House Speaker Michael J. Madigan issued the following statement after Moody’s Investor Services downgraded Illinois’ credit Thursday. The downgrade comes just three days after Fitch Ratings issued a downgrade of its own to the state’s credit rating:
“Two credit downgrades in the same week are certainly nothing to claim victory over and nothing to ignore. These downgrades will have direct consequences on state taxpayers. The interest rate on future debt repayment will be higher, costing taxpayers more for the foreseeable future.
“Yet despite the Fitch Ratings downgrade Monday, Governor Rauner has insisted on moving ahead with his agenda, which would damage middle-class families’ standard of living and drive down wages, despite the clear lack of support for his agenda from Democrats and Republicans alike.
“With its own credit downgrade Thursday, Moody’s made it very clear that what the state needs to do is focus on eliminating our budget deficit, creating a long-term plan to fund the state’s pensions and reducing the state’s bill backlog.
“We all want economic growth, more business investment and more good-paying jobs for hard-working families in every part of Illinois. That is not in question. These priorities can be achieved through a state budget that takes a balanced approach with some spending cuts and some new revenue, not by slashing services and programs that families count on.
“The biggest issue facing Illinois is the state budget deficit. Two credit downgrades in less than a week have driven home that important fact. So I urge the governor, again, to put aside his agenda that Democrats and Republicans alike oppose - an agenda that will hurt middle-class and struggling families - and instead focus on a budget that helps all Illinoisans.”
…Adding… From the governor’s office…
Hi, Rich –
The report is another confirmation that years of unbalanced budgets, deficit spending and mismanagement have damaged Illinois’ fiscal health and major, structural reforms are needed to restore it. This is more proof that instead of blocking all reforms and passing a broken budget that was $4 billion in the hole, the Super Majority in charge of the legislature should partner with the governor to enact real reforms that will grow jobs and free up more resources to balance the budget.
All the best,
Lyndsey
Um, the downgrade focused pretty exclusively on actions (or lack thereof) during calendar year 2015.
I am closing my nearly 26 years as a state employee. Today is my last day working at the Guardianship and Advocacy Commission.
While I may visit the blog from time to time, it is unlikely I will be posting since I am also leaving the state and traveling much over the next several years.
I appreciate this venue, and all the hard work you put into it. I may not be on the same “side” as you are but I appreciate having a monitored forum to see what other folks believe and say. There are few venues where this can occur, as you well know.
Take care, sir and all the best for you in this great state.
Today, Illinois Policy Action released the results of a new statewide poll conducted this week by Ogden & Fry. The poll found that likely Illinois voters are frustrated with the General Assembly budget gridlock and their elected officials – but they blame state politicians and Illinois House Speaker Mike Madigan the most, as opposed to Illinois Gov. Bruce Rauner. The poll also found that nearly half of likely voters would have an unfavorable view of elected officials who raise taxes to balance the budget.
Illinois has been without a state budget for more than 100 days. Lawmakers sent Rauner a budget that was unbalanced by nearly $4 billion, so he vetoed almost all of it. Rauner has said he would like to see the state make significant economic reforms before considering raising taxes. State politicians, specifically those under the leadership of Speaker Madigan, have refused to pass such reforms.
“The poll results are clear: Illinoisans are frustrated by the budget stalemate, and they’re frustrated with politicians who are holding the budget hostage in opposition to much-needed economic reforms,” said John Tillman, CEO of Illinois Policy Action. “For many years, lawmakers relied on tax hikes, borrowing and accounting gimmicks to pass unbalanced budgets, and voters see where that dysfunction has led the state. That’s why voters don’t want politicians to raise taxes to balance the budget, and they are putting more blame on Madigan and other members of the General Assembly than the newly elected governor. With these poll results out in the open, politicians now have a choice whose side they’ll take.”
Ogden & Fry conducted the statewide poll on Oct. 20 and 21. The same poll also was conducted in Cook County.
Here are some key findings from the statewide poll:
Do you approve or disapprove of the way Gov. Rauner is handling his job?
* None of that is a surprise, except that Madigan’s disapproval rating is only a few points higher than Rauner’s. That’s a big surprise to me. It took Madigan 40+ years to rack up that disapproval rating. Rauner has apparently done it in less than a year.
“Illinois is in terrible financial shape. Should Gov. Rauner fix the political and economic issues that created the problems even if services to the needy are cut?”…
“The Illinois Constitution requires the State to have a balanced budget. The State Budget has not been balanced in over 10 years helping create today’s budget crisis. How would you view the elected official who cut services to balance the budget?”…
“In order to fix the budget, would you rather services be cut or pay more in taxes?”…
* And check this one out: “Are you or someone in your immediate family affected by the budget stalemate?”…
Moody’s downgrades Illinois’ outstanding $27B of GO bonds to Baa1; outlook negative
Global Credit Research - 22 Oct 2015
About $33B of debt affected including subject-to-appropriation and sales-tax securities
New York, October 22, 2015 — Moody’s Investors Service has downgraded the State of Illinois’ $26.8 billion of general obligation bonds to Baa1 from A3, while also lowering ratings on the state’s sales-tax (Build Illinois) bonds to Baa1 from A3, and on the state’s subject to appropriation bonds (issued by the Metropolitan Pier and Exposition Authority and for the state’s Civic Center program) to Baa2 from Baa1. The outlook for all of these obligations remains negative.
SUMMARY RATING RATIONALE
The downgrades reflect weakening of the state’s financial position during 2015 and our expectation that an ongoing budget stalemate will lead to further deterioration. Structural budget imbalance, accounts payable, and other fiscal metrics are back-tracking, despite a favorable economic climate, leaving the state more vulnerable to the next economic downturn, barring unexpectedly strong and swift corrective actions. Any recurring measures ultimately enacted for the fiscal year that began July 1 will have a short time in which to offset the state’s approximately $6 billion (or 16%) general fund deficit caused in part by recent income tax cuts. Payment deferrals could drive the state’s balance of unpaid bills higher than the levels seen in late 2012, when the backlog approached $10 billion. Additionally, the partisan gridlock evident this year is impeding efforts to address the state’s unfunded liabilities for pensions and retiree health benefits. Despite the emergence of early speculative characteristics, Illinois’ credit is still supported by a diverse economy, legal provisions that ensure continued payment on debt even with no enacted budget, and a broad legal ability to adjust state revenues and spending.
OUTLOOK
The state’s negative outlook is consistent with the potential for additional credit weakening following this year’s extended budget impasse. Further deterioration in key measures, such as the state’s unfunded pension liabilities and amount of unpaid bills, would put pressure on the state’s GO and related ratings.
WHAT COULD MAKE THE RATING GO UP
- Implementation of a realistic plan to provide long-term funding for pension obligations
- Progress in reducing payment backlog and adoption of legal framework to prevent renewed build-up of unpaid bills
- Expectation of sustainable, structural budget balance
WHAT COULD MAKE THE RATING GO DOWN
- Persistent and growing structural imbalance that leads to reduced liquidity and growing payment backlog
- Continued growth in unfunded pension liabilities and indications of unwillingness to allocate sufficient resources to retiree benefits
OBLIGOR PROFILE
Illinois is the fifth most-populous state in the US, with estimated 2014 population of 12.88 million. Almost three quarters of its residents live in and around Chicago (Ba1 negative), the nation’s third-largest city. The state is comparatively wealthy and economically diverse, with personal income per capita equal to 103.5% of the nation.
Investors should brace for further deterioration of Illinois’ already battered bond ratings after this week’s Fitch Ratings downgrade prompted state leaders to further dig their heels in over the state budget impasse, market participants said Tuesday. […]
“I don’t know how much more patience the rating agencies will have. The state is going down a path that is going to be difficult to recover from,” said James Colby, senior municipal strategist at Van Eck Global.
* The sentiment is nice, but it’s not like there is a particular “logistics” problem with getting the four tops in the same room as the governor. But, hey, if it moves the ball forward, I’m fine with it…
We are calling for a meeting between the governor and the four Illinois legislative leaders to discuss solutions for the current prolonged budget impasse threatening our state.
This inaction is unprecedented and unacceptable to Illinois voters.
The Illinois Campaign for Political Reform along with Illinois Public Interest Research Group and our other nonpartisan reform organizations want to help.
We are ready to facilitate the logistics of a meeting in either Chicago or Springfield but believe that it must occur prior to Nov. 15 due to the urgent need for resolution on this issue.
After more than 100 days of this stalemate, the consequences have become clear. Illinois residents in serious need are unable to receive important government services, and many non-profit organizations are unable to continue critically important work tied to state grants. Illinois’ state universities and community colleges may not be able to operate in the next semester of this academic year, leaving many students unable to graduate on time.
The consequences are too great.
We cannot let this situation continue.
While leadership may not align on some core principles, we believe it is necessary for them to meet together, work through these issues and agree on a budget.
Now is the time to act, before the consequences become even more dire.
We extend this offer with sincere concern for the citizens and the state of Illinois.
Susan Garrett, board chair, Illinois Campaign for Political Reform
Mary Kubasak, president, League of Women Voters of Illinois
Hoy McConnell, executive director, Business and Professional People for the Public Interest
Maryam Judar, executive director, Citizen Advocacy Center
George Ranney, chair, CHANGE Illinois
Andy Shaw, president and CEO, Better Government Association
* I checked with the comptroller’s office and there’s no change in her belief that economic reforms must come if taxes are to rise to pay for all this…
Comptroller Leslie Geissler Munger on Thursday toured the Community Crisis Center in Elgin and discussed the impact the state’s budget impasse is having on domestic violence providers and other nonprofits in Illinois.
Without a budget in place, the state is legally not able to pay domestic service providers for work they have done since July 1. As a result, some centers have had to dig deep into their cash reserves, others have had to lay off workers and cut services, and others have closed their doors. Thousands of victims of domestic violence are going unserved.
“Ironically, October is National Domestic Violence Awareness Month,” Munger said. “The best way to acknowledge and honor the efforts of our domestic violence providers this month is to pass a balanced budget so they can continue providing critical services to women and children in need.”
One Illinois State Senator is trying to re-cast John Hughes’ Cult ‘80s classic “The Breakfast Club” with the state’s political leaders.
Deerfield Democrat Senator Julie Morrison filed legislation Tuesday that would essentially lock Illinois’ leaders into a room once every week until they learn to play nice with the people’s’ tax dollars. If passed, Senate Bill 2190 would make these weekly after-school detentions a public forum so all of Illinois can see how well it’s government is getting along.
What was Pat Quinn’s main goal when he came into office? Political reform. How far did he get with it? Nowhere - Madigan forced him to throw his own blue-ribbon commission under the bus and sign a warm puddle of next-to-nothing (I won’t say nothing because there was a soupcon of worth items in there). Now imagine if he had said “This state is messed up with corruption and I’m going to fix it, or you legislators are going to face the voters owning it. No budget gets passed without this reform.” Now imagine if Madigan had said “WE WON’T EVEN DISCUSS THOSE REFORMS - YOU WILL NOT HOLD THE BUDGET HOSTAGE.” I think there would have been immense pressure on Madigan to cave and at least agree to negotiate. I think there would have been stronger reforms passed as a result.
If you assume that 1) Rauner wants as many anti-union / pro-business goals as possible, 2) knows he won’t get everything he wants but 3) would rather force the Dems to take ownership rather than agree to something like Quinn did, his actions make sense. What other leverage does he have?
On September 18, 2012, the year before Bruce Rauner declared his candidacy for governor, he shared his vision for a crisis that could help reshape state government.
