By Jamey Dunn
A study released today takes a comprehensive look at Illinois’ fiscal situation and the events that led to the state’s current budget mess.
The study, which comes from the State Budget Crisis Task Force, is a follow-up to a report put out by the task force in July. The summer report focused on the budgets of California, Illinois, New Jersey, New York, Texas and Virginia. Richard Ravitch, the former lieutenant governor of New York, and Paul Volcker, the former chairman of the Federal Reserve, co-chair the task force, which seeks to parse state’s budget concerns in the wake of the national recession.
The report points to the usual suspects as cost drivers for the Illinois budget: growing pension and Medicaid costs. It also cites stagnant revenues, borrowing and shoddy accounting tactics as culprits in the state’s recent budget crisis.
The report says that that tactic of selling bonds to cover pension costs — 2003, 2010 and 2011 — has been the primary contributor to Illinois having one of the highest debt rates per capita of any state.
The study says that the 2008 economic collapse was part of a perfect storm that sunk the state budget. Revenues tanked as demand for services spiked. “But unlike other states, Illinois was effectively insolvent. Illinois had no reserves and had used fiscal gimmicks and borrowing to balance the budget for the previous six or seven years.”
The authors attribute the problems leading up to 2008 to expansions of state programs and services without corresponding revenue increases under former Gov. Rod Blagojevich. The study said that the governor’s refusal to increase the state income tax and House Speaker Michael Madigan’s unwillingness to work with Blagojevich on alternative revenue sources left the state spending more than it could afford. “During Blagojevich’s two terms as governor, new programs were created and expanded, including health insurance coverage and preschool for Illinois children and free public transportation and prescription drugs for Illinois seniors. But with an existing structural deficit, and without new sources of revenue, the state did not have sufficient resources to meet all of its obligations,” the report said. “And while the recession took a toll on the state’s resources, Illinois’ government became essentially dysfunctional with the federal investigation of Governor Blagojevich and his removal from office.”
The authors described the state’s budgeting tactics leading into the recession as such: “Illinois did all this without any sort of long-term financial plan to restore balance and without reserves. Illinois has been doing back flips on a high wire, without a net.”
Illinois economic growth has also stalled when compared with the rest of the country. “By FY 2010, Illinois’ total personal income fell 2 percent more and employment fell 1 percent more than in the U.S. as a whole. The impact of the recession on Illinois’ tax collections was much, much larger. In FY 2010, total state taxes in the U.S. were 93 percent of the amount in FY 2007, but Illinois’ tax revenues had fallen to 85 percent of the FY 2007 amount,” said the study. Illinois is recovering from the recession, but it is doing it more slowly than it recovered from the last three recessions.
The report notes that progress has been made to get the state back on secure footing. An income tax increase brought in new revenues, and lawmakers agreed on spending caps, cuts and sweeping Medicaid reforms. The authors note that such cuts are not painless and could have long-term effects on the state’s priorities, such as education and infrastructure. “There is, of course, nothing ‘encouraging’ about cuts in education, medical care and human services from the point of view of recipients or advocates. One of the most controversial budget appropriations was $6.5 billion for K-12 education, which was a cut of 3 percent from FY 2012,” said the study.
Despite cuts and new revenues, the authors say the state cannot continue on its current budget trajectory. “Illinois’ budget is not fiscally sustainable. Despite recent progress and difficult choices, it is still in a deep hole. It cannot simultaneously continue current services, keep taxes at current levels, provide all promised [public employee] benefits, and make needed investments in education and infrastructure.”
Gov. Pat Quinn’s new budget spokesperson, Abdon Pallasch, echoed the idea that the current budget is unsustainable when he spoke to the Daily Herald’s editorial board yesterday. Quinn is pushing for concessions from the state’s largest public employee union and pension reform as at least a partial solution. “The alternative is we, you know, close a few prisons or universities, I guess,” Pallasch told the Daily Herald. “I’m not threatening to close prisons or universities,” he said. “I’m just saying, let your imagination run wild with what we’d have to do.” Officials with the American Federation for State County and Municipal Employees say Quinn and lawmakers should repeal tax breaks given to corporate interests, such as a recent tax deal given the Sears and the CME group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade.
The study also looked to potential future concerns for Illinois, including cuts to federal funding as deficit reduction efforts continue, the need to invest in infrastructure upgrades and the state’s aging residents. “Illinois’ demographics show an aging population with a trend toward fewer workers and more retirees, which will pose daunting fiscal challenges in the years ahead.”
Showing posts with label state budget. Show all posts
Showing posts with label state budget. Show all posts
Wednesday, October 24, 2012
Thursday, January 20, 2011
Study: States don't need bankruptcy option
By Jamey Dunn
A new study says doom-and-gloom news stories predicting that states will default on their debts are overblown and draw attention away from the need for long-term reforms.
The report was released today by the Center on Budget and Policy Priorities (CBPP) — a Washington, D.C.-based think tank that studies state and federal fiscal decisions that affect low- and moderate-income families and individuals. It acknowledges that many states and municipalities are struggling to overcome large deficits, partly because of falling revenues caused by the recent recession.
According to the center, states face a total shortfall of $125 billion for fiscal year 2012. The report says state governments are taking steps to address their deficits, such as often-unpopular cuts and tax increases. “While these deficits have caused severe problems, and states and localities are struggling to maintain needed services, this is a cyclical problem that ultimately will ease as the economy recovers.”
Iris Lav, one of the authors of the study, said states should be able to solve their budget problems without resorting to bankruptcy. “They have a lot of internal pressure [to make cost-saving changes]. They have resources, they have taxes, they have the potential for cutting spending if they need to.”
Lav, former deputy director of the CBPP and now a senior adviser to the organization, said the potential for bankruptcy might take pressure off of states to address some unpopular issues “The political process will be more difficult [with default as an option] … and there’s not evidence that it’s necessary.”
The report says lumping pension and borrowing debt into the immediate operating funds shortfall is the wrong approach because states have more time to solve such problems as under-funded pensions. “Unlike the projected operating deficits for fiscal year 2012, which require near-term solutions to meet states’ and localities’ balanced-budget requirements, longer-term issues related to bond indebtedness, pension obligations and retiree health insurance … can be addressed over the next several decades. It is not appropriate to add these longer-term costs to projected operating deficits.”
Lav said some media reports claiming that states have a total of $3 trillion in unfunded pension liabilities are are based on the notion that states will make nearly risk-free pension investments from now on, which she says is not the case. The study estimates the unfunded liability is “a more manageable (although still troubling)” $700 billion.
She added that many states, including Illinois, have taken steps to cut future pension costs, and more will likely follow suit. Lav thinks states will also start cutting some health benefits for employees or requiring them to pay more for their insurance coverage because health care costs are outpacing both the growth of the economy and state revenues.
The report's authors cite Illinois as an outlier state facing more extreme short- and long-term problems. “Illinois also has one of the worst structural deficits in the country,” said Nick Johnson, director of the State and Fiscal Project for the CBPP.
The study describes the pension systems of Illinois, New Jersey, Pennsylvania, Colorado, Kentucky, Kansas and California as “grossly underfunded.” While most states will have to increase average pension spending from 3.8 percent of their operating budgets to about 5 percent, the study says these states will likely have to take more drastic measures.
The study makes several recommendations for states seeking to get their budgets in order:
Lav said Illinois lawmakers took a necessary step in passing an income tax increase. She said, however, that Illinois is “essentially paying the penalty for its failure to address its revenue situation over and over again for a number of years.”
A new study says doom-and-gloom news stories predicting that states will default on their debts are overblown and draw attention away from the need for long-term reforms.
The report was released today by the Center on Budget and Policy Priorities (CBPP) — a Washington, D.C.-based think tank that studies state and federal fiscal decisions that affect low- and moderate-income families and individuals. It acknowledges that many states and municipalities are struggling to overcome large deficits, partly because of falling revenues caused by the recent recession.
According to the center, states face a total shortfall of $125 billion for fiscal year 2012. The report says state governments are taking steps to address their deficits, such as often-unpopular cuts and tax increases. “While these deficits have caused severe problems, and states and localities are struggling to maintain needed services, this is a cyclical problem that ultimately will ease as the economy recovers.”
Iris Lav, one of the authors of the study, said states should be able to solve their budget problems without resorting to bankruptcy. “They have a lot of internal pressure [to make cost-saving changes]. They have resources, they have taxes, they have the potential for cutting spending if they need to.”
Lav, former deputy director of the CBPP and now a senior adviser to the organization, said the potential for bankruptcy might take pressure off of states to address some unpopular issues “The political process will be more difficult [with default as an option] … and there’s not evidence that it’s necessary.”
The report says lumping pension and borrowing debt into the immediate operating funds shortfall is the wrong approach because states have more time to solve such problems as under-funded pensions. “Unlike the projected operating deficits for fiscal year 2012, which require near-term solutions to meet states’ and localities’ balanced-budget requirements, longer-term issues related to bond indebtedness, pension obligations and retiree health insurance … can be addressed over the next several decades. It is not appropriate to add these longer-term costs to projected operating deficits.”
Lav said some media reports claiming that states have a total of $3 trillion in unfunded pension liabilities are are based on the notion that states will make nearly risk-free pension investments from now on, which she says is not the case. The study estimates the unfunded liability is “a more manageable (although still troubling)” $700 billion.
She added that many states, including Illinois, have taken steps to cut future pension costs, and more will likely follow suit. Lav thinks states will also start cutting some health benefits for employees or requiring them to pay more for their insurance coverage because health care costs are outpacing both the growth of the economy and state revenues.
The report's authors cite Illinois as an outlier state facing more extreme short- and long-term problems. “Illinois also has one of the worst structural deficits in the country,” said Nick Johnson, director of the State and Fiscal Project for the CBPP.
The study describes the pension systems of Illinois, New Jersey, Pennsylvania, Colorado, Kentucky, Kansas and California as “grossly underfunded.” While most states will have to increase average pension spending from 3.8 percent of their operating budgets to about 5 percent, the study says these states will likely have to take more drastic measures.
The study makes several recommendations for states seeking to get their budgets in order:
- Expand the sales tax base to services to capture the economic shift from manufacturing to service industries.
- Create a progressive tax system as opposed to a flat income tax rate.
- Create five-year-plan budgets based on accurate revenue projections, so lawmakers can see the future impact of today’s choices.
- Allow breaks for seniors only on a need basis instead of doling them out to all residents past a certain age.
Lav said Illinois lawmakers took a necessary step in passing an income tax increase. She said, however, that Illinois is “essentially paying the penalty for its failure to address its revenue situation over and over again for a number of years.”
Friday, January 07, 2011
Hynes: Lawmakers must act to prevent fiscal slide
By Jamey Dunn
If lawmakers fail to act on budget solutions, the state could face $7 billion to $10 billion in unpaid bills by the end of the current fiscal year, according to a quarterly fiscal report issued today by Comptroller Dan Hynes.
At the midpoint of this fiscal year, the backlog of unpaid bills is higher than it was at this time last year.
The total is greater in part because the General Assembly and Gov. Pat Quinn have not yet put a plan in place for making this fiscal year’s payment into the public employee pension system. More than $6 billion in bills from fiscal year 2011 have yet to be paid, including $1.8 billion unpaid pension obligations. The oldest bill dates back to the middle of last July, the first month of the current fiscal year.
The state did manage to pay off all its late bills from fiscal year 2010 by the end of last calendar year with some one-time cash infusions. The sale of bonds against some of state’s portion of a national tobacco settlement brought in $1.25 billion. A tax amnesty program raised $392 million, and $354 million came from inter-fund borrowing. “While the almost $2 billion in revenues helped reduce the overall backlog of unpaid bills, the state’s fiscal condition has not improved,” Hynes said in his report.
Paying off the $1.3 billion in short-term borrowing — made last July — by next June will result in more than $4 billion in fiscal year 2011 funds going toward fiscal year 2010 obligations.
On the revenue side, the personal income tax brought in $129 million more during the last six months, an increase of 3.4 percent. The corporate tax generated $235 million in growth over six months, an increase of 45.8 percent. Much of the growth came from delinquent tax payments paid during the tax amnesty period. Sales tax revenues went up 3.5 percent, not counting the portion paid under the amnesty, indicating some economic recovery.
Since legislators are considering several pieces of budget-related legislation while also mulling a possible tax increase package, Hynes’ future projections are not specific. The reports notes that a borrowing plan to make pension payments would prevent the need to take the money out of this fiscal year’s general revenues. Hynes cautions that borrowing would also limit future budget flexibility. According to Senate President John Cullerton, a tax package would also likely include borrowing almost $4 billion for the pension payment and more than twice that amount to pay down the unpaid bills for this fiscal year.
“Any use of bonds to deal with the state’s fiscal condition will continue to impact the state’s cash management practices in the future, as the state must adjust to those higher debt service obligations,” Hynes said.
However, Hynes warned that if legislators do not move some combination of new revenues, bonding and “budget restructuring,” the situation will only decline. Illinois received $600 million in federal funds for education in FY2010, which will not be coming again this year. The feds are also ramping down an elevated Medicaid match that was part of the stimulus package.
“Absent any significant budgetary developments, such as the initiatives currently under discussion in the General Assembly, the outlook for the state’s fiscal condition does not look to show any improvement and in fact is expected to weaken further,” Hynes said.
He added if that happens, legislators likely would have to extend the lapse period when the state is allowed to pay obligations from the previous fiscal year out of funds from the current year.
If lawmakers fail to act on budget solutions, the state could face $7 billion to $10 billion in unpaid bills by the end of the current fiscal year, according to a quarterly fiscal report issued today by Comptroller Dan Hynes.
At the midpoint of this fiscal year, the backlog of unpaid bills is higher than it was at this time last year.
The total is greater in part because the General Assembly and Gov. Pat Quinn have not yet put a plan in place for making this fiscal year’s payment into the public employee pension system. More than $6 billion in bills from fiscal year 2011 have yet to be paid, including $1.8 billion unpaid pension obligations. The oldest bill dates back to the middle of last July, the first month of the current fiscal year.
The state did manage to pay off all its late bills from fiscal year 2010 by the end of last calendar year with some one-time cash infusions. The sale of bonds against some of state’s portion of a national tobacco settlement brought in $1.25 billion. A tax amnesty program raised $392 million, and $354 million came from inter-fund borrowing. “While the almost $2 billion in revenues helped reduce the overall backlog of unpaid bills, the state’s fiscal condition has not improved,” Hynes said in his report.
Paying off the $1.3 billion in short-term borrowing — made last July — by next June will result in more than $4 billion in fiscal year 2011 funds going toward fiscal year 2010 obligations.
On the revenue side, the personal income tax brought in $129 million more during the last six months, an increase of 3.4 percent. The corporate tax generated $235 million in growth over six months, an increase of 45.8 percent. Much of the growth came from delinquent tax payments paid during the tax amnesty period. Sales tax revenues went up 3.5 percent, not counting the portion paid under the amnesty, indicating some economic recovery.
