Reform do-over

By Bethany Jaeger

In an unusual move, the Illinois legislative leaders asked the governor to veto a bill that Democratic members sent to his desk in May. Gov. Pat Quinn obliged, saying he would work with members of both political parties, as well as government reform advocates, to start from scratch — and get it done by October 14 — to tighten up the rules for the funding of political campaigns.

Quinn vetoed House Bill 7, which would have established contributions limits of $5,000 for individuals, $10,000 for businesses and labor unions and $90,000 for transfers from statewide political parties. Quinn said since he received the bill, he’s gotten a lot of feedback from individuals, reform advocates and newspaper editorials that the bill was flawed and could have unintended consequences, as well as risked turning voters away from a system that maintains the status quo. In turn, Illinois remains one of only a handful of states with no limits on the amount individuals, businesses or interest groups can donate to political candidates.

“I’d rather take more time to get it right and have public consensus behind it than hastily do something that might have happened in the spring,” Quinn said during a news conference with all four legislative leaders. They were joined by reform advocates from Change Illinois, a coalition of about 50 organizations seeking campaign contribution limits, among other things.

George Ranney, president and chief executive officer of Chicago Metropolis 2020, as well as a co-chair of the reform group Change Illinois, said the governor and the legislative leaders agreeing to work out a compromise before the General Assembly returns for its annual fall veto session was a “major step in the right direction.” Next, he said, “even more so, at this point, we think there is an opportunity to do the right thing for this state, to enact a bill that has strong limits, that has the right kind of committee structure and, importantly, has a real set of provisions for enforcement.”

It was "not perfect"
Quinn’s veto comes after he testified in favor of HB 7 in late May. Sitting next to House Speaker Michael Madigan, the governor said then that the bill was not perfect, but it was a “significant step forward” and that it was the “best we can do at this time.”

His testimony contradicted the recommendations of his own Illinois Reform Commission, which wanted more stringent contribution limits and other enforcement reforms.

Quinn said today that he seriously considered altering the bill or adding to it, which would have sent it back to the legislature. But he said it dawned on him that it was better to totally veto it and make a stronger bill. He added that he would seek the commission’s input on a new version. “Sometimes when you have to alter your course to make things better, you do that. I’d rather make it better than to not do it right.”

Senate President John Cullerton said in Quinn’s defense that a new negotiated bill wasn’t ready by the time Quinn had to act on HB 7 (he faced a Friday deadline). “We asked the governor to veto this bill. We asked him — the sponsors of the bill — asked him to veto it. Because if he signed it, there are people here who think it could be much better, and that would be interpreted as accepting something that had flaws. We didn’t want to do that,” Cullerton said. “He’s not flip- flopping. He’s doing what we’ve asked.”

Cullerton added that the general areas they intend to work on include the level of contribution limits and the ability of officials to enforce the new rules.

Cynthia Canary, who previously described HB 7 as “phony reform,” today defended Quinn. “We often slam our elected officials for not having a backbone, for not listening to us, for flip-flopping. What could be braver than listening to the people coming to the table and saying, ‘We hear you. We’re going to try to do things differently.’”

Republicans, who argued they were cut out of the negotiating process, deemed the bill “seriously flawed” and urged the governor to reject it in totality and start over. Senate Minority Leader Christine Radogno today commended Quinn for “courage” in not signing HB 7 just to have something on the books. “As desperate as our state is for reform, and that includes campaign finance reform, there was tremendous pressure on the governor to go ahead and enact a bill that really would have maintained the status quo or even made it worse.”

During the spring legislative session, Radogno sponsored multiple versions of campaign finance limits. One version matched recommendations by the Illinois Reform Commission and Change Illinois. It would have established contribution limits similar to those set at the federal level: $2,400 for individuals, $5,000 for political committees, businesses and unions, and $30,000 for legislative leadership. Her new bill eventually will appear in Senate Bill 2464 (the link won't be available for a while).

House Republicans also supported a Democratic-sponsored bill, HB 24, that would have mirrored federal limits.

House Minority Leader Tom Cross said today that agreeing to start over on campaign finance was a good beginning, but there’s more on the agenda. He said Republicans also want to address the idea of moving back the primary election date (now held in early February), allowing voters to recall elected officials, instituting special elections to fill vacant seats and reforming the redistricting process.

House Bill 7, as approved
HB 7 as approved by the Illinois General Assembly would not have taken effect until January 2011, after the next general election.

One point of contention among reform groups and legislators is that the bill set a pseudo limit on statewide political party transfers. While the dollar amount of transfers would be limited, the Democratic Party of Illinois, for instance, could offer unlimited in-kind contributions. That could include anything from support for advertisements, yard signs, mailers to manpower to knock on doors.

Anther debated provision would create a new type of fund for legislators to pay for maintaining their offices and assisting people in their legislative districts. Contributions to those funds would be capped at $5,000. The money could not be used for campaigns. Critics said the new so-called “constituent services” funds could be used as a loophole for politicians to throw political events.

And contrary to the wishes of the governor’s reform commission, HB 7 as approved would have only required real-time disclosure during the month of May, when state budget negotiations tend to peak. Other than that, political campaigns would have to file financial reports four times a year. The Illinois Reform Commission wanted politicians to immediately report contributions throughout the entire year. They currently only have to file major disclosure reports twice a year. The bill does include a provision to allow the Illinois State Board of Elections to audit candidates and committees if they missed two consecutive reporting deadlines.

House and Senate Republicans issued the following list of “flaws,” in addition to the points made above:

• “Limits are based on an annual cycle, not election cycles” — Annual cycles could benefit incumbents who could raise money year-round, while challengers would struggle to gain name recognition and financial support.
• “Too many possibilities for candidate committees” — It could spur the creation of even more political finance committees because each official and candidate would be able to have up to three separate committees, all with different contribution limits. House Minority Leader Tom Cross said that would cause a “diffusion of contributions, not a limitation on them.”
• “No comprehensive enforcement mechanism” — The Illinois State Board of Elections would gain little power and financial support to enforce the new rules, although it would be able to audit campaigns if they missed two consecutive reporting deadlines.
• “Doesn’t take effect until 2011” — That’s after the next general elections, which House Speaker Michael Madigan has said would make it fairer because candidates who started fundraising under the old rules would have an advantage over those who started under the new ones.

Two UI trustees remain

By Bethany Jaeger
Two University of Illinois trustees who refuse to resign after the exposure of an admissions scandal will remain. Gov. Pat Quinn said today he wanted to avoid potentially lengthy litigation that would distract from the new board’s mission.

“Indeed, I feel that if we went down that road, that would become the main show, as opposed to what we really have to do,” Quinn said during a Chicago news conference. “Our main focus should be on repairing the damage that ‘s been caused to the university.”

