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CAPITOL RECAP: Illinois' credit outlook 'positive,' per Fitch Ratings

CAPITOL RECAP: Illinois’ credit outlook ‘positive,’ per Fitch Ratings

By Capitol News Illinois

JONES MAYORAL CHALLENGE: State Rep. Thaddeus Jones, who was elected Calumet City mayor in April, is facing a challenge to his mayorship that is based on a municipal referendum that prohibits a Calumet City mayor from also serving as a state representative.

But Jones, a Calumet City Democrat, said a recently enacted state law ends any further challenges to his mayorship based on the referendum because a new law prevents local governments from requiring a member of the General Assembly to resign his or her office to seek elected office in that local government.

Calumet City Alderman James Patton and former Board of Police and Fire Commissioners member Mary Cox, in an open letter last week, asked Illinois Attorney General Kwame Raoul and Cook County State’s Attorney Kimberly Foxx to remove Jones as mayor, pursuant to the referendum.

The referendum, which voters in Calumet City passed Nov. 3, bans a person from seeking mayoral office “if, at the time for filing nomination papers, that person also holds an elected, paid office created by the Constitution of the State of Illinois.”

The referendum applies to “all persons seeking nomination or election to, or who hold, the office of Mayor of the City of Calumet City at the February 23, 2021 Consolidated Primary Election and each election thereafter.”

But Senate Bill 825, which Gov. JB Pritzker signed June 17, explicitly voids the mandate that was approved in the referendum.

The new law states “a unit of local government may not adopt an ordinance, referendum, or resolution that requires a member of the General Assembly to resign his or her office in order to be eligible to seek elected office in the unit of local government. Any ordinance, referendum, or resolution that contains such a provision is void.”

In a statement, Jones said the new elections law “officially puts an end to a long history of divisive politics within the government of Calumet City.”

Spokespeople for the attorney general’s office and Cook County state’s attorney’s office did not respond to requests for comment.

* * *

RATINGS OUTLOOK UPGRADE: Fitch Ratings, one of three credit rating agencies that grade Illinois bonds, has upgraded its credit outlook for the state from “negative” to “positive.”

Although the state’s overall rating remains at near-junk status at BBB-, the agency said Wednesday, June 23, the state’s economic outlook coming out of the pandemic, combined with the recently-enacted budget, are moving the state in the right direction.

The change in outlook is not the same as a change in the state’s immediate credit worthiness, but instead reflects the agency’s view of its credit trajectory, indicating the possibility of a credit upgrade in the future.

The continuing BBB- rating is the result of what Fitch called “a long record of structural imbalance and irresolute fiscal decision making” that has resulted in a credit position well below what the state’s broad, but slow-growing economy would otherwise suggest. It also reflects the state’s large, long-term liabilities such as pension obligations that will continue to put stress on the state’s finances.

But the agency also said that the state’s revenue base, primarily income and sales taxes, are expected to grow as the state’s economy grows, while recent improvements, such as paying down the state’s bill backlog and its plan to pay off its federal pandemic borrowing early, are signs of improved budget management.

The action by Fitch follows similar moves earlier this year by the state’s other two rating agencies, Moody’s and S&P, which revised their outlooks from “negative” to “stable.”

In its announcement, Fitch listed a number of things Illinois could do that might lead to a credit upgrade. Those include continuing to pay down the bill backlog, continuing the recent pattern of passing balanced budgets on time and narrowing what Fitch called a “structural budget gap” by matching recurring revenues with recurring expenses, including funding its pension obligations at actuarially determined levels.

However, the agency also noted factors that could lead to a credit downgrade, such as failing to follow through on plans for early retirement of federal pandemic loans and repayment of interfund borrowing, or using one-time federal aid for recurring expenses in the future.

* * *

JUVENILE SENTENCE PETITION: Lawyers for an Illinois man who was sentenced to 130 years for a murder when he was 16 years old are asking the U.S. Supreme Court to clarify how life sentences for juveniles should be reevaluated in light of recent U.S Supreme Court decisions against that practice.

Ashanti Lusby’s lawyers petitioned the U.S. Supreme Court last month to hear Lusby’s case challenging his sentence as unconstitutional cruel and unusual punishment, based on two recent U.S. Supreme Court’s decisions, Miller v. Alabama in 2012 and Montgomery v. Louisiana in 2016.