Since legislators are considering several pieces of budget-related legislation while also mulling a possible tax increase package, Hynes’ future projections are not specific. The reports notes that a borrowing plan to make pension payments would prevent the need to take the money out of this fiscal year’s general revenues. Hynes cautions that borrowing would also limit future budget flexibility. According to Senate President John Cullerton, a tax package would also likely include borrowing almost $4 billion for the pension payment and more than twice that amount to pay down the unpaid bills for this fiscal year.
“Any use of bonds to deal with the state’s fiscal condition will continue to impact the state’s cash management practices in the future, as the state must adjust to those higher debt service obligations,” Hynes said.
However, Hynes warned that if legislators do not move some combination of new revenues, bonding and “budget restructuring,” the situation will only decline. Illinois received $600 million in federal funds for education in FY2010, which will not be coming again this year. The feds are also ramping down an elevated Medicaid match that was part of the stimulus package.
“Absent any significant budgetary developments, such as the initiatives currently under discussion in the General Assembly, the outlook for the state’s fiscal condition does not look to show any improvement and in fact is expected to weaken further,” Hynes said.
He added if that happens, legislators likely would have to extend the lapse period when the state is allowed to pay obligations from the previous fiscal year out of funds from the current year.
Controversial budgeting reforms head to the governor
By Jamey Dunn
A bill headed to Gov. Pat Quinn would limit his power to bargain with unions on public employee contracts.
The House passed House Bill 5424, today, which would change how state government approaches budgeting. Under the measure, the state would be required to pay its debt obligations and annual required pension payments before allocating general revenue funds to any other area of the budget. Spending also could not exceed projected revenues for the year. The estimate would be based on revenue sources approved by legislators when the budget is presented.
Under the plan, a number of grants administered by state agencies would be suspended as of July 1, 2012, unless the General Assembly enacts legislation to keep them in place. After 2012, legislators would have to approve grants every five years to keep them from expiring.
The bill also would require the governor to name an advisory board to help him create an annual list of budget priorities.
“We are looking here at major budget reform — a way to control our spending, a way to get our pension payments made and our debt obligations before we divide up the budget,” said Rep. Carol Sente, the House sponsor of the bill.
Social service providers are concerned about the potential for grants being canceled not because recipients were not worthy but because the legislature might not get around to assessing programs before the grants would automatically expire. They raised the issue that lenders may not want to float providers loans — something that has become a necessity in the face of the states overdue payments — if grants are set to expire. They say lawmakers should evaluate programs when they decide whether to delegate funds.
“There is a review process already in place, and it is the appropriations process,” said Nancy Nyman, vice president of Illinois Action for Children
Perhaps the most controversial section of the bill would prevent any executive officer from entering into a labor contract that would extend past his or her elected term.
Union opponents said contract negotiations can take as long as two years, which could mean that they could potentially start talks with one governor and then reach an agreement with another.
The bill comes on the heels of a controversial deal that Quinn made with Council 31 of the American Federation of State, County and Municipal Employees (AFSCME) near the end of his first term while he was campaigning for election. Sente said the legislation is a direct reaction to that deal, although Senate sponsor Sen. Dan Kotowski, a Park Ridge Democrat, said it is not. He characterized the provision as a sensible budgeting decision that would prevent a governor from locking a future administration into a pricey union contract.
Union representatives also argued that the state enters into several types of long-term contracts, and it is unfair to target labor. They added that a new administration would likely be overwhelmed by the logistics of negotiating contracts as soon as it enters office.
Kotowski said that in light of the budget crisis, the state is also reevaluating many contracts with vendors.
“[The] budget address [is] due in eight weeks, and then on top of all the things that have to be done — new directors, new administration, all the things that need to be done — the new chief executive is going to be worrying about a collective bargaining agreement as well,” said Timothy Drea, secretary treasurer of Illinois American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). “This is bigger than AFSCME. This is bigger than AFL-CIO. This includes the trade unions. This includes a lot of people statewide from Chicago, from Waukegan to Cairo. It creates a lot of havoc.”
A spokesperson for the governor said he plans to review the bill when he receives it. It is unlikely, however, that he would approve it with a provision that limits his negotiating powers with unions.
A bill headed to Gov. Pat Quinn would limit his power to bargain with unions on public employee contracts.
The House passed House Bill 5424, today, which would change how state government approaches budgeting. Under the measure, the state would be required to pay its debt obligations and annual required pension payments before allocating general revenue funds to any other area of the budget. Spending also could not exceed projected revenues for the year. The estimate would be based on revenue sources approved by legislators when the budget is presented.
Under the plan, a number of grants administered by state agencies would be suspended as of July 1, 2012, unless the General Assembly enacts legislation to keep them in place. After 2012, legislators would have to approve grants every five years to keep them from expiring.
The bill also would require the governor to name an advisory board to help him create an annual list of budget priorities.
“We are looking here at major budget reform — a way to control our spending, a way to get our pension payments made and our debt obligations before we divide up the budget,” said Rep. Carol Sente, the House sponsor of the bill.
Social service providers are concerned about the potential for grants being canceled not because recipients were not worthy but because the legislature might not get around to assessing programs before the grants would automatically expire. They raised the issue that lenders may not want to float providers loans — something that has become a necessity in the face of the states overdue payments — if grants are set to expire. They say lawmakers should evaluate programs when they decide whether to delegate funds.
“There is a review process already in place, and it is the appropriations process,” said Nancy Nyman, vice president of Illinois Action for Children
Perhaps the most controversial section of the bill would prevent any executive officer from entering into a labor contract that would extend past his or her elected term.
Union opponents said contract negotiations can take as long as two years, which could mean that they could potentially start talks with one governor and then reach an agreement with another.
The bill comes on the heels of a controversial deal that Quinn made with Council 31 of the American Federation of State, County and Municipal Employees (AFSCME) near the end of his first term while he was campaigning for election. Sente said the legislation is a direct reaction to that deal, although Senate sponsor Sen. Dan Kotowski, a Park Ridge Democrat, said it is not. He characterized the provision as a sensible budgeting decision that would prevent a governor from locking a future administration into a pricey union contract.
Union representatives also argued that the state enters into several types of long-term contracts, and it is unfair to target labor. They added that a new administration would likely be overwhelmed by the logistics of negotiating contracts as soon as it enters office.
Kotowski said that in light of the budget crisis, the state is also reevaluating many contracts with vendors.
“[The] budget address [is] due in eight weeks, and then on top of all the things that have to be done — new directors, new administration, all the things that need to be done — the new chief executive is going to be worrying about a collective bargaining agreement as well,” said Timothy Drea, secretary treasurer of Illinois American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). “This is bigger than AFSCME. This is bigger than AFL-CIO. This includes the trade unions. This includes a lot of people statewide from Chicago, from Waukegan to Cairo. It creates a lot of havoc.”
A spokesperson for the governor said he plans to review the bill when he receives it. It is unlikely, however, that he would approve it with a provision that limits his negotiating powers with unions.
Thursday, January 06, 2011
Cullerton outlines a tax plan
By Jamey Dunn
According to a member of Democratic leadership, legislators may be close to reaching a deal on a tax increase and borrowing plan that would pay off the state’s late bills.
The personal income tax would increase from 3 percent to 5.25 percent. Corporate income tax would go up from 4.8 percent to 8.4 percent. The state would borrow about $8.5 billion to pay off the state’s backlog of bills, using some of the revenue from the tax increase to pay off the bonds.
The personal income tax increase would bring in an estimated $6.1 billion, and the corporate increase would bring in about $1 billion.
After four years, the personal income tax rate would drop to 3.75 percent, operating under the assumption that the state would have paid off the $8.5 billion in borrowing by then. Senate President John Cullerton said the corporate income tax rate would drop along with the personal tax rate.
Local governments would not get any of the new funds, but they would not see a reduction in the portion they currently receive. There have been recent proposals to take away all of the money given to local governments out of income tax revenues.
“We’re going to pay our bills on time. We’ll pay all of our backlog bills in the first months of 2011. And we’re going to stay current going forward,” Cullerton said.
The proposal included property tax relief for property owners — there is no component for renters in the plan — which would come in the form of a tax credit this year. Next year and every year following, a check for $325 dollars would go to all who are eligible. Cullerton said. If the plan passes, checks would go out in early January of 2012.
Cullerton said legislators still plan to borrow nearly $4 billion to make the required payment to public employee pensions for the current fiscal year, but going forward, the payment would have to come out of the new revenue from the tax increase.
The plan would also include $377 million in revenue for an education fund from a $1-a-pack cigarette tax increase, which has already passed in the Senate. Cullerton said the fund would be used for “growth” in education but would not give any specifics.
The proposal would include some spending restraints. Cullerton said there would be a moratorium on new programs for the next three years.
“Just think about how we’re going to be after we pass this. We would have all our bills, all these people that are owed money — $8 billion dollars will go back into the economy — people will be paid on time. Our credit rating will be dramatically improved. We will then have a balanced budget with virtually no growth,” Cullerton said.
Some Republicans say a tax increase, in any form, is not the solution to the state’s budget woes. “At some point, the Illinois economy can’t sustain continuing to take more and more money out of it to filter it through the halls of state government. … A tax increase, even one this size, will work for a while, but it won’t work forever because at some point, if you keep spending more, there’s not enough money left in government coffers. The way to deal with that is to go into the areas where you’re spending and change those," said Mattoon Republican Sen. Dale Righter.
Cullerton said House Speaker Michael Madigan and Gov. Pat Quinn are on board with the plan, though he said it may see “tweaks” in the coming days. He said the House could take up a bill as soon as Sunday. Spokespeople for Madigan and Quinn would not confirm Cullerton’s statement.
The House passed another tax-related plan today backed by Cullerton. House Bill 3659 would require Internet vendors without brick-and-mortar locations in the state to collect sales tax on purchases made in Illinois. Cullerton said it is a way to bring in tax revenues that many Illinoisans already owe the state without even knowing it.
Milan Democratic Rep. Patrick Verschoore, the House sponsor of the bill, said the measure could bring in an estimated $70 million of lost revenue.
Opponents said the measure will just spur lawsuits, and it could be years before the state sees any money, if it ever does. Similar plans in other states, such as New York, have spurred lawsuits.
But Verschoore seemed to think the plan was worth a try if it could capture lost tax dollars for the state. “We’ll just have to see if it holds up,” he said in response to critics.
According to a member of Democratic leadership, legislators may be close to reaching a deal on a tax increase and borrowing plan that would pay off the state’s late bills.
The personal income tax would increase from 3 percent to 5.25 percent. Corporate income tax would go up from 4.8 percent to 8.4 percent. The state would borrow about $8.5 billion to pay off the state’s backlog of bills, using some of the revenue from the tax increase to pay off the bonds.
The personal income tax increase would bring in an estimated $6.1 billion, and the corporate increase would bring in about $1 billion.
After four years, the personal income tax rate would drop to 3.75 percent, operating under the assumption that the state would have paid off the $8.5 billion in borrowing by then. Senate President John Cullerton said the corporate income tax rate would drop along with the personal tax rate.
Local governments would not get any of the new funds, but they would not see a reduction in the portion they currently receive. There have been recent proposals to take away all of the money given to local governments out of income tax revenues.
“We’re going to pay our bills on time. We’ll pay all of our backlog bills in the first months of 2011. And we’re going to stay current going forward,” Cullerton said.
The proposal included property tax relief for property owners — there is no component for renters in the plan — which would come in the form of a tax credit this year. Next year and every year following, a check for $325 dollars would go to all who are eligible. Cullerton said. If the plan passes, checks would go out in early January of 2012.
Cullerton said legislators still plan to borrow nearly $4 billion to make the required payment to public employee pensions for the current fiscal year, but going forward, the payment would have to come out of the new revenue from the tax increase.
The plan would also include $377 million in revenue for an education fund from a $1-a-pack cigarette tax increase, which has already passed in the Senate. Cullerton said the fund would be used for “growth” in education but would not give any specifics.
The proposal would include some spending restraints. Cullerton said there would be a moratorium on new programs for the next three years.
“Just think about how we’re going to be after we pass this. We would have all our bills, all these people that are owed money — $8 billion dollars will go back into the economy — people will be paid on time. Our credit rating will be dramatically improved. We will then have a balanced budget with virtually no growth,” Cullerton said.
Some Republicans say a tax increase, in any form, is not the solution to the state’s budget woes. “At some point, the Illinois economy can’t sustain continuing to take more and more money out of it to filter it through the halls of state government. … A tax increase, even one this size, will work for a while, but it won’t work forever because at some point, if you keep spending more, there’s not enough money left in government coffers. The way to deal with that is to go into the areas where you’re spending and change those," said Mattoon Republican Sen. Dale Righter.
Cullerton said House Speaker Michael Madigan and Gov. Pat Quinn are on board with the plan, though he said it may see “tweaks” in the coming days. He said the House could take up a bill as soon as Sunday. Spokespeople for Madigan and Quinn would not confirm Cullerton’s statement.
The House passed another tax-related plan today backed by Cullerton. House Bill 3659 would require Internet vendors without brick-and-mortar locations in the state to collect sales tax on purchases made in Illinois. Cullerton said it is a way to bring in tax revenues that many Illinoisans already owe the state without even knowing it.
Milan Democratic Rep. Patrick Verschoore, the House sponsor of the bill, said the measure could bring in an estimated $70 million of lost revenue.
Opponents said the measure will just spur lawsuits, and it could be years before the state sees any money, if it ever does. Similar plans in other states, such as New York, have spurred lawsuits.
But Verschoore seemed to think the plan was worth a try if it could capture lost tax dollars for the state. “We’ll just have to see if it holds up,” he said in response to critics.
Tuesday, January 12, 2010
Session Day 1 roundup
By Jamey Dunn and Rachel Wells
Legislators returned today for the start of their spring session. They will remain in Springfield tomorrow to hear Gov. Pat Quinn’s budget address. Session is expected to adjourn sometime tomorrow, and lawmakers do not plan to return to Springfield until after the primary election on February 2. They took action on several bills today, while ignoring other measures on the political radar.
Cemetery oversight
After stalling both in spring session and veto session, a cemetery regulation bill passed in the Senate today.
The measure is a response to the Burr Oak tragedy. Media reports exposed last July that bodies were moved and dumped into a mass grave in an alleged scheme to resell gravesites. (see Illinois Issues, September 2009, page 13)
HB 1188 puts the Illinois Department of Financial and Professional Regulation in charge of overseeing Illinois cemeteries.
It would require cemetery owners to maintain maps of their plots and create a statewide database that would document every burial and grave location. It would create a system for cemetery owners, managers and customer service employees to register with the state. It also contains a consumer bill of rights and protection for whistle blowers that report violators.
Family plots, cemeteries that have not had a burial in the last 10 years and ones that are less then two acres would be exempt from the new regulations. Religious cemeteries and municipal cemeteries that have fewer than 25 burials over the course of two years would be partially exempt.
Rep. Ed Sullivan, a Mundelein Democrat, opposed the bill because he said that a partial exemption should be given to small private cemeteries as well. He said many of these operations do not have frequent burials, and they have no tax revenue to bolster their profits. Sullivan said he is concerned many small private cemeteries in his district could not afford to implement the new regulations.
