* Illinois Policy Institute, April of 2020…
Two major credit ratings agencies, Standard and Poor’s Global Ratings and Moody’s Investors Service, have dropped Illinois’ credit outlook to “negative” from “stable” on expectations that economic fallout from COVID-19 will strain state budgets.
Both currently rank Illinois bonds just one notch above non-investment grade debt, also known as “junk” status, while the third major agency, Fitch Ratings, puts Illinois slightly higher at two grades above junk. The Prairie State has the lowest rating among states across all three agencies.
* October 8, 2020…
A public finance watchdog said the latest report on Illinois’ finances from Fitch Ratings is evidence the state is on the verge of having a junk credit rating.
Fitch gave $850 million of borrowing the state issued a BBB- rating. Some of that borrowing is for the state’s pension buyout program, the rest is for capital projects.
Wirepoints President Ted Dabrowski said the pension buyout program is a distraction and not providing real savings. He said the Fitch report shows state’s politicians are running out of options and are costing taxpayers more by borrowing more money.
* House Republican Leader Jim Durkin in 2019…
S&P called the Pritzker budget “dubious” and said enacting it could ”weaken the state’s credit trajectory,” which is already at a junk-bond-skirting BBB- in the S&P credit-rating table. Fitch Ratings explicitly warned Illinois that enactment of the Pritzker budget will place the state in risk of a credit downgrade.
A third major credit-rating office, Moody’s Investors Service, has also ranked the State of Illinois only one notch above junk-bond level.
The Illinois Republican Party also warned in 2019 that Gov. Pritzker could drive the state into junk bond territory.
* The ILGOP has often used downgrades to whack Democrats. A sampling…
* And, of course, there’s the Tribune editorial board…
And now that Illinois has earned its first credit rating upgrade in 21 years? Nothing. Zip. Nada. Nix, nein Frankenstein, as we used to say in Germany.
It’s not that I expected any joyous announcements, but I did expect something. Must take awhile to reprogram their talking points software. Or maybe their unified system was hit with a ransomware attack.
…Adding… Eleni Demertzis with the HGOPs…
The Democrats’ ransomware attack upon the US Treasury was successful, and the state has been able to pass a budget with the bailout cash. We are all old enough to remember a time when Governor Pritzker told us a graduated income tax was needed to save our state’s finances. Seems like he might still have retrograde amnesia.
The federal aid to the state was not used to balance the budget. And the governor said accurately yesterday that the state’s structural deficit remains, although it was pared back with $655 million in corporate loophole closures.
…Adding… For those either deliberately or ignorantly unclear on the concept in comments, what I meant was that I expected responses like this one from IPI after a 2013 California upgrade…
California’s fake reforms yield credit upgrade
I mean, at least give us a little grumpiness or something. Instead, crickets. By the way, those “fake reforms” led directly to California’s very real budget surplus of $80 billion today.
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* Background is here if you need it. WBEZ…
Lawmakers and advocates are calling for outside oversight of the Illinois Department of Corrections after a WBEZ investigation revealed a pattern of alleged beatings by guards in an area of Western Illinois Correctional Center where there was no video camera coverage.
The investigation documented nine people who separately accused a group of officers of beating them in the same area. Prison records show staff were aware of a blind spot that lacked cameras and of repeated accusations of violence, but the violence persisted until guards allegedly beat a prisoner named Larry Earvin to death in that same location. Federal prosecutors have charged three guards for the beating.
Illinois Gov. JB Pritzker has declined multiple requests to comment on WBEZ’s investigation or the repeated allegations of abuse. Pritzker’s silence continues a pattern in which his director of prisons has refused to do an interview about staff abuse and accountability despite requests over two-and-a-half years.
State Rep. Anne Stava-Murray said she was “horrified” by WBEZ’s findings. “The fact that somebody had to die before that was adequately taken care of, I think is atrocious,” Stava-Murray said. […]
“It’s not just how many cameras are there and where are they placed. It’s who’s reviewing the footage? How often is the footage being reviewed? Is it made publicly available? Is it being shared? Is it being reported?” Jennifer Vollen-Katz [the executive director of the John Howard Association] said.
* So, I checked in with Jordan Abudayyeh…
Protecting the safety of staff and individuals sentenced to IDOC custody is the highest priority of this administration. Under the leadership of Acting Director Rob Jeffreys, we have increased security measures statewide. These measures include, but are not limited to:
• The installation of 79 new cameras at Western Illinois Correctional Center over the last year.
• The institution of a unit management system at several facilities, including Western Illinois, to create greater contact between counselors, security staff, and people in custody. This approach increases opportunities for communication and improves the Department’s responsiveness to the concerns of incarcerated people.
• The hiring of an attorney to serve as Chief Inspector. Chief Latoya Hughes is charged with providing oversight of the statewide grievance system and identifying needed reforms to ensure the process is fair, consistent, and responds to the needs of the incarcerated population.
