Customers would get a rebate and pay cheaper electricity rates under a proposal approved along party lines in a House Committee late Thursday night. A $2 billion tax on power generators would allow utilities to start doling out reimbursements in January, a full year after most Illinois customers were hit with higher utility bills. Last January, a decade-long rate freeze was lifted. Under the measure, electricity rates would be rolled back and frozen at their 1997 levels for one year.
The major power companies subject to the tax — mainlny Exelon Generation, Ameren Generation, Midwest Generation, Dynegy and Dominion — predictably opposed the idea and threatened financial disaster. They also said Thursday night that the tax would be passed on to consumers (they would be taxed on their capacity for producing electricity, not on the actual amount of electricity they produced).
“Are you trying to run out … profitable business in Illinois?” asked Rep. Dave Winters, a Shirland Republican. “Because that’s what the message of this bill is, is you’re trying to destroy jobs, destroy industry that needs electricity. And believe me, if this goes through, you might as well shut the doors, blow up the bridges because nobody’s going to want to live in Illinois if there’s no power available. And this will do it.” He pointed out that the measure has no sunset, and his Republican peers on the committee didn’t like that the measure fails to specify what the state could do with the revenue once customers received their rebates.
The House sponsor, Democratic Rep. George Scully of Flossmoor, said he knows this would only yield a short-term solution, but it would buy time for lawmakers to come up with a longer-term idea for procuring power (read: getting rid of the Illinois Commerce Commission’s auction process that set electricity prices for distribution companies this year). Scully said, again, he doesn’t believe the power companies’ threats. “The hyperbole that the sky was going to fall that I heard tonight was over the top. The only thing that didn’t really disturb me is I’ve heard the same thing so many times before. That’s the exact same rhetoric. I don’t believe it this time. I didn’t believe the last time.”
Other changes in the measure include prohibiting utilities from shutting off power until March 2008, and condominiums would be charged residential rates rather than commercial rates they’ve been paying since January. Scully said he could call the bill today, Friday, but he hasn’t talked to anyone in the Senate about whether it has a chance in that chamber. The Citizens Utility Board executive director, David Kolata, said one good sign is that Sen. James Clayborne, a Bellville Democrat, first proposed a similar idea in his chamber. (Clayborne later said he sponsored the bill to tax power generators as a way to get them to the bargaining table, not because he thought it would solve any problems.) It’s also the chamber that hijacked Sen. Gary Forby’s original proposal to freeze rates for the Ameren Illinois and Commonwealth Edison utilities. Only Ameren was left in the one-year rate freeze measure approved by the Senate.
Earlier Thursday, House Speaker Michael Madigan surveyed his members about offering property tax relief for Cook County residents and about which income-tax breaks they’d end for businesses. Members received a list of some 20 “corporate loophole” ideas they would close to raise revenue. Next to the possibilities were the names of groups that would be against it.
We’ll blog again later today about legislative action, including whether the Senate acts on the governor’s Illinois Covered insurance program and the gaming proposal that we talked about yesterday that would create up to four new casinos in the Chicago area.
Friday, May 25, 2007
Thursday, May 24, 2007
New boats?
While House Speaker Michael Madigan has said he would consider expanding gaming to generate money for road and school construction, the Senate is working on two significant gaming measures potentially for education, construction projects and health care. Sen. James Clayborne, a Belleville Democrat, says he’s in negotiations to draft legislation that could create three or four new casinos in the Chicago area, although he didn’t know whether they would be land-based or riverboats. “I think that we should look long-term to make the industry competitive, and we should consider all options,” he said Thursday morning. “So that’s still being worked out.”
Clayborne also said negotiations include discussion about such ways to help racetracks remain competitive by allowing slot machines or charging boats “impact fees” that would offset some racetrack losses.
His proposals resemble a measure introduced by Rep. Lou Lang, a Skokie Democrat, that also would create four new casinos and add slot machines at racetracks. But Madigan announced Wednesday that the House would need Republican support to approve an expansion of gaming, which is significant because the chamber’s Minority Leader Tom Cross of Oswego said again Thursday he doesn’t want to add new casinos. At the start of this session, he led House Republicans in proposing a $5 billion capital plan ($3 billion for roads and mass transit, $1.5 billion for schools and $500 million for higher education) paid for by allowing existing casinos to add gambling positions.
Senate President Emil Jones Jr. wouldn’t say, however, how he felt about new casinos when he walked out of budget negotiations in Gov. Rod Blagojevich's office today. All he said was, “I’ve been here long enough to know that nothing’s ever dead,” referring to the governor’s gross receipts tax. Blagojevich spokeswoman Rebecca Rauch said the governor is willing to consider gaming as a way to help advance his priorities: health care, education and making businesses pay “their fair share.”
Meanwhile, Clayborne also is revising a second measure that would exempt all Illinois casinos from the statewide smoking ban for five years. He recently tried to exempt only casinos operating near state borders as a way to help East St. Louis. He said the city estimates it would lose $2 million in revenue because people wouldn’t be able to smoke in its casinos. He expanded the scope to heighten the chance of his measure winning approval. “We’re looking to exempt all the boats because obviously we need the support of those legislators from [districts with casinos].”
Success in taming gang violence?
BY DEANESE WILLIAMS-HARRIS
A program aimed at decreasing gang violence is working wonders in some areas of the state but not others. State legislators discussed potential problems hindering the success of the CeaseFire project during a House committee Thursday. Under the program, ex-offenders and community activists are deployed into communities to mediate problems that may lead to gang violence.
Rep. Annazette Collins cited workers not getting paid on time and some getting fired in her district representing the East and West Garfield neighborhoods of Chicago. Program director Dr. Gary Slutkin has yet to look into those allegations, he said. Rep. La Shawn Ford said outreach workers in the Chicago Austin neighborhood don’t have a chance to work with probation and parole officers to help other ex-offenders stay out of prison.
Other lawmakers were very pleased with the difference the program has made in their districts. Rep. Robert Flider, a Mount Zion Democrat, spoke highly of the project and the work of outreach worker Brandy Brown, who turned her life around as an ex-offender. She works with school principals, church pastors, social agencies, probation officers and law enforcement to create strategies to prevent gang violence in Decatur. “I walk the streets from 7 a.m. to midnight helping ex-offenders, gang members and children stay out of jail,” she said.
A few legislators asked to work with the director to assimilate some of the things that are being done in Flider’s district. Rep. Esther Golar, who represents Chicago’s Englewood area, was interested in some of the Decatur strategies as she described recent gang violence as being “explosive.”
Statewide, the program since 2004 has mediated more than 900 gang conflicts and saved between $100 to $200 million that would have been spent on medical care for shooting victims and on incarcerating offenders.
Clayborne also said negotiations include discussion about such ways to help racetracks remain competitive by allowing slot machines or charging boats “impact fees” that would offset some racetrack losses.
His proposals resemble a measure introduced by Rep. Lou Lang, a Skokie Democrat, that also would create four new casinos and add slot machines at racetracks. But Madigan announced Wednesday that the House would need Republican support to approve an expansion of gaming, which is significant because the chamber’s Minority Leader Tom Cross of Oswego said again Thursday he doesn’t want to add new casinos. At the start of this session, he led House Republicans in proposing a $5 billion capital plan ($3 billion for roads and mass transit, $1.5 billion for schools and $500 million for higher education) paid for by allowing existing casinos to add gambling positions.
Senate President Emil Jones Jr. wouldn’t say, however, how he felt about new casinos when he walked out of budget negotiations in Gov. Rod Blagojevich's office today. All he said was, “I’ve been here long enough to know that nothing’s ever dead,” referring to the governor’s gross receipts tax. Blagojevich spokeswoman Rebecca Rauch said the governor is willing to consider gaming as a way to help advance his priorities: health care, education and making businesses pay “their fair share.”
Meanwhile, Clayborne also is revising a second measure that would exempt all Illinois casinos from the statewide smoking ban for five years. He recently tried to exempt only casinos operating near state borders as a way to help East St. Louis. He said the city estimates it would lose $2 million in revenue because people wouldn’t be able to smoke in its casinos. He expanded the scope to heighten the chance of his measure winning approval. “We’re looking to exempt all the boats because obviously we need the support of those legislators from [districts with casinos].”
Success in taming gang violence?
BY DEANESE WILLIAMS-HARRIS
A program aimed at decreasing gang violence is working wonders in some areas of the state but not others. State legislators discussed potential problems hindering the success of the CeaseFire project during a House committee Thursday. Under the program, ex-offenders and community activists are deployed into communities to mediate problems that may lead to gang violence.
Rep. Annazette Collins cited workers not getting paid on time and some getting fired in her district representing the East and West Garfield neighborhoods of Chicago. Program director Dr. Gary Slutkin has yet to look into those allegations, he said. Rep. La Shawn Ford said outreach workers in the Chicago Austin neighborhood don’t have a chance to work with probation and parole officers to help other ex-offenders stay out of prison.
Other lawmakers were very pleased with the difference the program has made in their districts. Rep. Robert Flider, a Mount Zion Democrat, spoke highly of the project and the work of outreach worker Brandy Brown, who turned her life around as an ex-offender. She works with school principals, church pastors, social agencies, probation officers and law enforcement to create strategies to prevent gang violence in Decatur. “I walk the streets from 7 a.m. to midnight helping ex-offenders, gang members and children stay out of jail,” she said.
A few legislators asked to work with the director to assimilate some of the things that are being done in Flider’s district. Rep. Esther Golar, who represents Chicago’s Englewood area, was interested in some of the Decatur strategies as she described recent gang violence as being “explosive.”
Statewide, the program since 2004 has mediated more than 900 gang conflicts and saved between $100 to $200 million that would have been spent on medical care for shooting victims and on incarcerating offenders.
Wednesday, May 23, 2007
No dice for taxes, but good hand for gaming
Something may be brewing, but it’s not a tax increase. The House doesn’t have enough votes to support an increase in the income or sales tax, and that basically defeats the core of the HB 750 “tax swap” proposal, House Speaker Michael Madigan said in a rare Statehouse press conference Wednesday afternoon. He blamed the lack of support on Gov. Rod Blagojevich’s repeated threats to veto any income or sales tax increases.
Madigan said a survey of his 65 House Democrats (Madigan makes the 66th) revealed his caucus’ priorities remain education and a capital plan for road and school construction projects. Health care didn’t rank so well, he said. But to fund the caucus priorities, only 38 members would support some level of increase in the income tax. Only 10 would be OK with an expansion of the sales tax. There’s slightly more support for closing “loopholes” in the corporate income tax code and for expanding gaming in some way. But as Madigan said, “They’re still somewhat short of the 60 votes required to pass.”
If the speaker got his way, he would like to expand gaming — but he wouldn’t specify whether that would mean opening new casinos, allow existing casinos to add more employees or add slot machines at racetracks. He said he has spoken to House Minority Leader Tom Cross of Oswego about the possibility of gaming, and both “have an interest” in using any new gaming revenue to fund a capital plan. Madigan also said he met with Senate President Emil Jones Jr. to share the survey results with him, and he said their meeting was “fruitful.” Again, no details. Jones’ office said he has no comment.
In terms of the “alternative minimum tax” for businesses we talked about in Tuesday’s blog, Madigan said he was still attempting to fully understand how it would work. The sale of the Illinois Lottery got minimal interest in the caucus. He would not comment about the possibility of a “zero-growth” budget that doesn’t include any new revenue or new programs.
Madigan said it was unusual that the legislators differ this greatly from the priorities by the governor. And while he said he hopes the legislature can wrap up business by the May 31 constitutional deadline, he would oblige if the governor called a special session this summer. Madigan expects to meet with the governor Thursday. We’re still waiting for a response from the governor’s office.
Madigan said a survey of his 65 House Democrats (Madigan makes the 66th) revealed his caucus’ priorities remain education and a capital plan for road and school construction projects. Health care didn’t rank so well, he said. But to fund the caucus priorities, only 38 members would support some level of increase in the income tax. Only 10 would be OK with an expansion of the sales tax. There’s slightly more support for closing “loopholes” in the corporate income tax code and for expanding gaming in some way. But as Madigan said, “They’re still somewhat short of the 60 votes required to pass.”
If the speaker got his way, he would like to expand gaming — but he wouldn’t specify whether that would mean opening new casinos, allow existing casinos to add more employees or add slot machines at racetracks. He said he has spoken to House Minority Leader Tom Cross of Oswego about the possibility of gaming, and both “have an interest” in using any new gaming revenue to fund a capital plan. Madigan also said he met with Senate President Emil Jones Jr. to share the survey results with him, and he said their meeting was “fruitful.” Again, no details. Jones’ office said he has no comment.
In terms of the “alternative minimum tax” for businesses we talked about in Tuesday’s blog, Madigan said he was still attempting to fully understand how it would work. The sale of the Illinois Lottery got minimal interest in the caucus. He would not comment about the possibility of a “zero-growth” budget that doesn’t include any new revenue or new programs.
Madigan said it was unusual that the legislators differ this greatly from the priorities by the governor. And while he said he hopes the legislature can wrap up business by the May 31 constitutional deadline, he would oblige if the governor called a special session this summer. Madigan expects to meet with the governor Thursday. We’re still waiting for a response from the governor’s office.
Tuesday, May 22, 2007
Something's brewing
It’s no secret that House Democrats reject the governor’s gross receipts tax, but they’re coming up with a new mix of tax increases and other revenue ideas that they think would be easier for lawmakers to support — considering the GRT has been painted by the opposition as mysterious, catastrophic for businesses and sure to trickle down to consumers.
Rep. Edward Acevedo, a Chicago Democrat and an assistant majority leader in the House, dropped this one before noon today: “There were other ideas that were going to be brought to the table probably by the end of the day today — something that you haven’t heard of yet.”
Their priorities? More money for education and more ways to make the state and the schools accountable for what’s done with that new money. Their other priorities: Medicaid payments, road and school construction and higher education, for instance. In sum, the House Dems’ priorities would cost about $1.2 billion in new revenue. To raise that, they’re looking at closing corporate loopholes or reforming the state’s corporate income tax.
From GRT to AMT? One of the revenue ideas would still target businesses. The alternative minimum tax is becoming more common nationwide, but it applies to individuals. It basically taxes high-income individuals that could otherwise skirt the federal personal income tax. That falls in line with Gov. Rod Blagojevich's justification for a gross receipts tax — that corporations are allowed by law to skirt the state's corporate income tax — but Blagojevich spokeswoman Rebecca Rausch said Monday night that the alternative minimum tax hasn’t been talked about by the governor’s office as an option.
What it AMT? It’s currently a flat tax on individuals. The federal government uses a different formula that excludes some tax breaks or deductions allowed by personal income tax. If it were applied to Illinois businesses, some would have a higher tax liability under the alternative minimum tax than they would under the state corporate income tax. Some would have less liability, but they’d pay whichever amount was higher.
The alternative minimum tax at the federal level wasn’t widely used before 2001, but Congress keeps approving tax cuts that change taxpayers’ liabilities. By 2010, the tax is expected to affect one-fifth of all taxpayers, according the Internal Revenue Service’s 2003 annual report to Congress.
Opponents call the alternative minimum tax problematic because it’s not adjusted for inflation, requiring Congress to increase the income levels each year. And opponents say it complicates the tax filing system. The Center on Budget and Policy Priorities has some more FAQs here.
House Dems aren’t sold, however. They have questions about it just like they had questions about the governor’s gross receipts tax. Rep. Gary Hannig, a Litchfield Democrat and deputy majority leader, says it’s easy to look at tax stats and see who’s not paying their “fair share,” but then you realize that the way the law would be written might subject a hog farmer in Macoupin County to bear a high tax burden. The Devil’s in the details of how an alternative minimum tax would be written into law, he says.
Why would House Dems support it? Rep. John Fritchey, a Chicago Democrat, says, “It is easier to apply, easier to understand, easier to ascertain the impact. Additionally, you don’t have the pyramiding problems that you have with GRT. And it is not a tax that is as readily passed on to the consumer.”
Could Republicans support an AMT in the tax mix? “It would not be well received,” says House Minority Leader Tom Cross of Oswego. “I’m not buying into the premise that we need a tax increase.”
