Tuesday, June 30, 2009

The puzzle falls apart

By Bethany Jaeger, Jamey Dunn and Hilary Russell
Renewed hope and high spirits defined the transition from impeached Gov. Rod Blagojevich to Gov. Pat Quinn early this year, but frustration and gridlock have stained the end of the fiscal year.

Today marked the last day of fiscal year 2009. After a string of strange events, the legislature left town with no date certain to return. And Quinn would not specify how he would proceed, whether by calling special sessions or by holding more meetings with the top four legislative leaders behind closed doors. Nor would he address whether he would allow the state to shut down if a budget weren’t in place by the time the state ran out of money to pay its bills. According to the comptroller’s office, July 15 is a key date for the first wave of state payroll in the new fiscal year. But a spending plan would need to be in place by about July 9 or 10 to have enough time to process expenditures.

The legislature’s day started with a protest of sorts in an attempt to block House members from entering the chamber. Statehouse police removed eight individuals from the Service Employees International Union as they rallied outside the chamber and chanted, “Raise taxes now.”

Despite the governor’s wishes, the legislature didn’t even consider raising taxes today. Lawmakers, instead, sent him pieces of what Quinn dubs a “half-baked budget” that would mean drastic cuts to human services and, in some cases, has already resulted in layoffs and program cuts within community-based services. Quinn said he would veto the spending plan.

“We must not put off decisions for later in the summer or the fall or next winter," he said during a last-minute budget address before both chambers. "That’s not what adults do. They confront tough challenges. They meet those challenges with the best that they come up on behalf of the common good.”

And he gained one more reason to veto the so-called 50 percent budget late in the day. It would carry an even larger deficit than anticipated because the legislature failed to approve a short-term borrowing scheme to free up $2.2 billion. Senate Bill 415 actually failed twice tonight.

“Now you’re another $2.2 billion out of whack,” said Rep. Frank Mautino, assistant majority leader from Spring Valley. He added that the legislature has approved the governor’s authority to spend about $26 billion, but lawmakers didn’t approve enough revenue to pay for it. The result? In addition to giving Quinn more reason to use his veto pen, Mautino added that any momentum to override the governor’s veto deflated along with the Senate’s failure to approve the short-term borrowing (background here).

Sen. Jeff Schoenberg, sponsor of the borrowing plan, said not fully paying the state's $4 billion contribution into the public employee pension system will cost the state more than if the state borrowed money to make this year's payment.

And in a strange turn of events, Schoenberg confirmed that the governor’s office had called some senators to urge them not to vote for the bill, which the governor had proposed and supported earlier in the day. Schoenberg said members were told the borrowing plan would take pressure off of the legislature to act on more substantial revenue sources, such as an income tax increase.

Sen. Emil Jones III, son of the former Senate president of the same name, was one who changed his vote from a yes to a no. He said he ultimately voted against the borrowing plan to show support for a tax increase and to reject a piecemeal solution to the deficit.

Without the borrowing, Senate President John Cullerton said the spending plan sent to the governor’s desk would carry a $6.2 billion shortfall. Quinn maintains that the deficit is closer to $9.2 billion.

The disagreement is just one sign of the tension between the legislative and executive branches in the past month. They can’t even agree on the size of the deficit, let alone the methods to fill that gap.

House Speaker Michael Madigan said the governor and the legislature had “legitimate differences of opinion” but that they will continue to work through the differences. In the meantime, he said the governor has now received a package of bills that would allow him to spend the amount of money they expect to be available in fiscal year 2010. “The governor’s complaint is that he wants more money to spend,” Madigan said. “The legislature has said, ‘We’re not going to give you authority to spend money when we don’t think that money will be available.’”

Sounding similar to what he said last year when the General Assembly sent an unbalanced budget to then-Gov. Blagojevich, Madigan added, “As is contemplated by the Constitution, the governor has the ability to spend money at his total discretion.”

During his rare address to both chambers, Quinn said, “I’m prepared to stay here all summer to get the job done.” One person in the chamber clapped.

Quinn said the legislature’s spending plan is unbalanced and invites lawsuits. In fact, he cited a court order issued today. According to the Associated Press, U.S. District Judge John Grady’s order requires the Illinois Department of Children and Family Services to maintain support as promised for such services as psychiatric treatment, counseling and daycare.

The governor repeatedly said an income tax increase is the only way the state would be able to provide critical services to the most needy citizens. And even with a tax increase, he announced today he would need to scale back spending by another $1 billion, which would be in addition to the $1 billion in cuts he announced in March. Those cuts, he said, could come in the form of a dozen furlough days for state workers and 2,200 layoffs, as well as possible closure of state facilities. Closing prisons or other facilities, however, wouldn’t result in immediate savings because the process requires an intentionally long review by a legislative panel and the public.

Majority Leader Barbara Flynn Currie said she agrees with the governor, but his words could be falling on deaf ears. "He’s laying down the gauntlet, and he’s absolutely right," she said. "But I don’t think he changed a single mind or a single vote."

Some Republicans, including two gubernatorial candidates, Sens. Bill Brady of Bloomington and Matt Murphy of Palatine, said tax increases during an economic recession would cost more jobs and encourage more people to leave the state. Murphy suggested starting all over again. Senate Minority Leader Christine Radogno proposed a temporary budget that would fund services at the levels of two years ago, which she said was the “closest thing we’ve had to a balanced budget in recent years.”

Cullerton was in favor of buying some time, he said, to allow Republicans to come around to supporting an income tax increase and to continue to pursue long-term pension and Medicaid reforms. And the governor could sign the capital construction program for roads, bridges, schools and other infrastructure.

The construction program, however, is still in the lurch. Quinn said again this morning that he’s still tying the capital bill to an operating budget, meaning he’s unlikely to sign the bills into law without a balanced budget in place. The construction program was approved by the legislature last month, but it finally sent the bills to the governor's desk last night.

Monday, June 29, 2009

Pieces to the puzzle

By Bethany Jaeger, with Hilary Russell and Jamey Dunn contributing
The House easily approved a short-term borrowing scheme to fully pay the state’s pension contribution and to prevent about $2 billion in cuts to human services, but not all services will be saved from significant funding cuts. The measure, SB 415, now heads to the Senate. The House also sent to the governor a $29 billion capital construction program that was approved in May but withheld because the governor said he wouldn’t sign the package until he received a balanced operating budget on his desk.

With less than 30 hours before a new fiscal year begins, Gov. Pat Quinn still doesn’t have a balanced operating budget on his desk. House Democrats could argue that the series of budget bills already approved by that chamber would be enough to fund about 93 percent of the governor’s proposed spending plan, “which, in this economy, is not too terrible,” said Rep. Lou Lang, an assistant majority leader from Skokie. But without enough votes to approve an income tax increase, as preferred by Quinn, the House appears poised to send to the governor four basic budget bills and wouldn’t come back to the Capitol until the money ran out.

Three existing basic budget bills include SB 1197, a lump sum spending plan; SB 1433, authority to sweep money from dedicated funds; SB 1609, ability to refinance state debt, which the governor already signed into law. The short-term borrowing plan, SB 415, would be the fourth bill in a bare bones spending plan.

“I think it reflects exactly the money that we have, and I think that’s a responsible thing to do,” said Rep. Frank Mautino, an assistant majority leader from Spring Valley. “If there’s more money [down the road], you can allocate more spending.”

The House tonight approved the borrowing plan and specified that the $2.2 billion freed up from the short-term borrowing would have to fund community-based human services (see Amendment 4).

“This is not the total package,” Rep. Kevin McCarthy, an Orland Park Democrat sponsoring the measure. “This is not going to eliminate all the pain out there, but it is a step forward.”

If approved by the Senate, the plan would allow community-based services to be funded at 70 percent of the level sought by the governor, according to House Democrats. Some legislators said that’s better than the 50 percent funding level projected without new revenues to pay for it.

“It's still 70 [percent] is better than 50 [percent] on across the board,” Mautino said.

