Wednesday, February 27, 2008

The new "tax swap"

Senate President Emil Jones Jr.’s name appears on the list of sponsors of a version of a “tax swap” that would reform the way Illinois pays for public education. His support is a reversal from the Democratic leaders’ alliance with the governor last year but consistent with Jones’ stances in years before that. Support from the chamber leader is a big boost for Sen. James Meeks and Sen. John Cullerton’s measure, but the bill has two main hurdles: 1) Gov. Rod Blagojevich’s expected veto of anything that increases state income taxes and 2) the curse of gaming legislation, or getting so weighed down by trying to please everyone that the bill implodes and goes nowhere.

The measure advanced today from the Senate Education Committee, the first of many public hearings planned for this legislation before it’s ready for a vote by the full Senate.

Senate Bill 2288 is the new Senate Bill 750, but it has major differences. (Some are mapped out by Senate Democrats here. The main difference is that the new version would raise a lot more revenue — $7.2 billion — to do a whole lot more, funding a statewide infrastructure program and paying down state debt. Specifically, highlights include $633 million for early childhood and primary education, $300 million for higher education, $2.9 billion for property tax relief adjusted for inflation each year, $600 million for a family tax credit adjusted for inflation each year, $1 billion for a road and school construction plan and more than $1 billion for state pension and Medicaid debt.

“The goal of this bill is to pay off our debts,” Cullerton said in the committee hearing. He later added, “Not one penny is going to the operations of state government.”

Some Republicans in the committee found that hard to believe, but Cullerton said the sponsors eagerly seek input from the GOP and the House to codify better language. The sponsors still have the same list of supporters and opponents as 750. Most education and labor groups support it. Opponents include business groups and the Illinois Department of Revenue. (One school board in Chicago’s northwest suburbs of Palatine and Schaumburg opposed the property tax relief portion and said schools across the state can’t trust Illinois government to deliver, but those witnesses also said they supported many funding reform ideas in the legislation.)

The way the measure would raise the money is by increasing the personal income tax rate from 3 percent to 5 percent and the corporate rate from 4.8 percent to 8 percent. It also could, although it doesn’t yet, take back $800 million from the portion of the state income tax revenue that local governments currently receive.

On the spending side, the measure lists general initiatives but doesn’t specify where the money would go. Also absent, so far, are “accountability” measures, or safeguards for how state and local governments spend the money as intended. That’s a necessary component for Democratic Sen. Susan Garrett of Lake Forest. She voted “present” in committee to symbolize her concerns. “There has to be oversight. It’s not going to happen with this magic wand. I could never support this, especially from my area, without some major, major reforms.”

Meeks said those reforms are going to be drafted after collecting ideas in a series of public hearings, which is particularly important when “nobody trusts us to do what we say we’re going to do.”

We’ll have more details as they unfold. In the meantime, it’s safe to say this version isn’t going to advance for a while, maybe months.

The governor’s response is, according to an e-mail from spokeswoman Rebecca Rausch: “The push for an income tax increase isn’t new in Springfield. The governor’s position hasn’t changed. He thinks we should cut taxes, not raise them — especially at a time when families are already dealing with higher gas bills, higher prices for goods and stagnant wages.”

Jones’ spokeswoman, Cindy Davidsmeyer, said the Senate president has said and continues to say that he will not call this type of controversial measure for a vote on the Senate floor unless it has enough votes to pass — that’s 30 to pass and 36 to override a governor’s veto. Considering all the work that needs to be done to complete the legislation and all the GOP recruiting that needs to happen before the measure has a veto-proof majority, it’s optimistic to think that the bill could be called for a vote before May 31, as Meeks would like.

Update from Iraq

Take a break from what’s happening in Illinois — Public Official A, Democratic infighting, fiscal implosion — and think abroad. State Rep. Jim Watson, a Jacksonville Republican, reports to us from Iraq, where he’s expected to serve a nine-month tour of duty with the U.S. Marines. We received this e-mail from Ben Jackson in Watson’s legislative office:

Rep. Watson is currently stationed with the U.S. Marine Corps 3rd Civil Affairs Group in Fallujah, Iraq, working with local, tribal, and provincial governments. He is working long days reviewing local and provincial legislation, advising local officials, and assisting in the development of the modern Iraqi government. Tasks to date have included analyzing provincial powers laws (separation of powers) and assisting local government meetings and councils.

He is enjoying his work, and really feels that the Iraqi citizens want to succeed. He stated last week: “Governance is the key to victory, and I can personally attest that the Iraqis are working hard at implementing their own form of representative government.”

However, he is also able to communicate with his District on a regular basis. When he is not performing military duties, Rep. Watson is able to call into the office regularly, and we frequently correspond by e-mail regarding constituent issues, the budget, and his legislative agenda.

What’s in the bag? Watson said it held some of his gear. Jackson said Watson replied, “Hey, you have to work with what’s available around here!”

