53% of the tuition paid at the University of Illinois, Circle Campus, where the protest occurred, goes to college public pensions. Tuition at that campus protest site has rise 74% in the last ten years, and almost all of that extra tuition cost went straight to pay public university administrators’ and professors’ pensions. For twenty years, many will have to work and pay student loan payments. Comment: “Think twice”? They should think once.

In the U.S., federal, state and local governments have very large unfunded pension liabilities that will have worsened with the recent falls in equities and other risk assets. Disputes between Chicago teachers and the governor of Illinois have resulted in a surge in borrowing and in the interest rate paid on new debt.

Comment: Reminder that half of state money for higher education goes to pensions.

Polling in fact shows strong support for his agenda.

While new state numbers painted a rosier picture of 2015, Illinoisans are still struggling in a poor economic climate.

The bloated administration at CSU has pushed up the administrative cost per student to more than $3,600 per student, by far the highest of all Illinois’ public colleges and universities. By comparison, the average MAP grant at CSU is $2,600 per student.

During the past eight years, while there has been a 22.5 percent increase in tax revenue in Illinois, the budget deficit has more than doubled from $3 billion to $7 billion and the pension deficit has increased from $48 billion to $110 billion.

Of about $4.1 billion appropriated for higher education in fiscal 2015, more than half went to pensions.

The Murphysboro Food Pantry feeds 37,000 people every year, 850 families each month. But with jobs lost from the Illinois budget impasse and a drop in funding from outside sources, the food pantry is now in need of help.

Under existing law, a state cannot go bankrupt. That’s not because the action is forbidden. Not the U.S. Constitution nor any other piece of paper says a state cannot. The bankruptcy code simply does not address the possibility. Now lawyers, politicians and other ingenious folk are looking for a way around that problem — a fact that should come as no surprise, given the perilous financial health of California, Illinois and other states encumbered with crushing debts.

Though property taxes vary from county to county across the state, the average effective rate in Illinois — the proportion of the value of a home that a homeowner must pay each year in taxes — was 2.25 percent, just a hair below the New Jersey rate of 2.29 percent.

Because SURS has bigger pensions, it’s no small feat that for the moment TRS is grabbing headlines for more egregious abuses of taxpayer money.

The wealthy are an unstable source because their income fluctuates with markets.

Comment: Oliver’s video is actually a rather thorough look at the overuse of special taxing districts across the country.

Comment: In Illinois, of course, they’re long past being “undone.” Negative rates would just scatter the ashes.

Comment: Waste of time unless they pay a small fraction of the pension claim and figure out a way to exclude the sick, which is probably impossible.

Trump had the support of 32 percent, followed by Texas Sen. Ted Cruz with 22 percent, Florida Sen. Marco Rubio with 21 percent and Ohio Gov. John Kasich with 18 percent. An additional 7 percent were undecided. The poll of 600 registered voters likely to cast a ballot in the Republican primary has an error margin of 4.1 percentage points.

The author is an actuary who writes about pensions. Here, she adds Reboot, Ralph Martire and the Center for Tax and Budget Accountability to her “Wall of Shame” for repeating a pension myth.

Such proposals have a long history. “On Jan. 8, 1919, Gov. Frank O. Lowden (of Illinois) delivered a message to the General Assembly recommending “a consolidation’ of pension fund assets in the state under a central state supervising board.”

America’s ongoing—and underreported—public sector pension crisis — the role played by institutional greed and fecklessness—greed by public sector unions that have turned so many state and local governments into ATM machines, and fecklessness by politicians who were willing to keep wildly over-promising to keep their campaign contributions flowing.

Nice to see the FT wake up to the pension crisis, which they’ve been overlooking.

  By: Mark Glennon*   Michael Ferro is the Chairman and largest shareholder of Tribune Publishing, owner of the Chicago Tribune. This week, he said:   I now understand how important it is to have real journalism in the world and we’re starting here with our properties around the country. Bloggers can’t be the ones deciding public opinion, deciding presidential races.   As for the first part of his comment, let’s just say it’s good he “now” understands the importance, whatever that indicates.   But as for the rest, there’s evidently much he doesn’t understand:   •  Journalists aren’t the

Illinois is one of only two states nationwide (the other is Texas) that has a law regulating the use of biometric data, such as retina scans, fingerprints, and facial structure.

Comment: In a sane world, we’d be debating how Chapter 9 can be amended to make it a more efficient means to give zombie municipalities a fresh start. The suggestions in this article mostly would give bondholders a windfall and therefore should be suspect, but that’s a topic for a different day, and some of these suggestions are sensible. One change to Chapter 9 that definitely should be made would be to allow discretion to make pension cuts progressive — protecting the smaller pensioners more than the gluttons. In any event, let’s hope bondholders’ lobbyists don’t hijack Washington to rewrite

“There are about 300 area government retirees collecting pensions of at least $100,000 annually, while 17.6% of St. Claire County residents live below the poverty level, along with 14% of Madison County residents. Across 6 state pension funds, there are 12,154 government pensioners collecting six-figure pensions and 85,893 pensioners collecting more than $50,000 annually, where the state debt per capita is $24,959.”

