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*** UPDATED x1 - Assessor: Kennedy screwed up his example *** Assessor claims Kennedy’s plan has been prohibited by state courts for 70 years

Monday, Jan 22, 2018 - Posted by Rich Miller

* Let’s go to the substance of Chris Kennedy’s property tax press conference today. I originally had this Crain’s story in another post, but I moved it here

In the case of Hyatt Center, for tax purposes the building is valued at $160 million by Berrios, but it has a mortgage of $385 million––a solid indication in Kennedy’s view that the building is underassessed, shifting costs to homeowners “in the bungalow belt, and, as a result people are losing their homes.”

Kennedy said his solution bases assessments strictly on property sales, rather than on the “income” basis Berrios uses.

Berrios had no immediate response, but in the past he has suggested that the law requires him to base assessments on how much money a building makes rather than how much it last sold for, which can vary wildly at any point in time depending on market conditions.

Kennedy did not specify whether he would propose legislation to change the system, but said Democrats who long have controlled the General Assembly “did nothing to fix this system.”

Kennedy’s idea may not be as desirable as it sounds. Real estate values tend to be extremely volatile in the commercial market, and taxing bodies such as schools and City Hall need stable sources of finances.

* Kennedy was asked today if he knew why properties are assessed primarily on the income they generate rather than on sales prices and mortgage costs

I would say that it’s not surprising that occurs around the city. Joe Berrios ignores that data. He says the property’s sales value shouldn’t inform the valuation. He says that the mortgages shouldn’t inform valuation. The fact is every mortgage on anything big is recorded at the Cook County Recorder of Deeds’ office. The information is already in the hands of the county. Why we’re not using it to properly assess our buildings is a question best asked of Joe Berrios.

* From the Cook County Assessor’s office…

Mr. Kennedy demonstrates a woeful lack of knowledge about the assessment process in general, and Illinois law in particular, for commercial buildings – including buildings his family either controlled for decades or still controls.

Because commercial buildings exist solely to generate income, current income is the primary factor in the value of such buildings – as Illinois courts have stated for some 70 years. Sale prices are not primarily driven by a building’s current value. Transaction prices in these buildings are highly speculative and based on future income expected by buyers investing in buildings. They often include significant non-real estate components.

A mortgage for such a building can be based on that speculation and a discounted cash flow analysis but the Assessor, by law, cannot speculate on future income or non-real estate factors.

Mr. Kennedy was quite happy with the current-income-approach-to-value before, during and after his sale of the Merchandise Mart. The prohibition on speculative price valuation in property assessment has been bedrock of Illinois law for 160 years. He should actually become informed on the laws of this state.

To base individual assessment on a sale price is known as “sales chasing.” Sales chasing is prohibited by decisions of both the United States Supreme Court and Illinois Supreme Court as violations of equal protection under the law and the Article IX Illinois Command of uniformity in assessments.

*** UPDATE *** Oh, man, this is so bad for Kennedy. From the assessor’s office…

The Cook County Assessor’s Office assumed Mr. Kennedy would not have the temerity to state a false number, but he did. His claim is wildly inaccurate. The Hyatt Center at 71 S. Wacker is actually valued at approximately $382 million, not the $160M Kennedy falsely stated.

It is not uncommon for large commercial buildings to have multiple Property Identification Numbers (PINs). Evidently, Kennedy checked only two PINs. There are, in fact, seven PINs totaling $382M for the property at 71 S. Wacker (Hyatt Center). Clearly, he does not know how to even calculate a current, accurate assessed value.

By the way, the $382M is the Cook County Board of Review’s figure, reduced from the original, higher Assessor’s Office figure of $396M.

In addition to his failure to properly calculate value, Kennedy demonstrates a woeful lack of knowledge about the assessment process in general, and Illinois law in particular, for commercial buildings. That includes buildings his family either controlled for decades or still controls.

Because commercial buildings exist solely to generate income, current income is the primary factor in the value of such buildings – as Illinois courts have stated for some 70 years. Sale prices are not primarily driven by a building’s current value. Transaction prices in these buildings are highly speculative and based on future income expected by buyers investing in buildings. They often include significant non-real estate components.

A mortgage for such a building can be based on that speculation and a discounted cash flow analysis but the Assessor, by law, cannot speculate on future income or non-real estate factors.

Kennedy was quite happy with the current-income-approach-to-value before, during and after his sale of the Merchandise Mart. The prohibition on speculative price valuation in property assessment has been bedrock of Illinois law for 160 years. He should actually become informed on the laws of this state.

