Political Update from S4

Earlier in the day, Gov. Rauner’s general counsel sent out a letter about the newly extended AFSCME contract negotiation deadline of September 30th. In the letter, he stated that the administration was never planning to lock out state employees, and that while the latest “tolling agreement” prohibits striking, agencies should prepare for strikes anyway. An AFSCME representative responded and disputed that claim, saying the administration made no promises against a lockout until the new tolling agreement, and they have “actively recruited retired state employees as strike breakers and failed to deny considering the mobilization of the National Guard to break a strike.”

Bottom line: the contract negotiation deadline for the state worker union and the Rauner administration is now September 30th; workers are not allowed to strike, but the administration is preparing in case they do; and the governor vetoed legislation that would have replaced negotiations with arbitration after a certain time period. Senate President John Cullerton plans to hold a vote to override the veto next week.

After weeks of attacks on the subject from Gov. Rauner, Speaker Madigan filed a bill on Tuesday to stop the scheduled pay increase for legislators. The cost-of-living pay adjustment is an automatic increase, but legislators have foregone it for the past several years. Republicans introduced a bill with the same goal earlier this month, but it did not advance. Speaker Madigan’s bill passed within a matter of hours, but its path in the Senate may not be clear. Read more.

Fitch Ratings, a financial ratings agency akin to Moody’s, lowered Chicago Public Schools’ credit rating to junk status after its latest plan to borrow $1.16 billion by selling bonds. Fitch pointed to the $1.1 billion budget deficit for the upcoming school year and CPS’s reliance on borrowing, as well as its bitter relationship with the Chicago Teacher’s Union, as reasons for its decision. Read more.

Sen. Mark Kirk is already facing a tough battle to keep his seat, with Democratic challenger Rep. Tammy Duckworth leading in several polls and a prominent Republican donor publicly telling him to step down this week. The donor, Ron Gidwitz, later tried to retract his comments, but the damage was done.

Gov. Rauner has not formally proposed a tax on advertising, among other services, but several business groups are already gearing up to fight it. During his campaign Gov. Rauner proposed expanding the sales tax to certain services to rake in over $600 million in revenues, almost $38 million of which would come from a tax on advertising. The business groups say this contradicts the governor’s push for a more business-friendly climate, and Illinois would only be the third state in the nation to apply a tax or similar measure to advertising.

Former Gov. Rod Blagojevich plans to appeal the remaining 13 corruption counts against him next week. Five of the original 18 convictions were thrown out last week due to improper instructions given to witnesses during his trial, and Blagojevich’s attorney said they are optimistic about overturning the rest of the charges.

Some aviation analysts, however, are skeptical about the claims that the new design will reduce congestion and delays. Read more.

Chirlane McCray, Mayor de Blasio’s wife and the chairwoman of the Mayor’s Fund to Advance New York, announced a $30 million grant program that will expand mental health services to low-income residents. Connections to Care, as the program will be called, will train workers in existing community organizations, from preschools to job placement centers, to identify and respond to mental health problems like depression and substance abuse. The idea is to provide much-needed services by trusted peers directly in communities. Read more.

Senate Majority Leader John Flanagan appointed Sen. John DeFrancisco as the new Senate Deputy Majority Leader, now that Sen. Tom Libous has officially vacated his seat due to felony corruption convictions. Sen. Flanagan edged out Sen. DeFrancisco for the Majority Leader post in May when Sen. Dean Skelos resigned amid his own corruption scandal.

Despite the two corruption convictions in the state Senate this year, Gov. Cuomo said this week that there is no need to call a special session on ethics. He says lawmakers have not changed their minds on any pieces of legislation because of the verdicts, “so for the taxpayers to spend a lot of money to bring the legislators back to Albany for the same outcome they had several weeks ago makes no sense.” Read more.

The Federal Emergency Management Agency (FEMA) will grant the MTA and Port Authority of New York and New Jersey an additional $11.1 million in emergency preparedness funding this year. The agencies will receive a total of $42.9 million, intended for preparing against terrorist attacks. Read more.

And after a weeks-long standoff, Gov. Cuomo and Mayor de Blasio reportedly spoke to each other for the first time this week. The mayor said no resolution was reached, but “this is going to be an ongoing thing.”

The trustees of the state’s three largest pension funds filed an amended complaint against the Christie administration arguing that while the state Supreme Court declared the state cannot be forced to appropriate funds and pay into the pension system at a certain time, the state still owes the money and is not simply off the hook. Read more.

In a separate case, the state Supreme Court will decide whether the state had the right to freeze government workers’ cost-of-living adjustments (COLAs) in 2011, or if it will need to reimburse retirees for the losses and reinstate COLAs. Read more.

Senate President Stephen Sweeney has a solution to the state’s rising public employee pension debt: create a federal government loan program that would allow states to borrow about $50 billion at 1% interest over 30 years from the Federal Reserve. Sen. Sweeney, who may be a gubernatorial candidate in 2017, pointed to the 27 states grappling with funding shortfalls of over $10 billion and said, “If it is in the nation’s interest for the federal government to step in and keep Wall Street and General Motors afloat, it should be able to find ways to protect the pensions of middle-class teachers, police and government employees.” Read more.

The state’s overall structural deficit (the basic imbalance between revenues and expenditures) is now at $10.2 billion, only $500 million less than when Gov. Christie took office in 2010. Read more.

Acting Attorney General John Hoffman announced the state will spend $1.5 million “to fully equip the New Jersey State Police road troopers with body cameras” and will offer an additional $2.5 million to help local police units acquire body cameras. State troopers are expected to start wearing the cameras by mid-2016. Read more.

ResponsibleOhio submitted 95,000 new petition signatures yesterday to make up for the election officials’ ruling that they were close to 30,000 signatures short last week. The new signatures need to be validated by August 10th, and the November ballot will be finalized by the 25th. Read more.

Gov. Pence appointed Democrat Jim Schellinger to head Indiana’s economic development agency. Schellinger has served on the agency’s board of directors for the last several years, and he is the CEO of an architecture and interior design company based in Indianapolis. He ran unsuccessfully for governor in 2008, and he and his wife donated $15,000 to Gov. Pence last year. Read more.