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Two Burke-related scoops by the Sun-Times

Monday, Dec 10, 2018

* One

Chicago’s most powerful alderman, Edward M. Burke, had his cell phone seized by federal agents who raided his government and political offices late last month, the Chicago Sun-Times has learned.

It’s unclear why the FBI seized the phone or where it was when they took it.

I had heard they tracked him down the day of the raid and took his phone.

* Two

Shortly before FBI agents raided the offices of Ald. Edward M. Burke, they knocked on the door of the alderman’s top political aide, the Chicago Sun-Times has learned.

The FBI showed up at Peter Andrews Jr.’s home in Mount Greenwood around 7 a.m. on Nov. 29. […]

Andrews is the chairman of two of Burke’s three campaign funds, which total a combined $12 million — money the alderman has raised from companies that have gotten business from City Hall, some that also have hired his law firm, Klafter & Burke, to challenge their real estate assessments, seeking to lower their property tax bills.

Burke has paid Andrews more than $100,000 since 2001 to serve as a political consultant, according to records the alderman has filed with the Illinois State Board of Elections.

Fourteen years ago, Andrews and his wife, Ginger, got caught up in the scandal over the city’s Hired Truck Program under which the administration of Mayor Richard M. Daley spent $40 million a year to hire dump trucks that often ended up doing no work on city construction projects.

Oh, that’s big. Andrews is to Burke ~ what Marty Quinn is to Speaker Madigan.

- Posted by Rich Miller   19 Comments      

Today’s must-read

Monday, Dec 10, 2018

* The Southern Illinoisan’s Gabriel Neely-Streit has a well-written story about the many tough challenges facing volunteer fire departments in the rural south

“It’s hard to be a non-paid department and get anybody that wants to participate,” Grant said. “Then, if we do get people, we don’t have the proper equipment to give them for them to be safe.”

Throughout Southern Illinois, small town fire chiefs say they’re fighting to recruit and retain volunteers, and to provide expensive and time-consuming training to keep up with stringent state regulations.

Meanwhile, small towns like Buncombe are shrinking, and residents are growing older.

“We’ve had seven people pass away in Buncombe this year,” said Tommy Groner Jr., the town’s assistant fire chief. That means empty houses in town, less taxpayers to support the department, and a smaller pool of potential volunteers.

But as Buncombe’s population decreases, its need remains.

In rural Southern Illinois, having trained firefighters and first responders next door, instead of two towns over, can save lives, local officials say.

Buncombe’s population was just 203 in 2010.

Go read the whole thing.

- Posted by Rich Miller   19 Comments      

More details emerge about cannabis legalization

Monday, Dec 10, 2018

* Illinois Public Media News interviewed Sen. Heather Steans (D-Chicago) about her work on a new legislative draft to legalize marijuana in Illinois. The whole thing is worth a read, but here’s one excerpt

Steans: We see this as a three-piece process. One of them is the expungement, and two is inclusion and enabling people of color with backgrounds to be included in the industry now going forward.

We also want to ensure that anybody who is in the business has to have plans to do minority hiring. To the extent that we can do it, we want to encourage preference for minority-owned, women-owned and veteran-owned [cannabis businesses].

Then we also want to create new classes of licenses. You know right now we just have cultivation and dispensary [for medical marijuana], limited opportunities for people to get involved in the industry. We want to add additional license categories so that there’s more opportunities for people of color to get involved, and women and veterans.

And then the third piece is we think some of the revenue [from marijuana taxes] should be going toward neighborhoods that have been disproportionately impacted by the War on Drugs.

Go read the rest.