Democrats once again sought to bolster their election-year campaign attack fodder against Republicans on Thursday, voting for the latest plan to fund higher education and another union-backed measure to prevent a worker lockout or strike following earlier vetoes by Gov. Bruce Rauner.

Tens of millions of Americans are not going to get the benefits they are planning on! This is an underappreciated trend that will have a profound effect on America’s economy. Consider this: In Chicago, a recent report found that the city’s unfunded pension liabilities totaled 10 times the entire city’s revenues. According to analysts, this means that the city will soon be paying 50 percent of its revenue just to cover pension costs. Comment: As we’ve been saying repeatedly, only SOME face genuine hardship. There are haves and have nots, which is why pension reform must include means testing or

House Republicans’ side of the story is linked here.

In a written statement issued Wednesday, Sandra Martin, chief financial officer of Tribune Publishing, said Ferro’s “divestiture will create a very clear separation of ownership and avoid perceived conflicts of interest, while also providing millions of dollars for community programs and other charitable causes.”

The United States Supreme Court declined to hear an appeal from a New Jersey decision challenging pension underfunding under the Contracts Clause of the U.S. Constitution. A Bond Buyer article on the same story is linked here. Comment: If Illinois was to amend its constitution to allow pension cuts, unions say they would still challenge any cuts as a violation of the U.S Contracts Clause. This case appears to indicate the Supreme Court’s reluctance to hear such a challenge.

Comment: See our recent story about the implications of this Detroit chapter for Illinois.

Full COGFA report is linked here.

Comment: They’re “undercover” only because reporters ignore them, focusing, instead, on Madigan-Cullerton stunt government.

Ugly. Below 50 indicates contraction.

Under consideration will be plans that would allow workers at retirement to take pension benefits as a lump-sum cash payment and give up guaranteed pension payments for life. Comment: Don’t get your hopes up. Tiny lump sums would have to be offered to make this work and there wouldn’t be many takers.

Comment: This is fundamental to why widely-reported state and local budget and spending numbers are bunk. Losses are hidden, among other ways, by underfunding pensions, and ever-worsening unfunded pension liabilities aren’t in budgets.

Illinois’ growing pension costs – not the state budget gridlock – are taking away funding for essential government services, such as education.

Comment: The many headlines about layoff  “notices are a bit misleading. Despite the notices — including to the president — university spokesman Tom Wogan said that does not mean the 900 people working at Chicago State all will lose their jobs. He said the school is still trying to determine how many layoffs are needed to offset the loss of funding. “It means that every employee of the university, from the president on down, is susceptible to a layoff.” Wogan said the university has no plans to close, but said it needs the flexibility to make staff reductions to remain

Inexcusable.

The issue is diversion of Federal money into pensions — money that’s supposed to be helping school districts with large numbers of underprivileged students. Congressman Bob Dold got a fix passed in the House but the Senate stripped it out.

About 380-thousand of them signed up for private plans. But the majority are people on the government’s Medicaid program — who were previously ineligible or chose not to sign up.

And Rauner is letting them get away with it.

According to new polling by right-wing political consultant Frank Luntz, Americans 18 to 26 are extremely liberal — so liberal that “the hostility of young Americans to the underpinnings of the American economy and the American government” should “frighten every business and political leader.”

Mary Pat Campbell, the author, is an actuary who writes about pensions. Next time you hear a politician say Illinois is making “full pension contributions” or “what the actuaries require” tell them they’re lying. Same for almost all local pensions.

Detroit may sue some of the consultants who worked on its bankruptcy over a $490 million pension funding shortfall that will result in bigger-than-expected city payments. The mayor blamed the projected deficit on outdated mortality tables used by the consultants that assume retirees will not live as long. Sound familiar, WirePoints regulars?

One Illinois public university had its credit ratings lowered to junk, and two others had their debt downgraded by Moody’s Investors Service because the state’s record budget impasse has wrecked havoc on college finances.

Nearly a quarter of newly hired teachers will never vest in the state’s Teacher Retirement System, a new analysis says. What’s more, three quarters won’t even make back what they pay into the system. (That’s for new, Tier 2 teachers only.)

Standard trouble-making grandstanding.

One of the budget options Gov. Bruce Rauner presented to lawmakers last week could clear the way for the state to once again short or skip contributions to its beleaguered pension funds. Comment: Wake up, media. We already are shorting contributions. The state makes the contributions required by statute which are far short of what is required to prevent unfunded liabilities from worsening.  

Does more money equal a better education? There’s perhaps no better way to examine that question than the real-life experiment known as the Chicago Public Schools (CPS), where over the past 10 years, enrollment has fallen and spending has soared.

“Illinois’ teacher retirement plan is doing a poor job of serving the majority of its teachers.”

Comment: Don’t get your hopes up, and don’t think that passing a budget means that painful cuts can be eliminated. They won’t be.

The union is urging the Illinois Commerce Commission, which regulates utilities, to order WEC Energy to hire more full-time personnel. The commission has the power to do that under a state law enacted in 2008. The union is pushing for a workforce of 1,300, up 36 percent from today’s levels. Peoples’ unionized workforce numbers 954, up from a low-water mark of 872 a decade ago.