Willie Carter, member of the governor’s cemetery task force and owner of Restvale Cemetery in Alsip, agreed that the new regulations could put an undue burden on operations such as his. “Small cemeteries like mine cannot afford some of the fees that are proposed in this bill,” he said.
Chicago Democratic Sen. Emil Jones III represents the district where Burr Oak is located. He said that some changes would be made later in a supplemental bill because it “addresses some concerns but not all of them.” Sullivan said he hopes to work with Jones and others to help protect small private cemeteries from facing bankruptcy.
Medicaid matching funds
The House passed a borrowing plan that is half of the plan Gov. Quinn proposed in December. Quinn needed Comptroller Dan Hynes and Treasurer Alexi Giannoulias to sign on to that proposal. Hynes, who is challenging Quinn in the Democratic primary for governor, was not on board.
SB 1425 would allow the state to take out a $250 million loan to capture matching federal Medicaid funds and start paying some of its overdue bills to medical providers. The state would be able to get back $150 million in matching funds and could then leverage that money for $80 million from the feds. The bill does not include any money for social services providers. Quinn’s original plan had $250 million for social services. Rep. Linda Chapa LaVia, an Aurora Democrat and sponsor of the bill, said that the move would free up general funds that Quinn could then use toward need-based MAP grants for college students if he so chooses.
Tax amnesty
A bill proposed as another possible funding source for MAP grants didn't make it to the floor for a vote on Tuesday. A legislative panel on Monday discussed a tax amnesty measure that would allow individuals and businesses to pay back taxes without penalties or interest.
HB 4622, proposed by Hinckley Republican Robert Pritchard, would be a way to immediately bring in an estimated $100 million. It was proposed to fund MAP grants, but representatives on both sides of the aisle suggested the funds should instead be used to help pay some of the state's health and human service providers.
Race to the Top
Two measures that would help the state’s bid for the competitive federal education grant program Race to the Top, passed through the House:
SB 616 Would broaden teaching certification requirements to include nonprofit programs such as Teach for America.
SB 315 Would base the way teachers are evaluated mainly on student performance. Both moves will help the state score higher on its application for the federal program. Rep. Chapin Rose, a Mahomet Republican opposed the change to teacher evaluations. He said he was concerned that downstate schools would invest more money in the changes than they would potentially get back from the federal grants.
"Meritorious Good Time” reforms
Legislation requiring inmates to serve at least 60 days in state prison before receiving time off of their sentences for good behavior passed in the House. Danville Republican Rep. Bill Black offered the only opposition. He said the minimum stay should exceed 60 days.
SB 1013 would also establish procedures for determining and recording reasons for giving good behavior time and provide notification to prosecutors at least 14 days in advance of a prisoners' early release. The measure is a reaction to December findings that the Illinois Department of Corrections was releasing freshly imprisoned offenders, some violent, after only a few weeks in prison under the secret "Meritorious Good Time Push" plan.
Budget address
Quinn may not get any extra time to craft his budget plan this year. Legislators took no action Tuesday on a bill that would move the budget address from the third Wednesday in February, as is currently required by law, to sometime in March. A similar measure proposed during the fall veto session was never called for a vote.
Legislators returned today for the start of their spring session. They will remain in Springfield tomorrow to hear Gov. Pat Quinn’s budget address. Session is expected to adjourn sometime tomorrow, and lawmakers do not plan to return to Springfield until after the primary election on February 2. They took action on several bills today, while ignoring other measures on the political radar.
Cemetery oversight
After stalling both in spring session and veto session, a cemetery regulation bill passed in the Senate today.
The measure is a response to the Burr Oak tragedy. Media reports exposed last July that bodies were moved and dumped into a mass grave in an alleged scheme to resell gravesites. (see Illinois Issues, September 2009, page 13)
HB 1188 puts the Illinois Department of Financial and Professional Regulation in charge of overseeing Illinois cemeteries.
It would require cemetery owners to maintain maps of their plots and create a statewide database that would document every burial and grave location. It would create a system for cemetery owners, managers and customer service employees to register with the state. It also contains a consumer bill of rights and protection for whistle blowers that report violators.
Family plots, cemeteries that have not had a burial in the last 10 years and ones that are less then two acres would be exempt from the new regulations. Religious cemeteries and municipal cemeteries that have fewer than 25 burials over the course of two years would be partially exempt.
Rep. Ed Sullivan, a Mundelein Democrat, opposed the bill because he said that a partial exemption should be given to small private cemeteries as well. He said many of these operations do not have frequent burials, and they have no tax revenue to bolster their profits. Sullivan said he is concerned many small private cemeteries in his district could not afford to implement the new regulations.
Willie Carter, member of the governor’s cemetery task force and owner of Restvale Cemetery in Alsip, agreed that the new regulations could put an undue burden on operations such as his. “Small cemeteries like mine cannot afford some of the fees that are proposed in this bill,” he said.
Chicago Democratic Sen. Emil Jones III represents the district where Burr Oak is located. He said that some changes would be made later in a supplemental bill because it “addresses some concerns but not all of them.” Sullivan said he hopes to work with Jones and others to help protect small private cemeteries from facing bankruptcy.
Medicaid matching funds
The House passed a borrowing plan that is half of the plan Gov. Quinn proposed in December. Quinn needed Comptroller Dan Hynes and Treasurer Alexi Giannoulias to sign on to that proposal. Hynes, who is challenging Quinn in the Democratic primary for governor, was not on board.
SB 1425 would allow the state to take out a $250 million loan to capture matching federal Medicaid funds and start paying some of its overdue bills to medical providers. The state would be able to get back $150 million in matching funds and could then leverage that money for $80 million from the feds. The bill does not include any money for social services providers. Quinn’s original plan had $250 million for social services. Rep. Linda Chapa LaVia, an Aurora Democrat and sponsor of the bill, said that the move would free up general funds that Quinn could then use toward need-based MAP grants for college students if he so chooses.
Tax amnesty
A bill proposed as another possible funding source for MAP grants didn't make it to the floor for a vote on Tuesday. A legislative panel on Monday discussed a tax amnesty measure that would allow individuals and businesses to pay back taxes without penalties or interest.
HB 4622, proposed by Hinckley Republican Robert Pritchard, would be a way to immediately bring in an estimated $100 million. It was proposed to fund MAP grants, but representatives on both sides of the aisle suggested the funds should instead be used to help pay some of the state's health and human service providers.
Race to the Top
Two measures that would help the state’s bid for the competitive federal education grant program Race to the Top, passed through the House:
SB 616 Would broaden teaching certification requirements to include nonprofit programs such as Teach for America.
SB 315 Would base the way teachers are evaluated mainly on student performance. Both moves will help the state score higher on its application for the federal program. Rep. Chapin Rose, a Mahomet Republican opposed the change to teacher evaluations. He said he was concerned that downstate schools would invest more money in the changes than they would potentially get back from the federal grants.
"Meritorious Good Time” reforms
Legislation requiring inmates to serve at least 60 days in state prison before receiving time off of their sentences for good behavior passed in the House. Danville Republican Rep. Bill Black offered the only opposition. He said the minimum stay should exceed 60 days.
SB 1013 would also establish procedures for determining and recording reasons for giving good behavior time and provide notification to prosecutors at least 14 days in advance of a prisoners' early release. The measure is a reaction to December findings that the Illinois Department of Corrections was releasing freshly imprisoned offenders, some violent, after only a few weeks in prison under the secret "Meritorious Good Time Push" plan.
Budget address
Quinn may not get any extra time to craft his budget plan this year. Legislators took no action Tuesday on a bill that would move the budget address from the third Wednesday in February, as is currently required by law, to sometime in March. A similar measure proposed during the fall veto session was never called for a vote.
Wednesday, February 25, 2009
Change is inevitable
Illinois' budget deficit looks worse, but the cooperation and transparency within state government looks better.
Gov. Pat Quinn has said in the past and confirmed again today that the state’s budget deficit could exceed the previously projected $9 billion next fiscal year. And the federal stimulus funds won’t come close to helping the state close the gap between the amount the state spends versus the amount the state collects in revenue. Jack Lavin, the governor’s chief operating officer, said last week that the current projection is that stimulus funds could help knock off $2 billion of the deficit. That means a lot more changes are in order, and those changes could be painful.
The Senate is gearing up for a series of public hearings to discuss where to cut and how to bring in more revenue. Senate President John Cullerton and Minority Leader Christine Radogno are setting up a special committee, with an even number of Democrats and Republicans, to talk about where to scrutinize spending, including public employee pension systems, health and human services, education and state government operations. The committee is slated to produce a report with potential recommendations by March 25, one week after Quinn proposes his first state budget to the General Assembly.
While Cullerton said everything is on the table, he previously said that there wasn’t much room to cut from state employee payroll and that he couldn’t imagine cutting health care programs when so many people already lack health insurance. Republicans could have a completely different approach. So the creation of this new bipartisan committee gives Democrats and Republicans equal credit — or blame — for the product. It also means Republicans can’t sit back and say it’s a Democratic-controlled plan to which they can only voice opposition. Now they have to come up with some ideas, too.
Word of the day = transparency
Quinn also initiated another effort to change the climate within executive agencies and offices. Consistent with last week’s recommendations of public access advocates, including Attorney General Lisa Madigan, Quinn urged agency directors to err on the side of disclosure. “The people of Illinois demand an open, honest and transparent government,” Quinn said in a statement. “State government must take all steps necessary to make information as accessible as possible.”
In his memo to agency directors, he said, “No decision to withhold information sought [through the Freedom of Information Act] shall be made to avoid embarrassment or for any speculative or other improper purpose.”
Quinn also required that each agency submit a report within 45 days detailing the type of information that could be available online.
State parks to reopen
Quinn also will announce Thursday morning at the Springfield State Fairgrounds that the state will reopen seven state parks previously shut by former Gov. Rod Blagojevich.
Gov. Pat Quinn has said in the past and confirmed again today that the state’s budget deficit could exceed the previously projected $9 billion next fiscal year. And the federal stimulus funds won’t come close to helping the state close the gap between the amount the state spends versus the amount the state collects in revenue. Jack Lavin, the governor’s chief operating officer, said last week that the current projection is that stimulus funds could help knock off $2 billion of the deficit. That means a lot more changes are in order, and those changes could be painful.
The Senate is gearing up for a series of public hearings to discuss where to cut and how to bring in more revenue. Senate President John Cullerton and Minority Leader Christine Radogno are setting up a special committee, with an even number of Democrats and Republicans, to talk about where to scrutinize spending, including public employee pension systems, health and human services, education and state government operations. The committee is slated to produce a report with potential recommendations by March 25, one week after Quinn proposes his first state budget to the General Assembly.
While Cullerton said everything is on the table, he previously said that there wasn’t much room to cut from state employee payroll and that he couldn’t imagine cutting health care programs when so many people already lack health insurance. Republicans could have a completely different approach. So the creation of this new bipartisan committee gives Democrats and Republicans equal credit — or blame — for the product. It also means Republicans can’t sit back and say it’s a Democratic-controlled plan to which they can only voice opposition. Now they have to come up with some ideas, too.
Word of the day = transparency
Quinn also initiated another effort to change the climate within executive agencies and offices. Consistent with last week’s recommendations of public access advocates, including Attorney General Lisa Madigan, Quinn urged agency directors to err on the side of disclosure. “The people of Illinois demand an open, honest and transparent government,” Quinn said in a statement. “State government must take all steps necessary to make information as accessible as possible.”
In his memo to agency directors, he said, “No decision to withhold information sought [through the Freedom of Information Act] shall be made to avoid embarrassment or for any speculative or other improper purpose.”
Quinn also required that each agency submit a report within 45 days detailing the type of information that could be available online.
State parks to reopen
Quinn also will announce Thursday morning at the Springfield State Fairgrounds that the state will reopen seven state parks previously shut by former Gov. Rod Blagojevich.
Thursday, December 13, 2007
Pay now or later?
State Comptroller Dan Hynes wrote a letter to the editor that published in Springfield’s State Journal-Register that continues his effort to force conversation about the state’s delayed Medicaid bills. The topic is old, yet there could be an increased interest, some say urgency, to fix the problem in light of Gov. Rod Blagojevich’s recent statements that he’ll continue to push to expand a state health care program to 147,000 people without legislative approval.
Another 147,000 people in a Medicaid program means more bills to pay and, without adequate cash coming in to pay those bills, more debt. The comptroller’s point for rekindling the debate relates to “Section 25” of the State Finance Act (scroll down to the bottom to “fiscal year limitations”). State agencies are allowed to — and often do — defer medical bills until they can pay them with next year’s revenues. And they don’t have to notify the General Assembly to do so. The comptroller’s letter to the editor says, “In essence, then, the General Assembly has given the governor a blank check for health care spending.”
Hynes adds that the “loophole” also misrepresents the state’s current fiscal condition. His office says currently, Medicaid bills aren’t as backlogged as they have been, but the backlog exceeded $2 billion two years ago according to a March report. (You can see a here chart dating back to 1990.) Health care providers are currently waiting an average of two months for payment from the Department of Healthcare and Family Services. The agency can make expedited payments to doctors and hospitals that care for a lot of Medicaid patients, but everyone else has to wait as a result, says Carol Knowles, the comptroller’s spokeswoman. Because of Section 25, there’s no limit to how long agencies can hold their medical bills (other types of bills have to be paid by August 31 each year).
The comptroller wants to eliminate that. “For years I have urged the elimination of the Section 25 loophole, arguing that its existence allows state leaders to deny the true costs of state-provided health care and to sidestep requirements that the state maintain a balanced budget,” Hynes says in his letter.
He drafted legislation last spring that would have tightened the Section 25 rule and required the state to pay medical bills within four months of the new fiscal year. The October 31 deadline would give a little leeway in case of a cash flow problem or a complicated billing process at the end of the previous fiscal year.
Democratic Rep. Will Davis of Homewood sponsored the measure and says the objective was to try to avoid constantly carrying a deficit. Despite gaining bipartisan support, it went nowhere. Davis says the measure was still a legitimate effort and important issue for his community, where some providers care for mostly Medicaid patients. “Some people have tried to make it be a political issue between [the comptroller] and the governor. I really don’t think it’s political. It has a definite impact on my community and how people are being served in my community.”
Sen. Christine Radogno, a Lemont Republican and Deputy Minority Leader, says there’s consensus that Section 25 gives too much flexibility to the administration and that it should be tightened. Senate Republicans also sponsored a package of measures dealing with fiscal responsibility even before the governor’s recent actions to advance his health care plan without legislative approval. Radogno says she’ll try again but realizes it could share the same fate as a lot of good government and ethics measures. “None of that kind of stuff is moving.”
It also would be super hard to eliminate Section 25 for two reasons: One, the first year could actually cost a lot of money and time for state agencies that have to process their medical bills by a certain date if they don’t have enough cash. The Department of Healthcare and Family Services, for instance, said in a fiscal note to the General Assembly that an unintended consequence could be that cash-flow problems in the agency could require medical providers to file a claim with the state’s Court of Claims. And two, lawmakers would have to have the political will to end the practice of deferring bills. As it stands, if they push off $2 billion of bills into the future, that frees up $2 billion they can spend now on initiatives in their districts.
