Playing with fire
Tuesday, Mar 7, 2017 - Posted by Rich Miller
* The governor’s office tried its best to deal with the Chance the Rapper fallout…
After declaring his talks with Gov. Bruce Rauner accomplished nothing, Chance the Rapper donated $1 million to Chicago Public Schools on Monday — wowing his large fan base and creating an epic public relations nightmare for the Republican governor.
Chance, whose combined Instagram and Twitter following tops 7 million people, ripped into the governor after meeting with him on Friday. […]
Later Monday, Rauner’s office noted that he and his wife had donated some $7 million to Chicago schools in the past.
“While the Rauners are passionate donors to our schools, individual contributions will never be enough to address the financial challenges facing CPS,” Rauner spokeswoman Eleni Demertzis said in a statement. “It would be helpful if CPS officials came to Springfield and joined in serious good faith discussions about the long-term stability of all of our schools.”
While I totally agree that CPS ought to be doing a whole lot more to help pass some of this stuff, bigfooting a young rapper with money donated over 20 years is a bit much.
* Meanwhile, the governor said again today (click here) that Chicago should either bail out its own schools temporarily with a one-time infusion of TIF money (ironically enough, a position shared by the Chicago Teachers Union) or the pension reform proposal tied to that $215 million for CPS should be separated from the grand bargain and passed right away.
This reaction yesterday by Senate President Cullerton’s press secretary may have gotten buried in all the hooplah, so here it is again…
“We’ve split this out twice and Governor Rauner vetoed it both times, saying it had to be tied to be part of a comprehensive solution.
“Now we tie it to a comprehensive plan and he kills the deal and says it should stand alone.
“I think you can see why the Senate decided to try to negotiate its own solution and not negotiate with the governor.”
…Adding… Mayor Emanuel responds…
* In other developments, the Sun-Times went out of its way today to suggest that Chance was somehow being controlled by the powers that be. But scroll way down into the story and you’ll finally see the denials…
Top mayoral aides insisted Monday that Emanuel had nothing to do with Chance’s decision to go toe-to-toe with Rauner. Emanuel even tried to reach out to Chance over the weekend to coordinate with the music superstar, only to be ignored.
The mayor did manage to reach Ken Bennett, only to be told that Chance was not interested in coordinating with Emanuel.
“The mayor likes to be in control of everything. He has his own plan to save CPS and this is not part of it. But, Chance is his own man. He’s trying to solve this himself. Ken is not involved,” said a mayoral confidante, who asked to remain anonymous… “We’re not behind it at all and neither is Ken Bennett,” the aide said.
* As we discussed yesterday, the performing artist obviously did a lot of research on his own. To suggest he’s merely a tool of the city’s establishment is pretty darned patronizing…
Chance’s aggressive advocacy of Chicago public schoolchildren seemed to throw the governor off his game as there was no immediate way to blame his involvement on House Speaker Mike Madigan, Rauner’s usual all-purpose foil.
Exactly. So, instead, tie him to Rahm - the second most unpopular Democrat in Illinois.
Remember, it was Gov. Rauner who reached out to Chance with that congratulatory tweet on Grammy night. It was Rauner who agreed to a sitdown with the guy. It was Rauner who exchanged private phone numbers with him last Friday and then talked again to Chance over the weekend. This wasn’t some scheme hatched at the Grammy’s to entrap the governor. The governor did this on his own.
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* Press release…
With no relief in sight, Illinois’ finances deteriorated at an alarming rate in fiscal year 2016 as net deficit totals spiked to a staggering $126.7 billion, according to an annual report released on Tuesday by the Office of Illinois State Comptroller Susana A. Mendoza.
The State’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2016, paints a worsening outlook for the State’s financial future on this unsustainable path.
Mendoza said the CAFR findings reflect a lawless fiscal climate.
“Volumes of research go into this report, but I can summarize our State finances in one word: Abysmal,” she said. “During Governor Rauner’s first two years in office, our State moved from a budget impasse to a budget crisis. This third year of his administration has the makings of a complete financial meltdown. His failure in leadership has been so spectacular that, no aspect of the State has been spared. The numbers back that up.”
