I guess Tom has no choice but to see if his elected officials can actually fuck the state budget's corpse a little more since there is no evidence to suggest that they won't. I can't really blame him for trying to get the money that he could very well receive. If he doesn't ask, the Cubs would have to pay the whole $400 million in renovations themselves. If you had a stupid drunken rich uncle who is always pissing his money away on bad investments, wouldn't you ask him for money when you need it?
Perhaps I'm overstating things for the sake of humor. Can it really be that bad? Let's ask Dan Hynes, the State Comptroller who has never uttered a single humorous thing over the course of his entire life as far as I can tell. According to his website on October 10th:
Illinois had $5.1 billion in unpaid bills at the end of December. Add to that $2.25 billion in short-term loans the state must repay soon, and another $1.4 billion in unpaid health care bills that have not yet been sent to the Comptroller's Office, and the state's effective bill backlog climbs to more than $8.75 billion.
That doesn't sound too good, but deficit spending is the way things work, right? Aren't all those billions in debt just business as usual for a government that is in total control of it's cash flow?
"This ongoing fiscal disaster is threatening to permanently harm programs and services serving children, seniors and the disabled and if that is allowed to happen, this state will have failed our most vulnerable citizens," Hynes said.
Oh. Well maybe we've hit rock bottom and things are getting better?
Suppliers of goods and services to the state, including health care providers and other critical social services are waiting 92 business days to be reimbursed – or more than 4 ½ months. That delay is almost double the 48 business-day delay at this time last year.
So... it's getting worse.
But talking about "critical social services" sounds so abstract. Who is really being hurt by the state not being able to pay its bills?
As a speech pathologist specializing in Early Intervention, Kris works with hundreds of little kids under three years old who require help to eat, walk, use their hands, speak, or learn problem-solving skills. This includes kids who function high on the autism spectrum like kids with Asperger's Disorder. It also involves the kids who have chromosomal abnormalities like Down's Syndrome or DiGeorge Syndrome like Ryan Dempster's little girl.
She helps these little kids who have been dealt a bad hand at birth by contracting with the State of Illinois through their Early Intervention program that provides funding for evaluation and therapy. The problem is, the State doesn't pay her very often. Those estimates by Dan Hynes I quoted were pretty much dead on with how far the State gets behind with Kris' billing.
And it isn't just Kris. All of her colleagues are experiencing the same thing. Those who work for themselves better hope they had money set aside to meet their monthly bills, because you never really know when Illinois will cut them a check. Those who run small businesses of therapists often have to resort to taking out loans to make payroll. Many are nearing or at the end of their lines of credit since the state has been pulling this crap for at least two years now.
People just can't afford to stay in a profession where one might not get paid for the work one does. That is a looming tragedy for thousands of children in Illinois who may soon face a shortage of trained therapists to provide the services that they don't get paid for. And it will eventually hit us all in the pocketbooks.
Kids need these services before they are three years old. Kris, who is incidentally way smarter than me, said that children have what is called neural plasticity. She further explained to me in small words and a few drawings that neural plasticity is the ability of the brain to make new neural connections. Essentially, if the brain has bad connections, before the age of three it is much easier to redirect the connections and correct the issue. After the age of three, the neural connections slow significantly, making correction of issues much more difficult and costly.
Yes, State of Illinois, I said it would be more costly. How much more costly? Well, lets ask Louis Rosetti, who developed the essential tool used to assess kids' language skills that is named after him and knows a thing or two about treating children who are delayed:
Louis Rossetti reports that cost analyses of early intervention programs in terms of both program costs and savings in the long-term indicate that one dollar spent on an early intervention program can save anywhere from three to seven dollars. He provides an excellent summary of this data:
At the least, measurable savings can be realized if parents are better able to meet the needs of their child at home, thus avoiding the need for institutional or more involved care. There are considerable savings in educational costs, as early intervention increases the likelihood of regular education placement. A saving is also realized for children who need long-term special education services if intervention begins early. In addition, parents of children with special needs are enabled to become more self-sufficient.
I don't know what the hell he is talking about either, but I do understand that it could cost anywhere from three to seven times more in the future to ignore little kids therapeutic needs before the age of three.
