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Florida agency using progressive tax, SALT cap to lure Illinois businesses to Miami area
Other
Thursday, July 18, 2019  |   Article  |   By Cole Lauterbach | The Center Square
Economy (34) , Taxes, income (86)
An out-of-state development agency is lobbying Illinois businesses to move to the Miami area, using the Illinois' proposed progressive income tax structure as a conversation piece.

Christina Crespi with the Miami Downtown Development Authority said her trip in late June included talks with a number of financial firms in Illinois interested in a major city with lower taxes in a state with no income tax.

“A house here versus a house in Chicago would be double in income taxes,” she said.

She said the Miami Downtown Development Authority is going to states with higher taxes to convince investment firms to move to the Miami metro area's growing financial sector, something she calls “Wall Street of the South.” 

Chicago is one of the nation’s premiere cities for young workers who will become high earners, but Crespi said firms know that a proposed progressive income tax structure could hit their workers harder. 

“The threat of a progressive income tax ... raises the stakes for Illinois-based firms and their executives who may be eyeing a move to a tax-advantaged state,” she said. “They’re aware of that and a lot of companies are looking into what’s the best fit due to that depending on the size of the business.” 

She said the federal cap on deducting state and local taxes was another issue that businesses have raised concerns about. 

Florida is one of the top destinations for people leaving Illinois, seeing 10,500 more move there than did move here in 2017 alone, according to Census data.


Illinois creates fund to send state tax revenue to homeowners for property tax relief
Other
Thursday, July 18, 2019  |   Article  |   By Cole Lauterbach | The Center Square
Taxes, property (87) Mayfield, Rita--State House, 60 , McDermed, Margo--State House, 37
Illinois now has a fund that lawmakers can fill with tax revenue and will be divvied up between the state’s homeowners.

Illinois Gov. J.B. Pritzker signed the bill Friday creating the Illinois Property Tax Relief Fund. Should lawmakers decide to put state tax revenue from another source into it, that money would be split by county and show up as a rebate to anyone who qualifies for a homestead exemption.

Waukegan Democrat Rita Mayfield said in May that the fund will be used as the newly-formed property tax task force sees fit. 

“This bill simply creates a fund and there will be a task force that will look at how we’re going to fund the fund,” she said. 

Republicans questioned how the account would be filled, considering the state’s precarious fiscal situation. 

“If this bill had a mechanism that said no additional tax revenues and we pay for it with spending cuts I’d ask to be a chief co-sponsor, but my concern is this will actually incentivize tax increases,” said Rep. David McSweeney, R-Barrington Hills. 

State Rep. Margo McDermed, R-Frankfort, said simply giving homeowners a rebate on their property taxes would do little to incentivise local units of government to control their spending. 

“Where, exactly are you going to find this money?” she asked in May. “There is no money.” 

Mayfield said local school districts, the main driver of local property taxes, are incentivized by the state to control spending. 

The earliest the tax relief could be provided would be in the fiscal year 2021 which begins next July. The property task force that’s supposed to meet over the summer has yet to be enacted into law by the governor.


Illinois House Republican worries Democrats will use property tax relief task force to sell progressive income tax
Other
Thursday, July 18, 2019  |   Article  |   By Greg Bishop | The Center Square
Taxes, Graduated/Progressive , Taxes, property (87) Butler, Tim--State House, 87
 A task force of lawmakers could soon come together to address Illinois’ second-highest-in-the-nation property taxes, but one Republican said he's worried the task force will be used to drive support for a proposed progressive income tax.

One of the many bills passed in the Spring session was a measure to create a Property Tax Relief Task Force. While Gov. J.B. Pritzker hasn't yet signed the bill, Illinois House Republicans announced its members. Among others, Republican House leadership appointed state Rep. Tim Butler, R-Springfield, to be part of the group.

Butler said there are already ideas that can be fine-tuned such as relieving state mandates on local governments that drive up costs for taxpayers.

“Mandate relief for our schools, mandate relief for our municipalities, to allow them to do their job and do their job more cost effectively and that’s what’s going to help us drive down our property taxes,” Butler said.

Butler said unfunded pension liabilities aren't just a problem for state government. Local police and fire pension funds also drive up property taxes, he said.

“When I look at the property taxes I pay in the city of Springfield and I see it all goes to pensions, that happens across the state,” Butler said. “This is an issue we’re going to have to address across Illinois.”

Although Pritzker hasn't signed the bill to create the task force, he's expected to do so. Butler said once formed, the task force will have one report due within 90 days and a final report due by the end of the year. It could take time for those recommendations to translate into lower property taxes for residents.

“And we’re more than halfway through the year now, so I would encourage us to get going quickly and hopefully the task force will have meetings across the state,” Butler said.

Butler said he's concerned Democrats may have another agenda for the task force, such as creating talking points "to try to push through a massive tax increase through the progressive income tax."

“That if we raise people’s taxes on the state level through a progressive income tax that we can then cut property taxes, well I’m not going to be a part of that,” Butler said. “I am vehemently opposed to a progressive income tax.”

All Republicans opposed an amendment to change the Illinois constitution from a flat income tax to a structure that has higher rates for higher earners. They have said it will hurt small businesses and predicted the state will push higher rates onto the middle class if the state doesn’t get enough money from the initial rate proposal.

Some House Democrats held out on supporting the proposed progressive income tax amendment until the property tax task force measure was passed. Once that was guaranteed, Democrats passed the progressive tax rates and the progressive tax constitutional amendment on to voters to decide in the November 2020 election.

It’s unclear when the task force measure will be signed.

While House Republicans have appointed 15 members to the task force, Senate Democrats and Republican leadership are holding off on announcements until sometime after the bill is signed. House Democrats didn’t have any announcements immediately available.


