* The National Journal somehow snagged an interview with Fred Eychaner, one of the Democrats’ biggest campaign contributors both nationally and here in Illinois. Eychaner almost never grants interviews, so this is a very rare profile…
Eychaner decided to construct his own heavily funded lobbying and public-relations vehicle [to help pass gay marriage] instead of donating funds to existing gay-rights groups. To do his media, he hired ASGK Public Strategies, a Chicago-based PR firm with ties to Obama, and he enlisted several of the state’s top lobbyists. […]
Eychaner entrusted Mike Madigan—the powerful Democratic speaker of the Illinois House of Representatives and someone to whom he had been a generous donor over the years—to deliver the votes. This did not sit well with other advocates, who wanted to cast a wider lobbying net, as opposed to leaning so heavily on Madigan to round up support.
“I would go on the record with my respect for Mike Madigan, which will probably upset a lot of friends,” Eychaner says now. “He’s enormously skillful at what he does. The only speakers of any House who survive are the ones who can keep their majority and keep everyone going largely in the same direction. Mike Madigan is superb at that.”
When it appeared last summer that they didn’t have the votes, the Legislature’s gay-marriage supporters delayed calling the bill to the floor. The grassroots wing of the LGBT movement was upset, and some began blaming Eychaner. The most obstreperous of these critics, a longtime gay-rights activist named Rick Garcia, publicly chastised Eychaner for being in Madigan’s pocket.
But after a five-month delay, the bill was voted on and passed, marking a historic occasion as well as vindicating Eychaner’s strategy. Eychaner compared the process to 20 mad chefs cooking on 20 different burners. “The person to the left of you by one degree thinks you’re selling out,” he said. “You’ve got to do what you’ve got to do. I don’t think I’ll be in that position again.”
When I asked about his near-term plans, he indicated only his interest in putting money behind the reelection campaign of Illinois Gov. Pat Quinn whose self-funding Republican opponent, Bruce Rauner, busted the individual spending-limits cap in the primary. “I don’t expect to be among the top donors this year, but I will do my share,” he said. “I am not the progressive Koch brother.”
Go read the whole thing.
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In the eye of the beholder
Monday, May 12, 2014 - Posted by Rich Miller
* OK, I’m gonna give you a hint about how to read news stories. When you don’t see a hard number right away, it’s a tip off that the problem being claimed isn’t as large as the lede might suggest. For instance…
Dozens of state jobs involved in a dispute over whether they should be free of politics were filled by Gov. Pat Quinn’s administration with candidates who were politically connected or gave campaign contributions to the governor’s party, an Associated Press review of state documents shows.
* Four paragraphs in, we see that “dozens” is about two dozen…
In an analysis of about 45 Quinn administration hires described in the government emails, the AP found more than half had connections. For instance, four held jobs in Quinn’s office or worked for another Democrat before moving to IDOT; nine are relatives of officeholders, party officials, union representatives or others who are politically connected; seven are politically active, either as officeholders or party officials; three have donated to campaign committees; and two have served on campaign payrolls, including for legislators.
I’m not trying to minimize this revelation or the reporting at all, but if the administration thought those jobs were exempt, then of course they’d put political hires in there. The only thing that truly surprises me is that it wasn’t 45 out of 45. /snark
Again, it’s clear that those jobs shouldn’t have been classified the way they were. Whether anybody knowingly broke the law is now what’s in question.
* And along those same lines, do we really want to go down this road?…
The Illinois transportation secretary says it would be too difficult to reopen the hiring process for jobs contested in a federal lawsuit. […]
Transportation Secretary Ann Schneider told a Senate appropriations committee Thursday that people in those jobs are union members and repeating the hiring process would lead to costly lawsuits.
Republican state Sen. Matt Murphy of Palatine says taking no action could lead to future illegal patronage hiring.
I can see Murphy’s point, but it’ll cost a whole lot of money to fire these folks, who aren’t really guilty of anything. It was IDOT’s fault they got those jobs, not theirs. But perhaps you disagree and I’m all ears.
* Meanwhile…
An Illinois tollway director appointed by Pat Quinn also heads a union that is a major financial player in the governor’s re-election campaign, most recently giving $250,000 to the cause in January.
The International Union of Operating Engineers Local 150, whose president is tollway Director James Sweeney, has donated more than $450,000 to Quinn’s campaign fund since the 2010 election, state records show. Sweeney also is chairman of the Chicagoland Operators Joint Labor-Management PAC that contributed $150,000 to Taxpayers for Quinn in 2010 and 2011.
The contributions don’t breach any ethics laws but they’re troublesome, some government experts say, particularly given past cronyism at the Illinois State Toll Highway Authority.
“It’s worrisome to see so much money coming from one source, especially since the head of (Local 150) is also a member of the tollway board, where so many road construction dollars have been spent,” said Susan Garrett, chair of the Illinois Campaign for Political Reform.
I can also clearly see Garrett’s point, but you can’t deny that Sweeney knows a thing or two about building roads.
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Question of the day
Monday, May 12, 2014 - Posted by Rich Miller
* Last week, Rep. Mike Bost ran a local bill on the House floor…
Senate Bill 2721 sponsored by Representative Mike Bost and Senator Dave Luechtefeld will authorize Jackson County to generate revenue to repair the Grand Tower Levee by issuing bonds. In 1994, voters in Jackson County approved a referendum for the issuance of bonds needed to repair the Grand Tower Levee. Unfortunately, not enough bonds were sold and the timeline to sell the bonds expired – which led to Bost and Luechtefeld’s legislation to help repair the Grand Tower Levee.
* As it turns out, this was Rep. Bost’s final bill. Bost is running for Congress against Bill Enyart (who also traveled to Springfield to testify for the bill after it was bottled up by the House Democrats). Here’s Bost’s speech on his final bill…
And just in case you can’t watch videos where you are, he didn’t throw any papers in the air this time.
Bost has occasionally been someone of a lightning rod over the years, but he remains quite popular on both sides of the aisle. I covered his first successful race when he won a Democratic district in the 1994 GOP landslide. The HDems targeted him for defeat for years, but he always held on.
* The Question: Your thoughts on Rep. Mike Bost leaving the House this fall?
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Something has gotta give
Monday, May 12, 2014 - Posted by Rich Miller
* Paul Merrion asks, “Why is Illinois unemployment so high?”…
Illinois always has been one of the last states to suffer from a recession and one of the last states to recover, but this is getting ridiculous.
Nearly five years after the recession ended nationwide, the Illinois unemployment rate is 8.4 percent, third worst in the nation… The rate is now almost 2 percentage points above the national average… Since November 2010, when the Illinois unemployment rate was 9.6 percent—just two-tenths of a point above Indiana and the national average—only New Mexico has seen a smaller decline in its unemployment rate, compared with where it was. Indiana’s rate is down 3.5 percentage points since then, while Michigan, which started higher, is down 4.1 percentage points. […]
Income taxes went up in January 2011, precisely when Illinois started to diverge from most other states that saw steady improvement in their unemployment rates.
* As Merrion points out, quite a few people believe that the 2011 income tax hike is the main culprit. We’ve all seen charts like this before…
* But there’s also this chart which tracks employment levels…
However, as Andrew Crosby and David Merriman of the U of I’s Institute of Government and Public Affairs note…
Illinois still tracks below ROM after January 2011; however, this difference is no longer statistically significant. One of several possible explanations for the diverging trends in employment is noted by Illinois’ Commission on Government Forecasting and Accountability (COGFA). COGFA notes Illinois has a “growing number of part - time workers that now has reached a record high.” If these part - time workers get a second part - time job, they could be double - counted by CES.
