Gov. Pat Quinn gave an upbeat State of the State address today, touting his accomplishments and laying out a five-year plan for economic recovery.
Quinn, who was sworn in as governor after former Gov. Rod Blagojevich was impeached and removed from office, recounted the problems he faced when he became governor and the progress he said the state had made in the interim. “Exactly five years ago this day, I was sworn in as governor, at Illinois’ darkest moment. We were facing an unprecedented triple crisis of government corruption, economic collapse and financial instability,” Quinn said. “It was a perfect storm, and it left destruction in its path. We all knew that repairing the damage that had been done over decades would not happen overnight. But over the past five years, we’ve rebuilt one hard step at a time. And we’ve been getting the job done. Illinois is making a comeback.”
Quinn presented broad strokes of a plan that focused on education programs and economic issues. “It’s a blueprint that recognizes that a truly strong economy relies not just on jobs, but also on fairness and inclusion,” he said. “If we follow this blueprint, we’ll do three things: create more jobs, deliver stronger education and build an economy that works for everyone.”
Not surprisingly, Republicans vying for the chance to challenge Quinn in this year’s general election were not impressed by the speech. Their criticisms were similar.
“This afternoon, we heard an election year campaign speech from a governor who’s failing the people of Illinois,” said Bruce Rauner. “We’re one of the worst-run states in America. We have entered an economic death spiral, and Gov. Quinn is trying to cover it up and put a rosy picture on it.” Rauner brushed off questions from reporters regarding negative stories that have recently surfaced about his former investment firm, GTCR Golder Rauner. The company has been linked to neglect cases at nursing homes it invested in.
The venture capitalist from Winnetka today borrowed a line from President Barack Obama. “The attacks, we’ll have plenty of time to talk about them. ‘There’s no there there.’ We’ll be attacked every day in the race. That’s part of politics.” Obama used the “There’s no there there” quote from Gertrude Stein when questions about his administration’s handling of a terrorist attack in Benghazi, Libya, continued to hound him. “There's no there there. The fact that this keeps on getting churned up, frankly, has a whole lot to do with political motivations,” Obama said at a White House news conference.
Sen. Kirk Dillard, who is from Hinsdale, said Quinn should have addressed the state’s temporary income tax increase, which is set to begin stepping down in 2015, taking billion of dollars of revenue with it. “We’re overtaxed. We are greatly overregulated,” he said to the ideas Quinn put forward.
“That’s not a playbook for success,” Bloomington Sen. Bill Brady said of Quinn’s speech. “Ranking among the worst in the nation is the record of the current administration and the Democrats’ hostility toward the private sector. I didn’t hear any talk about reducing burdensome regulations or lowering the cost of doing business in Illinois through further reforms in our workers' compensation program. I certainly didn’t hear anything about his commitment to cut taxes by allowing his 67 percent income tax increase to expire next year.”
State Treasurer Dan Rutherford, who is from Chenoa, said Quinn’s speech was about what he had expected. “It was what an incumbent governor’s State of the State should be in an election year. It was very optimistic, very positive.” He said that creating a long-term plan is not a bad thing. “I don’t fault long-term planning. As I’ve said more than once on the circuit out there, strategic long-term planning for our state facilities, our capital assets, is extremely important.” However, he said Quinn should have focused more on creating an environment that would encourage private-sector job growth.
While responses to Quinn’s speech were generally tepid. Some Democrats were enthusiastic about the governor’s ideas. “I thought it was an excellent speech,” said Sen. Dan Kotowski of Park Ridge. “I thought the governor did a great job of communicating a vision of what it’s going to take in our state to make sure we address these challenges that are out there, so that we can create jobs and maintain the ones that we have. But also make sure we prepare our young people for a future. He’s identified the challenges we face in our state, and I agree with him. He’s taking them head on.”
But the verdict from other Democrats was less glowing. “It’s just talk. So the legislature will begin the process of crafting the budget and trying to work through these issues. We’ve already started. The people of the state of Illinois are tired of talk. They want action,” said Rep. John Bradley, a Democrat from Marion. Bradley is chair of the House Revenue and Finance Committee, which has preempted Quinn in the past on fiscal issues by proposing a spending cap for the budget before the governor gives his budget address.
Economic Issues
By Jamey Dunn
Quinn pitched several measures targeting businesses and workers, including a proposal to increase the state’s minimum wage. “This year, we really need to get the job done for our fellow citizens who are making the minimum wage of $8.25 per hour. Our minimum wage workers are doing hard work. They’re putting in long hours. Yet in too many instances, they are living in poverty,” he said. “That’s not right. That’s not an Illinois value. And that’s not a fair shake. This is all about dignity and decency. So I said it last year. and I’ll say it again: It’s time to raise Illinois’ minimum wage to at least $10 an hour.”
Quinn called for an increase to the minimum wage last year during his State of the State address.
“I’m pleased that the governor is continuing his message on the minimum wage,” said Maywood Democratic Sen. Kimberly Lightford, who sponsors legislation that would increase the minimum wage. She said she has been negotiating the issue for month with business groups.
Lightford said she knows that it is nearly impossible to expect that the business lobby will support the proposal. “There’s nothing that we can do for a corporation to agree with a minimum wage increase. There will be nothing that you can do. There is no happy medium on an increase.” But she said she has worked to revamp her legislation to give some consideration to businesses.
In perhaps the only surprise in the speech, Quinn also called for workers to get at least two paid sick days. Quinn also said he wants to double the Earned Income Tax Credit, which goes to low-income working families, over the next five years.
Doug Whitley, president and chief executive officer of the Illinois Chamber of Commerce, said he was glad the governor’s speech focused on the economy. But he said that adding more business regulations would not help job growth. “I was pleased with the themes [of the governor’s speech], but I was not impressed with the details,” he said.
Whitley said the minimum wage is not meant to sustain a family. He said those jobs are intended to be for young people, students and those looking to supplement their incomes with part-time work. He said he is concerned that if Illinois increases its minimum wage, which is already greater than many other states, it will hurt its ability to compete. “I would rather see the [U.S.] Congress do it than individual states do it,” Whitley said.
Republican leaders agreed. “The minimum wage doesn’t lift people out of poverty. I think the minimum wage is the wrong discussion,” said Senate Minority Leader Christine Radogno. “We’re not unsympathetic to the fact that people are making very low wages, but the questions are: Why aren’t people moving into higher wage jobs? How do we create those jobs? And how do we match the talent to get those jobs? So I think focusing only on the minimum wage is a distraction from the real work we need to be doing.”
But proponents say that those living on low wages often also receive help from safety net programs, so taxpayers are in effect being asked to subsidize the cost of workers for private businesses. “Those people will be on government benefits. And they will be relying more on government, and they’ll be relying more on government for services and that costs everybody money,” Kotowski said. “I think people recognize that if you’re working full-time hours but making wages that don’t allow you to feed your family and take care of yourself and pay for the basic necessities of life, there’s something fundamentally wrong.”
Quinn also called for cutting the cost for incorporating a limited liability corporation from $500 to $39. Whitley called that idea “creative and fresh.” But he said: “I’m sure that small businesses will appreciate that. But the magnitude of an increase in the minimum wage and additional required days off will dwarf any savings that that LLC might actually have from a reduction in the fee.”
Some lawmakers said the change might not be realistic, given the state’s budget situation. “What’s the cost to the state of doing that? It’s a great thing to say in a speech, but what’s it going to cost the state?” asked Bradley. “I mean, we’re staring at a really ugly budget scenario coming up and a really difficult fiscal and revenue situation coming up in the near future, and he’s talking about getting rid of money that’s coming in.”
Education initiatives
By Caitlin Rydinski
As part of his address today, Quinn proposed expanding early childhood programs and a college scholarship program, but lawmakers question where the funding for his plans would come from.
Quinn’s “Birth to Five Initiative” looks to provide prenatal care to low-income families, increase access to childhood early education and offer programs that provide parental support. Quinn said his initiative would help taxpayers avoid paying for the cost of medical needs, early intervention, remedial education and grade repetition.
Lightford said Illinois already focuses on early childhood programs from age 3 to 5, so adding prenatal care to age 3 may not be difficult.
“It’s really not as difficult of a challenge getting there,” Lightford said. “I think that the area of the wrap-around services that [Quinn has] included with the prenatal care and the parent involvement piece — I think those are good areas to focus on.”
But Lebanon Republican Sen. Kyle McCarter and other legislators are concerned with where funding will come from.
“I think it’s a great idea, but if you can buy parental support, we would have bought it decades ago. I don’t know how you buy that. That’s a cultural problem,” McCarter said. “Given the situation we are in with the tight budget, he is going to have to cut something else in order to pay for this.”
Wheaton Republican Sen. Michael Connelly said education is important, but he wants to focus on the economy to give students access to better jobs.
“I’ve got a constituent that has a child that is going into a graduate program, and other states … are basically saying Illinois is done. Come to our state. … This is where the future is,” Connelly said of states not only persuading jobs to leave Illinois but also college students.
Quinn also proposed to double the funding for Monetary Award Program scholarships that currently about 140,000 students receive.
Many lawmakers want to see both of those programs funded but are concerned they may lose out to other competing budget interests.
“I hope that we can find a way to fund that program, as well as the MAP grant,” Lightford said, adding that the MAP program helps keep Illinois competitive with other states in having an educated workforce. While Quinn’s initiative is a five-year plan, Lightford said she hopes the MAP funding increase can happen sooner.
With Western Illinois University and several community and private colleges in his district, Sen. John Sullivan said he supports the doubling of MAP grants. “We know that there’s huge demand there. We talked about actually doubling the scholarships. ... I think most people are supportive of that, but I think the next speech that the governor gives will be the budget address. And so, how is he going to pay for some of these new initiatives like the prenatal program,” he said of the budget issue with the state and the ending of the temporary income tax increase. “The governor has introduced some new perspective and new programs, and I’m going to be interested in how he is going to pay for them.”
Many lawmakers and advocates said they want to know more about how the state will be able to provide the finances for Quinn's education proposals and still maintain the programs Illinois has now. “I think it’s really encouraging to have the governor advocating early childhood education,” said Emily Miller, policy and advocacy director for Voices for Illinois Children. But she said she is waiting for the budget address in February to find out how much funding Quinn will propose for education and early childhood programs.
