We’re one year into the administration of Gov. Bruce Rauner, but somehow we’re still in campaign season. The latest never-going-to-happen idea: a state takeover of Chicago Public Schools and, possibly, a trip to bankruptcy court.
This plan, unveiled today in semi-baked form by the Republican governor’s legislative lieutenants Christine Radogno and Jim Durkin, doesn’t have a prayer of passing a Democratic-controlled General Assembly, so why propose it?
Even if a state takeover had a shot at passage, there are reasons to doubt it’s a good idea. Other cities have tried the “run it like a business” model with unintended and sometimes disastrous results. Google “Flint Michigan” and “water” for details.
Let’s be clear: CPS is a train wreck. The Board of Education approved an irresponsible budget with a $500 million hole in it. The Chicago Teachers Union is seeking hundreds of millions of new money but isn’t willing to add a penny to the employees’ pension contributions. The system keeps borrowing to meet short-term needs, and the cost of that borrowing is only going up. And CPS—which has been led by a merry-go-round of CEOs for the past five years under Mayor Rahm Emanuel—is so incompetent that it can’t account for the desks and chairs that were in the 50 schools it closed two years ago.
Against this backdrop, the idea of a takeover has a certain appeal. But a takeover by whom? The state of Illinois? Springfield, now entering Month 7 of a disastrous budget impasse, hardly seems the right place to look for guidance on effective governance.
In response to the forthcoming legislation seeking to allow for the bankruptcy and government takeover of the city of Chicago and Chicago Public Schools being pushed by the governor and Republican leaders, Senate Assistant Majority Leader Kimberly A. Lightford released the following statement.
“The Republican administration has gone too far, and the governor has shirked his real duties to the people. If he wants so desperately to restructure Chicago Public Schools, he should start by restructuring the systemic prejudice that continues to permeate our children’s schools.
“Chicago is not a third world country to be seized by a government. This is not our path to success. All of our leaders need to treat Chicago students and teachers with respect, value them as equally as any other student or teacher and be willing to proactively restructure our education system for the next generation.”
The legislation would also allow CPS to declare bankruptcy. And Rauner tried to calm nerves that tend to fray when the word ‘bankruptcy’ is used.
“Many people hear the word ‘bankruptcy’ and you think: ‘That’s horrible. That’s a disaster. That means massive layoffs. That means firings. That means destruction of the system.’ It does not mean that at all,” Rauner said.
“In fact, the liabilities are restructured so we can afford to hire even more teachers, if it’s done properly.”
…Adding… Mark Brown is more than somewhat on the mark…
As soon as Rauner drops his union fixation, it might be possible for him to finally get something accomplished.
* From the Southeastern Illinois Agency on Aging’s Facebook page…
Illinois Aging Network Alert
I4A Alert for Tuesday January 19, 2016 (Prepared by AgeSmart)
Since September 28, 2015 the Area Agencies on Aging have been providing a weekly alert addressing the impact of the budget Impasse. Reviewing those 15 alerts we are beginning to see the erosion of services to seniors in the State of Illinois. Below is a visual of the loss of services to seniors in Illinois.
Number of reported seniors who have lost:
Home Delivered Meals - 3203
Home and Community Based Services - 6104
Loss of Jobs (FTEs) – 90.5
Since October we have seen four senior centers close and many other organizations reduce the days they are open. In a network survey about the budget impasse conducted in the fall it was estimated that if there was no budget by the end of February 84,500 seniors will be without services.
Gov. Bruce Rauner says that if Illinois takes over Chicago Public Schools, he’ll stand up to the teachers’ union on contract negotiations.
The first-term Republican governor said Wednesday that he backs a proposal to allow a state-appointed board to take over operations of the nation’s third-largest school district. An appointed authority would have the ability to negotiate new contracts.
The Chicago Teachers Union is locked in contentious negotiations with school officials. The union went on strike in 2012, its first walkout in 25 years.
Rauner accused Chicago Mayor Rahm Emanuel of caving on contract negotiations then and says Emanuel is set to do so again.
* Mayor Emanuel and Sen. Heather Steans have both said Rauner is using the issue as a “distraction” because he doesn’t yet have a budget of his own and has to submit a new one soon. Senate President Cullerton has said the governor’s “ridiculous idea” is a “distraction from the state’s problems” and that it’s “not going to happen.”
They make a very good point about the distraction stuff, but how about we focus on the policy instead?
* From the Radogno/Durkin press release…
* Recognize CPS’ financial difficulties and amends current state law, established by HB5537/PA 98-1155, to include the Chicago Public School system in the Illinois State Board of Education District Intervention law
* Specifies the process for the Illinois State Board of Education to establish an Independent Authority (IA) to run the school district and the removal of the current CPS Board of Education
* Specifies the State Superintendent of Schools must appoint 5-7 members to the Authority, who shall be selected based on expertise and knowledge in education policy and governance including local community members, in cooperation with local officials;
* Authority members must not be CPS employees or have a financial interest
* Authority members will serve without compensation
* Grants the Authority the power to serve as the School Board, with the same powers and duties; specifics the Authority cannot unilaterally cancel or modify existing collective bargaining agreements
* The Authority would serve until the State Board of Education determined CPS is no longer in financial difficulty; Provides the phase-in process for an elected CPS Board of Education and prohibits union contributions to those candidates
* Establishes that the state is not liable for the school districts’ debt.
The Chicago Public Schools educate nearly 400,000 students, almost 90 percent of them from low-income households. Five percent are homeless. Almost one-fifth are learning English as a second language. Yet against the odds and starved of resources, the state’s largest school district is achieving higher test scores and graduation rates for its students. […]
They portray their plan as merely a matter of fairness – adding CPS to an existing law allowing for state intervention in certain districts. But this could not be farther from the truth.
Illinois’ current intervention law does not require or even allow bankruptcy; in fact, Illinois does not permit any unit of government to declare bankruptcy, and the current situation in Michigan demonstrates the serious pitfalls of rushing to release governments from their financial obligations.
In addition, CPS educates more than 14 times the number of students in the largest district currently eligible for state intervention. The State Board of Education is simply not equipped to manage such a large, complex and diverse system of schools.
* The Question: Should the state be allowed to take over CPS? Take the poll and then explain your answer in comments, please.
* As you’ll recall, the House came one vote short of passing a bill to overturn Gov. Bruce Rauner’s huge child care program cuts. The lone Democrat who didn’t vote for the bill, Rep. Ken Dunkin, was involved in the negotiations to craft an alternate plan. The SJ-R looks at how that compromise is going so far…
Enrollment dropped to an average of 133,374 children in the period from July through December 2015, compared with the average total of 181,563 children in the program during the same period one year earlier, according to Illinois Department of Human Services spokeswoman Marianne Manko.
That’s a reduction of about 48,200 children, or more than one-fourth of the previous eligibility level.
Even though eligibility guidelines have been mostly restored, there’s still a gap between 162 percent of FPL and 185 percent, and the higher co-payments instituted by Rauner remain, according to Maria Whelan, president and CEO of Chicago-based Illinois Action for Children.
The current income guideline, by itself, keeps 10,000 children out of the program who normally would be admitted under the original income ceiling of 185 percent of FPL, she said.
Another 5,000 children are being denied entry because of a restriction that Rauner opted not to lift, involving children whose parents are in school but not employed, Whelan said.
That still leaves more than 32,000 children who, in theory, could be enrolled in the program but aren’t. […]
The 24,498 home-based providers who received state subsidies in August had dwindled to 19,975 by October — a drop of more than 4,500 or 18 percent, according to Service Employees International Union’s health-care division in Illinois.
Rauner promised to raise the Federal Poverty Limit eligibility to where it was before (185 percent) once we have a state budget.
