Tuesday, July 22, 2014

Despite court rulings, Obamacare subsidies to continue in Illinois

By Jamey Dunn

Dueling court rulings handed down today put the future of a key piece of Obamacare into question, but for now, nothing will change about the way the law is implemented in Illinois.

A three judge panel in Washington D.C. ruled this morning that under the Patient Protection and Affordable Care Act, federal subsidies to bring down the cost of insurance should only be available to residents of states that operate their own online insurance exchange. Under the decisions, Illinois and 35 other states would lose the subsidies. Illinois partnered with the feds on Getcoveredillinois.gov, but the website still relies on the federal exchange to sign patients up for coverage.

Just hours after the U.S. Court of Appeals for the D.C. Circuit weighed in, The Fourth Circuit Court of Appeals in Virginia issued a diverging opinion on a similar case. That panel of judges said that the wording of the law was unclear, but the majority agreed that the law allows for the subsidies to be dispersed through the federal exchange.

In Illinois, 217,000 people obtained insurance through the exchange. More than three quarters of those qualified for a subsidy. Health officials in Illinois say that those approximately 168,000 will not lose their subsides as an immediate result of the rulings. “We are monitoring today’s appeals court decisions in which two courts have rendered differing rulings. The bottom line for now is that nothing has changed, and the subsidies created under the law to help people cover the cost of their health care remain in effect. Get Covered Illinois is focused on preparing for the enrollment period for year two that will start this fall,” Jennifer Koehler, executive director of Get Covered Illinois, said in a written statement.

President Barack Obama’s administration says it plans to ask the full panel of judges at the D.C. appeals court to consider the issue. That group is made up of seven judges appointed by Democrats and four appointed by Republicans. Two other judges, one appointed by a Democrat and one by a Republican, could sit in on the case. It is possible that the issue may end up before the U.S. Supreme Court. The court previously upheld the law, but allowed states to opt out of a massive Medicaid expansion called for by the Affordable Care Act. Illinois lawmakers approved and Gov. Pat Quinn signed into law the expansion in Illinois.
State online insurance exchanges 
Source: The Henry J. Kaiser Family Foundation, KFF State Health

Illinois ranks low in statehouse reporters per capita

A recent study found that Illinois has fewer than one statehouse reporter for every 500,000 residents.

The Pew Research Journalism project took a look at statehouse press corps in all 50 states. The population of a state was generally predictive of the size of the reporting pool based in its capitol building. However, when Pew's researchers diced the numbers a different way, they found that states with larger populations had fewer reporters per 500,000 residents than many smaller states. Illinois has 0.9 statehouse reporters per 500,000 residents.

From Pew:

 The state with the highest rate of full-time reporters per 500,000 residents (at 10.4) is tiny Vermont, which at about 625,000 residents, is the second smallest state in the nation by population. The smallest, Wyoming, ranks third when population is factored in, with 5.3 statehouse reporters per half million people. Several other states with modest populations round out the top tier: Alaska (5.6); Montana (4.0) and Rhode Island and Idaho (tied at 3.8). The median state rate is 1.3 reporters per 500,000 residents. 

Conversely, some of the largest states—with some of the largest statehouse press contingents—end up at or near the bottom in the rankings. California is second in overall number of full-time reporters (43) covering statehouse news for a population of more than 37 million. But that works out to only 0.6 journalists per 500,000 residents—the lowest rate in the nation. Texas, which ranks No. 1 at 53 full-time statehouse reporters, finishes in the bottom half of states by the same measure (1.1 reporters).

Thursday, July 10, 2014

Statehouse news coverage in Illinois follows national trends

By Jamey Dunn

Who Reports from U.S. Statehouses? A new report on statehouse press corps found that as the number of full-time reporters shrinks, new media outlets and political communication staffs seek to fill the gaps in coverage.

