* In case you need to refresh your memory, the Chicago Tribune story is here. From the Chris Kennedy campaign…
The tapes speak for themselves.
* Sen. Daniel Biss’ campaign…
Including JB’s $230,000 property tax scheme, this is part of a disturbing pattern that JB is using the same rigged game that the rich and well-connected have played to benefit themselves at the expense of the rest of us
* Ameya Pawar’s campaign…
“This is what billionaires and political insiders do and people across the state are tired of politics as usual. Ameya Pawar’s record of beating the Chicago machine and passing legislation on behalf of working families represents a break from the status quo. If elected governor, Ameya will be a voice for the millions of Illinois families who have been left behind to fight over scraps.”
On our 701st day without a budget, two more bond rating agencies gave Illinois the 7th and 8th credit downgrades since Gov. Rauner took office 2 ½ years ago. Before he took office, Illinois had been paying its backlog of bills down. It got down to less than $5 billion. In just two years of his failed leadership, he has about tripled that stack of unpaid bills to $14.5 billion and growing. Both Standard & Poor’s and Moody’s dropped the state to one grade above junk status Thursday.
While all sides could try harder to compromise toward a budget solution as the General Assembly has with every previous governor, business groups and independent third parties put the blame for Illinois’ crisis mainly on Governor Rauner. Standard & Poor’s said in its last assessment: “Illinois’ fiscal crisis is, in our view, a man-made byproduct of policy ultimatums placed on the state budget process.” In other words, Governor Rauner has created and now owns this crisis.
In the meantime, our office will continue triaging how to make payments to Illinois’ struggling schools, nursing homes, hospice centers and aging facilities from a near-empty bank account. We’re about to reach the breaking point at which court-ordered payments will exceed the state’s revenues. Illinois’ sick, elderly, young, and most vulnerable are paying the price. This crisis is untenable, unconscionable, and unnecessary. It’s time that the Governor stop campaigning and take responsibility for his failures and fulfill his constitutional mandate to introduce a balanced budget.
*** UPDATE 2 *** Treasurer Frerichs…
“Two credit downgrades in 24 hours further underscores the need for a full, balanced budget,” Frerichs said. “My warnings were ignored and credit agencies have responded. We need a bipartisan budget now to end this crisis.”
*** UPDATE 3 *** Illinois Working Together Campaign Director Jake Lewis…
“In light of today’s downgrades, the seventh and eighth downgrades of Gov. Bruce Rauner’s tenure, we are reminded of Rauner’s June 3, 2013 tweet:
Ilinois' credit rating just got downgraded….again. Unacceptable. #ILReform
Moody’s Investors Service has lowered the rating on the State of Illinois’ general obligation (GO) bonds to Baa3 from Baa2, amid a prolonged political impasse that has prevented progress on a growing pension deficit and an increasing backlog of unpaid bills. With this action, ratings of several state debt types linked to the GO rating also were lowered: Build Illinois Bonds backed by sales tax revenues, to Baa3 from Baa2; the Metropolitan Pier & Exposition Authority’s McCormick Place project bonds, to Ba1 from Baa3; and the state’s Civic Center program bonds, also to Ba1 from Baa3. Debt outstanding for all affected securities totals about $31.5 billion, but not all outstanding Build Illinois and Metropolitan Pier issues are rated by Moody’s. The outlook applicable to the state and these associated credits remains negative.
Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance, allowing a backlog of bills to approach $15 billion, or about 40% of the state’s operating budget. During the past year of fruitless negotiations and partisan wrangling, fundamental credit challenges have intensified enough to warrant a downgrade, regardless of whether a fiscal compromise is reached in an extended session. As the regular legislative session elapsed, political barriers to progress appeared to harden, indicating both the severity of the state’s challenges and the political difficulty of advocating their solutions. Extending the impasse, and the state’s embedded operating deficit of at least $5 billion (or 15% of general fund revenue) would signal further pressure on the state’s credit position. But the state’s credit could stabilize at the current level in the event of a political consensus that more closely aligns revenues and spending, without relying on unsustainable fiscal measures.
The downgrade to Baa3 for Illinois’ GO bonds is consistent with the state’s intensifying pressure from pension liabilities; by our calculation, the state’s unfunded pension liability (Moody’s adjusted net pension liability, or ANPL) for its five major plans in aggregate grew 25% in the year ended June 30, 2016, to $251 billion. The current rating also acknowledges intrinsic credit strengths, primarily the state’s sovereign powers over revenue and spending; a diverse and strong economic base with the long-term economic potential to provide for its liabilities, and statutory protections for bondholders, primarily requirements for monthly transfers in advance of semiannual debt service payment dates. During the past decade, the state’s governance framework has allowed practices that greatly offset these strengths. After eight downgrades in as many years, Illinois’ rating is an outlier among states, most of which are rated at least eight notches higher. The rating on the Build Illinois sales-tax revenue bonds is capped at the GO rating because of lack of sufficient segregation of pledged revenues from the state’s operating needs. The Met Pier and Civic Center program bonds are both rated a notch below the state GO bonds, because of the need for annual legislative appropriation of payments.
Rating Outlook
The state’s negative outlook is consistent with its potential for additional credit weakening because of a continuing political impasse that has left Illinois increasingly vulnerable to adverse revenue trends and severely underfunded retiree benefit plans.
Factors that Could Lead to an Upgrade
Implementation of a realistic plan to provide long-term funding for pension obligations
Progress in reducing payment backlog and adoption of legal framework to prevent renewed build-up of unpaid bills
Enactment of recurring fiscal measures that support expectation of sustainable, structural balance
Factors that Could Lead to a Downgrade
Continued increases in unfunded pension liabilities and indications of unwillingness to allocate sufficient resources to retiree benefits
Persistent and growing structural imbalance that pressures liquidity and increases payment backlog or bonded debt burden
Court rulings that increase the volume of payment obligations that are legally prioritized
Difficulty managing impact of any other adverse negative events, such as an unexpected economic downturn or reduction of federal Medicaid funding
Failure to enact legislation providing for timely payment of subject-to-appropriation debt
* If you’ve been to the Statehouse this week, you may have noticed that former Gov. Pat Quinn’s portrait is missing, even though it was unveiled back on May 8th…
* Several people asked me if I knew what was going on, so I reached out to Quinn’s people…
The artist thought some of the brushwork looked off in the light of the Capitol and is revising.
Let’s lighten things up a little.
* The Question: What “really” happened to the Quinn portrait? Put on your finest tinfoil hats and get to it.
What’s happening in Springfield is offensive to our values and to who we are as a state, and Bruce Rauner blames everyone but himself. The failure to pass a budget isn’t just about numbers. It’s creating real damage to people across Illinois especially those most vulnerable in our society. Thousands of women and children seeking refuge from violence are finding shelters either closed or with less availability than they once had. Substance abuse programs are at risk in the middle of an opioid and meth epidemic that’s ripping apart families and communities. Home care for seniors is in jeopardy. Access to mental healthcare is under siege. And with Donald Trump in the White House, now more than ever, we need leadership in our state that’s committed to fighting for the people of Illinois. None of us can afford to sit on the sidelines. We have to fight for what we believe in. That’s why I’m running for governor.
Narrator: JB Pritzker. Democrat for governor. Fighting for what’s right. Getting things done.
* Sen. Daniel Biss’ press release was pretty harsh…
“Politics have gotten in the way of progress for the people of Illinois. Neither Governor Rauner nor Speaker Madigan have showed a sincere desire to keep our schools open, to pay our bills on time, or to make sure the safety net stays in place.
That’s why I’m calling on Governor Rauner and Speaker Madigan to do something they’ve refused to do — sit down with each other, face to face, and hammer out a compromise. They need to do their job and end the pain they’ve caused. If they can’t, it’s more evidence that it’s time to replace both.”
* Chris Kennedy…
After more than 700 days without a budget, Bruce Rauner has turned a budget crisis into an economic catastrophe for Illinois. The situation that we are now in is the economic equivalent of circling the drain. Financial analysts are threatening that Illinois’s financial situation is approaching rock bottom. That’s what’s become of our state under Bruce Rauner. We need to demand accountability and reject a rigged system. Illinois needs a budget that reflects our values as a state and gives businesses and residents confidence that state government is financially stable and predictable. If I’m elected governor and I don’t balance the budget, I won’t run again, nor should I. That’s the level of accountability and honesty we need to show the people of Illinois.