* Kyle is referring to this Springfield press conference…
Higher Education Coalition Kicks Off Statewide Push for State Funding
Group Unites to Urge Lawmakers, Governor to Solve Months-Long Funding Stalemate
SPRINGFIELD – The time is now for legislators and the governor to find a solution for the stalemate over higher education funding as colleges and universities face a growing crisis heading into its seventh month, a new coalition announced on Wednesday.
The Illinois Coalition to Invest in Higher Education hosted a news conference at the Statehouse to outline what’s at stake in the ongoing funding stalemate and how that is affecting and will affect campuses around the state.
The Coalition is a collection of business, labor, and organizations representing public and private colleges and universities coming together to urge immediate action. Illinois universities and colleges have gone without hundreds of millions of dollars in MAP grants and operational funding since July, and aid has not been included in relief packages approved by legislators and the governor since the summer while they have not reached agreement on a full-year budget.
Coalition members discussed a number of problems facing Illinois campuses from the ongoing lack of funding and uncertainty about when funding will be approved, including:
· Students being unable to graduate or continue classes because their Monetary Award Program (MAP) grants that let them afford college are held up
· Prospective students – in and outside Illinois – choosing out-of-state colleges because of the funding uncertainty here
· Classes and programs being closed or suspended until funding is restored
· Employees being laid off
· Cuts creating long-term consequences for campuses – losing students and faculty/staff talent to other competitors, and projects being delayed that will cost more to complete later
The Coalition delivered a clear message: higher education cannot afford more funding delays from Springfield.
“The ongoing higher education funding crisis in Illinois is a real threat to our state because its impact is much deeper than the classrooms and productive people who fill them,” said Chris Harbourt, co-founder and CEO of Agrible, located in the University of Illinois Research Park in Champaign. “Agrible and scores of other innovative businesses like ours work to make our customers more efficient, productive and successful. Draining resources from our campuses does exactly the opposite.
“It not only hurts the thousands of students, faculty and workers on campus, but also it sends the message to business that the higher education system you depend on for your talent and support is not a priority here. We urge a quick resolution so we can refocus on creating a more dynamic, competitive workforce and business environment in Illinois.”
Tom Livingston, a University of Illinois alum and an official with CSX in the rail industry, notes business and higher ed need to work with legislators and the governor to stabilize this funding question.
“Successful states have formed strong economic and academic partnerships with their colleges and universities,” Livingston said. “Consistent investments in Illinois higher education over the decades have attracted businesses and life-changing innovation to the direct benefit of our fellow citizens.”
* One tweet does not a pattern make, but this is a somewhat interesting development from a group everybody figures is guarding Rauner’s Democratic flank…
House Speaker Michael J. Madigan released the following statement Wednesday after allies of Gov. Bruce Rauner announced plans for a state takeover of Chicago schools and to allow CPS to declare bankruptcy:
Seven months into a new fiscal year, the state still has no budget under Republican Governor Bruce Rauner, and it’s because he’s more interested in driving down the wages and standard of living of middle-class families than working together to solve our state’s problems.
Today, the sponsor of his new proposal admitted that this new plan is an attempt to force Governor Rauner’s agenda of destroying the middle class onto the Chicago Public Schools. Governor Rauner’s proposal could also help him achieve his goal of taking money away from public schools in order to establish more charter schools. Taking one unelected school board appointed by the mayor and allowing it to become a board of unelected and unaccountable bureaucrats appointed by Republican Governor Bruce Rauner is not a step in the right direction.
Governor Rauner hopes to use a crisis to impose his anti-middle class agenda. Republicans’ ultimate plans include allowing cities throughout the state to file for bankruptcy protection, which they admitted today would permit cities and school districts to end their contracts with teachers and workers – stripping thousands of their hard-earned retirement security and the middle-class living they have worked years to achieve. When Detroit was granted bankruptcy protection, retirement security was slashed for employees and retirees. That is not the path we want to follow in Illinois.
The disaster in Flint, Michigan, is a very timely example of how reckless decisions just to save a buck can have devastating consequences on children and families. In April 2014, under Republican leadership, the state of Michigan appointed an emergency manager to Flint to address a financial crisis, and switched Flint’s water source to the Flint River, which had long been known to be a dirty river. An earlier study showed that water from the river could have been drinkable had it been treated at a cost of about $36,000 a year. A crisis created by a Republican takeover could have been averted at what amounted to a mere fraction of a fraction of the state’s budget. That is not the path we want to follow in Illinois.
* And here’s Senate President John Cullerton’s response, in case you missed it in our live coverage post…
“This is not going to happen. It’s mean spirited and evidence of their total lack of knowledge of the real problems facing Chicago Public Schools. The unfair treatment of pension systems by the state is the immediate cause of CPS’ financial problem. That situation ought to be addressed rather than promoting this far-fetched notion that the state is somehow in the position to take over Chicago schools. This ridiculous idea only serves as a distraction from the state’s problems that these two state leaders should be focusing on.”
…Adding… Goldberg’s two cents…
Rep Greg Harris voted 2 allow state 2 takeover any school dist in #IL EXCEPT CPS, now against removing exception https://t.co/JJkx6NXuHZ
From: Richard A. Goldberg, Deputy Chief of Staff for Legislative Affairs
To: Members of the General Assembly
Date: January 19, 2016
Re: CSU: Lobbyists & Administrators Win, Students & Taxpayers Lose
Over the last few days, lawmakers from both sides of the aisle along with key university officials publicly agreed with the Administration that we must reform the way Illinois public universities spend taxpayer money. University of Illinois President Timothy Killeen said “he agrees with some of the concerns about excessive spending at public universities raised by an aide to Governor Bruce Rauner.” Democratic Senator Bill Cunningham said “bills are in the works to deal with some of the issues raised by Goldberg.”
At the same time, however, some university officials continue to reject reform and would rather double down on a broken system that spends tuition money without accountability or transparency. According to the Associated Press, Chicago State University spokesman Tom Wogan claimed the “characterizations of the state’s universities” contained in last week’s memo “do not fit 148-year-old Chicago State” because it doesn’t “have private jets, our president doesn’t have a country club membership.”
Mr. Wogan – a former aide to House Speaker Michael Madigan and operative for the Democratic Party of Illinois – must not remember an interview he gave to Fox 32’s Dane Placko just a few months ago in which he defended giving the university’s president a “spectacular mansion on historic Longwood Drive in Beverly” where the school “has paid more than $32-thousand dollars just for landscaping and sprinkler service alone since 2013.” Recent reports of wasteful spending, corruption and low academic performance at Chicago State are plentiful. Sadly, minority and disadvantaged students are among the worst served at Chicago State.
Chicago State Is Failing Their Students
· While 83% of white CSU students graduate in six years, only 19% of African-American students and 15% of Latino students do the same. On average across Illinois public universities, white students have a 61% graduation rate while African Americans have a 39% graduation rate. In Illinois, Chicago State has the second lowest graduation rate for African-American students (behind NEIU’s 8% graduation rate) and the second highest graduation rate for white students (behind UIUC’s 87% graduation rate).
· According to data from the Illinois Board of Higher Education, Chicago State’s enrollment fell by 45 percent from 1996 to 2014.
· For those full-time students who enrolled in 2006, 4% graduated in four years while 21% graduated in six years. For those who enrolled in 2008, those numbers got worse: 2% graduated in four years, 19% graduated in six years. According to the Chronicle of Higher Education, that puts CSU in the 2nd worst percentile nationwide.
· According to a recent Brookings Institute study, Chicago State ranks in the 6th worst percentile for the average mid-career income of its graduate.
Financial Mismanagement and Misconduct
·
In November 2015, just a couple of months ago, a former Chicago State University Vice President was indicted for hiring her mother in a ghost payroll scheme.
· In 2014, a jury awarded $3 million in back pay and damages to a former CSU employee who was fired by Chicago State’s former president in retaliation for reporting alleged misconduct by the president and others.