* Opening up opportunities is important because, as Tom Schuba reports, some real heavy-hitters are circling above

Cannabis is becoming big business in Illinois, with some local pot companies emerging as national leaders after inking record-setting deals and starting to trade publicly in Canada, where marijuana was recently legalized. […]

The River North-based pot firm now has operations in six states, with plans to expand to New York and Massachusetts. In October, Cresco began trading on the Canadian Securities Exchange after carrying out a reverse takeover of an existing company. The public offering comes on the heels of a $100 million private funding round, the second-largest for an American pot company. […]

Almost two decades later, Kovler started Green Thumb Industries. Headquartered in River North, the rapidly-expanding cannabis company now has eight manufacturing facilities and 60 dispensaries spread across eight states. Earlier this year, GTI raised $67 million after the company was listed on the Canadian Securities Exchange. According to Kovler, the company’s growth has happened “one step at a time.” […]

Teddy Scott recently brokered the largest acquisition in the history of the marijuana industry, selling Oak Park-based PharmaCann to touted California pot brand MedMen for $682 million in October.

* And here’s something that could be wrapped up by early January

Under the bill promoted up by Assistant Majority Leader Kimberly Lightford on Friday, a petitioner could ask a circuit judge to expunge the record of a conviction or plea of guilty for an offense from before July 29, 2016, if three years or more have passed since the petitioner has completed their sentence.

“As the conversation about legalizing recreational marijuana continues to gain traction, it would be irresponsible of legislators to overlook the damage over-criminalization has caused,” Lightford, D-Maywood, said. “This measure is about helping nonviolent offenders rehabilitate and have a better chance of getting a job.”

Lightford will have to get the bill through the Senate and get it to Gov. Bruce Rauner’s desk next month, or the process will have to start anew in the 101st General Assembly.

State Rep. La Shawn Ford, who initially sponsored the bill, said that expunging the low-level conviction would allow people to once again tell prospective employers that they’ve got a clean record. […]

According to a 2013 report from the American Civil Liberties Union, African-Americans in Illinois are more than 7 times as likely to be arrested for marijuana possession. […]

The city of San Francisco is in the process of clearing all marijuana convictions there dating back to 1975, a move that could result in the clearing of an estimated 3,000 misdemeanors and the possible reduction of an estimated 5,000 felonies to lower charges.

* Daily Herald

McHenry County State’s Attorney Patrick Kenneally has asked state representatives to vote against legalizing marijuana in Illinois, if and when the time comes. […]

“It is disheartening to see legislators willing to unleash recreational cannabis with all the driving force of capitalism before the health and social consequences are fully understood,” Kenneally wrote. “It is far better to wait for the ongoing experiments in Colorado, Washington, Michigan and Canada to reach fully mature and conclusive results over the next several years.”

The state’s attorney said he’s not opposed to decriminalizing the possession of larger amounts of marijuana, but he claims legalizing it entirely would open the door for cartels and black market dealers to move in and take advantage of Illinois’ “exorbitant” taxes.

Skillicorn, R-Crystal Lake, is a sponsor on a bill seeking to legalize marijuana in Illinois. As it’s written now, the bill would not allow for additional taxes to be tacked onto marijuana sales. The cautionary measure should be enough to stave off potential black market dealers, Skillicorn said.

- Posted by Rich Miller   33 Comments      

Did Pritzker defeat an incumbent Illinois governor by the biggest margin ever?

Monday, Dec 10, 2018

* Bernie

Gov.-elect J.B. Pritzker, traveling the state on a thank-your tour, told a crowd in Sangamon County Democratic headquarters Monday that his travels downstate and his efforts to build the party will continue. […]

Pritzker also said that as a “competitive sort,” he wanted to talk a little politics, in part saying that his defeat of Gov. Bruce Rauner was by “the largest margin that anybody’s beaten an incumbent governor” in history.

“It’s really because of you,” he said. “We all hung together, we Democrats.”

I asked Team Pritzker if “margin” meant percentage or vote total and was told it meant percentage.

He seems to be right. Or, at least, I think so. All of the results aren’t online and my set of “Centennial History of Illinois” had some of the results (all with much more narrow margins than Pritzker vs. Rauner), but is missing two volumes, so I couldn’t be sure. And then I found the online version, but I couldn’t find all the results there, either. Maybe one of you will have better luck because I ain’t got all day to mess with this.

The next biggest margin over a sitting governor appears to be Democrat Adlai Stevenson’s 1948 win against Republican Gov. Dwight Green. Stevenson won by 14.5 percentage points. Pritzker won by 15.7 points.

