Mayor Rahm Emanuel and Gov. Bruce Rauner on Friday released a list of locations proposed in the city and state’s bid for Amazon’s coveted second headquarters, and it includes “The 78” — a 62-acre South Loop site, where the governor hopes to build a $1.2 billion research and innovation center.
The governor’s office on Wednesday said the research center was “referenced” in the bid, but did not specify that it was being offered as a proposed site for Amazon.
A news release from City Hall listed the ten areas that could host the Amazon headquarters. The release acknowledges that “The 78” — touted as the city’s 78th neighborhood — is also the area where the University of Illinois “envisions” putting its ambitious research institute.
And there apparently could be room for both.
Both the mayor’s office and governor’s office said “The 78” was not mentioned as an Amazon proposed site during a Thursday press conference because bids were still open in competing cities. The deadline was midnight Friday. The city and state bid was submitted on Monday.
Once fully operational, University of Illinois System estimates that DPI will train nearly 10,000 student entrepreneurs every five years, support for more than $300 million in private real estate investment, and an estimated $500 million in new annual research and development spending.
The project could also stimulate $4 billion in annual venture capital investment, a level four times higher than Illinois currently pays.
That's an incredible return on investment for our state.
* The last time he had a Downstate event on his public schedule was 25 days ago…
** UPDATED**Daily Public Schedule: Monday, September 25, 2017
What: Gov Rauner visits the Galapagos Rockford Charter School Upper Academy
Where: 3051 Rotary Rd., Rockford
Date: Monday, September 25, 2017
Time: 10:00 a.m.
* From today’s public schedule…
What: Gov. Rauner attends the Illinois Association of Hispanic State Employees 30th Conference & Gala
Where: Hyatt Regency McCormick Place, 2233 S. Dr. Martin Luther King Jr. Drive, Chicago
Date: Friday, October 20, 2017
Time: 8:30 a.m.
What: Gov. Rauner attends the Wilbur Wright College Manufacturing Day Event
Where: Wilbur Wright College Humboldt Park Campus, 1645 N. California Ave., Chicago
Date: Friday, October 20, 2017
Time: 11:15 a.m.
Note: No additional media availability
What: Gov. Rauner attends the DuPage Children’s Museum Event
Where: DuPage Children’s Museum, 301 N. Washington St., Naperville
Date: Friday, October 20, 2017
Time: 1:15 p.m.
What: Gov. Rauner attends the Grand Opening of Apple Michigan Avenue
Where: 401 N. Michigan Ave. Chicago
Date: Friday, October 20, 2017
Time: 5:00 p.m.
Note: No additional media availability
Illinois State Treasurer Mike Frerichs is pressuring Facebook to own up to its role in allowing Russia to meddle in the 2016 U.S. Presidential election.
As treasurer, Frerichs oversees state investments that include a stake in Facebook. He began fighting in April to get the social-media company to put an end to bogus news reports.
“Facebook’s accountability for the spread of fake news cannot be outsourced,” Frerichs wrote in a letter to the company founded by billionaire Mark Zuckerberg.
In September, Facebook acknowledged that more than 3,000 political advertisements posted on the social-media network were linked to Russia. Some 10 million people saw the ads, which primarily targeted battleground states where Trump narrowly won. Some of the ads used socially divisive messages on such hot-button issues as gay rights and immigration.
“I was aware there was fake news but I didn’t realize that many Americans were consuming news that way,” Frerichs told me.
I strongly encourage Facebook to engage investors and the public at large to disclose (1) the extent of illegal and fraudulent activity on Facebook, (2) the success of current efforts to stem said activity, and (3) more broadly, what industry-wide measures are needed to prevent the proliferation of fake news while respecting First Amendment rights.
This is the opportunity for Facebook to step forward as an industry innovator, help launch a unified response effort, restore confidence among investors and government officials, mitigate long-term risks to shareholder value, and stand up for core values – like honesty, integrity, and responsibility – that define our national character.
* His office also participated in a conference call…
On June 8, 2017, representatives from the Treasurer’s Office and fellow concerned investors held a phone call with representatives from Facebook’s Investor Relations and Corporate Communications teams to discuss the issues raised in the Treasurer’s letter.
While the team at Facebook agreed that this is a serious issue and they outlined ongoing efforts to disrupt the proliferation of fake news, they did not express support for the transparency and accountability measures sought by the Treasurer and other investors, which include further reporting and disclosures on the extent of illegal and fraudulent activity on Facebook and the success of current efforts to stem said activity.
