Veto session CapitolView

The first week of veto session in the Illinois General Assembly wraps up with some unexpected movement on some of the issues facing the legislature. Gaming, the Smart Grid/ComEd rate hike and pensions are discussed.

Panel: Mike Lawrence, Charles Wheeler & Benjamin Yount. Moderated by Jamey Dunn (Illinois Issues Magazine)

Lawmakers push some issues to the last week of veto session

By Jamey Dunn

This week, lawmakers overturned Gov. Pat Quinn’s veto of a smart grid plan, clearing the way for the state’s two biggest utilities to raise rates and begin work on the state’s electrical grid. But legislators left many issues unresolved and say they plan to revisit them when they return next month for the second half of veto session.

Tax breaks
Senate Present John Cullerton presented a bill in committee this week that would give a tax break to a business that says the recent income tax increase would result in a $158 million tab.

The CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, has threatened to leave the state if lawmakers do not provide some form of tax relief.

Cullerton purposed changing the way the group’s taxes are calculated. CME’s tax bill is based upon its sales, but many of those sales are online trading. Cullerton said that state considers all of those sales as happening in Illinois, even though many of CME’s customers do not live in the state. “You can’t tell where the customer receives the service nor where the customer orders the service, so there’s a default that every sale takes place in the state of Illinois. So 100 percent of the revenue from this activity is being sourced to Illinois,” Cullerton said. His plan would lower the percentage of CME sales that are taxed by Illinois, and he said cut that $158 million tax bill “about in half.”

Cullerton added, “So there would definitely be a reduction in revenues to the state, but of course if they leave, there will be an even further reduction.”

Cullerton and other Democrats framed the change as keeping the tax code modern and in step with new technology. “The exchanges have said that if we don’t correct this inequity that they would consider going to another state, and so that obviously is something that we should take into account as well,” he said. “But it really is not a threat to leave that motivates me to do this. I think it’s just a recognition that this is an unfair way of calculating their tax.”

The proposal also includes a five year extension of a business tax break for research and development.

James Parasi, chief financial officer for CME, said his company employs more than 2,000 people in Illinois. He said those employees also pay income, property, sales and other taxes in the state.  Parasi said CME’s income tax payment for 2010, before the tax increase, made up 6 percent of all the cooperate income tax revenues the state brought in that year.

Senate Republicans said they supported the idea of lightening CME’s tax load, however they said it was unfair to focus in on one business for relief. “There are dramatic and significant unintended consequences from that tax increase that need to be addressed. And it is preferable if they are addressed not necessarily on a company-by-company basis so much as in a broader based fashion,” said Sen. Matt Murphy, a Palatine Republican. “And including things that frankly will help the little guy, the small business, as well.”

Sen. Dale Righter said that offering help to only CME sends the wrong message to small-business owners who do not have the means to lobby the General Assembly on the same level. He likened the plan to a “corporate bailout.”

“I believe that you have a real problem. I believe that you have been caught in a glitch here that probably does need a fix,” Senate Minority Leader Christine Radogno said to Parasi. “This may be a real issue, but there is a perception problem that the only folks that get the help are those that have the access and the money to buy that access.” She said of the bill as is: “What’s not real is moving this bill forward because the governor is not going to sign it. It is not going to go through the House. And I don’t want to perpetuate the perception of this special treatment.” Radogno said she is willing to work on a more comprehensive package, but she did not think that lawmakers should rush a plan through before the end of the veto session to appease CME. “If you guys leave because this doesn’t pass today, it does raise the question to the sincerity of whether or not you were staying in the first place.”

A Quinn spokesperson said the governor had some suggestions to be included in the plan.

Regional superintendents
Quinn’s plan to pay regional superintendents was shot down in the House this week, leaving the administrators, who have not been paid since the summer, scrambling to find a solution before the end of veto session.

Quinn vetoed from the budget in June the money to pay regional superintendents and their assistants. He said the locally elected administrators should not be paid with state dollars and put forth a plan to pay them out of a local tax.

Rep. Frank Mautino said some of the superintendents are receiving support from public aid programs because they are barred by law from having another job. Mautino, a Spring Valley Democrat, is the sponsor of House Bill 3828, which calls for the superintendents to be paid out of the personal property tax replacement fund.

Opponents said that it is unfair to push the cost onto local governments, when the budget the legislature passed included the funding for the administrators’ pay.

“We’re getting a lot of concern from every unit of government that receives part of this money,” said Crystal Lake Republican Rep. Michael Tryon. Some opponents said it would be better to simply override Quinn’s veto of the funds. Mautino said he had no control over whether an override would be called for a vote. He placed HB 3828 on postponed consideration, which means he could call the bill for another vote. An override of Quinn’s veto could also happen before the end of veto session, but for now, the superintendents continue to wait for paychecks.

"We have said from the outset we deserve to be paid now and moving forward. We are disappointed by [the] vote in this chamber against this possible funding solution. We know we need a solution now and can't wait any longer. We will keep working with legislators to find the votes for a reasonable solution for our very serious funding problem, and we remain hopeful that resolution will happen in this veto session,” Bob Daiber, president of the Illinois Association of Regional Superintendents of Schools and Madison County regional superintendent, said in a prepared statement.

Pension reform
House Minority Leader Tom Cross said this week that he has the 30 Republican votes he needs to pass Senate Bill 512 — which would reduce pension benefits for employees hired before January, when a reduction for new hires went into effect. Cross said it is now up to House Speaker Michael Madigan to call the bill and put up 30 Democratic votes. Madigan’s spokesperson said once Cross gives Democrats a chance to review an amendment he is working on, Democratic leadership will start polling its caucus members to gauge whether there is enough support to pass the measure.

Gaming expansion
Gov. Pat Quinn said that if he were given the opportunity, he would veto the gaming bill lawmakers passed last spring. Since the bill, Senate Bill 744, was held from going to Quinn’s desk through a parliamentary procedure, he instead laid out what he would like to see changed. After being pushed all summer by the sponsors of SB744 for specifics, Quinn shared his thoughts in a news conference a week before veto session. Waukegan Democratic Sen. Terry Link, sponsor of SB744, said Quinn’s plan couldn’t pass in the Senate.

However, Link is also sponsor of SB 747, a plan he says is “based” on Quinn’s demands. Quinn denounced that bill and called Link's efforts a “charade.” Link said he would call SB747 for a vote on Wednesday but then opted not to because he said he wanted to allow for more discussion on the bill.

Cullerton, who supports gambling expansion, said he wants to give Quinn next week, when lawmakers take a break from session, to consider his options. Cullerton said his chamber would take up the issue of gaming in the last days of veto session. Lawmakers are scheduled to return to Springfield for the final three days of the veto session on November 8.

House minority leader says Republicans are ready to pass pension reform

By Jamey Dunn

House Minority Leader Tom Cross said today that he has the Republican votes needed to pass a plan to reduce pension benefits for most state employees, but a teachers' union claims there is not enough support  from lawmakers to pass the legislation.

Cross said he and House Speaker Michael Madigan agreed that each of them would find 30 votes for  Senate Bill 512 within their respective caucuses. The two House leaders have partnered on pension reform talks that took place while the legislature was out for the summer. Cross said today that he has the votes on the Republican side. “We’ve got our votes ready to go. The bill itself is still being finalized. It’s a very complicated bill, so it should be ready this week.”

Cross said it is up to Madigan whether the bill is called for a vote when lawmakers return in November for the last week of the veto session. “We want to have a bill ready, and we want to be prepared on our side, and that’s what we’re doing.”

He added: “This is a priority. We need to do it.”

Cross' legislation would allow employees to keep all the benefits they previously earned. Under the bill, they would have to opt to pay more for their benefits, choose to participate in a reduced-benefit plan that was enacted for employees hired after Jan. 1 of this year or move into a plan similar to a 401(k).

Steve Brown, Madigan’s spokesperson, said Democrats are waiting to see Cross’ changes to the bill. “An accurate view of the situation from our side is the Cross staff has said there is another amendment to the bill. … That’s where we’ve been all week.” ” Brown said once lawmakers get a chance to see the review, Democratic leadership will begin polling them to see if there are enough votes to pass the bill.

The Illinois Education Association issued a response today saying that members of House leadership have told the organization that there are not enough legislators willing to vote in favor of Cross' bill. Jim Reed, director of government relations for the IEA, said in a video statement on the group’s website that claims that there is enough support to pass the bill are “false” statements. Reed said the group has been told by legislators that “really nothing has changed since last spring.” The House held a hearing on SB 512 during the the spring legislative session, but Cross acknowledged then that it lacked the support to needed pass on a full floor vote. Union officials say pension benefits are protected by the state Constitution, and plans such as SB 512 are unconstitutional. Senate President John Cullerton has said that he agrees that such changes are unconstitutional. However, if the bill is approved in the House, Cullerton said he would allow it to come up for a vote in his chamber.

The House today passed a different bill from Cross, House Bill 3813, meant to prevent pension fraud and double-dipping cases. The bill was rushed through the legislature after the Chicago Tribune reported on Chicago unions officials collecting both city and union pensions. The paper also uncovered two union officials who served as substitute teachers for one day each and then counted their years working for the union toward state pensions. Cross said such abuses have helped solidify support behind broader pension reforms. “We’re going to do what we can — and I think others will, too — in saying that those days are over, and we can’t go forward. We can’t afford it. Plus, it’s just wrong.”

