My suggestions for Illinois’ bankruptcy auction

Blogger at the Damen Silos

By John Ruberry

Last week I suggested that Illinois, arguably the most broke state in America, put itself under receivership to fix its dire financial problems, which include nearly $8 billion in unpaid bills and an astounding $138 billion in unfunded pension obligations.

I chose receivership as bankruptcy is not a legal option for the fifty states. Then Senate Majority Leader Mitch McConnell (R-KY) offered bankruptcy as a possibility, so it appears he’s open to changing the law so financially reckless blue states, Illinois, as well as New York and California, can call into one of those 800 lines that advertise on television late at night offering Chapter 11 as a salvation. (Okay, I’m kidding on the 800 line.)

Oh, Mitch, your home state of Kentucky also has a financially anemic public worker pension fund.

So state bankruptcy is no longer a pipe dream, although Illinois and New York’s Democratic governors, J.B. Pritzker and Andrew Cuomo respectively, immediately dismissed McConnell’s sound idea. But right now these blue states are acting like old-money aristocrats who believe bankruptcy is beneath them even though their income stream has dried up and their trust funds are depleted.

When there is a bankruptcy there is often a liquidation sale. Illinois has many valuable assets. Not enough to cover the $7 billion in unpaid bills–let alone the $138 billion in unfunded pension obligations–but the Land of Lincoln has to begin somewhere to dig itself out of the hole created by irresponsible politicians from both parties. So here are my suggested on what needs to go.

The Damen Silos: Illinois has owned the abandoned grain silos at Damen on the Sanitary and Ship Canal on Chicago’s South Side since the 1970s. It’s a popular spot for urban explorers–I’ve been there–and for graffiti-taggers. An explosion scene for Transformers: Age of Extinction was filmed at the silos. But the state has owned it four over four decades. Get rid of it. The location is also near Interstate 55. While demolishing the site will be pricey for the new owner which will drive down the selling price, every dollar counts during Illinois’ financial emergency. As it stands now, the Damen Silos are a towering monument to Illinois incompetence.

Illinois’ governor mansion: The last Illinois governor to live full-time in America’s third-oldest governor’s mansion was Republican Jim Edgar, he of the failed “Edgar ramp” pension rescue. He left office in 1999. Another Republican gov, one-termer Bruce Rauner, led the recent private efforts to restore the residence, which was in poor shape. The renovation cost $15 million. The project was completed last July. Four months later Pritzker trounced Rauner in his reelection effort.

Sell the mansion. It can be central Illinois premier luxury B&B. In fact it can be America’s premier luxury B&B.

When Illinois’ governor needs to be in Springfield there are plenty of hotel rooms to choose from there. Or the state can buy a humble bungalow for the governor.

A whole bunch of state parks: Illinois has 142 state parks. Many are tiny and little-visited. Illini, William G. Stratton (named for a governor who was indicted for tax evasion), Jubilee College, and Gebhard Woods state parks immediately come to mind as expendable. At least of half of Illinois’ state parks need to go on the auction block. Illinois has a very popular state park that I’m thinking of that I’ll talk about later.

The former Tinley Park mental health facility: Governor Pat Quinn shuttered the sprawling 250-acre site in 2012. There are toxic wastes that need to be cleaned up. But in real estate, of course, the most important concern is location, location, location. And the old asylum has a great one, at Harlem Avenue and 183rd Street in southern Cook County a few blocks away from an Interstate 80 exit.

Illinois Department of Transportation snow plows: Snow removal and the spreading of salt on roads where IDOT bears maintenance responsibility should be privatized.

Abraham Lincoln Presidential Library and Museum in Springfield: The Disney-esque ALPLM was the brain-child of Julie Cellini, the wife of longtime state contractor and power-broker William Cellini. A Republican, William got caught up in the Rod Blagojevich scandals which earned him a short stay in federal prison. Julie envisioned the state-owned library and museum as a way to upgrade Springfield as a tourist destination as opposed to merely being a two-hour detour and bathroom stop for travelers on I-55 who visited the Damen Silos in Chicago earlier in the day. It hasn’t worked. And it appears that the ALPLM was conned when it purchased $25 million worth of Honest Abe artifacts, the centerpiece of that swag was a stovepipe hat that was said to be worn by our 16th president. Except that there is no evidence that Lincoln ever wore that hat. At onetime the ALPLM owned a dress once worn by Marilyn Monroe. Who knows what other unrelated treasures that are gathering dust in closets there? Well here is one: There are five copies in Lincoln’s handwriting of his Gettysburg Address. All of them are considered priceless but a since-fired ALPLM director lent the one the library owns to a tiny museum owned by Glenn Beck for a paltry $50,000.