The Chicago Tribune reported in early June that over five years, about 800 students received special treatment and were admitted to the University of Illinois at Urbana-Champaign because they were sponsored by such politically connected officials as former Gov. Rod Blagojevich, legislators and university donors and trustees.

Quinn sought the voluntary resignations of all nine appointed trustees, as recommended by a special panel led by former federal Judge Abner Mikva. Two board members resigned before the report came out. Five resigned after. Two did not step down. They are Democrats Carroll Frances and James Montgomery. Quinn said he met with Frances and Montgomery and reiterated his stance that they had a fiduciary responsibility and that “if something goes wrong on your watch, seriously wrong, then you should voluntarily file your resignation.”

However, he said, it’s their choice to serve the remainder of their terms. Frances’ term ends January 2011, while Montgomery’s term is supposed to end in 2013.

“I am not going to seek to remove them,” Quinn said. “I think the litigation that would ensue if I did that would totally distract us from our mission at hand, which is rebuilding the public confidence in the integrity of the University of Illinois. That would be a sideshow.

He later added, “I think it’s much better to just soldier on with good men and women that I appoint.”

As of today, Quinn has filled two vacancies and said he would fill the remaining five before the board’s next meeting September 10.

Today, he appointed Christopher Kennedy, president of Merchandise Mart Properties based in Chicago and son of the late U.S. Sen. Robert F. and Ethel Kennedy (as well as nephew of the late U.S. Sen. Ted Kennedy). Chris Kennedy’s name was floated as a possible U.S. Senate candidate to fill the seat vacated by President Barack Obama and was mentioned as a potential candidate for governor. He opted not to run in either race.

“He’s a person of great accomplishment,” Quinn said. “He understands business, and he definitely believes in social service. He believes in education.”

Quinn also appointed Lawrence Oliver II of Orland Park. He has been a chief legal counsel for the Boeing Company since 2004. Previously, he was a private attorney and an assistant U.S. state’s attorney in Chicago, as well as a member of Quinn’s Illinois Reform Commission and a vice chairman of the state’s Executive Ethics Commission.

“He is a person who understands the law, and he definitely understands ethics,” Quinn said.

They replace Democrat Niranjan Shah, whose term was set to expire in 2015, and Lawrence Eppley, who lists his political affiliation as "independent" and whose term was to expire in 2013.

Of the 10 voting members, no more than five can be from the same political party. The trustees are charged with governing the University of Illinois, including all three branches in Chicago, Urbana-Champaign and Springfield.

Quinn, who is an ex officio member, said it’s up to the new trustees to decide how to reform the admissions process and whether to take action against the high-level administrators who were involved in the so-called Category I scandal.

Senate President John Cullerton is still encouraging the remaining trustees to step down, according to Rikeesha Phelon, his spokeswoman. “Since that is not likely to happen, he is reminding them that if Senate Bill 1333 passes the Senate, it will have the effect of removing the remaining trustees by law.”

The legislation was advanced as a way to force Quinn to “fumigate” state government from up to 750 employees or appointees put in place by then-Gov. Rod Blagojevich. The measure stalled during the spring legislative session. Cullerton is expected to call that legislation for a vote when the General Assembly convenes for its fall “veto” session in October.

Comptroller Dan Hynes, who is a Democratic opponent against Quinn in the February primary election, sent a statement through his campaign that said Quinn mishandled the situation from the beginning. “Yesterday, Gov. Quinn said he would act on the University of Illinois trustees issue with ‘certainty and with dispatch.’ Today he did neither. Unfortunately there is little that is certain about the ultimate resolution of a scandal first revealed last May, and acting with dispatch would have resolved this matter well before the students returned to class.”

Hynes did not say whether he would have forced the resignation of the remaining two trustees. A call to his campaign was not immediately returned. UPDATED: I just missed the Hynes' campaign returning my call last night. Spokesman Matt McGrath said that Hynes' criticism is not about the handling of individual board members, but it is about how Quinn handled the case from the beginning without immediately determining his legal powers to clear the board or not. He said Hynes would have been more immediate in determining those legal powers and would have set a deadline and established a clear plan to meet that deadline.

Ann Lousin, a John Marshall Law School professor who helped draft the 1970 state Constitution and who is a former chair of the Illinois State Civil Service Commission, points to the constitutional provision spelling out the governor’s ability to remove appointees. It states that the governor can remove an appointee for “incompetence, neglect of duty, or malfeasance in office.”

She said that provision — while arguable both ways — would not apply to gubernatorial appointees of the University of Illinois board of trustees. “Because then that would make the University of Illinois nothing more than a state agency under control of the governor and required to do his bidding.”

“If you want an independent board on the University of Illinois,” she added, “you do not allow the governor to get rid of them when they don’t part their hair right.”

Home services grant to be cut October 1

By Bethany Jaeger
A short-term borrowing plan approved by the General Assembly to prevent drastic cuts to human services might not be enough to prevent layoffs of workers who advocate for people with disabilities throughout the state.

A network of about two-dozen Centers for Independent Living were told earlier this month that starting October 1, a state grant that pays for recruiting and training personal assistants for individuals with severe disabilities would be cut. The so-called Home Services grant is funded through the Illinois Department of Human Services. It also pays for training of the people with the disabilities so they understand their civil rights when working with caseworkers and so they learn ways to manage their personal assistants.

The 23 Centers for Independent Living that operate throughout the state run on shoestring budgets, said Ann Ford, executive director of the Illinois Network of Centers for Independent Living based in Springfield. They already anticipated a 10 percent reduction in funding as part of the fiscal year 2010 budget agreement, which is expected to result in furlough days and potential layoffs. Cutting the Home Services grant on top of that would affect between 2,500 and 3,000 individuals who are served under the program each year, according to Ford.

For Mark Karner, director of advocacy for Progress Center for Independent Living in Forest Park, that means he’s out of a job Thursday. Karner also has multiple disabilities and needs a machine to help him breathe and a home aide to help him get out of bed each morning, among other daily functions. He expects to be on a job hunt, or, if he couldn’t find a flexible employer, then he would have to file for unemployment or Social Security, which he has not had since before he started working at Progress Center 16 years ago.

Tom Green, spokesman for the Department of Human Services, said it all comes down to the budget. “It’s the toughest financial challenge that Illinois has ever had. Everyone has to make sacrifices. There’s a limited amount of revenue in the budget that was passed by the General Assembly, not enough to cover all the expenses. And DHS has made cuts in all budget areas.”

He added that cuts to community-based services would have been far deeper, as much as 50 percent, without a $3.4 billion borrowing plan approved by the General Assembly in July. About $2.2 billion of that was slated for community-based human services. But that same budget agreement also relies on Quinn reducing another $1 billion in spending. The General Assembly gave Quinn unprecedented discretion in where to cut.

Ford said she was “very disappointed” in that budget agreement.