The Unbalanced Budget Response Act would allow the governor to make cuts and sweep special funds in the upcoming fiscal year. And while Democrat leaders have said the governor could use his line-item veto authority, Governor Bruce Rauner said Monday that won’t solve the state’s problems.

Illinois’ more than 200 hospitals and nearly 50 health systems generate a total impact of $88.8 billion annually on the state’s economy, according to a new report, “Illinois Hospitals and Health Systems $88.8 Billion State Economic Impact” releases recently by the Illinois Health and Hospital Association (IHA).

As expected. Likely to go up on appeal however the trial court rules. Fortunately, it’s in Federal courts where it belongs.

“Not only do these judges benefit from the redistribution of taxpayer wealth, they also rule in their own favor to protect the Illinois pension cabal when practical, necessary reforms are challenged in the courts.”

Comment: The real focus has to be on ending the heroin epidemic. It’s not just a humanitarian crisis but an economic one, at the core of gang violence and soaking up social service spending. Chicago is the distribution center for heroin coming out of Mexico and that’s another reason why the border must be enforced.

Though neighboring and Great Lakes states added a combined 200 factory jobs per workday on net in 2015, an average of 56 Illinois manufacturing workers, on net, received pink slips each workday during the same time.

Comment: Orrick is a leading California law firm. Municipal bankruptcies are not yet authorized for Illinois, but, if that happens, most of this would apply.

You might be surprised to learn that about 70% of the budget for Catholic Charities of Chicago comes from government funds, which are derived in turn from taxes. The developing fiscal crisis in Illinois may illustrate some of the risks in relying on government money for charity.

Comment: This is about Batnick’s plan to give retirees the option to immediately receive 75 percent of what the state expects they’d earn through their pension over the rest of their lives — which is too high to work.

IMSA, the Illinois Math and Science Academy, is breeding ground for some of best tech talent in the nation. This article looks at its role in Cleversafe, a hugely successful Illinois data storage company recently acquired by IBM.

Comment: No surprise that the innumerate goofballs at Crain’s would go for the the Civic Federation’s recent budget proposal. For the facts on that proposal, see the Illinois policy article linked here and our earlier one linked here. They want $9 billion in new taxes per year just at the state level, and assumption of liability by Illinois taxpayers of the $10 billion -plus unfunded Chicago teacher pension liability.

And you know who is the least trusted.

The formula is broken. The whole system, actually, is broken. Roughly half of the money many schools receive doesn’t get squeezed through the formula anymore. Grants have increasingly been sent to school districts as lump sums, in some cases outpacing what districts receive through the means-tested formula.

Treasury Department officials on Friday released $114 million to Illinois agencies to aid homeowners and neighborhoods still struggling due to the 2008 financial meltdown.

Comment: Good to see others going after The Civic Federation, which has gone off the deep end is now seems more like the union-funded CTBA of Ralph Martire. Illinois policy did a great piece linked here on The Civic Federation, and our own earlier one is linked here.

Former State Senator and current President and CEO of the Technology and Manufacturing Association (TMAIllinois.org) Steve Rauschenberger gives a detailed, blunt interview not just on manufacturing but on his own Republican party’s failings.

Comment: Seems like the only opponents on the planet to fair map reforms are Madigan and his friends.

The average Chicago citizen is walking around on real estate with a number of different, overlapping governmental jurisdictions, each of which poses financial implications for any single taxpayer. Calculating the full ‘Taxpayer Burden’ for a Chicago citizen requires analysis and assessment of his or her exposure to the multiple layers of government that are borrowing money, with future tax implications. Comment: That’s the key. Any one jurisdiction may look fixable in isolation, but in aggregate they are not.

A great reminder why government “budgets” mean little.

This analysis found that Illinois’ operating deficit, which has led to more than $6.9 billion in outstanding bills, would not exist if, since 2000, state government had simply paid its employees at a rate relative to what other state governments pay their workers.

This will get mighty interesting.

Illinois state government now pays more for pensions and health care for state workers than it spends on K-12 education, public safety or human services.

Comment: Balanced summary of Rauner’s budget address, drawing the right distinction between the short and long term. Includes an important reminder that one year ago Rauner’s reform agenda had 40 items and he already compromised it down to 5.

A new “metered” approach that will give nonsubscribers access to up to 10 articles each month before being asked to subscribe.

The Civic Federation is pushing a $30 billion tax hike in Illinois, following the same mistaken path that got Illinois in today’s fiscal crisis.

Comment: As states with comparatively small pension problems make reforms, Illinois will be rendered still less competitive.

Comment: Not one suggests his own plan. Put up or shut up.

She forgot to mention that she got $280,000 for one speech to GTCR, Rauner’s old firm!

Comment: Separately, Dold said he wants to “cover the hell” out of politics. Let’s hope Dold recognizes how poorly the fiscal crisis is covered.Political reporters just don’t understand fiscal issues well enough to cover them.