· In 2013, Chicago State was fined $311,963 by the federal government for allowing failing students to remain enrolled and continue collecting federal student aid. According to the Chicago Tribune, students with grades as low as 0.0 were allowed to register for classes, in part to boost enrollment.
· According to the Chicago Tribune, Chicago State doled out huge salary raises to school administrators. The Tribune reported that former Chicago State President Wayne Watson fired CSU’s Vice President of Administration and Finance after the latter raised questions about the salary increases.
· According to the Office of the Auditor General, during Chicago State’s most recent compliance audit, auditors found that the university could not locate $276,584 worth of university property.
Lobbyists and Administrators Win, Taxpayers Lose
· According to the Secretary of State’s records, Chicago State employs two firms to lobby the state on the university’s behalf: Taylor K. Anderson and James A. Deleo & Associates. At present, we do not have access to their contracts to assess compensation.
· According to a 2013 Auditor General report, CSU had, by far, the highest ratio of administrators to students of any state university – one administrator for every 17.7 students. The next highest was the University of Illinois system with one administrator for every 29.7 students.
· According to the Auditor General, Chicago State spent 45 percent of its total payroll on administrators and 55 percent on faculty – the worst ratio of any state university. The next highest was the University of Illinois system, which spent 31 percent of its payroll on administrators and 69 percent on faculty.
· According to the Auditor General, Chicago State’s administrator salaries cost $3,609 per student – the highest of any state university. The next highest was the University of Illinois system whose administrator salaries cost $2,960 per student.
· According to the Auditor General, Chicago State had the second fewest students of nine state universities and university systems, but the third most administrators.
· According to the Chronicle of Higher Education, Chicago State spent $114,762 per undergraduate completion (degrees and certificate programs) in 2013 – significantly more than the $90,406 per completion average for all Illinois public universities and the $66,436 per completion average for all U.S. public universities.
The Way Forward
The General Assembly cannot turn a blind eye to the rampant financial mismanagement inside the university system that hurts academic performance and sends tuition costs skyrocketing. Rather than creating a cash flow crisis by appropriating hundreds of millions of dollars in General Revenue Funds for MAP or general higher education without accompanying spending reductions or cost-saving reforms, let’s find a sensible and responsible way to fund MAP and higher education by tying such funding to other spending reductions or cost-saving reforms.
Radogno denied the idea is to dismantle traditional public schools in CPS in favor of charters.
“That is absolutely not true,” she said.
“It allows the state Board of Education to remove the current Chicago Public Board of Education and create an independent authority for CPS until the State Board of Education determines that CPS is no longer in financial difficulty,” Radogno said.
Durkin added that 24 states already allow local governments to declare bankruptcy, as the Republicans’ still-to-be completed legislation would do.
Sen. William Delgado, chairman of the Illinois Senate Education Committee, criticized the move.
“The governor has forced the state into a financial crisis, and now he wants to take over one of the biggest public school systems in the nation,” Delgado said in his written statement.
“I find it hard to believe that this decision has the best interest of CPS students and families in mind,” the statement continued. “We need to get CPS back on level ground, not force it into bankruptcy and then allow the governor to treat it like another business.”
I don’t think anyone’s talking about forcing CPS into bankruptcy.
* Press release…
Ald. Raymond Lopez (15) issued the following statement in response to the Republican proposal to take over the Chicago Public Schools:
“With this maneuver, Gov. Rauner has laid bare his true intentions. His purpose in stubbornly refusing to work with CPS, even at the risk of costing the jobs of thousands of teachers, is now clear: to force our public schools into layoffs and bankruptcy, in order to promote his political agenda.
“Bankruptcy and some type of state receivership could allow the Governor to vacate agreements and contracts such as pension obligations, health insurance and other benefits, and above all, the collective bargaining rights of teachers and other public employees.
“Instead of the GOP trying to highjack city government and our public schools and public services, long-term, attainable solutions for state funding are required.
“I support Sen. Andy Manar’s education funding bill as being fair and equitable for both the city and entire state. This bill is a good starting point to begin to repair the damage rather than inflicting more harm.
“What we need now is an open and honest discussion based on the goal of providing quality education through our neighborhood schools throughout our entire city.
“As a duly elected representative of the people of my neighborhood and of my city, I vigorously object to the Governor’s undemocratic attempt to disenfranchise the people of our city.
“Chicago should not allow itself to be bullied by Gov. Rauner and the Illinois GOP.”
Ald. Lopez represents the 15th Ward, which includes Back of the Yards, Brighton Park, Gage Park and West Englewood. There are seven elementary schools and three high schools in his ward.
Disenfranchise Chicagoans?
Huh?
…Adding… From 47th Ward in comments…
And everyone is taking the bait. Sigh.
Rauner can’t run Springfield. Why on earth would anyone think he’s serious about taking over CPS?
This is all a distraction to divert attention from the looming state budget disaster. This ploy is ridiculously transparent. I have a better chance of taking control of Google than Rauner has of taking over CPS.
*** UPDATE 1 *** Oy…
Responding to CPS bankruptcy idea, #CTU Prez Karen Lewis calls Rauner an emperor not a governor. pic.twitter.com/vSyNy0GCrK
“Giving control of our children’s future to a governor who can’t pass his own budget, who is racking up billions in unpaid bills, and who is crippling higher education across the state makes zero sense,” Emanuel spokeswoman Kelley Quinn said. “With just a few weeks to go before delivering a second budget address without having passed his first budget, it’s clear the Republicans in Springfield are trying desperately to distract from their own failures.”
*** UPDATE 3 *** Sen. Heather Steans…
State Senator Heather Steans (D-Chicago 7th) issued the following statement today on the announcement by Republican legislative leaders that they plan to file legislation allowing for a state takeover of the Chicago Public Schools:
The Chicago Public Schools educate nearly 400,000 students, almost 90 percent of them from low-income households. Five percent are homeless. Almost one-fifth are learning English as a second language. Yet against the odds and starved of resources, the state’s largest school district is achieving higher test scores and graduation rates for its students.
But the irresponsible agenda Gov. Rauner’s legislative allies rolled out today isn’t a reflection of those realities; it’s another politically motivated distraction from what the state and its public schools really need.
They portray their plan as merely a matter of fairness – adding CPS to an existing law allowing for state intervention in certain districts. But this could not be farther from the truth.
Illinois’ current intervention law does not require or even allow bankruptcy; in fact, Illinois does not permit any unit of government to declare bankruptcy, and the current situation in Michigan demonstrates the serious pitfalls of rushing to release governments from their financial obligations. In addition, CPS educates more than 14 times the number of students in the largest district currently eligible for state intervention. The State Board of Education is simply not equipped to manage such a large, complex and diverse system of schools.
The bottom line isn’t changing: Illinois needs a balanced budget, and Illinois’ public schools desperately need adequate and fairly distributed resources. Today’s announcement distracted from these difficult but essential objectives. If the governor and his allies in the General Assembly want to treat Chicago students fairly, they should start by supporting parity for CPS in state education funding and contributions toward teacher pensions.
The Chicago Board of Education can’t catch a break as it tries to borrow to pay for upgrades to the third-largest U.S. school system.
First, Moody’s Investors Service and Fitch Ratings cut it to one step above junk last month, delaying a planned $372 million bond sale. Then last week, before a pared-down $296 million version of the deal, set for today, Gov. Bruce Rauner said the system may need bankruptcy protection, an option that’s not legally open to it. […]
Given the system’s more than $9 billion in unfunded pension obligations and growing deficit, Rauner, a first-term Republican, raised the specter of bankruptcy April 14 at an education forum in Chicago. The governor, who supports giving Illinois localities authority to file for Chapter 9 reorganization, repeated his claim that union contracts are putting local governments in financial peril.