The House and Senate GOP members have said all along that they oppose tax increases because they don’t believe the state needs to spend more than it already is, especially with such ballooning costs as Medicaid bills and state employee health care and pension benefits. But could the House GOP support a plan that would override the governor’s veto of any income or sales tax increases? “Depends what the situation is,” Cross says, adding they want to improve education funding, build new roads and take care of Medicaid payments just as much House Dems. “We’re for less spending and less growth. We know the reality is people aren’t talking, and we could get out of here with a minimal-growth budget. And we’re certainly willing to look at that.”
Hannig, however, says the state’s obligations by law (eg. pensions) and by contracts (eg. AFSCME and SIUE contacts for state employees) add up to about $1.3 billion, which exceeds the nearly $900 million natural revenue growth expected in fiscal year 2008.
What about Senate support? Few if any House members would vote for an income tax increase if it were known to be dead on arrival in the other chamber. Senate President Emil Jones Jr., however, “ran faster than the speed of light into the chamber, avoiding the press” before the Senate started session at noon today, according to Deanese. We’ll get back to you with Senate reaction.
We’ll also post more revenue ideas as they shape up in legislation this week.
Some Senate comments update
BY DEANESE WILLIAMS-HARRIS
Sen. Donne Trotter, a Chicago Democrat and budget point person, says the Senate members he’s heard from want some sort of revenue growth in the next state budget. On the other hand, he said, “There’s no consensus at this point. We’ve had no discussions.” Instead, he says they’ve been studying the proposals on the table before debating the issue.
Sen. Christine Radogno, a Lemont Republican and GOP budget negotiator, said the House’s departure from the governor’s health care and tax proposals reflect public opinion. While Radogno says health care for the uninsured is definitely an issue legislators are interested in, she also says the governor’s Illinois Covered plan is “way too big and has way too many unintended consequences.”
At this point in the session, Radogno says she sees two choices before the legislature: It could either approve a maintenance budget, which Republicans in both chambers favor, or consider a tax swap package that would increase the state’s income tax and expand the state sales tax in return for property tax relief. The likelihood of both chambers approving a tax swap is slim, she said. And because the existing language in HB 750 is vague, she doesn’t see it winning legislative approval in just nine days. “My guess is that we’ll get called back in the summer to address education funding and health care.”
Rep. Edward Acevedo, a Chicago Democrat and an assistant majority leader in the House, dropped this one before noon today: “There were other ideas that were going to be brought to the table probably by the end of the day today — something that you haven’t heard of yet.”
Their priorities? More money for education and more ways to make the state and the schools accountable for what’s done with that new money. Their other priorities: Medicaid payments, road and school construction and higher education, for instance. In sum, the House Dems’ priorities would cost about $1.2 billion in new revenue. To raise that, they’re looking at closing corporate loopholes or reforming the state’s corporate income tax.
From GRT to AMT? One of the revenue ideas would still target businesses. The alternative minimum tax is becoming more common nationwide, but it applies to individuals. It basically taxes high-income individuals that could otherwise skirt the federal personal income tax. That falls in line with Gov. Rod Blagojevich's justification for a gross receipts tax — that corporations are allowed by law to skirt the state's corporate income tax — but Blagojevich spokeswoman Rebecca Rausch said Monday night that the alternative minimum tax hasn’t been talked about by the governor’s office as an option.
What it AMT? It’s currently a flat tax on individuals. The federal government uses a different formula that excludes some tax breaks or deductions allowed by personal income tax. If it were applied to Illinois businesses, some would have a higher tax liability under the alternative minimum tax than they would under the state corporate income tax. Some would have less liability, but they’d pay whichever amount was higher.
The alternative minimum tax at the federal level wasn’t widely used before 2001, but Congress keeps approving tax cuts that change taxpayers’ liabilities. By 2010, the tax is expected to affect one-fifth of all taxpayers, according the Internal Revenue Service’s 2003 annual report to Congress.
Opponents call the alternative minimum tax problematic because it’s not adjusted for inflation, requiring Congress to increase the income levels each year. And opponents say it complicates the tax filing system. The Center on Budget and Policy Priorities has some more FAQs here.
House Dems aren’t sold, however. They have questions about it just like they had questions about the governor’s gross receipts tax. Rep. Gary Hannig, a Litchfield Democrat and deputy majority leader, says it’s easy to look at tax stats and see who’s not paying their “fair share,” but then you realize that the way the law would be written might subject a hog farmer in Macoupin County to bear a high tax burden. The Devil’s in the details of how an alternative minimum tax would be written into law, he says.
Why would House Dems support it? Rep. John Fritchey, a Chicago Democrat, says, “It is easier to apply, easier to understand, easier to ascertain the impact. Additionally, you don’t have the pyramiding problems that you have with GRT. And it is not a tax that is as readily passed on to the consumer.”
Could Republicans support an AMT in the tax mix? “It would not be well received,” says House Minority Leader Tom Cross of Oswego. “I’m not buying into the premise that we need a tax increase.”
The House and Senate GOP members have said all along that they oppose tax increases because they don’t believe the state needs to spend more than it already is, especially with such ballooning costs as Medicaid bills and state employee health care and pension benefits. But could the House GOP support a plan that would override the governor’s veto of any income or sales tax increases? “Depends what the situation is,” Cross says, adding they want to improve education funding, build new roads and take care of Medicaid payments just as much House Dems. “We’re for less spending and less growth. We know the reality is people aren’t talking, and we could get out of here with a minimal-growth budget. And we’re certainly willing to look at that.”
Hannig, however, says the state’s obligations by law (eg. pensions) and by contracts (eg. AFSCME and SIUE contacts for state employees) add up to about $1.3 billion, which exceeds the nearly $900 million natural revenue growth expected in fiscal year 2008.
What about Senate support? Few if any House members would vote for an income tax increase if it were known to be dead on arrival in the other chamber. Senate President Emil Jones Jr., however, “ran faster than the speed of light into the chamber, avoiding the press” before the Senate started session at noon today, according to Deanese. We’ll get back to you with Senate reaction.
We’ll also post more revenue ideas as they shape up in legislation this week.
Some Senate comments update
BY DEANESE WILLIAMS-HARRIS
Sen. Donne Trotter, a Chicago Democrat and budget point person, says the Senate members he’s heard from want some sort of revenue growth in the next state budget. On the other hand, he said, “There’s no consensus at this point. We’ve had no discussions.” Instead, he says they’ve been studying the proposals on the table before debating the issue.
Sen. Christine Radogno, a Lemont Republican and GOP budget negotiator, said the House’s departure from the governor’s health care and tax proposals reflect public opinion. While Radogno says health care for the uninsured is definitely an issue legislators are interested in, she also says the governor’s Illinois Covered plan is “way too big and has way too many unintended consequences.”
At this point in the session, Radogno says she sees two choices before the legislature: It could either approve a maintenance budget, which Republicans in both chambers favor, or consider a tax swap package that would increase the state’s income tax and expand the state sales tax in return for property tax relief. The likelihood of both chambers approving a tax swap is slim, she said. And because the existing language in HB 750 is vague, she doesn’t see it winning legislative approval in just nine days. “My guess is that we’ll get called back in the summer to address education funding and health care.”
Friday, May 18, 2007
Weekly round up
Budget no-no’s
After 15 senators signed a letter opposing a so-called no-growth budget, we’re left asking what the majority of lawmakers would support by the end of the scheduled session (May 31, less than 13 days away)? Their Senate President Senate Emil Jones Jr. reportedly says he also opposes a flat budget, but he hasn’t publicly backed down from his support of the governor’s $7.6 billion gross receipts tax, either. While we know 107 House members voted in opposition to the governor’s gross receipts tax concept, we still don’t know what their leader, House Speaker Michael Madigan, thinks is the most reliable, politically palatable way to bring in more revenue to the state. The House Democrats are expected to hash out their wish lists in a meeting next week. And the governor’s administration still sends daily e-mails about why his “Tax Fairness Plan” would solve the state’s “unfair” tax system.
College loans for immigrants
College-bound students who are immigrants from low- or middle-income families would be eligible for a state grant to help pay for college under a measure unanimously approved by the Senate Friday. The original version failed by one vote earlier this week. Sen. Martin Sandoval, a Chicago Democrat, says regardless of legal status, all students should have an opportunity to finance their educations. To be eligible for the annual $5,000 loans, students would have to be an Illinois resident and a citizen or a permanent resident, which requires them to have a visa. They’d also have to have a “B” average and come from a family with an income less than 250 percent of the federal poverty level.
Sandoval adds the state also should get back into the business of making loans directly to college students. He echoes presidential candidate U.S. Sen. Barack Obama’s recent statement that all federal student loans should be under the government rather than through federally guaranteed bank loans, which have been under national scrutiny for potential conflicts of interest lately.
Statewide smoking ban exemption?
Rep. Lou Lang, a Skokie Democrat and frequent sponsor of gaming legislation, said while he voted for the statewide smoking ban, he supports an effort to grant a five-year exemption for casinos that operate on Illinois’ borders. He said they’re at a severe disadvantage to casinos less than five miles over the Missouri or Indiana borders that allow people to smoke. He expects an uphill battle in pushing for the exemption. The effort is starting in the Senate, where it’s already being delayed by a bunch of procedural tactics to prevent the opening the crack to reversals before the actual ban is signed by the governor.
A call for fiscal restraint ignored
Despite Senate Minority Leader Frank Watson’s pleas with legislators to halt to state overspending, the Senate joined the House in approving a measure that would start a pilot project to provide health care for the uninsured in Kane County. The program is designed provide additional health services to people who don’t qualify for any other form of public aid. “We don’t have a revenue problem,” Watson said, urging his peers to reject the idea. “We have a spending problem.”
However, Sen. Linda Holmes, an Aurora Democrat, said recent closing of clinics and the slashing of services used by the uninsured and the underinsured increase the need for drug assistance, diagnostic testing and extra state aid. A lot of Kane County residents use clinics in neighboring Cook County, but Cook County Board president Todd Stroger proposed closing more than a dozen medical clinics and cutting some health services provided by Cook County hospital earlier this year.
HIV testing gains momentum
HIV testing and counseling may soon become a routine part of prenatal care under a measure approved by both chambers. If the governor signs it, all expectant mothers would receive counseling prior to being tested. If she opted out of testing, her refusal would be documented in her medical records.
In another step for HIV testing, the House approved a measure that would make HIV testing a part of annual physicals. Doctors would offer the testing during routine blood tests. Patients would have to consent before being tested. However, refusals would be documented in their medical records. Earlier this session, Ford faced a lot of opposition from AIDS advocacy groups that were concerned that the measure would mandate testing, taking the choice away from patients. The Chicago Democrat compromised.
Prison time for Internet creeps
Sexual predators caught engaging in illicit chats with minors on the Internet would get sent to prison if the governor signs a TEXT
http://www.ilga.gov/legislation/billstatus.asp?DocNum=2858&GAID=9&GA=95&DocTypeID=HB&LegID=31692&SessionID=51 measure now on his desk. Such predators would face felony charges for using the Internet to lure underage victims or anyone they believed to be a child. “Unfortunately, sexual predators are using this new technology as a means to gain access to children,” says Rep. Tom Cross in a press release. “This bill will help law enforcement to intervene and prevent meetings before they are arranged.”
Oprah Winfrey Week
Oprah Winfrey will get an entire week of observance in Illinois starting next February’s first week of Black History Month. Both chambers approved a measure to recognize her accomplishments in and contributions to media, publishing, film, philanthropy, education, health and fitness.
After 15 senators signed a letter opposing a so-called no-growth budget, we’re left asking what the majority of lawmakers would support by the end of the scheduled session (May 31, less than 13 days away)? Their Senate President Senate Emil Jones Jr. reportedly says he also opposes a flat budget, but he hasn’t publicly backed down from his support of the governor’s $7.6 billion gross receipts tax, either. While we know 107 House members voted in opposition to the governor’s gross receipts tax concept, we still don’t know what their leader, House Speaker Michael Madigan, thinks is the most reliable, politically palatable way to bring in more revenue to the state. The House Democrats are expected to hash out their wish lists in a meeting next week. And the governor’s administration still sends daily e-mails about why his “Tax Fairness Plan” would solve the state’s “unfair” tax system.
College loans for immigrants
College-bound students who are immigrants from low- or middle-income families would be eligible for a state grant to help pay for college under a measure unanimously approved by the Senate Friday. The original version failed by one vote earlier this week. Sen. Martin Sandoval, a Chicago Democrat, says regardless of legal status, all students should have an opportunity to finance their educations. To be eligible for the annual $5,000 loans, students would have to be an Illinois resident and a citizen or a permanent resident, which requires them to have a visa. They’d also have to have a “B” average and come from a family with an income less than 250 percent of the federal poverty level.
Sandoval adds the state also should get back into the business of making loans directly to college students. He echoes presidential candidate U.S. Sen. Barack Obama’s recent statement that all federal student loans should be under the government rather than through federally guaranteed bank loans, which have been under national scrutiny for potential conflicts of interest lately.
Statewide smoking ban exemption?
Rep. Lou Lang, a Skokie Democrat and frequent sponsor of gaming legislation, said while he voted for the statewide smoking ban, he supports an effort to grant a five-year exemption for casinos that operate on Illinois’ borders. He said they’re at a severe disadvantage to casinos less than five miles over the Missouri or Indiana borders that allow people to smoke. He expects an uphill battle in pushing for the exemption. The effort is starting in the Senate, where it’s already being delayed by a bunch of procedural tactics to prevent the opening the crack to reversals before the actual ban is signed by the governor.
A call for fiscal restraint ignored
Despite Senate Minority Leader Frank Watson’s pleas with legislators to halt to state overspending, the Senate joined the House in approving a measure that would start a pilot project to provide health care for the uninsured in Kane County. The program is designed provide additional health services to people who don’t qualify for any other form of public aid. “We don’t have a revenue problem,” Watson said, urging his peers to reject the idea. “We have a spending problem.”
However, Sen. Linda Holmes, an Aurora Democrat, said recent closing of clinics and the slashing of services used by the uninsured and the underinsured increase the need for drug assistance, diagnostic testing and extra state aid. A lot of Kane County residents use clinics in neighboring Cook County, but Cook County Board president Todd Stroger proposed closing more than a dozen medical clinics and cutting some health services provided by Cook County hospital earlier this year.
HIV testing gains momentum
HIV testing and counseling may soon become a routine part of prenatal care under a measure approved by both chambers. If the governor signs it, all expectant mothers would receive counseling prior to being tested. If she opted out of testing, her refusal would be documented in her medical records.
In another step for HIV testing, the House approved a measure that would make HIV testing a part of annual physicals. Doctors would offer the testing during routine blood tests. Patients would have to consent before being tested. However, refusals would be documented in their medical records. Earlier this session, Ford faced a lot of opposition from AIDS advocacy groups that were concerned that the measure would mandate testing, taking the choice away from patients. The Chicago Democrat compromised.
Prison time for Internet creeps
Sexual predators caught engaging in illicit chats with minors on the Internet would get sent to prison if the governor signs a TEXT
http://www.ilga.gov/legislation/billstatus.asp?DocNum=2858&GAID=9&GA=95&DocTypeID=HB&LegID=31692&SessionID=51 measure now on his desk. Such predators would face felony charges for using the Internet to lure underage victims or anyone they believed to be a child. “Unfortunately, sexual predators are using this new technology as a means to gain access to children,” says Rep. Tom Cross in a press release. “This bill will help law enforcement to intervene and prevent meetings before they are arranged.”
Oprah Winfrey Week
Oprah Winfrey will get an entire week of observance in Illinois starting next February’s first week of Black History Month. Both chambers approved a measure to recognize her accomplishments in and contributions to media, publishing, film, philanthropy, education, health and fitness.
Wednesday, May 16, 2007
Mayor Daley rocks Springfield
Well, not really, but charter public school students from Chicago gave Mayor Richard Daley the star treatment —pictures, screeches and all — when he visited the Capitol Wednesday afternoon. Daley was in Springfield to meet with state lawmakers and to host the annual Taste of Chicago in Springfield. After meeting with each Democratic and Republican leader of both chambers for a brief, and I mean brief, meeting, he spoke to Democratic lawmakers in the afternoon.
“You could have heard a pin drop in that room because he’s that kind of force,” said Rep. Lou Lang, a Skokie Democrat in the afternoon meeting. Although, he added, “I don’t think we heard anything in that room that was surprising.” He said the mayor is anxious to make sure that education, particularly in Chicago, has a “bigger bite of the apple” and that funding comes through for mass transit and other infrastructure needs.
