* Tribune editorial…
Empower Illinois is a tuition tax credit program the legislature approved in 2017 as part of a state education funding overhaul. The program encourages donations to private schools by offering donors a 75-cents-on-the-dollar tax credit on their Illinois income taxes. Critics of the program have excoriated it as a diversion of tax money from public schools (not true) and an exclusive tax write-off for rich people (also not true). […]
Gov.-elect J.B. Pritzker does not support the tax credit program. On the campaign trail he said he would “immediately” move to repeal it. He believes the tax credits hurt public education by diverting dollars that could be earmarked for those schools. Yet he exerts school choice, and that’s fine: His own children attend one of the nation’s premiere private schools, Francis W. Parker in Lincoln Park, not their neighborhood CPS school.
We urge the incoming governor and members of the General Assembly to think less about public-private rivalries and more about students who have different needs and should have different choices. Illinois lags most states in offering options outside the public school system. Affluent families have school choice. It’s the low-income families trapped by their ZIP codes in marginal public districts who do not. And they don’t have years to wait for their public schools to improve.
* Finke…
Pritzker said the tax breaks for private school scholarships essentially diverts tax resources from public schools.
“Money that could go to public education is being diverted,” he said. “It’s better to put those dollars in public schools.”
Although Pritzker wants to end the program, he said it should be done in a way that doesn’t disrupt families already taking advantage of it.
* Meanwhile, on to the inauguration. WJOL…
Illinois’ incoming governor is going to pick up the tab for his inauguration. Governor-elect J.B. Pritzker yesterday said that he will pay for the full cost of his swearing in, and the two days of celebrations leading up to it. Pritzker will take the oath of office on January 14th.
* More…
Some of the Pritzkers’ closest pals and confidantes are on the committee, including, Lee “Rosy” Rosenberg, chief of staff at the Pritzker Group and an adviser to Pritzker on the campaign; businessman Michael Sacks and Cari Sacks; businesswoman Linda Johnson Rice; Marko Iglendza, CEO and Founder of Terminal Getaway Spa, and Neal Zucker, CEO and co-founder of Corporate Cleaning window cleaners; and businesswoman Desiree Rogers, who oversaw 330 White House functions while she was social secretary in the Obama administration. […]
The rest of the committee consists of members from a broad and diverse swath—nonprofits, business, upstate, downstate. They include: Obama Foundation President Martin Nesbitt; real-estate developer Elzie Higginbottom and his wife, Deborah; high-end boutique owners Ikram and Josh Goldman; lobbyist Loretta Durbin (wife of U.S. Sen. Dick Durbin); educator Barbara Bowman (she’s Valerie Jarrett’s mom); activist Emma Lozano; media exec Eve Rodriguez Montoya; community leader Felicia Davis; nonprofit leader Sol Flores; Illinois Business Immigration Coalition’s Rebecca Shi; LIUNA labor President Nicole Hayes; and businessman Skip Braziel and Erica Annise Braziel.
Politicos on the committee: former Gov. Jim Edgar and his wife, Brenda; Illinois Democratic County Chairs’ President Kristina Zahorik; Chicago Housing Authority Board Chair John Hooker; Highway Commissioner Calvin Jordan and his wife, Lori; former Congressman Glenn Poshard and his wife, Jo; St. Clair County Auditor Patty Sprague and attorney Bob Sprague; former state Rep. Lauren Beth Gash and Studio Gang Principal Gregg Garmisa; North Aurora Village Trustee Mark Guethle and his wife, Louise; and Wanda Rednour, wife of the late John Rednour, a former Du Quoin mayor.
* Let’s move now to cannabis legalization…
Pritzker says he’s already been working out the details with legislators.
“There’s an opportunity for us to be the first state in the Midwest to make it available, and so I think the legislature should get at it,” Pritzker says.
Michigan legalized recreational marijuana last month by referendum. But the state legislature there is looking at rewriting what the voters approved — lowering the tax rate, changing where that money is spent, and banning home-grown plants.
“The good news about being eighth or ninth to get this done is we can look at what works and put it in place in Illinois,” Pritzker says.
* Pritzker isn’t governor yet, but he attended his first jobs announcement today…
JPMorgan Chase announced Wednesday that it was committing $10 million to Chicago’s South Side and its West Side as part of its five-year, $500 million AdvancingCities initiative.
CEO Jamie Dimon made the announcement in Chicago and was joined by the Chicago Community Loan Fund’s president, Calvin Holmes, and Governor-elect J.B. Pritzker. JPMorgan’s investment will be through long-term commercial real estate loans with low interest rates, distributed by the CCLF. The goal is to promote development in underserved neighborhoods where access to grocery stores and other retailers is significantly lower than it is elsewhere in the city.
* More…
The Chicago Community Loan Fund is receiving its largest capital investment to date: a $10 million low-cost, long-term loan from JPMorgan Chase.
The loan is designed to boost the Chicago nonprofit lender’s work financing small-business and commercial development on Chicago’s South and West sides — particularly projects that might struggle to get financing at traditional financial institutions, Chase said Wednesday.
CCLF expects to begin using the loan to fund projects in the first quarter of 2019, Chief Operating Officer Bob Tucker said. There are about 16 commercial real estate projects in the organization’s pipeline that could benefit, including entertainment, healthy food and retail businesses and tech hubs in neighborhoods like Bronzeville, Englewood, Pullman, Woodlawn, West Humboldt Park and Austin, Tucker said.
* And finally…
Gov. Bruce Rauner is urging the incoming administration to continue his work in rooting out waste, fraud and abuse in the state’s Medicaid system, and to clarify rules for state workers who belong to the same union as the employees they supervise.
Rauner said both issues cost taxpayers “hundreds of millions of dollars every year.”
The governor’s office said its Health Care Fraud Elimination Task Force saved $218 million while the Department of Healthcare and Family Services Inspector General saved or recouped $190 million in fiscal 2018.
“The effort resulted in 39 fraud convictions including $27.8 million in recoveries through criminal prosecutions, civil actions, and/or administrative referrals,” according to a statement from Rauner’s office. “The task force has saved the state more than $665 million since its inception in 2016.”
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Krupa roundup
Wednesday, Dec 12, 2018 - Posted by Rich Miller
* Kass…
To get on the [13th Ward aldermanic] ballot, [David] Krupa was required to file 473 valid signatures of ward residents. He filed 1,703 signatures to the Chicago Board of Election Commissioners.
Amazingly, an organized crew — of Quakers or unicorns — walked door to door in the 13th Ward and turned in 2,796 affidavits from residents asking that their signatures for Krupa be revoked.
Do the math. That organized crew got far more affidavits of revocation of signature than were needed. Affidavits are legal documents, and notarized.
It appears many residents of Boss Madigan’s ward have left themselves open to felony perjury charges. Madigan’s ward is chock-full of workers on one government payroll or another. Felony perjury convictions would cause them to lose their government jobs.
OK, first of all, the affidavits were filed before Krupa turned in his own petitions. For lots of reasons, campaigns almost never file all the signatures they collect. It’s therefore possible that people who signed the affidavits could’ve signed Krupa’s petition, but their sheets weren’t submitted. It’s also possible that people made mistakes and thought they’d signed Krupa’s petition when they’d actually signed another one.