“In Illinois there’s been a long-time history of what I would call social service, social justice, a bigger role for government in the safety net than in many other states,” Rauner said at a tax policy conference sponsored by the George W. Bush Institute. “I think we can drive a wedge issue in the Democratic Party on that topic and bring the folks who say, ‘You know what? For our tax dollars, I’d rather help the disadvantaged, the handicapped, the elderly, the children in poverty. I’d rather have my tax dollars going to that than the SEIU or Af-scammy (AFSCME), who are out there for their own interests.’”
Three years later, Rauner says he’s “very unhappy” Illinois is without a budget. But he has followed through with his proposal that “the disadvantaged, the handicapped, the elderly, the children in poverty” be conscripted into his battle against organized labor. Domestic violence shelters are turning away victims. People with mental illness are losing access to treatment. Programs that make it less likely delinquent juveniles will become adult criminals are scaling back or closing. […]
All of this amounts to a selective government shutdown, and it appears to be the early result of Rauner realizing his vision. The plan imagined Democrats could be prodded into turning against unions. But a close examination of all the changes Rauner is demanding for labor in Illinois — and both the practical and political consequences of those changes — shows why Democrats have so far refused to relent, and why they say they never will. […]
In the run-up to the general election, on the other hand, Rauner was careful to mostly avoid union talk. “Pushing any specific labor regulation is not my priority at all,” he told Illinois Radio Network less than a month before voters went to the polls. Four months later, he unveiled the Turnaround Agenda. […]
Rauner, however, says his labor agenda “is not a partisan issue, it’s a good government issue.” At an appearance in Decatur last week, he discussed other topics, like selling the Thompson Center in Chicago and changes he wants for state pension plans. But he says labor is the core issue: “Are we going to be willing to modify how we handle collective bargaining inside government in Illinois or not? Are we going to take that on?” […]
“Crisis creates opportunity. Crisis creates leverage to change,” Rauner told the Chicago Tribune editorial board in April. “We’ve got to use that leverage of the crisis to force structural change.”
Quinn also compared Rauner to Wisconsin Gov. Scott Walker, saying he wanted to bust unions.
“Limiting collective bargaining is not part of my agenda,” countered Rauner.
* And even though Gov. Rauner told the Tribune editorial board what he planned to do back in April, that board continues to put the blame solely on the House Speaker…
So if you think the Democrats are sincere about fixing their budget mess, think again. And catch this: Cook County Board President Toni Preckwinkle told us Wednesday that the county is waiting on $70 million from the state. When Preckwinkle talked to Madigan about the money this summer, he told her to not count on a budget resolution until 2016 … when the state runs out of money.
“I was surprised and disappointed,” Preckwinkle said.
Madigan’s spokesman didn’t get back to us to clarify. But Madigan’s plan is clear: Wait it out, refuse to budge, blame Rauner.
There’s no doubt in my mind that Madigan shares significant blame here. I would never suggest otherwise.
But the Tribune editorial board has its devil, so its members will see only what they want to see, even when the governor himself makes it plain as day. From today…
“We’re going through some change, change is difficult, change causes pain. We believe very strongly that we’re going to go through some short term pain for some very long term gain,” Rauner said.
He dismissed suggestions that his refusal to back down could do more harm than good should he not eventually get his way, saying he’s been encouraged by business leaders to “stay the course.”
Republican candidate for governor Bruce Rauner issued the following statement regarding the news that Illinois’ unemployment rate was unchanged last month:
“Tragically, under Pat Quinn’s dismal leadership, Illinois continues to lag far behind our neighboring states and the rest of America. We will only get Illinoisans back on the job, when Pat Quinn loses his job.”
Illinois only created 2,200 total jobs in the first nine months of 2015, whereas its neighbors have seen significantly higher jobs growth. Iowa has created six times as many jobs as Illinois between January 2015 and September 2015, and Missouri and Kentucky have each created seven times as many jobs as Illinois during the same period. Wisconsin residents have seen 12 times as many jobs created as have Illinoisans. Indiana created 18 times as many jobs as Illinois, and Michigan created 24 times as many jobs as Illinois between January 2015 and September 2015.
In August of [2013], the Illinois jobless rate was 9.2 percent. Last month’s [2014] rate was 6.7 percent as state officials report the creation of 13,800 jobs, including 2,000 in manufacturing. […]
“We need to grow,” Rauner said. “I’ve been a business builder. I’ll grow our economy and we’ll fix our problems through growth.”
A major financial supporter of Rauner is the Illinois Manufacturers’ Association. Greg Baise, the group’s president and CEO, said that regardless of the future political implications, both sides need to reach a compromise on the budget quickly.
“You can only go so far when you wake up every day and Mike Madigan has 71 votes and John Cullerton has 39 votes, and that’s not going to change until the next election,” Baise said.
“I applaud the governor for his ardent support of business reforms that the business community supports very strongly. But ultimately, we need to get a budget, a balanced budget, so our businesses — manufacturers included — understand that this state is finally getting its act together,” he said.
Illinois continued to shed jobs in September, as the state lost a total of 6,900 jobs, including 1,800 manufacturing jobs, according to new data from the Bureau of Labor Statistics, or BLS. Illinois has lost manufacturing jobs in eight of the nine months between January 2015 and September 2015, for a total loss of 12,500 manufacturing jobs during this time period.
Rauner acknowledged in a statement that “it’s always good news when more Illinoisans are working,” but that didn’t stop him from calling the figures into question hours before they were even released. Speaking at a downtown job fair for veterans, Rauner said the data could be “misleading,” arguing the jobless rate may have dropped because many people have simply stopped looking for work. […]
According to the U.S. Department of Labor, 64.7 percent of the state’s population was employed in July 2014, down slightly than a year prior when that figure was 65.3 percent. Nationally, the labor force participation rate was 62.9, down from 63.4 during the same time period last year.
Worker dropout has driven Illinois’ labor-force participation rate to 38-year lows, dropping to 64.4 percent in September 2015 from 68.8 percent before the 2008 recession.
Facing criticism from two past Republican governors in recent days, Gov. Bruce Rauner pushed back Thursday, saying Illinois faces harder challenges than when Govs. Jim Thompson and Jim Edgar were in office.
“I don’t spend any time criticizing my fellow Republicans,” Rauner told reporters today. “I do not spend any time criticizing decisions made in the past that created the mess that we’re dealing with.”
…Adding… From comments…
Wasn’t he the guy who said something like a third of GA Republicans were corrupt, too?
Rauner backed off his so-called “right to work” push months ago when it apparently became obvious even to him that it was backfiring by firmly uniting organized labor.
* And, needless to say, dropping one idea of many that have absolutely zero chances of passage is neither negotiating nor compromising.
It would be like the Democrats saying they’ve dropped their plan to eliminate all restaurants, so now Rauner must compromise on their proposal to forbid the sale of cheeseburgers, and maybe, just maybe, they might be open to compromise by only banning double cheeseburgers with grilled onions. And then, and only then, will the Democrats give the governor the privilege of emptying all state prisons.
Before the NLCS started, [New York State Sen. Joseph Addabbo] and his fellow Queens senators agreed to the wager with Illinois Senate President John Cullerton and his colleagues. Should the Mets win, the Illinois Senate will ship deep-dish Chicago-style pizza to the Queens senators; should the Cubs prevail, the Queens senators will send to the Illinois Senate thin-crust New Yorkstyle pizza.
The losing delegation must also congratulate the winning team on the floor of its Senate chambers, and the senators must wear the winning team’s apparel during a cleanup day within their districts. […]
“I hope that Senator Cullerton looks good in blue and orange, and I wish our counterparts in Chicago the best of luck in coming up with a creative way to keep the deep-dish pizza warm while on its way to Queens,” [said Addabbo].
Wrigley Field is in Cullerton’s district, but he’s more of a Sox fan. Still, that isn’t gonna be fun.
…Adding… LizPhairTax has already won the Internet today with this gem…
Whatever Addabbo. We’ll get to it right after we pay the butter cow lady.
If you don’t get the joke, the as of yet unpaid Illinois State Fair “butter cow lady” lives in New York.
Illinois Senate Republican Minority Leader Christine Radogno said a tax increase is inevitable, given the state’s woefully inadequate pension funding levels and a legal ruling against legislation to revamp pension obligations.
“We have to bite the bullet and pay it,” Radogno said. “The payments have to be made. That does put Illinois at a disadvantage.” […]
Radogno said lawmakers likely will consider hiking the state income tax or taxing retirement income, rather than increasing the state sales tax or instituting a tax on services.
Illinois is one of the few states, which doesn’t tax retirement income, she noted. Any plan would have to avoid encouraging retirees to join others who’ve moved because it’s cheaper to live in another state with lower taxes, she said.
Radogno said she wasn’t optimistic about an end to the state’s budget impasse in the near future. It’s possible Chicago representatives could force Democratic leaders to the negotiating table so a deal could be reached before January when only a simple majority is needed to take votes on difficult issues, such as raising taxes, she said.
The fact that she’s not only talking about an income tax hike, but also a tax on retirement income is quite significant.
Then again, we’re nowhere near to a vote on any of that right now.
Former Illinois state Rep. Derrick Smith, of Chicago, has been ordered by a federal judge to report to prison on Friday.
The judge denied Smith’s attorneys’ attempts to keep the ex-lawmaker out of prison while they appeal his five-month sentence for his conviction on attempted extortion and bribery charges. Judges can allow a convicted person to remain out of jail if it appears that a higher court might accept their appeal and overturn the conviction, but U.S. District Judge Sharon Johnson Coleman indicated that will probably not happen for Smith.
The ex-lawmaker was convicted in June of 2014 for accepting a $7,000 cash bribe in exchange for writing a letter of support for a day care center seeking a state grant. During his trial, prosecutors played secret recordings of Smith allegedly accepting 70 $100 bills in exchange for the recommendation in what was ultimately an FBI sting.
* Also, some folks on the county central committee might want to keep in mind who was responsible for sending Smith to the House. The Illinois House, not the big house..
A Democratic Party committee is set to meet Wednesday to discuss rescinding the party’s endorsement of Cook County Circuit Court Clerk Dorothy Brown, with Ald. Michelle Harris (8th) and Ald. Walter Burnett (27th) being floated as potential replacements on the March primary ballot. […]
Burnett said he’s interested but wants to see what the party leaders decide.
“My mentor is asking me to take a look at it,” Burnett said. “I will say a lot of my supporters have been pushing me . . . I may if the party asks me. I’ll consider it.”
Illinois Comptroller Leslie Munger, who recently caught some heat from fellow Republicans for seeming to suggest that Gov. Bruce Rauner ought to stop union-bashing and just cut a budget deal, may be about to catch some more.
The comptroller, appointed by Rauner but now running for the job in next year’s elections, is due to tour the Community Crisis Center in Elgin, which provides services to Illinoisans dealing with domestic violence, sexual assault or economic and financial difficulties. She’ll then hold a press conference with its leaders to “highlight (the) ramifications of the (Illinois) budget impasse,” according to an advisory from her office. […]
But by publicly underlining that domestic violence shelters are not included in that part of the state budget that’s on auto-pilot, Munger inevitably will be boosting pressure on Rauner to save women from being beat up and leave anti-union reforms until later.
To refresh, here is what zero state investment in domestic and sexual violence services means:
* Ending state funding for services that help 75,000 survivors of domestic violence across the state of Illinois—20,000 women and children in Cook County alone. This includes medical, psychological and legal services as well as emergency shelter and other protections.
* Some rape crisis centers are facing closure and others will be forced to lay off 30-40 percent of their staffs in the coming months, which would result in turning away 3,400 victims of sexual violence who need advocacy and counseling;
* Eliminating state funding for services that provide immediate crisis intervention for at least 3,700 survivors of sexual assault;
* Eliminating state funding of civil legal aid, compromising access to the civil justice system for 17,500 vulnerable Illinoisans impacted by domestic violence, eviction, and financial exploitation.
