* I haven’t read the opinion yet, but this is a serious outrage…
A Cook County judge ruled today that a California technology blogger doesn’t qualify as a reporter and ordered him to turn over information on the tipster who leaked information about a Motorola cell phone.
Gadget blog TechnoBuffalo, a 3-year-old site which says it has one million readers a month, published images in August taken from the user’s guide for the Droid Bionic — a few weeks before the phone went on sale.
The blog’s president, Jonathan Rettinger, has so far declined to turn over any information on the tipster, arguing that it was publishing news and so is protected under journalist shield laws in Illinois and California.
A spokesman for the blog, which has a staff of writers and editors, said the case is the first time in Illinois a judge has been asked to rule whether a blogger is the same as a journalist in the law’s eyes.
Judge Michael Panter, while acknowledging that it was “a fast-evolving issue facing courts everywhere,” ruled that TechnoBuffalo isn’t a news medium and its bloggers aren’t protected under Illinois shield laws for journalists.
Elizabeth Bradshaw, an attorney for the blog, said she plans to appeal and the decision potentially “poses a threat to all news media, including bloggers.” Rettinger issued a statement saying he was “extremely disappointed.”
No court may compel any person to disclose the source of any information obtained by a reporter except as provided in [the other provisions of the shield law].
Sec. 8‑902. Definitions.
(a) “Reporter” means any person regularly engaged in the business of collecting, writing or editing news for publication through a news medium on a full‑time or part‑time basis and includes any person who was a reporter at the time the information sought was procured or obtained.
(b) “News medium” means any newspaper or other periodical issued at regular intervals whether in print or electronic format and having a general circulation; a news service whether in print or electronic format; a radio station; a television station; a television network; a community antenna television service; and any person or corporation engaged in the making of news reels or other motion picture news for public showing.
(c) “Source” means the person or means from or through which the news or information was obtained.
That judge is completely off his rocker.
* Meanwhile, candidates should always make sure to snatch up a domain that matches their name. If they don’t, then bad things can happen. For instance, typing in RosemaryMulligan.com leads to this website, which is not exactly supportive…
At a Chicago news conference on the one-year anniversary of the state’s income tax hike, Cross said a union wage freeze is among the cost-control measures the state should adopt as it continues to struggle with its finances. […]
“The ability to, or need to, freeze those salaries, not give increases, needs to be looked at as the governor starts negotiations with AFSCME,” Cross said. […]
Cross said he is working with House Speaker Michael Madigan’s office to put the wage freeze idea in writing. He wants it incorporated into House Joint Resolution 45, which Madigan introduced last year to set a limit on raises the state will grant unionized employees. […]
“Apparently Leaders Cross and Radogno believe the state should spend tens of millions of dollars on new corporate tax breaks, but nothing to ensure that caregivers, correctional officers and child-protection workers are fairly paid,” said AFSMCE spokesman Anders Lindall. “I think those priorities are upside-down.”
* The Question: Should AFSCME agree to a pay freeze in its new contract? Take the poll and the explain your answer in comments. Thanks.
* The Illinois State Board of Elections has changed its website address from http://www.elections.state.il.us to http://www.elections.il.gov. That’s no big deal, except that the Board is not auto-forwarding links from the old URL to the new one.
In order to make my life a little easier (actually, a lot easier), I’ve bookmarked almost 200 Board of Elections links to candidate contribution reports and other pages within the site that I use quite often.
But now, because the Board doesn’t auto-forward to its new URL, all my links are dead (click here for an example). So, I have to go back and change every single one of those links.
Ugh.
I am not a happy camper.
*** UPDATE 1 *** The old URL appears to be working now. Squeaky wheel, grease, etc. Thanks to whoever changed it back.
*** UPDATE 2 *** I just got off the phone with the State Board of Elections’ executive director and the top tech guy. They explained that they didn’t realize that people were using the old URL (little did I know that they changed their URL five years ago). They also vowed cooperation on whatever they could cooperate on. We talked about some things that I’ve wanted for years, like RSS feeds for various categories and a separate link to latest petition challenges that have been overruled.
It was the most positive conversation I’ve had with the State Board of Elections since they launched their first website in the late 1990s. Things got extremely heated back then for reasons I don’t need to dredge up again, and the relationship kinda went downhill ever since. Hopefully, things are about to get better.
[ *** End Of Updates *** ]
* And speaking of websites that make me unhappy, Gatehouse has found a way around my browsers’ popup blockers so it can load one of those irritating “pop-under” pages every time I visit their newspaper sites. I hate pop-unders and I despise any company that uses them. Stop it, please.
Since Illinois increased its corporate income tax by 46 percent from 4.8 percent to 7 percent this past year, several unexpected and expected changes occurred.
