Today, Governor Bruce Rauner announced that Matthew Besler will serve as Chief Strategic Advisor to Citizens for Rauner, Inc. In that role, he will be responsible for coordination between Governor Rauner’s campaign and the Illinois Republican Party, the Republican State Senate Campaign Committee, and the House Republican Organization. Mike Zolnierowicz would have served in the role for Governor Rauner’s campaign. Besler had been serving as President of the Illinois Opportunity Project.
Illinois Republican Party Chairman Tim Schneider, House Minority Leader Jim Durkin, and Senate Minority Leader Bill Brady released a joint statement regarding the appointment:
“As President of the Illinois Opportunity Project, Matt Besler worked closely with our organizations, state legislators, and grassroots advocates to protect families and businesses from the demands of powerful special interests and Speaker Mike Madigan’s agenda. Matt is a talented leader who understands the political landscape, the state’s critical issues, and the opportunity facing Illinois Republicans in the 2018 election.”
“We are excited to work with Matt towards our shared goal of turning around Illinois by re-electing Governor Rauner and electing more Illinois Republicans to the General Assembly and Congress. The Illinois Republican Party and the House and Senate Republicans’ political organizations believe in service to the common good and are committed to advancing the principles of freedom, opportunity, and limited government. A proven strategist, Matt Besler will be instrumental in the realization of those ideals.”
Pat Hughes will remain at the Illinois Opportunity Project as interim president. Dan Proft is also involved with the organization.
The IOP, you may recall, put $1.3 million into Rep. Ken Dunkin’s Democratic primary race.
* From Fitch Ratings, with all emphasis added by me…
Fitch has removed the state’s IDR [Issuer Default Rating] and related ratings from Rating Watch Negative and assigned a Negative Outlook. […]
KEY RATING DRIVERS
The affirmation of Illinois’ ratings follows the passage of a fiscal 2018 budget that incorporates a permanent increase in taxes to more closely align revenues with spending and that should significantly reduce the near-term liquidity stress that had threatened the state’s investment-grade rating. The state’s financial resilience has been materially weakened by the two-year period in which it spent far in excess of tax revenues while accumulating an extraordinary level of budgetary liabilities, adding to the strain presented by the state’s unfunded retiree benefit liabilities and rising contribution burden. These factors result in a rating well below the level that the state’s solid economic base and still substantial independent legal ability to control its budget would support. The Negative Outlook reflects the uncertainties related to successful implementation of the budget, particularly given the contentious political environment in the state. These risks include reducing the accounts payable backlog in the near term, including by coming to market with bonds that were authorized in the budget; completing the sale of a state building assumed in the budget; meeting revenue targets in a slow growth environment; and achieving near-term pension contribution savings, partly at the expense of worsening the state’s long-term liability picture.
Economic Resource Base
The state benefits from a large, diverse economy centered on the Chicago metropolitan area, which is the nation’s third largest and is a nationally important business and transportation center. Economic growth through the current expansion has lagged that of the U.S. as a whole.
Revenue Framework: ‘aa’ factor assessment
Illinois’ broad revenue base, primarily income and sales taxes, captures the diversity in its economy and has shown modest growth since the end of the recession. Fitch expects revenue performance to continue to track slow economic growth. The state has unlimited legal ability to raise revenues.
Expenditure Framework: ‘a’ factor assessment
Illinois has adequate expenditure flexibility despite elevated carrying costs for debt service and retiree benefits, with much of the broad expense-cutting ability common to most U.S. states. Contribution demands associated with retiree benefits will continue to be a pressure as these benefits are constitutionally protected. Further, a recent federal court ruling that limited the state’s ability to defer Medicaid spending poses some concern about the extent of the state’s budgetary control, although Fitch believes that the ability of the court to make such a mandate remains subject to challenge.
Long-Term Liability Burden: ‘a’ factor assessment
Liabilities are an elevated but still moderate burden on Illinois’ resource base, even when considering the large accounts payable backlog that the state has accumulated. The state has very limited flexibility with regard to pension obligations following a May 2015 Illinois Supreme Court decision that found 2013 pension reform unconstitutional.
Operating Performance: ‘bbb’ factor assessment
Illinois’ operating performance, both during the great recession and in this subsequent period of economic growth, has been very weak. The passage of a permanent tax increase that much more closely aligns revenues with current spending is a positive step, although structural action on the expenditure side was limited. The budget assumed savings from pension funding changes for which achievement of budgetary savings is uncertain even as funding progress is delayed. The state will also be challenged to rebuild its financial resilience given the likelihood that a sizeable accounts payable backlog will persist.
RATING SENSITIVITIES
MEETING BUDGET ASSUMPTIONS: An inability to meet the assumptions incorporated in the fiscal 2018 budget that results in failure to reduce budgetary liabilities and materially improve the state’s stressed liquidity environment would lead to a downgrade. Specific risks to successful implementation include pension contributions above the level assumed in the budget, a failure to take significant steps to reduce the accounts payable backlog including by issuing bonds, a return to political gridlock specifically related to school funding, and a significantly slower growth revenue environment.
ONGOING BUDGETARY BALANCE: Stabilization of the rating is sensitive to the state’s ability to maintain budgetary balance over multiple years, indicating more sustainable fiscal management. Upward rating momentum is unlikely until the state more comprehensively addresses its accumulated liabilities.
CREDIT PROFILE
Illinois is a large, wealthy state at the center of the Great Lakes region. It benefits from a diverse economy centered on the Chicago metropolitan area. Illinois’ economy has gradually shifted, similarly to the U.S. in general, away from manufacturing to professional business services. The remaining manufacturing sector includes more resilient non-durables, and is less concentrated in the auto sector than surrounding states, but remains vulnerable to cyclical downturn. By most measures the economy has grown slower than the nation for many years and population levels have been stagnant.
Revenue Framework
Illinois has a diversified revenue base. It relies most heavily on personal income taxes and sales tax, which combined provide approximately three-quarters of general revenue fund revenues. The balance consists of corporate income tax, lottery and gaming revenues, and a variety of other smaller taxes and transfers. The state permanently raised the personal income tax rate from 3.75% to 4.95% and the corporate income tax rate from 5.5% to7% in the fiscal 2018 budget; these are slightly below the temporary tax rates that were in effect from 2011 to 2014. Historical revenue growth, adjusted for the estimated impact of policy changes, has been slightly above inflation but has lagged national economic growth. With Illinois’ economic performance also lagging national growth, Fitch expects a continuation of this trend of flat to modest real policy adjusted revenue growth.
Illinois has no legal limitations on its ability to raise revenues through base broadenings, rate increases, or the assessment of new taxes or fees.
Expenditure Framework
As with most states, Illinois’ spending is largely for social services and education, although its carrying costs for debt service and pension contributions are comparatively high and retiree benefits have unusually strong legal protections.
Spending growth, absent policy actions, is likely to be higher than revenue growth, driven mainly by increasing pension contributions. Illinois has chronically underfunded its pension system based on a statutory formula that permitted a slow incremental build-up to higher contributions and targeting only 90% of full actuarial funding over the long term. Pension costs are unusually large and will continue to grow under the recently enacted budget, including due to the deferral of contribution increases triggered by lower investment returns.