“It helps them avoid the tough decisions,” Knowles says. “The first year of undertaking a change like this would be very painful and difficult for the state, but the consequences of not doing are much greater.”
Another 147,000 people in a Medicaid program means more bills to pay and, without adequate cash coming in to pay those bills, more debt. The comptroller’s point for rekindling the debate relates to “Section 25” of the State Finance Act (scroll down to the bottom to “fiscal year limitations”). State agencies are allowed to — and often do — defer medical bills until they can pay them with next year’s revenues. And they don’t have to notify the General Assembly to do so. The comptroller’s letter to the editor says, “In essence, then, the General Assembly has given the governor a blank check for health care spending.”
Hynes adds that the “loophole” also misrepresents the state’s current fiscal condition. His office says currently, Medicaid bills aren’t as backlogged as they have been, but the backlog exceeded $2 billion two years ago according to a March report. (You can see a here chart dating back to 1990.) Health care providers are currently waiting an average of two months for payment from the Department of Healthcare and Family Services. The agency can make expedited payments to doctors and hospitals that care for a lot of Medicaid patients, but everyone else has to wait as a result, says Carol Knowles, the comptroller’s spokeswoman. Because of Section 25, there’s no limit to how long agencies can hold their medical bills (other types of bills have to be paid by August 31 each year).
The comptroller wants to eliminate that. “For years I have urged the elimination of the Section 25 loophole, arguing that its existence allows state leaders to deny the true costs of state-provided health care and to sidestep requirements that the state maintain a balanced budget,” Hynes says in his letter.
He drafted legislation last spring that would have tightened the Section 25 rule and required the state to pay medical bills within four months of the new fiscal year. The October 31 deadline would give a little leeway in case of a cash flow problem or a complicated billing process at the end of the previous fiscal year.
Democratic Rep. Will Davis of Homewood sponsored the measure and says the objective was to try to avoid constantly carrying a deficit. Despite gaining bipartisan support, it went nowhere. Davis says the measure was still a legitimate effort and important issue for his community, where some providers care for mostly Medicaid patients. “Some people have tried to make it be a political issue between [the comptroller] and the governor. I really don’t think it’s political. It has a definite impact on my community and how people are being served in my community.”
Sen. Christine Radogno, a Lemont Republican and Deputy Minority Leader, says there’s consensus that Section 25 gives too much flexibility to the administration and that it should be tightened. Senate Republicans also sponsored a package of measures dealing with fiscal responsibility even before the governor’s recent actions to advance his health care plan without legislative approval. Radogno says she’ll try again but realizes it could share the same fate as a lot of good government and ethics measures. “None of that kind of stuff is moving.”
It also would be super hard to eliminate Section 25 for two reasons: One, the first year could actually cost a lot of money and time for state agencies that have to process their medical bills by a certain date if they don’t have enough cash. The Department of Healthcare and Family Services, for instance, said in a fiscal note to the General Assembly that an unintended consequence could be that cash-flow problems in the agency could require medical providers to file a claim with the state’s Court of Claims. And two, lawmakers would have to have the political will to end the practice of deferring bills. As it stands, if they push off $2 billion of bills into the future, that frees up $2 billion they can spend now on initiatives in their districts.
“It helps them avoid the tough decisions,” Knowles says. “The first year of undertaking a change like this would be very painful and difficult for the state, but the consequences of not doing are much greater.”
Friday, October 12, 2007
"There's always next year"
The state is starting to look a lot like the Chicago Cubs in dropping the ball and saying it’ll get the job done next year. The Illinois General Assembly finished its annual fall session Friday without addressing two of the big-ticket items that have divided the legislative leaders and the governor all session: capital construction projects and mass transit subsidies. House Speaker Michael Madigan said he’d give his members seven days’ notice before calling them back to Springfield to act on some leftover business from the regular spring session, which, by the way, still hasn’t ended. It was supposed to end in May. Here’s what they did do during the six days of so-called veto session:
Budget overrides The Senate restored $7.9 million of the $470 million cut out of the state budget by Gov. Rod Blagojevich in August. Senate President Emil Jones Jr. said Thursday that the move was to restore dollars that were “inadvertently cut out of the budget.” The move restored the original funding levels for the offices of the attorney general, the auditor general and such other legislative bodies as the Commission on Government Forecasting and Accountability, the Joint Committee on Administrative Rules and the legislative research and information bureaus, as well as the Illinois courts. Budget negotiator and Chicago Democratic Sen. Donne Trotter said the Senate can come back and approve more overrides or a supplemental budget bill when the state’s revenue forecasts improve. (See the Commission on Government Forecasting and Accountability’s monthly report that says sales tax revenue has declined and the latest comparative study that says Illinois has lagged behind most other states in economic growth.)
Property taxes The Senate president was the lone “no” vote when the his chamber overwhelmingly agreed with the House to override the governor’s changes to the so-called 7 percent solution. The program, which started in 2004, caps the taxable amount of residential properties’ assessed values, which started skyrocketing in 2000. As approved by both chambers, this session’s legislation extended the assessment caps another three years and raised the homeowner's exemption, on a sliding scale, to as much as $33,000 from an earlier high of $20,000. The governor used an amendatory veto to change the legislation by extending the homeowners’ exemption limit up to $40,000 and by making the 7 percent rule permanent. Because both chambers overrode the governor’s action, the original legislation immediately became law. Taxpayers can expect to receive their tax bills by November 1. The county can expect to receive payments by December 1. However, such lawmakers as Sen. Terry Link, the Waukegan Democrat who sponsored the legislation, favor making the program permanent. But he and others agreed to override the governor’s changes because a) if they didn’t agree with the House, then the measure would have died, and b) some questioned the constitutionality of the governor’s use of an amendatory veto to make such sweeping changes. Link says he’ll pursue legislation that would make the 7 percent solution permanent.
Moment of silence Rep. Bill Black, a Danville Republican, passionately spoke against the House and Senate approving a mandatory moment of silence to start each school day. “At least in that moment of silence, they can pray that the General Assembly finally sends them the money that they need,” Black said, referring to schools waiting for their belated state aid payments caught up in a political battle between Madigan and Jones, who is aligned with the governor. The moment of silence may be required, but there aren't any penalties for disobeying the rule. It’s immediately effective.
What’s next? There is no schedule for lawmakers to come back to the Capitol, but the House does have a public hearing scheduled for October 17 in Chicago to discuss the gaming-for-capital bill approved by the Senate. It would create three new casinos to pay for road and school construction projects and some mass transit subsidies, but it has been labeled as too aggressive by some House Republicans and by the speaker. It may well be next year before the legislative leaders set aside their differences and agree on capital and mass transit plans.
Budget overrides The Senate restored $7.9 million of the $470 million cut out of the state budget by Gov. Rod Blagojevich in August. Senate President Emil Jones Jr. said Thursday that the move was to restore dollars that were “inadvertently cut out of the budget.” The move restored the original funding levels for the offices of the attorney general, the auditor general and such other legislative bodies as the Commission on Government Forecasting and Accountability, the Joint Committee on Administrative Rules and the legislative research and information bureaus, as well as the Illinois courts. Budget negotiator and Chicago Democratic Sen. Donne Trotter said the Senate can come back and approve more overrides or a supplemental budget bill when the state’s revenue forecasts improve. (See the Commission on Government Forecasting and Accountability’s monthly report that says sales tax revenue has declined and the latest comparative study that says Illinois has lagged behind most other states in economic growth.)
Property taxes The Senate president was the lone “no” vote when the his chamber overwhelmingly agreed with the House to override the governor’s changes to the so-called 7 percent solution. The program, which started in 2004, caps the taxable amount of residential properties’ assessed values, which started skyrocketing in 2000. As approved by both chambers, this session’s legislation extended the assessment caps another three years and raised the homeowner's exemption, on a sliding scale, to as much as $33,000 from an earlier high of $20,000. The governor used an amendatory veto to change the legislation by extending the homeowners’ exemption limit up to $40,000 and by making the 7 percent rule permanent. Because both chambers overrode the governor’s action, the original legislation immediately became law. Taxpayers can expect to receive their tax bills by November 1. The county can expect to receive payments by December 1. However, such lawmakers as Sen. Terry Link, the Waukegan Democrat who sponsored the legislation, favor making the program permanent. But he and others agreed to override the governor’s changes because a) if they didn’t agree with the House, then the measure would have died, and b) some questioned the constitutionality of the governor’s use of an amendatory veto to make such sweeping changes. Link says he’ll pursue legislation that would make the 7 percent solution permanent.
Moment of silence Rep. Bill Black, a Danville Republican, passionately spoke against the House and Senate approving a mandatory moment of silence to start each school day. “At least in that moment of silence, they can pray that the General Assembly finally sends them the money that they need,” Black said, referring to schools waiting for their belated state aid payments caught up in a political battle between Madigan and Jones, who is aligned with the governor. The moment of silence may be required, but there aren't any penalties for disobeying the rule. It’s immediately effective.
What’s next? There is no schedule for lawmakers to come back to the Capitol, but the House does have a public hearing scheduled for October 17 in Chicago to discuss the gaming-for-capital bill approved by the Senate. It would create three new casinos to pay for road and school construction projects and some mass transit subsidies, but it has been labeled as too aggressive by some House Republicans and by the speaker. It may well be next year before the legislative leaders set aside their differences and agree on capital and mass transit plans.
Monday, October 01, 2007
Can he do that?
The House gathered more anecdotal evidence Monday to argue that Gov. Rod Blagojevich’s $470 million in budget cuts hurt the very people he says he wants to help through health care, education and social services. The six-hour hearing didn’t result in a vote. It simply laid the groundwork for the chamber’s expected override the budget cuts Tuesday, but the Senate is not expected to follow suit.
Monday’s House’s committee of the entire chamber is just one more example of a tit-for-tat battle with the governor’s office to see who can make the other entity seem more heartless during this record budget stalemate.
Bigger picture: The core question remains. The governor says he cut nearly $500 million of so-called pork and unnecessary spending to pay for the expansion of health care programs, and the administration’s press releases suggest a simple shift in state dollars. During the hearing, the governor’s office e-mailed a statement by Deputy Gov. Sheila Nix. “Some projects in the budget are worthwhile, and we are interested in seeing some funded — but not at the expense of health care for families and mammograms for women.”
But funding of the programs is not that clear cut. The state’s general revenue fund is a different pot of money than Medicaid dollars for subsidized health care programs. It’s unclear whether the governor would or could transfer money from one pot to the other.
Abby Ottenhoff, the governor’s spokeswoman, responded in an e-mail with this: “The governor has increased the pool of available revenue to cover any additional cost by cutting other less critical spending from the budget." She didn’t respond to a follow-up question requesting clarification about how the governor was increasing the “pool of available revenue” if he’s simply spending down Medicaid dollars.
The House committee, by the way, had just 79 of 118 members present. And much of the testimony repeated what had been said during the past month of public hearings across the state. The larger issue during the next two weeks of the annual fall session will remain a capital budget to fund road and school construction projects and, potentially, mass transit subsidies. Then again, all of those issues could intertwine if a promise to restore the governor’s budget cuts is held out as an incentive for House members to side with the capital program crafted by the governor’s office and Senate President Emil Jones Jr. That plan as approved by the Senate is so far unacceptable to the House.
Monday’s House’s committee of the entire chamber is just one more example of a tit-for-tat battle with the governor’s office to see who can make the other entity seem more heartless during this record budget stalemate.
Bigger picture: The core question remains. The governor says he cut nearly $500 million of so-called pork and unnecessary spending to pay for the expansion of health care programs, and the administration’s press releases suggest a simple shift in state dollars. During the hearing, the governor’s office e-mailed a statement by Deputy Gov. Sheila Nix. “Some projects in the budget are worthwhile, and we are interested in seeing some funded — but not at the expense of health care for families and mammograms for women.”
But funding of the programs is not that clear cut. The state’s general revenue fund is a different pot of money than Medicaid dollars for subsidized health care programs. It’s unclear whether the governor would or could transfer money from one pot to the other.
Abby Ottenhoff, the governor’s spokeswoman, responded in an e-mail with this: “The governor has increased the pool of available revenue to cover any additional cost by cutting other less critical spending from the budget." She didn’t respond to a follow-up question requesting clarification about how the governor was increasing the “pool of available revenue” if he’s simply spending down Medicaid dollars.
The House committee, by the way, had just 79 of 118 members present. And much of the testimony repeated what had been said during the past month of public hearings across the state. The larger issue during the next two weeks of the annual fall session will remain a capital budget to fund road and school construction projects and, potentially, mass transit subsidies. Then again, all of those issues could intertwine if a promise to restore the governor’s budget cuts is held out as an incentive for House members to side with the capital program crafted by the governor’s office and Senate President Emil Jones Jr. That plan as approved by the Senate is so far unacceptable to the House.
Tuesday, September 04, 2007
Transit trouble
The Illinois House failed to approve a regional sales tax increase to help fund the mass transit systems in and around Chicago today, leaving little time for the House to gain the 10 votes needed to prevent the Regional Transportation Authority from laying off employees and cutting services. Legislation sponsored by Rep. Julie Hamos, an Evanston Democrat, is expected to come back as soon as House Speaker Michael Madigan thinks he reversed the votes of some House Republicans and downstate Democrats. That’s not going to happen this week, and it might not happen before the September 16 “drop dead” date outlined by the RTA’s budget plan.
The RTA oversees the three separate agencies of the Chicago Transportation Authority, Metra rail services and Pace suburban bus services. It was subject of a state audit in March that said the systems’ “serious financial shortfall” combines with representation problems on the separate boards, an outdated funding formula and an aging infrastructure.
Hamos’ measure would enact many of the recommendations in the audit. It foremost would increase a regional sales tax, raising money to be split among the CTA, Metra and Pace. It also would allow a Chicago-only real estate transfer tax that would have to be voted on by the Chicago City Council and would cover CTA’s pension and retiree health care costs. Metra also would gain authority to borrow up to $1 billion to secure a federal match for capital projects, especially for suburb-to-suburb routes. And the legislation would reform the three agencies’ pension systems by such changes as requiring higher employee contributions, higher retirement age for pensions and limits on health care benefits.
Without the legislation, Hamos said the region and the state would feel its effects through job loss, limited transportation routes, increased traffic congestion, air pollution and a poorer rating for Chicago’s bid to host the 2016 Olympics.
Standing next to Madigan in a Statehouse press conference following the floor vote, Hamos said, “People did not so much pick at the substance of the bill, which was very promising, actually, but instead were talking about other agendas that they still continue to bring to the table.” She said the only portion that would be looked at for possible change is what Rep. Bill Black, a Danville Republican, said was concerning.
Black said while the legislation would require the state to match 5 percent of new tax revenues to help mass transit services for disabled riders, he didn’t like that it would not cap the state’s contribution as tax revenue increased over the years. “You’re talking the state share growing by hundreds of millions of dollars over the next four to five fiscal years,” he said on the House floor. “It could be in excess of $1 billion by FY10, considerably more money than it has ever been in the history.”