The governor, the mayor and Senate President Emil Jones Jr. briefly met this evening. When they came out of the governor’s office, they only joked about the Chicago Cubs vs. White Sox baseball rival, not about the $55 billion or more state budget in limbo with less than 12 days left in the scheduled spring session.
In the wake of a dismal House vote opposing the governor’s gross receipts tax proposal, such other revenue ideas as gaming are entering the mix. Lang, the chief sponsor of gaming legislation that would create four casinos in the Chicago area, isn’t giving up on his idea that could generate between $2 billion and $3 billion a year if approved. “The time will come in the not too distant future that we’ll be taking a vote on that legislation, and I think it’ll have a reasonable chance of passing,” he said. He’s tried and failed multiple times before, but he said he thinks “the demise of the gross receipts tax is actually going to be helpful in my effort to pass this.”
By Deanese Williams-Harris
Meanwhile, lawmakers talked about the governor’s attempted ban on violent video games for minors and its cost to the state in legal fees. We wrote about it in our May issue (see page 10).
Bob Greenley, the governor’s deputy chief of staff, and Matt Ryan, the governor’s deputy general counsel, sat in the hot seat as they testified to a House committee that the plaintiff's legal fees amounted to more than $500,000, and multiple state agencies footed the bill.
“How do we raid government agency [funds] to pay for legal fees?” said committee chairman Rep. Jack Franks, a Woodstock Democrat. “We’ve spent over a million dollars on a glorified governor press release.”
Rep. Robert Pritchard, a Sycamore Republican, rehashed a floor debate where legislators argued that the law violated First Amendment rights. In committee, Ryan said a similar measure in Indiana was found unconstitutional before Blagojevich drafted his ban, but the governor pursued it anyway.
Committee members repeatedly said the governor’s office and the attorney general’s office should have been responsible for the legal fees. Greenley said the fees were paid out of a general state fund, which he says is legal.
“It may be legal, but it doesn’t seem to be good policy,” Franks said.
The committee will meet again once the administration submits more information to the committee.
“You could have heard a pin drop in that room because he’s that kind of force,” said Rep. Lou Lang, a Skokie Democrat in the afternoon meeting. Although, he added, “I don’t think we heard anything in that room that was surprising.” He said the mayor is anxious to make sure that education, particularly in Chicago, has a “bigger bite of the apple” and that funding comes through for mass transit and other infrastructure needs.
The governor, the mayor and Senate President Emil Jones Jr. briefly met this evening. When they came out of the governor’s office, they only joked about the Chicago Cubs vs. White Sox baseball rival, not about the $55 billion or more state budget in limbo with less than 12 days left in the scheduled spring session.
In the wake of a dismal House vote opposing the governor’s gross receipts tax proposal, such other revenue ideas as gaming are entering the mix. Lang, the chief sponsor of gaming legislation that would create four casinos in the Chicago area, isn’t giving up on his idea that could generate between $2 billion and $3 billion a year if approved. “The time will come in the not too distant future that we’ll be taking a vote on that legislation, and I think it’ll have a reasonable chance of passing,” he said. He’s tried and failed multiple times before, but he said he thinks “the demise of the gross receipts tax is actually going to be helpful in my effort to pass this.”
By Deanese Williams-Harris
Meanwhile, lawmakers talked about the governor’s attempted ban on violent video games for minors and its cost to the state in legal fees. We wrote about it in our May issue (see page 10).
Bob Greenley, the governor’s deputy chief of staff, and Matt Ryan, the governor’s deputy general counsel, sat in the hot seat as they testified to a House committee that the plaintiff's legal fees amounted to more than $500,000, and multiple state agencies footed the bill.
“How do we raid government agency [funds] to pay for legal fees?” said committee chairman Rep. Jack Franks, a Woodstock Democrat. “We’ve spent over a million dollars on a glorified governor press release.”
Rep. Robert Pritchard, a Sycamore Republican, rehashed a floor debate where legislators argued that the law violated First Amendment rights. In committee, Ryan said a similar measure in Indiana was found unconstitutional before Blagojevich drafted his ban, but the governor pursued it anyway.
Committee members repeatedly said the governor’s office and the attorney general’s office should have been responsible for the legal fees. Greenley said the fees were paid out of a general state fund, which he says is legal.
“It may be legal, but it doesn’t seem to be good policy,” Franks said.
The committee will meet again once the administration submits more information to the committee.
Thursday, May 10, 2007
Zip, zero, zilch
By Deanese Williams-Harris
Not a single representative voted to support Gov. Rod Blagojevich’s proposed gross receipts tax, the crux of his spending plans for next year. Signs saying, “No means no, Governor,” were taped to the desks as the House voted on a nonbinding resolution asking whether members were for or against the tax plan. Zero voted in support, 107 voted against and seven voted present.
A silent observer was Sen. James Meeks, the Chicago Democrat co-sponsoring an alternative tax plan, HB 750, with Rep. David Miller, a Lynwood Democrat. It would swap higher income taxes and sales taxes for lower property taxes. Miller said the vote was a sign that members are willing to look at a different revenue source to fund education and to meet the state’s current obligations. “The GRT concept has been defeated today,” he said. “We need to look at an alternative plan, and I believe that plan is 750.”
As Blagojevich said Thursday, however, he would veto any increase in income or sales taxes as called for in 750. Miller didn’t seem too concerned because he said lawmakers could override the governor’s veto if they gained enough votes.
Before the House took the vote, Blagojevich issued a statement urging them to vote against the GRT resolution. “Considering that this meaningful dialogue was initiated just 24 hours ago, it would be premature to conclude the discussion today and ask members to make a decision before they have an opportunity to get answers to their questions and offer their ideas,” Blagojevich said. “So we are asking all members to vote ‘no’ to send a clear message that this issue is too important for a rush to judgment on a non-binding resolution.”
Abby Ottenhoff, a governor’s spokeswoman, said she wasn’t surprised by today’s outcome. “It isn’t a true reflection of what the long-term outcome will be,” she said. Regarding the questions House members asked during Wednesday’s special committee on the GRT, Ottenhoff said the governor’s office expects to have written answers ready in a few days.
Feds tag another kickback
By Bethany Carson
Former Chicago Ald. Edward Vrdolyak was indicted on federal fraud charges for allegedly scheming with one of Gov. Rod Blagojevich’s appointees, Chicago businessman Stuart Levine. The two allegedly worked in “behind-the-scenes manipulation” to pad their own pockets at the expense of the Chicago Medical School, according to a release from U.S. Attorney Patrick Fitzgerald’s office.
Levine already pleaded guilty last fall and is working with the feds in an ongoing investigation called “Operation Board Games.” The governor’s chief fund-raiser, Tony Rezko, also was indicted and pleaded not guilty in the same investigation. You can read more in my October 2006 blogs and about Operation Board Games here.
Vrdolyak’s indictment says he worked with Levine between 2002 and 2006 to steer a contract involving property owned by the Chicago Medical School, where Levine sat on the board of trustees. The alleged scheme was that Vrdolyak, an attorney, would solicit a certain Chicago real estate company, Smithfield Properties Development, to turn the medical school’s property into condominiums. And Levine would use his political influence on the medical school board to ensure the job was given to Smithfield. The deal would result in a $1.5 million payment to Vrdolyak once the condos were finished, and Vrdolyak would give a chunk to Levine. They never got their money, the prosecutor’s office says, because the condos aren’t finished and the investigation got in the way.
If convicted, Vrdolyak would face a maximum 20 years in prison for each count of mail fraud and wire fraud and another 10 years for one count of bribery. He was charged with four counts total. He’ll be arraigned in Chicago at a later date.
Not a single representative voted to support Gov. Rod Blagojevich’s proposed gross receipts tax, the crux of his spending plans for next year. Signs saying, “No means no, Governor,” were taped to the desks as the House voted on a nonbinding resolution asking whether members were for or against the tax plan. Zero voted in support, 107 voted against and seven voted present.
A silent observer was Sen. James Meeks, the Chicago Democrat co-sponsoring an alternative tax plan, HB 750, with Rep. David Miller, a Lynwood Democrat. It would swap higher income taxes and sales taxes for lower property taxes. Miller said the vote was a sign that members are willing to look at a different revenue source to fund education and to meet the state’s current obligations. “The GRT concept has been defeated today,” he said. “We need to look at an alternative plan, and I believe that plan is 750.”
As Blagojevich said Thursday, however, he would veto any increase in income or sales taxes as called for in 750. Miller didn’t seem too concerned because he said lawmakers could override the governor’s veto if they gained enough votes.
Before the House took the vote, Blagojevich issued a statement urging them to vote against the GRT resolution. “Considering that this meaningful dialogue was initiated just 24 hours ago, it would be premature to conclude the discussion today and ask members to make a decision before they have an opportunity to get answers to their questions and offer their ideas,” Blagojevich said. “So we are asking all members to vote ‘no’ to send a clear message that this issue is too important for a rush to judgment on a non-binding resolution.”
Abby Ottenhoff, a governor’s spokeswoman, said she wasn’t surprised by today’s outcome. “It isn’t a true reflection of what the long-term outcome will be,” she said. Regarding the questions House members asked during Wednesday’s special committee on the GRT, Ottenhoff said the governor’s office expects to have written answers ready in a few days.
Feds tag another kickback
By Bethany Carson
Former Chicago Ald. Edward Vrdolyak was indicted on federal fraud charges for allegedly scheming with one of Gov. Rod Blagojevich’s appointees, Chicago businessman Stuart Levine. The two allegedly worked in “behind-the-scenes manipulation” to pad their own pockets at the expense of the Chicago Medical School, according to a release from U.S. Attorney Patrick Fitzgerald’s office.
Levine already pleaded guilty last fall and is working with the feds in an ongoing investigation called “Operation Board Games.” The governor’s chief fund-raiser, Tony Rezko, also was indicted and pleaded not guilty in the same investigation. You can read more in my October 2006 blogs and about Operation Board Games here.
Vrdolyak’s indictment says he worked with Levine between 2002 and 2006 to steer a contract involving property owned by the Chicago Medical School, where Levine sat on the board of trustees. The alleged scheme was that Vrdolyak, an attorney, would solicit a certain Chicago real estate company, Smithfield Properties Development, to turn the medical school’s property into condominiums. And Levine would use his political influence on the medical school board to ensure the job was given to Smithfield. The deal would result in a $1.5 million payment to Vrdolyak once the condos were finished, and Vrdolyak would give a chunk to Levine. They never got their money, the prosecutor’s office says, because the condos aren’t finished and the investigation got in the way.
If convicted, Vrdolyak would face a maximum 20 years in prison for each count of mail fraud and wire fraud and another 10 years for one count of bribery. He was charged with four counts total. He’ll be arraigned in Chicago at a later date.
Wednesday, May 09, 2007
GRT debate or lack thereof
We only have to wait until Thursday to find out whether Gov. Rod Blagojevich’s plan for a new gross receipts tax will have enough votes to pass the House. House Speaker Michael Madigan said he's introducing a resolution that would ask whether each House member is for or against the GRT. And he said he'd call the resolution for a vote Thursday.
That opened Wednesday’s special committee of the entire House to debate the GRT, which House Minority Leader Tom Cross predicts will die in the chamber. Expected co-sponsor the resolution, Cross said he predicts the resolution would prove GRT lacks the votes regardless of the tinkering approved by a Senate committee Tuesday. He added that the only thing that would improve the GRT proposal is if it were eliminated all together. “Get rid of it,” he said.
Because it’s only a resolution, it’s nonbinding, but it would send a clear message to the governor about how far his legislation needs to go before he gets his wish list. Blagojevich said Wednesday morning that he’s eager to compromise, but only within his GRT plan and not other tax proposals.
All of his plans, by the way — education reform, state-sponsored health care and a capital plan for road and school construction — completely depend on the GRT becoming law. Blagojevich says no other revenue ideas would generate enough money to prevent having to cut spending: i.e. essential government services.
He warned legislators that if they sent him an increase in the income tax and extension of the sales tax, as proposed in the alternative “tax swap” plan in HB 750, they wouldn’t have big utilities to blame for increased bills as they have in the electricity rate debate. But more importantly, he said, he philosophically opposes swapping property tax relief for higher income and sales taxes. “If you pass it, I won’t sign it. If you pass it, I will veto it,” he said in his 21-minute opening statement. “It’s an unfair burden on people. It’s regressive, and people already are paying too much.”
The scene during this morning’s portion of the anticipated eight-hour hearing was interesting. Blagojevich wasn’t at a podium as he usually is during State of the State addresses each year. He sat at a folding table in the front of the chamber, so he had to face the representatives from a slight decline on the floor as they asked him questions: 26 minutes of questions from Republicans and 26 minutes from Democrats.
Blagojevich answered some questions directly, but the proceedings were so rushed that lawmakers resorted to asking the questions but allowing the governor to respond later in writing. GOP members said they’d share the answers with the press, but that simply repeats the pre-packaged answers that have been filtered by a select few communicators. I’d rather the real-time debate.
We’ll gather more reaction from legislators soon, but one point by Rep. David Miller, the Chicago Democrat sponsoring HB 750’s tax swap, is interesting: What commitment does the administration make for the GRT revenue generated in the second and third and fourth year of the tax?
The POWER rage
by Deanese Williams-Harris
ComEd released its proposed rate relief package Tuesday; however, a day later, angry Ameren and ComEd customers packed the Statehouse for a rally of POWER, which means People Organized and Working for Electric Relief.
A crowd of seniors repeatedly yelled, “We need relief. We need relief,” as they banged on cardboard boxes. Some chanted through orange caution cones. Several held homemade signs. One senior in a wheelchair held a sign that said, “The IRS takes your shirt; Ameren takes your pants too,” on one side and “When are those fat cats ever satisfied?” on the other.
Some legislators managed to slip out of the Committee of the Whole to share a few words with the crowd. “They said we would have $1 to $2 increases on our bills,” said Rep. Dan Reitz, a Steeleville Republican. “Maybe it was a misprint because our bills have gone up 200 [percent] to 300 percent.”
Same story, different company
by Deanese Williams-Harris
ComEd says it will move forward with a $64 million rate relief program for its customers. Then again, if the legislature approves a one-year freeze on electricity rates, the utility would snatch the program off the table. That’s exactly what Ameren Illinois did earlier this session.
ComEd filed the rate relief plan with the Illinois Commerce Commission and says there will be a public hearing later this month. The $64 million plan would spread out over three years, with $44 million this year and $20 million each in 2008 and 2009. It offers a $10 monthly credit to relieve summer bills. It also would put money into other programs to help low-income residents.
If a rate freeze is signed into law anyway, ComEd showed no qualms about taking action. “We will go to federal court,” said Bob McDonald, chief financial officer. “We think we have a very solid case.” If that doesn’t work, he said the next step for the company would be to file bankruptcy.
That opened Wednesday’s special committee of the entire House to debate the GRT, which House Minority Leader Tom Cross predicts will die in the chamber. Expected co-sponsor the resolution, Cross said he predicts the resolution would prove GRT lacks the votes regardless of the tinkering approved by a Senate committee Tuesday. He added that the only thing that would improve the GRT proposal is if it were eliminated all together. “Get rid of it,” he said.
Because it’s only a resolution, it’s nonbinding, but it would send a clear message to the governor about how far his legislation needs to go before he gets his wish list. Blagojevich said Wednesday morning that he’s eager to compromise, but only within his GRT plan and not other tax proposals.
All of his plans, by the way — education reform, state-sponsored health care and a capital plan for road and school construction — completely depend on the GRT becoming law. Blagojevich says no other revenue ideas would generate enough money to prevent having to cut spending: i.e. essential government services.
He warned legislators that if they sent him an increase in the income tax and extension of the sales tax, as proposed in the alternative “tax swap” plan in HB 750, they wouldn’t have big utilities to blame for increased bills as they have in the electricity rate debate. But more importantly, he said, he philosophically opposes swapping property tax relief for higher income and sales taxes. “If you pass it, I won’t sign it. If you pass it, I will veto it,” he said in his 21-minute opening statement. “It’s an unfair burden on people. It’s regressive, and people already are paying too much.”
The scene during this morning’s portion of the anticipated eight-hour hearing was interesting. Blagojevich wasn’t at a podium as he usually is during State of the State addresses each year. He sat at a folding table in the front of the chamber, so he had to face the representatives from a slight decline on the floor as they asked him questions: 26 minutes of questions from Republicans and 26 minutes from Democrats.
