Senate skips pension borrowing vote

By Jamey Dunn

The Senate wrapped up some major issues before leaving Springfield today but avoided one of the largest components of the budget framework approved by the House this week.

And it seems that if a bill to borrow more than $4 billion to make the required employee pension payment is going to pass, Gov. Pat Quinn will have to do some hard lobbying of senators.

The legislature has already passed its “Emergency Budget Act,” which gives the governor more power to shift money and make cuts. The spending bill that lawmakers sent to Quinn makes lump-sum appropriations to agencies, giving him the responsibility to dole out the money as he chooses. Democratic leaders hinted today that if the borrowing doesn’t pass, the governor could have to make do without the cash and make the payments anyway.

Senate President John Cullerton said his chamber did not take up the borrowing proposal today because it lacked the votes to pass. He said the Senate would likely come back to the Capitol to approve it in two or three weeks if a few senators change their minds on the issue. Cullerton made it clear he expects bipartisan support. Since borrowing bills require a three-fifths majority to pass, the constitutional Monday adjournment deadline would not affect the number of votes needed.

“We don’t have any Republican votes like they did in the House,” he said. He added that two Republican votes probably would be necessary to pass the bill. Cullerton said he would not be the one trying to persuade members on either side of the aisle. “[Gov. Pat Quinn] is going to be the one that helps convince them the importance of having this money for their districts.”

House Speaker Michael Madigan said the issue of making the pension payment for the next fiscal year is, in essence, Quinn’s problem. He said if borrowing doesn’t pass, “it makes life more difficult for the governor and the comptroller.”

Madigan said he would wait to see what the Senate does on the matter before committing to an alternate plan, such as passing a bill that would allow the state to skip the pension payment.

However, he added that even if the Senate doesn’t pass borrowing, it is not guaranteed that a “pension holiday” vote would follow. He said Quinn and Comptroller Dan Hynes, Quinn’s opponent earlier this year in the hard-fought Democratic primary for governor, might just have to manage what would essentially be a $4 billion demand on general revenues.

“Without the borrowing to make the pension payment, pension payments get in line with everybody else [owed money by the state], and they became a matter for the governor and the comptroller in terms of managing the cash flow,” Madigan said.

Senate Minority Leader Christine Radogno said she is not pressuring her side of the aisle to vote against borrowing. “Members are coming to the independent conclusion this is a bad deal.”

She said some Republicans voted to borrow for the payment last year, only to find that nothing has changed this time around. “It didn’t work last year, and in fact, all it did was encumber the revenue we needed to pay bills this year. It’s precisely what’s going to happen again because there’s no overall plan to deal with this. It’s just borrowing again — no way to pay it back.”

Radogno said she thinks Quinn will offer members of her caucus “perks” and projects for their districts to try to get “yes” votes for borrowing, and such tactics would put him on “very shaky” legal ground. “What’s going to be going on in the next few weeks are promises to get people to vote for things.”

Radogno said Quinn’s administration contacted Republican Sens. Larry Bomke from Springfield, David Luechtefeld from Okawville and John Jones from Mount Vernon about their votes. All three confirmed speaking with the governor’s people and flatly denied that they had been offered anything for their votes.

The Senate passed all the other components of the House’s budget:

Senate Bill 3660 is the “Emergency Budget Act.”

SB3677 is a “tax amnesty plan.”

House Bill 859 is the spending bill.

SB3662 is the budget implementation bill.

A couple of issues backed by Quinn took some big hits today, and almost everyone had something to say about it except the governor himself. He ducked reporters after leaving the Senate floor upon adjournment.

Quinn did issue a written statement late this evening. In it, he said: “Our task is not complete, and there’s more that must be accomplished before this session officially ends. I remind members of the General Assembly that the people of Illinois are depending upon their elected officials to promptly and squarely address the serious fiscal issues confronting our state."

The chambers adjourned today to “the call” of the House speaker and Senate president. So, legislators could be called back to Springfield at any time to wrap up loose ends and address the pension payment.

Senate takes up McPier and STAR Bonds

McCormick Place

Both legislative chambers overrode Gov. Pat Quinn’s amendatory veto on Senate Bill 28, which was intended to reform the operations of the McCormick Place convention facility and Navy Pier in Chicago.

Quinn took issue with the legislature appointing a trustee to oversee the agency commonly called “McPier.” He has publicly criticized lawmakers' choice of Jim Reilly, a former House member and the current chief executive officer of McPier. Quinn said there was no process to remove or replace a trustee. He wanted the bill to specifically require McPier to adhere to state procurement laws. He also removed a $2 taxi tax on rides to and from the city’s two airports.

The General Assembly shot down the governor’s changes but passed what legislators see as a compromise bill that would address the procurement and trustee succession issues.

STAR Bonds

By Rachel Wells

The city of Marion may have a shot at destination development and better unemployment rates if the governor signs legislation allowing for what’s been called Illinois’ largest tax incentive.

Supporters hope that through sales tax and revenue (also known as STAR) bonds, SB 2093 will entice investors to choose Marion as the place to build a major outdoor sports store and a water park or a music venue similar to that in Branson, Mo., said Sen. Gary Forby, a Benton Democrat.
Under the measure, developer Holland Construction Services would receive a portion of the new tax revenues the project brings in to help pay for up to 50 percent of the project’s cost. Nearby schools would also receive 15 percent of new property tax revenues resulting from the development.

Forby said the project, the details of which have not yet been solidified, could bring visitors from seven states to an otherwise economically distressed region and provide thousands of jobs.

The Illinois Department of Revenue estimated that the STAR bond district would cost the state $287.5 million to $437.5 million in future sales taxes, revenues resulting from the STAR bond development.

While Forby and fellow sponsor Marion Democratic Rep. John Bradley have the support of most entities within 25 miles of the project, Mount Vernon Mayor Mary Jane Chesley said her city, about 40 miles away, would suffer unless it’s included in the legislation.