Correct. That probably isn’t a reliable chart.
* Bill Testa at the Federal Reserve Bank of Chicago read that U of I report and then tested some theories…
Illinois’s slow recovery may have more to do with its industrial structure. […]
Illinois’s mix of industries, while similar in some respects to those of other Great Lakes states, differs as well. It is possible that the small differences in job growth between Illinois and its neighbors are due to its somewhat different industry mix rather from disinvestment and a reluctance to hire in the state. […]
As an analytic exercise, I further ask how the Illinois economy would have fared 1) if it had the same industry composition as the four other Great Lakes states combined and 2) if its industries had the same job growth rates as those in the other states.
The chart…
* So, we’d have been much better overall with that hypothetical. The big difference between Illinois and the rest of the Great Lakes is the prominence of manufacturing and the type of manufacturing…
What are some of the industry mix differences that are notable between Illinois and other Great Lakes states? The large professional and financial services employment base in the Chicago area has already been noted. Further, in relation to other states, Illinois is now much more services oriented overall rather than goods producing. Manufacturing’s share of employment for 2013 clocks in at 11.4 percent of private sector payroll jobs in Illinois, versus 16.4 percent for the other four states. […]
And within manufacturing, Illinois tends to lean more toward food processing and farm, construction, mining machinery relative to the other Great Lakes states. In contrast, while there are important auto assembly operations in the Bloomington–Normal and Rockford areas of Illinois, as well as important links to the automotive supply chain throughout the state, Illinois’s ties to the automotive industry are much less prominent than those of Michigan, Indiana, and Ohio.
We simply need to do better.
* But after all that, Testa buries this extremely important fact…
Nonetheless, even payroll employment trends suggest that Illinois is underperforming when examined on an industry-by-industry basis. Accordingly, recent changes in public policies that influence the investment climate, such as tax rate hikes, cannot be ruled out entirely, though such policy effects are unlikely to be exerting such a large and immediate effect. [Emphasis added.]
Economists are loathe to point to local taxes as being to blame for business decisions. But Illinois’ tax and budget crises are almost universally known and derided here, particularly among the corporate types (hence Rauner). There are other factors as well, including our notoriously high workers’ comp costs.
The underperformance in growth on an industry-by-industry basis is striking. Even if we had the same employment mix here, we’d still be behind.
* Then again, let’s go back to Merrion for two other important points to keep in mind…
“In fact, one could argue that the economy would be in worse shape had the tax hike not occurred, since the reduction in public-sector jobs and subsequent ripple effect would have been much larger,” says Aaron Smith, a regional economist at Moody’s Analytics Inc., an economics consulting firm in West Chester, Pennsylvania. “Of course, consumer spending would also have been stronger due to more discretionary income, but I don’t think the tax hike is a valid cause of the hiring slowdown in other industries.” […]
Despite claims that Illinois employers are freaked out by higher taxes, public-sector job losses account for a significant portion of the unemployment rate. Six of the nine occupations in Illinois losing the most jobs in 2011 were teachers and other government workers, according to Economic Modeling Specialists International, a labor market data analysis firm based in Moscow, Idaho.
Discuss.
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“An existential angst grips Chicago business”
Monday, May 12, 2014 - Posted by Rich Miller
* Joe Cahill at Crain’s writes “I’ve been following Chicago business for more than 30 years, and I can’t recall a time when so many of our big companies were in such a state of flux.” A few examples…
Walgreen’s deal with Europe’s Alliance Boots brought in a major wild card—Alliance Boots GmbH Chairman Stefano Pessina, now the company’s largest single shareholder—and sparked pressure to move its corporate headquarters to Europe.
United management underestimated the challenge of rationalizing the enormous airline it created by merging United and Continental. Poor first-quarter results all but ensure another round of disruptive cutbacks.
Caterpillar, similarly, is trying to right itself after the spectacularly ill-timed $7.6 billion acquisition of Bucyrus International Inc. Cat’s biggest deal ever dramatically increased its exposure to mining equipment just as the industry nose-dived. Sales have plummeted, forcing Cat to eliminate more than 9,000 jobs.
* I hadn’t really been following the Walgreen’s saga until I spoke with a company representative the other day. I was pretty shocked that the possibility of Walgreen’s moving its headquarters to Switzerland is quite real. The company could save huge money…
According to an analysis by UBS, Walgreen’s U.S. [effective] tax rate is 37.5% — compared with Alliance Boots’ rate in Europe of about 20%.
The state can’t do much about that. If it wants to go, it’ll go.
It’s not an unusual thing…
Aon Corp., one of Chicago’s most prominent businesses, shifted its corporate home to London in 2012. Last month, Deerfield-based Horizon Pharma Inc. said it would move its headquarters to Ireland as part of a merger.
And not just locally…
Michigan’s Perrigo, Pennsylvania’s Endo Health Solutions and New Jersey’s Actavis moved their headquarters to Ireland last year following merger deals. Connecticut’s Alexion Pharmaceuticals moved some of its intellectual property there, as well, to cut taxes.
* Back to Walgreen’s, which was founded in Illinois over one hundred years ago…
Mr. Pessina, a billionaire who resides in Monaco, turned his family’s struggling Naples pharmaceutical wholesaler into the heavyweight Alliance UniChem Group. In 2006, he merged it with U.K. pharmacy chain Boots Group to create Alliance Boots. A year later, the company was taken private in a $22 billion deal that remains Europe’s largest leveraged buyout. The deal was financed by Kohlberg Kravis Roberts & Co., the storied private-equity firm that inspired “Barbarians at the Gate,” a book about the tumultuous 1988 takeover of RJR Nabisco Inc.
“When Walgreens talks about the best interests of their shareholders, they’re talking about Stefano Pessina,” Mr. Fein says. “I don’t know if Walgreens did or did not anticipate his influence, but they’ve negotiated a transaction with one of the most sophisticated and respected businessmen in the world.”
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Fun with numbers
Monday, May 12, 2014 - Posted by Rich Miller
* From a PQ campaign press release…
A new poll today showing that 99% of Chicagoans don’t want higher property taxes confirmed a key principle of Governor Pat Quinn’s budget: Illinois over-relies on the property tax.
Governor Quinn is pushing a responsible and honest budget plan that would begin to reduce the state’s over-reliance on property taxes by properly funding education and sending every homeowner a guaranteed $500 property tax refund each year.
By contrast, billionaire Bruce Rauner is scheming to shift more of the tax burden to property taxpayers by cutting the state’s investment in education.
“It’s no surprise that Rauner - a self-proclaimed member of the .01% - would be scheming to do something that the 99% are strongly against,” Quinn spokesman Izabela Miltko said. “By cutting the state’s support for education, Rauner would preside over the largest property tax increase in Illinois history.
“It’s time to lower the property tax burden for homeowners across Illinois by properly funding our schools and sending every homeowner a guaranteed $500 property tax refund each year. The governor’s budget plan does just that.”
More than 2.1 million Illinois households would receive an annual $500 property tax refund under the governor’s budget plan, which also provides the largest increase in funding for the classroom in state history. Illinois collects more money in property taxes than the state’s sales tax and income tax combined.
* The poll didn’t say that 99 percent of Chicagoans don’t want a property tax hike. The somewhat oddly worded McKeon & Associates poll [ADDING: McKeon just called to say that the Sun-Times chose the question’s wording] merely allowed Chicagoans to pick their preference of new revenue streams…
Offered four choices on ways Chicago could solve its $20 billion pension crisis, raising property taxes ranked dead-last, chosen by only one percent of the Chicago voters surveyed.
