*** UPDATED x1 *** Hearing set for AG motion
Thursday, Feb 2, 2017 - Posted by Rich Miller
* The attorney general’s office just called to say they have a hearing set in St. Clair County on their motion to vacate the order to pay state employee salaries without an appropriation.
The hearing will be held February 16th at 1:30 in the afternoon.
* By the way, if you watch the Tribune interview video, Gov. Rauner shook his head “yes” when asked if state employees should be paid without an appropriation and without a court order to do so.
Those are some very dangerous waters.
Rauner wasn’t asked, however, whether social service providers should be paid without an appropriation even though they have signed state contracts in hand.
*** UPDATE *** The governor’s office has now responded to the competing legislative proposals by House Democrats and House Republicans to pay state workers…
“It is only right that state employees are paid for the work they do, which is why we were so disappointed by the Attorney General’s motion. We are reviewing the proposals but appreciate that lawmakers on both sides of the aisle are working on solutions.”
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* WaPo…
Democrats are moving urgently to harness the wave of grass-roots protests that have greeted President Trump in his first weeks in office to reclaim the House majority in next year’s midterm elections.
As of this week, the Democratic Congressional Campaign Committee is hiring full-time operatives to do political organizing work in 20 key Republican-held districts — an unusually early investment in House races that do not even have declared candidates yet.
Rep. Ben Ray Luján (D-N.M.), the committee’s chairman, called the move “unprecedented” for Democrats, who need to pick up two dozen GOP-held seats to win the majority. […]
The 20 targets include many of the districts where Democrats hoped to unseat Republicans last year — including suburban districts in California, Minnesota, Pennsylvania and Colorado. But they are also going into districts represented by veteran GOP lawmakers — such as Reps. John Abney Culberson (Tex.), Peter J. Roskam (Ill.), Edward R. Royce (Calif.) and Pete Sessions (Tex.) — who did not face a strong 2016 challenge but where Democratic presidential nominee Hillary Clinton ended up beating Trump.
I dunno about Roskam. Do you think he’ll be vulnerable?
* Then again…
A group of 16 constituents that arranged to meet with staff members at the West Chicago district office of U.S. Rep. Peter Roskam (R-Wheaton) Wednesday about their concerns with a repeal of the Affordable Care Act were abruptly told they would have to reschedule after staff realized a member of the press was present.
Sandra Alexander said she scheduled the meeting weeks ago and was stunned that they were turned away. “We are going to be respectful and see if they will change their minds,” Alexander said. […]
“He just ran off,” Alexander said. “They never told me that the media could not be here, and the reporter was willing to leave so that we could have our meeting,” she said.
* The DCCC might also want to look at Rodney Davis’ district, which is the home to something like ten universities and colleges, including UIUC and ISU. And speaking of ISU…
Josh Knight of Normal said he brought his 8-year-old son to a Not In Our Town Bloomington-Normal rally Wednesday night in Bloomington to show him how to be an American.
“I wanted to show him that we treat all people equally and that we instill in him the values of American culture that we believe in and that is freedom for all people and to be an open and welcoming person,” said Knight. […]
They were among about 1,200 people who filled the Bloomington Center for the Performing Arts auditorium to capacity in a show of support for their immigrant neighbors and to protest President Donald Trump’s executive order on immigration, making the rally one of the largest in recent memory in the Twin Cities.
1,200 people turned out for a pro-immigration rally in Bloomington? Something’s up.
Davis supported the president’s executive order, but that midterm could be rough if that district can be organized.
The problem with that idea, however, is the district is so spread out. Bloomington and Urbana aren’t far away geographically, but they are worlds apart in many other ways. The campuses appear to dominate the district on paper, but people on those campuses almost never work together. Also, I think about 40 percent of the district is in the St. Louis media market. It’s all over the place.
*** UPDATE *** Many thanks to a commenter who pointed us to this DCCC memo, which reveals that Congressman Davis is on the DCCC’s target list, along with Congressman Randy Hultgren (which may be a bit of a stretch). From the memo…
History Isn’t On Their Side:
* Since 1900, there are only three examples of the president’s party gaining seats in the first midterm: 2002 (George W. Bush), 1934 (Franklin D. Roosevelt) and 1902 (Teddy Roosevelt).
* In modern history- since 1982- the president’s party has lost an average 28 seats in the first midterm election, even accounting for Republican gains in 2002 under President Bush.
President Trump’s Historic Unpopularity:
* In all midterms over last 23 years, the sitting president has needed a net-positive job approval in the double-digits in order to stave off losses.
* According to a new Quinnipiac University Poll conducted over Donald Trump’s first five days as President, only 36% of voters approve of his job performance.