“An unstable state government — and that’s what we have right now, very unstable — is a detriment to economic growth,” he said. “I mean, folks aren’t going to come to this state and make an investment if they think state government’s dysfunctional.”
Edgar, who is a senior fellow with the University of Illinois’ Institute of Government and Public Affairs, noted that no higher education budget is in force. He said the U of I has a lot of reserves and can cover costs for a while, but other institutions “are really getting into trouble. … I’m not sure how long that can go.”
“One of the strengths this state’s had for years is … a great higher education system,” he said. “I think that is in jeopardy now.”
When he was governor, Edgar said, CEOs of companies would tell him that they’d wanted tax breaks and lower workers’ compensation costs, ” ‘but most important, we want a stable, dependable state government. We want an education system that works. We want a good quality of life.’ “
The Illinois Department of Employment Security (IDES) announced today that Illinois’ unemployment rate in September declined to 5.4 percent and nonfarm payroll employment shed -6,900 jobs, based on preliminary data released by the Department and the U.S. Bureau of Labor Statistics (BLS). The state’s job numbers dropped for a fourth consecutive month, keeping Illinois below the national average. Based on the slower path recorded this year, IDES analysts anticipate that Illinois employment will not recover from the 2007-2009 recession until April 2017. The nation is currently 2.9 percent above its prior peak level of employment.
“Illinois businesses have added only 2,200 new jobs since the beginning of this year,” said Jeff Mays, Director, IDES. “It’s been six years since the recession and job growth is still dismal. We’ve got a long way to go before Illinois realizes real employment and economic recovery.”
The Illinois unemployment rate fell in September for the seventh consecutive month to reach 6.6 percent while employers created +19,300 jobs, according to preliminary data released today by the Bureau of Labor Statistics and the Illinois Department of Employment Security. The data is seasonally adjusted.
The drop from 9.1 percent one year ago marks, for the second consecutive month, the largest year-over-year decline since 1984. The last time the rate was lower than 6.6 percent was in June 2008 when it was 6.3 percent. Also, there are +69,000 more jobs than one year ago.
“Unemployment rates continue to fall because private-sector employers are averaging more than 5,400 new jobs each month since the Illinois economy began to improve,” IDES Director Jay Rowell said. “Meanwhile, help wanted ads for full-time work continue to grow and indicate employers expect their need for more workers to remain strong.”
Rauner starts budget cuts to force Dems to negotiate on his agenda
Gov. Bruce Rauner on Tuesday said he will cut spending on programs that help the poor with child care costs and help the elderly stay out of nursing homes, nix the proposed Illiana toll road, close state museums and suspend tax credits for businesses and film production.
The Republican governor billed his moves as a way to show how he will deal with a deficit-ridden Democratic state budget that’s yet to reach his desk. It also represents Rauner’s latest attempt to ratchet up pressure on Democratic lawmakers to agree to the pro-business, anti-union agenda he’s made a condition of getting a budget agreement.
Many of Rauner’s actions appeared aimed at separating rank-and-file Democratic lawmakers from House Speaker Michael Madigan and Senate President John Cullerton. The two Chicago Democrats control the House and Senate, and have presented a largely unified front against the Republican governor.
Speaking at a Statehouse news conference, Madigan did not report progress in resolving the budget impasse, although he said he has met with Rauner three times in the past few weeks.
“They’ve been very cordial meetings. We had a very full discussion of the issues that are before the legislature and the governor’s office,” Madigan said. “I would say that we have not plowed any new ground. But we weren’t screaming and shouting at each other. I would say it’s better that we meet and talk than not meet and talk.”
* The first press release I’ve seen quoting the Illinois House’s newest member is from SEIU Healthcare…
Just moments after she was appointed by committeemen to fill the vacant 6th District House seat late Tuesday, community activist Sonya Harper signed the “Esther Golar Pledge” to support Senate Bill 570 and reverse the dangerous cuts to the Illinois Child Care Assistance Program (CCAP) promulgated by Republican Gov. Bruce Rauner.
The unilateral cuts already have excluded more than an estimated 15,000 families from CCAP.
Golar’s last legislative act before her death was to vote for SB 570 and Harper vowed to carry on the legacy of fighting for kids when a vote on the bill comes before the House on Nov. 10th:
“In an act of total bravery and at great risk to herself, Representative Golar came to Springfield to defy Bruce Rauner and stand up for the people of the 6th District. Her very last vote was to reverse his cruel cuts to child care, which do not solve our budget crisis but DO harm our economy and hurt working families.
“I have pledged to honor Representative Golar’s legacy and, on November 10th, I hope to join my new colleagues in voting to roll back the Rauner rules which are causing needless devastation to vulnerable residents of the 6th District and across all Illinois.”
A House committee Tuesday advanced a bill to provide money due to local governments from gaming revenue and fuel taxes, but the day ended with the state apparently no closer to resolving its months-long budget impasse.
The House Executive Committee gave its approval to a $1.9 billion bill that authorizes money to be paid to local governments from money that does not involve general state taxes. […]
“(It) is another attempt by the Democratic majority to piecemeal together a budget that will force a tax hike on hardworking families without any meaningful reforms,” said Rauner spokeswoman Catherine Kelly. […]
“This is money that will not be spent by the state government,” [House Speaker Michael Madigan] said. “Therefore we plan to advance that bill in the House.”
* Meanwhile, the Rauner administration has an alternate plan…
Republican Gov. Bruce Rauner’s administration floated a plan that would allow the Illinois Finance Authority to offer towns low-interest loans that could be repaid when the money raised by the gas tax and a 911 surcharge on phone bills is eventually sent out. […]
The proposal would not require legislative approval. It emerged after Democratic lawmakers advanced a competing plan that would release the gas tax and 911 surcharge money, plus $1 billion to the Illinois Lottery, which stopped paying out on winnings of more than $600 this month, saying its checking account ran dry.
Democratic House Speaker Michael Madigan said he was not familiar with the Rauner administration’s proposal but expected the broader bill to come before the House for a vote when lawmakers return Nov. 10.
The Democratic legislation has the backing of the Illinois Municipal League, which represents local governments. “Our position is there is no need to take a loan when the state should pay the money that’s owed,” said Brad Cole, the group’s executive director.
The idea might be to get that loan money out the door before the House returns to Springfield next month and therefore spare Republican members from the embarrassment of voting against their local governments.
And there’s also a new approp bill out there, which would fund programs for the State Fire Marshal (including the University of Illinois’ Fire Service Institute), Sudden Infant Death Syndrome and breast and cervical cancer screenings.
Why, oh why, does Sen. Mark Kirk even bother calling himself a Republican anymore?
Tuesday he somehow managed to be the only so-called member of the GOP to vote FOR sanctuary cities and allow the Senatae to keep federal funding while sanctuary cities nullify federal immigration law. […]
This after being given an award Monday by an Illinois anti-gun group and tweeting out a line about needing the close the gun show loophole and blaming Wisconsin, Indiana, and Mississippi???… for the guns being used in all of the gang and drug violence in Chicago, Rockford, and elsewhere in Illinois. […]
Before that, Kirk was voting to keep Planned Parenthood and its baby butchery fully funded.
Before that, he was working with Mitch McConnell and the Democrats to revive the corporate welfare of the Export-Import bank, which we now find out could be used to give out loans to Iran thanks to the nuclear deal.
Before that, he was voting for many of President Obama’s radical nominees.
* EMILY’s List…
EMILY’s List, the nation’s largest resource for women in politics, put Illinois Senator Mark Kirk “On Notice” for 2016. “On Notice” is a list of incumbent Republicans at all levels of government who will be held accountable for their anti-woman, anti-family records in the 2016 elections.
“Senator Mark Kirk can try to run from his record, but his extreme Republican colleagues depend on his support when it’s time to advance their anti-woman and anti-family agenda,” said Stephanie Schriock, president of EMILY’s List. “Sen. Kirk voted against ensuring that survivors of trafficking – the most vulnerable women and girls – would have access to comprehensive health care, voted against a provision to ensure women of color receive adequate services under the Violence Against Women Act, and has consistently opposed legislation aimed at protecting women and families from gender discrimination in pay. It’s clear that Illinois working families can’t count on Sen. Kirk to fight for them to have a fair shot, and that’s why EMILY’s List is putting him ‘On Notice.’”
The group is backing Duckworth for Kirk’s Senate seat.
* From the Illinois Policy Institute’s news service…
Asked Tuesday what responsibility he bears for previous downgrades over the years that lead to the [Fitch downgrade to] BBB+ rating, Madigan said he wants to remain focused on solutions.
“If you wish to be a critic of me then you would blame everything that’s happened in the state for the last several years on me. Some do that, some people do that. I don’t choose to be so negative. I choose to look at the problems we are looking at today–work to be reasonable, work to be moderate, work not to be extreme, bring people together and work toward a solution to the problems.”
Governor Bruce Rauner’s office said the Fitch report points to Illinois’ economy lagging behind other states and the major structural challenges facing the Land of Lincoln. Rauner said the legislature continues to protect the failed status quo. The Governor’s office also pointed to statements back in August where the Governor said he doesn’t work for the credit rating agencies, he works for the people.
Those are nice words from Madigan, but they ain’t getting us anywhere.
* Eric Zorn is joining the Tribune editorial board’s call for a new Rauner budget…
Rauner has yet to “prepare and submit” a balanced budget proposal, as the state constitution requires. The budget outline he released back in February relied on $2.2 billion in future savings from a change in pension law that would require a constitutional amendment to enact, and on $3.6 billion in spending cuts that Democrats contend would violate the law or existing contracts.
Instead Rauner has harped on the Democrats for submitting appropriations requests totaling some $3 billion to $4 billion more than anticipated revenue and for refusing to use their supermajority to try to pass tax increases to pay for the spending they want.
Just meeting in the middle on the spending dispute was always going to be hard enough without the paralyzing complication of Rauner’s attacks on unions.
To preserve any chance of winning, in the future, he needs to throw in now, not double down on what’s looking more and more like a losing hand.
Put forth a realistic budget, make the Democrats do the same and hammer out the differences. Live to play another hand.
Rauner can’t “make the Democrats do” anything right now. And he’s not going to introduce a realistic, balanced budget. He doesn’t want to wear the jacket for the cuts, which are usually far more controversial (to people who actually vote) than the tax hikes.
* The Speaker would be wise to heed his own advice. Start being a whole lot more reasonable on workers’ comp and some other biz items, for instance, and pressure will most definitely build on the other side to cut a deal.
Democratic state Rep. Frank Mautino was approved Tuesday to become the state’s third auditor general.
Mautino, 53, of Spring Valley, will take over for Auditor General William Holland who plans to retire at the end of the year.
At a time of deep partisan divides in the legislature over the budget impasse, Mautino won support from lawmakers in both parties. The Senate approved his nomination by a 55-0 vote. The House followed shortly after voting 102-10.
All of the opposition came from House Republicans.
And the HGOPs who voted against Mautino are the most conservative, and often some of the most partisan in the chamber…
Rauner met privately with House Republicans for about an hour Tuesday afternoon. He declined comment after leaving the session.
Rep. Raymond Poe, R-Springfield, said Rauner told the Republicans “everything is on track and moving forward.” Poe said his sense is that the House Republicans are all still behind the governor. Asked if he thinks things are on track and moving forward, Poe said, “What I read and what you listen to seems to be a little different. We’re going to have to start negotiating at some point.”
