Posted by Hal Dardick at 3 p.m.

As the federal government descends deeper into deficit spending, U.S. Sen. Dick Durbin and Mayor Richard Daley today came out in defense of one political practice some say is partly responsible for the nation’s sea of red ink.

The two powerful Democrats stood outside the Shedd Aquarium, with Lake Michigan as a back drop, and announced $4 million in federal earmark funds that will help fund the ongoing effort to rebuild a chunk of the city’s deteriorating shoreline.

“They are defensible,” Durbin said of earmarks. “What major earmarks we put in the bill have to do with major problems. . . This is an investment in the future of the major asset of the City of Chicago.”

Other earmark funds, he said, would go to bolster the CTA and address flooding problems in the suburbs.

Posted by Rick Pearson and Ray Long at 2:20 p.m.

Gov. Pat Quinn acknowledged today he will seek an increase in the Illinois income tax when he proposes his budget Wednesday, but sought to downplay the tax hike by labeling it “fundamental tax reform” that would lessen the blow on lower-income families.

The Tribune disclosed in today’s editions that Quinn was considering increasing personal income taxes by 50 percent, boosting the rate from 3 percent to 4.5 percent, while also looking to increase the personal tax exemption, currently at $2,000, to as high as $6,000.

"There will be some that will have a higher tax burden," Quinn said during a hastily called news conference at the James R. Thompson Center in downtown Chicago.

Quinn would not discuss the details of his proposed tax hike except to say that a significant increase in the personal deduction would more than offset the income tax increase he will be seeking for many taxpayers.

“If you have a generous personal exemption, you can reduce taxes, cut taxes, on millions and millions of people in Illinois—millions of people who right now are suffering in a very, very difficult economic time, a recession that’s probably the worst in our lifetime,” Quinn said.

Administration officials today painted an increasingly bleak picture of the state's financial situation. They said the budget deficit could reach more than $11 billion by July 2010, $2 billion more than recent estimates, if nothing is done. They also said state revenues from income and sales taxes are expected to be down a combined $1.8 billion from the previous budget year.

Jerry Stermer, the governor's chief of staff, said Quinn is also planning $850 million in new cuts to existing programs without providing details.

In recent weeks, Quinn has touted the issue of tax “fairness” in laying the political groundwork for a proposal to increase income taxes.

The Democratic governor, who succeeded the ousted Rod Blagojevich, said families of four who earn about $56,000 to $57,000 a year would see no increase in their income tax burden. Those who earn substantially less would see a tax cut because of the larger personal tax deduction while those who earn more would see an increase in taxes, he said.

“This is a once in a lifetime chance for the people of Illinois, the hard working taxpayers of Illinois, to get tax reform that produces tax relief for millions and millions of people,” Quinn said. “I’m going to fight as hard for this principle as I can.”

That fight may already be underway on a variety of fronts. Republicans and even some Democrats have opposed seeking an income tax increase in light of the state’s poor economic climate. And Quinn may have strengthened GOP opposition by also vowing to close unspecified corporate tax “loopholes” to raise revenues—an effort that his predecessor frequently sought from lawmakers and failed to achieve.

Quinn also said he would fight efforts by some Democrats to seek an increase in the state’s 19-cent-per-gallon gasoline tax, which some legislators have pushed as a way to fund a massive job-creating public works construction program.

“I’m going to hold the line on the gas tax,” Quinn said. “We’re not going to raise the gas tax. I don’t think we should raise it.”

Quinn favors a $25 billion public works program but has not specified how he would pay for it. But he may have given a clue when asked by a reporter if he would support increases in license plate and drivers’ license fees. “We’re going to talk about a capital (public works) plan and you’ll get a lot of details about that,” Quinn said.

Stermer later acknowledged the administration "might look at something like" increases in drivers license and vehicle fees without saying how the new revenue might be used.

The Democratic governor, whose push for higher taxes would become a political issue if he seeks election to the job in 2010, said the public needs to realize that Illinois “has a mountain of debt” that he inherited from Blagojevich.

“I think our budget next week will have good news for all of those who are owed money by the state of Illinois,” Quinn said.

“We’re going to pay our debt off. We’re going to reform a lot of different things in state government that, in the past, have been ignored. We’re going to cut costs and cut frills wherever we can and we’re going to take on the challenge of a lifetime—a fair tax system that produces tax reform and tax relief for the people doing the hardest jobs in our society,” he said.

Posted by Rick Pearson at 5:10 p.m.

