Worsening structural budget deficit could reach $1.9 billion/year by 2026. This would be approximately $700 per year for each Chicago resident. The grim budget projection is based on data generated by chronically challenged functions of the city and its government, including law enforcement, public-sector pensions, and the cost of housing and providing care to non-legal residents. In FY24 alone, the immediate budget deficit facing Chicagoans in the spending cycle that has already begun is $538 million.
In sharp contrast to budget projections generated by outsiders, the $1.9 billion-a-year worst case scenario came from the office of newly elected Mayor Brandon Johnson. It was developed with access to the city’s own budget books and cost trends, including cost trends for public-sector pensions and other historically underfunded city budget line items. Tax rates in Chicago are already among the highest in the U.S. When a Chicago purchaser buys non-grocery goods within city limits, the sales tax is above 10%.
CRIMINAL LAW
For judges and courts, right to ask defendant for cash bail will end within days in in Illinois. The State has set Monday, September 18, as the first day in which Illinois courts will no longer be empowered to hold a hearing and demand that criminal defendant post cash bail as a condition of pretrial release. Based upon the principle that persons are “innocent until proven guilty,” Illinois law has always granted criminal defendants a recourse under which they can pledge good behavior and live in freedom (albeit under pretrial supervision) until their criminal trial, which may be many months away. This pledge has often been cash, submitted under the supervision of the court.
A controversial law, enacted by Democrats in January 2021 within a lame-duck midnight session of the 101st General Assembly, told the courts they may no longer hold cash-bail bond hearings and order a defendant to post cash bail. House Republicans voted “no” against the new law. Many law enforcement officers protested against this law, and its constitutionality was litigated up to the level of the Illinois Supreme Court. The state’s highest court found in favor of the new law in July. This Supreme Court decision, and the underlying partisan statute, will bind the criminal courts of Illinois on September 18 and thereafter.
The new Illinois Pretrial Fairness Act purports to give the courts an alternative pathway to impose pretrial detention on some criminal defendants. However, the new Act is seen, in the eyes of those who sponsored it and voted for it, as a push for what is called “social justice.” This means that the pathway to Illinois legal pretrial detention, for courts and law enforcement professionals, will be a narrow one. The prosecution seeking legal pretrial detention of a dangerous defendant will have to take on the burden of submitting a series of findings of fact to the court, and only a widespread array of patterned facts will justify the court imposing pretrial detention on any individual defendant. In contrast to this burdensome course of action, after September 18 most Illinois criminal defendants will have a wide range of opportunities to make pledges and promises to the court that, for the purpose of pretrial status, will constitute pretrial bail.
DOWNSTATE
After the 2020 United States Census, the federal Census Bureau redraws the statistical-area map of Illinois. The Census Bureau’s formulas define most Americans, including most of the residents of Illinois, as residents of statistical areas that center on a small city, a big city, or a very big city. The post-2020 census map of Illinois defines these areas as combined statistical areas, metropolitan statistical areas, and micropolitan statistical areas, depending on the size of the central city and how large is the area that it influences.
The central city of an Illinois statistical area may be a large city, like Chicago or St. Louis; a medium-sized city, like Champaign-Urbana or Rockford; or a small city, like Effingham or Mount Vernon. If the central city has a census population below 50,000, the statistical area is likely to be classified as a “micropolitan” area rather than as a metropolitan area. In any case, many Illinois residents may be surprised to find that, in the eyes of the federal government, they live in an urban statistical area.
Census statistical maps are significant for many reasons other than telling people where they live. They are used by health planners when siting new capital resources where physicians and other health care providers offer services; they are used as one of the components in the definition of so-called “underserved areas” to which attention to health care and other items of local infrastructure are required; and they are used by private businesses to sell things, particularly in the advertisements that run on the Internet and on cable television.
GAMBLING
Casino floor opens at Chicago’s historic Medinah Temple. After a tech rehearsal demonstrated readiness for full operations, Illinois casino regulators granted full operating licensure to the Bally’s gaming floor in Chicago’s RiverNorth. The doors opened on Saturday, September 9. The Medinah Temple gaming floor, classified as a “temporary” facility to stand in for Bally’s planned permanent casino resort on the North Branch of the Chicago River, contains nearly 800 slot machines and 56 table games.