Though the primary is not until next March, the election to be the next governor of Illinois is already on track to become the most expensive in state political history, overtaking the $280m fight for the governorship of California in 2010 between Jerry Brown and Meg Whitman, a billionaire businesswoman. Election spending in Illinois has increased by 741% this year compared with the same period in the previous election, according to the Illinois Campaign for Political Reform, an NGO. The candidates burned through $15.6m in the past three months, led by J.B. Pritzker, a self-funded billionaire businessman running for the Democrats, who splashed out $11.1m, mostly on television advertising, followed by Bruce Rauner, the self-funding Republican incumbent, who spent $2.6m, even though he has not confirmed yet that he is running for re-election. Mr Rauner and Mr Pritzker have so far raised just under $100m between them. In the sort of twist that seems straight from a plot by Armando Iannucci, the lion’s share ($50m) was given by Governor Rauner to a group called Citizens for Rauner. Mr Pritzker gave his campaign a modest $28m.
Though an extreme example, Illinois is no outlier. More and more very wealthy men are running for and winning office as state governors. Tennessee’s Bill Haslam, West Virginia’s Jim Justice, Florida’s Rick Scott, Kentucky’s Matt Bevin, Minnesota’s Mark Dayton, Nebraska’s Peter Ricketts, Pennsylvania’s Tom Wolf, Michigan’s Rick Snyder, North Dakota’s Doug Burgum and Arizona’s Doug Ducey all have a net worth measured in the tens, and in some cases hundreds, of millions. The richest is Mr Haslam, a multibillionaire whose father founded Pilot Flying J, a chain of petrol stations and convenience stores. Mr Justice, a coal billionaire, is the richest man in the state he governs.
America has had wealthy governors before—think of Nelson Rockefeller and Franklin Roosevelt, both of whom governed New York. But their proliferation is new. In part this simply reflects increasing income disparity in the country, says John Geer of Vanderbilt University in Tennessee. Candidates with little money are disadvantaged by having to spend more time raising funds from donors to whom they are then beholden. One of President Donald Trump’s most popular campaign lines—that he was too rich to be bought by special interests—works in state elections too. Given the opacity of money in politics, perhaps voters find self-funding campaigns to be refreshingly transparent.
Whatever the reason, the result is that in many states there is now a wealth primary before the electoral primary, says Kent Redfield of the University of Illinois. Big money tends not only to limit the field, but to catapult candidates who have never run for anything before to the front of the race. Florida’s Rick Scott would probably not have won his Republican primary against Bill McCollum, a candidate with a proven track record, had he not spent $50m of his own dosh. The same is true of Mr Rauner, another political neophyte, who defeated Pat Quinn, the incumbent Democratic governor, and personally contributed $28m to the $65.3m, or $36 a vote, that his campaign cost.
The chairman of the Democratic Governors Association is swinging through town on a fundraising trip today, and though he did some predictable bashing of incumbent GOP Gov. Bruce Rauner, he also stuck up for J.B. Pritzker, who’s pulling ahead but has yet to lock down the race for the Democratic nomination.
The comment came from Washington state Gov. Jay Inslee when I asked him if, given the divide in the Democratic Party between progressive insurgents and establishment types, he has any concern that the party nominee here well could turn out to be the wealthy Mr. Pritzker.
“We’re not discriminating,” Inslee cracked, adding that he’s just finishing reading a biography of Franklin Delano Roosevelt, another rich pol, who led his party to decades of domination of Washington politics.
Roosevelt “did some great work for working people,” Inslee said, referring to things such as union rights, Social Security, and the first national minimum wage. “I don’t think that (the money) will be a problem.”
Inslee stressed that his group will remain neutral in the Democratic primary, preferring to hold its fire—and cash—for the general election against Rauner. Inslee promised the DGA will be here a lot. “Our nominee will be very strongly supported here,” he said. “This is going to be a very high-priority race for us.”
[John Jackson, professor at the Paul Simon Public Policy Institute] says the extraordinary amounts of money now required to run for national and statewide offices will prevent most people from ever seeking election.
“You’ve got to be a billionaire or a mega millionaire or at least have a lot of friends who are,” Jackson said.
He says the correlation between spending and winning is huge, and that the amount needed to get the name recognition required for a competitive run is going up.
“If you can’t spend at a certain rate, even if you don’t spend the most, you can’t be in the ballgame,” he said. […]
“Normal people who don’t have access to tens of millions and hundreds of millions of dollars can’t play in this game,” he said.