“We continue to borrow. We don’t really act like adults and look at what do we need to do to have enough revenue in this state to support the programs that allow some people some dignity in their lives,” she said. “It’s a huge disappointment to me that that was the option that was chosen, and it’s a bigger disappointment to me that the General Assembly then went home and said to the governor, ‘Do whatever you want to do.’”

On July 31, Quinn said that he would spread the cuts out in a way that would maximize federal matching and stimulus funds. And he said he would fund health-related initiatives that focus on disease prevention and that reduce demand for more expensive services later.

Karner said zeroing out the Human Services grant would do the opposite. Mike Ervin, for instance, needs the personal assistants. But he’s lived in his own condominium in Chicago as a freelance writer, a playwright and a community activist, and he’s not enrolled in Medicaid. Losing the personal assistants grant program, Ervin said, would take the system back 30 years. “Not only does it keep me out of nursing homes, but I employ five people. And it keeps us paying whatever taxes we do. It’s just positive all the way around. It’s the wave of the future, it’s the way the future should be going. And cutting it just such a huge regression.”

Karner said a meeting for consumers affected by the Home Services grant is scheduled in Chicago Friday. “I guess there’s still some glimmer of hope that the governor will change his mind before October 1,” he said.

Rallies against the cuts also are scheduled next Monday in Springfield and Chicago. Ford said if the centers don’t know by mid-September whether the grant will be restored, more layoffs are expected.

Republican transition

By Bethany Jaeger
As a handful of Republicans toss their hats into the ring for Illinois governor, their party’s ringleader of sorts surprised top GOP officials by stepping down Thursday during a meeting in Springfield.

Andy McKenna, chairman of the Illinois Republican Party since 2005, told state central committee members he was resigning to allow the party to transition before the February 2 primary elections, rather than waiting until his term was supposed to end. “I don’t to want distract you [during] the general election race,” he said.


The State Central Committee elected Pat Brady, a national committeeman, to fill out the rest of McKenna’s term. Members will elect a new chairperson after the primary election.

Countering some speculation, McKenna did not announce a bid for another race. He previously expressed interest in a bid for the U.S. Senate seat formerly held by President Barack Obama. His actions sparked controversy within the party, as Republican U.S. Rep. Mark Kirk, a five-term representative from Hinsdale, has announced in that race and is considered the front runner in the four-way contest.

McKenna instead told state central committee members that he would focus on building resources and getting involved in primary contests as chair of a “victory fund,” which he created to support Illinois’ GOP candidates.

The timing of McKenna’s resignation surprised party leaders, but Senate Minority Leader Christine Radogno said: “There’s been speculation for a while that a change might be coming. I don’t think anyone knew it was going to happen today or in this particular venue.”

She added, however, that the timing did help to avoid a distraction leading up to November 2010. “I think that it’s important that we get this chapter closed and settled and we have a new person at the helm the minute the primary’s over so that we can focus on the Democrats and not on the internal politics.”

Governor’s Day highlights 2010 primary

By Bethany Jaeger
Democrats got a preview Wednesday of what to expect leading up to the February 2 primary election: a partial-term governor who says an income tax increase is necessary to maintain essential state services versus a state comptroller who says citizens shouldn’t have a governor by default. They should have a choice.

Comptroller Dan Hynes stood a few feet away from Gov. Pat Quinn this morning when he said Illinois needs a governor who leads with “no sugarcoating, no short-cuts, no excuses.”

“We need a governor who can provide strong and steady leadership for smart budget policies that will put us on solid financial ground, and we will need a leader who will offer a clear, consistent and compelling vision for our future,” Hynes said. “That’s what this election is about.”

He spoke to a packed banquet hall during an annual breakfast of the Illinois Democratic County Chairmen’s Association in Springfield. Many Illinois elected officials typically attend the event before the annual State Fair rally day for Democrats.

Hynes continued to say that the Democratic Party has been through too much to take the path of least resistance. “The people of Illinois have been through too much to avoid asking tough questions and facing a public debate about which vision our party will embrace. I respect Pat Quinn. I find him to be a decent man, but this nomination must be earned, not bequeathed or signed or transferred. It must be earned.”

A few moments later, Quinn in his speech countered that on March 18, he proposed a budget that would raise the state income tax as a way to balance a severely out-of-whack budget and help recover from the aftermath of a nationwide recession. “Talk about courage. Talk about not sugarcoating our budget deficit. We have to tell the truth to the people of Illinois.”

Throughout his speech, Quinn thanked all statewide officers except Hynes. He even thanked local politicians, including Cook County Sheriff Tom Dart. The governor later said he would defend his record against Hynes’ statements, particularly since the comptroller has not endorsed the idea of an income tax increase. “He can stand on the sidelines and throw bricks at the guy in the middle of the arena, but I think part of the job of governor is not to be a shrinking violet, to take positions and to defend those positions and tell the people what they need to know,” Quinn said.

Hynes chose not to attend a Democratic rally at the State Fairgrounds later in the day because, he said, Quinn deserved to host of the annual Governor’s Day, a State Fair tradition. I ran into Hynes after the rally, when he said his budget plan would start with spending cuts, then find new revenues. "We have to eliminate wasteful spending and show the people that we’re doing everything we can to sacrifice and streamline before we ask them to pay more. And that hasn’t yet happened. Gov. Quinn has really been unwilling to do those tough things.”

As part of the budget agreement with the state legislature, Quinn already has cut $1 billion in spending and is charged with reducing another $1 billion before the end of the fiscal year. Among many other spending decreases, Quinn seeks furlough days and layoffs for state employees. But some of those plans require negotiations with public employee unions, who strongly oppose both ideas and instead say an income tax increase is necessary.

Governor’s Day at the State Fair
The Democratic rally completely differed from the past six years. The absence of former Gov. Rod Blagojevich, as well as busloads of union supporters that Blagojevich’s campaign brought in, made a difference. For the first time, the House speaker, the Senate president and the governor sat next to each other. Even Attorney General Lisa Madigan joined the rally, which she has not attended in a few years.

There was little drama, other than jokes made about six of at least eight candidates for lieutenant governor sitting on the stage together and addressing the crowd one by one.

Democratic leaders acknowledged that their political party faces many challenges, particularly the ethical lapses and fiscal woes exposed within the last year, but they tried to frame Blagojevich’s impeachment as a result of their proactive steps.

“As we face a challenge of ethics and integrity, it was the Democrats in the Illinois House of Representatives that initiated the impeachment proceeding against their own Democratic governor,” said House Speaker Michael Madigan. “We’re not happy with what happened, but when the time came, we were more than capable to make a decision that one of our own had done wrong and must be removed from office.”