While behind closed doors, Gov. Rauner told the House Republican Caucus: “We are winning … Democrats are scared.” How does he figure? As low as Rauner’s favorability has fallen, he told members House Speaker Mike Madigan’s are worse, several sources with knowledge of the meeting tell POLITICO. […]
SCARED? “There’s a lot of anxiety out in the streets, more so in the Democratic districts,” a Republican insider told POLITICO. That’s largely due to the IllinoisGO PAC, funded by five well-heeled donors, including Helen Zell, the wife of billionaire Sam Zell . Some of them, including Mr. Zell, also happen to donate to and align with Rauner. The plan is to run primary opponents in a series of Democratic statehouse races - including against Madigan. There are signs that other Chicago House Democrats, including Ann Williams and Will Guzzardi are also targets.
STRATEGY - Sources familiar with the IllinoisGO strategy say a slate of candidates will be announced in the waning days of petition circulating, which runs Nov. 23-30.
Drafted to run - Democrats who are pro-charter and conservative on budget matters while left on social issues.
‘BLEED’ THEM - Running to the right of Dems in the city sounds like a recipe for failure but there’s a long game, says one Springfield insider familiar with the strategy. “Not win but bleed,” is the point here. “Bleed them and [Senate President John] Cullerton and Madigan have less money in the target general races they care about.” And there goes their two-chamber, supermajority.
Yes, the House Democrats are truly anguished. You can just feel their fear.
Right.
Also, all you’re going to accomplish by running somebody against MJM is to poke the bear and make him even more difficult to deal with in Springfield.
* And while I get the idea, it’s gonna take way more than primary opponents against Williams and Guzzardi (one of the hardest working people in show bidniss) to bleed Madigan dry…
House Speaker Michael Madigan reported another $105,800 in 18 contributions, including $50,000 from the plumbers’ union Local 130, $10,800 from energy firm Ameren and $2,500 from red light camera firm American Traffic Solutions. The Democratic Party of Illinois fund Madigan controls got another $23,000-plus, including $15,000 from a Comcast political arm.
Since Jan. 1, Madigan’s personal campaign fund has collected $573,000 from 122 contributions, while the state party fund has received nearly $1.1 million through 262 contributions, according to State Board of Elections records.
Illinoisans for Gro wth and Opportunity (IllinoisGO) Executive Director Greg Goldner offered the following response to Natasha Korecki regarding her Politico report this morning:
“Since we haven’t spoken, and you haven’t spoken to any of our board members, there is no informed source as it relates to IllinoisGo’s political strategy.
Maybe so, but you can’t help but wonder if they’ll get their “political strategy” when a certain somebody gives it to them.
The Executive Committee of the Cook County Democratic Party will meet Wednesday to consider reversing its decision to slate Clerk of the Circuit Courts Dorothy Brown.
If the Executive Committee decides to no longer support Brown, it will need a full vote from all of the 80 members of the Central Committee, according to Manuel Galvan, a spokesperson for the Cook County Democratic Party.
Brown, who has held office for 15 years, is now facing a federal investigation, although she says the multiple published reports about it are just rumors. Cook County Democratic Party Chairman Joe Berrios told reporters Friday that Brown was questioned before the slating about whether she faced an investigation, and she told them no.
That last sentence right there is enough to revoke the slating. We’ll see.
The U.S. Supreme Court will soon decide whether the government can force government workers to pay union fees to keep their jobs when the court issues its ruling in Friedrichs v. California Teachers Association, a lawsuit brought by a group of California public-school teachers.
Many groups and individuals want the court to listen to their views on this issue. Last month, 25 amicus (“friend of the court”) briefs were filed in support of the plaintiffs, including an amicus brief from the Liberty Justice Center on behalf of three Illinois state workers who object to coerced union fees. And many people and groups will weigh in on the other side as well.
But there’s one person with an interest in this important case whose views Illinois Attorney General Lisa Madigan believes the court should not consider: Gov. Bruce Rauner, who filed an amicus brief on behalf of himself and a group of Illinois public-school employees who object to forced union fees.
After Rauner filed his brief, Madigan’s office took a most unusual action: It filed a letter with the Supreme Court insisting that Rauner had no authority to file a brief expressing his views on this issue without Madigan’s permission. The letter points to provisions of state law and state court decisions that say that only the attorney general may represent the state before the Supreme Court or represent the state or its officials in court cases in which the state “is the real party in interest.”
Madigan’s claim has some problems.
First, the idea that Rauner should have to go through Madigan to express his views on this issue is absurd. The governor is a citizen with First Amendment rights, and he is entitled to submit an amicus brief stating his views on the issue like anyone else. His brief made clear that it expressed his own views, not those of the state. And it’s well known that Rauner’s views on this issue – which favor workers’ freedom to choose whether to give money to a union – are the opposite of Madigan’s, whose campaigns have received substantial funding from government-worker unions that rely on coerced fees from government employees. In fact, as Rauner’s counsel pointed out in a response letter, Madigan has opposed Rauner on this very issue in more than one lawsuit.
The amicus brief is here. The AG’s initial response is here.
They’re absolutely correct that the “governor is a citizen with First Amendment rights, and he is entitled to submit an amicus brief stating his views on the issue like anyone else.”
I totally agree.
* But, as always, there’s an inconvenient fact that the Institute omitted. From the Solicitor General’s response about the governor’s state counsel, with emphasis added…
Mr. Barclay and Mr. Murashko claim that Governor Rauner submitted his amicus brief “in his individual capacity. ” But the brief makes no such claim, and its contentions do not relate to the interests of the Governor personally. In fact, both the brief and the letter explain that Governor Rauner’s interest in this matter derives from the fact that, as Governor, he oversees the negotiation of collective bargaining agreements and supervises much of the State’s workforce. Moreover, it would be unlawful for Mr. Barclay and Mr. Murashko, while acting as state employees paid from public tax revenues, to represent Mr. Rauner in his individual capacity in any matter.
Notice that highlighted word? Do you think Illinois’ Solicitor General uses that word lightly - in a letter to the United States Supreme Court, no less?
Yikes.
* So, which is it? Are they perhaps breaking the law to write private briefs on state time, or are they representing the governor in his official capacity? It can’t be both, and the AG’s office says they can’t do the latter. Back to the Solicitor General…
Finally, Mr . Barclay and Mr . Murashko are mistaken in their assertion that the First Amendment authorizes them to file briefs on behalf of the Illinois Governor or gives the Governor the authority to direct their filing. This Court has repeatedly held that the First Amendment protects private speech, not speech by government officials. See, e.g., Pleasant Grove City v. Summum, 555 U.S. 460, 467-68 (2009). The State of Illinois has the power to determine who speaks for the State in specific matters. For purposes of litigation, the State’s Constitution and statutes, see 15 ILCS 205/1, et seq., make the Illinois Attorney General the voice of the State and its officials.
…Adding… We have some (I believe) deliberately obtuse commenters who are trying to muddy the waters. So, click here and read the governor’s counsel admit that they submitted the amicus brief for Rauner “in his individual capacity,” and reveal that he is “expressing his own views.”
* Just remember, a committee vote ain’t a floor vote. Tribune…
Mayor Rahm Emanuel’s plan to double the homeowner exemption to blunt the impact of his proposed record property tax increase received initial approval from a House committee Tuesday, though it’s far from a done deal.
The measure, which would raise the exemption from $7,000 to $14,000 in the city, passed the panel 8-5 with all Democratic votes. Republicans and business groups opposed the plan, saying it unfairly placed the burden of the tax increase on businesses.
Counties also would be able to opt in to the tax exemption, though individual municipalities could not.
“This is a fine example of Chicago making its own rules and having their bad practice spread across the state,” said Michael Reever, a lobbyist for the Chicagoland Chamber of Commerce. […]
The legislation could receive a full vote on the House floor Tuesday, though it faces a tough hurdle. It will take 71 votes to pass, but Democrats have just 70 active members pending the appointment Tuesday evening of a replacement for Rep. Esther Golar of Chicago, who died last month. Forcing Republicans to vote on the matter puts them in the tricky position of being on the record voting either for or against tax relief, though they could also vote “present.”
During a hearing before the Revenue Committee in Springfield, Deputy Mayor Steve Koch, testifying for the city, suggested that Preckwinkle had dropped her opposition to the proposal on grounds that aging county computers could not be reprogrammed in a timely manner to handle it.
Preckwinkle’s “initial” statement to the Crain’s editorial board came before she had a chance to “talk with technical experts,” Koch told the committee. And in fact, the president now has “modified” her position, with the city having little doubt the technical tweaks can be made.
But Preckwinkle spokesman Frank Shuftan strongly disputes that.
Informed of Koch’s comments, Shuftan emailed me: “We have not modified our position. We sent the mayor a letter (on Oct. 16) expressing numerous concerns about his proposal. We did not receive a direct response, only a fact sheet and a copy of the bill.”
Despite repeated requests from a House committee, state education officials refused to appear at a Tuesday hearing to explain why the state’s superintendent of schools continues to receive an overly generous pension perk funded with taxpayer dollars.
“The state’s credit is being downgraded yet again, the governor’s handpicked comptroller has unilaterally decided to skip a statutorily mandated pension payment, and our tax dollars are being managed by a tangled web of court orders. The situation in Springfield is a full-blown financial crisis, but amid all this, taxpayers can’t even get a straight answer as to why officials within this administration are ignoring the clear intent of a state law meant specifically to save taxpayer dollars and rein in extravagant retirement perks,” said state Rep. Jack Franks, chair of the House State Government Administration Committee. “These decisions are too important to be made in a back room. The State Board of Education and this administration need to step out of the shadows and allow a real open discussion on their use of public funds.”
Under a 2010 state law that passed with strong support from Democrats and Republicans to rein in rising pension costs, state employees hired after December 31, 2010, are under a pension plan more modest than employees hired before that time. But the law hasn’t stopped the Illinois State Board of Education (ISBE) from giving state Superintendent of Education Tony Smith an additional yearly stipend, which translates into larger taxpayer-funded contributions toward a taxpayer-funded pension for Smith. The stipend is in addition to Smith’s $225,000 state salary, taxpayers paying the employee and employer portion of his family’s health care and life insurance, 35 vacation days each year plus sick time and a $500 per month auto allowance amongst other perks.
At a hearing of the State Government Administration Committee in July, Franks urged ISBE to renegotiate Smith’s contract to remove the pension stipend. When the board announced in September that they would not reconsider the contract, Franks requested Smith and Chairman James Meeks return to discuss the board’s management of taxpayer funds.
“Democrats and Republicans agreed that the creation of a Tier II pension plan was necessary to help save taxpayer dollars and was an appropriate benefit plan for new employees. That’s why it troubles me to see ISBE so blatantly ignore the cost-saving intentions behind the law,” Franks said. “Taxpayers deserve to know why the board continues to use our tax dollars to pay a perk that no other private or public sector employees receive.”
Hours after Mayor Rahm Emanuel announced a $250,000 gun buyback program on Monday, a downstate gun-rights advocate promised to come to Chicago to exploit it.
“We will be delighted to transact business once more with do-gooders in Chicago,” John Boch, executive director of Champaign-based Guns Save Life, said Monday.
Guns Save Life used Chicago’s 2012 gun buyback to embarrass city officials. That year, members said they turned in about 60 guns — some of them rusty and inoperable.
They received $100 MasterCard gift cards for each gun, which they used to buy ammunition for a National Rifle Association youth camp in Bloomington and bolt-action rifles to give away to campers.
Throughout history, oppressed peoples have used non-violent direct action and civil disobedience to win liberation. The Civil Rights movement in the U.S., under the leadership of Rev. Dr. Martin Luther King Jr., and the struggle for Indian independence, led by Mahatma Gandhi, come immediately to mind. Indeed, what Paul the Apostle called “a great cloud of witnesses” – too many to name here – has fought throughout the ages for justice for the oppressed and marginalized, despite great risk, persecution, and even death.
Wow.
They must be gearing up for some major action.