Blagojevich answered some questions directly, but the proceedings were so rushed that lawmakers resorted to asking the questions but allowing the governor to respond later in writing. GOP members said they’d share the answers with the press, but that simply repeats the pre-packaged answers that have been filtered by a select few communicators. I’d rather the real-time debate.
We’ll gather more reaction from legislators soon, but one point by Rep. David Miller, the Chicago Democrat sponsoring HB 750’s tax swap, is interesting: What commitment does the administration make for the GRT revenue generated in the second and third and fourth year of the tax?
The POWER rage
by Deanese Williams-Harris
ComEd released its proposed rate relief package Tuesday; however, a day later, angry Ameren and ComEd customers packed the Statehouse for a rally of POWER, which means People Organized and Working for Electric Relief.
A crowd of seniors repeatedly yelled, “We need relief. We need relief,” as they banged on cardboard boxes. Some chanted through orange caution cones. Several held homemade signs. One senior in a wheelchair held a sign that said, “The IRS takes your shirt; Ameren takes your pants too,” on one side and “When are those fat cats ever satisfied?” on the other.
Some legislators managed to slip out of the Committee of the Whole to share a few words with the crowd. “They said we would have $1 to $2 increases on our bills,” said Rep. Dan Reitz, a Steeleville Republican. “Maybe it was a misprint because our bills have gone up 200 [percent] to 300 percent.”
Same story, different company
by Deanese Williams-Harris
ComEd says it will move forward with a $64 million rate relief program for its customers. Then again, if the legislature approves a one-year freeze on electricity rates, the utility would snatch the program off the table. That’s exactly what Ameren Illinois did earlier this session.
ComEd filed the rate relief plan with the Illinois Commerce Commission and says there will be a public hearing later this month. The $64 million plan would spread out over three years, with $44 million this year and $20 million each in 2008 and 2009. It offers a $10 monthly credit to relieve summer bills. It also would put money into other programs to help low-income residents.
If a rate freeze is signed into law anyway, ComEd showed no qualms about taking action. “We will go to federal court,” said Bob McDonald, chief financial officer. “We think we have a very solid case.” If that doesn’t work, he said the next step for the company would be to file bankruptcy.
Friday, May 04, 2007
Round 'em up
This first week of May kept us on our toes. Lawmakers endorsed or rejected the governor’s budget plans, tons of teachers rallied at the Capitol, the speaker calls a special committee hearing and interesting legislation advanced. We also had some deadlines to meet, so we couldn’t get to as many things as we would have liked to. But here’s our weekly recap:
GRT “has no life in the House:”
Who’s for and who’s against Gov. Rod Blagojevich’s gross receipts tax? In the legislature, House floor debate this week circled around a GOP-drafted resolution opposing the GRT, saying, “This proposal is poor tax policy, criticized by economists and economic development experts across the nation as exactly the direction Illinois should not go if we hope to enjoy a growing economy.” More than half of House members, including Democrats and Republicans, signed on. “Gross receipts tax has no life in the House,” said Minority Leader Tom Cross of Oswego. It’s a non-binding resolution that never got called for a vote, but it sends a strong signal that the governor lacks the votes to pass his GRT plan as is.
The Latino Caucus previously issued a letter opposing the GRT and supporting the alternative tax swap plan designed to reform education funding. On the House floor this week, Rep. Susana Mendoza, a Chicago Democrat, said it’s not good for the state’s business climate when companies are seen as “fat cats” when they’re not. “We need to believe in responsible legislation,” she said. She took jabs at the governor by saying lawmakers should “govern by governing and not by press release,” adding they should “stay here as long as it takes and get it right the first time.”
Rep. David Miller, sponsor of HB 750 tax swap plan, called his peers out as using “political rhetoric” to avoid making difficult decisions. “If you’re not for GRT, [and] you’re not for 750, what are you for?” he said on the floor. “How are we going to fund a fair system for education?”
A strong Blagojevich ally, Democrat Rep. Jay Hoffman of Collinsville, defended the governor’s plans by saying those who signed on to the anti-GRT resolution are ignoring that they all have the same priorities. “We may disagree with the plans, but we’ve all said it over and over again,” that they’re fighting to improve education funding, health care access, infrastructure and $41 billion pension liabilities.
On the same day, thousands of teachers marched to the Capitol to rally in support of more education funding. But the teachers' union leaders stopped short of endorsing any of the tax plans on the table. The lack of GRT support in the House, however, means something’s got to give. So House Speaker Michael Madigan called a rare committee of the entire chamber to debate tax reform next week. He didn’t take a stance on the GRT, either, but he has let the tax swap proposal get some debate time among House members.
Legislative roundup
Undocumented immigrants are one step closer to being able to drive legally with a driver’s certificate. A Senate committee approved a measure that would allow people without Social Security cards to get the certificate, which would enable them to get car insurance and learn the rules of the road, supporters say. Opponents say the measure would reward people for breaking the law; however, lawmakers sponsoring the measure say the bill is strictly about improving public safety. The House already approved the measure.
The full Senate approved a measure that would provide public funding for Illinois judicial campaigns. The measure, sponsored by Sen. Kwame Raoul, a Chicago Democrat, also would set mandatory contribution limits for judicial races. In a press release, state Comptroller Dan Hynes urged the House to follow the Senate’s lead. “This public financing initiative will help maintain an independent judiciary and help eliminate financial barriers to attaining office,” Hynes said. The legislation comes in the wake of public scrutiny over the millions of dollars spent during the last Supreme Court judicial race between appellate court Judge Gordon Maag and Supreme Court Justice Lloyd Karmeier.
GRT “has no life in the House:”
Who’s for and who’s against Gov. Rod Blagojevich’s gross receipts tax? In the legislature, House floor debate this week circled around a GOP-drafted resolution opposing the GRT, saying, “This proposal is poor tax policy, criticized by economists and economic development experts across the nation as exactly the direction Illinois should not go if we hope to enjoy a growing economy.” More than half of House members, including Democrats and Republicans, signed on. “Gross receipts tax has no life in the House,” said Minority Leader Tom Cross of Oswego. It’s a non-binding resolution that never got called for a vote, but it sends a strong signal that the governor lacks the votes to pass his GRT plan as is.
The Latino Caucus previously issued a letter opposing the GRT and supporting the alternative tax swap plan designed to reform education funding. On the House floor this week, Rep. Susana Mendoza, a Chicago Democrat, said it’s not good for the state’s business climate when companies are seen as “fat cats” when they’re not. “We need to believe in responsible legislation,” she said. She took jabs at the governor by saying lawmakers should “govern by governing and not by press release,” adding they should “stay here as long as it takes and get it right the first time.”
Rep. David Miller, sponsor of HB 750 tax swap plan, called his peers out as using “political rhetoric” to avoid making difficult decisions. “If you’re not for GRT, [and] you’re not for 750, what are you for?” he said on the floor. “How are we going to fund a fair system for education?”
A strong Blagojevich ally, Democrat Rep. Jay Hoffman of Collinsville, defended the governor’s plans by saying those who signed on to the anti-GRT resolution are ignoring that they all have the same priorities. “We may disagree with the plans, but we’ve all said it over and over again,” that they’re fighting to improve education funding, health care access, infrastructure and $41 billion pension liabilities.
On the same day, thousands of teachers marched to the Capitol to rally in support of more education funding. But the teachers' union leaders stopped short of endorsing any of the tax plans on the table. The lack of GRT support in the House, however, means something’s got to give. So House Speaker Michael Madigan called a rare committee of the entire chamber to debate tax reform next week. He didn’t take a stance on the GRT, either, but he has let the tax swap proposal get some debate time among House members.
Legislative roundup
Undocumented immigrants are one step closer to being able to drive legally with a driver’s certificate. A Senate committee approved a measure that would allow people without Social Security cards to get the certificate, which would enable them to get car insurance and learn the rules of the road, supporters say. Opponents say the measure would reward people for breaking the law; however, lawmakers sponsoring the measure say the bill is strictly about improving public safety. The House already approved the measure.
The full Senate approved a measure that would provide public funding for Illinois judicial campaigns. The measure, sponsored by Sen. Kwame Raoul, a Chicago Democrat, also would set mandatory contribution limits for judicial races. In a press release, state Comptroller Dan Hynes urged the House to follow the Senate’s lead. “This public financing initiative will help maintain an independent judiciary and help eliminate financial barriers to attaining office,” Hynes said. The legislation comes in the wake of public scrutiny over the millions of dollars spent during the last Supreme Court judicial race between appellate court Judge Gordon Maag and Supreme Court Justice Lloyd Karmeier.
Tuesday, May 01, 2007
Smoking ban goes to the guv
It actually happened. The proposal for a statewide smoking ban scored overwhelming approval in the House Tuesday, with 73 lawmakers voting in favor of the ban and 42 voting against it. Both the House and the Senate approved the same measure, sending it to the governor's desk. If Blagojevich signs it into law as expected, businesses would have until January 1 to comply. All bars, riverboats, restaurants and bowling alleys would be smoke-free.
Numerous municipalities, including Springfield, have enacted smoking bans, but opponents say businesses operating just outside city limits or in unincorporated areas gain an unfair advantage by not having to comply with the local smoking bans. The statewide legislation approved May 1 aims to even the playing field for businesses in all communities.
Smoking bans in other states met customer opposition after winning approval. However, Kathy Drea, director of public policy for the American Lung Association, says this type of reaction should blow over in a matter of weeks.
"People generally adapt very quickly, even in Springfield,” she said immediately after the winning vote. “In the beginning, there was a lot turmoil, but people adapted. And that's what will happen in the state, too. This is a homerun for the residents of Illinois."
Numerous municipalities, including Springfield, have enacted smoking bans, but opponents say businesses operating just outside city limits or in unincorporated areas gain an unfair advantage by not having to comply with the local smoking bans. The statewide legislation approved May 1 aims to even the playing field for businesses in all communities.
Smoking bans in other states met customer opposition after winning approval. However, Kathy Drea, director of public policy for the American Lung Association, says this type of reaction should blow over in a matter of weeks.
"People generally adapt very quickly, even in Springfield,” she said immediately after the winning vote. “In the beginning, there was a lot turmoil, but people adapted. And that's what will happen in the state, too. This is a homerun for the residents of Illinois."
Friday, April 27, 2007
“Bingo-bango” legislative roundup
A lot of drama and legislation zipped through the Capitol this week, so Deanese and I compiled a quick list of interesting action in addition to the stuff we wrote about earlier this week:
Sen. Gary Forby’s proposed minimum one-year electricity rate freeze for Ameren Illinois customers won approval from a House committee, but it’s not expected to offer relief to customers anywhere in the state any time soon. At the wishes of House Speaker Michael Madigan, Democrats changed it to include Commonwealth Edison and effectively denied the wishes Senate President Emil Jones Jr. Republican Rep. Bill Black of Danville, the original House sponsor who was legislatively shoved aside by House Democrats, said he reached the limits of his frustration. “We’re tired of this tennis game between the president of the Senate and the speaker of the House, two intelligent and highly respected men in this process. The tennis ball that they’re using are my constituents’ heads, and I’m just a little tired of it,” he said after committee. “Who do these people think they’re fooling? They aren’t fooling my constituents. They know what’s going on: Bingo, bango, bingo, bango, and they don’t get any relief.” (SB 1592)
Rep. John Fritchey’s legislation banning some pay-to-play campaign contributions won House approval. It would prohibit state employees from getting perks from potential contractors. And people seeking state contracts worth more than $10,000 would have to report their campaign contribution history. Legal, banking and consulting fees also would be prohibited. (HB 1)
Rep. Lou Lang’s gaming measure to create four new casinos in the Chicago area and add slot machines at racetracks won approval from a House committee. It also would create 37,000 more gaming positions in the state and generate $1.3 billion to $3 billion a year. (HB 480)
Sen. Terry Link’s statewide smoking ban, already approved by the Senate, moved out of a House committee with no amendments. It could be called for a vote by the full chamber this afternoon. (SB 500)
Rep. Anazette Collins’ measure to lower the age nonviolent offenders can be tried as juveniles won House approval. While 18-year-olds would be still be tried as adults, 17 year-old nonviolent offenders would be tried as juveniles so, the sponsor said, they could reform themselves without having an adult criminal record and without serving in an adult prison. (HB 1517)
Rep. John Fritchey’s parental notification measure for minors seeking an abortion failed the House. It would have required minor women to talk to an adult, other than clergy or adult siblings, before terminating a pregnancy. During House floor debate, Fritchey said it was the hardest and most frustrating piece of legislation he’s had to do. (HB 317)
Rep. Harry Osterman and Rep. Deborah Graham’s gun control measures stalled in the House. One measure would require background checks at every level of sale, and the other would require licensing for people who wanted to sell their guns. (HB 758 and HB 796)
Sen. Gary Forby’s proposed minimum one-year electricity rate freeze for Ameren Illinois customers won approval from a House committee, but it’s not expected to offer relief to customers anywhere in the state any time soon. At the wishes of House Speaker Michael Madigan, Democrats changed it to include Commonwealth Edison and effectively denied the wishes Senate President Emil Jones Jr. Republican Rep. Bill Black of Danville, the original House sponsor who was legislatively shoved aside by House Democrats, said he reached the limits of his frustration. “We’re tired of this tennis game between the president of the Senate and the speaker of the House, two intelligent and highly respected men in this process. The tennis ball that they’re using are my constituents’ heads, and I’m just a little tired of it,” he said after committee. “Who do these people think they’re fooling? They aren’t fooling my constituents. They know what’s going on: Bingo, bango, bingo, bango, and they don’t get any relief.” (SB 1592)
Rep. John Fritchey’s legislation banning some pay-to-play campaign contributions won House approval. It would prohibit state employees from getting perks from potential contractors. And people seeking state contracts worth more than $10,000 would have to report their campaign contribution history. Legal, banking and consulting fees also would be prohibited. (HB 1)
Rep. Lou Lang’s gaming measure to create four new casinos in the Chicago area and add slot machines at racetracks won approval from a House committee. It also would create 37,000 more gaming positions in the state and generate $1.3 billion to $3 billion a year. (HB 480)
Sen. Terry Link’s statewide smoking ban, already approved by the Senate, moved out of a House committee with no amendments. It could be called for a vote by the full chamber this afternoon. (SB 500)
Rep. Anazette Collins’ measure to lower the age nonviolent offenders can be tried as juveniles won House approval. While 18-year-olds would be still be tried as adults, 17 year-old nonviolent offenders would be tried as juveniles so, the sponsor said, they could reform themselves without having an adult criminal record and without serving in an adult prison. (HB 1517)
Rep. John Fritchey’s parental notification measure for minors seeking an abortion failed the House. It would have required minor women to talk to an adult, other than clergy or adult siblings, before terminating a pregnancy. During House floor debate, Fritchey said it was the hardest and most frustrating piece of legislation he’s had to do. (HB 317)
Rep. Harry Osterman and Rep. Deborah Graham’s gun control measures stalled in the House. One measure would require background checks at every level of sale, and the other would require licensing for people who wanted to sell their guns. (HB 758 and HB 796)
Thursday, April 26, 2007
Update on hospital assessments
A House committee approved a so-called supplemental budget Wednesday afternoon that would give the Illinois Department of Healthcare and Family Services the authority to distribute $2.4 billion in federal funds over two fiscal years to reimburse health care providers who care for Medicaid patients. (See page 63 of the bill.)
Along with the department’s spending authority for the “hospital assessment” program, the budget also includes more than $1.4 million for legislators’ 9.5 percent pay raises (page 36 of the bill) recommended by the Compensation Review Board’s 2006 report. There’s also $7.7 million for families of veterans who passed away in the line of duty in the Middle East (first page of the bill).
The supplemental budget bill still has to get approval by the full House and the full Senate before going to the governor.
UPDATE: More political maneuvering resulted in the House Democrats, as expected, reinserting Commonwealth Edison back into Sen. Gary Forby’s legislation aimed at offering one year of relief for Illinois’ electricity customers (see our April 20 blog below). The full House still has to vote on the measure before it goes back to the Senate, where it’s expected to either stall or fail.
NOTE: I’m still waiting for an official response from the Department of Healthcare and Family Services regarding the Medicaid bills and the hospital assessment program.