House Republican Leader Tom Cross said his caucus rejects Hamos’ plan because members are holding out for a more comprehensive capital bill to fund school and road construction projects around the state. “You can’t do one without the other,” he said, but added, “The belief from a lot of us is we will never see a capital bill.”
He said even if there were movement on a capital bill, underlying tensions could stymie a deal. “I’m a little concerned about the trust issue that permeates around here — or lack of trust that exists in this building. I think we need to work through that. I don’t think we left … on a good note, so we’ve got to find a way to work through some of those trust issues.”
Willing to look at a Chicago casino previously promoted by Senate President Emil Jones and the governor, Cross said that’s not looking too good, either. “The more that discussion goes on, it just seems tougher and tougher to do. We may need to look at a different avenue.”
The governor issued a statement about the House vote that said “Speaker Madigan’s tax increase” was a “backdoor fare hike” and that the legislature was correct to reject that approach. He said he would continue to advocate the end of some business tax credits (a.k.a. closure of “corporate loopholes”) and find other sources of revenue to fund mass transit.
The RTA oversees the three separate agencies of the Chicago Transportation Authority, Metra rail services and Pace suburban bus services. It was subject of a state audit in March that said the systems’ “serious financial shortfall” combines with representation problems on the separate boards, an outdated funding formula and an aging infrastructure.
Hamos’ measure would enact many of the recommendations in the audit. It foremost would increase a regional sales tax, raising money to be split among the CTA, Metra and Pace. It also would allow a Chicago-only real estate transfer tax that would have to be voted on by the Chicago City Council and would cover CTA’s pension and retiree health care costs. Metra also would gain authority to borrow up to $1 billion to secure a federal match for capital projects, especially for suburb-to-suburb routes. And the legislation would reform the three agencies’ pension systems by such changes as requiring higher employee contributions, higher retirement age for pensions and limits on health care benefits.
Without the legislation, Hamos said the region and the state would feel its effects through job loss, limited transportation routes, increased traffic congestion, air pollution and a poorer rating for Chicago’s bid to host the 2016 Olympics.
Standing next to Madigan in a Statehouse press conference following the floor vote, Hamos said, “People did not so much pick at the substance of the bill, which was very promising, actually, but instead were talking about other agendas that they still continue to bring to the table.” She said the only portion that would be looked at for possible change is what Rep. Bill Black, a Danville Republican, said was concerning.
Black said while the legislation would require the state to match 5 percent of new tax revenues to help mass transit services for disabled riders, he didn’t like that it would not cap the state’s contribution as tax revenue increased over the years. “You’re talking the state share growing by hundreds of millions of dollars over the next four to five fiscal years,” he said on the House floor. “It could be in excess of $1 billion by FY10, considerably more money than it has ever been in the history.”
House Republican Leader Tom Cross said his caucus rejects Hamos’ plan because members are holding out for a more comprehensive capital bill to fund school and road construction projects around the state. “You can’t do one without the other,” he said, but added, “The belief from a lot of us is we will never see a capital bill.”
He said even if there were movement on a capital bill, underlying tensions could stymie a deal. “I’m a little concerned about the trust issue that permeates around here — or lack of trust that exists in this building. I think we need to work through that. I don’t think we left … on a good note, so we’ve got to find a way to work through some of those trust issues.”
Willing to look at a Chicago casino previously promoted by Senate President Emil Jones and the governor, Cross said that’s not looking too good, either. “The more that discussion goes on, it just seems tougher and tougher to do. We may need to look at a different avenue.”
The governor issued a statement about the House vote that said “Speaker Madigan’s tax increase” was a “backdoor fare hike” and that the legislature was correct to reject that approach. He said he would continue to advocate the end of some business tax credits (a.k.a. closure of “corporate loopholes”) and find other sources of revenue to fund mass transit.
Friday, August 24, 2007
You scratch my back ...
“You scratch my back, I’ll scratch yours” might not work in Gov. Rod Blagojevich’s budget game. If his budget vetoes announced Thursday are a political ploy to try to buy support from friends and to punish enemies, then he might lose in the long run.
“He seems to operate on the kind of strategy that it’s all about bringing pressure on the legislature from the outside,” said Kent Redfield, a political science professor at the University of Illinois at Springfield. And by the next election cycle, he said the governor’s key Democratic base, especially the African American population around the Chicago area, might grow wary if projects in their neighborhoods don’t get funded as promised. “I think that over time, he’s wearing out his act. I think that with people reacting to individual projects and the questions being raised about whether he’s actually producing in terms of health care, over time that really hurts his popular support.”
Blagojevich is determined to get his health care plan, which his office says would open the doors for all uninsured women to receive breast and cervical cancer screenings and expand other state-sponsored health insurance to low- and middle-income adults. As noted in Thursday’s press release, the governor’s plan has to go in front of the Joint Committee on Administrative Rules to change state regulations so he can implement and expand the programs even after the legislature denied him his original health plan. It still has a long way to go.
Another question being raised by state government insiders is why he cut a little more than $4 million in total from the budget of Attorney General Lisa Madigan’s office. An AG spokeswoman, Cara Smith, said some of the cuts are significant. Most disappointing to the office is the reduction in money for her inspector general, who is an independent lawyer responsible for investigating complaints of ethical violations. Each constitutional officer has one. Lisa Madigan’s was docked $50,000. But Smith said Lisa Madigan doesn’t have anything to do with her inspector general’s budget. “That budget is [not] controlled by the attorney general. It’s completely controlled by the inspector general. And it’s very disappointing that it would be touched at all. That work is the furthest thing from ‘pork.’”
Spokesman Justin DeJong of the governor’s budget office said all constitutional offices were funded at last year’s levels, but he has to get back to me about the inspector general line item in the attorney general's office.
“He seems to operate on the kind of strategy that it’s all about bringing pressure on the legislature from the outside,” said Kent Redfield, a political science professor at the University of Illinois at Springfield. And by the next election cycle, he said the governor’s key Democratic base, especially the African American population around the Chicago area, might grow wary if projects in their neighborhoods don’t get funded as promised. “I think that over time, he’s wearing out his act. I think that with people reacting to individual projects and the questions being raised about whether he’s actually producing in terms of health care, over time that really hurts his popular support.”
Blagojevich is determined to get his health care plan, which his office says would open the doors for all uninsured women to receive breast and cervical cancer screenings and expand other state-sponsored health insurance to low- and middle-income adults. As noted in Thursday’s press release, the governor’s plan has to go in front of the Joint Committee on Administrative Rules to change state regulations so he can implement and expand the programs even after the legislature denied him his original health plan. It still has a long way to go.
Another question being raised by state government insiders is why he cut a little more than $4 million in total from the budget of Attorney General Lisa Madigan’s office. An AG spokeswoman, Cara Smith, said some of the cuts are significant. Most disappointing to the office is the reduction in money for her inspector general, who is an independent lawyer responsible for investigating complaints of ethical violations. Each constitutional officer has one. Lisa Madigan’s was docked $50,000. But Smith said Lisa Madigan doesn’t have anything to do with her inspector general’s budget. “That budget is [not] controlled by the attorney general. It’s completely controlled by the inspector general. And it’s very disappointing that it would be touched at all. That work is the furthest thing from ‘pork.’”
Spokesman Justin DeJong of the governor’s budget office said all constitutional offices were funded at last year’s levels, but he has to get back to me about the inspector general line item in the attorney general's office.
Thursday, August 23, 2007
I'm back in time for budget cuts
I'm nice and refreshed from our honeymoon in Germany and expect to blog as regularly as possible again. Thanks for understanding while I took a break from state budget reporting. Now, back to work.
Gov. Rod Blagojevich on Thursday signed a state budget, allowing $340 million in school aid payments to immediately be issued. At the same time, the governor cut $463 million out of the state budget that was approved by both chambers earlier this month. The amount wasn’t surprising — he chopped about 1.7 percent of the $59 billion plan sent to him — but some of the cuts seem to contradict the governor’s numerous press releases about his priorities: health care and services for low- and middle-income families. For instance, he eliminated or reduced some cost-of-living raises for social service providers, cut money for community-based mental health services and decreased the amount allotted to expand broadband Internet services to rural areas. All cuts will become law if Senate President Emil Jones Jr., who’s been a Blagojevich ally most of the session, follows through on his promise not to let his chamber override the governor’s vetoes.
Along with the cuts is the governor’s never-ending push for health care. “While I’m pleased that we’re making a record investment in education, families across the state are still being priced out of health coverage and don’t have a way to see a doctor when they need to,” he wrote in a press release. “That’s why I’m removing almost $500 million in special pet projects and other spending that we simply can’t afford. And at the same time, we’re preparing new rules and administrative changes that will give half-a-million Illinoisans access to health care.” The details are still unknown, but his plan so far is designed to expand eligibility of existing state-sponsored health programs such as All Kids and Family Care.
The first-year cost of the health initiative is the exact amount Blagojevich cut from the budget: $463 million. That gives the impression he’s not spending money that he doesn’t have authority to spend, but it’s not that easy. The money doesn’t simply transfer from the line item cuts to his expanded health care programs. More on that another day.
As for the budget cuts, many are for state agency payroll and contracting services. “These are places where we thought we could achieve efficiencies while not impacting services,” wrote Justin DeJong, spokesman for the governor’s budget office, in an e-mail. Another common reduction in agency budgets was the state contributions to the employees’ retirement systems.
While he cut $75,000 here, $100,000 there, he made a lot of other reductions or total vetoes that might make some waves:
• Chunks of $3 million, $5 million or $7 million at a time for such education-related programs as reimbursements for transportation services, school safety block grants and supplemental payments to fast-growing school districts
• $6.62 million eliminated for cost-of-living adjustments for community-based substance abuse providers; and a $10 million reduction (from $29.3 million to $18.3 million) in cost-of-living adjustments for developmentally disabled providers that the governor’s office says was over-estimated in last year’s budget
• $6.25 million eliminated for a satellite campus of Lincoln’s Challenge, a military academy focusing on early intervention of high-school dropouts
• A $2.5 million reduction (from $3 million to $500,000) for the Illinois Abraham Lincoln Bicentennial Commission, which will join other states in planning a celebration of Lincoln’s 200th birthday in 2009
• About $26 million reduced from the Department of Human Services’ programs for home health care, autism diagnosis and other mental health services
• Nearly $5 million cut from the Illinois Arts Council, chaired by House Speaker Michael Madigan’s wife, Shirley Madigan
• $6.25 million eliminated for the statewide program Operation CeaseFire, a violence prevention program in 15 communities around Chicago, Rockford, Decatur and St. Louis.
Rep. Bob Flider, a Mount Zion Democrat, said he was particularly disappointed in the Operation CeaseFire cut because he says it sends a message to the former prison inmates who are now helping others get jobs that their mission isn’t important. Last year, the governor announced $3.9 million for the project. You can read more about it in our upcoming September issue.
DeJong had this to say: "While CeaseFire and other initiatives may serve a purpose for a particular community or organization, we can't afford to spend taxpayer dollars on them right now. With the changes the governor made, the budget better reflects the needs of the state."
Flider also said projects in his district, including money for a food pantry and a homeless shelter, are among the $141 million cut of so-called pork projects, or legislative initiatives slipped into the budget so members can “bring home the bacon” to their constituents. Most of the pork projects cut by Blagojevich are in Democratic districts. Flider said those services are hit in political crossfire. “The governor has declared war on House Democrats, but it’s the people in my district who suffer,” he said. Why would the governor target projects in his district? Flider said that's because he's responding to what the majority of his constituents want: a priority of making timely payments to current Medicaid providers before expanding or creating new health care programs. “The governor wants his health care plan, and he’ll do anything to get it,” Flider said.
Gov. Rod Blagojevich on Thursday signed a state budget, allowing $340 million in school aid payments to immediately be issued. At the same time, the governor cut $463 million out of the state budget that was approved by both chambers earlier this month. The amount wasn’t surprising — he chopped about 1.7 percent of the $59 billion plan sent to him — but some of the cuts seem to contradict the governor’s numerous press releases about his priorities: health care and services for low- and middle-income families. For instance, he eliminated or reduced some cost-of-living raises for social service providers, cut money for community-based mental health services and decreased the amount allotted to expand broadband Internet services to rural areas. All cuts will become law if Senate President Emil Jones Jr., who’s been a Blagojevich ally most of the session, follows through on his promise not to let his chamber override the governor’s vetoes.
Along with the cuts is the governor’s never-ending push for health care. “While I’m pleased that we’re making a record investment in education, families across the state are still being priced out of health coverage and don’t have a way to see a doctor when they need to,” he wrote in a press release. “That’s why I’m removing almost $500 million in special pet projects and other spending that we simply can’t afford. And at the same time, we’re preparing new rules and administrative changes that will give half-a-million Illinoisans access to health care.” The details are still unknown, but his plan so far is designed to expand eligibility of existing state-sponsored health programs such as All Kids and Family Care.
The first-year cost of the health initiative is the exact amount Blagojevich cut from the budget: $463 million. That gives the impression he’s not spending money that he doesn’t have authority to spend, but it’s not that easy. The money doesn’t simply transfer from the line item cuts to his expanded health care programs. More on that another day.
As for the budget cuts, many are for state agency payroll and contracting services. “These are places where we thought we could achieve efficiencies while not impacting services,” wrote Justin DeJong, spokesman for the governor’s budget office, in an e-mail. Another common reduction in agency budgets was the state contributions to the employees’ retirement systems.
While he cut $75,000 here, $100,000 there, he made a lot of other reductions or total vetoes that might make some waves:
• Chunks of $3 million, $5 million or $7 million at a time for such education-related programs as reimbursements for transportation services, school safety block grants and supplemental payments to fast-growing school districts
• $6.62 million eliminated for cost-of-living adjustments for community-based substance abuse providers; and a $10 million reduction (from $29.3 million to $18.3 million) in cost-of-living adjustments for developmentally disabled providers that the governor’s office says was over-estimated in last year’s budget
• $6.25 million eliminated for a satellite campus of Lincoln’s Challenge, a military academy focusing on early intervention of high-school dropouts
• A $2.5 million reduction (from $3 million to $500,000) for the Illinois Abraham Lincoln Bicentennial Commission, which will join other states in planning a celebration of Lincoln’s 200th birthday in 2009
• About $26 million reduced from the Department of Human Services’ programs for home health care, autism diagnosis and other mental health services
• Nearly $5 million cut from the Illinois Arts Council, chaired by House Speaker Michael Madigan’s wife, Shirley Madigan
• $6.25 million eliminated for the statewide program Operation CeaseFire, a violence prevention program in 15 communities around Chicago, Rockford, Decatur and St. Louis.
Rep. Bob Flider, a Mount Zion Democrat, said he was particularly disappointed in the Operation CeaseFire cut because he says it sends a message to the former prison inmates who are now helping others get jobs that their mission isn’t important. Last year, the governor announced $3.9 million for the project. You can read more about it in our upcoming September issue.
DeJong had this to say: "While CeaseFire and other initiatives may serve a purpose for a particular community or organization, we can't afford to spend taxpayer dollars on them right now. With the changes the governor made, the budget better reflects the needs of the state."