Illinois State Treasurer Mike Frerichs
Other
Thursday, July 18, 2019  |   Commentary  |   WTAX 1240
State Fair, Fairs , Treasurer (92)
Joey McLaughlin talks with Illinois State Treasurer Mike Frerichs about the unclaimed property auction coming up at the state fair, and opportunities to see a preview of auction items. https://wtax.com/podcasts/illinois-state-treasurer-mike-frerichs-7/

Illinois trade-in tax change: One example of growing affordability challenge
Other
Thursday, July 18, 2019  |   Article  |   By Jackie Charniga - Automotive News
Capital Development Board, Capital Construction Plan (14) , Governor (44) , Taxes, sales (88)
Affordability, an issue for car buyers nationwide, is becoming even more complex for consumers at the state level.

Starting next year, customers returning to the vehicle market in Illinois will find the advantage of a vehicle trade-in diminished.

A new law, titled Leveling the Playing Field for Illinois Retail Act, will apply Illinois' sales tax to the value of vehicle trade-ins over $10,000 rather than having car buyers pay sales tax on the difference between the value of the new car and the trade-in vehicle.

For example, a customer trading in a $30,000 vehicle for one valued at $50,000 is taxed only on the $20,000 difference. Under the new law, that customer will now be charged sales tax on the $40,000 value outside of the $10,000 tax exemption.

The additional tax is one change among many in a sweeping plan to eke out $45 billion from consumers in the state to bolster public services and improve infrastructure. Additional expenses on car buyers include doubling the document fee to $300, increasing the annual vehicle registration fee $50 beginning with 2021 registrations, and raising the motor fuel tax, according to a statement from the office of Gov. J.B. Pritzker.

Additional charges to customers, who are already facing higher transaction prices and interest rates when they return to the dealership, will likely force them to postpone purchases or switch to less expensive options. Auto loan amounts, interest rates and monthly payments have been consistently rising as automaker incentives such as 0 percent financing rates all but evaporate from the market.

Meanwhile, the sales tax credit cap will likely have an impact in F&I offices. According to Larry Doll, legal counsel for the Illinois Automobile Dealers Association, customers could be pushed into leasing, or opt out of F&I products such as service contracts or GAP coverage.

"It's hard to quantify, but you've got to think it'll have a negative effect," he told Automotive News.

Rising interest rates and transaction prices over the past two years have produced an inhospitable shopping climate for new-vehicle buyers. Affordability remains a concern for many shoppers nationwide, and dealers should be cognizant of state-level fees that strain consumers' wallets. Another regulatory-driven expense could be enough to turn customers away.


Latest Chicago pension fund reports lay out frail conditions
Other
Thursday, July 18, 2019  |   Commentary  |   By Yvette Shields - Fidelity by SourceMedia
Chicago (16) , Pensions (70)

Warnings about the weak health and liquidity risks of Chicago’s pension system abound in the funds 2018 financial reports.

The net pension liabilities of the four city pension funds grew to a collective $30.1 billion in 2018 from $28 billion in 2017. The funds all recorded negative investment earnings after double-digit returns in 2017.

The city has increased contributions to all four funds in recent years as it ramps up to an actuarially based contribution next year for its police and fire funds and in 2022 for the municipal employees' and laborers funds based on a schedule to reach a 90% funded ratio beginning in 2055 from their current levels that range from a low of 16.57% to a high of 40.6%.

Those higher payments adopted under former Mayor Rahm Emanuel’s state-approved revamp rescued the laborers' and municipal funds from looming insolvency while easing and pushing off a state mandate to reach a 90% funded ratio in 30 years for the police and fire funds. The new schedules don’t begin to make a dent in unfunded ratios for years, leaving the funds at risk in an economic downturn that hits investments hard, several funds warn.

The risk of insolvency for MEABF has increased due to the 2018 investment return performance combined with fixed-dollar contributions through 2022, which do not change when the fund experiences unfavorable investment performance,? the Municipal Employees' Annuity and Benefit Fund warns in bold print in its 2018 actuarial report.

We strongly recommend an actuarial funding method that targets 100% funding where payments at least cover interest on the unfunded actuarial liability and a portion of the principal balance, the report urges. If the fund becomes insolvent, the employer will be required to make contributions on a pay as you go basis, which means the employer would have to pay all benefits as they become due.

A separate warning also presented in bold type lays out the challenges of managing annuity payments and investments with such a weak funded status at 25%.

The investment return assumption is based on the fund being invested according to the target asset allocation in the investment policy statement. To the extent that the liquidation of assets to pay benefit payments and expenses requires a shift in investment allocation to more liquid, lower return asset classes, a lower discount rate will likely be required in the future, the municipal fund’s report says.

A lower discount rate, which is a factor in calculating the unfunded liabilities, would drive the net pension liabilities up.

Mayor Lori Lightfoot and her finance team know well the situation they’ve inherited.

It is no secret that our city faces extraordinary financial challenges, driven by a legacy of pension liabilities, mounting personnel contract increases, and growing debt service obligations all of which have been long in the making. While these costs loom large for next year and beyond, our administration will be looking at how city government functions to develop a sustainable road-map for the future,? Lightfoot said in a letter earlier this month introducing the city’s 2018 comprehensive annual financial report.

The city’s report includes the CAFRs for all four funds and all but the police fund have posted 2018 actuarial valuation reports on their respective websites.

The most urgent demand facing the city is the need to cover rising contributions. The phase-in period is covered by higher property taxes, a 9-1-1 surcharge, and a water-sewer fee but the city must find another $283 million next year when the actuarial contribution requirement hits for police and fire and another $310 million when the municipal and laborers? requirement hits.

All four continue to require higher annual contributions but at a more modest level. The 2018 contribution of $1.18 billion grew to $1.3 billion this year. It then rises to $1.67 billion next year, $1.78 billion in 2021, $2.13 billion in 2022 and $2.18 billion in 2023.