“All we’re asking for is to give us the same tools to promote growth that has been proposed for Marion and provide a level playing field to attract much-needed businesses to our area and to the state of Illinois.”

Forby argued that spreading the district out would dampen its ability to raise revenues. “You need a project where [businesses] all come together so they can draw from each other.”

The bill passed in the House earlier this month.

Legislature to reject Quinn's AV on McPier

By Jamey Dunn

Gov. Pat Quinn made some tweaks today to a bill intended to changes the operations of McCormick Place, the convention facility in Chicago that draws almost 3 million people each year.

The governor said the reforms in Senate Bill 28 did not go far enough, but legislators on both sides of the aisle are vowing to override his amendatory veto by the end of the week.

Quinn said the agency that oversees McCormick Place and Navy Pier, commonly known as McPier, should be required to follow state procurement rules at all times. The bill passed by the General Assembly requires McPier to “substantially” follow the procurement code. Quinn, a former tax attorney, said that he considers “substantially” a “weasel word” that is unclear about the procurement standards the agency would be legally required to uphold.

Quinn also took issue with the legislature having the power to appoint a McPier trustee, saying the position should be an executive appointment. He added that the legislation did not provide for a way to remove or replace the trustee. Quinn has been openly critical of the legislature’s choice for the job, Jim Reilly, a former House member and chief operating officer of McPier. He questioned the constitutionality of the bill specifically naming someone to the position.

This evening, the House passed SB3215, which would address the issue of removing a trustee. House Speaker Mike Madigan said the bill is an attempt to compromise and appease some of the governor's concerns. He added that he expects the House to shoot down Quinn's changes.

The final change to the bill addresses union rights to do business and says that the agency will only deal with two unions. Quinn said that would “streamline” business for customers. Critics say it is meant to benefit larger unions, which will absorb smaller ones that do business with McPier.

Quinn also removed a $2 tax on taxis to and from the city’s airports.

“I don’t think that’s a good way to greet visitors to our state, a higher tax on how they get from where they land at the airport to where they’re staying, This also includes people who live within our own state. … We have many many people who do business in other places of our country and our state. I don’t think they should be nicked by a nuisance tax,” Quinn said.

Senate President John Cullerton and Senate Minority Leader Christine Radogno issued a joint statement condemning Quinn’s veto. It said, "Governor Pat Quinn's decision today to veto key elements of the bipartisan McPier reform package has the potential to destabilize one of the most productive economic engines in the State of Illinois.”

Senators plan to start work to override the veto tomorrow, in addition to considering the budget proposals that came out of the House yesterday.

House passes a budget

By Jamey Dunn and Rachel Wells

Legislators voted tonight to borrow billions to the make the pension payment for next fiscal year and to give Gov. Pat Quinn “emergency powers” to shift funds and cut the budget.

A group of House Democrats presented the budget ideas they came up with while the General Assembly was out of session for two weeks. But by the end of the day, the plan that passed out of the House was similar to the one that emerged earlier this month.

Earlier in the day, Democrats voted down or withdrew proposal after proposal, including $300 million in cuts to K-12 education, $100 million in higher education cuts and a plan to make state retirees pay health care premiums, which would have saved an estimated $100 million.

The largest and most contested component of the budget, $4.09 billion in borrowing to make the pension payment, narrowly passed this evening. It failed by one vote the first time it was called today. After some arm twisting by Democratic leadership and Quinn, Lynwood Democratic Rep. David Miller, one of two members in opposition from his party, changed his vote.

Elmhurst Rep. Robert Biggins, one of only two Republicans to vote against his party, said he decided to support pension borrowing, Senate Bill 3514, after speaking with the governor’s office while the rest of the House minority party met in private. “I thought about all the people in Illinois. This is the responsible thing to do,” said Biggins, who had voted against borrowing earlier in the evening. “This is a much less expensive way to go.” Biggins, about to retire from the General Assembly, said he did not ask the governor for anything, nor was he offered a job in return for his support. Danville Rep. Bill Black, another Republican who is retiring after the current session, voted consistently in favor of borrowing.

Other Republicans who had agreed to borrow for last year's payment after being promised cuts they say never materialized did not support a similar plan this year because they said Democrats haven’t done enough to trim the budget and encourage job creation.

“[Republicans] participated in that process to help [Quinn,] in his first term, try to address some issues,” Minority Leader Tom Cross said. “Many would say it was a mistake. … We get, this year, the downside of not making a payment, and we are not saying, ‘Don’t make a payment.’ We’re saying we want to fundamentally change the way we run government in Illinois,” However, House Majority Leader Barbara Flynn Currie of Chicago, the sponsor of the plan, said members on both sides of the aisle do not have the will to make cuts that would add up to the money needed for the payment. “You need 60 people to vote ‘yes’ to pass cuts of this magnitude, and [those people] are not in this chamber,” she said.

The House also passed its version of the “Emergency Budget Act,” introduced earlier in the month, with some new cost-saving measures tacked on. Senate Bill 3660 would:

• Extend the time the state has to pay any overdue FY2010 bills from August 31, 2010, to December 31, 2010.
• Require lawmakers, constitutional officers and executive agency directors to take 12 furlough days.
• Create an independent state agency called the Railsplitter Tobacco Authority. The state would transfer its future payments from a national tobacco settlement to the agency, which would issue $1.7 billion in bonding, with the settlement money pledged to pay off the borrowing.
• Allow the governor to borrow from special funds for the General Revenue Fund and Common School Fund. That money would have to be put back into the special funds 18 months after it was borrowed.

