discourse in a healthy way.”

* Tribune | After putting the street race on hold, could NASCAR end up in Chicago and Joliet next summer?: While nothing is set, NASCAR is not only hoping to bring back the Chicago Street Race after a one-year hiatus, but perhaps add the long-dormant southwest suburban track to its regular schedule as well. “It could be both,” said Ben Kennedy, NASCAR’s chief operating officer and great-grandson of the family-owned racing organization’s founder. “It’s a market that’s strong enough that absolutely we could have two events there in the future.”

* Tribune | Chicago White Sox slugger Munetaka Murakami begins his injury rehab assignment with Triple-A Charlotte: Munetaka Murakami estimated he was at the 99% point of his recovery. “The last road is to play in the minors,” the Chicago White Sox first baseman said through an interpreter on Sunday evening in Cleveland. “That one percent at being at the minors and then being back on the (major-league) field.” That final hurdle got underway Tuesday when Murakami began a minor-league injury rehab assignment with Triple-A Charlotte.

*** Cook County and Suburbs ***

* Daily Southtown | Dolton passes ordinance allowing payment of $33.5 million judgment over 10 years: “We’re still in negotiations and discussing that, but it looks like we’re going to come up with a positive plan so the taxpayers won’t be burdened,” village attorney Michael McGrath said at Monday’s Village Board meeting. Dolton and the families of John Kyles and Duane Dunlap agreed in court June 10 the village would pay the judgment and accruing interest in installments over 10 years, with the payments secured through a bond. The village is only allowed to pay the judgment over time by adopting an ordinance, which passed Monday, stating that “unreasonable hardship will result” unless the judgment is paid in installments, according to state law.

* Daily Herald | State agency wants more information on how DuPage County Board approved raises: DuPage County Clerk Jean Kaczmarek filed a request for review of the board’s April 28 vote setting salaries for officials taking office after the November election. In a June 26 letter to the public access counselor, Kaczmarek raised questions about the legality of the vote, arguing the board did not provide enough notice to the public of the pending vote. She also argued the board violated the state’s Open Meetings Act when it approved a change, proposed on the board floor, that increased the originally suggested salary for the county board chairman from $154,390 in the upcoming fiscal year to $185,000. Under the amended salary, the chair’s pay will top $198,000 in the 2030 fiscal year.

* Daily Southtown | ‘The stench is putrid’: Nearly full Thornton reservoir brings sewage stink, increased flood risk: As of 10:15 a.m. Tuesday, the water level had receded slightly from that high to 93% capacity, or 7.3 billion gallons, according to the district’s website. The highest the reservoir has ever been before was in 2019, when it hit 54.5% capacity. […] “It smells,” said Thornton Village Clerk Nikki Kitakis. “It’s pretty horrific.” Odors from the reservoir have been a long-standing issue for residents of Thornton, though Kitakis said the issue is particularly severe with the reservoir so full.

*** Downstate ***

* WCIA | Decatur Council votes for city to cover full cost of leaking lead service line replacements: At Monday’s meeting, the Decatur City Council voted to up its reimbursement program from 50% to 100% for businesses and homes trying to get rid of drinking water supply pipes at risk of lead contamination. More specifically, for residential and commercial properties with possible lead contamination. […] Back on Jan. 17, 2023, city council approved a policy to provide a 50% cost share to replace privately owned water services. However, the city was recently informed that the Illinois EPA received additional funding from the U.S. EPA for lead service removal.

* WGLT | Bloomington Police say drones are an eye in the sky, not a surveillance state: Police Chief Jamal Simington compared the use of drones to other advances in technology that police use: DNA, fingerprinting, and radar guns for monitoring speed. “History tells us community members have struggled with advancements in law enforcement for many many years. This is nothing new,” Simington said. Sgt. Jared Bierbaum is the drone coordinator for Bloomington Police Department. He told the small audience of a few community members at a public forum Tuesday night that not every drone they see in the sky is from the department, but he can understand the unsettling feeling of seeing a drone hovering over one’s property.

* BND | Belleville repeals ban on ‘tiny homes’ approved under former administration: Belleville City Council has repealed a ban on new homes smaller than 1,000 square feet that was passed two years ago. At the time, zoning staff under former mayor Patty Gregory were trying to guard against construction of “tiny homes,” arguing they could reduce property values in some neighborhoods. But the ban unnecessarily regulated development and created problems for people trying to get loans or insurance when buying, selling, modifying or rebuilding existing small homes, according to officials.

*** National ***

* AP | Obamacare premiums surged this year. A new analysis shows it’s likely to happen again in 2027: Across the 77 insurers in the ACA program that have submitted rate filings that are publicly available, the median proposed premium increase for 2027 is 14%, according to Wednesday’s analysis from the healthcare research nonprofit KFF. The insurers cited mounting healthcare costs, federal regulatory changes and the recent expiration of pandemic-era enhanced subsidies as the biggest factors driving premiums higher.

* WIRED | Meta Now Lets Anyone Use Your Instagram Photos in AI Images—Unless You Opt Out: The new model, called Muse Image, rolled out with deep integrations woven into the Instagram app. As part of this update, public Instagram profiles are now automatically opted into being fodder for generative AI remixes. All someone has to do is tag your account’s profile in a prompt—if it’s public—and they can use Meta AI to generate an image using your likeness.