Synopsis: The Keefe, Campbell, Biery & Associates Monday Law Update Endorses Bruce Rauner for Illinois Governor.
Editor’s comment: While we have tried to remain as bipartisan as possible throughout this campaign, we feel we have to make a clear stand on where our state and its taxpayers should go in this crucial election. It is our strong feeling our state is at a crossroads with this administration and incumbent Democratic leaders pointing our state government to economic failure or collapse, like Detroit. We note President Obama, Vice-President Joe Biden, and the Clinton family can come to Illinois to raise millions but we didn’t hear any answers to the hundreds of questions about why Illinois is such a mess and how to fix it. We feel there are very few objective reasons to vote for incumbent Governor Quinn and ample reasons for any interested taxpayer to vote for challenger Bruce Rauner.
This week, we reviewed a 77-page warning from the nonpartisan Civic Federation of Chicago on our current IL state budget. This is the budget our Democratic legislators already passed and Gov. Quinn signed into law for the fiscal year that started on July 1, 2014. You will note under this administration, Illinois gov’t is still in miserable financial shape. This administration’s array of tricks and “creative” accounting will have taxpayers' unpaid bills growing dramatically. And this year's budget hides bombs and shocking surprises that are going to detonate on IL taxpayers soon. The budget is designed to protect Quinn and incumbents during the election only—they will then deal with what they have done to us when it is too late to take any effective action to remedy it. If you have concerns about trusting our leaders in Springfield, read this scathing report.
The Civic Federation report clearly demonstrates how Democrats in Springfield are trying to hide their decisions and not further enrage taxpayers. As you consider your vote, keep these Civic Federation bullet-points in mind:
· "General funds expenditures appear to decline by $1.1B from $36.8B in fiscal year 2014 to $35.8B in fiscal year 2015, but actually increase by $528M due to shifting of funds from year to year among state accounts."
· Hidden in the shifting spending increases: a new school in Multimillionaire Speaker Mike Madigan's district at a cost of $35M when our State can’t pay its bills.
· Despite spending growth, this budget underfunds agency costs by $470 million, chiefly for the state Departments of Human Services and Corrections and for mental health grants.
· This year Illinois' general funds will receive $4.5 billion from Washington, much of it for Medicaid. “State-source” revenues will total $30.6 billion. Of that total, state gov’t pension costs will consume 1 of every 4 dollars, or 24.7% of the total.
· Worse, IL taxpayers' pension contributions "are expected to increase sharply in fiscal year 2016.” Why? Because expected return on pension investments is comically low. Governor Quinn is doing nothing to improve investment returns.
· The current budget reverses course from two years in which the state began to reduce its backlog of unpaid bills. Unpaid state bills are projected to rise this year from $6.0 billion to $6.4 billion. Gov. Quinn has been a delinquent bill payer for all six years.
· This year's budget relies on borrowing $650 million from the state's Special Funds — debt that has to be repaid within 18 months. That's likely to crimp future spending on education, health services and other state government categories.
Governor Quinn's insistence on spending tomorrow's dollars today is one reason all three major bond rating agencies rank Illinois as the nation's least creditworthy state. Each agency also attaches a negative outlook to Illinois, meaning all three will almost certainly further downgrade our state's harmful credit rating even more. Please understand the awful credit rating of the Quinn administration isn’t a partisan/political view—it is simple math from three separate rating agencies. And it costs you and I more money to borrow. Standard & Poor's warned this current budget "is not structurally balanced and will contribute to growing deficits and payables that will likely pressure the state's liquidity." In shorter terms, Gov. Quinn is ignoring the approaching gov’t meltdown.
We ask our readers for a single objective reason someone who isn’t receiving or on a track to get a state government pension would vote for Governor Quinn. Illinois has a miserable unemployment outlook with jobs and people leaving Illinois in droves. As we advised last week, our state was ranked 48th out of 50 states in economic outlook—Governor Quinn can’t make lame excuses about a recession that all our sister states also dealt with. Governor Quinn was going to end the tollways and make every road into a freeway—Oooops, he then almost doubled your tolls. Gov. Quinn has already promised to retain the highest income tax increase in IL history in place, despite lying to us about having it automatically go down at year-end. Governor Quinn supports raising our highest state income tax rate to 8% and, if he wins, we expect that to start to happen in about three weeks. Governor Quinn tried to come up with phony property tax relief which failed and we assure our readers your property taxes are going to skyrocket across the state. Governor Quinn’s hiring practices have been questioned at IDOT and other state agencies—Illinois taxpayers are now going to have to pay for a federal monitor of Governor Quinn’s hiring practices.
Do We Really Want a Substantial Tax Increase to Pay for Spiraling Compensation for Folks Who Aren’t Working For Us Any More?