The path Lightfoot will take is unclear and her chief financial officer, Jennie Huang Bennett, said this month it’s too early to rule in or out any fiscal maneuvers to balance the city’s books and cover rising contributions as the city continues eyeing expense cuts and management efficiencies before raising taxes.

Lightfoot recently pitched the idea of a merger involving other local governments and/or a state pension takeover but Gov. J.B. Pritzker threw cold water on that idea, saying the state’s barely investment grade rating couldn’t afford such a move. The idea of tinkering with the funding schedule has been circulated, but any such move given the weak funded status could draw rating downgrades.

Chicago’s stable rating outlook for its BBB-plus rating reflects ?progress in stabilizing its pension funds and placing them on a path to actuarial funding as well as its narrowing budget gap and steps to more structurally align its budget,? S&P Global Ratings lead Chicago analyst Carol Spain said in a recent report that warned of a potential downgrade if ?the city backslides on its progress toward structural alignment on full actuarial pension funding.

The city’s GO bonds are rated BBB-minus by Fitch Ratings, A by Kroll Bond Rating Agency and junk-level Ba1 by Moody’s Investors Service. All assign a stable outlook.

The municipal employees' fund saw a market return of negative 4.9% last year, according to the results prepared by Segal Consulting. It assumes a 7% positive return.

The actuarially funded ratio dropped to 25% from 27.4% a year earlier. The net pension liability rose to $12.89 billion from $11.7 billion a year earlier. The increase in the NPL is primarily due to the lower than expected market value investment return, the report says.

The city’s 2019 contribution of $421 million is far short of an actuarially determined contribution the fund estimates at $1.12 billion. Each year there is a contribution deficiency leads to an increased deficiency in all future years, warns the report.

The phase-in period calls for contributions of $344 million, $421 million, $499 million, and $576 million leading up to an ARC in 2022 with the target of a 90% funded ratio in 2057.

The Laborers' & Retirement Board Employees' Annuity & Benefit Fund of Chicago saw a negative 6.36% return on assets in 2018. It assumes a 7.25% rate of return.

The actuarial funded ratio fell to 40.6% from 48.2% a year earlier. The net pension liability rose to $1.6 billion from $1.36 billion in 2017.

The city’s phase-in to a 2022 actuarial contribution for payments of $48 million, $60 million, $72 million, and $84 million in the years leading up to 2022. The 2019 contribution of $60 million compares to the $148 million that would be actuarially based.

While the new statutory funding policy is an improvement over the prior funding policy, it does not comply with generally accepted actuarial standards for the funding of retirement plans, and therefore we recommend strengthening the policy, says the report from Gabriel, Roeder, Smith & Co.

The Policemen’s Annuity and Benefit Fund of Chicago saw a loss on investments of 5.36% last year. It assumed a 7.25% rate of return for 2018. The funded ratio held steady at 23.8% from 23.7% in 2017. The net pension liability also held steady at $10.4 billion compared to $10.3 billion in 2017.

The phase-in cycle called for statutorily set contributions of $464 million, $500 million and $557 million in the last three years and $579 million this year. It rises to $737 million next year when the actuarially based contribution hits with modest increases then projected between $20 million and $30 million in future years, according to the comprehensive annual financial report for 2018 prepared by Mitchell & Titus LLP.

The separate actuarial valuation that has not yet posted was prepared by Gabriel, Roeder, Smith & Co.

The Firemen's Annuity and Benefit Fund saw a negative 5.2% return in 2018, when it assumed a positive 7.5% return. Its funded ratio fell to 16.57% from 19.6% and the net pension liability rose to $5.2 billion from $4.6 billion in 2017.

The city’s statutory ramp called for contributions over the last three years of $208 million, $227 million, $235 million and $245 million this year, leading up to an estimated ARC contribution of $371 million next year. The $245 million contribution this year falls short of an actuarial contribution of $442 million.

The funding policy significantly defers contributions? from a previous state mandate for all public safety funds across Illinois, the report warns. The unfunded liability is projected to continue to rise until 2027 when expected ARC payments will begin to bring down the tab down.

We continue to recommend that the plan sponsor seriously consider making additional contributions to ensure that there are sufficient assets available in the fund in all years to pay for promised benefits, reads the report.

This is a severely underfunded plan. The funded ratio is only 16.8% using market value of assets and it’s not projected to even reach 50% funded for another 26 years, warns the valuation report prepared by Gabriel, Roeder, Smith & Co.

The report further warns that if payments are not timely the fund may not have enough liquidity to continue making all the required benefit payments without changing its investment portfolio to one comprised of a larger percentage of short-term investments.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities. Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

Planned Parenthood of Illinois facilities remain open after court ruling
Other
Thursday, July 18, 2019  |   Article  |   By Greg Bishop | The Center Square
Abortion (1) , Medicaid, Managed Care Skillicorn, Allen--State House, 66
Planned Parenthood of Illinois isn’t getting any more federal tax money, but it has received millions of tax dollars from Illinois in the past decade.

A federal appeals court last month upheld President Donald Trump's new rule prohibiting federal dollars from going to family planning centers that promote abortion.

Planned Parenthood of Illinois President and CEO Jennifer Welch said the organization isn't taking any more federal dollars because of it, but that its “doors remain open.”

“We remain committed to ensuring patients can continue to receive high-quality, comprehensive, and affordable care at our 17 health centers statewide,” Welch said. “Long term, the gag rule will impact our ability to provide quality health care to all our patients. For now, Planned Parenthood of Illinois continues to offer financial assistance to qualified patients because of the generosity of our donors. At this time, we do not anticipate making service or staff cuts.”

Planned Parenthood provides cancer screenings, HIV testing and birth control services.

Planned Parenthood of Illinois received $18.6 million from Illinois taxpayers from 2009 to 2017, the most recent years available, according to the Illinois Comptroller’s Openbook website.