Maybe Tom Ricketts or any of the politicians that will almost assuredly give Tom the $200 million he's asking for would like to explain how better concessions at a baseball game are more important than kids with developmental delays. Maybe they can guarantee that anywhere from $600 million to $1.4 billion will be added back into the state's treasury as a result of wider aisles and a Hall of Fame of Epic Failure at Wrigley.
I'm obviously particularly close to this situation, but when someone talks about "critical social services," this is the sort of stuff they are talking about. The painful reality is that the people who get hurt most by things like this don't contribute millions to the campaigns of the people who make the decisions, nor are children able to vote, so they get screwed over and over again.
And it pisses me off. I only hear about a small percentage of the kids that Kris sees, but when she talks about her day, it is usually heart-breaking to hear about all the children who did nothing wrong who struggle just to get through each day and realizing that the State of Illinois obviously could give a shit, because if they did, they would pay the people who are trying to help.
Giving the Cubs the money they want while the state is in this kind of financial crisis is just plain wrong.
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UPDATE
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Lots of people don't like the plan and/or think the plan has no chance in hell of passing:
- Bleacher Report
- Chicagoist
- Desipio
- Ed Sherman
- Examiner.com
- Exile on Clark
- Field of Schemes
- Sun-Times
Finally, Tom went on the Score with Mully and Hanley to further rationalize his plan:
Posts
48 comments:
Well . . . yeah. This was my same problem with Chicago bidding on the olympics when we have more shelters for animals than we do domestic violence victims. But the sad truth is that a lot of that money would probably be spent on pet projects for state assemblymen, anyway, not on needy kids. And if the state can make a conservative investment and get a decent return on it, that's good for everyone in the long run, right? States make investments all the time. (cue someone who knows a lot more about economics than i do to tell me why I'm wrong).
Hell--Illinois' ghost payroll alone probably exceeds $200 million.
Yes, but they don't have the money to invest. I would love to invest more money instead of paying my rent and bills, but I'm not allowed to do that, so I have a problem with the state ignoring their bills.
Maybe if the $200 million was the difference between the Cubs staying in Chicago or moving to NW Indiana or anywhere else outside of Illinois, I could see that as being money well spent. But it isn't. The Cubs aren't going anywhere because their 27,000 strong season ticket base will not follow them.
They always find money for this kind of thing. They don't find it for social programs because people don't care. It was the same deal with the Olympics--we have schools falling down on the South Side, but hey, here's $15 billion to spend on building new stadiums for the IOC!
The only way the state will start spending $$ on social programs before corporate pet projects is if people start screaming about it, and no one is going to. It does look completely tone-deaf of the Ricketts to ask for $200 billion when the state is in such crisis, though.
I find it funny that all these Illinois residents are complaining about this...and I, a Wisconsin resident, will end up paying as much or more for this renovation via the Amusement tax than almost all of them will (present company excepted).
I do believe there is a chance that the ISFA funds will not be released to the Cubs (a small chance) at which point, the Ricketts will probably turn to personal seat licenses which will do something much worse than levee a small tax wealthier people who attend sporting events and other amusement activities...it will piss off their core fan base...and right now, that core fan base isn't too happy as it is.
That is true, Doc. The Ricketts will get the money they want one way or the other. But I'd rather it came from the people who willingly give it to them directly than from people who could give a shit about the Cubs at the expense of people in the state who need it more than the Ameritrade Family.
For me, I guess I'd like to have think that some of the money that I've contributed to the Amusement Tax over the last 18 years will finally be used for something that I actually go to. The Cubs fans have paid more for the building and maintenance of Comiskey Park and the renovation of Soldier Field than just about any other specific group of people. I know times are tough, but assuming this deal is entirely financed by the ISFA and the sale of bonds in a low interest loan that the Ricketts will be paying back, the net cost to the state should be 0.
But this is Illinois we are talking about, so you never know what bullshit will eventually come out of this.
Does anyone know the likelihood that this is not going to pass?
I don't claim to know crap about crap (see my entire history of Twitter posts) but the Olympics bid was (supposedly) entirely privately funded and didn't use one cent of tax monies. I think if it had been awarded that's when things would change.
Can someone explain how this would work as I'm not reading it as taking money already from the budget (that we can't afford) and the request is actually looking to issue Bonds (not that the State's credit rating is worth sh*t anyway) but this doesn't mean that it would come from tax monies that go to fund education, healthcare, (all the programs being mentioned above).
