- Private sector, University of Illinois announce pioneering business/higher education partnership to create jobs in northeastern Illinois. The announcement on Thursday, January 24, that the University of Illinois will lend its name and affiliation relationships to the new UI Labs, a Chicago-based think tank and technology incubator, marked Illinois’ entry into the new model of jobs and business development pioneered in California’s Silicon Valley. This joint move is a follow-up to the urging of many Illinois House Republicans, who pushed in 2011 for Illinois institutions of higher education to move towards an incubator model for job creation and development in Illinois. The push became law as P.A. 97-196 (HB 1876: Cross/Holmes).
UI Labs will be a private-sector, not-for-profit enterprise that will foster the growth of for-profit enterprise and job creation throughout the Chicago area. The initial focus of UI Labs and its for-profit affiliates will be to recruit graduate-level young professionals, particularly in engineering, as they complete their undergraduate studies in campuses that include the University’s flagship campus in downstate Champaign-Urbana. The University has announced the twin goals of affiliating 250 of their faculty members as lab fellows during the UI Labs’ first three years, and recruiting more than 1,000 graduate and undergraduate students into participation in UI Labs training and entrepreneurial programs during the first five years. Studies show that a disproportionate share of the U of I’s graduates in key programs, including engineering, want to live in an urban environment and often break their ties with the U of I and leave Illinois in order to pursue their careers. Creation of the new incubator should give some of these talented individuals an incentive to continue their professional lives in Chicago.
- Comptroller Topinka chides failure of State to align its budget with its spending patterns, says “supplementary” budget bill will be necessary before the end of Fiscal Year 2013 (FY13). The situation described on Monday, January 21 by Judy Baar Topinka, the State’s chief fiscal officer, is not new. The General Assembly has passed supplementary budget bills, intended to make up gaps in State appropriations to key spending areas, annually for more than three decades. Passage of these bills has traditionally been noncontroversial, but the State’s ongoing budget crisis has made it possible for lawmakers to express concerns about spending additional money, even if the expenditures are focused on programs that have already been authorized or are mandated by law.
Hopes in early January that the lame-duck General Assembly would enact a supplementary budget bill to make up inadequate spring 2012 appropriations in areas like State workers’ health insurance, workers’ compensation, and senior home care were not fulfilled, leading to the Comptroller’s warning and call on the incoming General Assembly to enact an FY13 supplementary budget bill. The chief fiscal officer estimated that $1 billion would be required to keep the State’s ongoing commitments in areas of inadequate budget lines.
- State announces plan to borrow additional $500 million. Critics warned of high interest rates to be paid by taxpayers as the State of Illinois announced plans to sell $500 million in general-obligation (G.O.) bonds on Wednesday, January 30. The debt move was disclosed less than two weeks after Fitch Rankings, a key “Big Three” debt-rating firm, placed Illinois G.O. debt on its “negative watch” list. Fitch had previously downgraded Illinois’ debt several times; currently ranked at single ‘A’ by that firm, Illinois G.O. debt is scored five notches below the prime ‘AAA’ level enjoyed by the highest class of borrowers. Standard & Poor’s, Fitch Ratings’ colleague in the debt rating market, also ranks Illinois as ‘A’ with a negative outlook.
In contrast to Illinois, solvent neighbor state governments Indiana, Iowa, and Missouri enjoy the coveted ‘AAA’/’Aaa’ rating granted by Wall Street to the institutions that offer the highest levels of security to their lenders and creditors. Illinois has repeatedly re-entered the credit markets in recent years, assailed by continuous patterns of multiplying health-care spending, uncontrolled pension costs, crumbling civil infrastructure, and disappointing tax receipts. The Prairie State expects to sell between $2.0 billion and $2.5 billion in new debt in calendar year 2013 to meet its need for infrastructure capital and other budget requirements.
- Cubs’ owners reveal plan for private-sector Wrigley Field rehab. Pointing towards Wrigley Field’s status as a 1914 icon of Major League Baseball, and the extensive 50-state network of fans of the Chicago Cubs, owner Tom Ricketts told the press on Saturday, January 19 that his family would mobilize the club’s private-sector resources to finance a major overhaul of the aging stadium. Fans from outside Chicago will be encouraged to stay in a new, “Friendly Confines”-themes boutique hotel to be built adjacent to the park. The Cubs organization believes that current zoning restrictions, unique to Wrigley Field, can be “tweaked” to generate other substantial new revenue flows to pay for the promised work. For example, the baseball park’s hand-operated sign could be replaced or supplemented with an electronic “Jumbotron” billboard similar to the ones in use in most other U.S. MLB fields. Current law also restricts the number of profitable night games playable by the club. Key request of many Cubs fans: removal, replacement, and expansion of the stadium’s venerable restroom facilities.