In the Miller case, the court ruled that mandatory life sentences without parole for juvenile homicide offenders are unconstitutional because it qualifies as cruel and unusual punishment. The court decided that children are different than adults for the purposes of mandatory life sentences because such sentences pose “too great a risk of disproportionate punishment.”

In the Montgomery case, the court clarified that its decision in the Miller case can be applied retroactively, and “requires a sentencer to consider a juvenile offender’s youth and attendant characteristics before determining that life without parole is a proportionate sentence,” according to the opinion.

Lusby’s 130-year sentence for the 1996 rape and murder of elementary school teacher, Jennifer Happ, in Joliet was not a mandatory sentence, but it is a de facto life sentence because it amounts to a lifetime in prison.

In October, Lusby exhausted his legal avenues in Illinois when the Illinois Supreme Court ruled in a 6-1 decision that his 2002 sentencing hearing did not violate U.S. Supreme Court case law because the sentencing judge sufficiently considered his age and factors related to his youth.

In their petition to the U.S. Supreme Court, Lusby’s lawyers argued that the court should clarify the procedures for reconsidering actual and de facto life sentences for juvenile offenders who were sentenced before the protections in the Miller and Montgomery cases were established.

Lusby is represented by lawyers with the Illinois Office of the State Appellate Defender, including Douglas R. Hoff.

A spokesperson for the Attorney General’s Office, which represents the state in this case, did not comment. The state’s response to Lusby’s petition is due July 2.

* * *

COAL ASH LAWSUIT: The Illinois attorney general on Tuesday sued a Delaware company that owns the now-closed Vermilion Power Station over claims of illegal pollution at the former coal plant, resulting from the storage of coal ash at the site.

The six-count lawsuit against Dynegy Midwest Generation LLC claims the company’s disposal of coal ash in three unlined pits violated the state’s Environmental Protection Act by contaminating the groundwater with toxic pollutants contained in the coal ash, including lead, arsenic and mercury.

The groundwater at the site flows into the three coal ash pits, which contain a total of 3.3 million cubic yards of coal ash located at the site of the former Vermilion Power Station, and discharges into the Middle Fork of the Vermilion River, which flows into the Vermilion River. The Vermilion River flows to the east into the Wabash River.

Long-term groundwater monitoring at the plant revealed that concentrations of certain toxic pollutants — including arsenic, boron, sulfate and iron — exceeded the groundwater quality standards outlined in the state’s administrative code.

The lawsuit, in Vermilion County court, was brought at the request of the Illinois Environmental Protection Agency, which found in 2018 the company’s disposal of coal ash violated the state’s groundwater quality standards.

Raoul’s office also filed an interim agreed order on Tuesday that would require Dynegy to prepare a safety response plan for the coal ash ponds at the site, as well as interim corrective actions that would be subject to approval by the Illinois Environmental Protection Agency.

Corrective actions in the interim order include requiring Dynegy to create written scopes of work for a groundwater collection trench and dewatering of the ponds, and to conduct riverbank inspections at the site.

Dynegy would also be required to prepare reports for public meetings where the company will discuss plans for removing the coal ash currently in the ponds.

The interim order has not yet been approved by a Vermilion County judge.

Vistra Corp, which merged with Dynegy in 2018, issued a statement Wednesday praising the agreement.

* * *

MURDER CHARGE VACATED: A woman found guilty of a McHenry County murder had her conviction vacated last week after serving 19 years of her 27-year sentence and maintaining her innocence throughout her imprisonment.

With the help of the lawyers from the Illinois Innocence Project, Jennifer McMullan was released from prison June 16 as a result of a plea agreement entered in McHenry County court.

McHenry County State’s Attorney Patrick Kenneally’s plea deal to grant McMullan’s release and vacate her murder conviction depended on if she agreed to plead guilty to an armed robbery charge in the case.

Stephanie Kamel, one of McMullan’s attorneys at IIP, said her client faced an extremely difficult decision of whether to accept a plea to a lesser charge or remain wrongfully imprisoned for years to come.

“Driving her decision was her father, whose health is deteriorating rapidly due to Alzheimer’s disease,” Kamel said in a news release. “While we would like to have seen Jennifer’s conviction vacated with no plea agreement required, we are glad she is finally free and reunited with her family after an almost 20-year absence.”