The new cuts in the bill would:

• Require state agencies to review contracts for opportunities to renegotiate, terminate or re-bid. House Democrats estimate that could save $300 million.
• Eliminate cost of living increases for legislators, state’s attorneys, constitutional officers and some state agency employees and members of boards of commissions for FY 2011.
• Reduce the per diem payments legislators get on session days from $139 to $111 and reimbursement for car travel from 50 cents a mile to 39 cents a mile.

A “tax amnesty” bill the House passed today would bring in an additional estimated $250 million.

SB 377 would allow anyone owing past due taxes between 2002 and 2009 to pay them during a tax amnesty period without penalties and interest. State agencies would also be allowed to enter into deferred payment agreements, settle debts at no less than 80 percent of the amount due and use private debt collection agencies to obtain owed money. Anyone who fails to take advantage of the tax amnesty period, from October into November 2010, would be charged double the penalties.

The House passed the Senate’s spending bill, HB859, which would cut 5 percent from agency operating budgets. Other than those cuts, the measure appropriates lump sums equal to last year’s spending to Quinn, giving him the power to cut where he sees fit.

Currie said that the education funding in the bill hinges on the House passing a $1-a-pack cigarette tax increase that the Senate approved last session. If not, she says at least $327 million in cuts to K-12 would be the alternative. The proposal lacked the needed votes in the House earlier this month.

The Senate is back in session tomorrow, and House members plan to be in at least through Thursday. The House passed the basic structure of a budget today, but changes could still be in the works. Check back for updates.

Group of House Democrats unveils proposed cuts

By Jamey Dunn

A group of House Democrats rolled out a plan today to trim the state budget by an estimated $1.3 billion while agreeing that the state cannot cut its way out of the estimated $13 billion deficit. The group proposed reductions in education and Medicaid spending, as well as requiring retired employees to pay health care premiums.

Rep. Elaine Nekritz, a Northbrook Democrat, says the group came forward with its own plan to show that “legislators can make tough decisions in tough times.”

She added: “I didn’t come to Springfield to say no. I came to say yes. But this is what’s necessary in this time.”

The plan includes:

• A 5 percent reduction to the operating budgets of state agencies, saving about $300 million, and the General Assembly, saving about $2.5 million.
• $300 million in cuts to K-12 education.
• $100 million in cuts to higher education.
• $200 million in Medicaid cuts.
• Renegotiating contracts and putting some up for new bids, which legislators say could save up to $300 million.
• $4 million in cuts to local subsidies for assessors, supervisors and coroners.
• Cutting the reimbursement rate for car travel from to 50 cents a mile to 39 cents a mile, which legislators say could save $6 million.
• Eliminating salaries for members of part time boards and commissions, which would save an estimated $2.5 million.
• State Retirees would pay health care premiums according to a sliding scale based on their income, saving the state an estimated $100 million in fiscal year 2011.

Reducing retiree health care benefits may not be a popular choice during an election year, considering that retirement-age voters tend to consistently show at the polls on Election Day.

“As much as we love out retirees, this is a tough love exercise. We don’t love them any less, but they need to feel the pain,” said Rep. Karen May, a Highland Park Democrat.

Nekritz said all the outlined cuts are necessary to make any kind of substantial dent in the deficit.

She said she was particularly dismayed by cuts to higher education. But she added that the amount the state promises may not matter if it can’t give the schools the money they are owed. “I venture to say that if we don’t come up with a realistic budget and we don’t pay our bills, then what good is the appropriation?”

The back burner

A plan to put off paying the required $3.7 billion pension payment for next fiscal year advanced through a House committee today.

House Bill 543 would essentially let Gov. Pat Quinn skip the payment until he deems that there is enough money to make it.

Barbara Flynn Currie said that borrowing to make the payment would be the better option. However, a short-term borrowing plan failed to gain the needed support in the House earlier this month. Currie said the bill could come up for another vote. “The prudent approach will be to borrow, and I think that we’ll have an opportunity to test that proposition with the members before we finish out our work this week.”

Nick Yelverton, a legislative director for the Illinois Federation of Teachers, said the deferment plan is essentially borrowing, too. But, the money would eventually have to be paid back at an 8.5 percent interest rate instead of the projected 4.5 percent Illinois could get on a short-term loan.

“[Skipping the payment] will multiply the already precarious position of pension systems with regards to investment decisions, asset sales and cash flow. They’ll have no idea when this money comes in.”

Curry told legislators that they “had a chance to borrow at 4.5 percent instead of deferring at 8.5 percent.”

She added: “You’ll have another chance this week, and I would advise you to take me up on that offer. But in the meantime, if it doesn’t happen, I think it’s important for us to have on the back burner a something that will get us out of this bind without $3.7 billion in cuts to elementary and secondary schooling.”

Curry said the bill to skip the pension payment would not come up for a vote in the House “unless and until the borrowing program fails.”

Legislative preview

By Jamey Dunn

The main focus when the Illinois General Assembly reconvenes next week will be working out a budget that lawmakers can find politically tolerable. Gov. Pat Quinn said at a Chicago news conference today that the plan is not final yet.

“I think we have made some good process. We aren’t there yet, but we’re very close,” Quinn said. “We have to balance reductions and expenses with investments in human beings.”

In addition to the budget, both chambers may still address some legislative issues. Here are a few possibilities:

Both chambers
HB 5873 The proposal would create a two-tiered pension system for firefighters and police officers. If the measure is signed into law, those hired after it takes effect would have to wait until age 55 to be eligible for full pension benefits. They would also be able to receive 72 percent of benefits after 30 years of service instead of the current 75 percent.

SB 377 This “tax amnesty” plan would allow citizens and businesses that owe back taxes to pay them off from October 1 to November 15 of this year without facing penalty. Chicago Democratic Rep. Barbara Flynn Currie, a sponsor of the bill, estimates the plan could bring in about $250 million. Gov. Pat Quinn said last month that he was not in favor of the plan. So even if it passes both chambers, it may not become law.