The favorite remedies on the list — both at 25 percent — were a “commuter tax” on suburbanites who work in Chicago and the transaction tax on LaSalle Street exchanges championed by the Chicago Teachers Union.
Running close behind — at 21 percent — was a city income tax. That’s somewhat surprising, since a city income tax would have to be paid by many of those polled.
The transaction tax is dead, as is the city income tax. The commuter tax isn’t going anywhere any time soon. And while the 1 percent favoring a property tax hike is newsworthy, there apparently were no follow-up questions about what voters actually thought of that prospect.
* Also, the governor’s proposed property tax rebate isn’t really a property tax rebate. It’s a $500 check to all Illinois homeowners - at a net new cost to income taxpayers of $700 million.
* And, as Rauner has noted before, education funding hasn’t been protected by Quinn in the past. So, is the governor, then, responsible for large numbers of school-related property tax hikes? And since the governor pushed the original income tax hike, which didn’t include money for local government revenue sharing, is he also responsible for their tax hikes?
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Taxing issues
Monday, May 12, 2014 - Posted by Rich Miller
* As I told you Friday, eleven House Democrats co-sponsored a bill to completely roll back the 2011 income tax hike. One of those House members was Rep. Willis, who now says she’s undecided about making the tax hike permanent…
State Rep. Kathleen Willis is “totally on the fence.”
“I’m totally undecided still. I’m talking to the people in my district to see,” the Addison Democrat said.
“I’m talking to the people in my district” more likely means “I’m waiting to hear from the Speaker.”
Freshman Rep. Willis is currently unopposed.
* Rep. Marty Moylan was the bill’s chief sponsor...
“Right now I’m leaning ‘no’ unless there’s some major reason or change of my mind on it,” Moylan said.
Moylan is most probably a “No.” But what he said is still pretty interesting.
* Rep. Carol Sente is still a solid “No” vote…
“I was a firm ‘no’ in 2011, and I continue to be a firm ‘no’ on making the temporary income tax permanent. What we really need is bipartisan, long-term economic development plans and major budget reform,” said Sente, who has outlined such plans in a proposal that’s been stagnant in the legislature since March.
* Meanwhile, Kurt Erickson had this to say over the weekend…
One theory for how this will all play out began emerging last week. Rather than take the tough vote, Madigan will ask his members to vote for Quinn’s preferred budget — one that doesn’t include the drastic cuts — but not take a vote on making the income tax permanent.
State government operations would continue as they are now. But, come January when income tax rates roll back from 5 percent to 3.75 percent, the state won’t have enough money to continue on its current track.
Such a move would turn the race for governor into a referendum on whether voters want the tax hike to stay permanent.
A vote for Quinn would be a vote for keeping the tax intact, thus avoiding the doomsday budget scenario he and his agency heads have been laying out this spring.
A vote for Republican businessman Bruce Rauner would be a vote for allowing the tax to roll back and the possibility of major cuts in state spending.
Subscribers know my take on that.
* An insightful take…
Rep. Elaine Nekritz, a leading Democrat, says members are split on the best approach.
“I’m not making any predictions right now, it’s all in such a state of flux and every legislator I talk to about the budget and what they’d like to see, how they’d like to see it resolved, has a different idea,” Nekritz says. “Until we get 60 that are on the same page, it’s going to be a real challenge.”
* Related…
* Cullerton: Downstate should be wary of political posturing over tax rates: I don’t believe decimating downstate Illinois will make our state stronger. I can only hope others share my view.
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Today’s Rauner-related quotables
Monday, May 12, 2014 - Posted by Rich Miller
* We once again quote Illinois Manufacturers’ Association chief Greg Baise. This time it’s about Bruce Rauner…
“He’s a transaction guy. He knows he can’t do this all alone. He knows he is going to have to come in here and work with” the legislative leaders, two of whom are powerful Democrats who currently hold supermajorities in their respective chambers.
* And speaking of Rauner, the Sun-Times ran a story over the weekend about how disgraced former Democratic US Senate candidate Blair Hull had given $5K to Rauner’s campaign…
“I admire wealthy people who want to serve,” Hull told the Sun-Times in an interview last week. “I admire people like Michael Bloomberg, and I think he did a great job. People who are wealthy can really do what they believe, they can push for the right reforms.” […]
When asked if more financial backing was on the way, Hull laughed.
“He doesn’t need my money. He’s got a lot more money than I do,” Hull said. As for the $5,000 check he wrote to Rauner: “It was emotional support.”
* And one more. Winnebago County GOP Chairman Jim Thompson recently made a bit of news by writing this in his party’s newsletter…
“Media update for the week: saw on the news this week the offspring of a donkey and a zebra, black and white legs, rest all donkey. Not sure why this is news. Now if we can teach him to read a teleprompter, we could have two living creatures the media will fawn over that is part white, part black and all a**!”
Rauner eventually reacted, saying Thompson should resign…
“Bruce believes the comments in the newsletter were wholly inappropriate and don’t have a place in the Republican Party. It would be best if he resigned,” said Mike Schrimpf, Rauner spokesman.
State Sen. Dave Syverson, R-Rockford, confirmed that Rauner called him Friday afternoon and said it would be best for the party if Thompson stepped down. Syverson has been one of Thompson’s supporters, saying he should stay in his position because he apologized for the “joke.”
“He’s not racist and he apologized and if somebody took it the wrong way, he apologized and that’s all he can do,” said Syverson.
Thoughts?
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Obama library money is a very unpopular idea
Monday, May 12, 2014 - Posted by Rich Miller
* My weekly syndicated newspaper column…
It’s been assumed all along that Illinois House Speaker Michael Madigan’s proposal to spend $100 million to help build Barack Obama’s presidential library was designed to put the Republicans on the spot and perhaps provoke an over the top, maybe even racial response, which would help gin up Democratic turnout a bit this November.
President Obama has put the library’s location out to bid, so Madigan’s proposal is ostensibly designed to help Chicago attract what will likely be a pretty big tourist destination.
But politics is just about everything in Springfield. Democrats are hoping to crowd the November ballot with enough measures to help gin up their party base and get them out to vote. A constitutional amendment to forbid any voter discrimination along racial, ethnic, gender, etc. grounds was already approved for the ballot. A non-binding referendum on whether voters want to increase the minimum wage to $10 an hour is being prepared.
So, this was mainly seen as just another in a series of ploys to fire up the base.
But the Republicans have so far played it quite well, publicly pledging their own support for the library and focusing on the cost. No Republican legislator has yet crossed the line. President Obama may not be all that popular elsewhere, but polling has consistently shown he remains popular here. There’s no sense attacking him and risk a backlash.
Plus, the Republicans make a good point. Obama has proved to be an incredible fundraiser. He still has a lot of very wealthy supporters and he just doesn’t need any help raising money. The government doesn’t really need to be involved.
Illinoisans overwhelmingly agree with the GOP.
“As you may know,” 1,029 likely voters were told May 7th in a Capitol Fax/We Ask America poll, “some lawmakers in Springfield want the state to commit $100 million to help pay for the construction of the future Presidential Library for Barack Obama, if it is located in Illinois. We’d like to know whether or not you generally approve or disapprove of that $100 million proposal?”
Just a scant 29 percent approved, while an overwhelming 67 percent disapproved. A mere 4 percent were unsure.
The only demographic support for the project wasn’t even majority support. A plurality of Chicagoans supported the idea 48-43, as well as a slim plurality of African-Americans, 45-44.
