Illinois Comptroller Susana Mendoza is among the Illinois politicians I’m least inclined to defend, but she got a bum rap in the Better Government Association’s latest fact-check.

It’s a bottomless pit without many drastic, structural reforms.

Whatever your answer, we’re probably on the same page.

Problem? What problem?

“Reamortization” and a pension obligation bond.

Beyond words.

It’s inexcusable that Illinois hasn’t acted to amend its pension clause, which our courts have interpreted as a suicide pact.

Comparing October tax revenue to October 2017 shows increases of 9.9%, 5% and 10.7% for the “big three,” respectively, the personal income tax, corporate income tax and sales tax.

A couple broader lessons are at hand.

How far has respect for freedom of speech sunk? How unaware are some Illinois lawmakers about constitutional protection for speech? House Bill 5977, now pending in the Illinois General Assembly, informs us.

More to this than being reported.

An obscure footnote raises the question.

Just let people vote blind, Edgar advises Pritzker.

Your tax dollars at work.

An easy chance to earn at least a few positive footnotes in the history books.

Plus a whopper about his nonexistent tax plan and more.

Why mess with proven success?

Money talks.

The first step towards recovery.

We’d be so much better off if political reporters stuck to politics, which most of them understand, and stayed away from fiscal policy, which they don’t.

For a break from the usual softball interviews, watch Mark Maxwell’s 15-minute interview of Governor Bruce Rauner. His questions largely reflect arguments made against Rauner by J.B. Pritzker and Illinois Democrats, but that’s OK — he put those arguments to Rauner clearly and demanded answers. When Rauner gave unresponsive answers Maxwell repeated his questions firmly. Pritzker must be forced to submit to the same kind of interview. He has not yet given a single, serious interview. The problem is whether there’s anybody in the Springfield press corps informed enough about right-of-center perspective to do the job, and with the guts

Because you get sued for lying to bondholders but not to voters.

Maybe over $1 billion? Easy.

What cities are best positioned to shoulder additional responsibilities as federal leaders seek to cut the federal budget and workforce and reduce regulatory authority in Washington? Not Chicago, says Brookings.

A lawsuit pending against Cook Country that could cost the county as much as $250 million might well set the precedent for similar exposure to the State of Illinois of $700 to $900 million.

A twenty-fold increase in the cap on tort claims against the state is on Rauner’s desk.

To you and others who offer nothing beyond name-calling, put up or shut up. And as for any call for us to be banned from township meetings or anywhere else, drop dead.

James Spiotto is a nationally recognized legal expert on insolvency. At an upcoming Brookings Institute conference on municipal finance, he will be delivering a significant new paper, with an appropriately long title: “When Needed Public Pension Reforms Fail or Appear to Be Legally Impossible, What Then? Are Unbalanced Budgets, Deficits and Government Collapse the Only Answer.” The paper is linked here. It’s for legal and policy wonks, but it’s important, primarily because it lays out the case for why and how the federal  government and federal courts can and should play a role in solving state and local fiscal crises,

Take heart. Excellence is everywhere.

“We demand that J.B. Pritzker, the Democratic candidate for governor of Illinois, pay his organizing fellows,” says a petition circulated by a group called the Campaign Workers Guild. It goes on: As the pro-labor candidate in this race, it just doesn’t add up that J.B. doesn’t pay his student workers. Even Republican Governor Bruce Rauner, J.B.’s opponent and one of the most anti-union governors in the country, pays his interns…. We demand that J.B. uphold his campaign’s values by paying his fellows a fair wage of $15 an hour. A $15/hour minimum wage is indeed a core item Pritzker campaigns

Riverdale, Illinois is in line to sell off its share of state income tax coming from the state of Illinois as part of an upcoming $10 million bond offering. It’s the third Illinois municipality to use the new authority given by the state last year to sell its ownership in future tax revenue to a separate entity, which will hold that money to ensure repayment of the bonds. The new structure is carefully designed to ensure that, even in bankruptcy, the bank — bondholders — gets paid no matter what the consequences. We’ve written often here criticizing this new structure.

For those unfamiliar with the concept, here is the basic background on bankruptcy-for-states.

“On hot mic, @GovRauner asks House GOP leader Jim Durkin (R-Western Springs) why he didn’t carry the stack of budget docs out for him to sign. Durkin jokes that he didn’t know if that’d be a “perp walk.” They know. They all know. Republicans and Democrats alike.

WASHINGTON – The most recent obstacle to the summit between President Donald Trump and North Korea’s Kim Jong Un in Singapore has been removed. As initially reported in Washington Post last week, cash-strapped North Korea expected difficulty paying for Un’s hotel during the summit, and the United States had been looking looking for a discreet way to cover the bill while saving face for Un. State Department officials, mindful of North Korean pridefulness, worked days to find funding safe from public scrutiny. “We needed a dark, dark source,” according to a department spokesman, and the president personally intervened with very

A day of phone calls by Barack Obama to his Hollywood buddies. That’s probably all it would have taken.

Rush Limbaugh has an article posted today saying the Federal Reserve in Chicago is instituting that new statewide property tax. Uh-uh.

Twenty-two school districts filed a lawsuit against the State of Illinois. They want $7.2 billion and they want it now.

I hate to say I told you so but, no, wait. Who am I kidding?

Thank the authors of the study. They helped prove the case that the establishment that wrecked us can’t fix us and that our problems are colossal.

Shameless dishonesty.

A bit of history to keep in mind when you see former Governor Jim Edgar pontificating about our fiscal and pension problems.

“Just looking at the data”? OK, let’s.

I’m trying hard to swear less about our lawmakers in action but, man, it’s hard.

