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Gov. Rauner: Bankruptcy for CPS Might Be ‘Best Option’ | Chicago Tonight | WTTW

21 Jun

Could Chicago Public Schools declare bankruptcy? Gov. Bruce Rauner on Monday renewed his call for possible bankruptcy protection during a sit-down interview with “Chicago Tonight.”

The governor says bankruptcy may indeed be the best of all options CPS faces now with a billion dollar shortfall. He says he does not support sending hundreds of millions more dollars from the state, and says it would amount to a bailout. He’s proposed an education budget that gives about the same dollar amount to CPS this year as last year. But, he says, the bankruptcy option should be back on the table.

“The mayor has said, we just need a bailout from the state,” the governor said Monday morning during a one-on-one interview at the State of Illinois Building. “Not fair, not appropriate. Really, the mayor has three options: One, get a more affordable teachers’ union contract. But he caved five years ago and I don’t think he’s ready to get a better contract. He could do a tax hike in Chicago. The teachers’ union and some community leaders want that. What I’ve said is we should change state law and allow a financially troubled district to have bankruptcy and go into court and have a judge help them re-organize their debt, their obligations and their contracts. That might be the best option for CPS.”

The state legislature would have to pass a bill allowing that. It is extremely unlikely with a supermajority of Democrats. In the last 60 years, only four school districts have declared bankruptcy, with only two small districts actually following through with it, according to Jim Spiotto with Chapman Strategic Advisors, who has written extensively about on this topic. And in those cases, it was unanimous that there were more problems than solutions with bankruptcy.

“Chapter 9 of a school district is a cloud on the community that likely will prevent progress,” Spiotto concludes. “Experience has shown that Chapter 9 has rarely been used by school districts for good reasons.”

His conclusion: best to solve the problem without it. A CPS spokesperson responded with this statement:

“Rather than invest in our state’s future, Governor Rauner seems hellbent on driving schools to the point of financial ruin – whether it’s CPS, Chicago State, Eastern Illinois, or dozens of local school districts around the state.”

Read More> Gov. Rauner: Bankruptcy for CPS Might Be ‘Best Option’ | Chicago Tonight | WTTW

Kwame Raoul, Emil Jones eyed as possible mayoral contenders | Early & Often

18 Jul

In the wake of Cook County Board Chairman Toni Preckwinkle’s hasty exit as a possible mayoral contender, Sneed is told there is a move to fill the void with two male contenders in the black community: State Sen. Kwame Raoul and former Illinois Senate President Emil Jones Jr.

Sneed is told that top African-American business and civic leaders are scheduling a meeting in August with Chicago Teachers Union President Karen Lewis, who has formed an exploratory committee, but a top source tells Sneed that Raoul should be regarded as a “bona fide contender.”

“There are a lot of bad feelings in the black community that Gov. Pat Quinn passed up Kwame as lieutenant governor, and that could hurt Quinn in the election,” said a top Sneed source familiar with the process of selecting a black consensus mayoral candidate.“

Trust me, Kwame Raoul, who chaired the pension reform committee, is the one to keep your eye on,” the source said. On Wednesday, the Sun-Times reported that Raoul had taken himself out of the running.

“We need a person who understands finance and the ins and outs of government, and Karen Lewis could be a disaster in that category,” the source added.

Sneed also hears a movement to draft former Illinois political powerhouse Emil Jones Jr., into the high-stakes race against Mayor Rahm Emanuel is in the works.

“Our intent is to tamp down support for CTU President Karen Lewis for mayor because there is no way she can bring the black community together on the schools issue to develop a black consensus,” said a major supporter of Jones supporter who asked not to be identified — but is well-known in the political structure of the African-American community.

“We need someone who can win,” the source said. “Emil was prominently mentioned in the mayoral election. He just needs to be cajoled and convinced.”

Jones, 78, is chairman of the Illinois Sports Facilities Authority. He is a viable commodity because he knows the political ropes — but his age is a major factor.

As president of the Illinois Senate, Jones once lent so much critical support to little-known state Sen. Barack Obama’s bid to be a U.S. senator — he was called Obama’s political godfather.

It was reported that Obama once described Jones as “a powerful advocate for those who need a voice” and someone with “passion for public service.”

“Emil Jones knows the give and take of politics; he’s an old pro who knows how to work across the aisle; he knows the ropes and could galvanize the black community like no one else,” the source said.

◆ Side note: Jones has been credited with helping Obama master the intricacies of the Legislature. He even had the theme from “The Godfather” as his cellphone ringtone.

A powerhouse in the black community who, in the past, was involved with fielding black consensus mayoral candidates told Sneed:

“No name has surfaced to run against Mayor Emanuel since [Cook County Board President] Toni Preckwinkle opted not to run,” said the source, who requested anonymity. “But Emil’s candidacy could be interesting. He knows how to build coalitions. He may be 78, but he’s vigorous, savvy, in good health and very smart. Hmmm.”