The number of limited liability companies, or LLCs, and corporations registered with the state actually increased, from 71,449 in fiscal 2010 to 73,130 in fiscal 2011, according to the Illinois Secretary of State.
The number of non-farming jobs increased by 1 percent, from 5.6 million in 2010 to 5.7 million in 2011, according to the Illinois Department of Employment Security.
The unemployment rate has risen a full point in the past year, from 9 to 10 percent, while the US rate dropped from 9.1 percent to 8.7 percent. Partly, that’s because as more jobs are being created, more people are actively looking for jobs. 30,000 new jobs were created in Illinois in October alone, the largest number in the nation.
Todd Maisch, vice president of government relations for the Illinois Chamber of Commerce, the state’s largest business association, said the income tax increases have crippled economic recovery.
“To be honest, if you are really in a hard-hit industry, you’re probably operating at a loss and so you haven’t felt the impact,” Maisch said. “Probably the ones that were hit the hardest were those that were starting to come out of the recession and starting to turn a profit.”
* Then again, slashing the state’s budget in order to immediately repeal the income tax hike would surely result in job cuts…
Rolling back the income tax increases could have a ripple effect.
Illinois House and Senate Republicans say the rollback would foster job creation by creating a more competitive business climate.
But a premature rollback could result in teachers, firefighters and police officers statewide being fired, said Kelly Kraft, Gov. Pat Quinn’s budget spokeswoman.
The tax increases, set to expire by the end of 2014, are estimated to bring in about $7 billion to the state’s coffers.
* Look, it’s more than obvious that Illinois has to do far more to help businesses create jobs here. The Illinois Policy Institute’s latest statewide poll shows that 71 percent of Illinoisans say the state’s business climate makes it more likely for businesses to leave Illinois.
But we aren’t the unmitigated disaster that so many people want to claim we are. I’m not arguing that we should ignore bad economic news. Far from it. I’m just saying we ought to have fair media coverage of both the good and the bad. It’s really easy to tee off on this state. Yet, a lot of us wouldn’t want to live and work anywhere else. Yeah, I’ve had daydreams about moving to South Beach or Hawaii or even the Riviera. That ain’t gonna happen. My home, my family, my business, and most importantly my heart are all right here. It’s where I’ve chosen to make my stand in life. Those of us who’ve made that choice have an obligation to help make our state better. Criticism is an absolutely necessary aspect of that process and blind cheerleading isn’t helpful at all. But too often all we see is the easy bash. It’s like we’re addicted to being known as the worst. We perversely revel in it. We use it to whack the other side and further divide ourselves.
Enough, already.
* And speaking of the income tax hike and the budget, yesterday’s press conference with Republican legislative leaders and the Illinois Policy Institute contained much talk about how the budget could be balanced without the tax hike by reforming pensions and Medicaid. But Leader Cross’ pension reform legislation actually requires an increase in pension contributions of a billion dollars next fiscal year. Cross said later that he could change the bill to lower the pension contribution, but that hasn’t yet been done.
* Aon to move corporate headquarters to London: The company said Chicago will remain its headquarters for the Americas and the move won’t result in job loss in Chicago or the United States. The company employs 61,000 people globally and expects to create 1,000 new jobs this year.
* Today is my first Sun-Times column since before the Christmas break, so I thought I would write about our Golden Horseshoe Awards. Comments were closed when the final awards were announced and the full list was published, so this will give you a chance to do so now…
Every year, commenters at my website (CapitolFax.com) vote on something we call the “Golden Horseshoe Awards.” I started the contest as a tongue-in-cheek lark, so I jokingly named it after Springfield’s most infamous culinary offering.
People took the contest seriously, though, and, unfortunately, the name stuck; just like the Horseshoe’s ingredients (cheese sauce, french fries, meat, toast) stick to your arteries. So now I run what some think is a prestigious annual awards contest which has a completely goofy name. Oh, well. There are worse things in life.
I decided to go with the “best of” the Illinois Statehouse rather than do a “worst of” because we always hear about the worst of state government. Besides, there’d be too many nominations to wade through.
So we have categories like the best “do gooder” lobbyist, which was awarded to Jeremy Schroeder of the Illinois Coalition to Abolish the Death Penalty. Secretary of State Jesse White won best statewide officeholder. Overall, we had 32 categories, way more than when I started the thing.
To me, anyway, the most interesting results were for best state legislators. Whether Republican or Democrat, they all shared some specific traits. They are all effective lawmakers, of course. They know how to pass bills. But they also make it a point to work with members on the other side of the political fence, which is more like a mini Berlin Wall in these times of extreme partisan divides.
The debilitating and paralyzing hyperpartisanship that has long infected the U.S. Congress has seeped into Springfield over the past few years, so I was happy to see that none of my readers nominated the Statehouse’s worst offenders.