The Pew Research Journalism Project surveyed statehouse media outlets, political communications staff and experts on government in all 50 states. (Disclosure: I participated as a respondent in the survey.) The group found that nearly 1,600 reporters are based in state capitol buildings covering state governments across the country. The majority of those journalists, 851, are assigned to cover state government part time, while 741 are on the state government beat—covering legislatures, governors and state agencies— full time. State populations are generally predictive of the size of their statehouse press corps. Pew found that of the 10 most populous states only two, Georgia and North Carolina, were not among the 10 largest press corps. At the time of the survey, Illinois had 22 full-time statehouse reporters. Texas had the most at 53 and South Dakota had the fewest with two.

Less than a third of all newspapers in the country assign a reporter, either full or part-time, to the statehouse. The vast majority of television stations, 86 percent, do not assign a reporter to the state capitol. Still, the largest share, 38 percent, of reporters based in state capitol buildings work for newspapers, and newspaper reporters make up 43 percent of full-time statehouse journalists. Television comes in second at 19 percent of all reporters covering state government. Nontraditional outlets, such as digital-only sources, make up 16 percent. Wire services make up 9 percent of reporters assigned to state capitols across the country, and most of those journalists work for the Associated Press. Radio reporters make up 8 percent. University entities and “additional sectors” rounded out the totals with 7 percent and 6 percent, respectively. (Pews figures total more than 100 percent because of rounding.)

The study cites statistics from the American Journalism Review, which tallied up statehouse newspaper reporters five times between 1998 and 2009. Each time the number of reporters dropped, and the largest decrease came between 2003 and 2009, when the overall number of newspaper reporters saw a large decline. Statehouse bureaus shrank at a slightly larger margin, 35 percent, than newsrooms, 30 percent. “It does suggest, if nothing else, that statehouse jobs are certainly no more immune to the cutbacks then anything else,” said Mark Jurkowitz, associate director of the Pew Research Center’s Journalism Project. For more on the cutbacks in Illinois, see Illinois Issues October 2008.

The survey found that traditional news sources are turning to consolidation and collaboration. One-time rivals are now working together and sharing information. For example, the Miami Herald and the Tampa Bay Times now share a bureau in Tallahassee and coordinate their coverage of Florida state government. Students are also playing a big role in statehouse coverage. One of seven people reporting from a state capitol pressroom is a college student. This finding holds true in Illinois, with statehouse bureaus taking on Public Affairs Reporting interns during the spring legislative session since the programwas founded in the 1970s. Jurkowitz said that it is impossible to tell if interns are being used to make up for recent cuts in staff because there is no historical documentation on the number of statehouse interns nationwide.

Pew found that one in six statehouse reporters work for “nontraditional” outlets, such as nonprofit organizations, niche publications and digital-only news sources. According to the study, the largest statehouse bureau in the country, which has 15 reporters, is operated by the Texas Tribune, a nonprofit primarily digital operation. Most of these outlets are relatively new, such as The Illinois News Network, which is based out of the conservative-leaning think tank the Illinois Policy Institute. But some are longstanding news sources, such as Rich Miller’s Capitol Fax. Pew found that many such organizations have an ideological bent or market paid subscription content to “insiders” seeking information on state governments because it relates to their occupation.

Political communication staffs now provide information that more closely resembles news coverage. “The legislative offices themselves are getting much more into the business of directly communicating with the public and circumventing the media,” Jurkowitz said. In Illinois, the Senate Democrats and House Republicans are both good examples of this trend. A slideshow highlighting new laws created by Senate Democratic communication staff went viral earlier this year, receiving more than 1 million views. Both caucuses frequently capture video of their members and distribute it online, post information to websites that resemble news outlets and stay active on social media. Former journalists serve as high-level staffers for both caucuses. For more on they ways Illinois officials use social media, see Illinois Issues November 2013.

Newspaper Statehouse Reporters DeclineCitizens can also access live-streaming video and audio of legislative session and most hearings on the Illinois General Assembly’s website. Jurkowitz called all this direct communication from officials a “mixed blessing” because it provides the public with more information, but it often comes with a hefty dose of political spin.

“I do think there’s been a loss in general across the country, and that’s very concerning to me,” Patrick Marley, who covers the Wisconsin Statehouse for the Milwaukee Journal Sentinel, told Pew “We have scads of reporters in Washington covering every bit of news that Congress makes. State legislators have more effect on people’s daily lives. We need to have eyes on them, lots of eyes.” Jurkowitz said Pew’s research indicates that state governments may be doing more heavy policy lifting than they have in the past. He said a separate Pew study found that almost half of state governments enacted more laws in 2012 than Congress did in 2011 and 2012 combined.

