Some Recent News re: State of Illinois / City of Chicago
City of Chicago
Annual Comprehensive Financial Report 2021
From June 29, widely unreported as usual, but showed the second consecutive year for accrual expenses coming in below revenue, thanks importantly to a $1.7 billion increase in tax revenue. One interesting note - every year, for decades, the City of Chicago included a useful footnote disclosure of the total interest expense incurred. It was useful because interest expense reported on the income statement only included interest on long-term debt (which doubled from $300 million in 2003 to $620 million in 2020, despite a massive decline in long-term interest rates). In 2020, the total interest expense reported in the footnote came to $1.3 billion, up from $560 million in 2003. But in the 2021 report, the total interest expense disclosure disappeared.
Chicago Sun-Times
Judge sets Ald. Ed Burke’s racketeering trail for November 2023 - giving Burke a chance to run again
From July 12, by Jon Seidel, includes “The long-awaited federal racketeering trial of Ald. Edward M. Burke (14th) has been set for November 2023, giving Chicago’s longest-serving City Council member an opportunity to seek reelection while facing federal criminal charges — again. … Federal prosecutors pushed for a trial date at a recent hearing, telling the judge, ‘There is a public interest in the trial here and in getting this trial date set in short order.’ However, the judge put off the discussion until Tuesday’s hearing. His ruling last month on the pretrial motions kept the case against Burke intact. …” (Note: Burke was a long-running chair of the Finance Committee of the Chicago City Council.)
Chicago Sun-Times
ComEd bribery case might not go to trial until 2023 - thanks to R. Kelly
From June 21, by Jon Seidel, includes “A major public corruption trial set for late summer has been postponed because of a delay in another major trial set to begin soon at the Dirksen Federal Courthouse — the child pornography trial of R&B superstar R. Kelly. … But Leinenweber announced Tuesday that the building’s ceremonial courtroom — its largest — won’t be available for Kelly’s trial until Aug. 15. That two-week delay was enough to knock the ComEd case off the calendar. … Also charged along with McClain in the ComEd case are former ComEd CEO Anne Pramaggiore, ex-top ComEd lobbyist John Hooker and former City Club President Jay Doherty. The four are accused of arranging for Madigan’s associates and allies to get jobs, contracts and money in order to influence Madigan as key legislation worked its way through Springfield. …”
WBEZ 91.5 FM
Former Excelon CEO out at Chicago Fed amid corruption probe
From October 2019, by Dave McKinney, includes “A former top official with Exelon Corp. has resigned her post atop the board of the Federal Reserve Bank of Chicago … The Oct. 25th departure of Anne Pramaggiore as chairman of the federal panel adds another layer of mystery to the rapid descent of someone who once was regarded as one of Chicago’s most powerful business executives. … Pramaggiore has not been accused of criminal wrongdoing. …”
U.S. Attorney’s Office, Northern District of Illinois
From November 2020, includes “Former Commonwealth Edison executives, including the former Chief Executive Officer, conspired with outside consultants to corruptly influence and reward a high-level elected official for the State of Illinois to assist with the passage of legislation favorable to the electric utility company, according to an indictment returned today in U.S. District Court in Chicago. … Pramaggiore and McClain also allegedly took steps to have an individual appointed to ComEd’s Board of Directors at the request of Public Official A and McClain, the indictment states. …”
The Conversation, “What happens when your local council goes bankrupt?”
From July 4, by Eugenio Vaccari, Laura Coordes, and Yseult Marique, includes “Local government fulfils an essential role in society. It provides fundamental services – from social care and transport to education, water and waste collection. And when it no longer can, when a council goes bankrupt, it is the most vulnerable citizens who bear the brunt of that failure. … Our research shows that when a local authority has strict accounting and reporting rules in place, it is less likely to experience financial problems. The national government, in turn, is less likely to have to use taxpayers’ money to rescue it. … We have found that local councils in those countries which have strict accounting rules – including Belgium, Canada, France, Germany, Japan, the Netherlands and the Russian Federation – are less likely to experience financial difficulties. …” (Note: Don’t see the USA in that list)
The Hill, “The next financial hammer to fall: Public pension funds”
From June 28, op-ed by Merrill Matthews, includes “… While leveraging can multiply market gains in the fat years, it can also magnify losses in the lean years. Those down-times tend to drive some public pension funds to take even riskier steps hoping to recoup some of the losses. It’s like the gambler who’s on a losing streak but keeps betting in the hope of making up some of the losses. … Of course, some of the private sector’s best money managers have been losing money in this market. But they won’t be able to go to the government and get a taxpayer bailout. If public pensions find themselves severely underfunded, whether because of a down market or bad, even ludicrously risky, investment decisions, or both, that’s exactly what they will do.”