Cross said Quinn backs HB 3813 and that it has a good chance of passing in the Senate.

“Earlier this week, at the start of session,” said a prepared statement from Quinn’s office. “Governor Quinn urged lawmakers to address flagrant abuses of the pension system. The governor wholeheartedly supports the pension abuse reforms that passed today and is very interested in pension reform moving forward but has always noted that any changes to the pension system should be within the bounds of the Constitution. Governor Quinn looks forward to reviewing legislation once it arrives on his desk.”

COGFA shoots down facility closures

By Jamey Dunn 

A legislative panel voted today to reject the closure of four state facilities because legislative leaders plan to work with the governor on budget tweaks that may make some closures unnecessary.

Gov. Pat Quinn called for the closure of seven institutions and the layoff of more than 1,900 state workers. Quinn said the budget approved by the legislature in the spring would not fund basic services through the end of the year, and the closures would be needed to keep government afloat. “Something has to give, and what has to give is we have to close down some of those facilities,” Quinn said when he announced the closures. Under Quinn’s timetable, the state would start closing facilities next month, with the last of the closures coming early next year.

But lawmakers sitting on the Commission of Government Forecasting and Accountability (COGFA) disagreed with Quinn’s tactics.

Legislators who voted for and against the closures generally agreed that the state does need to consider shutting down some of its institutions. Those who voted on both sides of the issue also agreed that Quinn’s plan was rushed and a coherent transition would take time. “We’re trying to do something in three or four weeks that we’ve waited eight years to do,” Hinsdale Republican Rep. Patricia Bellock said at this hearing this morning. “We want to close facilities, but taking a look at all the lives and jobs and people in these residences, it’s a very, very hard decision to make.”

Bellock, a co-chair of COGFA, said budget cuts affecting small providers that offer community-based care to the mentally ill and developmentally disabled raised concerns about whether they will be able to handle the needs of patients currently housed in state facilities. “The community providers have lost money, so to put that all on them and the hospitals … it’s a very. very difficult decision, especially when we’re looking at the fragile lives of the mentally ill. … It’s just not the one place. It’s how it affects the entire mental health system in Illinois.”

Other lawmakers echoed Bellock’s call for a more comprehensive look at all the institutions in the state to best determine where closures can be made. “We need to be taking a systemic look at all of these, and there may be a need for some closures, but it needs to be done in a much more organized [way] and in a manner that’s going to make financial sense and fit into reality,” said Sen. Dave Syverson.

Syverson, a Rockford Republican, argued that the closure of the Singer Mental Health Center in Rockford would not result in savings because the center is used for emergency cases — the average stay is 14 days — and such patients would have to be transported long distances to get similar treatment. “From a dollar standpoint, it does not make sense. The idea of how can we operate these facilities more cost-effectively immediately makes sense. Can some of these services of any of these facilities, can they be transferred to the private sector over a period of time with a legitimate transition plan? … That is a possibility, but again, that is going to have an upfront cost to it. And if the goal here is to try to save $50 million, that’s not going to occur.” Singer was in Syverson’s district until a new legislative map was drawn this year.

However, Rep. Elaine Nekritz, who voted to close Singer, said that the budget crisis is forcing lawmakers to make choices that could be damaging. “In this kind of environment — and it’s happening in other states too — the old decision-making models where it’s harm versus no harm or risk versus no risk don’t really work. The decisions we’re going to have to make are harm versus less harm and risk versus less risk because people are going to be hurt by the decisions we make,” said Nekritz, a Northbrook Democrat. “We don’t have the luxury of unlimited time or lengthy time. I wish we did. … And we’re going to have to make these decisions with incomplete information.”

Chicago Sen. Donne Trotter, a budget point man for the Senate Democratic leadership, scolded lawmakers who backed budget cuts in the past and voted today to keep facilities open. “I think that everyone that represents these districts that didn’t vote for some funding to make sure that these most-vulnerable people are taken care of should be voted out of office,” Trotter said. “That was not the concern when they were voting last May. Hard decisions had to be made … and we have to make them now. So there’s a story that should tug at everybody’s heart every place we go, but some hard decisions have to be made. … Do the right thing. Either close these places or come up with funding to ensure that we can keep them open until we can find some other alternatives.”

He added “This is B.S. The chickens have come home to roost, and the egg is on your face.”

All the members of the panel agreed to keep the Chester Mental Health Center open, arguing that there is no other facility prepared to house the criminally insane. “There are two facilities I think that we just couldn’t close, and it’s incumbent upon us to find the resources. One is Chester, one is Logan [Correctional Center in Lincoln,]” said Rep. Michael Tryon, a Crystal Lake Republican. “[Chester is] the only maximum security facility for the criminally insane and those who are not fit to stand trial. … These are not the kind or prisoners that we should put in Alton [Mental Health Center] or any other facility.”

The committee also voted to recommend that the Illinois Youth Center in Murphysboro and the Jack Mabley Developmental Center in Dixon remain open.

Those who did not vote in favor of some of the closures said that they were still open to the idea of closing facilities, but they want to see how budget negotiations during veto session pan out. “I think that these are things that really take time. A lot of things are happening. We’re looking at maybe redistribution money in the budget. I think there’s more information that we need. I don’t think that it really does us any good to be hasty just for the sake of haste,” said Rep. Al Riley, a Democrat from Olympia Fields.

House Minority Leader Tom Cross said that the four party caucuses plan to come together with Quinn and discuss shifting about $240 million in funds to other areas, including keeping facilities open. He said some of the money would come from Quinn’s line item vetoes. Cross said House members are open to moving dollars around, as long as the spending total is the same as the original budget passed in May.

COGFA plays an advisory role when it comes to facility closures, so Quinn could ignore today’s votes.

However, Evanston Democratic Sen. Jeffrey Schoenberg, co-chair of COGFA, said, “No administration has ever moved contrary to how the commission has recommended.” He said he expects the commission to vote on more closures during the last week of veto session.

"While we respect the role of COGFA, their recommendations do not change the reality of the budget we are tasked with managing. These are not closures that we sought to accomplish this fiscal year; we are forced to close these facilities now because there is not enough money appropriated to run all these facilities for the entire year. Unless the General Assembly takes action, we must continue to seek these closures and other actions to responsibly manage the budget, and we will continue to do so," said a prepared statement from Quinn's office.

Legislators override Quinn's veto on smart-grid bill

By Jamey Dunn

Lawmakers today overturned Gov. Pat Quinn’s veto of a bill that will allow the state’s two biggest utility companies to raise customers' rates in exchange for investments in the state’s power grid.

Under the plan, Ameren and Commonwealth Edison will be able to increase customers' rates by 2.5 percent annually in exchange for $3.2 billion in spending on the grid over 10 years. The companies will add smart grid technologies that allow them to monitor transmission and respond quicker to outages. The measure would also require ComEd to create 2,000 new jobs through the plan and Ameren to create 450 jobs.

Supporters were able to pass a trailer bill this week that would impose reliability standards on the utilities. It would also require them to spend more on traditional infrastructure, such as underground wires, to prevent blackouts. The bill also calls for $60 million from the utilities annually to go toward rate relief programs for low-income customers. Backers of the overall plan say the so-called trailer bill helped pull in the three-fifths majority needed to override Quinn’s veto.

Sen. Mike Jacobs, a sponsor of the plan, said the state’s increasing demands for energy make upgrades to the out-of-date grid a necessity. “If you look around the room here, everybody is on the phone. Everybody’s got a computer in front of them. Everybody’s got a smart phone in their pocket. We need the power.”

Opponents say the bill is just a way for the utilities to skirt the authority of the Illinois Commerce Commission (ICC), which rules on proposed rate hikes. “I’m not sure smart grid’s really the issue here. It think the real issue is that this is a new way to recalculate rate hikes because Ameren and ComEd didn’t get the approval that they wanted from the ICC. Let’s be honest, that’s what this is about. If you put the name smart grid on it, it doesn’t make it any better,” said Sen. Kyle McCarter, a Lebanon Republican.

McCarter said that increased energy rates would drive business out of the Illinois. “One of the last good things we’ve got going in this state for businesses is affordable power. We’ve increased taxes on people, we’ve got high regulation. and we still have high workers’ compensation rates.”

But Jacobs, a Democrat from Moline, pointed to the economic development that he says the plan will bring. “I don’t know the last time I was in a legislative body when anyone stood up and said they we’re going to create 2,450 jobs. And these are good paying jobs. … These are jobs that are written into the contract.”

Quinn, a vocal opponent of the plan from the start, would not say if he plans to sign the trailer bill containing some consumer protections. “The consumers of Illinois are deeply disappointed in the General Assembly’s action today to give Commonwealth Edison and Ameren guaranteed annual rate increases for each of the next 10 years… and so am I,” said a prepared statement from his office. “The fight for consumers against unfair utility practices will go on and will never end as long as I am governor.

Gaming bill held for more work

By Jamey Dunn

After publicly calling lawmakers' attempts to pass gaming legislation based on his suggestions a “charade,” Gov. Pat Quinn is reportedly in talks with its sponsor.

Last week, Quinn laid out the changes he wanted to the gaming expansion package lawmakers approved last spring. Sen. Terry Link, the sponsor of the original plan, Senate Bill 744, decided to back a bill, SB747, that he said was based on Quinn’s proposals.