* Ameya Pawar fundraising e-mail…
Today is the last scheduled day of the legislative session, and it appears there will again be no spending plan before lawmakers adjourn for the summer, leaving schools, universities and social service providers without many answers.
Gov. Bruce Rauner has failed to do the most basic function of a governor for two years in a row. With no budget on the horizon, Illinois is on the cusp of a third straight year in fiscal limbo while more and more businesses and families flee the state in search of stability.
This is how a billionaire plutocrat governs - pitting people against each other and leaving working families with scraps.
All Gov. Rauner is focused on is how to buy another election. While Ameya’s big money opponents crowd the airwaves and raise eight figure checks that could fund a small town’s budget, we’re running a people-powered campaign. And, thanks to supporters like you, we’re gaining momentum every day.
State Rep. Greg Harris, D-Chicago, whom Madigan appointed as a chief budget negotiator, will hold public hearings, with the first scheduled for June 8 in Chicago.
“Our plan is for the House, Democrats and Republicans, to work through the month of June, [to] continue to work on budget-making, working on a balanced budget,” Madigan said. “We will invite and will expect participation by all members of the House.”
The budget plan at hand, borne of months of bipartisan Senate negotiations, called for spending $37.3 billion fueled by $5.4 billion in tax increases. But Madigan said his members got skittish after watching a fickle Rauner during the Senate talks, allegedly often changing his mind on individual parts and pulling GOP members off votes while maintaining he was hands-off.
“Some of our people are concerned, having observed how the governor worked with the Senate Democrats, where he would negotiate, then back away, negotiate, back away,” Madigan said. “They just don’t have a high level of confidence in the way the governor has conducted himself.”
“A lot of folks have watched what has happened in the Senate, where they thought they had reached an agreement, and at the end of that agreement they found out the governor was pulling votes off the bill, and then attacking the very people who had worked on the compromise, voting for things he had previously supported.”
House Minority Leader Jim Durkin says it’s a pattern: Democrats can proclaim victory by passing a measure in one chamber, only for it to be ignored in the other – meaning it has no chance of becoming law.
Other measures that were part of the “grand bargain” are going to the governor’s desk, including bills that make it easier for local governments to consolidate (Senate Bill 3), that loosen state purchasing rules (Senate Bill , and one that would make way for Rauner to sell the James R. Thompson Center (Senate Bill 886), the seat of government in downtown Chicago.
“Despite all of these things along the way, where the governor was fighting us, where he was saying things to make us stop, promoting ideas that just aren’t accurate, or even putting out half-truths, I would go as far to say as lies about what we’ve done in the Senate. We acted responsibly,” Sen. Andy Manar, D-Bunker Hill, said.
The governor said negotiations stalled over term limits, local government consolidation, workers’ compensation and a property tax freeze.
“They know darn well where we are apart, what we need to do to cut, what we need to do to reform the system. The majority in the House knows darn well what needs to be done. They’re not doing it,” the governor said.
Rauner — who faces re-election next year — called reforms he wants to grow more jobs, as well as the property-tax freeze, “not partisan” and necessary. And he urged lawmakers to stay in Springfield and continue to negotiate on a budget deal.
Gov. Rauner: “I am going to demand that the Democratic majority [going forward] be here in Springfield and negotiate a compromise- a truly balanced budget with changes to fix our system…We could have and should have done this two years ago. You can’t find anyone in the State of Illinois who won’t say: ”We need property tax relief, our property taxes are too darned high.” Democrats in this state feel it just as passionately as Republicans…”
But he wouldn’t answer a question about whether he will call them back into town for a special session.
The couple knew the girl faced challenges, as she’d suffered neglect and abuse in former homes. For instance, she has reactive attachment disorder, where a lack of parental love and care renders a child with bonding difficulties.
“We tried our best to take care of her,” the mom says. “But we had lots of bumps in the road.”
The girl turned out to have other disorders, including psychoses that make her see hallucinations and hear voices. She’d steal from siblings and run away from home. Three times, the couple took the girl to mental health facilities. But the problems seemed to worsen.
She has been diagnosed as suicidal. “She will bang her head against a concrete wall, trying to give herself a concussion,” the mom says.
And she has been diagnosed as homicidal. “She has talked about killing me and how she would kill me,” the mom says.
So, last year the couple contacted The Baby Fold, a human-services agency in Normal that helps more than 1,000 children. Its services include residential treatment for children with severe mental and emotional challenges. It’s the only such treatment center in central Illinois, one of only two outside of a handful in Chicago and northern Illinois.
At The Baby Fold, the Washington girl (now 12) is under supervision 24-7, usually by two staffers — a level of care impossible at her home. Under treatment, the girl has been improving, with fewer outbursts. In fact, during visits, she gets along well with her adoptive mom.
As we’ve already discussed, The Baby Fold is closing its residential treatment center in a month because of the lack of a state budget.
She can’t afford the $200-plus per day her daughter needs for inpatient care and supervision. But the mom knows that if she signs the girl back over to the state, DCFS would have to cover the cost of moving her to a new treatment center. Nonetheless, such a move could mean the mom would never see her daughter again.
* And that doesn’t include community colleges and this…
WIU President Jack Thomas announced via email that the “University is delaying contract renewal notices to non-tenure track faculty (Unit B). This notice delays a decision on staffing levels for the Fall 2017 semester.” The 118 employees are being notified in writing.
The President explained, “Due to the unprecedented state budget impasse, Western Illinois University continues to consider fiscal adjustments.”
When I decided to run for governor, it was clear to me that Gov. Rauner and the GOP had nothing except the kitchen sink that they wanted to throw at the Democrats and particularly at me because Bruce Rauner’s afraid to run against me.
And, so, this is a nine-year-old tape that they are leaking in an attempt to distract from the fact that 700 days into this administration, into this failure of a budget, this governor has done nothing for the people of the state of Illinois.
He’s chosen to do this on the 700th day. A day when at the end of session it looks like we won’t get a budget for yet another year. So, Bruce Rauner having failed, the GOP having failed, this is their massive attempt to distract.
Pritzker said more about that later in the same media availability and then said much the same thing during another avail he had last night. Click here for that one…
It’s clear that Bruce Rauner and the GOP have nothing to run on, and so they are simply attacking… I knew when I decided to run for governor that they were going to throw the kitchen sink, that they were going to try to take down all the Democrats, particularly me because I think they’re mostly afraid of running against me in the general election. […]
So, what are they gonna run on? They can only run on trashing Democrats and introducing this idea of a nine-year-old leaked tape and attacking me.
We don’t ever talk about sourcing on these kinds of issues. I know the [Pritzker] campaign threw out a Bruce Rauner allegation. That’s not correct. I can say that. […]
This is Tribune reporting going back over … We have had routes for information on this case. I mean for me personally I’ve been protecting sources on this case back to 2006.
* I asked the Pritzker campaign if they still stood by the allegations that this story was leaked by Rauner and/or the GOP to “distract” people…
“This is a continuation of attacks Bruce Rauner and the ILGOP have already made and the leak happened to coincide with the 700th day of session, where the governor failed to pass a budget for a third year.”
So, they tightened it up a bunch and dropped the direct connection allegation.
* The Pritzker campaign does appear to have some legit beefs about the way this story was reported out. They say they were only given an hour to respond to the story and weren’t told that tapes even existed. The Tribune reporters, the campaign claims, wouldn’t even read them any excerpts from the Blagojevich conversations, which is why the campaign’s first response seemed so oddly off-topic.
The question remains as well whether a federal judge’s order sealing these tapes was somehow violated. Remember, this was a huge issue back in the day. Blagojevich kept demanding that the judge “Release the tapes!” and the judge wouldn’t do it. This was a private conversation that didn’t result in any charges or even any testimony and yet it’s now public.
I’m working in the gov primary for another candidate and am disgusted by this entire story. Nonpublic incidental collection should never be used for anything other than its intended purpose; that’s the entire reason the FBI is allowed to wiretap suspects. […]
This is the second time incidental collection from the Blagojevich trial has been used to embarrass a political target outside the investigation. People should be fired over this, and it’s disgusting nothing will happen.
The governor also held Democrats responsible for Thursday’s rating cut.
“Madigan’s majority owns this downgrade because they didn’t even attempt to pass a balanced budget, get our pension liability under control, and other changes that would put Illinois on better financial footing,” said Eleni Demertzis, a spokeswoman for Rauner. “The governor will continue working toward a truly balanced budget with changes to our system to grow jobs and provide real and lasting property tax relief.”