But a plurality of Democrats actually was against the plan, 48-44. And the idea is hugely unpopular with everybody else. A whopping 68 percent of women, 66 percent of men, 75 percent of independents, 80 percent of Republicans, 74 percent of both Latinos and whites, 65 percent of suburban Cook residents, 72 percent of collar county residents and 77 percent of Downstaters opposed the Obama presidential library idea. The poll’s margin of error was ±3.1 percent. 23 percent were cellphone users.
But even more said the state couldn’t afford to help build the library.
“No matter how you feel about the Presidential Library,” respondents were asked, “do you believe the state can afford to support it?”
Only 21 percent said the state could afford it, while an overwhelming 71 percent said it couldn’t. Another 8 percent were unsure.
Not a single demographic category said the state could afford the project. Chicagoans said it was unaffordable 43-42, a 53 percent majority of Democrats said it was unaffordable and African-Americans said it was unaffordable 54-35,
Everybody else’s responses were almost off the charts. 71 percent of women, 70 percent of men, 83 percent of Republicans, 79 percent of independents, 78 percent of whites, 69 percent of suburban Cook and 80 percent of both collar county residents and Downstaters said the state can’t afford it.
Speaker Madigan has had a few misfires this year. He wanted to put a constitutional amendment on the ballot to levy a surcharge on income over a million dollars, but he couldn’t round up enough votes.
Madigan said in March that he wanted to make the income tax increase permanent, but last year eleven of his members - many of whom are his most politically vulnerable - introduced a bill to roll the tax hike all the way back. He has 71 Democrats and he needs 60 to pass the permanent extension measure. That gives him no wiggle room at all.
And, as the poll makes clear, Madigan badly miscalculated with this Obama library thing, both with Republican legislators and the voting public.
Subscribers have full crosstabs.
Discuss.
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Reader comments closed for the weekend
Friday, May 9, 2014 - Posted by Rich Miller
* My mom doesn’t like loud music. Never has. It bothers her. And, unfortunately for her, she married a rocker and had five sons who loved to turn it all the way up. It’s a good thing for us that she had a lot of patience and a very strong sense of humor.
My dad always used to crank up the volume and sing this week’s song to my mom, whose name is Barbara. She’d usually roll her eyes and tell him to stop it, but always with a smile, albeit sometimes forced.
I actually grew to love this song over the years. It’s so loose, which is something the super-tight, even uptight Beach Boys weren’t exactly known for back then. The song was part of an album called “Beach Boys’ Party!,” which was made to sound like it was recorded during a party. Check out their version of the Beatles’ “I Should Have Known Better.” It really does sound like it was just a bunch of folks at an impromptu beach party singalong. You can almost see the campfire. It’s a fun little album.
Anyway, let’s hope Mom’s sense of humor is with her today…
Tried Peggy Sue
Tried Betty Lou
Tried Mary Lou
But I knew she wouldn’t do
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Question of the day
Friday, May 9, 2014 - Posted by Rich Miller
* This Sunday is Mother’s Day. So, how about telling us your favorite story about your mom?
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#SaveTheDE
Friday, May 9, 2014 - Posted by Rich Miller
* Last year, the folks who run SIUC’s student newspaper made an agreement with University President Glenn Poshard. They’d slash costs and Poshard would reallocate a little money to keep the paper afloat until a student fee could be approved. The Undergraduate Student Government approved a $9 fee to keep the daily paper going last December, while Poshard was still in charge. Carbondale Chancellor Rita Cheng backed the fee in February. The university’s Edwardsville campus has an $8 fee for a weekly newspaper, so the Carbondale fee wasn’t out of line at all.
Well, within six days of new SIU President Randy Dunn’s taking office, he and the board of trustees nixed the fee. Really bad move.
SIUC has the most committed alumni at the Statehouse. While the U of I alumni are incredibly organized statewide and are truly feared, Salukis have a tight-knit group of folks who make sure to unofficially watch out for the university’s interests. The Senate President’s chief of staff, the House Speaker’s spokesman, and on and on and on and on. That Saluki list is really long. I’m constantly amazed by it.
I’m assuming President Dunn is hearing from those folks this week.
What a wonderful little welcoming party they’ll be planning for his next Springfield visit.
* Then there’s this…
The paper’s closure would mean the end of the School of Journalism. There is no selling point without the Daily Egyptian, and future graduates will be less prepared than their peers who worked for college dailies. It renders us moot in the field of journalism; an already bleak job market.
The Daily Egyptian has former editors in prestigious positions around the country in media outlets such as the Chicago Tribune, St. Louis Post-Dispatch, Washington Post, Pittsburgh Post-Gazette, USA Today Weekly Edition and Almanac of American Politics.
Several of those folks took to social media yesterday to voice their opposition to President Dunn’s move.
* I’m no fan of journalism schools. At all. But my brother Devin received great hands-on training at the DE. I’ve known several people over the years who had the same experience at the paper. To me, newspaper reporting is more like a trade. I’m not sure that extensive classroom training is hugely important, but on the job training - and especially learning from real-time, real-life mistakes - can be crucial. And the DE, by all accounts, does a very good job.
Since the chancellor was for it, and the student government was for it and the other campus has a similar fee, I really don’t see the problem with allowing this small fee to proceed.
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Drone bill clears both chambers
Friday, May 9, 2014 - Posted by Rich Miller
* SB2937 passed the House unanimously today and now goes to the governor. From the synopsis…
Provides that except as provided in the Act, a law enforcement agency may not acquire information from or direct the acquisition of information through the use of a drone owned by a private third party. Provides that in the event that law enforcement acquires information from or directs the acquisition of information through the use of a privately owned drone under the Act, any information so acquired is subject to the retention and disclosure requirements of the Act. Provides that nothing in the Act prohibits private third parties from voluntarily submitting information acquired by a privately owned drone to law enforcement. Provides that in the event that law enforcement acquires information from the voluntary submission of that information whether under a request or on a private drone owner’s initiative, the information is subject to the retention and disclosure requirements of the Act.
Senate Committee Amendment No. 1
Allows use of a drone without a search warrant, if a law enforcement agency is using a drone during a disaster or public health emergency. The use of a drone does not require an official declaration of a disaster or public health emergency prior to use. The drone may be used to obtain information necessary for the determination of whether or not a disaster or public health emergency should be declared, to monitor weather or emergency conditions, to survey damage, or to otherwise coordinate response and recovery efforts. The use of a drone is permissible during the disaster or public health emergency and during subsequent response and recovery efforts. Disaster and public health emergency have the meaning as defined by the Illinois Emergency Management Agency Act.
* From the ACLU…
With today’s vote on Senate Bill 2937, Illinois soon will have some of the most far-reaching regulation of the use of drones by law enforcement in the nation. This new bill builds on last year’s enacted law, and ensures that law enforcement cannot simply turn to the growing army of private drone operators to conduct surveillance and evade the current law’s regulations. We hope the Governor will quickly add these protections to Illinois law.
The emerging drone technology is a powerful surveillance tool. We must ensure that our laws keep current with this advancing technology in order to protect privacy in our state. This measure is consistent with our commitment to this process.
Discuss.
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Fun with numbers
Friday, May 9, 2014 - Posted by Rich Miller
* GOP Rep. Patti Bellock and Sen. Dale Righter held a press conference yesterday to claim that Medicaid reform has turned into “un-reform.” From a press release…
Bellock and Righter said they feel an added sense of urgency because of recent meetings in which majority Democrats in the Senate and House of Representatives have been pushing for further unraveling of the agreed-to reforms.