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Wednesday, January 29, 2014
Wednesday, July 24, 2013
Obama keys Illinois speech on renewing the middle class
By Jamey Dunn GALESBURG — President Barack Obama kicked off a speaking tour today meant to shift focus to economic issues in Galesburg, which has had its own economic ups and downs in recent years.
Obama delivered his speech at Knox College, a private school that he visited eight years ago as a U.S. senator. The White House played up the history as the president coming full circle on his push to strengthen the middle class. And the middle class was clearly the target for the president’s speech.
“So eight years ago, I came here to deliver the commencement address for the class of 2005. Now, things were a little different back then. For example, I had no gray hair or a motorcade. Didn't even have a (tele)prompter. In fact, there was a problem in terms of printing out the speech because the printer didn't work here, and we had to drive it in from somewhere. But it was my first big speech as your newest senator,” Obama recalled. “And I came here to talk about what a changing economy was doing to the middle class and what we as a country needed to do to give every American a chance to get ahead in the 21st century.”
Today, Obama focused on the insecurity that many in the middle class feel as jobs have disappeared in the wake of the 2008 financial collapse. “In the period after World War II, a growing middle class was the engine of our prosperity. Whether you owned a company or swept its floors or worked anywhere in between, this country offered you a basic bargain, a sense that your hard work would be rewarded with fair wages and decent benefits, the chance to buy a home, to save for retirement, and most of all, a chance to hand down a better life for your kids,” Obama said. “But over time, that engine began to stall, and a lot of folks here saw it. That bargain began to fray.”
He also painted a picture of what he described as growing inequity and a declining opportunity for Americans to improve their economic standing. “So the income of the top 1 percent nearly quadrupled from 1979 to 2007, but the typical family's incomes barely budged. And towards the end of those three decades, a housing bubble, credit cards, a churning financial sector was keeping the economy artificially juiced up, so sometimes it papered over some of these long-term trends,” he said. “But by the time I took office in 2009 as your president, we all know the bubble had burst. And it cost millions of Americans their jobs and their homes and their savings. And I know a lot of folks in this area were hurt pretty bad. And the decades-long erosion that had been taking place, the erosion of middle-class security, was suddenly laid bare for everybody to see.”
While the economy in Illinois has slowly improved since that bubble burst, at 9.2 percent, the state’s unemployment rate is higher than the national rate of 7.6 percent. The Flash Index, an economic indicator produced by the Institute of Government and Public Affairs at the University of Illinois, reached its highest level in May since 2007. “While the economy continues its long, slow recovery, there appears to be considerable optimism that growth will continue and accelerate during the last half of 2013 and into 2014,” said economist J. Fred Giertz of the Institute of Government and Public Affairs. Knox County’s unemployment rate is lower than it has been in recent years. In May the county rate was 7.7 percent. Even before the recession, the county’s unemployment rate was higher than much of the rest of the state. In January 2004, it was 9.4 percent. It peaked in January 2010 at 12.1 percent.
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| Children play in the street as they wait for the president's motorcade to pass. |
Tucker, thinking back to his time at the plant, said, “I saw a lot of changes out there over the years.” He said he was shocked when Maytag moved the jobs to Mexico. “I woke up a lot of mornings thinking. ‘Was that a nightmare or what?’”
Local politicians say Galesburg was the appropriate stage for Obama to start his economic tour. “Galesburg was the right place to deliver this. His whole message is that we need to do something to really stabilize the middle class because that’s the future of America. He laid out an aggressive program,” said Peoria Democratic state Sen. David Koehler. “I think what’s new and different is his sense of urgency. He knows that he has no more elections; he’s got a little more than 1,200 days left in his presidency. Certain things he’s going to do as president that he can do, but he also has to reach out and work with Congress. So I think this is really an appeal to the Republican moderates as well as his own party, the Democrats, to roll up their sleeves and really get something done.”
Obama focused on four things that he said are cornerstones of a solid middle class: job growth, access to education, home ownership and secure retirement. While the president appears to be positioning the economy squarely in the center of his agenda, he said that other issues are still on his to-do list. “Now, of course, we'll keep pressing on other key priorities. I want to get this immigration bill done. We still need to work on reducing gun violence. We've got to continue to end the war in Afghanistan, rebalance our fight against al-Qaida. We need to combat climate change. We've got to stand up for civil rights. We've got to stand up for women's rights,” he said. “So all those issues are important, and we'll be fighting on every one of those issues. But if we don't have a growing, thriving middle class, then we won't have the resources to solve a lot of these problems. We don't have the resolve, the optimism, sense of unity that we need to solve many of these other issues.”
Ryan Hickey, who is from Galesburg and will start his sophomore year at Millikin University in Decatur in the fall, said he was glad that the president addressed the growing cost of higher education. Hickey, who sang the national anthem before the president’s speech, is studying acting. He said that Obama’s call to raise the minimum wage could help him if he ends up waiting tables before he gets his big break. “The points that he hit were, I think, what our country needs right now.”
Obama called for an end to the partisan gridlock in Congress and said he planned to use his executive powers to do what he could to put his agenda in place. “Now, in this effort, I will look to work with Republicans as well as Democrats wherever I can. And I sincerely believe that there are members of both parties who understand this moment, understand what's at stake, and I will welcome ideas from anybody across the political spectrum. But I will not allow gridlock or inaction or willful indifference to get in our way,” he said. “That means whatever executive authority I have to help the middle class, I'll use it. Where I can't act on my own and Congress isn't cooperating, I'll pick up the phone. I'll call CEOs. I'll call philanthropists. I'll call college presidents. I'll call labor leaders, I'll call anybody who can help and enlist them in our efforts because the choices that we, the people, make right now will determine whether or not every American has a fighting chance in the 21st century.”U.S. House Republicans from Illinois, however, were not moved by the speech. “Today, President Obama made his 19th pivot back to what has always been most important to Americans, jobs and the economy. With its 9.2 percent unemployment rate, full-blown budget crisis and sky-high taxes, our shared home state of Illinois is an example of government making all the wrong economic choices. However, no amount of presidential pivots and speech making will change the fact that too many Illinoisans are out of work. It doesn’t have to be this way,” said a written statement from Rep. Peter Roskam, Rep. Rodney Davis, Rep. Randy Hultgren, Rep. John Shimkus, Rep. Adam Kinzinger and Rep. Aaron Schock. “House Republicans have never strayed from our focus on creating jobs and strengthening our economy. We are developing a tax reform package for individuals and businesses that would increase American competitiveness in the global economy. We have passed a jobs and skills training package, approved the Keystone XL Pipeline, acted to protect families and individuals from a costly health care law and put forth a plan to permanently fix our student loan crisis. These proposals would immediately and demonstrably boost the economy and set the foundation for long-term growth. We agree with the president: Too many Americans are struggling in today’s economy, and we stand ready to work.”
Tucker said he felt optimistic after hearing the president’s speech. “He’s very positive all the time. I wish he could be able to convince the others to work with him to get things done.”
Monday, September 24, 2012
New statistics show poverty continues to grow in Illinois
By Jamey Dunn
New data from the U.S. Census Bureau shows that poverty continued to grow in Illinois in 2011.
According to estimates from the census bureau’s American Community Survey, about 1.9 million Illinoisans were living in poverty in 2011. That compares with about 1.7 million living below the poverty line in 2010. Last year, the census bureau considered a family of three with a household income of $17,916 or less to be living in poverty; in 2010 it was $17,374 for three people. In 2011, 15 percent of Illinois residents were living in poverty, which is a jump from 13.8 percent in 2010. The numbers from the census bureau are the most current comprehensive statistics available on poverty. For more on 2010 poverty numbers, see this Illinois Issues Blog post.
According to the bureau's findings, the median household income in the state has been slipping during the last three years for which figures are available. In 2011, it was $53,234, down from $58,743 in 2008.
Nationally, the poverty rate held relatively steady. It was 15.3 percent in 2010 and increased slightly to 15.9 percent in 2011. About 48.5 million Americans were living in poverty last year.
Of those living in poverty in Illinois last year, 648,592 were children. In 2011, the child poverty rate was 21 percent. That was a significant jump from 2010, when 590,949 children were living in poverty and the rate was 19.4 percent. One out of four children under the age of 5 was living in poverty last year.
“These near-unprecedented poverty levels are not simply the result of the recession and a sluggish recovery. Poverty was on the rise before the recession began as broader shifts in wages, job quality, workforce preparation, inequality and harmful cuts to the safety net disproportionately impacted people at the lower end of the income spectrum,” Amy Rynell, director of the Social IMPACT Research Center at the Heartland Alliance, said of the new poverty stats.
The Illinois Commission on the Elimination of Poverty, which includes members of the Heartland Alliance, set the goal of cutting extreme poverty in half by 2015, but the new statistics show that the state is losing ground. Extreme poverty is defined as an income that is less than half of the federal poverty level. Almost 100,000 more Illinoisans were living in extreme poverty in 2011 than in 2010. Nationwide, 21.4 million people lived in extreme poverty in 2011.The commission suggests that the state tackle extreme poverty through a series of policy changes, including increasing housing subsidies, increasing the number of families who receive welfare support and increasing access to community college scholarships.
New data from the U.S. Census Bureau shows that poverty continued to grow in Illinois in 2011.
According to estimates from the census bureau’s American Community Survey, about 1.9 million Illinoisans were living in poverty in 2011. That compares with about 1.7 million living below the poverty line in 2010. Last year, the census bureau considered a family of three with a household income of $17,916 or less to be living in poverty; in 2010 it was $17,374 for three people. In 2011, 15 percent of Illinois residents were living in poverty, which is a jump from 13.8 percent in 2010. The numbers from the census bureau are the most current comprehensive statistics available on poverty. For more on 2010 poverty numbers, see this Illinois Issues Blog post.
According to the bureau's findings, the median household income in the state has been slipping during the last three years for which figures are available. In 2011, it was $53,234, down from $58,743 in 2008.
Nationally, the poverty rate held relatively steady. It was 15.3 percent in 2010 and increased slightly to 15.9 percent in 2011. About 48.5 million Americans were living in poverty last year.