“Her comment is typical Rauner incompetence, and that’s too bad,” said Steve Brown, a spokesman for Madigan.
*** UPDATE 2 *** Pritzker campaign…
“A day after Bruce Rauner once again failed to produce a budget, the Illinois economy is already feeling the devastating impacts,” said JB Pritzker. “Under Bruce Rauner’s failed leadership, Illinois’ general obligation debt is now a step away from junk, the lowest ever for a U.S State. What we’re seeing is a state economy in shambles as state debt skyrockets and Bruce Rauner stumbles past 700 days without a budget. This will have long term ramifications for the economy of our state and it will take years to clean up Rauner’s mess. We need a governor who understands how to get results in Springfield and it is clear that Bruce Rauner will never be up to the job.”
*** UPDATE 3 *** Kelly Welsh, President, Civic Committee of The Commercial Club of Chicago…
“The failure of Illinois leaders to pass a budget has – as predicted – resulted in immediate action to downgrade state bonds. Once again, the State of Illinois debt backlog increases and taxpayers are on the hook for hundreds of millions of dollars in unnecessary debt payments, while schools and universities are put at risk and our communities suffer from deteriorating social services. With “Bringing Illinois Back,” the Civic Committee provided a sensible framework for resolving this fiscal crisis, which required change and compromise from our government leaders in Springfield. Their failure to act is inflicting serious damage on our state.”
*** UPDATE 4 *** Sen. Daniel Biss…
“Infuriating. Wall Street banks will now get even more of our tax dollars because Rauner and Madigan have failed again on the budget.”
Illinois had its bond rating cut to a step above junk by S&P Global Ratings because of the long-running political stalemate over the budget that’s kept the state from dealing with its chronic deficits.
The company warned that the rating could be cut again, which would make Illinois the first state since at least 1970 with a below investment grade. S&P said debt backed by state appropriations, including those issued by its sports authority, were cut to BB+, one step into junk.
“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,” S&P analyst Gabriel Petek said in a statement. “The unrelenting political brinkmanship now poses a threat to the timely payment of the state’s core priority payments.”
S&P Global Ratings lowered its rating on Illinois’ general obligation (GO) bonds to ‘BBB-’ from ‘BBB’. We also lowered our ratings to ‘BB+’ from ‘BBB-’ on the state’s appropriation debt, including bonds issued by the Illinois Sports Facility Authority and the Metropolitan Pier & Exposition Authority. Finally, we lowered to ‘BB-’ from ‘BB’ our ratings on the state’s moral obligation-backed debt. The ratings are on CreditWatch with negative implications.
“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,” said S&P Global Ratings credit analyst Gabriel Petek. “We placed the ratings on CreditWatch with negative implications because, in our view, the unrelenting political brinkmanship now poses a threat to the timely payment of the state’s core priority payments.”
We also believe that Illinois is now at risk of entering a negative credit spiral, where downgraded credit ratings would trigger contingent demands on state liquidity, further exacerbating its fiscal distress. Although CreditWatch typically has a 90-day time horizon, we anticipate resolving Illinois’ placement around the start of its 2018 fiscal year, which begins on July 1. If lawmakers fail to reach agreement on a budget with provisions designed to reduce the state’s structural deficit, it’s likely we will again lower the ratings. In our view, the ongoing budget impasse has increased the nonpayment risk associated with Illinois’ obligations that require a budget appropriation before they can be funded. We now view these payment obligations as having speculative-grade characteristics.
The ‘BBB-’ GO rating reflects our view of the state’s:
• Large and growing structural budget deficit now projected to top $7 billion (18% of expenditures) in fiscal 2018;
• Unpaid bills that have mushroomed to the equivalent of more than one-third of annual general funds’ expenditures;
• Elevated fixed costs and depleted budget reserves, the combination of which renders the state vulnerable to even more fiscal pressure when the economy enters a slowdown;
• Exposure to stepped-up interest costs related to variable-rate debt and swap termination payments tied to rating triggers;
• Distressed pension funding levels that will require substantial contribution increases in the coming years; and
• Inability to deliver adequate and timely funding for various important public services and institutions as a consequence of dysfunctional budget politics.
Partially offsetting these weaknesses is our view of:
• Well-established priority of payment for GO debt service established by statute;
• Ability to adjust certain cash disbursements to stabilize cash flow and to access substantial amounts of cash reserves on deposit in other funds for debt service, if needed, and for operations if authorized by statute;
• Deep and diverse economic base anchored by the Chicago metropolitan statistical area, though with a growth outlook that is expected to trail the nation’s through the next five years;
• Above-average income levels; and
• Substantial ability to adjust revenues, expenditures, and disbursements–albeit with a current lack of agreement on how to do so.
S&P Global Ratings lowered to ‘AA-’ from ‘AAA’ its rating on Illinois’ Build Illinois sales tax revenue bonds. The rating is on CreditWatch with negative implications.
“The rating actions reflect our view that, with the negative pressure on the state’s creditworthiness intensifying, the risk of interference with the flow of revenues pledged to the repayment of its Build Illinois sales tax bonds has increased,” said S&P Global Ratings credit analyst Gabriel Petek. “The CreditWatch placement reflects the likelihood that we would lower the rating further if the state’s general obligation rating were downgraded again.”
Our views are balanced against the fact that debt service, at about $325 million in fiscal 2017 and declining thereafter, is equivalent to less than 10% of the state’s structural budget deficit in its general funds. We continue to believe the state will adhere to legal provisions that insulate debt service on the bonds from its budget impasse. However, we believe the risk of a disruption is somewhat greater with the state’s overall fiscal condition experiencing more acute levels of distress.
The blame game quickly commenced. House Speaker Michael Madigan said Democrats will continue to work throughout June to “close the Rauner budget deficit.” House Democrats want to work “cooperatively” with Rauner, Madigan said, but many “just don’t have a high level confidence in how the governor has conducted himself.”
Rauner had vowed to veto a Democratic budget that included an income tax hike and sales tax expansion, but he nonetheless classified the House’s inaction on a spending plan as a “complete dereliction of duty by the majority in the General Assembly.”
“Please, members of the General Assembly in the majority, do not travel around the state holding sham hearings about a balanced budget,” Rauner said. “Don’t go through a process of just trying to create phony headlines around the state.”
Madigan’s decision not to hold budget votes Wednesday held some political benefits as he tries to protect a Democratic majority that’s kept him in power for all but two of the last 34 years.
Not only was Madigan able to sidestep the immediate pressure from some of his House Democrats to vote for a tax increase, but going into overtime also pushes GOP lawmakers to join in a solution or split the blame for the continued stalemate. That’s because starting Thursday, passing a budget will require at least some Republican votes to reach the three-fifths benchmark now required.
A House Speaker who has never really worked cooperatively with this governor claiming he has, and a governor who can’t cut a deal blames others for his inabilities. Not to mention a guy who constantly travels around the state ginning up phony headlines browbeating others for doing the same.
Illinois lawmakers late Wednesday approved a school funding reform measure, the first significant overhaul of the state’s system of funding public schools in decades.
The Senate gave final approval to Senate Bill 1 by a 35-22 vote. The House approved the bill earlier in the evening.
The legislation can now be sent to Gov. Bruce Rauner, where it faces an uncertain future. Republican lawmakers complained that the bill was changed in the House at the last minute to give hundreds of millions of dollars in additional money to Chicago schools.
The bill was the culmination of years of negotiating by Sen. Andy Manar, D-Bunker Hill. His goal was to change the school funding formula so that more state money is directed at the neediest school districts.
The General Assembly’s website has been down this morning, but the Senate Democrats filed a motion to reconsider the vote last night after SB 1 passed.
* I asked what the hold was about, and here’s their texted response…
Slow down the process and dial down the rhetoric in hopes of getting it signed by the governor who promised to overhaul state education funding.
I was also told that the hold would last only up to 30 days.ADDING: There was a miscommunication. The hold stops the 30-day clock to send legislation to the governor. It can be held indefinitely. I thought that was what was going on, but it was a late night and an early, hectic morning. Sorry.
Governor Bruce Rauner said Thursday that he would not sign an education funding reform bill that passed both houses of the Illinois General Assembly Wednesday night just before the legislative session ended. […]
“In its current form, absolutely not,” Rauner told the Chicago Sun-Times. “The amendment on there really amounts to an unfair-to-Illinois-taxpayers bailout of CPS.” […]
Rauner, however, said bills drafted by State Sen. Andy Manar, D-Bunker Hill, and Sen. Jason Barickman, R-Bloomington, should be used as a “base for a deal.”