The Chicago Board of Education will sell $875 million of bonds on Jan. 27, according to Bloomberg data from J.P. Morgan, an underwriter on the deal. The deal is made up of $796 million of tax-exempt securities and $79 million of taxable debt, according to bond documents. The proceeds will cover capital projects, convert variable rate debt to fixed, fund swap termination payments and pay debt-service bills, bond documents show.
So, the governor played up the bankruptcy angle the last time CPS went to the financial markets and he’s doing it again just days before CPS sells more bonds.
* I think I’m going to try and make this a regular feature. Here’s Mark Konkol…
Gov. Bruce Rauner came to Pullman Tuesday to promote a new effort that as far as anyone can tell is aimed to boost the clout of poor, minority entrepreneurs in hopes they might be more successful navigating the racial inequities that exist in big business and banking industries that have been controlled for generations by rich white men.
Rauner, a white multimillionaire capitalist with considerable clout, didn’t directly mention race to explain the benefits of his Advancing Development of Minority Entrepreneurship pilot program.
He put it this way: “We are jumpstarting minorities’ entrance into the web … of business relationships that gets transactions done. Minorities haven’t been in the … network.
“You can call it the Old Boys Network or whatever you want. It’s relationships of past success that drives future success; we have to jumpstart minority entrepreneurs into that web, into that network. That’s what this is about.”
UrbanDictionary.com defines the “old boys network” that Rauner refers to as the “informal system by which money and power are retained by wealthy white men through incestuous business relationships. It is not necessarily purposeful or malicious, but the ‘Old Boys Network’ can prevent women and minorities from being truly successful in the business world.”
One reporter asked the governor if he could be “candid about why … capitalists have not ventured into the hood before now?”
* From the Illinois Policy Institute’s news service…
Governor Bruce Rauner said Tuesday he does not control whether AFSCME strikes. But, Rauner said, he will be the first governor to stand up to the union.
“That makes them a little cranky and it’s one of the reasons they wanted me out of the negotiations. That’s my duty, representing the taxpayers. If every elected official said to them ‘if you’re going to say you’re going to strike and I can’t stand that so I’m going to give you whatever you ask for,’ then there is no balance of power. That’s what is going on in Illinois and the city of Chicago for decades.”
Rauner also says he has no intention to shut down government or to lock workers out.
The union has said the governor is trying to force a strike, something Rauner says is nonsense.
“I don’t control whether AFSCME strikes or not. I don’t control that. They decide. That’s their right. I hope they don’t. I have asked them not to strike. I said it would be terrible for the people of Illinois. What I have said is…if you do choose to strike, we’ll stand up to you and we’ll win”.
The governor says that somebody has to stand up to the union or else there will be continued economic decline. Rauner’s administration announced they asked for the Illinois Labor Relations Board to review negotiations to declare if there’s an impasse. AFSCME says they’re still willing to negotiate but the governor has said they don’t think continuing negotiations would be worthwhile.
* The governor also said yesterday he was “misquoted” about being willing to shut down the government.
“I may have to take a strike and shut down the government for a few weeks,” he said, with Dan Proft looking on. Rauner said he might not be happy about it, but “I will do it probablyproudly because it’s the right thing to do.”
Two years after Mayor Rahm Emanuel closed a record 50 schools over low enrollment, officials say they don’t know where many of the computers, desks, books and other items from those buildings ended up.
After being pressed for more than six months on what happened to the classroom equipment, Chicago Public Schools officials now say they don’t have an answer.
They blame bad record-keeping under Barbara Byrd-Bennett, Emanuel’s disgraced former schools chief, who awaits sentencing after pleading guilty in October to steering millions of dollars in CPS contracts to her former employer in exchange for what prosecutors said were promises of kickbacks.
“Unfortunately, the previous CPS administration did not adequately manage or keep records on the day-to-day operations of the transition logistics,” CPS spokeswoman Emily Bittner says.
B3 can’t totally take the fall for this, can she? I mean, she wasn’t personally tracking the movements of furniture, was she? Or is this just par for the CPS bureaucratic course?
• CPS says it has no records on what happened to any of the books from the closed schools.
• There are more than 9,400 desktop and laptop computers listed on inventories of schools that were closed. Of those, 3,724 were “redeployed” to other schools or to CPS headquarters, according to CPS, which says the rest were “disposed” of — though how or where isn’t clear.
• More than 33,000 chairs and roughly 12,000 desks and 6,000 tables were listed in good condition in the closed schools, CPS records show. About 9,500 of those chairs, 3,900 desks and 1,000 tables apparently were moved to other buildings. It’s unclear where the rest went.
It kinda goes without saying that if you want lots more money from the state for your school system, then this sort of news isn’t going to help matters much.
According to an analysis released today by the institute, $53 million is the “penalty” the state paid when it sold $480 million in general obligation bonds last week.
Specifically, it’s how much the state garnered from the sale compared with how much it would have netted in 2006, before the state’s credit rating repeatedly had been lowered.
Here’s how bond sales work: An interest rate is set, but then buyers bid for how much they’re willing to pay to get that return, effectively raising or lowering the price. Last week’s sale netted prices ranging between 98 percent and 114 percent of par value, depending on time to maturity. But the state got 104 percent to 127 percent of par value a decade ago. The difference between the two is $53 million, roughly $568 million for the state versus the $515 million we actually got.
Last week’s GO sale was the first since Gov. Bruce Rauner and House Speaker Mike Madigan went to war over the budget, tax hikes, the governor’s “turnaround Illinois” agenda, etc. But it won’t be the last. And if the standoff continues, the penalty could double on future sales, says study author Martin Luby, an institute visiting scholar from DePaul University.
Rod Blagojevich was governor in 2006, the benchmark for this study. The economy wasn’t great, but it was fairly decent. Blagojevich and Speaker Madigan started warring with each other right after Blagojevich was reelected and the feud didn’t end until early 2009. Because of this, the state government was totally unprepared to deal with the Great Recession.
• The $53 million financial condition penalty estimate only relates to the 2016 Bonds. Assuming that future debt sales will be at typical levels of about $1 billion each year, this financial condition penalty grows to $106 million per year.
• Furthermore, based on recent analyses, the state will need to issue much more annual debt than in the past to address its growing infrastructure needs. A recent estimate of the annual bond amount required to address these needs is $4 billion. At this $4 billion annual bond level, the financial condition penalty estimate grows to $424 million per year.
• Even in the context of the overall state budget, this $424 million is a significant annual amount of money, especially given the dire fiscal straits the state finds itself in today. For example, this $424 million would provide a substantial amount of the extra funding that the Chicago Public Schools is requesting from the state to address its budget deficit.
In other words, the governor’s projected revenue gains from passing his Turnaround Agenda will barely cover the added bond costs as a result of this impasse.
“Chicago Tonight” has learned that Gov. Bruce Rauner and top Republican leaders are planning to introduce legislation aimed at an emergency financial takeover of the city of Chicago and Chicago Public Schools. This comes in light of an imminent $500 million shortfall within the Chicago Public Schools system.
The Republican leaders are set to announce the legislation tomorrow, but Paris Schutz has the exclusive information tonight.
Sources tell “Chicago Tonight” that the governor and his top two legislative leaders – Senate minority leader Christine Radogno and House minority leader Jim Durkin will file a package of legislation Wednesday that would allow for an emergency financial oversight board appointed by the state to take over the financially strapped school district. Other legislation would allow for emergency financial oversight of the credit-beleaguered city of Chicago.
Legislation would also allow for CPS and the city of Chicago to declare bankruptcy – something by law both cannot currently do.
We’re also told that the legislation would call for an elected Chicago Public Schools board once the financial situation is remediated. This, in light of the fact that CPS has set now as a deadline to receive $500 million in relief from the state or else lay off thousands of employees, including teachers.
