August 26, 2013

Madigan Pension Fix Would Save Less Than Estimated

The estimated savings on a pension proposal backed by Illinois House Speaker Michael Madigan earlier this year is nearly $25 billion less than originally thought.

That's because the Teachers Retirement System - one of Illinois' five pension systems - says it made a mistake in its calculations. The change was outlined in a Monday letter to a bipartisan panel tasked with coming up with an approach to solving Illinois' nearly $100 billion pension crisis.

Madigan's plan involves across-the-board cuts in benefits. It was originally touted to save Illinois about $187 billion over 30 years. However, the new estimate is about $163 billion in the same time period.

Another plan from Senate President John Cullerton, which had union support, was estimated to save roughly $47 billion over the same timeframe.

Jim Edgar
(Seth Perlman/AP)
August 22, 2013

Former Gov. Edgar Weighs In On Pension Mess

After two months of on-and-off negotiations, a panel of lawmakers continues to search for a fix to the state’s $100 billion pension mess – the worst in the country.

It’s a crisis that’s grown for decades, and that many economists blame for dragging down the state’s economy.

Democratic House Speaker Michael Madigan and Senate President John Cullerton each back different plans. Neither has gained wide-spread support.

In the 1990’s then-Gov. Jim Edgar signed a law to gradually increase pension funding to the 90-percent level over 50 years.

Illinois Public Media’s Sean Powers talks with Gov. Edgar about why he says the current crisis could have been prevented and what a solution might look like.


July 31, 2013

Former Chicago Mayor Lends A Hand To Ailing Gary, Ind.

After more than 20 years as Chicago's Mayor, Richard Daley is working with the new Mayor of Gary, Ind., to try to revitalize that rust belt city. Daley is a senior fellow at the University of Chicago and his students are also helping in the transformation effort.


Jack Lew
(Brendan Smialowski/AFP/Getty Images)
July 28, 2013

Treasury Secretary: Congress Needs To End Uncertainty On Debt

Treasury Secretary Jack Lew says the debt ceiling needs to be raised, but without another economically damaging partisan fight.

In a series of interviews on the Sunday morning political talk shows, Lew said Congress needs to lift the "cloud of uncertainty" over the nation's finances and raise the limit before it fully expires on Sept. 30.

"The fight over the debt limit in 2011 hurt the economy, even though, in the end, we saw an extension of the debt limit," the secretary said on NBC's Meet The Press.

"We saw confidence fall, and it hurt the economy. Congress needs to do its job. It needs to finish its work on appropriation bills. It needs to pass a debt limit," he said.

Republicans have demanded deep cuts in non-defense-related spending in exchange for an appropriations deal. Some Democrats, however, don't want to agree to funding at levels set by across-the-board spending cuts that went into effect in March.

Lew's remarks echo a message that President Obama has taken up in recent days.

Speaking in Florida on Thursday, Obama said that if Republicans want to continue their "My way or the highway attitude," dire consequences and deadlock were likely to result. "It could plunge us back into financial crisis," he said.

"Threatening that you won't pay the bills in this country, when we've already racked up those bills, that's not an economic plan — that's just being a deadbeat," he said.

July 18, 2013

Reports: Deal Reached To Lower Rates On Student Loans

"Senators have reached a bipartisan deal to restore lower interest rates on student borrowers," The Associated Press reports, citing "Republican and Democratic aides who insist on anonymity because they are not authorized to discuss the ongoing negotiations by name."

According to the wire service, "the breakthrough came Wednesday, one day after lawmakers huddled with President Barack Obama at the White House. Lawmakers are expected to vote as early as Thursday on the deal that would lower rates before students return to campus."

NBC News' Kelly O'Donnell tweets that there is a "framework of rates fix deal in place. Senators still negotiating lots of complicated details in package."

Of that framework, the AP says:

"Undergraduates last year borrowed at 3.4 percent or 6.8 percent, depending on their financial need. Graduate students had access to federal loans at 6.8 percent and parents borrowed at 7.9 percent.

"Under the deal, all undergraduates this fall would borrow at 3.85 percent interest rates. Graduate students would have access to loans at 5.4 percent and parents would be able to borrow at 6.4 percent.