Sen. John Millner got the prize for best Republican state senator. The suburban Carol Stream resident is retiring at the end of this term, and he was clearly a sentimental favorite. There’s no doubt that Millner is a conservative, but he has a long history of working with Democrats. As a result, he’s been one of the more effective legislators on his side of the aisle. He’s also a gem of a human being.
Sen. John Sullivan was voted best Democratic state senator. Sullivan is from Rushville, a little town in “Forgottonia,” otherwise known as Western Illinois. His conservatism often puts him more in line with his Republican colleagues (a zero percent rating from Planned Parenthood, endorsed by the NRA), and he regularly works with the other side. Sullivan hasn’t convinced any Republicans to vote for his plan to float bonds to pay off past-due state bills, and the GOP will undoubtedly use that legislation against him this November. But his struggle to find a tiny bit of bipartisan consensus impressed my commenters, and impressed me as well.
Rep. Skip Saviano was a no-brainer choice for best Republican state representative. The man is a bill-passing machine. Saviano had a falling-out with House Speaker Michael Madigan, but it hasn’t really slowed him down. Some people use the term “Republicrat” as an insult. But for Saviano, it’s a badge of honor. As a result, he’s one of the best-liked legislators in the building.
Representatives John Bradley and Frank Mautino tied for best Democratic state representative. Both men are known for working honestly with the other side. Bradley’s almost Herculean bipartisan efforts passed the hugely controversial corporate tax cut package this past fall. Mautino was able to find a bipartisan solution to Gov. Quinn’s veto of regional school superintendent salaries and put together a complicated agreement on unemployment insurance reform. Both men are work horses, not show horses. Actually, all the winners are. We need more like them.
I’m looking for reader input on whether and when New York Times news reporters should challenge “facts” that are asserted by newsmakers they write about.
First, though, I must lament that “truth vigilante” generated way more heat than light. A large majority of respondents weighed in with, yes, you moron, The Times should check facts and print the truth.
That was not the question I was trying to ask. My inquiry related to whether The Times, in the text of news columns, should more aggressively rebut “facts” that are offered by newsmakers when those “facts” are in question. I consider this a difficult question, not an obvious one.
The top Republicans in the Illinois House and Senate are offering a one-year anniversary raspberry salute to the passage of a $7-billion state income tax hike, saying it hasn’t worked and ought to be immediately repealed. […]
Those themes were echoed by John Tillman, head of the Illinois Policy Institute, a libertarian research group. He released a poll saying 68% of state residents opposed the tax increase. […]
Meanwhile, the institute’s poll also found that only 53% of those surveyed believe the tax hike should be repealed immediately. Asked about that, Mr. Tillman noted that an additional 31% want it to expire as scheduled, beginning in 2015. […]
A spokeswoman for Gov. Pat Quinn strongly disagreed. Doing what Republicans want would require the state to cut spending back to 1988 levels, despite much higher costs today for pensions and health care, she said.
* The Question: Do you favor immediate repeal of last year’s state income tax hike? Take the poll and then explain your answer in comments, please. Thanks.
Sneed is betting Bill Daley, who just resigned from life in the Washington cesspool, will eye a possible run for governor in Illinois in 2014.
◆ The flipside: “I doubt if it’s on his agenda right now,” said a Daley family source. “Bill would be 66 at the time of the election — and I don’t think he’d be happy doing it.”
◆ Back shot: Daley, who abruptly resigned as Obama’s White House chief of staff a few days ago, opted off the political fast track in Illinois twice after testing bids for a gubernatorial and U.S. Senate run in 2008 and 2009.
◆ Buckshot: It’s no secret top Dems feel populist Gov. Pat Quinn is an odd duck with a sorry approval rating. “It’s impossible to get anything done with him,” said a top Dem source. “He’s always getting sidetracked.”
Shaw thinks Daley will take a serious look at running for governor, but it remains unclear what he will do in 2014. It could be the right time for him, Shaw said; he’s got a lot of national political experience under his belt.
It was unresolved if there would be a primary challenge to Gov. Pat Quinn, but another name being floated as a possibility is Attorney General Lisa Madigan.
As of right now, Lisa Madigan is running for attorney general again. Only pundits are floating her name. I don’t see her running against Quinn.
But, Daley? Who knows? The guy has floated his name for governor more times than Gov. Pat Quinn has, um, “changed his mind.” What do you think?
* Today is the one-year anniversary of the income tax increase. The Illinois Policy Institute is holding a Chicago press conference with House Republican Leader Tom Cross and Senate Republican Leader Christine Radogno at ten o’clock this morning. The live stream will be posted here. I’ll update this post when the presser begins.
Later today, IPI will host a free reception for Statehouse reporters at Boone’s Saloon. I’m not sure who is attending, or if I’m going.
Anyway, your thoughts on the tax hike anniversary?