“The mayor is 100 percent opposed to Gov. Rauner’s ‘plan’ to drive CPS bankrupt. If the governor was serious about helping Chicago students, he should start by proposing — and passing — a budget that fully funds education and treats CPS students like every other child in the state,” Emanuel spokeswoman Kelley Quinn said in a statement Tuesday.
Radogno brought up the bankruptcy option on last weekend’s “Sunday Spin” radio show on WGN-AM 720. Declaring bankruptcy would allow the district to ditch its union contracts, which dovetails with Rauner’s broader union-weakening push.
On Tuesday, Rauner was asked about a CPS bankruptcy bill and took shots at the mayor.
“I’m worried that the mayor is failing. The mayor gave in and caved on the (teachers) strike 41/2 years ago. Hurt the taxpayers, hurt the schoolchildren as a result. I’m very concerned about the trajectory of where we’re going with CPS. And right now, the mayor’s only real message to the state government is ‘Hey, we failed financially our schoolchildren, send us half a billion dollars. That’s not a reasonable position for the mayor to take,’” Rauner told reporters.
“The governor is defending a school funding system that is separate but unequal. Our children are facing systematic discrimination. CPS represents 20 percent of state enrollment but gets just 15 percent of state funding, even though 86 percent of our children live in poverty. The missing 5 percent represents nearly $500 million, the exact amount of our budget gap. Our children’s futures are just as important as those in the suburbs and downstate. But the state does not value them equally.”
Rauner is in the midst of a political war with Illinois House Speaker Mike Madigan, whose spokesman Tuesday night likened the takeover proposal to the state of Michigan’s takeover of Flint, Michigan which is now in the midst of a water lead poisoning crisis.
“I would say that anybody worried about state takeovers should look at Flint, that’s what takeovers look like,” Brown told POLITICO. “That may be the template you may want to use when you evaluate whether it’s a good idea to take over. Look at what happened to the people in Flint and try not to repeat mistakes.”
The school proposal would include a provision that would apply state oversight rules to Chicago schools if the district falls below a certain financial threshold, sources say. Under state law, school boards can be removed and replaced by the state board when that happens. CPS was exempt from the oversight, but the proposal would remove that exemption.
Um, but as that article points out, the General Assembly passed a bill last year to do just that.
* One of the bill’s Democratic sponsors talked to Greg Hinz…
Specifically, I’m told, the package offered by the two top Republicans would extend to Chicago a measure authored by Sen. Heather Steans that allows the state to intervene in and effectively run troubled downstate and suburban districts. Such a move would be initiated by an independent review panel appointed by the State Board of Education.
The bankruptcy measure likely would be in separate legislation. Local units of government are not allowed to file for bankruptcy under current state law, but a pending GOP bill in the House would allow cities and villages to file.
Steans, in a phone call, confirmed that her takeover bill last year excluded CPS, which has been treated differently than other districts since lawmakers turned control over to then-Mayor Richard M. Daley a generation ago.
Steans said her view of a state takeover of CPS might depend on whether it came with additional state aid, but said bankruptcy would be “insane,” potentially undoing gains in CPS performance in recent years. “You’d have a much harder time fixing the schools” under a bankruptcy filing, she contended.
* I’m told that Radogno and Durkin could claim today that the legislation is the result of anxious constituents who worry that the city and CPS will drag the state down. The press conference is at 9:30. I’ll have live coverage.
Gov. Bruce Rauner unveiled a new program Tuesday aimed at helping minority and women entrepreneurs grow their businesses, saying African-Americans didn’t come to Chicago “because we had a great welfare system or a great minimum wage,” but because they were seeking opportunity that has since “bled away.” […]
Asked if the state could make a greater impact by recruiting large, established businesses into struggling minority communities, Rauner said the focus instead should be on improving opportunity.
“The money follows the opportunity, and that’s what we got to get across,” Rauner said. “Here’s what’s happening. African-Americans are in Chicago in massive numbers. They didn’t come here because we had a great welfare system or a great minimum wage. That’s not why they’re here. That’s not why the people of Illinois are here. We’re here for opportunity.”
He continued: “Chicago used to be one of the greatest cities in the world, one of the fastest growing, most economically dynamic cities in the world. That’s why we’re all here. That’s why my ancestors, my grandparents — great grandparents — came to Chicago. That’s why our families are here. That opportunity is being bled away. It’s not about a government program. It’s not about more government money. We are not competitive in Chicago. We’re not competitive in the state of Illinois.”
Gov. Bruce Rauner says he thinks General Electric bypassed Illinois for its new headquarters because of the “trajectory” of the state’s fiscal problems. […]
Rauner says company officials didn’t want to go from “one failed state to another.” He cited Connecticut’s property taxes, income tax and pension problems.
It’s amazing to me that he can say stuff like this without ever thinking that maybe, just maybe, he’s at least partially to blame for our alleged “failed state” situation.
Sen. Daniel Biss (D-Evanston) today called on Gov. Bruce Rauner to seek to renegotiate lucrative interest-rate swap deals that send $6 million in taxpayer money to big banks every month at the expense of Illinois’ poorest residents and struggling college students.
An alarming new report indicates the state of Illinois is engaging in the same kinds of interest-rate swap deals that crippled the finances of the City of Chicago and Chicago Public Schools. So-called “swap” arrangements perversely penalize the state for low interest rates caused by the global financial crisis.
Illinois has spent $618 million on such swaps already, and the total cost to taxpayers could climb to $1.45 billion by 2033, when the deals are set to end. In addition, according to the report, taxpayers could be on the hook for $124 million in termination penalties as soon as November, depending on how long budget negotiations are delayed.
Biss noted that a great deal of harm is being done to the state’s most vulnerable residents – the poor, the elderly, the disabled and struggling college students – as a result of the current budget impasse.
“In this environment we have an obligation to pursue every possible avenue to relieve fiscal pressure, and if seniors, children and the disabled are being forced to sacrifice, then there’s no reason for Wall Street to remain untouched,” Biss said. “We in the legislature have a responsibility to the people of Illinois to explore these questions and do our best to recover any legally available funds.”
An interest rate swap is type of financial derivative that allows a bond issuer — like the State of Illinois — to limit or manage exposure to fluctuations in interest rates. The issuer pays a fixed interest rate on a floating-rate bond. The bank on the other side of the swap pays the variable rate and pockets the difference between the fixed and floating rates.
When Illinois first entered into the now-costly swap deals in the early 2000s, the intention was to hedge risks and save money on the billions of dollars in variable-interest bonds that state agencies had issued. These bonds, issued under former governor Rod Blagojevich, are pegged to fluctuations in the broader interest rate environment.
But in order to lock in what state financiers saw as bargain interest rates, the governor’s office entered into swap agreements with ten major Wall Street banks. Under the deals — which are commonplace in the corporate world — the state would pay the banks a fixed interest rate, while the banks paid bondholders the variable rate. In theory, the maneuver would protect the state from sharp interest rate moves.
When the stock market crashed and the Fed lowered interest rates virtually to zero, the state couldn’t refinance at the lower rate. “The swaps kept the state locked into rates nearly 4 percent higher than what its bank partners were paying bondholders,” the article states.
The state has paid $618 million in swap fees since 2003, according to the ReFund America report, with another $832 million yet to come. While Ciccarone noted that those totals include the interest Illinois would have otherwise paid on the variable-interest bonds, they also include tens of millions of dollars in additional costs related to the complex requirements that swaps entail.
Those fees might not be all. Today, with interest rates still scraping historic lows, termination fees totaling $286 million prevent the state from exiting its swap agreements.
The swaps can still get a lot worse: If the state’s credit rating continues to tumble and it is unable to renew its credit enhancements on the 2003B bonds in November 2016, that could trigger termination clauses on the Governor’s swaps and force the state to pay $124 million in penalties to the banks.