“We were going down that road but then the majority in the House kind of hijacked the process, added a big addendum, a big amendment onto Manar’s bill with massive more financing for Chicago Public Schools. That’s not fair for the statewide taxpayers. So we’ve got to get that out,” Rauner said. “Within the context of the bills I think coming up with a balance that works for everybody and gets more resources for Chicago Public Schools, I’m supportive of that. So hopefully we can keep working to get it done.”
* I asked Senate President Cullerton’s spokesman for a response…
This is the kind of premature rejection from the governor we’re hoping to avoid. Hopefully, cooler heads will prevail.
* A Rauner campaign e-mail sent out last night entitled “What happened today”…
Today, Illinois Democrats made clear that their partisan agenda is more important than the future of our state.
Despite being given the opportunity to set our state on the right path, Democrats in the Illinois House and Senate refused to pass a balanced budget with real lasting property tax relief.
A 32% tax increase without real reform is not the answer. Illinois already has the highest property taxes in America. We have the 5th highest tax burden in the country.
I am writing to you tonight to make something explicitly clear to our supporters and our opponents: Team Rauner will never give up on this fight for reform.
Challenge the Democrats directly by committing to reform instead: sign our reform petition here.
Democrats sent a strong message to Illinois families this evening: they are willing to push our state further into debt and destruction just to continue the corrupt, self-serving agendas of Speaker Madigan and the Chicago Machine.
Illinois deserves so much better. If you agree, pledge your commitment here.
Choosing reform over the status quo is not easy, but with your help - we will bring back Illinois.
Your support is more important now than ever before.
[Signed]
Bruce Rauner
* As I write this at 8:25 pm, the House has adjourned until later in June, or the call of the Speaker, whichever comes first. The Senate just reconvened has some concurrence motions it has to deal with…
* SB 1 - School funding reform. This bill passed the House with the bare minimum of 60 votes and just one Republican, Rep. Michael McAuliffe. Background is here.UPDATE: The Senate concurred, 35-22.
* SB 3 - Local government consolidation. Gov. Rauner pulled HGOP votes off this bill, but then put them back on after an amendment was filed. It passed the House with 75 votes. UPDATE: The Senate concurred, 49-3.
* SB 81 - $15 per hour minimum wage. The motion to reconsider the vote has been withdrawn in the House, freeing up the Senate to vote on it tonight if it has the votes. Background is here.UPDATE: The motion to concur passes 30-23-2.
* SB 1839 - AT&T bill, 911 tax hike. Despite the governor’s opposition, the bill passed with 81 votes, including 34 House Republicans. Background is here. UPDATE: The motion passed 53-3. Wow.
Other bills awaiting Senate concurrence are here. And you can click here to see all the bills which cleared both chambers today.
* Meanwhile, the Senate Democrats amended the House’s Chicago school board election bill (HB 1774), but apparently put off any floor action until the House left town. Its fate, as they say, is uncertain.
And the Senate approved an online fantasy sports bill, but the House didn’t take any action.
The state’s premier business groups have labeled the spring legislative session as “one of the worst for employers” citing lawmakers’ apparent “race to the bottom” and litany of anti-employer, anti-job growth measures considered this year.
At a press conference on the final day of session, the Illinois Manufacturers’ Association, Illinois Retail Merchants Association, Chicagoland Chamber of Commerce, Illinois Chamber of Commerce and NFIB joined together lamenting the continuous effort to tax, over-regulate, mandate and constrict employers at every turn by lawmakers in both chambers which has created one of the most crushing business climates in the nation. While this is not a new phenomenon in Springfield, the massive uptick in these anti-employer measures coupled with the accompanying rhetoric has exasperated an already hostile business climate.
Ironically, many of these measures – in theory – are aimed at increasing pay, hiring more employees or giving workers more certainty, yet they achieve quite the opposite. While the intention of our business community is to provide jobs with competitive pay and generate revenue to fix the state’s problems, the anti-employer narrative is having a chilling effect.
“My Democrat friends like to say we are in a race to the bottom. Unfortunately, I’m here to tell you we are winning but that means Illinois businesses and families are losing. The high cost of workers’ compensation is one of the biggest issues facing manufacturers but lawmakers fail to act because they continually side with wealthy trial lawyers. Their failure to act and create an attractive economic climate means that Illinois will continue to bleed jobs and remain a laughingstock of the nation,” said Greg Baise, president and CEO, Illinois Manufacturers’ Association.
“Every day seems to bring another report of another round of retail store closings. Instead of talking restraint and recovery for the retail community, the narrative out of Springfield, like the actual actions in Chicago and Cook County, is higher taxes, labor and regulatory burdens, and, in the case of Cook County, incentivizing theft. This ‘campaign against Main Street retailers’ will only hasten the continued job loss and store closings that have become all too familiar. Retailers have limited responses; reduce employee hours, lay people off, increase automation, or close. Passing legislation to mandate artificially higher wages when the jobs don’t exist doesn’t help anyone,” said Rob Karr, president and CEO, Illinois Retail Merchants Association.
“The ping pong of anti-employer policies coming from both Chicago and Springfield is unsustainable. At every corner, Chicagoland businesses are being asked to pay higher property taxes, soda taxes, and sales taxes while also being forced to implement countless mandates that do not grow the economy. Chicago has so much to offer but this economic death by 1,000 paper cuts does not create the jobs, quality of life and revenue Springfield should be seeking,” said Michael Reever, vice president of government affairs, Chicagoland Chamber of Commerce.
“Time and again lawmakers have suggested policies that shift greater financial burdens to employers statewide. Whether it is during the budget impasse or after it is resolved, standing up against job-crushing legislation is crucial for our economy. Increasing minimum wage, passing “fake” workers’ compensation reform and proposing a significant arbitrary tax increase is far from the progress Illinois deserves. We need pro-growth economic policies to prevent the steady decline of Illinois’ economic competitiveness. And we need them now, that is, if we want to continue to attract the best and the brightest individuals to Illinois,” said Todd Maisch, president and CEO, Illinois Chamber of Commerce.
“Our members aren’t surprised by the legislature’s anti-business antics this session, but they are disappointed and fed up. Illinois is broke and we haven’t had a budget in two years. We need leaders who are less focused on scoring easy political points and more on enacting good policies that benefit all Illinoisans. We need legislators who will act like adults, set aside their political differences, and make the difficult decisions that would make things better for working families and allow businesses to grow and create jobs,” said Mark Grant, Illinois State Director, NFIB.
Springfield’s Dirty Dozen
SB 81: Legislation that raises the minimum wage to $15
HB 2771: A costly government mandate forcing employers regardless of size to provide paid leave to every employee regardless of hours worked.
HB 160: A $5,000 fee on every employer for the “privilege” of doing business in Illinois
HB 156: Massive property tax shift onto commercial and industrial taxpayers
SB 1502: Trial lawyer supported legislation that burdens every e-commerce business, and every company with a credit card, loyalty program app or website, without providing any consumer protections
HB 3449: Trial lawyer supported legislation that unfairly targets companies that share or store location data and requires ecommerce businesses to ask for permission before collecting location data from your device
HB 3538: Penalizes business that move even one job out of state while discouraging future investment
HB 2802: Government mandate forcing businesses to pay the transportation costs of their workers
HB 2525: This bill codifies “a cause” workers’ compensation standard that mandates insurance rate review without providing any meaningful reform
HB 2622: Legislation that would disrupt the private workers’ compensation insurance market without having a strong reason to exist
HB 3337: A bill that allows someone to steal $2,000 of merchandise from a retailer
SB 9: Imposes $5.4 billion in new taxes on Illinois businesses and families - *revenue without
reforms
Ignored Reforms of the 2017 Legislative Session
· Pension reform
· Workers’ compensation reform
· Tax reform
· Restraint of local government
· Property tax relief
· Education and workforce development
Media Advisory: Governor, Senate & House Republicans to Address Media
What: Governor Bruce Rauner, Senate Republican Leader Christine Radogno and House Republican Leader Jim Durkin Discuss the Majority Party’s Refusal to Pass a Balanced Budget
Where: Governor’s Office – Illinois State Capitol
Date: Wednesday, May 31, 2017
Time: 4:45 PM
Note: The press conference will also be streamed on Governor Rauner’s Facebook.