There’s also an allegation that 13th Ward Ald. Marty Quinn’s campaign workers misled people at the doors. Derrick Blakley talked to some who’d signed the affidavits. Here’s his conclusion…
Many voters said they were falsely told the revocation petitions aimed at Krupa were simply signature verifications.
Derrick never got anyone to say that on camera, but it wouldn’t surprise me if that was the case.
* Now, on to the claim that some of the affidavit signers committed felony perjury. I asked the spokesperson for the Chicago Board of Elections Commission if this was indeed a felony. He said the board was not making that claim, Krupa’s attorney is making that claim. I also asked the board for one of the affidavits that people signed. I’ve redacted some info…
* From the state election code…
The petitions, when filed, shall not be withdrawn or added to, and no signatures shall be revoked except by revocation filed in writing with the State Board of Elections, election authority or local election official with whom the petition is required to be filed, and before the filing of such petition.
* Also from the election code…
Sec. 29-10. Perjury. (a) Any person who makes a false statement, material to the issue or point in question, which he does not believe to be true, in any affidavit, certificate or sworn oral declaration required by any provision of this Code shall be guilty of a Class 3 felony.
(b) Any person who is convicted of violating this Section shall be ineligible for public employment for a period of 5 years immediately following the completion of his sentence.
So, this all hinges on intent. If anyone signed the affidavits knowing they were making a false statement, then it’s perjury. As far as I can tell, nobody has yet made that claim. And it’ll be really tough to do that in court. But if Blakley’s report is accurate, then suborning perjury might be a possible angle.
Maybe the 13th Ward should just drop this whole thing.
* Meanwhile, the Chicago Reader retweeted this, so it wound up in my timeline…
* The linked story was one of those “reporter goes on safari to Trumpland” pieces from 2016. But, despite the area’s portrayal in the story, Hillary Clinton wound up winning the 13th Ward with 70 percent of the vote to Trump’s 26 percent…
The 13th, 14th, and 23rd Wards, gerrymandered into skinny puzzle pieces through the neighborhoods of Clearing and Garfield Ridge, are where a lot of the working-class white people Trump was banking on reside.
This is the land of trucks with White Sox vanity license plates, warehouses that go on for blocks, Polish bars, and Midway Airport. Little yellow brick bungalows fill the spaces between aging strip malls. You can still meet old men with Irish brogues, but Latino families have also made a home for themselves here, and the local grocery stores now carry Mexican products alongside every variety of canned vegetable and nonorganic meat.
Upon arrival Tuesday afternoon, I didn’t have to search long for ardent Trump supporters. Eighteen-year-old Dave Krupa and 53-year-old Edna Bice were standing in front of a polling place at a Centro Cristiano. Krupa waved a giant Trump flag, while Bice worked with a sign reading “Hillary for prison 2016″ and a flag with a patriotic collage of stars and stripes, a bald eagle head, and military insignia. Many a passing car and semitruck honked at them in appreciation. Some people honked and flipped the bird.
Krupa was happy to have the day off from school due to a parent-teacher conference. He describes himself as a “day-one Trump supporter” and hopes Trump’s law-and-order politics will shake up both the “inner city” (which he defined as “State and Madison”) and his own neighborhood.
“In the inner cities, if you’ve got your pants down to your ankles, and it looks like you’re a shady character, stop and frisk is the way to go,” he says, “because chances are if you have a gun you don’t have a license to carry that.”
Interesting philosophy. The accompanying photograph…
* Krupa now…
Looks like he’s cleaned himself up a bit.
* The only money Krupa has reported raising so far is $800 from himself. He’s also contributed about $3,300 in in-kinds to his own campaign, for a campaign office TV and for legal services that are not detailed. His attorney is Michael Dorf, who has been sparring with the Madigan machine for years.
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Rauner taking final swing at AFSCME
Wednesday, Dec 12, 2018 - Posted by Rich Miller
* I’m not sure if Rauner’s claim of “record levels” is accurate, but his claim is just one more example of how the governor’s term is not ending like he’d hoped….
* The governor was asked if he had expected any sort of unionization bump after the Janus decision…
The issue of unit clarification is in no way related to Janus, completely different issue. Completely different process, no relation. Unit clarification is a problem of financial incentives and conflicts of interest with folks who looking out for their best economic interest who are managers have joined a union, been pushed to join a union. Basically economically extorted to join a union, um, uh, illegally.
That’s, Janus has nothing to do with that, Janus is just giving people a choice, um, about whether to join a union or not.
This is about having managers who it’s illegal for them to be in a union, join the union for political purposes to get the union support for financial, for contributions for elections and other political support. Prior governors pushed this level of unionization of managers. And it cost taxpayers significant amount of money because of the conflicts between managers and with the union that they are supposed to be on the opposite side of the table from.
Apparently, the governor has a ton of unit clarification cases before the Illinois Labor Board to kick people out of bargaining units.
* I asked AFSCME Council 31 for a response to the governor’s comments…
A unit clarification petition is filed with the state labor board in order to determine whether newly created job titles are eligible for union representation, or whether such determinations made previously are correct (e.g., if a job title was excluded from collective bargaining, a union could later use the unit clarification process to present evidence that in practice the duties of that title should not exclude it from representation).
In recent months the Rauner administration has brought an unprecedented avalanche of unit clarification petitions in a transparent attempt to strip the rights of large numbers of state workers. The first salvo of these petitions, targeting members of unions such as the Nurses and others who represent smaller numbers of state employees, was brought on the very day of the Supreme Court’s decision in Rauner’s anti-union Janus case. The second salvo launched in July and August included no fewer than 136 separate unit clarification petitions targeting more than 1,000 positions represented by AFSCME.
Our union contract has specific language to enable labor and management to jointly address such questions as they relate to the employer’s legitimate operational needs. The Rauner administration failed to engage the union in this contractual process, suggesting that they are more interested in achieving a political goal of stripping workers’ rights and not at all interested in solving real problems together. AFSCME has filed a grievance over the administration’s failure to follow the contract in this respect.
Many of the Rauner petitions filed with the labor board included no factual justification for their attempt to remove employees from the union. AFSCME has filed responses to every one of the Rauner petitions, which have now been assigned to administrative law judges who will schedule hearings where AFSCME members will be prepared to present evidence that their job duties do not merit exclusion from the bargaining unit.
Make no mistake, Bruce Rauner’s attempts to manipulate the unit clarification process to strip more than 1,000 AFSCME members of their right to collective bargaining is just another ploy to silence working people and weaken unions like ours that stand up to his harmful and destructive schemes. For more than three years in office he never raised an issue with the job titles he’s now targeting; like the failed anti-worker governors of Michigan and Wisconsin who were likewise defeated by the voters, Rauner is simply trying do as much damage as possible to working people before he’s drummed out the door. We’re going to keep standing up for public service workers and their right to a strong union to represent them.
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* Kristi Dunn Kucera has served as spokesperson for Chicago mayoral candidate Amara Enyia. She sent this e-mail to reporters today…
As of December 12, 2018, I no longer represent Mayoral Candidate Amara Enyia as Communications Director. In light of several unknown and troubling factors that I was not privy to during the campaign, I am unable to effectively continue in this role. I wish her the best in her endeavor.
