*** UPDATED x1 *** Question of the day
Wednesday, Mar 22, 2017 - Posted by Rich Miller
* AP…
Sears, once the monolith of American retail, says that there is “substantial doubt” that it will be able to keep its doors open. […]
Sears has been a member of the retail dead pool for years, but until this week the company had not openly acknowledged its tenuous existence, said Ken Perkins, who heads the research firm Retail Metrics LLC.
Sears has long maintained that by balancing the sale of key assets while at the same time enticing customers with loyalty programs, it would eventually turn the corner.
Yet industry analysts have placed the staggering sums of money that Sears is losing beside the limited number of assets it has left to sell, and concluded that the storied retailer may have reached the point of no return.
The company has lost $10.4 billion since 2011, the last year that it made a profit. Excluding charges that can be listed as one-time events, the loss is $4.57 billion, Perkins says, but how the losses are stacked no longer seem to matter.
Needless to say, if Sears goes under, it’ll be a huge loss to Illinois.
* The Question: Your best (or worst) Sears memories?
*** UPDATE *** From Sears…
Following the release of our annual 10-K filing on Tuesday, there have been various media reports quoting a portion of the report that outlines potential risks associated with the company’s financial position, but those reports do not include the full disclosure which highlights the actions we are taking to mitigate those risks.
It is very important to reiterate that Sears Holdings remains focused on executing our transformation plan and will continue to take actions to help ensure our competitiveness and ability to continue to meet our financial obligations. However, we recognize there has been some negative commentary related to our recent disclosures.
To clarify, the comments from our Annual Report quoted by the media are in line with regulatory standards that require management to assess and disclose potential risks the company could face within one year from the reported financial statements. As 2016 proved to be another challenging year for most “bricks and mortar” retailers, our disclosures reflected these developments. While historical performance drives the disclosure, our financial plans and forecast do not reflect the continuation of that performance.
It is also critical to understand that our independent auditors have provided Sears Holdings with an “unqualified audit opinion.” This indicates the Company remains a “going concern,” which means we are a viable business that can meet its financial and other obligations for the foreseeable future. Nonetheless, we have always followed SEC guidelines by providing a complete and comprehensive set of disclosures, just as many other publicly traded companies do.
Again, as we have previously communicated, we are firmly focused on improving the operational performance and financial flexibility of Sears Holdings. This is evident in the decisive actions we have taken in recent months, which include:
earlier this year, we increased our liquidity by up to $1.0 billion through our Secured Loan Facility and a standby letter of credit facility;
we also announced an amendment to our existing asset-based credit facility in February 2017, which provided an additional $250 million of financial flexibility;
additionally, last month, the Company initiated a restructuring program targeted to deliver at least $1.0 billion in annualized cost savings;
earlier this month, we closed the previously announced Craftsman transaction for a net present value of over $900 million in cash; and
in late January, we monetized five Sears full-line stores and two Sears Auto Centers for $72.5 million, and we recently received an additional $105 million in gross proceeds from the sale of three Sears full-line stores, one owned and two leased.
In line with these initiatives, despite the risks outlined we remain confident in our financial position and remain focused on executing our transformation plan.
Jason Hollar is Sears Holdings’ chief financial officer.
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Another way our schools are inequitably funded
Wednesday, Mar 22, 2017 - Posted by Rich Miller
* Dusty Rhodes interviews Jessica Handy about state funding of suburban and Downstate teacher pensions…
Rhodes: Okay, so let’s look at figures for some of the districts. Take Danville. How much do we pay per student in pension costs for Danville?
Handy: Danville gets about $500 per student.
Rhodes: Where does that put them on the spectrum of how much we pay for pension costs in different districts?
Handy: That’s actually about average. You’ll see that Rondout, which — it’s one of the richest districts in the whole state, and the state is giving them an in-kind benefit of $1,700 per pupil. So Danville gets about $500 per pupil; Rondout gets about $1,700 per pupil.
Rhodes: What about a really poor district, like East Aurora?
Handy: East Aurora gets about $280 per pupil.
Rhodes: You know, anyone who listens to our station has heard many times that the State of Illinois has a very inequitable funding system, because it’s based on property taxes. We talk about the amount of “general state aid” that goes to each district. In that conversation, are we talking about these pensions? Or is that a separate conversation?