Tuesday, February 26, 2008

"My way"

I have Frank Sinatra’s “My Way” stuck in my head. It’s a reoccurring theme in the Statehouse, especially on days like today. Two House Democrats are trying to take a different route than the governor to expand state-sponsored health insurance to 147,000 adults. They’re using legislation, something Gov. Rod Blagojevich tried to do last year but got nowhere. When that didn’t work, he tried using his administrative authority. He repeatedly got blocked there, too. It happened again this morning, but the administration is moving ahead, anyway, stating that it can afford the expansions and that it expects federal approval and matching funds to come through.

This morning, the Joint Committee on Administrative Rules, a bipartisan legislative panel that reviews executive rules, again rejected and suspended the Department of Healthcare and Family Service’s effort to expand a health insurance program to two groups of people: 1) up to 20,000 individuals making up to 185 percent of the federal poverty level who were covered under the State Children’s Health Care Program; and 2) a new group of 147,000 adults who make up to 400 percent of the federal poverty level.

Background resources: See the administration’s original proposal in the November 26, 2007, Illinois Register, and scroll down to No. 15854. You can read more about the governor’s attempt to expand health care in my February column of Illinois Issues magazine and in a November blog.

Rep. Lou Lang, a Skokie Democrat and JCAR member, summed up his constitutional concerns and frustrations during the hearing. “Under what chutzpah do you come to this body and ask us to approve a rule that we already rejected when you had the unmitigated gall to put 3,300 people on a program that you ask us to approve that we did not approve? Why are we here?”

“To have an open forum, to hear comment, to participate, to try to make sure that we’re implementing, to listen to concerns,” replied Tamara Hoffman, chief of staff for the Department of Healthcare and Family Services.

The legislation proposed by the two House Democrats would do exactly the same thing to cover 147,000 more adults. The difference is that it would require the full General Assembly to approve the money allocated to the program every single year, allowing them to adjust for budget shortfalls.

“If it’s going to happen, this is how it should happen,” said Rep. John Fritchey, a Chicago Democrat sponsoring the measure with fellow Democratic Rep. David Miller of Lynwood, in a Statehouse news conference.

Both said they hope legislative hearings would be more successful in getting answers from the administration. Hearings could vet out the details so the full General Assembly, rather than a 12-member panel, could decide whom to cover, at what level to cover them and how to pay for it in the long run. “Going through the legislative process I think empowers the voters,” Miller said. He added that maybe 400 percent of the federal poverty level isn’t the threshold. Maybe it’s less, but that’s what the hearings would aim to figure out.

Fritchey added that the legislation could buffer 3,300 new enrollees, a number given by the administration today. Those people potentially could lose FamilyCare benefits if a judge rules that the governor violated his constitutional authority to expand a health care program without legislative approval. Read background of the lawsuit filed against the administration here. If a judge did rule against the administration, however, Rep. Rosemary Mulligan, a Des Plaines Republican and JCAR member, said it’s more likely that the Department of Healthcare and Family Services wouldn’t kick anyone off of the health insurance program; it simply would eat the cost and make up for it elsewhere. Hoffman said the department won't speculate about what would happen if the lawsuit overturns the administration’s authority to expand the program.

Department officials also said it has the money in its current budget to cover the expansions, but they didn’t specify. The General Assembly never approved spending authority specifically to cover the expanded health care programs. Department heads left without answering questions after the vote.

Eight JCAR members rejected the administration’s rule. Two Republican members went against the grain. Mulligan and Rep. Brent Hassert of Romeoville said they’re not happy with the administration’s lack of answers and don’t believe it has the money to cover the expansions, but they do believe the department has the authority to do expand FamilyCare. That’s because, Mulligan said, the General Assembly approved that authority in 2006. Hassert added that the JCAR hearings on the governor’s health care plans are symptomatic of the ongoing game of politics between the governor and House Speaker Michael Madigan.

Friday, February 22, 2008


Last week, I reported about revenue ideas, specifically mentioning an income tax increase. Thanks to commenters, I realize the need to clarify two things:

First, such business groups as the Taxpayers Federation of Illinois and the Civic Committee of the Commercial Club of Chicago said last year they could swallow a state income tax increase if Illinois also — or first — enacted reforms to control such costs as public employee pensions and retiree health care benefits. In last week's post, I mentioned the portion about the Taxpayers' Federation of Illinois willing to support an income tax increase but did not mention the other side of the equation – its belief in the need to take steps to address the structural deficit. See David Eldridge's comments at the bottom of this post. (I also wrote about both sides of the equation last spring.) And more background can be found in the Civic Committee's full December 2006 report that suggests raising money by increasing income taxes and expanding sales taxes while also cutting costs and reforming the education funding system.

Second, both groups recommended increasing the personal income tax rate from 3 percent to 4 percent, which is not the same thing as a 1 percent increase. See Cal Skinner's comment at the bottom of this post. (More context: The Civic Committee's report also recommended increasing the corporate income tax rate from 4.8 percent to 6.4 percent and expanding the state sales tax to apply to consumer services.)

Be specific, please
State legislators would have to be more specific in the state budget when they requested money for projects within their districts under a measure that sailed out of the House today. They would have to spell out who requested the money, what it's for and whom it would benefit. Sponsor Rep. Patricia Reid Lindner, an Aurora Republican, called it a good government measure aimed to make the budget-making process more transparent, as opposed to the common practice of slipping in vague descriptions of rather hefty grants for local projects, a.k.a. pork.