* The pitch…
Inspired by this cloud of witnesses, Moral Mondays Illinois will hold its 9th mass demonstration and civil disobedience to demand that Illinois tax corporations and the rich to fix the budget deficit instead of making deadly cuts to Illinois’ most vulnerable people:
Moral Mondays Illinois Returns
Monday, November 2, 2015
10:30 am SHARP at the Thompson Center, 100 W. Randolph St.
(At 10:45 we’ll march to an undisclosed location, so don’t be late.)
After a brief rally, we will march to a center of tremendous power and wealth where 50 of our sisters and brothers will put their bodies on the line in a civil disobedience designed to shut it down! We will demand that Illinois Governor Rauner and the legislature tax corporations and the rich so that the people may live and thrive.
While some Republicans have begun to criticize Gov. Bruce Rauner’s demands in the budget battle, U.S. Sen. Mark Kirk isn’t among them.
Kirk has close political ties to Rauner, being a staunch supporter of his campaign and having several former aides now working in Rauner’s administration. Kirk says he’s heard concerns about the state defaulting on its debt due to the impasse, and says he’s tried to put those fears to rest by talking up Rauner.
“When I was in New York, I get a lot of people asking about when is Illinois going to default, and they were asking questions about an inevitability about some sort of financial collapse here,” Kirk said. “I wanted to make sure people that knew that we had a reformist governor, and if his reforms go through, we would have a much better financial shot.”
We’re not going to default, so he’s right about that part.
…Adding… Like I said, he does have a point. From comments…
To be fair, it was ironic seeing Madigan lecture Rauner about credit downgrades yesterday after supporting pension holidays, decades of borrowing, passing consecutive unbalanced budgets and years of downgrades.
There were also reports that one of [Gov. Bruce Rauner’s] top lieutenants—the person he picked to head the state’s comptroller’s office, Leslie Munger—had also broke with him and said that he should abandon the union issues and pass a budget.
Today, she said that that quote was misreported. She and another top GOP official came to the governor’s defense.
“I think there are solutions, but we need two sides talking,” Munger said. “But right now we don’t have two sides talking, and I would put more blame on the legislature because they started with a budget that was $4 billion overspent.”
Asked if Gov. Rauner should stop targeting unions during a news conference in Moline Friday, Ms. Munger, said, “I don’t think it’s productive, I think we’ve got to work together, personally.
“I don’t think it helps to pit people against one another, to be completely honest,” she said. “I believe we need to be all working together to solve the problems in Illinois.”
“The things that I support are things like (changes in) workers’ comp and tort reforms. I don’t know what impact that has on weakening any unions, honestly. It really is just helping our businesses be more competitive with neighboring states. And actually the union members I talk to are looking for good jobs in Illinois,” Munger said.
“With respect to property tax reform and holding those, I do believe there are ways to do that if people would get together and talk. There are ways that don’t impact unions at all,” she said. “We have hundreds of unfunded mandates in this state. We can give up on a lot of those. It would give our municipalities the flexibility they need to manage a freeze on property taxes instead and yet still make all their commitments.”
Later, Munger was asked directly about the union provisions that Rauner wants and Democrats in the legislature oppose.
“I’d like to see us focus on, like I spoke before, ways around that. I’d like to see us find a way to freeze property taxes. I think there are alternatives to do it,” she said.
During a town hall meeting in Decatur, Illinois’ Governor repeated his call for structural reforms and a balanced budget and also laid out a few details about how he wants to reform pensions. Governor Bruce Rauner said there must be changes to the pension system and said he has a constitutional fix. His idea includes a new deal moving forward.
“People can keep their old deal if they want but then their salary increases don’t go into the pension. Or they can have their salary increases count towards their pension if they get into a new deal.”
To encourage workers to enter a potential new tier, the Governor said there would be incentives offered. If the plan is passed by the General Assembly and implemented, Rauner said there would be big savings.
“And if we do that we can save $2 billion for you as taxpayers.”
The Governor said his administration has researched the proposal and said it is constitutional.
* Our resident pension expert RNUG (who used to post under the longer name “Retired Non-Union Guy”) was dealing with some family health issues and didn’t comment until last night. Since many of you probably missed it, here, with some minor edits for things like spelling corrections, is his initial analysis…
All,
Rich tried to get me earlier but I’ve been dealing with a medical issue with an elderly mother-in-law.
I haven’t read any comments, but I did catch the story about the remarks in Decatur either yesterday or today. I just ignored it because it sounds like yet another more or less coercive choice going forward. Given the Pension Clause and the clear SB-1 ruling, unless it contains a complete “keep what you’ve got option”, it won’t pass Contract Law logic as consideration.
Yes, you could make such an offer along the lines of what Rauner suggested and bribe some people into taking cash and moving to a new tier and have it be legal, but it probably won’t be the existing “Tier 1″ people who take the deal. They will most likely say “thanks but no thanks, we’ll keep what we have” and the courts will back them up. In the past, the courts have mostly shot down any change (age, years of service) that, when applied to the formula, would have reduced a pension.
I get where Rauner is coming from. He thinks yet to be earned benefits can be modified; the courts have disagreed. Eric Madiar, when charged with finding a loophole in the Pension Clause, could only come up with the “consideration” possibility in contract law. But anyone who spends any time researching contract modification by consideration will find it has to be totally voluntary.
And, as it stands now, the threat of not having mythical future salary increases included in the pension calculation may not be much of a threat. Rauner wants to hold the unions to no raises; a lot of the Merit Comp people haven’t have a raise in 13 years. In the case of SERS retirees, the Final Average Compensation is based on the highest consecutive 48 months in the last 120 months (10 years) of service. So if you aren’t getting raises anyway, it won’t make a bit of difference.
Aside from union contracts, there is the little thing called “Civil Service” that protects almost all State employees, both union and Merit Comp
== Are we really going to go through this process again? ==
Sounds like it. The Rauner crew may want to be careful what they wish for. The last time the IL SC stopped short of ordering specific pension fund payments …
== It is going to take major backbone to deal with our pension mess in a fair, responsible and constitutional manner. ==
Fair - keep your contracted promise
Responsible - pay what is owed
Constitutional - “Tier 2″ was the reform
The only things left to do with the pensions are to (a) restructure the debt (longer ramp or borrow the $110B in the markets at lower than the assumed rates of return), (b) probably shift the normal pension cost on the local school districts AND (c) come up with revenue to pay off the debt.
== by constitutional amendment, almost anything would be constitutional, just extremely difficult to enact. ==
Even by constitutional amendment it wouldn’t get rid of the existing “pension contract” or the $110B debt owed to the pension funds. If you can’t get rid of the $110B (or a major portion of it), there is no reason to amend the constitution or “reform” pensions.
== Would you lend your money to this state? ==
Sure; they’ve never missed a bond or pension payment in about 100 years or so.
== Eric Zorn: Rich is right that this is far from a new idea. Eric Madiar, a lawyer who is Cullerton’s pension expert and widely considered an honest broker in these matters has looked carefully at the case law and thinks it can pass constitutional muster — I did a column on it recently http://www.chicagotribune.com/news/opinion/zorn/ct-tough-choice-pension-reform-perspec-0909-20150908-column.html ==
I remember reading it and disagreeing with it.
== How about trying this: no overtime, unused sick days or vacation days gets to be applied toward retirement. ==
At best, maybe. See the various decisions that say (to paraphrase a bit) “enhancements granted by the legislature can’t be diminished once granted.”
== What Justice Burke was saying was that the state had options to meet the obligation. Taxes etc. she never suggested that there is an out or a way to legally diminish pensions. Read the opinion, it is quite clear in its inference. Raise revenue and pay the debt. ==
-Old and in the Way- is on it. The other thing in the decision was a veiled threat to revisit the “hands off on how it is funded” stance in the IFT decision.
As I said at 8:21pm, Rauner and company want to be very careful what they wish for. They could end up in a real world of hurt if the IL SC decides they’ve heard enough attempted end runs and orders actuarially based annual funding, but doesn’t (and they won’t) order a tax hike.
== Wordslinger: RNUG, they’re softening up the ground — again — to try and bank $2 billion in “savings” to the pension fund contribution. It’s just like the “savings” proposed in February. See, if you call it “savings,” that sounds so much better than the short-funding that was done in the past. The effect is the same — more unfunded liability — but you can spin it to the willfully gullible. ==
It’s a bit more than that. Aside from another attempt to bank fictitious savings, it’s also some cover to try to sneak smaller pension changes / diminishments through the GA while we are all distracted by the big attack.
We all need to keep a wary eye out for various “nose of the camel under the tent” provisions tacked onto needed bills; just another variation on the Rauner “poison pill” attempts on the union.
== Jessica: Madiar is obviously the guy to talk to about constitutionality of this, but there is case law that suggests this is constitutional. See Peters v. City of Spfld. (http://cgfa.ilga.gov/Upload/2008%20JANUARY%20Handbook%20of%20Illinois%20Pension%20Case%20Law.pdf). Court ruled that future salary increases are not constitutionally protected. The problem is it doesn’t save much and if you make the option for them to move to really unattractive, no one will take it. So it’s not an alternative to a tax increase to be able to amortize the debt. But if it’s enough face saving to let republicans vote for a tax increase, do this! ==
Jessica,
To split hairs (which the law does), the court ruled future increases are not protected. But my memory, without re-reading it, is that pension benefits do have to accrue for any future raises that do occur.
In other words, Rauner can not give raises, but if he does give raises, they have to be counted in the pension calculation. Rauner wants the raises to not count towards the pension unless you take a reduced pension. Not quite the same thing as Peters.
== What does Rauner do about TRS then? Since he (kind of) cannot control what a district pays teachers. ==
My assumption is he plans a “starve the beast” approach even though he is for more school spending. If the State were to transfer the “normal cost” of the pensions to the local districts at the same time the State caps property taxes, the money to pay the pensions would have to come from somewhere. At that point, the only obvious choice for the school district would be to cut out raises and lower their salary costs, either by firing some teaching staff or trying to impose salary cuts on all teaching staff. Such a move, if logically analyzed, might also drive more local school district consolidations in order to achieve an economy of scale and eliminate some duplication of management overhead … but I’m not going to hold my breath knowing the psychological investment small towns have in their schools / sports teams.
The reason for the new rules is the budget impasse between the Democratic-led General Assembly and Republican governor. This fiscal year began July 1, but a budget deal is still not in place. Rauner employed the new childcare provisions after the stalemate crossed into the new fiscal year. Rauner’s office called the rule changes responsible.
“One of the governor’s first actions in office was to save childcare from the deliberate underfunding by the Democratic majority in the last fiscal year. Now, the administration is taking steps to responsibly manage the state’s finances due to the $4 billion budget hole created by the legislature this year. The governor’s reforms will free up resources to help the most vulnerable and grow the economy,” said Catherine Kelly, spokesperson for Gov. Rauner.
True in part, but only in small part.
* I asked Emily Miller (no relation) at Voices for Illinois Children to respond…
Hi Rich-
I’ve seen the standard response the Governor’s office releases to defend his child care cuts in a few newspapers now. I think it’s important to deconstruct the statement because it contains so many misstatements and misrepresentation of fact that letting it stand on its own is a huge disservice to Illinois children and families.
Here goes:
“One of the governor’s first actions in office was to save childcare from the deliberate underfunding by the Democratic majority in the last fiscal year.”
Before Governor Rauner signed a bill to ensure the child care system remained solvent for FY15, in February of 2015 during his budget address he proposed $135 million in child care cuts. The “cost savings” were achieved by increasing co-pays, eliminating child care for all children over the age of five, and discontinuing all relative care.
So, both before and after the Governor “saved” child care by funding it for FY15, he actively tried to destroy it for FY16. Unfortunately for low and middle-income working families, he is currently succeeding.