State Rep. Allen Skillicorn, R-East Dundee, said he expects that to see more state funding for Planned Parenthood of Illinois after Democrats passed a number of policies to protect abortion rights. Gov. J.B. Pritzker has said he wants Illinois to be the most progressive state for reproductive rights.

“Many taxpayers believe this is unethical and they don’t want their taxpayer money going to fund this but the Illinois legislature and the Illinois government has deemed otherwise,” Skillicorn said.

In 2017, the Illinois legislature passed House Bill 40, which allowed Illinois tax dollars to cover abortions for Medicaid recipients and for state employees on the state’s health insurance plans. Former Gov. Bruce Rauner signed House Bill 40.

Earlier this year, Pritzker signed the Reproductive Health Act, which expanded abortion protections.

Skillicorn said he’s working to get enough support to reverse course in Illinois. However, Democrats have supermajorities in both chambers.

One policy Democrats want to repeal is the state's parental notice law, which requires parents of minors seeking an abortion to be notified. Skillicorn said could lead to more state tax dollars being used for abortions.

“You could have out-of-state young ladies being transported into Illinois and someone that is under the age of consent is automatically going to be deemed Medicaid eligible so literally Illinois would be the capital of travel abortions and travel underage abortions,” Skillicorn said.


St Treasurer Michael Frerichs
Other
Thursday, July 18, 2019  |   Commentary  |   WFMB 1450
State Fair, Fairs , Treasurer (92)
The Treasurer previews the State Fair auction of unclaimed property. http://www.sportsradio1450.com/podcast-am-springfield/

SIU still months from new funding formula, may still give SIUE greater share of new money
Carbondale Southern Illinoisan
Thursday, July 18, 2019  |   Article  |   By Gabriel Neely-Streit The Southern Illinoisan
Education--Higher (37)
SPRINGFIELD — The Southern Illinois University Board of Trustees has received the results of a study commissioned to reassess the distribution of state funds between SIU Carbondale and SIU Edwardsville.

But it did not get the clarity it hoped, said Board Chair J. Phil Gilbert.

 

Instead of an updated mathematical formula indicating what share of state funds each campus should get based on costs, the firm AGB Consulting returned a set of policy recommendations to help the board create its own formula.

 

To Gilbert, that feels like a “punt,” he said, dodging the most controversial aspect of the project: quantifying the differences between SIUC and SIUE.

 

Since about 1975, state funds have been allotted on a roughly 64% to 36% split between Carbondale and Edwardsville— about $91.4 million and $53.8 million respectively in Fiscal Year 2018.

 

But calls to invest a greater share in SIUE have intensified as the university equaled and then eclipsed SIUC in enrollment over the last two school years.

 

Leaders of both campuses, as well as the board and Interim President J. Kevin Dorsey, agree a re-examination is warranted.

 

But they know its findings could vary greatly, depending on how the campuses’ costs are weighted.

 

A university’s instruction costs vary by academic discipline and by degree level, with doctoral students considered more expensive to educate than masters students, themselves more expensive than undergrads.

 

Post-secondary students are more common at SIUC, a high research classified Carnegie institution that awarded 880 masters degrees and 167 doctorates in FY 2018.

 

And Carbondale takes on other disproportionate costs too, according to Chancellor John Dunn and his chief of staff, Matt Baughman, including the facilities, payroll and salary costs for many SIU system employees.

 

“You have to look at what are the charges assessed or assigned to each campus,” Dunn told the board. “Those are not 50-50.”

 

The funding distribution must also account for fixed costs, pointed out Trustee Ed Curtis.

 

That could be a particular challenge for SIUC, where infrastructure built for higher enrollment, like the towers, has sat empty.

 

Lacking clear mathematical weighting directions from AGB, the board will now “take the bull by the horns,” Gilbert said at Wednesday’s board meeting, creating an ad hoc committee of trustees and administrators to work out a formula.

 

That places the board right back at the center of a potentially future-altering decision.

 

On some weighting schemes, students’ educational costs vary by factors of one or two. On others, students at different levels, in different disciplines, are considered more expensive to educate by factors of eight, 10 or 20.

 

The board hopes to agree on a weighting formula by its December meeting, Gilbert said, drawing on internal data and the Illinois Board of Higher Education’s annual statewide institutional cost comparisons.

 

The funding committee will be led by Interim President J. Kevin Dorsey, who told the board he hopes to save his successor from having to make such a potentially contentious decision right out of the gate.

 

“There are two primary players in this, and that runs the risk of having, quote, a winner and a loser in the eye of the beholder,” Dorsey said. “Wouldn’t it be better to have this be on the back of the guy who’s no longer here, as opposed to the new person coming in?”

 

But questions will remain even after a weighting framework is established, Gilbert said.

 

Will the universities adjust weighting as their costs, enrollment and demand for different degree programs change? How frequently will they adjust? Who will be in charge of gathering data to make such changes?

 

“It’s going to be a process with our new president and this committee to try to come up with a plan,” Gilbert said. “This is complex, and there are a lot of other factors besides enrollment.”

 

Most members of the board concurred on one AGB recommendation: make any allocation changes with future money, instead of shifting currently budgeted funds between campuses.

 

That was what former President Randy Dunn attempted in April 2018, proposing a $5.1 million transfer from SIUC to SIUE as an initial step toward equality for Edwardsville, while the campuses waited on the funding study.

 

The plan became mired in controversy, culminating in Dunn’s ouster.

 

But now, with Dunn gone and an updated funding formula still months away, the board appears poised to make a similar, albeit smaller, show of good faith toward SIUE.

 

A measure up for approval at Thursday’s full board meeting would give SIU Edwardsville fully half of the 5% funding bump given to the two campuses in the state budget, instead of the traditional 36-64 split.