Understand, I think this is all bullcr*p too, but want to understand hyperbole from fact on this issue. If you can enlighten me, I'd appreciate it. Sorry for being dense when it comes to this.
Duey, here's my best shot at explaining it: the Cubs would essentially be taking 35 years to pay back the loan and would be paying back with taxes they would have been paying anyway. That's 35 years of revenue the state would have generated that will instead just bring them back to even to pay for a renovation project. Maybe it isn't a new tax against the tax payers, but it is a giant new expense for the state.
To me, that's like me telling the IRS I'd like a $200,000 loan and that I'll pay it back in income tax over the rest of my life. I don't see them signing off on that one.
Duey...I wouldn't claim to be an expert on this either, but from my understanding, the $200 million (or $300 million, depending on the source) will come from the Illinois Sports Facilities Administration which owns Comiskey Park. The money will be immediately generated from the sale of bonds and from money saved in surplus as part of the 12% amusement tax.
The ISFA will then repay those bonds with some of the money collected from the Amusement Tax as well as money from Ricketts as a repayment for the loans. Now this loan that the Ricketts family will be getting will be at a very low interest rate (if any), so that extra money needed to repay the bonds will come from the amusement tax.
I believe that is how this will work, but I might be way way off on this. The city and county will still get a percentage of money from the Amusement tax, but it appears that part of this deal will turn that into a yearly flat sum as Amusement Tax revenues in general increase. That added money which the ISFA gets will then be used to help pay off the Bonds for Wrigley Field.
This is all assuming the apocalypse doesn't happen in 2012.
thanks Doc and AK. Yeah, sort of like the promise I got in '97 of a set of stock options being given to me each year for my company only to have my company continue to leverage the crap out of itself keeping stock prices down and thus, my options worth absolutely nothing. all the while selling it to me and others as a major benefit!!
Doc, just read your post on your blog. Yeah, PSL's would have me dumping my tickets too. could be a blessing in disguise.
The thing is, I don't care where the money comes from. If there is $200 million that can be made readily available for anything, it should not being going towards a sports team at this point.
If I fall behind on my bills while working one job, I can't get a second job and buy a new big screen TV with the income from the second job just because it is a separate source than I've previously used to pay my obligations. That is what this seems to be to me.
You know...over 35 years...if the Cubs could find some other form of low interest financing, if they could somehow leverage a deal like the Mets did with CitiCorp for full naming rights to the ballpark ($20 million a year for the Mets)...over 35 years, assuming the Cubs get 1/2 that for Wrigley, that's $350 million.
There are other ways to make the money. The truth is, I think it is right for the Ricketts, regardless, to at least make an attempt to get that money through the state.
I don't fault them for asking. They have to. The worst that happens is the state says no. The best case (for the Cubs) is they are handed the money. They absolutely have to ask.
I don't care that they are asking, but I will be royally pissed if they get it.
I have only one issue and Tim mentioned it. There's no reason whatsoever for the state to give the Cubs money. None. Here's what happens if they don't:
1. Ricketts comes up with the money by himself
2. Ricketts only invests the $200 million he had planned to do
Those are the two options. So what does the state of Illinois gain in giving them $200 million? As far as I can tell, nothing.
Now, let's change one aspect of the Cubs to make it interesting. Let's say there has been a threat of relocating. Ricketts said Wrigley is the greatest place on earth so the threat doesn't exist, but let's pretend it does. If the state says no now, Ricketts has three options:
1. Come up with the other $200 million
2. Go with just $200 million
3. Move the Cubs elsewhere (to a state that will presumably love to have them and give them the $200 million).
That changes everything. At this point the state has incentive to approve the bill. The loss of the Cubs would be far worse than coming up with $200 million to help them renovate the ballpark. it would make no sense at that point for the state to not approve it.
That's just not true right now. They have no incentive to come up with the money. Ricketts played his cards wrong. He let everybody know right off the bat how important Wrigley Field was to his family. He should not have done that until after this bill was approved. He should have remained silent on the subject and he should even have gone as far as leaking a story that the Cubs may seek to move the club. He didn't do that and it leaves the state with an easy decision. Unfortunately, the state will screw it up and give him the money when they don't have to.
This is all about whether or not the state has to give them the money. They don't. Ricketts could have played it so they did, but he chose not to. Lucky for him that government is next to useless.