By the way, Stevenson won by 572,067 votes, which was apparently the record until now. Pritzker won by 713,995 votes. So, the record is apparently for both percentage and vote margins.

- Posted by Rich Miller   28 Comments      

Question of the day: Golden Horseshoe Awards

Monday, Dec 10, 2018

* The 2018 Golden Horseshoe Award for Best Democratic State Senate Campaign Staffer goes to Natalie Benner

It’s nice to see women in the Senate Dem campaign apparatus start playing a more sustained, significant role on the managerial front and even more wonderful when it is someone like Natalie. Just being in the Tom Cullerton office for a short while, you can tell that Natalie’s hard work yielded a strong operation. And she even camped out at DuPage County Election Authority when her race was in the bag. Watch out for Natalie. She’s going places.

She received several strong nominations. Runner-up goes to Ben Donovan

Ben is a hard worker, fast learner, and super nice guy. He will out work the competition and he treats everyone on the campaign with respect. Ben was a major part of turning a district that went for Nybo by 20% in ‘14 to winning the rematch by 1.6%.

* The 2018 Golden Horseshoe Award for Best Republican State Senate Campaign Staffer goes to Rachel Bold

Rachel Bold did an outstanding job getting Senator Anderson back to Springfield. Held off a strong opponent during an otherwise blue victory party. Strong TV and mail ads. I hope we will get to see her in the quad cities again.

That was a no-brainer. Runner-up goes to Jon Nelson

One of the few bright spots for the Republican caucus was hanging on to Curran’s seat while the other “safe” suburban GOP seats went under.

Congrats to everyone.

* OK, let’s move on to today’s categories…

* Best campaign staffer - House Democrats

* Best campaign staffer - House Republicans

Please make sure to explain your nominations or they won’t count. I’d prefer nominations in both categories, but if you work exclusively with one party I will understand if you can’t.

- Posted by Rich Miller   42 Comments      

Caption contest!

Monday, Dec 10, 2018

* Lotta job seekers…

- Posted by Rich Miller   22 Comments      

Sun-Times begins to hold candidates’ feet to the fire

Monday, Dec 10, 2018

* The Sun-Times editorial board asked the city’s candidates for mayor what they would do about Tax Increment Financing Districts if elected

Candidates Toni Preckwinkle and Ja’Mal Green would get rid of TIF districts altogether.

“We’ve really got to look at unwinding as many of those TIFs as we possibly can and turning the resources back to Chicago Public Schools,” Preckwinkle said last Monday, a day before she won the Chicago Teachers Union endorsement. She said she would give all annual TIF surpluses to the schools until all 144 TIF districts are phased out. […]

Lori Lightfoot, Robert “Bob” Fioretti and LaShawn Ford called for a moratorium on creating new TIF districts. […]

Paul Vallas vowed to “implement a new paradigm” with “clearer TIF guidelines for developers.” Vallas would dedicate a third of TIF revenue to a Chicago Equity Investment Fund to be used in blighted areas.

Click here to see all the answers.

* David Greising at the BGA

Lightfoot touched on a topic during a mayoral debate last month that merits more attention: the issue of regressive taxation in the city of Chicago.

“We live in one of the most taxed cities and the most taxed county, unfortunately, in the country,” she said at a debate in November. “And low-income families and individuals and working families have shouldered far too great a burden because our tax system, our levies and fees have been completely regressive.”

Technically, Lightfoot’s wording was a bit overstated, as my colleagues at the Better Government Association recently pointed out. But her larger point—about the inequity of how taxation in Chicago affects the rich and the poor—is one that deserves consideration. It would be useful to hear more on this from all the candidates hoping to occupy the office on the fifth floor of City Hall.

I agree that, “technically” she might possibly have “a bit overstated” the facts, but Greising’s BGA colleagues rated her claim “mostly false” in yet another example of the BGA’s attempt to police political rhetoric instead of hard facts. Maybe the group should follow its leader and focus on policies and not goofy little click-bait gotcha pieces.