McMullan was one of four people — along with Kenneth Smith, David Collett and Justin Houghtaling — who were arrested for carrying out the attempted robbery and fatal shooting of Raul Briseno at a McHenry restaurant in March 2001.

McMullan’s release comes less than two months after a federal appeals court released Smith from prison and vacated his murder conviction, overruling prior Illinois state courts’ decisions in his case.

The convictions of McMullan and Smith were based on Houghtaling’s confession to police days after the murder. Houghtaling, who confessed in exchange for a lesser sentence, later recanted his confession.

After McMullan and Smith were found guilty at trial, their appeals focused on an alternate group of suspects — known as the DeCicco group — who confessed to the murder on multiple occasions but also later recanted.

* * *

RAUNER SETTLES LAWSUIT: People targeted by a campaign robocall from former Gov. Bruce Rauner since his first campaign in 2014 will be eligible to earn a portion of a $1 million settlement agreement that was reached last month in a class-action case.

The agreement would end the federal lawsuit against the former governor and his campaign entity, Citizens for Rauner, that was brought by Peter Garvey, an Illinois resident who received three prerecorded voice mails from Rauner’s campaign in 2018.

The amount owed to each person has not been determined, according to the settlement notice website, because the total number of class members and the costs of settlement administration, as well as attorney’s fees, haven’t been finalized.

The number of class members could exceed 35,000 people, according to Garvey’s lawsuit.

As part of the settlement agreement, Rauner and his campaign deny all allegations of wrongdoing and liability made it the lawsuit.

The campaign robocalls that left prerecorded voicemails to Garvey’s cellphone encouraged people to vote for Rauner in the upcoming March 2018 primary election.

The 30-second message featuring Rauner’s voice said, in part, “Illinois is worth fightin’ for and with real reform together we can bring back Illinois and provide the future our children deserve. Please join me in the fight against Mike Madigan and his special interest allies. I’m askin’ for your vote on Tuesday, March 20.”

The messages were left through so-called “ringless voicemails,” which is technology used to deliver voicemail messages the same way as text messages.

The lawsuit claimed that the ringless voicemails made to class members, like Garvey, violated the federal Telephone Consumer Protection Act.

Last month, a federal judge preliminarily approved the proposed settlement agreement. The final hearing on the agreement is set for Sept. 7.

More information about the settlement or submitting a claim is available at www.CitizensForRaunerTCPASettlement.com.

* * *

FAITH-BASED CARE CASE: A recent U.S. Supreme Court decision evoked a 10-year-old controversy in Illinois over whether faith-based charities can be prohibited from contracting with the state for foster care and adoption services on the grounds that they refuse to work with unmarried or same-sex couples.

In a 9-0 decision Thursday, the nation’s high court ruled against the city of Philadelphia, which had refused to renew a contract for foster care services with Catholic Social Services, arguing that the church-based agency’s refusal to place children in the homes of unmarried and same-sex couples violated a non-discrimination clause in the agency’s contract with the city.

Illinois went through a similar controversy in 2011, shortly after the state legalized civil unions among same-sex couples, when the Department of Children and Family Services refused to renew a contract with Catholic Charities of Illinois over a similar policy.

At that time, however, a circuit court judge in Sangamon County sided with the state and dismissed a lawsuit brought by Catholic Charities.

In last week’s Supreme Court case, Fulton v. Philadelphia, the court faced an almost identical question – whether the non-discrimination clause in the contract violated Catholic Social Services’ First Amendment right to the free exercise of religion.

In this case, the court ruled that it did, but the justices decided that issue on narrow grounds that some legal experts say only applies to the city of Philadelphia.

Normally, the court would uphold the right of a state or local government to enact a requirement that might burden the free exercise of religion as long as the rule is both neutral and generally applicable to all individuals and groups, regardless of religious affiliation. That standard comes from a 1990 Supreme Court case involving the Oregon Division of Employment Security.

But in Philadelphia’s case, the justices said, the rule is not generally applicable because the contract contains a clause allowing for exceptions to be made “at the sole discretion of the Commissioner” of the Philadelphia Department of Human Services.

Ed Yohnka, director of communications and public policy for the ACLU of Illinois, said that distinction makes the Philadelphia case markedly different from the 2011 case in Illinois.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

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