Illinois is incapable of running the ALPLM.

Lincoln’s New Salem: A twenty-minute drive north of Springfield near Petersburg is Lincoln’s New Salem. This was Lincoln’s first home away from his parents. The town lasted only ten years but it is central to Lincoln lore. This spot, consisting mostly of rebuilt log cabins, has many visitors, primarily kids on school field trips, but its value to buyers grows if it is packaged with the Abraham Lincoln Presidential Library and Museum.

Young Americans for Freedom owns the former Ronald Reagan Ranch in California. Perhaps they might be interested in the above sites tied to our first Republican president too. Hey, Disney might want to grab them for a Lincoln Land attraction. Is that a dumb idea? Well it is not as dopey as buying a Marilyn Monroe dress for a Lincoln museum.

The James R. Thompson Center in Chicago: Colloquially known as by its original name, the State of Illinois Center, it was designed by renowned German-American architect Helmut Jahn. Great artists are capable of colossal flops, after all Prince released several unlistenable albums, and Jahn’s Thompson Center is the turd in his career punch bowl. The heating and cooling systems have never worked well and they are expensive to operate. Its marble floors are slippery when visitors bring in snow from their shoes and it snows a lot in Chicago Ironically its atrium is supposed to be a monument to openness in government. But under the decades-long tenure of Boss Michael Madigan (D-Chicago), the speaker of the Illinois House, government in Illinois has not been transparent at all. The building is named for James R. Thompson, the Republican governor who signed the three-percent annual compounded pension raise into law. Governors back to Blago have suggested selling the white elephant, which sits on prime real estate in downtown Chicago.

Starved Rock State Park: Illinois’ crown jewel in its state park system is Starved Rock in LaSalle County. Desperate times call for drastic action and that is why the Prairie State needs to sell its most-visited state park, which includes an NPS-style lodge with cabins. Private industry can do a much better job running the park, which has crumbling roads, and perhaps new owners build a couple of more lodges. What did I say about location earlier? As with the former Tinley Park mental home, Starved Rock is a short drive from I-80.

What are your suggestions for things and places for divestment by Illinois?

John Ruberry regularly blogs from Illinois at Marathon Pundit.

Illinois should put itself under receivership over pensions

Blogger two years ago

By John Ruberry

“As a result, Illinois government is a massive retirement system that, during work hours, also offers some services.” Chicago Tribune Editorial Board in 2016.

“You never let a serious crisis go to waste.” Rahm Emanuel in 2009.

Last week the president of the Illinois state Senate, Don Harmon (D-Oak Park), sent a letter the state congressional caucus, a gerrymandered lot–more on that latter–asking for $41 billion in aid in response to the COVID-19 outbreak.

The devil is in the details–Illinois is a hellish place—and in that letter from Harmon is a request of $10 billion to fund its woefully-underfinanced public pension plans.

Illinois’ pension crisis goes back decades. In 1989 Governor Jim Thompson, a Republican, signed into law an annual compounded three-percent cost-of-living-adjustment for the state’s public pensioners. But the funding wasn’t there. His successor, Jim Edgar, another Republican, seemingly placed a fix into the system in 1994, “the Edgar ramp,” which started with low payments for the 15 years of his plan. But by that time, when the “ramp” was to kick in, Great Recession arrived. And there were “pension contribution holidays” before then. When the 2008 economic collapse hit Rod Blagojevich, who was as bad as math as Edgar and Thompson, was governor.

In the early 1990s pension payments consumed four percent of the Illinois budget–now it’s 25 percent. The state-controlled public pension plans are only about 30 percent funded.

All that time–except for two years–powerful Chicago Democrat, Michael Madigan, has been speaker of the state House.

According to the Illinois Policy Institute, 19,000 state pensioners collect more than $100,000 annually. On average these pensioners paid a paltry $160,000 into their retirement plans. What a great deal!

