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October 2009

They Run for the Money

  Have you noticed how quickly Illinois politicians move when it comes to raising taxes or fees?

  Take the Illinois Tollway Authority, for example, and how speedily it "closed" this week's decision to nearly double the rates drivers pay to use the system's highways.

  Board Chairman Paula Wolfe reminded me that her members had considered a toll increase to fund a $12 billion capital program since early 2010. 

  But public hearings on the 87.5% proposed hike did not begin until August 18th and the series of 15 sessions were crammed into the next five days ending on August 23rd.

  Incredibly, the Board met  two days later on the morning of August 25th to "vote" its approval of the 15-year program as if the members had given any real study or consideration to the public testimony, most of which was orchestrated by self-interested labor unions and roadbuilders.

  While covering what critics called the "done deal" at the Tollway's palatial Downers Grove headquarters, I could not help but think of the Chicago Public School Board's decision a day earlier to approve a "maximum-allowed" increase in the city property tax.

  On August 5th, only one week after Mayor Rahm Emanuel said Chicagoans were being "nickeled and dimed" by taxers, the CPS Board appointed by the Mayor proposed raising property taxes.  The new levy would cost the owner of an average home ($250,000) an additional $84 a year.  The increase would generate $150 million dollars of the district's projected $712 million deficit.

  Taxpayers barely had a chance to see the CPS budget on line, let alone on paper, before public hearings were scheduled five days later on August 10th, 11th and 12th. 

  Emanuel's Board voted and approved the tax increase unanimously August 24th. 


  The Tollway Authority and Chicago School Board may have learned from the "clinic" Illinois Governor Pat Quinn and the democratic legislative leaders held earlier this year on "the need for speed".

  Remember last January when the General Assembly reconvened for its "lame duck" session? 

  In a scant 48 hours ending before dawn on Jan. 12th, the democratic-controlled House and Senate had raised the Illinois corporate and personal income tax rates only hours before new members could be seated.  The next day, January 13th, the Governor signed the bill, which was retroactive to January 1st.


  Taxpayers never knew what hit 'em.

   Keep in mind that high-speed taxation is happening in Illinois as newly-elected state and city "reform" politicians use the word "transparent" to describe their new modus operandi.

  Its transparent, all right.

  Taxpayers should see right through it.




Downstate Darkness

  I began this entry from a place called Darkness, Illinois.  I am writing with my thumbs (blackberry), moving at 70 miles an hour on Interstate 55, headed back to Chicago, after spending the last two days in Springfield covering the Illinois General Assembly's "veto session".  From my passenger seat, I can't see a thing on either side of the roadway except the silhouettes of cornfields and blurred lights in the distance.

  Earlier Friday, it was a surreal scene in the Capitol building: As the bronzed likenesses of Lincoln, Grant, Daley and Douglas stared blankly from their perches above, a tuxedoed all-male choir sang festively on the rotunda's ground floor.                                Field-tripping pubescents bussed here from an unheard-of junior high school frolicked ignorantly in the corridors, brushing shoulders with many of the 177 lawmakers on their way upstairs to be willing prey for the legions of lobbyists who regularly infect this gilded, historic palace.  

  Representative Tom Cross (R-Oswego), the House Minority Leader and I shared an observation regarding the state's worsening budget crisis: "It's almost like this big gorilla in the room that nobody wants to acknowledge is here," said Cross.

  The controlling democrats, including Governor Pat Quinn, House Speaker Michael Madigan and Senate President John Cullerton took the budget mess off the table long before the fall session began.  They failed in the Spring regular and Summer special sessions to reach any consensus on tax increases and/or cuts to resolve the reported $10 billion dollar deficit and decided that with the 2010 primary election only three months away, there's no way there would be a bi-partisan agreement now.  Furthermore, it would take a three-fifths vote during the veto session, so why not they say, wait until the regular session next year.

  Senate Minority leader Christine Radogno (R-Lemont) all but accused the majority party of cowardice: "The Democrats have enough votes without any Republican votes to pass a tax increase, if that's what they want to do. I think what they recognize is the mood of electorate: (Illinois taxpayers) don't want to send more money to a system that they perceive to be corrupt and inefficient," said Radogno.