But not all providers would reach the 70 percent funding level, according to Mautino. The 70 percent would be an average. And the governor would have significant latitude to spend the money within human services, potentially directing the money toward services that would recapture the largest amount of federal matching funds. The governor also would still have to cut at least $1 billion to get closer to a balanced budget that suffers from a deficit ranging from $7 billion to $9 billion, depending on whom you ask.

And some services, including financial aid for needy college students and funding for Amtrak rail services, still would see significantly reduced funding levels. The knock to transportation services also could jeopardize federal stimulus funds, said Rep. Elaine Nekritz, a Northbrook Democrat.

Yet, the bill passed with 101 voting in support and seven voting in opposition, but many said the borrowing plan is only a short-term fix that doesn’t address the need for long-term reforms of everything from tax policy to pension benefits.

“This is one of many puzzle pieces that we need to put together, but it’s not a long-range solution to a problem we’ve had in this state,” said Rep. Sara Feigenholtz, a Democratic leader on human services, adding that this year’s budget and economic downfalls are more complicated than in the past. “It is the 9-11 of state budgets. It’s a very fragile situation. It’s more responsible for us to fix how we spend, fix how we collect revenue.”

Rep. Dave Winters, a Shirland Republican who voted against the borrowing plan, said although the pension obligation bonds would allow the state to make its full $4 billion pension payment in the new fiscal year, the state would still have to find more than $4 billion for the next year’s payment, too. In addition, the state would have to start repaying $500 million for the bonds. So that would mean the General Assembly would have to find about a $4.7 billion in general funds to make next year’s contribution, according to Winters’ math. House Democrats said the borrowing plan would cost about $257.4 million in interest over five years.

“Borrowing is not the answer,” Winters said during floor debate. “It is simply digging a hole that we’re going to be stepping in next year.” And that hole will be bigger than the hole dug this year.

The GOP leader, however, said even if borrowing isn’t an ideal way to cope with the budget gap, Republicans at least want the revenue to specifically save providers of human services to the most vulnerable citizens. “We have a responsibility to work with [Democrats] and get this resolved and diminish or minimize the potential pain,” House Minority Leader Tom Cross said during floor debate.

Rep. Jim Durkin, an assistant minority leader from Western Springs, added before the vote that most Republicans thought it was the “fair” and “moral” thing to do to help prevent such drastic cuts to community-based service providers. “We’ve received some pretty tough letters from these providers over the past few weeks,” he said. “And I don’t appreciate the most vulnerable in our society being used as pawns — which they are being used as at the moment — in this budget process, but it’s reality.”

Capital bill sent to the governor
Rep. Lou Lang, a Skokie Democrat, said he released four pieces of the $29 billion construction program to fix the state’s infrastructure and to put people to work. The bipartisan plan was approved with the understanding that Gov. Pat Quinn would sign them into law, Lang said. But the governor changed his tune shortly after the vote. “The fact is that the governor gave us his word that he would sign those bills.” And when he did not sign those bills, Lang filed motions to reconsider. “We had just gone through six years of a governor who didn’t tell it to us the way it was,” Lang said, referring to former Gov. Rod Blagojevich. Lang added that he felt that if the bills were not going to be signed immediately, better to be in the control of the legislature than in the hands of someone who had said he would sign them but then reneged on his word.

“I don’t know what he’s going to do with those bills,” Lang said, “but we have thousands and thousands and thousands of Illinoisans out of work.”

Quinn’s office said the governor had wanted Lang to lift the holds on the construction bills so he could examine them when they landed on his desk.

Friday, June 26, 2009

Governor signs bill to refinance debt

By Bethany Jaeger
Gov. Pat Quinn enacted one type of revenue source for the next fiscal year’s budget, which starts July 1. But there’s no budget in place to spend it.

The governor signed SB 1609, allowing the state to refinance debt. According to House Democrats, the plan would take advantage of a 4 percent interest rate and save $600 million next fiscal year. It would save $237 million over the life of the bonds.

The bill has been tied to the legislature’s version of a bare bones budget, which has been dubbed the “50 percent budget” because it would fund human services at half the level proposed by the governor.

But Quinn’s spokeswoman Libby White said this afternoon: “There’s no link between the two. This was our bill that was a part of the governor’s original budget proposal.”

She added, “The governor’s not in favor of the legislature’s 50 percent budget and is fighting to get his [budget] passed.”

Quinn is still campaigning for a temporary income tax increase, although he’s modified his original proposal in hopes of winning more votes from Democrats and Republicans. So far, Republicans have remained united against a tax increase without other longer-term reforms. The legislature isn’t scheduled to return to the Capitol until Monday and Tuesday, leaving little time to approve a balanced budget before the fiscal year begins.

But what it will take to balance the budget is debatable, as the size of the deficit and the consequences of not having a spending plan in place by Wednesday has widely varied. Yet, Quinn repeatedly has said thousands of state workers could lose their jobs and services would have to be reduced in July without a budget in place.

Thursday, June 25, 2009

Budget not the only thing in limbo

By Hilary Russell
Just as the state’s operating budget is in limbo with five days left in the fiscal year, many substantive bills were left in the lurch at the end of the regularly scheduled spring session. The following is a list of measures that Illinois Issues magazine covered in our monthly “legislative checklist” throughout the spring. See the full list in the July/August print edition. In the meantime, here is a list of bills that stalled but that could come up in this fall’s or next spring’s legislative sessions:

HJRCA 31 The constitutional amendment sponsored by Rep. Jack Franks, a Morengo Democrat, would give voters the option to remove a sitting governor from office. The resolution would require voters to decide whether they wanted to change the state’s Constitution to include a so-called “recall” provision. The bill passed the House, but it didn’t get called for a final vote in the Senate. Senate President John Cullerton recently said he would not call the measure for a vote until Gov. Pat Quinn signed another ethics reform measure, HB 7, which would cap the amount individuals, businesses and political organizations could contribute to candidates. Franks’ recall measure doesn’t have to be approved until May 2010, and he said he expects that it would pass without problems before then.

HB 2643, SB 1292 Newly hired state employees and teachers would receive less generous pension benefits than current employees. Quinn proposed the so-called two-tiered pension plan as a way to save the state money in the next fiscal year and to reduce the mounting pension liabilities in the long run. But public employee union members strongly oppose the idea and argue it ultimately won’t save the money projected by the governor’s office. The legislation, sponsored by Rep. Kevin McCarthy, an Orland Park Democrat, and Sen. Don Harmon, an Oak Park Democrat, stalled in both chambers.

SB 1381 A bill allowing the limited use of medical marijuana, sponsored by Sen. Bill Haine, an Alton Democrat, narrowly passed in the Senate, marking the first time in Illinois’ legislative history that such a proposal won approval. The clock ran out before House sponsor Rep. Lou Lang, a Skokie Democrat, presented it to the full chamber. Lang said he didn’t have enough votes to pass it and that he plans to lobby for the bill and could call it in the future.

SB 744, sponsored by Sen. Terry Link, proposed opening new casinos in Chicago, Danville, Rockford and Waukegan, as well as adding gaming positions at existing riverboats and allowing slot machines at horse racing tracks. According to Link, a Waukegan Democrat, the gaming package could generate as much as $1 billion a year. While the Senate approved the measure, the House sponsor, Lang, said he chose not to call the bill and would like to make changes so the bill would not specify where the gaming facilities would have to be built.

HB 2234 would recognize civil unions and give same-sex partners some of the same legal rights, including power-of-attorney, as married couples. Rep. Greg Harris, a Chicago Democrat, sponsored the legislation. It narrowly passed out of committee but wasn’t called on the floor because, Harris said, he didn’t have enough votes to ensure passage. He added that new legislation in Iowa that now legitimizes same-sex marriage could help pave the way for passage of Illinois’ bill in the future; however, Harris’ civil unions measure would not be the same as same-sex marriage.

HB 397 redefines stalking. The measure amends the 1961 criminal code by defining stalking as a behavior intended to terrorize or endanger another person through intimidation or threats. Rep. Dan Brady, a Bloomington Republican, sponsored the measure. The bill stalled in the House. Brady said the measure is undergoing further negotiations between the state’s attorney’s office and the attorney general’s office. He expects to present it again during the 2010 spring session.

