Sunday, January 29, 2017

Governor Rauner Reintroduces Plan To Sell Thompson Center

Republican state legislative leaders Senator Christine Radogno and Representative Jim Durkin are introducing measures reigniting Rauner’s proposal to sell the Thompson Center in the central loop to a private developer. The idea is to add hundreds of millions of dollars in state budget savings and City of Chicago real property tax revenues by putting the whole city block back on the city’s property tax rolls. Alternative proposals for the private use of the block bounded by Lake, Clark, Randolph and LaSalle streets include the Adrian Smith + Gordon Gill designed 115 story, three million square foot multi-use tower, and Helmut Jahn’s slightly shorter hotel and residential tower preserving the Thompson Center’s dramatic atrium next door. Renderings of these proposals are pictured above.

If it were to actually be built, the 115 story tower covering the entire block would replace the former Sears, now Willis, Tower as Chicago’s tallest building.

Latest Illinois Budget Proposal Includes Huge Tax Increases

Illinois’ budget crisis drags on in Springfield, with the fate of the latest and ever changing leadership proposal including increases in the individual income tax rate from 3.75% to 4.95%, and the corporate rate from 5.25% to 7.0%. Opposition is likely from Governor Rauner, because the proposed measure fails to include all the ethics, pension and workers compensation reforms he wants, and from Democratic legislators and leaders, because the proposed increases still won’t fill the state’s budget shortfalls and unfunded pension liabilities. Looks like the deadlock will continue for several more months.

Trump DOJ May Drop Support For Obama’s New Overtime Rule

Seeking a 30 day extension for filing its brief in the Fifth Circuit Court of Appeals case challenging the Texas federal judge’s nationwide injunction prohibiting enforcement of the Obama administration rule which would extend overtime pay requirements to virtually all salaried workers earning less than $47,426.00 per year, the Trump administration Department of Justice said it needs the extra time to “allow incoming leadership adequate time to consider the issue.” This signals at least the possibility that Trump’s DOJ will drop the appeal and allow the lower court ruling to stand. Should that potential materialize, employers won’t know whether there will be a different new rule coming out of the Labor Department, or whether the old duty based rules will remain in effect.

Is President Trump Putting Construction Trades Back To Work?

Among the early Trump administration executive orders last week were documents reinitiating the approval process for construction of the Keystone XL and Dakota Access pipelines, and a verbal promise to reduce business regulations by 75% to incentivize factory construction in the U.S. Laborers International General President Terry O’Sullivan says pipeline unions have $50 billion of work under contract. North American Building Trades Unions President Sean McGarvey says energy projects currently employ 32% of the U. S. construction industry workforce.

At the same time, it appears the Trump administration is preparing executive orders intended to reduce the influence of organized labor in the construction industry by rescinding Clinton and Obama administration executive orders favoring project labor agreements on major federally funded construction projects. Watch for more news on this front in the coming weeks.

Last week Senate democrats introduced legislation proposing the Trump campaign’s promised $1 trillion infrastructure investment over the next 10 years, including $210 billion for roads and bridges, $200 billion for funding other national transportation projects, $110 billion for water and sewer infrastructure construction, and $100 million for energy infrastructure. Trump administration spokesmen would not comment on the proposal, but Senate Majority Leader Mitch McConnell immediately told reporters he doesn’t want in infrastructure construction stimulus plan.

McConnell said he is waiting for a Trump administration proposal that pays for infrastructure projects “in a credible way.” Assistant Republican Leader Senator John Cornyn echoed McConnell’s sentiment, saying, “It needs to be paid for because we’ve got $20 trillion in debt.” President Trump himself earlier commented that putting people to work building infrastructure is “not a very Republican thing. I didn’t even know that, frankly,” and that infrastructure won’t be a core part of the first few years of his administration.

Sunday, January 22, 2017

McHenry County Board Dumps Property Tax Freeze Referendum

At its Monthly meeting January 17, the McHenry County Board voted 17 to 7 to adopt an agenda modification effectively eliminating an advisory property tax freeze referendum from the April 4 ballot. By deleting the item from the meeting agenda, the vote precluded a direct ballot by board members on the question whether the referendum should be on the ballot.

Representative Allen Skillicorn circulated petitions to get the referendum on the April ballot, but was unable to get nearly enough signatures to put the question to voters. The county board proposal to put the measure on the ballot needed to pass January 17 to meet the ballot proposition deadline.

The county board has refused to raise county property tax levies for the last five years, and board members voting to remove the issue from the agenda pointed this fact out, together with the fact that the proposed referendum was advisory only, and would not have effectively precluded levy increases in any event, even if adopted by the voters in April.

USEPA Opens Water Infrastructure Loan Applications

January 10, 2017 the USEPA began accepting applications for loans under the Water Infrastructure Finance and Innovation Act, and the agency will consider the first round of applications submitted through April 10, 2017. The Act appropriated $17 million to EPA for credit assistance up to 49% of the cost of water system projects, with the remaining 51% of the cost required to come from other matching funds. According to the agency, the appropriation should support up to $2 billion in water infrastructure construction financing.

Passed during the Obama administration, it will be interesting whether President Trump will claim this expected $2 billion in public/private partnership spending as part of his promised $1 trillion infrastructure job creation program.