The 375-page report released publicly Tuesday provides numerous insights into Illinois’ ongoing financial decline:
The State’s total net deficit increased by $5.7 billion from $121 billion in June 2015, to $126.7 billion as of June 2016. The lion’s share of that liability is a pension shortfall of $116 billion;
The General Fund’s deficit increased by $2.7 billion, from $6.8 billion to $9.5 billion;
The State is spending less on its neediest residents: spending on health and social service programs dropped by $834 million in FY2016;
The 2015 expiration of the temporary tax increase cost the State $3 billion in revenue in FY2016;
As of June 2016, the State’s total outstanding bonded debt is $30.7 billion. The State paid $1.5 billion in interest on its borrowing in FY2016;
We are forced to spend more on debt service ($3.6 billion) than on public protection and justice ($3.1 billion);
The backlog of delayed payments to Illinois doctors and hospitals for treating patients on state health insurance, under Section 25 liabilities, has more than doubled from $1.9 billion to $4.3 billion.
While bond sales have provided the State a temporary lifeline, the cost of borrowing is going up. The State’s general obligation bond ratings were not favorable last June and both Standard & Poor’s and Fitch Ratings have since downgraded their ratings to BBB with a Negative Outlook.
Three years ago those bond rating agencies said the state was on the right track out of this mess. But they now universally point to Governor Rauner’s failure to propose a balanced budget – or to hold budget proposals hostage to passage of his various unrelated pet projects – as the main cause of Illinois’ downward financial spiral: “Illinois’ fiscal crisis is, in our view, a man-made byproduct of policy ultimatums placed upon the state’s budget process,” Standard & Poor’s wrote in its most recent critique.
Mendoza said without principled leadership and a complete budget that provides for a sustainable financial future, the outlook remains bleak.
“The Governor is required by the State Constitution to prepare and submit a balanced budget to the legislature, but last month he handed the General Assembly a proposal in which expenditures exceeded revenues by $7 billion. Then he killed what was supposed to be a bipartisan Senate ‘Grand Bargain’ that could have provided a path to a better financial future. With 90 percent of State spending managed by court order, no plan to normalize our fiscal situation, and his recent establishment of ‘government shutdown prevention funds,’ it looks like Governor Rauner is trying to drive our State into bankruptcy,” she said.
The governor’s proposed expenditures exceeded revenues by $4.6 billion. If nothing was done, then spending would’ve been about $7 billion higher than revenues, but that’s the whole idea of a budget plan - to match spending with revenues. Rauner obviously didn’t do that, but this is a mistake that’s also been made by Senate President Cullerton and a few Chicago reporters. The comptroller shouldn’t do it. The actual facts are bad enough.
Anyway, the report is here.
*** UPDATE *** From Eleni Demertzis in the governor’s press office…
“As a decade long member of the General Assembly, Comptroller Mendoza was a leader in passing the very policies that helped plunge our state into its dire fiscal situation. The governor continues pushing for a truly balanced budget along with changes to our system that create jobs, strengthen schools and provide for our human services.
Instead of issuing press releases and pointing fingers, Madigan’s Comptroller should be urging her former colleagues in the General Assembly to help us pass a truly balanced budget and much needed structural changes.”
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* OK, it’s over now. Click here for an archived video. Or click here for the Facebook version. And here’s a quickie roundup of what went on…
*** UPDATE *** From his statement: “Gov. Rauner broke his promise to Chicago’s children a few months ago as the result of an admitted emotional reaction when he vetoed the $215 million, funding the Chicago schools were counting on to close out the school year.”
“Our kids should not be held hostage because of political positioning,” the rapper said. “If the governor does not act, CPS will be forced to end school 13 days early, which means over 380,000 kids will not have adult supervised activities in June, and could possibly be put in harm’s way,” he said.
“While I’m frustrated and disappointed in the governor’s inaction, that will not stop me from continuing to do all I can to support Chicago’s most valuable resource, it’s children.” He then announced the million dollar donation and asked others to do the same.
“I’m going to throw one more in,” he said after thanking several people. “Gov. Rauner, do your job.”
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* Here we go again…
* It starts like this…
Hi everybody. As you all know, Attorney General Madigan went into court last month, trying to force a government shutdown. At the same time, Speaker Madigan had a government shutdown bill ready in the legislature. And Comptroller Mendoza refused to fight for state employees. Fortunately for us, they all lost. A judge ruled state employees must continue getting paid and support for the Madigan Shutdown Bill collapsed in the House.
Actually, AG Madigan was simply attempting to clarify that state bills shouldn’t be paid without valid appropriations. Speaker Madigan proposed a bill to fund state worker salaries through the end of the fiscal year. And Comptroller Mendoza didn’t do as the governor ordered and hire her own lawyer in that AG Madigan fight.