HB 2633, sponsored by Democratic Rep. Julie Hamos of Evanston, called for stricter rules to define how and when inmates in minimum- and maximum-security prisons were transferred to Tamms Correctional Center in Alexander County. Questions about the treatment and living conditions of the prisoners prompted Hamos to write the bill, which she said is on hold because a new director recently took over the center. She said she wants to wait to see what kind of changes will come about as a result.

HB 288 proposes that public schools could give students a few moments before class begins to observe a moment of reflection. The bill is sponsored by Rep. John Fritchey, a Chicago Democrat, and Sen. Bill Haine, an Alton Democrat. The moment of reflection would be determined on a school-by-school basis. Fritchey’s definition of a moment of reflection would replace the existing Student Reflection and Student Prayer Act, which requires every school to have a moment of silence during which students could either reflect on the day ahead or pray. Because the law lacked consequences for not observing the moment of silence, some schools observed it while others did not.

Controversy has surrounded the moment of silence issue because federal court deemed it unconstitutional to require public school students to pray during school hours.

The law invited a lawsuit. Fritchey, who voted against the original moment of silence bill, proposed the new version that would remove the “student prayer act” from the name and allow teachers to choose whether to honor the moment.

Haine said the role of the government is to encourage freedom of expression, not force it on individuals who may hold different beliefs, but he said he didn’t know if he could get enough votes for the bill to pass next session.

Wednesday, June 24, 2009

Everything in limbo

By Bethany Jaeger, with Jamey Dunn and Hilary Russell contributing
Illinois’ human service providers, as well as other state contractors, remain in limbo as to whether they’ll receive state funding after July 1. The General Assembly finished its special legislative session this afternoon without sending a spending plan to the governor. Lawmakers aren’t scheduled to return until Monday afternoon (the Senate won’t be back until Tuesday), which some providers said would be too late. Providers, many of whom rallied at the Capitol yesterday, anticipate having to close their doors or lay off employees without a state operating budget in place by then.

“What’s going on right now is cruel, it’s cynical and it doesn’t need to be happening. And it should have been addressed this week,” Senate Minority Leader Christine Radogno said after the legislature adjourned. She added: “There is a lack of clarity, a lack of leadership, in terms of what is going on. And in the meantime, people are dangling in the wind thinking that their lives are going to be inextricably altered.”

She proposed enacting a temporary budget to keep state services going, uninterrupted, and to give service providers more predictability.

Gov. Pat Quinn continues to publicly reject the idea of a temporary budget and said lawmakers still have time to enact a full-year balanced budget within six days. But he said balancing the budget, which he projects will carry a $9.2 billion deficit, will require a two-year income tax increase to generate $4.2 billion. (Comptroller Dan Hynes calculated the deficit at $7 billion.)

Legislative leaders of both political parties have cast doubt on the governor’s ability to gain enough votes in each chamber to approve a tax increase by July 1, although House Minority Leader Tom Cross said a few of his members are leaning toward a tax increase if they see action on other efficiencies and long-term spending reforms first.

Senate Democrats maintain that they approved a version of a permanent income tax increase in House Bill 174, which never got called for a vote in the House. According to Sen. James Meeks, the caucus doesn’t want to give up on the idea of offering property tax relief and increased education funding. Meeks said a temporary increase would result in a permanent increase in two years. “Temporary should scream out to everybody saying, ‘In two years, they’ll be back.’”

There could be more immediate support for a short-term borrowing scheme. A plan backed by Quinn would issue pension obligation notes rather than bonds, which typically are repaid over longer periods of time with higher interest costs. The House advanced the plan, Senate Bill 415, today. It would allow the state to make its full contribution into the public employee pension systems and free up $2.2 billion to help plug the deficit.

“If we get $2 billion to help close the deficit, that’s a good thing,” Quinn said after finishing a series of meetings with all four legislative caucuses. “We’re making progress, but we still have $7 billion to go.”

The governor and all four caucuses appear to agree one goal: to reduce spending by another $1 billion. But they might disagree on how to do that.

Quinn said his administration could save about $125 million by mandating 12 unpaid days off, or furlough days, for state employees, including unionized workers. Layoffs also could be considered, he said, although he added that he wouldn’t pursue layoffs until after he and the General Assembly settled on whether the state would generate new revenues first. “Under our contract, we can lay off employees if we don’t have the money to pay them,” he said.

Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, said union leaders already met with the administration last week and determined that furlough days and layoffs wouldn’t save significant amounts of money. Henry Bayer, Council 31 executive director, said last week that even if every state employee worked the entire year unpaid, the state would only save about $3 billion. Lindall added this afternoon, “Any number of furlough days would be an insignificant savings to the state but a very real reduction in services.”

Cross said his caucus agrees with the need to look for $1 billion in cuts and recommends moratoriums on programs, furlough days and salary freezes, as well as reduced travel budgets.

Capital and recall
Two other items on hold include the $29 billion capital construction program and a provision that would allow voters to decide whether they wanted to change the state Constitution so they could recall the sitting governor.

Quinn said he will not sign the construction program without an operating budget in place. Democratic Sens. Martin Sandoval of Chicago and John Sullivan of Rushville said the capital plan and the operating budget have nothing to do with one another. In a Statehouse news conference, they joined organized labor groups to say Quinn has fallen through on his promise to immediately put people to work. "People are falling off the edge, losing their homes, having a very difficult time making ends meet, and he’s decided to hold the jobs bill as a political football until he gets his tax hike,” Sandoval said, citing the state’s 10.1 percent unemployment rate.

On the other hand, the Senate Democrats have held one of Quinn’s initiatives, House Joint Resolution Constitutional Amendment 31: a recall provision. Senate President John Cullerton said yesterday he would not call the provision for a vote until Quinn signed an ethics package that would limit the amount individuals, businesses and political organizations could donate to candidates. However, the Senate hasn’t even sent the measure, HB 7, to the governor’s desk.

Tuesday, June 23, 2009

Pension plan delays tax hike vote, for now

By Bethany Jaeger, with Jamey Dunn and Hilary Russell contributing
The latest scheme for the General Assembly to get closer to a balanced budget is to borrow money to fully pay the state’s contribution into the public employee pension system and to free up about $2 billion to help stave off deep cuts to human services.

This on a day when more than 5,000 advocates, parents and children rallied at the Capitol with Gov. Pat Quinn to urge an income tax increase to help fight those cuts. Top Democratic legislators indicated today, however, that they would not vote for an income tax increase this week. And if they did, there wouldn’t be enough support among Democrats to approve it without Republican votes. The GOP remains united against a tax increase, at least, officially. Some Republican members in both chambers have privately said they could support a tax increase but have stuck with their caucuses.

Senate Minority Leader Christine Radogno said that Republicans are not ready to vote for an income tax increase and described the projected cuts to human services as a “cynical ploy,” adding that spending reductions could be spread fairly across all areas of state government.

The idea to issue pension obligation notes, which we wrote about earlier this week, poses a less politically risky option. The short-term borrowing plan would be repaid within five years and would fund the state’s $4 billion contribution into the public employee pension system for the fiscal year that starts July 1.

It’s generally agreed that the plan would free up about $2.2 billion, which the General Assembly would put into the general revenue fund and give the governor, essentially, a blank check. The ball would be in Quinn’s court, then, to cut or to plug where he saw fit.

“This is more discretion than we’ve ever given any other governor, simply because the times require it,” said Rep. Frank Mautino, assistant majority leader from Spring Valley.

He said the pension obligation notes would combine with previously approved authority to sweep extra money (Senate Bill 1433) out of dedicated funds and to refinance other state debt (SB 1609). All three revenue sources combined would allow the spending authority to come within $2 billion of the governor’s proposed budget. Quinn wanted authority to spend $28 billion. The latest plan would authorize about $26 billion, meaning he would still have to cut back spending.

The legislature could vote on the pension plan Wednesday, according to Mautino.

A vote on Quinn’s proposed two-year tax hike, however, would not happen until the governor provided a list of specific cuts he would make if he didn’t have new tax revenues to spend, according to several House Democrats. His temporary tax increase would generate about $4.5 billion. But there’s still debate about the size of the budget deficit, said Rep. Art Turner, deputy majority leader from Chicago.