* Trump has reached majority disapproval (Gallup Poll) in a record-shattering 8 days.
Deeply Unpopular Agenda:
* On policy, House Republicans are taking the wrong lessons from 2016: kowtowing to Trump’s most divisive policies like his border wall, while opposing him on popular plans to preserve Medicare or action on trade.
* The Republican plan to repeal the Affordable Care Act is deeply unpopular, and will continue to create political backlash across the country.
* Republican attacks on Medicare, Social Security and Planned Parenthood, and efforts to gut ethics and transparency safeguards will have repercussions at the ballot box.
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*** UPDATE 1 *** From Catherine Kelly in the governor’s office…
“Fitch’s action further demonstrates the importance of reaching bipartisan agreement on a truly balanced budget and changes that will grow our economy and bring new jobs to our state.”
*** UPDATE 2 *** From John Patterson, spokesman for Illinois Senate President John Cullerton…
While unfortunate, this was expected.
The looming threat was among the many reasons why the Senate is working on a comprehensive budget and reform plan. The goal is to end the nearly two-year impasse and restore financial stability.
If there’s a silver lining, it would be that hopefully this adds to the growing urgency to pass the Senate’s plan and get a comprehensive budget for the state.
*** UPDATE 3 *** Treasurer Michael Frerichs…
“Our credit rating suffers because the leaders in the General Assembly and the Governor will not negotiate an honest budget,” Frerichs said. “This singular focus on non-budgetary items is silently ripping money out of the pockets of everyone who lives in this state.”
“Borrowing costs money. Borrowing without a budget costs even more money. We know a budget will bring down our borrowing costs and yet we still have a leadership team that chooses not to negotiate. We can do better.”
*** UPDATE 4 *** Democratic Governors Association…
“Bruce Rauner’s failed governorship continues to hurt Illinois jobs and cost Illinois families,” said DGA Communications Director Jared Leopold. “Over and over again, Governor Rauner has sacrificed Illinois’s economy to protect his special interest friends. Today, Illinois families and business are paying
* And from Illinois Working Together Campaign Director Jake Lewis…
“To borrow a phrase from Fitch Ratings, Bruce Rauner has been an ‘unprecedented failure’ as the governor of Illinois. Today’s downgrade, the sixth under Gov. Rauner, is yet another indicator of the damage the governor has inflicted on Illinois and its people during his time in office. According to Fitch, the budget impasse has ‘fundamentally weakened’ the state. It will take years for Illinois to recover from Rauner.
“As residents and college students flee Illinois in record numbers, it is time for the governor to do something he has failed to do in his first two years in office: listen. The governor must drop his extreme political agenda for good and work to pass a responsible, fully-funded budget.”
[ *** End Of Updates *** ]
* From Fitch Ratings…
Fitch Ratings has downgraded the following ratings of the state of Illinois:
–Issuer Default Rating (IDR) to ‘BBB’ from ‘BBB+;
–$25.9 billion in outstanding general obligation (GO) bonds to ‘BBB’ from ‘BBB+’;
–$431 million Illinois Sports Facilities Authority sports facilities bonds (state tax supported) to ‘BBB-’from ‘BBB’;
–$2.6 billion Metropolitan Pier and Exposition Authority McCormick Place expansion project bonds to ‘BBB-’ from ‘BBB’;
–$267.8 million city of Chicago motor fuel tax revenue bonds to ‘BBB-’ from ‘BBB’.
The Rating Watch Negative is maintained.
Fitch warned it would downgrade the ratings if the state didn’t have a budget by the end of January.
* The explanation…
KEY RATING DRIVERS
The downgrade of Illinois’s IDR and related ratings reflects the unprecedented failure of the state to enact a full budget for two consecutive years and the financial implications of spending far in excess of available revenues, which has resulted in increased accumulated liabilities and reduced financial flexibility. Even if the current attempts at a resolution to the extended impasse prove successful, Fitch believes that the failure to act to date has fundamentally weakened the state’s financial profile.
The Negative Watch reflects Fitch’s expectation that the state’s implementation of a solution, whether temporary or permanent, will be a challenge in the current political environment and that in the interim the state will continue to delay and defer payments in lieu of balancing the budget. While Fitch acknowledges that there is a plan being developed in the state Senate that contains elements that could ultimately resolve the impasse, its passage is uncertain and the timing of implementing solutions is unknown. Fitch expects to resolve the Rating Watch within the next six months based on an assessment of the state’s fiscal trajectory as it starts fiscal 2018. If the state continues on the current path, a further downgrade would be warranted.