As Congress continues to be gripped by gridlock, states have been left to tackle high profile policy issues, such as immigration and health care. For example, states are playing a large role in the implementation of the Affordable Care Act and a ruling from the U.S. Supreme court allowed them to opt out of a massive Medicaid expansion—a key component of the law. In many cases, state lawmakers voted on whether to adopt the expansion. In some states, governors made that call. “Obviously, we know that not a lot of activity is going on here at the federal level,” he said. “I think we’ve seen a lot of the big national public policy debates actually play out at the state level.”

Thursday, July 03, 2014

Options for a pension reform Plan B may be limited

By Jamey Dunn

The Illinois Supreme court issued a ruling Thursday on state employee health care that bodes ill for supporters of the recently passed cuts to public employee retirement benefits.

The court ruled that health care benefits for retirees fall under the pension protection clause—the very sentence of the state’s Constitution that many supporters of pension reform had hoped the justices would be willing to overlook. The pension clause states: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The ruling indicates that the justices are inclined to side with public employees and retirees. In the 6-1 opinion, Justice Charles Freeman wrote: “Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.” Justice Anne Burke wrote the dissenting opinion. In it, she did not question the protection of the pension clause, but she argued that retiree health care benefits did not fall under that protection.

Some lawmakers seem to see the ruling as writing on the wall for the pension reform law, which is still working its way through the legal system. “Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says,” Senate President John Cullerton said in a prepared statement. “The court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve. The clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.” Cullerton added: “If the court’s decision is predictive, the challenge of reforming our pension systems will remain. As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution.”

Kent Redfield, an emeritus professor at the University of Illinois Springfield, said that while the ruling pertains to a different case, the language used is clear. “You could find some way to parse some of it, but it’s really, really difficult. There’s no logical way to get to upholding Senate Bill 1 (the pension reform legislation) based on the clear content of this ruling and the way they’ve construed the pensions clause.”

Others disagree that the ruling is a harbinger of the pension law’s death. Rep. Elaine Nekritz, who was key player in getting SB 1 passed, said that the justifications the law makes for reducing benefits were not part of the retiree health care case. She said that the court has yet to consider those points. The law lays out the dire fiscal situation that the state is in and claims that state elected officials need special powers to curtail the estimated $100 billion unfunded liability and save the state from a budget disaster. However, one line in today’s decision seems to blow a hole in that argument. “In light of the constitutional debates, we have concluded that the [pension] provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.” 

Supporters also claim that a reduction in the amount that employee would pay into the system represents a consideration they are being given for a change to the contract that is their membership in a pensions system. Nekritz said that the ruling is clear that benefits are protected, but she says it is unclear if that protection is absolute. “Does it really mean that we can do nothing, or are there some things that we can do based on the legal arguments that we make under Senate Bill 1?”

Those arguments aside, if the Illinois Supreme Court rejects the new pension law, what options do legislators have?

Cullerton had proposed offering employees a choice between receiving subsidized health care coverage or keeping their current pensions benefits. If they had chosen health care, they would have seen a reduction in their retirement income including a cut to the expensive compounded interest cost of living adjustments (COLAs) retirees currently receive. Cullerton said that this scheme could potentially fulfill a legal standard of giving employees consideration for a reduction in benefits. The Senate approved the plan, but it was never called for a vote in the House.

However, that plan was based on the idea that health benefits were not protected by the Constitution—a concept that runs counter to today’s ruling. “The concept of consideration is still viable. The court has not rejected it or defined what the limits are. It’s just hard to see what you can give up in exchange,” Redfield said. “It’s hard to see what other major carrot you can offer to people in terms of giving up their COLA.”

Skokie Democratic Rep. Lou Lang introduced legislation that would extend the current income tax rates, which are due to start rolling back on January 1, to pay down the unfunded liability.