Handy: It’s an entirely separate conversation. Lots of the analyses that have been done by national think tanks — people who have said Oh, Illinois, you have one of the most inequitable school funding formulas — most of those studies don’t even count the funding that’s going into teacher pensions. So we are even more inequitable than the studies that say we’re the most inequitable.
The bottom line is if your school district can afford to pay teachers more money, then your state pension subsidy is automatically higher.
…Adding… Hmm…
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124 prison nursing jobs to be privatized
Wednesday, Mar 22, 2017 - Posted by Rich Miller
* This will supposedly save $8 million…
Unionized nurses at a dozen Illinois prisons are being laid off and their jobs privatized, the Illinois Nurses Association said Tuesday.
The union released a copy of a letter from the Department of Corrections that 124 nurses represented by the association will be laid off effective June 15.
The layoffs will occur at a dozen Illinois prisons, including four at the Logan Correctional Center in Lincoln, eight at the Jacksonville Correctional Center and eight at the Graham Correctional Center in Hillsboro.
The letter says the layoffs are the result of a “material change in duties and organization due to subcontracting of services …” […]
The letter sent by Corrections to the union says it notified the INA in June 2016 that it might privatize the jobs. The letter also says the union was told in January that the state was going ahead with the privatization and offered to meet with the union about it. The letter says the union declined to meet.
The IDOC letter is here.
* AP…
Alice Johnson, the association’s executive director, noted the notice came just days after the union filed an unfair labor practices complaint with state regulators, claiming the first-term Republican governor has reneged on his obligation to negotiate contract terms in good faith. She said members overwhelmingly rejected a tentative agreement last spring and Rauner is retaliating.
“It’s an attempt to bully and intimidate the nurses, and it’s not going to work,” Johnson told the AP.
She said the move is particularly troublesome because of a nationwide shortage of nurses that forces Illinois prison nurses to sometimes work 80-hour weeks while vacant positions go unfilled. […]
“Wexford is prepared to hire most of the nurses who will be impacted by the layoff,” [Nicole Wilson, spokeswoman for the Department of Corrections] said. “The department will work with those who wish to remain employed with the state and will … identify nursing vacancies within other state agencies.”
* Wexford was given a contract by the Quinn administration back in 2011 to administer health care services in state prisons. A 2015 Tribune report wasn’t exactly glowing…
The 55-year-old inmate with a family history of lung cancer was coughing up blood the day he arrived at the medium security Illinois River prison in November 2012.
A nurse sent him away with a container to spit in and told him to report back if it worsened. In a series of visits to the Peoria-area prison’s medical facility, doctors and nurses continued to miss the inmate’s classic signs of lung cancer.
By the time the inmate was finally diagnosed correctly and offered treatment in June 2013, it was too late. He died nine days later.
The details of the inmate’s potentially preventable death was just one example in a scathing 405-page expert report filed in federal court late Tuesday that alleged sweeping problems in medical care at the state’s prisons ranging from unqualified and incompetent physicians and nurses to woeful record-keeping and poor sanitation. […]
The experts found “significant lapses in care” in 60 percent of the cases they reviewed in which prisoners died of natural causes from January 2013 through May 2014.
…Adding… Press release…
Illinois AFL-CIO President Michael T. Carrigan statement following Gov. Rauner firing 124 correctional center nurses
“This action is unconscionable. First, the Rauner Administration makes it nearly impossible for these nurses to do their jobs by not filling vacancies and forcing 80-hour work weeks, then he lays them off to shift taxpayer dollars to yet another for-profit consultant.
“The list of Rauner carnage is growing every day and the citizens of Illinois are the victims. His priorities are wrong-headed and families are getting hurt.
“These nurses should be supported and celebrated for their extraordinary service under trying circumstances. For that they get a pink slip and a private company gets a bonus. Welcome to Rauner’s Illinois.”
…Adding More… Sen. Daniel Biss…
The Rauner administration is trying to privatize nursing in Illinois’ prison system, Senator Daniel Biss (D-Evanston) said Wednesday.
Biss’ comments were prompted by word that the Rauner administration is outsourcing the jobs of 124 prison nurses employed by the Illinois Department of Corrections to a private company. The unionized nurses are represented by the Illinois Nurses Association, and their layoffs are effective June 15, according to a March 18 letter from the administration to the association announcing the changes.