* Back to the governor…
Sadly, it appears the fight isn’t over. Since the court ruling, Comptroller Mendoza has been looking for other ways to create a crisis and force a shutdown of state services.
She’s cut hardship payments to the Department of Aging by millions of dollars, putting services for the elderly in danger of collapse. She’s delayed payments to critical vendors at the Department of Health and Family Services and the Department of Corrections. And now she’s threatening not to process payroll for nearly 600 state employees.
This latest attempt to force a crisis is a clear violation of a court order to pay state employees. It’s part of a pattern we’ve seen. Trying to create a crisis that would force another incomplete, stopgap budget or a massive tax hike with no changes to our broken system.
The payroll for nearly 600 state employees was submitted to the comptroller last week. It’s a valid payroll, no different than the payrolls she’s processed since she became comptroller. And by court order she is legally obligated to process it once again. But she is continuing to resist.
To state employees, please know that we will use all of our legal options to make sure Comptroller Mendoza processes the payroll we’ve submitted on your behalf, on time and in full.
And to the social services providers and vendors she’s putting at risk, we will forcefully advocate on your behalf as well.
Thank you for your support to keep government operating as we work for changes to fix our broken system.
The background on the payroll dispute is here, in case you need to refresh your memory from last week. I’ve asked the comptroller’s office for comment on this aspect and the rest of the allegations.
*** UPDATE 1 *** Background…
Today the Rauner Administration filed a motion in St. Clair County, asking the court to direct Comptroller Mendoza to continue paying state employees in compliance with the court order that has done so since July 2015. That order provides that state employees must be paid for the work they perform and orders Mendoza to process lawful payment vouchers submitted for that purpose. The Rauner Administration submitted a lawful voucher late last week for 578 employees of the Illinois Central Management Services. The Comptroller to date has refused to process it. That is a clear violation of the court order. Our filing today shows the Administration’s commitment to ensuring that all state workers continue to receive regular, uninterrupted paychecks.
The motion is here.
*** UPDATE 2 *** Comptroller’s office…
Instead of fulfilling his constitutional duty to propose a balanced budget, Governor Rauner is concocting ridiculous conspiracy theories and wasting more taxpayer dollars.
It gets harder to take him seriously when what he presents in his tweets and court filings has so little basis in reality.
CMS
Payroll records show that under Rauner’s handpicked “wingman” comptroller, the Dept. of Central Management Services consistently used the Garage Fund and the Maintenance fund to pay for 578 employees who work on maintenance and in state garages.
Now Governor Rauner suddenly wants to hoard those funds which he has tellingly renamed “government shutdown prevention funds” and instead raid the state’s General Revenue Fund, which would take critical funds away from nursing homes, hospice care and care for the disabled.
Instead of using the funds that are $93 million in the black, Gov. Rauner wants to raid the fund he put $12.5 billion in the hole by failing to propose a balanced budget for the last three years.
Rauner’s administration has more than enough money to pay employees from the department’s self-protected funds. The only reason to draw attention to this issue now is to manufacture a phony headline about state employees in “danger” of missing a paycheck. This is just one of many phony stories Rauner’s administration has shopped in recent weeks, like the Dept. of Aging hoax. Expect more: All just as phony.
No employees will miss any paychecks if the administration uses the money that the General Assembly authorized them to use and the Governor signed. The administration can continue using those funds for payroll as they always have. Or they can choose to create a phony crisis for P.R. value and continue playing politics with people’s lives.
Dept. of Aging
While the comptroller and her staff work tirelessly to triage the state’s obligations and do all they can to prevent closures and shutdowns, the governor is more interested in using state employees as political pawns to score political points.
In her first three months in office, The Comptroller made the elderly a greater priority than the previous administration by processing more than $110 million to providers in Department on Aging programs. The Governor is peddling the black-is-white falsehood that the Comptroller has “cut” payments to Aging while he proposes cutting the Community Care program and kicking 40,000 elderly people out of the program and forcing them into nursing homes. That’s the real Bruce Rauner - not the Twitter version.
All outside observers agree the main reason for the state’s financial crisis is the Governor’s failure for the third year in a row to propose a balanced budget for the General Assembly to consider.
Even Standard & Poor’s wrote, “Illinois’ fiscal crisis is, in our view, a man-made byproduct of policy ultimatums placed upon the state’s budget process.” In other words, Gov. Rauner owns this fiscal disaster.