But Lang’s plan also calls for larger contributions from employees and an increase in the retirement age. Both of these provisions could be seen as a reduction in benefits by the court. Much of the revenue from the temporary income tax increase has gone toward making the required annual pension payment after lawmakers voted to skip payments and short payments for several years in the past.

There have also been proposals to change the pension payment schedule to even out the cost of the annual payment. The state is currently on a system that resulted in large balloon payments, much like a subprime mortgage. Some such plans also call for funding the system at 80 percent as opposed to 95 percent or 100 percent. Redfield said that a proposal that changes the payment structures would need to be combined with changes to the state’s revenue structure, such as expanding the sales tax base to some services, budget cuts or both. “As a stand alone, then it looks like an excuse to keep doing what we’re doing,” he said.

Republican candidate for governor Bruce Rauner has advocated for moving employees’ future benefits to a system that looks more like a 401-K. That plan would go even further than SB1, so it is unlikely that it would be upheld if SB 1 were rejected. But it is possible that the court’s ruling might strengthen his case for offering a defined contribution plan to newly-hired employees. “It may embolden Rauner to say well we’ve got to get everybody going forward into a defined contribution [plan],” Redfield said. However, such a proposal would have no impact on the unfunded liability for current employee and retiree benefits. It also means the state would likely have to start contributing to Social Security benefits for positions that do not currently offer them.

Meanwhile Gov. Pat Quinn is emphatically sticking by his opinion that SB 1 is constitutional. “We believe the pension reform law is constitutional. This landmark law was urgently needed to resolve the state’s $100 billion pension crisis. It was also urgently needed to ensure that teachers, university employees and state workers who have faithfully contributed to the pension system have retirement security,” said a written statement from his office. “We’re confident the courts will uphold this critical law that stabilizes the state’s pension funds while squarely addressing the most pressing fiscal crisis of our time by eliminating the state's unfunded pension debt.”

Redfield said that there will likely be many suggestions for a Plan B on pension reform in the coming months. “I think people will be floating lots of ideas that probably aren’t feasible and really won’t address the short-term problems—between now and November,” he said. “There’s nothing politically to be gained by standing up and saying ‘you know, we really, really screwed up, and we have no options but to raise your taxes.’”

 But he said that new revenues and cuts to state services to cover the cost of the pension systems might be the only real option available to address the problem if the court rejects SB 1. If that happens, the state will almost certainly face another credit downgrade if it fails to act to address the liability. The current budget is based on $650 million in borrowing that has to be paid back. In Fiscal Year 2016, the tax rate will be lower for the entire fiscal year instead of just half of it. FY16 could turn out to be one doozy of a budget for lawmakers and whomever is the governor to sort out. “You want to be around for a historic session for the General Assembly? I think everybody has a front row seat,” Redfield says.

Thursday, June 26, 2014

Legislative inaction threatens some corporate tax breaks

By Caitlin Rydinsky

After lawmakers were unable to agree on changes to the state’s business tax policies, some Illinois companies could lose a sales tax break set to expire this summer.

The Manufacturer’s Purchase Credit is a tax incentive that businesses can receive when they purchase equipment from companies within the state and use that equipment in Illinois. This benefit is set to expire in August. A rollback would impact about 500 businesses. According to expenditure reports from the Illinois comptroller’s office, the state spent almost $35,000 on the credit in fiscal year 2013. Mark Denzler, president and chief operating officer of the Illinois Manufacturers' Association, said that the expiration could result in employee layoffs and increased prices for some goods.

Lawmakers on a special House committee have been evaluating business tax breaks in the state. But, so far, they have been unable to come to an agreement on what should be done. The spring session ended without the legislature sending a business tax plan to Gov. Pat Quinn’s desk. Speaker Michael Madigan introduced legislation in the last days of session that would have extended the manufacturer’s purchase credit for six months. The plan also would have changed the high profile Economic and Development for a Growing Economy credit. The House passed the bill on the last day of spring session, but it was not brought up for a vote in the Senate. Democratic senators who sponsor the legislation said that they wanted to have more time to consider it.