Thoughts?
*** UPDATE 1 *** I missed this one earlier in the week. Holy moly…
Three Choate Mental Health administrators have been indicted on felony charges related to their work at the state-run facility. […]
All are accused of violating the Department of Human Services investigating protocol, his office stated in a news release.
Tripp alleges these violations started a chain of events that impeded an active investigation by Illinois State Police-Division of Internal Investigation of a staff member battering an individual served at the facility. Felony charges are pending in this case. […]
The indictments come after a string of other arrests last year tied to the institution. In all, eight current or former employees were arrested on charges connected to their employment at Choate.
*** UPDATE 2 *** Rep. Deb Conroy…
Rich, the Choate situation is a huge red flag to our state that we must prioritize mental Heath and SUD. This is absolutely unacceptable that the very inadequate facilities we do have are not safe. It is long overdue, but today I submitted language to require Illinois to have a Mental Health and SUD Czar. We are at a crossroad of crisis and opportunity with a moral responsibility to act.
…Adding… Sen. Fowler…
State Senator Dale Fowler (R-Harrisburg) issued the following statement regarding the indictment charges:
“The abuse that came to light in 2018 at the Choate Mental Health facility was disturbing. To know that staff tasked with the care of some of the most vulnerable in our state were capable of such mistreatment was unsettling. Now we have three administrators, who should have worked to ensure the safety and wellbeing of the residents within this state-run facility and held their staff accountable for their actions, accused of misconduct and violating proper investigative protocol in regards to those abuse allegations. It is deplorable.
“As administrators, these individuals had a responsibility to protect those entrusted with their care. If it is proven that these officials ignored their duty and acted in any way to prevent justice for the residents harmed within Choate, they should be held accountable for their actions.
“Under the circumstance of the situation and with the seriousness of the charges, I urge the Administration to place all three individuals on administrative leave immediately.”
On June 28th, the Union County State’s Attorney announced that Bryant T. Davis, Teresa A. Smith and Gary K. Goins have all been charged with official misconduct, a Class 3 felony.
*** UPDATE 3 *** Sen. Bryant…
Three Choate Mental Health administrators are actively employed with the Illinois Department of Human Services despite being recently indicted on felony charges stemming from the abuse accusations of 2018 at the state-operated developmental center in Anna.
State Senator Terri Bryant (R-Murphysboro), who serves as the Minority Spokesperson of the Senate Behavioral and Mental Health Committee, issued the following statement:
“It is unconscionable that the individuals charged with covering up and interfering with an investigation into the abuse of residents are continuing to actively work and have access to the staff and facility—the very facility in which they failed to properly protect the vulnerable residents under their care. It’s simply inexcusable.
“These individuals must immediately be put on administrative leave until these allegations are thoroughly investigated.
“As we’ve seen with the recent tragedy at the LaSalle Veterans Home, failure to take the appropriate steps necessary to ensure the safety of residents and our most vulnerable have serious consequences.”
On June 28th, the Union County State’s Attorney announced that Bryant T. Davis, Teresa A. Smith and Gary K. Goins have all been charged with official misconduct, a Class 3 felony.
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* Assistant House Majority Leader Delia Ramirez has withdrawn her motion to reconsider the vote on HB2908, the Chicago elected school board bill.
Ramirez had put a hold on the bill to allow Mayor Lori Lightfoot a chance to make her case for what to include in the coming trailer bill. Ramirez and Lightfoot met last week to discuss the issue, but Ramirez has said all along that she wanted the bill on the governor’s desk by the end of June.
This post may be updated.
*** UPDATE *** From Leader Ramirez…
State Representative Delia Ramirez, D-Chicago, has lifted her motion to reconsider HB 2908. The legislation that creates a path to a fully-elected school board for Chicago Public Schools will now be sent to the governor’s desk. This action comes after meeting with stakeholders to begin discussing outstanding issues that may be addressed in trailer legislation during the fall veto session.
“Parents should have a voice in their children’s education and now Chicago will be in line with the rest of Illinois on this issue. Returning this right to Chicago parents, the overwhelming majority of whom support this measure, is an honor. Their participation in this process was invaluable and shows that they will be active participants in the electoral process which begins in 2024.
“I appreciate the support I’ve received from my fellow legislators, especially state Senator Martwick, who shepherded this measure through the state Senate. As a long time supporter of an elected school board, it is my hope that Gov. Pritzker will sign this measure into law expeditiously.”
…Adding… Apparently, it’s Lift the Brick Day in Illinois…
That was also expected.
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* Lynn Sweet…
Illinois GOP Reps. Rodney Davis and Adam Kinzinger — both being mentioned as potential 2022 governor candidates — joined with Democrats on Tuesday to approve a measure to remove statues of Confederate leaders from the U.S. Capitol.
