Bruce Rauner’s Next Campaign
Republican Bruce Rauner, a former private-equity manager, spent more than $20 million of his own money to defeat Illinois Gov. Pat Quinn. So what is he going to do next? Kick off another campaign, naturally.
Mr. Rauner faces perhaps the most daunting task of any governor in the country. Illinois has the nation’s worst credit rating, most insolvent pension system and barely any job growth. A Democratic state legislature can override his vetoes, and its chief power broker, House Speaker Michael Madigan, has every incentive to undermine the new governor given that Mr. Rauner’s likely Democratic challenger in 2018 will be the speaker’s daughter, state Attorney General Lisa Madigan.
First, Mr. Rauner will need to peel off enough Democrats to phase out the state’s 2011 “temporary” income and corporate tax hikes, which will begin to sunset at the end of this year. Democratic leaders want to force Mr. Rauner to break his campaign promise to roll back the tax increases and to sign onto a limited extension next year.
Chicago Tribune: Medicaid patients denied new hepatitis C cures
Revolutionary new drugs are curing hepatitis C, halting a disease that can corrode the liver to the point of cirrhosis, cancer and death. But state restrictions on who can get the costly drugs are keeping them out of reach for some of the poorest patients.
Treatment with new drugs Sovaldi and Harvoni, the first reliable cures for hepatitis C, costs more than $94,000 per patient. The high price of Sovaldi drove Illinois Medicaid’s hepatitis C spending to $22 million for the fiscal year ending June 30, 2014, up from $6.7 million the previous year, according to the Illinois Department of Healthcare and Family Services.
Facing higher costs, Medicaid officials stopped paying for any but the sickest patients to get the new drugs, drawing criticism from some liver doctors who have said the state is preventing them from properly treating their patients.
Another Win Against Hair-Braiding Licensing in Washington State
Salamata Sylla, an immigrant from Senegal to the United States, will not have to take 1,600 unnecessary hours of utterly irrelevant cosmetology training in order to keep operating her hair-braiding business in Washington State. It’s another victory for the lawyers at the Institute for Justice, fighting similar licensing regulations across the country designed to protect established businesses from competitors in the guise of public health or safety.
Sylla’s case is particularly notable in that it shouldn’t even have happened in the first place. According to the Institute for Justice, the state’s Department of Licensing determined in a similar case in 2004 that hair-braiders do not need cosmetology training. But they concluded that battle with a non-binding policy statement. That’s obviously bureaucratic-code for “Enforce it if you think you can get away with it.”
They targeted Sylla in 2013, and not only did she fight back, she’s gotten an apology from the Department and an agreement to put an actual administrative rule on the books exempting hair-braiders from the training. The Institute for Justice praised the decision but warned that it will keep watching to make sure they actually follow through and create the exemption in writing. The Institution for Justice is also fighting similar regulations right now in Arkansas and Missouri.
International Business Times: Chicago Mayor Rahm Emanuel Accepted Campaign Contributions From Financial Firms Managing City Pension Money
Executives at investment firms that manage Chicago pension funds have since 2011 poured more than $600,000 in contributions into Mayor Rahm Emanuel’s campaign operation and political action committees (PACs) that support him, according to documents reviewed by International Business Times. These contributions appear to flout federal rules banning companies that manage pension funds from financing the campaigns of officials with authority over pension systems, say legal experts.
The contributions also potentially conflict with an executive order Emanuel himself signed in 2011 prohibiting city contractors and subcontractors from making campaign donations to city officials.
A former chief of staff to President Obama, Emanuel, a Democrat, was elected Chicago mayor three years ago with a substantial boost from financial services executives. Since 2011, at least 31 executives at firms that harvest fees by managing city pension funds have contributed to his campaign and associated PACs. That list of donors includes Kelly Welsh, a Northern Trust executive who was recently appointed by President Obama to the top legal position in the U.S. Commerce Department. (See related story here.)
Crain's: Emanuel's toughest job lies ahead
Many Chicagoans are better off than three and a half years ago, when Rahm Emanuel was elected mayor.
The city’s unemployment rate has fallen this year more than it has in any other major city, while median household incomes are near their pre-recession peak, according to a special report by Crain’s that takes a wide-ranging, numbers-driven look at how the city has fared during Mr. Emanuel’s tenure. The downtown economy is buzzing with building and startups, while tourism is rising, thanks in part to his relentless promotion.
Despite these accomplishments, Chicago still suffers from deep divisions, which the Nov. 10 report also highlights. The city’s poverty rate is higher than before he took office. While Mr. Emanuel rightly touts soaring citywide high school graduation rates, the gap between black and white students actually has grown.
Wall Street Journal: A Solvent Detroit Isn’t a Self-Sustaining Detroit
God bless the child that’s got his own, goes the song. That won’t be Detroit, even after shedding $7 billion in debt in its just-concluded bankruptcy.
Detroit was once America’s fourth-biggest city, with its highest per capita income. But these days no city is more dependent on private philanthropy to keep it afloat. In the decade before its Chapter 9 filing, according to a study by Bloomberg News, Detroit relied on the equivalent of $600 per citizen per year in charitable contributions to perform fundamentally government-like functions such as housing subsidies and blight removal.
Then there’s the bankruptcy trial itself, which revolved around Detroit’s art collection, virtually the only valuable asset in the shrunken city’s possession. To take the Detroit Institute of Arts collection out of play to satisfy the city’s creditors, a group of philanthropies, including the Kresge Foundation, Ford Foundation, Knight Foundation and others coughed up $360 million to be spread among a selected group of creditors, namely the city’s pensioners.