* OK, let’s start the ScribbleLive feed. Blackberry users click here. Everyone else can just watch…
* The tradition in Illinois is to not challenge petition signatures for presidential delegates. We’ll know by Friday if the tradition will continue…
Delegates for GOP presidential candidate Rick Santorum have filed the minimum legal number of petition signatures to appear on the ballot in just four of Illinois’ 18 available congressional districts.
In 10 others, delegates who filed signatures came far short of the 600 required to appear on the ballot, a review of the signatures found. They didn’t file any delegates in four districts.
* In other news, the Illinois AFL-CIO released its list of primary campaign endorsements this week. Click here to read the full list. From the press release…
Topping the endorsement list were Democratic candidates for U.S. Congress including Bobby Rush (1st District), Jesse Jackson, Jr. (2nd), Dan Lipinski (3rd), Luis Gutierrez (4th), Mike Quigley (5th), Leslie Coolidge (6th), Danny Davis (7th), Jan Schakowsky (9th), Bill Foster (11th), Brad Harriman (12th), Matt Goetten (13th), Dennis Anderson (14th) and Cheri Bustos (17th).
No congressional Republican primary candidates were endorsed. Several state legislative candidates in tough primaries got the state fed’s nod, including Senate candidates Donna Miller (the wife of former Rep. David Miller) and Sen. Mike Jacobs (up against former Rep. Mike Boland). The labor umbrella group didn’t endorse anyone in the open seat race for Illinois Supreme Court.
Frustrated Chicagoans accused aldermen of shattering communities to protect their incumbencies at the first public hearing on the city’s ward remap process Wednesday night.
At least 600 people flooded into DePaul University’s Student Center in Lincoln Park, with many forced to wait temporarily outside closed doors due to concerns that attendance would exceed fire code limits. For three hours, scores of city residents hurled criticism at the more than 20 attending aldermen, and the two maps they created.
* Republican Congressman Don Manzullo continues to whack his primary opponent Congressman Adam Kinzinger as not conservative enough. From a press release…
An analysis of Congressional votes shows that U.S. Rep. Don Manzullo (R-16) continued his strong conservative record of voting against wasteful Washington spending in 2011 while his opponent voted much more often for big government.
Manzullo, who maintains a lifetime 96 percent rating with the American Conservative Union, voted 79 more times to cut spending in 2011 than Congressman Adam Kinzinger (R-11), who says he came to Washington in 2010 to cut spending. An analysis of all 949 roll call votes cast in 2011 shows Kinzinger voted to spend $209 billion more than Manzullo.
“Rather than speaking out as a voice of fiscal responsibility in Washington, Congressman Manzullo joined in the ‘big government’movement by voting to support taxpayer funded bailouts, advocating for Obama’s spending projects and voting twelve times to increase the debt limit piling on $5 trillion to our nation’s debt.
“Only when Congressman Manzullo realized he would have his first serious Republican opponent in decades, he began to take drastic measures to correct twenty years of overspending by voting in favor of the RSC budget, which would slash seniors’ Social Security and Medicare and threaten veterans’ benefits all in a desperate attempt to continue his two-decade congressional career.
“It is unfortunate that Congressman Manzullo is now disingenuously following the freshman class’ lead by talking about fiscal restraint when for the last twenty years he supported the failed policies that put us in this mess to begin with.
“In just one year, Congressman Adam Kinzinger and his freshmen class have changed the conversation from how much to spend to how much to cut. His class has brought a fresh approach, with strong, conservative voices that will fight tooth and nail to stop the reckless mistakes of the past by both parties. He will continue to lead this mission in Congress.”
* Democrat Raja Krishnamoorthi has a new web video. Have a look…
* Republican state Sen. Carole Pankau is running a new cable TV ad. Rate it…
Pankau is up against Rep. Randy Ramey in the GOP primary.
* Other stuff…
* Manzullo trumpets conservative rating in House race with Kinzinger: For what it’s worth, the only other “perfect” A-plus score in Illinois went to Tea Party favorite Joe Walsh. Just about every other Republican except the north suburban 10th District’s Robert Dold got a B — he got a C — while Democrats rated from D on down.
* Manzullo says U.S. should manufacture way out of debt
* State Election Board Certifies Rowe Candidacy, Dismisses McSweeney Challenge
* What’s smart, what’s not: In the no-planning camp was Steven Klingbeil, who thought he could run as a Republican candidate for the 108th state House District without his personal financial problems getting in the way. But he dropped out of the race last week, right before a story detailing those problems was scheduled to run. Of course, the story and the problems had nothing to do with his abrupt about-face.