You’d think Springfield is intent on a strategy of repetition inspired by a record of success.

If you’re not into economics or following our pension crisis, this is a primer on one key matter.

“Bulldozed through” in classic Springfield fashion.

It’s simple division. Divide the dollar size of our problems by the number of high earners. The numbers are preposterous.

Illinois Treasurer Michael Frerichs is getting national headlines today on a matter he has no business whatsoever dabbling in — a matter on which he has no oversight and no accountability.

We got hold of a scorching letter sent to an Evanston school by a black member of the U.S. Commission on Civil Rights. Read it.

Remember when, in 2013, a reform plan passed by the Illinois General Assembly for the Chicago Park District’s pension fund was held up by some as an example of a cooperative approach to fixing pensions?

Silly you, if you believed it.

Just got an email from a reader who made a great point: Tribune is in fantasy land the way they end this article. They think this theft is going to leave. Are you kidding! He’s getting paid to steal now. He’ll work the latest and hardest he’s ever worked now till when he’s off payroll. He’ll pushed through more bullshit assessments ASAP because it’s his last chance. The new guy should announce any deals done b/t now and his first day will be closely reviewed. Joseph Berrios, the defeated Cook County Assessor, is the slimiest major officeholder in Illinois. His

You didn’t really think the bond sale and tax increase would fix this, did you?

Backward. That’s where we’ve gone on political will to address pensions. That was the topic in my monthly Crain’s Chicago Business article this week, and this election for governor shows it.

We now have the first study on total state and local tax burdens done since Illinois raised its income tax rate last year. Illinois has the highest burden — 51st among other states and DC. That’s no surprise since rankings done before the tax hike already had Illinois at or near the highest tax burden. Illinoisans pay a staggering 38% more in state and local taxes than the average American with median national household income, according to the study. And that’s the right metric to look at in the study: total taxes in different states on a given amount of

Few things are as dear to Illinois Progressives as our public pension system. It provides fair and just retirement security for a key part of the working class. We critics of the system are pension thieves, vulture capitalists and couldn’t care less about Mr. and Ms. Average. Well, reality seems to have a different opinion. Take a look at the superb, detailed report by my colleagues here at Wirepoints, Ted and John, on the Illinois teachers’ pension, by far our state’s largest. Their article is now reprinted in ZeroHedge and getting tens of thousands of views around the country. Here’s

There’s more egg on the faces of last year’s Tier III pension reform champions than we knew. You may remember that the current year’s budget, finally passed last July, assumed savings of $500 million per year from pension reform. The savings were to be accomplished through implementation of a Tier III benefit level for new hires. We learned last year that it wasn’t feasible to get it done that quickly, which should have been obvious from the start. Now, however, it’s clear that Tier III can’t go live until the 2020 fiscal year, which starts July 1, 2019, at the

It’s not all bad news in Illinois. Among the things really working is venture capital and, with it, the entire startup ecosystem. Last year, total venture capital invested in Illinois approached $2 billion, spread among 273 companies. That’s serious money, especially when if you keep consider that most of that money goes straight into payroll. The jobs it supports are good ones — high pay and usually on the cutting edge of technology. About half of that money comes from out-of-state investors, which is supercharged money because it doesn’t detract from Illinois money that might otherwise have been going elsewhere

People talking without speaking People hearing without listening People writing songs that voices never share And no one dared Disturb the sound of silence -The Sound of Silence, Simon & Garfunkel Few things are as annoying as the smug hypocrisy of Illinois progressives when it comes to their boss, Democratic state party Chairman and House Speaker Michael Madigan. If you live where I do in north suburban Chicago, you’re represented by lawmakers that include Jan Schakowsky, Laura Fine and Robyn Gabel. They won’t miss a chance to virtue signal about sexual harassment, but Madigan sitting on a harassment complaint until

Oral arguments in the United States Supreme Court this morning offered no additional clues about how the Janus case will be decided. At issue are mandatory dues paid by public sector employees to unions. If the case goes as expected, public employees would be free to opt entirely out of paying dues, essentially rendering all states right-to-work for public sector employees. The long-term implications for Illinois are hard to overstate. Much of what broke Illinois stems from public unions having too much power over lawmakers. How did we get unaffordable pensions, rigged collective bargaining, burdensome work rules, broken prevailing wage

Why, sometimes I’ve believed as many as six impossible things before breakfast. ― Alice in Wonderland Governor Rauner, your own party’s legislators already think you’re dishonest and every one of their votes is critical to you, yet this is your strategy? Rauner’s new ads paint his primary opponent, Rep. Jeanne Ives, as “Mike Madigan’s favorite candidate,” an opponent of property tax freezes and a supporter of higher taxes. That’s so preposterous that seven of Rauner’s fellow Republicans, each a member of the General Assembly, issued a press release yesterday calling on Rauner to halt what they called his shameful distortions

In August, we wrote here about an unprecedented appellate court decision affirming an order to an Illinois city to approve a property tax increase specifically for its firefighters’ pension. That city, Harvey, already has effective tax rates of 5.7% for residential and 14.3% for commercial properties. Yesterday, Moody’s weighed in highlighting the implications for bonds. The full report, however, is for subscribers only. Among their comments: The increased Harvey levy could make it politically and practically difficult for Harvey to raise taxes any further to support government services and pay bondholders. The city has continually defaulted on its general obligation

I’ve written constantly over the past year about dangerous, new legislation that authorized Illinois towns and cities to sell off body parts through a new bond structure, but props to Jeanne Ives for articulating it better than I did. She’s the Republican candidate for governor challenging Bruce Rauner in the primary. Ives spoke at the City Club yesterday. The whole speech is worth watching for anybody interested in Illinois’ fiscal crisis, but the segment below is about the new borrowing scheme. It authorizes Illinois municipalities to transfer to bondholders full ownership of future income that flows from the state. The