Along with the department’s spending authority for the “hospital assessment” program, the budget also includes more than $1.4 million for legislators’ 9.5 percent pay raises (page 36 of the bill) recommended by the Compensation Review Board’s 2006 report. There’s also $7.7 million for families of veterans who passed away in the line of duty in the Middle East (first page of the bill).
The supplemental budget bill still has to get approval by the full House and the full Senate before going to the governor.
UPDATE: More political maneuvering resulted in the House Democrats, as expected, reinserting Commonwealth Edison back into Sen. Gary Forby’s legislation aimed at offering one year of relief for Illinois’ electricity customers (see our April 20 blog below). The full House still has to vote on the measure before it goes back to the Senate, where it’s expected to either stall or fail.
NOTE: I’m still waiting for an official response from the Department of Healthcare and Family Services regarding the Medicaid bills and the hospital assessment program.
Wednesday, April 25, 2007
Missed opportunity
The Illinois comptroller’s office says the state missed the boat in early April to do three things at once: 1) reduce its backlogged Medicaid bills by half, 2) activate the second half of a program that distributes federal dollars to hospitals that care for Medicaid patients, and 3) repay a $900 million loan that kick-started that program. Statehouse reporter Doug Finke wrote about it in Wednesdays’ State Journal-Register. I talked to Carol Knowles, spokeswoman for Comptroller Dan Hynes, Wednesday morning.
About $747 million in federal Medicaid funds are sitting unused until the Department of Healthcare and Family Services gets legislative approval to spend that money, according to Keith Taylor, Hynes’ chief of staff. He said in an April 4 letter to the department director Barry Maram that the federal money could be tapped to pay $650 million of the state’s backlogged Medicaid bills due to health care providers. But the comptroller can’t pay those Medicaid bills without the department submitting the invoices to Hynes’ office. Taylor’s letter said the department was holding more than $1 billion in Medicaid obligations.
“We can’t pay bills that they haven’t sent to us,” Knowles said. “It’s difficult when you’re sitting on more than $1 billion worth of bills everyday and you can’t bring that down. And that, in the end, winds up costing the state more money in interest. Why would they want to do that?”
Department spokeswoman Amy Rosenband wasn’t able to call me back before this post and before I head off to committee meetings, so I’ll add her response once I get it.
In a follow-up letter April 24, Taylor said the comptroller’s office was “extremely disappointed” that the department didn’t respond to the request. The timing was sensitive given the June 7 deadline for the state to repay its $900 million loan. The General Assembly also still has time to approve the spending authority needed to start the second year of the hospital assessment program. In fact, I’ll be in a House committee this afternoon that is expected to discuss a supplemental budget, which would give the spending authority needed for the program.
About $747 million in federal Medicaid funds are sitting unused until the Department of Healthcare and Family Services gets legislative approval to spend that money, according to Keith Taylor, Hynes’ chief of staff. He said in an April 4 letter to the department director Barry Maram that the federal money could be tapped to pay $650 million of the state’s backlogged Medicaid bills due to health care providers. But the comptroller can’t pay those Medicaid bills without the department submitting the invoices to Hynes’ office. Taylor’s letter said the department was holding more than $1 billion in Medicaid obligations.
“We can’t pay bills that they haven’t sent to us,” Knowles said. “It’s difficult when you’re sitting on more than $1 billion worth of bills everyday and you can’t bring that down. And that, in the end, winds up costing the state more money in interest. Why would they want to do that?”
Department spokeswoman Amy Rosenband wasn’t able to call me back before this post and before I head off to committee meetings, so I’ll add her response once I get it.
In a follow-up letter April 24, Taylor said the comptroller’s office was “extremely disappointed” that the department didn’t respond to the request. The timing was sensitive given the June 7 deadline for the state to repay its $900 million loan. The General Assembly also still has time to approve the spending authority needed to start the second year of the hospital assessment program. In fact, I’ll be in a House committee this afternoon that is expected to discuss a supplemental budget, which would give the spending authority needed for the program.
Tuesday, April 24, 2007
The Golden Rule exemption
Deanese Williams-Harris offered the following observation:
On stage, Gov. Rod Blagojevich repeatedly campaigns for his health care initiatives as following the Biblical Golden Rule: Do unto others as you would have them do unto you. Behind the stage, however, the governor uses a different approach, particularly when in Springfield.
He took the stage at Springfield’s Prairie Capital Convention Center Tuesday afternoon, speaking to a crowd of Illinois’ nurses to promote his Illinois Covered health insurance plan for all adults. He said “powerful forces” attack the way he plans to fund the program and accused the opposition of “having friends in high places” and “wanting to keep the system as it is.”
Once off stage, the governor briefly stopped to take pictures with some supporters. But a scene erupted when reporters approached the governor to ask questions, and things escalated when two of the governor’s security detail grabbed a newspaper reporter by both of his arms. The reporter called out, “Governor, do you see what your goons are doing to me?” and demanded the guards take their arms off of him.
Blagojevich, who clearly had no intentions of addressing the media after the event, flashed a deer-in-the-headlights look as other reporters started shouting out questions. He was in such a hurry to get into his black SUV that he closed the car door in Sen. Carol Ronen’s face before the Chicago Democrat could hop in. She started knocking on the window. The governor’s entourage finally let her in before driving off, but not before another reporter prompted the governor to at least put on his seatbelt.
Chicago PEOPLE in the news
Ron Huberman is the new board president of the Chicago Transit Authority, as recommended by Chicago Mayor Richard Daley. Huberman replaces Frank Kruesi, who resigned after more than nine years as the agency’s chief executive officer and shortly after the agency asked the General Assembly for billions of dollars.
In a March report, Auditor General William Holland’s office said the Chicago Transit Authority joins the Regional Transportation Authority, Metra and Pace in “facing a serious financial shortfall,” and it doesn’t bring in enough revenue to cover current operations and replacement of aging buses and rail cars. The report also said the CTA’s retirement plan is “severely underfunded and its condition is worsening” and that the whole mass transit system needs an overhaul.
The Chicago Transit Authority wholeheartedly agreed and backed a campaign for the state legislature to help pay for a five-year plan needing $10 billion in new capital funding and $400 million more a year for operating costs.
Huberman served the past two years as Daley’s chief of staff, and he previously served as executive director of the city’s Office of Emergency Management and Communications. The mayor’s new chief of staff is Lori Healey, the city’s former planning and development coordinator. She previously chaired the Chicago Housing Authority and became the first deputy commissioner of the city’s tax increment financing program (see our Q&A with her in Illinois Issues, October 2006, p. 40).
On stage, Gov. Rod Blagojevich repeatedly campaigns for his health care initiatives as following the Biblical Golden Rule: Do unto others as you would have them do unto you. Behind the stage, however, the governor uses a different approach, particularly when in Springfield.
He took the stage at Springfield’s Prairie Capital Convention Center Tuesday afternoon, speaking to a crowd of Illinois’ nurses to promote his Illinois Covered health insurance plan for all adults. He said “powerful forces” attack the way he plans to fund the program and accused the opposition of “having friends in high places” and “wanting to keep the system as it is.”
Once off stage, the governor briefly stopped to take pictures with some supporters. But a scene erupted when reporters approached the governor to ask questions, and things escalated when two of the governor’s security detail grabbed a newspaper reporter by both of his arms. The reporter called out, “Governor, do you see what your goons are doing to me?” and demanded the guards take their arms off of him.
Blagojevich, who clearly had no intentions of addressing the media after the event, flashed a deer-in-the-headlights look as other reporters started shouting out questions. He was in such a hurry to get into his black SUV that he closed the car door in Sen. Carol Ronen’s face before the Chicago Democrat could hop in. She started knocking on the window. The governor’s entourage finally let her in before driving off, but not before another reporter prompted the governor to at least put on his seatbelt.
Chicago PEOPLE in the news
Ron Huberman is the new board president of the Chicago Transit Authority, as recommended by Chicago Mayor Richard Daley. Huberman replaces Frank Kruesi, who resigned after more than nine years as the agency’s chief executive officer and shortly after the agency asked the General Assembly for billions of dollars.
In a March report, Auditor General William Holland’s office said the Chicago Transit Authority joins the Regional Transportation Authority, Metra and Pace in “facing a serious financial shortfall,” and it doesn’t bring in enough revenue to cover current operations and replacement of aging buses and rail cars. The report also said the CTA’s retirement plan is “severely underfunded and its condition is worsening” and that the whole mass transit system needs an overhaul.
The Chicago Transit Authority wholeheartedly agreed and backed a campaign for the state legislature to help pay for a five-year plan needing $10 billion in new capital funding and $400 million more a year for operating costs.
Huberman served the past two years as Daley’s chief of staff, and he previously served as executive director of the city’s Office of Emergency Management and Communications. The mayor’s new chief of staff is Lori Healey, the city’s former planning and development coordinator. She previously chaired the Chicago Housing Authority and became the first deputy commissioner of the city’s tax increment financing program (see our Q&A with her in Illinois Issues, October 2006, p. 40).
Friday, April 20, 2007
This week at the state Capitol
This week’s events provided little evidence of how things will play out before the state legislature reaches its constitutional deadline of May 31, but some Statehouse scenes throughout the week could hint at the status of the governor’s policy proposals (education, health care and a tax overhaul) and high electricity rates.
Education committee: well organized
There was an obvious elephant in the room when a Senate committee held a hearing about the governor’s education plan. The Senate Democrats gave a nice advanced notice about the hearing with a printed list of witnesses to testify, printed testimonies available to the press and everything. All testified in support of the educational policy side, but the committee chair intended to keep discussions from bleeding into the more controversial funding source, the gross receipts tax. Meanwhile, most of the room was packed with people who opposed the new business tax, and they got rowdy when Senate President Emil Jones Jr. tried to say the gross receipts tax was the most fair way of actively doing something about education reform. However, as hard as the administration tries to portray a positive message about the tax and education plan, the fear of the unknown in the GRT really does create skeptics among legislative members of both parties.
Health care committee: We want details
Deanese Williams-Harris contributed this portion
Senators want to see the rules to the governor’s new subsidized insurance plan in writing.
“You’re asking us to raise $2.1 billion in taxes for a plan we can’t identify,” said Sen. Mike Jacobs, a Democrat from East Moline. “If I don't know the rules, I can’t vote for it.”
Larry Barry, president of the Illinois Life Insurance Council, agreed, calling the initiative generic in nature. “Put in the bill what you want done. That’s all I’m asking,” he said. He also voiced concern that insurance companies would have to wait for the state to reimburse them for insuring people who were subsidized by the state, but the legislators would have to approve money in the next state budget for those reimbursements to be possible.
The gross receipts tax also would be the main funding source for Illinois Covered. “What happens if [GRT] fails?” said Sen. Dale Righter, a Mattoon Republican.
“GRT is a comprehensive package,” responded Anne Marie Murphy, Medicaid director and the governor’s health care policy advisor. “We have to see all of these [proposals] as a package.” She also said the rules would be put in writing before the measure is called for a vote.
Tax overhaul: Jones vs. Meeks
President Emil Jones and Sen. James Meeks didn’t exactly whisper when they were going back and forth about the gross receipts tax as a Senate committee heard testimony. At one point, Jones leaned back in his chair towards Meeks, who was sitting behind him, and said, “We are for the gross receipts tax, not taxing individuals.” Meeks is sponsoring alternative tax reform that would raise income and sales taxes and is designed to relieve property taxes. The measure, House Bill and Senate Bill 750, has potential to take some Democratic and Republican votes away from the governor’s gross receipts tax supported by the Senate president. Considering Meeks played chicken with the governor this summer by threatening a gubernatorial run if Blagojevich didn’t promise significantly more money for education, it’s safe to say Meeks has used his political leverage before.
Electricity rates: Procedural maneuvering
The full Senate approved a one-year rate freeze for downstate Ameren Illinois electricity customers, but they excluded Commonwealth Edison that serves northern Illinois. Procedural maneuvering allowed Senate members to cast a vote to include ComEd knowing full well it wouldn’t make it into the final legislation. Sponsor Sen. Gary Forby got a political slap in the face. The Benton Democrat has gotten a lot of angry phone calls from his southern Illinois constituents who really can’t afford their electricity bills, but he worked hard to get ComEd’s northern Illinois customers in the freeze, too. After ComEd was stripped from the legislation, Forby said he was completely surprised and disappointed. In fact, as many angered Democrats and Republicans pointed out during floor debate, the bill is expected to go to the House, where Speaker Michael Madigan is likely to favor a freeze that includes ComEd. Adding an amendment to include ComEd also would give House members a chance to go on the record as supporting a comprehensive freeze. The amended measure would then be sent back to the Senate (because both chambers have to approve the exact same wording before it’s sent to the governor), but the Emil Jones is unlikely to allow a freeze to impact ComEd, a large supporter of the Senate president. Sen. Chris Lauzen, an Aurora Republican, called it a “premeditated, parliamentary scheme.” Sen. Dale Risinger of Peoria told the chamber he wanted to go home and shower.
Education committee: well organized
There was an obvious elephant in the room when a Senate committee held a hearing about the governor’s education plan. The Senate Democrats gave a nice advanced notice about the hearing with a printed list of witnesses to testify, printed testimonies available to the press and everything. All testified in support of the educational policy side, but the committee chair intended to keep discussions from bleeding into the more controversial funding source, the gross receipts tax. Meanwhile, most of the room was packed with people who opposed the new business tax, and they got rowdy when Senate President Emil Jones Jr. tried to say the gross receipts tax was the most fair way of actively doing something about education reform. However, as hard as the administration tries to portray a positive message about the tax and education plan, the fear of the unknown in the GRT really does create skeptics among legislative members of both parties.
Health care committee: We want details
Deanese Williams-Harris contributed this portion
Senators want to see the rules to the governor’s new subsidized insurance plan in writing.
“You’re asking us to raise $2.1 billion in taxes for a plan we can’t identify,” said Sen. Mike Jacobs, a Democrat from East Moline. “If I don't know the rules, I can’t vote for it.”
Larry Barry, president of the Illinois Life Insurance Council, agreed, calling the initiative generic in nature. “Put in the bill what you want done. That’s all I’m asking,” he said. He also voiced concern that insurance companies would have to wait for the state to reimburse them for insuring people who were subsidized by the state, but the legislators would have to approve money in the next state budget for those reimbursements to be possible.
The gross receipts tax also would be the main funding source for Illinois Covered. “What happens if [GRT] fails?” said Sen. Dale Righter, a Mattoon Republican.
“GRT is a comprehensive package,” responded Anne Marie Murphy, Medicaid director and the governor’s health care policy advisor. “We have to see all of these [proposals] as a package.” She also said the rules would be put in writing before the measure is called for a vote.
Tax overhaul: Jones vs. Meeks
President Emil Jones and Sen. James Meeks didn’t exactly whisper when they were going back and forth about the gross receipts tax as a Senate committee heard testimony. At one point, Jones leaned back in his chair towards Meeks, who was sitting behind him, and said, “We are for the gross receipts tax, not taxing individuals.” Meeks is sponsoring alternative tax reform that would raise income and sales taxes and is designed to relieve property taxes. The measure, House Bill and Senate Bill 750, has potential to take some Democratic and Republican votes away from the governor’s gross receipts tax supported by the Senate president. Considering Meeks played chicken with the governor this summer by threatening a gubernatorial run if Blagojevich didn’t promise significantly more money for education, it’s safe to say Meeks has used his political leverage before.
Electricity rates: Procedural maneuvering
The full Senate approved a one-year rate freeze for downstate Ameren Illinois electricity customers, but they excluded Commonwealth Edison that serves northern Illinois. Procedural maneuvering allowed Senate members to cast a vote to include ComEd knowing full well it wouldn’t make it into the final legislation. Sponsor Sen. Gary Forby got a political slap in the face. The Benton Democrat has gotten a lot of angry phone calls from his southern Illinois constituents who really can’t afford their electricity bills, but he worked hard to get ComEd’s northern Illinois customers in the freeze, too. After ComEd was stripped from the legislation, Forby said he was completely surprised and disappointed. In fact, as many angered Democrats and Republicans pointed out during floor debate, the bill is expected to go to the House, where Speaker Michael Madigan is likely to favor a freeze that includes ComEd. Adding an amendment to include ComEd also would give House members a chance to go on the record as supporting a comprehensive freeze. The amended measure would then be sent back to the Senate (because both chambers have to approve the exact same wording before it’s sent to the governor), but the Emil Jones is unlikely to allow a freeze to impact ComEd, a large supporter of the Senate president. Sen. Chris Lauzen, an Aurora Republican, called it a “premeditated, parliamentary scheme.” Sen. Dale Risinger of Peoria told the chamber he wanted to go home and shower.
