Category: Finance

  • Clout Boosts Ex-Police Chief $30k per Year

    The Machine taking care of its own:

    At first blush, a pension bill adopted by the General Assembly in 2007 seemed to have a laudable goal: extending retirement benefits to local police force employees’ widows after they remarried.

    But buried within the legislation was something considerably less altruistic: a provision that enabled a member of one of Chicago’s better-known political families to boost his pension by more than $30,000 a year — while saddling unsuspecting taxpayers in Oak Brook with nearly $750,000 in funding liabilities, the Chicago Sun-Times and Better Government Association have learned.

    The recipient of that larger pension, Thomas Sheahan, is a former police chief in Oak Brook, the current village manager in Lyons and a member of a Democratic clan that has helped rule Chicago’s Southwest Side for decades.

    Sharp-tongued and unapologetic about benefitting from the provision that no one else has used, the 59-year-old Sheahan said of his pension: “I worked for 24 f—— years [in the public sector], I deserve every penny of it and I deserve a lot f—— more.”

    Retiring from Oak Brook last spring, Sheahan now is drawing an annual payout of nearly $77,000. Although pension records show that’s about $32,000 more than he would have received had he retired at the same point without the legislation, Sheahan said it’s still a relatively modest sum. “I get about what a sergeant gets,” he said.

    Sheahan — brother of former Cook County Sheriff Michael Sheahan and James “Skinny” Sheahan, a long-time aide to ex-Mayor Richard M. Daley — wouldn’t say if or how he was involved in the origin of the pension sweetener.

    via Chicago Sun-Times.

    When will the people rise up and say “Enough!”  A foul-mouth connected punk thinks he deserves more.  Go get a real job in the private sector and find out what you’re really worth.

    But that’s not even the end of the story:

    The main sponsor of the bill, then-state Rep. Bob Molaro (D-Chicago), told members of the Illinois House that the tweak to the state’s pension code was intended to help one person, according to a transcript that didn’t identify the person.  …

    Molaro declined to be interviewed, but released a statement to the Sun-Times indicating he did not know Thomas Sheahan at the time the legislation was crafted, something Sheahan echoes. They came to know each other, however, after Molaro left the Legislature in late 2008 and, with a partner, became a $5,000-a-month lobbyist for Oak Brook.

    Molaro said in the statement: “Any attempt to connect the sponsorship of this bill and my being part of the lobbying team for the village of Oak Brook is completely unfounded and absurd.”  …

    Sheahan now is village manager in Lyons, where he said he’s paid roughly $65,000 a year for fewer than 20 hours a week.

    So this political hack is now drawing $140,000 per year from the taxpayers.  Unbelievable.

    And Molaro… the tool that he is, doesn’t even know who he’s working for.  He’s just doing what he’s told; nothing more than a warm body filling a seat collecting $80,000/year from the taxpayers to be Michael Madigan’s bag man.

    Speaking of Madigan… Where’s Lisa Madigan in all this?  Shouldn’t the state’s highest law enforcement officer look into the matter to see if a crime’s been committed?

  • Our Per Capita Government Debt Worse Than Greece

    This chart was put together by Senator Jeff Session’s office.  I found it over at The Weekly Standard.

  • No Tax Refund if You Owe Parking Tickets

    Really?

    Mayor Rahm Emanuel on Wednesday referred to people and businesses with unpaid city debts as “the deadbeats and the delinquents” after winning City Council approval to intercept their state income tax refunds to collect millions of dollars.  …

    At every level we have protected the taxpayers of the city of Chicago by not raising property taxes, not raising or creating an income tax, not raising a sales taxes, not raising a gas tax,” Emanuel said. …

    Under the diversion measure approved Wednesday, Illinois income tax refunds of those who owe will be redirected to the city, possibly as soon as this spring. …

    The citys measure, made possible by a state law that took effect in December, will affect individuals and businesses that received final notices for debt owed on parking tickets, red-light citations and administrative hearing judgments.  More than 100,000 people and businesses owe the city about $80 million, but refunds wont cover all of that, officials said.  About 51 percent of the debt can be traced to addresses outside the city, the administration said.

    Ald. Robert Fioretti, 2nd, one of the aldermen to vote against, described the citys administrative hearing system as “a kangaroo court” that needs to be fixed before income tax refunds are diverted to the city.

    via Chicago Tribune.