U.S. News: Federal insurer of pensions reports $62B deficit for fiscal 2013; blames multi-employer plans
The federal agency that insures pensions for about 41 million Americans saw its deficit nearly double last year. The agency said the worsening finances of some multi-employer pension plans mainly caused the increased deficit.
At about $62 billion for the budget year that ended Sept. 30, it was the widest deficit in the 40-year history of the Pension Benefit Guaranty Corp., which reported the data Monday. That compares with a $36 billion shortfall in the previous year.
Multi-employer plans are pension agreements between labor unions and a group of companies, usually in the same industry. The agency said the deficit in its multi-employer insurance program jumped to $42.4 billion from $8.3 billion in 2013.
AEI: Adjusting for transfers and taxes reduces income inequality between highest and lowest quintiles by 50%
As a follow-up to my post on Saturday about the new CBO study on the “Distribution of Household Income and Federal Taxes, 2011,” the table above shows how income inequality between the highest and lowest income quintiles changes when we account for: a) transfer payments and b) federal taxes. Here’s a summary:
1. When we compare “Average Market Income” (labor income, business income and capital gain income), the average household in the highest income quintile received 15.1 times more income in 2011 ($234,700) than the lowest income quintile ($15,500).
2. After adjusting for government transfers, the average household in the highest quintile received only 10 times more before-tax income ($245,700) in 2011 than the average household in the lowest one-fifth ($24,600).
Chicago Tribune: Emanuel campaign, aldermanic hopefuls file for spot on Chicago ballot
Scores of aldermen, election attorneys and campaign volunteers formed a long line that snaked through the basement of the Dunne Cook County Office Building on Monday morning as they waited to be among the first to file petition signatures to get on the ballot for the Feb. 24 Chicago election.
All 50 City Council seats are on the ballot, plus mayor, city clerk and treasurer. Those who were in line by 9 a.m. got a shot at the coveted first spot on the ballot for a particular race. A lottery will be held Dec. 3 to sort that out.
Mayor Rahm Emanuel campaign manager Michael Ruemmler and election attorney Michael Kasper were among those toward the front of the line, with Kasper towing a dolly carrying five boxes full of petition signatures. A couple of those boxes belonged to Emanuel’s campaign while the rest were for 16 other candidates Kasper represented.
Yahoo Finance: Another rude Obamacare surprise awaits
Taxes are bad enough when you know they’re coming—and much worse when they arrive unexpectedly.
As the Affordable Care Act enters its second year of operability, a key and controversial element of the plan will begin to affect several million Americans for the first time. People who didn’t have health insurance during 2014 may soon have to pay a penalty fee that starts at $95 and goes up based on how much you earn. Some Americans know about the penalty, and they’ve budgeted for it or at least accepted its inevitability. But several million others could be in for a rude surprise when Washington assesses a fee they didn’t even know was coming.
The uninsured rate has fallen since Obamacare, as the ACA is known, went into effect at the start of 2014. But there are still roughly 40 million adult Americans who lack health insurance, according to Census Department data. A recent poll by Gallup shows that about 55% of the uninsured plan to get insurance, while 35% say they’re willing to pay the fine for not having coverage. That leaves 10% of the uninsured — 4 million people or so — who appear to be unaware they need to have insurance or pay a penalty. Plus, some of the 55% who say they plan to get coverage inevitably won’t, including a portion who probably don’t know they’ll get stuck paying a penalty.
WirePoints: No Easy Task: Consolidating Illinois’ 8,466 Units of Government
Illinois is #1 on another list, this time comparing number of units of government to all other U.S. states. 6,963 is our number published by federal census records, which is actually lower than data provided by our own state records. Illinois Dept. of Revenue shows the state has 7,409 units of government and our own state Comptroller shows we have a whopping 8,466. How did we get here?
Illinois government units are either General Purpose, such as cities and counties, or Special Purpose which perform a specific function, such as school districts, parks, and sanitary districts. Illinois has about 3,000 General Purpose units and 1,400 of these are Townships. Special Purpose units comprise the rest, including about 800 local school districts.
Township government is the oldest existing unit of government in the U.S. The 1848 Illinois Constitution gave voters in each county the opportunity to adopt township government. By law, Illinois townships are charged with the assessment of real property for local taxes, general assistance for the indigent, and maintenance of roads and bridges outside other government jurisdictions. Tax and debt limits in Illinois in the late 1800s likely contributed to the state’s growing government. When officials needed more money, they created a new unit, said former Illinois Comptroller Dawn Clark Netsch, who helped write the state’s 1970 constitution.
Chicago Tribune: A minimum wage hike will cost jobs
Illinois voters elected a successful businessman who has promised to do everything he can to improve the climate for economic prosperity and job growth. They also approved a nonbinding measure to increase the statewide minimum wage to $10 from the current $8.25.
The latter change would hinder rather than help job creation by making it more expensive for employers to hire entry-level workers. But the effect can be partly offset if, as Gov.-elect Bruce Rauner has proposed, the wage hike is part of a bigger package that includes reforms in the state’s workers’ compensation program and its tort liability system. This is no time for the General Assembly to ignore the need to make Illinois a better place to do business.
We remain convinced that raising the minimum wage is well-intentioned but economically self-defeating. Everyone would like to see low-paid workers earn more. But it’s the nature of supply and demand that the higher the price of something, the less people will purchase.