Republicans will try not to let them get away with that, however. Senate Minority Leader Christine Radogno, whom I stood next to in the Statehouse basement during a tornado warning, countered the Democratic message. “They can try as hard as they want, but the people of this state are smarter than that. And the fact of the matter is, people need to remember, the Democrat legislature enabled Blagojevich from Day 1. So it’s difficult for them just to walk away now.” Madigan also co-chaired Blagojevich’s reelection campaign, she added.

Republicans will have their rally day at the State Fair on Thursday.

Revamped employee ethics rules enacted

By Bethany Jaeger
In a “week of reform,” Gov. Pat Quinn today signed Senate Bill 54, which addresses state employee ethics rules and lobbyist registration requirements. The governor enacted a revamped Freedom of Information Act yesterday.

Here’s the breakdown of SB 54 and some background, including why provisions to strengthen the role of inspectors general were needed (it relates to when former Gov. Rod Blagojevich formed the inspectors general but did not give them the ability to shine a light on ethics violations).

Employee ethics:

• Reports written by inspectors general will be made public record if the inspectors find wrongdoing and either suspend or terminate a state employee. Some information could still be blacked out, or redacted, if its release would harm an ongoing investigation.
• However, routine reports about the status of investigations will not be subject to requests under the Freedom of Information Act.
• Inspectors will be able to open investigations based on anonymous tips.
• The law clarifies the process for investigating potential ethics violations.
• The Executive Ethics Commission will house new procurement officers to oversee the way state agencies buy goods and services.
• Employees and candidates cannot promise compensated time off, benefits, raises, job promotions, favorable regulatory treatment or a state contract in exchange for a campaign contribution.
• State employees have to take an online ethics exam within 30 days of starting their new jobs, rather than within six months, as currently required.

Updated revolving door ban:

• Policymakers will not be able to resign and within a year accept a position with private companies that received significant state contracts from the agencies where the officials worked.
• The state is expected to have an easier time tracking which employees will be subject to the revolving door ban because the legislation also requires agencies and executive offices to list those employees. Those lists will be filed with the agencies' respective ethics commissions.

New lobbying rules:

• People who lobby state boards, commissions or retirement boards now will have to register as lobbyists.
• All lobbyists will have to abide by stricter disclosure requirements, including listing all expenditures related to lobbying activities, their clients and the subject matter of lobbying activities. The reports will have to be filed with the secretary of state on a weekly basis when the legislature is in session and monthly during the off-season.
• Many will have to pay a higher $1,000 fee, which is the way the state is expected to pay for more inspectors to monitor lobbying activities. House Speaker Michael Madigan previously said he would consider lowering the fee for smaller nonprofit groups in the future.

Quinn: "This will be a week of reform"

By Bethany Jaeger
The end of August marks a deadline for Gov. Pat Quinn, who has to act on legislation approved by the General Assembly before bills automatically become law. In Chicago today, Quinn deemed this week as a “week of reform,” starting with today’s enactment of the revamped laws to ensure public access to information. He could soon act on ethics legislation to limit the amount individuals and political organizations could donate to candidates.

Freedom of Information Act = Senate Bill 189
Quinn signed SB 189, which rewrites the Freedom of Information Act (background here). Starting in January 2010, the process of requesting public information is supposed to get faster and more accountable.

In addition to new training requirements and higher standards for denying access to information, the new FOIA will require public bodies to reply to requests for information within five business days, as opposed to the current seven days. And if a public body denies a request, individuals will have to take fewer steps and less time to appeal that denial.

“The main thing this new act does is enforce many of the good words that were already part of Illinois law that were ignored by public officials,” said Hanke Gratteau, a member of Quinn’s Illinois Reform Commission and former investigative reporter and managing editor for the Chicago Tribune. “There is now recourse if that is avoided, and that’s why it’s good enough for me.”

Local and state governments still can deny access to information under a series of exemptions, and the legislature still can withhold internal documents such as staff analyses and final reports drafted by consultants.

But there are new penalties, something absent from the current FOIA. Under the new version, if a court finds that a public official intentionally violated the FOIA or Open Meetings Act, the official could be fined between $2,400 and $5,000 for each offense.

The new law also gives new powers to the Illinois attorney general's office, where members of the public, media or government can seek help from a specialized lawyer to settle disputes about whether information should be released. The so-called public access counselor will have new authority to issue binding opinions and to subpoena information.

“Today, we can say that Illinois will officially make it out of the Stone Age of transparency,” Attorney General Lisa Madigan said. “We will end the culture of secrecy that surrounds our government, and we will have, I think, a better relationship and better trust with members of the public.”

The Illinois Municipal League, however, believes the new FOIA will place a heavy burden on local governments and won’t go as smoothly as lawmakers think in the next four and a half months, said Roger Huebner, the organization’s deputy executive director and general counsel. Every governmental body covered by the FOIA now has had its primary function fundamentally redefined to field information requests, regardless of whether their budgets have been slashed, he added. More background on the Municipal League’s statements are online.

Cara Smith, deputy chief of staff of policy and communications for the attorney general's office, said she disagrees and that the new law could lessen the burden on local governments because they will have a built-in resource with access to a public access counselor, as opposed to an outside legal counsel.

Heubner referred to commercial requests, in particular, as problematic because they tend to be broad, time-consuming requests. “That’s going to become a financial nightmare.” Local governments still can reject requests by deeming them unduly burdensome.

Heubner also said the new FOIA isn’t written for lay people and that information requests immediately will become legal matters if disputed. “This bill has gone from the hope to help the laymen to the lawyer’s dream.”

Smith said: "If the public body has denied a request and the citizen comes to us for help, then the public body will have to decide if they want to interact with us informally or if they have to get a lawyer. It's certainly not necessary." She added, "I recognize that the public bodies have not looked at this as a benefit to them, but I think that over time, they will see it as just that."

Quinn’s enactment of the new FOIA comes after the governor came under media scrutiny for reportedly using his personal cell phone rather than using a state-provided phone that is subject to public access laws. Quinn said in Chicago today that taxpayers do not pay for his private cell phone and that he doesn’t use it for official state business.

“I do not use this phone to make e-mails to government employees or conduct any kind of communication with government employees,” he said. “As the person of the attorney general’s office who oversees this law [determined], private phone calls that don’t come out of public funds are not subject to the Freedom of Information Act.”

Transparency = House Bill 35
The state also launched a new Web site where anyone with Internet access can look up state employee salaries, state contacts and state-issued licenses. It’s called the Illinois Transparency and Accountability Portal.

Individuals also can look up all board and commission members, as well as their terms and whether they get paid at a new site dedicated to executive appointments. It was created under Senate Bill 1602, which also establishes new ethics requirements for board and commission members.

Campaign finance reform = House Bill 7
Quinn indicated he also could act as soon as tomorrow on legislation that would limit the amount individuals and political organizations could donate to political campaigns. HB 7 won legislative approval but was not the version recommended by the governor’s own Illinois Reform Commission. (Background here.)