Illinois Democrats are having a ball ridiculing Governor Rauner for claiming he always submitted balanced budgets and taunting him about balancing his upcoming new submission. “LOL” tweeted Lou Lang (D-Skokie) today about Rauner’s claim. Comptroller Mendoza has been lead heckler, writing that Rauner “has 14 days to deliver a balanced budget that doesn’t involve pixie dust and magic beans.” They’re certainly right that Rauner’s proposed budgets have not been balanced. I’ve been hard on him, too, for saying otherwise. But, jeez, what hypocrisy. If you want to see “pixie dust and magic beans,” look through the Civic Federation’s list of

Governor Rauner’s fourth State of the State speech today was mostly a pep rally about Illinois’ potential and a list of what he sees as his accomplishments. If you’re looking for something concrete and new, there was only this: Today, I will sign an executive order to strengthen the policies that ensure all government employees under my office’s jurisdiction have reliable and responsive outlets for reporting acts of sexual misconduct. The order makes the Ethics Act supreme over all other laws and agreements in the state, even those in collective bargaining agreements. Offhand, that seems like a good idea. It

Cold cash is great, but the currency of the realm in Springfield is something more. In yesterday’s joint appearance before the Chicago Tribune’s editorial board, primary challenger Jeanne Ives’ two themes were that Governor Rauner is ineffective and has lost credibility. Rauner handed Ives a twofer by further undermining his own credibility, which actually reinforces both her themes. In Springfield, believe it or not, your word is the currency of the realm. Sure, many politicians lie with impunity to the public, but that’s not how the top dogs deal in the backroom with friends and opponents alike. I’ve heard that

An outline of federal legislation to help Puerto Rico got leaked yesterday. It’s linked here. Before you laugh at me for seriously discussing a potential bill sponsored by Elizabeth Warren and Bernie Sanders, know this: Elizabeth Warren, despite what she has become, was a first rate-bankruptcy scholar. When I taught as an adjunct at the University of Texas Law School she was a full professor there. I read her stuff often. It was balanced, smart and showed none of the lefty stuff she’s now infamous for. Forget about Title II in the summary, which is a cash bailout for Puerto

Get this through your head, Illinois: The only ways to significantly reduce our state and local unfunded pension liabilities is through either 1) amending the state constitution to delete the pension protection clause, or 2) federal bankruptcy. Our courts have been crystal clear on that. And the state constitutional amendment may well not work because cuts to pension obligations would still be challenged under federal constitutional principles. In any event, it would take many years to accomplish and litigate. Instead of dealing with that reality, it looks like we’re heading into another round of diddling and deceiving, and one whopper

Get real, ISBE. Last year’s $5 billion tax increase wasn’t close to enough, says ISBE, the Illinois State Board of Education. Schools need another $7.2 billion per year starting this July, they say. See the detailed article on that today by my partner, Ted Dabrowski, who asked what planet they are on. ISBE on Wednesday unanimously called for that increase in its budget request, seeking nearly twice as much funding as the state now provides, taking the total to about $15.7 billion. That would be 43% of the budget! (Total revenue in the new budget will be about $36.2 billion.)

“We know the statistics — that children who grow up without a father are five times more likely to live in poverty and commit crime; nine times more likely to drop out of schools and 20 times more likely to end up in prison.” That was Senator Barack Obama in 2008. “You know how you’re going to solve [gun violence]? Fathers in the home.” That was Jeanne Ives, candidate for governor, at a forum yesterday. This time, the audience booed and shouted. Watch the video here. Chris Kennedy walked off the stage and said, “When I hear such ignorance and

There’s a simple reason why Illinois Democratic candidates for governor don’t get specific about the progressive income tax they all want: The numbers immediately expose why it’s not the magic bullet their reality-challenged progressive supporters imagine. Just as we saw with the recent income tax hike, we’d just be putting more money into a bottomless pit. Some light emerged on this topic last week. Bob Dailber is a downstate Democrat running for governor you never heard of. He, alone, got specific, proposing a tax cut for everybody earning less than $150,000 per year and progressively higher rates on higher earners.

Which is it? 1) The sky isn’t falling and there’s nothing a tax increase won’t fix, or 2) The sky is falling but it’s all because of the budget impasse which was entirely Governor Rauner’s fault. For Illinois Democrats, it’s both. You see one or the other in virtually every communication they put out. The first one is old, though they still use it. Senate President John Cullerton said four years ago there’s “no crisis” with Illinois pensions, earning him national derision. Watch this funny video collage of House Speaker Michael Madigan’s use of the word “moderate” about any action

The monthly report for December is out from Illinois’ Commission on Government Forecasting and Accountability. It includes a comparison of state revenues for the fiscal year-to-date (which started July 1) to the same six-month period for the previous year. The only good news is a nice jump in revenue from the corporate income tax, which increased by 80% thanks to the recent corporate income tax increase and growing corporate profitability. Corporate income taxes, however, are not a huge revenue source. That increase amounts to $473 million. Personal income tax revenue increased by 27%. Interestingly, that’s a bit less than the

Lots of articles recently on the new law lowering the punitive fees Illinois charged for starting a new business by forming a limited liability company. The legislation lowers LLC startup fees from $500 to $150 and reduces LLC annual renewal costs from $250 to $75. That’s good news, but it’s another illustration how Democratic leadership in the General Assembly works and how much of the press lets them get away with it. The business community and plenty of lawmakers have been screaming for this change for years, only to be ignored by Democratic leadership in the General Assembly. Anybody familiar