I stand before you today with respect for our co-equal branches of government – acknowledgment of our shared responsibility for the future – and a deeply-rooted desire to work with each and every one of you to right our ship of state. Although we succeeded last year in eliminating an inherited $1.6 billion budget hole without a tax hike, we are now in our 8th month without a state budget – and court orders are forcing us to spend beyond our means. Shocking, yes. Acceptable, not even close. For more than two decades, we’ve had unsustainable unbalanced budgets, undisciplined spending,

State lawmakers have effectively exempted themselves from the consequences of budget gridlock.

A recent Gallup poll found residents in states with higher tax burdens are more likely to want to move. Illinoisans are the third-most-likely to say they would prefer to move permanently to another state.

Bill sponsor Rep. Andre Thapedi says President Obama’s distinctions as a Nobel Peace Prize winner and first black president of the United States are reasons to honor him.

A U.S. Supreme Court case that could affect Gov. Bruce Rauner’s move to do away with unions’ so-called “fair share” payments is among those thrown into question by the death of Justice Antonin Scalia.

While Illinoisans’ incomes have flatlined since the recession, state tax revenue has grown by more than that in almost every state in the nation.

“One of the reasons Nebraska has more of these than anywhere else is because of the sheer volume of municipal entities formed.” Comment: Sound familiar? Illinois has more units of government by far than any other state.

“It will take more than a handshake, a vote and a signature to restore spending in FY16 to FY15 levels. There is a $6.6 billion deficit to deal with. Already over seven months into FY16, it is hard to imagine any new sources of sustainable revenue that could be adopted and cover a gap of this magnitude.”

House Bill 580 is similar to Senate Bill 1229 that failed to overcome Rauner’s veto by only a few House votes. If passed, it would treat the members of the American Federation of State, County and Municipal Employees Council 31 like law enforcement or firefighters in that they would not be off the job in the event of an impasse in contract negotiations.

About 150 miles south of Chicago, past open fields and small-town water towers like pushpins on the Illinois map, you’ll find a surprising corporate outcropping. Twenty-five big-name businesses—from Dow Chemical to Yahoo—have set up shop in a cluster of buildings at the University of Illinois Research Park in Champaign.

Illinois politicians ignored Caterpillar CEO Doug Oberhelman’s 2012 plea for pro-growth reforms, and Illinois is the only state in the region to have lost manufacturing jobs on net over the last four years.

Residents living in states with the highest aggregated state tax burden are the most likely to report they would like to leave their state if they had the opportunity. Connecticut and New Jersey lead in the percentage of residents who would like to leave their state.

Comment: Yes, and Illinois should be all over this.

They should have added that 50% of state higher education money is going to pensions.

The money that social service agencies, state colleges and universities are owed by the state is not likely to show up, and new money is not likely to flow to them, either. This is the new normal.

“Speaker of the House Mike Madigan has scheduled Soviet-style show hearings on the topic.”

Through House Bill 580, Democrats in the General Assembly take a second run at removing Gov. Bruce Rauner from contract negotiations with AFSCME.

Comment: Illinois stands alone in not even measuring the cost of various clean energy alternatives. Inexcusable. See our earlier article linked here.

Sun-Times Holdings Chairman Bruce Sagan said he isn’t focused on whether the Chicago Sun-Times will ultimately fold into its larger rival, Chicago Tribune, now that the two papers have owners in common. Instead, he’s all about keeping the Sun-Times “viable,” in the face of shrinking industry revenue and circulation.

“The mineworkers’ pension funds are not the only one in danger of foundering. The Labor Department has placed hundreds in other industries on its list of funds in such poor condition that benefits may be reduced.” Comment: Just a reminder that severe problems with defined benefit pensions aren’t limited to the public sector.

Comment: The misunderstanding reflected here, which is epidemic, is that passing “a budget” means the painful cuts will be restored. They won’t be. We’re running a $6.2 billion annualized excess of expenses over revenue, even with the cuts in place, and excluding the massive pension underfunding. “Compromise” to get a budget won’t help much and nobody wants a tax increase big enough to cover it all.

Comment: The article certainly isn’t true to the headline.

Comment: With a ratio of inactives to actives of almost 2:1, unfunded actuarial accrued liability of $45,173,850 — a 30% funded ratio, yes, you can call that a “thorn.” Alston is hardly unusual. Illinois is a thorn garden.

Great study showing how the system is rigged for gluttony at the top and hardship at the bottom. See our own article about the study linked here.

Comment: “The only road forward is through compromise,” the article says. Compromise will will speed the spiral down. The opposite it true. The list of radical reforms needed immediately must be expanded — bankruptcy for many municpalities, pay cuts, layoffs, slashed pension payments. The crisis is now spinning out of control and a state of emergency should be recognized by all.

Comment: Just another indication of the severity of the heroin crisis, which, as a primary cause of crime and gang activity, is helping undermine the entire economy.

Illinois’ workers’ compensation system’s physician medication-dispensing rules provide incentives for physicians to overprescribe opioid pain medication to workers’ compensation patients.