- Chicago mayor revisits goal of privatizing Midway Airport. Former mayor Richard M. Daley’s 2009 push to lease out Midway International Airport, transfer its terminal and runways to a private-sector lessor was abandoned pursuant to that year’s global financial conditions. Cash-strapped Mayor Rahm Emanuel, Daley’s successor, dusted off the plan on Friday, January 18. Critics note Chicago’s existing pattern of conduct includes its 75-year lease-out of the city’s streetside parking meters, a deal signed in 2008 and widely characterized in following years as exploitative. Subsequent analysis indicated that the parking lessors paid Chicago taxpayers less than 10 cents for every dollar the meters would be expected to take in over this lengthy period. The agreed price for Midway Airport in 2009, abandoned when financing for the deal could not be obtained, would have been $2.5 billion.
- Ambulance services among tens of thousands of Illinois health care service providers who are forced to wait many months for State payments. A report published on Monday, January 21 by Springfield’s State Journal-Register counted 400 to 500 ambulance services in Illinois that are being forced to wait “six months to a year” before the Department of Healthcare and Family Services (DHFS), and other State agencies that contract for health services, pays their bills. One emergency responder reported having to wait 14 months. Another told a reporter that the State’s inability to pay its bills on time has forced it to keep a vehicle in service even though it has rolled up 230,000 miles on its odometer. Illinois ambulance services are provided by a variety of public-sector and private-sector local agencies, including city and village fire departments. DHFS admitted to the press that it currently owes $20 million in unpaid and slow-paid bills due to statewide emergency responders and medical transportation providers – a small fraction of the State’s estimated $9 billion in total unpaid bills.
- Governor appoints former U.S. Attorney to serve on University of Illinois Board of Trustees. Patrick Fitzgerald, 52, is best known for high-profile prosecutions of Illinois statewide elected officials, including former Governor Rod Blagojevich. In 2012, Fitzgerald laid down his duties in Chicago’s Dirksen Federal Building to rejoin the private sector; service on the Board of Trustees, a part-time position, will not interfere with the former prosecutor’s practice of law. “We are lucky to have him,” University of Illinois board chairman Christopher Kennedy told reporters. The former law enforcement officer joined the board on Thursday, January 24.
- Illinois foreclosure rate jumps to fifth highest in nation. Figures compiled for 2012 by nationwide realty data compiler RealtyTrak shows that Illinois home foreclosure activity rose 32.6 percent in 2012 compared to 2013. With 136,603 foreclosure filings last year, 2.58 percent of all Illinois homes were filed upon in 2013. Calculated on a nationwide basis, 1.8 million U.S. homes were subjected to foreclosure filings in 2012, with the highest foreclosure rate being recorded in Florida. In the Sunshine State, 3.11 percent of all homes were foreclosed upon.
RealtyTrak, which published its figures on Monday, January 14, estimates that the average Illinois foreclosed-upon home will spend 697 days in the foreclosure process.
- Assets of Illinois’ State-managed pension systems posted disappointing results in 2012. Reports indicate that valuations dropped by almost 2.5 percent in fiscal year 2012, from nearly $63.5 billion to nearly $62 billion. The collective “funding ratio” of the five pension systems dropped from 43.3 percent at the end of fiscal year 2011 to 39.0 percent at the end of fiscal year 2012.
“Funding ratio” is a term used by actuaries who determine the current value of the defined benefits to be paid out by a defined-benefit pension system and compare them to the market values of the assets possessed by the systems. In the case of these Illinois systems, the market value of these assets represents less than 40 cents of the current value of all of the benefits that the systems are scheduled to pay out. The five systems each have different funding ratios, with the State University Retirement System at 41.3 percent funding and the General Assembly Retirement System at 17.5 percent.
- Another light turns green for construction of new toll highway on southern edge of metropolitan Chicago area. Planners have drawn a 2,000-foot-wide proposed route for the Illiana Expressway, a $1.25 billion toll road projected to connect Illinois’ Interstate 55 with Indiana’s Interstate 65. On Friday, January 18, the Federal Highway Administration issued a preliminary go-ahead for the corridor planned by Illinois and Indiana state transportation executives. The 47-mile right-of-way will use a strip of land in southern Will County. Like many toll roads recently built or privatized in Florida, Indiana, and Texas, the toll road is expected to be built and operated by the private sector. Officials stated that further environmental impact planning would be required before final permits are issued and construction begins.