* Related…
* Pritzker touts infrastructure investments, bashes Rauner during Decatur stop: But Pritzker said he is nothing like other notable wealthy businessmen-turned-politicians like Rauner and President Donald Trump, pointing to his past work in the public sector and years of pushing for “progressive values.” “I’ve spent a lifetime standing up for progressive Democratic values, expanding educational opportunities for our youngest children, making sure we are feeding School breakfast to low income kids, creating new economy jobs, more than 7,000 of them, in a small business non-profit incubator,” Pritzker said. “Those are all part of a set of progressive values I’ve fought for my whole life. That’s a lot different, and I’m nothing like Bruce Rauner or Donald Trump.”
* VIDEO: Is Spending on Statewide Elections Going Too Far?
* How New Wealth, Few Rules Fuel Family-Office Boom: They team up in club-like investor groups or strike out solo to buy other private, often family-owned, businesses. By going direct, rather than through a private-equity fund, a family can exert tighter control over the money, cherry pick investments, minimize fees and even give the kids a board seat to learn the trade. Billionaire brothers Tony and J.B. Pritzker, whose family money came from running Hyatt Hotels Corp. and industrial conglomerate Marmon Holdings, in 2015 bought a manufacturer of coffee sleeves for companies including Starbucks Corp.
* Can Commercial Real Estate Development Lead To A Turnaround For Chicago’s Most Violent Neighborhood?: That is starting to turn around: Crawford said a handful of small businesses are moving into Austin, including insurance firms and restaurants. Ruby’s, the popular soul food restaurant in neighboring Garfield Park, is opening a storefront in the Soul City Corridor. Crawford said the most exciting development along the corridor is the opening of a campaign office for gubernatorial candidate and hotelier J.B. Pritzker.
* Tio Hardiman: The Next Governor of Illinois?: “I’m really the last great hope for my people, African-American people,” said Hardiman. “The reason why I talk about the Black community is because everyone wants the Black vote. The Black vote is a hustle. Black death is a hustle. The governorship has been dominated by White men since the inception of the state of Illinois and it’s time to change the narrative.”
The new company hired to run the Illinois Lottery projects it will increase annual sales to $4 billion, generating more than $1 billion per year for schools and other projects by the end of the 10-year deal, according to a contract obtained by The Associated Press.
Lottery officials and Camelot Illinois are set to announce the contract Friday, more than three years after the state first tried to fire its current private manager for falling short of sales goals and other problems. Northstar Lottery Group will remain on the job until Camelot takes over on Jan 2.
Lottery proceeds are used to help fund education and construction projects. Sales for the most recent fiscal year were $2.85 billion, marking the second straight year total sales were basically flat, according to a state report published last month.
Camelot Illinois is subsidiary of Camelot Group, which runs the Great Britain national lottery. The company says its plan to increase sales includes investing $15 million on new, more prominent retail sales equipment and signage and improved online sales, with better marketing and technology such as a mobile app.
* Leslie Munger defends Gov. Rauner’s veto of the Debt Transparency Act, which is supported by Comptroller Mendoza and would require monthly reports from all state agencies about how many vouchers they were sitting on…
As Gov. Bruce Rauner noted in his veto of the bill, the desire to provide more transparency about the state of our finances is a good one. As the former state comptroller, I kept a running estimate of vouchers in agencies though frequent phone calls so we could plan for payments and manage available cash.
OK, but what happens when the governor doesn’t want to get along with the comptroller? This is what happens…
To give you an idea of how ridiculous this process is, the state’s bill backlog unexpectedly grew by $1 billion one day in May when the governor’s Office of Management & Budget abruptly revealed the unpaid invoices.
Vouchers come into the state agencies continually. Paper reports are out of date almost as soon as they are issued. Our agencies are already burdened by the state’s decades-old methods for processing budgets, invoices and fund transfers, and an antiquated technology infrastructure. This has resulted in dysfunctional, unclear and paper-based systems that require manual entry of payment vouchers because our system cannot accept vouchers via email.
Any report on unpaid bills will be out of date as soon as it’s issued.
There is a better solution. In 2015, the state purchased the software for a new statewide enterprise resource planning (ERP) system. The system, once implemented, will allow vouchers to be submitted electronically, eliminating the need for manual data entry and saving the state hundreds of millions of dollars annually.
Importantly, once a voucher is entered into the system it is transparent throughout the entire process. Everyone — including the comptroller — will have visibility to all the bills held at all agencies with a click on the computer. No need for additional staff to comply with the reporting requirements. No need for burdensome monthly paperwork. Real-time data. Faster. Cheaper. Better.