The measure received 99 supporting votes and one in opposition, but a few members voiced concerns about whether the rules would actually work as intended. Rep. David Leitch, a Peoria Republican, was the lone “no” vote because the requirement could draw out the process if simple errors were made in the state budget, he said. For instance, a drafting error prevented the state from awarding a grant to a cancer center in his district even though it had received legislative approval. “You're absolutely correct. We should provide a description. We should provide transparency. But this would be a very impractical way to accomplish your worthwhile goal.”

The measure now goes to the Senate, where lawmakers predict it will have a tougher time getting approved.

Thursday, February 21, 2008

Moment of silence returns

By Patrick O’Brien
The controversial law mandating a moment of silence or prayer in state schools will face a challenge at the Statehouse after a House committee on Thursday approved a proposal by one vote to make the moment of silence optional.

Chicago Democratic Rep. John Fritchey proposed taking the word “prayer” out of the law’s name. Gov. Rod Blagojevich vetoed the law last year but was overridden by legislators. Classrooms are now mandated to observe the moment at the beginning of each school day, although there are no penalties for not complying.

Fritchey insists that the issue isn’t prayer in schools, rather the wording of the original law. He said after the committee hearing that he would prefer to repeal the moment of silence mandate but would compromise by reverting back to the intent of the original 1969 law allowing it.

A federal judge in the Northern District of Illinois is considering whether the mandate is constitutional. James Ferg-Cadima, a representative of the American Civil Liberties Union, told the committee that the court indicated that a challenge is likely to succeed.

Rev. Bob Vanden Bosch of Concerned Christian Americans said similar laws in Virginia and Texas survived multiple court challenges. Other supporters of the original law say that 32 states have similar laws, and 14 of them make the moment of silence mandatory.

Rep. Karen Yarbrough, a Maywood Democrat, said the law is about prayer. “In people’s hearts and minds, that is the underlying issue here.”

Other lawmakers think the mandate harms schools’ bottom lines. Rep. Bill Black, a Danville Republican and former teacher, said the law takes more control from local school districts and gives it to Springfield. “It’s not about God, it’s not about my faith.”

Wednesday, February 20, 2008

Budget breakdown

Old contents, new package
Gov. Rod Blagojevich’s grandiose budget proposals of the past made this year’s speech — his sixth since taking office — seem tame, almost conciliatory after last year’s political turmoil and gridlock. His new proposals remain focused on benefiting the middle class, this time with a one-time tax credit for families and businesses to help stimulate the economy, in addition to expanded health care. But Blagojevich’s overall package faces widespread skepticism about whether the funding sources for those tax credits and health care, along with other revenue ideas for education, pensions and infrastructure could fly in the legislature — let alone be good for the state down the road.

House Republican Leader Tom Cross of Oswego said if someone in the audience were from Mars and visiting Illinois for the first time, it might seem appealing — tax credits, health care and road and school construction projects. “It sounded good, and there may be something to it, but as you dive into the details, you’re going to see one-time revenues, you’re going to see borrowing, you’re going to see maybe a pension bond deal, you’re going to see a tax increase, you’re going to see corporate loopholes. More of the same, but talk about the devil in the details, it won’t be good.”

Overall support
Few, if any, came out in support of the entire package, although some aspects did receive positive feedback. Cross, for one, said he and the House GOP Caucus appreciate the governor’s proposals to further streamline government and to cut costs, but Cross said that alone wouldn’t solve the deep-rooted budget problems. The governor also has support from the Campaign for Better Health Care for the concept of universal health care. The Champaign-based nonprofit group backed the governor’s similar plan last year and issued a statement today that blames the General Assembly for failing to enact affordable, quality health care for all. The Chicago-based Illinois Coalition for Immigrant and Refugee Rights also issued a statement in support of the governor’s plan to dedicate significant amounts of money to citizenship services, English programs and other immigration-related initiatives.

The main argument among critics, including Republicans and business groups, is that the one-time tax breaks for families and businesses would be counteracted by a laundry list of other tax credits that the governor wants to erase. A lot of businesses also would be subject to a so-called payroll tax to pay for expanded health care. The GOP and the Illinois Chamber of Commerce lump those together to say the governor proposes more than $1 billion in tax increases for businesses.

Chamber president and chief executive officer Doug Whitley summed it up this way: “I’m glad that he’s finally recognizing that he needs to pay a little bit of attention to business, but as far as I’m concerned, he can keep that business tax credit, which is a one-time proposal. While on the other hand, he’s trying to raise over $1 billion annually from employers. That doesn’t make a lot of sense to me.”

Many agreed, however, that the governor seemed to adjust his tone for this speech. He even made fun of his extremely unpopular idea last year to enact a gross receipts tax on businesses by saying he had a better appreciation of Hank Williams’ lyrics, “I’m so lonesome I could cry.” While seeming to blame the House for not sending him a capital construction plan that passed the Senate last year, Blagojevich repeatedly called for lawmakers and the Democratic leaders, in particular, to put side their differences and nix the “poison pills.”