* As I told subscribers a while ago, Speaker Madigan has been carefully creating a paper trail so that he can justify ending the spring session with a splat. And here it is all in one spot…
Speaker Madigan: House Democrats to Continue Working to Find Common Ground with Rauner and toward State Budget
SPRINGFIELD, Ill. – House Speaker Michael J. Madigan issued the following statement:
“There is no more urgent matter facing the state than the passage of a comprehensive, balanced budget, and House Democrats will continue our efforts to address this challenge, end this destructive impasse and close the Rauner budget deficit. The House Democratic Budget Working Group led by Representative Greg Harris will hold public hearings and continue working in June to prepare a budget for the coming fiscal year. The first hearing will be held on June 8 in Chicago.
“The governor’s reckless strategy of holding the budget hostage to create leverage for his corporate agenda that pads the profits of large corporations and insurance companies has for the third year left Illinois without a budget at the end of the May legislative session. He has put our schools at risk of being unable to open, denied care to victims of domestic violence, kept tens of thousands of seniors from receiving Meals on Wheels, and tripled Illinois’ backlog of unpaid bills. This cannot continue.
“Where we can compromise with the governor without hurting middle-class families, House Democrats have consistently advanced measures that address the governor’s requests so we can get down to the work of passing a balanced budget. House Democrats have:
· Voted to provide property tax relief to homeowners;
· Put forward reforms to the workers’ compensation system that will ensure employers see the savings from reform;
· Introduced an agenda of economic reforms that make Illinois a better place to do business while also lifting up middle-class families, not tearing them down;
· Voted at the governor’s request to streamline the state procurement process;
· Voted to sell the Thompson Center.
“I have directed members of the House Democratic leadership team to meet with the governor and seek common ground on his other proposals. To date, the governor has refused to meet.
“We remain ready to work with the governor and find common ground whenever he is ready to return to the table and work in good faith.”
*** UPDATE 1 *** Another one…
Speaker Michael J. Madigan issued the following statement Wednesday after the House voted to pass House Bill 2525, a package of workers’ compensation reforms addressing a key element of Gov. Bruce Rauner’s agenda:
“House Democrats have consistently stated that we will work with the governor to reach compromise, but we will not hurt middle-class families. Throughout his tenure, Governor Rauner has made it clear that changes to the workers’ compensation system are a pre-condition to his cooperation on a state budget. While the governor’s plan does not have the support of majorities in the Legislature, we can still find common ground on this issue.
“The bill passed today will help ensure Illinois businesses see the benefits of reform by requiring insurance companies to pass savings on to local employers. It takes steps to crack down on fraud and abuse, and includes additional measures to reduce costs without jeopardizing the health or economic security of workers. We believe this compromise meets the governor’s stated goal of reducing workers’ compensation costs for businesses, and Democrats’ goal of protecting working people and their families.
“As House Democrats work to address the governor’s pre-conditions to a budget, we remain steadfast in our belief that the budget is the most important issue facing families, seniors, children, and businesses. We ask the governor to stop holding the state budget hostage and join us in working in good faith to end this destructive impasse.”
*** UPDATE 2*** And another one…
– Speaker Michael J. Madigan issued the following statement Wednesday after the House voted to pass Senate Bill 3, allowing taxpayers to consolidate duplicative and unnecessary units of local government and addressing another element of Gov. Bruce Rauner’s agenda:
“With today’s passage of a local government consolidation package negotiated by Governor Rauner, House Democrats have again advanced legislation directly addressing the governor’s pre-conditions to negotiating a budget.
“As a new fiscal year quickly approaches with no budget yet in place, the governor’s approach of refusing to negotiate a budget is setting our state on a course for a third straight year of impasse and destruction. It’s not too late for the governor to change course and come back to the table. If and when he does, he will find House Democrats waiting to negotiate and compromise.”
As his agency faces another crisis, George Sheldon on Wednesday resigned as head of the Illinois Department of Children and Family Services.
The exit comes as DCFS remains under fire over the Semaj Crosby tragedy. Sheldon has accepted a job at a nonprofit in his home state of Florida. Sheldon tendered his resignation on Wednesday morning, according to Gov. Bruce Rauner’s administration. Rauner will appoint DCFS general counsel Lise Spacapan as interim director and begin a national search for a full-time replacement.
Earlier this month, Sheldon had revealed that he was considering the offer he eventually accepted – to be CEO of Our Kids of Miami-Dade/Monroe, Inc., in Florida.
No one answered the phone early Wednesday afternoon at OurKids. A message left for Sheldon seeking comment was not immediately returned.
Lise T. Spacapan is the general counsel for the Illinois Department of Children and Family Services. She oversees a law department with nearly 100 members throughout the state. Over the past 30 years, she has been a litigation partner in the Chicago offices of three major law firms: Husch Blackwell, Jenner & Block and Kirkland & Ellis. She handled cases throughout the country focused on Complex Commercial Litigation and Products Liability. Ms. Spacapan received her L.L.M. in Health Law in 2014 and serves on the DePaul College of Law Health law Institute. She served as a national director on the Board of DRI, chair of the DRI Publications Board and chair of DRI’s Toxic Tort and Environmental Law Committee. She has authored numerous articles and book chapters on litigation issues. Ms. Spacapan is AV Peer Review Rated, Martindale-Hubbell’s highest peer recognition for ethical standards and legal ability.
*** UPDATE *** SB1 as amended passed the House with 60 votes, including one Republican, McAuliffe.
[ *** End Of Update *** ]
* I’m told this info is being shared by the governor’s office with legislators on the new House Democratic amendment to SB 1, the education funding reform bill. The Democrats are saying 250 school districts come out better than Chicago, based on per pupil money. The Rauner administration disagrees…
The “runs” being shared by House Democrats do not accurately reflect the real cost of this bill over and above FY17. Overall, this bill would require AT LEAST $650 million more than FY17 funding levels in order for schools to see increases. Here is what is missing from the “runs”:
An additional $313 million must be added to the base funding minimum. The runs being shared are based on the FY2016 budget. It does not include the stop loss grant.
· An additional $216 million to $250 million to fully fund the mandated categoricals. Although CPS will get its appropriate share of “claims,” it will also get its block grant in its base funding minimum. That means those funds are not available for other legitimate claims. To rectify that, the GA will either have to continue to prorate mandated categoricals or increase the education budget by an additional $250 million
· The runs do not include $50 million increase for early childhood education
With so many unknowns and without allowing time for real runs to be evaluated, members are forced to vote on this proposal without knowing the answer to at least four vital questions:
1. Which school districts would suffer the most if the General Assembly fails to appropriate the extra $650 million required to hide this CPS bailout?
2. Under this proposal, exactly how much money is being diverted from every school district to Chicago instead of being equitably distributed across all school districts?
3. If this level of additional funding was provided to other proposals in the General Assembly, what would the runs look like? How would school districts statewide fare if $650 million in new money was put through the model in Sen. Barickman’s latest proposal?
4. Similarly, how would school districts fare if $650 million were added to the current funding formula?
The Rauner folks are also issuing behind the scenes warnings that the Illinois State Board of Education’s eventual analysis will not show the same sort of winners that the Democratic analysis does because of the assumptions the Democrats are using. So, a lot of Democratic targets, they warn, could be voting for something that might not help their own schools.
* Back when then state Treasurer Alexi Giannoulias was in the running for a job in President-elect Barack Obama’s administration, none other than JB Pritzker told Gov. Rod Blagojevich that he was interested in being appointed to fill out the remainder of Giannoulias’ term.
Pritzker already had raised the idea of being named state treasurer if an opening occurred, and he followed up during a Nov. 14, 2008, call with the governor.
“I’ve got a lot of reasons why it makes sense. The problem for you would be the same problem with the Senate really,” Pritzker said. “I’ve given you contributions.”
“Total nonissue,” Blagojevich replied. “First of all, you give money to everybody, like (Attorney General) Lisa Madigan, OK?”
“Yeah, yeah, yeah, no question,” Pritzker said.
“Which, incidentally, if you can do for me what you did for her, before the end of the year. Can you think about that?” Blagojevich asked, aware that Pritzker had donated $50,000 to Madigan during the previous year.
“I can’t, I mean, not while everything’s up in the air, but I hear ya,” Pritzker said. “I hear ya and, and and … But anyway …”
“If we go in that direction, though, if that does happen, I mean there’s some other people who can help us that you know,” Blagojevich said.
“Sure,” Pritzker said.
“If you feel skittish about that, which I believe you shouldn’t, but go ahead,” Blagojevich said.