“The biggest issue right now is just trying to put the bean counters together to come up with what’s the agreed number,” he said. “So then from there, we can … say, ‘What’s going to be the number that we have to use in terms of the cuts?’”

A Republican, Rep. Richard Myers of Colchester, said he’d be willing to look at a tax increase if he knew where the money was specifically going to be spent.

Comptroller Dan Hynes added to the debate with a letter to the governor. He wrote: “I believe that part of your difficulty in obtaining votes for an income tax increase is the fact that the public is confused about how much money is really needed to fix the deficit. Legislators are, therefore, understandably reluctant to vote for an ever-changing proposal for an ill-defined problem. In a sense, we have all been given a false choice: raise taxes by $4 [billion] to $5 billion or cut human services by the same amount.”

He proposed starting over, operating on a 60-day budget to keep services going while the legislature found more ways to cut spending. He cited across-the-board cuts to contracts, grants and agency spending. And then he suggested such new revenue sources as an expansion of the sales tax, building new casinos and increasing cigarette taxes. All of those proposals came up during the spring legislative session but failed to advance in both chambers.

Senate Democrats point to their version of an income tax increase, which also would offer property tax relief and an expansion of the sales tax. Senate President John Cullerton said his caucus already took the hard vote on House Bill 174 last month and that it’s up to the other caucuses to make the next move. “Anything is negotiable, as long as we keep the principles in mind that we need to balance our budget and not have these draconian cuts that all the people surrounding the capital are complaining about today.”

Cullerton added that his caucus would not vote on the governor’s desired “recall” provision until Quinn enacted campaign finance reforms approved by the legislature last month. The House already approved the recall provision, which would allow voters to decide whether to change the state Constitution so they could recall the governor at the time. The provision awaits final action in the Senate.

The rally
By Hilary Russell and Jamey Dunn, with Bethany Jaeger contributing
The secretary of state’s office confirmed that more than 5,000 people attended the rally coordinated by numerous social service providers and public employee unions. Police temporarily blocked more people from entering the Capitol out of safety concerns, said Henry Haupt, spokesman for the secretary of state.

The temperature rose as participants chanted, “People before politics,” “Do the people’s work,” and “No budget cuts.” Signs advocated for everything from substance abuse treatment services to early childhood education and autism. The anecdotes were endless.

For instance, Michelle Lefrere, who has epilepsy and volunteers with Springfield’s Epilepsy Resource Center, said without an income tax increase, the doors to the center would close June 30. Having used the center since the age of 9 and turning 40 next year, she said: “There will be no counseling, no recommendations to doctors, no job placement. There won’t be any help for people with epilepsy in Springfield or the certain communities. There won’t be any money for research.”

After the rally, Quinn remained optimistic that the legislature would vote on a tax increase by June 30, the end of the fiscal year. In any case, he said, “I am not going to preside over a dismantling of the fundamental human safety net that we are proud of in Illinois.”

Monday, June 22, 2009

Quinn: Won't cut human service funding in half

By Bethany Jaeger
Without a state budget in place eight days before a new fiscal year starts, Gov. Pat Quinn said in Springfield on Monday that he would not accept a budget proposal that would chop state funding for human services by half, as advanced by Democrats May 31.

“So I want to make that clear to our legislators this week that whatever has been concocted up to now is insufficient, and hopefully we can work together to repair the oversights in revenue,” he said, previewing Tuesday’s special legislative session. “You can’t have a balanced [budget] if you’re short billions of dollars.”

His office estimates an $11.6 billion deficit next fiscal year.

But just how he will work with the legislature to enact a balanced budget before July 1 is a mystery, despite Quinn’s optimism that a few legislators who rejected a temporary income tax increase last month would support it this month “under the circumstances.” If an income tax increase failed again, however, he said he would not support the idea of a so-called month-to-month budget to keep the state operating as long as money remained available.

He did not specify how he would prevent cuts to human services, only that even if the state increased the income tax for two years, Illinois would still have to accept a “no-frills, lean government.” But, he added, “That doesn’t mean that the most important things for the most vulnerable people are left behind.”

Quinn has campaigned since last month for a two-year tax hike to stave off deep budget cuts to human services. He even used Monday’s ceremony to honor Scripps National Spelling Bee contestants to seek support from parents in the audience, whom he asked to “invest in our future, even in hard times.” He’s scheduled to continue his campaign Tuesday morning during what’s expected to be a large rally in the Capitol before the legislative session starts.

But approving an income tax increase any time soon will be difficult, given that Democrats have said they don’t have enough votes without Republican support. And Republicans have said they won’t consider a tax increase without action on Medicaid and pension reforms, which could take months to compile and to gain momentum.

Democrats in both chambers approved a bare bones budget at the end of May, but they have prevented the legislation from going to the governor’s desk (see Senate Bill 1197 for the lump sum spending plan; SB 1433 for authority to sweep excess money from dedicated funds; SB 1609 for authority to refinance state debt).

In a light-hearted plea to legislators, Quinn quizzed national spelling bee contestants by asking them to spell such words as “whistleblower,” “gridlock” and “mudslinging.” He asked one student to spell out “fortitude,” which he later defined as “doing very hard things for the common good, worrying about people above and beyond yourself.”

Also Tuesday, Quinn said he hopes the legislature will take another try to approve a measure that would allow voters to decide whether to change the state Constitution so they could recall elected officials. House Joint Resolution 31 passed the House last month and awaits Senate action. And watch for a new short-term borrowing proposal that could help the state fund most of its $4 billion pension contribution next fiscal year.

Friday, June 19, 2009

Note a possible pension plan

By Bethany Jaeger
Watch for a new pension proposal that could help buy some time for the state to recover from the economic slump and free up about $2 billion during the next cash-strapped year.

Gov. Pat Quinn’s administration could propose issuing pension obligation notes, which differ from pension obligation bonds. A note is a form of short-term borrowing that would have to be repaid within five years. The state does short-term borrowing all the time. The notes could carry a lower interest rate than pension obligation bonds, which are repaid over much longer periods of time.

The idea was talked about at a recent meeting of a new pension reform task force. Rep. Roger Eddy, a Hutsonville Republican, serves on that panel of legislators, labor organizations, unions and business groups. “This has some hope,” he said.

The idea could come up this week, when the governor called legislators back to Springfield for a special legislative session.

The legislature is scheduled to return Tuesday, seven days before Illinois’ new fiscal year starts. Quinn’s special session proclamation says he urges the legislature to consider measures, particularly an income tax increase, that would result in a balanced budget, as well as measures needed to implement a major construction program and a constitutional amendment to allow voters to recall elected officials. Quinn and Senate President John Cullerton specifically mentioned House Bill 174, the education-funding bill formerly known as a “tax swap,” as a potential solution for the state to generate revenue and knock down some of the deficit and to provide some property tax relief.

House Democrats didn’t have enough votes needed at the end of May, which means it could be even harder to acquire an extra majority of votes needed now that the legislative session has stretched into June. An extra majority would require at least some Republicans. GOP leaders, however, have strongly opposed the idea of a tax increase until they see progress on government reforms, including cheaper models of Medicaid health insurance programs and ways to reduce the state’s long-term pension debt.

One of the largest pressure points on the state budget for the next fiscal year is the contribution to the public employee pension system. Illinois is supposed to pay about $4 billion. Quinn proposed skipping next year’s payment to free up about $2 billion to help fill what his office estimates will be an $11.6 billion deficit. The legislature rejected the idea of skipping the payment; however, the Democratic-approved budget only authorized $1.5 billion for the state’s contribution into the pension system. If enacted, money would have to be skimmed from other state programs to cover the full $4 billion payment, which is required by law.

The idea to issue pension notes could take some pressure off to find the extra money needed to make the full payment, according to Eddy.

With the $1.5 billion already approved, one idea would be to issue about $2.2 billion in pension notes. That would get the state to about $3.7 billion, leaving only about $300 million that the state needed to find to get all the way up to $4 billion.

Eddy added that once the economy recovered and revenue started flowing into the state again, the state would be better able to cope with the annual contributions.