To base individual assessment on a sale price is known as “sales chasing.” Sales chasing is prohibited by decisions of both the United States Supreme Court and Illinois Supreme Court as violations of equal protection under the law and the Article IX Illinois Command of uniformity in assessments.

  29 Comments      


*** UPDATED x2 - Biss, Pritzker respond *** Kennedy asked about Rauner praise

Monday, Jan 22, 2018 - Posted by Rich Miller

* Chris Kennedy talked to reporters about property taxes today, but he was also asked to address his Friday comments about Gov. Rauner

Rick Pearson: Why should any Democrat be lauding Bruce Rauner? I mean, you said that he speaks truth to power. What exactly are you talking about as far as ‘the power’ [unintelligible]

Chris Kennedy: I think that, that Bruce Rauner was critical of Mike Madigan and the pay to play culture that’s present in our state. And when you, you see, when you see JB Pritzker, when you listen to that tape of him talking to Blagojevich, and this notion that big money is coming in to buy an outcome, buy an outcome maybe for him to become treasurer of the state or some other appointed position. I think that’s the culture that we need to get rid of in Illinois. We cannot have a pay to play system if we’re gonna end up with a great economy and an expanding, uh, economy that works for everyone because we’re underfunding the very institutions that lead to those good outcomes.

Greg Hinz: Do you have any regrets over saying what you said the other day?…

Kennedy: I mean, I’m running against Bruce Rauner. I campaigned against him all over the state while he was running. I’ve been an absolute critic of his behavior. I think he’s reprehensible for, for throwing a million people out of government programs. His silence against Donald Trump is beyond belief. His willingness to put Dreamers at risk is inhuman. And, and yet, and yet, and yet he’s, he’s taking on this pay to play culture that needs to be criticized.

The full Q&A video is here.

*** UPDATE 1 *** I asked the Pritzker and Biss campaigns to respond to the fact that Kennedy didn’t say he had any regrets when pressed. Here’s the Pritzker campaign’s Galia Slayen…

Bruce Rauner has done unconscionable damage to this state, stripping over 1 million Illinoisans of critical services and creating crisis after crisis. The fact that Chris Kennedy can’t stop praising Rauner tells Illinoisans all they need to know about Chris and his failed campaign.

*** UPDATE 2 *** Biss spokesman Tom Elliott…

“Chris Kennedy wants to be governor so bad he’s unapologetically copying Bruce Rauner’s playbook. Kennedy blames Democrats for maintaining the broken system he and J.B. Pritzker use to enrich themselves, and he ‘applauds’ the worst Republican governor in the country who’s made life harder for middle-class families in Illinois.

“When Kennedy applauds Rauner for speaking truth to power, does he agree the budget impasse between Rauner and Madigan was worth the lasting damage it caused to our state and working families?

“When Kennedy applauds Rauner for calling out a pay-to-play culture, is he forgetting about the politically-connected lawyers he hired to get massive tax breaks on his properties?

“And now, with the Rauner-Kennedy plan to ban lawmakers from being property tax appeals lawyers, they both fail to understand that the problem is larger than any one elected official.

“Instead of casting blame, we need a leader who will offer real solutions and work toward meaningful reforms to finally make our state work for the rest of us. Not someone who uses a crisis to score political points.

“That’s the choice we have in this election. We could have Bruce Rauner — or a copy of Bruce Rauner — for four more years. Or we can elect Daniel Biss, who knows how middle-class families like his own are struggling to make ends meet, while Rauner, Kennedy and Pritzker all take advantage of a broken system to enrich themselves and avoid paying their fair share.”

[ *** End Of Updates *** ]

* From the Pritzker campaign…

Today, Chris Kennedy held a press conference where he provided more property tax rhetoric that is at odds with his record, refused to say if he regretted “applauding” Bruce Rauner on Friday, and said “I don’t know the answer” to basic questions about his own plan.

Most notably, the basis of Kennedy’s “plan” is the idea that the building he was standing in front of was assessed for a fraction of what a bank valued the same building. However, Chris Kennedy’s Merchandise Mart benefitted from this same practice during his tenure.

THE FACTS – In 2007, while Chris Kennedy was President of the Merchandise Mart:

    * The Merchandise Mart was appraised at $917 million in documents used to obtain a loan.

    * That same year, the Assessor and Board of Review assessed the Merchandise Mart at $436,068,830, less than half of its appraised value.

    * The Cook County Assessor at the time, James Houlihan, is now a major donor and fundraiser for Chris Kennedy’s campaign.