House
HB 4623 This bill would cap the amount of income seniors can earn and still get free rides on Chicago public transit. The issue was hotly contested in the Senate, but lawmakers reached a compromise, which they advanced over to the House in early May.

Senate
SB 2093 Creates a plan for Sales Tax Revenue or STAR bonds. The plan allows for state sales tax dollars from a certain area to go toward a local development project. In this bill, the area is Marion and the project is an entertainment and shopping complex being built by Holland construction.

The Southern Illinoisan reported today that Republican Sen. John Jones is interested in including his hometown of Mount Vernon in the plan. He argued that other southern Illinois communities should have the option to create STAR districts as well. That could potentially hold up the bill. However, Jones said it could also be accomplished with additional pieces of legislation.

SB 3750 The measure would ban the sale of children’s food containers that contain bisphenol-A, or BPA, which has been linked to certain cancers and other health problems. Business groups strongly oppose the bill. The issue has been on the legislature’s radar for a while, but lawmakers failed to move a ban last session. The Senate held a committee hearing dedicated to the topic early this month, and the bill could come up for a vote next week.

Adult adoptees granted access to birth records

By Rachel Wells

Adopted adults will soon have greater access to their own birth certificates, under a measure signed into law today by Gov. Pat Quinn that will open most records beginning in November of 2011.

The law will allow adopted adults born before 1946 to access their birth certificates immediately and will allow most people born after January 1, 1946 to access their birth certificates after a year-long informational campaign.

Through public service announcements and driver’s license notifications, the state will attempt to notify adopted adults and birth mothers, who will have the option of maintaining anonymity by submitting the appropriate paperwork. New mothers will also have the option of partial or full openness or complete anonymity. If a mother chooses to make birth records open, her child would not be able to access them until he or she turns 21. The measure’s House sponsor, Rep. Sara Feigenholtz, a Chicago Democrat who is an adoptee, said most birth parents prefer openness.

“[Seeing your birth certificate] is a right that a lot of you who are not adopted take for granted,” Feigenholtz said at the bill signing, describing access to the document as a basic human right. “My story began on a piece of paper that I have never been allowed to see. When Gov. Quinn signs this legislation today, I -- like any other person -- will be able to walk into the office of vital records, put my $15 down on the table and get a copy of my original birth certificate for the first time in my life.”

Opponents of the bill have said making open birth records the default could cause more young pregnant women to choose abortion instead of adoption.

Read more about the measure in the upcoming June print edition of Illinois Issues magazine.

U of I trustees approve tuition hike

Freshmen starting school at the University of Illinois in the fall will face higher costs.

Facing $381 million worth of late payments from the state, the university’s board of trustees voted today to raise tuition for the incoming class by 9.5 percent and give schools the power to borrow.

The base tuition for freshmen at the U of I in Urbana will increase $902 per year to $10, 368. At the Chicago campus, it will jump $792 to $9,134. Students attending U of I Springfield will pay $706 more for a total of $8,108.

This increase can only apply to freshman because the state's truth-in-tuition law guarantees incoming students steady rates for the next four years. The board approved fee increases that included raising the application fee for prospective students by $10.

President Stanley Ikenberry said in a news release that the university could not wait any longer on the legislators to pass a budget because students and their families need to be prepared for the increased tuition costs. "We decided to set tuition so students and their families can plan realistically for the next school year," Ikenberry said in the release.

The board also authorized the schools to take out short-term loans, under SB 642 which passed both chambers, in anticipation of receiving state funds.

Lawmakers back next week to talk budget

By Jamey Dunn

The Illinois House will head back to Springfield on Monday with the intent of passing a budget.

According to an e-mail from House Speaker Mike Madigan’s spokesman, Steve Brown, lawmakers will be back in the chamber Monday afternoon. In the e-mail, Brown told legislators to come prepared to work Tuesday and Wednesday as well. Senate President John Cullerton sent out a memo to his members telling them they would be back Wednesday and may be in until Friday. He said in the memo that although he did not expect the session to stretch into Memorial Day weekend, “it may be necessary, depending on the action taken in the House of Representatives.”

Lawmakers must approve a budget by midnight on Monday, when the new fiscal year begins. Anything passed after that date will need a three-fifths majority to take effect.

The Senate passed a budget plan earlier this month, and Cullerton has reiterated that it is now the House’s move.

Representatives have not yet been able to reach agreement on a plan. A bill to borrow almost $4 billion to make the annual pension payment failed, as well as a proposal that would cut roughly the same amount next fiscal year. The reductions mainly target primary and secondary education, an area that is politically difficult for both parties to cut.

Madigan, the sponsor of the cuts measure, invited members from both sides of the aisle to file amendments to the bill proposing alternative cuts. So far only one member, Madigan’s fellow Democrat Rep. Jack Franks from Woodstock, has presented many amendments (Amendments 3, 4 and 5). Franks’ amendments would end salaries for members of executive branch boards or commissions and cut legislators’ and top agency officials’ pay.

Expect a lot of debate and grandstanding from both sides of the aisle next week on hot-button issues like cuts and borrowing.

As part of its budget plan, the Senate passed a bill to direct money toward education from a dollar-a-pack cigarette tax increase that the chamber passed last session. The bill lacked the votes in the House when the legislators left town on May 7.

Without new revenue or borrowing in the mix, the only other substantial option is fairly drastic budget cuts. Democrats have spent the last two weeks negotiating agreements behind close doors, and the plan may take shape next week.

State can keep interest on unclaimed property

By Rachel Wells

As a result of a Supreme Court ruling issued today, Illinoisans can rest assured that, for now, at least one state bank account won’t lose millions of dollars.