You’ll find dozens of articles online today, for Illinois and nationally, about issues surrounding deductibility of prepaid of property taxes. You may even find one for your particular county. I can’t begin to attempt to summarize them because there’s so much contradiction and inconsistency. For Illinois, it’s yet another chapter in our miserable property tax system. Inconsistencies abound across Illinois counties and — at least for now — it looks like unfairly disparate results may be dictated by what county your property is in. For Cook County, we wrote earlier that it appeared second half 2017 taxes (ordinarily payable in

Check out the great display of state population trends in the Washington Post article linked here. It makes the point that the big population losers have been two states heavily dependent on coal — Wyoming and West Virginia — but it sure paints the picture nicely about Illinois. Except for those two coal states, Illinois is the biggest loser, both in the most recent year and since the 1980s. (But don’t blame Illinois’ current problems on the loss of coal jobs. The industry hasn’t employed more than 5,700 people in over 20 years and it lost only about 2,000 jobs

There’s a beacon of light in the academic world. With political indoctrination replacing education on campuses, free-thinking professors resisted by founding the Heterodox Academy. “We share a concern about a growing problem: the loss or lack of ‘viewpoint diversity,’  their site says. “When nearly everyone in a field shares the same political orientation, certain ideas become orthodoxy, dissent is discouraged, and errors can go unchallenged.” They’ve compiled a terrific ranking system for colleges and universities. Schools with high scores are the ones you should apply to if you want to maximize your odds of attending a school that welcomes intellectual

Governor Rauner on Tuesday accused WBEZ of discontinuing an “Ask the Governor” segment with him because “it’s really more of a Democrat station.” The Chicago Sun-Times responded with an editorial headlined, “Going down ‘fake news’ low road, Gov, is bad for democracy.” Rauner has never run around shouting “fake news,” says the Sun-Times, “until now.” The editorial goes on to more broadly condemn complaints about “fake news” by Trump and others, which they equate with Rauner’s comments. The trouble is, Rauner didn’t shout “fake news.” He said no such thing. He didn’t even use the term. He just said he thought

State Rep. Jeanne Ives (R-Wheaton), who is challenging Governor Rauner in the Republican primary, today announced how she’d like to tackle our pension crisis. It has three parts: Pass a constitutional amendment to change the pension protection clause. Require all new hires to enter a 401K-stlye self-managed plan. Re-negotiate pension obligations with current workers and retirees.  You’d think those steps would be obvious in light of the plain numbers on pensions, which have been clearly insurmountable for years. Not to Illinois candidates for governor. What’s the proposal from Democratic candidates? Just pay them, each says, without offering a hint of

We now have the key provisions of the new tax bill likely to become law that relate to Illinois home values and our property tax mess. This will update the piece I did last month when Congress was considering somewhat different, competing versions. The conclusion remains the same: Home values likely will drop materially, at least in the pricier Chicago area counties, and anger over high property taxes likely will grow. To see why you need to understand the paradox that results from the huge increase in the standard deduction under the bill. For a married couple filing jointly, it

Read, if you have access to it, that Wall Street Journal editorial headlined “Illinois Drives People Away.” The primary data it cites is this: The Prairie State lost a record $4.75 billion in adjusted gross income to other states in the 2015 tax year, according to recently IRS data released. That’s up from $3.4 billion in the prior year. Many of the migrants were retirees who often flock to balmier climes. But millennials accounted for more than a third of the net outflow in tax returns. That data should be on every front page, I wrote last week, but the

Still largely unnoticed is that the new school funding formula provides an additional $350 million for schools every year for ten years. Governor Rauner generally supported that and now often lists it among his successes. His amendatory veto of the bill targeted only the out-sized share Chicago got. It’s a blue state so you have to throw some big bones to the other side if you want to win — that’s the defense often put up in Rauner’s behalf. On Saturday we got one indication of whether that will work. The Illinois Federation of Teachers endorsed J.B. Pritzker. They didn’t

The Sun-Times editorial board finally wrote something everybody should agree with, linked here. “Do the time, then we’ll decide if you’ve done the crime.” That’s how they describe what’s become of due process for indigent defendants in Illinois. “A legal backlog has grown so lengthy that some defendants are getting hearings on their appeals only after they have already completed their sentences…. [L]awyers in the office have uncovered many egregious examples of innocent people who were wrongfully convicted.” The editorial goes on: It can take close to three years or more for a ruling from an appellate court if the opening

Even if you’re already off-the-charts cynical about how things work in Cook County, Part 4 of that Chicago Tribune/ProPublica report on commercial property may surprise you. Sure, owners of expensive properties use politically connected law firms to reduce their bill, but the report shows how dysfunctional the whole system is. It’s mostly small businesses and cheaper properties that get the short end of the stick. Big owners get their reductions and everybody else has to pay for it, as the report shows. The study looked at how many properties had no change in assessed valuation since 2009, despite huge, obvious

Texas, like Illinois, splits its sales tax collections with local governments. Unlike Illinois, its economy and tax base are growing. Result: Texas today announced it will share almost $700 million with localities just for collections in October. That’s a whopping increase of 10.8% over October 2016 — an additional $75 million for Texas towns and cities for just one month. In Illinois, meanwhile, sales tax collections have been close to flat, as reported in the most recent report from Illinois’ Commission on Government Forecasting and Accountability. And the state recently reduced the portion it shares with municipalities by subtracting a