I originally thought that Ricketts was a pretty shrewd guy the way he seemed to have played Naples in order to get a better deal in Mesa for the spring training facilities, but I'm starting to think that was more about dumb luck than any sort of actual plan.
He has totally backed himself into a position where he has no leverage, so the State's stupidity is his only hope. I think he's got a pretty good shot.
...and despite what tommy boy says the number is $300 million because that's the max number in the bill.
we have cps kids throughout the city that go to classes in trailers. a billionaires son asks for $300 million from the state to rebuild his sandbox and he'll probably get it. that my friends is flat out fucked up.
wait al yellon supports the legislation...please delete my earlier comments.
A hundred million here, a hundred million there... pretty soon it adds up to real money.
Al really couldn't have his nose further up the Ricketts' asses without some sort of Human Centipede surgery involved.
tim, one thing i'd really like to know is where is the money from the amusement tax going right now? because they are taking this money away from others. so what is that?
It's pretty hard to find, but it looks like the amusement tax was originally meant to reimburse the city for security provided to major events. Of course, they now also bill the teams for that, so who the hell knows where the money is actually going.
mb, i just don't understand guys like ricketts. this mother fucker can spend $800 million of daddy's money on a hobby and he can follow that up by ripping off state and local governments for $400 million tp spend on his hobby.
must be nice to be a member of the lucky sperm club.
Hey WPBC,
Can I bring you down to Springfield with me the next time I need to go beg for my money?
i'd love to go with you kris. this whole thing is a sham. these corporate assholes like ricketts think that the system should just hand them money for their hobby, while working people can't even get paid by the state for work they have already done. this is a sham.
if the state gives tom ricketts a penny it's too much.
here's an idea for ricketts...pay for the stadium upgrades with some more of daddy's money. or did daddy cut tommy boy off?
LOL and yellon is for it. I'm shocked! If you're for this you've either been co-opted by the little charade that inhabits clark and Addison out beyond your ability to reason or you need to think about it a little harder. It's the moral equivalent of being for a defense contractor getting paid $64,000 for each toilet seat it sells to the army - except the contractor keeps the seat and the army is bankrupt.
ricketts has become the bill wirtz of this franchise. he's driving away fans.
Seems to me like they’re doing the right thing, not raising any additional taxes AND spending quite a bit of their own money.--ALVIN YELLON
Oh crap. If that pattern holds, the Cubs won't be winning a championship for a long time. Tom is a pretty young guy.
the sister will take control of the team within the next decade. tom is a bumbling idiot that makes michael mccaskey look like a brilliant sportsman. old man joe will figure that out in the next few years as attendance drops and less and less people give a fuck about the cubs. he'll have to find a less prominent role for tommy like vag had to for mikey.
family ownership can be bad when the family is a bunch of spoiled rich kids.
...al is certain the cubs will win a ws under ricketts. so they have that going for them.
It would be funny if it weren't so sad and infuriating. There are clearly lots of people who haven't the faintest idea how bad the state and municipal budget situation is.
People, the state could fire every employee on its payroll and it would still run a large deficit. It is unimaginable how wide the gap is between spending and tax collections. The idea of adding $300mm to the tally for a ballpark when U of I is owed $1000mm, there's $5000mm of unpaid bills laying around and tens of thousands of state employees will be fired next year is beyond silly. It is immoral.
gm, i agree with you on the immoral part. that's why i have very little doubt that it will happen. ricketts already has cullerton sponsoring the bill. he probably can bring through the votes.
it's maddening when you think that the states flagship public university is owed $1 BILLION.
They should ccd - and rickets' firm can take the underwriting juice from that IPO! Win-win!
I'm dead serious when I say I'd rather the park burned to the damned ground than the state take this on, man. Illinois is fiscal roadkill, and there's ricketts out there raping the carcass before God and everyone.
You wonder how this society has ended up in such a hellacious mess? The utter lack of ethics or morals among its so-called leadership has everything to do with it.
It really goes back to how shoddily the state has been run, because if they hadn't been hornswaggled by Reinsdorf and the McCaskeys for all the millions their teams got, Ricketts probably wouldn't have the balls to even propose this. But why shouldn't he try? I would too given the past behavior of the government.
When it is all said and done, the $200 or $300 million really wouldn't even put a dent in the state's financial problems, so why not make the best financial deal for himself?