After a piece of property – such as money in an abandoned safe deposit box – goes unclaimed for up to seven years, the state takes control of it. While the rightful owner can later reclaim the items, or at least the value of those items, the state gets to keep any interest it earns while keeping in its trust the neglected or abandoned property.

Some owners of reclaimed property argue that the interest should go to them, not the state. But the Supreme Court decided today that the state’s procedure, outlined by law, is constitutional and can continue.

In their decision, justices pointed to Illinois’ system as more “benevolent” than many other states' procedures, which have been upheld by the U.S. Supreme Court, in that it allows owners to reclaim property no matter how long it’s been under state control. Illinois never assumes ownership but holds the property indefinitely or until it’s reclaimed.

“In return for this seemingly advantageous, long-term reclamation service, the state receives the benefit of retaining the interest earned from its management of the property after it is placed in state custody,” Justice Lloyd Karmeier wrote in the Supreme Court opinion. Citing the lower court, which said it was unclear whether the property in question was earning interest prior to the state taking control of it, Karmeier added: “Simply put, the State’s gain did not establish a loss on the part of the plaintiffs.”

According to the treasurer’s office, had the court accepted the argument of property owners who filed the lawsuit, the state could have lost millions of dollars. Right now, the claims trust fund holds a balance of roughly $50 million, which earns interest for the general revenue fund. But the state also, over the last four years, returned an average of $85 million to property owners.

“If we had to pay out interest on all property we return, the numbers would amount to millions,” said Scott Burnham, spokesman for the treasurer’s office. He added that the state is incapable of earning interest on all properties in question, such as a payroll check. “When we return funds, we may have held those funds for six weeks or six years or far more. If we had to calculate interest at a rate determined by the court and pay compound interest to each owner, we would pay millions in interest out each year.”

The legal team arguing against the state is “disappointed” in the court’s decision and will consider appealing to the U.S. Supreme Court, said counselor John Wylie with Chicago firm Donaldson and Guin.

Quinn shoots down scholarship reforms

By Rachel Wells


Reforms aren't enough, Gov. Pat Quinn said today in a message vetoing changes to the General Assembly's scholarship program, which some lawmakers allegedly have used to reward political supporters.

The program, which cost state universities roughly $13.5 million last year, allows each lawmaker to award two four-year tuition waivers every year to students in his or her district.

Senate Bill 365 would have allowed lawmakers to continue awarding the waivers, but would limit them from giving them to anyone whose family members had contributed to the lawmaker’s campaign within five years of the award, among other changes.

Quinn said he would like the legislature to instead look at House Bill 4685, which would eliminate the program. Opponents of the waivers also complain that they place more strain on already underfunded university budgets.

“This bill fails to adopt the fundamental reforms that are necessary to bring transparency, competition and fairness to the General Assembly scholarship program,” Quinn said in a veto statement. “A program that relies on the favor of a legislator rather than the merit of an applicant is not a program I can endorse.”

Rikeesha Phelon, spokeswoman for the bill’s sponsor, Senate President John Cullerton, said Cullerton would discuss the issue with his caucus before the legislature's fall veto session. “Right now the focus needs to stay on the budget,” she said. In passing the measure this spring, Cullerton’s position was that “there’s no need to throw the student out with the bathwater,” Phelon said.

Legislative wrapup

By Rachel Wells

University borrowing
Under a bill passed today, universities would have the ability to borrow in anticipation of payments from the state. SB 642, would allow schools to borrow 75 percent of what they are owed. The money would have to be repaid within one year of the loan or 10 days after the state comes through with the payments.

Telecommunications
The Senate on Wednesday unanimously approved changes to Illinois’ Telecommunications Act, the framework regulating providers of basic telephone service.

SB 107, if signed by the governor, would lighten regulations on those providers, which include AT&T, while ensuring that providers of newer technologies, such as cable telephone systems and broadband, that they would not be regulated by the state for at least the next three years. The measure would also require companies such as AT&T to offer price-fixed, basic telephone packages.

The measure is heralded as a “jobs bill” and a way to lure in more broadband investment. But consumer advocacy groups such as the Citizens Utility Board [CUB] say the bill might actually widen the digital divide between rural and urban Illinois.

The House on Wednesday approved the bill with unanimous support. Gov. Pat Quinn, an who helped create CUB and who as governor says jobs are a main priority, has not said whether he would sign the measure into law.

Illinois State Police funding
The Illinois State Police will likely avoid numerous layoffs and regional office closures now that both chambers of the General Assembly have approved a measure expected to provide $22 million.

SB 3695 would require county courts to assess additional fees of between $1 and $15 to go to the ISP Operations Assistance Fund. When those fees are placed on mail-in bonds, which by Supreme Court rule cannot exceed $75, the ISP fee would further diminish the amount now distributed to several local agencies.

Opponents say local governments can’t afford a shrinking piece of the pie. Those in favor of the measure say that without the additional funding, the ISP would have to cut about 460 officers and close five regional offices. With fewer police on the roads, counties and municipalities would see less money from ISP citations.

Nursing home reform
Potential nursing home patients would undergo enhanced screening and background checks before being admitted to a long-term care facility, under SB 326, which the General Assembly approved this week with near unanimous support.

Mentally ill patients would also only be admitted to nursing homes specially certified for handling such patients, who would be segregated from other patients, and nursing homes would be subject to tighter reporting and ethics regulations.

A working group of state agencies and other stakeholders would also be formed to study possible expansion and funding of residential and community-based care options.

Unfunded mandates
Schools would be allowed to ignore certain state mandates, under a measure now headed to the governor.

If HB 80 becomes law, schools could use a lower blend of biodiesel, raise driver’s education fees to $250 from $50 and reclassify students receiving only speech services so that they don’t require an individual education program, as other special education students do.

Lobbyist reform
If Gov. Pat Quinn signs SB 1526, lobbyists would again be required to pay an annual registration fee, but it would be less expensive than the one the legislature wrote into law last year.