Danville, Waukegan, Normal, Palatine, Hoffman Estates, Lake Zurich,  Elgin, Peoria, Normal are just a few of many I’ve seen reported in the last two days. The list goes on from communities large and small in Illinois, all scraping for more revenue. Sorry to you readers who sent others we haven’t printed. If we linked to all of them, our homepage would be overwhelmed with the same story. It’s already beyond crisis. Illinois already has the highest property tax rates in the nation. Further increases will accelerate the death spiral. Municipalities have very limited options beyond property taxes. Some are looking

Crain’s reported today that College Now, Illinois’ prepaid tuition program for state higher education, has closed to new investors while it sorts its future. It’s not to be confused with Bright Start and Bright Directions, which are the state’s 529 college savings programs. According to Crain’s, “the Illinois Student Assistance Commission (ISAC), which administers College Illinois, is huddling with state lawmakers on how to fill a gap between the dollars in the investment fund backing the program and the family-purchased contracts” to attend Illinois colleges.” “The program is marketed as a worry-free way for parents or others to lock in

A whopping $3 billion budget deficit looms next year despite the recent tax increase, and that’s using the usual phony budget accounting that ignores growing pension deficits. See today’s article by my partner, Ted Dabrowski. He lays out in careful detail (he always does) why that $3 billion is a good estimate. The budget battle will begin in Spring for Illinois’s next fiscal year, which starts July 1. Will  lawmakers vote for a $3 billion tax increase, cut spending or some combination? Good luck finding agreement on that because it will be an election year. And tempers will be inflamed

What we need most in the primary between Bruce Rauner and Jeanne Ives may not be in the cards: a debate. Rauner today would not commit to one and focused his anger on Michael Madigan, avoiding specifics about Ives. Maybe that’s smart political strategy for Rauner, which would be a shame, because just getting people up to speed on the scope of Illinois’ financial challenges remains a priority. A debate can get attention, especially if it includes a firebrand like Ives who doesn’t worry about scaring the children. More importantly, a debate would indicate whether Rauner has lost a few

On November 30 the Internal Revenue Service released new data on the deterioration in Illinois’ tax base. So far, Illinois Policy is the only source I’ve seen that has reported it. You’d think this is newsworthy: Illinois saw a net loss of nearly 42,000 tax returns to other states on the year, representing a net loss of more than 86,100 people (measured in exemptions), according to the IRS. That’s an all-time high. And when people leave the state, they don’t just take their talent, drive and ingenuity. They take their wallets, too. Illinois lost $4.75 billion in adjusted gross income,

The numbers may be staggering, but the calculation is pretty straightforward. It’s just a matter of multiplying publicly available total home values by the estimated impact of the bill. Last week I wrote about how the pending federal tax reform would reduce Illinois home values, focusing particularly on the doubling of the standard exemption. Regardless of whether homeowners would get a federal tax cut, loss of any need to use the mortgage interest and property tax deductions would eliminate major incentives for home ownership, suppressing sales prices in most of Illinois and the around the country. Let’s quantify the total

Wisconsin Governor Scott Walker today announced a national ad campaign to bring needed workers to his state. Walker said it was “critically important” to “get more bodies” in Wisconsin. The good news, or maybe the bad news if he’s talking about people already employed, is that his targets include “young professionals currently living in the Midwest, particularly in cities like Chicago….” I’ve been wondering where they expect to get all the workers. The unemployment rate in Southeastern Wisconsin is already near 2%, and that’s before some 13,000 new openings that are supposed to come with the Foxconn plant to be

Governor Rauner today announced pricing on $750 million bond issue, mostly for capital expenditures. The full press release is below. Capital spending in Illinois is a history of pork and political favoritism. The last big program was called “Jobs Now” under Governor Quinn. I wrote about some of the waste as it was announced, hidden in a Thanksgiving Eve announcement three years ago. Coulda saved the state millions if anybody had listened, , as explained here, but the press ignored it. Kristen McQueary of the Tribune also wrote a great piece last fall on why to beware of “pork disguised as

Take a look at that INN story today on Rockford. There’s a broader lesson being played out in many Illinois towns and cities. The city is considering making itself “home rule” to give it power to raise rates and to tax more things. It’s mayor says he’s looking at a hotel/motel tax increase, a fee for 911 service to private nursing homes, and a new fee on the city’s video gaming machines. Part of the rationale for those new taxes may be sensible — the city would like to swap them out for lower property taxes. But it’s unfunded mandates

Through tax hikes and other actions taken since Emanuel took office, Chicago has reduced its structural budget deficit from nearly $636 million to $114.2 million in 2018. That’s how Reuters and others reported it last week when the Chicago City Council approved a new budget. Rahm has made a point of that. But isn’t the city required by law to balance its budget? The city’s own website says it’s bound by a balanced budget requirement, so how can there be deficits, especially “structural deficits.” The answer is that the budget is little more than a plan for how the city

I’ll now have a regular, monthly column in the Government section of Crain’s Chicago Business, both online and print editions. It will appear around the middle of each month. The first is linked here. It’s about why “balanced” claims about government budgets in Illinois are so dishonest. Wirepoints readers learned that long ago, but we’re glad to be reaching a broader audience. I’m happy to report that Crain’s published it and my earlier pieces as I submitted them with no edits. They didn’t even object to the shot I took at their editorial board in the first line of the

Somebody gave a remarkably good speech at the City Club of Chicago this month about our fiscal crisis that’ s worth watching. Never mind who it was. Watch the video imagining it’s a Democratic newcomer and reformer. He’d have gotten a standing ovation. There’s nothing — absolutely nothing — in the speech that Democrats and Republicans wouldn’t agree on. But it was given by Dan Proft, so the reaction from most Illinois voters, if they were to see the speech, would be “Oh, he’s that right winger.” Or, “he’s a social conservative and has nothing to say that I want