"But if the economy improves as congressional economists predict, rates would climb in coming years. The compromise reached Wednesday evening would limit how high those rates could go, although all were higher than the current fixed levels."

As NPR's Ailsa Chang has reported, House Republicans earlier passed their own student loan bill. It was the Democratic-controlled Senate that was hung up. But there was broad agreement that while rates shouldn't double, they did need to go up at least a bit and be tied to market rates.

Along those lines, the Obama administration has proposed that loans be pegged to the 10-year Treasury rate, now about 2.5 percent. The administration's plan would have undergrads pay the 10-year Treasury rate plus 0.93 percentage points.

The House plan would have undergrads pay 2.5 points more than then 10-year Treasury rate.

There's a chart comparing the competing ideas here.

July 03, 2013

Analysis Favors Senate Bill For Immigration Curbs

The Congressional Budget Office says an immigration bill passed by the Senate would cut illegal immigration by one-third to one-half beyond what would happen under existing law.

That's a significantly greater reduction than the budget office said would have resulted from an earlier version of the bill approved by the Senate Judiciary Committee, which would have cut illegal immigration only 25 percent.

Partly in response to that finding, senators agreed to greatly boost border security in the bill and take steps against people who overstay their visas. Those changes helped the bill pass the Senate with a bipartisan majority last week.

The CBO also said the legislation would reduce the federal deficit despite spending $36 billion more on border security than would happen under the committee-approved version.

June 21, 2013

Illinois Pension Committee Sets First Meeting

The bipartisan committee of lawmakers tasked with fixing Illinois' $97 billion pension crisis will hold its first meeting next week.

The committee has scheduled a public hearing for Thursday morning downtown Chicago.

Gov. Pat Quinn called lawmakers back to Springfield for a special legislative session to address the pension shortfall.

But the House and Senate remained in a stalemate on how fix the problem. Lawmakers voted Wednesday to form the conference committee in hopes its 10 members will be able to come up with a compromise.

Legislative leaders appointed six Democrats and four Republicans to the committee.

Quinn wants them to report back July 9.

Illinois has the nation's worst state pension shortfall, due largely to lawmakers skipping or shorting its payments to public-employee retirement funds.

June 06, 2013

Contradictions Between Iowa, Illinois Show Uneven Employment

On Friday, the Labor Department will release May jobs data, giving economists a better read on the national labor market. But this much they already know: Unemployment is very uneven, with some states still running nearly double-digit unemployment rates and others hitting full employment. The contrast is especially great between booming Iowa and hard-hit Illinois.


Protesters of Chicago Mayor Rahm Emmanuel's plan to close dozens of city schools
(Seth Perlman/AP)
May 23, 2013

Losers in Chicago School Closings Target Elected Officials

A day after school officials approved shutting down 50 schools, the Chicago Teachers Union and community activists say they'll hold a voter registration and education campaign.

The union is agitated that Mayor Rahm Emanuel, school board members and some lawmakers failed to listen to parents, teachers and others who called for the schools to remain open.

Before they voted yes on the sweeping school closure plan, school board members faced a torrent of criticism Wednesday. Protesters tried to conduct a sit-in at the front of the boardroom, but security officers escorted them out.

Sonya Williams, a parent who had come to testify in defense of her school, said she understood the passion and the outbursts.

"It's just like going to a long funeral and no one will close the casket yet," she said. "The fate of your position, the fate of your job, the fate of your children are up in the air, and they're based on a few people making a decision."

This was the last time before the vote that people could make their pitch to keep schools open. Chicago Alderman Bob Fioretti was among them.

"Substantial research shows that closing schools and moving students increases the dropout rate and the incidence of street violence," he said.

Chicago's 'School Utilization Crisis'

The arguments did not deter Chicago Public Schools CEO Barbara Byrd-Bennett, who, along with Mayor Emanuel, has argued that Chicago has to "right-size" its school district. They have said demographic shifts in mostly black neighborhoods left schools underutilized — plus, the district faces a budget deficit of a billion dollars.

Byrd-Bennett said the district had held marathon hearings, and it was time to do what's right.

"Like it or not, this system does have to change. By addressing our school utilization crisis, we have an opportunity to redirect limited resources to make investments in what matters," Byrd-Bennett said — investments that she said would let the schools students shift to have computer labs, libraries, art classes and air conditioning.