A judge blocked the state from collecting the $1,000 fee approved last year after groups sued on the basis that such a high figure violated First Amendment rights. Following the ruling, the secretary of state stopped collecting fees altogether.

The new measure would lower the annual fee to $300.

The blame game

By Jamey Dunn and Rachel Wells

It seems everybody had someone to blame today after a budget failed to pass both chambers of the General Assembly.

Senate Democrats, with no Republican backing, passed a plan and are now looking to the House to finish the job. “The action is over in the House. We have passed a budget. We have passed the revenues necessary to fund the budget, and it’s up to the House,” Senate President John Cullerton said.

The Senate passed:

House Bill 2428 which is similar to the House “Emergency Budget Act” that emerged last night. It requires legislators, state constitutional officers and agency executives to forfeit one day's pay each month during the fiscal year. It also extends the “lapse period,” the time when the state can pay off its bills from the previous fiscal year, from August 31 to December 31. It also gives Gov. Pat Quinn the power to borrow from special funds and includes the tobacco settlement “securitization.”

HB543 would let the state skip its employee pension payment until Quinn can find the nearly $4 billion needed.

HB991 would appropriate the money from a $1-a-pack cigarette tax increase, which passed in the Senate last year, to K-12 education, assuming that the increase, Senate Bill 44, passes in the House.

The Senate passed a spending bill early this morning. That plan would require Quinn to make about $2 billion in cuts from last year’s spending.

Although the Senate passed several major budget components, the House failed to pass any budget legislation or take up the bills the other chamber approved.

“[House Speaker Mike Madigan] doesn’t have the necessary votes to pass the bills that we have passed here,” Cullerton said. However, he added that budget negotiations frequently take longer than originally planned. “Every once in a while this happens at the end of the year.”

Needing Republican votes to pass a borrowing plan to finance the annual pension payment, Rep. Barbara Flynn Currie from Chicago, the House majority leader, pointed to the minority party for failing to propose a real alternative. “Borrowing for the pension payment is not a great thing to do, but it is, I think, the only thing to do, since no one has proposed a $4 billion cut in state spending.

“More than half of you supported a substantial borrowing program for the state universities as recently as yesterday, and you supported a plan like this just one year ago. So what’s changed?” Currie asked.

But, as Currie blamed Republicans for the possibility that the state might skip a pension payment, which would cost more money in the long run, House Minority Leader Tom Cross blamed Quinn for repeatedly disappointing them.

“A year ago, we said to you, ‘Yes, we will participate in a borrowing plan,’” Cross said. “The problem of today versus a year ago is we said to the governor, ‘Governor, we’re going to give you a chance, we have a new governor, a fresh start, we have some problems.’” But Quinn didn’t live up to House Republicans’ expectations, Cross said. “Our governor needs to lead. Leaders lead. He needs to cut; he needs to control spending; he needs to pay his bills; he needs to provide for job growth and Medicaid reform.”

The bill, SB 3514, only received 59 votes, 12 short of the number required for a borrowing measure.

Democrats then moved on to SB 1211, a spending bill that called for cuts equal to what the pension payment would be. The reductions were aimed at primary and secondary education, an unpopular area to cut. The measure failed by a wide margin, but House Speaker Michael Madigan challenged the minority caucus to file amendments detailing other cutting options.

Sen. Donne Trotter sees the troubles in the House as a chronic problem. “The House, I believe, has dropped the ball for the past two years in trying to be a partner and trying to make Illinois whole again. And it’s not easy, the economy is still bad, but there are certainly things that can be done that make it better than what it is now.”

Trotter said he doesn’t blame Quinn, and in the end the legislature has a duty to legislate. “He’s not our daddy,” Trotter said.

That may be the biggest passing of the buck to come out of the negotiations. Like last year, the General Assembly plans to give Quinn lump-sum appropriations and expects him to make what are sure to be unpopular cuts instead of negotiating a budget that doles out money by line item.

Cullerton blamed the recent financial crisis and lack of Republican support for pushing legislators to what he called the “dubious honor” of letting the governor make the spending decisions.

“In order to pass a budget when you have to cut so much, you have to get 30 and 60 people to agree to these cuts, and when the other party is saying no to everything, it makes it very difficult to pass,” he said.

Cullerton said Democrats "have worked on many, many things with the Republicans here. The one area where they just basically have just said we’re not going to help you is the budget, and that obviously is major area.”

But the deadline that the General Assembly missed today was really only one that they imposed on themselves.

As lawmakers left the Statehouse on Friday, on the day leaders had for months said would be the final day of their spring session, Rep. John Fritchey, a Chicago Democrat, said the self-imposed deadline didn’t matter. He said any budget deadline other than the constitutionally established date of May 31 is “arbitrary.”

Cullerton said both chambers will be returning before the end of the month.

Budget plans emerge in each chamber

By Jamey Dunn

On the night before the self-imposed adjournment date, each chamber of the General Assembly unveiled its own budget bill. The Senate passed its legislation and sent it to the House, but the House did not take final action on its own spending plan.

Both the Senate and the House spending bills hinge upon an “emergency budget act” passing in the House. That bill, Senate Bill 3660, would:

• Suspend the $3.7 billion annual pension payment until January 31, 2011.
• Extend the time the state has to pay any overdue FY2010 bills from August 31, 2010, to December 31, 2010.
• Require lawmakers, constitutional officers and executive agency directors to take 12 furlough days.
• Create an independent state agency called the Railsplitter Tobacco Authority. The state would transfer its future payments from a national tobacco settlement to the agency, which would issue $1.7 billion in bonding with the settlement money pledged to pay off the borrowing.
• Allow the governor to borrow from special funds for the General Revenue Fund and Common School Fund. That money would have to be put back in the special funds a year after it was borrowed.

