Illinois budget impasse seen lasting for weeks

 

By Karen Pierog

CHICAGO (Reuters) - The standoff in Illinois between newcomer Republican Governor Bruce Rauner and long-time Democratic House Speaker Michael Madigan showed no sign of abating as the state approached a second full week without a budget for the fiscal year that started July 1.

"This could go on for weeks. Or a few months? It’s all uncharted waters at this point," Christopher Mooney, director of the Institute of Government and Public Affairs at the University of Illinois, said on Friday.

He said pressure to pass a budget eased with Rauner's signing last month of a funding bill ensuring schools will open on time in September. The pressure could ease further if state courts ultimately allow state workers to be paid without a budget.

While Rauner and Madigan exchanged barbs this week, Illinois continued to have the worst funded pension system and the lowest credit ratings among the 50 states.

The budget battle has not triggered any rating action that could push Illinois into the low-investment grade level of triple-B rarely assigned a state. That could change.

Moody's Investors Service analyst Ted Hampton said the longer the impasse continues, the harder it will become for Illinois to balance its budget.

"At a certain point, the impasse, the gridlock does matter," he said. "The question is who's going to blink first."

Standard & Poor's warned this week it could take "rating action within the next two months, even in the absence of an adopted budget if, in our view, there is limited progress in budget deliberations or if credit fundamentals weaken."

On Wednesday, Rauner dared Madigan to use his Democratic House majority to pass a tax hike, a move the speaker later said was "not realistic." The governor also reintroduced a package of controversial reforms, including a property tax freeze and legislative term limits, that he wants before he considers new revenue.

Madigan shot back, releasing a list of seven House hearings that Rauner's Administration failed to attend to answer questions despite the governor's campaign pledge for an open and transparent government.

"We have considered the issuance of subpoenas but we haven't done it because we want to be reasonable," Madigan told reporters on Thursday.

Overtime legislative sessions have given lawmakers a stage to vent frustration at the impasse and each other.

During a Thursday House debate on a one-month budget, Republican State Representative Chad Hays suggested that lawmakers be locked in the capitol.

"This is ridiculous. Day after day after day we're no closer to a budget," he said.

(Reporting By Karen Pierog; Editing by David Gregorio)

Illinois budget impasse seen lasting for weeks

These 20 schools are responsible for a fifth of all graduate school debt - The Washington Post

 

These 20 schools are responsible for a fifth of all graduate school debt

By Danielle Douglas-Gabriel July 9

In this Oct. 6, 2011 photo, Gan Golan of Los Angeles, dressed as the “Master of Degrees,” holds a ball and chain representing his college loan debt during Occupy DC activities in (AP Photo/Jacquelyn Martin)

Getting an advanced degree doesn’t come cheap, which is why graduate students carry nearly half of all student debt. But it turns out that a handful of schools are responsible for a large share of that money.

A new study from the Center for American Progress (CAP) found that 20 universities received one-fifth, or $6.5 billion, of the total amount of loans the government gave graduate students in the 2013-2014 academic year. Those schools, however, only educate 12 percent of all graduate students.

What’s striking about the Center’s findings is that a majority of the debt taken to attend the 20 schools on its list is not for law or medical degrees that promise hefty paydays. Most graduate students at those schools are seeking master’s degrees in journalism, fine arts or government, according to CAP.

[It’s about to get cheaper to borrow for college]

Still, at two foreign medical schools, St. George’s University in Grenada and Ross University in Dominica, students borrowed more than $200 million in a single school year. Medical schools in the Caribbean are often a refuge for students rejected from top American schools, but their tuition easily rival schools in the United States. Tuition for one semester at Ross, for instance, costs up to $21,710.

It’s not exactly shocking that pricey private schools like New York University, Georgetown University and George Washington University made the list–tuition alone at all three schools is well over $40,000 a year. But the eight for-profit colleges, including University of Phoenix and Capella University, may raise some eyebrows.

Indeed, students borrowed the most amount of money, $756 million, to attend Walden University, a for-profit school that specializes in offering graduate degrees in education, healthcare and business. The second highest loan balance on the list is attributed to Nova Southeastern University, a private college in Florida where 59 percent of students are working toward graduate degrees online.

Although online programs are billed as time and cost effective, schools like Nova and Liberty University prove otherwise. About 98 percent of graduate students at Liberty, founded by evangelical leader Jerry Falwell, are enrolled in online programs that led them to borrow $351 million in a single year.