In a nearly unanimous vote, the board approved shutting 49 elementary schools and one high school program.

Okema Lewis, a parent who has kept track of the school board for a decade, called it a sad day.

"Underutilized — what does that mean? You had the option to put other things in the building if you wanted to utilize the building, not even children. You got communities. You got people need GED classes. All kind of services could have been used in the building. Half the building would have been a school, half would have been used for the community," Lewis said.

First District To Close So Many Schools At Once

Hearing officers had recommended that the school board take more than a dozen schools off the chopping block. In the end, the board voted to save four.

Outside school board headquarters, Jesse Sharkey with the Chicago Teachers Union said that wasn't progress.

"There's an old expression, which is, 'Don't put a knife into my back 6 inches, pull it out a couple and say you're doing a favor,' " he said. "This move is irreversible, deeply harmful for the people in the schools, and they have no evidence to say that it's going to work."

Chicago becomes the first district in the nation to close so many schools at once. Timothy Knowles, head of the Urban Education Institute at the University of Chicago, says this effort will be closely watched.

"The true test is really going to be whether children perform better over time and whether the city makes good on its promise of safe passage," he says. That is, putting enough adults on the streets to help children get to and from school safely.

Zeroing In On School Governance

The fight over school closings is part of a political showdown that began earlier in the school year when teachers went on strike for the first time in 25 years. This week, Mayor Emanuel said he was standing firm on the school closings: "I will absorb the political consequence so our children have a better future."

The Chicago Teachers Union backs lawsuits filed by parents to block the closings, arguing that they disproportionately affect African-American students and harm special education students.

The school board in Chicago is appointed by the mayor, and teachers union President Karen Lewis said the fight must eventually move to the ballot box.

"Our next plan is to have to change the governance of CPS [Chicago Public Schools]," she said. "Clearly this kind of cowboy-mentality, mayoral control is out of control. We're starting our deputy registration, and we will be registering voters across the city."

Their goal is to push the mayor and others who backed the school closings out of office, and to gather support for an elected school board.


Chicago Board of Education President David Vitale, center, listens to opponents of proposed school closures at a packed board meeting Wednesday, May 22, 2013, in Chicago.
(M. Spencer Green/AP)
May 22, 2013

Chicago Board of Education Votes to Close 50 Schools

The Chicago Board of Education voted on Wednesday on proposed closings or changes at 54 public schools.

It's the largest round of school closings in American history: 49 elementary schools will be closed and one high school program will end.

In a move Tuesday, district CEO Barbara Bryd-Bennett recommended that four schools be removed from the earlier closure list: Garvey, Ericson, Mahalia Jackson and Manierre. In addition, Barton will not be turned around, and Canter will be phased out instead of closed. 

The board voted on those recommendations and on proposals to replace the staff at six grammar schools and to have 23 schools share 11 buildings, in what’s commonly called a "co-location."

Chicago Public Schools officials unveiled a list of schools they wanted to close in March, after a months-long process of whittling down a list of more than 300 elementary schools they considered to be under-enrolled.

At first, CPS pitched the massive closures as a way to save money in light of a projected $1 billion deficit, arguing they needed to combine “half-empty” schools in order to operate more efficiently. But in recent weeks, school leaders quietly reduced the estimated cost savings and started talking more about getting kids into higher performing schools.

“The goal is to make sure every child has a high-quality education, because without that, rather than doors being open, doors will be closed to their future,” Mayor Rahm Emanuel said at a press conference Tuesday. An analysis by Illinois Public Radio station, WBEZ of school performance shows only three closings sending kids to a top-performing school. One third will send kids to equally low-performing schools.

In an unprecedented move, CPS is investing heavily in the receiving schools. According to board reports for today's meeting, 19 receiving schools are slated to get extra money and positions next year to implement new middle school programs. Schools getting Science, Technology, Engineering and Mathematics (STEM) programs may receive $376,000 in startup funds and two extra positions. Schools implementing International Baccalaureate (IB) programs may get $255,000 and two positions and one school, Haley Elementary, may get $237,000 to start a fine and performing arts program.

The closures are just one piece of a larger school reform and restructuring plan. Buried in the school shake-ups being voted on today are plans to open 13 new schools and a handful of alternative programs. Many of those have already been approved by the board.

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