JPMorgan Chase is both a credit enhancement provider for the 2003B bonds and a counterparty to one of the related swaps. This would potentially put the bank in a position to be able to collect termination penalties on the swap by refusing to renew the credit enhancement—a tactic the bank has used elsewhere in the past.
* Dan Proft, writing in the Tribune over the weekend about how he wants Bruce Rauner to get tough with AFSCME and other unions…
This is Rauner’s moment of truth.
Even more important than a fiscal-year budget is sending the unmistakable message to AFSCME (and its SEIU and teachers’ union cohorts) that the balance of the nearly 13 million residents of Illinois not in their ranks do not exist as spare parts for the machine that spits out compensation packages 27 percent higher than their own.
If that involves a siege on Springfield like Wisconsin Gov. Scott Walker confronted in Madison, so be it.
If that requires layoffs and outsourcing of state work to contractors, so be it.
If that requires losing an election, so be it.
Rauner ran for governor saying he is not a politician. He said he is a businessman who will make the difficult decisions to turn around the state he loves.
We’re about to find out if that’s true.
* Well, today Turnaround Illinois, which is funded mainly by Gov. Rauner and Sam Zell and has as its officially stated purpose “To support state legislative candidates who support Gov. Rauner’s bold and needed reforms, and to oppose those who stand in the way,” made a big contribution to Liberty Principles PAC…
All in!! $1,818,000.00 from Turnaround Illinois to Liberty Principles PAC. https://t.co/J4Sm2FHTjH
House Speaker Michael Madigan and Senate President John Cullerton controlled a combined $13.25 million warchest to begin 2016.
Heading into a critical election year of House and Senate races, the Democrats who lead the Illinois General Assembly have assembled a combined $13.25 million warchest to begin 2016, state campaign finance records show.
Veteran House Speaker Michael Madigan had $8.5 million to start the year in the four campaign funds he controls, records showed, while Senate President John Cullerton had $4.75 million in the three funds he operates.
That compares to $1.2 million in campaign funds controlled by House GOP leader Jim Durkin and $1 million in campaign funds authorized by Senate GOP leader Christine Radogno, according to reports filed with the State Board of Elections.
If you’re looking for something good amid all the rotten news in Illinois, here’s a little something: Gov. Bruce Rauner says there’s some agreement on the fundamentals of a pension reform plan.
That’s not to say that a deal is imminent, he cautioned.
“The president of the Senate (John Cullerton) and I agree on what it’s going to take to have a constitutional pension reform, and the speaker’s staff is not disagreeing. I can’t say they’ll be out there proactively being positive, but they’re not really disagreeing. And that’s a big deal,” Rauner said.
It’s a big deal if it gets worked out, resulting in “billions of dollars in pension savings at the universities as well as school districts and state government,” the governor said.
But state employee unions already indicated opposition to Cullerton’s plan, which is said to include a provision that makes employees choose between retaining cost-of-living increases in retirement or taking pay raises now. That may not be the offer made to employees.
* So, I reached out to Cullerton’s press secretary John Patterson. His response…
“There are still major differences regarding the recognition of collective bargaining rights.”
* And here’s Speaker Madigan’s spokesman Steve Brown…
“I don’t think that, unfortunately, they’re anywhere close to a constitutional plan.”
At this point, I suppose, he has no other choice. But, man, this isn’t going to be an easy Democratic primary for him while he’s locking arms with a hugely unpopular (among city Democrats) Republican governor.
* Meanwhile…
Today, Jason Gonzales, candidate for state representative against Speaker Madigan, has announced the first of his endorsements. First is Dick Simpson, former Alderman and Chair of Political Science at the University of Illinois-Chicago. The second is Democracy for America, it’s Southside chapter.
In his endorsement letter Dick Simpson remarked, “I’m endorsing Jason Gonzales for State Representative of the 22nd District because he has the education and experience to start leading our state back in the right direction. I know he will work tirelessly on behalf of the people of the 22nd District and the State of Illinois, and make the tough choices necessary to make sure that the best days of Illinois are still ahead, and that the pathways to opportunity will be here for future generations.”
Simpson’s full endorsement letter can be found here:
https://www.facebook.com/jasonforillinois/photos/a.1697480273798899.1073741828.16964610739008 19/1710838759129717/?type=3&theater
The endorsement from Democracy for America came after a Saturday forum that included elected officials, candidates, and campaign surrogates for campaigns for federal, state, county, and local offices. After the forum, the members of the group voted on the endorsements of the candidates, which led to Gonzales’ nearly unanimous endorsement.
“It’s an honor to have the endorsement of both Alderman Dick Simpson and DFA-Southside,” Gonzales said. “Dick has consistently been a tireless advocate for working families and political reform throughout Illinois. DFA-Southside is a group of passionate, instrumental political activists fighting for democratic values in our communities.”
Higher Education Coalition Kicks Off Statewide Push for State Funding
Group Unites to Urge Lawmakers, Governor to Solve Months-Long Funding Stalemate
* On January 4th, the Illinois Municipal League’s executive director Brad Cole sent his higher education ideas to the U of I’s government relations office. I’m told the proposals received a “mixed” response. The IML got involved because the universities want to work with mayors of college towns…
Here are my suggestions for moving forward on the higher education funding issue. What seems to be lacking is any kind of plan that everyone can get behind, and without that there will probably be no movement by the General Assembly or Governor. I think everyone needs to agree to a few points and then present a focused effort. Thanks for coordinating this group, we’re looking forward to hosting the meeting tomorrow. This is what I would do (which doesn’t mean they are necessarily good ideas):
1. Ask for a six month appropriation to be passed immediately in January based on the same levels as what was passed and vetoed last year, I think that included a 6.5% overall reduction. As part of that, though, ask for a six month extension on the lapse period spending authority (through 12/2016). This would give schools half the budget now (since it is halfway through the fiscal year) and if something isn’t worked out on-time in the upcoming budget they would have more flexibility in holding it over into the fall. The chance of getting a full twelve month budget at this point seems very slim, and the fact that schools have managed thus far doesn’t help them in saying they need the full appropriation. It also shows a willingness by the schools to take a massive cut and move on. This could be coordinated by campus presidents/board leaders to make the ask officially.
2. Ask for the full fiscal year funding of MAP. By default this would mean some money to offset the lost appropriation, as it would bring in money that was floated for students enrolled in fall 2015. Then bring in a thousand students, whether they all get MAP or not, and let the story be about students… since that’s what each school should be about, anyway. I would do this a few days before either the State of the State Address or the Budget Address, but not too close prior or immediately after either. Put the story in the news about three days before the Governor gives his speech and make him and the legislative leaders react or account for it in all of their remarks. Timing is important and having the capitol under siege by students is critical; one bus load of students from every university campus and community college would be overwhelming. The local chambers of commerce could pay for the buses and the student government associations can coordinate from each campus; give everyone a t-shirt or hat or sign or something and set them loose in the capitol with the name and office location of their home district legislators… the organized chaos would be quite interesting and better than any AFSCME rally (and they know how to rally).
3. Find a judge/court in a county seat that houses a public university, probably downstate or in St. Clair County where the other suit was filed, and file a motion to consider all public university employees in the same class as all other state employees that are getting paid without a state budget. Public university employees are state employees (with state sponsored health care, retirement, etc) and the courts have already ruled on this issue, but the rulings didn’t specifically include university employees. I realize this won’t help the private schools or community colleges, but it will help the public universities. I would throw-in an extra motion that seeks repayment of employee salaries that were paid during the first six months of the fiscal year, as reimbursement, which would obviously further strengthen the cash flow for those schools that are hurting most. Maybe there is a bigger reason why the universities were left out of the original suit so this may not work, or maybe it was not seeing the forest for the trees; I don’t know, but it seems worth a try. The employee unions could take the lead on this like they did in the original employee payroll suit last July. I have a marked-up copy of the Fifth District Appellate ruling that I will give you for more information.