  The campaigning Governor, who's in a primary battle with State Comptroller Dan Hynes, plunged into the rotunda circus to personally greet as many Capitol visitors as possible.  At one point last week, he went on a multi-city tour to promote a new lottery ticket a few hours after he announced plans to seek a $900 million dollar loan to keep the state afloat through the end of the year.

  But what really set this reporter back on his heels was the admission by Speaker Madigan that the democratic leadership has unofficially adopted a pay-as-you-go "budget" plan that could allow the deficit and unpaid bills to persist for months after the February 2, 2010 primary.  During an exclusive interview, Madigan told me there is no set budget plan and that the amount of money the state spends these days is limited based on monthly revenue shortfalls.  

  "We do have a budget.  A budget is authority to spend money. The governor asked for additional authority yesterday. We're going to give it to him, but we're not going to give him authority to spend money he doesn't have", said the Speaker.  

  Hmmm.  Sounds like "paycheck to paycheck".  And as the current evidence suggests, when there isn't enough cash to make ends meet, the state will just borrow some more to keep the lights on.

  That's how they survive the darkness downstate.


So Many Homeless People...

...and so many more empty houses. 

   According to the city's numbers, there are at least three times as many recently foreclosed houses in Chicago as there are men, women and children without homes.

  During 2008, the city's Community Development Department reports that 9,947 Chicago houses underwent foreclosure and the vast majority of those homes remain vacant.  During the first six months of 2009, foreclosures were filed against 9,739 properties, and again, the overwhelming majority of those houses remain and will remain unoccupied.  That's nearly 20,000 foreclosures in 18 months, and at this rate, many more to come.

  Mayor Daley held his annual mid-fall news conference on homelessness reporting that Chicago's Plan to End Homelessness is working, but its resources are being pushed to the limit by an economy mired in what Daley called "The Great Recession".  During its most recent "count", the city estimated just over 6000 Chicagoans should be considered homeless.  They include just under 900 people living on the streets with the rest either sleeping in shelters or living day-to-day in interim housing.   While many of those counted as "homeless" (mentally ill, drug addicted) do not have the financial wherewithall or social skills to reclaim a foreclosed house, the comparison of the numbers, homeless vs. empty house, is stunning. 

  So isn't there some way to use the foreclosed housing stock?  Most of it is in very usable condition given the fact the foreclosure crisis only began 18-24 months ago.  Why not offer the houses for rent, or better, allow the foreclosed owners the opportunities to rent the properties until they are resold?  Said Daley, "You should see some of it.  Its amazing how many good structures are out there!".

   City officials say they have pleaded with federal mortgage insurers Fannie Mae and Freddie Mac to come up with a plan to utilize foreclosed houses the agencies now own that are boarded up, deteriorating and destroying the values of occupied homes on the same block.  '"We've argued with the Federal Government, with Fannie and Freddie", says the Mayor. "There are so many legal complications, its so complex.  If you don't get through that complexity, then basically all this housing, nobody's gonna live in it anymore".

   And if that happens, the "Great Recession" could last a long time in the hardest hit Chicago neighborhoods. 


Candidate $ix

  At 9:30 this morning, 52 year old Andy McKenna became the sixth republican to formally announce his candidacy for the party's nomination for governor. 

  The Chicago attorney ran unsuccessfully in the primary for U.S. Senate in 2004 and was the chairman of the Illinois Republican Party until his abrupt resignation during last summer's State Fair.   He calls State Senator Matt Murphy, a contender in the lieutenant governor's race, his "running mate" even though Murphy must stand for election on his own merit in the LG's primary.

  Already, one thing separates McKenna from the five other Republican hopefuls:

Money.   Lots of it.

  McKenna's father is 79 year old megabusinessman Andrew J. McKenna, Sr., the owner of the Schwarz paper company, Chairman of the Board at Oakbrook-based McDonald's and a board member at the Chicago-based AON Insurance Company and The Chicago Bears Football Club, Inc.  One of the region's wealthiest businessmen,  McKenna, Sr. has been a major funder of too many political candidates to count here, both republican and democrat.