The Supreme Court on Tuesday temporarily blocked the Obama administration’s effort to combat climate change by regulating emissions from coal-fired power plants. The brief order was not the last word on the case, which is most likely to return to the Supreme Court after an appeals court considers an expedited challenge from 29 states and dozens of corporations and industry groups. Comment: Pertinent to Illinois’ pending clean energy bills — a multi-billion dollar issue for Illinois consumers.

“Counties with colleges are growing, but the rest of the state is losing population—and it could prove costly.” “Could” prove costly?

Congress needs to have a better understanding of how endowment funds and “the exorbitant cost” of higher education interact, Roskam, of Illinois, said in an interview. “The status quo, in terms of the cost of higher education, isn’t working,” Roskam said. “If the tax code is having an impact one way or another, we need to understand it.”

Obama on Wednesday will address the stalemated Illinois legislature nine years to the day after he announced his presidential campaign a few blocks away.

The “It’s Rauner’s Fault” meme, long planned by Dems and their friends in the press, is now rolling out in full force.

“The risk premium, which can exceed half the true pension cost, has been confiscated by the first generation, which bore no risk. In practice, where immediate settlement is not required, risks continually pass to future generations, with surpluses swept off the table and deficits allowed to run for as many generations as possible. “The dependence on future generations of taxpayers violates the fundamental principle of public finance: each generation should pay in full for the services it consumes.

“Free-spending Democratic lawmakers have been blocked by the Republican governor. Result: No budget for seven months (so far).”

The job cuts come on the heels of big losses at HCSC, fueled by capturing a large portion of enrollees who bought health plans on the public health insurance exchange. Through its Blue Cross plans, including in Illinois, HCSC offered some of the lowest-cost policies on the online marketplace, which launched in 2013. The problem was, like for many insurers around the country, many of the enrollees were sick and expensive. Claims racked up. Some health insurers even closed under the financial stress.

Comment: Skip down to the part about Oak Brook — how even a municipality with the best of assets gets slammed by pension liabilities.

“Budget gridlock isn’t why Illinois’ higher-education system is facing financial troubles. The truth is that more than 50 percent of Illinois’ $4.1 billion budget for state universities is spent on retirement costs – making it easy to understand why there’s not money out there for much else. Comment: For higher education and so many other parts of our fiscal crisis, it’s the pensions, stupid.

A response by Sen. Matt Murphy to a particularly goofy article by Sen. Dan Biss.

The “task force” is just a bunch of legislators who will meet under the leadership of Barbara Flynn Currie, a career Madigan stooge. Whoopee.

Comment: Lots of controversy over Illinois Treasurer Mike Frerichs’ recent announcement expanding the investment of state dollars he controls in a fun-of-funds for venture capital.

Lincolnshire, IL recently passed a local right-to-work measure.

Merger with Sun-Times appears inevitable.

Actually, it’s not that hard. It’s just that so many refuse to look at it. It’s just the math.

Comment: Excellent, detailed look at the big picture for our kids, written by a very smart guy, Nick Binotti.

Comment: That’s the excess of expenses over revenue for the year — $6.2 billion, even with the cuts now in effect. Restoration of the temporary tax increase would not even cover the $6.2 billion.

A little off-topic for us, but this a great article about a guy with guts.

With a $50 million net loss heading into last fall’s enrollment period for Obamacare, it wouldn’t be surprising if Land of Lincoln Health experienced the same fate as peers that have folded across the country in the past year.

Regular readers here should be able to spot the obvious errors so, this time, we’ll let you do it.

Federal data show how Illinois workers suffer under their state’s anti-manufacturing status quo.

A market research company is growing pessimistic about Illinois medical marijuana, telling investors that retail sales could reach just $15.6 million in 2016.

Corporations moving their headquarters to Chicago arrive with only a handful of employees and a modest economic impact.

“It’s a benefits crisis. Flint’s money shortage came about largely from high municipal pension obligations and a retiree health plan that could not be properly funded after the biggest taxpayer, General Motors, moved out. “The city’s population shrunk, the city budget shrunk, and wages shrunk, but benefits for retirees could not shrink because of protections in the state constitution. Currently, pensions and retiree health care consume 33% of general fund expense and 20% of all city spending. The city has been in receivership since December 2011. “Flint is not the first victim of excessive municipal benefits—and it won’t be the

A response from a local trader on the proposed financial transaction tax.

The NYT article itself is linked here. Illinois progressives have been pushing this idea locally — the “LaSalle Street Tax.”  Whether local or Federal, it would slam Chicago’s financial sector.

Chicago’s many bureaucratic barriers to starting a business shield established businesses from competition and keep low-income entrepreneurs from getting ahead.

“Perhaps it’s time for all the Rauner critics to put their plan to save Illinois on the table. Or, as they used do say in the neighborhood where I grew up, ‘It’s time to put up or shut up.’”

Senate, Deputy GOP Leader Matt Murphy called the bill “a hollow, empty gesture.” He said it amounts to telling constituents, “Hey, we passed this bill for $720 million for you — just don’t look under the hood and realize we actually don’t have $720 million.”

Instead of spending reform and policies to promote economic growth, Illinois House Speaker Mike Madigan proposes the same high-taxing, big-spending plans that got Illinois into its current fiscal mess.