Transportation Secretary Designee Chao Fails To Clarify Trump Infrastructure Plans

Senators, Representatives and construction industry trade association officials all hoped to hear details of the $1 trillion ten year infrastructure investment plan promised by President Trump during the campaign, but in spite of her nearly certain confirmation, Elaine Chao’s testimony at her confirmation hearing before the Senate Commerce, Science and Technology Committee was singularly unenlightening, devoid of details, and embarrassingly disappointing. Combined with President Trump’s statements in interviews after the election that putting people to work building infrastructure is “not a very Republican thing. I didn’t even know that, frankly,” and that infrastructure won’t be a core part of the first few years of his administration, and Senate Majority Leader Mitch McConnell’s statement to reporters that he wants to avoid a $1 trillion stimulus, Chao’s testimony puzzled Association of General Contractors spokesman Brian Turmail: “Are we hearing signs that people just don’t know what the plan is, or signs that people don’t want any kind of plan? We don’t know the answer.”

While acknowledging in her remarks that Highway Trust Fund revenues fall $10 billion short of spending every year, and that attracting the promised private investment in infrastructure projects is a “major challenge,” Chao offered no specific proposals for solving either difficulty. All she would say is that “the pay-fors for any infrastructure proposals are all challenging and all have their particular champions and also detractors.” Guess everybody except President Trump knew that already.

Chicago Federal Judge Strikes Down Lincolnshire’s “Right To Work” Ordinance

Enacted with the encouragement of Governor Rauner, the village of Lincolnshire’s December 2015 anti-union “Guarantee of Employee Rights” ordinance came to an abrupt end with the filing January 7, 2017 of U. S. District Judge Matthew F. Kennelly’s order invalidating the ordinance as preempted by the National Labor Relations Act. The Lincolnshire ordinance, passed under that village’s home rule powers, purported to make unenforceable labor union contract provisions requiring workers not belonging to a union to pay union dues and be hired through union halls.

In a federal lawsuit filed against the village by the Carpenters union, Laborers union, and two Operating Engineers locals, Judge Kennelly held that the U. S. Constitution’s supremacy clause prohibited local governments from overriding provisions of the National Labor Relations Act. While the Act permits state legislatures to enact statewide laws eliminating the Act’s grant to unions of the right to contractually require employers to deduct dues equivalents from non-union employees’ wages, allowing local units of government to do so on a piecemeal basis would create an unmanageable patchwork of labor laws across the nation, and effectively negate the collective bargaining rights granted to labor unions by the NLRA.

Lack Of Congressional Funding Delays Major Infrastructure Projects

President Trump’s campaign promise of a 10 year, $1 trillion infrastructure construction program could face major hurdles in the halls of Congress, given the U. S. Treasury Department’s December 30, 2016 report listing the seven most ambitions infrastructure projects already on federal drawing boards, but delayed due to lack of funding from our Republican controlled national legislative body.

The DOT report lists the top 7 projects facing lack of appropriations as:

1.    Technology to accommodate driverless motor vehicles, at a cost of $1.3 trillion.
2.    Recapitalization and expansion of the Interstate Highway system, at a cost of $790 billion.
3.    Improvements in Amtrak’s Northeast Corridor, at a cost of $101 billion.
4.    California’s high speed rail program, at a cost of $59 billion.
5.    Interstate 10 upgrades, at a cost of $29 billion.
6.    Next Generation Air Traffic Control system at a cost of $25 billion.
7.    Interstate 35 Minnesota to Texas Trade Corridor, at a cost of $16 billion.
Facing a Congress reluctant to fund these $2.3 trillion in major projects already planned by DOT, FAA and other federal agencies, it seems most unlikely President Trump can coax Congress to raise revenue an additional $1 trillion to fund his promised infrastructure program.

Despite Financial Woes, CPS Considers $75 Million New South Side High School

After shuttering 50 school buildings in 2013, Chicago Public Schools is under a moratorium on further closings until 2018. Commenting on the dichotomy of closing existing schools while spending tens of millions to build new ones, former CPS Vice President Jesse Ruiz says: “I’ve always said that instead of cornerstones with the year the school was built, we should put expiration dates and not have folks believe that a given facility or building is what is always going to be there for that community.”

Rapid growth of school choice alternatives, including charter schools and selective enrollment programs, without a comprehensive city wide plan for school building locations has created substantial under-enrollment at traditional neighborhood school buildings. Twenty two attendance boundary high schools in the city draw less than 13% of their students from within their attendance areas.

Ironworkers Union Pension Benefit Cuts Approved

Cleveland based Iron Workers Local 17 has received approval from the U. S. Treasury Department to cut pension benefits to retirees under the union’s multi-employer pension plan. The plan has 2,067 members, and is projected to become insolvent within 20 years. Union members and retires iron workers are voting whether or not to approve the benefit cuts.

The 2014 Kline-Miller Multiemployer Pension Reform Act authorized the Treasury Department to approve requests for benefit reductions by multi employer pension funds .to extend their solvency. Treasury has denied three applications, and is still considering the application of Oklahoma City based Bricklayers Local 5.