The move would, among other things, take down a bust of Supreme Court Chief Justice Roger Taney, who in 1857 authored the Supreme Court Dred Scott decision that said people of African descent brought to the U.S. were not citizens. The plan is to install a bust of Thurgood Marshall, the first African American Supreme Court justice, in his place.
The measure passed the House on a 285 to 120 roll call. A similar piece of legislation was advanced last by the Democratic-controlled House only to stall in what then was a GOP-run Senate. Now the Democrats run the Senate.
Kinzinger and Davis were among the 67 Republicans joining Democrats in backing the measure. Freshman Rep. Mary Miller, R-Ill., did not vote.
Rep. Miller did vote “No” on ordering the previous question before she took a walk on the actual vote.
* Rachel Hinton…
Democratic Illinois secretary of state candidate Alexi Giannoulias added another union to his growing list of supporters, garnering the endorsement of the Laborers’ International Union of North America a little less than a year before the June primary.
That endorsement spans the union’s 15 locals and nearly 23,000 members as part of the labor organization’s Cook County base as well as an additional 26 local chapters and 17,000 members downstate.
A spokeswoman for Giannoulias’ campaign said employees from 16 different unions, including the laborers, work in the secretary of state’s office.
* I told subscribers about this development last week. Notice that Rep. Mazzochi doesn’t say what office she is running for…
Illinois Democrats targeted Republican state Rep. Deanne Mazzochi for termination with extreme prejudice — in other words, political oblivion.
But the Elmhurst Republican has decided she won’t retire quietly to the sidelines. In fact, once she makes up her mind which direction she’ll go, Mazzochi said she plans to fight hard to maintain her place in the political arena.
“I certainly will be a candidate in the 2022 elections,” said Mazzochi, an Illinois House member since 2018. […]
Regardless of what happens, however, Mazzochi is running — for something. Although she recently contributed $150,000 to her campaign fund, Mazzochi said she doesn’t have “an established timeline” to make a decision on how or where to proceed because the situation is so fluid.
…Adding… Young Democrats of Illinois…
On June 26th, with a keynote from Dr. Robin Kelly the Young Democrats of Illinois held their convention to elect the new Executive Board. Quinne Welter will succeed Arielle Maffei as President, Saghi Sandra Hosseini will step in as the Executive Vice President with Dan Asonye, 1st Vice President, Bobby Mannis, 2nd Vice President, and Akanksha Balekai, 3rd Vice President. Followed by Marla Johnson as Secretary, Anthony Vega as Treasurer, and Izzy Dobbel and Thomas Maillard as the National Committeepeople. They will expand on the groundwork laid by the previous Executive Board, grow the organization, and represent Illinois at the Young Democrats of America convention in August.
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* Moody’s…
Moody’s Investors Service has upgraded the State of Illinois’s general obligation (GO) rating to Baa2 from Baa3. In connection with this action, ratings on Build Illinois sales tax revenue bonds were upgraded to Baa2 from Baa3, and annual appropriation bonds issued by the Metropolitan Pier and Exposition Authority Ratings were upgraded to Baa3 from Ba1. Total debt affected amounts to about $33 billion, including $27.7 billion of general obligation bonds, $3 billion of Metropolitan Pier and Exposition Authority bonds, and $1.9 billion of Build Illinois bonds. The outlook remains stable.
RATINGS RATIONALE
The upgrade of Illinois’ GO rating to Baa2 from Baa3 is supported by material improvement in the state’s finances. The enacted fiscal 2022 budget for the state increases pension contributions, repays emergency Federal Reserve borrowings and keeps a backlog of bills in check with only constrained use of federal aid from the American Rescue Plan Act. Illinois still faces longer-term challenges from unusually large unfunded pension liabilities, which are routinely shortchanged under the state’s funding statute. These liabilities could exert growing pressure as the impact of federal support dissipates, barring significant revenue increases or other fiscal changes.
* Press release…
Governor JB Pritzker hailed the state’s improved bond rating from Moody’s Investor Service on Tuesday, the first such rating upgrade from a credit rating agency in more than 20 years. Since taking office, Gov. Pritzker has tirelessly focused on strong and responsible fiscal management, working with the General Assembly to hold the line on spending while making key investments to strengthen Illinois’ outlook.
Moody’s last upgraded the state’s bonds in June of 1998 and today’s upgrade credited “material improvements,” with only “constrained use of federal aid,” including increased pension payments, repayment of federal borrowing and keeping the bill backlog in check.