As with most states, other spending drivers include Medicaid and education. Federal action to revise Medicaid’s programmatic and financial structure, including a basic restructuring of federal Medicaid funding to a capped amount remains a possibility. Whether a change in Medicaid funding has consequences for Fitch’s assessment of a state’s credit quality would depend on the state’s fiscal response to those changes. Responses that create long-term structural deficits or increased liability burdens could negatively affect both the expenditure framework assessment and the IDR. Despite carrying costs that are among the highest of the states and rising, Fitch believes that Illinois retains adequate expenditure flexibility that could be used in the budget process. There is little flexibility to control spending outside of the budget process in part because the governor cannot unilaterally make many changes. Illinois funds a broad range of services for its citizens and did not significantly reduce spending either during or since the recession. The state has ongoing capacity to make spending reductions should it choose to; however, Illinois has no ability to unilaterally modify retiree benefits following the May 2015 Illinois Supreme Court decision that found 2013 pension reforms unconstitutional. Given the magnitude of annual pension contributions, this notably constrains the state’s expenditure flexibility compared to that of most other states. The enacted fiscal 2018 budget reduces near-term spending for pensions by deferring the impact on contributions of actuarial assumption changes, including from lower return assumptions, and implementing a less costly third tier hybrid defined contribution/defined benefit plan that will also shift costs to school districts and universities for new employees. The latter change has structural benefit to the state’s budget while the former defers higher contributions into future years, allowing liabilities to rise further.
Long-Term Liability Burden
Illinois’ long-term liabilities, particularly pension liabilities, are very high for a U.S. state. As of Fitch’s October 2016 State Pension Update report, the state’s combined debt and pension burden of $147.8 billion was 23% of personal income, well above the 5.1% state median and the highest of the states. Using a more conservative 6% return assumption for pensions, instead of the 7% rate assumed under the state’s accounting valuation, would raise the burden of long-term liabilities to $181.7 billion, or 27% of personal income. The state’s three largest pension systems, covering teachers, universities, and state employees, have low funded levels driven by a history of weak contribution practices. Unfunded pension liabilities, and related contribution demands, are expected to grow as the state continues to underfund the systems.
In addition to its long-term liabilities, the state has a sizeable accounts payable balance that has accumulated through multiple years of operating at a deficit. As of the end of fiscal 2017, the accounts payable balance is estimated to total $14.7 billion. If the state issues general obligation bonds to reduce this budgetary liability, as is provided for in the enacted fiscal 2018 budget, Illinois’s debt levels would be further elevated but remain within the moderate range.
Operating Performance
Illinois’ budget management during the current period of expansion has been exceptionally weak. Temporary increases in personal and corporate income tax rates in place for four years, from Jan. 1, 2011 through Dec. 31, 2014, closed or partially closed the budget gap across five fiscal years. However, with their expiration, and the failure to enact a spending plan within expected revenues, the budget gap ballooned over the course of fiscal 2016 and fiscal 2017.
The state achieved a break in its ongoing budgetary impasse with the passage of the fiscal 2018 budget through legislative override of the governor’s veto. The budget is narrowly balanced and relies on approximately $5 billion in additional revenues to be generated by the increase in personal and corporate income tax rates and other more modest adjustments. The budget limits general revenue fund spending growth but does not make significant reductions in spending after two years of spending deferrals. The largest sources of savings are expected to come in the form of lower pension contributions as noted earlier as well as shifts in spending from the general revenue fund to other state funds. An announced 5% reduction in appropriations to state agencies and a 10% reduction to universities are expected to generate only $303 million in savings, less than 1% of general revenue fund appropriations. The budget also assumes sale of a state building in Chicago for $300 million.
The greatest risk to successful implementation of the budget is likely to be the assumed pension contribution savings, in particular related to the establishment of a third tier of benefits for new employees that also shifts the normal cost of pensions to school districts and universities. The budget assumes $500 million in savings in the first year of implementation that may not immediately materialize. The budget also delays the impact of lower investment returns on employer contributions by phasing in the impact over five years, increasing the state’s liabilities in the future.
Despite the significant increase in expected tax revenues, Illinois remains poorly positioned to address a future economic downturn. Illinois’ approach to revenue shortfalls has historically been to delay payments, as it did during the great recession when it accrued an accounts payable balance that at its peak reached 20% of the operating budget. With a backlog that is now approaching 40% of the operating budget following the inaction of recent years, the state’s ability to respond to a change in the economy is even more limited. Although it is Fitch’s expectation that the state would look to address future deficits by again deferring payments, its ability to do so may be limited by the extent to which the current backlog persists or priority payment demands reduce that flexibility. While the enacted budget package begins to address the backlog with authorized bond issuance, inter-fund borrowing, and application of federal Medicaid matching funds, it does not provide funds or a means to reduce the backlog to what might be considered a more normal operating level. Fitch expects that even with these measures, the state will carry an accounts payable balance into the foreseeable future above the peaks seen in the great recession. One source of future flexibility will arise in fiscal 2020, when annual debt service of approximately $1 billion on bonds issued previously to fund annual pension payments rolls off as the bonds mature. The state has not communicated a plan for how these freed up monies will be applied.
In Fitch’s opinion, the state will continue to be challenged to reduce budgetary liabilities that accumulated during the impasse and then to prevent a similar build-up in the future. The enacted fiscal 2018 budget authorizes up to $6 billion in general obligation borrowing to reduce the backlog, although it only provides for debt service for a lower borrowing level and the borrowing plan has not yet been determined. By applying borrowed funds to Medicaid payables, the state will generate federal matching revenues that will further reduce the backlog while also addressing a federal judge’s order to increase and bring current Medicaid payments. The state is also authorized to utilize another $2.1 billion in interfund borrowing and use of other state funds to reduce the backlog. While these sources will begin to address the accumulated budgetary liabilities, the state is likely to be left with a still very high balance that will keep pressure on its liquidity.
Asymmetric Additional Risk Considerations
Illinois has demonstrated a repeated inability to address its structural challenges due to an absence of consensus and resistance among key stakeholders. The political environment in the state remains a negative rating consideration.
Q: If you win and become governor, you most likely will have to work with Speaker Mike Madigan. Why do you think you could negotiate with Madigan and get a budget in place, unlike what we saw the last couple of years?
A: “Well, I’m an independent leader and independent thinker. So I’m going to go to Springfield on the issues that I’m running on and I’m going to stand up for them. Whoever the Speaker of the House is or whoever the President of the Senate is at the time, those are the people I’m going to work with. It’s important to know that Bruce Rauner on the other hand has decided from the very beginning that he really didn’t want to work with anybody, he just wanted to dictate an answer and not figure out the solution by working together with people. And frankly he was so far off where people in Illinois really are on the issues. I think where I stand, standing up for education, health care and jobs, means that when I get to Springfield, having run on those issues, I’ll be able to work with people there because I think the forcefulness with which I would have run and won on it means they’ll come to the table (with) the understanding we’ve got to get things done.”
Q: You put $14.2 million into your campaign fund. How much are you willing to put in for this race, and how much do you think you’ll have to put in?
A: “All I know, with Bruce Rauner writing a $50 million check and $20 million coming from Ken Griffin and tens of millions of dollars that will come in from the Koch brothers network on his side, is somehow we have to be competitive in this race. There isn’t a number in my opinion that anybody could name. I don’t know what it would be. All I know is we got to build the infrastructure for beating Bruce Rauner and whatever that’s going to take.”
Here is some information on why Governor Rauner can’t legally issue an amendatory veto of SB1.
· Under the Constitution, Governor’s power to issue amendatory veto is limited to making “specific recommendation for change.”
· The Supreme Court has previously stated that an amendatory veto cannot either change the “fundamental purpose/intent of the legislation” or make “substantial or expansive” changes to it.
· The purpose and intent of SB1 is to establish a new and more equitable statewide school funding formula – a new formula that holds all school districts harmless.