4. Have each college and university put money toward a major statewide public relations campaign that would promote the value of higher education, tie it to the brain drain and population out-migration hitting Illinois, show how the local economies are impacted, and tell the story of students who might not get their diplomas because of the lingering impasse. If every school, through their private foundation funds and not with state funds obviously, would contribute $20,000 or $50,000 or $100,000, there would easily be a couple million dollars to launch a comprehensive and immediate press/media campaign throughout the state and in targeted legislative districts to get attention on this issue. Radio, television, print and social media advertisements bombarding the issue would be impressive. That amount of money to contribute to this effort is minimal considering the tens- and hundreds of millions of dollars the campuses are losing. Have everyone contribute, pick a major firm to handle it, and then let them go (without a university-style committee to slow it down forever) and get it done. A lot of this should be focused on the FY17 budget process.
5. Key to any future (FY17) appropriation is making an offer of what schools are willing to do without. If a reasonable plan was submitted to the Governor and General Assembly, and reasonable in the sense of the overall state budget problems not just keeping the status quo for the campuses, there would be more of a chance of getting something agreed to by the leaders. There are lots of suggestions I could make, which I will save for another conversation, but asking for a multi-year budget appropriation or anything that doesn’t resemble a significant cut to really transform the funding levels is likely a non-starter. Unless the higher education community goes on offense with a plan, they will be on defense and other plans will be made without them.
I’ve been surprised at the lack of involvement by the U of I’s alumni group. The school has fired up that much-feared (at the Statehouse) group several times to stop what it considered to be harmful legislation. But where are the alumni now?
Anyway…
* The Question: Which of Brad’s 5 suggestions is the best? Take the poll and then explain your answer in comments, please.
* My former intern Barton Lorimor came over to the house yesterday with his cute daughter Robin…
Oscar loves him some Barton, and after a slow start, Robin fell in love with Oscar, too (he can sometimes be a bit too rambunctious for little kids).
Barton said he needed to get home to make dinner, but my mom and dad, my daughter and her family and some other great friends of ours were all coming over so I said he ought to just invite his wife to my place and we’d have dinner together.
He stayed and we all had a great time, particularly Oscar, who basked in all the attention.
* Mom and Dad left today, though, and Oscar spent some time by the front door. I think he was hoping for more visitors…
To combat challenges created by uncertain economic conditions, Chicagoland small businesses plan to expand business operations in 2016 to continue revenue growth.
The results of the second annual Chicagoland Small Business Economic Outlook Survey, conducted by the Chicagoland Chamber of Commerce in partnership with Loyola University Chicago’s Quinlan School of Business, reveal that local business owners are realistic about the current state of business. Business owners have lost confidence in the local, state and national economies over the past year, and revenue growth remains their top concern.
“Only 28 percent of business owners surveyed believe Chicagoland’s economy will strengthen over the next year, down from 42 percent last year,” said Katie Fitzpatrick, Executive Director of Programs at the Chicagoland Chamber of Commerce. “These survey results show us that in order to combat current economic conditions and restrictive public policies, business owners are forced to be realistic and find new ways to expand their business operations.”
Key takeaways from the 2016 Chicagoland Small Business Outlook Survey:
· Small businesses are significantly less confident than last year in the economy at the local, state and national levels
· More than three in four respondents plan to grow their business [in the coming year]
· 38 percent expect to hire additional workers
· 52 percent plan to expand within Illinois (up from 45 percent last year)
· Nearly one half of respondents feel negatively impacted by local taxation
· The top three areas small businesses need support are marketing, technology and business planning
“Revenue growth remains a top concern for small businesses,” said Dr. Alexander Krasnikov, assistant professor, Loyola University Chicago’s Quinlan School of Business. “These businesses are increasingly self-reliant, looking to grow through investment in things like marketing and tech platforms, hiring part-time employees, and taking on more clients.”
Given the vital role small businesses play in creating jobs and anchoring communities, this study will be used to better understand the needs and expectations of local small businesses and entrepreneurs and help shape Chamber programs and policies to best suit the needs of small businesses in Chicagoland.
“Small businesses are the heart of Chicago’s neighborhood economy and we must continue providing them with resources they need to thrive,” said Kurt Summers, Treasurer of the City of Chicago. “I am pleased to see the results that highlight over 50 percent of small business owners surveyed are planning on expanding in Illinois in 2016. The Treasurer’s Office is committed to providing new and innovative ways to help small business owners access capital in order to grow and expand in Our Chicago.”
The 2016 Chicagoland Small Business Outlook Survey was conducted electronically in October and November of 2015, with 574 small businesses participating. Several partners contributed to the survey, including the Better Business Bureau, Constant Contact, Blue Daring the Office of the City Treasurer.
* As the Illinois Review rightly notes, this op-ed by former Republican Gov. Jim Edgar appears to be more about the never-mentioned Bruce Rauner than it is about Congressman Rodney Davis…
When faced with the choice to fund the government or face another government shutdown, he voted for progress. It was the responsible vote to cast. The economic losses from a government shutdown would have been astronomical. Continuing dysfunctional government in Washington is not governing and it is not leadership. Unfortunately, some in politics allow the perfect to become the enemy of the good.
In my experience, you don’t always get everything you want. But it is important to keep making progress and stay focused on solving problems. Davis voted to lead, to govern and to make progress. He did the right thing.
Governing is challenging. Negotiating with divided branches is difficult and success comes slowly. When I was governor, for all but two years, we had a divided government and I often faced situations where I didn’t always get the reform I wanted. But even in divided government, we were able to work together to eliminate a massive backlog of state bill payments, build historic state budget surpluses and reduce the size of government.
We made progress together because we were disciplined, kept lines of communication open between the divided branches of government and recognized the need to compromise for the good of the people. […]
In this time of polarizing politics, our country needs to make progress. I appreciate true leaders who will make the tough decisions to strengthen America and tackle problems. And I count Rodney Davis as one of them.
Democratic U.S. Sen. Dick Durbin has endorsed Highland Park Mayor Nancy Rotering over former U.S. Rep. Brad Schneider in the race for the Democratic nomination in the North Shore 10th Congressional District.
“Nancy combines fiscal responsibility with true progressive values,” Durbin said in a statement.
Rotering called Durbin a “role model” and “the epitome of a public servant for over 30 years.”
Durbin’s endorsement, while significant, also shows the split among the Democratic establishment over the race. While he backs Rotering, Schneider has the backing of top House Democratic leadership, including Rep. Nancy Pelosi.
* From the Durbin press release…
“Nancy brings to this race an extraordinary record for a first-time Congressional candidate. As Mayor of Highland Park she successfully confronted ComEd when local families were suffering from unreliable service, balanced the City budget five consecutive years and enacted real reforms,” stated Durbin. “Her most noteworthy achievement gained national attention when she passed one of the nation’s first local assault weapons ban and successfully defended the ordinance against an onslaught of gun lobby attacks all the way to the U.S. Supreme Court. While the Republican-led Congress refused to respond to the nation’s gun violence, Nancy Rotering and her City of Highland Park showed real leadership. Nancy combines fiscal responsibility with true progressive values.“
* From the Pelosi release…
“Brad Schneider is a relentless defender of women’s rights and LGBT equality. His legislative vision is a direct reflection of his genuine passion for helping others. We need strong progressive voices like Brad’s in Congress. That’s why I’m proud to endorse his candidacy,” said Democratic Leader Nancy Pelosi.
“I am humbled to receive the endorsement of Leader Pelosi,” said Schneider. “I’m looking forward to returning to Congress to work with Leader Pelosi on the critical issues facing Americans.”
