* From David Jacobson at Moody’s Investors Service…
On p. 5 of its new Weekly Credit Outlook for Public Finance released today, Moody’s notes the State of Illinois (rated Baa2/negative outlook) has experienced a third consecutive annual population drop in 2016, a credit negative underscoring tepid growth trends that will complicate efforts to enact a balanced budget and keep up with mounting pension funding pressures. From 2013-16 as the national population increased 2.2%, Illinois shrank by 0.6% as thousands of residents departed for other states. Illinois was one of only four states to see population declines each year for the period 2014 through 2016, according to Census Bureau data released on December 20.
Net migration has had a negative impact on populations in 31 states since the last census, while helping population growth primarily in states that serve as retirement havens or that have strong economies. But the case of Illinois appears more severe; its annual outflow of residents steadily worsened during the past three years. Based on the Census Bureau’s state-to-state migration estimates for 2015 (the most recent available), many of the top destination states for those leaving Illinois were adjacent or nearby states, such as Indiana (Aaa/stable) or Michigan (Aa1/stable), which both featured faster job growth. Other top destinations for those leaving Illinois included Arizona (Aa2/stable), California (Aa3/stable) and Florida (Aa1/stable).
Population loss can be a cause, as well as an effect, of economic deterioration. A self-reinforcing cycle of population loss and economic stagnation could greatly complicate Illinois’ efforts to stabilize its finances. Even assuming the state reaches a consensus on addressing its current operating deficit and benefits from steady economic growth, Illinois’ pension funding requirements as a share of budget likely will rise to 30% (from about 23% currently) in coming years.
Moody’s declaration of “credit positive” or “credit negative” does not connote a rating or outlook change. It is indicative of the impact of a distinct event or development as one of many credit factors affecting the issuer.
Pension payments rising to 30 percent of the budget is just downright chilling.
A plan could be coming together to end the 18-month-long state budget impasse, but one lawmaker is still concerned the logjam may continue.
State Rep. Mark Batinick, R-Plainfield, said he hears a deal is being worked amongst legislative leaders in the State Senate as a means of circumventing the bad blood between House Speaker Michael Madigan and the governor.
“It does kind of make sense that maybe there would be some shoots out of the Senate because the relationship there is a little more cordial, to say the least,” Batinick said.
While the exact details of the deal are not yet known, in the past Gov. Rauner has expressed openness to considering an increase in the state income tax, if it were paired with significant economic reforms, such as property tax freezes, workers’ compensation reform or term limits.
State Rep. Monique Davis of Chicago has resigned from office, ending a nearly 30-year career in which she developed a reputation as an outspoken lawmaker unafraid of controversy.
Davis submitted a letter of resignation in late December, but it was not received by the Illinois House clerk until Tuesday. In her letter, Davis thanked Democratic House Speaker Michael Madigan for “your respect, ethical leadership, responsibility, concern, information, knowledge and most importantly care, concern and assistance for my district.”
“Your leadership as speaker of the House of Representatives of Illinois contributed to my successful legacy,” Davis wrote.
During her time in office, Davis co-sponsored legislation with then-state Sen. Barack Obama to require police to videotape interrogations of murder suspects, fought for funding for her alma mater Chicago State University and served on the panel that recommended the impeachment of ex-Gov. Rod Blagojevich.
Her retirement letter is here. She was a force to be reckoned with, for sure.
* I’m told that Justin Slaughter is getting the slot today. Slaughter worked in Pat Quinn’s policy shop and was Deputy Director of Programs for the Illinois Department of Juvenile Justice. He was also district director for Cook County Commissioner Stanley Moore. And he worked for Sen. Kwame Raoul.
Slaughter, 36, is currently the legislative coordinator to the Secretary to the Board of Commissioners in the office of Cook County Board President Toni Preckwinkle.
Slaughter filed to run against Rep. Davis in the Democratic primary, but withdrew from the race.
Mr. Slaughter has a Bachelor’s in Political Science from the University of Chicago and a Masters of Public Policy and Administration from Northwestern University. Mr. Slaughter is also a proud member of Alpha Phi Alpha Fraternity Inc., where he is an executive board member for his local chapter’s foundation. A native Chicagoan, Justin Slaughter grew up on the Southside of Chicago in the Washington Heights community where he currently still resides.