State auditors said today they had so many unanswered questions about how former Gov. Rod Blagojevich’s administration awarded Pepsi an exclusive contract to dispense soft drinks at all state facilities that they couldn’t tell whether state government got a good deal.

Auditor General William Holland said so many details were lacking about how the state Revenue Department conducted its review of proposals by Pepsi and Coke that auditors were “unable to conclude whether or not this procurement was in the state’s best interests.”

The exclusive soft-drink contract was the brainchild of a Blagojevich administration initiative headed out of a governor’s office that was constantly looking for ways to bring in new state revenue. Pepsi projected it could provide the state nearly $6 million a year in the 10-year deal of being the sole provider for beverages at state facilities and at the University of Illinois system.

Posted by Hal Dardick at 4:45 p.m.

Some Chicagoans with homes built before the mid-1970s could get city water meters installed free with a guarantee their bills won't rise beyond regular rate increases for seven years.

The offer was approved by a City Council committee today as part of a $15 million test program called MeterSave.

It's aimed at owners of single-family and two-flat homes in the Bunaglow Belt---21 wards along the city's western edge---where up to 20,000 meters would be installed, Water Management Commissioner John Spatz Jr. said.

Most major U.S. cities have water meters on all homes, but Chicago has long been an exception because of its proximity to Lake Michigan. Six years ago, Mayor Richard Daley signaled a move to universal metering to boost conservation.

Homes and apartment buildings built or significantly renovated in the last 35 years or so have had water meters installed.
For older homes without meters, twice-yearly water bills are estimates based on the size of the lot and number of fixtures, Spatz said.

City officials said most owners who get on board with the new program should find they end up paying less with a meter.

In addition to the free installation and seven-year guarantee, participants will get an indoor or outdoor water conservation kit, a rain barrel or a refrigerator magnet that shows how much water is being used in a home.

If the trial program goes well, the effort could be extended to the entire city next year, Spatz said. There are about 327,000 single-family and two-flat homes in the city without water meters, and it would take 17 years at a cost of about $290 million to install meters in all, he added.

In the end, though, it is expected to reduce water consumption by about 30 million gallons a day, because the city will be better able to pinpoint leaks and residents will reduce usage.

Although Chicago and other Northeast Illinois residents tend to take an abundant supply of fresh Lake Michigan water “for granted,” the area could face water shortages by 2050 if consumption isn’t reduced, Spatz said.

Posted by Rick Pearson at 4:40 p.m.

The Illinois Republican Party has retained a prominent law firm and is warning state lawmakers of both parties it will fight any proposed changes to how Republicans choose their top governing body.

State GOP Chairman Andy McKenna today issued the warning after an Illinois Senate panel backed a measure to require that the 19-member Republican State Central Committee be elected by voters at the primary election every four years. Currently, the representatives from each of the state's congressional districts are chosen by Republican township and county committeemen.

The change long has been pushed by a group of insurgent conservatives looking for a toe-hold in running a political organization beset by strife and hobbled by the scandals surrounding imprisoned former Gov. George Ryan.

Posted by Hal Dardick at 2:27 p.m.

Mayor Richard Daley today named as the city's new chief financial officer a banker at JP Morgan Chase & Co., the firm that employs his brother William.

Gene Saffold, 54, replaces Paul Volpe, whom Daley promoted to chief of staff in December.

Saffold is managing director for national accounts at JP Morgan Chase. William Daley, who was commerce secretary under President Bill Clinton, works at the banking company as an executive.

Saffold, who holds an MBA from the University of Chicago, also served for 10 years on the Chicago Public Schools board. Daley appointed him.

Asked whether he was prepared to step into the CFO’s job when the city, like all major U.S. cities, was struggling financially because of the recession, he responded:

“I wish I was riding in with a sliver bullet that was going to provide the answer to all these challenges, but I’m looking forward to the opportunity to take this jacket off, pull my sleeves up, get in there and go through the numbers and really work with the mayor and the rest of the staff here to come up with some solutions that would keep the city moving forward.”

He said that at Chase, he worked with William Daley “on some our local civic and philanthropic activities, as one of the senior leaders in the Midwest.”

Posted by Stacy St. Clair at 1:01 p.m.

Mayor Richard Daley today called Chicago's $1 billion share of federal stimulus money "better than nothing," lamenting the limitations even as he said he'd gladly accept more.

City Hall plans to spend the money largely on transportation and public housing projects, but also summer jobs for teens and child care, health care, education and social service positions. Community services jobs will be created for ex-offenders and other difficult-to-place workers, according to the mayor’s office.