Any money freed up by the pension notes could help ease some pressure to cut human services, as well as buy some more time for the pension reform task force and a separate Medicaid reform task force to recommend ways to save money. The pension panel is supposed to issue a report to the General Assembly November 1, which is just before the regularly scheduled fall veto session. The panel is scheduled to meet once a month through October, and all meetings are public and subject to the Open Meetings Act and the Freedom of Information Act, which Eddy said prevents a 200-page report being dropped on legislators’ desks 15 minutes before they’re supposed to vote on it.

“This is not how we approached the problem before,” which is a good thing, he said, adding, “Any hint that we’re going to become serious about pension modernization, Medicaid reform, looking at job creation, all those are good signs that we’re really moving off the dime.”

The strategy of issuing pension notes differs from when former Gov. Rod Blagojevich’s administration issued an unprecedented $10 billion in pension obligation bonds in 2003. He and the legislature skipped that year’s payment and planned to use the interest earned on the investments to repay the debt. The strategy backfired when the economy tanked last fall. Pension notes, on the other hand, would be obligated directly to the state pension fund rather than to an investment bank.

No proof for perjury

By Jamey Dunn
U.S. Sen. Roland Burris will not face perjury charges in Sangamon County related to his testimony in January before the Illinois House committee that impeached then-Gov. Rod Blagojevich.

Sangamon County State’s Attorney John Schmidt said in a press release today that there was not enough evidence to charge Burris with the crime. Schmidt launched an investigation after it was revealed that Burris did not tell the committee about conversations he had with Rob Blagojevich, the former governor’s brother, and other close Blagojevich associates about seeking an appointment to President Barack Obama’s vacant Senate seat. Burris said he sent an affidavit to the committee that provided that information after he realized he had forgotten to mention the conversations in his testimony.

In a letter to House Speaker Michael Madigan, Schmidt said that to charge Burris with perjury would require proof that he intentionally lied to the committee. “Some of his statements were vague, but vague statements cannot support a perjury charge,” Schmidt said. He added that as long as an individual clarifies previous statements before a tribunal such as the House investigation committee concludes, it’s not considered perjury. (Letter here; press release here.)

While he said Burris’ second affidavit confirmed that he did not intend to exclude information, Schmidt did not go as far as saying Burris’ affidavit told the whole truth. But the question was not whether Burris misled anyone, but whether he intentionally misled the committee by withholding information.

Burris said in a statement today that he cooperated with the investigation and maintained that he did not commit perjury or engage in pay-to-play politics to gain his Senate seat. “I am glad I can now put this matter behind me and get on with my work in the United States Senate serving the people of Illinois,” he said.

Burris is still the subject of a U.S. Senate Ethics Committee investigation.

Thursday, June 18, 2009

Merit pay tops panel's recommendations

By Jamey Dunn

A bipartisan reform group raised the concern today that the majority of Illinois high-school graduates are not prepared for college or the workforce.

According to Robin Steans, Advance Illinois executive director and sister of Democratic state Sen. Heather Steans of Chicago, one out of every four incoming high-school freshmen in Illinois will drop out. Two will not be prepared for college or work upon graduating, which leaves only one graduate out of the four prepared for the next step.

Former U.S. Commerce Secretary Bill Daley, Advance Illinois co-chair and brother of Chicago Mayor Richard Daley, said that ensuring kids are ready for college or work would benefit Illinois businesses by creating a stronger workforce. “If we can close this gap of the number of students who are either college-ready or work-ready, it would have a tremendous impact on the economy of our state,” Daley said.

The group laid out some sweeping changes in it’s report, released today, which focused on three areas of reform:

  1. Radically shift personnel policy. Teachers' pay and tenure would be determined by student achievement, not by the number of years a teacher is on the job. Former Gov. Jim Edgar, co-chair of Advance Illinois, said that automatically giving teachers a pay increase for getting a master's degree should be reconsidered because, he said, there is no correlation between teachers who hold degrees and students who perform better in the classroom. Edgar said the money could be better spent on other training programs that prove more effective. 

  2. Increase standards for test scores. Raising the standards for test scores and the requirements for high-school graduation would help ensure that Illinois is on par with the rest of the country and that students are prepared for life after high school.
  3. Create a special fund to encourage innovative solutions. The “Race to the Top Fund” was inspired by a federal program and would allow schools to compete for grants for specific problems in their districts. Schools that received the money would have to illustrate that students improved before they could get renewed funding. 

Members of Advance Illinois, a non-profit organization funded by several philanthropic groups, set out in November of last year to tour the state and talk to parents, educators and interested groups. They also have been researching reform methods. Their report will be submitted to the General Assembly.

The report did not address school funding. Edgar said the group plans to take up that issue later. He said the next step is for members to rally support for these proposals. “It's going to take some major battles to get some of these things,” he said, adding that the current budget crisis will probably keep the legislature from taking up education reform until next year.

UPDATE: Gail Purkey, spokeswoman for the Illinois Federation of Teachers, said that rating educators on students' test scores alone does not consider all the traits needed to be a good teacher. “Test scores in a vacuum is not the best way to evaluate teachers,” she said. However, she added, the group's recommendations are in their earliest stages, and her organization wants to work with Advance Illinois to create viable reforms. “These are bullet points, and there’s going to be a lot of discussion.”

Foster care children at risk

By Hilary Russell
If July 1 turns into a "doomsday" for state-funded human services, thousands of children in foster care could lose their homes within three months, according to the Childcare Association of Illinois.

advocacy group organized a standing-room only rally today in Chicago's James R. Thompson Center to propose severe funding cuts and to encourage lawmakers to find a better way to balance an out-of-whack state budget. Democrats approved a so-called bare bones budget May 31 that would fund human services at half the level proposed by Gov. Pat Quinn, who said he does not intend to sign the budget into law because it carries a $9.2 billion deficit and would require devastating cuts to services for the most vulnerable citizens.

The Childcare Association of Illinois said that within 90 days of the proposed budget taking effect, monthly state payments to foster parents would be cut in half.
CORRECTION: The state currently pays $384 per foster child in a home. When the fiscal year begins July 1, that payment would reduce to $192. Caretakers described the decrease as drastic and said it could require families to return the foster children to the Illinois Department of Children and Family Services.

Rhonda Hansen, who raises four foster children between ages 4 and 7, faces that possibility. She attended the rally and later said in a phone interview that she not only couldn't afford to care for the children on her part-time wages of $800 a month, but she also couldn't keep working if she lost her childcare services through DCFS.

Foster children cannot be left with a friend or relative unless the individual has gone through a background check and been approved by DCFS, she said.

She added that she worries about what would happen to the children if she gave them up. For instance, two of the children were removed from their original home, Hansen said, after findings of severe neglect and physical abuse by their mother, who is now serving time in prison. They also were removed from a second foster home because, she said, relatives also neglected them. They are both in therapy, another service Hansen said they stand to lose if the budget isn't changed.

“I can't bear thinking about making that call to someone telling them to come get them,” she said.

If Quinn signed the budget as approved by Democrats, about 9,000 foster parents could be affected, according to David Ormsby of the Childcare Association of Illinois.

Gladys Boyd, president of the association and a foster parent in Richton Park, said she, too, would have to return her children to DCFS if the state cuts reimbursement levels.

"These politicians should be ashamed of themselves," she said. "Completely ashamed."

The governor and legislative leaders have been meeting behind closed doors since June 1. Lawmakers are scheduled return to Springfield for a special session Tuesday, seven days before the new fiscal year starts without a budget in place. Quinn's goal is to approve a state income tax increase to avoid cutting or eliminating funding to human services. However, legislative leaders said yesterday that there doesn't appear to be enough support for an income tax increase as early as next week.

This is not the first time DCFS has experienced massive cuts. In the late 1980s and early 1990s, the state's child welfare system was in chaos, Ormsby said. More than 50,000 children were in the system at that time, which prompted the state to house them in welfare agencies, where they slept on cots.

Today, there are about 16,000 foster care children in the system. Ormsby said more than half of them could face the same fate.

“This time, with so many cuts, they will be drawing out the pool of foster care parents to some degree,” he said. “Many of the agencies themselves will simply go out of business because of the enormity of the cuts.”