· One important and essential element of this new funding formula is to remedy the long-standing unfairness in having the Chicago Public Schools be the only school district in Illinois that is solely responsible for paying all of its required pension contribution from local property taxes—as opposed to all other school districts, whose pension contributions are funded from general state revenues.
· In the coming year, the State of Illinois is projected to spend an additional $600 million on downstate and suburban teacher pensions, for a total of $4.6 billion.
· SB1 specifically addresses this inequity by including in the new school funding formula annual state funding to pay for Chicago’s required contribution for its teachers’ pensions. Further to this point, the floor debates on SB1 are clear that a fundamental intent of the legislation is to make teacher pension funding more equitable throughout the State.
· By using an amendatory veto to remove funding of Chicago teacher pensions from SB1, the Governor is changing a fundamental purpose of the legislation – and he would be making a substantial change to the legislation.
· As a result, this amendatory veto exceeds the power of the Governor under the State Constitution.
Your own thoughts?
…Adding… I’m not sure if CPS realizes this, but their argument is essentially that an AV would be ruled out of compliance by the Senate or the House. If such a ruling is made, however, the bill would die and the GA would have to start all over again.
[Madigan] doesn’t want to do education funding reform. He doesn’t care about the teachers. He cares about political power. He wants to manipulate the pensions in Chicago, that’s the reason he’s doing it. And we’ve gotta stand against it and say no.
And, I tell ‘ya, I’ve talked to school superintendents around the state, principals, and they’ve said ‘Gosh, governor, maybe we’ve just gotta go along and let’s support SB 1. At least it’s a little bit more money for us.’
And you know what? You know why they say that? They’re scared. They know that Speaker Madigan is powerful and he’s ruthless and he’s cold blooded, he doesn’t care about them. He’s cut their money for years. And they’re scared. If they don’t go along and get a tiny bit more money from him, then he’ll give them nothing. That’s what they’re scared of.
We shouldn’t let a tyrant do that to our teachers. Don’t just take a little bit, get what’s fair for you in Decatur, in Springfield, in Champaign-Urbana, in Mount Zion. Don’t live on Madigan’s crumbs. He wants to just give every school district, some school districts a little bit more and then a ton more to Chicago pensions? No. Mt. Zion deserves a lot more. Decatur deserves a lot more. Springfield deserves a lot more.
And I call on our superintendents, many of whom said ‘I’m scared governor, I think I gotta go along with SB 1 because otherwise Madigan will take my money away.’
No. Don’t give in to him. Don’t give in to a tyrant. Stand up for your districts. Support my amendatory veto and you’ll get what you deserve and you’ll be treated equitably. Don’t give in to fear. Don’t give in to fear and just take a little penny because it’ll hurt your districts for years if you give in today.
* From the governor’s new communications director…
The governor has made several changes to his communications staff, so I wanted to share the names and some background information with you:
Diana Rickert starts today as Deputy Chief of Staff of Communications. Many of you have worked with Diana during her six years at the Illinois Policy Institute, where she most recently served as vice president of communications. At the Institute, Diana was directly responsible for liaising with hundreds journalists from Illinois-based and national news outlets, resulting in more than 5,000 news placements for the Institute annually. Diana’s writing has appeared regularly on the commentary pages of the Chicago Tribune since 2013. Before joining the Institute, Diana was an accomplished journalist who worked for the Northwest Herald, Associated Press, Daily Herald and Milwaukee Journal-Sentinel, among other publications. Diana’s reporting on the Illinois pension crisis during her time at the Northwest Herald won more than nine prestigious journalism awards. Diana also holds a journalism degree from Marquette University.
Laurel Patrick joins the team as Director of Communications. Laurel holds a master’s degree from the Public Affairs Reporting program at the University of Illinois at Springfield. She comes to the governor’s office with a robust background in broadcast and public affairs reporting, as well as government affairs and media outreach. She previously worked as Press Secretary and Deputy Director of Communications for Wisconsin Gov. Scott Walker and is thrilled to return to her home state of Illinois.
Meghan Keenan starts today as a communications specialist. Meghan also is an Illinois native who studied journalism at the University of Illinois. Most recently, she was a communications analyst at the Illinois Policy Institute and worked regularly with reporters to book interviews and assist with stories about Illinois’ economic climate and reform opportunities. Meghan also has worked as a reporter and editor for Red Alert Politics, and as an account associate at CRC Public Relations. She previously held internships at the office of Illinois congressman Adam Kinzinger, the Daily Herald newspaper in suburban Chicago and the National Journalism Center.
Enough stalling, legislators. Cullerton should send the bill to Rauner. And the legislature should prepare to return to Springfield, soon, to address his possible veto. […]
What we have recommended, and what we hope Rauner will consider, is vetoing one portion of the bill that gives CPS pension relief. Yes, the state already pays for pensions of every other district statewide, and it’s not unreasonable that CPS should get help too. But not until lawmakers go a step further and curb pension costs for taxpayers statewide: Pass the separate Cullerton pension bill that is sitting in the House Rules Committee, or a strong version of it. The bill would give employees in the pension systems an option to switch up their plans. Create a 401(k)-style plan for new workers. End pensions for legislators. The more reforms, the better.
Do that quickly, and also give CPS its pension relief. That was the deal struck last year between Rauner and Democratic leaders. Stick to it.
The only difference is, the Tribune maintains the bill isn’t a CPS “bailout.”
Illinois gives governors constitutional authority to use an amendatory veto to make “specific recommendations for change.” But it’s unclear whether lawmakers left language specific enough to alter.
I’ll try to have more on that angle in a bit. Meanwhile, here’s react from Sen. Andy Manar…
“Gov. Rauner should be building bridges with lawmakers so that he can become the governor who finally signs education funding reform into law. But instead of seizing the chance to cement his legacy as a reformer, he’s making demands in front of TV cameras.
“Gov. Rauner promised to overhaul the worst school funding formula in the country to the benefit of all Illinois schoolchildren. He promised to be the education governor. Unfortunately, he is more interested in spouting divisive soundbites than in solving the real problems that grip Illinois.
“Given his repeated pledges to veto this historic and vitally important legislation – despite his reported support of 90 percent of what’s in the bill – of course we are doing everything we can to protect it from his poor judgement.
“Gov. Rauner has never contacted me directly regarding his alleged problems with Senate Bill 1. It is clear to me today that he intends to use the children of Illinois as leverage for his political agenda when he could be working out a compromise to accomplish a much-needed and long-awaited reform. I am saddened and discouraged by his display today.”
*** UPDATE 2 *** Press release…
Today, Governor Bruce Rauner called on members of the Illinois Senate to send him Senate Bill 1, the education funding bill. Democrats in the Illinois Senate are using a procedural quirk to keep the bill from advancing. If the bill is not sent to Governor Rauner’s desk soon, public schools throughout the state may not open in time for the new school year.
In squatting on this bill, Democrats are taking away critical resources from school districts across the state. When the bill does reach his desk, Governor Rauner plans to issue an amendatory veto that will result in higher state funding for almost every school district in Illinois. The bill includes a bailout of Chicago’s broken teacher pension system, so Governor Rauner plans to amend SB 1 to remove this from the bill and instead provide adequate and equitable funding for students in Illinois no matter their zip code.
The governor’s amendatory veto also will adjust the bill so that it is more closely aligned with the to the original ideals proposed by the governor’s School Funding Reform Commission – which has bipartisan support. These reforms include mandating that the majority of all money in SB 1 will go to statewide school districts serving a majority of students from families with low income. This marks a historic change that will, over time, fix education inequity in Illinois.