I’ve followed up by e-mail, phone and Twitter direct message. I’ve heard nothing back.
*** UPDATE *** Enyia campaign…
As we step into the next and final stage of this campaign, internal transitions and shifts are to be expected. We are excited for the opportunity to expand our growing team ahead of this critical next phase of work, and we remain grateful to all of our colleagues, past and present, for the exceptional work they’ve done thus far.
More details to follow.
* Meanwhile…
State Comptroller Susana Mendoza on Tuesday ripped fellow mayoral candidate Toni Preckwinkle, who chairs the Cook County Democratic Party, for challenging her campaign petitions and those of four African-American women in the race.
Mendoza’s campaign also said she has more than enough names to get on the Feb. 26 ballot and called Preckwinkle’s challenge of her petition signatures “shoddy.” The Mendoza campaign is planning to file a motion Wednesday seeking to dismiss the challenge filed by Preckwinkle, who also is the Cook County Board president.
“It’s ironic that in the year of the woman, in Trump’s America, the highest-ranking woman in Cook County government, who happens to be the boss of the party bosses, thinks it’s a good idea to challenge five women of color and no one else, by the way,” Mendoza said. […]
“After multiple reviews of Mendoza’s petitions, it is clear that she meets the requirements necessary to be on the February 2019 ballot and that fact further underscores that Preckwinkle’s sole motive in challenging her petitions was to deny voters their rights and stop Susana from making the ballot,” the Mendoza campaign said in a statement.
As we’ve already discussed, the Preckwinkle campaign will have to be successful on 85 percent of its challenges to kick Mendoza off the ballot. That’s likely only if Mendoza’s sheets were some of the worst ever.
* Interesting thread…
So, Amara Enyia has three bodyguards and her spokesperson just resigned because of “several unknown and troubling factors.” Hmm.
* Speaking of those two debates…
Last night’s mayoral debate at the Copernicus Center on the Northwest Side started calmly enough. Candidates made their opening statements, sticking to their bios. When it came to Gery Chico, he lit into Toni Preckwinkle, saying, ”Toni, that soda tax really hurt us. That sales tax you said you’d repeal hurt us.”
The discussion moved fast with 10 participating candidates covering TIFs, crime, workers’ comp and pension issues. The event was sponsored by the 38th Ward Dems.
A few zingers: Lori Lightfoot challenging Preckwinkle: “Join me in calling for taking away the $100 million ‘ATM’ that Ed Burke controls with the Workers Comp system.” Ja’Mal Green, whose petitions have been challenged by Willie Wilson, talked about Wilson, saying, “He’s not black first. He’s rich first.”
*** UPDATE *** Press release…
The mayoral campaign of attorney and neighborhood advocate Jerry Joyce on Wednesday withdrew its challenge to the ballot submission of William Daley, though the challenge process revealed a widespread pattern of forgery and fraud in the petitions gathered and submitted by Daley circulators.
Three individuals collected more than 11,000 signatures, all using the same notary. One of the three collected more than 5,000 signatures..
The Daley submission included thousands of examples of:
— incorrect addresses
— unregistered voters
— forged names
— duplicate signers
Said campaign spokesman Graeme Zielinski:
“The idea that a single individual collected 5,000 signatures and that three circulators collected more than 11,000 signatures, almost enough to qualify for the ballot, is unbelievable even by Chicago standards. Using paid-per-signature circulators with no idea about the campaign, candidate or election is a practice that screams for reform.
“In the end, we’re withdrawing our challenge. We can’t spend the next months scouring the earth for purported circulators who, in many cases, are gone with the wind or who don’t live at the addresses that were provided.”
*Click HERE to download a .zip folder containing images of examples from the Daley submission.
* Related…
* At odds with Obama: 6 Chicago mayoral candidates say presidential center should guarantee community benefits: On Tuesday night, Cook County Board President Toni Preckwinkle, Cook County Circuit Court Clerk Dorothy Brown, former federal prosecutor Lori Lightfoot, public policy consultant Amara Enyia, activist Ja’Mal Green and former Chicago police Superintendent Garry McCarthy all said Obama and the city should agree to protections for the nearby neighborhoods. It was a popular position in a room full of Chicagoans who have pushed for more equitable and affordable housing at an event hosted by the Chicago Housing Initiative.
* Progressive aldermen move to strip Burke of $100M-a-year worker’s comp program: Mayoral candidate Toni Preckwinkle is also on record as supporting the worker’s compensation shift—even though Burke held a recent fundraiser for her re-election campaign as county board president.
* Chicago aldermen raise white flag in $1.5 billion TIF fight: Add mayoral candidates Toni Preckwinkle and Paul Vallas to the list of those urging the city to slow down on the Lincoln Yards TIF. Said Preckwinkle in a statement: “Chicagoans deserve an open and transparent conversation on TIF reform before the approval of any new TIF moves forward. I stand with community groups and say delay the TIF.” And Vallas says that until the TIF program is completely reorganized, under a new mayor, no new TIF districts should be created at Lincoln Yards or anywhere else.
* Chicago mayoral candidates face off in 2 forums
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Question of the day: Golden Horseshoe Awards
Wednesday, Dec 12, 2018 - Posted by Rich Miller
* The 2018 Golden Horseshoe Award for Best Campaign Spokesperson goes to Galia Slayen at the Pritzker campaign…
There is no doubt who owns this category - Galia. Having worked with the media in both campaigns and government, I can honestly say navigating the Chicago press corps is quite possibly one of the hardest jobs for both. What reporters and many outsiders forget is that the press secretary is not there to be their “secretary” but rather to be the spokesperson and voiciferous defender of their boss. Galia did that and then some. She is a smart, tactical operative who is 100% loyal to her candidate…and when running for office in a state like Illinois that’s exactly what one needs in from the head of their comms shop.
Also…
She frequently made more sense than her bosses. While persistent, she let you fight back when she knew you had a point. There’s a crazy line between protecting a campaign and the truth, and I don’t think she ever crossed the line into lying, which is super important to media in this day and age. Looking forward to seeing where she lands.
* The 2018 Golden Horseshoe Award for Best Government Spokesperson is a tie between Patty Schuh and Eleni Demertzis. Here’s my nomination of Patty, who spent decades with the Senate Republicans and then moved over to the governor’s office…
Grace under fire, decades of experience, volunteered for an impossible job with an impossible boss, excellent human being. It’s gonna take some truly great nominations for another gvt spox to convince me that Patty shouldn’t get this award in what will likely be her final full year of eligibility.
* But then I read this nomination of House Republican spokesperson Eleni Demertzis and I decided a tie was in order…
She dealt with a ton of challenging issues this year, including Jerry Long, Sterigenics, etc and always kept a balanced approach that put her boss in the best possible light. And she was never shy to tell a reporter their story needed to be “updated”.
Yep. Congrats to all.
* OK, let’s move right along to today’s categories…
* Best Illinois State Representative - Republican
* Best Illinois State Representative - Democrat
Please make sure to explain your votes or they won’t count. Also, do your best to nominate in both categories if you can. Thanks.