New Jersey and Kentucky have public pension funding issues that are as bad, or perhaps slightly worse, than that of Illinois. Will they be asking for pension bailouts next?

Cutting the three-percent COLA has been tried–it was ruled unconstitutional in a unanimous decision by the Illinois Supreme Court because of the pension guarantee clause in the state constitution. Repealing that clause is the smart thing to do but it’s a politically tall hurdle. Such an amendment would likely have to pass both chambers of the General Assembly. Thanks to Madigan, a skilled gerrymanderer who is also the chairman of the state Democratic Party, there are Dem supermajorities in both chambers. Two attempts by petition to effectively ban gerrymandering by way of a constitutional amendment was struck down in court. Allies of Madigan were behind the anti-Fair Map suits. The petition process to amend the Illinois constitution is deeply flawed. 

The organized labor wing of the Democratic Party, the public sector unions, won’t remain quiet if pensions are challenged. Hey there unions, you contributed to this problem too. In 2005 most public service unions signed on to that year’s pension holiday.

Last week Fitch lowered its bond rating for Illinois to BBB- with a negative outlook. That’s one level above junk.

I’m against an Illinois pension bailout by the federal government. For the most part. But if such aid comes in the form of an International Monetary Fund-style rescue package with conditions that Illinois cleans its fiscal house, such as dropping the 3-percent COLA and taking aim at the top pension earners, those six-figure retirees, I’m willing to listen. 

But receivership is best. Okay, let me dream a bit. As Chicago architect Daniel Burnham said a century ago, “Make no little plans; they have no magic to stir men’s blood.” I know, states are viewed as sovereign entities and cannot, as Detroit did in 2013, declare bankruptcy. But what if Illinois agrees to a strings-attached receivership deal? An emergency manager can be appointed. Pritzker, or whoever is governor if receivership comes about, can still handle the ceremonial stuff, such as ribbon cutting for a new bridge and placing bets with other governors when Chicago sports teams are playing for a league championship.

Oh, I’m thinking loans from the feds, not handouts.

As badly funded as Illinois’ pension plans are, many local government pension systems are in worse shape. Illinois municipalities and government agencies, unlike those in Michigan, cannot do so under current state law. That needs to change too.

On a personal note, several friends and relatives of mine are collecting state pensions. Money that was taken from their checks every two weeks for their retirement was instead spent on lord-knows-what. They deserve to be angry and that fury needs to be directed at every Illinois governor from Thompson through Blagojevich. And of course at the Where’s Waldo of Illinois failure, Boss Michael Madigan. He deserves the most rage.

Let me be clear: I don’t take my pension reform views lightly.

Prior to Harmon’s bailout request, the latest pension fix idea was a constitutional amendment to eliminate the Illinois flat income tax guarantee and replace it with a graduated one. That amendment will be presented to Prairie State voters in November. My guess is that it will fail. And even if the graduated income tax amendment passes, the additional revenue won’t be enough. Illinois, which has had negative population growth for six straight years, can’t tax its way of the mess.

John Ruberry regularly blogs from Illinois at Marathon Pundit

Illinois corruption investigation breaks wide open with guilty plea of state senator for bribery over red-light cameras and more

By John Ruberry

Last Sunday in this space I wrote about the need to ban red-light cameras in Illinois–and nationwide. One of the reasons I gave was that the easy cash collected from these “safety devices” fosters corruption. Oh, as far as safety, I mentioned in that post that the record on safety involving red-light cameras is at best mixed. They may even cause automobile accidents.

On Tuesday former Illinois state senator Martin Sandoval (D-Chicago), who has close ties to longtime state House speaker Michael Madigan–who also is the chairman of the state Democratic Party–pleaded guilty to bribery, tax evasion, and extortion charges in federal court. Sandoval is now cooperating with the feds.

Sandoval is the former chairman of the senate Transportation Committee. Using the clout from that post, he promised to “go balls to the walls for anything you ask me” to a representative of the red-light camera firm referred to as “Company A” in the plea agreement.

So far that company has not been officially named but perhaps in a verbal misstep, told a judge, “I accepted money in exchange for the use of my office as a state senator to help SafeSpeed, or Company A.”

SafeSpeed denies wrongdoing and in a statement says it is cooperating with federal authorities. 