Flider also said projects in his district, including money for a food pantry and a homeless shelter, are among the $141 million cut of so-called pork projects, or legislative initiatives slipped into the budget so members can “bring home the bacon” to their constituents. Most of the pork projects cut by Blagojevich are in Democratic districts. Flider said those services are hit in political crossfire. “The governor has declared war on House Democrats, but it’s the people in my district who suffer,” he said. Why would the governor target projects in his district? Flider said that's because he's responding to what the majority of his constituents want: a priority of making timely payments to current Medicaid providers before expanding or creating new health care programs. “The governor wants his health care plan, and he’ll do anything to get it,” Flider said.
Thursday, July 26, 2007
12-month budget buzz
BY DEANESE WILLIAMS-HARRIS
The Senate moved a 12-month budget out of committee by an 8 to 4 vote along party lines. The budget proposes a 9 percent increase from fiscal year 2007 and relies on the creation of four additional riverboats, the closure of some corporate tax breaks, the sweep of left over money in dedicated funds and the natural revenue growth.
Some of the spending highlights include dropping $600 million into the state’s pension fund, spending $2.3 billion on school and road construction and placing $900 million in a special fund for education. The minimum amount of state aid spent per child would increase by $554, and the budget would authorize the second year of a “hospital assessment program” that would distribute federal dollars to hospitals that care for Medicaid patients.
What the budget doesn’t include is property-tax relief, funding for transit, funding for the governor’s health care initiative, stem cell research or any mechanisms to address the Medicaid spending cycle. The measure’s sponsor, Sen. Donne Trotter, said those are “stand-alone issues” that will be taken up later in separate legislation.
Senate Republicans oppose the budget because it doesn’t say how any of the money for school and road construction would be spent, leaving little assurance that any money would reach their districts. The AFSCME Council 31 union opposes the budget because it doesn’t include money to address what it calls staffing shortages in state prisons and the Illinois Department of Children and Family Services.
The Senate did not call the bill for a vote on the floor Thursday night. They’re back in session Friday, as is the House. It’s still unknown whether they’ll be working over the weekend.
The House and the Senate approved the $1 billion electricity rate relief package. It also creates a new, independent state agency to procure power on behalf of the utilities, dismisses lawsuits brought against the utilities and power generators, requires the state to implement more energy efficiency programs and requires the state to use more renewable energy sources.
Bethany Carson contributed to this report.
The Senate moved a 12-month budget out of committee by an 8 to 4 vote along party lines. The budget proposes a 9 percent increase from fiscal year 2007 and relies on the creation of four additional riverboats, the closure of some corporate tax breaks, the sweep of left over money in dedicated funds and the natural revenue growth.
Some of the spending highlights include dropping $600 million into the state’s pension fund, spending $2.3 billion on school and road construction and placing $900 million in a special fund for education. The minimum amount of state aid spent per child would increase by $554, and the budget would authorize the second year of a “hospital assessment program” that would distribute federal dollars to hospitals that care for Medicaid patients.
What the budget doesn’t include is property-tax relief, funding for transit, funding for the governor’s health care initiative, stem cell research or any mechanisms to address the Medicaid spending cycle. The measure’s sponsor, Sen. Donne Trotter, said those are “stand-alone issues” that will be taken up later in separate legislation.
Senate Republicans oppose the budget because it doesn’t say how any of the money for school and road construction would be spent, leaving little assurance that any money would reach their districts. The AFSCME Council 31 union opposes the budget because it doesn’t include money to address what it calls staffing shortages in state prisons and the Illinois Department of Children and Family Services.
The Senate did not call the bill for a vote on the floor Thursday night. They’re back in session Friday, as is the House. It’s still unknown whether they’ll be working over the weekend.
The House and the Senate approved the $1 billion electricity rate relief package. It also creates a new, independent state agency to procure power on behalf of the utilities, dismisses lawsuits brought against the utilities and power generators, requires the state to implement more energy efficiency programs and requires the state to use more renewable energy sources.
Bethany Carson contributed to this report.
Wednesday, July 25, 2007
Revenue, health care and electricity rates
The House and Senate advanced different pieces of legislation — a cigarette tax and a health care plan in the Senate and an electricity rate relief plan in the House — but there’s no clear indication that these individual pieces could actually converge into the much-delayed state budget. House Democrats spent about three hours in what felt like an end-of-session gathering behind closed doors Wednesday afternoon. And each of the pieces is expected to be heard on the floor in their respective chambers Thursday, but their futures in the opposite chambers are murky. The same goes for their future in Gov. Rod Blagojevich’s office. As House Speaker Michael Madigan said of the cigarette tax advance in the Senate, “We’ll see.” Here’s a recap of the different measures:
Cigarette tax
BY DEANESE WILLIAMS-HARRIS
Seven days before a possible government shutdown, lawmakers moved a bill out of committee that would generate additional revenue for the state by taxing smokers.
The measure would increase the tax on cigarettes by 75 cents a pack. If approved by both chambers and signed by the governor, the proposed tax on cigarettes would generate about $328 million a year.
It’s unclear how the money would actually be spent, but its sponsor, Chicago Democratic Sen. John Cullerton, said that so far, the money would go into the state’s general revenue fund and be intended to fund a road and school construction plan. Cullerton also said legislators have their own wish lists for the money, such as education funding, capital and health care. However, he assured the final decision would be made collectively by the General Assembly.
Sen. Chris Lauzen, an Aurora Republican, wasn’t so quick to jump on the cigarette tax band wagon. He said Democrats would control where the money goes. “What’s happened to the rest of us who serve a quarter of a million people back home is truly disgraceful,” he said, mentioning unfunded projects for school and road construction in Republican districts.
“Somebody’s [going to] have to take a chance,” Cullerton said. “I know one thing. We can’t fund it at all if there’s no new revenue. This is new revenue, and it’s the easiest way I can think of to get support of three-fifths.”
Opponents voiced concern about small businesses losing revenue from people crossing the borders to buy cigarettes. Coincidentally, Indiana increased its cigarette tax by $1.01. In Washington, the U.S. Senate also approved a $1 tax on cigarettes.
The Illinois Department of Revenue said it supports the proposed cigarette tax, straying away from the governor’s campaign pledge not to sign any legislation that would increase sales tax. “This is different than the sales tax,” said Larry Doll, spokesman for the department. “It’s an excise item. It’s different than a general sales tax. A sales tax is applied to all items including necessities. People need food, clothing, what have you, whereas I don’t think you can make the same argument for cigarettes.” Doll also said it’s his understanding that the governor would sign the legislation if it wins approval.
The governor’s office hasn’t confirmed that yet. If approved, the legislation would immediately go into effect.
Revamped health care proposal
BY DEANESE WILLIAMS-HARRIS
Despite a weird afternoon of goofs and misunderstandings, the governor’s scaled-back Illinois Covered health care proposal moved out of a Senate committee with a 7-4 vote along party lines.
The governor wants to pay for the $1.2 billion initiative with a 3 percent payroll tax on businesses that employ at least 10 but that don’t provide comprehensive health benefits to them. The biggest question of the day was how many businesses would actually be subject to the tax. The committee will have to wait for that answer because no one had those numbers on hand.
The $1.2 billion would go into a trust fund, and the General Assembly would be limited to spending 90 percent of the cash per year to curtail overspending.
Some Senators voiced concern that almost 500,000 of the 1.4 million uninsured and underinsured Illinoisans wouldn’t qualify for either of the two health care packages the governor proposed. Eligibility would be modified as the program moves forward, depending on the revenue generated. Sen. Carol Ronen, the measure's sponsor and Blagojevich ally, estimates that 300,000 people will qualify for one of the programs, and 600,000 would qualify for a second option.
Todd Maisch of the Illinois Chamber of Commerce said the payroll assessment tax would “target the most vulnerable employers.” He also called the tax erroneous and excessive. “The major change is funding,” he said. “This is not a scaled back proposal.”
The proposal will most likely be called for a vote in the Senate this week.
Electricity rate relief
BY BETHANY CARSON
The $1 billion in electricity rate relief for Ameren Illinois and Commonwealth Edison customers is one step closer to becoming law. It’s not without controversy, however, as House Republicans aren’t happy that they weren’t part of closed-door negotiations for most of the past month. If Wednesday night’s House committee hearing was any indication, House Republicans could protest by voting “no” or “present” when the legislation reaches the House floor. But it would still have enough votes among Democrats to return to the Senate.
House Speaker Michael Madigan seemed to smile as he welcomed the chance of Republican rejection. “If there’s some member of the legislature who wishes to vote ‘no’ against $1 billion of rate relief, be my guest.” In other words, a Republican “no” vote for rate relief would make prime campaign literature for the Democrats during election season — it’s the equivalent of saying their opponent voted against health care for children or meals for the elderly.
One controversial portion of the deal that’s unsettling to some is that the state would dismiss six lawsuits brought against the utilities and power companies as a result of the September power auction. That includes the case filed by Attorney General Lisa Madigan’s office that alleged the power companies colluded to set electricity prices that robbed customers of an extra $4.3 million.
Rep. Jim Durkin, a Western Springs Republican, was one of the skeptics. “How’s the public protected by not following through and getting to the bottom of each one of these lawsuits instead of just dismissing them with the signing of this letter of understanding and the passage of this legislation? How in good faith can the state of Illinois settle those two cases when you have made serious allegations of manipulation and fraud upon the public?” He was the lone Republican to vote “present” in committee because he said he supported offering rate relief but didn’t like the process of coming to this deal.
Susan Hedman, senior assistant attorney general, justified the dismissal of the lawsuits by saying her office believed rate relief was needed now and that the procurement of power needed to be reformed for the future. “There’s a tradeoff between getting relief up front and waiting. If we do not get reforms in the procurement process now, it would mean that every year that we’re litigating that case, there could be another reverse auction with the danger of the same problems that we observed last time.” She later cut someone off and said, rather bluntly, that without dismissal of the lawsuits, “the deal falls apart.”
Cigarette tax
BY DEANESE WILLIAMS-HARRIS
Seven days before a possible government shutdown, lawmakers moved a bill out of committee that would generate additional revenue for the state by taxing smokers.
The measure would increase the tax on cigarettes by 75 cents a pack. If approved by both chambers and signed by the governor, the proposed tax on cigarettes would generate about $328 million a year.
It’s unclear how the money would actually be spent, but its sponsor, Chicago Democratic Sen. John Cullerton, said that so far, the money would go into the state’s general revenue fund and be intended to fund a road and school construction plan. Cullerton also said legislators have their own wish lists for the money, such as education funding, capital and health care. However, he assured the final decision would be made collectively by the General Assembly.
Sen. Chris Lauzen, an Aurora Republican, wasn’t so quick to jump on the cigarette tax band wagon. He said Democrats would control where the money goes. “What’s happened to the rest of us who serve a quarter of a million people back home is truly disgraceful,” he said, mentioning unfunded projects for school and road construction in Republican districts.
“Somebody’s [going to] have to take a chance,” Cullerton said. “I know one thing. We can’t fund it at all if there’s no new revenue. This is new revenue, and it’s the easiest way I can think of to get support of three-fifths.”
Opponents voiced concern about small businesses losing revenue from people crossing the borders to buy cigarettes. Coincidentally, Indiana increased its cigarette tax by $1.01. In Washington, the U.S. Senate also approved a $1 tax on cigarettes.
The Illinois Department of Revenue said it supports the proposed cigarette tax, straying away from the governor’s campaign pledge not to sign any legislation that would increase sales tax. “This is different than the sales tax,” said Larry Doll, spokesman for the department. “It’s an excise item. It’s different than a general sales tax. A sales tax is applied to all items including necessities. People need food, clothing, what have you, whereas I don’t think you can make the same argument for cigarettes.” Doll also said it’s his understanding that the governor would sign the legislation if it wins approval.
The governor’s office hasn’t confirmed that yet. If approved, the legislation would immediately go into effect.
Revamped health care proposal
BY DEANESE WILLIAMS-HARRIS
Despite a weird afternoon of goofs and misunderstandings, the governor’s scaled-back Illinois Covered health care proposal moved out of a Senate committee with a 7-4 vote along party lines.
The governor wants to pay for the $1.2 billion initiative with a 3 percent payroll tax on businesses that employ at least 10 but that don’t provide comprehensive health benefits to them. The biggest question of the day was how many businesses would actually be subject to the tax. The committee will have to wait for that answer because no one had those numbers on hand.
The $1.2 billion would go into a trust fund, and the General Assembly would be limited to spending 90 percent of the cash per year to curtail overspending.
Some Senators voiced concern that almost 500,000 of the 1.4 million uninsured and underinsured Illinoisans wouldn’t qualify for either of the two health care packages the governor proposed. Eligibility would be modified as the program moves forward, depending on the revenue generated. Sen. Carol Ronen, the measure's sponsor and Blagojevich ally, estimates that 300,000 people will qualify for one of the programs, and 600,000 would qualify for a second option.
Todd Maisch of the Illinois Chamber of Commerce said the payroll assessment tax would “target the most vulnerable employers.” He also called the tax erroneous and excessive. “The major change is funding,” he said. “This is not a scaled back proposal.”
The proposal will most likely be called for a vote in the Senate this week.
Electricity rate relief
BY BETHANY CARSON
The $1 billion in electricity rate relief for Ameren Illinois and Commonwealth Edison customers is one step closer to becoming law. It’s not without controversy, however, as House Republicans aren’t happy that they weren’t part of closed-door negotiations for most of the past month. If Wednesday night’s House committee hearing was any indication, House Republicans could protest by voting “no” or “present” when the legislation reaches the House floor. But it would still have enough votes among Democrats to return to the Senate.
House Speaker Michael Madigan seemed to smile as he welcomed the chance of Republican rejection. “If there’s some member of the legislature who wishes to vote ‘no’ against $1 billion of rate relief, be my guest.” In other words, a Republican “no” vote for rate relief would make prime campaign literature for the Democrats during election season — it’s the equivalent of saying their opponent voted against health care for children or meals for the elderly.
One controversial portion of the deal that’s unsettling to some is that the state would dismiss six lawsuits brought against the utilities and power companies as a result of the September power auction. That includes the case filed by Attorney General Lisa Madigan’s office that alleged the power companies colluded to set electricity prices that robbed customers of an extra $4.3 million.
Rep. Jim Durkin, a Western Springs Republican, was one of the skeptics. “How’s the public protected by not following through and getting to the bottom of each one of these lawsuits instead of just dismissing them with the signing of this letter of understanding and the passage of this legislation? How in good faith can the state of Illinois settle those two cases when you have made serious allegations of manipulation and fraud upon the public?” He was the lone Republican to vote “present” in committee because he said he supported offering rate relief but didn’t like the process of coming to this deal.
Susan Hedman, senior assistant attorney general, justified the dismissal of the lawsuits by saying her office believed rate relief was needed now and that the procurement of power needed to be reformed for the future. “There’s a tradeoff between getting relief up front and waiting. If we do not get reforms in the procurement process now, it would mean that every year that we’re litigating that case, there could be another reverse auction with the danger of the same problems that we observed last time.” She later cut someone off and said, rather bluntly, that without dismissal of the lawsuits, “the deal falls apart.”