* Greg Hinz bemoans the lack of proposals about crime

But most of the contenders so far are barely touching this issue. Like businessman Willie Wilson, No. 2 on the February ballot, who says on his website that he wants to “create safe neighborhoods” and “end carjackings . . . (and) police brutality”—along with letting seniors ride free on the Chicago Transit Authority. I appreciate that, sir. This senior just loves free stuff—providing the CTA doesn’t slash service to pay for it, that is. But what specifically are you going to do to make the streets safe?

Ditto Bill Daley, who says in his new TV ad that he’ll “make getting gangs and guns off of our streets priority No. 1″ but doesn’t give a clue as to how. […]

As usual, the most detailed policy plans come from Paul Vallas, and I give the former Chicago Public Schools chief lots of credit for daring to open himself up to critics rather than peddling bromides. Among ideas from him: bringing back—perhaps part time—retired but experienced detectives who could help the Police Department clear up a huge backlog of unsolved cases, and offering a city witness protection program for those who are worried about gang retaliation if they help prosecutors. Of course, it’s not clear Vallas has a plan to pay for that and other proposals. But his ideas are worth a look.

Then there’s Toni Preckwinkle, who calls herself a progressive but lately has been focused on trying to knock foes off the ballot on technicalities and lining up endorsements from powerful labor chiefs. On her website, she talks not about cutting crime but cutting the number of nonviolent drug offenders in the county jail and the number of children tried as adults. There’s some merit to both, but what does Preckwinkle want to do about crime? What would she do to those who run around with guns, terrorizing people?

* Another good question…

The Chicago Sun-Times editorial board has the heft to put all of these questions and more to the candidates. What they did with TIF districts was a good start.

…Adding… Sounds like I hurt the BGA’s fee-fees…

My name is Bob Secter and I am the senior editor at the Better Government Association. I realize that it has become fashionable these days for people to elevate themselves by trying to diminish others, so I usually laugh off your gratuitous commentary about us and others as well. Today’s ridicule of our recent Lori Lightfoot seemed particularly ill-informed, however. Here we have a candidate for Chicago mayor who is making sweeping assertions about complicated tax policy that are ill informed. The irony was that she could have made a compelling point had she simply stuck to the facts about how the tax system was particularly unfair to low-income residents. But she didn’t do that, and our job is to provide context for the claims politicians make. One of the reasons tax policy is so difficult to fix is that its too easy to demagogue rather than deal with the nuance. Your ill-informed attack on us simply reinforces that problem.

Politifact does not allow us to slap any old rating we feel on a statement we are vetting. There are a strict set of guidelines we are required to follow in rating comments, and all ratings are decided on by a jury of three editors. We are not doing this by the seat of our pants. In case you are interested, here are the guidelines:

The definition of Mostly False is: “The statement contains an element of truth but ignores critical facts that would give a different impression.”

And that’s exactly where Lightfoot’s claim fell. She didn’t just “overstate things” as you contend. She got a little bit right, but a lot a bit wrong.

As for your snark about “goofy little click-bait gotcha pieces,” have you read your blog lately?

Pot meet kettle.

“I” didn’t originally “contend” that she “overstated” things a bit. That was David Griesing, the president of the Better Government Association, for crying out loud. I therefore have no choice but to rate this Bob Secter reply “Pants on Fire!” /s

Also, I don’t sell ads based on clicks. Never have. So, the senior editor is wrong once again. Is there a double “pants on fire” rating allowed?

- Posted by Rich Miller   23 Comments      

CTBA responds to Fitch Ratings

Monday, Dec 10, 2018

* From Fitch Ratings’ “Illinois: What Happens Next” report…

The governor-elect’s plans regarding pension liabilities focus more on possible adjustments to the state’s funding schedule, rather than on any steps to seek employee consent for or constitutional changes to allow for accrued benefit changes, or shifting costs to school districts or public universities as proposed by the incumbent. When asked about his pension proposals during the campaign, the governor-elect suggested stepping up the statutory payment to a level-dollar amortization that would potentially mean higher annual contributions in the near- compared to the systems’ level percentage-of-payroll amortization under current statute. He did not provide extensive details on where the necessary funding would come from. Fitch notes that the current statutory contribution remains inadequate relative to the level recommended by actuaries to ensure full funding over time.