 

On Wednesday, SIU Carbondale Professor Marcus Odom challenged its logic in comments to the board.

 

“Currently there is no factual basis for this. Nothing objective supports the proposed 50-50 split,” Odom said. “Making any changes now is untimely.”

 

If approved, the measure will award about $1 million to SIUE that would have gone to SIUC, Odom added, a significant reduction to the 5% operating budget increase that the Carbondale campus was expecting.

 

“This will have harmful consequences at SIUC,” he said, imploring trustees to wait for the funding study's results before reallocating any money.

 

However, multiple trustees, including Chair Gilbert, spoke up in favor of the plan on Wednesday.

 

“There’s never going to be a good time to do this, but this is a start,” Gilbert said. “Things have changed. We have a footprint at Carbondale for over 20,000 students with 11,000 students (currently enrolled) and there’s going to have to be some changes to Carbondale.”


FBI tracks Michael Madigan in Chicago’s great tiger hunt
Chicago Tribune
Thursday, July 18, 2019  |   Article  |   John Kass

In all the heat and excitement over the capture of a little bitty gator in a park lagoon, many of you have been distracted from the most dramatic hunt of all:

 

Chicago’s great tiger hunt.

 

But this tiger has cold blue eyes and eats apple slices for lunch.

 

In old India, even in oppressive heat and humidity, the British wore starched white shirts, proper regimental neckties and linen suits, just like Rudyard Kipling. They’d send beaters into the jungle in a great circle, miles in diameter, to pound the bush with sticks and torch the grass. As they walked forward, beating, torching, the circle tightened until the tiger had no place to go.

 

In modern Chicago, FBI agents also wear suits on the hunt. But they stalk the silent carpeted corridors of politics, commerce and the law. They look for signs of political muscle. And they, too, use bait, but not stupid goats. Instead they catch jackals and send these out to lure the tiger into traps.

 

Chicago’s great tiger has no stripes. He’s no Shere Khan.

 

He’s Mike Madigan, the longest-serving state legislative speaker in American history, the Democratic political boss of Illinois who controls just about everything.

 

“It’s obvious the feds are going after Mike,” said a Madigan supporter. “I don’t think he’s done anything wrong. And he’s too careful for them. But look at what they’re doing.”

 

Whether he’s done anything wrong or not, we just don’t know. He’s not been charged with a thing. But it’s clear the FBI is taking the ground away from him by raiding his allies.

The Southwest Side politician is careful, disciplined, cautious and precise. He’s never been charged with even the hint of crime. He’s made his fortune as a property tax appeals lawyer, representing much of wealthy downtown Chicago real estate, and leveraged his political clout to do so.

 

But Boss Madigan holds Illinois politics in the palm of his tiny pink hand. He runs the selection of judges, draws the state’s political maps, controls all legislation and all taxes. And he’s thought by many to be the reason Illinois is in the J.B. Pritzker toilet.

 

And tiger or no, the circle around Madigan is shrinking with the feds beating the bush and burning the grass, waiting for him to make a mistake.

 

Just a few days ago, the FBI raided the home of Madigan ally and former Chicago Ald. Michael R. Zalewski of the 23d Ward in Madigan’s district. Zalewski was golfing when the FBI knocked at his door.

 

Reports from WBEZ-FM and the Better Government Association — citing unnamed sources — suggest the FBI wants information about Zalewski’s relationship with Commonwealth Edison, and a Madigan loyalist and lobbyist named Mike McClain.

 

Zalewski’s daughter-in-law, Carrie Zalewski, was recently appointed by Gov. Pritzker to run the Illinois Commerce Commission, the agency that regulates ComEd. The parent company of ComEd released a statement acknowledging subpoenas had been received from a federal grand jury.

 

No charges have been filed. It’s all just in the investigative stage. But the beaters are busy with their sticks and torches.

 

In May, the Tribune first reported that federal agents raided the South Side home of Kevin Quinn, another top Madigan political operative and brother of Madigan’s silent alderman, Marty Quinn, 13th.

 

Madigan’s alderman before Quinn was also ostentatiously silent. Frank Olivo said perhaps only 20 known public words in all the years he served as 13th Ward alderman. And even then, you could barely hear him. Mike likes them quiet.

 

It all may have started with former Ald. Danny Solis, 25th. He hasn’t been charged with anything. But it was his fondness for massage parlors, free Viagra and Asian women at those massage parlors — “Oh good. Good, good, good. I like Asian,” Solis said on federal tape — which may have led him to cooperate.

 

He’s been wired up for years and he talked to them all, Burke, Madigan, all of them. I wouldn’t doubt that he shared a few private words with former U.S. Rep. Luis Gutierrez, who’s gone stone-cold silent. Silence is odd for Luis.

 

Most of Chicago already knows about Madigan ally Ald. Edward Burke, 14th, the former chairman of the City Council’s Finance Committee who has been indicted on multiple corruption counts. The feds have years’ worth of phone tape on Burke, and recent news stories that he’d been using a burner phone suggests that he knew good and well the federal circle was tightening on him too.

 

Burner phones are temporary phones. Once you’re done with them, you throw them away. And many think they’re secure. Several were used by the former Chicago police Chief of Detectives William Hanhardt when he was running an Outfit-sponsored national jewelry theft ring.

 

But burner phones didn’t help the late Hanhardt. The FBI knew what he was up to. And I bet some of the same FBI agents working the Burke case worked the Hanhardt case.

 

“What do you think they’re doing?” said a smart political guy who reveres Madigan. “They go after Zalewski, and this Quinn? They have Madigan on tape. They’re beating the bushes, hunting him.”

 

Will they get him?

 

“I don’t know. He doesn’t say much. If you ever get Madigan on the phone, you get the feeling you’re talking to yourself. He doesn’t say a thing. He’s a good listener.”

