QUOTE OF THE DAY
WSJ: Rahm Emanuel Faces New Test With Chicago Pension Crisis
Jumping from city-hall meetings to public-school classrooms in his black SUV, Rahm Emanuel worked to buff his image as the hard-driving mayor of the nation’s third-largest city in the CNN TV series “Chicagoland.” But the biggest challenge he faces as his first term ends isn’t so camera ready.
On the eve of his re-election bid, Mr. Emanuel is confronting one of the nation’s most underfunded municipal pension systems. Pushing him to act is Chicago’s deteriorating credit rating and a growing risk that the retirement funds could run dry. The mayor also has tried to portray himself as an elected official unafraid to tackle tough issues.
So far, Mr. Emanuel, a Democrat, is seeking to raise property taxes by $250 million and shrink retirement benefits for most city workers and retirees. But his administration has months of work ahead as it tries to sell aldermen, state officials, unions and the public on a complex plan that is only starting to take shape.
Crain’s Chicago: Why is Illinois unemployment so high?
Illinois always has been one of the last states to suffer from a recession and one of the last states to recover, but this is getting ridiculous.
Nearly five years after the recession ended nationwide, the Illinois unemployment rate is 8.4 percent, third worst in the nation. When Gov. Pat Quinn took office in January 2009, the recession had been underway for a year and unemployment stood at 8.0 percent, just slightly above the national average.
Since then, the Illinois economy has sputtered, with unemployment peaking at 11.4 percent before slowly dropping. The rate is now almost 2 percentage points above the national average.
Daily Herald: Income tax decision looms for suburban Democratic lawmakers
With just three weeks before state lawmakers’ deadline for approving a budget, most suburban Democrats are still on the fence about whether to vote to renew a temporary state income tax hike or allow it to roll back as scheduled.
Allowing the tax rate to drop means much less revenue for state programs, but voting for the higher tax rate is risky for lawmakers who face a November election. The leader of one political action committee already is promising to work against any lawmaker who votes for keeping the higher tax rate.
Moving some Democratic “undecideds” into the “yes” column would be crucial for passing an extension of the tax hike.
Chicago Tribune: Driver cellphone ban off to an uncertain start in Illinois
Since Jan. 1, when Illinois became the first Midwestern state to ban motorists from using hand-held phones, the number of citations Illinois state troopers have written for distracted driving has nearly tripled, records show.
Some municipalities also are writing steadily higher numbers of tickets for distracted driving, although the numbers vary widely, as do enforcement tactics, the Tribune found.
As drivers get used to the new rules of the road, it is unclear whether the increase in citations is encouraging news for safety or just another indicator of how ubiquitous and entrenched mobile phone use has become in an era of hyper-connectivity and multitasking.
The Daily Journal: The real governor of Illinois
If one were to look up the word “shrewd” in the dictionary, you’d likely see Mike Madigan’s mug staring back at you.
In 2011, he sponsored an income tax hike but promised it would be temporary.
Now, he says it should be made permanent.
Politico: $474M for 4 failed Obamacare exchanges
Nearly half a billion dollars in federal money has been spent developing four state Obamacare exchanges that are now in shambles — and the final price tag for salvaging them may go sharply higher.
Each of the states — Massachusetts, Oregon, Nevada and Maryland — embraced Obamacare, and each underperformed. All have come under scathing criticism and now face months of uncertainty as they rush to rebuild their systems or transition to the federal exchange.
The federal government is caught between writing still more exorbitant checks to give them a second chance at creating viable exchanges of their own or, for a lesser although not inexpensive sum, adding still more states to HealthCare.gov. The federal system is already serving 36 states, far more than originally anticipated.
A frequent question I hear is: Why don’t we see falling gasoline prices at the pump now that the the US is producing increasing amounts of crude oil, currently at the highest level of output in 26 years, and heading for an all-time record high by the end of next year? The chart above shows that since January 2010, US crude oil production has increased by 54% (and by almost 3 million barrels per day), while at the same time retail gasoline prices in the US have increased by more than 35%, from $2.70 per gallon in January 2010 to $3.66 in April. So why has America’s rising oil production been accompanied by rising, and not falling, gasoline prices for US consumers?
One reason that might explain why gas prices haven’t fallen in the US is that crude oil is a global commodity, and oil prices are determined by market forces at the global level (global supply and global demand), not at the national level. In contrast, rising domestic natural gas production has resulted in falling natural gas prices in the US, because natural gas is a primarily a local, not global, commodity, and US natural gas prices are determined by the local (national), surging supply. Despite the rising production of domestic crude oil, the US share of global crude oil output has increased only slightly, from 8.6% of the world’s oil supply in January 2010 to 8.8% of world oil in December 2013. Therefore, the rising oil production in the US, while impressive, hasn’t been significant enough to impact the global supply of oil (or the global price), which would be one reason the rising US oil supply hasn’t translated into lower prices at the pump.
CARTOON OF THE DAY