Politicians are nervous. This weekend on his Fox Chicago show Flannery Fired Up, host Mike Flannery said, “This red light camera company–suddenly candidates, Republicans and Democrats in Springfield and elsewhere are racing to get rid of this money as if it was infected with the coronavirus. ”

Prosecutors say that Sandoval accepted $250,000 in bribes, including $70,000 in bribes to benefit the red-light camera industry. 

It hardly seems that the industry needs the help. According to the Illinois Policy Institute, Illinois drivers have handed over $1.1 billion to municipalities in fines involving red-light camera infractions. Illinois’ largest city of course is Chicago so it won’t shock you that it has more red-light cameras than any American municipality. Chicago, as I also mentioned in last week’s DTG entry, has already endured its own red-light camera scandal. The central figure in that scandal worked his way up the ranks in Boss Madigan’s Chicago ward organization.

Part of the federal investigation involves lobbying done on the behalf of Commonwealth Edison, the local electrical utility.

As far as public interest, the jaded residents of Illinois will have reasons to keep their attention focused on these scandals. Why?

  • Because people hate utilities.
  • They hate red-light cameras.
  • They hate politicians.

Yes, people keep re-electing the latter, but Boss Michael Madigan, the Michelangelo of gerrymanderers, mocks the electoral system by creating legislative districts that all but ensures Democratic super-majorities in the Illinois General Assembly. 

And increasingly, people hate Illinois. The Prairie State has lost population for six straight years. And no, cold winters aren’t the reason. The states that border Illinois, as well as nearby Michigan, are gaining residents. 

As nauseum pols and media figures are calling–again–for “meaningful reform” in Illinois. Here are my suggestions: Amend the state constitution to ban gerrymandering, and bring term limits to the General Assembly–four terms in the House and two in the Senate. Majority leaders, minority leaders, House speakers and Senate president should be limited to four-year terms. And while we are amending the constitution, the pension guarantee clause needs to dropped, but while protecting those recipients on the lower and of the pension scale. 

Did you know that state legislators can be paid lobbyists? Ban that too.

Also, the state needs a strong inspector general with the power investigate General Assembly members. 

John Ruberry regularly blogs at Marathon Pundit.

Illinois red-light camera probe provides convincing evidence why they should be banned

Chicago’s Northwest Side

By John Ruberry

There is a lot of red-light camera news in Illinois. As part of an overall corruption investigation in the state, federal authorities are into looking into the activities of Chicago firm, SafeSpeed, LLC, which installs red-light cameras in some Chicago suburbs.

Last week the mayor of west suburban Oakbrook Terrace, Tony Ragucci, resigned. He is part of that SafeSpeed probe. Federal agents have also have raided the municipal offices of the villages of McCook, Summit, and Lyons in conjunction with this investigation. A state senator who is part of the red-light camera probe, Martin Sandoval (D-Chicago) has since resigned.

Last year federal authorities seized $60,000 from Ragucci’s home, according to the Chicago Sun-Times, and $51,000 from a safe from Cook County Commissioner Jeffrey Tobolski’s residence. Tobolski is also the mayor of McCook.

SafeSpeed’s CEO denies any wrongdoing and no charges have been filed regarding the firm.

In 2017, the Forest Park Review called SafeSpeed a “clouted company.”

Something stinks in Illinois. Actually, something new stinks in the state.

Red-light cameras are a cruel cash cow. At best their record in preventing accidents, the prima facie for them, is mixed as evidence shows out of fear of a $100 ticket–the charge in Illinois–motorists often abruptly slam on the brakes but then end up getting rear-ended.

As the nation’s most corrupt city, it shouldn’t be surprising that Chicago has more red-light cameras than any other municipality. Nor should it be surprising that it has endured a bribery scandal involving red-light cameras. John Bills, a former precinct captain in Michael Madigan’s political organization, is currently serving a 10-year prison sentence for accepting $2 million in bribes and gifts from a different red-light camera company, Redflex.

Madigan has been speaker of the Illinois House for thirty-five of the last thirty-seven years and he’s been the chairman of the Illinois Democratic Party since 1998.