So far so good.

* Onward…

One possibility, advocated by the also progressive-leaning Center on Tax and Budget Accountability (CTBA) in Illinois, is to use pension obligation bonds (POBs) to partially fund stepped-up pension contributions for several years. The proposal also calls for re-amortization of pension liability with a new funded ratio target of 70% by 2045, versus the already comparatively weak 90% statutory funding target (also by 2045) under the current statutory ramp-up. The CTBA’s executive director was recently appointed as one of 17 members of the governor-elect’s budget and innovations transition committee.

Fitch has previously noted that issuance of POBs is generally neutral to negative for an issuer’s credit quality. If POB proceeds are deposited with a pension trust, while actuarial contributions continue to flow uninterrupted from annual budgetary resources, the issuance of POBs offsets unfunded liability and has little immediate impact on the issuer’s overall long-term liability burden.

However, the CTBA proposal to use proceeds for budget relief by offsetting an annual pension contribution is viewed by Fitch as deficit financing. Such situations result in the issuer’s bonded debt increasing without necessarily a corresponding decrease in its net pension liabilities, a factor that may negatively weigh on the credit ratings.

* I asked the CTBA’s Daniel Kay Hertz for a response…

CTBA agrees that using POBs to “offset an annual pension contribution”—ie, to replace funding that would normally be coming from tax revenue—is irresponsible. That was one of the upshots of our Crain’s editorial in August.

But I think it’s not right to say the POBs in the reamortization plan are “offsetting an annual pension contribution.” Those POBs are *in addition to* the amounts paid with tax revenue as scheduled under current law. In other words, CTBA’s reamortization plan doesn’t create false savings by substituting tax-funded spending with debt-funded spending; it uses all of the POB proceeds to directly increase contributions to the pension systems as a bridge to the level-dollar amortization contributions.

As for the 70% funded ratio target, two things. First, and most importantly, by putting more money in the pension systems up front, CTBA’s reamortization plan actually increases the funded ratio *faster* than the current ramp through about the mid-2030s. That’s crucial in the short term because it gives the pension systems more breathing room in the increasingly likely case of a recession. In the longer term, it’s important because it means that, fifteen years from now, if the state decides it wants and is in a position to increase its funded ratio target for 2045, *it will be in no worse, and maybe a better, position to do that than under the current ramp*. Because, again, the funded ratio is actually higher under the CTBA reamortization than under the current ramp through the mid-2030s.

Second, while pushing the pension systems’ funded ratios higher is important, it needs to be weighed against the state’s capacity to raise revenue and fund crucial public services. Our view is that the current ramp—which achieves a 90% funded ratio in 2045 by calling for annual contributions approaching $20 billion at the end of the schedule—is just not sustainable without unrealistic, and intolerable, revenue increases and service cuts.

In large part because of the pressure created by pension debt in the ramp, Illinois’ real per capita General Fund spending on current services has already declined by more than 20% since FY2000, including a 50% cut to higher education. We understand that a 70% funded ratio target isn’t ideal in the abstract, but in the actual circumstances Illinois finds itself in, we believe it is part of a plan that responsibly stabilizes the pension systems while creating room for the state to meet other obligations that Illinoisans depend on.

* I had earlier asked Hertz to explain the group’s idea…

So basically the challenge with replacing the ramp with the level-dollar reamortization is that, while the level-dollar saves a lot of money over the whole 2019-2045 period, it requires higher payments for the first eight years.

Our suggestion, essentially, is that in each year where the level-dollar payment is higher than the ramp payment (as currently projected), we fill the gap with a POB, to avoid facing a cliff of either new revenue just for pension contributions or service cuts. So if in a given year the level-dollar payment is $1 billion over what the ramp would have called for, the state would issue $1 billion in POBs. Since the level-dollar payments are higher than the ramp payments for the first eight years, that means we’re talking eight years of POBs, which add up to a total of $11.2 billion.