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Where we’re heading and where we’ve been
Wednesday, Dec 12, 2018 - Posted by Rich Miller
* Daily Illini…
Brian Gaines, professor in LAS, said Pritzker’s plan implies substantial surges in spending, which may make it difficult for Pritzker to deliver on promises he made for higher education during his run for governor.
“The state, however, is in dreadful fiscal condition, effectively bankrupt,” Gaines said in an email.
* I asked Professor Gaines to define “effectively bankrupt.” His e-mailed explanation…
I had in mind something like: unable to pay creditors in a timely manner; Steadily incurring more obligations, so that overall debt and unfunded liabilities continue to grow, rather than shrink; and, having no plausible plan to reduce an extreme debt-to-income ratio.
It is, I grant, a somewhat careless or hyperbolic phrase given that states cannot declare bankruptcy right now (though that could change). Rules of thumb for unsustainable debt-income ratios for individuals and businesses don’t transfer easily to cities let alone states, and the accounting details behind estimating the state’s true fiscal imbalance are complicated. But I think we’re quite clearly mired in last (50th) place, in fiscal health, and setting a new record each year. The adverb is the clue that I was not making a legal claim, but an observation more like, “If Illinois were not a state, we’d have declared bankruptcy by now.” Four years ago, The Economist carried a piece about Illinois’s pension liabilities entitled “America’s Greece?” that concluded, “In 2015 Illinois will either sink further into a Greek-style morass of debt or start its long-delayed rehabilitation.”
* People usually point to the state’s horrific unfunded pension liabilities when they discuss state finances. For instance, here’s the Tribune editorial board…
First, the awful numbers: For several years we’ve cited the figure of $130 billion to represent Illinois’ estimated unfunded pension liability. Never mind that number, it was $133 billion as of June 2018 — and it’s getting worse — according to a new state report. The Commission on Government Forecasting and Accountability estimates the shortfall in commitments to future retirees will deepen to nearly $137 billion in the current July-to-June year, and to $139 billion in fiscal 2020.
Unfunded liabilities did, indeed, increase and will increase next fiscal year as well.
* COGFA explains…
At the end of FY 2017, the aggregate unfunded liability based on the actuarial value of assets was $128.860 billion. The unfunded liability based on the actuarial value of assets stood at $133.683 billion as of the end of FY 2018. It grew by $4.823 billion during FY 2018, an increase of 3.7% over FY 2017. The primary reason for the increase was, again, actuarially insufficient State contributions, which increased the unfunded liability by $3.187 billion, accounting for 66.1% of the total increase.
There were two more factors that worsened the unfunded liability. One was an actuarial loss that resulted from unfavorable experience from demographic and other factors, largely due to TRS’ unfavorable retirement experience. This brought the combined unfunded liability up by $1.603 billion. The other factor was the cumulative effect of the change in assumptions, which increased the unfunded liability by $1.245 billion. It is worth noting that SURS was the only system that generated a loss by altering actuarial assumptions, although the other four systems also changed their actuarial assumptions in their 2018 actuarial valuations. This means TRS, SERS, JRS, and GARS realized gains by changing their actuarial assumptions, but these gains were eroded mainly by the impact of SURS’ reduced investment assumption rate from 7.25% to 6.75%. However, actuarial gains from three components helped lessen the effect of actuarial losses; lower-than-expected salary increases, higher-than-expected investment returns and an estimated gain from TRS due to the new pension buyout plans decreased the unfunded liability by $342 million, $489 million, and $381 million, respectively.
* Again, that unfunded liability is such a huge number that it simply boggles the mind. And, under the current “ramp” law, it’s gonna get bigger and therefore scarier over the coming years. From page 13 of the most recent COGFA pension report…
Click the pic if you’re having trouble seeing it.
From the current fiscal year through FY2028, when unfunded liabilities finally start trending downward, the state’s annual pension payments are projected to increase a total of $2.976 billion, or an average of about $300 million a year. That’s definitely not ideal, but it’s mostly manageable.
And the state is getting a break starting next fiscal year when its $1 billion annual payment on Gov. Quinn’s pension bond finally expires. That money could and should be put right back into the system, aside from the ramp.
However, there could be further changes in actuarial assumptions, which could drive these projected annual costs even higher. That’s happened often over the past several years.
In the 13 years starting in FY28, the back-loaded ramp will require total annual state pension payments to increase by $5.4 billion, or about $415 million a year. And, again, we don’t know what actuarial adjustments will be made. Annual payment increases continue to be pretty high every year through 2045, which is gonna have to be addressed.
* Speaking of the ramp, this COGFA chart from 2015 gives us a really good view of its back-loaded nature…
Whew.
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*** UPDATED x2 *** Emanuel/Emmanuel
Wednesday, Dec 12, 2018 - Posted by Rich Miller
* Remember this post about the French riots?…
[Under French President Emmanuel Macron] pensions themselves have ceased to be indexed to inflation (and thus to retirees’ ability to buy consumer goods) […]
The tax will increase the price of fuel by about 30 cents per gallon and will continue to rise over the next few years, the French government says
* And then yesterday, Chicago Mayor Rahm Emanuel (one “m”) proposed doing away with the 3 percent automatic annual increase for pensions and proposed raising gas taxes by 30 cents a gallon, among other things.
Here’s how the mayor justified doing away with the pension AAI…
What kind of progressive, sustainable system guarantees retirees 3 percent annual compounded pay increases when inflation has been at basically zero
And here’s his reasoning for raising the gas tax…
Illinois last raised the gas tax from 16 cents per gallon to 19 cents in 1990. Emanuel said raising the tax by 20 cents would be about the equivalent to inflation over the past 28 years. He said the group of mayors settled on a range of 20 cents to 30 cents to serve as a guideline for state lawmakers when they take up debate on the issue next year.
So, inflation “has been at basically zero” to justify reducing future pension payments, but he uses more than 100 percent inflation to justify a gas tax increase.
*** UPDATE 1 *** Illinois AFL-CIO President Michael Carrigan and Chicago Federation of Labor President Bob Reiter…
“Too many politicians, including Mayor Rahm Emanuel himself, have wasted years pushing extreme, immoral and illegal schemes to slash pension benefits instead of working together to craft fair, sustainable and constitutional funding solutions.
“In Chicago and throughout Illinois, teachers, fire fighters, nurses, caregivers and other public service workers earn a modest pension and pay toward it from every check. Their pension is their life savings, and since most public employees aren’t eligible for Social Security, it is their main source of income in retirement. Reducing that already modest benefit—now just about $35,000 a year on average—is both unfair and unconstitutional.
“Those pushing to repeal the Illinois Constitution’s pension clause ignore the real problem, which is not the cost of benefits but the decades-long habitual failure of politicians to pay the employer’s share.
“They also ignore the clear, strong rulings of the Illinois Supreme Court, which have reinforced both the plain language of the pension clause and the sanctity of the contracts clause, which protect these obligations. Their unanimous decisions have forcefully made clear that any attempt to slash the modest benefits promised to employees already in a pension system would violate both Illinois and federal law.
“Real solutions are achievable, and we remain committed to working together with anyone of good faith to identify and implement them.”