“Now, the administration is taking steps to responsibly manage the state’s finances due to the $4 billion budget hole created by the legislature this year.”
When lawmakers allowed personal and corporate income taxes to roll back on January 1, 2015, Illinois lost between $5 billion and $6 billion in annual revenue - not $4 billion. That was a move encouraged by then-candidate Rauner.
Since then, both the governor and the General Assembly have failed to restore the revenue required to fully fund a year-long budget.
Despite the lack of both appropriation authority and available funds, the executive branch has instructed providers of state services to continue to provide services at last year’s levels. In other cases, the state has failed to make good on payments for existing contracts. In all cases, outside of consent decrees and federal pass-through funds, zero state dollars are being spent on many critical state priorities, meaning that the state is paying with IOUs that are adding to our back-log of unpaid bills.
That is not a responsible way to conduct business, and that is why there is a budget hole.
“The governor’s reforms will free up resources to help the most vulnerable and grow the economy”
The Department of Human Services identified exactly zero economic benefits attributable to Governor Rauner’s child care cuts when it testified before the Joint Committee on Administrative Rules this summer.
The administration gave no written financial justification for the child care cuts, and they failed to produce any numbers regarding the amount each of the cuts would “save.” Further, the administration admitted during the hearing that they did no research regarding the economic impact of the cuts on the community—a step that would have been taken if the real goal were economic development. Further, when asked what the impact of the cuts on families would be, the answer was delivered by the then-Director Linda Saterfield, who said the cuts are “devastating.” She has since been replaced by the administration.
In fact, the “most vulnerable” families in Illinois have been hit the hardest by the Governor’s child care cuts. As Voices has pointed out before, the Governor’s cuts mean that a single mom of one child entering the work force can only access child care assistance in Illinois if she makes less than 50% of the federal poverty level, or $664 per month ($8.25 per hour for 20 hours per week.) At least 15,000 children were denied child care by the end of September, based on historic data. Before the Rauner cuts, a single mom of one who earned up to 185% of the federal poverty level, or $2,456 per month (about $15 an hour working 40 hours per week), had access to child care assistance.
That means it makes more financial sense for parents to stay home with their child than to get a job that supports the family. That makes no economic sense at all.
* Rep. Jack Franks on Comptroller Leslie Munger’s decision not to make November’s state pension payment…
“It’s illegal,” said state Rep. Jack Franks, a Democrat from Marengo. “I helped draft the law. We have to pay this — there’s no discretion. So for her to knowingly not pay this, she’s violating the law.”
But as long as all the payments are made by the end of the fiscal year, delaying a payment is not illegal…
The comptroller’s office argued it wasn’t at odds with the law because the office wasn’t skipping payments all together — a past practice that largely contributed to the more than $100 billion in unfunded pension liability facing the state.
“Really the monthly payment is more of an internal matter. We’re not skipping payments, we’re merely delaying them,” said Munger spokesman Rich Carter.
“This is the worst position the state of Illinois has ever been in,” said former Gov. Jim Thompson, the state’s longest-serving governor from 1977 to 1991 and namesake of the state government building fellow Republican Rauner wants to put up for private auction.
“I agree that it’s going to take some difficult negotiations to solve this,” Thompson said in a phone interview with the Daily Herald. “That’s the responsibility of the governor and the legislature. They will have to do their jobs.” […]
However, he conceded, “running the government is not like running a business.”
“What I’m saying is both sides have to sit down and look at what they’ve requested. And if it’s clear the other side can’t deliver those, even if they wanted to, then they have to negotiate on the basis of what each side can deliver.”
That last sentence is just basic governance, but it seems far beyond the grasp of some folks, including Tribune editorial board members…
He had no role in creating the twin messes he’s trying to fix — the ruined state finances and the Illinois economy that reflects Springfield’s grave anti-employer biases. Rauner gets enough grief from Democrats who set Illinois on its disastrous course. He had to be surprised to read that a Republican who had supported him now wants him to surrender to what little the Democratic defenders of the status quo would accept.
What’s doable with those folks? Not enough to make Illinois prosper again.
Excuse me, but the state’s finances are currently in ruins, and the governor has played a very concrete role in today’s mess. He wasn’t sworn in yesterday.
And only extremist radicals would claim that two former Republican governors want Gov. Rauner to just give up and “surrender,” particularly since so many of the governor’s own economic “reform” demands are radical in and of themselves, despite the Tribune editorial page’s best and repeated efforts to skim over the troubling details.
…Adding… MrJM in comments…
Shorter Tribune editorial: Don’t stop the hurricane when the levies are about to break!
Illinois’ credit standing took another hit on Monday as Fitch Ratings downgraded the state’s rating for the first time on Governor Bruce Rauner’s watch, citing the deterioration of state finances during its four-month budget impasse.
The downgrade is the most potent sign yet that the stalemate between Republican Rauner and Democrats who run the legislature - which has taken a bite out of state services - is making Illinois’ already-precarious standing on Wall Street worse.
The one-notch downgrade from A-minus to BBB-plus, affecting $26.8 billion of general obligation bonds, leaves Illinois as the only U.S. state with a rating in the low investment grade triple-B level. Fitch has previously dropped only California to that level in 2003 and 2009, according to Karen Krop, a Fitch analyst.
Catherine Kelly is spokeswoman for Republican Gov. Bruce Rauner. She says Rauner is fighting to “put the state on the path to fiscal health,” but the Democrat-led Legislature is standing in his way.
Rikeesha Phelon is spokeswoman for Democratic Senate President John Cullerton. She says Illinois can’t afford for Rauner “to prioritize his corporate class agenda over basic budget math and governing.”
* Full statement from Speaker Madigan…
“As I’ve been telling Governor Rauner for several months, the number one problem facing Illinois is the state budget. The lack of a resolution on the state budget and today’s downgrade are direct results of the governor’s continued focus on issues other than solving our budget crisis. It’s time we put aside the governor’s list of issues that Democrats and Republicans believe will hurt middle-class families and instead focus on a budget that helps all Illinoisans.
“Fitch Ratings agrees with my view. Nowhere in Fitch’s statement does it suggest that the state needs to follow the governor’s agenda by weakening collective bargaining rights, reducing workers’ wages and hurting the middle class.
“I continue telling the governor we need to take a balanced approach to the state’s financial challenges, one that includes some cuts, like those included in the budget passed by the Legislature in May, and new revenue. Today’s news is another reminder to the governor that it’s time to focus on our budget.”
Fitch Ratings has downgraded the rating on $26.8 billion in outstanding Illinois general obligation (GO) bonds to ‘BBB+’ from ‘A-’.
In addition, the ratings on bonds related to the state based on its appropriation have been downgraded to ‘BBB’ from ‘BBB+’ as detailed at the end of this release.
The Rating Outlook has been revised to Stable from Negative.
SECURITY
Direct general obligation, full faith and credit of the state of Illinois
KEY RATING DRIVERS
REDUCED FLEXIBILITY: The downgrade reflects the continued deterioration of the state’s financial flexibility during its extended budget impasse. Illinois’s inability to balance its operations, eliminate accumulated liabilities, and grow reserves during a period of economic expansion leaves it far more vulnerable to the next economic downturn.
ONGOING BUDGET GAPS: After four years of nominally balanced operations that benefitted from temporary tax increases, the fiscal 2015 budget was only balanced through extensive one-time action and a budget has not been enacted for fiscal 2016, which began on July 1. The state continues to spend in most areas at the fiscal 2015 rate, which is expected to lead to a sizeable deficit. As was the case during the most recent recession, this deficit spending is likely to be addressed by deferring state payments and increasing accumulated liabilities.
LONG TERM LIABILITIES HIGH: The state’s debt burden is above average and unfunded pension liabilities are exceptionally high. The state has limited flexibility with regard to pension obligations following the May 2015 Illinois Supreme Court decision that found the 2013 pension reform unconstitutional. Pensions remain an acute pressure on the state’s fiscal operations.
ECONOMY A CREDIT STRENGTH BUT RECOVERY WEAK: The state benefits from a large, diverse economy centered on the Chicago metropolitan area, which is the nation’s third largest and is a nationally important business and transportation center. Economic growth through the current expansion has lagged that of the U.S. as a whole.
RATING SENSITIVITIES
The Stable Outlook incorporates the expectation that the state of Illinois will use one-time solutions to nominally balance the fiscal 2016 budget, but will not achieve more permanent, structural solutions in a time frame that will have a significant impact on fiscal 2016.
Failure to enact measures that lead to ongoing budget balance beyond fiscal 2016 could lead to negative rating action.
Successful implementation of measures to enact a structurally balanced budget and reduce accumulated budget liabilities may lead to positive rating action.
CREDIT PROFILE
The downgrade on the GO bonds of the state of Illinois to ‘BBB+’ from ‘A-’ reflects the deterioration of the state’s financial flexibility as its budget stalemate continues deep into the current fiscal year. With the national economic expansion now extending into a sixth year, Illinois has failed to capitalize on economic growth to restore flexibility utilized during the last recession or to find a solution to its chronic mismatch of revenues and expenditures. Once again, the state has displayed an unwillingness to address numerous fiscal challenges, which are now again increasing in magnitude as a result.
Temporary increases in personal and corporate income tax rates in place for four years, from January 1, 2011 through December 31, 2014, closed or partially closed the budget gap across five fiscal years. However, with their expiration, and the failure to enact a spending plan within expected revenues, the budget gap has ballooned. As a result, the state finds itself with a current operating deficit, structural budget deficit, cash crunch that is now causing a delay in pension system contributions, and accumulation of accounts payable that approaches its highest level at the depth of the recession. As the fiscal year progresses, fewer options remain for closing the gap on a current year basis, pushing the potential solutions into fiscal 2017.
ONE-TIME SOLUTIONS CLOSED 2015 GAP
The current budget stalemate follows a fiscal 2015 when a significant gap was closed primarily through the use of one-time fund sweeps rather than on-going spending or revenue action. The enacted budget for fiscal 2015 relied on approximately $2 billion in one-time revenues to achieve balance, given the anticipated expiration of the temporary taxes half-way through the fiscal year. These included interfund borrowing, use of prior year surplus to prepay fiscal 2015 Medicaid expenses, underfunding of specific budget line-items, and an increase in anticipated accounts payable.
Upon taking office in January 2015, and finding a budget gap that was larger than expected, the current administration proposed, and the legislature enacted, an additional $1.3 billion in fund sweeps and approximately $300 million in budget reductions. However, the lack of a structural solution in fiscal 2015 left the state in a weak fiscal position in developing the fiscal 2016 budget.
The governor and state legislature have not come to agreement on a spending and revenue plan for the current fiscal year, which began July 1, 2015, for which there is a large projected deficit that reflects the full-year impact of the temporary tax expirations.
Despite the absence of an enacted budget, due to continuing and permanent appropriations, court orders and consent decrees, and an enacted appropriation for schools, the state is spending approximately 85% of its budget at the fiscal 2015 enacted rate during the budget impasse. Continuing to spend at this rate, without further appropriations or other changes, is forecast to lead to an annual operating deficit of approximately $2.1 billion, or 6.8% of forecast revenues. This deficit would most likely be addressed by an increase to the accumulated accounts payable balance.
Fitch believes that this deficit figure is likely to be higher, as it incorporates the state withholding $5.9 billion in spending for universities, the group health insurance program, and a variety of other programs, some of which would ultimately have to be covered with state revenue. The state notes that it has already taken approximately $1 billion in actions to reduce spending and reallocate funds to the general fund.
The Illinois Gaming Board plans to seek a legal opinion on whether daily fantasy sports websites like those ordered shut down in Nevada violate state law.