* Revolving Door: John Keller’s been named Cook County Board President Toni Preckwinkle’s new chief of staff, the fourth for Preckwinkle in the last 16 months. Keller previously ran Chicago Democratic state Rep. Christian Mitchell’s campaign and also worked for Democratic former Gov. Pat Quinn. He most recently served as Preckwinkle’s director of external affairs. In a statement, Preckwinkle said Keller has “a demonstrated ability to work well across the county’s vast landscape of responsibilities” noting his recent work on the 2017 budget, which she called “balanced and fiscally responsible.” Keller replaces Brian Hamer, who was appointed in March and resigned Friday.
Two men and two women have been charged with a hate crime, after allegedly kidnapping an 18-year-old mentally challenged man, torturing him for up to two days, and posting videos of the torture online.
Jordan Hill, 18; Tesfaye Cooper, 18; Brittany Covington, 18; and Tanisha Covington, 24, have been charged with aggravated kidnapping, aggravated unlawful restraint, aggravated battery, and hate crime, according to the Cook County State’s Attorney’s office. Hill also was charged with robbery and possession of a stolen motor vehicle. Hill, Cooper, and Brittany Covington also were charged with residential burglary.
Police have said the 18-year-old victimized in the videos is a northwest suburban resident with special needs who had been reported missing. The four suspects are black. The victim is white.
In the first 30-minute video, which apparently was posted live on Facebook on Tuesday, the victim is backed into a corner, his mouth duct-taped shut. The victim’s clothes were cut, he was peppered with cigarette ashes, and then his hair cut with a knife until his scalp bled.
Several people can be seen laughing and eating during the attack, in addition to making disparaging remarks about President-elect Donald Trump and using racially charged language. At one point, while the victim is backed into a corner, someone is heard shouting “F*** Donald Trump. F*** white people.”
A second video, which surfaced on Twitter, showed the suspects grabbing the teen’s head, shoving it into a toilet, and forcing him to drink.
All four face charges of aggravated kidnapping, hate crime, aggravated unlawful restraint and aggravated battery with a deadly weapon, according to the state’s attorney’s office. Hill also faces charges of robbery, residential burglary and possession of a stolen motor vehicle. Cooper and Brittany Covington are also charged with residential burglary. […]
Community activist Andrew Holmes said of the incident: “In so many ways this was a hate crime because of what they said to him — saying he’s with Trump. When you make a person say, ‘I love black people,’ that’s a hate crime all the way.”
Holmes said he hopes the video doesn’t provoke a racial backlash in Chicago.
“Let the chips fall where they may, and let the judicial system work,” he said.
In November, the day after the election, an online video showed a man being attacked in the North Lawndale neighborhood on the West Side, while bystanders taunted him, saying he had voted for Donald Trump.
Eventually, four people were charged in connection with that attack.
Chicago police said the victim encountered one of the suspects on Monday - apparently someone he’d met before - and he was driven into the city. They did not say which suspect that was.
“He is an acquaintance of one of these subjects. They stole a van and brought him to Chicago,” Area North CPD Commander Kevin Duffin said Wednesday.
“It’s sickening. It makes you wonder what would make individuals treat somebody like that,” [Police Superintendent Eddie Johnson] said. “I’ve been a cop for 28 years and I’ve seen things that you shouldn’t see. It still amazes me how you still see things that you just shouldn’t.
“I’m not going to say it shocked me but it was sickening,” he said.
JAMEY DUNN, the interim editor of Illinois Issues, is leaving her media job to become deputy director of communications for Comptroller SUSANA MENDOZA.
“She’s distinguished herself in her ability to analyze budget data and describe the impact on Illinois residents of state budget decisions,” said ABDON PALLASCH of Chicago, Mendoza’s director of communications who said he approached Dunn about the position. […]
Dunn said she wrote about state special funds some years ago, helping generate what has become a focus on budgetary issues.
Jamey is a darned good reporter.
The others who left are Ivan Moreno and Seth Perlman (AP), Kelsey Gibbs (WCIA), Ed Cross (WAND), Amanda Vinicky (WUIS) and Mike Riopell (Daily Herald).