“What we have seen since passage of the 2011 and 2012 laws is the ‘un-reform’ of the Medicaid system,” said Righter. “Where the reforms have been implemented, the state has experienced significant savings. However, these carefully negotiated reforms have consistently fallen short of projections and mandated goals because the Quinn administration and Democrat lawmakers refuse to implement the reforms as mandated in law and have quietly worked behind the scenes to undermine and disassemble the bipartisan reforms we enacted.”
In 2011, only 7% of Medicaid enrollees were in a managed care program, leaving the majority of Medicaid enrollees without a medical “home,” with many relying on more costly emergency room care. In response, the 2011 Medicaid reforms mandated that within four years, managed care enrollment was statutorily required to reach 50%. Well over three years later, and quickly approaching the end-of-year deadline, the number in managed care stands at an abysmal 16%.
The lawmakers stress this lagging enactment is indicative of the program’s overall implementation. Many provisions in the SMART Act have been ignored and program expansions have continued. Provisions limiting the number of prescriptions have not been enforced, and the third-party vendor hired to scrub the Medicaid rolls was relieved of its duties—despite saving the state more than $86 million after only reviewing 25% of total Medicaid cases.
* SJ-R…
Illinois Department of Healthcare and Family Services personnel were not available for comment Thursday, but department director Julie Hamos said in a statement that the state is on pace to meet the goals set out in the SMART Act.
“Since the implementation of that plan two years ago, we reduced Medicaid spending by $3.2 billion, and are now managing within that budget,” Hamos said.
She said the Act was passed with strong bipartisan support to put the state “on track to catch up with the nation’s other states by implementing coordinated care. As a result, we are on target to achieve the state’s 50 percent mandate by Jan. 1, 2015.”
She said the department’s goal is to provide better health care at a lower cost, “and we are doing that.”
The lag on managed care enrollment is indeed quite curious and deserves a much better response. Soon.
* However, Righter’s claim during the press conference that the effort to root out fraud was a “stunning success” caught my eye.
Bruce Rauner and many other Republicans have claimed that billions of dollars could be saved by kicking ineligible recipients off Medicaid. Yet, the outside contractor only found $86 million in savings? That’s not a “stunning success,” and it can’t even be easily projected out over the other 75 percent when you remember this crucial point by Doug Finke last December…
the ones that were checked first were mostly cases where the state already had suspicions. In other words, easy pickings. Once those are gone, it’s entirely possible the rate of fraud discovered will go down.
And what happens when the rate of fraud discovered goes down as most likely will be the case? Well, critics will contend it’s all Quinn’s fault.
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Union wants Quinn intervention
Friday, May 9, 2014 - Posted by Rich Miller
* UNITE HERE Local 1 represents approximately 15,000 hospitality workers and casino workers in the Chicago area, including a couple of dozen workers at the Thompson Center food court. From a press release…
Today, food service workers at Great State Fare in the Thompson Center are calling on Governor Quinn to protect their jobs. Sodexo, the food service company that employs Great State Fare workers, is leaving its post at the State of Illinois building putting all 29 workers’ jobs at risk, some who have worked at the cafeteria for over two decades. Layoffs are expected to begin in the coming days. Workers are rallying outside of the State of Illinois building, home of Governor Pat Quinn’s Chicago office.
Sodexo workers at Great State Fare have recently ratified a collective bargaining agreement that improves their wages. The new contract would bring the lowest paid worker up to $10.35 an hour – more than the minimum wage increase to $10.00 that the Governor has been advocating. Yet, as the company plans to leave in the coming weeks, workers will not make it to the wage increase they’ve bargained for.
“Just as we’re about to make a more livable wage, we’re losing our jobs,” said Maria Sanchez, Sodexo worker at Great State Fare. “I’ve been able to rely on this job to support my family for over 20 years. But, now, I don’t even know if I will have job next week.”
In Illinois, a full-time worker earning the state minimum wage of $8.25 an hour makes approximately $17,000, which is far below the Federal Poverty Threshold of $19,790 for a family of three. By increasing the minimum wage to just $10.00, those that earn the current minimum wage would make an extra $4,800 a year.
Should Quinn intervene?
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*** UPDATED x1 with photo *** Chicken man?
Friday, May 9, 2014 - Posted by Rich Miller
* It’s Friday, so a light post is in order. AP…
Things are getting a little fowl at the Illinois governor’s mansion.
A flock of eight clucking hens has moved onto Executive Mansion property, laying eggs that are eaten by guests dining at the home in downtown Springfield.
The chickens peck at flowers, recycle plant waste and provide manure for the gardens. They live in a donated coop that’s inside a fenced-in enclosure and are part of an ongoing sustainability effort.
Backyard chickens are legal in Springfield and several other Illinois communities. They’ve become increasing popular as part of a local food movement among other reasons.
* Erickson…
Located on the heavily landscaped grounds surrounding the 159-year-old Italianate home is a penned-in area home to eight laying hens.
The chickens have come home to roost at 5th and Jackson streets in downtown Springfield as one part of the governor’s ongoing sustainability initiative. […]
The chickens live in a donated coop inside of a secure fenced-in enclosure near Fifth Street and eat a mix of chicken scratch and vegetation from the gardens.
The hens are a range of breeds, including Rhode Island Reds and Ameraucana, which lay eggs that can be pastel shades of brown, green or gray.
There was a huge and very loud party Wednesday night at the governor’s mansion. I can’t help but wonder how the chickens felt about that.
*** UPDATE *** Rep. Greg Harris sent along this photo of himself posing with the chickens. He said the party didn’t appear to have bothered them at all…
Caption?
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*** UPDATED x1 *** A justifiable warning
Friday, May 9, 2014 - Posted by Rich Miller
* Dan Proft warns legislators about voting to make the income tax hike permanent…
Liberty Principles PAC intends to monitor very closely the votes of those legislators up for re-election in November, such as the 11 House Democrat sponsors of HB 1064, who made a commitment to sunset the 2011 tax increases as originally promised.
I hasten to add that Liberty Principles PAC’s willingness to engage is bipartisan in nature, as was proven in the March primary election. We will also take an interest in the political future of any Republicans who would aid and abet defrauding Illinois taxpayers.
If we do not hold to account legislators who make promises they know they will not keep, we will beget more of those kinds of legislators. And if we do not have legislators who keep their promises, Illinois will keep losing businesses and families to states that do.
Liberty Principles PAC has a balance of more than $1 million in its campaign account currently. I am confident that figure will grow substantially between now and November.
* Set aside the rhetoric and Proft makes an extremely good point about HB 1064, which was introduced last year…
Reduces the rate of tax to 3% for individuals, trusts, and estates and 4.8% for corporations.
The bill’s sponsorship list…
Martin J. Moylan - Stephanie A. Kifowit - Sam Yingling - Katherine Cloonen - Natalie A. Manley, Deborah Conroy, Sue Scherer, Jerry F. Costello, II, Carol A. Sente, Patrick J. Verschoore and Kathleen Willis
Those legislators, plus historically anti-tax Democratic state Rep. Jack Franks, are more than enough to kill the tax hike extension on their own. If any of them flip, Proft and everyone else will have good reason to go after them.
*** UPDATE *** I also seriously doubt that former Rep. Keith Farnham’s recent replacement can be a “Yes” vote on the tax hike extension. That’s 13 total. The House Dems have 71 members with 60 needed for passage. Do the math. This ain’t gonna be easy or pretty.
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* Tribune…
Cook County prosecutors are investigating a land deal that netted Circuit Court Clerk Dorothy Brown and her husband tens of thousands of dollars with no money down, the Tribune has learned.
Brown’s husband, Benton Cook III, confirmed that a grand jury is probing the deal, which saw him get a North Lawndale building for free from a longtime campaign contributor to Brown.