A Senate committee heard testimony on SB747 today, and Quinn balked at the idea of his plan being pushed through the legislative process. “This is not the governor’s bill. Instead of improving their current bill and having good faith discussions within the governor’s framework amongst the House, the city of Chicago, the racing industry, the [Illinois] Gaming Board, and the governor’s office, some have chosen to put on a charade,” said a prepared statement from Quinn’s office. “The governor announced a framework — not a bill — for any gambling expansion last week. He will support a smaller, more moderate gambling expansion that prevents corruption and provides adequate revenue for education.”

But Link, a Waukegan Democrat, said he carried they bill with the sincere hope that it would pass. “I can do only as much as I can do.”

Link said he thinks Quinn may have backed away from the plan after he began to realize that it did not have enough support to pass in the legislature. “I think he already felt that there were a lot of people out there that didn’t have the willingness to vote for his concept. So now that we put it in a bill form, his feelings [are] a little bit different.”

Link said he and supporters of the original bill tried to work with Quinn all summer to negotiate a rework of the bill that he could live with. “President [John] Cullerton has met with him a couple times without any type of real negotiations,” Link said. “Until that press conference [when Quinn made his demands] … we had no idea of where the governor stood on any of these issues.”

After the committee hearing this afternoon, Link said he doubted Quinn’s willingness to negotiate. “If he was truly open to negotiations … why wouldn’t he personally call me and say, ‘I’d like to negotiate with you?’ I’m still the sponsor of the bill. I’m the chief sponsor of both bills.” However, someone must have picked up the phone because a member of Cullerton’s staff said Link, Quinn and Cullerton plan to meet  to discuss an amendment to SB747. Earlier today, Link said he planned to call the bill for a floor vote this evening, but later, he chose not to. “We’re going to have a meeting,” he said. A spokesperson for Quinn would not confirm the meeting, but said the governor will be attending a scheduled leaders meeting in the morning where several topics would be discussed.

Per Quinn’s suggestions, the bill does not allow for slot machines at horse racing tracks and limits gaming expansion to five new casinos, including one operated by the city of Chicago. However, it would require casinos to pay a so-called impact fee of more than $330 million to replace the money that the tracks could have made with slots. “This would be a fee that would make up for the amount of money that was figured to be made from the racetracks,” Link said. “Casinos would also have to chip in on an impact fee of $70 million that would go toward education.” He estimated that each casino would pay about $25 million.

Tom Swoik of the Illinois Casino and Gaming Association said the fees would put four or five of the state’s 10 existing casinos out of business. “You’re against SB 744 when you had the racinos,” Link said of the casino owners. "Now you’re against this with the impact fee. What do you want? You can’t have it both ways. If we want to increase he number of casinos in the state of Illinois, you have got to be for something." Link said that he was open to making changes to the fee system and filed an amendment this afternoon that would put off the fees until 2015.

Swoik said casino owners are not inherently against new casinos, as long as they do not cannibalize the business of existing operations. “We’re not opposed to expansion if it’s in new markets and in areas that don’t have such a concentration of existing gaming positions. All of the racetracks are right next to existing casinos.”

Cullerton said today that he supports the legislation but that there were some components he did not like. He noted that making local governments vote to opt into a plan to legalize video poker in bars and restaurants across the state likely result in less money for capital construction projects. Currently, local governments can vote to be exempt from the plan but do not have to vote to be included. The Illinois Gaming Board has not issued any licenses for video poker, and the gaming expansion has yet to bring in dollars for the capital plan it was enacted to fund.

Cullerton said SB 747 plan could bring in education dollars and more than $1 billion to help the state pay down its billions of dollars in unpaid bills. He said that even though he disagrees with parts of the plan, it is more important to try to stop gamblers from crossing state lines by approving five new Illinois casinos. “We do have all these people from Illinois spending their money in other states,” Cullerton said. “If you supported the original bill, I think there’s a way in which you could also support this bill.”

Sen. Matt Murphy, a Palatine Republican said that if a gaming bill does not pass during the veto session, it would be a “failure of leadership” on Quinn’s part. “The state is losing out on the $1.5 billion in up front revenue to pay down the backlog of bills and $1 billion in annual revenue that say could go to reducing or rolling back the tax increase that has seen us struggle on the jobs numbers since January.”

Murphy added: “That is going to sit right at the foot of the governor.”

Whatever happens with SB 747, Link, who by his own count has been pushing gaming expansion for about 20 years, said he would not be ready to give up. “I won’t sit back and just go in a corner. I will be working with the [Senate] president and the House to try to get another bill resurrected and make sure we can get something done.”

Madigan wants lawmakers involved in union contract negotiations

By Jamey Dunn

House Speaker Michael Madigan today unveiled a plan that he says would allow lawmakers to play a role in bargaining with unions for state employee contracts.

“Traditionally, prior governors have negotiated with [the American Federation of State, County and Municipal Employees] and the other unions without regard to the legislature. Traditionally, the governor would negotiate. The governor would come into agreement with the unions, and then subsequently, the legislature would be told this is the cost of the contract we just negotiated,” Madigan said. “They’d send the bill to us, and we’d be told pay the bill.”

Madigan seeks to change that. He introduced a resolution today that he said would “interject the legislature into collective bargaining.” If approved, the measure would allow the legislature to vote on a cap for wage increases when union contracts are up in 2012. It would also remove staffing levels from bargaining contracts. Madigan said this would prevent governors from making a deal like Quinn’s promise to AFSCME last year that there would be no layoffs until 2012. “Once there’s a contract in place that states a rate of pay, why the only venue for adjustment in a budget year is the size of the workforce. Gov. Quinn gave that away. I don’t think he should do that.”

Quinn has since gone back on that deal by announcing about 1,900 layoffs as part of a state facility closure plan. He also recently put a freeze on pay raises included in union contracts. Quinn said he was forced to do both because the legislature approved a budget that does not include enough money to fund essential government services through the end of the fiscal year. The unions and Quinn are fighting over the raises in court, and hearings on the proposed facility closures are currently under way throughout the state.

House members publicly grumbled about Quinn’s deal with AFSCME during the spring legislative session as they tried to craft a budget without spending more than their chamber’s admittedly conservative revenue estimates. Madigan tapped the same committee that produced the revenue estimate to come up with a percentage to use as the wage increases cap. “We have a choice. We can stand on the sidelines and let those people go off and do what they do and send us a bill. Or we can interject ourselves now and be present through the negotiations so that our position is known and understood,” Madigan said.

He added: “What we’re talking about is about a two-and-a-half-year obligation on spending. Well, I think the legislature has a rightful place in this bargaining,”

House members said they were unsure whether the resolution would have any binding effect on Quinn’s actions. However, they said it would send a message to the governor about how such agreements limit their budgeting power, especially when faced with revenues lowered by the recent economic crisis.

“The governor created his own problem by not only the raises but by guaranteeing no layoffs. I mean how do you do that combination in this kind of an environment?” asked Hutsonville Republican Rep. Roger Eddy. He said the resolution sends “the message to the governor that we can’t have that type of budgeting take place. We’re the appropriating agencies. We’re the arm of appropriation in the Constitution.”

Quinn has yet to take a position on the plan. “It’s an interesting suggestion. There will be many challenges confronting the state as we begin collective bargaining negotiations,” said a prepared statement from Quinn’s office. A call to AFSCME for comment was not returned.

Meanwhile, the Illinois Senate approved a bill today that is the first step to a potential override of Gov. Pat Quinn’s veto of a plan to upgrade the state’s electric grid.

Lawmakers approved a so-called trailer bill that would increase requirements on Commonwealth Edison and Ameren. Supporters of plan that would allow the companies to raise customers' rates in exchange for more than $3 billion in grid investments over the next 10 years hope that the changes will bring enough votes onto the original bill to override Quinn’s veto.

The utilities would be able to increase rates by up to 2.5 percent annually. Quinn said today the plan allows the companies to do “an end run” around the Illinois Commerce Commission, which rules on rate hikes. Quinn called the trailer bill — which among other changes, would require utilities to spend more money on grid upgrades focused on reliability and spend millions more annually on rate relief for low-income customers — “a hasty effort to try and paper over this bad bill.”

Oak Park Democratic Sen. Don Harmon, who sponsored the follow-up bill that passed today, said that the plan would not result in the automatic rate increases opponents have described. “You have to remember, it’s not net revenue to the utility. They are recovering costs that they have already incurred.” Harmon said any rate increases would be capped and would likely result in about $3 more per month for average customers.

However, he conceded that voting on a bill that would result in rate increases may be unpopular with voters. “This is one of those things that is difficult to explain to folks back home, and I understand that. … We all want reliable power delivered to our homes and businesses. The only way that’s going to happen is if the ratepayers pay for it.”

Lebanon Republican Rep. Kyle McCarter said that instead of raising rates on all customers, the legislature should set a price for smart meters — an important component of Smart Grid that allows customers to potentially save money by monitoring their power usage — and utilities could then give interested customers a chance to buy them. “Other states have chosen other ways to pay for this,” McCarter said. “If this smart grid is wonderful like we’re being told it is, surely everyone will ask to have a smart meter and be part of the smart grid.”

Lawmakers look for ways around Quinn's opposition

By Jamey Dunn

Tweaks to two major legislative packages emerged the day before the fall veto legislative session is scheduled to begin.