The problems I have are:
1) The state will probably fucking do it, and as I mentioned and GM reiterated, that is just wrong on a number of levels.
2) The Ricketts making a big show about how much they care and how families are so important to them, but at the end of the day they are driven by the dollar as much as any other corporate entity and that duplicity pisses me off.
GM, you're letting Ricketts get off too easy by fucking the handle of the ax.
As for burning it to the ground, I'm all for it. I always have been. It seems to me if you're going to ask for money from the state it should be to build a new ballpark. The White Sox got $200 million in tax money when they built a new ballpark. The Cubs are seeking $200 million to modernize as best as possible a shitty ballpark that is a hundred years old. When it's all done, it's going to be the same ballpark that features the second most uncomfortable seating in baseball. Well done.
ccd, I think you might be onto something with Tommy getting cutoff by his daddy. Perhaps that's why payroll is decreasing just one year after he bought the team. I have a feeling in 20 years we're going to miss the Tribune. How fucked up is that?
It would be funny if it weren't so sad and infuriating. There are clearly lots of people who haven't the faintest idea how bad the state and municipal budget situation is.
I'm not from Illinois and don't live there so I was unaware just how bad the situation was. However, in this economic climate, it doesn't take a genius to understand that all the states are hurting. At that point it's fairly simple. Do you spend money you don't have? I can't. Can you? Why can the state do it?
Tim, I get your point about ricketts only doing what all others have done, but I will say this:
If we know it's wrong under these circumstances, shouldn't ricketts? And if ricketts knows it's wrong, why is he doing it?
I don't find it easy at all to exculpate him on fiduciary ground. There is a clear moral point here. And he has no fiduciary duty whatsoever to be greasing palms, which of course its what he's doing because this is Illinois.
I'm afraid ricketts is just another warped amoral bastard product of our unhinged society. We live in a banana republic, friends, when this kind of behavior is not only proposed but expected and then seen to completion.
here's the thing that really pisses me off. ricketts has been blessed with great fortune. in times like these he should act like a leader. he should have the moral compass to understand that people are hurting and it is not the time nor place to ask taxpayers to shell out money for his family toy.
it doesn't matter what reinsdorf or mccaskey did before him. he and his family are owed nothing because they have great fortune to buy a toy. it's just the opposite he and his family owe society. they need to be leaders. they have the connections and the business sense to make the kind of money they have. come up with a plan to raise $200 million. sell naming rights. sell stock in the team. but don't ask for corporate welfare. don't take money away from causes that can't get this kind of media attention.
the whole thing is shameful.
GM, you might know this. I would assume Illinois bonds at this point have been relegated to near junk-bond status. What sort of annual interest would they have to pay out on this (assume the full 300 million mentioned in the bill)?
Also, if anyone hasn't heard it, you need to listen to the Tiom Ricketts interview from WIND yestersday. Yellon has it linked through a fanpost or shot or whatever.
Basically, Tom explains that this doesn't cost the city anything, because without improvements he won't be able to raise ticket prices (how sad) so the amount generated through the amusement tax would remin the same. But, if this is approved, the state still gets the same money, and (here's the good part in Tom's opinion) - He WILL be able to riase ticket prices (hooray!).
Just for fun I'm going to estimate that the total amount to retire 300 million worth of 35 year bonds is 600 million total (which seems low to me). If Rickett's raises ticket prices enough to cover that over 35 years that means that he would pocket 4.4 billion over current ticket income(125 mil per year avg) over that same time frame - and the state ties up 300 million for 35 years to assist with that.
Ignoring the state funding aspect, the fans would be much better off paying an extra $10 per seat surcharge over the next ten years.
Let's say 9 million would be required next year to finance this plan. Privately done, that would add up to about $3 per ticket. In order to raise the same amount of money by relying on the amusement tax it would require raising ticket prices over $24 per seat.
pwhalen
To borrow a phrase from MB21: New shit up - Master of the House
I'm not sure what kind of coupon they would float. ISFA bonds are different from general obligation bonds, being differently collateralized, and even under these depressing circumstances chances are the the coupon would not be very large. Conditions can and will change in a heartbeat, of course, and any plans they have today could be dashed by events well beyond their control.
Anyone who buys that this "doesn't cost the state anything" because of planned ticket price increases should be banned from commenting publicly on the topic. How gullible are we supposed to be?
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