Of those living in poverty in Illinois last year, 648,592 were children. In 2011, the child poverty rate was 21 percent. That was a significant jump from 2010, when 590,949 children were living in poverty and the rate was 19.4 percent. One out of four children under the age of 5 was living in poverty last year.
“These near-unprecedented poverty levels are not simply the result of the recession and a sluggish recovery. Poverty was on the rise before the recession began as broader shifts in wages, job quality, workforce preparation, inequality and harmful cuts to the safety net disproportionately impacted people at the lower end of the income spectrum,” Amy Rynell, director of the Social IMPACT Research Center at the Heartland Alliance, said of the new poverty stats.
The Illinois Commission on the Elimination of Poverty, which includes members of the Heartland Alliance, set the goal of cutting extreme poverty in half by 2015, but the new statistics show that the state is losing ground. Extreme poverty is defined as an income that is less than half of the federal poverty level. Almost 100,000 more Illinoisans were living in extreme poverty in 2011 than in 2010. Nationwide, 21.4 million people lived in extreme poverty in 2011.The commission suggests that the state tackle extreme poverty through a series of policy changes, including increasing housing subsidies, increasing the number of families who receive welfare support and increasing access to community college scholarships.
Tuesday, July 17, 2012
Study finds states struggling at recovery
By Jamey Dunn
A new study on struggling state budgets found that the recent recession exposed and exacerbated unsound practices occurring nationwide and left many states struggling to find stability.
The report released by the New York City-based State Budget Crisis Task Force focused on California, Illinois, New Jersey, New York, Texas and Virginia. According to the report, these states hold a third of the country’s population and account for almost 40 cents of every dollar spent by state and local governments. “The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” Richard Ravitch, the former lieutenant governor of New York, and Paul Volcker, the former chairman of the Federal Reserve, wrote. Both are chairmen of the State Budget Crisis Task Force. “The conclusion of the task force is unambiguous. The existing trajectory of state spending, taxation and administrative practices cannot be sustained. The basic problem is not cyclical. It is structural. The time to act is now.”
States' spending has a significant effect on the economy as a whole. States spend a total $1.5 trillion annually. State and local governments cover 90 percent of education costs, and states spend an estimated $200 billion annually on health care for the poor each year. States are also important employers. They employ more than 19 million workers, which account for 15 percent of all workers in the nation. States employ six times as many people as the federal government.
But employee headcounts are shrinking as states face post-recession budget realities. According to the report, states are facing budget shortfalls that total an estimated $55 billion. States responded to the crisis by dipping into reserves, if available, raising taxes and cutting, especially staff. According to the report, Illinois lost 23,300 state and local government jobs from June 2009 to May 2012. New York saw comparable numbers. But most states in the study experienced more public jobs cuts than Illinois and New York. California saw state and local employment dip by 125,800 over the same period. Only New Jersey lost less than Illinois, at 21,600. The report said that states targeted personnel costs for larger cuts after the 2008 financial crisis more than they did in other recent economic downturns. “This is a fundamental shift in the way governments have responded to recessions and appears to signal a willingness to “unbuild” state government in a way that has not been done before,” the report said.
The report found that state budgets fared worse in the downturn than other areas of the economy and would likely take longer to bounce back. “The sharp deterioration in state finances as a result of the 2008 financial collapse and associated recession is well-known. State government tax revenues were hit much harder than the overall economy. Although real gross domestic product declined by 5.1 percent during the recession, the components of personal income typically taxed by state governments declined by 10 percent; and consumption of items typically subject to state sales taxes declined by 11 percent.”
As Congress seeks to reduce the federal deficit in wake of the recession, the authors of the study also try to predict the potential impact of cuts to federal funding, which they say would most likely hit grants that go to states. “Even if Congress and the president do not cut the federal budget drastically this year or next, significant cuts are almost certain over the longer term. We may assume that areas such as defense, Social Security, Medicare, and net interest will not be cut as deeply as other programs. If this is the case, federal grants to state and local governments will be a primary target of federal budget cuts.” The study says a 10 percent cut to such grants would mean a $60 billion reduction in funds going to states. The study says such a cut would be “equivalent to more than doubling the corporate income tax, cutting police and fire spending almost in half, or eliminating all spending on libraries, parks and recreation.” Under such a reduction, Illinois would lose $2.3 billion.
However, the study said that not all state budget problems can be blamed on the recession. Growing health care and retirement costs, coupled with budget gimmickry, had set many states, including Illinois, up for a fall. “The rapid growth in Medicaid spending has pushed aside other types of state spending. Medicaid recently surpassed K-12 education as the largest area of state spending when all funds, including federal funds, are considered; Medicaid appears likely to continue to claim a growing share of state resources,” the report said. All six states in the study have made efforts to slash Medicaid liabilities. Illinois is not the only state that has pushed off Medicaid bills from one fiscal year into the next. Texas intentionally underfunded its Medicaid program and now must make up a $4.8 billion shortfall by September 2013.
It will come as no surprise to Illinois residents that pension and retiree health care costs are also included in the reports analysis of budget challenges. According to the study, California, Illinois and New Jersey account for more than half of the total unfunded liability for pension costs nationwide.
All six states were guilty of using budget gimmicks or paying for ongoing costs with one-time-only revenues. California, New Jersey and New York joined Illinois in borrowing against tobacco settlement revenues, a budgeting trick called securitization. All six states have delayed payments to local governments, schools or vendors. All six have also used fund sweeps to balance their budgets. All the states but Texas have borrowed either to refinance other debt or cover annual costs, including pension payments.
The report makes a number of recommendations, including that states make budgets more transparent and create multi-year projections that are more than just window dressing. The study also suggests that states make their pension funds more transparent by reporting on investment risks. The authors say that states should create automatic funding mechanisms to ensure that pension payments are made, as well as automatically deferring some money each year into rainy day funds.
A new study on struggling state budgets found that the recent recession exposed and exacerbated unsound practices occurring nationwide and left many states struggling to find stability.
The report released by the New York City-based State Budget Crisis Task Force focused on California, Illinois, New Jersey, New York, Texas and Virginia. According to the report, these states hold a third of the country’s population and account for almost 40 cents of every dollar spent by state and local governments. “The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” Richard Ravitch, the former lieutenant governor of New York, and Paul Volcker, the former chairman of the Federal Reserve, wrote. Both are chairmen of the State Budget Crisis Task Force. “The conclusion of the task force is unambiguous. The existing trajectory of state spending, taxation and administrative practices cannot be sustained. The basic problem is not cyclical. It is structural. The time to act is now.”
States' spending has a significant effect on the economy as a whole. States spend a total $1.5 trillion annually. State and local governments cover 90 percent of education costs, and states spend an estimated $200 billion annually on health care for the poor each year. States are also important employers. They employ more than 19 million workers, which account for 15 percent of all workers in the nation. States employ six times as many people as the federal government.
But employee headcounts are shrinking as states face post-recession budget realities. According to the report, states are facing budget shortfalls that total an estimated $55 billion. States responded to the crisis by dipping into reserves, if available, raising taxes and cutting, especially staff. According to the report, Illinois lost 23,300 state and local government jobs from June 2009 to May 2012. New York saw comparable numbers. But most states in the study experienced more public jobs cuts than Illinois and New York. California saw state and local employment dip by 125,800 over the same period. Only New Jersey lost less than Illinois, at 21,600. The report said that states targeted personnel costs for larger cuts after the 2008 financial crisis more than they did in other recent economic downturns. “This is a fundamental shift in the way governments have responded to recessions and appears to signal a willingness to “unbuild” state government in a way that has not been done before,” the report said.
The report found that state budgets fared worse in the downturn than other areas of the economy and would likely take longer to bounce back. “The sharp deterioration in state finances as a result of the 2008 financial collapse and associated recession is well-known. State government tax revenues were hit much harder than the overall economy. Although real gross domestic product declined by 5.1 percent during the recession, the components of personal income typically taxed by state governments declined by 10 percent; and consumption of items typically subject to state sales taxes declined by 11 percent.”
As Congress seeks to reduce the federal deficit in wake of the recession, the authors of the study also try to predict the potential impact of cuts to federal funding, which they say would most likely hit grants that go to states. “Even if Congress and the president do not cut the federal budget drastically this year or next, significant cuts are almost certain over the longer term. We may assume that areas such as defense, Social Security, Medicare, and net interest will not be cut as deeply as other programs. If this is the case, federal grants to state and local governments will be a primary target of federal budget cuts.” The study says a 10 percent cut to such grants would mean a $60 billion reduction in funds going to states. The study says such a cut would be “equivalent to more than doubling the corporate income tax, cutting police and fire spending almost in half, or eliminating all spending on libraries, parks and recreation.” Under such a reduction, Illinois would lose $2.3 billion.
However, the study said that not all state budget problems can be blamed on the recession. Growing health care and retirement costs, coupled with budget gimmickry, had set many states, including Illinois, up for a fall. “The rapid growth in Medicaid spending has pushed aside other types of state spending. Medicaid recently surpassed K-12 education as the largest area of state spending when all funds, including federal funds, are considered; Medicaid appears likely to continue to claim a growing share of state resources,” the report said. All six states in the study have made efforts to slash Medicaid liabilities. Illinois is not the only state that has pushed off Medicaid bills from one fiscal year into the next. Texas intentionally underfunded its Medicaid program and now must make up a $4.8 billion shortfall by September 2013.
It will come as no surprise to Illinois residents that pension and retiree health care costs are also included in the reports analysis of budget challenges. According to the study, California, Illinois and New Jersey account for more than half of the total unfunded liability for pension costs nationwide.
All six states were guilty of using budget gimmicks or paying for ongoing costs with one-time-only revenues. California, New Jersey and New York joined Illinois in borrowing against tobacco settlement revenues, a budgeting trick called securitization. All six states have delayed payments to local governments, schools or vendors. All six have also used fund sweeps to balance their budgets. All the states but Texas have borrowed either to refinance other debt or cover annual costs, including pension payments.
The report makes a number of recommendations, including that states make budgets more transparent and create multi-year projections that are more than just window dressing. The study also suggests that states make their pension funds more transparent by reporting on investment risks. The authors say that states should create automatic funding mechanisms to ensure that pension payments are made, as well as automatically deferring some money each year into rainy day funds.