* David Reis appointed to Firearm Public Awareness Task Force
* Decatur’s unemployment rate in November was slightly lower than the statewide average, at 9.9 percent, but this is gonna hurt bad…
Agribusiness conglomerate Archer Daniels Midland Co. announced plans Wednesday to cut 1,000 mostly salaried jobs as it navigates volatile global crops markets.
The move will cut 15 percent of the Decatur-based company’s corporate staff, about 3 percent of its total work force, CEO Patricia Woertz said in statement. […]
ADM said it first will offer employees a chance to voluntarily retire early if they are at least 57 years old and meet other requirements. Employees have until the end of January to take the retirement package. After that, the company will cut the remaining number of jobs needed to meet the 1,000 mark.
* Lots of those eliminated jobs will be in Decatur…
The company has yet to determine the number of positions affected at its headquarters in Decatur, although it would appear to observers that many of the cuts will affect jobs based locally. […]
ADM employs about 30,000 people worldwide, of which 4,300 people in the Decatur area are either salaried or hourly. The focus of the cuts will be on those in salaried positions at the corporate level, although ADM did not release the number of employees fitting that category.
“It’s kind of a bitter pill to swallow in that regard,” [Craig Coil, president of the Economic Development Corporation of Decatur and Macon County] said. “It’s one of those things we can’t control. We’ll automatically feel a disproportionate impact of that because of the fact we’re a fairly small community and they’re a major player in our community.”
Despite the plan to cut positions, Coil said ADM appears to remain committed to the Decatur area, and the reductions should not reflect negatively on Decatur itself.
CIT Group Inc. will no longer provide loans to Sears Holdings Corp. suppliers to finance their shipments to the retailer, a Bloomberg report said, citing two people familiar with the matter.
Sears shares fell 9.7 percent to $29.71 in premarket trading on the New York Stock Exchange. The shares dropped 56 percent last year.
CIT Group, the business lender run by Wall Street executive John Thain, will no longer approve credit for those waiting to be paid for orders delivered to Sears after today, the report said, citing unnamed sources.
Look for home foreclosures to rise here and nationally this year, but the worst is behind us.
That’s according to RealtyTrac, which released its latest report Thursday showing the number of homes hit with foreclosure filings in the Chicago metropolitan area fell 7.6 percent last month from a year earlier. Foreclosure activity was little changed from November as documentation issues continued to slow foreclosures here and across the country.
The continuing resolution of those document problems is what’s expected to push foreclosure activity up in 2012.
“The numbers in 2011 were artificially low because of the foreclosure delays, so we will see an uptick” this year, said RealtyTrac spokesman Daren Blomquist. “But we are past the peak in this foreclosure cycle.”
The report revealed 12,075 homes in the Chicago area received a foreclosure filing last month, 11 more than in November, or up 0.09 percent. Last month, one in every 313 homes in the area received a filing.
Homeowners insured with Allstate Corp. will soon be hit with rate increases of as much as 10 percent, the company said Wednesday.
Rate increases for renewals and new business will range from 4 percent to 10 percent annually, which translates into monthly increases of $4 to $9, effective March 26, said spokeswoman Shaundra Turner.
The rate hike is due to increased claims for water, wind and hail damage, Turner said.
A group of Illinois legislators has started meeting with local LGBT groups to strategize on making marriage equality a reality in Illinois.
State representatives Greg Harris, Deb Mell, Ann Williams, Kelly Cassidy, Sara Feigenholtz and Senator Heather Steans are in talks with Illinois organizations about introducing a bill that would allow same-sex partners to marry in Illinois.
According to Harris, the bill will not likely be introduced until at least 2013. Harris believes the fight will be difficult, especially as anti-gay political candidates work to bolster support for upcoming presidential elections.
“I do not delude myself into thinking this will be an easy process,” Harris said. “But we need to take the first step.”
It might take several more years to pass that bill once it’s introduced. Keep in mind that Illinois passed an anti-discrimination bill for gays almost exactly seven years ago after many, many years of work. Organizers started laying the groundwork almost immediately for gay marriage, but it took another six years before the General Assembly passed a civil unions bill. Gay marriage could take a while longer. Then again, maybe it won’t take as long. There really hasn’t been much of a sustained blowback on the civil unions bill. So, we’ll see.
* 12:58 pm - The governor’s budget office claims via press release that, despite the recent Moody’s downgrade, interest on the state’s bond sales are actually lower than recent issues…
The Governor’s Office of Management and Budget today is pleased to announce the State successfully has sold $525 million of tax exempt General Obligation Bonds and $275 million of taxable General Obligation Bonds. The bond sale provides funding for the Illinois Jobs Now! Capital plan, which was signed into law by Governor Quinn to help revive the state’s ailing economy by creating and retaining more than 439,000 jobs over six years.