Wednesday, June 17, 2009

Little hope for compromise by July 1

By Bethany Jaeger
The General Assembly will return to the Capitol in a special legislative session Tuesday afternoon, seven days before a new fiscal year starts without a state budget in place. However, legislative leaders appear unlikely to agree on a way to avoid a budget plan that would cut at least $7 billion from state-funded services after July 1.

According to Senate President John Cullerton, legislators will return to Springfield to address technical problems with the $29 billion capital construction program approved last month, as well as some other bills that authorized limited spending. But Gov. Pat Quinn indicated he still does not intend to sign the infrastructure program into law without a balanced operating budget in place.

While Quinn emerged from a meeting with legislative leaders in Chicago this afternoon and said he hopes to achieve both next week with bipartisan support, none of the leaders mentioned income tax increases as part of next week's agenda. (Thanks to Capitol Fax Blog for providing video.)

“Unfortunately, it appears at this point in time that the Republicans are not ready to vote for any revenue increases," Cullerton said. "And that’s unfortunate.”

Democrats maintain that the state cannot cut its way out of what Quinn estimates to be a $9.2 billion deficit and that an income tax increase is the only way to prevent draconian cuts to human services to the most vulnerable citizens. Republicans repeat their call for government reforms first, which Senate Minority Leader Christine Radogno said could reveal savings that would offset some of the need to raise income taxes by as much as proposed by Democrats. “The Democrat proposal is to raise taxes now and we’ll figure out reforms maybe later, and we don’t accept that that’s a realistic way to approach this,” Radogno said.

She also described the state's budget situation as "manufactured." “I believe it is a manufactured crisis to the extent that we do not need to have those draconian cuts on July 1," she said, adding that the state could fund services for the first half of the fiscal year while legislators continued to negotiate. Quinn said it's irresponsible to begin a year by spending money that would run out halfway through.

Cullerton said before the meeting that a "reasonable solution" would be to enact the Senate-approved version of an income tax increase that also would relieve property taxes and expand the sales tax to some services. He said House Bill 174 would need Democratic and Republican votes to pass in the House. House Speaker Michael Madigan said that not enough members of his caucus, which has 70 members, are willing to vote for an income tax increase without GOP support. “There were a certain number of House Democrats who said quite flatly, ‘I’m not going to go on a roll call when it’s Democrats-only,’” Madigan said.

Any revenue-generating proposal would need 71 votes to pass now that the legislative session has extended beyond May 31, making it harder for enough legislators to get beyond politics and agree on a budget plan within seven days of the new fiscal year.

Tuesday, June 16, 2009

Quinn: Legislature should return next week

By Bethany Jaeger, Jamey Dunn and Hilary Russell
Gov. Pat Quinn’s administration is starting a full-court press to pressure state lawmakers into approving an income tax increase to help avoid catastrophic cuts, highlighting cuts to human services. The General Assembly approved a bare bones budget at the end of May that would only fund community services by half and, according to the governor’s office, would still carry a $9.2 billion deficit. But the same question remains that loomed May 31: How will Quinn recruit nearly 30 more representatives to support a tax increase when they rejected the idea two weeks ago?

All four top Democratic and Republican leaders are scheduled to meet with Quinn in Chicago tomorrow, when they could talk about whether the General Assembly will be called back to Springfield next week, as Quinn urged. That would leave about one week before the new fiscal year starts and when an operating budget would need to be in place.

Quinn still urges the need to enact a state income tax increase. However, his proposal to temporarily increase the state income tax fell 18 votes short in the House May 31. He now needs to gain 29 more votes to get up to the supermajority needed after May 31.

While enough Democrats in the Senate approved two versions of an income tax increase last month, House Democrats have said they need Republican support before they’d be able to approve new revenue sources. Republicans, however, continue to demand major reforms to the state’s public employee pension system and Medicaid program and other efficiencies before they’ll consider a tax increase.

House Minority Leader Tom Cross’s spokeswoman, Sara Wojcicki, said the GOP Caucus has a series of reform measures (about 31 bills), most of which have been bottled up by Democratic leadership. For instance, House Republicans would target the practice of rolling over the current year’s bills to the next fiscal year, allowing officials to claim the budget is balanced when it actually doesn’t cover expenses. House Bill 4095 would require the state to set new accounting benchmarks before an operating budget could be deemed “balanced.” House Bill 4097 would ban the state from rolling over payments to Medicaid providers and state employee and retiree health benefits.

Patty Schuh, spokeswoman for Senate Minority Leader Christine Radogno, says her caucus has proposed reforms during the past six years and hasn’t seen progress, including during the last few weeks of meetings between legislative leaders and the governor. “There have been long discussions. Other than that, we haven’t seen much.”

She adds that Radogno believes the cuts to human services highlighted by Quinn’s administration today would be “irresponsible” and that the budget should be looked at in its entirety, not just in one service delivery area.

The legislature has yet to send the so-called bare bones budget to the governor’s desk. But Quinn’s chief of staff, Jerry Stermer, said agencies and community service providers have to act as if the budget situation won’t change before July 1.

Stermer met with human service providers this morning in Chicago and said that the bare bones budget would still fall $9.2 billion short of normal spending levels. He said that would result in layoffs of more than 100,000 people working for community-based social services and up to 10,000 state workers.

State employee unions oppose the idea of laying off workers or asking them to take unpaid days off to help stave the severity of budget cuts. Henry Bayer, executive director of the American Federation of State, County and Municipal Employees Council 31, said in Springfield today: “There is nothing that would alleviate the threat of layoffs short of a tax increase. We don’t have a tax increase, there will be substantial layoffs.” He said even if every state employee worked the entire year unpaid, the state would only save $3 billion, far short of the $9 billion deficit projected by the governor’s office. “That may make some people feel good to think they’re inflicting pain on somebody, but that is not a solution to the problem,” Bayer said. “There is only one solution to the problem.” He referred to tax increases.

Other possible consequences of the bare bones budget laid out by Quinn’s office include:
  • Giving foster parents half the money they currently receive to help care for foster children.
  • Eliminating daycare for more than 5,250 children of low-income working parents.
  • Tripling foster children case loads for Department of Children and Family Service workers.
  • Closing 15 DCFS field offices.
  • Ending addiction treatment for more than 20,800 clients.
  • Closing six state-run psychiatric hospitals.
  • Eliminating multiple preventative health care services such as vaccinations for children and cancer screening programs.
  • Cutting financial aid to college students by $275 million.

Quinn’s office also said Illinois would lose $2 billion in federal matching funds and some stimulus money.

In Springfield, a local chapter of the Service Employees International Union rallied outside the state Capitol in protest. Gail Hamilton, a home health aide, said if the cuts in human services went through, as many as 80,000 parents would have no place to take their children while they worked. And about 40,000 senior citizens would lose access to home health services and, potentially, end up in more costly nursing home care.

The group staked out offices of representatives who voted “no” on raising the income tax last month. Today, it was two Republicans from the Springfield area, Reps. Raymond Poe and Rich Brauer. On Monday, they targeted two downstate Democrats, Reps. Brandon Phelps and John Bradley, as well as Chicago suburban Republican Rep. Beth Coulson. Last week’s focus was all northern Illinois Democrats: Reps. James Brosnahan, Jack Franks, Michael Zalewski and Kevin McCarthy.

Hamilton said conversations with legislators have been “infuriating.”

“They’ll admit to us that they know we need a tax increase, but when it comes down to it, they don’t have the guts to go through with it.”

Thursday, June 11, 2009

Helping hands for the legal profession

By Hilary Russell
In the legal community, rates of mental illness, including depression and substance abuse —especially alcoholism — are rising, according to the National Law Journal. The economy is part of the problem, but demand for treatment also is increasing because more people are finding out about services that are available.

The nonprofit Lawyers’ Assistance Program, which offers interventions and support when someone in the legal community hits bottom, conducted a training session today in Springfield. Services range from counseling with a clinical director to one-on-one peer counseling or referrals. Interventions involve three trained volunteers, one of which is a judge.

This year marks the first time that psychological problems were more common than drug and alcohol abuse, according to the Lawyers’ Assistance Program.