   At the announcement, the McKenna/Murphy campaign featured a slick video called "Hair Today,
Gone Tomorrow" (as in Blagojevich).  The film depicted McKenna as a self-made business success but everyone in the room realized Andy, Jr. grew up with money and privilege unimaginable for the vast majority of voters.

*(Look for excerpts from the video in McKenna campaign commercials to begin airing on broadcast TV this week.  That's HOW the money will separate this candidate from the rest of the field.)

  McKenna, who despite his resume is calling himself an "outsider", dismissed any concern about his wealth and associations with the power elite.  He called the questions just another example of his opponents' practicing "politics as usual".

  He similarly dismissed concerns by some of the other candidates that McKenna unethically used his position as party chairman last spring to get access to their campaign strategies.  McKenna, by the way, also has hired for his campaign several former staffers who worked for him at state party headquarters.  

  But McKenna knows from his 2004 US Senate primary experience that money does not guarantee success in a statewide election.  He reportedly spent well over $10 million that year before finishing far behind ill-fated winner Jack Ryan. 

  Apparently, he's convinced himself another statewide run is worth spending more dollars out of his and his family's fortune. 

  A not-so-difficult decision when you've "got it like that".  


Daley's CPS Control Questioned


  State Senator James Meeks (D-Chicago) will introduce a bill in Springfield this week to take away control of the Chicago Public Schools from the Mayor's office.  The Reverend Senator Meeks, the pastor of the 20,000-member Salem Baptist Church, says he was moved to act after the beating death of 17 year old Fenger High School Student Derrion Albert.   Meeks says the larger problem at Fenger and virtually every other all-black or all-latino high school is that 95% of the students perform below grade level.

  In 1995, the General Assembly passed and Governor Jim Edgar signed a bill giving Mayor Daley sole authority over the Chicago Public Schools system, the third largest in the country.   The Mayor not only appoints the school board, he also names the Chief Executive Officer.  Neither of the last two  CEO's he has appointed (Arne Duncan and Ron Huberman) were professional educators.   Meeks wants a return to the system with nonpolitical educators in charge.

   A 17 or 18 year old attending a Chicago Public High School was 3 or 4 years old when Daley took over the system.  Most CPS high schoolers are kids whose entire formal educations have occurred in the system controlled by the Mayor.   Meeks points to the high percentage of high school students who cannot read at a fifth grade level and the horrific 60% drop out rate among African-American males as evidence of Daley's failures, and says,  "There needs to be a discussion about whether or not Mayor Daley's control of the schools has run its course".

   At groundbreakings for new buildings and other events the Mayor and his CEO's laud "improving test scores" and the fact that since 1995, there has been relative peace (no strikes) between CPS and the Chicago Teachers Union.  But minority lawmakers, who have whispered concerns about Daley's control for years, suspect the higher test scores are "juiced" when results are added from the new, college prep magnet schools that have attracted city kids who in years past would have attended private or parochial academies.    Meeks says test scores in general attendance elementary and high schools in the worst neighborhoods are as bad as they have ever been.  And he says the "labor peace" has allowed the CTU to resist any effort to fire unqualified teachers who are mostly assigned to the worst schools.

  Meeks says he will file his bill in the Senate during this week's veto session but does not expect committee hearings on it until January.


Stroger vs. Health Pros

  I got an e-mail news release a couple of days ago from the office of Cook County Board President Todd Stroger.  The headline read "Stroger Condemns Health Layoffs as Assault on Care for Uninsured, Poor and Unemployed".  It went on to explain that the county's health system, now overseen by an independent governing board, wants to layoff hundreds of front-line workers.  And Stroger contends that if the employees who include nurses, food service workers, dieticians, cooks, clerks and others are fired, the action could "undercut health care needs in Chicago and the suburbs".

  Wait a minute.

