QUOTE OF THE DAY
Readers, this is my last column. I wanted to thank my readers and the team at Reuters for a truly great ride. I’ve been covering municipal securities, market structure, pensions and bankruptcy for over three years. There have been a lot of big changes in America as the country seeks to recover from the global financial crisis. The crisis affected state and local governments by slowing revenues and investment in infrastructure. I don’t see this changing in the near term.
Our country is still wealthy according to global standards. We have the resources to make an equitable economy and protect the most vulnerable. But reform is necessary through all levels of government. As citizens and taxpayers, we all should demand this.
I’ve written about seven municipal bankruptcies. The biggest and most complex is beginning now in Puerto Rico. In March 2012 I first wrote that the Puerto Rico government would have solvency issues. Now this has come to pass. I wrote 76 columns about Puerto Rico, 74 of which were negative. The last two I wrote were somewhat positive because the government is beginning to take the hard steps of rationalizing its debt structure, reform spending and reduce the level of government employment. Puerto Rico is beginning a vital transformation process.
Chicago Sun Times: Internal Quinn emails: Suburban mayoral jockeying shaped NRI move
Newly released emails from Gov. Pat Quinn’s office show politics appeared to trump credentials when deciding how big a serving some nonprofits should get from his now-tarnished $54.5 million Neighborhood Recovery Initiative anti-violence grant program.
Emails from Quinn’s former top aides recount how Cook County Recorder of Deeds Karen Yarbrough, a Maywood Democrat who had been the suburb’s state representative, approached Quinn’s administration in January 2011 to oppose giving NRI funding to a longtime social service provider in Maywood.
In her pitch, Yarbrough told the one-time head of the now-defunct agency that oversaw NRI that the Proviso Leyden Council for Community Action should not be paid to help integrate former prisoners into the community because it was “not being effective in Maywood and not using resources well,” the emails show.
Chicago Tribune: Chicago School Board approves $5.8B budget
The Chicago Board of Education today unanimously approved a $5.8 billion operating budget, even while acknowledging problems with a spending plan that relies on a one-time accounting maneuver to make ends meet and fails to address long-term deficit issues.
Board of Education member Henry Bienen said one time fixes to close the district’s deficit of nearly $900 million could hurt the district’s bond rating and lead to higher interest rates for any bonds CPS might issue. He called the spending plan the board is expected to approve at its meeting today a “stop-gap budget.”
Under questioning from board member Andrea Zopp, Chief Financial Officer Ginger Ostro acknowledged the decision to use two extra months of revenue to balance the budget for 2015 could lead to cash flow problems later in the fiscal year.
Despite being passed without Republican support, Republican governors across the country are now falling for the president’s health care scheme.
The latest sales pitch comes from a recent report issued by the president’s Council of Economic Advisors. It aims to persuade 24 states that have not expanded Medicaid as part of Obamacare of the program’s supposed benefits to the uninsured and to states’ economies.
Under Obamacare, states may choose to expand Medicaid eligibility to residents falling below 138 percent of the federal poverty level. The federal government pays anywhere between $0.50 to $0.73 for every dollar the state pays in Medicaid spending. For the newly eligible individuals, the federal government would pick up almost the entire tab.
Reason: New York’s Taxi Commission Seems to Think Everybody Is Driving Illegal Cabs
So it appears that New York City Taxi and Limousine Commission can suspect just about anybody of picking up other people of operating an illegal cab. And based on just this suspicion, they are able seize people’s vehicles until they prove otherwise. Guess the obvious outcome of such authority. It’s about as bad as you can imagine (though at least they’re not getting arrested). FromDNAinfo New York:
Kareeal Akins still gets chills thinking about the long, frigid walk home that he and his then-pregnant wife were forced to make this past winter after the city seized his car.
At about 9 p.m. on Jan. 24, he drove his white 2002 Honda Accord from his Sheepshead Bay apartment to the corner of Church Avenue and Ocean Parkway in Kensington to pick up his wife, Natalie, from her friend’s home.
Chicago Tribune: City to review 9,000 questionable red light tickets
The review process will be reopened for some 9,000 Chicago drivers who received red light citations during suspicious spikes in ticketing revealed last week by a Tribune investigation, the city’s top transportation official said today.
Transportation Commissioner Rebekah Scheinfeld told aldermen during an unscheduled appearance at a City Council committee hearing that the ticketed drivers will be given the opportunity to have each violation “reviewed” to “determine its validity.”
But her prepared statement to the council’s Transportation Committee did not specify what intersections, how her office chose them, or what form the review process would take. Scheinfeld’s statement also did not address whether the city would consider the fairness of tickets issued at intersections where faulty equipment or human tinkering caused the spikes.
DNA Info Chicago: Policy Giving CPS Grads Preference in City Hiring Riles Some Firefighters
Union firefighters are threatening to sue over a city initiative that gives graduates of Chicago Public Schools preferential treatment in city hiring, just as Mayor Rahm Emanuel trumpets a new round of recruitment for the Fire Department.
Emanuel’s office made a point Wednesday of drawing attention to an online application for the Fire Department open through Sept. 16. It costs $30 to apply, with a written exam set for December for qualified applicants.
The job description makes clear that those who already have completed fire or police training receive preferential treatment for firefighter and police positions, as do relatives of those who died in the line of duty as police officers, firefighters or military personnel. It also states a hiring preference for veterans and CPS high school graduates.
Bloomberg: Illinois Outlook Cut to Negative by S&P on Deficit Concerns
Illinois, the lowest-rated U.S. state, had its outlook dropped to negative by Standard & Poor’s, which cited the prospect of budget deficits and questions over whether pension overhaul measures will survive legal challenges.
S&P changed its outlook on the fifth-most-populous state to developing from negative in December after lawmakers broke through decades of political gridlock to pass a measure aimed at fixing the worst-funded U.S. state pensions. Illinois’s A-rating is four steps above junk.
The Illinois Supreme Court ruled this month that the state can’t cut contributions to government retirees’ health-insurance premiums, potentially jeopardizing the pension legislation. Lawmakers on May 31 approved a spending plan for this fiscal year that will require further action to keep the government operating. In the meantime, the state will forgo paying vendors, borrow and delay payments.
CBS News: Dueling rulings on critical part of Obamacare
President Obama’s health care law is enmeshed in another big legal battle after two federal appeals courts issued contradictory rulings on a key financing issue within hours of each other Tuesday.
A divided court panel in Washington called into question the subsidies that help millions of low- and middle-income people pay their premiums, saying financial aid can be paid only in states that have set up their own insurance markets, or exchanges.
About 100 miles to the south, in Richmond, Virginia, another appeals court panel unanimously came to the opposite conclusion, ruling that the Internal Revenue Service correctly interpreted the will of Congress when it issued regulations allowing consumers in all 50 states to purchase subsidized coverage.
CARTOON OF THE DAY