Illinois has failed to capitalize on the economic growth of recent years to bolster its financial position. Rather, the decision to allow temporary tax increases to expire and the subsequent failure to develop a budget that aligns revenues with expenditures have resulted in a marked deterioration in the state’s finances during this time of recovery. Once again, the state has displayed an unwillingness to utilize its extensive control over revenues and spending to address numerous fiscal challenges.
* Fitch projects revenue performance will “continue to track slow economic growth,” and claims it is “unlikely that reductions in state spending alone would be sufficient to achieve budgetary balance given the magnitude of the current budget gap.”
* Oof…
Operating Performance: ‘bbb’ factor assessment
Illinois’ operating performance, both during the great recession and in this subsequent period of economic growth, has been very weak. The failure to address a long-standing structural budget gap with permanent and comprehensive solutions, whether revenue or expenditure, has left the state with an gaping hole in its operating budget and increasing budgetary liabilities.
* On the Senate’s “grand bargain”…
The state Senate has put forth a series of bills that have the potential to lead to a compromise that will resolve the impasse. The Senate bills include raising the state income tax and other revenue measures, debt issuance to reduce accumulated budgetary liabilities, pension reforms, aid to Chicago public schools, and non-budgetary reforms sought by the governor, including a freeze on property taxes, workers compensation reform, and some form of term limits. These proposals, if they proceed through the full legislature and are signed by the governor, have the potential to meet the requirements to stabilize the Illinois IDR and related ratings. However, their passage is uncertain as is the timing of the implementation of any solutions.
Yep.
* A look ahead…
RATING SENSITIVITIES
BUDGET SOLUTIONS: Failure to enact a balanced budget for fiscal 2018 would result in a further downgrade. Successful implementation of measures to enact a structurally balanced budget and reduce accumulated budget liabilities would stabilize the credit.
LIQUIDITY: The rating is sensitive to a material reduction in the state’s ability to manage within available revenues through discretionary payment deferrals. Furthermore, failure of the state to make its statutorily required debt service transfers as scheduled, 12 months in advance on a rolling basis, would result in an immediate downgrade of the rating to below investment grade because it would suggest that the state’s liquidity pressures are presenting a risk to bondholder interests that has not been evidenced to date.
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* Lynn Sweet…
At a meeting Wednesday with members of the African American community, President Donald Trump again talked about Chicago violence saying if city officials don’t take steps,”we’re going to solve the problem for them.”
“Because we’re going to have to do something… What’s happening in Chicago should not be happening in this country,” Trump said.
Trump said violence in the city was ‘totally out of control.” […]
[Darrell Scott, an Ohio pastor who campaigned for Trump] said he was talking to members of “top gangs” in Chicago – he did not identify who – who wanted a “sit down” to discuss how to “get that body count down” in return for “social programs.”
“It’s a great idea,” Trump said about a possible meeting involving gang leaders and social programs.
…Adding… Video…
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Show ‘em the pain
Wednesday, Feb 1, 2017 - Posted by Rich Miller
* I, for one, believe that we should take the Illinois Policy Institute’s budget plan seriously. For too long, way too many Illinoisans have believed that the undefined “they” could simply cut governmental waste to balance the state’s budget. So, the “Institute,” in some ways, is doing us all a service by showing what will really happen if the budget is balanced without a tax hike, like tossing 600,000 people off Medicaid, or whacking university funding by a billion dollars and forcing school districts to pay a billion dollars a year in higher pension costs, etc.
Amanda Vinicky pursued another angle…
A [property tax] freeze, coupled with stripping municipalities of the 9-cents per dollar they’ve received since Illinois first implemented an income tax, would further strip localities of another key funding source. The IPI says it’s taking away a “subsidy,” but head of the Illinois Municipal League Brad Cole says that’s a misnomer.
“For many small communities, it’s the only source of income they have, so it provides for the health, safety and welfare of their residents,” Cole said. “It’s not as simple as saying ‘let’s cut the LGDF (Local Government Distributive Fund).’ I mean, that would abandon the entire state, whether it’s Cairo or Chicago.”
Additionally, the IPI wants to make it harder for units of local government to look to raise taxes in the future, by requiring referenda pass with a two-thirds majority before any hikes. […]
That would be a “heavy burden” and is “overly restrictive,” Cole said.
“What if a water treatment facility doesn’t get expanded, then the community can’t grow, or keep up to date with EPA (Environmental Protection Agency) regulation,” he said, as a hypothetical.
Cole needs to up his game, but at least it’s a start. Local reporters ought to call their mayors, school board chairs and university/college presidents to hear what they have to say, as well. And, you know, maybe talk to some people who got into Medicaid because of Obamacare and who would be facing a life without affordable or any health insurance.