  Weren't the county's public hospitals (3) and clinics (16) put under the control of an independent governing board last year and re-named the Cook County Health and Hospital System?   The change was made so that professional healthcare managers could run the system and not political hacks.  The pros have apparently decided they can reduce the number of positions (most of them vacant) by as many as 1300 in the next two years and still provide the same amount of service.  But Stroger, who to my knowledge has no expertise in healthcare management, is suggesting in his news release that he knows better the staffing needs of hospitals and clinics.

  A week ago, this reporter had a lengthy "sit down" with the newly appointed Health and Hospital System CEO William Foley.  He told me that when CCHHS managers reviewed the employee list at Oak Forest Hospital, for example, they counted 120 food service workers.  Oak Forest, in the far south suburbs, has an average of only 60 inpatients a day.  The layoff's "condemned" by President Stroger include 75 food service workers at Oak Forest.

  By the way, the new management team improved efficiency so much during its first year, it actually returned $80 million of its subsidy to the county board.  We're also told that wait times for surgery at Stroger Hospital and in the county's notorious pharmacies have been reduced dramatically.

  So why is President Stroger "condemning" CCHHS?  It seems like the county's public health system is running better than it did when Stroger took office three years ago. 

  And it makes you wonder why the President isn't making that point as part of his struggling re-election campaign.


Bad Moon Risin'

  The latest poll released by Southern Illinois University's Paul Simon Institute for Public Policy indicated some serious "trouble on the way" for state democrats.  Both of the party's major candidates for Governor favor their own versions of an income tax increase to resolve the state's estimated $10 billion dollar budget deficit. 

  But the Simon survey of 800 registered voters around the state found that nearly two-thirds (65.5%) oppose an income tax increase from 3% to 4.5% as proposed by Governor Pat Quinn.  Another substantial majority of respondents (56.5%) thought that the state's budget problems could be resolved by cutting waste and inefficiency in government.

  Whoa!  That last line could have been taken from the stump speech of at least five of the six republicans running for their party's nomination.

  The poll, conducted between September 8th and October 9th, has a 3.4% margin of error.  It also revealed that Illinois voters were very fuzzy when asked which wasteful or inefficient programs should be cut.  In short, there was no consensus whatsover in the answers to those questions.

   Professor Charles Leonard, who supervised the survey said, "a huge underlying problem lawmakers face is the folk wisdom that state government is so full of massive waste and fraud that, if we could only cut them, such an action would make our fiscal problems disappear."

   Well, this reporter is no expert in folk wisdom.  But if this poll is accurate, I wouldn't want the job trying to sell Illinois voters on any kind of tax increase now or anytime in the near future.


City Hall Gamble

  While Chicagoans are relieved that city hall will hold the line on taxes, fines and fees in 2010 and that trash pick-up and snow removal efforts won't be scaled back, their Mayor and Aldermen will spend the next 12 months worried what the dice will say when they stop rolling.  

  The pols are betting that during 2010, the nose-diving economy will either "flat-line" or so improve that monthly tax revenues will recover enough to keep the following year's Chicago deficit under control.  In meetings with the Mayor's Office of Management and Budget earlier this week, aldermen were told to expect a 2011 projected deficit in the neighborhood of  "only" $94 million dollars.  That would be a number that presumably could be balanced without asking for a tax increase or drastically cutting services much more than they've already been cut.

  Believe me, the last thing the Mayor and 50 aldermen want to do during next year's budget process is recommend a tax increase or service cuts for 2011, which of course, is a city election year.  They want the bad news out of the way now.   But if the 2011 projected shortfall runs into the hundreds of millions again...as they say in a dice game...

...craps, you lose!


The Mayor Has Left The Building

  On the long-awaited morning of October 21st (today) Mayor Daley delivered his 2010 budget recommendations.  Then, incredibly, he would *not* take questions.   Hmmm...so that's the reason he held those half-baked, "teaser" news conferences (See10/19 Blog entry); so we couldn't accuse him of not talking to reporters about the budget. 

   This is "transparency" in government?  Gimme a break!!!