“We have a chance to make history and adopt a new school funding plan that, for the first time, ensures all school districts in Illinois are equitably and adequately funded. Unfortunately, Democrats want to turn this historic opportunity into a bailout for the CPS pension system,” said Governor Rauner. “The point of this school reform bill is to help low income students across the state, including those in Chicago, get the education they deserve – not to bailout CPS’s mismanaged teacher pension system.”
As written, SB 1 is a bailout for the decades of financial mismanagement at CPS. The bill directs millions of dollars to CPS and away from other deserving districts. Under SB 1, as compared to the Governor’s plan, the other 851 school districts in Illinois will receive less of the FY18 budget money while CPS receives credit for a $506 million historical pension payment. The CPS hold harmless includes both the $250 million block grant credit and $221 million for normal pension costs and retiree health care credit.
“The General Assembly under Speaker Madigan have failed to adequately or equitably fund our schools for decades. It has hurt generations of Illinois children who live in low income communities,” said Governor Rauner. “It’s not right to give CPS more than its equitable share at the expense of other struggling school districts. That’s not reform. It is the same old rigged politics that created this disgraceful system we are trying to fix. ”
A new webpage launched by the governor shows how much more money each school district will receive after the governor issues his amendatory veto: https://www.illinois.gov/gov/SitePages/SchoolDistrictFunding.aspx
Video footage from today’s tour will be available here.
*** UPDATE 3 *** Senate President Cullerton’s spokesman…
There are ongoing discussions about when to send it to the governor’s desk.
*** UPDATE 4 *** Pritzker campaign…
“After holding this state hostage to force his special interest agenda on Illinois for the last two and a half years, Bruce Rauner has reached a new low as he tries to pit school-children and communities against each other to further divide this state,” said JB Pritzker. “Instead of press stunts and shortsighted attacks, Bruce Rauner should stop treating children and families like political pawns and sign SB1.
“Rauner agrees with 90 percent of the bill, but still refuses to do what’s right for our students. It’s another broken promise from a governor who talks about reform, but can’t deliver and has now surrounded himself with a team of radicals who will do further damage to this state. Students in Illinois deserve a quality education and Rauner won’t let that happen because it’s not politically expedient for him.”
Home to nearly 118,000 people in 2000, Austin has seen its population drop to 97,600, according to an average of census data collected between 2011 and 2015. It has been overtaken by the North Side’s Lakeview neighborhood, whose population has remained steady since the 1980s and currently has about 98,200 residents.
Chicago’s violence is at its highest since the drug wars of the 1990s, and Austin is center stage to many of the shootings and homicides: As of July 13, there were 258 shootings in the area in 2017 and 44 homicides, according to Tribune data. More than 1,900 people have been shot in Chicago so far this year.
The city as a whole is losing residents, and Chicago last year was the only city of the country’s 10 largest to lose population. Residents who’ve packed up and left Chicago have cited a variety of reasons — high taxes, the state budget stalemate and the weather.
Those in Austin have a different list of concerns. More than 30 percent live in poverty. Storefronts are shuttered, and grocery stores are few and far between. The neighborhood high schools that remain open are under-resourced.
But in a neighborhood where retaliatory shootings mean unending violence, many residents say safety is the biggest issue. […]
(M)oving isn’t always easy. Some people are trapped in the neighborhood by their subprime mortgages; others can’t leave because no one wants to buy a house on a block saturated with gun violence.
The commission handling workers’ claims and the courts that supervise it have endlessly expanded the liability of employers, forgetting that the system was supposed to cover only employment-related injuries. One Illinois court held, for example, that a worker was entitled to benefits when he was injured throwing himself up against a vending machine in an attempt to dislodge a stubborn bag of potato chips. The court said that the injured employee was a deserving “Good Samaritan” on a rescue mission to help a fellow co-worker who had deposited the coins. The court thought that the defect in the vending machine “created a need for action to dislodge the bag of Fritos.” (I am not making this up!)
Illinois courts are generous to workers even when it defies common sense. A firefighter that was injured when he was out of town for a seminar and engaged in “horseplay” with a fellow worker in their hotel room (“wrestling like two oversized kids”) succeeded in persuading a court that the injury is work related. Numerous employees have had great success receiving lifetime benefits for degenerative injuries like carpal tunnel syndrome, even when it was proven highly unlikely that they were caused on the job. Ex-workers often continue to receive lost wages awards after returning to work elsewhere!
Illinois’ bottomless workers’ compensation system has contributed to the state ranking as one of the most labor-expensive states. In the construction industry, for example, $20 of every $100 of wages goes to workers’ compensation (in neighboring Indiana it’s less than $5). It is perhaps one more reason why the state has lost 300,000 manufacturing jobs since 2000, and why, unlike its Midwest neighbors, it has not enjoyed any manufacturing job growth since the Great Recession.
In the public sector, the effect is even grimmer. State workers file workers’ compensation claims far more often than in any other employment sector, costing more than 4 percent of government payroll. A whopping one third of Illinois state employees have open claims alleging work-related injuries. (Is it really that dangerous to work for the state?) The claimants are often counseled by lawyers, whereas poor Illinois does not have the resources to either defend this Tsunami of claims or pay the insurance premiums.
It is not obvious why the Illinois workers’ compensation system unraveled, but let’s see who benefits from this cash cow. As in any litigation-intensive area, lawyers do well. The paradigm of a litigation-free insurance system is long dead in Illinois, where 52 percent of workers’ compensation claimants—more than in any other state—are represented by an attorney. (In neighboring Wisconsin only 13 percent are represented.) Health care providers also benefit, since the fees for work injury medical treatments are much higher than the fees Medicare pays for the same treatments. But a big part of the blame is on judges. Don’t courts realize that dealing out insurance benefits makes premiums more expensive? That such reckless courtroom generosity would drive employers out, and the state’s finances to the ground?
As the article shows, workers’ comp is a state and local budget issue.
* From the Illinois Policy Institute’s news service…
The entirety of the $5 billion in tax increases the legislature imposed on Illinoisans will be eaten up by this year’s pension payment, and that’s still not enough to address the growing liability.
Lawmakers overrode Gov. Bruce Rauner’s veto of a $36 billion budget July 6, enacting it into law. Under the newly enacted budget, the state will spend around $7 billion for public sector pension funds. […]
State Rep. Jeanne Ives, R-Wheaton, said the same thing happened with the 2011 temporary income tax hike, where the increase went to pay off growing pension obligations.
That’s true.
Illinois got itself into a big hole over the years by failing to make its pension payments, keeping state taxes relatively low while still expanding programs. You simply can’t do that forever. Eventually, you gotta pay the tab.
Attorneys for Illinois residents with developmental disabilities have pleaded with the federal court to force the State to raise rates to service providers, contending that the existence of the state’s group homes is “precarious” under current funding levels.
The argument came Friday in a brief (attached) in support of a motion the lawyers filed in April, asking U.S. District Judge Sharon Johnson Coleman to enforce the Ligas Consent Decree. The court-appointed monitor has declared the State out of compliance with the decree for the past two years, and the attorneys said in May that the service system “is on the brink of disaster.”
The attorneys rejected the State’s contention that the court lacks authority to order a rate increase, citing a decision by Judge Joan Lefkow June 30 to enforce another consent decree by ordering the State to pay $586 million a month in Medicaid payments to physicians and $2 billion worth of back bills. They said Lefkow’s order “requires funding to enforce the provisions of the consent decree, as (we) have requested here.”