“Chris Kennedy held a press conference to attack himself, railing against the same practice he exploited to get millions in property tax breaks at the Merchandise Mart,” said Pritzker communications director Galia Slayen. “For Chris Kennedy, it is do as I say not as I’ve done for millions of dollars in property tax breaks.”

* From Daniel Biss’ spokesman…

When you post about Kennedy’s presser, maybe include this video and transcript?

https://www.youtube.com/watch?v=xcWl3z0n9p0

“We can let these two guys complain about whose tax scam was the worst until Bruce Rauner gets reelected. Or we can elect someone who’s not participated in a tax scam, we can elect someone who lives a normal, middle-class life, oh and by the way, elect someone whose property tax burden is a legitimately significant part of his income, because I pay more than ten percent of my income in property taxes. I’m sure neither one of you does. I don’t think it’s important to get into JB Pritzker’s head and figure out exactly what he was thinking at the moment that the toilet got removed, what I know is what happened in your two mansions is not what fifty thousand residents do a year, and what I know Chris, is that you hired the most politically-connected people on a repeated basis to get massive property tax breaks. And now you guys are both running for governor and you say that you want to fix the system. Who is actually going to fix it? Come on.”

  22 Comments      


Andy Shaw to step down from BGA top job

Monday, Jan 22, 2018 - Posted by Rich Miller

* Press release…

Better Government Association President and Chief Executive Officer Andy Shaw will be stepping down from his day-to-day responsibilities at the nonpartisan, nonprofit civic watchdog organization later this year.

Shaw, 69, has led the BGA since 2009 after spending 37 years as a print and television journalist in Chicago.

Under his leadership, the BGA has grown from a staff of three people and a budget of $300,000 to a full-service statewide organization with 30 full, part-time, freelance and contract employees and an annual budget of more than $3.5 million.

“Andy has done a phenomenal job elevating the scope and impact of this vitally important watchdog organization,” said BGA Board Chairman Mark Rust. “He has made a lasting contribution to the fight for government that is more honest, efficient, transparent and accountable.”

Once his successor is chosen, Shaw will remain active in supporting the BGA’s fund-raising, journalistic and civic engagement efforts.

In addition to his BGA leadership duties, Shaw is a columnist and regular contributor to radio and TV stations in Chicago and Springfield. He is also a frequent guest speaker at business and civic events.

“There’s still a lot of work ahead of us if we’re ever going to have the good government we’re entitled to in exchange for our hard-earned tax dollars,” Shaw said. “I plan to support our board and new leadership team in whatever ways I can to keep the BGA in the forefront of this critically important mission.”

The BGA has won dozens of national, state and local awards for journalistic excellence and civic contributions, including last year’s national Society of Professional Journalists’ First Amendment Award for unearthing the Chicago mayor’s private emails, which prompted major changes in the city’s private email policies.

The BGA will celebrate its 95th anniversary this year. The organization was founded in 1923 by a group of Chicago business, civic and religious leaders who were sick of corruption at City Hall and mobster Al Capone’s influence on local politics and government.

The search for Shaw’s replacement is being directed by BGA board member Clark Bell, former Journalism Program Director of the Robert R. McCormick Foundation. Internal and external candidates will be considered. Those interested in applying should email a cover letter and resume to Ernest Crowder, the BGA’s VP of Operations (ecrowder@bettergov.org).

He’s been one heck of a fundraiser and has lately restored the group’s investigative chops.

…Adding… Andy also sent out a personal message about his decision. Click here to read it.

  17 Comments      


*** UPDATED x3 - Ruiz responds to Raoul - Raoul responds without addressing the charge - Ruiz claims Raoul bragged about delaying a bill to elect Chicago school board *** CTU backs Raoul, NNU backs Biss

Monday, Jan 22, 2018 - Posted by Rich Miller

* Press release…

Sen. Kwame Raoul joined Chicago Teachers Union officials today, who formally announced that their 24,000-strong union is endorsing Raoul in his candidacy to serve as the next Attorney General of Illinois.

“Our members know how critical it is to support candidates who are principled, trustworthy and committed to the greater public good – not just by the words they speak but by the record of public service they bring to the table,” said CTU Vice President Jesse Sharkey.”We can count on Kwame to put the people’s business and the people’s needs front and center as Attorney General, something we simply could not expect from some of the other candidates vying for this office. We know he’ll support fair taxes, adequately and fairly funded schools, the health and safety of Illinois residents, and honest, open, accountable government. We’re proud to support him.”

For more than 75 years, the Chicago Teachers Union has been in the forefront of education advocacy and public school reform in Chicago. The CTU represents the teachers and educational support personnel working in the Chicago Public Schools and, by extension, the students and families they serve.