The period over which we pay off those POBs is 30 years, at (in our model, using a very high 6.5% interest rate) between $900 million and $1 billion per year when all of them have been issued.

Then there’s the question of the freed up revenue from the old POBs that are coming off the books in the next year or so. In our model, we see that revenue—nearly $1 billion a year—as money that should be redirected from paying debt service on POBs to directly supporting the pension systems, and so we use that as well to boost the state’s annual contributions.

* Is there arbitrage involved?…

No. There may very well be some arbitrage benefit, but that isn’t really the point. The point is to be able to immediately get annual contributions to the pension funds up to the amount called for by the level dollar plan.

In a “pure” version of reamortization, you just make that full payment from tax revenue, and the state would be forced to either immediately raise a sizable amount of additional funds or cut spending. The POB idea is to ease that transition so there aren’t big shocks on either side.

And to be clear, making the full payments with tax revenue would save more money, looking just at the pension systems, than easing the transition with POBs. But a) the POB version still saves $67 billion between 2019 and 2045 in our estimates, and b) the POB version may be more realistic, given that the state has many other crucial services it needs to fund. In other words, we don’t think it’s a great idea for the state to find the money to make the level-dollar contributions by further slashing higher education funding or human services.

- Posted by Rich Miller   43 Comments      

Unclear on the concept

Monday, Dec 10, 2018

* Tribune editorial cartoonist…

The French are protesting “progressive” taxation?

That’s a new one on me.

* A bit of history

Immediately upon reaching office, Macron abolished the Solidarity Wealth Tax (ISF), giving €4 billion to the richest; and has strengthened the Tax Credit for Solidarity and Employment (CICE), a tax cut and exemption program transferring €41 billion a year to French companies, including multinationals. Shortly afterwards, with the 2018 budget bill, Macron established a flat tax that allowed a lowering of taxation on capital, handing another €10 billion to the richest.

At the same time, the government has increased the General Social Contribution (CSG) income tax to be paid by pensioners, while pensions themselves have ceased to be indexed to inflation (and thus to retirees’ ability to buy consumer goods). It has got rid of the subsidized contracts (which allowed large numbers to work on contracts partly financed by public bodies) and lowered by five euros a month the amount of housing contributions (APL) for the most disadvantaged.

* More

The [tax] cuts, which mainly target employers, fit into a strategy of making work pay more in a country where labor costs are high and unemployment — currently stuck above 9 percent — is plaguing the presidency.

But to pay for his cuts, Macron is hitting the less productive sections of society: Pensions are to be capped, as are welfare benefits, and public sector jobs are to be axed, according to a sneak peek of the budget provided Sunday by Prime Minister Edouard Philippe.

* More

However, Macron has ruled out a return of the impôt de solidarité sur la fortune, or solidarity tax on wealth (ISF). The president reportedly told a meeting of the council of ministers on Wednesday: “We’re not going to unpick anything we’ve done in the last 18 months.”

Lifting part of the ISF was a pillar of Macron’s election campaign and one of the first fiscal measures he implemented on taking power in May 2017, leading to his nickname “president of the rich”.

Flatter taxation, tax breaks for the wealthy and big corporations, pension “reform” and austerity. That pretty much sums up the Tribune editorial board’s policy road map for Illinois.

* More

In France, an individual earning between $30,675 and $82,237 is taxed at 30 percent. In the U.S., an individual earning $30,675 would pay 12 percent in federal tax while someone earning $82,237 would pay 22 percent.

Joseph Downing, an expert in French politics at the London School of Economics, agreed that the protests were about “much more” than taxes on gas.”

* And as far as gas taxes go

The tax will increase the price of fuel by about 30 cents per gallon and will continue to rise over the next few years, the French government says. Gas already costs about $7.06 per gallon in France.

* There is so much disinformation out there. From the AP

THE CLAIM: Video shows French firefighters turning their backs and walking out on French President Emmanuel Macron during a ceremony.