Our office and Attorney General Lisa Madigan’s office will present to the court today the history of CMS payments coming from the Garage and Maintenance funds and Gov. Rauner’s attempt to rewrite history.
*** UPDATE 3 *** Ouch…
She even quotes Chance the Rapper at the end.
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* This isn’t going to die down soon…
*** UPDATE 1 *** Interesting…
Gov. Bruce Rauner’s administration is recommending two solutions to address the Chicago Public Schools’ teacher-pension mess — allowing Mayor Emanuel to use TIF funds to fill a $215 million hole, or adding the funding to the Illinois Senate’s pension bill and taking it out of the “grand bargain” budget package.
The options are outlined in a memo obtained by the Chicago Sun-Times. This memo is from Rauner’s policy head Michael Mahoney to Rauner’s chief of staff Richard Goldberg.
It comes days after Chance the Rapper brought national attention to the school district’s money woes after a meeting with the governor on Friday.
The TIF, short for tax-increment financing, option would allow Emanuel to transfer $215 million for a one-time authorization from Chicago TIF funds to CPS. It would require that the Illinois General Assembly pass legislation to allow that funding.
* The memo…
As you know, Chicago Public Schools continues to request an additional $215 million from the state to help the city fund the normal cost of teacher pensions and retiree healthcare expenses this year. This request is in addition to the $102 million increase the city received in General State Aid, Hold Harmless, and Equity Payments for the current school year and on top of the $250 million in additional funds CPS receives through its special block grant as compensation for the state not picking up its normal pension cost for teachers.
At present, there are two paths toward a legislative agreement that could fulfill the city’s request.
1) Authorize Chicago to Transfer TIF Funds: In 2016 the City of Chicago received $461 million in Tax Increment Financing dollars. Under current law, TIF funds can only be used to promote investment and economic development. However, given the extraordinary mismanagement of both the city and CPS budgets, legislation could be enacted to authorize a one-time mayoral transfer of $215 million from Chicago TIF funds to CPS. We are in the process of drafting this legislation in case the General Assembly, the Governor and other advocates want to move on this idea quickly.
In order to address the long-term financial future of Chicago Public Schools, we also recommend that Chicago revise their policy on TIF districts and collect taxes for education. This solution is in place across the state and represents a compromise that both attracts business investment and supports public schools.
2) Add the CPS Request to SB16 and Pass the Pension Package Separate from the Grand Bargain: Senate President Cullerton recently unveiled his plan to enact statewide pension reform. SB16, now pending in the Senate, applies President Cullerton’s consideration model to state pension systems and the Chicago teachers’ pension system; enacts a new Tier 3 hybrid pension plan for the state and local governments; and makes other critical changes to reduce state pension payments in the future. While this bill is currently tied to the “Grand Bargain” in the Senate, this bill could be broken off from the “Grand Bargain” and amended to add the city’s request to pick up the normal cost of teacher pensions and retiree healthcare expenses in this fiscal year. Such a comprehensive pension reform agreement would satisfy the deal we made last summer and could be signed into law without delay.
*** UPDATE 2 *** CPS’ Emily Bittner responds…
“Yet again, Governor Rauner is perpetuating a racially discriminatory state funding system and his so-called plan actually demands that Chicago students do more to get the same funding that every other student in the State of Illinois is entitled to receive – a gross disparity that has no place in 2017. Chicago residents stepped up and are paying $342 million more in taxes this year alone to support schools, and it’s past time for the state of Illinois to end the racial discrimination that is creating a separate and unequal funding system.”
*** UPDATE 3 *** John Cullerton press secretary John Patterson
“We’ve split this out twice and Governor Rauner vetoed it both times, saying it had to be tied to be part of a comprehensive solution.
“Now we tie it to a comprehensive plan and he kills the deal and says it should stand alone.
“I think you can see why the Senate decided to try to negotiate its own solution and not negotiate with the governor.”
* Related…
* Rolling Stone: Chance the Rapper to Illinois Governor: ‘Do Your Job’
* Vibe: Chance The Rapper Continues Mission To Improve Chicago Schools After Disappointing Meeting With Illinois Governor
* AP: Chance the Rapper, Illinois governor discuss school funding
* The DePaulia: Taking a chance to save CPS: In 1970, rock n’ roll legend Elvis Presley was frustrated with a counter culture, influenced by acts like the Beatles and the use of illicit drugs, he believed to at the center anti-Americanism.
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