Sen. Raoul has been a strong champion of teachers during his 13-year legislative career, and believes that protecting and investing in public education is a critical element in mitigating the violence that plagues Chicago’s streets.

“A quality education is a civil right that must be afforded to all the children of Illinois,” Raoul said. “Unfortunately, we live in a state with a separate and unequal public education system that teeters on the brink of educational apartheid – one for the students of affluent districts and parents, and another for low-income students in districts like Chicago. I’m proud to stand with the CTU in its efforts to ensure that public education is governed and funded with equity, here in Chicago and across the state. I appreciate the CTU’s endorsement immensely, and I look forward to serving the best interests of public school students from across the state as Illinois Attorney General.”

In the legislature, Raoul has voted to increase education funding, fought for more equity in the State’s school funding formula, and is sponsoring legislation to bring an elected school board to Chicago.

“Kwame has consistently demonstrated his belief in democracy and voting rights,” said high school teacher Ben Coyle, who chairs the union’s legislative committee. “He is committed to protecting both the families who depend on public education and the union educators, clinicians, and paraprofessionals who are the backbone of our school communities, and after a vigorous review of all the candidates for AG, we are proud to endorse him.

CTU President Karen Lewis, who has been ill, also sent a statement declaring her support for Raoul.

“Kwame believes in fairness – for our children, our families, our public workers and all of Illinois’ residents,” she wrote. “He cares deeply about the rights and needs of Black students across the city, and as the child of immigrant parents, he’s also committed to the needs of immigrant students and families. As Illinois’ highest ranking legal advocate, he’ll protect the rights and dignity of our schools’ children and their parents, and he’ll advocate for fair treatment for the city’s Black educators, who have seen their numbers decimated by school closures and so-called ‘turn-arounds’. He’s the candidate we need in the age of Trump and Rauner’s attacks on moderate-income and poor families, and for all of our state’s school-children.”

The CTU is an affiliate of the American Federation of Teachers (AFT) and the Illinois Federation of Teachers (IFT), as well as the third largest teachers union local in the country and the largest local union in Illinois. Chicago Teachers Union affiliations also include the Chicago Federation of Labor (CFL), the Illinois State Federation of Labor-Congress of Industrial Organizations (ISFL-CIO) and the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO). The union represents nearly 25,000 teachers and educational support personnel working in Chicago public schools, and by extension advocates for nearly 400,000 public school students and their families.

*** UPDATE 1 *** Democratic attorney general candidate Jesse Ruiz…

For months now, Kwame Raoul has been trying to curry favor with the teachers’ unions by claiming that he strongly supports an elected school board in Chicago. But in a March 15 meeting behind closed doors in his Senate office, he bragged to me and to others that he was actually working to delay a pending bill that would enable election of Chicago school board members. That bill still has not moved in the Senate.

Kwame Raoul is the ultimate Springfield insider: He says one thing behind closed doors and something completely different in public. Teachers in Illinois can’t trust Kwame Raoul to fight for them and for our children’s futures.

In December, I called on the Illinois General Assembly to pass new legislation giving voters control of the Chicago Board of Education. I am sorry that the Chicago Teachers Union has been deceived by Kwame Raoul’s empty rhetoric. Illinois voters don’t need a duplicitous, ethically-challenged attorney general.

There was no way on Earth that the CTU would’ve ever endorsed Ruiz because he was vice president of the Chicago school board when it unanimously voted to close 50 schools.

Anyway, I’ve asked the Raoul campaign for comment and will post an update if they respond.

*** UPDATE 2 *** Raoul campaign…

No one can testify to the harm and havoc that Jesse Ruiz wreaked on Chicago’s school children and our neighborhoods more than CTU. Mr. Ruiz voted to close 50 schools, borrowed $1 billion just to cover budget gaps created by his board’s mismanagement and had multiple ethics scandals take place on his watch. Meanwhile, as a legislator Kwame has voted to increase education funding, fought for more equity in the State’s school funding formula, and passed legislation out of the Senate to bring an elected school board to Chicago.

Kwame is on the right side of history and he’s happy to have Chicago’s teachers on his side during this campaign.

That didn’t address the claim at all.

*** UPDATE 3 *** Jesse Ruiz…

“I have been honest and candid throughout my career - as I proved when I publicly stood up to CPS leadership as they tried to sweep an ethics scandal under the rug. People may not agree with every decision I’ve made throughout my decades in public service, but the voters of Illinois can count on my word.