Tuesday, April 17, 2007
GRT or nothing?
If Gov. Rod Blagojevich’s revenue idea to create a gross receipts tax fails to get legislative approval this spring (or summer), the governor is willing to consider other revenue sources, according to John Filan, Blagojevich’s former budget director and current chief operating officer.
“He won’t support an income and sales tax increase, but there are other aspects of the budget, other revenues he’d take a look at,” Filan said Monday after a budget-related conference in Springfield. But the administration is determined to keep the gross receipts tax as its primary revenue source, with some flexibility in tweaking it. “We think the gross receipts tax is the kind of tax that can generate that kind of money without disrupting large parts of the economy with smaller tax bases like an income tax or, especially, a sales tax does.”
He and budget director Ginger Ostro joined a panel of policy experts on taxes, education funding and business at “A Budget on the Brink” conference at the Springfield Hilton Monday. (Find more information about “A Budget on the Brink” here.) There was a lot of back-and-forth and repeated allegations of people citing facts based on assumptions rather than on transparent numbers. But the panels also posed a few good questions: 1) Does the state truly need more money to spend? If so, then how can the state fairly restructure its tax code? And 2) If the state needs to control spending as business groups advise, then what can the state and state agencies cut out?
Blagojevich’s $10 billion investment in education over four years wouldn’t fly without a revenue source as big as the $7 billion expected from GRT. Because the governor already ruled out increases in income or sales taxes proposed in HB 750 (see our March 20 blog), what else is on the table that would generate as much revenue as the GRT?
- Leasing the Illinois Lottery: at least $10 billion, but the governor already earmarked that for pension funding
- Leasing the Illinois Tollway: anywhere from $1 billion to more than $20 billion, but that hasn’t gone anywhere this session
- Selling a larger chunk of the state’s student loan portfolio: a $4 billion asset, but legislators urge that money only be used for higher education
- Opening four new Chicago-area casinos with expanded gaming statewide: between $2 billion and $3.5 billion a year. HB 480, proposed by Rep. Lou Lang of Skokie, wasn’t mentioned by the governor and is stalled in negotiations
- A combination of all of the above
And what about the near-universal health care plan that would cost about $2.1 billion annually by the time it’s fully implementation in 2010? The governor could still secure the $1.1 billion generated by a payroll tax on businesses that don’t offer comprehensive health benefits. But he’d also need some other form of revenue or federal funds.
Thursday, April 12, 2007
Ethical dilemmas
Deanese Williams-Harris wrote the following post.
The results of a recent state employee ethics survey paint a gloomy picture of the environment in state offices. The survey, conducted by the Illinois Executive Ethics Commission, surveyed 402 random employees.
Employees reported ethical concerns with leadership roles and with how ethics investigations are carried out. As it stands, investigator general reports are not made public.
"Because the Ethics Act requires complete secrecy about investigation into wrongdoing, employees are not convinced that wrongdoers face any consequences," says Chad Fornoff, executive director of the commission.
Furthermore, an overwhelming majority report ethic rules weren't being fairly enforced, and many say they're uneasy about reporting unethical behavior. "The bad news is many employees believe agency ethics programs are ineffectual and fear retaliation if they report unethical activity," he says.
Eighty-seven percent of those surveyed identified one or more elements in the workplace that lend themselves to an unhealthy climate. More than 45 percent of employees say senior officials in their departments are less likely to be disciplined for wrongdoing than other employees.
Fornoff says the lack of trust reported by employees shows the need for transparency in the investigation and disciplinary process. "We believe that a pending bill that we have been supporting, SB157, will alleviate this problem." If approved, the measure would make public all alleged violations, the history of those violations and recommended disciplinary action against the state employees.
Natural Selection
A report released by the Illinois auditor general says the state Department of Natural Resources showed favoritism to certain hunters in issuing administratively approved hunting permits. The department also exceeded hunting quotas stipulated by Illinois law.
More than 1,200 permits were given out by administrative approval. The special permits benefited Illinois Conservation Foundation donors, professional athletes, judges, politicians and five representatives of an ammunition company.
The process allows hunters to bypass the hunting permit lottery system. However, the process wasn't open to the public. According to the report, fewer permits were available to Illinois hunters because of the number of special permits issued before and after the lottery process.
More than 90 percent of the applications for the special permits were incomplete, and fees weren't paid for more than 20 percent of the permits.
As a result, the department was asked to establish policies and procedures for issuing administratively approved permits. The department agreed to the recommendations.
For a quick synopsis of the violations, log on to the auditor general's findings.
The results of a recent state employee ethics survey paint a gloomy picture of the environment in state offices. The survey, conducted by the Illinois Executive Ethics Commission, surveyed 402 random employees.
Employees reported ethical concerns with leadership roles and with how ethics investigations are carried out. As it stands, investigator general reports are not made public.
"Because the Ethics Act requires complete secrecy about investigation into wrongdoing, employees are not convinced that wrongdoers face any consequences," says Chad Fornoff, executive director of the commission.
Furthermore, an overwhelming majority report ethic rules weren't being fairly enforced, and many say they're uneasy about reporting unethical behavior. "The bad news is many employees believe agency ethics programs are ineffectual and fear retaliation if they report unethical activity," he says.
Eighty-seven percent of those surveyed identified one or more elements in the workplace that lend themselves to an unhealthy climate. More than 45 percent of employees say senior officials in their departments are less likely to be disciplined for wrongdoing than other employees.
Fornoff says the lack of trust reported by employees shows the need for transparency in the investigation and disciplinary process. "We believe that a pending bill that we have been supporting, SB157, will alleviate this problem." If approved, the measure would make public all alleged violations, the history of those violations and recommended disciplinary action against the state employees.
Natural Selection
A report released by the Illinois auditor general says the state Department of Natural Resources showed favoritism to certain hunters in issuing administratively approved hunting permits. The department also exceeded hunting quotas stipulated by Illinois law.
More than 1,200 permits were given out by administrative approval. The special permits benefited Illinois Conservation Foundation donors, professional athletes, judges, politicians and five representatives of an ammunition company.
The process allows hunters to bypass the hunting permit lottery system. However, the process wasn't open to the public. According to the report, fewer permits were available to Illinois hunters because of the number of special permits issued before and after the lottery process.
More than 90 percent of the applications for the special permits were incomplete, and fees weren't paid for more than 20 percent of the permits.
As a result, the department was asked to establish policies and procedures for issuing administratively approved permits. The department agreed to the recommendations.
For a quick synopsis of the violations, log on to the auditor general's findings.
Wednesday, March 28, 2007
Corruption, power and money
Corruption
I'm actually talking about my computer's hard drive, which has "major corruption." While my laptop is in the shop, I apologize if my blogging is rather light this week. I'm still crawling at a snail's pace, but enough sob stories. On to some news:
Power
The newest twist to the already dynamic electricity rate debate: House Speaker Michael Madigan's brand new proposal to create the Illinois Power Authority, which would create a five-member state board to control power procurement, generation and distribution, as well as the creation of new power plants. More details and reaction later (I hope soon).
Money
Deanese Williams-Harris contributed this observation of a committee hearing this morning
Several House committee members repeated a new slogan — GRT is DOA — coined by Rep. Roger Eddy, a Hutsonville Republican. GRT is the governor’s proposed gross receipts tax, which Gov. Rod Blagojevich says would generate a net $6.3 billion a year but hasn’t gained popularity just yet. Committee members asked the governor’s budget director, Ginger Ostro, if the administration had Plan B to fund education or other initiatives if the GRT fails.
Rep. Will Davis, vice-chair of the committee, asked if property tax relief was included in the governor's proposal. Ostro said no. Davis said he felt concerned and that something needed to be done about the “racist system” of relying on property taxes to fund education.
Rep. Jerry Mitchell, a Sterling Republican, wanted to hear the Plan B for leasing the state lottery and funding the state’s pension deficit. He said the governor’s unwillingness to consider other funding proposals is a disaster waiting to happen. He asked Ostro whether the governor would consider expanding gambling as a funding source for education, pension deficit and backlogged Medicaid bills. Ostro said the governor is willing to consider other proposals, but he definitely opposes hikes in income and sales taxes (i.e. HB/SB 750 to reform the way the state pays for education). Ostro said, “We think GRT is a viable way to fund education and provide tax fairness throughout the state.”
Sen. President Emil Jones Jr. has said he wouldn’t call the HB/SB 750 (called the tax swap proposal) and that he supports the governor’s GRT plan.
I'm actually talking about my computer's hard drive, which has "major corruption." While my laptop is in the shop, I apologize if my blogging is rather light this week. I'm still crawling at a snail's pace, but enough sob stories. On to some news:
Power
The newest twist to the already dynamic electricity rate debate: House Speaker Michael Madigan's brand new proposal to create the Illinois Power Authority, which would create a five-member state board to control power procurement, generation and distribution, as well as the creation of new power plants. More details and reaction later (I hope soon).
Money
Deanese Williams-Harris contributed this observation of a committee hearing this morning
Several House committee members repeated a new slogan — GRT is DOA — coined by Rep. Roger Eddy, a Hutsonville Republican. GRT is the governor’s proposed gross receipts tax, which Gov. Rod Blagojevich says would generate a net $6.3 billion a year but hasn’t gained popularity just yet. Committee members asked the governor’s budget director, Ginger Ostro, if the administration had Plan B to fund education or other initiatives if the GRT fails.
Rep. Will Davis, vice-chair of the committee, asked if property tax relief was included in the governor's proposal. Ostro said no. Davis said he felt concerned and that something needed to be done about the “racist system” of relying on property taxes to fund education.
Rep. Jerry Mitchell, a Sterling Republican, wanted to hear the Plan B for leasing the state lottery and funding the state’s pension deficit. He said the governor’s unwillingness to consider other funding proposals is a disaster waiting to happen. He asked Ostro whether the governor would consider expanding gambling as a funding source for education, pension deficit and backlogged Medicaid bills. Ostro said the governor is willing to consider other proposals, but he definitely opposes hikes in income and sales taxes (i.e. HB/SB 750 to reform the way the state pays for education). Ostro said, “We think GRT is a viable way to fund education and provide tax fairness throughout the state.”
Sen. President Emil Jones Jr. has said he wouldn’t call the HB/SB 750 (called the tax swap proposal) and that he supports the governor’s GRT plan.
Thursday, March 22, 2007
Busy day
Maneuvering inside the Statehouse was interesting today. About 1,000 people stood shoulder to shoulder on the three tiers of the Capitol rotunda and waved American flags. They were showing support measures that would grant drivers’ certificates to immigrants and earmark $25 million for expanded English classes. Roughly seven more busloads of people wearing green, pro-business T-shirts spread throughout the Capitol to show opposition for a statewide smoking ban. Meanwhile, lawmakers sat inside committee rooms and in their chambers to debate policy dealing with AT&T, electric utility bills and college loans, among many others. But the following measures could keep unfolding in the next couple of weeks:
Immigrant drivers’ certificates — Two measures, one in the House and one in the Senate, are being revised and are expected to come up soon.
Statewide smoking ban — One of the smoking ban measures is in its passage stage in the Senate.
AT&T — the telecommunications measure would allow companies to enter the video market through a statewide video franchise rather than through individual municipalities. Hours of testimony have been heard for three weeks, but no amendments have been filed, yet. It might take more time to get out of the House committee.
Electric utility bills — A Senate committee approved 11 to 1 a measure that was revised to freeze electricity rates for one year for Ameren Illinois and Commonwealth Edison customers. Watch for it on the Senate floor in the next couple of weeks.
College loans — The Illinois Student Assistance Commission is looking to sell up to 80 percent of its student loan portfolio, in line with one of Gov. Rod Blagojevich’s revenue ideas last year. Here’s legislation that would expand the existing grant program for college students from low-income families.
Immigrant drivers’ certificates — Two measures, one in the House and one in the Senate, are being revised and are expected to come up soon.
Statewide smoking ban — One of the smoking ban measures is in its passage stage in the Senate.
AT&T — the telecommunications measure would allow companies to enter the video market through a statewide video franchise rather than through individual municipalities. Hours of testimony have been heard for three weeks, but no amendments have been filed, yet. It might take more time to get out of the House committee.
Electric utility bills — A Senate committee approved 11 to 1 a measure that was revised to freeze electricity rates for one year for Ameren Illinois and Commonwealth Edison customers. Watch for it on the Senate floor in the next couple of weeks.
College loans — The Illinois Student Assistance Commission is looking to sell up to 80 percent of its student loan portfolio, in line with one of Gov. Rod Blagojevich’s revenue ideas last year. Here’s legislation that would expand the existing grant program for college students from low-income families.
Tuesday, March 20, 2007
Education and electricity
Two juicy debates
In downtown Springfield, the Illinois Commerce Commission heard Ameren Illinois president Scott Cisel defend his recent decision to end some of the utility’s electricity rate relief to downstate customers. In the Capitol, Gov. Rod Blagojevich said he’d veto any proposal that would increase income and sales taxes, as stated in a press release handed out during a House committee. House Speaker Michael Madigan, on the other hand, signaled he’s willing to let the so-called tax swap proposal see the light of day by sending his general counsel to moderate debate on an education funding reform proposal.
That legislation has nine lives, but supporters and opponents of the revised version agree on two things: 1) no one at the hearing likes the governor’s revenue idea to replace the corporate income tax with a new tax on business inputs; and 2) there’s lots of room to tweak the legislation. The House committee is expected to vote on the measure when it reconvenes, which could be soon.
In general, HB/SB 750 would reform the way the state funds education by increasing income taxes, expanding sales taxes to apply to services and offering property tax relief.
Supporters of the bill include Ralph Martire of the Center for Tax and Budget Accountability. In committee, he said no schools would lose, and businesses would be “net tax winners” under the legislation.
The opposition includes J. Thomas Johnson of the Taxpayers’ Federation of Illinois, who said the legislation puts “the cart before the horse” because it talks about distributing new revenue before it spells out how the money would improve education (and stipulates that it wouldn't be diverted to other state or local operations). He added that legislators needed to have a clear understanding of the actual property tax relief offered by a tax swap. “We’ll never meet the taxpayers’ expectations,” he said. “Rhetoric will come back to haunt us.”
Johnson, along with the Civic Committee of the Commercial Club of Chicago, said the state should consider at least three ways to save $1 billion before asking taxpayers to pay more. He said Illinois could save by reforming the state’s public employee retirement benefits, such as the retirement age and cost of living adjustments, as well as by using more managed care for state employees and Medicaid enrollees.
Electricity rates
The Illinois Commerce Commission cut off discussion that was leading to Ameren Illinois’ recent proposal to return to a regulated system, where the state sets electricity rates rather than the utilities buying power on the open market. The downstate utility used doom’s day rhetoric in Tuesday’s commission hearing to explain its recent decisions.
Ameren also recently decided to suspend programs that would provide rate relief to its customers. Commissioner Erin O’Connell-Diaz chastised the utility for “not keeping customers in the loop.” Ameren has yet to inform the 7,000 customers enrolled in a deferred payment plan that it has stopped the program.
The utility blamed its decision to halt these programs on the House, which approved a measure that would provide credits to customers and a three-year rate freeze. Soon after the House measure won approval, the company’s credit rating was downgraded to junk status.
According to the company's president and CEO, Scott Cisel, if the Senate approves a separate but similar measure, Ameren Illinois may be forced to lay off employees and contractors. Furthermore, unless the legislative leaders in both chambers ensured Ameren that the General Assembly wouldn’t attempt to refreeze electricity rates, the company would go into survival mode.
“This is a who-blinks-first game,” says Illinois Commerce Commission chairman Charles Box. “Both sides do not want to give up leverage, but whose suffering? It's the citizens that are suffering, especially the elderly and the people who have gigantic bills.”
In downtown Springfield, the Illinois Commerce Commission heard Ameren Illinois president Scott Cisel defend his recent decision to end some of the utility’s electricity rate relief to downstate customers. In the Capitol, Gov. Rod Blagojevich said he’d veto any proposal that would increase income and sales taxes, as stated in a press release handed out during a House committee. House Speaker Michael Madigan, on the other hand, signaled he’s willing to let the so-called tax swap proposal see the light of day by sending his general counsel to moderate debate on an education funding reform proposal.