The court clerk quickly became a co-owner, and her company sold the parcel for $100,000 to a Frankfort real estate developer who’d long had his eye on it. The developer said Thursday that he testified before a grand jury earlier this year about how he came to acquire the land.
The investigation of the land deal comes as State’s Attorney Anita Alvarez’s office also is looking at money Cook received as part of a controversial state anti-violence program that Democratic Gov. Pat Quinn launched in fall 2010 as he was locked in a close election campaign. County prosecutors have issued subpoenas seeking documents related to the Neighborhood Recovery Initiative and specifically requested information about the agency that hired Cook. […]
Musa Tadros, the owner of south suburban Frankfort-based Crown Commercial Real Estate and Development, told the Tribune that he testified before a grand jury in January or February about the land deal.
It’s becoming even more clear that Alvarez’s probe of Gov. Quinn’s anti-violence initiative is a lot more about Brown than it is about Quinn - at least, for now.
* Meanwhile, from the Sun-Times…
Not long after taking over the budget committee of a state agency, Cook County Circuit Clerk Dorothy Brown voted by proxy to channel $5 million to a West Side nonprofit to help continue funding Gov. Pat Quinn’s now-disbanded Neighborhood Recovery Initiative.
That vote by Brown came at the same time the nonprofit, Chicago Area Project, employed her husband, Benton Cook III, to oversee millions of dollars in Neighborhood Recovery Initiative programming. The organization subsidized his paycheck with state anti-violence grant money.
It’s not clear whether any of the grant funds Brown authorized for Chicago Area Project’s use in September 2012 trickled into Cook’s paycheck since the nonprofit says he left its payroll in October of that year.
As I told subscribers earlier this week, that decision about CAP’s funding came directly from Quinn’s office. The vote was most likely a mere formality, and it doesn’t look like Brown’s husband got much, if any, benefit from it.
* But that didn’t stop the governor’s office from once again throwing Brown under the bus…
“If that’s the case, it’s unacceptable,” Quinn spokeswoman Brooke Anderson said of her vote. “Potential and actual conflicts of interest should always be disclosed by public officials and their designees. They should recuse themselves from decision-making on any matter involving a member of their family.
“The governor’s office has asked the authority’s chairman to look into this matter and act appropriately to address any conflict-of-interest issues,” Anderson said.
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[The following is a paid advertisement.]
Credit unions are committed to several cooperative principles, including social responsibility. At First Illinois Credit Union in Danville, reaching out to area school children as part of their financial literacy program is a top priority. For over 20 years, the credit union has partnered with area schools, educated students in the classroom and has invited them to open savings accounts. Scholarships are awarded to graduating eighth graders. Members that are high school graduates are also granted scholarships. By giving out scholarships at school-wide functions, it affords the credit union the opportunity to provide financial education to hundreds of students in the audience. Educating children is just one facet of the credit union’s extensive outreach, which also includes breakfast meals for low income families, financial education for seniors during Money Smart Week, volunteering as a buddy at baseball games for children with disabilities, and many more local clubs and organizations. For all their efforts, First Illinois Credit Union has been recognized by their members and the community as a top financial institution. At the heart of the credit union philosophy is the principle of people before profits – and another reason why members are so fiercely loyal.
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Chicago Tribune: Same Safety Standards for Ride-Share
Thursday, May 8, 2014 - Posted by Advertising Department
The following is a paid advertisement.
“As we’ve said before, the part-time/full-time distinction is meaningless to the customer ordering a ride. The same safety standard should apply to all ride shares and, yes, to taxis. We’re increasingly wary of leaving it to the ride shares to police themselves when it comes to making those checks, given (Uber’s) unapologetic disregard for rules. UberX just underscored that point.”
Chicago Tribune editorial, “UberX thumbs its nose at the rules,” May 8, 2014
Ride-share companies claim they can regulate themselves, but time and time again they prove they have no interest in following the rule of law or even in protecting their own passengers.
As the Chicago Tribune editorial board points out, the distinction between ride-share drivers is “meaningless.” What’s important is that everyone is held to the same fundamental public safety and consumer protection standards that come with the proper chauffeur licensing.
Instead, multi-billion dollar companies like Uber and Lyft continue to fight the same public safety protections that transportation companies currently follow, including HB 4075, which would provide safety standards for all drivers across the board.
Customers deserve to have the peace of mind knowing that their driver has passed a comprehensive police background check and drug test and carries sufficient insurance in case of an accident.
It’s time for these common sense safety standards for everyone in the transportation industry. Ask Uber why they would want less.
Vote YES on HB 4075 and support ride-share protections for all!
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Downstate a big winner in Manar plan
Thursday, May 8, 2014 - Posted by Rich Miller
* After Republican outrage that Sen. Andy Manar’s school funding reform plan would provide a windfall to Chicago, it turns out that Chicago wouldn’t do all that well. From the State Board of Education’s analysis of the plan, which weights poverty rates much heavier on school funding…
* Finke…
Manar said the numbers show that the poorer school districts in the state fare better under his revised formula. By poorer, Manar said, that includes both districts with high numbers of students from poverty backgrounds and districts that have lower property values that do not generate enough tax revenue. […]
Manar said that the “most striking thing in the (report) is how far downstate districts lag behind in terms of funding. Downstate is very different than it was in 1997 when the current (funding) law was put in place and we have to account for those things to a better degree than we do today.”
That argument did not necessarily play well with Republicans who represent school districts in the suburban Chicago area. Sen. Matt Murphy, R-Palatine, said school districts in his area already supply 90 percent of their funding from local property taxes. Yet, under Manar’s revised formula, they would lose state assistance, with one district dropping $13 million in state aid.
“If that narrow amount that we get from the state is cut, what do people in my district, who already have high property taxes, do if they want to maintain the current funding level?” Murphy asked Manar at a committee hearing Wednesday. “It sounds like you are telling my constituents to raise their property taxes.”
* AP…
Schools in Palatine, Murphy’s hometown, would see an 87 percent decrease in overall state aid under the funds — about a $13 million dip compared to how much they received in the 2011-12 school year, the year the state board used to make the calculations.
Similarly, schools in Skokie and Evanston in Chicago’s northwest suburbs would lose 85 percent of state aid under the new formula. Meanwhile, Galesburg schools could stand to gain a 30 percent funding boost — about $5 million more a year than they receive now.
Schools in Red Bud, an Illinois suburb of St. Louis, would see an 83 percent decrease.
* Erickson…
State Sen. Dave Luechtefeld, R-Okawville, said many of the schools in his Southern Illinois district would gain under the proposal. He acknowledged it would be a tough vote for lawmakers in areas that would be losing state funds.
“It may not end up a Republican-Democrat issue,” Luechtefeld said.
The measure won approval in the Senate Executive Committee on a 10-3 vote with Luechtefeld voting “present.” He said the overhaul needs more work.
Republicans said the changes might be made more palatable if the state eases back on some of the programs and paperwork it requires of local school districts.
It remains unclear whether the House will take up the proposal if it emerges from the Senate. The plan was developed through a series of hearings in which the House was not involved.
Discuss.
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The carrot and the stick
Thursday, May 8, 2014 - Posted by Rich Miller
* Let’s revisit yesterday’s Daily Herald story about how some municipal groups were contemplating whether to back an extension of the state income tax in order to possibly get a bigger piece of the revenue sharing pie or to ward off an attack by Democrats.