Waukegan Democratic Sen. Terry Link said he plans to bring a bill that contains Gov. Pat Quinn’s suggested changes for the gaming expansion up for a floor vote in the Senate this week. Quinn said last week that he supported five new casinos in the state, including one owned by the city of Chicago, but opposed the slot machines at horse racing tracks that would be allowed under the gaming plan lawmakers approved in the spring session.

Last week, Link told Illinois Issues that legislation based on Quinn’s demands could not find the support needed to pass in the Senate. However, Link said today: “I will carry it with sincerity. I will tell all the facts, figures and everything that the governor has in it. I will … make it as a positive endeavor.” He said if it does not pass, he plans to sponsor a trailer bill in the last week of veto session that he hopes will be a “compromise” that the governor can accept. Quinn has been unable to veto the gaming bill because a parliamentary move was used to hold it from going to his desk. But he said last week that given the opportunity, he would use his veto pen on Senate Bill 744. Link would not share any details today about a potential trailer bill.

Gov. Pat Quinn has also shot down a plan that sponsors say would help the state’s two biggest utility companies update Illinois’ electrical grid. Quinn was a vocal opponent of Senate Bill 1652 when lawmakers passed it last spring. He followed through on his vow to veto the bill and has been urging  residents to call their lawmakers and ask them to vote against a potential override of his veto.

The measure would allow the companies to increase consumer rates in exchange for a $3.2 billion investment in the grid over 10 years.

Supporters worked to craft a follow-up bill that they say would tighten restrictions on Ameren and Commonwealth Edison. They hope it will be enough top drum up the supermajority needed to undo Quinn’s veto. A Senate committee approved the changes today.

“I commended the governor for vetoing the bill, having voted against it. There were clearly some defects in Senate Bill 1652 that caused concern for myself and other members of the General Assembly who voted ‘no,’” Oak Park Democratic Sen. Don Harmon said. Harmon is the sponsor of House Bill 3036, the so-called trailer bill that asks more of utilities and would only go into effect if lawmakers vote to override the governor’s veto. Harmon said the plan “would make that underlying bill, in my opinion, much better.”

House Bill 3036 would increase reliability standards and require the utilities to spend more of their investment on traditional infrastructure, such as buried power lines, to make transmission more reliable. The plan calls for spending on so-called smart grid technologies — which allow utilities to better monitor lines, outages and transmission in real time — as well as basic costs like power lines and poles.

The original legislation requires ComEd to create 2,000 jobs under the plan and Ameren to create 450 jobs. Harmon said his bill would crack down on how those jobs are counted to avoid the potential double counting of a single job. It would also increase the penalty for not meeting those hiring goals from $3,000 per job to $6,000.

The bill calls for both companies to spend an annual combined total of $60 million a year on rate relief programs for low-income customers.

The legislation would also lower the return on equity the companies would be allowed to earn from 10.4 percent to about 9.7 percent. Harmon said in years two through 10 of the plan, the return would be capped at 8 percent to 9 percent. Consumer advocates said the utilities should not be able to make more than 10 percent returns on their investments, since they would likely be backed with rate increases.

Despite such changes, major consumer advocacy groups, along with Quinn and Attorney General Lisa Madigan, remain opposed to the plan.

“We don’t think ... it addresses the fundamental problems,” said Scott Musser, associate state director of AARP Illinois. “I think we need to start from square one on this and go a new direction and get everyone at the table. One of the fundamental problems all along is there hasn’t been substantial negotiations.”

Madigan blasted the proposed changes to the plan. “Just like they tried to muscle this legislation through the spring session, ComEd and Ameren are at it again. On the eve of veto session, the utility companies gave the public just 59 minutes to review their smart grid “trailer bill” before taking it to the Senate for a vote. If ComEd and Ameren’s proposal were actually a “smart” deal for consumers, it would hold its own rather than be rushed through the process without public input. Instead, ComEd and Ameren have produced a “Trojan Horse” deal that’s designed to distract us from what this legislation really does: guarantee the utilities’ profits, mandate automatic, annual rate hikes and eviscerate independent oversight,” the attorney general said in a written statement.


For more on what to expect during veto session, see Illinois Issues' roundup of the big issues with links to background piec

Veto session preview

By Jamey Dunn

Illinois lawmakers will likely have a busy veto session as they consider two industry changing plans opposed by Gov. Pat Quinn, components of a budget that Quinn says is forcing him to close several state facilities and other potentially hot button issues.

“The agenda is pretty full. It’s really kind of the fall legislative sessions these days rather than a veto session,” said Kent Redfield, an emeritus political science professor at the University of Illinois Springfield. Several committee hearings are scheduled for Monday, and the session will runs Tuesday through Thursday. It will resume November 8, with an adjournment date scheduled for November 10.

Gaming
Gov. Pat Quinn laid out what he would like to see changed in the gaming expansion package that lawmakers passed at the end of the spring legislative session. Senate President John Cullerton still has a procedural hold on Senate Bill 744, so Quinn has been unable to do anything but present his list of demands. Skokie Democratic Rep. Lou Lang and Waukegan Democratic Sen. Terry Link, the sponsors of the bill, have been pushing Quinn all summer for specifics on what he wants. When he finally gave them this week, the sponsors seemed less than thrilled. Lang and Link agree that if they drafted Quinn’s plan into a bill, they couldn’t scrape up the votes to pass it.

The governor wants to remove a provision that would allow slot machines at horse racing tracks. He does  support the addition of five new casinos, including one owned by the city of Chicago. He also wants to add a measure to address legalization of video poker in some bars and restaurants across the state. When video poker was approved as part of the funding plan for the capital construction bill, Quinn supported allowing local governments to opt out of having it in their area. Now, he wants local officials to vote to opt it if they want video poker. So far, the Illinois Gaming Board has not issued any video poker licenses, and the plan has not generated any revenue for the state. Quinn also wants to take tax breaks out of the bill, which are a sweetener for existing casinos. His plan also calls for a ban on campaign contributions from those holding gaming licenses or managing a casino.

Supporters of the gaming expansion say they are working on a trailer bill with changes that they hope will appease Quinn and say they plan to roll it out in a committee hearing early next week. They say they cannot pass legislation that does not include slots at the racetracks. Quinn said he will not sign a bill that does, and he has also vowed to veto SB 744 if it is sent to him — making the plan to fix the situation with a trailer bill that would tack changes onto the original legislation a shaky prospect. “Somebody may figure out how to pull a rabbit out of a hat that makes Quinn, and [Chicago Mayor Rahm] Emanuel, and downstate [lawmakers] and the horse racing people happy,” said Redfield. “But it would be a neat trick.”

For more on video poker and the challenges it has faced getting off the ground, see Illinois Issues April 2010.

Smart grid
Sponsors of a Senate Bill 1652, which would allow the state’s two biggest utility companies to increase customers’ rates in exchange for investments in the state's electric grid have said they will  try to drum up enough votes to override Quinn’s veto. Supporters say smart grid technology will create jobs, make service more reliable and help some customers save money by allowing them to monitor their usage.

Opposition to the bill includes AARP; the Citizens Utility Board, which is a consumer advocacy group started by Quinn; and Attorney General Lisa Madigan. Quinn has appealed to the public and even set up a website encouraging people to call their lawmakers and tell them to vote against the bill. Quinn and others say it was written by Ameren and Commonwealth Edison lobbyists as a way to lock in the utilities’ profits. “It seems to me that the governor has a right to set up a media campaign and hire lobbyists and do everything that he’s doing,” said Sen. Mike Jacobs, an East Moline Democrat and sponsor of SB1652. “But at the end of the day, this comes down to the question, do you want a smart grid or don’t you?”

Lawmakers backing the legislation say they are working on a trailer bill to tighten up customer service and reliability requirements in the hopes of getting some fence sitters’ votes to keep the plan alive. Expect heavy lobbying and public relations efforts on both sides of the issue.

For more on smart grid technology and its potential public policy implications, see Illinois Issues July/August 2011.

Budget
Hearings are under way throughout the state about the potential closure of seven state facilities. Quinn announced last month his plans to close the institutions and lay off more than 1,900 state employees. The governor said the budget lawmakers approved in the spring would not fully find state operations, so the facilities must be shuttered to shift money to the core services of the state. Quinn is calling on lawmakers to approve his budget vetoes, many of which, such as a cut to school transportation budget, are generally unpopular with legislators. Quinn is also reportedly working up a list of budget tweaks and cuts he would like to see restored.

Some school officials are looking to lawmakers to find a way for them to get paid. Quinn cut money for the salaries of regional superintendents. The majority of them stayed on the job and have not seen a paycheck since June. Quinn said that local governments should pay them and has a bill in the works to shift the cost. The Illinois Municipal League opposes dipping into local funds. Lawmakers could also vote to override the governor’s veto and restore the money to the state budget. Regional superintendents say they do not prefer one plan over they other; they just want to get paid.

Legislative scholarships
Quinn used his veto pen to try to end a program that has been a source of controversy and scandal for years, but it is unlikely that his changes will ever see the light of day.

Quinn took a bill that would have barred lawmakers from giving scholarships to family members and rewrote it to end the program altogether. He has the support of the bill’s sponsors and has been publicly calling on lawmakers to end the program. However, House Speaker Michael Madigan said Quinn overstepped his constitutional authority, and it is unlikely that the speaker will call the veto for a vote. If no vote is taken, Quinn’s changes and the underlying legislation would die.