Jones, an old school politician, started out as a Chicago sewer inspector and worked his way into the leadership structure of the Illinois Senate.

Stay tuned.

via Kwame Raoul, Emil Jones eyed as possible mayoral contenders | Early & Often.

Exclusive poll: Karen Lewis could give Rahm run for his money | Early & Often

13 Jul

For the past couple of weeks, Karen Lewis has been saying she is “seriously” considering running for mayor.

It turns out voters are taking the fiery Chicago Teachers Union president’s potential candidacy seriously as well.

And Mayor Rahm Emanuel probably should, too.

At least that’s what a surprising new Early & Often Poll suggests.

If the mayoral election were held today, the lightning rod union leader who was the architect behind a 2012 teachers’ strike would beat Emanuel by 9 percentage points in a head-to-head contest, the survey found.

Lewis was leading Emanuel 45 percent to 36 percent with 18 percent of the likely voters undecided.

And Emanuel could face an even steeper hill if he faces Cook County Board President Toni Preckwinkle, long considered his most formidable challenger.

A head-to-head contest found Preckwinkle romping Emanuel by a stunning 24 points.

Preckwinkle dominated with 55 percent of those surveyed. Emanuel notched just under 31 percent.

“Laughable” is what Emanuel’s camp called the results of the automated telephone poll, conducted for the Sun-Times’ political portal by We Ask America. More…

via Exclusive poll: Karen Lewis could give Rahm run for his money | Early & Often.

CEOs seldom get recruited to other corporations: study by Delaware’s Elson – Joe Cahill Business Blog – Crain’s Chicago Business

22 Apr

Among the more pernicious myths fueling CEO pay inflation is the widespread belief that every one of these chiefs is a superstar wooed day and night by headhunters bearing lucrative offers to run other companies.

Unquestioning acceptance of this shibboleth in corporate boardrooms drives the common practice of “benchmarking” CEO pay to the compensation of counterparts at companies deemed comparable in some way.

Although executive pay packages contain multiple moving parts — salary, short- and long-term bonuses, stock options, restricted stock grants, to name just a few — this practice plays a big role in determining the final amount.

Directors often target CEO pay to a point on the peer group continuum, usually the median or higher. Pay less than average, and a rival will spirit away your superstar. Or so the thinking goes.

I’ve always thought this notion was patently false, given the inability of so many CEOs to produce extraordinary results for shareholders. Yet it persists among the people who determine CEO pay.

IT JUST ISN’T SO

– Corporate governance expert Charles Elson of the University of Delaware

Corporate governance expert Charles Elson of the University of Delaware

That’s why I was glad to see new data debunking the idea that every CEO is just a phone call away from a higher-paying gig running another company.

Professor Charles Elson of the University of Delaware, a noted corporate governance expert, has produced a study showing that companies rarely recruit sitting CEOs. Mr. Elson and his research colleagues found that 72.9 percent of CEO vacancies in 2012 were filled from within. And the vast majority of outside hires were lower-level executives moving up to their first CEO job.

“According to our research it is quite rare for a CEO to jump from one company to another,” Mr. Elson writes, noting that another study found only 27 CEO-to-CEO moves at the 1,500 largest companies between 1993 and 2009.

There’s a good reason for this, Mr. Elson says. Most CEOs aren’t qualified to run any company other than the one they’re running now. Conversely, most companies find better-qualified CEO candidates within their own ranks, not outside.

That’s because deep familiarity with a company’s operations, accumulated over many years with the organization, is more likely to foster success in the CEO role than the general management skills an outsider can bring. And the specific expertise so vital to running one company rarely is transferable to another.

NOBODY CALLS

When companies do look outside for a leader, it’s often because they’re facing serious problems the incumbent hasn’t been able to solve. Few executives would abandon a secure CEO post for that kind of trouble.

“There’s this idea that the skills of top CEOs are transferable, and they’ll jump ship and take them somewhere else if you don’t pay them enough,” Mr. Elson told my colleague John Pletz at a corporate governance forum in Chicago this week. “We’ve demonstrated they can’t jump, won’t jump and don’t jump.”

Hear that, corporate directors? You can stop worrying about losing your CEOs. Nobody’s calling them.

More important, you can stop paying them as if they were the subject of a nonstop bidding war.

Targeting compensation to an external irrelevancy like CEO pay at other companies undermines the primary goal of any effective compensation program — linking pay to performance. It creates a bias toward higher pay regardless of how well the company performs. For example, Exelon Corp. CEO Christopher Crane got a 70 percent boost last year when directors targeted his compensation to the median of Exelon’s corporate “peer group” despite lagging profitability and shareholder returns.