Spokesman Gene O’Shea said Friday the board believes sites like DraftKings and FanDuel are illegal in Illinois. He says the board will likely send a letter next week asking Attorney General Lisa Madigan for an opinion because it doesn’t have authority to take action.
Nevada regulators on Thursday ordered the sites to shut down, saying they can’t operate in the state without a gambling license.
The sites insist they’re skill-based — not chance-based — wagers and therefore not subject to gambling regulations.
* The Question: Should those ubiquitous fantasy sports betting sites be banned in Illinois? Take the poll and then explain your answer in comments, please.
In its Oct. 19 Credit Outlook report, Moody’s focuses on last week’s announcement by Comptroller Leslie Geissler Munger that cash flow problems due to the state budget impasse will force the state to delay its scheduled November payment to the state’s five public pension systems. Moody’s deems that action as a “credit negative” — meaning it could negatively affect the state’s credit rating if not corrected.
“The delay, which was made because the state’s cash on hand is insufficient to meet all of its payment obligations, reflects Illinois’ outsize unfunded pension obligations, the lapse of an existing tax package that would have yielded roughly $5 billion in the current fiscal year, and the continued failure of the state’s political leadership to enact a fiscal 2016 budget. The underpayment also ensures the continued deterioration of Illinois’ pension plans’ funding status,” says Moody’s spokesman David Jacobson. […]
In its Oct. 19 Credit Outlook report, Moody’s focuses on last week’s announcement by Comptroller Leslie Geissler Munger that cash flow problems due to the state budget impasse will force the state to delay its scheduled November payment to the state’s five public pension systems. Moody’s deems that action as a “credit negative” — meaning it could negatively affect the state’s credit rating if not corrected.
“The delay, which was made because the state’s cash on hand is insufficient to meet all of its payment obligations, reflects Illinois’ outsize unfunded pension obligations, the lapse of an existing tax package that would have yielded roughly $5 billion in the current fiscal year, and the continued failure of the state’s political leadership to enact a fiscal 2016 budget. The underpayment also ensures the continued deterioration of Illinois’ pension plans’ funding status,” says Moody’s spokesman David Jacobson. […]
“The state’s $6.7 billion pension contribution for the fiscal year that ended June 2014 was more than 10% of its total governmental revenues, but still short of the $7.8 billion that would have met its actuarial required contribution, a minimum standard needed to achieve full funding. The underpayment ensures the continued deterioration of Illinois’ pension plans’ funding status. Furthermore, the gap between the state’s statutory contribution and the amount that would reasonably amortize its pension liability is only a portion of the state’s structural imbalance, which has resulted in repeated and large payable balances at fiscal year-ends.”
* Gov. Rauner has a new plan, according to the Illinois Policy Institute’s news service…
During a town hall meeting in Decatur, Illinois’ Governor repeated his call for structural reforms and a balanced budget and also laid out a few details about how he wants to reform pensions. Governor Bruce Rauner said there must be changes to the pension system and said he has a constitutional fix. His idea includes a new deal moving forward.
“People can keep their old deal if they want but then their salary increases don’t go into the pension. Or they can have their salary increases count towards their pension if they get into a new deal.”
To encourage workers to enter a potential new tier, the Governor said there would be incentives offered. If the plan is passed by the General Assembly and implemented, Rauner said there would be big savings.
“And if we do that we can save $2 billion for you as taxpayers.”
The Governor said his administration has researched the proposal and said it is constitutional.
Chicago business and labor leaders have joined United Way of Metropolitan Chicago in calling for an end to the months-long state budget impasse.
In a press event on October 19, Paul La Schiazza, President of AT&T Illinois and Jorge Ramirez, President of the Chicago Federation of Labor, joined United Way President and CEO, Wendy DuBoe, in calling for a resolution to the now 4-month long budget stalemate. New results from a survey of more than 500 human service agencies conducted by United Way of Illinois show the further deterioration of the human services sector and the citizens it serves. The event was held at Access Living, one of the many human service agencies in the region that has been impacted as a result of the state budget impasse.
“These survey results highlight the impact of the budget stalemate on children, families and entire communities,” said Wendy DuBoe, President and CEO of United Way of Metropolitan Chicago, “As the largest private funder of human services in the region, United Way of Metropolitan Chicago has a responsibility to bring people from across sectors together to urge Illinois lawmakers to come to a resolution.”
Key findings from the survey show that children, low-income families and the mentally ill continue to suffer the effects of inaction in Springfield.
• 84% of respondents have cut the number of clients they serve (up from 34% in July)
• 79% of respondents have cut programs, most impacting children and working adults
“The labor movement works every day through organizations like the United Way and its partners to help those in need, but it’s no substitute for the safety net our government is morally obligated to provide through the social contract,” said Jorge Ramirez, President of the Chicago Federation of Labor, “The delay in resolving the state budget marginalizes the most vulnerable segment of our society. Irreparable harm is being done to programs that support adult education and employment. It threatens our state’s economic viability and is counterproductive to the state’s economic interests.”
Survey findings also highlight the measures that human service agencies reported taking to maintain operations and serve clients during the stalemate.
• 31% of respondents have one month or less of cash reserves
o 8% of agencies have already utilized their full cash reserves
• 25% of agencies have tapped into lines of credit, and of those, 58% are more than $50,000 in debt as a result of the impasse
• 22% of agencies have been forced to layoff staff
“Without a budget resolution, human service organizations are tapping into cash reserves, exhausting their reserves in some cases and finding it necessary to take out lines of credit. Further, the impasse is forcing them to layoff staff and reduce hours,” said Paul La Schiazza, president, AT&T Illinois, “I’m not picking sides or casting any blame. However, to help people and families in need – and the human service agencies that are struggling to support them—Illinois needs a state budget resolution soon.”
This is the second survey conducted by United Way of Illinois on the state budget stalemate. The survey was conducted September 28-October 2 2015, and responses were received from 544 human services agencies across every county in Illinois. Survey respondents represented a range of service categories including youth development, early childhood education, mental health, emergency housing, senior services and employment training, and varied in budget size from less than $500,000 to more than $15 million.
Emergency Justification: The current vendor chose to stop working under the current contract becase a lack of payment from the State. The emergency contract is necessary until a competitive bid can be completed
Accordance with Admin Rule: Minimize serious disruption to critical state services that affect health, safety, or collection of substantial state revenues, Protect against further damage to state property
* I’m not sure that Rep. Sandack understood what Rep. Zed was saying here…
To my eyes, anyway, Zed was saying, “Hey, Ron, you may think we’re dying to vote for a tax hike and to bail out the City, but we’re not really crazy about doing it, so maybe we should try something else besides this Turnaround Agenda.”
Rep. Sandack, however, is apparently of the belief that the City’s problems will force Statehouse action to his guy’s favor. He could be right. It’s gonna get pretty darned awful.
Rauner has tried to compromise. He put the option of new taxes on the table to help balance the budget. He is asking for common-sense reforms, including giving voters a greater voice in their government — the chance to vote for term limits and redistricting reform — and labor-rule changes that would attract employers.
But Madigan and Cullerton refuse to meet him halfway. On anything.
In September we urged Rauner to set a deadline for a budget deal. Enough with the nonsense. Declare that after a certain date, the offer of higher taxes vanishes: “If there’s no deal by a date certain — how about Nov. 1? — then set the rest of your agenda aside for another day, another year. But make it clear to Democrats that their failure to reach a deal with you by that date locks in how much money Illinois will have to spend.”
Nov. 1 is two weeks from Sunday.
Taking taxes off the table would disappoint those who think state government is well-run and can’t economize.
I would love to see the governor finally introduce a balanced budget without gigantic pension gimmicks and tax hikes. Really, I would. Do it, man.
Determined to bite the bullet and get it over with, aldermen on Monday questioned why Mayor Rahm Emanuel is not proposing an even bigger property tax increase instead of assuming that Gov. Bruce Rauner will sign a bill that gives Chicago more time to shore up police and fire pensions.
“What I’m detecting here is an appetite to get this over with one way or the other and not keep coming back and doing it again and again,” said Ald. Edward Burke (14th), chairman of the City Council’s Finance Committee.
In proposing a four-year, $543 million increase for police and fire pensions, Emanuel is making a rosy and risky assumption that, if he’s wrong, would make the financial hit absorbed by Chicago taxpayers significantly worse.
The mayor is assuming that Gov. Bruce Rauner will sign legislation — approved by the Illinois House and Senate, but not yet on the governor’s desk — giving Chicago 15 more years to ramp up to 90 percent funding level for the police and fire pension funds. […]
“Would it not be more intelligent to levy at that amount — $220 million or whatever it is — and then abate … when the governor signs it?” Burke said.
Those that are promoting stringent federal and state gun control will be honored Monday by the Illinois Council Against Handgun Violence, their website says.
Among those receiving awards from the group are Republican U.S. Senator Mark Kirk, Democrat state Representative Kelly Cassidy and former Illinois Council Against Handgun Violence executive director, Democrat former State Senator Dan Kotowski.
Senator Kirk is the only Republican in the U.S. Senate that received an “F” from the National Rifle Association and an “F-” from the Gun Owners for his support of gun control measures.
* According to Kirk’s office, he’s the first GOP Senator to ever get the award…
Kirk Is First Republican Senator to Receive Illinois Coalition Against Handgun Violence Lincoln Award for Leadership in Confronting Gun Violence
Kirk, Gillibrand Introduced S.1760 to Make Gun Trafficking a Federal Crime
Sixty Percent of Illegal Guns in Chicago Come From Out of State
CHICAGO – U.S. Senator Mark Kirk (R-Ill.) today received the Abraham Lincoln Award from the Illinois Coalition Against Handgun Violence (ICHV) in recognition of his leadership on legislation to make gun trafficking a federal crime and strengthen background checks. Senator Kirk is the first Republican U.S. Senator to receive the award.
“Illinois families shouldn’t have to live in fear of armed gangs and criminals,” Senator Kirk said. “The Gillibrand-Kirk bill would make it illegal to bring guns used for criminal activity into Chicago - where Indiana, Wisconsin and Mississippi alone are responsible for 30 percent of guns at crime scenes.”
“Senator Kirk was there for us when we needed him most, and crossed party lines to support universal background checks. His courage and leadership truly symbolize the purpose of the Lincoln Award,” said ICHV Executive Director Colleen Daley. “As much as we fight at the local level for common sense gun laws, the fact remains that more than 60 percent of all crime guns in Chicago are illegally trafficked from states with weaker gun laws, like Indiana and Mississippi. The Senator’s support on this issue is critical to public safety, and we are incredibly grateful to him.”
The Illinois Council Against Handgun Violence is a statewide, non-profit organization that works to reduce death and injury caused by guns. Previous winners of the Lincoln Award include New York Mayor Michael Bloomberg, President Bill Clinton, Chicago Mayor Rahm Emanuel, U.S. Senators Dick Durbin (D-Ill.) and Dianne Feinstein (D-Calif.), and Education Secretary Arne Duncan.
Illinois’ last Republican US Senator, Peter Fitzgerald, was no fan of the NRA, but Kirk has taken it further.
A hearing Tuesday will focus on the Rauner administration’s attempt to roll back an increase in the personal allowances received by developmentally disabled residents.
In 2014, the Legislature boosted the allowance to $60 per month. It returned to its previous levels of $30 and $50 on July 1.
After reading about the upcoming hearing, Barbara Thomas of Charleston got in touch.
Here’s what she wrote:
“Whether it’s $30 or $60, it’s not enough to cover personal expenses of anyone, whether the person has a disability or not. That so-called allowance is supposed to pay for much more than snacks, toiletries and entertainment. Individuals with disabilities must pay for clothing, dental care, podiatry, medication co-pays, psychiatric visits, and if there is money left (seriously), they will have money for snacks and entertainment.