The story was based on a letter that DuPage Mayors and Managers Executive Director Mark Baloga wrote to his members…
You likely have seen recent news reports of Governor Quinn and Legislative Leaders discussing the opportunity for local governments to secure, or even increase, the local share of state income tax (aka “LGDF”) if the current 5% income tax rate is extended beyond its current sunset date of 2015. Senate President Cullerton directly addressed this topic with DMMC members on April 9 during our Springfield Drive Down. Since that meeting, our lobbyist has been in discussions with legislators and has conveyed the following:
1. Extension of the 5% income tax is almost certain to pass regardless of municipal support, opposition, or neutrality.
2. If municipalities and municipal groups uniformly oppose or fail to support the legislation, then it is also a near certainty that LGDF will be eliminated or severely cut. This would be framed as cutting state expenses to help balance their budget.
3. If municipalities and municipal groups such as DMMC support the tax rate extension, this could secure an increase in the local share of income tax and direct deposit of LGDF revenue—both long- standing DMMC legislative priorities.
4. Support for the tax rate extension would generate ongoing political capital for DMMC, other municipal groups, and municipalities themselves.
5. “Support” can range from a simple statement of organizational support, to individual mayors actively supporting the legislation and the legislators who vote for it, and anything between. More active support would result in even more political leverage on LGDF and other current and future issues.
After extensive discussion, the DMMC Legislative Committee (by unanimous consent, on April 25) and the DMMC Board of Directors (by a 9-4 vote, on May 1) approved DMMC’s conditional support for continuation of the 5% tax rate as long as the bill adequately increases the current 6% LGDF portion of income tax and provides for direct deposit of LGDF revenue to eliminate delays in payments to municipalities. The Board’s motion further specified using this opportunity to pursue additional legislative action including:
A. Stoppage of HB 5485 which would require negotiation of minimum staffing for fire departments and districts.
B. Consideration of additional legislative priorities such as expenditure authority for non-home rule hotel motel tax revenue.
C. Ability to participate actively in development of municipal public safety pension reform legislation.
That’s all really quite fascinating. A grand bargain laid open.
* OK, now back to yesterday’s Daily Herald story…
Cullerton spokeswoman Rikeesha Phelon said she couldn’t confirm the conversations between her boss and municipal leaders.
However, Phelon said Cullerton has said for months that mayors would see a smaller share of state income taxes if the rates don’t get extended.
“That’s not a threat,” she said. “That’s just math.”
In order to cut the municipal share, new legislation would have to be passed.
“This certainly sounds to me like out-and-out extortion,” said Madeleine Doubek, chief operating officer of Chicago-based Reboot Illinois, a voter-advocacy digital media group. “This just pulls back the curtain on the worst of Illinois government in action. Who, in this equation, is looking out for the taxpayers?”
* As I also told you yesterday in an update, Sen. Donne Trotter unveiled legislation yesterday designed to put heat on the mayors…
After facing years of funding cuts, Illinois’ schools could get more than $1 billion in new funding as State Senator Donne Trotter (D-Chicago) is urging his colleagues to truly make education the priority they claim it is.
Currently, mayors and village presidents get a cut of the state’s income tax with no strings attached. Trotter’s proposal ends that giveaway and instead steers the dollars – $1.45 billion in the upcoming budget year – to the state’s public schools in an effort to have the state finally live up to its education funding commitments.
* The bill had a hearing today. Trotter eventually pulled the proposal out of the record, but the SDems tweeted extensively during the debate…
Discuss.
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* As I told subscribers on Monday morning, the Commission on Governmental Forecasting and Accountability has revised its Fiscal Year 2014 revenue estimate upwards by $588 million. Most of this is considered to be a one-time income tax windfall, so next fiscal year’s estimate was revised up by just $167 million.
Anyway, some Senate Republicans have a plan for spending some of that found money…
Thousands of state workers are owed an estimated 112 million dollars in back wages. Governor Pat Quinn negotiated raises with members of AFSCME back before the 2010 elections, but lawmakers never came through with the money to pay them. […]
“We’re not calling for any new spending, any new spending proposals here. We’re just asking for commitments to be honored. Bottom line,” [GOP Sen. Sam McCann] said.
Under McCann’s proposal, the rest of the extra revenue would be used to pay down the state’s backlog of bills. Illinois owes schools, hospitals, and many other service providers nearly five billion dollars.
Sounds like a good idea to me.
* Related…
* McCann still open to keeping current tax rates: “I don’t think the people of the 50th District sent me here, just like the people of everyone’s respective districts back home sent them here, to stick their fingers in their ears and not listen to what people have to say,” said Carlinville Republican Sen. Sam McCann. “They don’t send us here not to roll up our sleeves and go to work on their behalf. They send us here to engage.”
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Today’s numbers are lousy
Thursday, May 8, 2014 - Posted by Rich Miller
* Chief Executive Magazine ranked Illinois 48th in the nation for business…
Anti-growth hot mess can only coast on Chicago’s economic engine for so long.
And…
Oof.
* Numbers…
State GDP
% Growth ’11-’12: 1.9
% Growth ’11-’12 v. Nat’l Avg. (2.5%): -0.6
Unemployment
Unemployment Rate Dec. 2013 %: 8.6
Comparison with Nat’l Rate (6.70%): 1.9
Domestic Migration
Domestic Net Migration 2013: -67,313
Rank: 49
State Government
State Debt per Capita Fiscal Year ’13 ($): 5,569
State & Local Gov’t Employees per 10k Residents: 503.1
Oy.
* But considering all the screaming about taxes, our state/local tax burden is pretty average…
State-Local Tax Burden
Rate (%): 10.2%
Compared to Nat’l Avg. (9.9%): 0.34%
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Rauner: “Step down” the tax hike
Thursday, May 8, 2014 - Posted by Rich Miller
* I thought about putting this in the post below about another temporary tax hike extension but wanted to wait until I heard back from the Bruce Rauner campaign about his statement yesterday regarding the tax hike. Sun-Times…
“I’m very much against keeping the tax hike permanent,” Rauner said. “They promised it would be temporary. We’re going to have a plan we’ll be coming out with soon on how to step that back down, all the way down.”
So, does “step that back down” mean a phaseout? That would be more like what Toni Preckwinkle did with the hugely unpopular sales tax hike - phased it out over a period of years.
I’m pretty sure he’s said this before, but if Rauner was being accurate about his position yesterday, phasing it out is actually a far more fiscally responsible approach than just eliminating the tax hike outright in January.
* The campaign offered no further insight today…
Bruce has always said he wants to get rid of the Quinn-Madigan tax hike and comprehensively reform the tax code so it is pro-growth and fair to all taxpayers. That is still the plan.
* Related…
* Quinn, Rauner address Illinois business leaders
* Quinn, Rauner paint different pictures of Illinois at business lunch
* Quinn, Rauner trade jabs in separate talks with business leaders
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Under the bus he goes
Thursday, May 8, 2014 - Posted by Rich Miller
* AP…
One of the people behind Gov. Pat Quinn’s troubled anti-violence program is now heading a new initiative to reduce Chicago violence that’s backed by major businesses and Mayor Rahm Emanuel.
The Chicago Sun-Times reports that Toni Irving was a deputy chief of staff for Quinn when his Neighborhood Recovery Initiative was formed in 2010. […]
She told the newspaper she had no role in implementing Quinn’s program, but the newspaper says she chose grant recipients.
The Sun-Times reports that Irving helped steer the choice of the Chicago Area Project as “the main conduit for state anti-violence grants in West Garfield Park.” CAP then hired Dorothy Brown’s husband.