Republican Illinois Gov. Bruce Rauner says he won’t be in Washington later this month for GOP President-elect Donald Trump’s inauguration.
Rauner says he’s “focused on Illinois” and is trying “to minimize the distractions” and his time out of state. Rauner is amid a state budget impasse with Democratic lawmakers. Trump is to take the oath of office Jan. 20, just five days before Rauner is scheduled to give the State of the State speech in Springfield.
Rauner did not back Trump for president in the primaries and can claim limited personal and political connections to the new president. He did lend his name to a big Chicago fundraiser that Vice President-elect Mike Pence starred in just before New Year’s, but was on a family vacation and did not attend.
One Rauner insider says you shouldn’t read too much into the inaugural no-show. “There’s no bad blood,” that source says.
But another just chuckled when I asked whether Rauner’s focus isn’t just on passing his budget but in getting himself re-elected in 2018, a task that likely would not be furthered in Democratic-dominated Illinois by the perception that Rauner and Trump are thisclose.
Keep an eye on Trump’s tweets to see if he has any thoughts.
Governor Bruce Rauner spoke on-camera to ABC7 for about 10 minutes in his office on Wednesday. No topic was off limits. He discussed the state’s budget crisis, his relationship with House Speaker Michael Madigan, and what grade he would give himself as governor so far.
RAUNER: The simple fact is both sides need to want an agreement. If you don’t want an agreement, it won’t happen. That’s part of negotiations.
BACA: You are saying you want an agreement.
RAUNER: Boy, very much so.
BACA: But you’re saying the Democrats do not.
RAUNER: They don’t want any change, of any type.
Madigan’s people constantly complain (including on this blog) that reporters don’t provide the other side to Rauner’s statements, but then they don’t cooperate with reporters when Rauner is doing yet another one of his TV appearance rounds.
#FacePalm2.
By the way, Rauner gave himself a “very high grade” on “the things that we control,”and gave himself an “incomplete” on “things that the legislature controls.”
He’s the state’s chief executive, but rarely talks publicly of the scandalous violence in Illinois’ biggest city: hit by 4,300 shootings and nearly 800 killings last year.
FOX 32: Do you agree it’s a crisis, the shootings and killings in Chicago?
“It’s a massive tragedy. It’s just heartbreaking what’s happening in many of our neighborhoods,” Rauner said.
Rauner says his pro-business, turnaround agenda would help reduce Chicago violence
FOX 32: Should you be dropping everything else and focusing on stopping the killing?
“Um, so the question is, “what’s the answer?” Everybody’s got different ideas,” Rauner said. “There’s a lack of economic opportunity. Young people don’t see a future for themselves in so many of these neighborhoods. We have massively high unemployment. Massive unemployment in many neighborhoods in Chicago and around the state. And we have the worst-funded schools in low-income neighborhoods of any state in America. And I’m working to change those two facts, because that will have the long-term impact to keep our neighborhoods safe.”
People need to live in the short-term, too, governor. Long-term is certainly necessary, but what are you doing for them right now during this very real crisis? That was the question.
Ortiz and Garcia were victims of the 38th shooting on Chicago-area expressways in 2016, a record-high number for a city stung by a murder rate not seen in two decades. […]
Political gridlock in Springfield is also a factor, said Joe Moon, president of the Illinois Troopers Lodge 41 Fraternal Order of Police, the union representing state troopers.
Feuding between Republican Governor Bruce Rauner and Democrats who control the legislature has kept the state without a full operating budget since July 2015. That meant no cadet hires in 2015 and 2016, and 2017 remains in limbo as well, state police said.
Since 2000, the number of sworn officers has declined steadily to just over 1,600 from around 2,100, Moon said.
State police said the budget impasse had no impact on the force’s work. Governor Rauner’s spokeswoman, Catherine Kelly, declined to comment beyond what state police said.
“While the world was changing around him, Boss Madigan stayed the same - choosing to tighten his grip on power over fixing a broken status quo. Forty-six years of damage is enough. It’s time for House Democrats to embrace reform and toss Boss Madigan into the dustbin of history.” - Illinois Republican Party Spokesman Aaron DeGroot
Following the release of the Boss Madigan Quiz, the Illinois Republican Party continued its countdown towards January 11th, the election for Speaker of the Illinois House. With six days left until Decision Day, the Illinois Republican Party is releasing a digital ad highlighting major world events that have occurred during Mike Madigan’s unprecedented forty-six years in Springfield.