   Facing a deficit in excess of $500 million,  it was the most critical  budget address hizzoner has given during his 20 years in office.  As he promised in the teasers, the Mayor assured Chicagoans that there would be no tax or fee increases, that non-union city workers would be required to take 24 unpaid furlough days next year and that the administration would continue its support ($22 million) for several human services agencies. 

  What he did not say is that his administration would dip into the city's reserves (the storied "rainy day fund") to the tune of $370 million to meet the expense of running city government during 2010.   Critics say that Daley will torpedo Chicago's credit rating by depleting the reserve.  The mayor countered during his speech claiming there remained $730 million dollars in it.  But what will the city do if it has to tap the reserves again for 2011?  (Even, the Mayor says he believes the recession will continue next year and cause continued shortfalls in tax revenues)

  Having decided last night that he would not answer any questions today, King Richard left the council chambers with his Royal Guard, reportedly jumped in his waiting mayormobile and sped away from the castle. 

  Just another day in the realm.




...that's the sound of budget information coming from Mayor Daley's 5th floor office these days.

   Hizzoner called another news conference on the 2010 spending plan today and told the assembled reporters that he planned to cut $114 million next year by consolidating some city departments and asking non-union workers to take 24, that's right, 24 furlough days.

  "But Your Honor, last week you told us the budget shortfall was $550 million.   How will you make up the rest of the deficit?  Service cuts?  Layoffs?  Dipping into the "rainy day fund?"   Daley's answer: "You'll have to wait until Wednesday" (when he addresses the city council).

   Last Thursday, Daley scrambled the city hall press corps for an earlier "news conference on the budget" and told us only that no taxes or fees would be raised next year.  I called it "half a news conference" because the mayor said absolutely nothing about other actions he would take to balance it.  He didn't call today's event until a couple of hours before it began.  Then all we got was this latest "drop" of information.

  This must be some new P-R technique being used by Daley's press secretary Jackie Heard.  Like any good flak she's trying to control information so it benefits her boss and to hell with journalists trying to put it in perspective for their viewers, readers and listeners.  There is no "flow" of information from city hall on this budget issue.  

   Just a drip...drip...drip.

   Kinda like water torture.


Simon Says...

  With their candidate trailing in the democratic primary race for Governor by significant margins in early polls and their media buyers spending money on television ads as if there's no tomorrow...Illinois comptroller Dan Hynes' political advisers are spinning hard to rally the troops.  And they're getting some back-up from the most recent independent survey of voters on the contest.

  It was conducted by the Paul Simon Public Policy Institute at Southern Illinois University between September 8th and October 9th and released late last week.  It surveyed 800 registered Illinois voters and found that among those who planned to cast ballots in the democratic primary, incumbent Pat Quinn (33.9%) was favored by a two to one margin over challenger Hynes (16.5%).  But the Hynes spinmeisters are quick to point out that those in the "don't know/no answer" category were the largest plurality (35.4%) of the survey. 

  No matter what the election race or where its being contended, when a challenger's handlers see an incumbent polling at only 34% with a larger percentage of voters undecided, they begin to salivate.

  Then there's the other encouraging number for three-term Comptroller Hynes:  The Simon Poll measured his job approval rating at an eye-raising 82%.  But only 41% of those surveyed were able to respond because the rest didn't know who he was.   (Attorney General Lisa Madigan had a smaller 81% approval rating but a scored a whopping 86% in name recognition)

  So the Hynes camp is convinced that if it can get their candidate's name recognition up they can close the gap and eventually overtake Quinn.  That explains why they're spending so much of their campaign war chest on the TV ad blitz we see on ABC-7 and other stations around the city and downstate.  Quinn, who has a much smaller fund is doing all he can to make ad buys in rebuttal.

  But no matter how many times the Hynes people tell me they are in it to the finish, if they don't show some movement toward closing that 2-1 Quinn lead soon, it will affect their candidate's ability to raise money.    And Hynes will need more cash than he has now if he hopes to sprint to the wire with another televison ad barrage in January.  

  So while it might seem early in the Quinn/Hynes war...what's happening on TV now could be the critical battle of the campaign.