“You can boil Wednesday’s speech down to a nine-word answer from Rauner:  Because Illinois has to grow more taxpayers. That’s why.”

Comment: Hard to envision any bailout getting through Congress. It would essentially mean taxpayers in the majority of states that have been comparatively responsible would pay up for the minority of states that have been comparatively irresponsible, the major ones being Illinois, New Jersey, California and New York. How does that get through the Senate? And if the Federal Reserve Bank tried to do this without Congress there would be a national uproar.

Rauner says he wants to get the state out of legal agreements called consent decrees. The deals are a big part of the reason the government is still operating without a budget; they also impact the lives of thousands of Illinois residents. But unless you are affected by one, you’ve probably never heard of them.

Part of the problem is we don’t offer new teachers a reasonable and reliable retirement plan. New, “Tier 2” teachers are promised very little, and the promise is unreliable. They are forced to subsidize the fat cats in Tier 1. Worse, a huge portion of new teachers will get nothing at all. See our earlier article on this linked here.

In Illinois, the report says that Amazon in 2014 sold $1.8 billion worth of retail goods and would have avoided $36.1 million in sales taxes. The report equated this amount to 1,289 retail storefronts, or 4.5 million square feet of commercial space, which would mean an estimated $23.6 million was lost in property taxes.

Comment: Be assured Illinois Dems won’t support anything more than the Rauner-Cullerton deal now on the table, which could save around $1 billion per year — not nearly enough.

Comment: The Tribune brags a bit — as it should — about its role uncovering the red light camera scandal, and asks the right question about pervasive corruption.

Key people include Chicagoans Lois Scott and Jim Spiotto.

“It’s an issue that’s not going away.” Comment: In a sense, it’s not an “issue.” Dozens of Illinois municipalities are deeply insolvent — unquestionably — and don’t have a snowball’s chance of recover unless pension and other debt gets slashed, which only bankruptcy offers.

From 2009 to 2014, the state added $8.9 billion in new tax dollars to the education budget, over and above the base amount of $6.8 billion it spent in 2009. Of those new dollars spent, 89 percent went to retirement costs and just 11 percent made it to classrooms.

Comment: A pretty good article, unlike most that come out of our crappy Springfield press corps.

Comment: The pension deal would accomplish far too little.

Mautino, the former Deputy Leader in the general assembly, was the anointed pick of powerful House Speaker Michael J. Madigan (D-Chicago).

Comment: The longer we wait on real reform for public pensions, the deeper the cuts will inevitably be, making genuine hardship stories like this more common.

Illinois paid $53 million more to borrow money through its Jan. 14 bond sale than it would have paid had politicians not let the state’s debt and government-worker pension obligations spiral out of control, while driving out taxpaying residents and businesses through tax hikes and costly regulations.

At the rotten core of Illinois governance lurked this big lie: If you ran a city or a school system or a statehouse, you perpetually could force Tomorrow to pay for Yesterday and Today. Each mini-generation — a new mayor or governor, a new cohort of legislators, a new county board — could spend and borrow and force their children to pay for it all.

Entrenched political interests giving Rauner no room for reforms.

Big win for plaintiffs’ lawyers. More municipal liability for taxpayers to fund.

Read up, folks.

Comment: Yes, actually, it’s a further nightmare for a system already doomed. And Elaine Nekritz is an “expert” on pensions? She’s another reason why they are doomed.

Canhead Keeton says he can make up to $1,000 a day and even $8,000 for a weekend of renting out his head.

“[I]t’s eternally perplexing to witness how easily the Democrats in this state change the storyline, deflect and get away with lies.” Comment: Outstanding piece by Tribune editorial writer Kristen McQueary, loaded with undeniable facts. Too bad Tribune’s reporters aren’t as good.

Whoa! The Tribune’s liberal, Eric Zorn, had the question occur to him!

Comment: The “old co/new co” concept discussed in this article about Detroit is the same thing we wrote could be done for Chicago, probably without the need for a bankruptcy proceeding, but get the same result and a fresh financial start. It would save Rahm the embarrassment of a formal bankruptcy. Our earlier articles about that are linked here and here. Problem is, the state and the city would need the political will to actually fix CPS, which they do not have.

Comment: The proposal would not solve the problem anyway. However, it would save about $1 billion per year, which is certainly significant, without a constitutional amendment.

By: Mark Glennon*   The water disaster in Flint, Michigan proves you can’t “run government like a business.” And since you can’t run government like a business, the recent proposal to change control over Chicago Public Schools and authorize bankruptcy is a terrible idea.   That’s a perfectly fair summary of a Crain’s editorial this week.   It parrots the lines about Flint being used by Mike Madigan and his spokesman, Steve Brown. Flint’s water, they say, invalidates Rauner.   Only in Illinois.   *Mark Glennon is founder of WirePoints. Opinions expressed are his own. Updated to add the material

The numbers pertain to the 2012 fiscal year, the most recent year for which data is available. The average state-local tax burden is 9.9% nationally, but in these six states, state and local taxes amount to 11% or higher: 12.7% New York 12.6% Connecticut 12.2% New Jersey 11% California 11% Illinois 11% Wisconsin

Translation: Gimme, gimme, gimme.

