* Banks closer to the brink

Local banks’ cushion to absorb losses is shrinking fast, pushing a growing number to the point where they must raise additional capital or face the prospect of failure.

At the end of 2008, 16 local banks had bad loans on their books that equaled or exceeded their loan reserves plus their equity, up from just three banks last spring, according to Virginia-based data provider SNL Financial. Many more were in an only slightly less precarious position, including Broadway Bank, owned by the family of Illinois Treasurer Alexi Giannoulias.

* Ex-Rezko partner bankrupt

His creditors are a “who’s who” of Rezko’s world, including:

• • A company owned by Nadhmi Auchi, the Iraq-born billionaire who took control of 62 acres in the South Loop that Rezko and Mahru hoped to develop.

• • Joseph Cacciatore, a lawyer and developer who says he’s owed $5 million from the South Loop project.

• • John Thomas, a developer and FBI mole who helped authorities document the repeated visits former Gov. Rod Blagojevich and President Obama made to the offices where Rezko and Mahru ran their Rezmar Corp.

• • Fortunee Massuda, a podiatrist who invested millions in Rezmar projects.

* New Medicaid income limits help disabled stay on the job

* Homeless student numbers on the rise

Across the Chicago suburbs, a 67 percent increase in homeless students during the two years that ended in June reflects a faltering economy. Some districts are reporting their first homeless students. In Chicago, the schools expect to top last year’s record number of 10,642 homeless students.

* Homeless kids lack school to call home

* Going for the gold: Does Chicago’s transportation system stack up?

* RTA Chair Not Asking State to Solve Revenue Shortfall

Illinois lawmakers last year voted to raise some sales and real estate taxes to help balance the books at the Chicago Transit Authority, Metra and Pace. Because of the economic slump, those tax revenues are coming up short. But don’t expect transit officials to lobby Springfield for another bailout.

REILLY: The state couldn’t help us, and we’re not about to ask the state to help us.

REILLY: The legislature did very well by us, and it’s our job to get through these tough times.

* Mass-transit ‘doomsday’ looms yet again

The total estimated CTA shortfall — $213 million — dwarfs the $158 million deficit the CTA faced in its 2008 budget until state lawmakers and Chicago aldermen raised taxes dedicated to transit in 2008, averting a partial shutdown of the agency.

* Tax Drop Means Transit Trouble

* Metra sees record ridership for 2008

* Midwestern SEIU official resigns

A high-ranking Midwest officer of the Service Employees International Union, who had been serving as trustee of a financially troubled local, has resigned after being accused of billing the labor organization for $9,000 in personal expenses.

The Chicago-based Byron Hobbs, who also sat on the union’s national board, is the latest of several SEIU officials to lose their positions or otherwise come under scrutiny for alleged financial improprieties. Among them is Tyrone Freeman, former president of the union’s largest California local, who is the target of a federal criminal investigation.

Hobbs could not be reached for comment.

He was executive vice president of the SEIU’s 90,000-member Illinois-Indiana healthcare local, and was overseeing a St. Louis chapter that the union had placed in trusteeship.

* Ex-Ald. Troutman to be sentenced today

* Preckwinkle poised to challenge Stroger

With the exception of U.S. Rep. Jesse Jackson Jr., Chicago’s black political class monolithically backed Stroger. Now Preckwinkle poses a potential dagger to the heart of Stroger’s electability. She could vanquish the racial conundrum that black voters are compelled to support tired and incompetent black officials in order to “keep the seat.”

Preckwinkle, who has already pulled in backers such as Cook County Commissioner Jerry “Iceman” Butler and 5th Ward Ald. Leslie Hairston, is in heavy meeting mode. She has already buttonholed “40 or 50″ pols, she says, including 20 aldermen, county commissioners in Chicago and suburban townships. Preckwinkle, who vows to pitch every committeeman in the county by June, has hired campaign consultants and is spending 25 to 30 hours a week dialing for dollars. She’s starting from scratch.

* 26-year-old chairman plots Cook GOP rebirth

* Chicago Suburban Democrats Throw Homeless Man off Ballot

* Two independents kicked off Kankakee mayoral ballot

By identical 3-0 votes Friday afternoon, the Kankakee Electoral Commission knocked both independent mayoral candidates off of the April 7 ballot.

Candidates Nickey Yates Sr. and Dexter Thompson both said they are considering taking their cases to the Kankakee County Circuit Court to seek reversal of the city commission’s decisions.

Yates, a political unknown in 2005, became the Democratic primary nominee and ran a surprisingly close race against Mayor Don Green as he won his fourth four-year term.

“Dogs bark and cats meow,” Yates said after the approximate 25-minute hearing. “You can’t make a dog meow. This was the decision I expected. They already had their minds made up.”

* Time to hang it up: New cell fine may not help

* Pedestrian deaths in Chicago are up despite safety measures

Fifty-six pedestrian fatalities were logged last year—up from 49 deaths in 2007 and 48 deaths in 2006. Chicago Department of Transportation spokesman Brian Steele said the agency is reviewing the reasons behind the uptick but said in certain cases, problems with pavement markings, faulty signage and construction projects may be to blame.