“This is about the recovery part,” said former Cook County Judge Daniel Welter. Recovery, he said, doesn’t end when someone stops drinking. “I’m an alcoholic, and the important part is that I am recovering, not recovered.”

Welter said that his own experiences with alcoholism propelled him to get involved with the non-profit agency. The same is true for many of the volunteers, who often are from the legal community and are recovering from an addiction or illness.

James Faught, associate dean at Loyola Law School in Chicago, began volunteering with the Lawyers’ Assistance Program in the late 1980s.

“Often people come to us when their impairments or issues are not at the stage that requires intervention,” he said. “Sometimes, they’re just depressed. … And we’re able to provide a good ear from lawyers and judges who have been through the same thing in their own careers.”

The numbers have gone up regularly since early 2000, added Faught, in part because the program has been gaining publicity. “When we started getting funding from the [Illinois] Supreme Court and the lawyers’ fees, we started seeing more people coming to us for help.”

The program began in 1980 with a small group of judges and lawyers and funding from the Chicago Bar Association and the Illinois State Bar Association.

Wednesday, June 10, 2009

New panel to look into UI admissions

By Hilary Russell
The exchange of contracts for political contributions, known as “pay-to-play” politics, may have extended itself into academic life. Only this time, people are accused of trying to use clout to influence the acceptance of certain students into the University of Illinois, and contributions to political campaigns may have helped. The accusation is that low-test scores and inadequate grades may have been cast aside in lieu of political favors.

Today, at the University of Illinois Chicago, Gov. Pat Quinn signed an executive order forming a seven-member investigative panel to look into allegations that a select number of students were not accepted based on grades and test scores.

“This is [being] done so that the public understands that when someone is admitted to this institution, it is done on their abilities and on their merit and qualifications,” Quinn said. “Politics, preferential treatment and undue influence have no role whatsoever to play.”

Two members on the panel include a former federal judge and a key inspector general who exposed alleged wrongdoing in the administration of former Gov. Rod Blagojevich.

In early June, the Chicago Tribune reported that during a five-year-period, almost 1,000 undergraduate and graduate students, dubbed “Category I,” were not accepted at the University of Illinois at Champaign-Urbana based on their own accords. The Tribune’s investigation alleges that parents, family friends or relatives paid for certain students to get in.

In fact, the Tribune reported that without the help of some influential insiders, including particular politicians, students who had not met the school’s criteria most likely would not have been accepted otherwise.

. The longstanding tradition of statewide political corruption comes at a time when Illinois residents are leery about business as usual in state government. Quinn, already facing the state’s bleak economic outlook, now must address allegations of academic corruption in the state’s largest public university.

In an attempt to assure the public that the admissions process at the state’s public universities will be fair to all, Quinn gave the new panel 60 days, or until August 8, to report findings to him.

Quoting former President Abraham Lincoln, Quinn said, “On the one side are the movers and the shakers; on the other are the moved and the shaken. And the difference is a good education.”

The man who is chairing the commission was a recipient of the university’s Ethics in Government award. Retired federal Judge Abner Mikva also is a former professor, Illinois House member, congressman and, most recently, the director of a legal aid clinic in Chicago.

One of the panel members joining him, Zaldwaynaka “Z” Scott, is no stranger to the politics of Illinois. She was Blagojevich’s first inspector general, a position he created to review ethics reform in government. In 2003, she issued a report charging that Joe Cini, supervisor for the governor’s patronage office, orchestrated the exchange of jobs in the Department of Employment Security for politically motivated contributions. Scott is a partner with the law firm Mayer Brown LLP in Chicago. In addition to serving as executive inspector general, she worked as a prosecutor in the U.S. attorney’s office in Chicago.

They are joined by:

  • Ted Chung, Quinn’s general counsel.
  • Ricardo Estrada, executive director of the Erie Neighborhood House, a community service organization helping low-income families in Chicago.
  • Charles Scholz, a private practice attorney and former mayor of Quincy.
  • Doris Lowry, President of the Aspen Pine Group Inc., a management consulting firm in Chicago, and has a master’s degree in theological studies.
  • Bernard Judge, former editor and publisher of the Chicago Daily Law Bulletin.
  • Martha Vander Weele, president of Vander Weele Group, a corporate investigations firm in Chicago.

University President B. Joseph White said the university will support the panel in its investigation, and is using its own in-house counsel, Thomas R. Bearrows, to handle the university’s working association with the commission. “I am mandating complete and full cooperation with the commission from every member of the university community,” White said. “The commission will have access to everybody and everything it needs to conduct its work. Any request or directive from the commission is to be treated as the highest priority and responses are to be timely.”

Tuesday, June 09, 2009

First cuts, then taxes

by Jamey Dunn
The top four legislative leaders and Gov. Pat Quinn agreed that they will have to cut spending from a budget that is severely out of whack before resorting to tax hikes to plug the deficit. But how soon those cuts could be made and when lawmakers will agree on a budget is far from clear.

Leaders of both political parties met again with Quinn in his Chicago office today to continue budget talks after failing to agree on a bare bones budget approved along party lines May 31.

Quinn is not backing off of the need to approve a state income tax increase. He said after the meeting that his office would send out notices this week to human service providers letting them know that their funding could be slashed in half if the budget that legislators passed were enacted.

The governor said he and leaders discussed about $1 billion in cuts and cost-saving ideas in today’s meeting. However, he said that even if those cuts were achieved, an income tax increase would still be necessary. “We have to do this. Otherwise, … we won’t recognize our state,” he said.

Republicans continued to demand cuts and reform before considering tax increases, and they said they now sense some cooperation from Democrats. “I am encouraged that there does seem a willingness to consider some real changes to the way we do business in Illinois,” Senate Minority Leader Christine Radogno said.

Quinn said he could support pension reform, including a two-tiered system that would offer lesser benefits to newly hired state employees and teachers, as well as switching to a managed-care style for Medicaid programs. (His proposal for a two-tiered pension system stalled in the legislature last month.)

House Speaker Michael Madigan said he agrees that pension and Medicaid reforms are necessary and that they should be addressed regardless of the need to approve a budget. But he would not indicate whether making budget cuts and cost-saving reforms this summer would improve the chances of his chamber approving a tax increase. He said he thought that voter opinion, especially opposition from unemployed or under-employed constituents, played a large hand in legislators' rejection of a temporary income tax increase at the end of May.

“I think that lawmakers that do not wish to vote for the income tax increase are reflecting people in their districts,” Madigan said. “Seldom do Americans welcome tax increases.”

While Quinn emphasized the need to produce a “balanced budget” before the new fiscal year starts July 1, House Minority Leader Tom Cross said he doesn't think there's enough time to make the level of changes he thinks are necessary before his caucus would consider a tax increase.

“I think the worst thing we do as a state is to just come along and say that we’re going to raise taxes in this economy,” Cross said, “ and hand it over to a system that’s going to put us in the same situation in another two or three or four or five years without fundamentally changing how we handle things.”

Cross said that Quinn’s staff will sit down with Democrats and Republicans of both chambers to go through the budget line by line to look for places to cut. In addition, Quinn said he will issue executive orders to create a Taxpayer Action Commission to implement the Tax Payer Action Board’s cost-cutting recommendations as quickly as possible, and he said he'd form an Economic Recovery Commission intended to stimulate job growth and economic development.

Senate President John Cullerton said that he thinks a tax increase ultimately will be needed but that cutting the budget is the first priority. “It’s inevitable, I believe, after we do this cutting, …eventually we’re going to have to have some new revenues to help avoid the draconian cuts that the governor was talking about. So, hopefully, we’ll do that. But, first, we have to focus on those cuts.”

The next leaders’ meeting is tentatively scheduled for next Tuesday.

Monday, June 01, 2009

June issue: A spectacular collapse

Read the latest Illinois Issues magazine to read how the quest for the American Dream led to a national economic nightmare.

Also read "Culture of caring" to explore how the federal government relies on a wide range of Illinois nonprofits to provide human services, to support education and to keep the arts alive.