Quinn could use his amendatory veto power to change the legislation, although he said he uses that power judiciously. “I’m going to use that only where it’s needed and where it can advance the common good. I think that’s the way we have to do it. We don’t do it to kick the legislature in the shins. I don’t believe in that.”

Patty Schuh, spokeswoman for the Senate Republicans, said Minority Leader Christine Radogno asked the governor to veto the bill in its entirety "because it’s been called worse than nothing. We believe there is ample opportunity to revisit this if everyone is committed to change,” Schuh said.

Overtime costs corrections

By Bethany Jaeger
Gov. Pat Quinn plans to lay off as many as 1,000 prison workers at the same time a lengthy state audit reveals that overtime costs within the Illinois Department of Corrections increased from $19.2 million to $37 million two years ago because of staffing shortages.

The review by Illinois Auditor General Bill Holland’s office only pertains to fiscal years 2007 and 2008, when the corrections department was managed by a former director and under the administration of a former governor. Former director Roger Walker was appointed by then-Gov. Rod Blagojevich. Walker was replaced in June by Gov. Pat Quinn’s appointee, Michael Randle.

Holland said the deficiencies, including everything from spending more than authorized by the General Assembly to failing to spend money earmarked for hiring new frontline staff, does not paint a “pretty picture.”

“This goes to the heart of the failure of the management of the department,” he said, adding that because there have not been dramatic changes in the management since the two years in the audit, the foundation going forward is weak. “I think the new director has got some real soul searching to do with his management team.”

One problem cited in the audit was that the department violated the legislature’s intent by not spending extra money dedicated to hire new frontline staff. The General Assembly authorized spending $11.7 million to hire 231 new staff in fiscal year 2007, but only 154 new staff were hired. The next year, the legislature allotted $12 million to hire 500 new employees, but only six were reported as being hired. Instead, according to the audit, the department used the money to pay for existing staff, which also included more expensive overtime costs.

At the same time, the department reported that it lost 324 employees in fiscal year 2007 and 455 employees in fiscal year ’08.

The audit also states that mandatory overtime costs from inadequate staffing levels cost more money — overtime costs increased from $19.2 million in FY07 to more than $37 million the following year. The audit identified 126 employees working at various correctional centers that had worked so many extra hours during FY08 that they earned more $100,000, when their normal salary rates ranged from $40,000 to $75,000 a year. At Stateville Correctional Center, alone, overtime costs topped $13.7 million in FY08.

Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees, which represents many prison workers, said the most recent tab for understaffing at all Illinois prisons was more than $60 million in fiscal year 2009, which just ended June 30. “That’s a five-fold increase over just a few years ago,” he said.

“On its face it may seem counter intuitive,” Lindall added, “but it’s simple math that hiring new staff at the lowest end of the salary scale and paying them straight time is far cheaper than paying time and a half to more senior employees.”

According to the audit, the Blagojevich administration ordered the department not to hire new front line staff in fiscal year ’08.

“There were clearly directions from the Blagojevich administration that certainly did not help the day-to-day operations of the department,” Holland said. However, he added, 19 of the findings were repeated from the last two-year audit. And 28 new findings were added.

“These were not immaterial findings,” Holland continued. “These were findings of great significance that related from the top to the bottom of financial management of the Department of Corrections. And clearly it demonstrated that there was a failure on the part of the management of the Illinois Department of Corrections.”

Januari Smith, spokeswoman for the corrections department, said in an e-mail that the department already is looking to reduce overtime costs while also preparing for potential layoffs planned by Quinn. “A cadet class graduated from the academy last week and will be on the job soon. As well, another cadet class will begin in mid-August. Those staff affected by layoffs may be eligible for vacancies at other facilities across the state.”

Smith added that other corrective action is challenged by current budget constraints. “IDOC has limited resources and is working with antiquated systems. It’s a challenge to keep up with increasing requirements and a decreasing staff.”

UI admissions panel: The leadership failed

By Maureen Foertsch McKinney

A separate office of the inspector general should be established for CORRECTIONthe state's universities, Gov. Pat Quinn’s Admission Review Commission recommended Thursday. (We had it as the U of I only. So sorry for the mistake) As expected, the commission also recommended that Quinn seek the resignations of the entire board of trustees.

The new inspector general would act as an ombudsman and would review problems with the law or the university’s own policies.

Regarding resignations, Commission Chairman Abner Mikva, a former federal judge, said earlier this week: “Obviously, [the governor is] free to accept those he wants and reappoint or refuse the resignations of those he thinks are doing a good job or can continue to do a good job. It is clear, as an institution, the board of trustees has not been governing in a way that the university needs or [that it] has the kind of governance it should have.”

Both the chairman and immediate past chairman of the board of trustees — Niranjan Shah and Lawrence Eppley — resigned within the past 10 days as the commission wound down its deliberations.

The Chicago Tribune reported in early June that over five years, about 800 students were admitted to the University of Illinois at Urbana-Champaign after receiving special treatment because they had obtained recommendations from clout wielders such as former board of trustees chairmen, former Gov. Rod Blagojevich, legislators and university donors. The Tribune reported that the names of those students, including some applying for admission to the law school, were marked in red on so-called “Category I” lists and received special consideration.

Other recommendations the panel agreed to send to Quinn include:

• A firewall be placed around the admissions process so that no one except a designated individual in the admissions office be allowed to influence admissions decisions.
• Only a high school guidance counselor, individual student or parent should be allowed to check on the status of an admission.
• The university should have a clearly stated policy on what information — such as testing scores, grade point average or class standing — would be used for consideration of admission.
• The university should establish a clearly stated, transparent process for appeal of admission decisions.

Quinn’s panel interviewed more than 30 people over a six-week period.

Governor: Budget plan won't fund the full fiscal year

By Bethany Jaeger
Gov. Pat Quinn started using his unprecedented discretion to spread around about $3.4 billion largely to prevent drastic cuts to human services, followed by health care, education and public safety programs. At the same time, he continued to outline general areas of state operations that will get cut by $1 billion total. However, he said the reductions won’t free up enough money to satisfy such spending needs as financial aid for needy college students and health care liabilities for state employees and retirees.

During a Chicago news conference Friday afternoon, the governor’s office said the revised operating budget also does nothing to address the exceptionally high $3.9 billion backlog in unpaid bills. As a result, Quinn said he will continue to urge lawmakers to consider a temporary income tax increase to get through the rest of this fiscal year when they return to the Capitol in October.

Quinn said the roughly $26.1 billion spending plan would run out of money before the fiscal year ends next June. “We are aware of the fact that we are going to come up short this fiscal year.”