“Positive feedback like we have seen today from investors demonstrates the strong confidence investors have in Illinois,” said David Vaught, Director of the Governor’s Office of Management and Budget. “These bond bids make clear that investors know we are taking steps to correct the decades of fiscal mismanagement in our state, and they understand we continue to take major steps to reform pensions and control skyrocketing Medicaid costs in an effort to return Illinois to sound financial footing.”
In a competitive sale, the $525 million tax exempt issuance priced with an interest rate of 3.9125 percent with Wells Fargo as the successful bidder. This is the lowest rate the State has received on a tax-exempt capital bond issuance in recent history. As a note of comparison, in November of 2011, the states triple A rated Build Illinois Bonds priced with an interest rate of 4.07 percent. The state received 8 bids overall.
The $275 million taxable issuance priced with an interest rate of 5.2992 percent with J.P. Morgan Securities LLC as the successful bidder. The state received 9 bids overall for this issuance. As a basis of comparison, the 2037 maturity has a 5.76 yield which is 277 basis points higher than a comparable U.S. Treasury rate. The most recent General Obligation capital bond issuance in July of 2010 priced similar bonds with a spread of 325 basis points above the comparable U.S. Treasury rate. This equates to a 48 basis point improvement. [Emphasis added]
Discuss.
…Adding… Treasurer Dan Rutherford’s prediction via press release last week apparently didn’t hold up…
“The downgrade will result in Illinois taxpayers paying an estimated additional $60 million to repay the issuance of next week’s scheduled $800 bond sale. In addition, this may impact Illinois institutional bond holders which may have to sell their current Illinois bond holdings because their investment policies require minimum bond ratings greater than our new rating.”
…Adding More… You also have to wonder if Bloomberg and the Tribune editorial board will run corrections…
The sorry result: when it sells these bonds, Illinois may face borrowing costs more than four times as high as the average it has paid over the last 10 years, according to Bloomberg.
Don’t bet on it.
*** UPDATE 1 *** The budget office says they looked at the history of Illinois’ long-term tax exempt capital bonds all the way back to 1984 (the earliest records they have) and didn’t find any at a lower rate than the 3.9 percent from today’s $525 million tax exempt issuance.
Wow.
Of course, interest rates are at historic lows, so that’s obviously helping here. And the rate would’ve been even lower if we were a AAA state. But the hand-wringing about this particular issuance appears to have been way, way off the mark. Let’s see if anybody admits it.
*** UPDATE 2 *** From Treasurer Rutherford…
“Illinois sold $800 million worth of bonds today for important projects such as new roads and schools. I am indeed pleased that we will pay a lower interest rate on these bonds than we did last year, but it’s important to keep these ‘savings’ in perspective.”
“Market conditions – such as the European crisis causing a flight to American quality – were favorable today, but the rates we received would have been considerably better without Moody’s lowering of Illinois’ credit last week. Tens of millions of extra dollars were still taken out of taxpayers’ pockets today because of the financial condition of Illinois as determined by Moody’s.”
“Moody’s downgrade reinforces my stance: Illinois needs to solve its unfunded public pension crisis and pay all outstanding bills without borrowing additional money.”
*** UPDATE 3 *** The budget office says they’ve found records dating back to 1976, and they still haven’t found a lower interest rate on a similar bond offering.
*** UPDATE 4 *** Bloomberg compares Illinois’ offering to other “top rated debt” and has a negative conclusion…
Illinois’s cost to borrow relative to top-rated issuers tripled from 2009 when it sold $800 million of bonds today, after its credit rating was cut by Moody’s Investors Service to the lowest among U.S. states.
The $525 million tax-exempt part of today’s sale included 10-year general-obligation bonds priced to yield 3.1 percent, according to data compiled by Bloomberg. That’s 110 basis points more than the 2 percent yield of top-rated 10-year debt.
A 10-year bond sold on Sept. 16, 2009, the last time Illinois took competitive bids for tax-exempt general obligations, was priced at 37 basis points above top-rated debt. A basis point is 0.01 percentage point.
Both Wells and J.P. Morgan reoffered bonds to investors at lower yields than where outstanding Illinois debt currently trades, reflecting how strong the sale was, market participants said.
Wells offered 10-year tax-exempt debt for Illinois with a coupon of 4% and a yield of 3.10%, for instance. That’s around 0.20 percentage point less in yield than where comparable outstanding Illinois debt traded late last year, said Michael Pietronico, chief executive officer of Miller Tabak Asset Management in New York. It’s also around 1.30 percentage point more in yield than what triple-A munis offer on Thomson Reuters Municipal Market Data’s benchmark scale.
“The flavor of the muni market so far in 2012 has been investors reaching for [higher-yielding] product to generate excess total return and income,” said Pietronico, whose firm manages about $625 million in muni assets. He said his firm would buy Illinois debt in the secondary trading market if it came at juicier yields than those offered in the deal Wednesday.