“Yeah,” Pritzker replied, “I don’t think we should even talk about it but I understand what you’re saying.”
There was nothing untoward about JB Pritzker’s conversations and throughout his career he has considered different ways he could serve the people of Illinois. The record is clear that Rod Blagojevich was having dozens of conversations with both elected officials and private citizens, including members of President Obama’s transition team, which is why he is currently in prison. JB has been a proud supporter of hundreds of progressive and Democratic leaders and organizations in Illinois and across the country, especially those who have been supporters of early childhood education.
Also, as the campaign is pointing out, the last contribution Pritzker gave to Blagojevich was during the 2006 race, two years before those contributions.
*** UPDATE *** A new Pritzker campaign statement…
“If one listens to the actual calls released in the story there was nothing untoward about JB’s conversations with the Governor,” said Pritzker campaign spokeswoman Galia Slayen. “Throughout JB’s life he’s had an interest in serving the people of Illinois and that’s exactly what he expressed when discussing a potential opening in the Treasurer’s office. In fact, when the Governor brings up whether JB would be interested in being appointed to the Senate, on multiple occasions JB expresses he is not and moves away from the type of conversation that landed Rod Blagojevich in prison.
“This is just a continuation of attacks made by Bruce Rauner and Republicans and it’s no coincidence that it was published by the Chicago Tribune on the last day of another session where Governor Rauner has failed to pass a budget.”
* Man, did I ever get tired of hearing Speaker Madigan say “The House is meeting in continuous session” these past two years. Here we go again…
Illinois House Democrats resolved to keep meeting in a “continuous session” this summer, signaling they’re unlikely to agree on a budget plan to send to Republican Gov. Bruce Rauner on what was previously their last scheduled day to be in Springfield on Wednesday.
Earlier, Democrats in the Senate had approved a comprehensive budget plan that relies on a series of tax increases, but House Speaker Michael Madigan’s members have been reluctant to embrace it amid a veto threat from Rauner. While negotiations among House Democrats were continuing, doubts remained if they would be able to unite behind a measure that could reach Rauner’s desk before they are scheduled to head home Wednesday.
“I think there would be very little support for just throwing it up on the board to see what happens. I think people want to make sure that it has the requisite number of votes to pass,” said state Rep. Greg Harris, a Chicago Democrat.
I was told yesterday that the plan was to come to town every Wednesday through June. We’ll see if that holds up.
* Let’s take a little break from all the end of session weirdness for a few minutes. There was some sort of snafu at the beginning of yesterday’s Facebook Live event with Gov. Rauner and Lt. Gov. Sanguinetti…
* And the audio de-linked from the video during the introduction of Chris Kennedy yesterday, producing this weird little online moment…
An Office of Executive Inspector General investigation into Northern Illinois University’s hiring and spending practices has found that President Doug Baker routinely circumvented state laws and regulations to reward friends and associates.
The report, commissioned after watchdog groups and whistleblowers questioned Baker’s use of the so-called “affiliate employee” classification for hires in key university positions, shows what investigators call a pattern of dodging procurement code requirements.
“As a result of (Baker’s) actions, since 2013 NIU has paid over $1 million in public funds to consultants who were not selected through a competitive procurement process,” the report released Wednesday said. […]
In addition, the school, facing millions of dollars in cuts due to a $35 million funding gap, has paid nearly $200,000 in legal fees to outside counsel for Baker during the course of the OEIG investigation. […]
The report also found numerous support staff to Baker had assisted in the practices, and some had further used their positions to gain extra payments over and above their salaries. […]
Another Baker hire, Ron Walters, received $463,125 in compensation as an affiliate employee from June 2013 to Dec. 2014. According to the report, Baker described Walters as a friend and explained to then NIU Dir. of Human Resources Steve Cunningham that Walters was a “turnaround consultant.”
The OEIG report says that when Cunningham informed Baker that the school could not pay Walters more than $20,000 for his services, “Baker showed a ‘high degree’ of dissatisfaction with the Procurement Code,” and that Baker instructed Cunningham to “find a way” to onboard Walters.
The report identified five employees: Ron Walters, who was paid $463,125; Nancy Suttenfield, who was paid $425,041; Ken Wilson, who was paid $135,963; Magaly Rodriguez, who was paid $85,031; and William Pfeiffer, who was paid $23,516. […]
Although Baker agreed with the report’s findings that there were no violations of the state’s Ethics Act, he disagreed with any implications that there was intent to circumvent NIU’s guidelines or state regulations.
I promise not to keep making this a thing, but there's a visitor at the statehouse today for the final day of legislative session pic.twitter.com/yK8LtqRCzS
Over 200,000 911 calls come into St. Clair County dispatch centers every year, according to Herb Simmons, the executive director of the Emergency Telephone System Board of St. Clair County.
Simmons said the legislation that currently funds the 911 systems is set to expire on June 30, meaning on July 1 people in Illinois could be without a 911 system.
Simmons said if the bill expires, call centers would be left without money for basic operations like electricity and the phone bill.
Although the 911 bill doesn’t expire until the end of June, the legislative session ends May 31, so lawmakers have to come up with something before they leave Springfield on Wednesday.
“I just hope somebody can come to their senses and say the state of Illinois has to have a 911 system up and operating at its full capacity because when people need it they deserve it,” Simmons said.
* Instead of just simply extending the sunset date, the House Democrats combined it with increased mobile phone taxes and AT&T’s bill to get out of the state mandate to provide old-style copper wire service. The tax in Chicago would rise from $3.90 to $5 per phone. Everyone else’s bills would rise increase to $1.50 from 87 cents.
Emergency dispatchers, phone companies, and lawmakers from both parties were in agreement. The fee on cell phone bills needed to increase — to keep 911 services going and to add new technology mandated by Illinois.
Rep. Chad Hays, R-Catlin, says he was not part of the talks, but he was ready to lend his support when talks broke down.
“My understanding of where it bogged down was this notion that there were perhaps disagreement between the City of Chicago and others,” Hays said.
Rep. Brandon Phelps, D-Harrisburg, says the “others” was the governor’s office — and industry members in the negotiations say that was indeed the reason the agreement disappeared.
The nixed deal involved letting Chicago increase its fee per phone from $3.90 to $5. All other cell phone bills in the state would see an increase of $1.50 from 87 cents.
“Evidently the way I’m understanding is that the governor pretty much pulled the Republicans and said ‘We don’t want to give Mayor Emanuel any more money,’” Phelps said.
All three bills under consideration would legalize fantasy sports, tax it and set up oversight by the Illinois Gaming Board, which also oversees casinos and video machines at bars and restaurants. Two of the bills also would legalize internet gaming, like playing poker online, but only for websites operated by companies that own Illinois casinos.
Including internet games was a move designed to bring on board casino operators, who view fantasy sports as competition but have long wanted to break into the online gambling space.
“There was controversy last year as to why are we regulating daily fantasy sports activity, which is ongoing in the state, and not regulating internet gaming, which is also occurring,” said Sen. Kwame Raoul, a Chicago Democrat who is sponsoring one of the bills. “So what this bill attempts to do is also regulate and bring licensure and supervision of internet gaming under the jurisdiction of the Gaming Board. And it would limit the operation of internet gaming to existing casinos.”
The internet gaming provision has been pushed hard by Rush Street Interactive, an online gaming business affiliated with the Rivers Casino in Des Plaines, whose owner is Neil Bluhm, a Chicago real estate and gambling executive. Bluhm has given more than $500,000 in campaign contributions to lawmakers from both parties over the past 20 years, records show.
But as the final hours of the spring legislative session ticked away, the rushed nature of the effort was on display in the Senate on Tuesday morning when more than a dozen representatives of the horse racing industry packed into a hearing room to object to the legislation.
Before they had a chance, Raoul announced plans to amend the bill to give racetrack owners the right to obtain an internet gambling license as well. Those from the horse racing industry said they’d be satisfied with the accommodation, which hadn’t been put down on paper before the hearing. Looking to advance the legislation to the Senate floor in time for votes before Wednesday’s adjournment, senators pushed the measure through the committee.
The House Executive Committee hearing room was so crowded with lobbyists and industry representatives last night that it was difficult to move.
Kennedy declined to characterize his [property tax] proposal as a tax swap, saying he would leave it to individual communities to decide whether or how much to lower property taxes.
So he’s not going the full Netsch/Edgar/Meeks route. Hmm.