“A Republican president and a Democrat-controlled congress put aside their differences and came together to act quickly,” he said relating to federal tax cuts. “If Washington can do it, we can do it.”

An amiable tone is necessary if there’s any chance to avoid last year’s legislative purgatory that stretched 12 months. But, as Cross pointed out, lawmakers’ frustration isn’t just directed at the governor. They feel “hand cuffed” and angered by Democratic infighting among House Speaker Michael Madigan and Senate President Emil Jones Jr. that entangled numerous legislative agendas.

Today could have set the stage for a potentially shorter and smoother session. Yet there’s a lot to work out, considering that the governor’s budget proposal lacked details and failed to define exactly how he would divvy up new revenue. Comptroller Dan Hynes pointed out that while the governor’s not quite proposing another bombshell like a gross-receipts-tax, he still wants a major health care expansion, a $1.2 billion tax relief plan and a $16 billion pension bond scheme that increases the state’s debt by the same amount. Hynes’ question: How do we fund all these programs when even the governor acknowledges revenues are slowing, the economy is teetering on recession and the state already suffers from a structural deficit?

4 top legislative leaders
  • House Speaker Michael Madigan: Wants to prevent the “prolonged, acrimonious encore of last year.” He intends to vet the budget process more with a series of regional hearings, but he also has potential to slow down legislative progress with a new rule that all legislation needs additional language to spell out how to implement the new laws. Jones said that’s blatantly unconstitutional and problematic for the passage of legislation in his chamber.
  • Senate President Emil Jones Jr.: Supports the governor’s general plans but says he’s open to an income tax increase or a gaming expansion if lawmakers shore up enough support. He said his priority, interestingly, was to keep his caucus together, a huge problem last year.
  • House Minority Leader Tom Cross: Likes the notion of considering ways to cut government spending. But he’s skeptical of the long-term effect of selling a portion of the state lottery and losing an estimated $700 million each year. He says all members want a capital bill, and some still support gaming expansion as a funding source.
  • Senate Minority Leader Frank Watson: The governor can’t have it both ways by offering tax cuts and then increasing spending related to health care and Medicaid. Watson points to a potential revenue source of selling the state’s 10th casino license as a way to fund a state capital program. He’s wary of any tax policies that would further damage the state’s business climate.
What’s still out there
  • Gaming: The typical advocates of gaming expansions are still pushing for last year’s proposal to build two new riverboats and one new casino in Chicago, but as Democratic Sen. John Cullerton of Chicago said, “Gambling is like a Christmas tree. You keep on putting ornaments on there, and finally, it just falls over. It’s just so complicated.”
  • Income tax increase: The idea to change the way Illinois funds public education by increasing the state’s income tax and decreasing local property taxes is still breathing. It has new life in Sen. James Meeks’ legislation that also would use some of that money to pay for a capital plan. But the governor repeats his pledge not to sign an income tax increase.

Budget basics
Details are slim, but here’s the skeleton of Blagojevich’s general proposals:
  • Child tax credits: $300 tax credit per child for Illinois taxpayers who qualify for the federal tax break. Funding source: “Securitization” of state assets, or selling an existing revenue source to investors for a one-time influx of cash. The only specific example provided by the administration: Get an up-front payment from investors who buy the state’s portion of national tobacco settlement funds. The justification is that those funds are likely to decrease because the state has fewer smokers and has a statewide smoking ban.
  • Business tax breaks: $300 million in tax breaks — amounting to a 20 percent break — for businesses that filed corporate income taxes in Illinois for 2007 and that maintained employment levels. Funding source: Partially be paid for by “securitization” of a dwindling revenue source.
  • Health care: $417 million “Illinois Covered” health care plan. Funding source: 3 percent payroll tax on businesses with more than 10 employees (this is very similar to his proposal last year).
  • Education: $300 million increase for education, but it would be up to the legislature to hash out where the money would go in the education system. Funding source: Selling 80 percent of the Illinois Lottery for $7 billion.
  • Infrastructure: $25 billion capital plan with money for schools, roads, bridges, mass transit, airports, railways, energy and technology, economic development and state buildings. Funding source: selling 80 percent of the Illinois Lottery and by issuing $3.8 billion in bonds. The debt service would come from annual transfers from the Road Fund.
  • Pensions: $16 billion pension obligations bonds (borrowing/refinancing debt) to pay down pensions and to save money from a lower interest rate. Funding source: Partially by selling the Illinois Lottery and by transferring $300 million each year from the Road Fund and other sources.
Other revenue proposals
  • Gaming tax: Increase gaming tax rates (on riverboats) on a sliding scale, generating $300 million
  • New casino/riverboat: Accept bids on the dormant 10th gaming license for an up-front $575 million; once online, the new casino also would generate money for the state each year.
  • Fund transfers: Take back excess money from special purpose funds and “charge” them for cost of administering those funds, generating $95 million.
  • Corporate “loopholes”: End a laundry list of tax breaks for businesses, generating $140 million.
  • State employee head count/streamline: Don’t replace employees who retire or quit, and continue to consolidate administrative functions.
  • Sell more state assets: Sell state buildings that are or will be vacant, generating $40 million.