 

If he is a good listener, then he can hear them out there, with their torches and sticks, the great circle growing smaller.

 

Mike, Mike, burning bright, in the forests of the night.

 

Listen to “The Chicago Way” podcast with John Kass and Jeff Carlin — at www.wgnradio.com/category/wgn-plus/thechicagoway.


First a downstate Goodwill announced it would stop paying many disabled workers. Facing outrage, the local nonprofit rescinded the decision and apologized.
Chicago Tribune
Thursday, July 18, 2019  |   Article  |   Angie Leventis Lourgos
Disabled (47)

Illinois lawmakers expressed outrage after a downstate branch of Goodwill Industries announced plans to stop paying many of the nonprofit’s disabled employees, citing expected rising payroll costs due to the pending state minimum wage increase.

 

Yet after much backlash on social media, Land of Lincoln Goodwill Industries in Springfield on Wednesday reversed its decision, with the chief executive officer issuing an apology to “our constituents, our clients and our faithful donors.”

 

“Our recent decision regarding the (Vocational) Rehab program and the resulting harm it might have caused falls short of living up to our mission and we apologize for this error in judgment,” said Land of Lincoln Goodwill President and CEO Sharon Durbin in a written statement, citing an outpouring of comments regarding plans to no longer pay the workers. “We are reversing the decision to realign our Voc Rehab program and those participants affected will return to their part time skills training program with pay.”

 

A Land of Lincoln Goodwill spokesman confirmed a letter was sent in mid-June to a dozen workers with disabilities in a job skills program, letting them know they would no longer receive a paycheck for their work because of budgeting constraints attributed to a recently approved Illinois minimum wage increase.

 

The charity now says all of those workers will receive their paychecks.

“All affected individuals will keep their previous jobs and their previous wage rate (minimum wage or higher),” said Patrick Anderson of Land of Lincoln Goodwill in an email Wednesday. “Back pay is being discussed now and most likely will happen for the affected individuals.”

 

The nonprofit receives state funding for contract work and some reimbursement for services provided to people with disabilities. The charity does not pay taxes.

 

Land of Lincoln Goodwill, like other Goodwill agencies, is a separate entity operating independently under its own board of directors, Anderson said. Officials with Goodwill Industries International did not immediately respond to requests for comment.

 

The local charity, which is based in Springfield, has 15 central Illinois retail stores and donation centers, and employs over 400 people.

 

Many Chicago lawmakers on Tuesday expressed anger that the nonprofit would threaten the pay of workers with disabilities, strongly advising the charity to reconsider.

 

[Most read] ‘Mai Tai Guy’ defends himself after swiping home run ball from kids: ‘You know the rules here’ »

“Seems to me that this is the opposite of what ‘goodwill’ means,” state Rep. Kelly Cassidy, a Chicago Democrat, said on Twitter.

 

 

Rep. Kelly Cassidy

@RepKellyCassidy

 Seems to me that this is the opposite of what “goodwill” means. Hey @GoodwillIntl - You can’t say our donations “create jobs” when your greed means your clients don’t get paid while your CEO makes $165K & her son makes $95K https://www.wcia.com/news/local-news/goodwill-pulls-paychecks-from-disabled-workers/ …

 

 

Goodwill pulls paychecks from disabled workers

CEO blames state’s minimum wage increase SPRINGFIELD, Ill. (WCIA) — An iconic nonprofit thrift store is crying poor in the face of looming payroll increases, and it is announcing plans …

 

wcia.com

48

10:11 AM - Jul 16, 2019

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State Sen. Julie Morrison, D-Deerfield, said in a written statement that the Goodwill agency in 2018 received nearly $400,000 in state grants and contracts intended only to be used for workers with disabilities. She also accused the nonprofit of using “false excuses,” adding that Goodwill is permitted by the U.S. Department of Labor to pay these workers below minimum wage.

 

“What are these contracts going toward if not for the employment of individuals with disabilities?” Morrison said. “That is something we will be looking into. We need Goodwill to return to its mission of working to lift up those experiencing barriers to employment, especially those with disabilities.”

 

The story, first reported by local news station WCIA, also drew the ire of U.S. Sen. and presidential candidate Bernie Sanders.

 

“No worker should be told they’re lucky to get less than minimum wage,” Sanders tweeted on Tuesday. “People with disabilities deserve jobs that pay a living wage. It’s time to end the subminimum wage and guarantee truly integrated employment opportunities for people with disabilities.”

 

 

Bernie Sanders

@BernieSanders

 · Jul 16, 2019

 No worker should be told they're lucky to get less than minimum wage. People with disabilities deserve jobs that pay a living wage. It's time to end the subminimum wage and guarantee truly integrated employment opportunities for people with disabilities. https://twitter.com/markmaxwelltv/status/1150995873058426891 …

 

Mark Maxwell

@MarkMaxwellTV

The President and CEO at Goodwill defended her decision to pull paychecks from disabled workers:

 

"It really was not a job," she said. "We gave them through grace out of our budget to pay them so they had a paycheck to go home with."https://www.wcia.com/news/local-news/goodwill-pulls-paychecks-from-disabled-workers/ …

Rishi reddy

@Rishireddy12

Why Goodwill so cruel?

 

10:08 AM - Jul 17, 2019

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Land of Lincoln Goodwill CEO and president Durbin’s salary in 2018 was $164,849 with $6,145 in benefits, according to Internal Revenue Service documents.

 

The local nonprofit’s stated mission is to “provide rehabilitative and job-training services to persons with disabilities and other barriers to employment in and around Springfield, Illinois,” according to IRS forms.

 

Gov. J.B. Pritzker signed legislation in February to increase the state’s minimum wage to $15 an hour by 2025; the last time Illinois raised its minimum wage was in 2010, to $8.25 an hour.