The brief was filed by Equip for Equality, an advocacy group, and the ACLU, representing the Ligas plaintiffs, and two lawyers representing residents of intermediate care facilities.
Illinois is the wealthiest of the Midwest states, the attorneys said, “yet only contributes a third of the average Midwest per-person rate for developmental disability services. The lower overall funding of these services in Illinois—at rates substantially less that the actual operation costs—places Illinois’ (group homes) in a precarious existence.”
The plaintiffs only seek “what was promised to them” by the State, the attorneys said. They said the State “ignores the fact that plaintiffs bargained for—and, more importantly, obtained—an express commitment that class members would not simply be moved out of institutions, but would receive the person-centered services necessary for true community integration. . . . The State cannot enter into a consent decree agreeing to provide certain services and then excuse itself from compliance by claiming that providing the very services it agreed to would be too expensive.”
The new state budget provides for a 75-cent-an-hour wage increase for disability workers, far below what the lawyers say is needed.
Disability consultant Ed McManus said the State is clearly shirking its duty to Illinois’ residents with developmental disabilities. McManus operates a Wilmette-based consulting firm representing 30 provider agencies around the state.
“Equip for Equality sued the State in 2005 for its failure to provide adequate services, and the State settled the litigation and avoided trial by agreeing to the consent decree,” he said. “Now it’s claiming all it had to do was provide services to more people, with no regard for quality. That’s preposterous! Providers are experiencing an unprecedented staff shortage due to low wages, and the quality of services has plummeted as a result. Hopefully, Judge Coleman will recognize this and not let the State off the hook.”
A Republican strategist who was expected to lead Gov Bruce Rauner’s 2018 re-election campaign has left his position days after Rauner replaced top employees with staff from a conservative think tank.
Mike Zolnierowicz was an architect of Rauner’s 2014 campaign. He also served as Rauner’s chief of staff before resigning in 2016 to work as chief strategic adviser for Illinois GOP political operations. XPS Professional Services announced Friday that Zolnierowicz is leaving that role to lead XPS’ political operation.
The move comes after Rauner overhauled his staff in the wake of a legislative defeat, hiring leaders of the Illinois Policy Institute to high-level positions, including chief of staff.
The departure of Mike Zolnierowicz, who headed the transition team after Rauner’s 2014 election and served as the governor’s first chief of staff, is a serious blow to Rauner as the governor prepares for the costliest reelection campaign the Midwest has seen.
Former Rauner staffers say the recent staffing decisions — not just clearing out key, loyal personnel, but hiring several members of the Illinois Policy Institute, a lightning-rod conservative think tank, in their place — are an attempt to lay the groundwork for more upheaval up ahead. […]
Zolnierowicz was the behind-the-scenes architect of Rauner’s 2014 victory and a key to the governor’s 2016 election gains in the General Assembly.
He did not return messages seeking comment, but sources close to him say he was disturbed by a series of high-level Rauner staff changes this week, ending up this afternoon with the termination or resignation of most of the governor’s policy staff. Most of those positions reportedly will be filled with personnel from the Illinois Policy Institute, a libertarian Chicago think tank that strongly opposes tax hikes and says the state’s budget woes can be solved via spending cuts and slashed benefits for state and local government workers.
Quoted in the Xpress news release was the head of its parent firm, Greg Baise, whose Illinois Manufacturers’ Association operates Xpress as a wholly owned subsidiary. “His understanding of the political environment extends beyond Illinois’ border, and his list of accomplishments is second to none,” said Baise, whose group is a major player in Illinois politics, usually on behalf of Republicans.
Already working for the firm is Eric Elk, who like Zolnierowicz got his start in politics working as a staffer for former U.S. Sen. Mark Kirk.
If you’re scratching your head wondering if you’ve ever seen anything like this past week in Illinois politics, stop. You haven’t.
The big question: Will Mike Mahoney, the governor’s policy chief, be told to leave?
“Mike was the guy who kept the troops together, but the expectation is that there is a lot more to come in the cleaning house department,” a Rauner source said.”
It almost goes without saying that this is yet another big loss for the administration. Mahoney was a key player and both House Republican Leader Jim Durkin and Senate GOP Leader Bill Brady reportedly asked the governor to do what he could to keep Mahoney on the payroll. In the end, however, he really had no choice but to leave.
I’m told that more resignations are expected as early as today, so stay tuned.
*** UPDATE 1 *** Sources close to the governor’s office confirm that the governor’s Deputy Chief of Staff for Public Engagement Phil Rodriguez has also resigned. Rodriguez worked for Comptrollers Topinka and Munger and ran both of their campaigns. He’s moving over to the Tollway.
*** UPDATE 2 *** The govenor’s body man, Kyle Haevers, has been told his services were no longer needed and was asked to find an agency to move to. His replacement is Ben Tracy, who has already begun traveling with the governor. Kyle was a loyal Raunerite and has been part of Rauner World since 2014 and helped on the Rep. McAuliffe race last fall.
*** UPDATE 3 *** Digital Director Bridget Davidson and Deputy Press Secretary Olivia Munson also resigned today. Davidson came on board last October from a TV station in Milwaukee. I’m told that under Davidson’s direction “Facebook followers grew organically (no paid or sponsored posts) by 300 percent” in seven months.
*** UPDATE 4 *** Kathy Lydon, who runs the state’s Washington, DC office, has left. I’m told her deputy left as well. Lydon previously worked for Judy Biggert and goes all the way back to the Chuck Percy days.
*** UPDATE 5 *** Bob Stefanski, Director of House and Senate Operations, has departed. The House and Senate Republican leaders both wanted the governor to keep him around.
Illinois GOP Gov. Bruce Rauner’s new “body man” — the government staffer who spends long days with governor — has a history of writing racially-charged, homophobic and sexually explicit tweets.
“I’d f— her teeth straight,” said one. “To the Indian people in the library: SHUT THE F— UP!,” said another.
The Twitter account belongs to Ben Tracy, who was just hired as Rauner’s new body man, the person who travels with the governor, handles scheduling and other duties.
After another social media account started flagging the tweets, Tracy’s account was put into a private, protected mode.
The administration on Monday confirmed Tracy’s termination.
“These tweets are unacceptable. The individual in question is no longer an employee of our Administration,” Rauner’s Director of Communications Laurel Patrick said in an email.
Each side badly misjudged the other and blundered headlong into brutal “trench warfare,” I wrote. At the time, Gov. Bruce Rauner and House Speaker Michael Madigan were battling furiously, gaining no sustainable ground while they waited for the other side to collapse.
“Democratic lawmakers won’t easily abandon historical allies for a short-time Republican sugar daddy,” I warned then. “Moderate, pro-union Republicans would rather cringe behind the first GOP governor in 12 years than make nice with the Democrats who stuck it to them during their years in the political wilderness.
“And so, like the awful war a hundred years ago, this battle likely will continue until one side finally has had enough. God help us all.”
She didn’t. The impasse was brutal and ugly, and the effects will be felt for years to come.
The problem with the Great War’s end is that core issues weren’t resolved and new resentments built during a bitter peace. And, so, when Rauner’s Republican support partially collapsed in the Illinois House (and, to a lesser extent, in the Senate) and a bipartisan budget and tax hike were passed over his vetoes, it ended one war but created a hostile environment for the next.
Rauner completely controls the Illinois Republican Party, and it issued a dire warning to the 10 House Republicans and one GOP senator who voted to override the governor’s vetoes, all but promising to field primary opponents against them.
“I am confident voters will hold those politicians accountable for choosing Mike Madigan over the people of Illinois,” party Chairman Tim Schneider said after the successful override votes. That doesn’t sound like a vanquished side to me.