THE FACTS: Macron was not at the event where firefighters were captured on video turning their backs on officials on Saturday, Dec. 1, but the video is real. Social media users began sharing the video with the false claim after grassroots demonstrations in France turned violent last weekend. The protests began as a response to Macron’s plan to increase the fuel tax. Sebastien Delavoux, secretary general of the local fire and rescue union, told The Associated Press that firefighters turned their backs toward their employers because they were angry that their yearslong concerns about staffing issues had not been addressed. […]

THE CLAIM: Video shows French citizens chanting “We want Trump!” during recent protests.

THE FACTS: Social media users are misrepresenting the video, falsely claiming it was taken during recent protests in France. The video actually shows people at a demonstration in London chanting for President Donald Trump. The video was taken June 9, 2018, during a rally held in support of Tommy Robinson, a right-wing activist who was jailed for contempt of court in England. In the video, a demonstrator wearing a Trump mask can be seen on top of a blue sightseeing bus trying to rally the crowd by chanting, “We want Trump!” Posts saying the video was taken during a French demonstration began circulating widely on social media after protests in France turned violent the weekend of Dec. 1.

* Related…

* Chris Miller calls pension benefits ‘legalized extortion’: State Rep.-elect Chris Miller (R-Oakland) points to news that just over 19,000 state retirees received pension benefits totaling nearly $2.4 billion in fiscal year 2018 as yet another example of how taxpayers are victimized in Illinois. … “One of the biggest reasons why pensions are so underfunded is the people in them don’t have to fund them,” he said. “They don’t have to pay any income taxes on their retirement benefits and are making a 1,000 percent return on this investment.” … The 110th House District includes Clark, Coles, Crawford, Cumberland, Edgar and Lawrence counties.

* INN: Rauner say yes to infrastructure bill, no to new taxes

- Posted by Rich Miller   43 Comments      

So far, so good for Illinois auto jobs

Monday, Dec 10, 2018

* This is one reason why Illinois’ manufacturing economy badly lagged Michigan and Indiana post-crash

The nearly 181,000 jobs in Michigan tied to the auto industry constitute 19 percent of the nation’s total, according to data from the U.S. Bureau of Labor Statistics. Indiana has the second-most auto jobs, heavily concentrated in recreational vehicles. Illinois ranks No. 8, with about 13,000 jobs building chassis or bodies and 23,600 making auto parts.

Michigan and Indiana are the dominant players in the auto industry and both states lost a whole lot of jobs during the economic crash during the final years of the previous decade. But when auto sales rebounded, so did their state economies.

* But while other states are now reeling from GM’s recently announced layoffs, the same article has some good news for Illinois

That popularity [of the Ford Explorer] means the 5,400 employees at Ford’s plants on Torrence Avenue and in Chicago Heights can breathe easier, at least a little, even as GM announces up to five plant closures and Ford transfers 1,150 workers in Michigan and Kentucky to build better-selling models. The same is true in Belvidere, near Rockford, where 5,300 Fiat Chrysler workers pump out the Jeep Cherokee, another model with solid sales. […]

The question is whether, when the Taurus disappears, anyone at the Torrence Avenue plant will even notice. The facility is operating at 150 percent capacity, running above and beyond the two shifts that equal normal production. The Explorer placed among the 10 best-selling light trucks for the first 10 months of the year, with 218,805 purchased nationwide. […]

The Jeep Cherokee also sells well. Fiat Chrysler sold 198,341 of the model in the first 10 months of the year, a 48 percent increase over the year-earlier period.

- Posted by Rich Miller   12 Comments      

*** UPDATED x1 *** Tax credit could help small biz deal with minimum wage hike

Monday, Dec 10, 2018

* My weekly syndicated newspaper column

Gov.-elect J.B. Pritzker was asked last week about the timeline for passage of a new minimum wage law.

“That’s very important to me,” Pritzker said, “It’s probably something we’ll be able to get done in the first six months in office.”

Pritzker had campaigned to increase the minimum wage to $15 an hour, so he was asked whether he was still on board for that goal.

“Yeah,” he said, and then went on a somewhat long, rambling explanation, during which he repeated a talking point about how he wants to make sure that small business “are not ill-affected” by a minimum wage hike and that “large businesses are implementing it in as rapid fashion as we can make happen.”