If elected governor, Kennedy said he would implement “radical” reforms, like banning the Cook County assessor from leading political parties and stopping elected officials from being property tax lawyers.
These reforms were clearly veiled swipes at Cook County Assessor Joe Berrios, who is the chairman of the Cook County Democratic party, and House Speaker Michael Madigan, whose law firm files appeals to property tax assessments.
But when questioned by reporters, Kennedy insisted his campaign wasn’t about them.
Asked afterward by reporters if he was contending that Madigan, Berrios and Burke were part of a corrupt system, Kennedy repeatedly declined to directly answer.
“This isn’t about individuals by any stretch of the imagination. This is about an entire system and it really begins with kids,” said Kennedy, who noted the bulk of public school financing is through local property taxes. “This is about them, not about any elected official.”
Kennedy was later asked if Berrios, Madigan and Burke are corrupt.
He replied: “The people who are in the system feel like they’re playing by the rules and, as such, they feel like they’re not breaking the rules. I think we need to change the rules so if this conduct continues, it’s against the law.”
No current elected officials attended Kennedy’s speech, the first major policy rollout of his campaign.
But former White House Chief of Staff William Daley, former county Assessor James Houlihan, former Board of Review Commissioner Robert Shaw and former Senate President Emil Jones were on hand to lend support.
Former Democratic state Senate President Emil Jones Jr., a Kennedy backer who attended the speech, was asked if he believed the property tax system was corrupt.
“Yes, it is,” said Jones, served with Madigan. “The system has always been there as far as the (property) taxes are concerned. So those who have access, be it through contributions or wealthy lawyers, the city assessor or his organization — so that, in a sense, is not immediately wrong, but it’s not right, see?”
Madigan spokesman Steve Brown said the veteran House speaker’s outside legal work does not include examples of “anything improper or special treatment.”
“I don’t know what he’s referring to, and I believe others have used that idea as a campaign plank (in the past) and it hasn’t proven successful,” Brown said of Kennedy.
Jones also backed a tax swap of sorts back in the day. He’s also a noted Madigan hater. Houlihan had his own falling out with Madigan.
* Kennedy Talks Business with McDonough County Democrats: He told the crowd of more than 200 people at the V.F.W in Macomb that while president of merchandise mart, he worked to bring businesses to Illinois and help them grow and not one business ever asked about the issues deemed priorities by Governor Rauner’s turnaround agenda.
THE BUZZ — This is what day 700 without a state budget looks like in Springfield: dozens of protesters are arrested; demonstrators block the entrance to Gov. Bruce Rauner’s office, protesters are physically dragged out of the Illinois House in front of TV cameras.
34 ARRESTED — Kristi Sanford, with the People’s Lobby, said 34 leaders with Fair Economy Illinois’ March to Springfield “were arrested outside of Gov. Rauner’s office. Activists were released within the hour on the west side of the capitol building. They will be charged with criminal trespass and are awaiting a court date.” Secretary of State Capitol Police warned protesters they would be arrested if they didn’t leave. Brian Mackey’s photo here
‘WE GOT YOUR BACK’ — Lawmakers, including state Sen. Daniel Biss and Rep. Kelly Cassidy, both Dems, chant for the last protester as he’s arrested: Video
PROTESTERS DRAGGED OUT OF HOUSE — Not the best images for anyone in state government right now. Earlier on Tuesday, Capitol Police could be seen dragging protesters by the arms through the Illinois House gallery, as members were in session. According to a report by NBC5’s Mary Ann Ahern, among those who demonstrated on Tuesday were representatives from social service agencies who had not been paid by the state. Watch
I never realized there were so many Capitol police on staff until yesterday.
And while it may have not been the “best image,” if you loudly interrupt the House’s proceedings and you refuse to walk out on your own, you’re gonna get dragged. Pretty sure the protesters knew that. It’s part of the game and everyone has their role.
* The thing that bothered me the most was when the cops wouldn’t let the protesters outside the governor’s office eat sandwiches sent by supporters…
Earlier in the day, dozens of protesters from a coalition of Chicago area social services agencies demanded to get inside the Illinois capitol.
“So they are acting like this is actually a complicated thing, but in reality if they had the courage to close corporate tax loopholes and make the every wealthy pay their fair share of taxes we could raise the revenue we need for our state,” said Kristi Sanford, Fair Economy Illinois.
But they don’t want just any budget – they’re calling for one that spends $23 billion more. That’s 61 percent of the Senate’s $37.3 billion proposed spending plan.
Dr. Alfred Klinger, another member of the inaugural group and a retired physician, celebrated his 91st birthday during the march. A WWII veteran, he said government support via the G.I. Bill made medical school possible. Klinger and his fellow marchers say their budget plan would offer young people opportunity and give the elderly a sense of security.
Marchers contend their proposal would raise $23 billion to finance universal health care and free college tuition and fully fund public schools, social services and infrastructure needs by closing so-called corporate tax loopholes and taxing the wealthy at higher rates.
“This would give us all a step up,” Klinger said.
The throng shouted chants about the governor and House Speaker Michael Madigan such as, “Rauner, Madigan, can’t you see, human needs beat corporate greed!” and carried a banner outlining their vision for Illinois as it wended its way toward the Capitol.
Lawmakers approved the bill with a 61-53 vote largely along party lines, but Rep. Jay Hoffman, D-Swansea, filed a motion to keep it from moving to the Senate. Democratic Rep. Will Guzzardi said supporters were working to make sure the measure had enough support in the other chamber.
After the legislation passed, Rep. Jay Hoffman, D-Swansea, put the bill on hold in the House. Guzzardi said the move was to ensure “all their ducks were in a row” before sending the bill to the Senate.
“It’s just some procedural work that we’re trying to do on our side to make sure everything is in order,” he said. “I’m still optimistic that we’re going to get this thing passed to the Senate and onto the governor by the end of the day tomorrow night.”
The Senate has passed several minimum wage bills in the past only to see them die in the House.
So, the bill’s passage took just about everyone by surprise yesterday, both in the House and in the Senate, which hadn’t yet met in caucus to talk about the bill. They even had to change the Senate’s chief sponsor yesterday to the person who normally handles this issue.
There’s a lot of suspicion and finger-pointing, with some senators believing that Speaker Madigan is playing his usual games with the issue and may not send it to the Senate until it’s too late, and some House members worried that the Senate can’t pass the bill. We’ll see.
Rep. Scott Drury, a Highwood Democrat who has often split with Madigan, took the opportunity to bash the leaders of his party for failing to call the wage hike for a vote when they had veto-proof control of the General Assembly or when there was a Democratic governor. Drury suggested that the Democratic leaders had called it for a vote in order to put the Republican governor on the spot.
“I am truly, truly concerned that what is going on here is that Maria, that one of our colleagues spoke about, is being used as a pawn to embarrass our Republican governor,” Drury said, referring to a minimum wage worker whose struggles to make a living were pointed to by Democratic lawmakers during debate on the floor. “It’s all about the left embarrassing the right and the right embarrassing the left.”
ILGOP Releases Digital Ads Ahead of House Tax Hike Vote
Will House Democrats end session by voting for a tax hike while rejecting true property tax relief?
Days ago, NBC Chicago reported that 46 members of Mike Madigan’s House Democrats planned to vote for a 32% income tax hike with no reforms, protecting Madigan’s broken status quo.
Illinois homeowners cannot afford another tax hike without true and lasting property tax relief.
Today, the Illinois Republican Party launched digital ads heavily targeting 19 House Democrats. Will they side with taxpayers and pass a balanced budget with real property tax relief or will they side with Madigan and pass a massive tax hike with no reforms to fix Illinois’ broken system?
Or will they end session in complete failure and refuse to pass any budget and reform plan whatsoever?
* The ad…
* Targeted districts…
HD 15 – John D’Amico
HD 17 – Laura Fine
HD 18 – Robyn Gabel
HD 43 – Anna Moeller
HD 44 – Fred Crespo
HD46 – Deb Conroy
HD 55 – Marty Moylan
HD 56 – Michelle Mussman
HD 57 – Elaine Nekritz
HD 59 – Carol Sente
HD 62 – Sam Yingling
HD 72 – Mike Halpin
HD 84 – Stephanie Kifowit
HD 98 – Natalie Manley
HD 96 – Sue Scherer
HD 111 – Dan Beiser
HD 112 – Katie Stuart
HD 116 – Jerry Costello
HD 118 – Brandon Phelps
The Illinois General Assembly that launched the careers of such political giants as Abraham Lincoln, Stephen A. Douglas and Barack Obama and the governor’s office once occupied by Adlai Stevenson II have set a record in futility in failing to agree on an annual spending plan for more than two years, the longest fiscal drought of any state since at least the Great Depression.