And days later, Rauner swept out his top staff and replaced them with hotshot executives from hardcore anti-tax “think tanks” like the Illinois Policy Institute.
After Gov. Bruce Rauner hired Illinois Policy Institute president Kristina Rasmussen as his new chief of staff, I reached out to one of the House Republicans who voted to override the governor’s budget and tax hike vetoes. How was he feeling?
“You mean after the irate phone calls and e-mails and the letter that arrived at my house today telling me and my wife (by name) to move out?” he texted back. “I’m doing fine—seriously I am. I can just guess what the new chief of staff might have in store for me.”
Rasmussen’s anti-tax group essentially weaponized its Facebook page against lawmakers during the run-up to and aftermath of the overrides of Rauner’s vetoes.
The group’s Facebook page generated hundreds of thousands of often profanity-laden, hate-filled and even some comments that appeared to advocate violent acts like lynching. It also succeeded in inundating legislators with calls and e-mails. At least one legislator, Rep. Steve Andersson (R-Geneva), reported receiving death threats. The group claims to have an “unblemished” record of “decency, civility, and candor,” but that’s not how some of those legislators see it.
So, instead of trying to woo back those 11 Republican legislators who crossed him on the budget, the governor instead brought in the very bane of their existence as his new chief of staff. You can’t send a clearer signal than that.
Rasmussen quickly filled the governor’s office ranks with ideological allies. She hired a new policy director, Michael Lucci (the Illinois Policy Institute’s former policy director) and new “special assistant” Jean Hutton (the Institute’s director of operations). Laurel Patrick, who worked for Wisconsin Gov. Scott Walker, was hired as the new communications director. And Diana Rickert is reportedly being hired as the deputy chief of staff for communications. Rickert is the Illinois Policy Institute’s vice president of communications who once advocated for the firing of all state workers so that they could be rehired on a new, cheaper pension plan. Her idea was derided as unworkable and not legal.
Rauner has always been a big fan of the Illinois Policy Institute’s way of thinking and ways of doing business. He insisted, for instance, that Rasmussen be included in some policy meetings. Rasmussen reportedly voiced support at those meetings for things like shutting down some state universities and prisons, regardless of the consequences, including the possibility of a prison escape during a hastily arranged facility shutdown. That’s just the sort of “bold” thinking that Rauner likes.
As a corporate roll-up specialist, Rauner was a big fan of creative destruction and outsourcing. Underperforming executives were tossed aside like yesterday’s garbage. And he’s doing the same thing now. His once fiercely loyal staff is being treated worse than Pat Quinn’s staffers were when the Raunerites took over. If this looks like a hostile corporate takeover to you, it’s because it is.
And so we’re about to embark on an adventure that I don’t think any state has ever experienced. A governor of a large state is out-sourcing the operation of his government to a libertarian-minded activist “think tank” that he helped fund before he was elected.
The organization is hostile to unions, public pensions, taxes and government regulations. It has railed against this state’s governance for at least a decade, building up an impressive operation that supplies free news stories, opinion columns and even cartoons to cash-strapped newspapers throughout the state. It has a legal arm that has filed or is handling anti-union lawsuits. It has mastered social media to spread its gospel and whip up the public and lash out at opponents online. It took over a statewide radio news network. It employs researchers who regularly spit out pieces about how Illinois lags other states, particularly Indiana.
In other words, it’s the perfect fit for Rauner, a man of almost identical ideology who nurses a constant obsession about “messaging.”
The Illinois Policy Institute’s higher-ups didn’t seem all that troubled about the two-year impasse and heartily cheered on Rauner’s attempts to use the fiscal crisis as leverage to try and ram through his business and political reforms.
We can probably figure that new executive orders and rules are on the way to further the governor’s new agenda. But he’s also bringing in a bunch of governmental neophytes, so we can expect a lot of rookie mistakes.
But what we probably won’t see is any legislative progress. Perhaps just the opposite if the disaffected Republicans decide to continue crossing the governor.
* The governor recently asked him to stay on, so this is, by far, the biggest Rauner defection of the week. Boom…
Xpress Professional Services, Inc. (XPS) today announced that Mike Zolnierowicz of Chicago will head up XPS’ political operation starting Monday, July 17 and will concentrate on building the firm’s strategic political service. According to XPS Chief Executive Officer Greg Baise, Zolnierowicz’ background in political campaigns and his administrative experience as Chief of Staff for Illinois Governor Bruce Rauner dovetails perfectly with XPS’ business portfolio.
“Mike Z has proven himself both on the campaign trail and at the administrative helm of state government,” Baise said. “His understanding of the political environment extends beyond Illinois’ border, and his list of accomplishments is second to none in this very complex arena.”
After serving as Deputy Campaign Manager of Governor Bruce Rauner’s election campaign, Zolnierowicz—known simply as Mike Z to most in the political world— served as Transition Director for Governor Rauner’s incoming administration (First transition of Democrat Governor to Republican Governor in 30 years), and served as Rauner’s Chief of Staff from inauguration until June, 2016. He left that position to serve as Chief Strategic Advisor for GOP political operations through the 2016 elections where he presided over the increase of six GOP seats in the Illinois House in a campaign cycle President Trump lost Illinois by 17 points. Z was also the Chief Strategist for the statewide safe roads ballot initiative that won approval with 80% in 2016. In 2016 Z was featured in Crain’s Chicago “40 Under 40” series. Zolnierowicz managed
Congressman Rodney Davis’ first Congressional race in 2012 and served as deputy chief of staff for U.S. Senator Mark Kirk. He graduated from Downers Grove North High School and graduated Phi Beta Kappa and magna cum laude from Hope College.
Mike Z will join another Kirk alum, Eric Elk, who heads up XPS’ Fulcrum Illinois division.
Founded in 2004, XPS, Inc. is an independent for-profit subsidiary of the Illinois Manufacturers’ Association that has conducted campaign communications in eight states and specializes in measuring and shaping public opinions for both elections and issued-based efforts.
Zolnierowicz did not return messages seeking comment, but sources close to him say he was disturbed at a series of high-level Rauner staff changes this week, ending up this afternoon with the termination or resignation of most of the governor’s policy staff. Most of those positions reportedly will be filled with personnel from the Illinois Policy Institute, a liberatarian Chicago think tank which strongly opposes tax hikes and says the state’s budget woes can be solved via spending cuts and slashed benefits for state and local government workers.
* Rep. Sam Yingling (D-Grayslake) is sending a robocall into his district urging residents to call Gov. Rauner…
* Transcript…
Hi, this is State Representative Sam Yingling.
This morning, following the historic floods in our area, I asked Governor Rauner to declare a Lake County a disaster area, but as of now he has ignored my request.
Our district really needs him to act now in order for our neighbors to gain access to federal resources.
If you have a moment, please call the Governor and urge him to do his job and declare a Lake County a disaster area.
The purge within Gov. Bruce Rauner’s government continues today. Even as the governor was touring flood plagued Lake County—a little late, in the opinion of some—most of what left of his policy staff was being axed or hitting the road before they could be canned.
Here’s who’s out, according to multiple reliable sources:
• Corrections and criminal justice adviser Jennifer Grady-Paswater;
• Jason Heffley, who handled environment and energy and helped cut the recent Exelon nuclear funding deal;
• Brian Oszakiewski who came from the staff of U.S. Rep. Dan Lipinski, D-Chicago, and who handled transportation;
• Daniel Suess, who made policy recs for smaller state agencies.