“Illinois Governor Bruce Rauner has the hardest job in America—saving Illinois from public union power—so wish him luck in his latest showdown.”

  By: Mark Glennon*   “The Cost of Gridlock” is Crain’s headline about a recent University of Illinois Study that quantified Illinois’ higher borrowing cost.   The study said no such thing. It compared recent Illinois borrowing cost to those in 2006. Illinois paid a penalty of about $53 million on its recent $513 million bond offering, the study says, if you compare its pricing to 2006 Illinois bonds.   Fair enough. Let’s assume that’s right.   It certainly does not say that’s the price of gridlock. Many bad things happened since 2006 that hurt Illinois’ borrowing costs, beyond the

Rauner unveiled a new program Tuesday aimed at helping minority and women entrepreneurs grow their businesses, saying African-Americans didn’t come to Chicago “because we had a great welfare system or a great minimum wage,” but because they were seeking opportunity that has since “bled away.”

http://ilnews.org/7288/governor-requests-ilrb-review-of-negotiations-rep-sandack-review-could-be-good-for-taxpayers-and-more-from-inn-radio/

One leaves every five minutes.

A new report by Governor Bruce Rauner’s administration projects that the State of Illinois’ backlog of unpaid bills could grow to $25.0 billion in FY2019 from $4.4 billion in FY2015 based on current tax and spending policies.

We’re that red blob in the middle.

Comment: Jim Edgar’s culpability for our problems and lack of credibility goes far beyond the “Edgar Ramp” for pensions, for reasons we wrote about earlier.

They don’t like us there, as you might guess.

So far, AFSCME has stuck with its demands of step salary increases of 3.8 percent, along with regular wage increases. The union also has failed to budge on workers receiving overtime pay after 37.5 hours. It’s estimated the AFSCME proposal would cost the state $1.6 billion per year.

Why are some states losing people, even as the country continues to grow? Jobs, jobs, jobs (and, in some cases, aging).

The budget impasse in Illinois is beginning to depress enrollments at the state’s colleges and universities, as state money earmarked for low-income students remains tied up in a political stalemate that shows no signs of easing.

Mike Hoffman to head CMS. Jean Bohnhoff to head Department on Aging.

Total eclipse will run through southern tip of Illinois.

University of Illinois President Timothy says he agrees with some of the concerns about excessive spending at public universities raised by an aide to Governor Bruce Rauner.

“State employee unions already indicated opposition to Cullerton’s plan, which is said to include a provision that makes employees choose between retaining cost-of-living increases in retirement or taking pay raises now. That may not be the offer made to employees.”  

Taxpayers United of American chief said the “largesse is stolen from a constituency whose standard of living is far below the ‘civil servants’ they support.” He also referred to the public employee pension system as a “Ponzi-scheme” generated by “Chicago Machine Boss (Mike) Madigan” and his “cronyism with unions.”

Author Jan Schakowsky represents the Ninth Congressional District of Illinois in Congress. Presented without comment (for now).

Organized labor in Illinois is unified against Gov. Bruce Rauner’s decision to seek regulators’ review of contract negotiations with state employees. Republicans back the GOP governor.

723 otters made the ultimate sacrifice last year.

Illinois companies attracted more than $1.1 billion in venture capital in 2015, ranking it sixth in a survey of 2015 funding.

Most of it applies to all Illinois pension systems.

“The oil industry actually employs more people than the coal industry in southern Illinois, or did,” says trade association head.

In most cases, the only way to stop an SSA is to petition against it, which relies on citizens organizing and finding the voters and property owners to oppose the tax in writing. Here’s an example of how the game works: Conrad Frederick twice voted in favor of an SSA in Wheaton in 2009 and 2011, because he was a registered voter and failed to sign a petition opposing it. Actually, Mr. Frederick couldn’t have signed any petition because he died in 2008, but since he was on the voter roll, he counted in the base number to determine if

Illinois could have saved a cumulative $3.5 billion had AFSCME salaries simply grown at the rate of inflation since 2004.

Rauner took a shot at “waste” and “cronyism” in public universities Wednesday, telling lawmakers through a surrogate that schools should be more accountable for their spending before the state finds money for tuition grants which Democrats are pushing.

Chicago was a finalist to score General Electric’s corporate headquarters — and 800 jobs — but the state’s pension crisis and the condition of Chicago’s public schools helped remove it from the running, sources close to the selection process told the Tribune on Wednesday. Getting GE Healthcare was a “consolation prize.”

“My estimate is that just in the last two years we probably have lost out on about $40 million,” Sheldon said. “With the fiscal crisis that Illinois is in, I think it’s inexcusable.”

Comment: The lion’s share of the budget is mandated or nondiscretionary. Don’t expect Attorney General Madigan to lift a finger helping.

“There comes a point when the government does so much that you’re afraid to move and go forward,” said the owner of The Olive Tap. “So we’re going to use 2016 as a transition year. Instead of being angry, I’m just looking at other states and locations and making plans to move.”