The Democratic-led Legislature and first-term Republican Gov. Bruce Rauner have stared each other down since 2015. They have until 12:01 a.m. Thursday before striking out again and facing the possibility of entering a third consecutive year with no spending blueprint.
House Democrats said they’re in communication with Senate Democrats on a revenue bill that includes an income tax hike. They are reviewing “minor changes,” including potential changes to the service taxes that were included in the initial bill. House Democrats must still be briefed on those changes to gauge support.
Even if a last-minute agreement among Democrats could be reached, the Republican governor is unlikely to sign off on a tax hike. Those conflicts set the stage for Illinois’ historic budget stalemate to continue into the summer, leaving schools, universities and social service providers that depend on state money without many answers, just like last year.
“I do believe that we will be back at some point in the month of June,” said House Republican leader Jim Durkin of Western Springs. “If we can reach a fair, balanced budget, I will do everything I can to provide votes from my caucus … one that’s negotiated on both sides, not just negotiated between the Democrats in the Senate and Democrats in the House.”
After May 31, the threshold to pass most budget legislation jumps. It would take 71 votes to approve a spending plan in the House, but there are just 67 Democrats, meaning any agreement would need some Republicans. That could have the dual effect of insulating Democrats from taking the blame alone for any potential tax hikes, while spreading the responsibility for continued dysfunction across both parties. The next pressure point for an agreement would be July 1, the start of the new budget year. And school districts likely will amplify their concerns as a new school year approaches.
But Durkin said he doesn’t believe Democrats will be as willing to find common ground this time around, saying he believes the goal is about muddying Rauner as he seeks re-election.
Rep. Will Davis, from Homewood, is sponsoring the House version of a tax plan approved last week in the Senate. He says he doesn’t think his fellow Democrats should vote on taxes that don’t have enough support to pass.
“I think that walks us backwards, and possibly gives the governor a lot of rhetoric to say about Democrats not being able to pass their own revenue package,” he says.
Some Democrats say it’ll be better to wait until June, when the constitution requires more votes to pass a spending plan. That, they say, could force both parties to come to terms.
State Representative Lou Lang, from Skokie, says even if Democrats do not pass a spending plan in May, it doesn’t mean they’re abdicating their responsibility.
“We have worked tirelessly for the last two-and-a-half years under Gov. Bruce Rauner to get a budget,” Lang says. “And we can’t do it on our own.”
In another sign of the political war between Rauner and Illinois House Speaker Michael Madigan, a bill to let the governor move closer to selling the Thompson Center was met by resistance by state House Republican Leader Jim Durkin, who called it “another attempted money grab by the City of Chicago and a bad deal for the taxpayers of Illinois.”
Rauner has been pushing for the sale since 2015 but Republicans weren’t happy with the Democratic-sponsored measure, arguing the governor should control future zoning changes and development costs. Republicans argued the bill would limit the state’s ability to get the most profit over the sale. The governor has said the state could get $300 million from the sale.
* From House Republican Leader Jim Durkin…
“The Democratic bill to sell the James R. Thompson Center is another attempted money grab by the City of Chicago and a bad deal for the taxpayers of Illinois. The James R. Thompson Center was built with state taxpayer money and is owned by the State of Illinois – not the City of Chicago. Our first obligation should be to negotiate a deal that maximizes proceeds to benefit the State of Illinois. The bill that passed the House tonight takes care of Chicago at the expense of all other Illinois taxpayers.
* I asked Durkin’s office what that “money grab” was about and they sent me this passage from the Democrats’ proposal…
Any contract to dispose of the property is subject to the following conditions:
(1) A commitment from the purchaser to make any applicable payments to the City of Chicago with respect to additional zoning density;
* The Democrats forwarded me this language which was favored by the governor…
Any contract to dispose of the property is subject to the following conditions:
(1) commitment from the purchaser to make any applicable payments to the City of Chicago with respect to additional zoning density, as agreed to between the administrator and the City of Chicago in a memorandum of understanding or other agreement;
The “administrator” in this instance is the Rauner administration.
Chicago has a zoning density program that allocates money from major downtown property developments to neighborhoods.
The governor wants to be a part of that negotiating process. Mayor Emanuel, who’s been battling the governor tooth and nail, doesn’t want him involved.
There’s no money grab here. This is about who controls the process.
Rauner’s office insisted their proposal would not give his office zoning supervision over the city, but would just protect the state’s interests and help ensure it can sell the property at the highest value. But the governor could reach a deal with the city on zoning before selling the land without it being required in the legislation. Rauner aides couldn’t explain how their proposal would offer taxpayers extra protection.
Whatever zoning Emanuel’s administration applies to the Thompson Center moving forward is key, because it could have a significant impact on whether Rauner gets anywhere close to the $300 million he’s claimed the property is worth.
The bill’s sponsor, Rep. Al Riley, D-Olympia Fields, said the legislation served as “framework” for a sale and said it wouldn’t be appropriate to include specifics of negotiations between the city and the state on zoning in the legislation.
“We know there are going to be very tough negotiations between the (Rauner) administration and the city of Chicago with regard to the fees and the zoning of that land,” Riley said. “… We’re not in that. It’s going to be up to them to decide what they’re going to do.”
* One of my goals in life is to never get on the wrong side of Neil Steinberg. The dude can write…
It is disingenuous for the Sun-Times, my beloved mother ship, to post a daily front page count of how long it has been since Illinois has had a budget. The idea is that doing so will somehow shame our leaders into coming to an agreement and getting on with the business of trying to right the capsized and foundering vessel that is Illinois.
But really, if embarrassment were a possibility with the speaker of the house and the governor, this would have resolved itself long ago. I’ve met crackheads living in a nest of blankets on Lower Wacker Drive who had a more highly developed sense of shame than these two jokers.
I do not want to fall into the easy “a plague on both their houses” trap. Yes, they are equally unpleasant men.
Bruce Rauner is a callous, sneering billionaire who comes across in person like the human model of C. Montgomery Burns on “The Simpsons.” Rauner expressed no interest whatsoever in public life beyond enriching himself until, perhaps bored, he took some of his bottomless lake of money and began fire hosing it at Illinois — a kind of political waterboarding. Eventually the state, sputtering and gasping, cried uncle, and elected him governor over Pat Quinn. Good old Pat, standing at the mound in his zigzag T-shirt, lowered his head as if weighed down by the brim of his enormous baseball cap, uttered a sigh and padded home.
And Mike Madigan is a grim slip of a man: think of a last year’s jack-o’-lantern mounted on a broomstick, the whole thing marinated in vinegar then hung out to dry. […]
If rich old white men like Madigan and Rauner were being hurt by this impasse, it would have been resolved yesterday. But it damages the poor, the struggling young — who rely on public universities and colleges that are dropping staff, injecting furlough days into their academic calendars, and, in general, suffering on starvation rations. Plus those with disabilities, victims of crime, and all the unfortunates who must fall back onto a safety net that both men are pawning to the rope merchant.
That backlog is “headed in the direction of being a factor that just by itself really threatens the sort of financial foundations of the state,” Ted Hampton, Moody’s lead analyst on Illinois, said in an interview, citing litigation from those demanding payment. “There is kind of an uncertain but very real legal and political limit to the state’s ability to keep deferring payments.”
“We are probably approaching that point of impaired ability to function at basic level,” said John Humphrey, the Chicago-based head of credit research for Gurtin Municipal Bond Management, which oversees about $10.1 billion of state and local debt and has steered clear of Illinois. “We’ve already probably passed that point. We haven’t seen this in a modern state before.” […]
Bond-rating companies have warned of further ratings cuts, signaling that Illinois could be the first state since at least 1970 to lose investment-grade status. […]
Despite the gridlock, Illinois hasn’t missed any bond payments and state law requires it to continue making monthly deposits to its debt-service funds. Still, the fighting has impeded any progress on bolstering a state retirement system that has more than $129 billion of unfunded liabilities — a source of stress that has helped drive its rating down.
* Today is the last scheduled day of the spring session. It feels like it began years ago. Watch all the action and inaction in real time with ScribbleLive…
, and one that would make way for Rauner to sell the James R. Thompson Center (Senate Bill 886), the seat of government in downtown Chicago.