In addition, the city will be able to preserve jobs at the CTA and Chicago Public Schools, the mayor said.

“With a regional unemployment rate of 7.6 percent, the worst it’s been since December 2003, those jobs come at just the right time,” Daley said.

But Daley, who faces a budget problem as city revenues plummet in the bad economy, also offered a mix-bag reaction to what Chicago is getting out of Washington.

“It’s better than nothing,” Daley said during a media briefing this morning. “Yes, we’re happy with it. This is good news.”

Posted by staff at 12:20 p.m.; updated at 7:45 p.m. by Joel Hood

There was much rejoicing in Pontiac today as Gov. Pat Quinn announced he will keep open the town's state prison, reversing plans by former Gov. Rod Blagojevich to transfer inmates and nearly 600 jobs out of the central Illinois community.

“There were a lot of handshakes and hugs, you'd think we had won the Super Bowl,” Pontiac Mayor Scott McCoy said. “Quinn did his job. He looked at all the facts and figures and he made the decision that was in the best interest of the state.”

The 130-year-old prison is the second-largest employer in Pontiac. Officials said it generates about $54 million a year for rural Livingston County, which is about 100 miles south of Chicago.

In May, Blagojevich announced plans to close the prison and transfer the bulk of its 1,600 inmates to the $140 million Thomson Correctional Center due to open in northwest Illinois. The Illinois Department of Corrections sided with the decision, saying the outdated Pontiac was too expensive and inefficient to remain open.

Pontiac's community leaders and state lawmkers responded quickly and angrily, saying the prison's closure would be a devastating blow to a town already hit hard by recent floods, plummeting home values and thousands of layoffs.

In reversing Blagojevich's decision, Quinn said in a statement:

“Especially in these tough economic times, we must be more fiscally responsible,” Quinn said. “Keeping Pontiac Correctional Center open will ensure nearly 600 people in the region keep their jobs, prevent hundreds of families from being uprooted, and allow Pontiac to maintain one of its largest sources of revenue.”

Posted by Hal Dardick at 10:35 a.m.; updated at 1:30 p.m. with lack of vote

A powerful Chicago alderman today put off a vote on his proposal to require nearly all cats and dogs to be sterilized following hours of testimony from those on both sides of the issue.

Several aldermen raised questions about whether the ordinance sponsored by Ald. Ed Burke (14th) could be considered a government intrusion.

Burke, who put off the vote after saying the court reporter hired to document the hearing had to leave, said he plans to push ahead, though he didn't say when.

“I still believe there is a sufficient number of votes to pass this thing,” he said at a joint meeting of Finance and License and Consumer Protection committees.

Posted by Hal Dardick at 3:10 p.m.; updated at 3:35 p.m.

A City Council committee today endorsed the recommendation of Ald. Tom Tunney (44th) to allow the Chicago Cubs to hold a record three concerts at Wrigley Field this July.

The Southport Neighbors Association opposed allowing more than the two shows they said the team had agreed to, in part because one concert falls on the same weekend as an annual neighborhood festival. Tunney said he was working to “minimize the concerns of the community at large.”

Initially, the Cubs booked Billy Joel and Elton John for a single Tuesday night show in July and added the country band Rascal Flatts on an earlier Saturday to make the economics work. After the first set of Billy Joel-Elton John tickets quickly sold out, a second concert featured the two rock pianists was added for Thursday.

“I do understand this is an important issue for our community,” Tunney said at the committee meeting. “We have met with certain neighborhood groups and have come to an agreement to disagree in some respects, but they are willing to move forward with this concert.”

He also said that under the Neighborhood Protection Ordinance, the Cubs must come back “each and every year to visit this, so when we move forward next year, we’re back to the negotiating table, in making sure that our community groups felt their voices heard and their directions."

Posted by Ashley Rueff at 12:45 p.m.

SPRINGFIELD---Hours before busloads of gun rights advocates are scheduled to descend on the Capitol, a House committee today advanced a series of measures designed to increase gun control in Illinois.

Among the restrictions approved by the House Executive Committee include an assault weapons ban and legislation allowing only one gun purchase a month. Chicago Mayor Richard Daley perenially pushes for such gun crackdowns due to continued violence in some city neighborhoods.

Testifying in favor of anti-gun measures was Annette Nance, whose son, Blair Holt, was shot on a CTA after leaving Julian High School in May 2007.

Posted by Dan Mihalopoulos at 5:59 p.m.