Lang, a longtime member of House Democratic leadership, said Madigan has historically been opposed to allowing governors to use their veto pens to make broad changes in the legislation that lands on their desks. “Even if he likes the changes, he has not allowed those bills to be called to a vote because they violate the Constitution.”

Other critical pieces of legislation may come up for a vote in the short time that lawmakers are scheduled to be in session. Legislators may consider a bill that would create the state’s insurance exchange, an online marketplace that is meant to drive down the cost of insurance by encouraging competition. Such exchanges are a key component of the new federal health care reform law. Legislators may also consider a controversial bill that would bring the state in line with a federal plan regarding the punishment and tracking of sex offenders. For more on those topics, see Illinois Issues September 2011 and Illinois Issues blog.  Pension reform working groups that include Madigan and House Minority Leader Tom Cross have been meeting throughout the summer and could potentially produce a bill. For more on the two sides of the pension debate, see this month's Illinois Issues. Cross backed a bill that would diminish benefits for employees hired before other changes to benefits went into effect in January, but it lacked the needed support in the House. “Most people I talk to would be really surprised if [Cross’ plan] moved in the House [during veto session.] Other than if the speaker really just got tired of doing all this and puts it out there so it won’t pass,” Redfield said.

He added: “There are a lot of very heavyweight things to be dealing with. And there’s the context of the budget. … They may not ultimately do anything, but they do have a lot on their plate.”

For more on veto session, see this month’s Illinois Issues.

Illinois tries again for Race to the Top education dollars

By Jamey Dunn

Illinois education officials have decided to again try their hand at the federal Race to the Top competitive grant program. This time, the state wants money to fund early childhood programs.

Illinois lost out on Race to the Top funds in the first two rounds of the program and is now competing for up to $70 million for early childhood education from the up to $500 million the U.S. Department of Education is offering to all competing states. The money would be spent to ensure that more children with the “highest needs” would end up in preschool programs. “Although Illinois currently has enough publicly funded preschool — Preschool for All and Head Start — slots to serve more than 85 percent of the 3- and 4-year-olds in low-income families across the state, school districts continue to report that many children with the highest needs — those from families in poverty, with very low levels of parental education, and with multiple risk factors — still arrive at kindergarten having received no high-quality early learning services,” said the state’s grant application.

The plan calls for a coordinated outreach programs that start before a child is even born. “The state recognizes that its existing strategies are not yet sufficient to ensure that the most at-risk young children and their families will be connected to the services they need. Finding every child with high needs and connecting them with services requires a systemic effort that spans multiple service delivery systems — health care, education, child care, Early Intervention, Child Welfare, etc .— across the prenatal to kindergarten entry age span.”

Illinois set the goals in its grant application that by 2015, 75 percent of children with “high needs” would have at least one year of preschool before kindergarten, 40 percent would have two years or more and 15 percent would have five years of preschool services, including homes visits during their toddler years.

The Illinois Department of Human Services and the state Department of Children and Family Services are also included in the grant application, and some of the money would go toward offering wrap-around social services, such as family counseling, health care and mental health services, to young children and their families. Money would also go toward training and professional development for early childhood educators.

The State Board of Education also proposes that all school districts offering kindergarten programs administer a uniform school readiness test to incoming students so the effectiveness of preschool programs at preparing children for K-12 education can be studied.

The announcement that the state is vying for the grant comes as Illinois is still hoping to opt out of some requirements from another federal program.

No Child Left Behind, passed under former President George W. Bush, requires that all students reach math and reading proficiency goals by 2014. Assessment data released today shows that 695, or 80 percent, of Illinois school districts and 2,548, or 65 percent, of schools failed to make the 2011 Adequate Yearly Progress in student test scores required by the program. Last year, 51 percent of Illinois schools failed to meet the bar set by the federal programs.

In 2011, 85 percent of students had to have proficient test scores in reading in math for schools to pass. That requirement increased from 77.5 percent of students in 2010. The goals for high school graduation rates increased to 82 percent in 2011 from 80 percent in 2010. Only eight Illinois high schools were able to meet the standards in 2011.

U.S. Secretary of Education Arne Duncan announced last summer that his agency would offer waivers to exempt schools from stringent No Child Left Behind performance requirements. “Where there’s a high bar, where folks are really doing the right thing for children, we want to give them a lot more flexibility,” Duncan said when he announced that states would have a chance receive the waivers if they meet certain reform standards.

Illinois officials said they plan to seek a waiver. “We need a realistic, measurable accountability system based on growth and individual student progress rather than an absolute, unattainable goal handed down from Washington,’’  Gery Chico, chairman of the State Board of Education, said in a written statement. “Illinois will request a waiver that builds upon the board’s goals to better prepare every student for success in college and careers, raising expectations for all students and closing achievement gaps.”

 State education officials saw at least one bright spot in the scores: progress on closing the achievement gap. Test scores for African-American elementary students have increased by 11 percent since 2006. Scores for Hispanic students have increased by 2.6 percent over the same time frame.

Lawmakers may move on setting up health insurance exchanges

By Jamey Dunn

As lawmakers return to the Statehouse next week to consider several headline grabbing issues, they also may take up legislation that would affect the lives of the millions of Illinoisans living without health insurance.

Under the federal health care reform law, states can either join the federal health insurance exchange — a competitive marketplace for insurance that is intended to drive down costs — or they can create their own exchanges. Lawmakers in Illinois have opted for the latter, but some say they must make a move during the  veto session to ensure that the state fulfills the timeline set out by the feds.

Illinois must submit its plan for an online health insurance exchange to the federal government for approval by December 2012. If the state misses that deadline, it also loses the opportunity to tailor its own exchange. “It is our feeling that an Illinois-run exchange will offer the state more local control,” said Michael Gelder, senior health policy adviser for Gov. Pat Quinn. Gelder said a local exchange would allow decisions about enrollment, eligibility and other issues to remain at the state level.

About 1.7 million of the 11.2 million Illinoisans under 65 are uninsured — or about 15 percent of that age group. Quinn’s office estimates that about 900,000 of those people would purchase insurance through the exchange by 2015. The federal government plans to help cover the costs of those buying on the exchange who cannot afford insurance on their own. An estimated 1.4 million would be insured through the exchange by 2020. “A million people who will who get health insurance coverage in the state of Illinois. That is a terrific thing,if we get it all done right,” Gelder said during a recent hearing on the exchange.

But to get to that goal, he said there is still much to be done. “Many people …think of the exchange as, ‘Well, it’s just getting an Internet site up so that people can sign up.’ … But the fact is, it’s a whole series of tasks, each one of which has a certain degree of complexity associated with it. All of these have to be done in a very short time.”

The first two tasks some lawmakers are looking to tackle during the veto session are deciding how the board that oversees the exchange is chosen and how the exchange will be funded after federal money to administer it dries up in 2015.

The state must demonstrate progress on the plan by March to get in on the first round of so-called phase two federal grants. Illinois already received about $5 million in phase one funds for research. “Most other states who have received their phase one establishment funding have legislation passed,” Gelder said.

Jim Duffett, executive director of the Campaign for Better Health Care, estimated that the next level of grants could bring up to $30 million to cover technology costs and pay new staff to work on the exchange. “It could be a lot of money to really begin to put in the infrastructure that needs to happen,” he said. “I see level one money as really digging the basement and beginning to put up the foundation. … The level two money is really [needed to begin] building the house.”

But the issues of governance and funding are not without controversy. Health care advocates and the Quinn administration oppose allowing members of the insurance industry to sit on the governing board because they stand to profit from the exchange. They also oppose legislators serving on the board because they say every effort should be made to keep politics out of the exchange. “This new marketplace is going to be very beneficial to the insurance companies. They want to be the fox that guards the chicken coop,” Duffett said. He said the board should be similar to the Illinois Commerce Commission, which oversees utility companies and decides whether they can increase rates for consumers. “We wanted to make sure on the board that nobody serving would have a vested financial interest in the outcome of their votes,” Gelder said.

However, industry representatives say the board needs their professional expertise. “To suggest that insurance expertise should be prohibited on the board, as some have…we believe is analogous to suggesting that an aeronautical engineer should be prohibited form serving on the board of Boeing Aircraft,” said Phil Lackman, Illinois vice president of government relations for the National Association of Insurance and Financial Advisors “Everyone has a potential conflict. The key is not having a lopsided board because all interests are relevant and they’re all very valuable.” Lackman suggested to a legislative committee that has been holding hearings on the issue in recent months that a nine- to 13-member board should have two members from the industry, one agent and one representative of an insurance company. That way, they could provide institutional knowledge but not band together to create a majority.

Gelder and some legislators support the idea of allowing the board to create advisory committees so that members could draw on other sources, such as industry insiders, consumer groups and lawmakers, for information.

Duffet said insurance companies should foot the bill when the federal government stops paying to administer the exchange. He said of the price tag, which is estimated at up to $89 million, “This is a spit in the bucket for them.” Gelder said everyone who buys insurance in the state should pay a small fee to subsidize the exchange.

Brian Imus, director of the Illinois Public Interest Research Group, agrees that all insurance buyers chipping in would be a fair deal because he said the exchange will make the market better for everyone, even those who purchase policies through more traditional means. “Everyone is going to benefit from the exchange program. There are going to be more choices in Illinois.”