Campaign Manager Magen Ryan said, “Our campaign is in a better spot than ever less than 60 days from the election. This week Brad received the unanimous endorsement of the AFL-CIO following the recent endorsements of SEIU Illinois State Council, the Lake County Federation of Teachers, and many other unions throughout the Tenth District. The support of labor along with seven members of the Illinois Congressional Delegation, including Tammy Duckworth, more than 60 other of Brad’s former colleagues in Congress, the Democratic Congressional Campaign Committee, Secretary of State Jesse White, Cook County Board President Toni Preckwinkle, and more than 30 other local elected officials demonstrates the breadth and depth of the support of his candidacy.”
*** UPDATE 1 *** Rotering is now airing her first TV ad of the primary. Click here.
*** UPDATE 2 *** From our pals at Comcast…
Nancy Rotering for Congress
Democratic Candidate for US Congress in IL CD 10
Agency: Dudley Media, Philadelphia
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1/19/16 - 2/8/16
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Total Buy: $122,892
[Cook County State’s Attorney Anita Alvarez] defended her record on police prosecutions. “Any officer who commits a crime should be held accountable,” Alvarez said to a smattering of boos. “I’ve been doing it, I will continue to do it and there’s no need for a special prosecutor.” Alvarez and More opposed special prosecutor appointment while Foxx welcomed it.
By her own admission, Chicago Police Officer Allyson Bogdalek was “untruthful” during a 2011 court hearing for Ranceallen Hankerson, who was charged with armed robbery and attempted murder in connection with a violent liquor store stick-up on the South Side a year earlier.
While under oath on the stand, Bogdalek told the courtroom she hadn’t shown the liquor store owner – who was shot in the leg during the 2010 robbery – a photo spread with Hankerson’s picture prior to his arrest.
In reality, she had shown the owner Hankerson’s photo, but the victim initially failed to identify Hankerson as the assailant – a critical piece of information for Hankerson’s defense, according to court records and interviews.
In 2012, following a series of court hearings but before Hankerson’s actual trial, Bogdalek came clean about what happened – after Hankerson’s defense attorney got a hold of Bogdalek’s squad-car video from the day Hankerson was arrested. The video captured a cell phone conversation between her and a supervisor in which she mentioned showing lineup photos to the liquor store owner shortly after the stick-up.
Hankerson’s criminal case was quickly dropped by Cook County State’s Attorney Anita Alvarez’s office because of Bogdalek’s conduct, according to interviews and court records […]
But more than three years later, Bogdalek is still on the job, and it recently came to light that Alvarez ignored a recommendation from an underling to hit Bogdalek and her partner with perjury-related charges – raising further complaints that Alvarez too often looks the other way when it comes to alleged police misconduct, particularly within the Chicago Police Department.
The budget impasse in Illinois is beginning to depress enrollments at the state’s colleges and universities, as state money earmarked for low-income students remains tied up in a political stalemate that shows no signs of easing.
More than 1,000 students failed to return for the second semester as their schools stopped picking up the tab for the $373 million Monetary Award Program, said Randy Dunn, president of the Southern Illinois University system.
The program normally provides grants of up to nearly $5,000 to some 128,000 students with mean family incomes of about $30,000, said Lynne Baker, spokeswoman for the Illinois Student Assistance Commission, which administers the program. But with no state budget in place since summer, the program’s funding has stopped. […]
The problem is poised to grow quickly as schools wait for their share of about $1 billion in state funding.
Disabled Illinois residents who depend on in-home help for daily needs will suffer once the state stops paying overtime for their caregivers beginning March 1, some home health care workers and their union say.
Tens of thousands of employees who help people with disabilities live independently are eligible for time-and-a-half pay over 40 hours in a week, under a federal rule that took effect Jan. 1. But without a state budget in place to control spending, Gov. Bruce Rauner’s administration says it can’t afford the extra pay.
A state Department of Human Services memo obtained by The Associated Press indicates the policy will allow 35 hours of work and five hours of travel.
The workers, who make about $13 an hour, and their supporters say that 30,000 clients who need assistance because of physical or developmental disabilities will receive less-efficient and less-effective care because most need more than 40 hours of weekly assistance. Families will have to find other aides to help, meaning disruption, and for some clients, discomfort with a new person.
A lot of folks have taken to calling Bruce Rauner “Governor 1 Percent” because of his immense personal wealth. Gov. Rauner himself told the Chicago Sun-Times during the 2014 campaign that he was in the top one-tenth of one percent of income earners.
But, right now, anyway, he ought to be referred to as “Governor 1.4 percent.”
Why? Stay with me a bit and I’ll explain.
I sat down for an interview last week with Gov. Rauner. As with just about every reporter, Rauner blamed House Speaker Michael Madigan for stifling his beloved Turnaround Agenda. The governor said he was “frustrated” with Madigan for saying that his anti-union, pro-business reforms were “unrelated to the budget.”
“For example,” Rauner said, “if we can get business regulatory change so I can recruit manufacturers here and more transportation companies here, and more businesses here, we can generate billions of new revenue without raising tax rates. That’s directly tied to the budget.”
“Billions?” I asked.
“Billions,” he replied, while promising to send me a detailed analysis.
A few days later, his staff e-mailed me a memo that the governor had sent to lawmakers last fall. You can see it yourself at CapitolFax.com/turnaround.
But the memo didn’t really say much of anything about revenues, other than if the governor could get Illinois to “average” levels of unemployment and Gross State Product and if the governor could stop the migration of Illinoisans to other states, his agenda would produce a grand total of $510 million in additional revenues.
That ain’t “billions.”
And while $510 million is nothing to sneeze at, it won’t even cover the interest on the state’s mountain of overdue bills that have been accruing because the state has no budget and no way to pay them.
Of course, the state has not had a budget since June and has no way to pay those overdue bills because the governor refuses to negotiate a new budget until he gets his Turnaround Agenda passed, which according to his own memo wouldn’t produce enough revenue to pay the juice on money owed to the state’s vendors — not to mention the universities which haven’t received any state funding, creating major crises at several of them, and all the other social service groups which make up our safety net being stiffed, forcing the state’s most vulnerable to go without.
And while $510 million seems like a lot of money, the governor’s projected revenue growth from his Turnaround Agenda would only be a 1.4 percent increase over the last state fiscal year.
Hence, “Gov. 1.4 percent.”
And would it even be that much? Rauner has said he would agree to higher state taxes if legislators agree to his Turnaround Agenda. But as a Republican legislative friend pointed out to me last week, that tax hike will reduce growth, even with all of Rauner’s agenda items.
“The point is that they can’t argue that these anti-labor changes will magically produce $510 million of economic growth/revenue and then discount the negative effect of a tax increase on economic growth,” he wrote me.
True.
OK, but maybe the governor was just a little confused and meant to include state governmental savings in that “billions” remark.
So, let’s go back to the memo.
The governor claims the state would save $1.75 billion by making his demanded changes to union collective bargaining laws. $750 million of that would come from cutting healthcare costs for state employees. The rest isn’t explained.
He also claims that workers’ comp reforms would save the state $65 million a year. So, we’re looking at about $1.8 billion in savings. That’s far more substantial, but so far he’s getting absolutely nowhere because he’s taken such a hardline stance against unions.
To be fair, Rauner’s memo also claims that local governments would save billions more with his reforms, but some of his numbers just don’t add up, like overstating the savings on allowing governments to opt out of prevailing wage requirements on nonfederal projects.
I’m not all opposed to doing some pro-business reforms. I think an easy case can be made that workers’ comp costs are far too high, for example.
But I spent part of an afternoon last week listening to an otherwise tough-minded woman cry helplessly on the phone about the literal implosion of the state’s social service safety net.
And one of the greatest charitable groups in the history of this state, Lutheran Social Services of Illinois, is facing an existential crisis because the government owes it $6 million.
In my opinion, the payoff for continuing this governmental impasse is not worth the price being paid.