When you consider one out of every four Illinois tax dollars are going to folks who don’t work for our government any more, it is hard not to get mad. The current “fake” pension setup includes a 3% annual kicker that means we will rapidly pay more money to retired workers than they made while employed. For an example, Hank Bangser who retired about 7 years ago as the New Trier School Superintendent is getting an IL pension of around $300K a year annually with around $200K of that as fresh money coming from you and me. Yes, you are right, he gets millions of dollars from IL taxpayers not to work here. His annual pension 3% compound interest increases are currently more than $10K every year and will spiral and go up for life. He is around 57 years old. If he lives to be 87 and you do the math, we will owe him over $700K a year! http://articles.chicagotribune.com/2011-01-29/news/ct-met-superintendent-pensions-20110129_1_pension-rules-public-school-pension-state-pension Please note Hank isn’t actually retired and is working in the same job in California and probably making a combined income of over $500K a year. There are lots and lots of wealthy IL state pensioners getting six-figure pensions with compounded 3% increases out there all over our country. The only way our taxpayers will stop owing these people mega-money is when they eventually die off, as if they were feudal kings, queens and lords. The money to pay the staggering lifetime compensation could be going to social programs and women’s issues and psych counselors but, based on the IL Constitution created by Multimillionaire Speaker Mike Madigan, it has to be spent on former state workers. The only way to change this rapidly growing whirlpool for our tax dollars is to change the IL Constitution (not likely) or change benefits for incoming workers. We are sure Gov. Quinn won’t do so, as his money and support are coming from unions who won’t allow it. Please remember the gov’t pension debt was $54B under Quinn in 2009 and it is $105B and growing even faster now. That money has already been spent and you and me and our kids and their kids will have to pay it back along with the interest charged on it.
Our IL Supreme Court also ruled this year former Illinois state workers are also entitled to taxpayer-paid lifetime healthcare. There was no façade or pretense about the workers contributing a penny toward that immensely expensive post-employment benefit. Former IL government workers appealed all the way to the Supreme Court about being asked to contribute a measly 1 or 2% of the cost and they won—we have no idea why our tax dollars are going to provide “free” or taxpayer paid health care benefits to folks like President Obama and former Mayor Daley when they haven’t served in IL state government in over a decade. When we consider and weigh the amount of unfunded post-employment benefits for former IL state workers it is hard not to consider them the biggest mooches in Illinois history. If you don’t like the term “mooch,” please note our judges/justices and legislators can fully vest in their six- and seven-figure pensions without contributing one full year’s salary. They get it all back before the end of the first year of being on a fake pension and then get millions more with taxpayer-paid healthcare for life. Illinois taxpayers can’t and shouldn’t have to pay our former government workers this outrageous largesse.
Bruce Rauner Positives
For all the silliness in the attack ads about Bruce Rauner, we don’t think our readers understand how cool this guy and his wife Diana are. He is not your typical IL state Republican. Did you know there is a Rauner College Prep in Chicago? http://raunercollegeprep.noblenetwork.org/about/history-and-campus-overview. We think that is a pretty cool thing. Please note he didn’t use your tax dollars, their family contributed their own money. In contrast, we assure you Multimillionaire Speaker Mike Madigan hasn’t yet contributed anything from his own pocket to the new school in his district that we mention above—he is quietly using your money. We are also certain Multimillionaire Speaker Mike Madigan legally “rigged” this election by gerrymandering election districts across the state—just because he legally can and did do so doesn’t make it morally or ethically right. We feel Illinois needs a two-party system and Gov. Quinn’s administration is fighting to end it.
Please also remember Bruce Rauner and his great wife Diana aren’t “using” their charitable donations and activities in their campaign. Again, we consider that to be a very cool thing to keep off the map but we don’t know if our readers know how good for education, economics and jobs this guy is.
1. Rauner was named the 2008 Philanthropist of the Year by the Chicago Association of Fundraising Professionals.
2. In 2003 Rauner received the Daley Medal from the Illinois Venture Capital Association for extraordinary support to the Illinois economy and was given the Association for Corporate Growth’s Lifetime Achievement Award.
3. Rauner and his wife Diana received the Golden Apple Foundation’s 2011 Community Service Award.
4. Rauner and his wife Diana have been a financial supporter of many great projects including
- Chicago’s Red Cross regional headquarters,
- YMCA in the Little Village neighborhood,
- Six new charter high schools,
- An AUSL turnaround campus,
- Scholarship programs for disadvantaged Illinois public school students, and
- Achievement-based compensation systems for teachers and principals in Chicago Public Schools.
Bruce and Diana Rauner variously provided major funding for the construction of the Rauner Special Collections Library at Dartmouth College, endowed full professor chairs at Dartmouth College, Morehouse College, University of Chicago and Harvard Business School, and was the lead donor for the Stanley C. Golder Center for Private Equity and Entrepreneurial Finance at the University of Illinois. Bruce Rauner also serves on the board of the National Fish and Wildlife Foundation.
More Bruce Rauner Potential Positives – A Solid Business Approach to Illinois State Government May Be Coming!