*** UPDATE 2 *** Press release…
Following is a statement from Ald. Scott Waguespack (32), Chair of the City Council Progressive Reform Caucus, in response to Mayor Emanuel’s proposed constitutional amendment on pensions:
“Our caucus opposes Mayor Emanuel’s proposed constitutional amendment to eliminate pension protections.
“These workers have held up their end of their agreement. They served our communities honorably throughout their careers with the assurance that their retirement would be secure. Now, Mayor Emanuel is proposing going back on that promise, and making even more vulnerable the retirement security of tens of thousands of workers who cannot rely on Social Security.
“Mayor Emanuel has missed many opportunities over the last eight years to fight for progressive revenue options to fund our pensions. We urge the next mayor to work with Springfield to achieve a progressive income tax that asks the very wealthy and big corporations to pay their fair share, and the legalization and taxation of recreational marijuana to help fund our pensions.”
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* Some people will believe anything, particularly on Facebook. From November 13th…
This was written by Carl Segvich, committeeman in Cook County. He friended me awhile back so I accepted. He is a…
Posted by Scott Finch on Tuesday, November 13, 2018
It got quite a bit of play on Facebook. I don’t spend much time on that site (partly because of silly stuff like the above post), but I did receive an e-mail the other day asking me if the Pritzker “proposal” was real.
* St. Louis TV station KSDK reached out to 11th Ward Republican Committeeman Carl Segvich to ask him about his post…
Pritzker’s transition team tells 5 On Your side it’s “not a real proposal” and there’s “absolutely no truth to that.”
We called the man whose name is on the post - a Chicago area Republican Committeeman Carl Segvich. Segvich confirms he shared the post, but insist he’s not the one who wrote it. And he concedes, he now knows it’s not true. There is no plan to tax people for leaving Illinois.
“It’s all fake. It’s all false,” said Segvich. “And, I believe I erroneously passed it along. No big deal really.”
5 On Your Side legal analyst, Jon Ammann from Saint Louis University Law School says this “departing tax” idea would also be unconstitutional. He says it goes against the 14th Amendment and the right to live and travel where we want.
He just “passed it along.” OK.
* Snopes even got into the act…
We reached out to Jordan Abudayyeh, Pritzker’s spokeswoman, who confirmed that the contents of post circulating on Facebook were “absolutely not true” and appeared to be nothing more than a hoax or an unflagged attempt at satire.
Prtizker, a billionaire and Hyatt hotel heir, won the Illinois gubernatorial race on 6 November 2018 by a wide margin over Republican incumbent Bruce Rauner. Pritzker and his Democratic colleagues supported replacing the state’s flat income tax with a progressive income tax, which would mean higher rates for wealthier Illinoisans with tax breaks for others. However, we found no evidence to suggest Pritzker had ever floated charging residents a special tax assessment for moving out of the state, and it’s unlikely any such plan could be legally implemented.
Segvich, by the way, has done campaign work for Bob Grogan, Adam Andrzejewski, Jim Oberweis and Tony Peraica. From his LinkedIn page…
It’s about The American CULTURE (Political) War. Voting for any democrat is a vote for deranged Public Policy.
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* Click here for background…
…Adding… Tribune…
“Too many people look at our pension obligation through green eyeshade – in terms of dollars and cents. That is just one way to see it, but it is not the whole picture. The other is in terms of our principles and priorities,” Emanuel is expected to say in his speech. “That is why I am also for amending the clause added to the constitution in 1970 that caused the Supreme Court to shoot down our initial agreements with labor.”
Emanuel in particular will cite the 3 percent annual compounded cost of living adjustments, or COLAs, for retirees in the laborers fund.
“Think about it. What kind of progressive, sustainable system guarantees retirees 3 percent annual compounded pay increases when inflation has been at basically zero and current employees have at times been furloughed, laid off, or received one percent raises?” Emanuel said. “There is nothing progressive about 3 percent compounded raises for retirees and furloughs for workers. The mantle of progressivity must not just be more taxes on the wealthy, it must be more respect for our workers’ paychecks. I applaud our labor unions for being willing to fix this inequity in 2012 with me.”
*** UPDATE *** Jordan Abudayyeh at the Pritzker transition…
As JB has said, pensions are a promise and the state has a responsibility to live up to that promise. As governor, he will work with the General Assembly to propose a balanced budget that meets our pension obligations and puts the state on a more sustainable path forward.
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Question of the day: Golden Horseshoe Awards
Tuesday, Dec 11, 2018 - Posted by Rich Miller
* The 2018 Golden Horseshoe Award for Best Democratic State House Campaign Staffer goes to Tiffany Moy and it wasn’t even close…
She was responsible for nearly all of the top tier races. Tiffany is a no-nonsense powerhouse who will tell it like it is and do what is necessary to get the job done. She works more than she should, but does it all for the House Democrats. Tiffany is the campaign staffer others should be measured against and aspire to be.
Also…
Tiffany Moy for the already mentioned reasons, but also for her many efforts that can go unnoticed in the off-season. She’s one of the few who puts in the work for candidates and campaigns all year round. From recruitment, to petitions, to candidate management and everything in between - she does it all. It’s not glamorous stuff, but it’s that kind of work that helps campaigns build a strong foundation and she does it all without complaint.
She was also endorsed by “Soccermom”…
TIFFANY MOY IS AMAZING.
Good enough for me.
* The 2018 Golden Horseshoe Award for Best Republican State House Campaign Staffer goes to Ryan Tozer…
Not only did he do an awesome job in Norine Hammond’s general, but he also did a great job on the primary too.
No way that his ground game was going to be outmatched in either race. Lots of Republicans that fended the right flank in March went down in November. Not Hammond, and that’s because of Ryan.
This is what put him over the top…
It’s been six plus years since I’ve lived in the state or had anything to do with politics but I still got hit up by Ryan Tozer to knock doors for Norine Hammond. Dude, how about “how are the kids?”
* Honorable mention goes to Deb Kraulidis, who was nominated by Rep. Mark Batinick…
Based on performance my Staffer, Deb Kraulidis, should win the GOP staffer award. Only one to win a competitive race in a district Rauner AND Harold lost. Outperformed Rauner by 3.75% while most targets in the suburbs were 3%-7% behind him. Withstood the massive late spend. She managed/developed a large team of volunteers. And she did on the smallest budget of any incumbent target. She’s unknown in Springfield and is unlikely to be nominated but she should be!
* OK, on to our next categories…
* Best Government Spokesperson
* Best Campaign Spokesperson
Don’t forget to explain your votes or they won’t count. And please do your best to nominate in both categories. Thanks!
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Let’s be careful out there
Tuesday, Dec 11, 2018 - Posted by Rich Miller
* Tribune…
A volunteer for a candidate for alderman of the 15th Ward was shot while on Facebook Live as he was out canvassing the West Englewood neighborhood Sunday, officials said.
Maxwell Omowale Justice, 32, a volunteer for the Joseph Williams campaign, is speaking to the camera when shots can be heard in the video.
The shooting took place while Williams was a few houses away with his two children, as a group from the campaign tried to get affidavits from residents following a challenge to Williams’ petitions, said Erin Ellenbolt, Williams’ campaign manager.