Another issue that must be resolved is how the exchange will work. It can be an open marketplace where sellers compete for customers, or the board could be given the power to negotiate with insurers to try to get lower rates for customers. While Duffett, Imus and several good-government organizations favor allowing the board to negotiate, Quinn’s administration is undecided on the issue.

Duffett said there is still time to sort that out, and he hopes that lawmakers do not vote in the coming weeks to close the door on the potential for the board to negotiate. “Definitely the insurance industry wants nothing to do with that at all, and many legislators don’t either,” he said. “That should not be on the table during the veto session, but you know it might get snuck in there.”

Some lawmakers disagree that there is an urgent need to pass legislation. “There’s a lot more information that needs to be gained before we can even think about making recommendation or before the legislature can consider any action,” said Sen. Bill Brady, who served on the committee that took up the issue during the legislature’s summer break. “There are a number of things that the federal government has to define for us to really know what we are in for.”

The United States Supreme Court is slated to decide on the constitutionality of the new federal health care law — specifically the requirement that all individuals have health insurance — and Brady said he would like to wait and see how it rules. “There’s a court case that may challenge the whole nature of this, and it may be determined before the end of next legislative session.”

Imus said Brady and other Republicans calling for more time are simply stalling to put off the implementation of policy they do not support. “Regardless of what happens at the national level, creating a health exchange is the right thing to do in Illinois,” he said.

Gelder said the state has to get moving because insurance companies need time to develop the plans they will offer in the exchange. “The insurance companies asked for 18 months of lead time so they can have a product ready to sell on the exchange.” Open enrollment for such plans is scheduled to begin in October 2013. He said passing a bill that sets out the guidelines for the board and funding would only create the bare bones of the plan, and there will be plenty of flexibility to tweak things down the road. Gelder said the board itself would make the final decisions on many of the details of the exchange. “We need the money as soon as possible so we can plan the exchange so that it is functional in order to be approved by the federal government.”

He added, “December 2012 is like tomorrow.”

Quinn vows to veto gaming plan, but supporters still seek a deal

By Jamey Dunn

Gov. Pat Quinn wants lawmakers to start over with new gaming legislation, but backers of the gambling expansion that passed last spring are not ready to walk away from the bill.

“I think it was done in a hasty manner, and it has major flaws. That’s why I will veto it,” Quinn said about Senate Bill 744 at a Chicago news conference today. The governor presented sweeping changes that he says he would like to see drafted into a new bill. “I think members of the General Assembly realize it’s not exactly a masterpiece. It has a lot of shortcomings. It needs fundamental improvement. It’s better to go back and start over and do it right.”

Perhaps the most controversial part of the governor’s plan is his opposition to slot machines at horse racing tracks. Instead he said he would only back the five new casinos called for in SB 744. Quinn also shot down slots at the state fairgrounds and Chicago airports. “We … cannot have the massive expansion of gambling envisioned by this bill. A smaller and more target expansion is the way to go,” Quinn said. “The bottom line is, in the metropolitan area of Chicago, instead of having nine new casino gaming operations, there would only be three — Chicago, Lake County, southern Cook [County.] Downstate, instead of having five new casino gaming operations, there would be two — Rockford, Danville.” Quinn said he is concerned about oversaturation of the gambling market. “If folks are leaving our state to gamble, the locations that I’ve selected are right in the area[s] where people are most likely to leave. … There’s a limit to how many dollars can be spent on gambling in the first place. Our current casinos have seen a decline in revenues — rather significant.”

Quinn also called for a tweak to implementing video poker, which was legalized at some bars and restaurants statewide as part of the capital construction plan passed in 2009. While local governments can now opt out of allowing video poker machines, Quinn wants local officials to have to vote to accept video gaming instead. The Illinois Gaming Board has yet to issue any licenses to businesses seeking to offer video poker, and the plan has brought in no revenue. SB 744 would require the board to begin issuing provisional licenses, but Quinn said the gaming board should be allowed to work on its own timetable. He also complained that the proposed timeline for issuing new casino licenses would be too rushed. “I think that gaming board should act after it’s done all its work and feels that it’s complete.”

Quinn said that the gaming expansion plan would not direct enough money to schools and construction. He added that the plan’s tax breaks for casinos were too generous. “We do not need excessive tax breaks for lucrative casinos.” While the legislation calls for revenues that state would receive from new casino licenses to be paid over time, Quinn wants the money upfront to spend on the state’s overdue bills.

Despite Quinn’s vow to veto SB 744, supporters say they are still working on a trailer bill with changes in the hopes of reaching a compromise. Waukegan Democratic Sen. Terry Link is optimistic about working out a deal. “I think that we addressed [in the trailer bill] a lot of the concerns that the governor addressed in his statement today, even though we didn’t know about it,” Link said. “We’re probably not a mile apart, but we’re maybe a half of a mile to a quarter of a mile.”

Link, who sponsored SB 744, did take issue with Quinn’s plan to assign some casinos to cities, while leaving the locations in Lake County and southern Cook County up for grabs. “Some he’s designating and some he’s not, and I think it’s ridiculous.” Quinn said that opening up the licenses for bidders in the two areas would likely pay off in more revenues for the state. “I think the gaming board should choose the location in Lake County. I think the gaming board should pick the location in southern Cook County. There will be, I think, robust competition in both of those locations for a site for gambling.” However, Quinn may be open to compromise about the locations. He made previous negative statements about a Danville casino but ultimately included it in his plan. “I said ‘Don’t hold your breath.’ Well, they’re breathing now,” he said today.

Link also said it would be difficult to pass a plan that doesn’t include slot machines at horse racing tracks and that slots at the tracks are included in the working version of a trailer bill. “No, we did not take slots away from the tracks because we don’t think the bill will sail out of the General Assembly if we did that. It will have a hard time.” Sponsors sold the bill as a way to help the state’s struggling horse racing industry. Tony Somone, executive director of the Illinois Harness Horsemen’s Association, said that under Quinn’s proposals, “harness racing in Illinois in two years would look very, very different. And I am confident that within three to five years, it would not exist.”

Current casino operators may see Quinn’s suggestions as a favorable shift and an opportunity to get back to the negotiating table. “It certainly is reflective of many of our concerns about the size of expansion,” said Tom Swoik, executive director of the Illinois Casino Gaming Association. “We’re not against expansion … as long as it’s done reasonably.”He said he thought Quinn’s plan was “well-thought-out” but said it was difficult to judge because it has not been drafted into legislation. Swoik said he hoped the governor’s reservations about expansion and cannibalization of current casinos would make current owners' interests heard in the debate that is sure to come over the next few weeks. As for the trailer bill, he said, “To my knowledge we have had not input into the bill, which is sort of distressing.”

Skokie Democratic Rep. Lou Lang, the House sponsor of SB 744, said it is not up to lawmakers or Quinn to make sure that casinos’ profits are protected. “We should not care as a government which gaming enterprise makes money, as long as we as a state make more money.” Lang agreed that a trailer bill would be the simplest solution. “It would be very difficult to put the coalition together necessary to get the votes to pass [a gaming bill] again.”

Both Lang and Link said they have not ruled out creating a new bill if Quinn cannot be persuaded to sign the original legislation and a trailer bill. Link, who has been pushing various gaming expansion packages in the Senate for years, said Quinn’s statements that the legislation was rushed and ill-conceived are wrong. “He never sat down with us and questioned why we did some of the stuff. We didn’t just pull this stuff out of the clear blue sky,” Link said. “It’s easy to tear it apart if you don’t understand it.”

Senate President John Cullerton is sponsoring Senate Bill 747, which his office has identified as the vehicle for a trailer bill. “Now that the governor has articulated his proposed changes, we will fold his recommendations into our ongoing discussion of how we can make the gaming bill better for the state. Additionally, we will be evaluating the governor's framework in light of what is passable by both chambers of the General Assembly,” Cullerton said in a prepared statement. Those following the issue closely say they expect the legislation to be filed publicly soon, possibly as early as tomorrow.

While supporters have said they want a resolution on the gaming bill by the end of the legislature's fall veto session, which is scheduled to start next week, Quinn said he doesn’t mind waiting. “If it takes longer, so be it. If they have to take a longer period of time in order to do their work. I think it’s better to do it right the first time so we don’t have problems,” he said. “The bottom line is, I’m the goalie. I’m the final word.”

Quinn wants speedy end to legislative scholarships

By Jamey Dunn

A day after House Speaker Michael Madigan rejected his plan to abolish legislative scholarships, Gov. Pat Quinn renewed his call for lawmakers to put an end to the embattled program.

“We should abolish political scholarships altogether in Illinois. I think every citizen feels that way, and it’s time for the legislature to wake up,” Quinn told reporters in Chicago today. Last spring, lawmakers approved a bill that would ban legislators’ family members from receiving the tuition waivers. Quinn used his veto pen to rewrite House Bill 1353 so the measure would outlaw the program altogether.

But Madigan said Quinn has overstepped his amendatory veto powers. “It’s not in compliance with the constitution as it relates to the use of the amendatory veto. That’s very clear,” Madigan spokesman Steve Brown told the Chicago Sun-Times.

Quinn argued today that he and Madigan agree on the subject of scholarships. “He has voted in the past himself to end this program.” The governor said he wants the $13 million spent on legislative scholarships each year to instead go toward the Monetary Award Program. “We should devote our scholarship money to those who have the merit to go to college and the need [for help] to go to college. Political connections shouldn’t play a role in any way, shape or form.”