While the world was witnessing history-making events such as the resignation of an American president, the collapse of Communism, and the advent of new technologies, Mike Madigan, the longest serving House Speaker in United States history, amassed political power to the benefit of his corrupt Chicago Machine.
Next week, House Democrats face an historic choice - side with taxpayers and embrace bipartisan, broadly popular reforms or side with Illinois’ most unpopular career politician, Chicago Political Boss Mike Madigan, and his status quo.
The future of Illinois is at stake. Voters are watching and they will not forget.
* Some progressive House Democrats are hopeful about the direction of their party and their leader…
“The speaker is ready to lead the party in favor of a more bold and clear agenda,” state Rep. Will Guzzardi, a Chicago Democrat, told POLITICO Illinois.
Guzzardi said that he and colleagues in both the House and Senate have been meeting to discuss a policy platform, a messaging strategy, and social media presence — areas in which he says Democrats have failed over the last two years. “The most important work that we must do and that I am working on is to define the message and define the agenda,” Guzzardi said.
Guzzardi said he was among several Democrats who spoke to Madigan last year to “rethink our approach” about how the party was combating the proposed policies of the Republican governor. The group told Madigan that Democrats were failing to express a specific message and offer concrete solutions to the state’s budget woes.
“I was surprised by how receptive the speaker was,” Guzzardi said, adding that Madigan and the rest of the leadership team “have really expressed an openness to start putting forth a more ambitious agenda … I think early in the session you’re going to hear from Democrats on what we think needs to be done. At the very least, we’ll put some bills on the governor’s desk.”
* The House Democrats are getting absolutely pummeled by Rauner. Yeah, the governor’s numbers ain’t good, but theirs are worse. So even a slapdash response would be better than what they’re doing now.
As for social media, I find myself being not quite as optimistic as Guzzardi. Here’s a memo distributed to Madigan’s members during the veto session. Click the pic for a better image…
Sigh.
A caucus website is more than a decade overdue. A leader who once prided himself on using the latest technology became an absolute Luddite when the World Wide Web became a thing, and then doubled down on his retro views when social media emerged.
The problem with this idea is that Speaker Madigan is one of, if not the most unpopular politicians in the state. Tying all of his members’ social media accounts and press releases directly to himself through a web page might not be the greatest idea he ever came up with.
But, hey, that’s classic Madigan. It’s all centralized at the top.
* A far better idea would be to individually help his members expand their social media reach into their own districts.
On top of that, maybe the state party could hire some folks to help focus the hounds on Twitter and Facebook.
For the past two years, I’ve been monitoring two Twitter searches constantly throughout the day. One searches for all mentions of the word “Rauner” and one searches for “GovRauner,” which is his official Twitter handle. I do this as just one more way to monitor breaking news.
However, something else has been happening lately. Ever since Donald Trump won the presidential election, I’ve noticed a dramatic increase in the number of negative references to the governor on Twitter and that far more people are tweeting some pretty harsh stuff at the guy. Some of it is coming from known people and entities, but a whole lot of it is being generated by what appear to be everyday citizens. Something is definitely going on.
Madigan, Rauner’s primary political adversary, is up for reelection as house speaker next week. The governor claimed Wednesday that he’s staying out of the election altogether.
“I’m not getting involved in any of the General Assembly’s decisions on their leadership,” Rauner told NBC 5.
However, the Illinois Republican Party has gotten involved in the race, launching a “Boss Madigan” blog targeting Illinois Democrats with ties to the longtime speaker. Rauner dumped millions into the Illinois Republican Party’s coiffeurs in the lead-up to the 2016 general election, but claimed Wednesday that he doesn’t “run” the party.
“I support it,” he said. “We need a two-party system. We were a one-party state for a long time.”
I just find it impossible to believe that a guy like that would spend money like that and not involve himself in the least.
When asked about re-running for election next year, he said that’s a conversation for another day, but he’s persistent.
He just dumped $50 million of his own money into his campaign account and yet he doesn’t want to talk about it. Lovely.
