CN June 2, 2016

Forrest Claypool laid it out in stark terms yesterday. Unless there’s a state budget, with funding for Chicago Public Schools, no Chicago school will open in September. They just don’t have the money.

“I don’t think he’s posturing,” says Tribune City Hall correspondent Hal Dardick.. “If you look at the finances of the Chicago Public Schools they have about $20-million in their bank account and with the kind of payroll they have that’s pennies. That’s a few days, you know, and they don’t have the ability like some other districts to borrow money. They have a junk bond rating. They had to pay a really high 7½% interest rate the last time they borrowed money, and the markets probably next time would just say no, we’re not even going to loan to you, or we’re going to do it at such exorbitant prices that it’s untenable. So he can’t do any of the things that you would do in a crisis. There’s no reserves to spend. They won’t open, I think he’s right.”

We talk Springfield on this week’s show, specifically the epic collapse of any effort to create a budget before the end of the Spring session on Tuesday night. Reuters correspondent Dave McKinney tells us the plan Mike Madigan’s House passed was seven billion dollars out of balance, and was never serious.

“A total wish list, so it wound up getting out of the House comfortably, but then it just sat and sat and sat in the Senate, he explains. “And even though the Senate is the upper legislative chamber in Illinois they have a bit of an inferiority complex there because they are just years and years and years of being spoon-fed by Mike Madigan, and a lot of members who have been around a long time are resentful of that.

“And so when they see this gigantic budget bill coming to them in an election year that doesn’t have any way to pay for it they know immediately hey, this is a problem, we could wind up suffering in the fall.”

In terms of the raw politics, McKinney tells us there are plenty of House Democrats who are getting worried after seeing the cash resources Governor Rauner was able to marshall against a couple of members in the primaries. “It took $5 or $6-million in spending,” he tells us, “And most of these legislators have no means to get that kind of money. They’re completely dependent on Madigan and the Unions to come up with it, and everybody is like, if we can avoid that fight we would love to avoid that fight.  So, yeah, Rauner does have a little bit of leverage that way, but what we’re seeing right now is just this deadlock we’ve had since really the beginning of ’15 when Rauner came into office, it’s just a continuation of that and I don’t see any immediate end to it in Springfield.”

Mayor Emanuel scored a major victory on Memorial day when both the House and Senate voted to override the Governor’s veto of a bill that allows Chicago to extend payments into its police and fire pensions.

“It gives the City 15 more years to bring financial health back to the police and fire funds which are woefully underfunded,” Dardick explains. “They are about more than $10-billion short in money, and they would go broke in 7 or 8 years without more money. But the Mayor agreed, he passed a property tax increase last year, a record high property tax increase to put money into it. But at the same time it wasn’t enough to pay them down under the current schedule which would have been 25 years. He wanted to extend it to 40 years so he doesn’t have to raise those property taxes any further.”

Dardick said Emanuel didn’t go to Springfield, but he worked the phones and Facebook diligently beforehand pushing for the override.

“I can tell you he is working the phones,’ he says. “I think one thing you never do as a politician is you don’t go down there and actually be seen in person pushing for something if you’re not 100% sure it’s going to happen because then you look weak.”

So where do we go from here?

McKinney says expect only incremental progress between now and the November elections.

“Well, I do think that things will gravitate slowly back to this scheme that Rauner has floated to do a little bit of spending for fiscal 16 and then a K through 12 budget for fiscal 17,” he tells us. “I think that’s where they gravitate back toward, but it’s like a chessboard where there are two kings and that’s all that’s left on the board you know. They’re just chasing each other across the Board.

It’s not clear how much longer Rauner and Madigan can continue this stalemate. There’s increasing resistance in the Legislature itself, McKinney reports.

“Rank and file Republicans hate it; rank and file Democrats hate it. The Democrats hate it because the social service programs that they rely upon in their areas are going bankrupt and the universities and the MAP students. Most of the universities downstate are all in Republican districts. Those guys are acutely feeling the strain of the budget impasse.

“The failure to have a budget belies (Rauner’s) theme of fiscal responsibility, because every day that we don’t have a budget the debts grow, the interest on the debt grows. The problem for the State of Illinois becomes worse. There’s more risk of the debt ratings going down,” McKinney asserts.

You can read a full transcript of this show as a Word document here:   CN transcript June 2 2016

 

 

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About Ken

Ken's the host of Chicago Newsroom. A former news director, reporter and radio program host, he's also a past Vice President of the Chicago Headline Club.
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