Rather than doubling down on our antiquated inefficient paper-based system, Comptroller Susana Mendoza should reinstate the funding for the implementation of the ERP system and be the strong advocate for improving the accuracy, efficiency and transparency of the financial transactions in the state.
…Adding… From comments…
This is total nonsense. Just because an agency has an invoice doesn’t mean they create a voucher right away. If someone is sitting on invoices without creating a voucher the Comptroller has no idea what’s out there & that’s true even if ERP were 100% live today.
* If any of the 263 State’s legacy accounting systems have been retired through the ERP, our Office has not been notified. The project is scheduled to be completed by 2019.
* The ERP pilot agencies have encountered so many errors that requests for change orders will require an estimated 15,000 hours, according to information shared by program administrators with the program oversight group.
* Officials from the Rauner Administration report that $63 million, or one-quarter, of the ERP budget has been spent.
* Related…
* Mendoza: Taxpayers deserve a better look at the state’s bills
I declare that this Statement of Economic Interests (including any accompanying schedules and statements) has been examined by me and to the best of my knowledge and belief is a true, correct and complete statement of my economic interests as required by the Illinois Governmental Ethics Act.
Click here to see the governor’s latest signed statement, which includes the disclosure that the governor has a partnership interest in Kirkpatrick Partners Capital Fund I LP.
Despite lawyers asserting in court that Gov. Bruce Rauner is trying to keep a lawsuit filed by a former business partner sealed, the governor on Friday denied that he’s fighting to keep the information under wraps.
The suit against Rauner — who ran a private equity firm before becoming governor — was filed Oct. 5. by Harreld “Kip” Kirkpatrick III and the Kirkpatrick Capital Partners Fund, according to Cook County Circuit Court records.
Speaking to reporters at the Illinois Association of Hispanic State Employees conference Friday morning, the governor was asked why he’s fighting to keep the case sealed.
“I’m not,” Rauner said. “To be clear, all my investments are in a trust that I don’t control. I did that when I became governor. I can’t comment on any business disputes. That gets settled in its own process.”
When asked whether the dispute involved any investments in his “blind trust,” Rauner said he didn’t know.
“I can’t even tell you,” Rauner said. “I don’t really have much to do with that.”
So, he’s being sued by what I’m told is a personal friend (or, at least, a former personal friend) and former business partner and he knows nothing at all about it? And he doesn’t know if it involves a company in which he himself officially disclosed an ownership interest?
I think it’s more of a state of mind in exurban regions. Like everything, it’s tough to define along the margins, like northern McHenry County, for instance.
And, if “Downstate” contains certain connotations, it’s important for our reporters to understand them, so we can better choose our words both in how we write and how we talk.
They also posted a couple of defensive tweets…
it's a way Chicagoans try to minimize us; in my case, my house is exactly due west from the Loop. Not exactly 'down' geographically
Downstate is definitely not a monolith. Kankakee has more in common with the South and Southwest Sides of Chicago than it does with, say, Anna. And we haven’t even talked about the Metro East yet. Go to Edwardsville and you’d think you were in a leafy suburban Cook town.
* And this…
Downstate isn't offensive, but I think people in Central Illinois get offended if Champaign/Decatur/Bloomington are called southern.
I have a theory that “the real southern Illinois” starts 45 miles south of wherever you live.
* I’ve lived in Chicago and loved it, but I was born and raised Downstate (with detours to Utah and Germany) and I’ve never been offended if somebody called me a “Downstater,” even though the term was probably coined by a snooty Chicagoan.
* The Question: Should people be offended by the terms “Downstate” or “Downstaters”? Take the poll and then explain your answer in comments, please.
* He won’t take a position on ACA repeal and replace, won’t discuss anything having to do with preventing a mass shooting, won’t say where he stands on the congressional move to repeal the deductions for state and local taxes and won’t even utter the President’s name…
Chicago Tribune’s Rick Pearson: “Don’t you owe the public and voters an obligation to say where you stand on these things? Where do you stand on eliminating the state and local tax deduction with Peter Roskam, your Republican colleague, and Republicans in Washington?
Governor Bruce Rauner: “I have no obligation to comment on every possible policy change in Washington DC. I never have and never will. So, I appreciate your advocacy on that.”
Illinois Gov. Bruce Rauner urged the Securities and Exchange Commission recently to approve the sale of the Chicago Stock Exchange to a group that includes Chinese buyers, but his support may be too little too late.
Under Chairman Jay Clayton, an appointee of President Donald Trump, the SEC in August delayed a decision on the embattled sale, and last week two would-be Chinese buyers dropped out.
Now, even a top Illinois Democrat, U.S. Sen. Dick Durbin, is holding back on support for the transaction.