Monday, February 18, 2008

Shifts at the top

In preparing for Gov. Rod Blagojevich’s annual budget address this week, it might help to have a list of new names in state government. You can keep track of personnel changes as well as other newsy “People” items in the print version of our magazine every month. Note that the following information is attributed to the administration.

Kelley Quinn, spokeswoman for the Office of Management and Budget since January, previously worked in Cook County Clerk David Orr’s office. Before that, she was a reporter for a newspaper in upstate New York and a court reporter for the Chicago Daily Law Bulletin. She replaces Justin DeJong, who is now spokesman for the Chicagoland Chamber of Commerce.

David Rudduck became a press secretary for the governor after working 17 years in communications, most recently as regional director of communication and government relations for the American Red Cross.

Cybil Rose is spokeswoman for Central Management Services. She has a decade of experience working behind the scenes in local news, including as executive news producer for CLTV News. She relieves Susan Hofer, who was serving double duty as spokeswoman for CMS and for the Department of Financial and Professional Regulation.

Bob Arya became deputy director of the Office of Communication and Information. He previously was a senior adviser to the governor. Before joining the state, he spent 11 years as a news anchor and reporter for Chicagoland’s Television.
Rikeesha Cannon was spokeswoman of the Department of Human Services and now is senior communications manager of the Office of Communication and Information. She used to be a spokeswoman for the Sargent Shriver National Center on Poverty Law in Chicago. She replaces Chris Herbert.

Ruth Igoe replaces Amy Rosenband as spokeswoman for the Department of Healthcare and Family Services. Igoe is the former communications director for the Greater Chicago Food Depository.
Annie Thompson is the new Springfield spokeswoman for the Illinois Department of Healthcare and Family Services. She most recently was a press assistant with the governor’s press office. She replaces Teresa Kurtenbach, who now works in the Department of Commerce and Economic Opportunity.

Marielle Sainvilus switched from a press officer with the governor’s office to a spokeswoman of Department of Human Services and director of the governor’s Multicultural Media Affairs. She replaces Rikeesha Cannon, who moved to the governor’s Office of Information and Communication.

Ashley Cross, former spokeswoman for Allstate Insurance Co., joined the state as a spokeswoman of the Department of Commerce and Economic Opportunity in Chicago. She replaces Andrew Ross, who returned to the private sector.
Marcelyn Love switched from the spokeswoman for the departments of Agriculture and Natural Resources to the Department of Commerce and Economic Opportunity. She replaces Mark Harris, who left to work for the University of Chicago.
Kim Luckey is policy director. She previously served as director of government affairs for Tew Cardenas LLP and, before that, as a legislative assistant for a member of Congress.
Teresa Kurtenbach is the northwest regional manager for Opportunity Returns. She previously served as communications manager for the Illinois Department of Healthcare and Family Services.
Jeff Polsean is the Opportunity Returns regional manager for northern Illinois. He previously served as regional administrator for human capital development for the Illinois Department of Human Services.
Sam Sandoval is now deputy general counsel. He previously served in the state procurement office for the Department of Revenue.

Paris Ervin, former reporter for WICS News Channel 20 in Springfield, is a spokeswoman for the departments of Agriculture and Natural Resources. She replaces Marcelyn Love, who joined the Department of Commerce and Economic Opportunity.

• Illinois Natural History Survey chief David Thomas will retire February 29.

Sara Wojcicki is based in the treasurer’s Statehouse office as deputy communications director for downstate and central Illinois, vacant since Treasurer Alexi Giannoulias took office. Wojcicki was a reporter and anchor for WICS News Channel 20 and most recently covered the Statehouse.

Friday, February 15, 2008

NIU and taxes

Shooting lingers over Capitol
By Patrick O’Brien
Thursday’s shooting rampage at Northern Illinois University in DeKalb cast a pall over the Statehouse today. Legislative action led off with condolences and a moment of silence on the House floor. (The Senate was not in session today.)

A group of lawmakers also received a private briefing by Michael Chamness,
chairman of the Illinois Terrorism Task Force and adviser to the Illinois Emergency Management Agency. Chamness praised the efforts of university officials and first responders in DeKalb, saying that an alert about the shootings was issued through text messages and other means less than 20 minutes after the incident occurred. “From our standpoint, NIU did everything correct,” he said.

Comparisons between Virginia Tech and NIU were inevitable. Chamness said reports confirm it took two hours for word of the shooting to reach students at last year’s Virginia Tech shootings. In the case of NIU, students were given specific instructions shortly after the incident to stay away from the area of campus where the shootings occurred.

Chamness said it’s unlikely the DeKalb shootings could have been prevented. “There didn’t seem to be the flags there were at Virginia Tech” that may have alerted authorities.

And Illinois state universities learned from the Virginia Tech tragedy through training in school safety. NIU Police Chief Donald Grady and officials from 95 other state schools attended.

Further, a statewide Campus Safety Task Force is conducting a mental health survey to identify potential problem individuals, but there’s no clear-cut answer about how to prevent such incidents, Chamness said. The task force’s report, including the study, will be available April 1.