The General Assembly approved the spending plan July 15, giving the governor wide discretion in spending lump sums for each state agency. Legislators also approved a $3.4 billion short-term borrowing plan to make the state’s contribution into the public employee pension system, freeing up that same amount to put towards state operations. Of that, $2.2 billion is dedicated to community-based human services, while another $1.2 billion is up to the governor to divvy out. The plan also charged the governor with cutting an additional $1 billion.

Quinn said on Friday that he decided to spread the cuts out in a way that would maximize federal matching funds, as well as federal stimulus dollars. And he said he chose to fund health-related initiatives that focus on disease prevention and that could reduce demand for more expensive services later, including home health programs that allow senior citizens to remain in their homes rather than be sent to more expensive nursing homes.

The general areas of reductions have not changed since announced last month. The administration still plans to cut $185 million from state operations. The administration already sent out layoff notices earlier this month. Some employees will lose their jobs. Others will fill vacancies. Lawmakers and executive branch workers also will have to take one furlough day a month. The administration wants unionized employees to consider such concessions, but that would require the unions to open their active contracts that provide for annual pay raises.

“Do we really need the pay raise for union employees in the coming fiscal year, given all the things that have happened in this fiscal year?” Quinn said. “That’s $125 million. If the union said, ‘Well, we’ll take a pay freeze. We understand that we don’t want to, but we’re going to do that,’ then they can help save a lot of jobs.”

The idea is strongly opposed by the American Federation of State, County and Municipal Employees Council 31, the largest public employee union. Officials have met with the administration to bargain over the impact of layoffs, but they have not negotiated whether unionized employees will take furlough days, according to Anders Lindall, Council 31 spokesman.

“Should the administration make a proposal, we’re obligated to listen and prepared to do so,” he said in an e-mail. “But the height of this terrible recession is the worst possible time to reduce services to Illinois residents, whether by furlough or layoff of the frontline employees who make those services happen.”

Jerry Stermer, Quinn’s chief of staff, said frontline employees such as Department of Corrections officers will not be subject to furlough days because they would be replaced by fellow workers who would be paid for overtime. Stermer said the administration within the week would release more details about which employees would have to take unpaid days off.

Other general areas of spending reductions include grants to local agencies and governments, which would be reduced by $250 million.

Even after the cuts, the administration contends that Medicaid funding will fall $600 million short of the need, and financial aid for low-income college students will be reduced by $225 million.

“Some legislators screamed to the heavens, ‘Cut, cut, cut,’” Quinn said. “We have cut. We have cut from here to Kingdom Come. I don’t like college scholarships being cut $225 million. That’s our future.”

On the other hand, the administration does plan to put more money toward some education programs, human services and other public health and safety initiatives.

As part of the $3.4 billion borrowing scheme, Quinn must dedicate $2.2 billion to human services. Here’s how he said he would spend it:
- $1.4 billion for grants to programs that serve people with developmental disabilities, drug and alcohol addictions and mental health needs.
- $342 million for Department on Aging community care program, aimed at keeping seniors in their homes.
- $272 million for the Department of Children and Family Services for court-ordered services.
- $27 million for community adult education and GED services.
- $18 million for Chicago-area mass transit subsidies and free rides for seniors and people with disabilities.

The remaining $1.2 billion is slated to be split among programs related to health, education, disease prevention and public transportation. Some examples include:
- $300 million for Medicaid.
- $700 million for group health insurance for state employees and retirees.
- $85 million for early childhood education (brining it up to about 90 percent of last year’s funding levels). See our July 21 blog for background.
- $11 million for bilingual education (bringing it up to about 90 percent of what they were operating at before).
- $17 million for HIV/AIDS community-based programs (“pretty much full strength” funding levels compared with last year).
- $9 million for breast and cervical cancer screening programs.
- $13 million for Amtrak.

Stermer said while the new spending plan authorizes $26 billion in spending from the general revenue fund, it falls $1.4 billion short of funding services at last year’s levels and does nothing to address the $3.9 billion backlog of unpaid bills.

The cuts that are being implemented now may not be the last, he said. “We may have to make additional cuts as time goes on if we cannot make resolution with the General Assembly as to the unmet needs.”

He referred to the administration’s belief that an income tax increase will be necessary to get through the rest of the fiscal year.

UI admissions panel narrows in on recommendations

By Maureen Foertsch McKinney
The committee entrusted with evaluating the admissions process at the University of Illinois is expected to recommend that Gov. Pat Quinn at least seek the resignation of the chair of the board of trustees, Niranjan Shah, said committee member Ric Estrada today.

The admissions review committee established last month by Quinn (press release here) is expected to review a report outline tomorrow and submit its recommendations by August 7.

In early June, the Chicago Tribune reported that over a five-year period, about 800 students were admitted after scoring recommendations from such clout wielders as Shah, former Gov. Rod Blagojevich and university donors. The Tribune reported that students whose names were marked in red on so-called clout lists received preferential treatment, including special consideration for admission to the law school.

According to the Tribune, documents the newspaper obtained showed that Shah in 2007 directed Chancellor Richard Herman to hire his future son-in-law Maarten de Jeu at the Champaign-Urbana campus.

In testimony before the committee last week, as reported by the Tribune, Shah acknowledged that he intervened on a relative’s behalf when she forgot to apply to an honors program at the Champaign-Urbana campus.

Shah could not be reached for comment today.

Meanwhile, with his resignation Tuesday, University of Illinois trustee Lawrence Eppley joined mounting calls for the board step down.

Commission Chairman Abner Mikva, a former federal judge, told WGN radio in Chicago that he supports the mass resignation of the board. “I think the best thing that could happen, as far as the state and the governor, is if all of them would submit their resignations and he would decide which, if any, he would keep.”

Retired presidents James Stukel and Stanley Ikenberry earlier this week also told the panel they would support replacement of the current board, while current President B. Joseph White called the situation a “crisis” for his campus.

According to the Tribune, Eppley, a Chicago-based attorney, played a greater role in admissions requests than other trustees. Eppley also served as Blagojevich’s intermediary in cases that included “one in which a relative of political fundraiser Antoin ‘Tony’ Rezko’s had his rejection overturned following Eppley’s involvement,’’ the Tribune reported.

Then-Gov. George Ryan appointed Eppley to the board in 2001, and he was elevated to chair in 2003 by Blagojevich. His term would have expired in 2003.

“I thank him for his years of service and wish him well,’’ Quinn said in a statement announcing Eppley’s resignation.

Education cuts "rough" this year, worse next year

By Bethany Jaeger
Grant-funded education initiatives ranging from after-school programs to gifted education were “zeroed out” in a $7.2 billion budget adopted today by the Illinois State Board of Education.

The budget relies on about $362 million in cuts. It would have been worse without about $2 billion in federal stimulus funds, which won’t be available next fiscal year.

“This is a rough year. Next year could be a catastrophic year,” said Jesse Ruiz, chairman of the Illinois State Board of Education, which met in Springfield today for an emergency meeting to enact the fiscal year 2010 budget.