* There’s an interesting little political development in the Sun-Times story as well. Mayor Emanuel kinda threw Gov. Quinn under the bus…
At an unrelated news conference Wednesday, Emanuel sought to distinguish Get In Chicago from Quinn’s troubled Neighborhood Recovery Initiative, which was launched during the governor’s closely contested campaign in 2010. Republican critics have blasted the Quinn initiative as a political “slush fund” created to generate support for Quinn.
“First of all, this is private money. Totally different,” Emanuel said.
“If you were doing it only one-year and around the campaign season, I understand why people would get cynical. But given that it’s also in the years that there is no campaign, but it’s about safety, I would say look at the consistency over the four-year time.”
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Today’s quotable
Thursday, May 8, 2014 - Posted by Rich Miller
* Greg Baise from the Illinois Manufacturers Association….
“I think business owners in this state have really gotten to the point that they want to see a change. … I think the business community’s perception of this state (is) if we don’t make a drastic change of some sort, a lot of my members who can will move, and I hear that lament over and over again.”
Baise has told me this more than once and he’s pretty darned adamant about it. Whether he’s right or wrong is beside the point. The guy who runs one of the most influential biz groups in the state truly believes an exodus is coming. And Baise is not someone who regularly engages in hyperbole.
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SURS to re-interpret pension language
Thursday, May 8, 2014 - Posted by Rich Miller
* AP…
The State Universities Retirement System now says a troublesome piece of last year’s state pension-reform law may not cut retirees’ pensions after all.
William Mabe is the executive director of the retirement system. He said the language in law that would cost retirees’ a year of pension should be interpreted as if it didn’t – because it wasn’t intended to.
That’s based on the interpretation the Teachers Retirement System has been using when it looks at the law. Now SURS plans to follow suit.
* The News-Gazette broke the story…
Teachers also have a money-purchase option when they retire, and that annuity calculation was changed in the new pension bill as well. But the Teachers Retirement System chose to interpret the “legislative intent” of the added provision, preserving members benefits earned through June 30, 2014.
“From the get-go the way we read the law, the legislative intent was designed to hold members harmless,” said spokesman Dave Urbanek. “Our interpretation was fiscal year 2014 all along.”
The state pension code says that whenever a statute’s language is ambiguous, the interpretation must favor the employee, he said.
Only about 14 percent of teachers use that option when they retire, as opposed to approximately 60 percent of SURS retirees, officials said.
Mabe said SURS had been trying to get the problem fixed legislatively for months, and had been considering adopting the approach used by the teachers’ retirement system anyway when he received [House Speaker Michael Madigan’s] letter. There is legal precedent to support that approach, he said, and Madigan’s letter provided evidence of “clear evidence of intent.”
* From Madigan’s letter to Mabe…
With respect to the money purchase benefit, SURS is the only pension system interpreting the language in a manner that is inconsistent with the intent of the General Assembly. It is my understanding that SURS and the University of Illinois were directly involved in the development of the money purchase benefit language, and reviewed several drafts of the legislation prior to the General Assembly taking final action. At no point did SURS, University of Illinois, or any other pension system indicate there was a technical error with the language that would cause it to be inconsistent with the intent of the Conference Committee Report.
Given that members of the General Assembly have received numerous letters and emails regarding this issue, it is worth addressing the timeline related to the development of the language. The concept of changing the money purchase benefit was introduced on April 30, 2013, in House Amendment #1 to Senate Bill 1, and approved by the House on May 2, 2013. When the Conference Committee was appointed, the members of the Committee met with representatives from SURS and the University of Illinois, and together they drafted the language that ultimately became law. The pension systems were provided with copies of draft legislation throughout the fall and prior to the General Assembly taking action in December 2013. On November 26, 2013, legislative staff specifically asked each of the pension systems if there were any technical concerns with the language. At this time, SURS did not present this objection.
Legislative staff was advised that SURS preferred a hard date for the provision, but that this request was simply to ease administrative burden and would not impact the intent of the provision.
With respect to your concerns regarding the effective date of the bill and the method used to determine the effective rate of interest, again, SURS reviewed this language over the course of many months and did not present any objections. After passage, legislative staff was advised that these provisions could be difficult, but would not be impossible to administer.
While I support efforts to correct the technical error, I urge SURS to consider that its interpretation is inconsistent with the intent of the General Assembly, and also inconsistent with the way TRS has interpreted the same language. A similar reading by SURS may help ease the concerns of university faculty and personnel impacted by the language and assist with avoiding unintended consequences for our universities.
With kindest personal regards, I remain
Sincerely yours,
MICHAEL J. MADIGAN
Speaker of the House
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CTU peace gesture on pension reform
Thursday, May 8, 2014 - Posted by Rich Miller
* Greg Hinz has an important story about a pension reform peace gesture by CTU President Karen Lewis…
During an appearance yesterday afternoon before the Crain’s editorial board, Ms. Lewis specifically said the union is willing to consider reducing benefits for those who still are working, although she emphatically ruled out changes for members who already have retired.
“There could be some modification (for current workers),” said Ms. Lewis, who has a reputation as a firebrand and who on May 5 opened the door to a second teachers strike in three years. “We’re interested in talking about modifications, yes.”
* Lewis said she wouldn’t talk about specific cuts until revenue had been negotiated. She’s generally opposed to raising property taxes and has floated things like a financial transaction tax (which was shot down by Mayor Emanuel yesterday) and a commuter tax, which is going nowhere. However, there’s another idea out there…
Ms. Lewis said Chicago Public Schools officials lately have been “more open to discussion [about revenue] than in the past.”
She didn’t say what they’re “open” to. A source who should know says a plan to dedicate revenue from expiring tax-increment financing districts is picking up steam because it would provide a revenue stream for pension bonds without raising the overall property tax rate above today’s level.
* On to Mayor Emanuel…
What he has ruled out — pointedly and specifically — is a transaction tax, a city income tax increase, and a commercial lease tax like the one championed by Mayor Harold Washington during the mid-1980’s. A Circuit Court judge overturned the six percent lease tax in 1986. The city appealed that decision, but the City Council repealed the tax before the city’s appeal was heard.
The mayor has also nixed the idea of using the jackpot of revenue from a Chicago casino to solve the pension crisis.
“I don’t think you should go to the roulette table with somebody’s retirement check. I’m not gonna do that,” the mayor said last month.
“How long has it been laying out there?… A lot of the credit agencies want something that’s reliable that they count on. I’m trying to stop the city from going to a place that I don’t think it can if we…do the morally responsible thing to ensure that every workers, every retiree gets a pension.”
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Make it temporary again?
Thursday, May 8, 2014 - Posted by Rich Miller
* Rep. Jerry Costello is against making the tax hike permanent, or even extending it a few years, but suggests another temporary extension might be an alternate way forward…
There might not be enough votes in the House to make Illinois’ temporary tax hike permanent, so a one-year extension of the increase might be sought instead, according to a local lawmaker.
“They’re having problems — leadership in the Democratic Party — coming up with enough votes to pass a permanent extension of the tax,” said Rep. Jerry Costello II, D-Smithton. […]
“I think for some of the people on the fence, if they could say it was a finite situation, it would be easier for them. For me, it doesn’t change my position — I’m a ‘no,’” Costello said.
Steve Brown, a spokesman for Madigan, said he’s not aware of any plan to back away from the permanent increase, in favor of another temporary one.
“That’s news to me,” Brown said. “I know the speaker is supporting what the governor has proposed. The speaker has told the press in recent days that he’s continuing to work on that roll call.”
As subscribers know, the House Speaker is, indeed, having some problems with that permanent tax hike. But another temporary tax hike would mean yet another politically contentious tax vote in a few years, and the Speaker isn’t loving that idea.
Your thoughts?
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