Says one Rauner insider with a bird’s eye view of all of this: “The IPI (Illinois Policy Institute) folks have fully taken over. This government is going to be a petri dish for them for the next year and a half,” until Rauner’s term is up.
Brian O turned in his resignation earlier today. He walked out on his own and isn’t looking back. The other dismissals reportedly came after the governor finished his Lake County photo op.
Heffley is a huge talent, by the way. And he has a family.
…Adding… From a Jennifer Grady-Paswater friend…
She had a great gig at ISP and was really respected but left it to help Rauner with his criminal agenda. Without her help, many of the reform bills wouldn’t have moved. It’s a real shame.
That’s the thing that grates about this purge. These folks aren’t being fired because they’re incompetent. They’re all talented folks. They’re being shoved aside because they don’t align with the “new ideology.” And, in the past, including in this administration, when people were moved out of the governor’s office a spot was found for them in an agency, or on the campaign or whatever. Not under the new regime. They’re being dumped into the cold.
“This is a clear signal John Tillman, the CEO of the Illinois Policy Institute, has a firm grip on the new regime in the Rauner administrative,” a top Sneed source said.
*** UPDATE 1 *** Rauner spokesperson Eleni Demertzis has just resigned. Unlike some of the others, Eleni walked out on her own terms.
*** UPDATE 2 *** Allie Bovis, who oversees agency communications and was the traveling press secretary today for the governor’s trip to Lake County, has submitted her resignation effective next Friday. She’s also leaving on her own terms.
Both Demertzis and Bovis will hopefully be fine. They are top notch and should be able to get private sector gigs rather quickly.
*** UPDATE 3 *** Jared Dubnow, who is the governor’s Director of Operations, is reportedly leaving and will be going to DCEO. He made the trains run on time, but before that he was the governor’s top advance man and was Rauner’s “body man” during the campaign.
REPORTER: Have you been too preoccupied with reorganizing your staff and not focusing on this?
RAUNER: Not whatsoever. We have been monitoring this situation very closely, if I was needed here or requested here I would be here. I’m here today to say thank you ’cause we got awesome first responders.
2) Rep. Yingling received this phone message from a Rauner staffer at 10:50 this morning telling him that the governor was on his way in a few minutes…
I apologize for the last-minute notice. I’m sure you saw we had some staff changes, so things are fluid right now
That’s interesting. Folks focused on, um, administration personnel issues.
But we’re always building and enhancing, uh, the best team we can possibly have. I’m incredibly proud we’ve got an outstanding team. I think we’ve got the best team to lead uh, the, um turnaround and restoration and transformation of the state of Illinois.
And then he went on another one of his patented long soliloquies about the problems in Illinois, including saying property taxes “are too dang high and we’re gonna work to bring ‘em down,” before reporters got him back on topic…
We are always trying to recruit and retain the best people in America to serve the people of Illinois. That’s all that matters.
* Related…
* Mark Brown: Rauner won’t talk about Trump but borrows from his playbook
Moody’s: New revenues will begin to flow, but disparities and uncertainty remain for Illinois and its municipalities
Despite improved revenue prospects following the passage of its first comprehensive budget since fiscal year 2015, the State of Illinois (Baa3 review for downgrade) and its municipalities face lingering credit challenges, according to Moody’s Investors Service in a new report examining the budget’s implications.
“Illinois projects its income tax increases will generate an additional $4.7 billion in fiscal 2018,” says David Levett, a Moody’s assistant vice president and analyst. “The funds will help ease a long-running cash crunch that has driven up a $15 billion backlog of unpaid bills and placed growing pressure on other issuers in the state.”
The budget legislation authorizes supplemental cash resources totaling $7.5 billion, primarily consisting of the ability to issue as much as $6 billion of general obligation debt, to help pay down the state’s unpaid bills. However, the state’s ability to generate sustained surpluses to prevent further growth in its backlog remains unclear.
Among downstream issuers that receive state aid, K-12 public school districts face the greatest uncertainty since they will not receive revenue appropriated by the new budget until a separate, evidence-based funding model is enacted. The General Assembly passed a bill on May 31 that would adopt such a funding formula, but the governor does not support the bill in its current form. Any delay would further pressure school districts, including Chicago Public Schools (B3 rating under review)
“School districts with low property tax wealth or high poverty face the greatest risk from a state funding disruption because of their material dependence on state aid,” said Levett. “School districts with high property wealth and healthy reserves will be minimally affected.”
For public colleges and universities, the passage of a budget relieves some immediate operating and liquidity pressures by backfilling a material portion of a funding gap for fiscal year 2017. The comptroller has announced the release of $523 million, using existing education funds, to the state’s colleges and universities to cover MAP and operational funding. However, the ongoing timing of additional and future payments from the state is uncertain given the state’s massive bill backlog.
Smaller, regional public universities in Illinois are also confronting material challenges that linger following two years without a full budget. Their competitive positions have been impaired due to reputational damage, program and staff reductions, and notable enrollment declines that will continue this fall.
Community colleges, which had more flexibility to weather pressures during the two year impasse, will benefit from the renewed flow of funding for scholarship programs and state appropriations Although the state’s budget cuts some revenues for Illinois’ cities and counties, state aid distributions should become more timely, reducing uncertainty for local governments.
Extended delays in Medicaid payments from the state during the budget impasse had a limited effect on the majority of rated NFP hospitals, but came as hospitals continue to experience lower Medicare reimbursements and declining rate increases from commercial insurers. Illinois hospitals will thus benefit from the increase in unrestricted cash and investments as the state makes its payments. The June 30 ruling expediting state Medicaid payments will also benefit Illinois’ hospitals.
We’re gonna make sure that it’s done on a basis that’s fair for taxpayers all across the state and it doesn’t benefit only one community at the expense of residents of other communities.
Please share with me your best ideas for transforming Illinois through better public policy and improved operations by Friday at 3:00 p.m.
* The Question: There’s not much time left, so what are your “best ideas for transforming Illinois through better public policy and improved operations”?
It should go without saying that Wordslinger is a frequent critic of the House Democrats’ messaging. He ain’t Steve Brown.
Sheesh.
* The poor darlings were apparently stung by this Wordslinger comment on a story yesterday aimed at them…
If I could be radically candid, don’t tell me your problems, tell me your solutions that you can accomplish through the democratic processes as set forth by the Constitution and statute.
You’re in an action position now, not a coffee klatch. The taxpayers are compensating you very well. Get to work.
As a candidate for governor, Democrat Chris Kennedy has called for a sweeping overhaul of a property tax system he calls “a racket” that enables politically connected lawyers to arrange lucrative breaks for their clients.
But as the part-owner and manager of a four-acre parcel near the Merchandise Mart, Kennedy leveraged the very system he now condemns to shave $1.5 million off property tax bills for the lot, known as Wolf Point, just as he and partners were priming it for a $1 billion high-rise development.
An investigation by the Better Government Association found that Cook County Assessor Joseph Berrios had initially calculated a $23.5 million fair market value in 2012 for the then mostly undeveloped Wolf Point property. That was up sharply from the pre-2012 valuation by the assessor’s office of $13.5 million.
Instead, Kennedy appealed the valuation through the law firm of Thomas Tully, himself a former Cook County Assessor, who since 2012 has donated more than $135,000 to political funds tied to Berrios.
The appeal filed by Tully centered on an argument that the assessor had mistakenly thought a revenue producing three-story parking garage occupied the Wolf Point property. Such a structure had once existed but had long since been demolished and replaced by a surface parking lot.
