Tag Archives: Illinois

Illinois is Still Corrupt

Yup

One of Illinois House Speaker Michael Madigan’s oldest and most trusted confidants was among four people charged Wednesday with orchestrating an elaborate bribery scheme with utility giant Commonwealth Edison that allegedly funneled money and do-nothing jobs to Madigan loyalists in exchange for the speaker’s help with state legislation.

Michael McClain, 73, of downstate Quincy, was charged in a 50-page indictment returned by a federal grand jury with bribery conspiracy and bribery.

Also charged were former ComEd CEO Anne Pramaggiore, 62, of Barrington; lobbyist and former ComEd executive John Hooker, 71, of Chicago; and Jay Doherty, 67, a consultant and former head of the City Club of Chicago.

The indictment alleged that beginning in 2011, the defendants “arranged for various associates” of Madigan — including his political allies and campaign workers — to “obtain jobs, contracts, and monetary payments” from ComEd even in instances where they did little or no actual work. Madigan is referred to in the charges only as Public Official A.

Illinois’ Horrible Fiscal Shape

This is happening just across the border. Just remember… when politicians make bad decisions, they don’t pay the bills. You do.

Sometimes the clearest warning about Illinois’ fiscal crisis can be communicated using numbers, sometimes with a well-chosen phrase. Here we present both, as reminders during the period before a new Democratic governor takes office with a Democratic mega-majority, that the state’s messes will only worsen. Until lawmakers take decisive action.

First, the awful numbers: For several years we’ve cited the figure of $130 billion to represent Illinois’ estimated unfunded pension liability. Never mind that number, it was $133 billion as of June 2018 — and it’s getting worse — according to a new state report. The Commission on Government Forecasting and Accountability estimates the shortfall in commitments to future retirees will deepen to nearly $137 billion in the current July-to-June year, and to $139 billion in fiscal 2020.

Now a choice word or several: Fitch Ratings in a new report says Illinois has exhibited a “lack of coherent fiscal policymaking over many years” and is guilty of “irresolute fiscal decision-making.” Over the years, lawmakers skimped on payments into the retirement kitty, or avoided making payments altogether, rather than being disciplined about putting enough money into the funds to pay for all the benefits they had promised.

Today, Fitch says, Illinois’ net pension liability plus other long-term debt represent 29 percent of the state’s personal income, the highest of any state (our emphasis) and well above the 50-state median of 6 percent. Oh yes, the annual operating budget — an astonishing one-fourth of which goes to pensions — is also a wreck: Fitch reminds us that about $2 billion of the $38 billion budget revenue is either unlikely to be realized or one-time in nature. Irresolute, indeed.

State of Illinois Takes Over Chicago Public Schools Special Education

Of course, it’s not like the State of Illinois has a solid record of competent management.

The Illinois State Board of Education took on sweeping authority to supervise special education at Chicago Public Schools on Wednesday, voting to appoint an outside monitor who for at least three years will have to approve any changes to the district’s special ed policies and procedures.

ISBE will now meet with CPS to map out what state schools Superintendent Tony Smith described as “the road to transformation” after officials concluded that the district’s 2016 overhaul of special ed violated a swath of federal law and regulations.

“The corrective action and recommendations we offered today are the right first step to helping CPS fully serve all children and families,” Smith said in a statement. “The common good requires uncommonly good public schools.”

ISBE also recommended that the district change the way it creates legally mandated education programs for special ed students, and identify students who may have had their services delayed or denied because of the CPS policy overhaul so parents have an opportunity to pursue needed changes.

Illinois Heads to Junk Rating

Lest we look upon Illinois with too much hubris, this is exactly what our federal government is doing. Illinois is serving as a leading indicator.

“The massive pension liability results from a chronic tendency to defer difficult decisions,” said Ted Hampton, who as a senior credit officer at Moody’s will help decide whether to downgrade Illinois into junk.

Hampton said Illinois treated the pension fund as a “financial cushion” that could be relied on to provide fiscal relief. He also pointed to a tendency to delay paying bills and chronically underestimate spending needs.

“All of these problems are governance and management weaknesses,” Hampton said.

That’s a polite way of saying the political leaders broke the system.

Lottery Players Come to Wisconsin

Illinois is in free-fall thanks to years and years of bad policies. In a Federal system, we have the advantage of seeing the results of different policies in different states. Illinois serves as a stark warning.

Businesses near the Illinois state line are cashing in on Illinois’ budget impasse.

Illinois state lottery officials suspended Powerball ticket sales, and Mega Millions is expected to stop on Friday.

Convenience stores in Kenosha have already noticed more players from Illinois stopping in to buy tickets.

“Today alone there’s so many people coming up here,” said store owner Roxanne Jackson. “They’re real disappointed that Illinois is canceling their lottery but that’s OK, we’ll bring them here.”

Illinois Supreme Court Overturns Pension Reform

Let us not forget that Illinois has screwed themselves with decades of liberal rule and ridiculous pandering to the public employee unions.

The Illinois Supreme Court on Friday unanimously ruled unconstitutional a landmark state pension law that aimed to scale back government worker benefits to erase a massive $105 billion retirement system debt, sending lawmakers and the new governor back to the negotiating table to try to solve the pressing financial issue.

The ruling also reverberated at City Hall, imperiling a similar law Mayor Rahm Emanuel pushed through to shore up two of the four city worker retirement funds and making it more difficult for him to find fixes for police, fire and teacher pension funds that are short billions of dollars.

At issue was a December 2013 state law signed by then-Democratic Gov. Pat Quinn that stopped automatic, compounded yearly cost-of-living increases for retirees, extended retirement ages for current state workers and limited the amount of salary used to calculate pension benefits.

Employee unions sued, arguing that the state constitution holds that pension benefits amount to a contractual agreement and once they’re bestowed, they cannot be “diminished or impaired.” A circuit court judge in Springfield agreed with that assessment in November. State government appealed that decision to the Illinois Supreme Court, arguing that economic necessity forced curbing retirement benefits.

On Friday the justices rejected that argument, saying the law clearly violated what’s known as the pension protection clause in the 1970 Illinois Constitution.

Now what? Their choices are very limited. They can jack up taxes and cut spending on every other public priority (roads, schools, prisons, healthcare, etc.), but even then they will likely not be able to meet their pension obligations. Plus, the public will not be very appreciative of such actions. Or the state could declare bankruptcy and default on the pension obligations. Bankruptcy appears to be the most likely scenario.

For more reasons than just this, I’m glad that I don’t live in Illinois.