Tax talk
By Bethany Jaeger
Anticipate a battle between ideas for raising revenue and for stimulating the economy. There’s more talk about Gov. Rod Blagojevich seeking to garner revenue through a so-called carbon tax, which the Illinois Chamber of Commerce already is prepared to oppose if it appears in his annual budget address February 20. At the same time, even typical proponents of tax credits say the state should avoid anything that could further cut into a revenue shortfall.

If the governor does propose a form of tax on carbon dioxide emissions, expect vocal opposition from the agribusiness and coal industries. We’ll have more on the carbon tax later if it is indeed proposed. The chamber suggests to learn more in the meantime.

In addition, the Taxpayers’ Federation of Illinois said it will oppose all legislative proposals for tax credits, exemptions and deductions this year. “There’s no money,” said David Eldridge, legislative director for the group and former assistant counsel to House Speaker Michael Madigan.

Eldridge testified before a House Revenue Committee Friday and said the state faces a deficit ranging from $600 million to $750 million. The state needs all the revenue it can get for the upcoming fiscal year (that starts July 1). (See our previous blog for background.)

To generate money, the federation repeats an earlier position that it could support an increase in the personal income tax by 1 percent. The Commercial Club of Chicago’s Civic Committee recommended that last year, and increasing the rate from 3 percent to 4 percent already is proposed in a measure sponsored by Rep. Annazette Collins, a Chicago Democrat.

Rep. Frank Mautino, a Spring Valley Democrat and Revenue Committee member, said the federation’s statement is significant given the timing. “Normally, the members of the Taxpayers’ Federation are the large manufacturers who would be looking for the tax credits. But given the Chicago Civic Committee’s report from last year — and many of their members are members of the Taxpayers’ Federation — they came out in favor of an income tax with a corresponding corporate income tax increase.”

Rep. Bob Biggins, an Elmhurst Republican and committee member, said it’s a reasonable position, even for lawmakers such as him who like to propose tax cuts. A former township assessor, he said local governments saw enormous revenue growth as property values increased during the past 30 years. Now that property values are flat, particularly in the Chicago area, local governments aren’t collecting as much money.

“There’s a natural stoppage of increases in revenue from the real estate being flat to the economy in the state — people aren’t spending as much. We’re not going to have enough money. Let’s be prudent here, and let’s not make it worse.”

Thursday, February 14, 2008

Stormy start to session

A week before Gov. Rod Blagojevich's annual budget address, the state's economy already casts a cloud over the Statehouse.

Amid national news that a full-blown recession is looming, President George W. Bush signed an economic stimulus package. It's supposed to send checks in late spring and summer to singles who made less than $75,000 and couples who earned less than $150,000 in 2007. (People qualify by filing their federal income taxes.)

If the national economy tanks, Illinois won't be far behind. That's the message of a report requested by the state General Assembly's Commission on Government Forecasting and Accountability. The agency's January briefing says, “Illinois will most certainly succumb if the economy sinks into a recession - if it has not done so already.”

Moody's also said in a report for the commission that the odds of a recession increased from 40 percent to 60 percent last month.

Those reports couple with the Illinois comptroller's recent warning that state government is unprepared for a recession. His office released a report to the General Assembly. In his Statehouse office Wednesday, Comptroller Dan Hynes said, “The bottom line is that the state of Illinois, unlike many other states, has not taken advantage of our five years of economic growth. And now as we face a recession, our financial problems are daunting.”

He said the state accumulated “tremendous revenue growth” of $5.5 billion during the past five years. But lawmakers spent it on new programs rather than putting it toward compounding, long-term obligations. While the state devoted more money to pensions, Medicaid, health care, higher education and general education in that time, Hynes said it hasn't necessarily made a difference or addressed a structural deficit that the Blagojevich Administration often misrepresents.

“Each year, the governor has made his budget presentation and has declared that the deficit has been eliminated -- each and every year. And each and every year, that has been proven untrue when the final numbers come out. And that's a problem in and of itself, but it's especially problematic when the economy slows down," Hynes said. (For more information about whether the budget is balanced, see Charlie Wheeler's Illinois Issues column about the governor's 2006 budget address.)

Stormy Smoke Free Illinois debate
Rep. Bill Black, a Danville Republican and vocal GOP leader, blew his top in a House committee, later calling the chairwoman an “idiot” for not acting on her own and instead relying on behind-the-scenes staffers to tell her what to do.

Black threw a tantrum because the committee chair didn't call for his amendment to be attached to the Smoke Free Illinois Act, which went into effect January 1 but doesn't have all rules in place. Committee chairwoman Rep. Karen May of Highland Park said leadership told her that other amendments weren't ready and that they're expected to be called for debate next week.

This could happen a lot this session. New measures will have extra amendments that spell out the rules for implementing them. That's a direct shot at the governor, who publicly stated that the Joint Committee on Administrative Rules - which reviews such rules - doesn't matter. Blagojevich's office previously suggested the bipartisan legislative panel plays only an advisory role after the panel denied his rules for expanding health care to more low- and middle-income adults.

Black's measure, by the way, would change wording in the definition of private clubs. It would allow veterans' halls to vote on whether they want to allow smoking in their halls.