That legislation has nine lives, but supporters and opponents of the revised version agree on two things: 1) no one at the hearing likes the governor’s revenue idea to replace the corporate income tax with a new tax on business inputs; and 2) there’s lots of room to tweak the legislation. The House committee is expected to vote on the measure when it reconvenes, which could be soon.
In general, HB/SB 750 would reform the way the state funds education by increasing income taxes, expanding sales taxes to apply to services and offering property tax relief.
Supporters of the bill include Ralph Martire of the Center for Tax and Budget Accountability. In committee, he said no schools would lose, and businesses would be “net tax winners” under the legislation.
The opposition includes J. Thomas Johnson of the Taxpayers’ Federation of Illinois, who said the legislation puts “the cart before the horse” because it talks about distributing new revenue before it spells out how the money would improve education (and stipulates that it wouldn't be diverted to other state or local operations). He added that legislators needed to have a clear understanding of the actual property tax relief offered by a tax swap. “We’ll never meet the taxpayers’ expectations,” he said. “Rhetoric will come back to haunt us.”
Johnson, along with the Civic Committee of the Commercial Club of Chicago, said the state should consider at least three ways to save $1 billion before asking taxpayers to pay more. He said Illinois could save by reforming the state’s public employee retirement benefits, such as the retirement age and cost of living adjustments, as well as by using more managed care for state employees and Medicaid enrollees.
Electricity rates
The Illinois Commerce Commission cut off discussion that was leading to Ameren Illinois’ recent proposal to return to a regulated system, where the state sets electricity rates rather than the utilities buying power on the open market. The downstate utility used doom’s day rhetoric in Tuesday’s commission hearing to explain its recent decisions.
Ameren also recently decided to suspend programs that would provide rate relief to its customers. Commissioner Erin O’Connell-Diaz chastised the utility for “not keeping customers in the loop.” Ameren has yet to inform the 7,000 customers enrolled in a deferred payment plan that it has stopped the program.
The utility blamed its decision to halt these programs on the House, which approved a measure that would provide credits to customers and a three-year rate freeze. Soon after the House measure won approval, the company’s credit rating was downgraded to junk status.
According to the company's president and CEO, Scott Cisel, if the Senate approves a separate but similar measure, Ameren Illinois may be forced to lay off employees and contractors. Furthermore, unless the legislative leaders in both chambers ensured Ameren that the General Assembly wouldn’t attempt to refreeze electricity rates, the company would go into survival mode.
“This is a who-blinks-first game,” says Illinois Commerce Commission chairman Charles Box. “Both sides do not want to give up leverage, but whose suffering? It's the citizens that are suffering, especially the elderly and the people who have gigantic bills.”
Friday, March 16, 2007
Price fixing?
The mess over electricity rates just got messier. Illinois Attorney General Lisa Madigan filed a complaint with the Federal Energy Regulatory Commission to allege that 15 power companies manipulated a power auction last September. The auction set electricity prices for Ameren Illinois and Commonwealth Edison, which buy power and distribute it to homes and businesses. Madigan’s office says the auction set unfair prices that cost Illinois consumers an extra $4.3 billion.
The complaint cites evidence, some of which is blacked out for the public. For instance, it says ComEd’s parent company, Exelon Generation, won 97 percent of the 41-month ComEd contracts.
Madigan, along with Lt. Gov. Pat Quinn, has opposed the so-called reverse power auction from the beginning, saying it violates the intent of the 1997 state law that set the stage for today’s “deregulation” process.
Today also marks the day that Ameren Illinois has to answer the first batch of questions from the Illinois Commerce Commission, but spokeswoman Beth Bosch says the commission will have to review the answers before deciding whether they’ll be public. She adds that the commission is scheduled to meet at 1:30 p.m. Tuesday and 10:30 a.m. Wednesday in Springfield. Ameren’s invited to the Tuesday meeting. We’ll see if we can hear some of those answers.
The complaint cites evidence, some of which is blacked out for the public. For instance, it says ComEd’s parent company, Exelon Generation, won 97 percent of the 41-month ComEd contracts.
Madigan, along with Lt. Gov. Pat Quinn, has opposed the so-called reverse power auction from the beginning, saying it violates the intent of the 1997 state law that set the stage for today’s “deregulation” process.
Today also marks the day that Ameren Illinois has to answer the first batch of questions from the Illinois Commerce Commission, but spokeswoman Beth Bosch says the commission will have to review the answers before deciding whether they’ll be public. She adds that the commission is scheduled to meet at 1:30 p.m. Tuesday and 10:30 a.m. Wednesday in Springfield. Ameren’s invited to the Tuesday meeting. We’ll see if we can hear some of those answers.
Wednesday, March 14, 2007
ICC calls Ameren to account
This just in: The Illinois Commerce Commission asked Ameren in a letter to explain all the threats they’re making about how a negative credit rating (see the March 13 blog below) would lead to drastic measures and hurt customer service. Specifically, the commission demands explanation of why the company would resort to laying off between 700 and 800 workers and delaying projects and connections when the higher 2007 rates should cover those costs (the commission allowed the downstate utility to collect $96.7 million from customers to cover operating costs and to get a fair return on investments). And the commission points out that the Ameren Illinois utilities paid millions that padded the pockets of shareholders of the parent company, Ameren Corp.
The commission set deadlines for Ameren to answer some questions by March 16 and the rest by March 28.
Hell freezing over in the Senate?
The Senate previously rejected the idea to freeze electricity rates again. Committee action today could potentially shift the winds, but the coast still isn’t clear.
Seven Senate Democrats approved legislation that led Moody’s Investors Service to give a negative outlook for Ameren Illinois’ credit rating (see the March 13 blog below for the story).
After starting an hour late, the Senate Environment and Energy Committee took a break to gather enough votes to approve Sen. Gary Forby’s legislation (see amendment 2). It would roll back Ameren's electricity rates to the December 2006 level and freeze them for a year, which Froby said would buy time so lawmakers could figure out a more permanent solution to skyrocketing electric bills in downstate Illinois. The four Republicans present voted no.
Forby, a Benton Democrat, said his legislation focuses on Ameren customers and that lawmakers who want to address Commonwealth Edison customers in northern Illinois should introduce a separate measure. He added that he’s got a feeling Senate President Emil Jones Jr., who opposes a rate freeze, would call his bill for Senate floor debate. “I’m pretty convinced, not 100 percent convinced, but I’m pretty convinced that he’s going to let my bill run,” Forby said.
Jones’ spokeswoman, Cindy Davidsmeyer, said, “[Jones’] personal position on a freeze has not changed, but he certainly realizes that the situation with Ameren is very serious.”
As with every other rate freeze proposal, Ameren opposes the measure and threatens financial hardship. But one shoe has already dropped. Ameren spokesman Leigh Morris sent this e-mail Tuesday night in response to the Moody’s credit rating announcement:
“The Ameren Illinois utilities are continuing to evaluate the impact of yesterday’s decision by Moody’s Investors Services to downgrade the issuer credits of the three Ameren Illinois utilities (AmerenCILCO, AmerenCIPS and AmerenIP) to non-investment grade (junk) status. The utilities are carefully evaluating our next steps. It must be noted this credit rating action already has triggered cash collateral demands from several of our natural gas suppliers including banks with which we have financial hedging positions. In addition, the Ameren Illinois utilities believe our ability to acquire long term gas supply will be effected very shortly, which could ultimately drive up costs to our customers and potentially impact system reliability.”
Downstairs in a House committee, Rep. Bill Black moved a bill that would freeze electricity rates just for Ameren’s all-electric customers, who were particularly shocked by higher bills after their discount ended along with the state’s 10-year rate freeze. Black, a Danville Republican, says the year would give the homeowners and businesses time to find an alternative power source or to rewire their homes so they wouldn’t be all-electric anymore.
Black promised the committee that he would amend the bill to remove ComEd from the legislation, although some Chicago lawmakers wanted their all-electric customers to be included in the one-year freeze.
The commission set deadlines for Ameren to answer some questions by March 16 and the rest by March 28.
Hell freezing over in the Senate?
The Senate previously rejected the idea to freeze electricity rates again. Committee action today could potentially shift the winds, but the coast still isn’t clear.
Seven Senate Democrats approved legislation that led Moody’s Investors Service to give a negative outlook for Ameren Illinois’ credit rating (see the March 13 blog below for the story).
After starting an hour late, the Senate Environment and Energy Committee took a break to gather enough votes to approve Sen. Gary Forby’s legislation (see amendment 2). It would roll back Ameren's electricity rates to the December 2006 level and freeze them for a year, which Froby said would buy time so lawmakers could figure out a more permanent solution to skyrocketing electric bills in downstate Illinois. The four Republicans present voted no.
Forby, a Benton Democrat, said his legislation focuses on Ameren customers and that lawmakers who want to address Commonwealth Edison customers in northern Illinois should introduce a separate measure. He added that he’s got a feeling Senate President Emil Jones Jr., who opposes a rate freeze, would call his bill for Senate floor debate. “I’m pretty convinced, not 100 percent convinced, but I’m pretty convinced that he’s going to let my bill run,” Forby said.
Jones’ spokeswoman, Cindy Davidsmeyer, said, “[Jones’] personal position on a freeze has not changed, but he certainly realizes that the situation with Ameren is very serious.”
As with every other rate freeze proposal, Ameren opposes the measure and threatens financial hardship. But one shoe has already dropped. Ameren spokesman Leigh Morris sent this e-mail Tuesday night in response to the Moody’s credit rating announcement:
“The Ameren Illinois utilities are continuing to evaluate the impact of yesterday’s decision by Moody’s Investors Services to downgrade the issuer credits of the three Ameren Illinois utilities (AmerenCILCO, AmerenCIPS and AmerenIP) to non-investment grade (junk) status. The utilities are carefully evaluating our next steps. It must be noted this credit rating action already has triggered cash collateral demands from several of our natural gas suppliers including banks with which we have financial hedging positions. In addition, the Ameren Illinois utilities believe our ability to acquire long term gas supply will be effected very shortly, which could ultimately drive up costs to our customers and potentially impact system reliability.”
Downstairs in a House committee, Rep. Bill Black moved a bill that would freeze electricity rates just for Ameren’s all-electric customers, who were particularly shocked by higher bills after their discount ended along with the state’s 10-year rate freeze. Black, a Danville Republican, says the year would give the homeowners and businesses time to find an alternative power source or to rewire their homes so they wouldn’t be all-electric anymore.
Black promised the committee that he would amend the bill to remove ComEd from the legislation, although some Chicago lawmakers wanted their all-electric customers to be included in the one-year freeze.
Tuesday, March 13, 2007
Reconsidering rebate
Shortly after the Illinois Commerce Commission approved a plan Monday to reimburse some Ameren Illinois customers for high electricity bills, the utility began reconsidering that proposal because Moody’s Investor Service downgraded the utility’s credit rating to junk status. That makes it more expensive for Ameren to borrow money, says spokesman Leigh Morris. “But it creates tremendous problems for the company and it puts at risk all of the programs we have in play.”
Currently at risk is Ameren’s latest plan to spend $20 million (using $10 million of its own money and borrowing the other $10 million) to reimburse customers who use a lot of electricity, mainly residents who use only electricity to heat their homes. The plan also would stop charging interest on the customers who have chosen to phase in their rate increases over three years. As of Tuesday morning, Morris says Ameren still hasn’t declared whether it would take the plan off the table.
But in its March 7 filing with the Illinois Commerce Commission, Ameren warns the $20 million plan would end if its credit rating status were downgraded to junk.
The utility, which serves 1.2 million electric customers downstate, and the Illinois Commerce Commission have been under scrutiny for increases in electricity rates since a 10-year rate freeze expired in January. Ameren’s all-electric customers have gotten bills that have increased an average of 90 percent to 150 percent over last year’s rates. Lawmakers are still trying to move legislation to return all electricity rates to their 2006 level, when rates were frozen. The pending legislation was a factor in Moody’s decision to downgrade the utility’s credit rating.
Currently at risk is Ameren’s latest plan to spend $20 million (using $10 million of its own money and borrowing the other $10 million) to reimburse customers who use a lot of electricity, mainly residents who use only electricity to heat their homes. The plan also would stop charging interest on the customers who have chosen to phase in their rate increases over three years. As of Tuesday morning, Morris says Ameren still hasn’t declared whether it would take the plan off the table.
But in its March 7 filing with the Illinois Commerce Commission, Ameren warns the $20 million plan would end if its credit rating status were downgraded to junk.
The utility, which serves 1.2 million electric customers downstate, and the Illinois Commerce Commission have been under scrutiny for increases in electricity rates since a 10-year rate freeze expired in January. Ameren’s all-electric customers have gotten bills that have increased an average of 90 percent to 150 percent over last year’s rates. Lawmakers are still trying to move legislation to return all electricity rates to their 2006 level, when rates were frozen. The pending legislation was a factor in Moody’s decision to downgrade the utility’s credit rating.
Wednesday, March 07, 2007
Budget reaction
Gov. Rod Blagojevich’s budget proposal for the next fiscal year now goes to the General Assembly. Many Democratic and some Republican lawmakers applauded parts of his plan, but there’s a lot of negotiating to be done before the spring session’s constitutional deadline of May 31. (I’m not holding my breath that they’ll adjourn by then.) Deanese Williams-Harris and I gathered some reaction from lawmakers on Budget Day:
See highlights of the governor’s budget proposal in the “governor’s moral imperative” blog entry below.
Senate President Emil Jones Jr.
He says he supports the governor’s entire plan and doesn’t have anything he wants to change right now. While he supports the tax on business’ gross receipts (because it would be fairer than the current tax on corporate income), he leaves the door open to other revenue ideas.
Specifically — and significantly — Jones says four new casinos in the Chicago area are still on the table. And that could possibly be linked to a capital plan for school and road construction. He also says senators are talking with utilities and that a tax on power generators is something to consider for easing electricity rates, although he’s not revealing his stance on the subject, yet. He flat out opposes another regulatory freeze on electricity rates because he says it would “only delay the inevitable.”
Rep. Lou Lang, a Skokie Democrat
He introduced gaming legislation to create four new casinos in the Chicago area, which he expects could generate $2.3 billion to $3.5 billion this year. The governor didn’t mention gaming in his budget address.
“I think that to ignore the obvious economic development and revenue that we could get by making some changes in gaming laws is short-sighted. I did notice that while he didn’t mention it, his budget plan includes new taxes on casinos. And so it’s a tremendous source of revenue for our state, and to make it more difficult for them to do their work, to make it more difficult for them to create jobs or build things all over the state of Illinois, I think he’s putting a road block in front of a business that simply wants to invest in Illinois. I think we need to do more in that area.”
“I think my plan regarding gaming and his plan might find a way to mesh. And we need to sit down and talk about balance. I’ve got a bill that would generate $2 or $3 billion. I don’t think we should ignore that. And I’d do it without a tax increase. The governor’s proposal today will raise several billion dollars, but it’s taxes. No matter what he calls it, it’s taxes.”
House Minority Leader Tom Cross of Oswego
About the gross receipts tax: “Call this what you want. It’s a tax on consumers. What’s interesting about today and the speech is that everything is connected. The concern you would have about lottery is that you’re giving up $620 million in annual revenue. And the governor would say, I suppose, that if you do GRT it wouldn’t matter.”
“I’m not embracing [the idea to lease the lottery], but I’m not outright dismissing it. The thing about the lottery is, ‘What would be the conditions of the lease? What would the company that comes in and gives us money demand?’ Might be some good, might be some bad.”
About education: “No one is talking today about how to ensure a quality education. I don’t know if everybody accepts the premise that if you throw $1.5 billion into schools, then all of a sudden you’re going to end up with a perfect product. We need to focus our attention on how we can end up with a quality education and a quality product at the end of the day and not just have a discussion about money.”
Sen. Minority Leader Watson of Greenville
About the governor’s spending plans: “This is the largest spending increase in the history of the state, the largest tax increase in the history of the state,” he says. “Another $16 billion in borrowing, and what troubles me greatly is to see the debt being piled upon debt.”
About universal health care: “Fifteen percent of people in Illinois do not have health care insurance, and I feel bad for them. But is it the government’s responsibility to take care of them from birth to the grave?”