A relative dearth of new bonds in the muni market helped reception of Illinois’ sale, too, said portfolio managers. States, cities and other so-called municipalities have sold $1.6 billion of municipal debt so far this year, according to data provider Thomson Reuters. That’s less than one-third of the volume of a typical week in 2011.
* As you all know by now, the Civic Committee, the Tribune and others are demanding that the General Assembly pass pension reforms that the Senate Democrats have concluded violate the Illinois Constitution…
Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.
* The Question: Should the General Assembly go ahead and pass what very well might be an unconstitutional law and leave it up to the courts, or should the Legislature find another way to reform the pension systems? Or should there be no changes in the benefit structure?
Take the poll and then explain your answer in comments, please. Thanks.
* Champaign News-Gazette political columnist Tom Kacich (not online, so no link) reported today that James Liautaud, the CEO of the Jimmy John’s chain, is running as a Mitt Romney convention delegate, in Champaign.
* But, wait, I thought Liautaud said he was moving to Florida and had already enrolled his children in school there to avoid Illinois’ higher income taxes? From this past January…
Jimmy John Liautaud told The News-Gazette on Tuesday that he is angry about the moves, which boosted the individual income tax from 3 percent to 5 percent and the corporate income tax from 7.3 percent to 9.5 percent.
“All they do is stick it to us,” he said, adding that the Legislature and governor showed “a clear lack of understanding.”
“I could absorb this and adapt, but it doesn’t feel good in my soul to make it happen,” Liautaud said. […]
As for himself, “my family and I are out of here,” he said.
Liautaud said he has rented a house in south Florida and his children started school there last week. He said he has applied for Florida residency and plans to commute to Champaign.
So, he doesn’t want to live and pay taxes here, but he wants to run as a convention delegate here? Bizarre.
The sorry result: when it sells these bonds, Illinois may face borrowing costs more than four times as high as the average it has paid over the last 10 years, according to Bloomberg.
The Trib does go on to explain that Illinois “is expected to pay 1.82 percentage points more than what top-rated states pay for comparable bonds, Bloomberg said.” But what does this “four times as high” thing mean?
Illinois state and local general-obligation bonds yielded 182 basis points more than top-rated debt yesterday, according to data compiled by Bloomberg. That’s more than four times the 10-year average of 43 basis points and about triple the 66 points over five years. A basis point is 0.01 percentage point.
So, when compared to AAA ratings, the extra amount Illinois has paid will rise from .43 percentage points above AAA ten years ago to an “expected” 1.82 percentage points above AAA this month. But nobody really knows for sure because these are competitively bid. Nine states had Moody’s highest rating in 2010.
Illinois ended last fiscal year with a $6 billion gap even after the largest tax increase in its history.
Actually, no. Illinois had about that much in long overdue bills, but the structural deficit wasn’t nearly that high.
* Meanwhile, Gov. Pat Quinn pointed out again yesterday that over half the state’s pension costs were for local school districts. He’d like to reduce that amount. House GOP Leader Tom Cross counters…
Cross warned that shifting costs to school districts and universities alone won’t solve the problem.
“That’s not reform,” Cross said. “It’ll result in perhaps a local property tax increase. It’s a different way to pay for it,” Cross said.
But cost-shifting could be an element of any reform package, he said.
“The school of thought would be that it gives school districts a little skin in the game … they will have to analyze what they do for pay raises, both during and at the end of (teachers’) careers,” Cross said.
The very real constitutional problems with pension reform means that cost-shifting will likely be attempted. But you can expect school districts and teachers’ unions to scream bloody murder if this is tried. It won’t be easy, either.
It’s not too difficult to see why they fight so hard against competition in the legislative arena. Des Plaines has had a huge impact on the Elgin casino. [Fixed chart. Previously posted chart was the wrong one.]
…Adding… A brief roundup…
* Officials report drop in Chicago-area tollway usage: Illinois State Toll Highway Authority officials say the number of cars using the state’s toll roads dipped by 4.5 percent since fees for users nearly doubled on Jan. 1. Spokeswoman Wendy Abrams says the decrease was not as great as the 5.9 percent drop forecast by the agency’s engineers. Despite the expected decrease in auto traffic, tollway officials say they expect a 41.9 percent increase in revenue in 2012. Abrams says during the first week, revenue increased 45.7 percent.
* Slate takes a look at some studies of yard signs and finds that nobody has really figured out yet if they really work…
In 2008, Ohio State’s Todd Makse and the University of Colorado’s Anand Edward Sokhey set out to see if they could identify a link between candidate signs and support. They went to Franklin County, a celebrated Ohio swing county that includes Columbus, and drove the streets of 30 precincts on two weekends, one just after the conventions and one just before the election. Each time they saw a candidate sign displayed at a single-family home, the academics marked it with a GIS locator and then linked each address to its residents’ voting records and sent a survey to each household, asking the resident “most responsible” for the sign to complete it.