“I have a son receiving residential services… I pay for my son’s dental care, give him spending money, buy his clothing, buy his bedding, etc. I do it willingly and with love. He is my son and deserves a quality of life that is more than ‘eats and sheets.’ The real question is what happens to the individuals who don’t have anyone to subsidize their care.”
* From a press release…
Gov. Rauner is making it official: His administration is amending the Illinois Administrative Code to slash the personal needs allowance for persons in developmental disability group homes from $60 a month to $50. A hearing is scheduled Tuesday.
Disability consultant Ed McManus today called the move “outrageous” and issued a plea to families, provider agencies and the public to oppose it.
“Is this what we have come to?” said McManus. “Our people with intellectual and developmental disabilities have no money of their own to take care of their personal needs. We’re talking here about shampoo, deodorant, a haircut, a movie, a cup of coffee. So the state for years has at least been allotting them $50 a month; in intermediate care facilities it has only been $30.
“Last year, the legislature increased the allotment to $60 for both group homes and intermediate care facilities; the statutory increase was for Fiscal Year 2015 only, with the expectation that the Administrative Code would be amended. And in March, Rauner’s Department of Healthcare and Family Services did just that—they revised the code to make the increase permanent—or so we thought. The increase had a cost of only $3 million a year out of a $30-billion-plus state budget. The allowance goes to 16,000 people.
“In late June, the Division of Developmental Disabilities issued an information bulletin stating that the allowance was being rolled back to the previous levels, effective June 30, the end of the fiscal year. This was clearly illegal, in view of the increases enacted in March. Now, four months later, the administration is finally at least following proper procedure for proposing an amendment to the code.
“Unfortunately, the governor and his staff have provided no coherent explanation for why they don’t think people with disabilities deserve the extra few dollars. Frankly, I didn’t think they’d stoop this low.”
The public hearing on the proposal will be held at 1 p.m. Tuesday at the Prescott E. Bloom Bldg., 1st floor conference room, Springfield.
Governor Bruce Rauner released his 2014 federal and state 1040’s, reflecting income and tax rates, while detailing the Rauner family’s charitable and community giving last year.
Last year, the Rauners paid more than $18 million in federal and state taxes on income of $58.3 million for a total effective tax rate on income of more than 31%. Their federal effective tax rate on income exceeded 26%.
In addition, the Rauners and their family foundation made charitable contributions totaling more than $3.3 million.
Rauner 2014 Tax Summary:
Income on Federal Return: $58.3 million
Adjusted Gross Income on Federal Return: $57.5 million
Federal Income Taxes Paid: $15.2 million
Federal Effective Tax Rate on Income: 26.1%
Federal Effective Tax Rate on Adjusted Gross Income: 26.4%
Illinois Net Income on State Return: $58.7 million
Illinois Income Taxes Paid: $2.8 million
If you’re keeping track, he paid a 26.4 percent effective federal rate on his income last year. That’s well below the 39.6 percent top federal rate that quite a few folks with much, much smaller incomes pay, but that’s because much of his income is from capital gains.
Even so, a bare-bones version of such information can be gleaned from the 1040s. It shows, as it has in prior years for Rauner, that the bulk of his income comes from revenue categories that qualify for tax rates discounted well below the 39.6 percent top federal tax bracket for high earners. As such, the $15.2 million in federal taxes paid by Rauner were equivalent to just 26 percent of his income.
More than 60 percent of Rauner’s income — $35.4 million — was listed as coming from capital gains, a preferential tax category on which he would owe a 20 percent rate. At the same time, Rauner reported more than $7.6 million in losses in a different business related income category where the top 39.6 percent tax rate would apply if had reported making money.
He also reported paying $151 in the tax imposed on the self-employed as a substitute for Medicare and Social Security taxes. For most wage earners, those taxes are deducted routinely from their paychecks.
Rauner also released the cover sheets for his Illinois tax return. They showed he paid $2.8 million in state taxes in 2014, the last year for which the flat state income tax rate stood at 5 percent.
Last week, Governor Bruce Rauner said that he had spoken with both Senate President John Cullerton and House Speaker Michael Madigan about his proposed sale of the state’s Thompson Center building in Chicago, and that both men were “forward leaning and positive” about the plan.
So I checked in with the legislative leaders, and that’s not exactly what I heard.
“The governor and President Cullerton spoke,” said the Senate President’s spokesperson Rikeesha Phelon. Okay, so far so good. At least these weren’t “phantom” phone conversations like the ones Governor-elect Rauner claimed he had with those two on election night last November, but didn’t.
“We will take a look at the specifics of the plan in light of state statutes regarding property control and facility closures,” Phelon continued.
Um, wait. That doesn’t sound all too “forward leaning and positive.” I asked Phelon: Is Cullerton positive about this at all?
“I would say the word is ‘open,’ but under review,” she replied.
Speaker Madigan’s spokesman Steve Brown said afterward that he’d allow Phelon’s comments to stand for his guy.
So what’s going on? I’m not totally sure, but the governor now has yet another new “ask” for the Democratic leaders, and as we’ve seen during this excruciatingly long state-government impasse, they’re not in much of a giving mood – and he isn’t either.
The Thompson Center has become a symbol for much that has gone wrong with this state. The skyscraper was a grandiose design with numerous flaws. Its construction heralded the beginning of the move of much of the state’s governmental business from Springfield to Chicago.
Despite its architect’s claim last week that it was designed to represent the “openness and transparency” of state government, it was harshly criticized from the start for including a “private elevator” for the governor’s personal use. Like seemingly everything else in this state, the building was then allowed to deteriorate over the years. It’s infested with cockroaches and had to be sprayed for bed bugs not long ago.
Architecture often involves clashes over ideals, and this proposed Thompson Center sale feels like one more attempt at a dramatic break with the past.
The building’s legendary namesake, 14-year Governor James R. Thompson, actively sought organized labor’s political support – including from the state government union AFSCME – and was the most memorable purveyor of this state’s “Republicrat” politics that our current anti-union governor is now attempting to demolish along with his building.
It’s also fitting that Rauner’s move would get caught up in the current gridlock.
Check out the joint statement released last week by the House and Senate Republican leaders regarding the proposed sale.
“We filed House Bill 4313 and Senate Bill 2187 at the request of Governor Rauner. The James R. Thompson Center is in complete disarray due to years of neglect by previous administrations and better utilizing this asset would benefit Illinois taxpayers tremendously. It has become a white elephant for the State of Illinois. This legislation will enable us to review all of our options to maximize the overall value of the property and secure the greatest savings for taxpayers.”
Notice anything missing? How about a pledge to work cooperatively with others in the General Assembly to achieve the governor’s goal?
For their part, the Democrats are reluctant partly because they see this as a media-motivated sideshow – a way for the governor to show he’s making progress when the government is in reality mired in stagnation.
However, the Democrats have produced more than their share of sideshows this year, with the endless committees of the whole and the staged votes on bills designed to go nowhere.
Governor Rauner also stopped in Quincy last week and claimed he was “negotiating” with the Speaker and the Senate president and making some progress on ending the months-long stalemate.
But I’m told he met personally with the Senate President a couple of weeks earlier and it apparently went nowhere. The governor reportedly brushed off legal questions about the Thompson Center sale during a subsequent phone call with Cullerton as a pesky matter for the lawyers to figure out. Then, of course, Rauner had two bills introduced without asking for assistance.
Governor Thompson had his faults, and he didn’t always get his way. But he never would’ve let a political stalemate hurt this state like we’re seeing now.
I never much cared for the Thompson Center, but in my mind it’s become a sad, dilapidated symbol of a government that, like the man the building was named after, used to work.
Former Chicago Public Schools CEO Barbara Byrd-Bennett and her indicted pals apparently were quite a group of grifters.
If the U.S. attorney’s office is right, they successfully concealed their graft from some pretty important and powerful people, including a mayor, a financial titan, a future governor and a future U.S. Senate candidate.
How could so many well-educated, successful people drop the ball so badly?
Mayor Rahm Emanuel, former investment banker and chief of staff to President Barack Obama, flat out denies knowing anything about Byrd-Bennett’s nefarious activities. The Northwestern University alum says he never met her alleged benefactor, Gary Solomon, a high-flying education consultant who allegedly promised to pay “B-3,” as Emanuel affectionately called her, hundreds of thousands of dollars under the table for feeding him school contracts. Emanuel’s denials came after the Chicago Sun-Times reported that Solomon was involved in the hiring of both B-3 and her predecessor, Jean-Claude Brizard, by the mayor’s handpicked school board.
Solomon’s infamous Supes Academy training program for principals was started at CPS with seed money from the Chicago Public Education Fund, which has been heavily financed and even at one time was chaired by former private-equity investor Bruce Rauner. Rauner, who received his MBA from Harvard University and helped make Emanuel a millionaire, denied to the Chicago Tribune in April that the fund had a role in getting Supes the schools contract, saying that the fund was merely a “facilitator for what the mayor or the schools or the leadership wanted to do.”
* Gov. Rauner was in Quincy last Thursday around noon…
The governor on Thursday said Chicago’s financial problems will push a budget deal in Springfield.
“I’m cautiously optimistic that we’re going to get (a budget) in the next 60 to 90 days, frankly, if for no other reason than Chicago needs help and I said I’m willing — I’m not going to do a bailout, but I’ll help Chicago solve its own problems by giving them the power to do it, but only if Chicago is helping us get reforms at the state. This is a two-way partnership … and Chicago needs help in December and January, big, big help,” Rauner said during an appearance in Quincy.
An opening in the state budget stalemate may come in the form of financial problems for the city of Chicago.
Speaking a town hall-style meeting in Decatur, Rauner hinted he may be able to use Chicago’s demands of the General Assembly—including $480 million in pension assistance needed by the beginning of 2016 to avoid large teacher layoffs at Chicago Public Schools—to get Democratic support on some of his own proposals.
“I’m cautiously optimistic because of Chicago’s financial challenges,” Rauner said. “They need some help in December. Maybe in December or January, maybe they’ll be enough incentive to compromise and we’ll be able to get something done, but I don’t know, it could be longer.”
Pressed on Friday whether [his Quincy remarks] meant Emanuel had promised to push his agenda in Springfield, Rauner was more cautious.
“I don’t want to over-commit on the time frame, we should have had a budget in May,” Rauner told reporters gathered in his Capitol office for an announcement on a Springfield high-speed rail issue. “I believe that there’s a lot of pressure, a lot of incentive to get something done given Chicago’s issues, in December. That’s true.
“Will we get it done in December or early January? I hope that it’s before then. But it could well last a lot longer,” he said. […]
“As I’ve said before to the governor, I’m not going to agree to right-to-work, I fundamentally, on principle, don’t agree with that, so I won’t support you,” Emanuel said in Chicago. “Having supported workers’ comp before, in 2011 when we passed the last major reform of workers’ comp, there’s a place I’ll work with you. And I want to see a municipal part of that because, as one of the largest employers in the state, we have a vested interest in reform to workers’ comp.”
“He does not come from government,” Edgar said of the governor, who was a venture capitalist. “He doesn’t even really come from mainstream business. He comes from (being an) entrepreneur where you buy a business, you tear it apart and you sell it. … I don’t think you’re going to tear apart the state and sell it. He might want to, but you can’t do that.”
If Rauner thinks Democrats will “cave” under pressure, Edgar added, “I don’t know if they are. … There’s some basic things that he’s trying to get that I’m not sure they will ever give up.”
Rauner ran television ads against Madigan in June. He also told reporters that month that he thought Madigan and Cullerton had a “conflict of interest with taxpayers” because they work for law firms that handle property tax appeals.
“I don’t think those comments help,” Edgar said. He said he doesn’t think the ads “softened up the Democrats any. I think, if anything, they probably got a little more dug in.”