Monday, September 19, 2011
Economic downturn may help keep space open at landfills
By Jamey Dunn
Illinois landfills have an average of 23 years of capacity left if they continue to accept trash at current rates, which the state’s economic slump may be helping to keep down.
In 2010, 43 Illinois landfills took in about 14 million tons of waste, about 11 percent of which came from other states. According to the Illinois Environmental Protection Agency’s landfill capacity report, 22 Illinois landfills accepted a total of more than 1.5 million tons of trash from other states including California, Iowa, Indiana, Kentucky and Wisconsin. The overall capacity of the state’s landfills, which is currently more than 303 million tons, decreased by 18.2 million tons or 5.4 percent in 2010. The measurements are based on waste before it is compacted for storage.
Landfills in northwestern Illinois and the Chicago metropolitan area have the least amount of projected capacity. If landfills in that region continue accepting trash at their current rates, they will run out of room in 14 years. Of the seven regions the Illinois Environmental Protection Agency designates for solid waste management, five saw a shrinking capacity for trash in 2010 when compared with 2009 capacity levels.
Both the IEPA and those in the solid waste disposal industry say the state is in no immediate danger of running out of room for its trash. However, one industry expert said the recent dip in waste production could be an indicator of the state’s economic woes. “I think for the time being, we’re fine. The economy has not been booming, so we haven’t seen a big increase in waste production,” said David Hartke, president of the Illinois Counties Solid Waste Management Association. Hartke noted that the amount of waste going into landfills has dropped every year since 2006, and he said it is directly related to residents’ levels of consumption. Landfills saw a small increase —.5 percent — of the amount of trash they took in 2010.
Hartke, senior waste analyst for the Will County Land Use Department, said waste haulers in some northern areas of the state, where construction was booming in recent years, are now reporting up to 15 percent less trash as the building of homes and businesses has died off. “It is just interesting to see the amount of waste received as compared to our latest slump in the economy,” he said.
Overview of the state’s landfill capacity by region:
Maggie Carson, a spokesperson for the IEPA, said that the trend in Illinois is toward larger landfills that have the potential to grow. “The bigger picture is that the larger [landfills], and typically those managed by the large waste management companies, continued to get bigger,” Carson said. “They saw they way things were going was that smaller landfills were unable to meet the environmental requirements. They have space to continue to develop for the foreseeable future.”
Hartke said of smaller landfills: “They can’t afford to continue their operations. They can’t afford the meet regulatory requirements.” He said some requirements are confusing and difficult to implement. He pointed to a new law that will bar many electronics, such as computers and televisions, from being placed in landfills as of 2012. “It’s definitely going to be difficult for waste haulers and landfills to pull those items out, compared to tires, which are banned. It’s a lot more obvious to see a tire or landscaping waste, [which is also banned.]” Hartke said an exemption for businesses makes the law even more difficult to enforce in practice. “When you see a [computer] out there, how do you know if it was in a business or a house?” he asked. Hartke said several waste management operations are working on drafting a standard that all facilities in the state can live by.
Illinois landfills have an average of 23 years of capacity left if they continue to accept trash at current rates, which the state’s economic slump may be helping to keep down.
In 2010, 43 Illinois landfills took in about 14 million tons of waste, about 11 percent of which came from other states. According to the Illinois Environmental Protection Agency’s landfill capacity report, 22 Illinois landfills accepted a total of more than 1.5 million tons of trash from other states including California, Iowa, Indiana, Kentucky and Wisconsin. The overall capacity of the state’s landfills, which is currently more than 303 million tons, decreased by 18.2 million tons or 5.4 percent in 2010. The measurements are based on waste before it is compacted for storage.
Landfills in northwestern Illinois and the Chicago metropolitan area have the least amount of projected capacity. If landfills in that region continue accepting trash at their current rates, they will run out of room in 14 years. Of the seven regions the Illinois Environmental Protection Agency designates for solid waste management, five saw a shrinking capacity for trash in 2010 when compared with 2009 capacity levels.
Both the IEPA and those in the solid waste disposal industry say the state is in no immediate danger of running out of room for its trash. However, one industry expert said the recent dip in waste production could be an indicator of the state’s economic woes. “I think for the time being, we’re fine. The economy has not been booming, so we haven’t seen a big increase in waste production,” said David Hartke, president of the Illinois Counties Solid Waste Management Association. Hartke noted that the amount of waste going into landfills has dropped every year since 2006, and he said it is directly related to residents’ levels of consumption. Landfills saw a small increase —.5 percent — of the amount of trash they took in 2010.
Hartke, senior waste analyst for the Will County Land Use Department, said waste haulers in some northern areas of the state, where construction was booming in recent years, are now reporting up to 15 percent less trash as the building of homes and businesses has died off. “It is just interesting to see the amount of waste received as compared to our latest slump in the economy,” he said.
Overview of the state’s landfill capacity by region:
- Region One is the Northwestern Region, which includes the counties of Boone, Bureau, Carroll, DeKalb, JoDaviess, LaSalle, Lee, Ogle, Putnam, Stephenson, Whiteside and Winnebago. Landfills in the region would be able to take in trash for another 14 years at current rates.
- Region Two is the Chicago Metropolitan Region, which includes the counties of Cook, DuPage, Grundy, Kane, Kankakee, Kendall, Lake, McHenry and Will. Landfills in the region would be able to take in trash for another 14 years at current rates.
- Region Three is the Peoria/Quad Cities Region, which includes the counties of Fulton, Hancock, Henderson, Henry, Knox, Marshall, McDonough, Mercer, Peoria, Rock Island, Stark, Tazewell, Warren and Woodford counties. Landfills in the region would be able to take in trash for another 56 years at current rates.
- Region Four is the East Central Illinois Region, which includes the counties of Champaign, Clark, Coles, Crawford, Cumberland, DeWitt, Douglas, Edgar, Effingham, Ford, Iroquois, Jasper, Livingston, Macon, McLean, Moultrie, Piatt, Shelby and Vermilion. Landfills in the region would be able to take in trash for another 26 years at current rates.
- Region Five is the West Central Illinois Region, which includes the counties of Adams, Brown, Calhoun, Cass, Christian, Greene, Jersey, Logan, Macoupin, Mason, Menard, Montgomery, Morgan, Pike, Sangamon, Schuyler and Scott. Landfills in the region would be able to take in trash for another 26 years at current rates.
- Region Six is the St. Louis Metropolitan East Region, which includes the counties of Bond, Clinton, Fayette, Madison, Marion, Monroe, Randolph, St. Clair, and Washington. Landfills in the region would be able to take in trash for another 18 years at current rates.
- Region Seven is the Southern Illinois Region, which includes the counties of Alexander, Clay, Edwards, Franklin, Gallatin, Hamilton, Hardin, Jackson, Jefferson, Johnson, Lawrence, Massac, Perry, Pope, Pulaski, Richland, Saline, Union, Wabash, Wayne, White and Williamson. Landfills in the region will be able to take in trash for another 47 years at current rates.
Maggie Carson, a spokesperson for the IEPA, said that the trend in Illinois is toward larger landfills that have the potential to grow. “The bigger picture is that the larger [landfills], and typically those managed by the large waste management companies, continued to get bigger,” Carson said. “They saw they way things were going was that smaller landfills were unable to meet the environmental requirements. They have space to continue to develop for the foreseeable future.”
Hartke said of smaller landfills: “They can’t afford to continue their operations. They can’t afford the meet regulatory requirements.” He said some requirements are confusing and difficult to implement. He pointed to a new law that will bar many electronics, such as computers and televisions, from being placed in landfills as of 2012. “It’s definitely going to be difficult for waste haulers and landfills to pull those items out, compared to tires, which are banned. It’s a lot more obvious to see a tire or landscaping waste, [which is also banned.]” Hartke said an exemption for businesses makes the law even more difficult to enforce in practice. “When you see a [computer] out there, how do you know if it was in a business or a house?” he asked. Hartke said several waste management operations are working on drafting a standard that all facilities in the state can live by.
Friday, July 29, 2011
Possible federal default spells trouble for states
By Jamey Dunn
As lawmakers in Washington, D.C., struggle to find a compromise over raising the federal debt ceiling, concerns are brewing in Illinois about the state’s investments, credit rating and programs funded by federal dollars.
Republicans in Congress have called for budget reforms and cuts before they will vote to raise the amount the federal government can borrow. The U.S. Treasury Department warned that if Congress does not vote to raise the ceiling, America would default on its debts. President Barack Obama is now looking to the Democrat-controlled U.S. Senate to create a plan that can pass in the Republican-controlled U.S. House. “Today I urge Democrats and Republicans in the Senate to find common ground on a plan that can get support from both parties in the House — a plan that I can sign by Tuesday,” Obama said in televised statement today. “There are plenty of ways out of this mess, but we are almost out of time. We need to reach a compromise by Tuesday, so that our country will have the abilities to pay its bills on time as we always have -- bills that include monthly Social Security checks, veterans benefits and the government contracts we’ve signed with thousands of businesses.”
Obama warned today that too much foot dragging could cause bond rating agencies to lower the country’s credit score, “not because we didn’t have the capacity to pay our bills — we do — but because we didn’t have a AAA [political] system to match our AAA credit rating.”
If the country’s credit rating drops, it could spell trouble for states, where ratings might quickly follow suit. “If for some reason the United States government bond rating is lowered from AAA down, that will absolutely have a splash back on other units of government,” Illinois Treasurer Dan Rutherford said at a Chicago news conference today. “If for some reason the American government’s bond rating is lowered, there is no question in this treasurer’s mind that that will affect Illinois’ bond rating. … So when Illinois looks to go into the marketplace and borrow money, it will be more expensive.”
In recent years, Illinois has struggled to keep its rating from dropping to “junk” status. After lawmakers approved an income tax increase in January, one agency improved the state’s fiscal outlook to “stable”, but two others gave the state a “negative” outlook for the future. “Illinois does not have any immediate plans to issue debt, and the current rates we have are fixed. However, if a compromise is unable to be met, the U.S. could lose its AAA rating for the first time in history. This would likely lead ratings agencies to downgrade every state, which would add hundreds of millions of dollars in interest costs to bonds sold in the future. In Illinois, that would mean money we desperately need to educate our students, ensure public safety and protect our seniors would now be used to pay interest costs,” Kelly Kraft, spokesperson for Gov. Pat Quinn’s budget office, said in a prepared statement.