Infrastructure vote shows state serious about the future
Daily Herald
Thursday, July 18, 2019  |   Letter to Editor  |   John L. Carrato

Policymakers in Springfield sent a strong positive signal this spring with the passage of a historic infrastructure investment program that will begin to stabilize the state's economic base and improve the quality of life for all Illinoisans. As the Chief Executive Officer of an Engineering News Record Top 500 engineering and design firm and a local resident, I have experienced firsthand the difficulties faced by businesses in Illinois over the past 10 years who have lost talented and highly skilled employees to other states where they can find work.

 

It's ironic that until this spring, the transportation system on which people and businesses rely for their daily needs has been left to crumble, while elected officials have continued to use this same, formerly world-class, system as the main selling point for attracting business and jobs to the state.

With their approval of a sustainable and constitutionally protected funding program to allow Illinois to rebuild its world-class infrastructure to meet today's demands, policymakers have sent the message that they do believe in our future.

 

Thank you to area Reps. Carroll, Conroy, D'Amico, Didech, Edley-Allen, Martwick, Mazzochi, McAuliffe, Moylan, Mussman, Walker and Willis and Senators Tom Cullerton, Harmon, Gillespie, Link, McConchi, Morrison, Mulroe, Murphy and Villivalam for their support.

 

John L. Carrato

 

Arlington Heights


What The Decisions Of Illinois Goodwill Say About Overall View On Disabled Workers
Forbes Online
Thursday, July 18, 2019  |   Commentary  |   Sarah Kim Contributor
Disabled (47) , Minorities (66)
The state of Illinois is to raise its minimum wage from $8.25 to $9.25 by January of 2020, $10 by the next July, and then a dollar more each year until it reaches $15 by 2020. Although this seems to be a step in the right direction for workers’ equality, a certain population is going to take a fall because of it: employees with disabilities.

Specifically, the President and CEO of Land of Lincoln Goodwill in Central Illinois, Sharon Durbin, told a dozen of the thrift store’s workers with disabilities that they’ll no longer receive paychecks as a result of the state’s new minimum wage. She also warned the remaining 11 disabled workers on payroll that their jobs are in danger as well.

Goodwill Industries International Inc. is filed as a 501(c)(3) organization, which exempts them from paying taxes, allows them to collect state funding, and awards them with state contracts. Additionally, the organization has permission from the federal government to pay disabled workers below the minimum wage floor.

A 1938 provision in the Fair Labor Standards Act, Section 14 (c), permits employers, who apply to the Department of Labor for a waiver, to pay lower wages to people with disabilities.

As a nonprofit organization that claims to help people with disabilities "reach their full potential," Goodwill's practice of paying its employees with disabilities sub-minimum wages seems
According to a local news outlet, Durbin sent out a letter dated June 14 to the over 400 employees at 15 retail locations that she oversees. The letter outlined the upcoming changes to the Vocational Rehabilitation Program, which employs people with disabilities and provides them with work training. 

 “As of January 1, 2020, a new minimum wage law takes effect which will increase our payroll cost significantly,” Durbin’s letter reads. “Over the next five years, the added expense will exceed two million dollars if we do not make changes… That means that many of our clients will no longer be working to receive a paycheck, but will be involved in some type of learning based initiative.”

The participants of the vocational program get paid $8.25 per hour, which Durbin considers as an act charity. No matter how long they’ve worked for Goodwill, their pay remained the same. Durbin explains, "it really was not a job. It was a work component and through it we gave them through grace out of our budget to pay them so they had a paycheck to go home with."

Meanwhile, Durbin earns an annual salary of $164,849 and $6,145 in benefits, according to public records. She further defended the decision by explaining that disabled workers need additional training and are not as efficient as traditional employees.

However, this isn’t the first time that Goodwill is under scrutiny for exploiting and underpaying its disabled employees. A 2013 NBC News investigation reported that the organization used the 1938 labor law provision to pay disabled workers as little as three to four cents an hour. Defenders of Section 14 (c) say that it is reasonable to pay disabled workers sub-minimum wages since otherwise they’ll be left with no job at all.

As of later today, due to the enormous public outcry, the policy was reversed. In a statement to INSIDER, Durbin stated, "The outpouring of comments regarding our decision to refocus the Vocational Rehab program and its impact on 12 program participants has caused us to take pause. While we must be good stewards of our nonprofit, we must remain sharply focused on our mission. Our recent decision regarding the Vocational Rehab Program and the resulting harm it might have caused falls short of living up to our mission and we apologize for this error in judgment."

It is imperative that Goodwill and other organizations stop seeing employees with disabilities as disposable and replaceable. Like everyone else, these workers deserve to earn a minimum livable wage and to be adequately compensated for their labor. This “othering” of disabled workers further discriminates them and pushes them into poverty and isolation.