In the appeal, Tully said it was proper to only consider revenue produced by the surface lot in calculating the property’s value for tax purposes. Berrios’ office agreed, choosing not to factor in the development potential of a property that the Kennedy group had already begun trying to exploit by 2012.
So, is there hypocrisy here? Some, but Kennedy did have a fiduciary responsibility to his investors at the time. And it’s not like he was ripping out toilets to game the system. The property was clearly being assessed too high. And Kennedy’s first hand experience ought to give him some credibility to talk about the system’s many problems. Instead, the BGA goes for “sizzle” stories.
Forecasters say flooding in north-suburban Chicago could worsen over the weekend as water flows down rivers into the state from Wisconsin.
The National Weather Service says the Des Plaines River and Fox River could crest on Saturday even though the area isn’t getting fresh rainfall. The flooding prompted Lake County to issue a disaster declaration.
Illinois Gov. Bruce Rauner, state Emergency Management Agency Director James Joseph and Lake County officials plan to survey flood damage Friday in Gurnee.
Rauner is slotted to visit the county today for a 10 a.m. briefing according to Lake County Chairman Aaron Lawlor. Lawlor said the call from Rauner’s office didn’t come until nearly 6 p.m. on Thursday. […]
Rauner was getting trounced in the local media for failing to visit, fly over, make a statement or even send a Tweet, after an unprecedented amount of rainfall in northern Illinois caused flash flooding, leaving subdivisions under water, shutting down a major amusement park, flooding a community college and even prompting the evacuation of a local hospital. Just over the border, Wisconsin Gov. Scott Walker is showing him up. Rauner won’t even see Illinois’ damage until today, Walker already declared a state of emergency in Kenosha, Racine and Walworth counties and deployed 100 members of the National Guard to assist with resident checks and other flooding-related complications.
* And from a press release…
Senator Melinda Bush (D-Grayslake) and Representative Sam Yingling (D-Round Lake Beach) issued a joint statement in response to the governor’s visit to Lake County to tour flood sites:
“Lake County residents have been working to pick up the pieces after major flash floods hit the area. The governor has not declared a state of emergency for Lake County, so residents with devastating property damage and no flood insurance have been unable to get access to low-interest loans that help people rebuild.
“Today, the governor will be in Lake County touring flood sites. The devastation experienced by our constituents over the last few days needs to be seen to be understood. Clean up from this historic flooding is going to take all of us working together.
“With more flooding expected to occur this weekend, we urge Governor Rauner to do what Governor Walker has already done, declare a state of emergency and call in the National Guard to provide much-needed relief to flood victims. Lake County residents need this help immediately.”
…Adding… The governor is not scheduled to view any areas of Rep. Yingling’s district and neither Bush nor Yingling have yet been contacted by the governor’s office. Very, very bad form.
…Adding More… A phone message left for Rep. Yingling by a Rauner staffer at 10:50 this morning, a half an hour or so after I posted that first “Adding”…
Hi Representative. This is [name] calling from the Governor’s office. I just wanted to let you know that he is going to be in Lake County this morning. He will be stopping in Gurnee at Warren Township High School to survey the flood damage and he’ll also be in North Chicago at the Strawberry Condominiums from 11:30 to noon. I apologize for the last-minute notice. I’m sure you saw we had some staff changes, so things are fluid right now. Hope you are staying dry. And let me know if you would like more details for this morning’s events. Otherwise just want to let you know he’s around your area. Have a nice weekend, thanks, bye.
* We’ve talked a little about this before, but here’s Greg Hinz…
Democrats may have provided most of the votes to override Gov. Bruce Rauner’s veto of the state’s new budget and income tax hike, but the Dems in the process picked up an idea that GOP fiscal conservatives have been pushing for years: reduced money for municipalities and other local governments.
My reference is to a little-noticed provision in the budget implementation bill, or BIMP, that imposes a 2 percent “collection fee” on sales taxes gathered for the locals by the Illinois Department of Revenue.
The handling charge will apply to sales taxes levied by local governments, including not only obvious targets such the city, Cook County, Schaumburg, Evanston, et al., but also the Regional Transportation Authority and levies by the Metropolitan Pier & Exposition Authority on automobile rentals and hotels, according to an analysis by the Illinois Municipal League.
The levy will not apply to the 1.25 percent local share of the state’s mandatory 6.25 percent sales tax, only to additional levies beyond that figure that are imposed by local governments. But it’s still an estimated $60 million-a-year hit, says the league, which is not at all happy about the loss.
This idea was first floated by the governor’s office.
A decision to move the annual Illinois State Fair Twilight Parade Aug. 10 is being criticized by defenders of a decades-long tradition.
The parade for years has headed north up Ninth Street/Peoria Road. This year, it will start in Lincoln Park and then go north through the park to Sangamon Avenue, bypassing Ninth Street/Peoria Road altogether.
“Personally, I’m not in favor of it,” Mayor Jim Langfelder said Thursday. “It comes down to the tradition of the parade route. I’m not sure if they realize the thousands of people who come out and enjoy the parade.”
Rebecca Clark, communications manager for the Illinois Department of Agriculture, said there are advantages to moving the parade. She said the starting point in Lincoln Park provides handicapped-accessible bathrooms, more shade from the mid-summer heat, and water fountains for parade participants and spectators. […]
Clark said there will also be cost-savings because fewer streets will need to be blocked off. The fair is charged by the city for the blocked-off streets, she said, a cost that is expected to drop from about $10,000 to less than $5,000.
Saving money is good. And, who knows, maybe it’ll be a better parade. Wait and see.
The Southern Illinois University Board of Trustees on Wednesday reviewed a financial sustainability plan for the Carbondale campus that recommends the closure of seven programs and the consolidation of some departments.
Even with state appropriations restored after the passage of Illinois’ first full budget in two years, administrators say the sweeping structural changes are needed to account for SIUC’s dwindling student enrollment.
The financial sustainability plan recommends the closure of the following programs “based on a significant history of low enrollment and substantially weaker comparative performance on other metrics”:
Illinois lawmakers who recently ended the longest fiscal standoff of any state since the Great Depression are counting on an ironic strategy to dig out of mountains of debt: borrowing even more money.
It’s an unorthodox approach, considering deficit spending largely created the mess, and Illinois’ worst-in-the-nation credit rating makes borrowing inordinately expensive. However, supporters say it’s the best way to begin to erase $14.6 billion in overdue payments to vendors and service providers.
Bills that are 90 or more days past due incur 12 percent in late-payment fees. By paying off a chunk of that at a time with the sale of bond proceeds, the state could cut that rate in half.
“We are being smothered by our liability and our indebtedness, not only in the state and trying to deal with the budget, but with the people we owe money,” said Democratic Sen. Donne Trotter, of Chicago, the assistant majority leader who sponsored the measure.
Trotter said it currently takes Illinois about 200 days to pay a bill, but his plan would reduce that to as few as 60 days.
The Democratic-controlled General Assembly endorsed the budget — and a $6 billion borrowing scheme — over Republican Gov. Bruce Rauner’s vetoes. However, it’s unclear whether Rauner will actually use the borrowing authority given to him. He has said nothing about it in the 10 days since the budget was passed, and his spokeswoman, Eleni Demertzis, declined to comment on Thursday.
It’s not necessarily “unorthodox.” For two years, the state spent more than it was taking in, under judicial orders and executive branch contracts and leases. Revenues now balance with spending, but businesses and not-for-profits are owed billions. Continuing to borrow from them is irresponsible and forces continued and unnecessary hardships. It’s therefore better (and in many cases cheaper) to borrow on the bond markets.