Experts predict a default could create serious economic upheaval nationwide, which could stall or even turn around any economic recovery made in the state. “All the gurus suggest — and it makes sense — that this is going to put a drag on the economy, this sort of delicate recovery that we’re in,” said Christopher Mooney, a political studies professor with the Institute of Government and Public Affairs at the University of Illinois. Such a decline could also be bad news to a state government, such as Illinois, struggling to find its way out of a record deficit. “You’ve got the two things that happen when the economy goes bad: Revenues go down and service costs go up,” Mooney said.
Rutherford said he is working to ensure that the state’s investments are protected, but safety may come at the expense of potential interest that could be earned. Rutherford said the state earned about $5 million in interest in June. “Risk is not an option. I’m prepared to put the state portfolio that becomes liquid into zero interest accounts,” Rutherford said. He said the money would go into accounts where it would not earn interest but would be protected by the Federal Deposit Insurance Corporation.
Quinn said he is confident that a solution will be reached. However, he is concerned about areas of government that rely heavily on federal support. “We have to worry about public safety first and foremost. … We have 11 nuclear power plants in Illinois — reactors — we have to have inspections of them by the federal government all the time for public safety. So that’s a concern. Our military — we want to make sure our soldiers are paid. They’re on the front line for our democracy in far away places. Here in Illinois, we have our National Guard that we have to deploy from time to time to deal with natural disasters,” Quinn said at a Chicago news conference.
Kraft said the state is working on contingency plans. “We are working with agencies to evaluate the potential impacts in our state that could affect job creation, Medicaid and our infrastructure.” Illinois receives a high rate of matching funds for both the Medicaid program as well as capital construction projects.
Mooney said state officials are probably perplexed about how to handle the situation because no one knows exactly what the ripple effect of a federal default would be on the states. “It’s going to be awful for everybody. This isn’t just Illinois-specific. … It’s totally uncharted territory.”
As lawmakers in Washington, D.C., struggle to find a compromise over raising the federal debt ceiling, concerns are brewing in Illinois about the state’s investments, credit rating and programs funded by federal dollars.
Republicans in Congress have called for budget reforms and cuts before they will vote to raise the amount the federal government can borrow. The U.S. Treasury Department warned that if Congress does not vote to raise the ceiling, America would default on its debts. President Barack Obama is now looking to the Democrat-controlled U.S. Senate to create a plan that can pass in the Republican-controlled U.S. House. “Today I urge Democrats and Republicans in the Senate to find common ground on a plan that can get support from both parties in the House — a plan that I can sign by Tuesday,” Obama said in televised statement today. “There are plenty of ways out of this mess, but we are almost out of time. We need to reach a compromise by Tuesday, so that our country will have the abilities to pay its bills on time as we always have -- bills that include monthly Social Security checks, veterans benefits and the government contracts we’ve signed with thousands of businesses.”
Obama warned today that too much foot dragging could cause bond rating agencies to lower the country’s credit score, “not because we didn’t have the capacity to pay our bills — we do — but because we didn’t have a AAA [political] system to match our AAA credit rating.”
If the country’s credit rating drops, it could spell trouble for states, where ratings might quickly follow suit. “If for some reason the United States government bond rating is lowered from AAA down, that will absolutely have a splash back on other units of government,” Illinois Treasurer Dan Rutherford said at a Chicago news conference today. “If for some reason the American government’s bond rating is lowered, there is no question in this treasurer’s mind that that will affect Illinois’ bond rating. … So when Illinois looks to go into the marketplace and borrow money, it will be more expensive.”
In recent years, Illinois has struggled to keep its rating from dropping to “junk” status. After lawmakers approved an income tax increase in January, one agency improved the state’s fiscal outlook to “stable”, but two others gave the state a “negative” outlook for the future. “Illinois does not have any immediate plans to issue debt, and the current rates we have are fixed. However, if a compromise is unable to be met, the U.S. could lose its AAA rating for the first time in history. This would likely lead ratings agencies to downgrade every state, which would add hundreds of millions of dollars in interest costs to bonds sold in the future. In Illinois, that would mean money we desperately need to educate our students, ensure public safety and protect our seniors would now be used to pay interest costs,” Kelly Kraft, spokesperson for Gov. Pat Quinn’s budget office, said in a prepared statement.
Experts predict a default could create serious economic upheaval nationwide, which could stall or even turn around any economic recovery made in the state. “All the gurus suggest — and it makes sense — that this is going to put a drag on the economy, this sort of delicate recovery that we’re in,” said Christopher Mooney, a political studies professor with the Institute of Government and Public Affairs at the University of Illinois. Such a decline could also be bad news to a state government, such as Illinois, struggling to find its way out of a record deficit. “You’ve got the two things that happen when the economy goes bad: Revenues go down and service costs go up,” Mooney said.
Rutherford said he is working to ensure that the state’s investments are protected, but safety may come at the expense of potential interest that could be earned. Rutherford said the state earned about $5 million in interest in June. “Risk is not an option. I’m prepared to put the state portfolio that becomes liquid into zero interest accounts,” Rutherford said. He said the money would go into accounts where it would not earn interest but would be protected by the Federal Deposit Insurance Corporation.
Quinn said he is confident that a solution will be reached. However, he is concerned about areas of government that rely heavily on federal support. “We have to worry about public safety first and foremost. … We have 11 nuclear power plants in Illinois — reactors — we have to have inspections of them by the federal government all the time for public safety. So that’s a concern. Our military — we want to make sure our soldiers are paid. They’re on the front line for our democracy in far away places. Here in Illinois, we have our National Guard that we have to deploy from time to time to deal with natural disasters,” Quinn said at a Chicago news conference.
Kraft said the state is working on contingency plans. “We are working with agencies to evaluate the potential impacts in our state that could affect job creation, Medicaid and our infrastructure.” Illinois receives a high rate of matching funds for both the Medicaid program as well as capital construction projects.
Mooney said state officials are probably perplexed about how to handle the situation because no one knows exactly what the ripple effect of a federal default would be on the states. “It’s going to be awful for everybody. This isn’t just Illinois-specific. … It’s totally uncharted territory.”
Thursday, February 10, 2011
Minimum wage increase proposed
By Lauren N. Johnson
Workers earning minimum wage in Illinois could see an increase in their paychecks under a proposal to raise the state's minimum wage from the current $8.25 per hour to $10.65 per hour by 2014.
Senate Bill 1565, sponsored by Sen. Kimberly Lightford, a Maywood Democrat, would also raise minimum wage to $10.65 for tipped workers – individuals who provide services, such as waitresses, car wash workers and nail salon employees. They currently receive $4.95 per hour.
“As we go forward, I want to make sure that minimum wage workers are not ignored and not forgotten,” said Lightford. “Their issues and rights need to be a part of the discussion. The bill will help to keep this important issue on the table as members of the General Assembly work to keep Illinois competitive and fair for business and for workers.”
Under the bill, the minimum wage would increase to $8.90 this year, $9.50 in 2012, $10.15 in 2013 and $10.65 in 2014.
“People who have to work for a living ought to make a living wage,” said Madeline Talbott, lead coordinator of Action Now, a grassroots coalition of Illinois community and labor organizations that advocates the rights of working families.
Talbot said 17 other states require employers to pay more than the federal minimum wage of $7.25 per hour. She said that in a statewide poll conducted in January, 71 percent of Illinois voters in all regions of the state supported an increase to $10.50 by 2013. Kiley and Co., a Boston-based public polling and research firm, conducted the poll for Action Now.
In 2007, former Gov. Blagojevich signed into law a similar plan to increase wages for hourly workers over a period of three years, bringing the rate to $8.25 per hour last July. Darby Anderson, vice president of Addus Healthcare’s Home and Community Services, said since that increase in wages, the group has seen a 20 percent reduction in turnover of their employees – home aides who service elderly and disabled persons.
Members of the business community opposed to the increase said it would stop economic recovery in the state after the national recession. “Illinois policy makers must understand their actions, like significantly raising the minimum wage and imposing higher income taxes, do impact our economic viability,” Kim Clarke Maisch, Illinois state director of the National Federation of Independent Business, said in a written statement.
However, Ron Baiman, director of budget and policy analysis for the Center on Tax and Budget Accountability, said a wage increase would not cause Illinois businesses to flee the state because those that would be impacted by the increase serve local markets in retail and health care and cannot “pick up and leave.”
Rob Karr, senior vice president of government and member relations for the Illinois Retail Merchants Association, said an increase at this time would be a “recipe for disaster.” Karr said the proposed increase would be yet another blow to businesses, citing Illinois’ high workers’ compensation costs and the recent income tax increase.
Workers earning minimum wage in Illinois could see an increase in their paychecks under a proposal to raise the state's minimum wage from the current $8.25 per hour to $10.65 per hour by 2014.
Senate Bill 1565, sponsored by Sen. Kimberly Lightford, a Maywood Democrat, would also raise minimum wage to $10.65 for tipped workers – individuals who provide services, such as waitresses, car wash workers and nail salon employees. They currently receive $4.95 per hour.
“As we go forward, I want to make sure that minimum wage workers are not ignored and not forgotten,” said Lightford. “Their issues and rights need to be a part of the discussion. The bill will help to keep this important issue on the table as members of the General Assembly work to keep Illinois competitive and fair for business and for workers.”
Under the bill, the minimum wage would increase to $8.90 this year, $9.50 in 2012, $10.15 in 2013 and $10.65 in 2014.
“People who have to work for a living ought to make a living wage,” said Madeline Talbott, lead coordinator of Action Now, a grassroots coalition of Illinois community and labor organizations that advocates the rights of working families.
Talbot said 17 other states require employers to pay more than the federal minimum wage of $7.25 per hour. She said that in a statewide poll conducted in January, 71 percent of Illinois voters in all regions of the state supported an increase to $10.50 by 2013. Kiley and Co., a Boston-based public polling and research firm, conducted the poll for Action Now.
