STUMP » Articles » Illinois Financial Disaster: Madigan Wants it All to Burn » 27 June 2017, 06:15

Where Stu & MP spout off about everything.

Illinois Financial Disaster: Madigan Wants it All to Burn  


27 June 2017, 06:15

So, I guess Madigan wants this to happen. I guess I didn’t exagerrate the “This is Fine” attitude many Illinois politicians are taking.

Madigan offers new demands, says property tax relief part of ‘extreme right-wing agenda’

Legislative leaders say there’s a sense of optimism about budget negotiations, but with new demands from Democrat House Speaker Michael Madigan and Friday’s budget deadline approaching, it’s unclear if all sides will agree on a spending plan before the new fiscal year begins Saturday.

Leaders from both parties met Sunday, the fifth day of the special session called by Gov. Bruce Rauner and only five days before the Friday budget deadline. On the table is a spending plan that relies on at least $5 billion in tax increases in exchange for various GOP-backed reforms of pensions, workers compensation and other items.

House Speaker Michael Madigan, D-Chicago, offered up new demands from Democrats, including passage of an education funding reform measure that Republicans say is a bailout of Chicago Public Schools.

“No. 1, I expect the governor to sign Senate Bill 1, which changes the school aid formula,” Madigan said. “No. 2, I expect the governor to sign a bill that would provide for regulations of rates by workers’ compensation insurance companies.”

You have got to be kidding me. I’m not touching the workers’ comp thing right now, and I probably won’t, because again: AYFKM.

Look, dumbass, how about focus on the budget. The school aid formula is relevant there (as in, it would require more money to be spent by the state); the workers’ comp thing is not.

But back to the piece, because I want to get to the statement promised by the headline. (Yes, I’m eliding over bits.

During an interview with reporters after the leaders meeting, Madigan also said the GOP’s push to tie property tax relief and other reforms to tax increases is part of an “extreme right-wing agenda.”

Maybe I would say that Madigan’s opposition to property tax relief is not part of an extreme left-wing agenda, but part of him personally lining his pockets. Oh, did he think anybody forgot his prime way of making money is his law firm, which represents people disputing property tax bills?

Let’s take a quick whirl through history.

From 2010: House Speaker Michael Madigan says he follows a personal code of conduct to avoid conflicts of interest. Even so, some clients of his private law firm have benefited from his public actions.

In his rise to the pinnacle of Illinois politics, House Speaker Michael J. Madigan built a reputation for wielding control over every bill, every budget line and every Democratic representative elected to oversee them.

Away from the public eye, the state’s ultimate power player enjoyed a similar rise in his private career: rainmaker for one of Chicago’s most successful property tax law firms.

In a first-of-its-kind examination, the Tribune found these two careers repeatedly intersect, and in some cases Madigan took public actions that benefited his private clients.

As a public official, he got a private road behind a shopping mall repaved, helped secure state funding for an expanded tollway interchange and intervened for a developer looking for state cash. In each case, Madigan was a private lawyer for businesspeople who stood to benefit.

His list of clients multiplied as Madigan consolidated political muscle over the last two decades. Now, many of his decisions as speaker have the potential to affect someone who has hired Madigan & Getzendanner in hopes of having a tax bill lowered. The Chicago firm represents banks the state regulates, investment houses that have overseen billions of dollars in public pensions, developers who want roads — all subject to decisions made by a state House in the firm control of their tax lawyer.

So, there are two ways Madigan can get hurt — anything that reduces any of the taxes, and possibly chokes off tax revenue, gives him less fun money to throw around for his connections (and thus makes being connected to him less valuable).

The second item is if people already don’t have to worry about their property taxes rising (whether as a business or individual), they don’t very well need to pay for a lawyer to try to play the game to keep the taxes from rising.

A few related items:

The section of his wiki page on the law firm

MEET THE POLITICIANS GETTING RICH OFF CHICAGO’S PROPERTY-TAX SCHEME – from 2015, and that’s Madigan, Chicago Alderman Ed Burke, and Illinois Senate President John Cullerton. That was 2015, so let’s check — yup, Burke is still alderman and Cullerton is still Senate President. Hmm, these guys all look pretty old. Hey y’all, don’t you think you’ve made enough money?

From February of this year: Illinois House speaker makes his money lowering property taxes

Between 2004 and 2015, the speaker’s firm won $63.3 million in refunds for clients, according to a Reuters analysis of data from the Cook County treasurer’s office. In 2015, Madigan’s practice ranked second among law firms in total property tax refunds, the county data shows.