Three paragraphs ago I called red light cameras a cruel cash cow. How much cash? From 2008 through 2018, drivers forked over $1 billion to municipalities. Not a major reason, but I suspect the proliferation of red-light cameras, most of which are concentrated in the Chicago area, as among the causes of Illinois’ six-years-and-counting population decline.

Here’s a personal take on red-light cameras. Thursday night Mrs. Marathon Pundit, who is a limousine driver, called me. “You have to pick me up at O’Hare Airport.” I replied, “Why?” She answered, “There is a boot on my limo.” Yes, one of those wheel boots. When I picked her up at O’Hare she supplied more details. “The city says there are four unpaid red-light tickets, two of them are from 2018, but the office says they were never told about them.”

Okay, you may answer that one of her co-workers could be covering up inaction at the office. But in order for her employer to receive a city vehicle sticker for the limo she drives, all red-light camera tickets must be paid off. But the limo she drives has the latest Chicago vehicle sticker.

Those four tickets cost her employer $988, which included late charges and sending someone out to the car to remove the boot. Not knowing what was coming next, Mrs. Marathon Pundit parked her limo in a short-term lot, so her fee–which we have to pay–was a staggering $77. As it took all day Friday to sort out this debacle, my wife missed a day of work. She’s not on salary.

I’m certain hundreds of thousands of Illinoisans have similar stories.

There is some good news regarding red-light cameras. Last year Texas became the eighth state to abolish them. And in a rare bipartisan push, there is a movement in Illinois to ban them. And Illinois drivers now have a new friend, Illinois Comptroller Susana Mendoza. The Chicago Democrat says she’ll no longer assist municipalities in collecting red-light camera tickets. “As a matter of public policy, this system is clearly broken,” Mendoza said in a statement, “I am exercising the moral authority to prevent state resources from being used to assist a shady process that victimizes taxpayers.”

Good for her. 

Red-light cameras should be banned. 

John Ruberry regularly blogs at Marathon Pundit.

Chicago teachers demand smaller class size by striking, but enrollment is already declining

Chicago Teachers Union member at a 2012 Occupy Chicago rally–classes were in session that day

By John Ruberry

Chicago Teachers Union members are on strike again, 300,000 students and their parents have to reshuffle their weekday routines. 

In Chicago and many other big-cities, school is more than being an educational institution. Three quarters of Chicago Public Schools students qualify for government paid-for or subsidized lunches, many also qualify for breakfasts under similar circumstances. 

Or maybe schools in Chicago are less than being an educational institution as barely one-in-four students read at grade level, despite most schools having “College Predatory” and “Excellence” in their names. But CPS schools serve, even when there isn’t a strike, sadly as day center centers.

While meals are still being provided at CPS schools since the strike began last week, the walkout is hurting those that the Chicago Teachers Union purports to represent, the kids and their families. Parents are taking time off work to watch their children. Chicago’s new mayor, Lori Lightfoot, has offered teachers a 16 percent pay raise, but union leaders say that they are striking for, wait for it, the kids and their hard-pressed parents.

On the other hand, the CTU is advocating for a financial program for teachers and support staff so they can purchase a home in Chicago. Wait, aren’t Chicago taxpayers paying teachers and other CPS employees so they can buy a home? There is plenty of affordable housing in Chicago, just not so much in the fashionable neighborhoods on the lakefront.

The quick reaction to the strike is that Chicago has no more money, as the city is essentially bankrupt due to unfunded public worker pension obligations, including those for teachers. But somehow the cash to end the strike will be “found,” although it will likely involve borrowing from Judas so the city can rob Peter to pay Paul. If that last sentence doesn’t make sense then you are not from Chicago

One of the CTU’s key demands is a familiar one, smaller class size. But that issue should be taking care of itself as for three straight years CPS enrollment has dropped by 10,000. Twenty-six CPS high schools have fewer than 270 students and two of them fewer than 100. These schools were built to accommodate much larger enrollments. But that didn’t stop CPS from opening a new high school in Englewood, a neighborhood whose population has dropped by two-thirds since 1960.

And Chicago’s overall population is declining, leading the charge of the Illinois Exodus that has been going on for five years now

Incompetent and corrupt government reaps a poor harvest. And the money that Lightfoot will need to “find” to end the Chicago teachers strike will hasten the Exodus. And fewer taxpayers means less money.

John Ruberry blogs from the Chicago area at Marathon Pundit.