In 2008, 14 percent of homes displayed a sign for a candidate, and 65 percent of them were for Democrats. A few traits were consistent across party lines: Young people, generally less politically active than older folks, were more likely to display a sign. (In the survey, young people indicated that signs were one of the forms of activism with which they were most comfortable.) The act of putting a sign in a window seems as contagious as leaving one of its panes broken: Those whose neighbors had signs were more likely to have one themselves, regardless of whether they supported the same party or different ones. Those whose houses were exposed to greater levels of car traffic—Makse and Sokhey coded every thoroughfare in their precincts into one of six categories, from “dead end” and “main artery”—were more likely to put out signs, suggesting that the motivation to put one out was more “strategic” (to reach as many people as possible) than “expressive” (a need to be public about one’s allegiances).
Voters decorate their lawns. In 2006, Auburn agricultural economist David N. Laband, who had previously conducted studies showing that people who wore campaign buttons and checked the Federal Election Commission contribution box on their tax returns were more likely to vote, started looking at signs. Along with colleagues Ram Pandit and John P. Sophocleus, they mapped Auburn, Ala., neighborhoods south of Interstate 85 and marked which houses displayed an American flag on Memorial Day and July 4. Once football season kicked off in the fall, they documented expressions of support for the Auburn Tigers with a flag, sign, pom-pom sticker, or an inflated figure of Aubie, the school’s mascot. Just before the elections they went back to the same neighborhood with an eye out for candidate signs. Seventeen percent of houses had a flag, 7 percent had football paraphernalia, and 12 percent had a political sign.
After the November 2006 elections, Laband matched the addresses up against the voting histories of the people who lived there. Households that displayed either an American flag, football insignia, or campaign sign were 2.4 times more likely to have a resident who voted in the elections than houses which had none of the three. While campaign signs were the most strongly predictive of having cast a vote, just sporting an American flag made a household twice as likely to have a voter, and even Auburn football gear made it 1.6 times more likely. (The authors don’t account for whether they’re really measuring a mediating variable, like whether Auburn fanhood is a proxy for having a college degree.) The same sense of expressiveness that inspired people to publicly project their patriotism or fandom seemed to be driving them to vote.
Essentially, people who put up political signs do so because they are the type who put up signs. And they may be a bit more likely to put up signs if their neighbors already do.
* Campaigns spend a lot of time on yard and window signs, so candidates must think they do some good. I’ve come to regard them as an indication that a candidate has a decent organization (unless, of course, the signs are placed in public rights of way, which often indicates a less-organized campaign).
I was driving through the Pontiac area around Thanksgiving and noticed a ton of yard signs from legislative and local candidates - five full months before election day. I wondered aloud what those campaigns would do when winter weather struck. Would they replace the signs or let them rot in lawns? Since we’ve had an incredibly mild winter so far, I wasn’t able to see what happened when I returned to the area at Christmas/New Year.
* Anyway, I’d like to hear what you think about this topic. Do signs work? And if so, how do they work? If not, why don’t they work?
CBOE Holdings Inc. CEO Bill Brodsky derided the State of Illinois for financial problems, such as underfunding of state pensions, just weeks after the state passed a new law that will reduce the taxes that his Chicago-based options exchange pays.
“I’m embarrassed to live here,” Mr. Brodsky said in answer to a reporter’s question at an annual CBOE media lunch Tuesday. His remark was in reference to a bond-rating downgrade by Moody’s Investors Service Inc. last week to A2, that agency’s lowest for any state. “We need people to come together and recognize the gravity of the situation and work together to a solution.”
His comments follow the passage last month by the Illinois legislature of a bill that revamps the state’s tax rates for CBOE and futures exchange CME Group Inc. by sharply reducing the number of trades taxed as Illinois sales because many trades are transacted over electronic systems by parties outside the state. […]
Mr. Brodsky noted that he’s a member of the Commercial Club of Chicago executive group that has been pushing for reform of the state’s pensions. The state has fallen short on addressing its financial troubles while the City of Chicago and Cook County have made progress, he said.
“The city is taking serious steps to deal with its financial problems,” Mr. Brodsky said. “I think the county is taking serious steps to deal with its financial problems. The state has yet to take serious steps to deal with its financial problems.”
If he was so concerned about Illinois’ budget problems, then perhaps he shouldn’t have threatened to move his company out of state unless he received a big tax cut.
Brodsky is a member of the Civic Committee, along with several other corporate chieftains who have received Illinois handouts. The Civic Committee is behind the Illinois is Broke campaign, which has put up billboards and run radio ads announcing that the state is, well, broke.
Discuss.
[For some reason, the comment link wasn’t working. I think I fixed it.]