In 2007, former Gov. Blagojevich signed into law a similar plan to increase wages for hourly workers over a period of three years, bringing the rate to $8.25 per hour last July. Darby Anderson, vice president of Addus Healthcare’s Home and Community Services, said since that increase in wages, the group has seen a 20 percent reduction in turnover of their employees – home aides who service elderly and disabled persons.
Members of the business community opposed to the increase said it would stop economic recovery in the state after the national recession. “Illinois policy makers must understand their actions, like significantly raising the minimum wage and imposing higher income taxes, do impact our economic viability,” Kim Clarke Maisch, Illinois state director of the National Federation of Independent Business, said in a written statement.
However, Ron Baiman, director of budget and policy analysis for the Center on Tax and Budget Accountability, said a wage increase would not cause Illinois businesses to flee the state because those that would be impacted by the increase serve local markets in retail and health care and cannot “pick up and leave.”
Rob Karr, senior vice president of government and member relations for the Illinois Retail Merchants Association, said an increase at this time would be a “recipe for disaster.” Karr said the proposed increase would be yet another blow to businesses, citing Illinois’ high workers’ compensation costs and the recent income tax increase.
Tuesday, August 10, 2010
Most employers cannot check credit scores
By Jamey Dunn
Those who have been having trouble making ends meet and are looking for work in the down economy may have one obstacle cleared from their paths.
Gov. Pat Quinn signed a bill today that prevents employers from looking at credit histories when deciding whom to hire, promote or fire. The law makes exceptions for certain jobs and industries.
At a Chicago news conference, Quinn acknowledged that the recent economic collapse has caused many people to fall behind on their bills. “We cannot allow folks who are doing their level best to be discriminated against with respect to getting a job or keeping a job. And unfortunately, some employers are using the credit score of an individual person to decide whether someone gets hired or someone gets retained on a job or someone gets a promotion on that job. And I don’t think that’s fair.”
Oak Park Democratic Sen. Don Harmon, a sponsor of House Bill 4658, said that if employers use credit histories when making hiring choices, people who are down on their luck face a much tougher climb to get their finances back in order. “If you lose your job and your credit is damaged as a result, and if employers use your credit to prevent you from getting a job, this is a vicious cycle that folks will never get out of. … At the same time, it provides to employers that have a legitimate need to look at an applicants credit history the ability to do so.”
Karen Kent, executive vice president of the hospitality industry union UNITE HERE Local 1, said that credit history is not relevant to job performance for most jobs. “Bad credit is often the result of life circumstances not poor character. … We don’t believe that a bartender that has been through a divorce is less likely to serve a good cocktail or that a hotel housekeeper who has medical bills is less likely to present a clean room to the guests.”
Kent said the bill would especially help out minorities who have been disproportionately impacted by foreclosure, unemployment and predatory lending. Harmon said he hopes the bill would stop some employers from “using credit scores as a convenient way to discriminate against applicants.”
The bill exempts entire industries, such as banks and insurance providers, which Harmon said “traditionally and almost universally deal with people’s confidential financial information.” The bill also makes exemptions for specific positions that might require an applicant to handle cash or have access to credit information.
Mary Lynn Fayuomi, president and chief executive officer of The Management Association of Illinois, said the legislation would not change much. “For a lot of employers, there won’t be any major changes because they were only using credit reports for people who had access to cash or where financial decisions where being made. She said her organization only recommends credit checks in such cases, and those are exempted by the bill.
Lisa Callaway, vice president and general counsel for The Management Association of Illinois, said some employers that are not included in the exceptions may have run credit checks when they found a “red flag” in a potential employee’s resume, work history or interview. However, she said that practice was not the norm.
Laura Minzer, director of policy for the Illinois Chamber of Commerce, agrees. She said that businesses are not regularly pulling credit reports on potential employees who do not handle large amounts of money or sensitive information. Minzer said many states are considering similar laws during the recession, hoping to people find jobs, but she doubts the move will make much of a difference. “I don’t think that this law speaks to that. In all fairness, it is probably not going to get more jobs on the table.”
The law takes effect January 1.
Friday, February 06, 2009
Time for some long-term fiscal planning
State Comptroller Dan Hynes already painted a dismal picture of the state's fiscal status with his projection of a nearly $9 billion deficit in fiscal year 2010, which starts July 1. He estimated that could drop to a roughly $6 billion deficit if the state received $3 billion from the federal stimulus package, but the federal bailout amount for states is in flux at this very minute. Adding to the problem is that the current fiscal year 2009 budget keeps getting more and more out of whack. The revenue forecast looks worse than it did in November, according to the legislature’s economic forecasting arm.
Last fall, the bipartisan Commission on Government Forecasting and Accountability said revenues for the current fiscal year 2009 would fall $550 million below the previous year, or $1.34 billion less than the level budgeted.
Part of that spending plan assumed the state would collect $435 million by selling the state’s 10th riverboat license, but the winning bid for the license came in at only $125 million — and it won’t be available in time to ease this year’s budget crunch. According to the Illinois Gaming Board, the money could come in two chunks, one in fiscal year 2010 and the rest in 2011.
In short, the current year’s revenue picture “worsened virtually over night to nearly $1 billion less than the previous year,” the commission said in its January revenue forecast.
The commission added that it may need to make further adjustments when state income and sales tax revenues decline as the national recession unfolds. The cumulative damage: at least $1.6 billion by March.
As all four legislative leaders met with Gov. Pat Quinn this past week, talk of tax increases and budget cuts circled the Capitol. Public administration professor David Merriman at the University of Illinois at Chicago said even if the state gets $3 billion in federal bailout money, cuts spending and increases the state income tax by 1 percentage point, it's still going to be a rough road ahead. "The state needs to do long-term fiscal planning, and they need the legislature to take that seriously," he said.
Watch for more context and analysis in the March edition of Illinois Issues magazine.
Last fall, the bipartisan Commission on Government Forecasting and Accountability said revenues for the current fiscal year 2009 would fall $550 million below the previous year, or $1.34 billion less than the level budgeted.
Part of that spending plan assumed the state would collect $435 million by selling the state’s 10th riverboat license, but the winning bid for the license came in at only $125 million — and it won’t be available in time to ease this year’s budget crunch. According to the Illinois Gaming Board, the money could come in two chunks, one in fiscal year 2010 and the rest in 2011.
In short, the current year’s revenue picture “worsened virtually over night to nearly $1 billion less than the previous year,” the commission said in its January revenue forecast.
The commission added that it may need to make further adjustments when state income and sales tax revenues decline as the national recession unfolds. The cumulative damage: at least $1.6 billion by March.
As all four legislative leaders met with Gov. Pat Quinn this past week, talk of tax increases and budget cuts circled the Capitol. Public administration professor David Merriman at the University of Illinois at Chicago said even if the state gets $3 billion in federal bailout money, cuts spending and increases the state income tax by 1 percentage point, it's still going to be a rough road ahead. "The state needs to do long-term fiscal planning, and they need the legislature to take that seriously," he said.
Watch for more context and analysis in the March edition of Illinois Issues magazine.
Monday, November 10, 2008
Veto session preview
As we head into the first week of the Illinois General Assembly’s fall session, the biggest questions are who will be selected to lead the Senate Democrats and the Senate Republicans? Leaders of both caucuses are stepping down, opening the door for a rare change in leadership that has potential to drastically change the atmosphere in the Capitol.
See this month’s Illinois Issues magazine for information about the Democratic race for Senate president.
So far, two Senate GOP members are openly seeking the minority leadership position, while two others are mentioned as potential candidates if the caucus can’t agree. Sen. Christine Radogno of Lemont and Sen. Kirk Dillard of Hinsdale both represent suburban Chicago districts in mostly DuPage and Will counties. Both have described themselves as fiscal conservatives who can work with different factions within the Illinois Republican Party. And both say they have a good understanding of issues throughout the state.
Radogno says she’s “definitely” interested in becoming Senate minority leader. Although she says she had absolutely no intentions to become a career politician, she now fills the caucus’ No. 2 position and serves as its budget negotiator. She also ran for statewide office in 2006 but lost to Democrat Alexi Giannoulias, the current state treasurer.
Radogno didn’t agree or disagree with former Gov. Jim Edgar’s statements that the Illinois GOP needs to move toward the middle for it to revive its stature. She simply says: “I think what we need to focus on are the issues that we all agree on. And those, quite frankly, are the very ones that are on voters’ minds right now, and that is jobs, the economy and policies that allow people to succeed. That would be making sure they have job opportunities so that people can make their own way.”
Her name also has been mentioned as a potential gubernatorial candidate in 2010. Radogno doesn’t rule it out. “It’s hard to never say never. Right now, my interest is clearly legislative,” she says, adding, however, that, “it may make it more challenging to run for governor if I were leader.”
Dillard also uses the word “definitely” in describing his interest in the position. “I definitely know that I am the best person to move my caucus and the state’s business forward in Springfield.” He says the principles in which he ran Edgar’s office as his chief of staff and in which he used to run the DuPage Republican Party are the blueprint for the way he would operate as a Senate leader.
Dillard sought the leadership position before, but the caucus selected outgoing Senate Minority Leader Frank Watson. Watson announced last week that he would not seek the position after having a minor stroke last month.
“Sen. Watson was my friend. And I tried to help him in any way that I could, from fundraising on down,” Dillard says, but, “no matter who the new Senate leader is in the Republican Caucus, it is imperative that we remain cordial and cohesive because when you only have 22 members, you have no room for dissention.”
Some dissention did occur when Dillard, who says he has a personal relationship with President-elect Barack Obama, appeared in a TV ad for the Democrat during the campaign season. But Dillard cites his relationship with Obama as helping to break the logjam of recent ethics legislation, in which Dillard says he was one, with Comptroller Dan Hynes’ leadership, who encouraged Obama to call Senate President Emil Jones Jr. to call the bill for a vote. Dillard also cites his legislative work with Obama to revise the state’s death penalty statute.
Dillard also won’t rule out a run for governor, but he says he won’t run in 2010. “I’m 52 years old. I have time.”
Two other names mentioned as possible compromise GOP candidates are Sen. Dave Luechtefeld of downstate Okawville and Sen. Dale Risinger of Peoria.