Overpaying an underperforming CEO hurts a company in other ways, too. Morale suffers when a CEO’s pay rises unimpeded by compensation structures and performance metrics applicable to everybody else. Alternatively, unwarranted raises can cascade through the ranks as a company tries to maintain its wage structure in the face of runaway CEO pay.

Mr. Elson isn’t urging companies to ignore market pay levels altogether. They have a role to play in any balanced, rational approach to executive compensation. But a predetermined pay target can crowd out more important factors, like shareholder returns.

Like all executives, CEOs should be rewarded for their performance, not somebody else’s.

via CEOs seldom get recruited to other corporations: study by Delaware’s Elson – Joe Cahill Business Blog – Crain’s Chicago Business.

Lobby days. | Fred Klonsky

28 Mar

Fred,

I had the opportunity to talk with Senator Bill Cunningham and Representative Kelly Burke at a town hall meeting here on the south suburbs this morning. I wanted to ask them about their position on possible future cuts to the pension system, given that all of the corporate special interests have stated that complete elimination of the pension systems is what is necessary if Illinois is to survive. I also wanted to ask them about the system of corporate welfare in the state and what they are specifically doing to push for a progressive tax in Illinois. Mind you, both of these are Democrats that are routinely endorsed by the IEA.

Senator Cunningham, said to me that he will carefully consider proposals to reform the pensions of City of Chicago workers.

“Don’t you have members of your family that are teachers in Chicago?” I asked him.

“Yes,” he said.

“You would vote to cut their pension?” I asked.

“I will be taking a close look at the bill.” he replied.

He also indicated that while the believes that the Senate supports a progressive income tax, the House is far from supporting the idea.

Representative Burke, was adamant about the fact that projections she has been studying with respect to a progressive income tax indicate that there would be no new significant revenue generated with a progressive income tax.

“Haven’t you looked at Ralph Matire’s framework?” I asked her.

“His projections are way too optimistic.” she stated.

“Then how do you propose to fix Illinois fiscal condition? I asked

She then stated that the legislature is requesting to see other models from different groups. I took this to mean that she was not in favor of a progressive tax at this time. And then she explain to me the merits of “shared sacrifice” and that I have come to her with pre-conceived notions of what the problems are with Illinois fiscal condition. I was truly shocked by her ability to talk through me and I cannot begin to express how angry I was when she spoke to me this way.

This sent my train of thought way off mark and I wish I would have been smarter to respond back to her. Instead, I held back for fear I would say something to her far from respectful in tone.

Why is she endorsed by IEA? What work has IPACE done to be convince that she deserves our support?

In general, I walked away with these impressions:

1. There will not be a progressive tax in Illinois for a very long time if the attitude in Springfield in anyway reflects the beliefs of these two so-called Democrats.

2. Additional reforms to our pension benefits are fair game. A court decision that favors Senate Bill 1 will open the door, wide-open, to additional cuts to our benefits.

3. Nobody in Springfield thinks for themselves. These two are perfect examples. They are waiting to be told by great forces, whoever those forces may be (Madigan, Cullerton, special interests) to put a bill in front of them so they can choose to vote yes or no.

– Jerry More…

via Lobby days. | Fred Klonsky.

Today Show: Teacher Quits Over Standardized Testing

26 Mar

View video here.

After 11 years, time to deal with legislator’s unpaid rent: Brown – Chicago Sun-Times

6 Jan

Remember that story about how Rep. Monique Davis of Chicago had gone seven years without paying rent on a Chicago Public Schools building she was using for her district office?

Well, Davis’ obstinacy has now reached a preposterous 11 rent-free years and counting with no resolution in sight as the veteran South Side Democrat continues to fight her eviction.

CPS Inspector General James Sullivan reminded us Friday about this unfinished business as part of his annual report to the public.

Sullivan, whose office first disclosed Davis’ freeloading in 2009, summed up the situation nicely in his update.

“In essence, [last year], nothing happened to resolve the disputes, and taxpayers continue to pay for never-ending litigation,” he wrote.

This has gotten beyond ridiculous. Enough already.

It’s time for somebody to show some common sense and resolve the situation, which pretty much rules out Davis.

Maybe House Speaker Michael Madigan and Mayor Rahm Emanuel could add it to the agenda for their next phone call. Fixing this is well within their power.

Davis’ unpaid rent has now surpassed $158,000. There are alternate ways to calculate the arrearages that drive the total owed above $600,000, but I’d say $158,000 is closer to what’s fair.

Keep in mind this isn’t money Davis owes personally. It’s money the state owes the Chicago Board of Education, which helps explains why she isn’t in any hurry to settle the matter.

But that money certainly would have been enough to pay for a couple of laid off CPS teachers.

This doesn’t seem to register with Davis, who first started renting space in the CPS building at 1234 W. 95th Street in 1988 and insists she should be allowed to stay — even though school officials have been trying to get rid of her since her lease expired in 2002.