Monday, July 23, 2007
One of those weeks
Monday’s events could set the tone for an action-packed but odd week at the Capitol. Strange bedfellows flew around the state to announce an electricity rate relief package that took months to unfold, and the governor spent the day in Chicago while busloads of Chicago ministers drove down to Springfield to rally and pray outside of his Statehouse office, as well as the House and the Senate.
First, the strange bedfellows of Senate President Emil Jones Jr., House Speaker Michael Madigan and state Attorney General Lisa Madigan flew around the state Monday announcing a long-awaited deal to relieve electricity rates for Ameren Illinois and Commonwealth Edison customers. Details of the agreement are provided from the House Democrats’ Web site in this press release and this fact sheet. Highlights: In addition to one-time credits, customers’ bills would reflect between 40 percent and 70 percent off of the 2007 rates. The rates going forward would be set by the new Illinois Power Authority, which would scrap the type of auction that set this year’s rates and that was supposed to transition Illinois into a deregulated system. Legislation is expected to move soon.
Second, four busloads of ministers and education advocates tried to storm the Capitol to urge state lawmakers and the governor to increase education funding. When guards calmly told them they couldn’t get onto the floor of each chamber, the group knelt in prayer and then sang spiritual hymns as they walked to the next door. When they approached the governor’s office, they were again greeted by guards and then by the governor’s chief of staff, John Harris. Their momentum deflated when Harris told them the governor wasn’t even in the Capitol, that he was in Chicago signing the statewide smoking ban. The ministers were invited to a meeting with all legislative leaders and the governor in the Capitol Tuesday, but most of them returned to their busses.
Earlier, the ministers held a Statehouse press conference and said lawmakers have a “moral obligation” to increase education funding. They stressed they weren’t in town for anyone’s agenda other than the children’s and that they were in Springfield to urge the governor to stand by his promise to put more money into education. (Blagojevich and Jones proposed $1.5 billion for education.)
“We’ve had the governor to our churches on several occasions, singing, what’s his favorite song, ‘Precious Lord, take my hand,’” Rev. Roosevelt Watkins of Bethlehem Star Church in Chicago said. “I think that if there’s no budget, absolutely, he’ll get a different reception. Not only him, but we’ll have Emil Jones, who we have a lot of lines with. All of them, they all will get a different reception.”
But Rep. Arthur Turner, a Chicago Democrat, said the group is the first of many to stressing the need for more education funding, but they’re just starting to realize the complexity of weighing all the budgetary needs. “If you’ve got funding in the schools and the CTA busses aren’t running on a school day, you’re still no better off than you were before,” he said after speaking with the ministers.
Third, AFSCME Council 31, which represents about 40,000 state employees, sent a letter Friday urging the leaders and the governor to avoid a government shutdown, preferably with a 12-month budget or at least with another one-month budget.
Fourth, the governor signed the statewide smoking ban in Chicago Monday. It bans smoking in restaurants, bars, bowling alleys, hospitals, nursing homes, sports arenas, casinos and other places January 1, 2008.
More action gets under way Tuesday.
Deanese Williams-Harris contributed to this report.
First, the strange bedfellows of Senate President Emil Jones Jr., House Speaker Michael Madigan and state Attorney General Lisa Madigan flew around the state Monday announcing a long-awaited deal to relieve electricity rates for Ameren Illinois and Commonwealth Edison customers. Details of the agreement are provided from the House Democrats’ Web site in this press release and this fact sheet. Highlights: In addition to one-time credits, customers’ bills would reflect between 40 percent and 70 percent off of the 2007 rates. The rates going forward would be set by the new Illinois Power Authority, which would scrap the type of auction that set this year’s rates and that was supposed to transition Illinois into a deregulated system. Legislation is expected to move soon.
Second, four busloads of ministers and education advocates tried to storm the Capitol to urge state lawmakers and the governor to increase education funding. When guards calmly told them they couldn’t get onto the floor of each chamber, the group knelt in prayer and then sang spiritual hymns as they walked to the next door. When they approached the governor’s office, they were again greeted by guards and then by the governor’s chief of staff, John Harris. Their momentum deflated when Harris told them the governor wasn’t even in the Capitol, that he was in Chicago signing the statewide smoking ban. The ministers were invited to a meeting with all legislative leaders and the governor in the Capitol Tuesday, but most of them returned to their busses.
Earlier, the ministers held a Statehouse press conference and said lawmakers have a “moral obligation” to increase education funding. They stressed they weren’t in town for anyone’s agenda other than the children’s and that they were in Springfield to urge the governor to stand by his promise to put more money into education. (Blagojevich and Jones proposed $1.5 billion for education.)
“We’ve had the governor to our churches on several occasions, singing, what’s his favorite song, ‘Precious Lord, take my hand,’” Rev. Roosevelt Watkins of Bethlehem Star Church in Chicago said. “I think that if there’s no budget, absolutely, he’ll get a different reception. Not only him, but we’ll have Emil Jones, who we have a lot of lines with. All of them, they all will get a different reception.”
But Rep. Arthur Turner, a Chicago Democrat, said the group is the first of many to stressing the need for more education funding, but they’re just starting to realize the complexity of weighing all the budgetary needs. “If you’ve got funding in the schools and the CTA busses aren’t running on a school day, you’re still no better off than you were before,” he said after speaking with the ministers.
Third, AFSCME Council 31, which represents about 40,000 state employees, sent a letter Friday urging the leaders and the governor to avoid a government shutdown, preferably with a 12-month budget or at least with another one-month budget.
Fourth, the governor signed the statewide smoking ban in Chicago Monday. It bans smoking in restaurants, bars, bowling alleys, hospitals, nursing homes, sports arenas, casinos and other places January 1, 2008.
More action gets under way Tuesday.
Deanese Williams-Harris contributed to this report.
Thursday, July 19, 2007
Transit woes
BY DEANESE WILLIAMS-HARRIS
As the clock ticks toward a possible government shutdown, Sen. Martin Sandoval said Thursday he wouldn’t support a state budget that lacks funding for education and transportation.
“Once again, there needs to be a recognition there is a crisis in Illinois and that service cuts will happen 60 days from today as a result of our inability to fund this priority,” he said during a Statehouse press conference Thursday morning. “I, from my own perspective, will not vote, and cannot, in right conscience, vote on any budget compromise that does not include money for the RTA, CTA, PACE and Metra.”
He joined legislators from both chambers to talk about ways to avoid service reductions in transportation services scheduled to take place in northeastern Illinois as early as September 17.
The CTA plans to eliminate 63 bus routes and two rail lines. Fares also would rise from $2 to $4.25 during rush hour, and workers would be laid off. PACE plans to cut all weekend bus services, all Metra station routes and 23 regional routes for the entire suburban Chicago area. It also would raise fares by 33 percent and reduce transportation for the disabled to the federally-mandated standards.
Rep. Julie Hamos, an Evanston Democrat, said legislators are in the final stages of drafting legislation that would generate additional funding for transit. “The transit system has not been fully supported by the state budget in 24 years,” she said. “This is no time now to take on the responsibility for transit as part of our state budget. What the system does not need is a one-year bailout that would put us back in not only the same place next year, but in an even worse condition.”
Lawmakers propose a regional tax increase and a full range of reforms that would address transit spending and pension system accountability.
So far, legislators have two funding components on the table that include a one-quarter percent sales tax increase for the six counties in northeastern Illinois and a real estate transfer tax in Chicago. Gov. Rod Blagojevich has repeated his campaign promise that he wouldn’t approve any legislation to raise state income or sales taxes. Therefore, if the measure wins the approval of both chambers, lawmakers could override his veto.
As the clock ticks toward a possible government shutdown, Sen. Martin Sandoval said Thursday he wouldn’t support a state budget that lacks funding for education and transportation.
“Once again, there needs to be a recognition there is a crisis in Illinois and that service cuts will happen 60 days from today as a result of our inability to fund this priority,” he said during a Statehouse press conference Thursday morning. “I, from my own perspective, will not vote, and cannot, in right conscience, vote on any budget compromise that does not include money for the RTA, CTA, PACE and Metra.”
He joined legislators from both chambers to talk about ways to avoid service reductions in transportation services scheduled to take place in northeastern Illinois as early as September 17.
The CTA plans to eliminate 63 bus routes and two rail lines. Fares also would rise from $2 to $4.25 during rush hour, and workers would be laid off. PACE plans to cut all weekend bus services, all Metra station routes and 23 regional routes for the entire suburban Chicago area. It also would raise fares by 33 percent and reduce transportation for the disabled to the federally-mandated standards.
Rep. Julie Hamos, an Evanston Democrat, said legislators are in the final stages of drafting legislation that would generate additional funding for transit. “The transit system has not been fully supported by the state budget in 24 years,” she said. “This is no time now to take on the responsibility for transit as part of our state budget. What the system does not need is a one-year bailout that would put us back in not only the same place next year, but in an even worse condition.”
Lawmakers propose a regional tax increase and a full range of reforms that would address transit spending and pension system accountability.
So far, legislators have two funding components on the table that include a one-quarter percent sales tax increase for the six counties in northeastern Illinois and a real estate transfer tax in Chicago. Gov. Rod Blagojevich has repeated his campaign promise that he wouldn’t approve any legislation to raise state income or sales taxes. Therefore, if the measure wins the approval of both chambers, lawmakers could override his veto.
Wednesday, July 18, 2007
Tax talk
It’s almost like we’ve come full circle. The spring session started with momentum behind talk of state tax increases to address funding for education, public employee pensions and health care. But the Statehouse chatter fizzled by the time the General Assembly missed its May 31 deadline to approve a state budget. Now, 48 days later, a couple tax ideas have popped back into summer budget negotiations.
It’s like déjà vu. House Speaker Michael Madigan announced on Chicago talk radio and to the Statehouse press Wednesday that the best way for Gov. Rod Blagojevich to get new revenue is to consider that the majority of House Democrats support some kind of an income tax increase. But Blagojevich has repeatedly and passionately promised to reject an increase in the state income or sales tax. The only possible change is by Senate President Emil Jones Jr., who has sided with the governor since he first proposed the now defunct gross receipts tax on businesses to fund health care. Jones said Wednesday, however, he would consider an income tax increase.
“[HB] 750 had the regressive sales tax, which I strongly oppose,” Jones said after a budget meeting in the governor’s Statehouse office. “But I’m open to the income tax, as well.” (The 750 legislation has long called for an increase in income and sales taxes to reduce property taxes and reform the way the state funds education.) When asked whether he could change the governor’s mind on an income tax increase, Jones said, “The governor was opposed to gaming, and I persuaded him to back off his opposition to gaming. And so if the House passes the income tax as the speaker indicated on WVON, he should go ahead and pass the legislation, and we would give it a strong consideration in the Senate.”
Madigan even made a point to tell the press that he had dinner with Jones Tuesday night in Springfield. “The most significant thing for me coming out of the meeting was that Sen. Jones strongly indicated that he was willing to work with me to finalize the budget for the next fiscal year,” Madigan said. He also said gaming was not in the budget that he was preparing.
But Jones said he wouldn’t accept a budget without gaming expansion unless Madigan came up with an alternative revenue source to fund Jones’ desired $1.5 billion increase in education funding. Jones said other revenue ideas still on the table include the closure of some corporate tax breaks and an alternative minimum tax, which would apply to businesses that make a lot of money but that don’t pay a lot of state taxes. The way to come up with a compromise on alternative revenue ideas, Jones said, was up to the speaker. “Now it’s up to [Madigan] to provide the quality leadership to get additional dollars we need for education — quality leadership.”
Senate Republicans oppose the idea of an income tax increase, according to Sen. Minority Leader Frank Watson. But his caucus’ votes wouldn’t be needed if the Senate Democrats utilized their veto-proof majority of 37 to 22. Over in the House, Republicans would be needed to override to a governor’s veto on an income tax increase.
House Minority Leader Tom Cross wasn’t feeling today’s leaders' meeting as he made an early exit. “We’re having the same discussion that we had in January, February, March, April, May, June, and now July,” he said, raising his voice a little more than normal and seeming more perturbed. “We’ve had a budget process, we’ve had a committee process, we have caucuses, and we hear political rhetoric and political speeches everyday, and it doesn’t bring us any closer to conclusion.”
Poll results favor Illinois Covered
BY DEANESE WILLIAMS-HARRIS
Will the results of a poll released today by Lake Research Partners make some lawmakers change their tune about the governor’s Illinois Covered proposal? One survey question in particular foreshadows campaign season. When asked whether they would be more likely to re-elect their legislator if he or she supported the governor's health insurance plan, out of the 600 likely Illinois voters surveyed, 55 percent said they would. That number breaks down to 67 percent Democrats, 40 percent Republicans and 52 percent Independents.
Participants also were asked whether they would support a plan if it were paid for by an increase in gaming taxes, a tax on employers who don’t offer comprehensive health insurance and an insurance premium based on the ability to pay. Seventy-eight percent were in favor of those three funding sources; 15 percent opposed and 8 percent were undecided.
People also identified that they thought the focus for this summer's special sessions should be health care costs and health care reform (88 percent), education investments and reform (80 percent), improving roads and transportation (65 percent), as well as unfunded state pensions (53 percent).
“The people of Illinois are telling us that health care is their top priority and we cannot let them down,” said Gov. Rod Blagojevich in a press release today. “This year in Illinois, we have a unique opportunity to pass the most comprehensive health care plan in the country that would give every family and small business in our state access to affordable health coverage.”
The poll was sponsored by America’s Agenda Health Care Education Fund, the AARP, the AFL-CIO and the Campaign for Better Health Care. All of those organizations supported Blagojevich’s Illinois Covered plan from the beginning.
It’s like déjà vu. House Speaker Michael Madigan announced on Chicago talk radio and to the Statehouse press Wednesday that the best way for Gov. Rod Blagojevich to get new revenue is to consider that the majority of House Democrats support some kind of an income tax increase. But Blagojevich has repeatedly and passionately promised to reject an increase in the state income or sales tax. The only possible change is by Senate President Emil Jones Jr., who has sided with the governor since he first proposed the now defunct gross receipts tax on businesses to fund health care. Jones said Wednesday, however, he would consider an income tax increase.
“[HB] 750 had the regressive sales tax, which I strongly oppose,” Jones said after a budget meeting in the governor’s Statehouse office. “But I’m open to the income tax, as well.” (The 750 legislation has long called for an increase in income and sales taxes to reduce property taxes and reform the way the state funds education.) When asked whether he could change the governor’s mind on an income tax increase, Jones said, “The governor was opposed to gaming, and I persuaded him to back off his opposition to gaming. And so if the House passes the income tax as the speaker indicated on WVON, he should go ahead and pass the legislation, and we would give it a strong consideration in the Senate.”
Madigan even made a point to tell the press that he had dinner with Jones Tuesday night in Springfield. “The most significant thing for me coming out of the meeting was that Sen. Jones strongly indicated that he was willing to work with me to finalize the budget for the next fiscal year,” Madigan said. He also said gaming was not in the budget that he was preparing.