“Maxwell had just shown up and he was handing out flyers as well and trying to get signatures,” Ellenbolt said.
* More…
Justice drove himself to Little Company of Mary Hospital, where he was treated and released. Reached Monday morning, Justice said he was resting and wasn’t ready to speak more. In social media posts, he shared an image of his bleeding leg.
Glad he’s OK.
* Justice is also known as Maxwell Little. You may remember that name…
The shooting of a campaign worker in Chicago’s West Englewood neighborhood has led to a heated war of words between the incumbent alderman and one of his challengers in the 15th Ward.
Campaign worker Maxwell Little was handing out literature for candidate Joseph Williams in the 6600 block of South Marshfield Avenue Sunday afternoon, and broadcasting his efforts via facebook live. Suddenly, without warning, a series of gunshots are heard on the video, and after a brief jumble, the broadcast ends. […]
Little made news earlier this year, when he and other staffers sued then-gubernatorial candidate J.B. Pritzker, alleging racial discrimination and intimidation within that campaign.
He is also a staffer for mayoral candidate Lashawn Ford.
* Little initially claimed it was a hit…
Police said a masked gunman had come out of a gangway and fired the shots. No one was in custody.
Little posted a Facebook message from his hospital bed saying, “This was no random shooting. Someone wanted me dead.”
Community activist Jedidiah Brown has just parked his car to help campaign with 15th ward candidate Joseph Williams. There were about a dozen people around including Williams’ two young children.
* A friend of his and the police thought otherwise…
Chantal Grant, a friend of Little’s, said she didn’t believe the shooting was targeting Williams’ campaign or Little, specifically. […]
Chicago police were canvassing the neighborhood, looking at video footage from doorbell cameras and home security systems to establish a timeline surrounding the incident. Police do not believe at this point that Williams was specifically targeted, instead suggesting this was a case of mistaken identity.
* Little’s boss also more than just implied that the incumbent alderman may have been involved. But…
An aldermanic candidate in for Chicago’s 15th Ward is backtracking further from remarks he made Monday, suggesting that incumbent Ald. Raymond Lopez might have been responsible for the weekend shooting of a campaign worker in the city’s Englewood neighborhood. […]
Speaking Monday, Williams said, “I don’t put anything past the incumbent,” when asked who he felt might be responsible. […]
“It is disgusting, it is outrageous,” Lopez said. “And it takes away from the real violence that we are facing in our communities.”
But Williams released a statement overnight, seeking to distance himself from the controversy.
“As it is with so many of us who have experienced gun violence, I am still trying to make sense of Maxwell’s shooting and my children’s exposure to it, so my emotions may have been running high,” he said.
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* The Chicago Tribune has editorialized three times on public pensions in the past several days…
* Goodbye to Illinois’ $130 billion pension hole. Now it’s $133 billion. And getting deeper.
* Even pension loopholes are protected? Then amend the Illinois Constitution.
* What Emanuel should say: Amend the Illinois Constitution
Two of those editorials were calls to amend the Illinois Constitution so the state could cut pension benefits of current employees/retirees going forward…
Reworking that amendment and giving elected officials the ability to adjust pension benefits going forward is the only transformative solution for Illinois. It is the most pro-growth, pro-taxpayer, pro-jobs pathway the state’s leaders could embrace. But it will require them to stand up to public employee unions.
* Gov.-elect Pritzker’s response…
“What’s most important to me is the principle that people who’ve been promised a pension should get the pension they’ve been promised,” Pritzker said. “That’s the principle we’re going to go by. But there’s no doubt that we’ve got to address the challenge in the budget of the increasing share of the budgeting going into pensions.”
Pritzker supports putting more tax dollars into pensions in earlier years of a pension ramp to lessen how much needs to go toward the funds in later years. One idea is to sell bonds to make those payments in earlier years. Pritzker said everything is on the table.
The Tribsters and others can scream “But Arizona!” until they’re blue in the face. The incoming governor is dead-set against the idea and I doubt there’s even a super-strong majority of legislative Republicans who would be for it and they’re in the super-minority anyway.
In other words, the anti-pension chattering class needs to come up with another idea. Right now, they’re simply shouting into the wind. They may prefer that role, but it doesn’t move anything forward.
Also, the gubernatorial candidate who hated public unions received 38.8 percent of the vote last month. His position was thoroughly rejected.
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Preckwinkle pushing new tax hike
Tuesday, Dec 11, 2018 - Posted by Rich Miller
* Shia Kapos…
The Cook County Board is considering hiking a tax that it established two months ago on apps like SpotHero and ParkWhiz, which allow drivers to find parking spots.
In October, then-Commissioner John Fritchey proposed creating a baseline 1.75 percent tax rate for parking-reservation apps, which is in line with the sales tax. The measure was approved by a 12-4 vote and would take effect Jan. 1. Chicago-based SpotHero and other apps supported that measure, saying a 1.75 tax rate was fair given they don’t operate the parking lots—whose owners pay a 6 percent tax rate. Cook County Board President Toni Preckwinkle opposed it.
With Fritchey no longer on the board, Preckwinkle has moved to ramp up the tax to 6 percent—or, as Preckwinkle sees it, the board would return it to 6 percent. She says SpotHero should have been paying that all along. “Despite the administration’s objections, the board approved an amendment to the existing tax that passed with the help of a number of outgoing members of the County Board,” Preckwinkle’s team said in a statement. […]
How the current tax works: Say a driver reserved a spot costing $20 total with one of the apps. The parking spot owner typically pays a 6 percent tax to the county. The apps pay 1.75 percent on the portion of the transaction it receives for its services—it’s less because they don’t control the parking facility.
SpotHero opposes the new measure, saying it “incorrectly and unfairly” characterizes apps as parking garage owners.
* Meanwhile, from the Sun-Times…
Toni Preckwinkle just added $1 million to her mayoral campaign treasure chest.
The cash infusion Monday came from the Service Employees International Union state council.
In 2015, the group — the political arm of SEIU in Illinois, comprised of SEIU Local 1, SEIU Local 73, and Healthcare Illinois Indiana — backed Jesus “Chuy” Garcia with $3 million mainly in the form of direct contributions, in kind contributions and television ads in an unsuccessful bid to unseat Mayor Rahm Emanuel.
* NBC 5…
As the crowded race for Chicago mayor heats up – and with 21 candidates who hope to be on the ballot – those campaigns are hiring field staff for the work ahead. A political consultant firm working with Toni Preckwinkle’s campaign is recommending the current Cook County Board president hire workers from out of town.
An internal email was forwarded to NBC 5 from Democracy Partners Recruiting Services. It provides advice for interviewing field staff including going over job requirements, the possible seven-day workload and recommends:
“It will be so much better for the campaign if we can get out-of-towners instead of Locals, who have distractions, family, friends. If we need to fire someone for being trump-y with the ladies, or missing numbers, it’d be far better if they leave town than hang around to try to make trouble.”
A spokesman for the Preckwinkle campaign says “this is not our position, the majority of our staff is from right here; this does not represent our position.”
One of the firm’s partners is Bob Creamer, the husband of Jan Schakowsky, who has endorsed Preckwinkle.