In Kwame’s response to my statement, he attacked me but didn’t deny what he knows to be true: Kwame Raoul told me and others - to my face- that he didn’t support Chicago Teachers in their efforts to have an elected school board. Then he turned around and told the CTU the opposite, in a bald-faced attempt to get their support.

Unfortunately for the people of Illinois, Kwame Raoul frequently finds himself on the wrong side of the truth. The voters deserve better.”

[ *** End Of Updates *** ]

* Press release…

Today, National Nurses United (NNU) and Reclaim Chicago announced their endorsements of Daniel Biss for Illinois Governor. The first union to endorse Bernie Sanders for President and first national labor union to endorse a candidate in the Illinois governor’s race, NNU is the nation’s largest and fastest growing union of registered nurses with more than 150,000 RNs across the country, including 6,500 in Illinois.

Reclaim Chicago is known for its ability to mobilize grassroots volunteers to talk with voters about how our lives and communities could be transformed by electing people who will prioritize Medicare for All, fully funded public education and social services, world-class infrastructure and other investments in the common good. They gave 9,000 hours of volunteer field-work over five months in the 2015 Chicago municipal elections and more than 5,000 hours over 10 weeks to the campaigns of Kim Foxx, Bernie Sanders and many down ballot races in 2016.

Together, these organizations represent national and local progressive communities and will be a dominant force in this election by mobilizing grassroots support for Daniel Biss and sharing his vision of a state government that puts people first.

“Nurses are proud to endorse Daniel Biss because he shares nurses’ values of caring, compassion and community,” said Martese Chism, RN, a member of the Board of Directors of National Nurses Organizing Committee, NNU’s Illinois affiliate. “Under Governor Rauner, our communities are in jeopardy. Daniel Biss shares our vision for an Illinois where every resident receives quality healthcare through a single payer/Medicare for All healthcare system. He rejects the notion that cuts to social services are necessary or inevitable and is committed to raising the progressive revenue that we need to fully fund and expand the services that our communities need.”

National Nurses United cited Biss’ support and co-sponsorship for SB 1970, the LaSalle Street Tax, which would create a tax on the nearly $900 trillion of financial transactions that occur yearly at the Chicago Mercantile and the Chicago Board Options Exchange (CBOE). While working families pay sales tax for their purchases, LaSalle Street traders pay no sales tax on trades.

“It’s an honor to receive the endorsement of National Nurses United,” said Daniel Biss. “I’m running for governor because our system is broken: for too long, the wealthy and well-connected have gotten further ahead while working families have fallen further behind. In this election, and in elections like this one across the country, we need to decide whether we will compromise within a system that’s failed us, or chart a new path. As the national leader in the fight for Medicare-for-all, National Nurses United understands the stakes in this election. I’m especially proud to have their support as we fight for an Illinois where healthcare is a right, not an option — and where working families are a priority, not an afterthought.”

“Daniel is not a billionaire. He worries about balancing the cost of living with saving for his children’s college education, and he understands that the necessities of life are out of reach for far too many families,” said Amanda Weaver, Reclaim Chicago’s Executive Director. “Daniel knows first hand what a difference it would make in our lives to fully fund public education, to make public universities tuition-free, and to have a Medicare for All system that would free us from the financial crisis that almost always accompanies a health crisis. Daniel is already leading the fight to close corporate tax loopholes and make the very rich pay their fair share so that Illinois can afford to make these investments.”

“I’m incredibly excited to receive the endorsement of Reclaim Chicago,” said Daniel Biss. “By mobilizing middle-class and working people to fearlessly take on incumbents, machine politicians, and the ultra-rich, Reclaim Chicago is changing what’s possible in Illinois.

“It’s humbling and inspiring to join a group of Reclaim-backed leaders including Cook County State’s Attorney Kim Foxx, State Senator Omar Aquino, State Representatives Will Guzzardi and Theresa Mah, and so many other progressive champions. Our grassroots movement is proving that that no race is a done deal—that we can reject a mode of politics that has failed our families, and build a state that works for us.”

Reclaim Chicago’s members conduct a rigorous endorsement process. Unlike traditional political parties who close up shop after each election, Reclaim Chicago builds power in between election cycles by organizing grassroots support for public policies that increase investment in our communities and reduce income, racial and gender inequality.

  15 Comments      


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* Isabel’s afternoon roundup
* Madigan pens op-ed from prison
* CPS budgetary chickens finally come home to roost, but Mayor Johnson blames Statehouse
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* Credit Unions: Expanding Financial Opportunity Through Community Partnerships
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