Next fiscal year, the board anticipates having to cut an additional $1 billion “just to tread water” and maintain this year’s funding levels, even with 25 percent to 100 percent reductions for education-related grants, said state superintendent Christopher Koch.

The cuts are the result of a $26 billion state operating budget enacted last week. The General Assembly relied on $3.5 billion in short-term borrowing. While much of that money is earmarked to helping prevent more severe reductions in grants to community-based services, none of it so far has been dedicated to education-related grants.

For instance, agricultural education was cut in half. Early childhood education programs were reduced by a third. Bilingual education lost funding by a quarter. And $3 million for homeless education programs was eliminated, but the board said federal stimulus dollars will cover some costs this fiscal year. As we wrote about in Illinois Issues magazine this spring, the number of homeless youth is increasing while funding has failed to keep pace for years.

When deciding how to spread the pain, the board chose to fully fund general state aid and so-called mandated categoricals, which cover special education and transportation costs. The minimum amount of state aid provided for each student increased by $160, bringing the so-called foundation level up to $6,119.

Board member Joyce Karon said fully funding general state aid and mandated categoricals accomplishes two goals: It spreads the money around to reach as many students as possible and grants the most flexibility to local school districts.

The board also avoided cutting programs or line items that would leverage significant amounts of federal matching funds. If the board decreased funding for certain programs, it would fail to satisfy federal requirements to maintain past funding levels, added Linda Mitchell, the board’s chief financial officer.

“The budget passed by the General Assembly gave the board a lot of discretion, and that means gave the board a lot of difficult choices — a lot of ‘Sophie’s Choices’ of which children and which programs,” Mitchell said.

Ruiz added that the General Assembly again is mandating that districts provide such services as bilingual education but it is not approving the necessary funding. “We are just in essence putting the burden on local districts to somehow find the means and putting more stress on them,” he said. “And we can’t, as regulators in that regard, let them off the hook. Yet, we’re kind of passing the buck.”

On multiple occasions he reminded more than two-dozen advocates in attendance that the new budget has a political context: Incumbents and candidates will be campaigning throughout the state as they prepare for the 2010 elections. He said this year’s budget process, while disheartening, should energize advocates to pressure politicians to explain why they rejected revenue increases.

“Before you give them a check and a dime, challenge them and ask them how they’d invest in education in the future,” he said. “And I don’t want platitudes. I want specific plans. And make sure how they’re going to balance it all.”

He continued: “We need to become very, very, very discriminating consumers of our public officials. And I for one would raise the benchmark in my level of scrutiny in that regard. Keep your dollars in your pocket. Give to a school before you give it to a candidate.”

One advocate was Linda Drust, Williamson County Early Childhood Cooperative executive director. She said the 33 percent reduction to early childhood block grants would mean that her organization, which serves five school districts in southern Illinois, would go from serving 600 at-risk children to 400. She said she did not have alternative funding sources.

One wild card is whether Gov. Pat Quinn will use some of his discretion in a limited amount of money left over to fund such grants as early childhood education. The short-term borrowing scheme approved as part of the fiscal year 2010 budget deal allotted $2.3 billion to community-based human services and left $1.3 billion for him to spend as he chooses.

FutureGen on track to a 2010 decision

By Bethany Jaeger and Jamey Dunn
The east-central Illinois’ site for the first-of-its-kind, cleaner-burning power plant meets all environmental standards needed for FutureGen to continue, according to a recent decision by the federal government.

The U.S. Department on Energy issued a formal opinion called a record of decision, one regulatory step needed for the public-private partnership to move forward. Any small step forward is a big relief for a group of investors, as well as state and local officials, who have worked since at least 2004 to secure support of the technology called fully integrated carbon capture and sequestration. Simply, it would capture carbon dioxide pollutants and trap them underground. The goal is to capture 90 percent of the carbon emissions by the third year of a five-year test period, according to the record of decision.

The entire project and design of the Mattoon plant stalled in January 2008, when former President George Bush’s administration pulled support because of concerns about growing costs and increasing risks to taxpayers. A federal report by the Government Accountability Office, however, later indicated accounting errors overestimated the cost by $500 million.

The Mattoon site and the project were revived last month when U.S. Energy Secretary Steven Chu of President Barack Obama’s administration committed to working toward constructing FutureGen in Mattoon and contributing $1.073 billion, $1 billion of which is expected to come from the federal stimulus package. Including the cost of materials, recent estimates have said the total price tag could exceed $2 billion.

A group of investors and energy industry stakeholders called FutureGen Alliance would have to foot at least $400 million to $600 million of the remaining costs. The goal was for at least 20 partners to contribute a total of $20 million throughout the next four to six years.

But two partners recently dropped out of the alliance, reducing membership to nine. American Electric Power Co. and Southern Co. cited concerns about costs. Steve Higginbottom, spokesman for Southern Co., added that the company pulled out to focus on other technology research being conducted by the government and industry partners. The uncertainty of FutureGen also contributed, he said, but added: “We’re supportive of the FutureGen project. We think it has the potential to lead to some developments.”

The state’s involvement has included the Illinois Department of Commerce and Economic Opportunity, which now will contribute to more behind-the-scenes work, said Marcelyn Love, agency spokeswoman. That will include helping to prepare the final design and the site layout. “But we will continue to do whatever is needed to ensure that FutureGen can become a reality,” she said.

Illinois' recent enactment of a capital construction program includes $17 million, which Love said is intended to help pay for site development or construction.

The next stages in the project will start at the end of this month and continue through early 2010. The U.S. Energy Department listed the following steps:

• Restart preliminary design activities.
• Complete a site-specific preliminary design and update the cost estimate.
• Expand the alliance sponsorship program.
• Develop a complete funding plan.
• Consider adding “subsurface characterization.”

A decision about whether to discontinue the project is expected by early 2010.

Budget deal reached but only builds a bridge

By Bethany Jaeger, with Jamey Dunn and Hilary Russell contributing
The state now has an operating budget in place, although the legislature likely will have to address a remaining $4 billion to $5 billion deficit later this year or early next year. Gov. Pat Quinn enacted the 12-month spending plan soon after it won approval by the General Assembly Wednesday night.

Numerous legislators described the package as less than ideal, the least bad option or a bridge to buy time until lawmakers agree on alternative revenue sources and long-term reforms. Instead of generating new revenue through a state income tax, the spending plan relies on various forms of borrowing and debt instruments.

Several lawmakers echoed the sentiments of House Majority Leader Barbara Flynn Currie: “We have run out of options,” just as state workers and agencies have “run out of time.”

The governor signed the spending portion of the bill (Senate Bill 1216) late Wednesday night, which will allow the comptroller’s office to issue hard copies of paychecks to 5,000 to 6,000 state employees Thursday, said Carol Knowles, spokeswoman for the comptroller.

