QUOTE OF THE DAY
Greg Hinz: Illinois in deepest financial hole ever
Despite the national economic recovery and a hike in state income taxes, Illinois is in a deeper financial hole than ever, a state financial disclosure released yesterday reveals.
Illinois is far and away in worse shape than any state in the country, although the red ink is flowing more slowly.
According to the disclosure statement, Illinois’ net cumulative deficit for “governmental activities” — a broad measure of obligations the state has accrued, relative to resources it has to pay bills — rose an additional $1.2 billion in the fiscal year that ended June 30, to $47.8 billion. The overall figure is nearly triple what it was just seven years ago, though the annual increase was the smallest it’s been since at least fiscal 2006.
Built in Chicago: Court rules Evanston food truck case can move forward
The Liberty Justice Center’s legal challenge to Evanston’s anti-competitive food-truck law took an important step forward today, as Cook County Circuit Court Judge Jean Prendergast Rooney denied the city government’s motion to dismiss our lawsuit’s claims that the city’s law violates the due process and equal protection guarantees of the Illinois Constitution.
The Liberty Justice Center brought the case in August 2012 on behalf of Jim Nuccio and Gabriel Wiesen, owners of the popular Beavers Coffee & Donuts food truck. They want to be allowed to serve customers in Evanston, but an ordinance the city adopted in 2010 says that you can’t operate a food truck in Evanston unless you already own a “licensed food establishment,” such as a brick-and-mortar restaurant, in Evanston. Jim and Gabriel have a lot of experience safely operating a food truck, but they don’t own a restaurant or other food establishment in Evanston, so the city denied their application for a food-truck license.
Evanston’s rule obviously exists for just one reason: to protect Evanston restaurants from food-truck competition. That isn’t a legitimate purpose under the Illinois Constitution, which requires that all laws restricting individual rights bear some reasonable relationship to serving the public’s health, safety or welfare.
Chicago Tribune: Mayor Rahm Emanuel in salesman mode at SXSW
Mayor Rahm Emanuel and Cultural Affairs Commissioner Michelle Boone double-teamed the city of Austin on Tuesday in what was essentially a daylong info-mercial for Chicago as a musical and cultural force.
There was an agenda, of course: Cater to the thousands of technology executives and entrepreneurs at the South by Southwest Interactive conference in an effort to lure their businesses to Chicago. Emanuel and Boone were on message all day: Chicago is a vibrant music/theater/arts city with a first-rate transit system, world-class architecture and restaurants, and a relatively moderate cost of living in which young innovators can prosper. The city set up an informational booth at the pricey trade show at the Austin Convention Center, and even brought its own soundtrack: a Chicago musical showcase Tuesday night that included Chance the Rapper, the production duo Hood Internet and rising singer-songwriter Bonzie.
Earlier in the day, Emanuel went on a whirlwind tour of some of the city’s businesses with Charlie Jones, the cofounder of Austin-based Lollapalooza promoters C3 Presents, as his guide.
Bloomberg: Chicago Lifts Size of Bond Sale to $780 Million After Rating Cut
Chicago increased the size of its planned offering this week of tax-exempt and taxable general-obligation bonds to $780 million from an initial $405 million, according to data compiled by Bloomberg.
The third-most-populous U.S. city is preparing to issue general obligations for the first time since 2012. Its rating was cut one step to Baa1 on March 4 by Moody’s Investors Service, which cited “massive and growing unfunded pension liabilities, which threaten the city’s fiscal solvency.”
The offering is coming during the busiest period of debt issuance since December, Bloomberg data show. Puerto Rico increased the size of its deal to $3.5 billion from $3 billion today, andCalifornia set initial yield levels on about $1.7 billion of bonds, up from a planned $1.6 billion sale.
Chicago tripled its debt load from 2002 to 2012. A $590 million additional payment for retirement obligations is due next year unless state lawmakers step in to restructure the pension funds.
Crain’s Chicago: Illinois deficit grows to $45 billion
An annual state report puts the Illinois deficit at nearly $45 billion.
Comptroller Judy Baar Topinka released the report Wednesday. She says the shortfall grew by less than 1 percent from the previous year. She says the growth in liabilities was mostly because of obligations to state pension systems and other post-employment benefits.
The state has a $100 billion shortfall in its five pension systems. But Topinka’s office says the accounting method used in this report measures only what should have been set aside to keep pace with obligations — not the total debt.
Lawmakers and Gov. Pat Quinn adopted a plan last fall to reduce that debt over 30 years, but it has been challenged in court.
The general spending account deficit fell 19 percent to $7.3 billion.
The Atlantic: How to Give Workers a Voice Without Making Them Join a Union
One can trace the United Auto Workers’s defeat in Chattanooga last month to a factory in Elkhart, Indiana.
Two decades ago, employees at Electromation Inc.’s Elkhart plant opposed plans to change their attendance bonuses. Surprised, Electromation formed joint worker-management “action committees” to solve workplace problems. The company committed to implementing committee solutions that did not cost too much. This gave workers a meaningful voice on the job while management fixed problems it didn’t know it had.
Everyone was happy—except the government. The National Labor Relations Board stepped in and disbanded the committees.
Real Time Economics: Those With Jobs Are More Secure Even as Hopes Dwindle for Long-Term Unemployed
Yet another recession-triggered split in the consumer sector is becoming more evident: Higher job security among those with a job versus dwindling hope for the long-run unemployed.
The growing gap is recasting the consumer sector and raises questions on how it will support economic growth.
Recent reports show workers are feeling fewer job jitters.
The Survey of Consumers Expectations released Monday by the Federal Reserve Bank of New York shows workers on average give a probability of 16.15% of losing their current job, the lowest reading since July. In addition, the latest U.S. household survey done by the Royal Bank of Canada indicates only 22% of workers fear they may lose their jobs. That is the lowest reading in three years.
Chicago Tribune: Illinois ObamaCare enrollment falling short of target
With less than a month remaining before a March 31 deadline, about 4.2 million Americans have signed up for insurance policies offered under President Barack Obama’s health care law, including nearly 114,000 in Illinois, according to federal data released Tuesday.
The enrollment figures show that the pace of new sign-ups in Illinois slowed in February, suggesting that the state will fall far short of its 2014 enrollment goal of 300,000. To reach that number, more than twice as many people need to sign up for plans in March than in the previous five months combined.
From Feb. 1 to March 1, 25,131 Illinoisans selected policies on new exchanges created under the Affordable Care Act, down from 27,491 in January. Nationally, about 943,000 signed up in February, down from 1.14 million a month earlier.
Daily Herald: Speed cameras outside Chicago? Not yet
A downstate lawmaker wants to allow the expansion of school-zone speed cameras beyond Chicago, where tickets from the controversial cameras are already upsetting drivers.
The proposal from state Rep. Jay Hoffman, a Belleville Democrat, is far from becoming law. It has not yet been debated in Springfield. And even if lawmakers approve the use of cameras outside Chicago, local officials would have the final say.
“Local school districts as well as a local municipality must actually pass an ordinance that allows it,” Hoffman said.
CARTOON OF THE DAY