If you don’t know what Bruce Rauner does for a living, he is a “Shark Tank” guy. He looks at businesses and turns them into well-run machines. He can do that for our IL Government, if we let him. Please vote for a guy as smart and as sharp as this guy is. If you are comparing the intellects and business acumen of these two candidates, Bruce Rauner wins by a light year. The defense team at KCB&A suggests you select the smart, successful private-sector candidate over the clunky political hack whose intentions are more aligned with victory than personal conviction and good government. You also don’t have to feel any remorse for Pat Quinn if he loses, as he is eligible to immediately retire with an annual fake pension starting at approx. $160K plus healthcare.
If you want some easy, outside looking in “better-government” thoughts on how Governor Quinn is wasting your money and how Bruce Rauner could easily and quick save IL taxpayers zillions of dollars, here are a couple:
· IL has “Tow-Trucks-that-don’t-tow-trucks.” Those “Minutemen” tow trucks you see on our highways aren’t allowed to tow anything. They will bring you gas if you run out and they will provide guidance or call a private tow service for you but they won’t and can’t give you a tow. Try to understand how stupid it is that our state officials keep buying expensive vehicles they don’t and won’t allow to be used. Couldn’t our IL State Police do exactly the same thing our “Minutemen” do and save millions?
· IL State Government has 88 agencies with 88 department directors and 88 assistant directors and 88 HR heads and 88 information departments and lots of redundancy. Couldn’t we consolidate them to 44 agencies or 22 agencies and save millions?
· IL is the Land of Little Governments—Illinois leads the entire U.S. in expensive and redundant mini-governments at 6,963 to include irritating and duplicative government bodies like grade school districts, community college districts, water reclamation districts, mosquito abatement districts, park districts, forest preserve districts, townships and counties and everything else. Lots of these districts have their own duplicative and do-nothing police departments. Some of the workers get local pensions and some of the workers get state pensions—all of the pensions have challenging funding. Most Illinoisans have 10-20 taxing districts on our bills—your money is going to all these government workers to fund their retirements and not your retirement. We are used to too much government and, for the most part, don’t have any idea who all these folks are or what they do for us. All of it runs through Springfield and our Governor could work to minimize all this redundancy, if he were so inclined.
· Please note four-five years ago, State Treasurer Rutherford and Comptroller Judy Baar Topinka both openly agreed their state agencies were redundant/duplicative and one of them could be shut down at an annual savings to Illinois taxpayers of about $12M. They both agreed those new-fangled “computers” ended the need for one of the agencies. Under Governor Quinn, nothing has happened about it. http://www.wrex.com/story/13029972/treasurer-comptroller-could-be-one-office-in-illinois.
· Similarly, the Lieutenant Governor job in Illinois is a complete waste of everyone’s tax dollars. Current IL Lieutenant Governor Sheila Simon appears to be seeking a different office so she finally has something to do to keep busy. Why not save additional millions and simply end that office?
· Automate Illinois tollways and save over $100M a year—Automated tollways have been around for over thirty years. If you want an example, travel the Indiana tollway—you can’t give money to a human. In contrast, Illinois spends over $100M each year on toll-takers’ salaries and overtime. In our view, that tax money is completely wasted and the boring task of taking coins and making change need to be phased out. Please note the toll-takers who hang around long enough then get lifetime healthcare coverage and fake pensions that pay them more than they made while working.
What Will Bruce Rauner Mean to the Illinois Workers’ Compensation Industry?
There are many players with a role in the IL WC system, including adjusters, risk managers, attorneys on both sides, healthcare providers, hearing officers and lots of support folks. We are sure Bruce Rauner doesn’t have major WC changes in mind but there are a lot of simple minor changes we feel could be made in a “good-government” model. Please also remember Bruce Rauner won’t have the power to change the IL WC Act as he won’t have control of the Illinois legislature—he may be able to appoint an IWCC and Arbitrators who might more closely follow the actual wording of the Act and put an end to all the “activism” and unusual definitions.
To the Petitioners’ attorneys in the IL WC system who are running around like the “sky is falling” if Bruce Rauner gets the governor’s job, we like to point out Illinois unemployment has stayed at high levels and there are almost no new jobs in important industries like manufacturing and construction coming to IL under Gov. Quinn. Newly filed IL WC claims have dropped by half under this administration and the one before it. If the downward trend of fewer and fewer IL jobs continues, there isn’t going to much need for the IWCC or Petitioners’ lawyers. In our view, both sides of the bar are better served if Illinois becomes a much better place for business and builds new jobs and we get our state government back on the rails and start aggressively competing with our sister states.
The election is ongoing—please go vote right now! It ends in eight days. We join with just about every major news outlet in and outside our state to confirm our choice is clearly Bruce Rauner for the best interests of our state. But please, please vote for the candidate of your choice. Neither candidate approved this message. We appreciate your thoughts and comments.