“These are people who grew up in a certain type of environment, and behave in a certain way. And not all of them have been very beneficial to us.” That was among the comments at a recent Iowa City forum on poverty. Eastern Iowa’s Gazette has a detailed article today on viewpoints like that, and the Gazette’s opposing view. Overcrowded housing, moochers, crime, gangs, drugs – they’re all discussed in the article. The debate is nothing new for all our neighboring states. Linked here is a detailed article from three years ago in Indiana’s Journal & Courier about the the

Read yesterday’s Bloomberg piece, “Bondholders Fret as Alchemy Turns Chicago’s Junk to Gold.” It’s about Chicago’s new sale of ownership to some of its future income. Bondholders will have a first claim to more than 90 percent of the approximately $715 million of sales-tax revenue collected each year, says Bloomberg. We wrote often about the legislative authorization for this as it, and similar proposals, moved through the General Assembly. Most recently, my article in Crain’s last month was about the same financing method. Too late now. Not mentioned in the article is that the legislation also made it mandatory for

Take a look at the piece linked here from The Badger Institute, a conservative Wisconsin think tank. It lays out how they figure Wisconsin can “take full advantage of the festering mess that is Illinois,” and summarizes Illinois’ problems quite well. “Go ahead and gloat for a moment,” it tells Wisconsinites. Comparing border counties is particularly illuminating, it says. For instance, Lake County Illinois lost 1,043 private establishments on a net basis during that period, while just-across-the-border Kenosha County gained 202 establishments. It concludes: While many Illinois businesses and residents already have moved to Wisconsin, we may be only at

Two years ago Chicago Tribune editorial board member Kristen McQueary was savaged by liberal critics around the country for writing that she wished — literally, critics claimed — for a catastrophic storm to wake Chicago up about its financial problems. “The most evil op-ed writer ever,” wrote one critic. “Cheerleading for Katrina-like disaster to strike confirms paper’s bankrupt journalism,” tweeted state senator Lou Lang (D-Skokie). “Insensitive…racist,” wrote plenty of others. Well, this summer’s hurricanes back her up. Puerto Rico is going back to the drawing board on a plan to relieve it from its impossible debt burden. Hurricane Maria washed

Crain’s New York had a good piece yesterday on efforts in New York to amend its state constitutional pension protection clause. Our clause is modeled on New York’s. The primary issue is that even if you amend the state constitution to allow benefit cuts, the Contracts Clause in the United States Constitution still forbids states from passing any “law impairing the obligation of contracts.” Legal opinions differ on whether that clause would allow for benefit cuts as the article explains. That’s critical because cutting unfunded pension liabilities means cutting pension benefits, which Illinois courts won’t allow under our pension protection

Obama hasn’t even said he needs Illinois taxpayer help for construction of his presidential library in Chicago! It’s no surprise Chicago Democrats who run the General Assembly nevertheless would be talking up giving perhaps $100 million or more for the library, but Governor Rauner, too, is said to be considering it. Does anybody doubt it would take Obama no more than one day calling around to some of his Hollywood buddies to raise another $100 million? Any number of them would cough up tens of millions to get their names on this or that element of the library. The library

Four Illinois House Democrats sponsored a resolution last week calling on the United States Congress to change its spending priorities. As reported by Illinois News Network and the Illinois Review, they want money going to the military to go instead to human and environmental needs including solar panels for other countries. And who are those state reps with expertise in national fiscal matters and foreign affairs? I’m particularly familiar with two of the sponsors, Robyn Gabel (D-Evanston) and Laura Fine (D-Glenview). They are exceptionally reckless on financial matters and they are liars. I’ve seen Gabel speak assuring her constituents that

How ’bout that! Crain’s Chicago editorial board, which generally leans Democratic and liberal, just came out opposing further efforts to prohibit local ordinances creating right-to-work zones in Illinois. This past week the Illinois House failed to override a veto by Governor Rauner of legislation that would have banned local right-to-work. In fact, it would have criminalized officials who act to implement local right-to-work. Democrats are expected to try again but Crain’s says they shouldn’t. But Crain’s watered down that opinion by saying, in its last paragraph, that Illinois has a backup strategy if local right-to-is banned. They think Illinois can

TRS, the Illinois pension for teachers outside of Chicago, reported today that it generated a positive 12.6 percent rate of return, net of fees, during fiscal year 2017 (which ended on June 30) – a return that exceeded the System’s custom investment benchmark of 11.4 percent. TRS is the state’s biggest pension and accounts for roughly 60% of the state’s unfunded pension liability. That’s good news, but the problem is that TRS, like most Illinois pensions, just doesn’t have the assets on which good returns will return it to health. It’s funded ratio is just 39.8% according to the most

Not having facts sure doesn’t stop the press from editorializing on pensions. The latest is from the State Journal-Register. “We’re wondering why Rauner is pursuing a new avenue…instead of focusing his energy here on accomplishing change.” That’s the Journal-Register’s reaction to reports that Rauner is considering federal legislation that would override Illinois’ constitutional ban on cutting pensions. “What the focus should be is working, in a bipartisan manner in the Statehouse, on a way to get it under control. Oh, and what might that be? Maybe the state should “essentially refinance the pension ramp to level annual payments, like a

I got to know Scott quite well some years ago when we were law partners and worked together often on venture capital and corporate stuff. Here’s what I can assure you: He’s relentless, financially savvy and the the hardest working guy I’ve ever known. And he hates — I mean truly hates — government like Chicago has. A number of stories today describe his trip to Chicago to lure businesses to the Sunshine State. To date, he has stayed away from Illinois, I presume in deference to a fellow Republican governor. No longer. That’s bad news for us. Elsewhere, Scott