But Jones said he wouldn’t accept a budget without gaming expansion unless Madigan came up with an alternative revenue source to fund Jones’ desired $1.5 billion increase in education funding. Jones said other revenue ideas still on the table include the closure of some corporate tax breaks and an alternative minimum tax, which would apply to businesses that make a lot of money but that don’t pay a lot of state taxes. The way to come up with a compromise on alternative revenue ideas, Jones said, was up to the speaker. “Now it’s up to [Madigan] to provide the quality leadership to get additional dollars we need for education — quality leadership.”
Senate Republicans oppose the idea of an income tax increase, according to Sen. Minority Leader Frank Watson. But his caucus’ votes wouldn’t be needed if the Senate Democrats utilized their veto-proof majority of 37 to 22. Over in the House, Republicans would be needed to override to a governor’s veto on an income tax increase.
House Minority Leader Tom Cross wasn’t feeling today’s leaders' meeting as he made an early exit. “We’re having the same discussion that we had in January, February, March, April, May, June, and now July,” he said, raising his voice a little more than normal and seeming more perturbed. “We’ve had a budget process, we’ve had a committee process, we have caucuses, and we hear political rhetoric and political speeches everyday, and it doesn’t bring us any closer to conclusion.”
Poll results favor Illinois Covered
BY DEANESE WILLIAMS-HARRIS
Will the results of a poll released today by Lake Research Partners make some lawmakers change their tune about the governor’s Illinois Covered proposal? One survey question in particular foreshadows campaign season. When asked whether they would be more likely to re-elect their legislator if he or she supported the governor's health insurance plan, out of the 600 likely Illinois voters surveyed, 55 percent said they would. That number breaks down to 67 percent Democrats, 40 percent Republicans and 52 percent Independents.
Participants also were asked whether they would support a plan if it were paid for by an increase in gaming taxes, a tax on employers who don’t offer comprehensive health insurance and an insurance premium based on the ability to pay. Seventy-eight percent were in favor of those three funding sources; 15 percent opposed and 8 percent were undecided.
People also identified that they thought the focus for this summer's special sessions should be health care costs and health care reform (88 percent), education investments and reform (80 percent), improving roads and transportation (65 percent), as well as unfunded state pensions (53 percent).
“The people of Illinois are telling us that health care is their top priority and we cannot let them down,” said Gov. Rod Blagojevich in a press release today. “This year in Illinois, we have a unique opportunity to pass the most comprehensive health care plan in the country that would give every family and small business in our state access to affordable health coverage.”
The poll was sponsored by America’s Agenda Health Care Education Fund, the AARP, the AFL-CIO and the Campaign for Better Health Care. All of those organizations supported Blagojevich’s Illinois Covered plan from the beginning.
Tuesday, July 17, 2007
Electricity deal could come soon
The Capitol is buzzing about a potential deal on electricity rate relief for Ameren Illinois and Commonwealth Edison customers, who have been paying between an average of 25 percent to 55 percent higher electricity rates since a state law expired January 2.
The general framework of the relief package footed by the power utilities and potentially their parent companies is expected to total about $1 billion — doubling the former proposal — and offer relief for customers over three years, according to Sen. James Clayborne, a Belleville Democrat who’s been following the negotiations. Customers could receive checks for credits as early as two weeks after the agreement were approved by the state legislature and processed through the Illinois Commerce Commission. Another major change could be the creation of an Illinois Power Authority, which I wrote about in our June issue and could procure and generate power for Illinoisans.
We’ve been following the electricity rate debate and private negotiations for months, but Clayborne says, “We’re very, very close,” and, “I think we pretty much have an agreement. Logistically, we have to work out some issues.”
Rep. John Bradley, a Marion Democrat also close to the negotiations, said those details that still have to be ironed out are enough to stop him from screaming from the rooftops that a deal is coming. “The deal isn’t completely done. It’s being finalized. It’s in the final stages, but it’s not completely done.” But he did say he didn’t deny anything Clayborne said or deny that the deal is very close to being turned into legislation for the General Assembly to consider.
Ameren Illinois spokesman Leigh Morris had this to say: “I’m very optimistic that we are going to see a positive resolution to all of this in the very near future.” He added, “We certainly will be making the appropriate announcements to the news media. I think you will hear the thunder of feet running to the Blue Room.” (The Blue Room is in the Statehouse Press Room where people hold press conferences in front of a blue curtain.)
Gov. Rod Blagojevich is expected to approve an electricity rate relief package that comes his way. “For several months, the governor has urged the legislature to pass a bill that provides consumers significant relief from skyrocketing electric rates,” wrote Blagojevich spokeswoman, Rebecca Rausch, in an e-mail. “We understand negotiators are close to an agreement, and we look forward to reviewing the final product.”
Small group meetings or small progress?
The governor has been in town since Monday, but no official leaders’ meetings have convened. The legislature has broken up into small group meetings so far to discuss gaming, a capital plan, education, revenue, agency spending and the Illinois Department of Corrections. They’re closed to the public.
The governor also sent a letter to House Speaker Michael Madigan, House Minority Leader Tom Cross and Senate Minority Leader Frank Watson criticizing them for halting progress on a proposal to expand gaming, which would pay for the debt service on a capital plan and for education. “Negotiations broke down over your refusal to dedicate some portion of new gaming revenue to education,” the governor wrote. He also said, “A budget that invests in infrastructure without providing resources for education and health care is not an option. We must find a way to meet all of our obligations.”
A leaders’ meeting will convene in the governor’s Capitol office Wednesday afternoon. The Senate Education Committee also is holding multiple-hour hearings every day this week, and many witnesses testify about the impact of the state budget problems on education and its relationship to student achievement. The hearings are a well-organized love fest between educators and some of the lawmakers and won’t result in a vote on legislation.
Other legislative movement
Illinois is on an even playing field with Texas in the final stages of competition for a $1 billion coal gasification plant, which would bring national and international attention to the state, according to sponsors of legislation designed to attract the FutureGen project to Tuscola or Mattoon in central Illinois. The Illinois House approved the incentive package 99 to 0 with one voting present this afternoon. If Illinois were chosen by an international alliance, this state would house the world’s first zero-emissions coal-fired power plant that’s touted to be a cleaner source of energy. It also would be a groundbreaking public-private partnership between local, state, national and international entities, with the added perk of creating a lot of new jobs wherever it lands. The bill has to go back to the Senate for final approval.
The House also “approved” a resolution stating the current governor should stay in Springfield during overtime session. It’s written to identify and pressure Gov. Rod Blagojevich, not future governors. Despite loud “boos” primarily from Democrats, who said the resolution was unfair and presented only for political gain, the resolution was considered approved by a “voice vote.” The measure is nonbinding.
The general framework of the relief package footed by the power utilities and potentially their parent companies is expected to total about $1 billion — doubling the former proposal — and offer relief for customers over three years, according to Sen. James Clayborne, a Belleville Democrat who’s been following the negotiations. Customers could receive checks for credits as early as two weeks after the agreement were approved by the state legislature and processed through the Illinois Commerce Commission. Another major change could be the creation of an Illinois Power Authority, which I wrote about in our June issue and could procure and generate power for Illinoisans.
We’ve been following the electricity rate debate and private negotiations for months, but Clayborne says, “We’re very, very close,” and, “I think we pretty much have an agreement. Logistically, we have to work out some issues.”
Rep. John Bradley, a Marion Democrat also close to the negotiations, said those details that still have to be ironed out are enough to stop him from screaming from the rooftops that a deal is coming. “The deal isn’t completely done. It’s being finalized. It’s in the final stages, but it’s not completely done.” But he did say he didn’t deny anything Clayborne said or deny that the deal is very close to being turned into legislation for the General Assembly to consider.
Ameren Illinois spokesman Leigh Morris had this to say: “I’m very optimistic that we are going to see a positive resolution to all of this in the very near future.” He added, “We certainly will be making the appropriate announcements to the news media. I think you will hear the thunder of feet running to the Blue Room.” (The Blue Room is in the Statehouse Press Room where people hold press conferences in front of a blue curtain.)
Gov. Rod Blagojevich is expected to approve an electricity rate relief package that comes his way. “For several months, the governor has urged the legislature to pass a bill that provides consumers significant relief from skyrocketing electric rates,” wrote Blagojevich spokeswoman, Rebecca Rausch, in an e-mail. “We understand negotiators are close to an agreement, and we look forward to reviewing the final product.”
Small group meetings or small progress?
The governor has been in town since Monday, but no official leaders’ meetings have convened. The legislature has broken up into small group meetings so far to discuss gaming, a capital plan, education, revenue, agency spending and the Illinois Department of Corrections. They’re closed to the public.
The governor also sent a letter to House Speaker Michael Madigan, House Minority Leader Tom Cross and Senate Minority Leader Frank Watson criticizing them for halting progress on a proposal to expand gaming, which would pay for the debt service on a capital plan and for education. “Negotiations broke down over your refusal to dedicate some portion of new gaming revenue to education,” the governor wrote. He also said, “A budget that invests in infrastructure without providing resources for education and health care is not an option. We must find a way to meet all of our obligations.”
A leaders’ meeting will convene in the governor’s Capitol office Wednesday afternoon. The Senate Education Committee also is holding multiple-hour hearings every day this week, and many witnesses testify about the impact of the state budget problems on education and its relationship to student achievement. The hearings are a well-organized love fest between educators and some of the lawmakers and won’t result in a vote on legislation.
Other legislative movement
Illinois is on an even playing field with Texas in the final stages of competition for a $1 billion coal gasification plant, which would bring national and international attention to the state, according to sponsors of legislation designed to attract the FutureGen project to Tuscola or Mattoon in central Illinois. The Illinois House approved the incentive package 99 to 0 with one voting present this afternoon. If Illinois were chosen by an international alliance, this state would house the world’s first zero-emissions coal-fired power plant that’s touted to be a cleaner source of energy. It also would be a groundbreaking public-private partnership between local, state, national and international entities, with the added perk of creating a lot of new jobs wherever it lands. The bill has to go back to the Senate for final approval.
The House also “approved” a resolution stating the current governor should stay in Springfield during overtime session. It’s written to identify and pressure Gov. Rod Blagojevich, not future governors. Despite loud “boos” primarily from Democrats, who said the resolution was unfair and presented only for political gain, the resolution was considered approved by a “voice vote.” The measure is nonbinding.
Friday, July 13, 2007
Gov: No gaming without health care
On Tuesday we learned that Gov. Rod Blagojevich was willing to delay his plan to provide health insurance for adults. That would help lawmakers break the deadlock and approve a state budget, he said. On Thursday we learned state lawmakers were considering an expansion of gaming to pay for improvement of roads, bridges and schools. Friday’s developments taught us that the governor won’t sign an expansion of gaming without first having a health care bill approved.
Blagojevich’s point person in the House, Democratic Rep. Jay Hoffman of Chicago, spoke for him after a leaders’ meeting in the governor’s Statehouse office. Hoffman said the governor was willing to scale back his health care plan, but “scale back” doesn’t mean reducing the price. “We’re not talking about scaling back the goals,” Hoffman said. “We’re not talking about scaling back any of the means of providing affordable access to health care for everyone. We would look at taking the employer assessment as well as potentially some other revenue and implementing the health care plan beginning June 1, 2008, and over a four-year period.”
The “employer assessment” is a 3 percent tax on businesses that employ more than 10 people but that don’t offer health insurance for them. That’s still expected to generate about $1 billion, which Hoffman said would be available to help kick start the adult insurance plan in 2008, easing the burden on this year’s state budget. A pilot project isn’t an option, he said. Hoffman mentioned such other revenue sources as consolidating state funds and ending more corporate tax breaks.
But still, as the legislative leaders of both political parties look to fund construction projects through a gaming expansion — however they define expansion — they would have to swallow a health care plan in order to get the governor’s signature. “We would work on the health care piece, which is a prerequisite of signing any gaming bill, from other sources of revenue in the state of Illinois,” Hoffman said.
We also learned Friday that state legislators will have the day off Sunday, July 15, the first day since the governor has ordered them to be in Springfield every day since July 5 to negotiate an already delayed budget. But when lawmakers come back Monday, they’ll have 16 days before the current, one-month budget expires and threatens a state shutdown without another budget in place.
The threat of a state shutdown could be a good thing because it could force a compromise, according to Senate Minority Leader Frank Watson. “There’s just constantly more and more people saying, ‘Why should we vote for another one-month budget?’” he said after the budget meeting. “I’m not for shutting the state government down, but to bring some sort of conclusion to this, some people think that may be the only solution.”
House Speaker Michael Madigan agreed all caucuses want to avoid more 30-day budgets. “Those people probably have not contemplated what they would do if they were a leader and it’s the fifth day of August and paychecks aren’t going out,” he said. “I would hope that the end of the spending authority at the end of the month would move people toward a resolution.”
But he had this damper for people hoping to get that gaming bill: “It’s a very wide-ranging discussion. I wouldn’t put a lot of hope on it.”
Blagojevich’s point person in the House, Democratic Rep. Jay Hoffman of Chicago, spoke for him after a leaders’ meeting in the governor’s Statehouse office. Hoffman said the governor was willing to scale back his health care plan, but “scale back” doesn’t mean reducing the price. “We’re not talking about scaling back the goals,” Hoffman said. “We’re not talking about scaling back any of the means of providing affordable access to health care for everyone. We would look at taking the employer assessment as well as potentially some other revenue and implementing the health care plan beginning June 1, 2008, and over a four-year period.”
The “employer assessment” is a 3 percent tax on businesses that employ more than 10 people but that don’t offer health insurance for them. That’s still expected to generate about $1 billion, which Hoffman said would be available to help kick start the adult insurance plan in 2008, easing the burden on this year’s state budget. A pilot project isn’t an option, he said. Hoffman mentioned such other revenue sources as consolidating state funds and ending more corporate tax breaks.
But still, as the legislative leaders of both political parties look to fund construction projects through a gaming expansion — however they define expansion — they would have to swallow a health care plan in order to get the governor’s signature. “We would work on the health care piece, which is a prerequisite of signing any gaming bill, from other sources of revenue in the state of Illinois,” Hoffman said.
We also learned Friday that state legislators will have the day off Sunday, July 15, the first day since the governor has ordered them to be in Springfield every day since July 5 to negotiate an already delayed budget. But when lawmakers come back Monday, they’ll have 16 days before the current, one-month budget expires and threatens a state shutdown without another budget in place.
The threat of a state shutdown could be a good thing because it could force a compromise, according to Senate Minority Leader Frank Watson. “There’s just constantly more and more people saying, ‘Why should we vote for another one-month budget?’” he said after the budget meeting. “I’m not for shutting the state government down, but to bring some sort of conclusion to this, some people think that may be the only solution.”
House Speaker Michael Madigan agreed all caucuses want to avoid more 30-day budgets. “Those people probably have not contemplated what they would do if they were a leader and it’s the fifth day of August and paychecks aren’t going out,” he said. “I would hope that the end of the spending authority at the end of the month would move people toward a resolution.”
But he had this damper for people hoping to get that gaming bill: “It’s a very wide-ranging discussion. I wouldn’t put a lot of hope on it.”
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