“We are going to continue to work on things. The reaction is that this is something that needs to be reworked,” Madigan’s spokesman Steve Brown said. Lawmakers are expected to revisit the issue during the fall veto session. If they cannot reach consensus, the state’s Research and Development Tax Credit could be the next casualty. It is set to expire next year.

Arlington Heights Republican Rep. David Harris, who is on the committee, said that he thinks legislators will vote on the manufacturing credit during the veto session. But he said that other issues, such as the EDGE credit, the Franchise Tax and the Research and Development Tax Credit, would likely fall on the next General Assembly to address. Members of the next General Assembly are scheduled to be sworn into office in January.

Denzler is optimistic that legislators will restore the manufacturing credit in the veto session. But he said that their inability to reach agreement on many of the policies considered by the committee creates an unstable situation for businesses. “It just kind of continues the path of uncertainty and unpredictability.”

Tuesday, June 10, 2014

Rep. Derrick Smith convicted on corruption charges

Chicago Democratic Rep. Derrick Smith was convicted of accepting a bribe in exchange for official duties.

Smith was caught on tape as part of a federal sting negotiating a $7,000 bribe in exchange for writing a letter of recommendation for a day care center he believed was seeking a $50,000 state grant. The day care center was not actually seeking the grant — instead federal prosecutors used an informant who had been a campaign worker for Smith to broker the deal and deliver the bribe money. Perhaps some of the most damning evidence against Smith was an audio recording of him counting the cash.

Smith was found guilty on one count of bribery and one count of extortion. Both are felonies.

Smith’s lawyers argued that he was not seeking to commit a crime and would not have taken a bribe if the federal informant had not continued to push him in that direction. According to court documents, the informant discussed the bribe with Smith for three months before moving forward with it. “We gave it a good fight,” Smith told reporters after the verdict was handed down. “It’s God’s will. God knows the truth about it all. The jurors just didn’t see what God saw.” Prosecutors say they received information that Smith would be willing to take bribes and argue that it would have been negligent for them not to investigate the claims.

After Smith was arrested in 2012, the House voted to expel him. But he was re-elected and returned to his seat in 2013. Smith, who was defeated in the Democratic primary this year, automatically loses his seat due to the convictions.

Monday, June 09, 2014

Illinois bans plastic microbeads

By Caitlin Rydinsky 

Illinois is the first state in the nation to ban potentially hazardous plastic beads from common hygiene products.

Gov. Pat Quinn signed Senate Bill 2727 into law over the weekend. The law would phase out the small plastic beads that are used in some exfoliating body scrubs and whitening toothpastes. Manufacturers will have to stop including the beads in products by 2017, and stores can no longer sell products with them after 2018. The use of the beads in prescription medicines, such as toothpastes or acne washes, will be eliminated in 2019. Consumers can identify products containing the plastic pieces by checking for polyethylene or polypropylene in the ingredients list.

The plastic pieces are designed to roll down the drain easily after use. However, the beads, which are about the size of a grain of salt, are too small to be caught by water filtration systems. So, they end up in bodies of water. “Banning microbeads will help ensure clean waters across Illinois and set an example for our nation to follow,” Governor Quinn said in a prepared statement. “Lake Michigan and the many rivers and lakes across our state are among our most important natural resources. We must do everything necessary to safeguard them.”

The issue was brought to the attention of lawmakers after a study of the Great Lakes performed by environmental groups found the plastic beads polluting the water. The study found twice the beads in Lake Erie samples than in some parts of the ocean. Fish are eating the beads, which are brightly colored and small enough to be mistaken as microbes. The other remaining plastic pieces end up floating on top of the water or sinking to the floor after they absorb pollutants within the water. Once the plastic pieces are in the water, it is too difficult to eliminate them all because of their small size.

Big names in the personal hygiene industry, such as Johnson & Johnson and Unilevar, have already acknowledged the dangers of the beads and support replacing them with more natural items, such as ground nut shells, salt, rice, sugar, or silica. Backers of the ban say it is needed to ensure that the companies follow through and to cover any producers that have not signed on to phasing out the beads.