* Press release…
Renowned Chicago broadcast journalist, Charles Thomas, whose stellar career has spanned four decades, is joining Amara Enyia’s mayoral campaign as a senior advisor. He started his career as a Midwest Correspondent for ABC News and then spent more than 25 years at ABC Eyewitness News in Chicago. In a new video being released today onwww.amaraenyia.com and on social media, Thomas talks about why he is endorsing Amara Enyia, what he loves most about Chicago, and what Chicago needs in a future Mayor.
“I remember my first interview with Amara. I was impressed at how she listened to the questions. Because a lot of politicians – you ask them questions - and they immediately go to their talking points. Amara didn’t do that, said Thomas. “She is a good listener. And she will listen to all sections of the city: the downtown businesses and the neighborhoods too. But she will listen to everyone,” he added.
In the video, Thomas underscored the fact that this is the first time that he has publicly endorsed any political candidate adding that “Amara is the future of Chicago”. He went on to acknowledge that Amara is a bright and dynamic generational bridge builder. Since she announced her run for Mayor, Enyia has been running a people-powered campaign with the slogan: All People. All Voices. One City. Thomas acknowledges her platform in the video saying “Amara has based her whole campaign around people, and her goal is to return control of the city government to the people. No other candidate is doing that”.
During his career in journalism, Thomas has interviewed everyone from Mayors to Governors to Senators and even Presidents. His impressive and dynamic career began in 1973. After working at various stations across the country, he eventually landed a job in 2009 as a political reporter at ABC Eyewitness News in Chicago. Looking back at this transition in his career, his main recollection is that his first full day on the job happened to coincide with President Obama’s first full day in the Oval Office.
“As a trained journalist, it is such an honor to receive the support of Charles Thomas – someone I’ve always admired in the profession, said Enyia. “He is proof that it is possible to reach all people across all generations and have a message that resonates and energizes people of all ages. Charles Thomas’ endorsement means a lot to me, and I appreciate and fully embrace his support as we move forward on to the next phase of our campaign.”
The video is here.
* Sun-Times…
Furious about Willie Wilson’s attempt to knock him off the ballot, Ja’Mal Green is fighting back—by attacking Wilson as a Republican and tying Wilson to outgoing Gov. Bruce Rauner and President Donald Trump.
On Monday, Green released an attack ad that will be posted on YouTube and other social media sites.
It opens with the words, “Willie Wilson, a Republican for mayor?” That’s followed by a clip of Wilson at a podium declaring that he voted for Rauner, who was overwhelmingly defeated by Democrat J.B. Pritzker.
As the background music plays the song “Thank You For Being a Friend,” the ad shows two still photos of Rauner and Wilson yukking it up.
The video is here.
* Other stuff…
* Hearings on ballot petition challenges for mayoral candidates to begin Tuesday: The first challenge to be reviewed was filed by mayoral candidate Paul Vallas against Bill Daley. It’s up at 9:30 a.m. Reviewing Preckwinkle’s challenge to Mendoza begins at 1 p.m. Early voting is scheduled to begin next month, January 17th. But election officials warn it’s possible the ballot won’t be finalized until early February.
* Wilson has a long way to go to win LGBTQA vote
* Former Obama adviser, political reporter David Axelrod handicaps race for mayor
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* I’ve already told subscribers about this, but every year about this time, I’m asked if there are any tickets left for my annual “Christmas with Rich Miller” event with the City Club of Chicago. And every year I have to either turn people down or send them to the City Club people to see if they can squeeze another one in.
We decided to do something a little different this year. The City Club held back ten tickets so we could auction them off to benefit Lutheran Social Services of Illinois. The annual event is this coming Monday at Maggiano’s in Chicago and the auction has begun.
The bidding starts at $35, which is the normal price of a ticket. Six tickets are being sold individually, and four are being sold in pairs of two. I don’t think we’ll get a hot bidding war on every ticket sold, but I would like to see all of the tickets purchased for at least the base price - and LSSI does great work and was pummeled hard by the impasse.
* Click here to bid. You’ll be asked to create an account. Then they’ll send you a verification e-mail and you click a link and enter your bid. The whole thing takes about a minute.
And if you’ve already purchased a ticket, please don’t forget to bring a toy to the event for LSSI’s child care program.
Thanks!
*** UPDATE *** Somebody just paid the “buy now” price of $500 for a ticket. Thanks!!!
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* Rachel Otwell at NPR Illinois…
A new report says Illinois lacks comprehensive guidelines when it comes to dealing with sexual misconduct cases in elementary and high schools.
Wendy Pollack heads the Women’s Law and Policy Initiative of the Sargent Shriver National Center on Poverty Law. She authored the report, based on a series of interviews with students and service providers across the state.
Pollack says the lack of guidance leads too often to problems like school employees mishandling survivors’ confidentiality, and survivors being revictimized by having to explain the abuse repeatedly. Pollack says when situations are mishandled it can even lead to bullying, and some students interviewed dropped out of school as a result.
In the midst of the #MeToo movement, there are more conversations about the existence of problems resulting from sexual violence. But Pollack says not enough of those conversations involve young survivors.
* From the report…
This report provides a snapshot of Illinois K-12 schools’ responses to student survivors of domestic and sexual violence. The report’s findings are based on four focus groups and 31 in-person and phone interviews conducted in 2015 and 2016; a total of 59 students (middle school and high school students) and service providers participated. The participants were diverse in terms of race, ethnicity, and LGBTQ status; in addition, the participant service providers served diverse student populations. Geographically, participants were from all over the state, including Chicago and surrounding suburbs, and smaller cities and rural areas in northern, central, and southern Illinois. The schools varied in size, the availability of resources, and their response to and support of students and their experiences of domestic and sexual violence.
Although since 2007 Illinois law requires K-12 schools to conduct trainings by experts in domestic and sexual violence once every two years for all school personnel who work with students, including teachers, administrators, counselors, and nurses, the lack of comprehensive school policies creates barriers to student survivors’ success in school. Focus groups uncovered issues due to the lack of survivor-centered, trauma-informed policies in the following areas:
• Protocol and Training — Protocols that are sensitive to survivors and their needs were too often either absent or not followed by school personnel.
For example, staff generally did not know when and to whom they report. Compounding the problem, the required training of school personnel is generally not conducted, leaving school personnel unequipped to appropriately respond to disclosures of domestic and sexual violence.
• Confidentiality — School personnel often lacked understanding of the need for confidentiality and how to ensure it. Even when processes were in place, they were often unaware of confidential reporting processes. Routinely, confidentiality was either knowingly breached or there was a lack of privacy necessary to maintain confidentiality.
• Accommodations and Support Services — Schools too often did not provide any accommodations in response to student survivors trauma — whether academic-, safety-, or health-related. And if offered, in-school support was often
inadequate, and relationships with external service providers in the community that could offer expert support to student survivors were lacking.
• Revictimization — School personnel often dismissed the experiences of student survivors out of disbelief or through minimization, criticism, or even punishment.
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* Rachel Droze…
Repairing and replacing the city of Springfield’s sewer system is estimated to cost more than $50 million over the next decade. […]
When averaging the age of Springfield’s oldest in newest pipes, the sewer system is about 60-years-old. The oldest pipes were laid about 150 years ago.