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Freeport to be added to Abraham Lincoln National Heritage area
Freeport Journal Standard
Thursday, July 18, 2019  |   Article  |   By Jane Lethlean, Correspondent
Abraham Lincoln, Presidential Library and Museum (50) , Congress (22) , Historic Preservation, historic sites (50) , Tourism (90)
FREEPORT — In the near future, travelers east and west of Freeport on U.S. Highway 20 will realize they are entering the Abraham Lincoln National Heritage Area. With Freeport steeped in the history of the famous Lincoln-Stephen A. Douglas debates of 1858, the city has been a travel destination that has attracted national media coverage over the years. Under legislation enacted by Congress and signed into law, Freeport has been added to the Abraham Lincoln National Heritage Area, which is managed by the National Park Service. Freeport’s inclusion is expected to boost tourism and economic development, and that brings a smile to the face of Mayor Jodi Miller. “We have a national treasure in Freeport’s own George Buss, who plays Abraham Lincoln on the national stage,” Miller said. “We in Freeport know what we have with the history of the debates, and this puts us on a national map in another way, and it can only boost our tourism to this city and our Debate Square.” The new designation also includes Jonesboro. Freeport and Jonesboro are the only two Lincoln-Douglas debate sites not included in the original legislation. Livingston County also will receive heritage area recognition. The federal legislation was sponsored by U.S. Rep. Adam Kinzinger, R-Channahon, whose district includes part of Livingston County. U.S. Sen. Dick Durbin, D-Springfield, shepherded the legislation through the U.S. Senate. On May 23, Sarah Watson and Heather Wickens of the Looking for Lincoln Heritage Coalition, which manages the Lincoln heritage area on behalf of the park service, came to Freeport to meet with the Freeport Working Group, which consists of the Lincoln-Douglas Society board, as well as Miller, City Manager Lowell Crow, Nicole Haas of the Greater Freeport Partnership and Ashley Huffines, executive director of the Freeport Public Library. Buss was in Washington, D.C., when the legislation passed in March, and he’s pleased to see what it means to the area. “This is incredibly special because all of the national marketing will now include Freeport, and this means the scope also reaches internationally,” Buss said. “This has been in the works for a long time. This puts Freeport on a bigger map for tourism and history, and this also means Freeport will have a spot on the advisory board for Looking for Lincoln.”

Racing board falls short
Illinois Times
Thursday, July 18, 2019  |   Article  |   Bruce Rushton
Gambling, Gaming , Racing, racetracks (76)

 The Illinois Racing Board hasn’t kept proper track of either money or drugs at horse racing courses, according to a report by the state auditor general.

 

The report released last month came after lawmakers approved a landmark expansion of gambling that could boost the racing board’s workload by increasing the number of races at tracks that want casino-style gambling.

 

Criticism included failure to properly account for euthanasia drugs, according to the June 4 report. Auditors found that veterinarians at one unnamed track didn’t accurately log such drugs. An invoice for one purchase didn’t indicate how many vials were kept at tracks. At another track, auditors reported, veterinarians didn’t properly maintain a log showing usage of the drugs and balance remaining in inventory.

 

The board didn’t dispute issues involving euthanasia drugs and said in a written response that it has initiated corrective action. Auditors examined board operations for a two-year period ending in the summer of 2018. In a prior report covering two years ending in the summer of 2016, auditors reported problems with drug testing procedures, including a finding that the board didn’t ensure that drug-testing records kept by the University of Illinois, which held a contract to test for drugs in racehorses, had been adequately secured to prevent unauthorized alterations. Drug testing records were kept on a shared computer drive, auditors found. In one case, auditors reported, a new university employee had accidentally changed a file. Problems uncovered in last year’s report, the auditor general reported, have been resolved.

 

Issues with drug testing and euthanasia drugs correspond with a fall in the number of positive drug tests at the state’s three racetracks. Between 2009 and 2016, the number of positive drug tests each year ranged from 25 to 55. In 2017, the racing board reported six positives, and the number for last year, also, was six, including results for both thoroughbreds and standardbreds that pull carts. Domenic DiCera, racing board executive director, blamed the decrease in positive tests on decreases in the number of races. “It’s more to do with less racing than anything else, at this point,” he said.

 

However, the percentage of positive tests has fallen at a faster rate than the number of races and number of horses tested. In 2016, for example, 10,521 thoroughbreds started races at Illinois tracks, and 3,653 were tested for drugs, according to racing board records, with 26 testing positive. In 2018, 9,569 thoroughbreds started races and 3,651 were tested for drugs, with five testing positive. With the number of horses tested nearly identical, it amounts to a fivefold decrease in positive tests over the course of three years.

 

While auditors found problems with recordkeeping, DiCera said, no substantive issues were discovered with euthanasia drugs. “They didn’t like the way the veterinarians maintained the logs,” he said. “I can state that there was a lack of materiality in terms of what the finding produced.”

 

In the most recent report, the auditor general also found that the board hasn’t ensured that tracks have held the required number of races for Illinois horses. By law, thoroughbred tracks are supposed to host at least two races a day and six races a week limited to Illinois-bred horses. In nearly 10 percent of race dates examined, two of the state’s three tracks didn’t have Illinois-only horse races. Auditors also reported that all three tracks didn’t have the required weekly number of Illinois-only horse races, with six out of 28 weeks of racing calendars failing to meet the standard. The racing board blamed a lack of Illinois-bred horses for the shortfall as well as a steward’s failure to ensure the standard was met.

 

Other issues in the June report included lax oversight of admissions taxes tracks are supposed to collect. The board, auditors reported, relied on reports from tracks to determine how much the state was owed without proper verification by a board auditor. DiCera says the board has addressed the issue. “We accepted the recommendation of the auditor and we implemented many of those recommendations,” he said.

 

The auditor general also found that the board hasn’t been verifying that off-track-betting parlors have been making required payments to local governments, but the board pointed out that no county or municipality has complained. There does not appear to be a problem in Sangamon County, where county officials and the Springfield Office of Budget and Management each report receiving one percent of the amount wagered at Capitol Teletrack, as required by law.

 

Auditors also say that the racing board hasn’t ensured that overdue child support payments are deducted from winning bets. Auditors found the same issue in last year’s report. The issue centers on advance deposit wagering, which allows gamblers to stock accounts with money, then make bets. DiCera says the board is working on the issue, but has had difficulty getting necessary information from state databases that track delinquent child support

payments. “It’s their opinion there have been insufficient efforts,” DiCera said. “That’s not necessarily true.”

 

Contact Bruce Rushton at brushton@illinoistimes.com.


KIDS survey should be launching pad for change
Northwest Herald
Thursday, July 18, 2019  |   Article  |   Our View
Education--Elementary and Secondary (36)
The headlines were alarming – a study showing that three-quarters of Illinois students aren’t ready for kindergarten when they get there.