“This appears to be nothing more than a back-door attempt to get around Illinois’ ban on privatizing prisons,” Biss said. “Gov. Rauner is offering up another failed policy that looks like it came straight out of the Trump White House.”
Illinois banned private prisons in 1990. The General Assembly declared that “the management and operation of a correctional facility or institution involves functions that are inherently governmental.” However, the privatization ban does not apply to ancillary services, such as medical care.
“Just last week, Gov. Rauner tried to insist he had the best interests of state workers at heart. This week he’s laying off 124 nurses employed by the state,” Biss said. “The only interests I think Gov. Rauner has at heart are those of his business friends who can make money off state government.”
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* Tribune…
Republican Gov. Bruce Rauner on Tuesday expanded the list of Democrats he says are working against him, adding Mayor Rahm Emanuel to the group he contends is trying to create havoc in Illinois. […]
Rauner brought Emanuel into the fray Tuesday, saying the mayor was causing a “crisis” at Chicago Public Schools by demanding the state pick up $215 million in teacher pension costs or the school year could be cut short.
“It seems to be part of a plan orchestrated by Attorney General Madigan, Comptroller Mendoza, Mayor Emanuel, working with the speaker — attack, criticize, create crisis. We see it everywhere,” Rauner said. […]
“They’re defending a broken system. They don’t want to change the system. They want to force a big tax hike on the people of Illinois with no changes. That’s not fair. It’s not right. We’ve got to change our system,” Rauner said.
* From the mayor’s spokesman…
* McGrath’s full response was even harsher…
“Governor Rauner keeps accusing others of trying to ‘create a crisis,’ when it’s painfully clear to everyone else that the entire state of Illinois is already dealing with the crisis of going two-plus years without a budget. Across Illinois, social services have been slashed, universities are making devastating cuts, and college students are fleeing the state in droves. The fact that Governor Rauner can’t see the crisis he’s created is just further proof that he’s lost touch with reality.”
Ouch.
As the years drag on and the governor’s poll numbers drop, people are seemingly less afraid of firing back. I cannot imagine what life will be like in late 2018 if this keeps up.
…Adding… From a senior Rauner administration official…
Just another reminder that every time you hear machine Democrats say “Do Your Job,” they mean just raise taxes and bailout Chicago.
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Posner shoots down “fair share” appeal
Tuesday, Mar 21, 2017 - Posted by Rich Miller
* As we’ve discussed before, the Illinois Policy Institute’s legal arm is attempting to overturn Abood v. Detroit Board of Education, in which the US Supreme Court upheld government union “fair share” fees for those who didn’t want to pay full union membership dues.
Seventh Circuit US Appellate panel, led by Judge Richard Posner, today shot down the group’s attempt with some pretty basic logic…
Of course, only the Supreme Court has the power, if it so chooses, to overrule Abood. Janus and Trygg acknowledge that they therefore cannot prevail either in the district court or in our court—that their case must travel through both lower courts —district court and court of appeals — before they can seek review by the Supreme Court. […]
Janus’s claim was also properly dismissed, though on a different ground: that he failed to state a valid claim because, as we said earlier, neither the district court nor this court can overrule Abood, and it is Abood that stands in the way of his claim.
The judgment of the district court dismissing the complaint is therefore
AFFIRMED.
I assume this will be appealed. The opinion is here. A press release touting the victory is here.
…Adding… Press release…
National Right to Work Legal Defense Foundation Mark Mix released the following statement regarding the Seventh Circuit Court of Appeals’ decision to affirm the judgement of the district court in Janus v. AFSCME.
“The court’s ruling is no surprise but simply allows the next step forward in the journey to end forced unionism for public employees across the country. No one should be forced to pay a union dues or fees just for the privilege of working for their own government and this decision means the case can now move up to the United States Supreme Court.”
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*** LIVE *** Session coverage
Tuesday, Mar 21, 2017 - Posted by Rich Miller
* What I thought was a mild case of the sneezes/sniffles turned into a bit more than that this morning. I’m going back to bed. The House is in town today, but the Senate is not. Follow along in real time with ScribbleLive…
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