That's just one proposed exemption. A more sweeping measure sponsored by Rep. Harry Ramey, a Carol Stream Republican, would allow smoking in bars, bowling alleys, veterans' halls, strip clubs and casinos. In other words, restaurants would be one of the only mandated smoke-free facilities. Some Illinois veterans testified at the House committee. One urged lawmakers to retain the ban on smoking in all public places for the sake of public health. Another urged them to let veterans, many of whom started smoking while serving in World War II and Vietnam, smoke in their own halls.

Thursday, February 07, 2008

Rezko redux?

By Patrick O’Brien
As the presidential race remains heated across the country, Tony Rezko’s federal corruption trial still could play a role in determining the Democratic nominee. U.S. Sen. Barack Obama is still trying to distance himself from Rezko. He even returned direct and indirect campaign contributions from or related to the political networker to shed a real or perceived relation.

Rezko is scheduled to go to trial March 3, the day before large primaries in four states, including Texas and Ohio, that should go a long way in determining the presidential nominee.

Former Gov. Jim Edgar says he doesn’t think the Rezko affair will hurt Obama as much as it will plague embattled Democratic Gov. Rod Blagojevich. Rezko has been a longtime friend and adviser to Blagojevich.

Edgar says he hasn’t seen anything that he would consider a “smoking gun” between Obama and Rezko, adding Rezko has donated to a lot of politicians. “I took a campaign contribution from Tony Rezko, and I don’t remember him ever asking for anything,” Edgar said Thursday after sitting on a post-election panel sponsored by the Institute of Government and Public Affairs and the Center for State Policy and Leadership in Springfield.

“We all have acquaintances and friends where they’ve done something we wished they didn’t do, but that doesn’t mean we’re in the same boat as them,” Edgar said.

Pundits believe the upcoming primary schedule is much more favorable to Obama than to his opponent, Sen. Hillary Clinton, but as the trial date nears, Obama’s links to Rezko are sure to be scrutinized again by the national press. In addition to being a campaign contributor, Rezko also sold land to Obama adjacent to his Chicago home, a deal Obama later admitted was a mistake. The deal occurred while U.S. Attorney Patrick Fitzgerald was investigating Rezko for fraud and extortion.

Democratic Sen. John Sullivan of Rushville, who has worked on Obama’s behalf in Iowa, Minnesota and South Carolina during the primaries, also spoke on the panel and said he didn’t think the Rezko story would mean anything to voters from out of state. Sullivan said the “average person out there” doesn’t know who Rezko is and that media attention to the case has exceeded the public’s interest.

Kent Redfield, director of the Sunshine Project and interim director of the Institute for Legislative Studies at the University of Illinois at Springfield, has another perspective. He says the incident “raises some doubts nationally because they don't have the context.” He adds that Illinois voters are more used to “rough and tumble politics” than voters in other states.

Wednesday, February 06, 2008

Wrap-up Wednesday

By Bethany Jaeger and Patrick O'Brien
The surprise on Super Duper Tuesday in Illinois was at the state level, not the national level. Illinois still played a significant role February 5 by doling out more than 200 presidential delegates to the Democratic and Republican candidates, but the state got lost in the mix of 22 states that held primaries that day. I’ll repeat this point made by Kent Redfield, political scientist at the University of Illinois at Springfield, for a previous blog. “There’s a certain irony in the fact that we moved our primary up so we could be a major player, and now states that didn’t move actually may be more important than Illinois. If we’d have stuck to mid-March, we might have been this huge battleground all by ourselves instead of one of all of these other states.”

National view
Illinois Democrats were predictable in electing Barack Obama, former state senator and current U.S. senator of Chicago. But Obama is still in a tight race against U.S. Sen. Hillary Clinton of New York to win enough delegates nationwide to secure the Party nomination. (See more at the Associated Press’s “Delegate Tracker” here.) By Wednesday morning, Clinton had fewer than 100 delegates more than Obama, heightening the importance of the next round of primary elections throughout this month and next (other states have primaries scheduled through June for Democrats and July for Republicans).

Republicans in a dozen states nominated U.S. Sen. John McCain of Arizona. He already has half of the GOP delegates needed to win the nomination over former Massachusetts Gov. Mitt Romney and former Arkansas Gov. Mike Huckabee.

State view
The state-level surprise was that Senate Democrats fared better than expected, and Gov. Rod Blagojevich could still have some allies to replace those who vacated their seats to work for him.

Senate Democratic incumbents — particularly assistant majority leaders Iris Martinez and Ricky Hendon, both of Chicago — withstood challenges that had potential to significantly alter the chamber.

Martinez’s leadership position sparked controversy within the Latino Caucus because Senate President Emil Jones Jr. selected her over fellow Latino Sen. Tony Munoz to serve in Jones’ cabinet. The disagreement affected the entire chamber, sometimes preventing such major legislation as the governor’s health care plan from advancing.

Martinez received a lot of money from Senate Democrats, including four separate $40,000 donations and a $100,000 check from the Illinois Senate Democratic Fund. (We're having a hard time with the State Board of Elections Web site linking to the wrong page. I hope it works for you.) She ended up winning more than half the vote over state Rep. Rich Bradley, who vacated his House seat so Chicago Ald. Dick Mell’s daughter, Deborah Mell, who also is the governor’s sister-in-law, could run. Mell is uncontested in that race.