I’m told that Pritzker hopes to shield small businesses from excessive harm to their bottom lines by using some sort of tax relief, including tax credits. The devil is always in the details, including defining what is and isn’t a small business, but that’ll apparently be part of the upcoming negotiations.

Illinois’ current minimum wage is $8.25 per hour. Indiana, which has often made a public spectacle of poaching Illinois businesses, has a $7.25 an hour minimum wage. Chicago’s minimum is $12 per hour and will rise to $13 an hour next year. Mayor Rahm Emanuel has claimed an increased minimum wage would attract workers from around the region.

The governor-elect also noted that his team has the “various constituents and stakeholders … at the table. The Illinois Retail Merchants, the entrepreneurs and the labor unions, all at the table.”

The Illinois Retail Merchants Association voted earlier this year to not endorse anyone in the governor’s race, making it the only major business group that didn’t back Gov. Bruce Rauner. It also took a pass on the gubernatorial contest four years ago, but endorsed Republican state Sen. Bill Brady over Democratic Gov. Pat Quinn in 2010.

This year’s decision came after two meetings between Pritzker and Rob Karr, IRMA’s president and CEO. Karr came away impressed, believing that, while Pritzker has some very liberal goals, he will negotiate in good faith on ways of reaching those goals.

Retailers are very sensitive to labor costs, and Karr was instrumental in convincing House Speaker Michael Madigan to not move forward with a minimum wage increase bill in 2014. Instead, Madigan pushed through legislation to put a non-binding referendum on the ballot. It passed overwhelmingly, but Gov. Rauner was also elected that year and he had once said he opposed having a minimum wage at all. A minimum wage hike has been put on the back burner ever since.

Crain’s Chicago Business has referred to the pre-campaign version of J.B. Pritzker as the “unofficial mayor” of Chicago’s downtown business community. Not many of those business titans stepped up to endorse Pritzker, but they also didn’t rise up in strong opposition to Pritzker or in fervent favor of Rauner. So, there’s also a level of trust that Pritzker won’t go totally overboard.

The Pritzker folks say they want to negotiate with all stakeholders on numerous issues, with the minimum wage being just one of them. This is the way things were done before Rod Blagojevich came onto the scene. Blagojevich was a big fan of jamming major ideas through on partisan roll calls.

IRMA has always tried to be an honest and willing negotiator. And its leader Karr was reportedly convinced from his two meetings with the then-candidate that once Pritzker made a deal he’d stick with it and pass it, despite any objections from the hard left.

Pritzker will have his work cut out for him in that regard. The head of the legislative Progressive Caucus, Rep. Will Guzzardi (D-Chicago), recently threw down an online gauntlet about how Illinois “must not” follow the lead of Colorado Democrats, who after taking over their state’s legislature have now signaled that they’ll be more open to negotiations with the business community.

“People elected us because we said we’d make their lives better,” Guzzardi wrote. “Raise their wages, provide decent benefits, make college and healthcare more affordable, etc. We ran on this. We won. And now… we run away? If so, why vote for us at all?”

And Pritzker will also have to deal with more moderate Democrats on this topic. Those I’ve spoken with are not necessarily opposed to a minimum wage increase, but going all the way up to $15 an hour gives them serious pause, even with possible tax credits.

*** UPDATE *** Pritzker was asked about a possible tax credit for small businesses and the phase-in of the higher wage today…

- Posted by Rich Miller   54 Comments      


Monday, Dec 10, 2018

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* *** UPDATED x1 *** Tribune asked 16 mayoral candidates to release tax returns, 6 complied
* A rough idea of what they're looking at
* Question of the day: Golden Horseshoe Awards
* Rauner was wrong about "record levels" of unionization
* SUBSCRIBERS ONLY: Stava-Murray updates
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* Rauner claims he's been too busy to reflect on his term
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* *** UPDATED x3 - Morrison wants emergency meeting of ILGOP - McConnaughay explains - Schneider responds *** Rauner says he tried to drop out of race after primary
* Feds re-raid Ald. Burke's office
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