    As someone who does a little bit of legal practice over at 400 E. Superior I can attest to what a kangaroo court it is.  The process dealing with building violations is so bad that I truly believe they simply make it up as they go along.  It’s not quite as bad with parking tickets but it’s still a case of any given Sunday as to whether the judge will follow the law or not.

  • Your Water Bill Doubles For What?

    God bless Ben Joravsky.

    All summer long, in press conferences and at public hearings, Mayor Rahm Emanuel’s budget refrain remained the same: no more accounting gimmicks and no new taxes.

    “We have been doing smoke and mirrors on the budget and avoided taking control of our own future as a city,” he said at a public budget hearing in Englewood in August. “That moment of reckoning is here.”

    But the mayor who vowed to bring honesty to the budgeting process continues to rely on one of the oldest tricks of them all: the water/sewer fund sleight of hand.

    That’s the one where the mayor says he’s jacking up your water and sewer bill to pay for infrastructure and environmental protection—but then diverts millions of dollars a year to finance other city operations that have little direct connection to water, sewers, or protecting the lake.

    In this case, Emanuel is proposing to double water and sewer fees over the next decade, an eventual increase of about $500 a year for the average household. Yet how much of that money will actually make it to the water and sewer system is hard to determine, since, despite Emanuel’s promises of transparency, his first budget obscures what’s being diverted.

    A conservative estimate is that the mayor’s 2012 budget will siphon off at least $70 million in water and sewer fees to cover other city spending, according to our analysis of budget documents and interviews with current and former city officials.

    via Chicago Reader.

    Another amazing piece from the Reader.  A must read.

  • Illinois, the Greece of America

    It all started with this story:

    Even though the legislature and Gov. Pat Quinn last year imposed a temporary 67 percent state income tax increase, Quinn’s office expects to have a $500 million budget deficit this year.

    Quinn is calling for a 9 percent cut in most areas of state government, except education and health care. But even with cuts at that level, the state would have a projected $800 million budget deficit for fiscal 2015, the year when most of the tax hike expires.  …

    Looking at the bigger picture, the state has a backlog of about $8.5 billion in unpaid bills and owes about $27 billion in outstanding bonds. And then there’s the roughly $80 billion owed to the state’s public employee pension funds.

    via Belleville News-Democrat.

    Think about that: One Hundred Fifteen Billion Five Hundred Million Dollars.  I’m told there’s about 12.9 million people in Illinois.  So were looking at $8,953.50 per person.  That’s pretty astonishing!

    And that story led to this story:

    [W]hy aren’t we more worried about Illinois? It’s more or less the same size as Greece, its finances are in the same generally catastrophic shape, and its leaders are just as feckless and dishonest. It owes tens of billions of dollars to various investors and stakeholders and will clearly have to stiff many of them at some point.  …

    How a state with a constitutional mandate to balance its budget can do this in the first place — and how an “unpaid bill” can be excluded from the annual budget — is a question for future prosecutors. But for investors it’s a clear sign that some sort of default is coming.

    via: Dollar Collaspse.

    Dare to dream that someone (cough cough Madigan) would go to jail on this mess.

    Hat tip to SCC.

  • Illinois Unemployment vs. The Media

    Good News!!

    CHAMPAIGN, Ill. (AP) — Unemployment dropped to 9.8 percent in Illinois in December, state officials said Friday, a second straight monthly decrease that capped a year in which the jobless rate fell almost a full percentage point from 2010.

    via Chicago Tribune.

    Or, maybe not:

    The unemployment rate in the Chicago area rose to 10.2 percent in December from 9.3 percent a year ago, according to seasonally adjusted figures released Thursday by the Illinois Department of Employment Security.

    via Chicago Tribune.

    Hummm…  So, I can’t tell if this is good news or bad news.  So I did some searching and found a cool link at CapitalFax.com which led me to a supercool Google tool were one can graph public data.

    The unemployment rate for the last 20 years of several mid-western states:

    Then check out the same graph for the last 5 years:

    Wisconsin and Michigan appear to be heading in the right direction.  Illinois… not so much.