“I promised to restore fiscal stability to Illinois, and Moody’s ratings upgrade demonstrates that Illinois’ finances are heading in the right direction for the first time in two decades. A ratings upgrade pays momentous dividends for taxpayers, and the people of Illinois deserve credit for their incredible resilience and determination,” said Governor JB Pritzker. “This upgrade is the result of many leaders working together on a strong fiscal plan and putting that plan in place, and I would like to especially thank Speaker Welch, President Harmon, Leader Greg Harris, Senator Sims, Comptroller Mendoza and Treasurer Frerichs for their partnership. I also applaud Moody’s for answering our request to take a fresh look at the State and their willingness to listen to our progress and our plans.”
Moody’s upgraded Illinois’ rating on its General Obligation bonds from Baa3 with a stable outlook to Baa2 with a stable outlook, and also upgraded the Metropolitan Pier and Exposition Authority ratings to Baa3 from Ba1 based on the state’s support. Build Illinois bonds were upgraded to Baa2 from Baa3.
* Some recent history…
On June 1, 2017, Standard and Poor’s Global Inc. and Moody’s Investors Service, credit rating agencies, downgraded Illinois’ credit rating. S&P also said that it might downgrade the state’s credit rating further if the state failed to adopt a budget. The downgrade placed the state’s credit rating at one step above a junk rating (a low rating which indicates the state is a high risk investment). At the time of the downgrade, the state had not passed a budget in two years due to disagreements between the Democratic state legislature and Republican Governor Bruce Rauner. According to S&P analyst Gabriel Petek, “the rating actions largely reflect the severe deterioration of Illinois’ fiscal condition, a byproduct of its stalemated budget negotiations, now approaching the start of a third fiscal year.” Prior to this downgrade, Illinois’ credit rating was the lowest in the country. If downgraded again, Illinois would become the first state to receive a junk rating from a credit agency.
…Adding… Daily public schedule update…
What: Gov. Pritzker to address Moody’s upgrade of the state’s bond rating, the first rating upgrade from a credit rating agency in more than 20 years.
Where: Illinois State Capitol, Governor’s Office, Springfield
When: 4 p.m.
Watch live: https://www.Illinois.gov/LiveVideo
…Adding… Speaker Welch…
There’s consensus—not only have all three rating agencies upgraded our state’s outlook, but now Moody’s has given Illinois a full credit upgrade. Thanks to responsible and balanced budgets, as well as sound economic policy decisions, we continue to move our state toward financial stability. This is yet another example that we can support all Illinois families, invest in our communities, provide high-quality state services to those in need, all while improving our fiscal health.
…Adding… Historical chart…
…Adding… Comptroller Mendoza…
“I couldn’t be happier that our hard work is producing results: the first rating upgrade for Illinois in two decades from Moody’s Investor Services,” Illinois Comptroller Susana A. Mendoza said. “This means lower costs for Illinois taxpayers. As you have seen in recent months, even in the middle of a global pandemic, my administration has successfully paid down a backlog of bills that just four years ago hit $16.7 billion — down to $2.9 billion today — and did so while prioritizing the most vulnerable people in our state.
“As your state Comptroller, I vowed to stay laser-focused on paying down the backlog of bills and earning a credit upgrade. Governor Pritzker, leaders of the General Assembly and I all agreed to use better-than-expected revenues this year to pay down bills and we did not over-commit the federal stimulus funds which – it should be noted here – have not yet arrived and are not the reason we were able to pay down these bills.”
As Moody’s said in its announcement today that it was raising the state’s status to Baa2 from Baa3, “The enacted fiscal 2022 budget for the state increases pension contributions, repays emergency Federal Reserve borrowings and keeps a backlog of bills in check with only constrained use of federal aid from the American Rescue Plan Act.”
…Adding… Senate President Harmon…
Stability and responsibility produce results. You don’t need to ruin people’s lives to have sound fiscal policies and positive outcomes.
I want to thank Governor Pritzker and Speaker Welch for their teamwork in helping us find a better way forward.
…Adding… Senate GOP Leader McConchie…
“The change is encouraging but claiming victory with federal money is misleading the people of our state,” said Illinois Senate Republican Leader Dan McConchie (R-Hawthorn Woods).
“Like someone trying to hide a hole in the wall by covering it with wallpaper, the governor and Democratic majorities are trying to ‘paper over’ the state’s ongoing systemic budgetary and economic issues. For example, we still have over $140 billion in unfunded liabilities for the five state retirement systems. The Chicago pension system is still projected to run out of money in six years. Meanwhile, state pension payments continue to consume a quarter of Illinois’ operating budget, which is billions of dollars that can’t be used to fund schools, increase public safety, or improve our transportation systems.
“Illinoisans deserve systemic, structural changes to our long-standing issues - not lies about our financial status. The truth is, that without the influx of federal aid, our state would very likely be looking at yet another credit downgrade.
“When the federal money dries up, as it will, the governor and his party will no longer be able to pretend that there’s no hole in the wall.
“Today is a positive step, but there will come a day when the governor and his party run out of other people’s money. Unfortunately for the people of Illinois, that day is coming sooner, rather than later.”
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