The Senate spending bill, House Bill 859, which passed early this morning, would cut 5 percent from agency operating budgets, the bulk of which likely would come from the furloughs. The plan would give Gov. Pat Quinn lump-sum appropriations to spend as he sees fit. It would then be up to him to make difficult cuts, which would total about $2 billion. The House plan, SB 1211, is similar but has yet to be called for a vote.

One of the differences is that the Senate bill relies on the House to pass a cigarette tax hike. A $1-dollar-a-pack increase barely passed in the Senate last year and has so far lacked the needed support in the House.

The Senate spending bill became the centerpiece for a rhetorical debate because it would appropriate the spending for capital construction projects that passed last session again. Democrats said they were trying to point out that Republicans supported big-ticket items while calling for budget cuts. Senate President John Cullerton said Senate Republicans were asked to vote again on their capital projects to highlight their “priorities.”

Senate Republicans accused the Democrats of playing games with the budget and going back on hard-fought negotiations that had produced the first capital bill in a decade. Regarding the overall budget bill, Republicans said Democrats were forcing members from both parties to vote on a more than 2,000-page bill that they hadn't had time to read. They called on Democrats to slow down the process to make it more transparent, since they have until the end of the month to pass the budget. But the Democrats, who control the Senate, called the budget bill for a vote, anyway, and it passed, 31-26

Both chambers are scheduled to be in session Friday.

"We have other plans that we have to sift through to make it work," said Chicago Democrat Sen. Donne Trotter, the sponsor of the HB 859, "There's still a lot of heavy lifting to do."

House approves telecom rewrite

By Rachel Wells

Telecommunications companies are a little closer to assurance that advanced technologies will not be regulated, at least until 2013, and that old technologies won’t drain their resources.

The House today approved a rewrite of the 1985 law regulating telecommunications companies operating in Illinois. The act was last updated in 2001.

Under the measure, SB 107, broadband and Internet-based phone providers would be guaranteed for the life of the law that those services would remain unregulated. Internet-based phone services would be required to register with the Illinois Commerce Commission but would only have to provide very basic information. That information would allow the state to map where Illinois does and does not have adequate broadband adoption.

Regulations on landline service providers would also be loosened. Instead of requiring repair of landline service within 24 hours, the measure would allow a 30-hour window. The threat of a $30 million fine for companies such as AT&T for failing to meet service quality standards would also disappear if the bill became law.

They would, however, still be subject to fines of up to $200,000 for each offense. Other service quality standards would include installing service to customers within five business days and keeping appointments with customers. Failing to meet those standards would result in consumer credits.

The measure would also fix costs for three levels of basic phone service for the next three years.

Proponents say loosening regulations and providing regulatory certainty will encourage telecommunications companies to invest in broadband in Illinois, which in turn would bring more jobs in other sectors to the state.

The consumer advocacy group The Citizens Utility Board says the bill contains no provisions requiring telecommunications companies to invest in broadband throughout the entire state, including rural and low-income areas, nor does it guarantee jobs.

“You can not guarantee the unguaranteeable,” said Rep. Kevin McCarthy, an Orland Park Democrat. “But we can guarantee the way we’ve been going up until now, has been nothing but losing jobs.”

The House approved the measure with unanimous support.

Budget off to rocky start

The broad strokes

By Jamey Dunn

House Democrats appear to be crafting a budget without a tax increase, without borrowing to make the annual pension payment and without Republican support.

In a House committee this morning, Majority Leader Barbara Flynn Currie, a Chicago Democrat, laid out some possible pieces of the budget. The committee approved an amnesty plan for delinquent taxpayers that Currie said could bring in about $250 million.

She later voiced support for a $1-a-pack cigarette tax increase that passed in the Senate last session. Currie estimated it would bring in about $320 million. A plan to “securitize” the state’s chunk of the national tobacco settlement would bring in more than $1 billion for next fiscal year.

“All of these things are part of a final budget mix, and we’ll see where we go,” Currie said.

But by far the biggest component was a plan to borrow almost $4 billion to make the pension payment. It passed in the committee along partisan lines.

On the House floor, the borrowing amendment, which is similar to the tactic the state employed to make the pension payment last fiscal year, was called for a vote to add it to existing legislation, and it received the simple majority it needed. However, the full bill will require a three-fifths vote to pass on to the Senate.

With Wednesday's vote, the Democrats were testing the waters for pension borrowing, and the response was a resounding “no.” There wasn’t even unanimous support on their side of the aisle. Of course, the bill can always be called for another vote later, and time will tell if Democrats can find the 10 or so votes they would need for it to garner the three-fifths majority.

“It’s the same old thing. We’re just continuing to look at a budget as an instrument of debt rather than a balanced instrument that’s supposed to have real revenue for the expenses,” said Rep. Roger Eddy, a Hutsonville Republican.

Eddy added, “I think unless and until there is a real commitment to talk about some of the reforms that we feel are necessary for a responsible approach to budgeting, nobody’s really interested in borrowing more as the answer. ... When you think about the cost that has been piled onto the pension system in the last seven or eight years with various schemes and payments not being made, we’re paying hundreds of millions of dollars in interest.”

Currie said that while cuts may be necessary, Republicans couldn’t produce a list of $4 billion in cuts that would be politically tolerable or sustainable for the state.

After the committee meeting this morning, she had hinted that the borrowing might not find the support it needed. Currie said that without borrowing, “we’re going to have to scuttle about and figure out what our other options might be.”

Gov. Pat Quinn’s budget director David Vaught said of the pension bonds this morning, “This bill is about cash—we don’t have any, so we’d like to use bonds, issue bonds and sell some bonds, to pay the pension funds.”

If pension borrowing cannot pass in the House, it begs the questions: Where will the “cash” come from? Or will it come at all?

State Police Funding

By Rachel Wells

Illinois State Police may get their funding, but local governments won’t be happy about it.