U.S. Rep. Luis Gutierrez (D-Ill.) today angrily denied sworn federal court testimony placing him at meeting that led to the creation of the scandal-scarred Hispanic Democratic Organization.

The statement by the congressman came a day after former HDO operative Roberto Medina testified during a City Hall corruption trial.

Medina, who has immunity from prosecution, said Gutierrez was at a meeting in the early 1990s with Mayor Richard Daley's brother, William, and top Daley campaign strategist Timothy Degnan. Medina said they urged him to organize support for Daley in North Side Latino neighborhoods, spawning what became known as "HDO North."
 
In a statement today, Gutierrez said: "I'd sue for slander, given that I was never at the meeting, but the settlement would be about as worthless as the witness' memory."

Posted by Ray Long and Ashley Rueff at 3:20 p.m.

SPRINGFIELD---With many state lawmakers expecting Gov. Pat Quinn to call for an income tax increase next week, the new governor warned today that his budget speech will have some "castor oil" even as he strongly came out in favor of protecting low- and middle-income taxpayers.

Quinn said he will ask lawmakers in his budget speech to increase the standard income tax exemption from $2,000 per person as part of "fundamentally reforming" Illinois' tax system.

Posted by Dan Mihalopoulos at 1:15 p.m.

In a surreal scene that ended with South African Archbishop Desmond Tutu giving mock absolution to Chicago’s City Hall reporters, Mayor Richard Daley today discussed flying on a private jet owned by a non-profit student loan group connected to his wife’s former employer.

While the mayor was on vacation last week, CBS News reported that the Daleys had taken 58 flights on a jet owned by EduCap. That Washington-based organization funded the Academy of Achievement, which employed Maggie Daley as a consultant in recent years to set up conferences.

Last week, Daley spokeswoman Jacquelyn Heard said the mayor had only gone on one flight to Singapore on the private jet.

Today, during his first news conference since the story broke, Daley was asked how often he had flown on the jet.

“Once or twice, we pointed that out. Yes, you’ve got all the facts on that,” the mayor replied.

Posted by Dan Mihalopoulos at 10:08 a.m.

William Daley returned a call Monday evening, hours after his name surfaced in the federal corruption trial of brother Richard Daley's former Streets and Sanitation Commissioner Al Sanchez.

William Daley's comments are included in today's story, which offers new details about the creation of a key cog in the mayor's political machine. Here is a lengthier version of those comments.

Former city worker Roberto Medina testified that he was involved in founding the scandal-scarred Hispanic Democratic Organization at the urging of William Daley and others.

"I don't think I've ever heard of the guy," William Daley said of Medina. "I have no memory of him."

Daley asked when Medina said their meeting supposedly took place. Medina testified Monday that the meeting was in the early 1990s at a restaurant on Fullerton Avenue and that it also was attended by top mayoral strategist Timothy Degnan, U.S. Rep. Luis Gutierrez (D-Ill.) and mayoral Cabinet member Ben Reyes.

"A restaurant on Fullerton Avenue?" Daley said. "I may have had meetings in '91 or '90 about Rich's election. It surely wasn't about creating some organization."

He then added, "I'm not saying I didn't meet (Medina). Everybody meets a lot of people in politics."

Daley then noted that the alleged meeting took place long ago, in an era when Chicago's political scene was in flux as his brother gained power. Some may have been hoping for jobs or other benefits for supporting the new mayor, Daley said.

"There was a lot of political stuff going on," he said. "Everybody could interpret it however ...

"Many people were trying to get in favor. You've watched this game a long time."

Daley was asked if he knew of Degnan or others close to his brother ever promising city jobs for political support, as alleged by another witness in the Sanchez case.

Daley replied that he knew of no such conversations, but added, "Times were different. You’re talking about 20 years ago. Even if it happened—and I’m not saying it did—things were different. There was nothing illegal about that stuff.”

dmihalopoulos@tribune.com

Posted by Dan Mihalopoulos at 6:50 p.m.

Several aldermen will announce a new effort Tuesday to expand the power of City Hall’s inspector general, calling for the removal of a long-standing prohibition against internal investigations of aldermen.

The measure also seeks to guarantee a much bigger budget for the inspector general and set up an independent panel to pick three finalists the mayor would be required to choose from for the job.

Ald. Joe Moore (49th) said he and several colleagues will hold a news conference Tuesday to push for the changes because of recent scandals in state and local government.

Posted by Hal Dardick at 1:48  p.m.