And while the Illinois General Assembly left Springfield without approving a state budget that the governor would sign, lawmakers did overwhelmingly support a new data system that will track students from preschool through college and career. The trick is whether anyone will know what to do with the data. Read "Data mining" for more.

Available in the print edition only is an essay about "A man with the plan," Daniel Burnham, as well as a feature about how college grads struggle to repay student loans during the national recession.

On Illinois Issues online, also find a variety of sources for the ongoing corruption trial of former Gov. Rod Blagojevich.

More than just the budget

By Bethany Jaeger
Less than 12 hours after the Illinois General Assembly left the Statehouse without knowing how state government services would be funded for the full fiscal year 2010, Gov. Pat Quinn said he would start sending notices to social service providers alerting them of the consequences if a budget isn’t enacted by July 1, the first day of the new fiscal year.

Late Sunday night, the legislature sent him a reduced budget that’s unlikely to fund services for 12 months. But Quinn said a “partially funded budget isn’t a budget” and would not say whether he would sign it or veto it. He still urges the need for a temporary income tax increase.

However, after a leaders meeting in the governor’s Statehouse office, House Speaker Michael Madigan indicated negotiations between the leaders and the governor are positioned to address how government operates, not just the cost of operating it.

House and Senate Republicans have said they were not invited to be part of the process until the 11th hour, and they would not put any votes in an income tax increase without reforms.

With or without Republican support, there’s a big gap between the number of votes needed to approve an income tax increase and the number gained last night. Just 42 House Democrats voted in support of a temporary income tax increase, falling short of the 60 votes necessary. Now that the spring session has gone into “overtime,” the threshold increases to 71 votes.

While there’s pressure to enact a budget by July 1, Madigan said, “I’m not going to put a timeline on this process.”

The next leaders’ meeting is in Chicago later this week, when they could discuss the final report of the governor’s appointed Taxpayers’ Action Board. We wrote about it earlier this spring (scroll down).

Campaign finance reform headed to the gov

By Jamey Dunn

A bill that would limit campaign contributions for the first time in Illinois passed both chambers, but critics said the proposal wouldn’t take reform efforts far enough.

The House voted to approve HB 7, the campaign finance reform bill that is opposed by numerous reform groups, including Gov. Pat Quinn’s own Illinois Reform Commission. Quinn ended up backing the bill and testified in a House committee last Friday in support of it.

Members of both parties voiced opposition to the bill because they said it veered too far from the suggestions of the commission.

Rep. Elaine Nekritz, a Northbrook Democrat, said that it had gaping loopholes and was inconsistent in the way it placed different limits on different groups. She then voted in favor of the bill. “While this bill is far from the one we need, it is the one we have,” she said.

Rep. Kathleen Ryg from Vernon Hills was one of a handful of Democrats that cast a “present” vote. “Even the supporters of this bill recognize that it’s only better than nothing,” she said.

The House also unanimously passed a different provision that would create a task force to study the merits of implementing a public financing system for judicial races. Quinn’s reform commission recommended starting a pilot program to publicly finance judges, making the task force measure a watered-down solution.

Democrats who supported the campaign finance provisions in the bill said that it was a good start and could be revisited later.

May 31 deadline certainly leaves uncertainty

By Bethany Jaeger, with Hilary Russell and Jamey Dunn contributing
The General Assembly approved a bare bones budget that funds human services at 50 percent of Gov. Pat Quinn’s proposed levels, but the governor indicated Sunday night that he would not sign the minimal budget into law.

Not only do state agencies and community service providers not know if they’ll have enough to operate for 12 months of the new fiscal year, but the entire state government won’t know whether it’ll have a balanced operating budget before the fiscal year starts July 1.

Quinn would not say he would veto the bare bones spending plan, but he said he wouldn’t sign it. “A partially funded budget is not a budget,” he said about five hours before the midnight deadline to adjourn the spring session. “You’ve got to make sure you have a whole budget for 12 months of the fiscal year.”

He sent members of the General Assembly home after 1 a.m., failing to meet the midnight deadline. But Quinn intends to meet with Democratic and Republican leaders in his Statehouse office Monday.

One more uncertainty from the lack of an agreed budget is when construction will begin for roads, bridges, schools and other infrastructure projects. Although the General Assembly approved a $26 billion construction program 10 days ago, with a second installment approved early Monday morning, Quinn said he wouldn’t sign it until lawmakers sent him a balanced budget.

He said bond-rating agencies and bond buyers wouldn’t buy bonds from a seller (the state) “as long as that seller has a gaping hole in its operating budget of billions of dollars. It’s just common sense.”

To get a balanced operating budget, Quinn said he still supports an income tax increase despite its trouble gaining enough support in the legislature. He deemed the tax as the fairest way to generate revenue because it’s based on ability to pay.

“We have to have a sufficient budget that’s balanced, and that is the only way to go. Our work is not done until that happens, until we have revenues matching expenditures.”

But Quinn had changed his message several times as various budget options gained support throughout the past week. He initially sought a permanent income tax increase of 1.5 percentage points, but he changed to supporting a temporary income tax when it was clear the permanent version wouldn’t acquire enough votes. He changed his stance again Saturday night when the Senate approved an income tax increase accompanied by a sales tax expansion and property tax relief, as well as education funding reforms.

By Sunday, Quinn would not exclusively support either plan. “I’m for any bill that can balance the budget. … If we also can reform an unfair property tax system, I think that’s good also.”

Quinn did urge House Speaker Michael Madigan to find the votes for HB 174, which has been proposed by Chicago Democrat Sen. James Meeks in various forms for the past seven years as a way to address funding disparities between public schools. “I’m counting on Mike Madigan to deliver votes. He’s very good at it. He does the best on the deadline.”

Madigan didn’t deliver the votes. His Democratic Caucus met behind closed doors to take an informal vote on the bill. Rep. David Miller, the sponsor, said it would have only gained 35 votes, far short of the 60 needed for approval.

So the House instead took a vote on Quinn’s temporary income tax. Again, the votes didn’t come. Only 45 members, all Democrats, supported it.

House Republicans remained united against an income tax increase of any kind. Minority Leader Tom Cross said his members were voting against the status quo. “We’re not voting no for the sake of voting no. We want change. We want Medicaid reform and pension reform and some restraint and some discipline.”

Earlier in the day, he said: “To just raise money and hand it over to the same group of people, we’re not going to support that.”

Bare bones budget
When House Democrats couldn’t gain enough votes to either raise the income tax or make massive budget cuts, they resorted to approving reduced levels of spending for state agencies and programs. But it would leave it up to the governor’s administration to decide how to spread the money as far as it would go and decide where to cut.

“It’s better than not having a budget,” said Rep. Jack Franks, a Woodstock Democrat who voted against the temporary income tax.

The plan would generate an additional $1 billion through sweeping unused money sitting in dedicated funds and refinancing state debt to take advantage of historically low interest rates. (SB 1197 is the budget bill; SB 1433 is the fund sweeps bill; SB 1609 is the debt refinancing bill.)

Rep. Dave Winters, a Shirland Republican, said his “no” vote was symbolic. The bare bones budget still would fund all state employee contracts without requiring unpaid days off or restricted travel budgets.

The General Assembly did approve a measure, SB 2090, which would require legislators to take four unpaid days off and would cancel their cost-of-living raises for next fiscal year.

In the Senate, GOP Sen. Matt Murphy of Palatine dubbed the bare bones budget as “the final piece of the failure-to-lead budget.” His fellow Republicans said it was irresponsible to refinance the debt but not pay the first two years of principle on the loan; however, Minority Leader Christine Radogno actually supported the “temporary holiday” from the stringent requirements the General Assembly placed on itself in the 1990s. She said because Republicans oppose tax increases, the refinancing plan would allow some flexibility in the current revenue shortfall and economic recession.

But, she added, “The result right now looks a little like the same old thing, and the fact is the Democrats failed to put together a budget that can take us through the year, despite the fact they have significant majority.”

Sen. Donne Trotter, budget negotiator for the Democrats in his chamber, described the bare bones budget as “the worst bill that we could have passed.” But, he added, it was necessary in the 11th hour — literally with 45 minutes before the midnight deadline — to prevent the government from shutting down operations when the new fiscal year starts July 1.