Skokie Rep. Lou Lang, a longtime member of House Democratic leadership, said Madigan’s support for the issue is irrelevant. He said the speaker has historically been opposed to allowing governors to use their veto pens to make broad changes in the legislation that lands on their desks. “Even if he likes the changes, he has not allowed those bills to be called to a vote because they violate the Constitution.”

Quinn said today that he would back a new bill to outlaw the scholarships, but he wants to see it approved within the next month. “There are some legislators who are very contentious and have not abused the program. But, unfortunately, too many have. And we have example after example over decades of this program being abused,” Quinn said.

Lawmakers seek to improve conditions for migrant workers

By Jamey Dunn

Lawmakers are looking to improve conditions for the thousands of migrant and seasonal workers who travel to Illinois to work in agriculture and other industries.

One witness testifying before an Illinois Senate agriculture committee this week compared the conditions for migrant workers formerly living in an apartment building in northern Champaign county to those documented in "The Jungle," Upton Sinclair’s 1906 expose on the conditions workers met in Chicago’s meat packing plants.

Julie Pryde, administrator of the Champaign Urbana Public Health District, said her department received a complaint about raw sewage being dumped from the Cherry Orchard housing complex, which often houses migrant workers. “I was absolutely shocked with what I encountered. And all of the amount of services that have come to bear on this one situation, and the hundreds of thousands of dollars it costs [to intervene],” Pryde said. “We were not able to do anything until this summer, when the courts were finally able to give us the authority to go up there and board up the facility and shut it down and keep people out for good.” Pryde recounted holes in walls and ceilings and a lack of running water and electricity.

The owners — who Pryde said were licensed in the past by the Illinois Department of Public Health (IDPH) to use the building as housing for migrant workers — were brought up on charges. It is this sort of scenario that committee members say they hope to address. “In 35 [or] 40 years, things have not changed. This is a condition of indentured servitude,” said Peoria Democratic Sen. David Koehler, who says he saw such conditions first hand when he worked with organizations run by immigrants’ right advocates Dolores Huerta and Cesar Chavez. “It was deplorable then. It’s deplorable now, and I think we need to do something to fix it.”

Pryde said industries reap the benefits of cheap labor while local governments and charity organizations foot the bill for services needed by the workers. “This is subsidized labor. If you think that cheap labor is cheap, you are absolutely not looking at it correctly. … There are enormous costs for having what I would consider a very low paid group of workers who are not even earning a living wage. … We need to provide them rent subsidies. We need to provide them health care.” She said it is not just farming operations that profit from the situation. “It is all the really cheap labor we’re talking about. We’re talking about agribusiness. We’re talking about people working in restaurants. We’re talking about people working in manufacturing.” According to the Latino Policy Institute, a majority of the migrant workers in the state are legally allowed to work in the United States, and 33 percent are U.S. citizens. They typically bring family members along for the trip — on average four people — and their median household income is $17,000 to almost $20,000. The average length of stay for a migrant worker in Illinois is just over six months. According to the Illinois Migrant Council, approximately 28,000 seasonal and migrant workers traveled to the state last year.  That number is down from about 32,000 in previous years.

Pryde pointed to local efforts to close down Cherry Orchard. “This one situation cost tens of thousands of dollars locally. That’s not even counting what the state had to pay for this situation—to finally get it shut down. And of course all we’ve done is push the situation elsewhere. The situation still exists. We just can’t see it.’ Miguel Keberlein Gutierrez, supervisory attorney of the Illinois Migrant Legal Assistance Project, said migrant workers are lured to Illinois, as well as other states across the nation, by labor recruiters. The recruiters contract with companies to provide low cost workers and also act as sort of a legal buffer because the companies often do not technically employ the workers. Gutierrez said workers typically come to Illinois from Texas, Florida and Mexico. “[The recruiters] begin to make promises about good free housing, about getting their kids into school, about access to food stamps, SNAP benefits. But of course, farm workers are never told how dangerous or poor the housing will be that they’re going to be placed in.” He said once workers come here, they and their families are usually crammed into small and decrepit living spaces. “The labor contractor is used as the middle man to do all the basically the dirty work that no one else wants to do,” Koehler said.

If workers complain, they can lose their jobs and have no way to get home, or they can even face physical retaliation. Gutierrez said the only way a worker can get legal help is to file an injunction to shut downh a housing camp or a work operation. “The likelihood of a farmworker being able to navigate the local court system [with no legal representation] to get an injunction against a labor camp is remote,” he said.

Pryde said cramped and unsanitary living conditions create a public health threat for the community at large. “It does hurt them, and it hurts us when there is tuberculosis involved, when there are other illnesses involved. People are coming here and being hired without even the most basic infectious disease health screening.” She said the dumping of raw sewage, like what was happening at the Cherry Orchard complex, opens up the potential for the public to be exposed to a host of diseases. “You're probably thinking, 'Cholera, typhoid fever, what are the chances of that happening?' Cause we don’t even see those in this country hardly, do we? We certainly have had cases of them in Champaign County this year.”

Witnesses suggested that lawmakers require the IDPH to meet three times a year with advocacy groups and those providing services to migrant workers, make it easier for migrant workers to contact the state for help and to highlight the need for legislation to improve IDPH oversight of both migrant housing and labor contractors. Bob Palmer, policy director for Housing Action Illinois, said lawmakers must step up the consequences for those who skip out on the state’s licensing process. Multiple witnesses said that because since the consequences for not getting licensed are minimal, many involved in recruiting and housing migrant workers do not go through the process and avoid oversight from the state. “In order to not have more growers or labor contractors totally remove themselves from the limited regulatory system that we have now, we need to have … some penalties for not participating,” he said.

The committee plans to hold more hearings on the issue, and Sen. Toi Hutchinson said she hopes they will produce legislation addressing some of dangerous housing and labor conditions faced by many migrant workers in the state. “If this were [happening] in another country, we would be talking about human rights violations — not an agricultural protection act — I’m talking about human rights violations.”

Pryde said she thinks the issue is one that goes largely unnoticed by Illinois residents. “I am truly an accidental advocate,” she said. “Until I had a personal experience with this, I had no idea. And now I simply cannot not talk about it.”

Gaming revenues down as Quinn continues to mull expansion

By Jamey Dunn

A legislative commission report paints a bleak picture for Illinois gaming revenues, and Gov. Pat Quinn says he plans to have specifics by the end of the month on what he wants for a gambling expansion bill.

The Commission on Government Forecasting and Accountability released a report that says total gaming revenues for the state in 2011 reached their lowest level since 2001. The state's take of riverboat, horse racing and lottery revenues for last fiscal year was about $1 billion.

Revenue for riverboat gambling decreased by almost 6 percent from Fiscal Year 2010 and made up almost 34 percent of total gaming revenues. Four years ago, riverboats contributed about 52 percent of gaming revenues. The report said revenues from riverboats are at the lowest since FY 1999.

The report pointed to the economic downturn and increased competition from neighboring states as possible causes for the drop. However, the numbers continue to suggest that the biggest contributor to the drop in Illinois casino revenues is the indoor smoking ban. “Since the indoor smoking ban began in January 2008, adjusted gross receipts for Illinois riverboats have fallen a combined 30.7 percent from pre-smoking-ban levels,” the report stated.

COGFA’s report also warned against expecting consistent revenue increases under a gaming expansion plan that will be a topic of debate during the legislature's fall veto session. “Many estimate a significant amount of one-time revenues and recurring revenues would come from gaming expansion. However, factors such as a reduced tax rate and cannibalization will make it challenging for substantial amounts of new state revenues to be realized. Lowering the tax rates would likely increase the amount spent by gaming operators on the casino[s], which, history has shown, could lead to higher attendance. … But large increases in overall adjusted gross receipts will be necessary to offset the loss of revenues from the lower tax rates and from the expected loss of revenues from existing gaming facilities that would be cannibalized by the new casinos.” The report estimates that revenues from legalizing video poker in some bars and restaurants across the state would not start coming until "FY2013 at the earliest." The state has been dragging its feet getting the licensing process off the ground and had to rebid a contract for a necessary computer system because of mathematical errors made when totaling costs associated with bids.

Quinn again pointed to fears of saturating the gaming market as he talked to reporters in Chicago today about the gaming expansion passed by the legislature last spring. “I just think it’s top heavy, I’ve said that all along. You can’t over-saturate the gambling market in metro Chicago or anywhere else. If you have too many positions and casinos, they hurt each other, and they don’t really add to the revenue. And I don’t think the people really want our state to become the Las Vegas of the Midwest.” Quinn has voiced support for a provision of the bill that calls for the creation of a casino owned by the city of Chicago.

Meanwhile, lawmakers have said negotiating with Quinn over Senate Bill 744, which would allow for slot machines at horse racing tracks, as well as five new casinos, have been difficult because Quinn won’t say what he wants. Quinn countered today that legislators have not been specific about changes they are willing to make. “I haven’t seen anything specific or tangible from the legislature. All I know is what they did on May 31.” He said he would release specific changes he would like see “later this month.”

Senate President John Cullerton put a procedural hold on the bill in the hopes of negotiating with Quinn. The governor has pointed to that move as an indicator that the plan is flawed. “Obviously they know they have some defects there, because they haven’t sent it my way,” Quinn said. He added, “obviously they’re afraid of my review, and I think they should be.”