By: Mark Glennon* I’m very proud to have Ted Dabrowski joining Wirepoints as President. Our press release is linked here. Nobody has as comprehensive an understanding of our state and local fiscal matters and the policy failures that broke us than Ted. He’s exceptionally qualified. With an MBA from Wharton and a Masters in Public Policy from the University of Chicago, he could have stayed in banking to earn a fortune, but chose a career in public policy. You’ve seen many of his articles posted here from the Illinois Policy Institute where he worked previously for six years. He has

Illinois’ tax-increase-with-no-reforms would “save the state,” some supporters told us. Others claimed the new tax increases would cap growth of the unpaid bill balance: “We’ve been saying for 2 months that the higher income tax receipts would not start getting to our office until September,” Comptroller Susana Mendoza spokesman Abdon Pallasch said. “The new budget should stop [the backlog] growing. The part of the budget aimed at getting it down was the bond authority which the governor just said he would take advantage of.” It has done neither. It hit a record $16.3 billion today, according to the Comptroller’s office.

It’s no wonder so many Illinoisans remain in the dark on the severity of our pension crisis. On October 6 Illinois published its 900-page Biennial Report on all 671 Illinois public pensions. It’s the state’s most comprehensive published data on pensions, both state and local. Critically, it showed that the pensions sank another $17 billion in the most recent year covered by the report — that’s the total increase in unfunded liabilities. For some perspective, that’s roughly half the annual state government’s entire budget. Chief Investment Officer magazine has a story on it today. Illinois News Network had one last

We try to stick to policy instead of politics here, but if you want to get a quick sense of the huge debate going on among Illinois Republicans, here are two good pieces: First, read the email from Richard Porter, the Illinois GOP’s national committeeman sent to the party’s state Central Committee. It’s reproduced in an Illinois Review column linked here. On the other side is an opinion piece linked here by Chris Robling, a long-time Republican activist and commentator. It’s brutal. You decide, but one thing Porter wrote is certainly true: Madigan once again “forked” his opponents the way

With Mayor Emanuel’s annual budget address coming next week, just a few tweaks are needed to the shock-and-awe one we suggested two years ago. Chicago’s financial position has deteriorated, its insurmountable pension hole has deepened and the can was kicked again on funding for them. Changes are marked: Upon completion of this speech I am ordering implementation, as rapidly as law allows, of the emergency financial measures I will describe. Each of these measures can and will be accomplished through a combination of voluntary agreement, legislation and bankruptcy. We have prepared a full reorganization plan that incorporates these measures, all

After all the shots I’ve taken at Crain’s over the years, I have to say it was pretty big of them to ask me to write something for them. Linked here is my article criticizing the new borrow scheme for Illinois municipalities that transfers ownership of future public income to bondholders. Too late for Chicago. Just today, the Chicago City Council approved $3 billion in bonds structured that way. Some alderman worried that it may turn out like the the despised deal to sell city parking meters. No, it’s worse. That’s because there’s a good chance the parking meter deal

Kristina Rasmussen resigned today as Gov. Diana Bruce Rauner’s Chief of Staff. Remember the claim a couple months ago by Dems and certain friends in the press that right wing extremists had taken over Rauer’s staff? Rasmussen, formerly with the Illinois Policy Institute and definitely conservative, was at the top of their list. Maybe a different theory is in order now: that the appointment of those conservatives was cover for Rauner’s lurch to the left and that Mrs. Rauner, a liberal Dem, is the ascending superpower on the staff. That lurch began about the same time and turned Republicans in

The JouralStar reported yesterday that the new Tier 3 pension plan can’t be implemented before next fiscal year for TRS, the state teacher’s pension which represents over 60% of the state pension system. Tier 3 is for newly hired workers in TRS and SURS and for their Tier 2 workers who opt in. But the article didn’t connect the dots and missed the real impact. The new state budget, recently passed along with the Tier 3 changes, assumed $500 million dollars in savings from the change this year. That clearly won’t happen (though some minor changes may be realized if

If you long to see a politician just say what he thinks to a lying activist, refresh yourself by watching the video linked here of Bob Bielinski, Village President of Wilmette at a board meeting last week.

If Illinois had a buck for every time a panelist said “we’ll have to live within our means” at a City Club of Chicago forum this week our financial mess would be gone. Waste an hour if you want watching the tape of it linked here: Illinois Finances: What’s Next? Its only real significance, however, is to illustrate how nobody will put forth even a rough outline of any combination of higher taxes and spending cuts that will stabilize our situation. The silliest comments came from Rep. Elaine Nekritz (D-Northbrook), who the press regards as an expert on pension matters.

How have public-sector unions in Illinois managed to take over so much of our government? Their members represent just three percent of Illinois’ population but have captured much of our democracy. Their influence is behind most of what broke us, particularly pensions and the unfunded mandates from Springfield imposed on municipalities. Political scientists should be writing books on how they did it, and it’s a question I was asked again at a presentation on Tuesday. Well, a big part of the answer is a matter the United States Supreme Court announced this morning it will take up. It’s about forced dues:

“Unlike so many other communities, we’ve cleared our legacy costs,” said Eric Larson, CEO of the Downtown Detroit Partnership. “You think about Chicago, which is great competition, but the reality is they have a very significant pension liability that they’re going to have to deal with pretty soon. And that’s going to be all-consuming, just like it was for us.” That’s part why Detroit thinks it has a reasonable shot at landing the huge Amazon project, as described in a good piece today in Crain’s Detroit. “Economic developers in Detroit think Bezos can’t ignore the uncertainty of how Chicago and