People have seen what the impasse has done. But they have to understand that solving this problem is no easy or painless matter.
…Adding… The Center for Tax and Budget Accountability has a new report called “The all-cuts balanced budget for Illinois: 1/6 of K-12 funding gone, and billions in delayed pension costs”…
research suggests that these cuts would also have a devastating effect on the state’s economy. Partly, that’s because they would directly lead to thousands of lost jobs, as schools and colleges laid off teachers, janitors, counselors, and other employees. (To get a sense of the magnitude, $200 million in cuts led to 1,400 layoffs in the Chicago Public Schools in 2015; Chicago State University laid off 300 employees to save $24 million in 2016. Scaled up to the full statewide cuts, that would total nearly 20,000 lost jobs as a direct results of cuts in the education sector alone).
But education, in particular, drives Illinois’ economy in ways beyond the people that schools directly employ. In fact, economists have estimated that for each dollar invested in an institute of higher education, $2.286 is generated in the state economy, as students, professors, and other employees patronize local businesses, support families, and contribute to a vital local economy. That means that IPI’s proposed $950 million cut to higher education could result in over $2.17 billion in losses to the state economy.
More broadly, CTBA’s recent report on higher education funding highlighted research showing that over the last generation, investing in residents’ educational attainment has been crucial to robust state economies.
Additionally, copious independent studies have found that the Medicaid expansion under Obamacare has been a net positive for state economies. A study in Kentucky found that Medicaid expansion in that state generated 40,000 jobs; another study found that Medicaid expansion created 31,000 jobs in Colorado. Blending these estimates and adjusting for Illinois’ population, that suggests that IPI’s proposal on Medicaid alone could eliminate more than 95,000 jobs.
* The CTBA also looked at the “Institute’s” pension plan and discovered this…
While IPI’s plan costs less in the first few years — in part thanks to artificially lowered state payments from delaying the full implementation of changes to actuarial assumptions — within a decade or so, it actually becomes a net drag on the state budget, and continues to add billions of dollars in additional payments through the 2040s.
Chart…
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* Not sure yet if this is true, but the word is definitely going around, so heads up…
Yeah, it will most definitely mess with the governor’s messaging if it happens. How can Team Rauner say King Madigan is trying to shut down the government via his daughter’s legal motion in St. Clair County if the House puts this one on the big board?
Not to mention that the Illinois Policy Institute has already proposed doing the exact same thing.
On the other hand, how do lots of House members vote for this bill if it doesn’t include money for social service programs, higher education, etc.? And what does the Senate do? They’ve got their own proposal, after all.
So, possibly more positioning, but probably little actual progress - which is pretty much par for the course in the Illinois House.
*** UPDATE *** And away we go…
Democratic members of House leadership received an email from Speaker Mike Madigan’s office Wednesday morning telling them to expect a bill that would appropriate funds for tens of thousands of employees. It could be voted on next week. […]
With such a bill, however, comes an interesting set of questions for lawmakers with various priorities, including those who would question paying state workers before paying social service providers or funding MAP grants for needy students. That likely means additional items are added to the bill. The proposed legislation would not negate the court battle, which could prove to take months, but would act as a stopgap, giving the Illinois Comptroller authority to pay certain bills on time.
*** UPDATE 2 *** The House Republicans are out with their own proposal…
- State Representative Avery Bourne (R-Raymond) filed House Bill 1787 today that would make state workers’ salary payments a continuing appropriation, guaranteeing payment during a budget impasse. This measure would keep workers paid and prevent a government shutdown.
This has become a particularly urgent issue due to Attorney General Lisa Madigan filing a motion in court to end payment to state employees beginning February 28th, 2017. In response, there has been talk of a similar bill that would provide for a short term appropriation for state worker salaries. However, a stop gap appropriation would be a temporary fix and would leave state worker pay vulnerable to future attacks. This proposal is a long-term solution to the problem of state worker pay being held hostage in a larger political fight.
“This legislation will prevent state worker pay from being used as a political pawn. Families across Illinois rely on the vital services provided by our state agencies. Before I arrived in the General Assembly, legislators chose to make their pay a continuing appropriation which guaranteed their pay with or without a budget. However, those legislators did not afford those protections to state employees. This legislation will keep state worker pay out of the political games that are too often played in Springfield.”
If enacted, this legislation would be effective immediately. Bourne previously co-sponsored similar legislation in the 99th General Assembly that was not allowed a committee hearing. Representative Bourne and her colleagues are calling on the House of Representatives to take up this issue as soon as they return to the Capitol next week.
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