Skokie Democratic Rep. Lou Lang, a sponsor of SB 744, said he expects the fate of the expansion will be decided one way or another when lawmakers return later this month. “The plan would be to have some finality to this gaming issue during veto session.” Cullerton backed a plan to draft a so-called trailer bill that would make changes to the original legislation and then send both bills to the governor to be signed at the same time. “I’ve been pushing for a trailer bill. … It would be very tough to pass a new gaming bill or an amended gaming bill that makes substantial changes,” Lang told Illinois Issues.

But Quinn came out strong today against reworking the plan with a trailer bill. “They have a bill. If they don’t think the bill is good enough, they should go back to the drawing board and pass another bill that’s better,” Quinn said. “Do it right the first time. If it’s not right the first time, it’s got to go in the reject pile, and [lawmakers have] got to go back to the drawing board.” When asked if he would veto SB 744, if given the chance, Quinn said, “I think anybody with common sense, if they saw that [bill], would probably throw up their hands in shock and disbelief that we would have gambling expansion in Illinois without proper oversight.”

For more on video poker and the challenges the state faces in implementing it, see Illinois Issues April 2010.

For more on the upcoming veto session, see Illinois Issues October 2011.

Democrats use rail construction project to push Obama's jobs plan

By Jamey Dunn

Illinois Democratic officials today used the ground breaking of a project aimed at reducing rail congestion to urge support of President Barack Obama’s jobs plan.

Gov. Pat Quinn was joined by several of Illinois’ political elite, such as Chicago Mayor Rahm Emanuel, U.S. Sen. Dick Durbin and U.S. Rep. Bobby Rush, to kick off the so-called Englewood Flyover, a bridge meant to untangle one of the state’s worst snarls of rail traffic. According to figures from Quinn’s office, each day,14 Amtrak trains, 78 Metra trains and 46 Norfolk-Southern freight trains pass through the area where Norfolk Southern Railway and Metra Rock Island District Line tracks cross near 63rd Street and State Street in the neighborhood of Englewood. The project, scheduled for completion in 2014, will run three Metra tracks over the freight traffic.

“When you talk about trains, that’s really what defines our state. We have just about every railroad in the country crisscrossing Illinois,” Quinn said at the Chicago event. “We want to eliminate delays and end bottlenecks and make things faster for freight and for passengers. We take literally thousands of tons of freight through this very area every single day.” The overpass will also create room for Amtrak trains capable of travelling up to 110 miles per hour. “We want to build a fast train from Chicago to St. Louis,” Quinn said. “One of the keys to making that possible is to eliminate the bottlenecks right here.”

The $133 million project will be funded with about $6.6 million from Illinois’ capital construction legislation, which leveraged $126 million in federal dollars. A group of railroads kicked in more than $3 million for design costs through the Chicago Region Environmental and Transportation Efficiency Program (CREATE).

U.S. Secretary of Transportation Ray LaHood, a Republican from Peoria, said more money will be needed to complete to project, and he urged lawmakers to approve the jobs creation package that Obama presented before a joint session of Congress last month. “This project will continue to get funding [if Congress passes the plan]. We don’t have all the money for this project right now. We have a good share of it, but we know that it needs a lot more money that can really come about as a result of the American Jobs Act,” LaHood said. “This project is also illustrative of what can happen other places in America if the Congress were to pass the American jobs Act.”

The president’s plan includes a cut to payroll taxes, an extension of unemployment benefits, spending for new infrastructure projects, incentives for businesses that hire the long-term unemployed and money for local governments to fund salaries for teachers and first responders.

Durbin also pointed to the Englewood project and the estimated 1,500 construction jobs he says it will create as an example of a positive inroad against the state’s unemployment rate, which has hovered recently around 9 percent. “We need these jobs. They’re good paying jobs right here at home — that pay a living wage with benefits. That’s what we need for the future of American.” Durbin called on Republicans in the U.S. Senate to back the president’s legislation when it comes up for a procedural vote in the chamber tomorrow. “This much I can guarantee you. We’re going to produce an overwhelming number of votes on the Democratic side for the president’s bill. But this much I can guarantee you as well: Without the support of Republican senators, the president’s jobs bill will not pass. That’s a reality. We need bipartisan support on the floor of the Senate tomorrow. … Tomorrow is the test.”

The bill has been widely panned by Republicans in the Senate and the House, who say that it relies on accounting gimmicks and unfair taxes on the wealthy for funding. After Obama introduced his plan, U.S. Sen. Mark Kirk, a Republican from Illinois, said he support some aspects, such as rolling back regulations on some businesses and entering into trade agreements with foreign countries. "Some parts of the president's proposal should receive quick, bipartisan action, like tax reform, trade agreements with South Korea, Colombia, and Panama and enactment of regulatory relief for businesses,” Kirk said in a written statement.

However, Kirk was less than thrilled about Obama’s plans to pay for the spending in the bill and cut the deficit. "We need the president to endorse bipartisan ways to reduce federal borrowing, runaway spending, entitlement growth and closing loopholes through tax reform. I am concerned that the president is pushing a formula of partisan tax hikes and budget gimmicks. Tax hikes made the Great Depression vastly worse.” Members of House Republican leadership agree that the taxes proposed to fund the plan would stymie economic growth. U.S. House Majority Leader Eric Cantor, a Republican from Virginia, has described the bill as “dead.” It seems unlikely that the package in its current form will ever make it to a floor vote in the Republican controlled U.S. House.

Quinn looks to public to fight smart grid plan

By Jamey Dunn

Gov. Pat Quinn is gearing up for a battle with legislators over smart grid legislation.

Quinn toured the state today pushing back against backers of Senate Bill 1652, which he vetoed last month. Supporters say the measure would help the state’s two largest utilities upgrade infrastructure and add new technologies to make power delivery more reliable. Quinn — who is joined in his opposition by Attorney General Lisa Madigan, AARP, the Illinois Commerce Commission, which oversees utilities and signs off on rate increases, and others — says the legislation would lock in “automatic rate hikes” for consumers and loosen oversight of utility companies. “We’re really on the eve of one of the biggest consumer battles in Illinois in the last generation really,” Quinn said today at a Peoria event. “It’s very very important, I think, that consumers in Illinois know that this is a bill that will impact their utility rates now and for years and years to come.”

Quinn said today he is hoping to spearhead a “statewide movement of citizens and businesses” opposing the bill. He rolled out a new website that prompts visitors to contact their state representatives about the legislation. “[Commonwealth Edison and Ameren] have a lot of campaign money. They have a lot of lobbyists. As a matter of fact, I think they may have hired a lobbyist for each member of the General Assembly. … They’re putting every ounce of their power and money behind this bill. They want to override my veto. I believe the people of Illinois are on our side,” Quinn said at a Decatur news conference. AARP has joined Quinn in his opposition tour. “This bill would give many of our members increased utility costs. A lot of our members live on fixed incomes. And when their expenses go up, their standard of living goes down. It’s a balancing act,” said Dean Clough, a member of AARP’s Illinois Executive Council.

The governor said the potential rate increases would be bad for business in Illinois. “One of the very best and most important things that businesses look at is what your utility rates are. And it’s not good at all for the people of Illinois and their jobs to have a permanent raise in utility rates. That is something that’s going to hurt the jobs climate in our state of Illinois.” At least one Illinois business agrees with this assessment. “[Archer Daniels Midland Co.], like other employers in Illinois, relies on competitively priced, reliably delivered electricity in order to operate,” said Greg Webb, a spokesperson for Decatur-based ADM. “Unfortunately, this bill does neither of those things in our view. Its reliability provisions are not strong enough. And its rate provisions could very well lead to Illinois businesses paying higher rates than neighboring states without commensurate benefits.”

But the bill’s sponsors maintain that an upgraded grid — which could help consumers save energy and make utilities more responsive to outages — would be a business draw. “It seems to me that the governor has a right to set up a media campaign and hire lobbyists and do everything that he’s doing,” said Sen. Mike Jacobs, an East Moline Democrat.“But at the end of the day, this comes down to the question, do you want a smart grid or don’t you?”

Jacobs said that smart grid technologies, such as allowing consumers the option to track real-time power prices and lower their usage when rates are highest, would result in savings on many power bills. He added that customers would value getting their lights back on more quickly after an outage with the help of smart grid technology that notifies utility companies when there is a problem with power transmission. “When the power goes out, right now nobody even knows. How can that be good for consumers?” Jacobs said the use of more technology in Illinoisans’ everyday lives has created the demand for grid upgrades. “You can’t have all these brand new iPads and not provide a way to power them,” he said. “Yes, things cost money. You can’t have something for nothing. Those days are over.”

Jacobs is confident that the three-fifths majority needed to override Quinn’s veto will materialize by the legislature's veto session, which is scheduled to start Oct. 25. But he said things could change. “Nothing’s ever a lock in government. People have a right to change their minds.” If Quinn’s efforts work to urge large numbers of voters to call their legislators in protest, he may be able to scare some votes off of a potential override. However, his repeated use of the bully pulpit on this issue, capped off with a campaign-like tour of the state, may alienate some lawmakers from his cause.

For more on smart grid technologies and how they might affect public policy in the state, see the July/August 2011 Illinois Issues.