From June 25, by Mark Glennon, includes “… Miller and others cynically ascribe Griffin’s decision only to the failing campaign of Richard Irvin for governor, who Griffin heavily supported. Employee concerns about crime, taxes, corruption, insurmountable debts and all the rest had nothing to do with it, they’d have us believe. Illinois’ loss from Citadel’s departure is enormous. … There’s a special irony here and a more important lesson. Illinois did reduce inequality by driving Griffin away. Inequality drops whenever the rich flee. But does that really help the poor and middle class? …”
From March 21, by Natalie Alms, includes “Total fraud levels in pandemic relief programs are upwards of $100 billion, but getting a clear estimate is made difficult by data gaps and ongoing fraud recovery efforts, officials said at a Senate hearing. … ‘I wish I could answer that right now,’ Department of Justice Inspector General Michael Horowitz and chair of the Pandemic Response Accountability Committee told ranking member Sen. Rob Portman (R-Ohio) when asked about fraud levels in the $5 trillion-plus in pandemic relief spending. …”
Reason Foundation, “Deferred retirement option plans expose public pensions to unique risks”
From March 16, by Ryan Frost, includes “A range of states, from Arizona to Florida, are introducing proposals to extend or introduce a deferred retirement option plan (DROP) to help retain public employees, specifically public safety personnel. While it’s true that public safety vacancies are up, there is little, if any, evidence to suggest that increasing a public pension plan’s benefit offering will help retain workers. A deferred retirement option plan is a mechanism that allows a retirement-eligible member to begin receiving his or her pension benefit while still working. …”
Tahlequah Daily Press (Oklahoma), “Government shouldn’t bail out public endeavors”
From March 21, by Devin Gordon, includes “Should private enterprise have commercial access to public sites at no cost? Public-private partnerships or PPPs exist, for the most part, as creative alliances, usually formed between a government entity and private developers to achieve a common purpose. … As a business owner, I would love for the state or local municipal government to assume all risks and expenses associated with my business in exchange for a promise to pay once I become profitable, but in reality, it shouldn’t work that way. Tax money shouldn’t be used to prop up my business in hopes that one day it succeeds and comes back to the governing body used to finance it.”
From March 7, 2022, by John Kiernan, includes “Taxpayers in the most tax-expensive states, for instance, pay three times more than those in the cheapest states. Surprisingly, though, low income taxes don’t always mean low taxes as a whole. For example, while the state of Washington’s citizens don’t pay income tax, they still end up spending over 8% of their annual income on sales and excise taxes. … As this year’s tax-filing deadline, April 18, comes closer, it’s fair to wonder which states give their taxpayers more of a break …”
Illinois Policy Institute, “Taxes nearly 25% of what Illinois drivers pay at the pump”
From March 9, by Dylan Sharkey, includes “As gas prices nationwide continue to rise, Illinoisans are forced to pay even more thanks to notoriously high gas taxes that rank No. 2 in the nation. One big culprit is Gov. J.B Pritzker. He doubled the state gas tax in 2019 and allowed further increases in local gas taxes, adding $3.50 to every 15-gallon tank of gas, or $0.23 to every gallon for Chicago drivers. Illinois’ average gas price has reached $4.53, over a quarter more than the national average of $4.25, according to AAA. … Pritzker proposed delaying the upcoming automatic hike in the tax, but that temporary election-year ploy offers little real relief. Instead, Pritzker’s automatic gas tax increases should be repealed.”
City Journal, “Time for a pension reckoning in New Jersey”
From March 9, by Thomas Healey and Andrew Biggs, includes “New Jersey should not be lulled into a sense of false security from federal largesse. The state recently made its first actuarially full pension contribution in 20 years (an estimated $6.4 billion), but it could do so only because it received higher-than-expected tax payments and billions in federal assistance. Long-overdue systemic pension reform should be at the top of the legislature’s agenda in Trenton.”