A controversial proposal to require nearly all dog and cat owners in Chicago to sterilize their animals resurfaced today, but this time the City Council sponsor says it's been revised to win more support.

Under the new proposal, released by Ald. Ed Burke (14th), a third offense for not neutering or spaying a pet before they turn 6 months old would trigger a fine of $100 per month. In Burke’s previous proposal, the fine would have been $500 and the animal could have been impounded and sterilized.

Burke and Ald. Ginger Rugai (19th) introduced the ordinance last summer, and former TV game show host Bob Barker came to Chicago to back the measure, saying it would cut down on the numbers of stray dogs and cats euthanized each year. Burke contended it also would reduce dog attacks on humans.

But the Chicago and Illinois State Veterinary Medical Associations opposed the measure, saying decisions about sterilization were best left to pet owners and their veterinarians, and it never was called for a vote. “I’ve been encouraged by the response of the members of the City Council, who I think now are prepared to support this initiative,” Burke said.

The proposal is expected to be voted on at a committee meeting Thursday.

Burke’s new measure also makes it clear that veterinarians would not be required to report animals that have not been sterilized.

Posted by Hal Dardick at 1:30 p.m.

People caught impersonating a Chicago police officer or firefighter would be eligible for jail time and a fine, under a proposal approved today by the City Council Police and Fire Committee.

The amendment proposed by Ald. James Balcer (11th) is a response to the recent arrest of a 14-year-old boy who reported to the Grand Cross District police station and went on patrol with a real officer for hours before he was detected.

Balcer later discovered a city ordinance first enacted in 1939 only imposed a $10 to $100 fine for impersonating a police officer and $10 for impersonating a firefighter. In each case, the penalties were mere tickets.

Under his proposal, on the agenda for the March 18 City Council meeting, both crimes would become misdemeanors punishable by up to six months in jail and fines of between $1,000 and $1,500.

Someone impersonating a police officer also can be charged with a felony under state law, but a misdemeanor will give law enforcers and prosecutors options when evaluating the seriousness of the offense, Balcer said.

hdardick@tribune.com

Posted by Monique Garcia at 1 p.m.

Gov. Patrick Quinn today said he wants to spend $25 billion on a statewide construction program to improve schools, roads and bridges and create jobs.

Quinn offered few details about the plan, which he will likely formally unveil during his March 18th budget address, but said he would like the measure implemented quickly in order to spur the state’s economy.

“We hope to have a $25 billion… Illinois economic recovery investment program that invests in rail as well as highway and bridges and water and everything else,” Quinn said. “I think it’s imperative… but we have to get it passed. I’d like to see it passed by April 3, and we’re going to work very hard in that direction.”

Quinn would not say how he plans to pay for such a massive spending program as the state faces a deficit of $9 billion or more. He once again said he’s “not a big fan” of increasing gas taxes, as some lawmakers have proposed. And he again used the kind of code language that has many speculating an income tax increase could be on the table.

“I think if you’re going to use any revenues to try to invest in our future in Illinois, in job creation, in making sure we get our economy moving, you should rely on taxes that are based on ability to pay,” Quinn said. “That’s my philosophy, you’ll hear about it next week. We’re going to have, I think, a very robust program in Illinois of job creation, investing in things that matter today, but also matter for our kids and grandkids.”

Quinn’s comments came at a morning press conference with U.S. Sen. Dick Durbin and other transportation officials who want to secure funding included in the federal stimulus bill to pay for a long-talked about high speed rail route between St. Louis and Chicago.

mcgarcia@tribune.com

From the Sunday print edition:

The push is on for public records access in Illinois

Advocates want open book policy, opponents worry about identity theft

By David Kidwell and John Chase

Tribune reporters

The shattering end to Gov. Rod Blagojevich's scandal-plagued tenure may provide some antidote to the pervasive secrecy that often prevents citizens from monitoring their own government.

Amid a blizzard of proposals to reform the way government does business, advocates are seeking to re-write the state law that allows—and also restricts—access to records. After long criticizing the law as weak, news organizations and citizen action groups are trying to seize opportunity in the aftershocks of a governor who routinely denied requests for public documents.

"Rod may be the best thing that ever happened to the Freedom of Information Act," said Don Craven, a Springfield lawyer who represents some of those news organizations, including the Tribune, in seeking government records.

The battle to re-write the law is a microcosm of a broader quest for more open government at every level in Illinois. While the debate is often framed in terms of lawsuits brought by newspapers and advocacy groups, regular people around the state engage in quiet struggles every day to get information from public officials.