The agri-business project, an aquaponics facility, will combine conventional aquaculture with hydroponics. The energy project will retrofit locomotive engines to reduce harmful emissions and increase fuel efficiency.

Illinois’ manufacturing job losses accelerated in 2015, while most neighboring and Great Lakes states continued to post gains in factory jobs.

Comment: This article isn’t about municipal finance specifically, but the point applies. All you need to know is that the raters are selected and paid by the very bond issuers they rate.

Comment: Good. Let’s hope the quality improves, too.

Comment: Count on this becoming the basic message of public unions — “It’s all Rauner’s fault.”

Comment: Follow Lincolnshire’s lead and make it a right-to-work zone.

http://www.bettergov.org/news/illinois-pols-forge-cuba-connection

Additional projections are linked here.

United Van Lines’ annual look at where people are moving to and from in the nation again showed Illinois in the third-highest spot of people who are leaving the state. The Land of Lincoln was narrowly edged out by New Jersey and New York.

“I went into this line of work because I care about kids. But just because I care about kids doesn’t mean I also want to support a government union. Unfortunately, I have no choice. To keep my job at the state, I have to pay monthly fees to the American Federation of State, County and Municipal Employees, or AFSCME, a public employee union that claims to ‘represent’ me.”

“The recurring theme from many of the political elite, government unions, and phony government watchdog groups has been to balk at any discussion of reforming Illinois’ unrestrained spending and unfunded liabilities, instead shifting the focus to raising more revenue.”

Absurdly high property taxes demand bold reforms from Illinois lawmakers. New recommendations from a state task force show exactly what kind.

Comment: She’s particularly good on local working class issues. Let’s hope she ends up somewhere independent of the sell-side bias that encumbers many pundits like her.

Taxpayers pay once for state politicians’ salaries and another 1.5 times for their bankrupt pension system. In 2017, taxpayers will contribute the equivalent of nearly $123,000 for each lawmaker just to keep the General Assembly Retirement System afloat.

Statewide in 2015, 30,357 of the state’s 100,689 retired teachers and administrators got pensions higher than their average highest pay while they were working.

  By: Mark Glennon*   The most common criticism of Governor Rauner I hear, even from his supporters, is poor messaging and communication — he just doesn’t get out and articulate his reasoning often and clearly enough. It’s a fair criticism.   To a large extent, however, it’s not fairly reported when he does. Today was a great example. Linked here is a nice, clear 13 minute audio if you want to understand his perspective on a number of things — CPS’s budget problems, Rahm’s troubles, the budget fight with Madigan and more.   Especially notable is his emphasis on

“The choice isn’t between Rauner and some imaginary progressive utopia. It’s between Rauner’s reforms and more Madigan misrule. That’s an easy choice to make.”

Comment: Be careful. Most investments will be losers.

The Flash Index fell to 105.5 in December from its 106.1 level in November. This is not only the lowest reading all year, but the lowest reading since March 2013. The Illinois economy is still growing, as the reading is above 100, the dividing line between growth and decline. However, this reading suggests that the state’s economy slowed considerably in the last part of 2015.

“You see, the Land of Lincoln is the Land of Let It Ride so long as Illinois’ elected kingpins are collecting the vig.”

Comment: This is about Puerto Rico, but pay attention. Dipping into these funds may well be the prelude to payment defaults that you’ll see with Illinois municipalities, too.

“I am one of 10 California teachers suing to end compulsory union dues in Friedrichs v. California Teachers Association, which will be heard by the Supreme Court Jan. 11. Our request is simple: Strike down laws in 23 states that require workers who decline to join a union to pay fees anyway.”

The state plans to conduct a $480 million general obligation bond sale on Jan. 14. The money would be used for road and transit projects and to pay related costs.

In Illinois, net pension benefits are actually negative for a 25-year-old teacher who teaches anything less than 26 years. Meanwhile, an Illinois teacher who stays for a total of 30 years receives a net lifetime pension benefit of $389,000. Comment: We’ve been pounding on this repeatedly. Senior pensioners are ripping off junior pensioners, not just taxpayers.

Illinois’ 2011 reform of its workers’ compensation law left a loophole that’s driving up overall costs.

  *By Mark Glennon   Much of Chicago’s media praised the city’s property tax increase as a bold step towards solving its financial crisis. Property taxes are “the best way to soak the rich,” said a Crain’s headline.   Give credit where it’s due, to Al Jazeera, for its story today, Chicago’s historic property tax increase expected to burden working class. That headline says it all. They got the facts right. Read the whole thing.   *Mark Glennon is founder of WirePoints. Opinions expressed are his own.

Democratic House Speaker Michael Madigan has been on a fundraising tear, courtesy of a quirk in state campaign finance law that allows him to amass multiple five-figure contributions from the same donor into four funds he controls. As a result, Madigan raised more than $7.1 million in 2015, including $2.8 million that arrived in December alone, State Board of Elections reports showed. That 2015 total is about $2.3 million more than what Madigan collected during the same pre-election period two years ago.

Whether Illinois ends its current budget stalemate is almost beside the point. Fiscally, the state is doomed unless it finds a solution to its pension nightmare.