We’ll see if commitments to the leadership candidates solidify this week and next. Republicans have an internal caucus meeting scheduled for November 19.
Veto session
The Illinois Senate will return to the Capitol on Wednesday and is scheduled to meet through Friday, although that could change. The House canceled the first week of session and won’t convene until November 19. Action during the so-called veto session could be somewhat light but significant if the General Assembly considers allocating more money to such state agencies as the Illinois Department of Transportation.
Veto session serves as a good time to review the state’s fiscal realities, including whether revenues match up to spending. They don't, according to the Illinois Department of Revenue. They're $800 million out of whack. This comes on top of Gov. Rod Blagojevich’s $1.4 billion budget cuts that are causing state parks and historic sites to close this month, although the General Assembly approved ways to restore about $221 million to keep those sites open and to save some social services from closing. Blagojevich still hasn’t signed Senate Bill 1103, which would release the money. He has until December 5 to do so before it automatically becomes law.
Tenaska update
Watch for Senate action that would take one more step toward the state’s first clean-coal power plant. Senate Bill 1987 would kick off a study to estimate the cost and design of the proposed Taylorville Energy Center, but it also would set the framework for the state’s long-term energy portfolio. Future power plants would have to use Illinois coal and advanced technology to reduce pollution, and the door would open for a system of carbon tax credits as one more way to reduce pollution. Tenaska Inc., a Nebraska-based energy company, announced today that it already purchased half of the land for the energy center.
Medical malpractice update
This Thursday, the Illinois Supreme Court will consider the controversial medical malpractice law that limits the amount juries can award for pain and suffering caused by malpractice. See the background here.
My update
I’ll be on an airplane headed for North Carolina for the annual CapitolBeat conference for Statehouse reporters Thursday, so, unfortunately, I’ll catch up with these updates next week.
See this month’s Illinois Issues magazine for information about the Democratic race for Senate president.
So far, two Senate GOP members are openly seeking the minority leadership position, while two others are mentioned as potential candidates if the caucus can’t agree. Sen. Christine Radogno of Lemont and Sen. Kirk Dillard of Hinsdale both represent suburban Chicago districts in mostly DuPage and Will counties. Both have described themselves as fiscal conservatives who can work with different factions within the Illinois Republican Party. And both say they have a good understanding of issues throughout the state.
Radogno says she’s “definitely” interested in becoming Senate minority leader. Although she says she had absolutely no intentions to become a career politician, she now fills the caucus’ No. 2 position and serves as its budget negotiator. She also ran for statewide office in 2006 but lost to Democrat Alexi Giannoulias, the current state treasurer.
Radogno didn’t agree or disagree with former Gov. Jim Edgar’s statements that the Illinois GOP needs to move toward the middle for it to revive its stature. She simply says: “I think what we need to focus on are the issues that we all agree on. And those, quite frankly, are the very ones that are on voters’ minds right now, and that is jobs, the economy and policies that allow people to succeed. That would be making sure they have job opportunities so that people can make their own way.”
Her name also has been mentioned as a potential gubernatorial candidate in 2010. Radogno doesn’t rule it out. “It’s hard to never say never. Right now, my interest is clearly legislative,” she says, adding, however, that, “it may make it more challenging to run for governor if I were leader.”
Dillard also uses the word “definitely” in describing his interest in the position. “I definitely know that I am the best person to move my caucus and the state’s business forward in Springfield.” He says the principles in which he ran Edgar’s office as his chief of staff and in which he used to run the DuPage Republican Party are the blueprint for the way he would operate as a Senate leader.
Dillard sought the leadership position before, but the caucus selected outgoing Senate Minority Leader Frank Watson. Watson announced last week that he would not seek the position after having a minor stroke last month.
“Sen. Watson was my friend. And I tried to help him in any way that I could, from fundraising on down,” Dillard says, but, “no matter who the new Senate leader is in the Republican Caucus, it is imperative that we remain cordial and cohesive because when you only have 22 members, you have no room for dissention.”
Some dissention did occur when Dillard, who says he has a personal relationship with President-elect Barack Obama, appeared in a TV ad for the Democrat during the campaign season. But Dillard cites his relationship with Obama as helping to break the logjam of recent ethics legislation, in which Dillard says he was one, with Comptroller Dan Hynes’ leadership, who encouraged Obama to call Senate President Emil Jones Jr. to call the bill for a vote. Dillard also cites his legislative work with Obama to revise the state’s death penalty statute.
Dillard also won’t rule out a run for governor, but he says he won’t run in 2010. “I’m 52 years old. I have time.”
Two other names mentioned as possible compromise GOP candidates are Sen. Dave Luechtefeld of downstate Okawville and Sen. Dale Risinger of Peoria.
We’ll see if commitments to the leadership candidates solidify this week and next. Republicans have an internal caucus meeting scheduled for November 19.
Veto session
The Illinois Senate will return to the Capitol on Wednesday and is scheduled to meet through Friday, although that could change. The House canceled the first week of session and won’t convene until November 19. Action during the so-called veto session could be somewhat light but significant if the General Assembly considers allocating more money to such state agencies as the Illinois Department of Transportation.
Veto session serves as a good time to review the state’s fiscal realities, including whether revenues match up to spending. They don't, according to the Illinois Department of Revenue. They're $800 million out of whack. This comes on top of Gov. Rod Blagojevich’s $1.4 billion budget cuts that are causing state parks and historic sites to close this month, although the General Assembly approved ways to restore about $221 million to keep those sites open and to save some social services from closing. Blagojevich still hasn’t signed Senate Bill 1103, which would release the money. He has until December 5 to do so before it automatically becomes law.
Tenaska update
Watch for Senate action that would take one more step toward the state’s first clean-coal power plant. Senate Bill 1987 would kick off a study to estimate the cost and design of the proposed Taylorville Energy Center, but it also would set the framework for the state’s long-term energy portfolio. Future power plants would have to use Illinois coal and advanced technology to reduce pollution, and the door would open for a system of carbon tax credits as one more way to reduce pollution. Tenaska Inc., a Nebraska-based energy company, announced today that it already purchased half of the land for the energy center.
Medical malpractice update
This Thursday, the Illinois Supreme Court will consider the controversial medical malpractice law that limits the amount juries can award for pain and suffering caused by malpractice. See the background here.
My update
I’ll be on an airplane headed for North Carolina for the annual CapitolBeat conference for Statehouse reporters Thursday, so, unfortunately, I’ll catch up with these updates next week.
Friday, February 15, 2008
NIU and taxes
Shooting lingers over Capitol
By Patrick O’Brien
Thursday’s shooting rampage at Northern Illinois University in DeKalb cast a pall over the Statehouse today. Legislative action led off with condolences and a moment of silence on the House floor. (The Senate was not in session today.)
A group of lawmakers also received a private briefing by Michael Chamness,
chairman of the Illinois Terrorism Task Force and adviser to the Illinois Emergency Management Agency. Chamness praised the efforts of university officials and first responders in DeKalb, saying that an alert about the shootings was issued through text messages and other means less than 20 minutes after the incident occurred. “From our standpoint, NIU did everything correct,” he said.
Comparisons between Virginia Tech and NIU were inevitable. Chamness said reports confirm it took two hours for word of the shooting to reach students at last year’s Virginia Tech shootings. In the case of NIU, students were given specific instructions shortly after the incident to stay away from the area of campus where the shootings occurred.
Chamness said it’s unlikely the DeKalb shootings could have been prevented. “There didn’t seem to be the flags there were at Virginia Tech” that may have alerted authorities.
And Illinois state universities learned from the Virginia Tech tragedy through training in school safety. NIU Police Chief Donald Grady and officials from 95 other state schools attended.
Further, a statewide Campus Safety Task Force is conducting a mental health survey to identify potential problem individuals, but there’s no clear-cut answer about how to prevent such incidents, Chamness said. The task force’s report, including the study, will be available April 1.
Tax talk
By Bethany Jaeger
Anticipate a battle between ideas for raising revenue and for stimulating the economy. There’s more talk about Gov. Rod Blagojevich seeking to garner revenue through a so-called carbon tax, which the Illinois Chamber of Commerce already is prepared to oppose if it appears in his annual budget address February 20. At the same time, even typical proponents of tax credits say the state should avoid anything that could further cut into a revenue shortfall.
If the governor does propose a form of tax on carbon dioxide emissions, expect vocal opposition from the agribusiness and coal industries. We’ll have more on the carbon tax later if it is indeed proposed. The chamber suggests http://www.carbontax.org/ to learn more in the meantime.
In addition, the Taxpayers’ Federation of Illinois said it will oppose all legislative proposals for tax credits, exemptions and deductions this year. “There’s no money,” said David Eldridge, legislative director for the group and former assistant counsel to House Speaker Michael Madigan.
Eldridge testified before a House Revenue Committee Friday and said the state faces a deficit ranging from $600 million to $750 million. The state needs all the revenue it can get for the upcoming fiscal year (that starts July 1). (See our previous blog for background.)
To generate money, the federation repeats an earlier position that it could support an increase in the personal income tax by 1 percent. The Commercial Club of Chicago’s Civic Committee recommended that last year, and increasing the rate from 3 percent to 4 percent already is proposed in a measure sponsored by Rep. Annazette Collins, a Chicago Democrat.
Rep. Frank Mautino, a Spring Valley Democrat and Revenue Committee member, said the federation’s statement is significant given the timing. “Normally, the members of the Taxpayers’ Federation are the large manufacturers who would be looking for the tax credits. But given the Chicago Civic Committee’s report from last year — and many of their members are members of the Taxpayers’ Federation — they came out in favor of an income tax with a corresponding corporate income tax increase.”
Rep. Bob Biggins, an Elmhurst Republican and committee member, said it’s a reasonable position, even for lawmakers such as him who like to propose tax cuts. A former township assessor, he said local governments saw enormous revenue growth as property values increased during the past 30 years. Now that property values are flat, particularly in the Chicago area, local governments aren’t collecting as much money.
“There’s a natural stoppage of increases in revenue from the real estate being flat to the economy in the state — people aren’t spending as much. We’re not going to have enough money. Let’s be prudent here, and let’s not make it worse.”