Martinez’s likelihood of staying put won’t change the Senate dynamic much, but it will deepen tensions that likely will affect this spring’s negotiations or lack thereof.

Hendon, a former West Side Chicago alderman and Party committeeman, is a rather outspoken senator called “Hollywood Hendon” because of his flashy suits and quick quips. He’s also a licensed producer and writer. He’s become a point person on gaming negotiations and gained a last-minute sponsorship of the Chicago-area mass transit legislation because he was in an intense race against Chicago Democrat AmySue Mertens, an experienced community advocate who had the backing of AFSCME Council 31. A third candidate, Jonathan Singh Bedi, had potential to be a spoiler if it turned out to be a close race. That wasn’t the case. Hendon won more than 60 percent of the vote, according to the Chicago Board of Election Commissioners. The $17,000 donation January 31 from the Senate president probably didn’t hurt.

In the Illinois House, two successful candidates backed by Blagojevich could place more emphasis on the dynamics of the governor’s relationship with House Speaker Michael Madigan, as the governor held onto the seat of a former ally and gained another probable supporter.

Blagojevich ally Patti Hahn of Centralia won the democratic primary for Rep. Kurt Granberg’s seat in the 107th District. Granberg, a Carlyle Democrat, vacated his seat and could pop up in the Blagojevich Administration. Hahn defeated Travis Loyd by twenty points in the historically Democratic district. Democratic Rep. Jay Hoffman, a key Blagojevich ally in the House, contributed to Hahn’s campaign.

Will Burns, a former aide to the Senate president, won the primary in the 26th District on Chicago’s South Side with 33 percent of the vote in a five-way race. Incumbent Rep. Elga Jeffries, who was appointed to the seat in 2007, finished a distant fourth with 12 percent. Burns also was an Obama staffer at one point, and Obama won more than 90 percent of the vote in that district in 2004. The victory means another potential supporter to the Blagojevich-Jones alliance next year. Burns received significant financial support from Senate Democrats allied with Jones and from contributors with strong ties to Jones, including utility giant Commonwealth Edison.

(And follow-up from January)
House District 44 Democratic incumbent Rep. Fred Crespo will face Republican Margaret “Peggy” Brothman in November to serve the northwest suburbs of Chicago.

House District 56 Schaumburg Rep. Paul Froehlich, who switched from a Republican to a Democrat last year, won the Democratic nomination despite fierce opposition from John Moynihan. He’ll now face Schaumburg Republican Anita Forte-Scott, who was unopposed in the primary.

House District 92 Because Republican state Rep. Aaron Schock vacated his seat to run — and ultimately win — a GOP nomination for Congress, the west-central Illinois seat was vacant. Now Peoria Democrat Jehan Gordon will face Peoria Republican Cindy Ardis Jenkins. Gordon won the primary with financial help from Senate Democrats and Hoffman despite a controversy regarding whether she actually graduated from the University of Illinois as stated in campaign literature. The district leaned Republican by fewer than 300 votes in 2004 and was competitive in 2006.

Tuesday, February 05, 2008

Election Day analysis

Watch Illinois Issues Blog throughout Wednesday for post-Election Day analysis, and have fun watching returns tonight.

Friday, February 01, 2008

Ready for Super Tuesday

Super Bowl Sunday will lead into Super Tuesday, when more than 20 states including Illinois will hold primary elections. That invites this fun fact: U.S. Sen. Barack Obama collected enough donations in January alone to pay for 13 TV advertisements during the game. That's a lot, considering a 30-second ad goes for $2.4 million.

Obama's campaign officials reported that the Democratic presidential hopeful raised $32 million just in January. (We'll have more on Obama's campaign donations linked to the federally indicted Tony Rezko later.) Obama's camp also attracted 170,000 new donors, bringing his total to 650,000, according to David Plouffe, his national campaign manager. He said in a conference call that the strongest day was the day after the New Hampshire primary, when Obama came in second to U.S. Sen. Hillary Clinton of New York.

Clinton's campaign said it wasn't releasing its January donations yet. You can see older contribution summaries for all candidates here. Obama's campaign said it's now able to run advertisements in every state with a February 5 primary, as well as in states with later primary dates.

Kent Redfield, political scientist at the University of Illinois at Springfield, has a good point about moving up Illinois' primary to February 5 from its original date in March. “There's a certain irony in the fact that we moved our primary up so we could be a major player, and now states that didn't move actually may be more important than Illinois. If we'd have stuck to mid-March, we might have been this huge battleground all by ourselves instead of one of all of these other states.”

That's an indication the Democratic race has some legs. While Redfield predicts that the Republican race between U.S. Sen. John McCain and former Massachusetts Gov. Mitt Romney could be decided on Super Tuesday, he doesn't think the Democratic nominee will be as clear-cut. It is likely that Obama will win the majority of delegates in Illinois, he says, but it's still a really tight race because every delegate counts.

FutureGen factsAnd to keep FutureGen discussion going, the FutureGen Alliance released this fun fact sheet in response to the federal government's kibosh on the Mattoon project announced Wednesday.