Davis argues her constituents know the location well after so many years, and that she has few alternatives in the neighborhood.

“We have to have an office some place,” she told me.

Davis blames the unpaid rent on CPS’ failure to renew her lease, ignoring the fact the school system wants her out and is trying to sell the building — which may prove impossible with her there. I don’t rule out the possibility that different regimes at CPS played games by overlooking her freeloading status.

It wasn’t until Sullivan’s office made the situation public that CPS finally took Davis to court in 2009.

A lawsuit filed in Cook County Circuit Court was dismissed on grounds the case properly belonged in the Illinois Court of Claims, where monetary claims against the state are heard.

Now that the case has been moved to the Court of Claims, Davis’ lawyers from the Illinois Attorney General’s office are arguing it should be dismissed there as well because that’s an improper venue for an eviction and because CPS waited too long to seek the back rent.

In the notoriously slow Court of Claims, a decision could be years away, when what’s obviously needed is for somebody to forge an immediate settlement.

Davis receives an annual allowance from the state of $69,409 to pay for her district office activities, which would include renting office space.

I’m curious as to how she spends the money that would normally go toward rent, but could not obtain the records on short notice Friday.

Davis told me she uses her allowance to pay her secretary and to publish a newsletter to constituents, as well as for utilities and repairs to the building. In its court filings, CPS claimed she stuck the agency with $15,000 in repairs to the heating and air conditioning systems.

In a separate lawsuit, Cook County is pursuing Davis for $467,000 in leasehold real estate taxes it claims are owed on the property. This makes no sense to me: forcing state taxpayers to pay taxes to the county for renting a government building for a public purpose. The Legislature properly tried to clear this up a couple years ago with special legislation to take Davis off the hook, and any negotiations between the powers should make that suit disappear as well.

Back in 2008, a CPS lawyer sent Davis a letter offering to settle the whole business for $75,000.

That’s where it should have ended — with her paying up and moving out. We shouldn’t leave this decision in her hands.

via After 11 years, time to deal with legislator’s unpaid rent: Brown – Chicago Sun-Times.

Teachers Losing Supplies Tax Cut

27 Dec

Local teachers may be forced to spend more of their own money on school supplies next year, now that a federal tax break is about to expire.

Teachers are able to deduct up to $250 on what they spend on classrooms supplies including workbooks, pencils, and posters. Congress hasn\’t passed a measure that would extend that tax break into 2014. Teachers shopping at The Three R\’s in Rockford say if the benefits went away, they\’d still buy supplies for their classrooms, but this could affect their personal spending.

\”I teach with a passion and I want to provide different perks for my kids,\” said Joe Kowalski, an ESL teacher at Marsh Elementary. \”I\’m in this profession because I love it, I love working with the kids and making the world a better place. And if I lose the $250 deduction, it\’ll hurt me more on a personal level then on a professional level.\”

The National Education Association estimates that teachers spend an average of $400 annually on supplies.

via Teachers Losing Supplies Tax Cut.

Daily Kos: “YOU PEOPLE! JUST DO YOUR JOB!”

3 Nov

That’s what Chris Christie shouted today while his wife smiled at New Jersey public school teacher, Melissa Tomlinson, who dared approach him at the Rutgers football game rally and ask the question, “Why do you portray New Jersey Public Schools as ‘failure factories?’ ”

Dave Weigel of Slate snapped a picture of the incident and posted it to twitter: Bully Chris Christie shouting down a teacher when she asked him a question.

Everyone knows Chris Christie loves to be rude and shout at people. Shouting at public school teachers is a ‘thing’ of his that he enjoys. 99% of the time the people he chews out are women.

The teacher who was bold enough to ask Christie this question admits she was shaking when he jabbed his finger in her face and shouted at her, but she’s still proud of what she did. We’re proud of her too.

It’s a shame Christie will most likely be re-elected governor on Tuesday, which is probably why he felt it was no big deal to be photographed shouting at a single woman who dared to ask him a question. So nice to see what he really thinks of his constituents and how he treats them.

via Daily Kos: “YOU PEOPLE! JUST DO YOUR JOB!”.

Town Hall Meeting on Changes to TRIP

29 Oct

You are invited to attend a Town Hall meeting with Teachers’ Retirement System Executive Director Dick Ingram on Wednesday, November 6 in Tinley Park. Director Ingram’s Town Hall presentation will be about issues facing TRS and its members. This presentation will include a very general overview of the state’s new Medicare Advantage program for Medicare participants in TRIP. More specific information about Medicare Advantage is available from the Illinois Department of Central Management Services: http://www2.illinois.gov/cms/Employees/benefits/Teachers/Pages/TRIPMedicareAdvantage.aspx
November 6th

Andrew High School

9001 West 171st Street

Tinley Park
7 – 8:30 PM

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