By Patrick O’Brien
Thursday’s shooting rampage at Northern Illinois University in DeKalb cast a pall over the Statehouse today. Legislative action led off with condolences and a moment of silence on the House floor. (The Senate was not in session today.)
A group of lawmakers also received a private briefing by Michael Chamness,
chairman of the Illinois Terrorism Task Force and adviser to the Illinois Emergency Management Agency. Chamness praised the efforts of university officials and first responders in DeKalb, saying that an alert about the shootings was issued through text messages and other means less than 20 minutes after the incident occurred. “From our standpoint, NIU did everything correct,” he said.
Comparisons between Virginia Tech and NIU were inevitable. Chamness said reports confirm it took two hours for word of the shooting to reach students at last year’s Virginia Tech shootings. In the case of NIU, students were given specific instructions shortly after the incident to stay away from the area of campus where the shootings occurred.
Chamness said it’s unlikely the DeKalb shootings could have been prevented. “There didn’t seem to be the flags there were at Virginia Tech” that may have alerted authorities.
And Illinois state universities learned from the Virginia Tech tragedy through training in school safety. NIU Police Chief Donald Grady and officials from 95 other state schools attended.
Further, a statewide Campus Safety Task Force is conducting a mental health survey to identify potential problem individuals, but there’s no clear-cut answer about how to prevent such incidents, Chamness said. The task force’s report, including the study, will be available April 1.
Tax talk
By Bethany Jaeger
Anticipate a battle between ideas for raising revenue and for stimulating the economy. There’s more talk about Gov. Rod Blagojevich seeking to garner revenue through a so-called carbon tax, which the Illinois Chamber of Commerce already is prepared to oppose if it appears in his annual budget address February 20. At the same time, even typical proponents of tax credits say the state should avoid anything that could further cut into a revenue shortfall.
If the governor does propose a form of tax on carbon dioxide emissions, expect vocal opposition from the agribusiness and coal industries. We’ll have more on the carbon tax later if it is indeed proposed. The chamber suggests http://www.carbontax.org/ to learn more in the meantime.
In addition, the Taxpayers’ Federation of Illinois said it will oppose all legislative proposals for tax credits, exemptions and deductions this year. “There’s no money,” said David Eldridge, legislative director for the group and former assistant counsel to House Speaker Michael Madigan.
Eldridge testified before a House Revenue Committee Friday and said the state faces a deficit ranging from $600 million to $750 million. The state needs all the revenue it can get for the upcoming fiscal year (that starts July 1). (See our previous blog for background.)
To generate money, the federation repeats an earlier position that it could support an increase in the personal income tax by 1 percent. The Commercial Club of Chicago’s Civic Committee recommended that last year, and increasing the rate from 3 percent to 4 percent already is proposed in a measure sponsored by Rep. Annazette Collins, a Chicago Democrat.
Rep. Frank Mautino, a Spring Valley Democrat and Revenue Committee member, said the federation’s statement is significant given the timing. “Normally, the members of the Taxpayers’ Federation are the large manufacturers who would be looking for the tax credits. But given the Chicago Civic Committee’s report from last year — and many of their members are members of the Taxpayers’ Federation — they came out in favor of an income tax with a corresponding corporate income tax increase.”
Rep. Bob Biggins, an Elmhurst Republican and committee member, said it’s a reasonable position, even for lawmakers such as him who like to propose tax cuts. A former township assessor, he said local governments saw enormous revenue growth as property values increased during the past 30 years. Now that property values are flat, particularly in the Chicago area, local governments aren’t collecting as much money.
“There’s a natural stoppage of increases in revenue from the real estate being flat to the economy in the state — people aren’t spending as much. We’re not going to have enough money. Let’s be prudent here, and let’s not make it worse.”
Thursday, February 14, 2008
Stormy start to session
A week before Gov. Rod Blagojevich's annual budget address, the state's economy already casts a cloud over the Statehouse.
Amid national news that a full-blown recession is looming, President George W. Bush signed an economic stimulus package. It's supposed to send checks in late spring and summer to singles who made less than $75,000 and couples who earned less than $150,000 in 2007. (People qualify by filing their federal income taxes.)
If the national economy tanks, Illinois won't be far behind. That's the message of a report requested by the state General Assembly's Commission on Government Forecasting and Accountability. The agency's January briefing says, “Illinois will most certainly succumb if the economy sinks into a recession - if it has not done so already.”
Moody's Economy.com also said in a report for the commission that the odds of a recession increased from 40 percent to 60 percent last month.
Those reports couple with the Illinois comptroller's recent warning that state government is unprepared for a recession. His office released a report to the General Assembly. In his Statehouse office Wednesday, Comptroller Dan Hynes said, “The bottom line is that the state of Illinois, unlike many other states, has not taken advantage of our five years of economic growth. And now as we face a recession, our financial problems are daunting.”
He said the state accumulated “tremendous revenue growth” of $5.5 billion during the past five years. But lawmakers spent it on new programs rather than putting it toward compounding, long-term obligations. While the state devoted more money to pensions, Medicaid, health care, higher education and general education in that time, Hynes said it hasn't necessarily made a difference or addressed a structural deficit that the Blagojevich Administration often misrepresents.
“Each year, the governor has made his budget presentation and has declared that the deficit has been eliminated -- each and every year. And each and every year, that has been proven untrue when the final numbers come out. And that's a problem in and of itself, but it's especially problematic when the economy slows down," Hynes said. (For more information about whether the budget is balanced, see Charlie Wheeler's Illinois Issues column about the governor's 2006 budget address.)
Stormy Smoke Free Illinois debate
Rep. Bill Black, a Danville Republican and vocal GOP leader, blew his top in a House committee, later calling the chairwoman an “idiot” for not acting on her own and instead relying on behind-the-scenes staffers to tell her what to do.
Black threw a tantrum because the committee chair didn't call for his amendment to be attached to the Smoke Free Illinois Act, which went into effect January 1 but doesn't have all rules in place. Committee chairwoman Rep. Karen May of Highland Park said leadership told her that other amendments weren't ready and that they're expected to be called for debate next week.
This could happen a lot this session. New measures will have extra amendments that spell out the rules for implementing them. That's a direct shot at the governor, who publicly stated that the Joint Committee on Administrative Rules - which reviews such rules - doesn't matter. Blagojevich's office previously suggested the bipartisan legislative panel plays only an advisory role after the panel denied his rules for expanding health care to more low- and middle-income adults.
Black's measure, by the way, would change wording in the definition of private clubs. It would allow veterans' halls to vote on whether they want to allow smoking in their halls.
That's just one proposed exemption. A more sweeping measure sponsored by Rep. Harry Ramey, a Carol Stream Republican, would allow smoking in bars, bowling alleys, veterans' halls, strip clubs and casinos. In other words, restaurants would be one of the only mandated smoke-free facilities. Some Illinois veterans testified at the House committee. One urged lawmakers to retain the ban on smoking in all public places for the sake of public health. Another urged them to let veterans, many of whom started smoking while serving in World War II and Vietnam, smoke in their own halls.
Amid national news that a full-blown recession is looming, President George W. Bush signed an economic stimulus package. It's supposed to send checks in late spring and summer to singles who made less than $75,000 and couples who earned less than $150,000 in 2007. (People qualify by filing their federal income taxes.)
If the national economy tanks, Illinois won't be far behind. That's the message of a report requested by the state General Assembly's Commission on Government Forecasting and Accountability. The agency's January briefing says, “Illinois will most certainly succumb if the economy sinks into a recession - if it has not done so already.”
Moody's Economy.com also said in a report for the commission that the odds of a recession increased from 40 percent to 60 percent last month.
Those reports couple with the Illinois comptroller's recent warning that state government is unprepared for a recession. His office released a report to the General Assembly. In his Statehouse office Wednesday, Comptroller Dan Hynes said, “The bottom line is that the state of Illinois, unlike many other states, has not taken advantage of our five years of economic growth. And now as we face a recession, our financial problems are daunting.”
He said the state accumulated “tremendous revenue growth” of $5.5 billion during the past five years. But lawmakers spent it on new programs rather than putting it toward compounding, long-term obligations. While the state devoted more money to pensions, Medicaid, health care, higher education and general education in that time, Hynes said it hasn't necessarily made a difference or addressed a structural deficit that the Blagojevich Administration often misrepresents.
“Each year, the governor has made his budget presentation and has declared that the deficit has been eliminated -- each and every year. And each and every year, that has been proven untrue when the final numbers come out. And that's a problem in and of itself, but it's especially problematic when the economy slows down," Hynes said. (For more information about whether the budget is balanced, see Charlie Wheeler's Illinois Issues column about the governor's 2006 budget address.)
Stormy Smoke Free Illinois debate
Rep. Bill Black, a Danville Republican and vocal GOP leader, blew his top in a House committee, later calling the chairwoman an “idiot” for not acting on her own and instead relying on behind-the-scenes staffers to tell her what to do.
Black threw a tantrum because the committee chair didn't call for his amendment to be attached to the Smoke Free Illinois Act, which went into effect January 1 but doesn't have all rules in place. Committee chairwoman Rep. Karen May of Highland Park said leadership told her that other amendments weren't ready and that they're expected to be called for debate next week.
This could happen a lot this session. New measures will have extra amendments that spell out the rules for implementing them. That's a direct shot at the governor, who publicly stated that the Joint Committee on Administrative Rules - which reviews such rules - doesn't matter. Blagojevich's office previously suggested the bipartisan legislative panel plays only an advisory role after the panel denied his rules for expanding health care to more low- and middle-income adults.
Black's measure, by the way, would change wording in the definition of private clubs. It would allow veterans' halls to vote on whether they want to allow smoking in their halls.
That's just one proposed exemption. A more sweeping measure sponsored by Rep. Harry Ramey, a Carol Stream Republican, would allow smoking in bars, bowling alleys, veterans' halls, strip clubs and casinos. In other words, restaurants would be one of the only mandated smoke-free facilities. Some Illinois veterans testified at the House committee. One urged lawmakers to retain the ban on smoking in all public places for the sake of public health. Another urged them to let veterans, many of whom started smoking while serving in World War II and Vietnam, smoke in their own halls.
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