About electricity rates: “The issue of the day is what’s happening with people getting their power? To not even spend four sentences on the power rate issue and then have the audacity to say I’ll sign whatever bill you agree to, that’s not leadership.”
About the gross receipts tax: “The consumer is who pays taxes in Illinois, and for him to stand there and say that this isn’t going to be an increase on taxes to the consumer is totally misleading to the public. There’s a certain amount of class warfare that’s being developed by these kinds of policies. It’s a hidden tax and those are the worse kind.”
Sen. James Meeks, a Chicago Democrat
He’s sponsoring the education reform proposal in Senate Bill 750, which we explain in our “Moneymakers” blog entry February 9, 2007.
“Generating new dollars for education is great, but true education reform is going to have to deal with property tax relief.” Under the governor's plan, Meeks says, “Those who are paying property taxes that are too high now, there is no room for relief for them.”
Sen. Christine Radogno, a Lemont Republican
She’s the Senate GOP budget negotiator and last year’s Republican candidate for treasurer.
About the gross receipts tax: “The consumers will be paying that. The assertion that he made in the speech over and over again — it’s corporate, not people — is just baloney. Corporations don’t have bank accounts and checkbooks the way a family does. There’s really no such entity. It’s a legal entity. There’s no question a $6 billion tax increase is going to be paid by people. If it was not going to be paid by people, why would he exempt food and drugs? Because he knows it’s going to apply to people. It is a sales tax that is embedded throughout the system, and people will pay it. They won’t be able to see it, but they will pay it, there’s no question.”
About pension bonding: “There are ways to do it that could be positive. The question is what are the details of his plan, and that’s oftentimes the problem with this administration: We don’t see the details. We’ll have to see how the bonds are structured, whether he’s going to take some of that bond money out to use as cash for budget relief today instead of putting it all in [pensions]. I would take a look at that, for sure.”
See highlights of the governor’s budget proposal in the “governor’s moral imperative” blog entry below.
Senate President Emil Jones Jr.
He says he supports the governor’s entire plan and doesn’t have anything he wants to change right now. While he supports the tax on business’ gross receipts (because it would be fairer than the current tax on corporate income), he leaves the door open to other revenue ideas.
Specifically — and significantly — Jones says four new casinos in the Chicago area are still on the table. And that could possibly be linked to a capital plan for school and road construction. He also says senators are talking with utilities and that a tax on power generators is something to consider for easing electricity rates, although he’s not revealing his stance on the subject, yet. He flat out opposes another regulatory freeze on electricity rates because he says it would “only delay the inevitable.”
Rep. Lou Lang, a Skokie Democrat
He introduced gaming legislation to create four new casinos in the Chicago area, which he expects could generate $2.3 billion to $3.5 billion this year. The governor didn’t mention gaming in his budget address.
“I think that to ignore the obvious economic development and revenue that we could get by making some changes in gaming laws is short-sighted. I did notice that while he didn’t mention it, his budget plan includes new taxes on casinos. And so it’s a tremendous source of revenue for our state, and to make it more difficult for them to do their work, to make it more difficult for them to create jobs or build things all over the state of Illinois, I think he’s putting a road block in front of a business that simply wants to invest in Illinois. I think we need to do more in that area.”
“I think my plan regarding gaming and his plan might find a way to mesh. And we need to sit down and talk about balance. I’ve got a bill that would generate $2 or $3 billion. I don’t think we should ignore that. And I’d do it without a tax increase. The governor’s proposal today will raise several billion dollars, but it’s taxes. No matter what he calls it, it’s taxes.”
House Minority Leader Tom Cross of Oswego
About the gross receipts tax: “Call this what you want. It’s a tax on consumers. What’s interesting about today and the speech is that everything is connected. The concern you would have about lottery is that you’re giving up $620 million in annual revenue. And the governor would say, I suppose, that if you do GRT it wouldn’t matter.”
“I’m not embracing [the idea to lease the lottery], but I’m not outright dismissing it. The thing about the lottery is, ‘What would be the conditions of the lease? What would the company that comes in and gives us money demand?’ Might be some good, might be some bad.”
About education: “No one is talking today about how to ensure a quality education. I don’t know if everybody accepts the premise that if you throw $1.5 billion into schools, then all of a sudden you’re going to end up with a perfect product. We need to focus our attention on how we can end up with a quality education and a quality product at the end of the day and not just have a discussion about money.”
Sen. Minority Leader Watson of Greenville
About the governor’s spending plans: “This is the largest spending increase in the history of the state, the largest tax increase in the history of the state,” he says. “Another $16 billion in borrowing, and what troubles me greatly is to see the debt being piled upon debt.”
About universal health care: “Fifteen percent of people in Illinois do not have health care insurance, and I feel bad for them. But is it the government’s responsibility to take care of them from birth to the grave?”
About electricity rates: “The issue of the day is what’s happening with people getting their power? To not even spend four sentences on the power rate issue and then have the audacity to say I’ll sign whatever bill you agree to, that’s not leadership.”
About the gross receipts tax: “The consumer is who pays taxes in Illinois, and for him to stand there and say that this isn’t going to be an increase on taxes to the consumer is totally misleading to the public. There’s a certain amount of class warfare that’s being developed by these kinds of policies. It’s a hidden tax and those are the worse kind.”
Sen. James Meeks, a Chicago Democrat
He’s sponsoring the education reform proposal in Senate Bill 750, which we explain in our “Moneymakers” blog entry February 9, 2007.
“Generating new dollars for education is great, but true education reform is going to have to deal with property tax relief.” Under the governor's plan, Meeks says, “Those who are paying property taxes that are too high now, there is no room for relief for them.”
Sen. Christine Radogno, a Lemont Republican
She’s the Senate GOP budget negotiator and last year’s Republican candidate for treasurer.
About the gross receipts tax: “The consumers will be paying that. The assertion that he made in the speech over and over again — it’s corporate, not people — is just baloney. Corporations don’t have bank accounts and checkbooks the way a family does. There’s really no such entity. It’s a legal entity. There’s no question a $6 billion tax increase is going to be paid by people. If it was not going to be paid by people, why would he exempt food and drugs? Because he knows it’s going to apply to people. It is a sales tax that is embedded throughout the system, and people will pay it. They won’t be able to see it, but they will pay it, there’s no question.”
About pension bonding: “There are ways to do it that could be positive. The question is what are the details of his plan, and that’s oftentimes the problem with this administration: We don’t see the details. We’ll have to see how the bonds are structured, whether he’s going to take some of that bond money out to use as cash for budget relief today instead of putting it all in [pensions]. I would take a look at that, for sure.”
The governor's "moral imperative"
Gov. Rod Blagojevich proposed levying new taxes and floating bonds pay for his spending plans, particularly “universal health care,” education and pension obligations. Here’s the breakdown. Reaction from legislators and groups from around the state will come in the next blog.
Taxes
Governor: “This will ease the burden on the middle class and force big corporations to start paying their fair share.”
Businesses aren’t so excited about the new taxes, one of which — the gross receipts tax — would tax every Illinois-based business input as it goes through the distribution chain. Think of it in terms of two key factors — how many steps are in the supply chain and how many of those steps happen in Illinois — says Tom Johnson, president of the Taxpayers’ Federation of Illinois. (See his highlights of the budget here.) While the governor says five other states tax business’ gross receipts, Johnson says the governor’s plan as it would be applied could make Illinois unique and, therefore, at risk of losing a competitive edge.
The governor’s tax idea, expected to net of $6 billion a year, would eliminate the corporate income tax and phase in a tax on business’ gross receipts. That’s an alternative to expanding the state sales tax to such services as haircuts and car repairs. Some lawmakers and education groups prefer the sales tax expansion as a way to reform education funding and to relieve the burden on property taxpayers.
John Filan, the former budget director and current chief executive officer for the state, said Tuesday night that a gross receipts tax would be “less onerous” than an expanded sales tax because it’s broad-based and low-rate. However, Johnson says the gross receipts tax is not as low-rate as it seems on the surface, and there’s a risk that businesses would move part of their supply chains out of state to avoid the tax. “Companies that don’t make a profit would have a liability they didn’t have before,” he said last week at a Statehouse press briefing.
The other tax that’s likely to raise opposition, particularly among small businesses, is a 3 percent tax if employers don’t offer comprehensive health benefits to employees. The so-called payroll tax is expected to generate $1 billion a year, which the governor would use to help fund his new $2.1 billion health care program.
Health care
Governor: “First, we will cover the 1.4 million uninsured adults in Illinois. Second, we will help provide assistance to middle-class families so they can get, keep and afford the health care they need. Third, we will help small businesses pay for health insurance for their workers.”
Illinois Covered offers three types of plans. One gives state subsidies to help people pay for their private insurance plans if they don’t get medical benefits through their employers. Another offers rebates to help individuals or families pay their monthly insurance premiums if they have employer-based plans. And a third expands the public aid program FamilyCare for single adults who have children or for families with incomes at 400 percent of the federal poverty level ($80,000 a year for a family of four).
And businesses that have more than 10 employees and that don’t pay for at least 70 percent of employees’ health benefits will be assessed a 3 percent tax on their total payroll.
Education
Governor: “Ten billion new dollars [over four years] will help relieve the pressure on local property taxes and finally bring an end to the savage inequality in how we fund our schools.”
For fiscal year 2008 that starts July 1, he proposes spending $1.5 billion on education. Some of that money would increase the state minimum spent per student by $686, bringing the minimum to $6,020. Students would have more options for after-school tutoring, and the school year and school day would be extended.
He also would increase the reimbursement rate for special education teachers for the first time in 20 years.
Early childhood education would get $70 million to expand state-sponsored preschool for children of low- and middle-income families and $10 million for all-day kindergarten.
Teachers would have access to statewide mentoring programs and have incentives to work in schools with limited resources and poor test scores. The governor proposes working with teachers’ unions to develop “merit-based pay,” which would reward teachers whose students meet federal testing standards.
But perhaps most important to hundreds of districts that have been on a waiting for state capital funds to build new schools or do maintenance projects, the governor proposes $1.5 billion over three years for school construction.
Pensions
Governor: “Our plan will free up an asset like the [Illinois] Lottery, lease it, generate $10 to $12 billion and put that toward our pension obligation. That, along with another pension bond refinancing, will put an infusion of $26 billion into the system and bring down our liability from $41 billion to $15 billion.”
He wants to float $16 billion in pension obligation bonds and rely on $10 billion from leasing the Illinois Lottery. Filan says paying down the pension debt from $41 billion to $15 billion would require less drastic increases in the state’s annual pension contributions. He says increased investment returns would help pay off the debt.
Ginger Ostro, the governor’s budget director, adds private operators could run the lottery more efficiently because they’re more nimble and can respond better to the market.
Watch list
What wasn’t on the governor’s list of revenue ideas was an expansion of gaming. Instead, his administration is proposing a new renewal fee on gaming licenses. Meanwhile, state Rep. Lou Lang, a Skokie Democrat, has sponsored legislation to create four new casinos in the Chicago area. See more reaction in the next blog.
Watch for legislation that would consolidate some of the state’s 621 special funds dedicated for such services as youth alcoholism and substance abuse and veterans’ rehabilitation. As with other governors, Blagojevich has swept some surpluses of the funds to pad the state’s main checkbook called the general revenue fund. Some of those funds could be merged into the general revenue fund to shore up the state’s “rainy day” fund.
Taxes
Governor: “This will ease the burden on the middle class and force big corporations to start paying their fair share.”
Businesses aren’t so excited about the new taxes, one of which — the gross receipts tax — would tax every Illinois-based business input as it goes through the distribution chain. Think of it in terms of two key factors — how many steps are in the supply chain and how many of those steps happen in Illinois — says Tom Johnson, president of the Taxpayers’ Federation of Illinois. (See his highlights of the budget here.) While the governor says five other states tax business’ gross receipts, Johnson says the governor’s plan as it would be applied could make Illinois unique and, therefore, at risk of losing a competitive edge.
The governor’s tax idea, expected to net of $6 billion a year, would eliminate the corporate income tax and phase in a tax on business’ gross receipts. That’s an alternative to expanding the state sales tax to such services as haircuts and car repairs. Some lawmakers and education groups prefer the sales tax expansion as a way to reform education funding and to relieve the burden on property taxpayers.
John Filan, the former budget director and current chief executive officer for the state, said Tuesday night that a gross receipts tax would be “less onerous” than an expanded sales tax because it’s broad-based and low-rate. However, Johnson says the gross receipts tax is not as low-rate as it seems on the surface, and there’s a risk that businesses would move part of their supply chains out of state to avoid the tax. “Companies that don’t make a profit would have a liability they didn’t have before,” he said last week at a Statehouse press briefing.
The other tax that’s likely to raise opposition, particularly among small businesses, is a 3 percent tax if employers don’t offer comprehensive health benefits to employees. The so-called payroll tax is expected to generate $1 billion a year, which the governor would use to help fund his new $2.1 billion health care program.
Health care
Governor: “First, we will cover the 1.4 million uninsured adults in Illinois. Second, we will help provide assistance to middle-class families so they can get, keep and afford the health care they need. Third, we will help small businesses pay for health insurance for their workers.”
Illinois Covered offers three types of plans. One gives state subsidies to help people pay for their private insurance plans if they don’t get medical benefits through their employers. Another offers rebates to help individuals or families pay their monthly insurance premiums if they have employer-based plans. And a third expands the public aid program FamilyCare for single adults who have children or for families with incomes at 400 percent of the federal poverty level ($80,000 a year for a family of four).
And businesses that have more than 10 employees and that don’t pay for at least 70 percent of employees’ health benefits will be assessed a 3 percent tax on their total payroll.
Education
Governor: “Ten billion new dollars [over four years] will help relieve the pressure on local property taxes and finally bring an end to the savage inequality in how we fund our schools.”
For fiscal year 2008 that starts July 1, he proposes spending $1.5 billion on education. Some of that money would increase the state minimum spent per student by $686, bringing the minimum to $6,020. Students would have more options for after-school tutoring, and the school year and school day would be extended.
He also would increase the reimbursement rate for special education teachers for the first time in 20 years.
Early childhood education would get $70 million to expand state-sponsored preschool for children of low- and middle-income families and $10 million for all-day kindergarten.
Teachers would have access to statewide mentoring programs and have incentives to work in schools with limited resources and poor test scores. The governor proposes working with teachers’ unions to develop “merit-based pay,” which would reward teachers whose students meet federal testing standards.
But perhaps most important to hundreds of districts that have been on a waiting for state capital funds to build new schools or do maintenance projects, the governor proposes $1.5 billion over three years for school construction.
Pensions
Governor: “Our plan will free up an asset like the [Illinois] Lottery, lease it, generate $10 to $12 billion and put that toward our pension obligation. That, along with another pension bond refinancing, will put an infusion of $26 billion into the system and bring down our liability from $41 billion to $15 billion.”
He wants to float $16 billion in pension obligation bonds and rely on $10 billion from leasing the Illinois Lottery. Filan says paying down the pension debt from $41 billion to $15 billion would require less drastic increases in the state’s annual pension contributions. He says increased investment returns would help pay off the debt.
Ginger Ostro, the governor’s budget director, adds private operators could run the lottery more efficiently because they’re more nimble and can respond better to the market.
Watch list
What wasn’t on the governor’s list of revenue ideas was an expansion of gaming. Instead, his administration is proposing a new renewal fee on gaming licenses. Meanwhile, state Rep. Lou Lang, a Skokie Democrat, has sponsored legislation to create four new casinos in the Chicago area. See more reaction in the next blog.
Watch for legislation that would consolidate some of the state’s 621 special funds dedicated for such services as youth alcoholism and substance abuse and veterans’ rehabilitation. As with other governors, Blagojevich has swept some surpluses of the funds to pad the state’s main checkbook called the general revenue fund. Some of those funds could be merged into the general revenue fund to shore up the state’s “rainy day” fund.
Budget highlights
Tom Johnson, tax expert and president of the Taxpayers' Federation of Illinois, breaks down Gov. Rod Blagojevich's budget proposal for the next fiscal year with these highlights. The governor will give his annual budget address and combined State of the State to the General Assembly at noon today. We'll provide updates and reaction as much as we can throughout the day. And, as always, see Illinois Issues magazine for more in-depth coverage in the issue that publishes April 1.
Subscribe to:
Posts (Atom)
Posts