These 20 schools are responsible for a fifth of all graduate school debt - The Washington Post

Analyzing Gov. Rauner's Latest Pension Plan | Chicago Tonight | WTTW

 

Analyzing Gov. Rauner's Latest Pension Plan

Natalie Valdes | July 9, 2015 12:30 pm

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Is Gov. Bruce Rauner's newest pension proposal constitutional? How will it impact city and state employees? John Tillman, CEO of the Illinois Policy Institute, and Ralph Martire, executive director for the Center for Tax and Budget Accountability, analyze the plan.

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On Wednesday, Gov. Bruce Rauner said he was re-introducing his five-point turnaround agenda as well as a new pension plan. According to Amanda Vinicky’s reporting, Rauner’s yet-to-be-released 500-page plan gives state employees and public school teachers a choice: take a smaller retirement immediately or take a smaller benefit down the line by choosing to forgo having future salary hikes count toward pensions.

• Read a summary from Rauner’s pension reform bill.

The Chicago Teachers Union on Wednesday issued a statement following Rauner’s announcement:

“The Pension Reform Bill proposed by the governor is nothing more than a collection of Bruce Rauner’s worst ideas as it relates to Illinois’ public sector workers.  He continues to treat the people who perform some of the hardest jobs in our state with contempt and disregard,” said CTU Vice President Jesse Sharkey.

“His proposal stands in stark contrast to the tax cuts he’s enjoyed this year as one of the wealthiest men in Illinois. We continue to be dismayed at his lack of economic vision that would include progressive revenue solutions and the stabilizing of our pension systems.

“The legal theory he is using has resulted in an unconstitutional mishmash of proposals which diminish and impair pensions. Chicago’s public school educators should not have to choose between having an arm cut off or a leg---meaning we should not have to decide which hard earned right we must give up in order for the state to make contributions to our fund, as it does to others across Illinois. Asking people who do not receive social security upon retirement to take a 7 percent pay cut in order to possibly retire healthy enough to draw down their deferred compensation is an insult to our intelligence,” Sharkey said.

Cook County spokesman Frank Shuftan issued the following statement on Wednesday:

“We just received a copy of the Governor’s proposal and staff will now begin their analysis of it. The issue of pension reform has languished for too long without substantive action as costs continue to rise. While we will carefully review the proposal and continue to work with legislative leaders, the bill we introduced, and which we still endorse in its current form, is designed to resolve the County’s actuarial shortfall and put the Pension Fund on a road to long-term, sustainable solvency. Our bill was crafted over two years in consultation with our labor partners. It calls for shared sacrifice and it earned the support of the vast majority of our unions. We believe that our bill, as it is constructed, is the best vehicle through which true and meaningful pension reform for Cook County can be achieved, and we will continue to respect the legislative process as debate on this issue continues.”

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Summary of Rauner's Pension Plan.pdf

Politics

Analyzing Gov. Rauner's Latest Pension Plan | Chicago Tonight | WTTW

Rauner approves more spending on Illiana tollway - Blogs On Politics - Crain's Chicago Business

 

Gov. Bruce Rauner quietly has signed a measure to spend another $5.5 million on the proposed Illiana expressway, raising questions about whether he's seeking to keep the project on financial life support.

Several weeks ago, Rauner shelved the controversial south suburban toll road with a flourish:

"In light of the state's current fiscal crisis and a lack of sufficient capital resources, the Illiana will not move forward at this time," his office said then in a statement. "It is the determination of the Illinois Department of Transportation that the project costs exceed currently available resources. The department will begin the process of suspending all existing project contracts and procurements." Rauner also ordered the highway removed from the state's five-year road program.

But on June 30, Rauner signed a bill that includes $5.5 million for the Illiana, even as he knocked out money for other projects, such as land acquisition for the proposed south suburban airport at Peotone. The bill said the money would "enable the Illiana Expressway to be developed, financed, constructed or operated."

So what's up?

The governor's office says the money will be used to pay consultants to wind down the project and to handle any costs from continuing litigation. Most of the latter is coming from foes who want to drive a legal stake through the road's heart.

A Rauner aide adds that the money is only being reappropriated from last year, and just because the state is allowed to spend the money doesn't mean it will.

But authorizing $5.5 million in expenditures sure doesn't look like "suspension of all existing project contracts and procurements" to longtime Illiana foe Howard Learner, whose Environmental Law & Policy Center has long battled the road in court and in various public bodies.

"Gov. Rauner clearly said on June 2 that no more state funds would be spent on Illiana contracts and procurements," Learner told me. "It's time to bring the wasteful Illiana tollway gravy train for consultants to an end. These public funds should instead be used to meet our state's high-priority needs."

Most interesting. With talk persisting in Springfield that Rauner wants to keep the project alive as trade bait with south suburban officials, this subject is worth keeping a close eye on.

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Rauner okays new spending on Illiana despite promised ban

Rauner approves more spending on Illiana tollway - Blogs On Politics - Crain's Chicago Business