If necessary repairs aren’t made, sinkholes can form. […]
Since most of the city’s major sewage pipes run under roads, cave-ins could cause roads to collapse. […]
[Springfield’s Sewer Engineer John Higginbotham] said the city should be spending roughly $4 million a year on repairs and upgrades, but last year they only spent $1 million.
When people think of infrastructure, they often think only of roads, bridges and transit. But sewer and water systems in this state also need attention. It’s easy to get away with neglecting them because they’re underground. Out of sight, out of mind - until, that is, a sinkhole forms and a main road collapses.
*** UPDATE 1 *** Madeleine Doubek…
One of Illinois’ biggest and most critical assets always has been its transportation network. We’re smack dab in the middle of America, but we lost Amazon’s HQ2 and we could lose more economic opportunity if we don’t tend to that network. That means planes, trains, transit, roads and, especially, bridges, noted Illinois Department of Transportation Secretary Randy Blankenhorn.
Three quarters of Illinois’ bridges are in need of repair. We should be rebuilding five major bridges a year, but we’re working on one every five years, he said. “This is a crisis that’s coming,” Blankenhorn said. “This is what keeps me up at night.”
If we want to build our communities, attract new people who can contribute to those communities and fund governments, then we need to invest in transportation, Blankenhorn and others said.
He called for an increase of at least 15 cents in the state gas tax, which hasn’t been increased since 1990.
Once again, Blankenhorn says this stuff about a big gas tax hike after the election even though the governor has been saying for years that no tax hike is needed to pay for a capital bill.
*** UPDATE 2 *** Tribune…
Mayor Rahm Emanuel on Wednesday called for a 20 to 30 cent per gallon increase in the state’s gas tax to fund a major statewide transportation bill.
Emanuel made the push during a City Hall news conference in which he was joined by members of the Metropolitan Mayors Caucus, an organization that represents the Chicago region’s 275 cities, towns and villages.
“Our state can’t wait any longer,” Emanuel said, noting neighboring states have passed transportation bills with gas tax hikes.
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SOTS or no SOTS?
Tuesday, Dec 11, 2018 - Posted by Rich Miller
* Bernie…
Pritzker said he hasn’t decided if he will give separate State of the State and budget messages next year. He said he will give a speech at his inauguration, but beyond that “it depends on how much we need to convey during that one-month period.”
If he gives a State of the State address, people will bemoan the fact that he didn’t talk about the state’s budget problems. If he skips the State of the State, he loses out on some publicity. Some governors have combined the two, some have given both.
The budget address is scheduled for February 20th.
Thoughts?
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“It’s a first”
Tuesday, Dec 11, 2018 - Posted by Rich Miller
* Sneed…
Pritzker has dispatched invites to Senate President John Cullerton; House Speaker Michael Madigan; House Minority Leader Jim Durkin and Senate Minority Leader Bill Brady — and their wives Pam, Shirley, Celeste and Nancy — to wine and dine at Pritzker’s Astor Street mansion.
“It’s a first,” said one of the invitees, who asked not to be identified. […]
“Certainly, Gov. Bruce Rauner never entertained us this way for dinner,” the source said.
And what do you bring as a party gift?
“A bottle of wine … or a plunger,” said the source, jokingly referring to the campaign imbroglio over the controversial removal of toilets at the home, which lowered Pritzker’s property taxes.
That’s a fine way to repay the guy for the invite.
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* Click here for background if you need it. Here’s Adam Schuster with the Illinois Policy Institute’s response to the Center on Tax and Budget Accountability’s defense of its pension obligation bond proposal…
The CTBA plan does use the POBs to reduce contributions, but in the long-run rather than the short-run/Blago-style. It reduces the contributions by both lowering the funding target and extending the pension ramp, both of which violate Actuarial Standards of Practice from professional actuary associations.
Hertz correctly points out that a recession is increasingly likely, but then comes to the exact opposite conclusion about what this should mean. Just prior to a recession is the worst possible time to play an arbitrage gamble with taxpayer money, which is what this plan does. It would be like going all in on a Black Jack hand knowing the dealer has 21. This will likely make our pension repayment even more expensive than already envisioned by CTBA.
Hertz’s admission that arbitrage benefit “isn’t really the point” tells us what their true motivation is here. Potential arbitrage benefit is the only positive aspect of their plan. But that’s not their goal; their goal is to trade soft debt for hard debt by putting taxpayers on the hook for these bonds, which cannot later be made cheaper through reform like the pension debt can.
Hertz claims to be worried about the service cuts being caused by the rapidly growing pension payments, but the CTBA plan explicitly puts pension payments above those services with its $11 billion cash infusion. That insulates pensions from the risk of economic downturn while also restricting the amount of revenue available for the services Hertz claims to care about, by making them hard debt.
You know what our alternative is, because I’ve seen you write about it. I know you think a federal contracts clause challenge is likely. We’ll have more on that soon, but for now its worth noting that Arizona did not face such a challenge despite a virtually identical situation. They have the same pension clause and their court also struck down a prior round of reforms, claiming they diminished benefits. And yet they’ve successfully amended their constitution twice now.
Arizona hasn’t yet faced a federal court challenge. That doesn’t mean it won’t. Or that it wouldn’t be challenged here.
…Adding… Schuster has a new post up on the topic. Click here.
…Adding… From comments…
Not weighing in on the CTBA proposal itself, but it’s worth pointing out that the IPI response seems to misunderstand (or misrepresent) it in several ways. First, IPI writes that CTBA’s proposal “reduces the contributions”, which isn’t really true. In the short-term CTBA’s proposal would increase contributions above what’s required under current law. Yes the CTBA proposal does not conform to actuarial standards, but making payments that align with actuarial best practices would require dramatically higher pension contributions (both above current law and CTBA’s proposal). Second, IPI is critical of the proposal’s use of POBs because it’s an “arbitrage gamble,” but this is simply not what CTBA is proposing. In CTBA’s proposal the POBs are meant to be a revenue source for making pension payments that are higher than required under current law in the short term. This using POBs for budgetary relief. POBs resolve CTBA’s issue of wanting to increase pension contributions without cutting other aspects of the budget or simply raising taxes. It’s also worth pointing out that Quinn issued two POBs for budgetary relief (in 2010 and 2011). The Blago POB was issued for arbitrage reasons; however, once issued Blago used some of the proceeds for budgetary relief (which was a different use than original proposed). Blago’s use of POB proceeds for budgetary relief is one source of criticism; however, it remains to be seen whether the arbitrage play materializes as the bonds aren’t paid off. As of 2017, investment returns have actually exceed the 2003 POB interest rates. (see p. 121 http://cgfa.ilga.gov/Upload/FinConditionILStateRetirementSysMar2018.pdf)
Last, I think people should realize that CTBA’s proposal actually has several distinct policy components that can be independently debated. 1) switching the amortization method (aka debt repayment schedule) from level % of pay to level dollar. Doing this alone requires higher pension payments; 2) changing the funded ratio target from 90% to 70%; and 3) using POBs to make part of the state’s pension payments.
I know who that commenter is, by the way, and the person knows this topic well.
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