The Medinah Temple gaming floor is the first legally licensed gaming casino to operate in Chicago. Licensed under the 2019 gambling expansion law enacted by the General Assembly, the new floor was created to raise money to help deal with significant budget pressures felt by Chicago and the State, including pressures related to the pension payments made to public-safety and other employees. As part of the licensure permission, the Chicago casino will be required to make a one-time payment of more than $135 million to the State of Illinois for use in rebuilding Statewide infrastructure projects, including capital assistance for Illinois schools and institutions of higher education. The long-term operation of Bally’s in Chicago is expected to generate $55 million per year in city of Chicago tax revenue, earmarked for public safety pensions.
JOBS
Manteno gets announcement that China’s Gotion Hi-Tech will build a plant to assembly EV batteries. The manufacturing plant, which will be located near Interstate 57, will assemble lithium iron phosphate (LFP) battery packs and battery cells to power motor vehicles. The plant will be 100% owned by the U.S. subsidiary of Gotion Hi-Tech. Proponents of the plant say that approximately $2 billion will be invested and that the plant will be geographically situated to supply EV motor vehicle assembly customers throughout the U.S. Midwest.
As part of the Manteno announcement, Gov. Pritzker and local officials announced that more than $536 million in current and future State and local moneys would be “invested” in the new plant. The word “invested” is in quotes because neither the State nor Kankakee County will own any of the plant. The $536 million constitutes direct subsidies ($125 million through “Invest in Illinois”) and foregone tax collections to be paid out, over time, to Gotion as a golden welcome sign for agreeing to build the plant in Kankakee County. Further subsidies may be paid as the plant goes into operation.
Parent company Gotion Hi-Tech has close ties with the government in Beijing, with the Chinese firm’s CEO also serving as the party secretary for the Chinese Communist Party (CCP) within the plant. The CCP answers, in turn, to national political boss Xi Jinping.
Proponents of the Manteno plant announcement say that the complex, when complete, will support approximately 2,600 well-paying full-time jobs. The plant announcement was made on Friday, September 8.
STATE GOVERNMENT
Investigation uncovers evidence of massive pandemic fraud among many public-sector employees. The findings, released this week by Illinois Executive Inspector General Susan Haling, include preliminary evidence that indicates that at least 177 State of Illinois employees filed incorrect claims with the federally-mandated Paycheck Proitection Program (PPP). This program, created under crisis conditions by Congress in spring 2020, tried to generate emergency financial survival help for people made jobless by the COVID-19 pandemic. Shutdown orders in Illinois and many other states had led not only to massive layoffs, but to sharp drops in cash flow for many independent contractors and businesspeople. Federal COVID-19 assistance was intended to help all Americans, including independent contractors and people with small businesses.
Under the conditions within which PPP was created and operated, it was very difficult to impose adequate verification requirements upon people who sent online messages to the Illinois Department of Employment Security (IDES), asking for money. Before many weeks had gone by, information was circulating on the Internet on how to fill out a false application and grab some free money. Even if a person continued to enjoy a paycheck of a different type, such as pay from a public-sector job, they could always claim to be an independent contractor on the side who had been harmed by the pandemic and shutdown orders. The 177 individuals in the preliminary Haling disclosure many be only a subset of the total roll of alleged PPP fraudsters in Illinois. The cases mentioned by Inspector General Haling have been referred to the Office of the Illinois Attorney General for further action.
The office of the Illinois Executive Inspector General reviews the hiring and employment practices and procedures of the State of Illinois. It accepts information and complaints from all sources regarding fraud, waste, and abuse, including circumstantial evidence that can be used to build a conclusion that reasonable cause exists to determine that fraud or abuse has taken place. Haling’s office has launched 438 investigations into possible PPP fraud, and has concluded 204 of the inquiries; more than half of the inquiries remained active as of this week. The preliminary Haling findings were released on Tuesday, September 12.