  • Wall Street Partying in Davos, We Suffer

    I realize this is not a local issue but I can’t help myself:

    JPMorgan Chase & Co.’s profits last year were the highest in the bank’s history, and Citigroup Inc. returned money to the U.S. Treasury and reported its first full- year profit since 2007.  Governments have so far opted against breaking up or levying extra taxes on banks deemed too big to fail, and the Basel Committee on Banking Supervision, which sets global financial-regulatory guidelines, isn’t requiring lenders to meet new capital standards until 2015.

    (Full story here.)

    Does anyone remember “to big to fail”?  So ya’think those “to big to fail” companies are bigger or smaller today than they were back in 2008?

    They’re all BIGGER!!

    So what are we doing about it?  Nothing.  Nothing at all.  Those “to big to fail” are making record profits while the rest of the country pinches pennies and struggles with massive unemployment and sliding home values.

    You and I, the taxpayer, have been sold a bill-of-goods, a bridge to nowhere.  We, our children, and our grandchildren will have to suffer the effects of our tax dollars going to bail-out these bankers for years to come.  But now they party in Davos likes it’s the 1980’s.

    Something is wrong here.  Very, very wrong.

  • SEC Launches Inquiry Into IL Pension Fund

    The Securities and Exchange Commission has launched an inquiry into public statements by Illinois officials about the state’s underfunded pension fund, the state’s governor’s office confirmed Monday night.

    (Full story here.)

    Well it’s official!  The Springfield cabal has so poisoned the well that now the SEC is asking questions.  We can only hope that they uncover what most of us already know and turn the investigation over the FBI.

    We’ve been lied to for so long on this pension debacle.  It’s going to get worse, much worse before it gets any better.  Don’t think so?

    All you state retirees: Do you really believe that your pension was in any way secured by those blow-off-the-roof income tax increases? All you hospitals and social services that are owed billions: Think that check will arrive soon?  …

    Truth is, you’ve been chumped. None of that is happening.

    Let’s do the simple math: The new revenues will produce $6.5 billion. That amount has to cover a $15 billion budget deficit. Failing a miracle of loaves and fishes, it won’t work.

    Billions in delinquent bills will remain unpaid. New borrowing of $8.75 billion was supposed to take care of that, but even Democrats didn’t have the stomach to swallow that one. Gov. Pat Quinn’s office said that the new taxes would “address” the backlog, which is bureaucrat-speak for “we don’t have a clue.” State Comptroller Judy Baar Topinka warns unpaid bills could double soon, even with the increases.

    (Full story here.)

    It is extremely important to realize that we’ve been sold down the river by the current politicians who refuse to stand up to union leadership.

    Locally, Da Mare — as in Mayor Daley — didn’t want any labor unrest before the Olympic nonsense so he granted big labor long term contracts.  No the taxpayer gets hit with the results.

    We have indebted our children and our grandchildren.  It is incumbent upon us to stand-up and scream like Howard Beale that we’re simply not going to take it anymore.

    We demand better.

  • Position on TIFs

    Well it took some doing, but I have completed my policy on TIFs.

    This is critically important to the sustainability of the city moving forward.  We cannot survive continuing to go further and further into debt year after year while our schools are failing and the TIF funds are growing bigger and bigger.  We need to assess what it would take to shut-down the TIFs, eliminate all of the overhead, take what is needed for debt service, and give the rest of the money back to the operations and schools budgets where it belongs.

    It’s worth pointing out that currently no one else running for alderman in the Second Ward is advancing such a position.  Alderman Fioretti and all the other candidates are taking the position that TIFs are necessary for development, which I so easily prove false.

    I’m waiting for the media to wake-up to this issue and begin asking the tough questions.  Hopefully someone will start soon… before it’s too late.

  • Bankruptcy an Option

    From yesterday’s NYT:

    Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.  …

    Unlike cities, the states are barred from seeking protection in federal bankruptcy court.  …

    But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.

    (Full story here.)

    I said that bankruptcy should be an option in my response to the Chicago Tribune’s Ed. Board.  No one else but this on the table.

    More and more people are realizing that cities and states are under-water and that something must be done.  Bad management led to the collapse of GM.  Similar bad management has led to the collapse of Chicago and Illinois.  Why can’t we seek a similar remedy?

    It’s not going to be pretty; but neither is falling off the cliff like Detroit.