The Illinois Senate approved a measure today that would provide an estimated $22 million to the state law enforcement agency, which under proposed cuts would otherwise lay off about 460 sworn officers and close five regional offices.

Some of that funding will come from additional $1 to $15 fines imposed during court proceedings, but others would apply to mail-in bonds, such as those associated with some speeding tickets, that by Supreme Court ruling cannot be raised above $75. In those cases, counties and municipalities would have to share the $75 fee with the Illinois State Police, shrinking local government’s cut.

Lawmakers aren’t sure how much Senate Bill 3695 would take from local governments statewide, but Kip Kolkmeier of Metro Counties said Lake County government had estimated annual losses at about $160,000, with municipalities in Lake County losing about $180,000.

“I’m not trying to diminish that, that just doesn’t seem like a whole lot at risk compared to the employment of 460 officers and us losing five of our regional offices to protect us,” says Senate sponsor Kimberly Lightford, a Maywood Democrat.

“If the state police are to lay off 464 officers and close five districts, the director has already testified in committee that we will become a reactive agency and no longer be proactive out writing citations,” said State Police Capt. Tim Becker. “In 2009, our 540,000 citations generated $16 million for the counties. That’s $16 million they will not be getting if we’re not out writing tickets.”

Opponents voiced concerns that the money could be swept into the general revenue fund and may not go toward state police funding in the end

“[It’s] going to take a big slice out of municipal and county law enforcement officials’ money. So in the end, we’re robbing Peter to pay Paul,” said Rep. Dale Righter, a Mattoon Republican.

The measure, already approved by the House, now heads to the governor.

Quinn calls for insurance reform

By Jamey Dunn

Gov. Pat Quinn called for lawmakers to pass legislation before they adjourn their spring session that would allow Illinois to capture $200 million in federal funds to expand the state’s pool for high-risk health insurance.

Illinois offers people with preexisting conditions an opportunity to be insured through the Illinois Comprehensive Health Insurance Plan, often referred to as ICHIP. However, the premiums, which can often be steep, make the program unaffordable for many. Quinn said the federal funds would expand the program and make “high risk” health insurance more readily available.

Quinn is also asking lawmakers to pass a “bill of rights” for health care consumers. It would include:

• Coverage for children with preexisting conditions.
• Guaranteed access for women to obstetrical and gynecological care.
• Requirements that insurance companies make information, such as premium and health care costs, available to the public.

Quinn added that the state needs a system to review cases of insurance companies dropping people from their plans.

“Right now if you have home insurance or auto insurance, you have an ability to appeal to the [Illinois] Department of Insurance to make sure that you’re getting a fair shake. That provision does not apply right now to health insurance, and it should,” he said at a Chicago news conference.

Michael McRaith, director of the Illinois Department of Insurance, agreed that reforms are needed.

“Make no mistake that Illinois’ health insurance marketplace right now is completely dysfunctional,” he said at the news conference.

McRaith, who has long advocated for expanding consumer access to insurance, said Quinn’s proposal will not fix all the problems, but it will help some families get access to health care and bridge the gap until federal heath care reform takes effect in 2014.

“It is not a silver bullet. It is not a panacea, but it will provide great relief to families around our state in this important transition period leading up to 2014,” he said.

Quinn’s demand that the legislature address this becomes another issue stacked upon some sweeping changes to nursing home and telecommunications regulation that the General Assembly plans to address this session — not to mention passing a “balanced” budget, that will not contain an income tax increase, in the face of a $13 billion deficit. And don’t forget, legislators are still saying they will have session wrapped up by the end of the week. Things are going to start moving quickly. Check back for updates.

Free rides compromise moves forward

By Rachel Wells

Sen. Rickey Hendon has changed his mind. Offering free mass transit rides to all seniors is going too far, the Chicago Democrat said.

Last month, after blocking a repeal of the program that he sponsored in 2008, Hendon today sought and found committee approval for limiting free rides to only low- and middle-income seniors.

Previous proposals to repeal the program set the annual income level limits at about $22,000 for individuals, $29,000 for a household of two and $36,000 for a household of three or more. Those limits are too low, Hendon said.

The limits included in HB 4623, which received unanimous approval from committee members, would be about $41,000 for one, $54,000 for two and $57,000 for a family of three or more, Hendon said.

“I think this is a real number. It works. Seniors won’t have to make the decision between trying to ride and feeding themselves or buying their medication,” Hendon said.

He thanked Senate President John Cullerton and Republican Sen. Christine Radogno for convincing him that free rides for all seniors, including the wealthy, was not the way to go.

The measure would allow financially troubled Chicago transportation systems to collect $25 million to $35 million more.

Hendon did, however, insist upon a sunset clause that, if the legislation is not renewed in two years, would reopen the program to all seniors.

“I don’t quite trust CTA,” Hendon said. “The two-year sunset allows us two years to see if they’re going to put more trains on the tracks and more buses and see what they do with the money.”

Radogno said giving free rides to wealthy seniors is not the way to make the CTA accountable. “It just doesn’t seem to me to make a lot of sense to revert to bad public policy to discipline an agency, that if we have problems with CTA we ought to find another way to do it.”

Cohen plans governor bid

Former lieutenant governor candidate Scott Lee Cohen announced today he plans to run for governor as an independent.

Cohen stepped aside as the Democratic candidate for lieutenant governor after allegations of domestic violence and stories of steroid use surfaced from his past. The Democratic Central Committee has since chosen Sheila Simon as Cohen’s replacement.

"Everybody, everybody makes mistakes in their life. Everybody's entitled to a second chance, and everybody is entitled to redemption," Cohen said at the Chicago news conference he held to announce his candidacy for governor. He will have to collect 25,000 signatures from registered voters by June 21 to get his name on the ballot.