June 2016: Rauner takes shot at Madigan law practice; speaker calls governor ‘extreme’

Republican Gov. Bruce Rauner ramped up the rhetoric on Tuesday, accusing Illinois House Speaker Mike Madigan of a personal conflict of interest — saying the Democrat’s law firm made millions of dollars off of high property taxes.

Rauner took aim personally at Madigan as lawmakers in Springfield debated a freeze on Illinois property taxes on Tuesday. Rauner criticized the property tax debate on Tuesday, calling it a “waste of time.”

Rauner then blasted Madigan, saying he stood to personally profit from a failure of a property tax freeze.

That drew a strong retort from Madigan later in the day. At a Capitol news conference, the speaker said he has always held strong ethical standards in his law business and encouraged Rauner to stop “functioning in the extreme.”

Madigan added that his law practice has to do with contesting errors in assessments. He encouraged Rauner to maintain a level of professionalism and repeatedly said he vowed to do the same.

Oh look – this one is from a year ago. I see Rauner did point out the issue, and Madigan got all huffy —“How DARE you impugn my integrity!”

Yeah, well, I will impugn it all over the place. You should have picked: either be a state legislator, or be a lawyer dealing directly with the decisions made by government. It’s cute to say you’re merely disputing assessments, but again, if the tax rates were moderated, there wouldn’t be so much pressure to try to do that.


Also, it seems the area where Madigan’s firm does its work – Cook County – there is something iffy about how those assessments were done.

As assessor, James Houlihan knowingly sent out inaccurate property valuations. The future consequences could be costly

For more than a decade, the Cook County assessor’s office hid a secret inside the massive computer programs used to calculate property tax assessments for single-family homes.

It didn’t look like much — just a few snippets of code amid thousands of lines — but it created erroneous valuations for homes throughout the county, affecting the tax bills sent to more than 1 million residential property owners every year.

What the code did was deceptively simple: It decreased every estimated home value in the county by about 40 percent, a troubling practice that ignored legal requirements set out in county ordinances.

The artificially low values threw the property tax system so far out of whack that it may have violated provisions of the state constitution. But, shrouded by an opaque and convoluted assessment system, these widespread inaccuracies were invisible to the average homeowner.
The undervaluing of residential properties, for instance, may have given homeowners a false sense that they were getting a huge break on their tax bills. In reality, that was far from the case, because the computer code undervalued all homes in pretty much the same way.

The Tribune also found that for many years commercial and industrial properties were undervalued even more than residential ones. If all properties had been assessed accurately during that time, homeowners would have paid less in property taxes, according to Tribune estimates.

And the consequences continue to this day, with taxpayers potentially paying the price in a different way. A prominent law firm has filed lawsuits on behalf of dozens of properties contending that Houlihan produced “fictitious” residential valuations between 2000 and 2008.

Kind of curious who that “prominent law firm” is.

The suits seek to claw back as much as $100 million in tax dollars, the Tribune estimated — money that Chicago Public Schools and other financially struggling agencies and municipalities would have to repay.

Houlihan, now a state lobbyist, declined to be interviewed for this story.

I can imagine. What’s the statute of limitations on federal charges here?

[….]Property valuations in Cook County are handled differently from anywhere else in the state, thanks to a complicated system that makes it difficult for most taxpayers to fully understand how their taxes are calculated.

Unlike the other 101 counties in Illinois, Cook County assesses the value of property at different levels depending on their use. Known as classification, the system is meant to give homeowners a break on taxes.

To shift more of the burden onto businesses, the assessment level for residential properties has always been lower than the levels for commercial and industrial properties.

Still, the categories can’t be too different. Under the state constitution, no one class of property can be assessed at a level that exceeds 2.5 times the level of any other.

On the surface, Cook County met that standard under Houlihan and Hynes.

The reality, however, was different — thanks to the county’s practice of undervaluing residential properties.

State revenue department studies show that from at least 1994 to 2003, the median assessment level for commercial properties in Cook County was more than 2.5 times greater than the roughly 10 percent median assessment level for residential homes.

Which means you need to hire a lawyer if you think something needs fixing.

By the way, the “prominent law firm” is named later in the piece: O’Keefe, Lyons & Hynes.

The law firm of O’Keefe, Lyons & Hynes was well positioned to know what was wrong. Thomas Lyons was a former deputy assessor and state senator who pushed to allow Cook County to continue using classification during the 1970 state constitutional convention. Robert Hynes was the brother of longtime assessor Hynes. And lead attorney Mark Davis once headed the tax division for the Cook County state’s attorney’s office.

Isn’t that sweet?

Robert Hynes’s brother is Thomas Hynes, who had been the assessor before Houlihan. Evidently, Thomas Hynes hand-picked Houlihan as his successor.