“Lake Michigan is a critically important natural resource for our state, and its health affects recreation, tourism and the flourishing of aquatic plant and animal species,” Sen. Heather Steans, who sponsored the bill, said in a written statement. “I’m proud that Illinois is an environmental leader, taking the first step away from plastic microbeads toward natural exfoliates, and I’m optimistic that we’ve started a nationwide movement to protect not just the Great Lakes, but other bodies of water with high concentrations of microbeads.”

New York and California have similar legislation waiting to be signed into law and other states surrounding the Great Lakes, such as Wisconsin, Ohio, Minnesota and Michigan have introduced bills that would eliminate the products from their states.

Tuesday, June 03, 2014

End-of-session roundup

By Jamey Dunn

The fast pace of the end of the regular legislative session can make things kind of a blur, and much of the focus tends to fall on the budget. But lawmakers considered several other issues in the final days of May.

What passed 
Voters could be asked several questions on the November ballot. In addition to two constitutional amendments approved by lawmakers—and potentially two amendments proposed through citizen initiatives—three advisory referendum questions might also be presented to voters. The questions are not legally binding and only gauge voters’ opinions on policy. (For more on the proposed constitutional amendments, see this month's Illinois Issues.)

House Bill 3816 calls for an advisory question on whether personal income over $1 million should be taxed an additional 3 percent to raise money for schools.

HB 5755 calls for a question asking voters whether insurance plans that cover prescriptions should be required to cover prescription birth control. The requirement has been state law since 2004, but supporters say they want voters to weigh in because the contraception coverage provisions in the Affordable Care Act are currently being challenged in court.

HB0105 would seek input from voters on the state’s minimum wage. The measure contains a ballot question that asks if the minimum wage should be increased from the current $8.25 per hour to $10 per hour by 2015.

HB 0008 would create protections for expectant mothers in the workplace. The legislation would require employers to make “reasonable accommodations” so women can stay on the job while pregnant without threatening their safety or the safety of their unborn children. Gov. Pat Quinn supports the bill and is expected to sign it into law.

SB 2187 would allow psychologists to prescribe medication when working collaboratively with a doctor. The legislation would require that psychologists apply for a special license to be allowed to prescribe medication.

HB 0105 would make sweeping changes to election rules in Illinois. It would extend in-person early voting hours and remove the requirement that early voters present identification. Voters would also be allowed to register on election day. The legislation would also allow in-person absentee voting on college campuses on election day. Quinn has said he plans to sign the bill.

SB 0352 would allow the state to collect sales taxes from online businesses, such as Groupon, that sell promotional deals and coupons. The move comes after the Illinois Supreme Court struck down the state’s attempt to tax online retailers, such as Amazon, through their connections with Internet marketers based in Illinois.

SB2352 would create an independent ombudsman to oversee the Illinois Department of Juvenile Justice. The department has entered into a legal consent decree that requires it to improve education, mental health treatment and safety for detainees. Experts who created recommendations for the department found that juvenile detention centers were not offering the education required by law and lacked adequate mental health staffing. Fifteen percent of youth in the state’s system reported, as part of a Justice Department survey, that they had been sexually assaulted by other inmates or staff.

What failed
SB 0649 would have cut the Department of Natural Resources out of setting the rules for fracking in the state, but the bill lacked the votes needed to pass. Supporters said that IDNR is taking too long to set the rules for the controversial method of extracting oil and natural gas. Opponents argued that the department needs time to ensure that the rules protect the water supply and Illinois residents.

SB 2694 The Senate voted to reject changes made in the House to a bill that was geared toward protecting adults from online revenge. The proposal would have made it a felony to post online sexual images without the permission of the subject of the photo or video. The lead sponsors from each chamber could not agree on the final language so the legislation fizzled out on the last day of session. According to the National Conference of State Legislatures, eight states have so-called revenge porn laws. Anti-stalking laws in some other states also cover such scenarios.

HB 3836 would have broken the Abraham Lincoln Presidential Library and Museum away from the Illinois Historic Preservation Agency. Under the plan, the Springfield-based museum and library would have become its own state agency. The House approved the bill, but the Senate did not vote on it.

SB 0016 would have changed the way the state gives money to schools. The legislation calls for more of state funding to be distributed based on local need. The Senate approved the plan, but the House did not take it up for a vote.