“In light of recent major breaches of private financial information, it’s entirely appropriate for the SEC to thoroughly review this sale, which could give China access to American financial data and critical market operations,” Durbin said in a statement. […]
Other than Republican U.S. Rep. Randy Hultgren, who also wrote a letter to the SEC supporting approval, few members of the Illinois congressional delegation have been eager to aid the struggling sale effort, in the face of a campaign by U.S. Rep. Robert Pittenger, R.-N.C., to shoot the deal down. Pittenger has repeatedly raised security concerns about the Chinese buyers.
Moody’s has written a short report regarding Cook County, IL’s (rated A2/stable outlook) recent repeal of the penny-per-ounce sweetened beverage tax, also known as the “pop tax.” With the repeal, Cook County will forego $200 million in annual revenue, which it will likely offset with sufficient expenditure cuts to maintain stable financial operations. The repeal also reflects practical constraints on revenue raising.
The pop tax took effect on August 2, 2017, and Cook County projected it would generate $67.5 million this year and budgeted for slightly over $200 million in 2018, which would have been the first full year of collections. The county had planned to use the revenue for general operations and to offset potential fluctuations in economically sensitive revenues. The county will now need to identify alternate revenues and/or reduce expenditures to offset the revenue loss (equivalent to 5% of operating revenue), and will be looking at solutions through property taxes, sales taxes, and expense cuts, all of which carry practical challenges.
Over the last decade, Cook County has raised sales taxes, hotel taxes and beverage taxes to generate revenue to meet pension costs and other growing expenditures, including increasing debt service costs. The various tax hikes were implemented in an effort to keep the county’s property tax levy relatively flat. As a home rule unit of local government, the county has the legal ability to raise its property tax without limitation and has wide latitude to impose a variety of other taxes and fees.
However, the political backlash against the pop tax highlights the practical limitations on raising taxes, even if a government is legally permitted to do so. This practical limitation is particularly critical for Chicago-area local governments, given the significant revenue needs of Cook County, the City of Chicago, CPS and related entities. Any future tax hikes in the wake of the pop tax repeal will likely be met with some political opposition, exacerbating budget pressures for Cook County and other area local governments. [Emphasis added]
Moody’s observation came a day after Mayor Rahm Emanuel proposed a 2018 city budget that includes a $1.10-per-month increase in the current $3.90 emergency communications fee that’s charged on every land line and cellphone billed to a city address. The mayor’s proposal also includes a phased-in 20-cent increase to the current 52-cent tax on all trips using ride-sharing services like Uber and Lyft.
Some aldermen who will be called on to vote on those taxes have said the soda tax repeal was on their minds as they weighed the mayor’s proposal.
“This whole idea of revenue-generating ideas has to stop,” 12th Ward Ald. George Cardenas said after Emanuel gave his budget speech. “We have to sit down at a table and talk about cost-cutting ideas.” […]
The [Moody’s] analysis also noted that there were “unique issues” surrounding the penny-an-ounce tax on sweetened beverages that’s now coming to an end Dec. 1. Those included the much-debated public health benefits of the tax, the hefty cost increases for the drinks and the troubled rollout of the tax.
Those “unique issues” include the absolutely botched rollout and implementation.
Chicago, Cook County and Illinois government are willing to shell out an incentive package worth around $2 billion in order to lure Amazon, according to two sources close to the bid process. That breaks down to around $1.6 billion in tax breaks and $400 million in infrastructure and capital spending around the project, the sources said. It is not known how the money is divided up between city, state and county, and over what period of time the incentives would be paid.
The main tax incentive the state has to offer is the EDGE tax credit, which was re-authorized into law this year by Gov. Bruce Rauner after it had expired. It works as a credit against payroll taxes for companies that create new jobs in the state. The credit has been controversial in the past, but several analysts say it would make sense in this instance, as Amazon is pledging to create 50,000 new jobs with an average salary of $100,000 and invest $5 billion in new office space. […]
Others point to the fact that the choice is between having Amazon and giving them tax breaks vs. not having the company at all. “It’s not as if you’re pledging current revenue to them,” Msall said. “That revenue doesn’t exist yet. You’re just pledging future revenue if they get here.”
* Related…
* Some of Amazon’s Suitors Have Been Burned Before: Good Jobs First says that in trying to lure and retain employers, many cities and states give away more than they get back. The group’s analysis of 386 deals worth at least $50 million since 1976 found that the average cost per job created was $658,427 — far more than cities and states could expect to get back from income taxes, sales taxes, property taxes or other revenue.