* Meanwhile, I told subscribers about this yesterday…
As for the race for speaker, House Minority Leader Jim Durkin confirmed Wednesday that he planned to throw in his hat for the position, which he did two years ago. Typically, the top vote-getter in the chamber is elected speaker and the runner-up is minority leader. After the November election, the GOP caucus voted to re-elect Durkin as minority leader and by caucus rules, members will be bound by those votes next week. If a Democrat were to challenge Madigan, he or she would have needed Republicans to cross over.
State Rep. Kelly Cassidy, a Chicago Democrat, said Republican talk of ousting Madigan is nothing more than a distraction from the real issues facing the state.
“There’s a lot of folks talking stuff up as if there’s a bunch of candidates,” she said. “They’re generating emails everywhere, it is creating noise and distraction.”
* As I’ve been warning, fighting a brutish political war and not getting the state’s economic and fiscal houses together is gonna put us into a much, much deeper hole if we slip into a recession. We’re not there yet, but the signs are troubling. From the General Assembly’s Commission on Governmental Forecasting and Accountability’s latest monthly briefing…
Year To Date
With half of the fiscal year completed, base receipts are off $865 million, or 6.1%. Readers of the last several briefings likely have noticed growing oncern with each successive month’s disappointing revenue performance. Embedded within the overall falloff of 6.1%–of which a large part is due to a drop of $290 million or 22.4% in federal sources—is the combined drop of 4.5% from the “Big Three” [gross personal, gross corporate, and sales]. While that percentage falloff may slightly overstate the decline due to timing aspects still related to the income tax rate phase down, perhaps most unsettling is that the last time the Big Three experienced a combined decline during the first half of a fiscal year [absent tax rate changes] was during the recessionary years impacting FY 2009 and FY 2010, when performance was - 0.9% and -10.4%, respectively. That is not to say we are in recession, as most economic measures would indicate otherwise, but rather gives context to what only can be described as troubling revenue performance thus far in FY 2017.
Gross corporate income taxes are off $386 million, or $340 million net of refunds. Gross personal income tax is down $189 million or $260 million if refunds and diversions to the education and human service funds are included. As mentioned, sales taxes are weak and have managed to grow only $45 million. Overall transfers are down $62 million to date. Only the one-time nature of this month’s SERS repayment has allowed other sources to post a $111 million increase.
With continued dramatic falloffs month after month in federal sources, receipts are behind last year’s dismal pace by $290 million. In all likelihood, federal sources will fall several hundred million below the Commission’s forecast, and probably over a billion below the GOMB forecast released in Oct/Nov. [See last month’s briefing for a more detailed discussion of the CGFA/GOMB revenue estimate comparisons].
To summarize, to date the State has experienced across the board revenue weakness. The most closely economically-tied major sources are experiencing levels of weakness not seen since the last recession. This poor receipt performance has limited the ability to direct more resources to reimbursable spending and as a result, federal source receipts have also suffered.
That being said, economic conditions as measured by most conventional indices would reflect weakness, but not at recessionary levels. In addition, non-wage income from strong stock market performance in 2016 could translate into more positive performance in final payments. Additionally, as the Commission has indicated in earlier briefings, the DoR’s ledger conversion has altered historical receipt patterns, likely contributing to some of the year to date declines experienced thus far. As we near the end of the first year’s impact of that accounting conversion, the potential exists for a return to less volatile monthly swings, which up until now, has trended toward the negative.
* John McCarron has long been one of the few adult opinions of reason at the Chicago Tribune. Here’s his latest…
Compromise is possible in Springfield.
Don’t believe it when Democrats say Gov. Bruce Rauner’s reform agenda has no place in negotiations over a state budget. Technically that’s true, but informal quid pro quo deals long have been part of our state’s legislative history.
Likewise, don’t believe Republican claims that Illinois is about to go under because of mismanagement by longtime House Speaker Michael Madigan. Truth is, both parties have been screwing up the state’s finances for decades.
It’s past time to end the blame game and craft a set of compromises that lets both sides save some face, that lets Illinois avoid digging a fiscal hole so deep we may never emerge.
Go read the whole thing. I don’t necessarily endorse all of his ideas, but I do endorse his sentiment. It’s time to end this war once and for all.