Columnist Rich Miller wrote that he noticed Rep. Jeanne Ives (R-Wheaton) doesn’t have a legislative district office, which is unusual, so he asked her why. She sent the following answer, which speaks for itself: Rich, In the four years that I had a District Office I had maybe 5 people cold call – just walk in to find me and most the time I wasn’t there. My assistant would take a message or help them if she could. My office became a place to store a bunch of government brochures paid for by taxpayers (with my name on them) that

UPDATE 10/1/17: TRS, which is over 60% of the state’s pension system, now says they won’t be able to implement Tier 3 changes until next fiscal year, per a JournalStar article linked here. So, very little of the supposed savings of $500 million per year assumed under the new budget will be realized. The Better Government Association has a “Whodunit” article this week questioning the supposed savings of $500 million dollars per year from adoption of the “Tier 3” changes in the state pension system. Nobody can prove up that number, and it appears very clear only part of whatever

A movement is slowly forming around the country to ban or restrict noncompete clauses in employment contracts. Those clauses prohibit workers from joining a competitor for a certain period of time after termination. Both parties should get on board in Illinois, where legislation is coming. Research indicates noncompete agreements dampen competition for workers and reduce wages. Evidence also indicates states that allow noncompetes suffer from brain drain, pushing workers to leave for less restrictive places. California is among the states that disfavor noncompetes, which helps make Silicon Valley’s a hot market for workers. A Chicago Tribune opinion piece last week

The Daily Herald reported today on Illinois Treasurer Mike Frerichs boasting about his purchase of a new issue of Kane County forest district bonds using taxpayer money. Those particular bonds may be quite safe; I’m not questioning that. And Frerichs might have paid a fair price, but the circumstances and his comments suggest he might not have. According to the article, Kane County Forest Preserve District officials fretted about Illinois’ budget chaos as they prepared to take $50 million of bonds to the market in July. The state’s financial woes added uncertainty that could have resulted in greater costs to

Read Thursday’s WBEZ article on what they correctly call the “down payment” we’ll be making this year under the new school funding bill. Most people probably think the bill was just about fairness in how state dollars get allocated because that’s what its supporters always talk about. Changes inn that formula indeed were long overdue. What’s been overlooked is that the bill also calls for massive new spending. WBEZ details how many districts will be deemed underfunded and what they will be expecting. 60% of districts are underfunded today. That won’t be fixed by the additional $350 million authorized under

The Census Bureau today released its numbers on household income for 2016. Nationwide, median household income increased a respectable 2.4%. For Illinois, the increase was 1.4%. Numbers for other states are reproduced in the chart linked here. As you can see there, our neighboring states didn’t do so well, either. Nor did energy producing states. Household income growth is perhaps the key measure of how we are doing, provided growth is shared fairly. “Inclusive growth” is the term I like as a goal. And the Census Bureau included data on how that growth is being shared. It’s called the Gini

The thing about writing about Illinois government, particularly pensions, is that you’re forever discovering new things that make your jaw drop. I only recently learned that the people of River Forest saw fit to make Ralph Martire president of their school board. He runs the Center for Tax and Budget Accountability. The CTBA is a union propaganda shop we’ve often criticized for distortions and half-truths. I was truly skeptical when I reviewed today’s guest piece by Nick Binotti about that school board hiding a 100% teacher pension pick-up in their new school contract, so I looked at the contract and

It appears we have somebody to thank for saving Columbus Day in Illinois — Rep. Tony DeLuca of Chicago Heights. See the article linked here. Nice to see anybody standing up to the madness of political correctness, but especially a Dem. Don’t mess with guys named DeLuca from Chicago Heights. I already knew that from going to high school there. We had our own Tony DeLuca then from an earlier generation. Toughest guy in the Heights, which said something. Don’t know if they are related. I’ve given this Rep. DeLuca a hard time on some financial bills he has sponsored,

By: Mark Glennon* Our readership continues to grow rapidly. Thank you. We’ve added a new section at the top right for our quicktakes on major daily topics as they arise. More detailed original articles will continue to appear under Wirepoints Originals. The best and most significant articles from other sources are in the left two columns. Second, we’ve ironed out the last of the bugs on the new comment system and you can spew pretty much wherever you want. So, have at it, my fellow policy wonks, bitchers and moaners. We have some very informed readers who add great value

You read that headline right on the posted article: “Citing social equity issues, Illinois utility seeks to cut efficiency targets.” It’s about the Future Energy Jobs Act that became law last year with bipartisan support and no understanding of the multi-billion dollar cost to consumers. It pushes utilities into renewable energy sources to a degree that was rejected by neighboring states because of the extreme costs to the public. We’ve written about it often before. Electricity costs are very regressive. Amren is challenging a small part of the bill and it has gotten some support on the left — a

What’s up with Chicago’s approach to luring Amazon’s new 50,000-job second headquarters? Rahm apparently knew about it well before the stories broke yesterday and is reportedly talking to them. Good, but he evidently didn’t coordinate it with the state in any way (which seems to be the implication of today’s Tribune story on it). That’s crazy — only shows that nobody works together in Illinois, and winning this would take a gigantic, coordinated effort. It would indeed be a game-changer if Chicago got it, but you’ll find any number of stories today in papers from other towns saying they’re just

The Center for Tax and Budget Accountability has a piece out today linked here challenging the “narrative,” as they call it, about shrinking Illinois that’s being misused, as they see it, to justify policy reforms. It’s really a problem of too few people moving in, not people moving out, they say. We’re actually pretty content with how we’re doing, is their point. And property taxes have no influence on where people move, they say. No. Negative net migration is what counts, and it’s bad, no matter which side of the equation is the cause. In fact, you should expect lower