Man, sounds like Chicago is the place to be if you’re an investigative reporter — so many things you could nose out. Might not get a Pulitzer for it, though.


I agree with this letter writer — Madigan is an active obstacle to Illinois actually dealing with any of its financial issues. Cullerton is, too, but Madigan seems to wield more power,

Even without pension debt hanging over the state, the state hasn’t managed its ongoing operational costs at all well. Without the pension debt, Illinois might not be flirting with junk status, but merely the first few notches down.

With the pension debt, which they’re not dealing with at all in this budget… yeah, I don’t blame the credit rating agencies.

While I don’t necessarily have an issue with the extremely short sessions:

The sixth day of the special session of the Illinois General Assembly called by Gov. Bruce Rauner saw the Illinois House of Representatives and Senate combined to work the least amount of time yet. The two chambers adjourned after less than 11 total minutes between the two in special session.

The Senate adjourned after only six minutes and five seconds. The House adjourned their special session after just four minutes and 20 seconds.

Over five days, the two legislative chambers have put in less than 100 minutes of work in special session. With each day of special session costing taxpayers about an additional $50,000, according to an estimate from the Chicago Tribune, the special session has run taxpayers around $300,000, or about $3,000 for each minute the House and Senate have worked.

The reason I’m not necessarily belly-aching over these extremely bad optics for the Illinois legislature, is I assume all the “real work” on the budget – the wheeling & dealing – goes on outside of official sessions.

If they are not actually working on putting a budget together behind the scenes, then yes, hammer for them for all they’re worth.

I assume Madigan think he’s being very clever in brinkmanship, not making any official progress so that he can hand the governor an untenable bill at the last minute and say “take it or leave it”.

Rauner already showed some softening up, by compromising on various tax policies.

The Illinois Capitulation
Gov. Bruce Rauner cries uncle on taxes and economic reform.

June 20, 2017 7:11 p.m. ET
Bruce Rauner spent a chunk of his personal fortune running for Governor in 2014 to save Illinois from its tax-and-spend political class. More than two years later it looks like the former private equity star has made better investments.

On Tuesday evening the Governor with the worst job in America explained why he and his fellow Republicans have offered to raise taxes for the sake of ending a multiyear budget impasse with Democrats. He said he’ll accept a four-year increase in the flat state income tax to 4.95% from the current 3.75%, expand the sales tax and implement a cable and satellite TV tax.

This is a political defeat by any definition since Mr. Rauner campaigned on lowering the income tax to 3%, not on restoring the rate close to what it was under the last Democratic Governor. The “temporary” 5% rate partially sunset in December 2014. Democrats who run the legislature refused to negotiate over a budget unless Mr. Rauner agreed to a tax increase, and now they’re refusing to make notable spending or economic reforms in return.

Mr. Rauner is also proposing to freeze property taxes and says the deal will reduce the state’s backlog of unpaid bills by at least $4 billion. The property-tax freeze could provide some election contrast with Democrats. But a freeze isn’t a reduction from already sky-high property levies, and the current backlog of unpaid state bills is $15.1 billion.

So I assume Madigan think he can draw out more. We’ll see what happens.

I’m assuming Madigan will have something to hand to Rauner, so that he can blame and yadda yadda yadda.


By the way, those short gavel out of the “special session” didn’t mean they then leave… they went into regular session to consider such important matters as:

Day 6 regular session items:

After adjourning from special session, the House entered regular session where it passed two House Joint Resolutions to name two separate Illinois expressways after former President Barack Obama. House Joint Resolution 17, which renames the entirety of Interstate 294 as the “President Barack Obama Tollway,” passed 84-0. House Joint Resolution 36, which renames Interstate 55 between the Tri-State Tollway to mile marker 202 near Pontiac as the “President Barack Obama Expressway,” passed 63-10-1.

Your state should pass a law disallowing naming government items after living people. It’s a very good policy.

It won’t look good if people realize the chambers are empty during the special session.

You can check out what’s on the regular calendar for today. If you care. And I don’t.

The Illinois Policy Institute has been doing a good job of keeping track of how little time is spent in special session. If you want the current rundown:

Day 1: House 7 minutes; Senate 10 minutes
Day 2: House 10’ 41”; Senate 11’ 54”
Day 3: House 6’44”; Senate 10’1”
Day 4: House 8’15” ; Senate 7’3”
Day 5: House 7’40” ; Senate 9’12”
Day 6: House 4’20” ; Senate 6’5”

Now I hate just looking at numbers like that – let me make some graphs!



Hmmm, looks like the House is more efficient than the Senate – way to go, Madigan, for running a tight ship!

Take your compliments where you can.

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