Human service agencies are in a less certain position. While community-based providers received some assurance of state support, the governor will have wide discretion when deciding how to divvy out limited remaining funds and where to further reduce spending.

The budget deal primarily relies on borrowing to pay public employee pensions, borrowing from state agencies and essentially borrowing from Medicaid providers that don’t receive federal stimulus funds because the payment cycle is likely to lengthen.

Sen. Donne Trotter, a Chicago Democrat and budget negotiator for his caucus, said, “It’s not the best deal, but it will keep us going until we can really sit down and get a grasp on how we’re going to change doing business here in the state of Illinois.”

Even Rep. Bill Black, a Danville Republican, who berated the recent budget-making process as primarily behind closed doors and inadequate for essential state services, ended up voting for the bill that he disliked. “Because there is no alternative,” he said afterward.

Spending = SB 1216
Grant-funded services will receive an average of 86 percent of the funding level originally sought by the governor, while much of state government operations will receive about the same level as last fiscal year.

The Illinois Department of Transportation will get some extra money to hire engineers who will handle the increased workload generated by the federal stimulus package and state’s $31 billion capital construction program recently enacted.

Cost-cutting measures (included in the BIMP) = SB 1912
There will be significant cuts, but the legislature left it up to the governor to decide when and where. Quinn also will have authority to take “administrative charge backs,” which basically are loans from state agencies that the state has to repay.

Members of the executive branch and of the General Assembly will have to take 12 unpaid days off, which amounts to about 4.5 percent of legislators’ annual salaries and stipends, according to Rep. Frank Mautino, assistant majority leader from Spring Valley. The governor also said he hopes to negotiate furlough days with unionized employees to avert the need for layoffs as large as 2,600 workers.

The governor now has authority to ask agencies to reserve a percentage of their funding in an attempt to save an additional $1.1 billion (on top of the $1 billion he’s already supposed to cut). He would have a rare range of flexibility in deciding how to cut that $1.1 billion.

“There is a check on it, but it’s a much greater latitude than anyone’s ever had, the first year of [former Gov. Rod] Blagojevich included,” Mautino said. If Quinn if were to lower a service provider’s payment rate or raise co-payment amounts for people enrolled in state-sponsored programs, then he would have to go first get approval from the legislative panel called the Joint Committee on Administrative Rules.

The governor won’t need that committee’s approval to tell state agencies to reserve a percentage of their funds to, say, hold the line on travel costs. To close a prison or other state facility, he would still have to go through a public review process of another legislative panel, the Commission on Government Forecasting and Accountability.

Elementary and secondary schools will receive about $161 more in general state aid per student than they received last year, but that’s less than the governor originally planned. Mautino said the hope among some lawmakers is that he’ll put more of his discretionary spending money into grants for early childhood education and other education-related programs.

Borrowing = SB 1292
One of the main revenue sources that prevented the need for deeper cuts is a short-term borrowing scheme that increased to about $3.5 billion. Of that, $2.2 billion will go to community-based human services. The governor will have wide discretion in spending the remaining $1.2 billion.

Rep. Patricia Bellock, a Hinsdale Republican, said such groups as substance abuse providers fear that their funding will remain cut because their services are not matched by federal Medicaid reimbursements. Currie said during floor debate that the governor would have discretion to shift money to those services.

The borrowing scheme received mixed reactions. “This is one of the only cards we have left on the table,” said Rep. Kevin McCarthy, an Orland Park Democrat.

“We are not acting prudently,” said Rep. Jack Franks, a Marengo Democrat. “This will not balance the budget. Let’s not kid ourselves. This is only smoke and mirrors.”

Rep. Dave Winters, a Shirland Republican, added that borrowing this year would automatically create a budget hole next year because it’s a one-time revenue source that will have to be repaid by about $750 million a year. Sen. Bill Brady, a Republican from Bloomington, said that the budget sets the state up to fall off of a “financial cliff” next year because it relies on short-term borrowing and stimulus funds that will not be available in the future.

What’s not in the budget?
What the budget deal will not do is address the state’s multibillion-dollar backlog of unpaid bills. In fact, the spending plan might even create longer payment delays for providers that don’t receive extra federal stimulus funds for Medicaid reimbursements.

The state will maintain payment cycles for providers such as hospitals that capture extra federal stimulus funds. That does not include pharmacists or some grant-funded human services, however.

Sen. Jeff Schoenberg, an Evanston Democrat, said the longer-term structural deficit will continue to plague state-funded services. “One thing that we’ll know with absolute certainty is that all of the hospitals, nursing homes and community-based health and human service providers will continue to experience severe cash flow problems,” particularly as the economic downturn makes it harder for them to access lines of credit, said Schoenberg, who said he’s working on two backup proposals if the borrowing schemes don’t pan out as hoped.

What’s next?
The legislature adjourned without a date certain to return, although the annual fall “veto session” is scheduled to start October 14.

When the legislature comes back, it’ll have an opportunity to reassess whether the revenue outlook improved from the economic stimulus and state construction programs. And when crafting next year’s budget, they won’t have to tackle as large of a pension payment ($4 billion topped a ramped-up payment schedule this year).

But Senate President John Cullerton said the state won’t be able to borrow its way through another year and that a tax increase is “inevitable.” “Now you see why we need the tax increase, if for no other reason than to pay [bills] instead of borrowing.”

Chicago Democrat Sen. James Meeks, longtime advocate for an income tax increase similar to House Bill 174 that the Senate approved in May, was absent from the floor during the vote. Meeks has campaigned for the income tax increase because he said it would provide property tax relief and create more equitable funding for education. Earlier in the day, Meeks said: “You either borrow or you vote for revenue. So since I voted for revenue, I’m not voting for borrowing.”

Budget bills

FYI: These are the five bills the governor signed Wednesday night:

• SB 1216 = spending bill
• SB 1292 = bonding bill ($3.5 billion)
• SB 1912 = budget implementation bill (with cost-cutting measures)
• SB 1433 = fund sweeps
• HB 2206 = designates state and federal funds

Expect ILGA action on Burr Oak this week

By Jamey Dunn
Public outcry and personal tragedy spurred quick reaction to a Chicago-area cemetery scandal.

Investigators revealed last week that bodies buried in Burr Oak, a historic African-American cemetery in Alsip, were moved and dumped into a mass grave in an apparent scheme to resell individual gravesites. Four cemetery employees have been charged in connection with the scam.

Rep. Monique Davis, a Chicago Democrat whose district includes Burr Oak, said that as early as tomorrow, the General Assembly could consider legislation intended to address regulatory gaps exposed by the crimes. “I think emergency legislation is surely needed,” she said.

The measure is part of a joint effort from area legislators, Comptroller Dan Hynes, Gov. Pat Quinn, Cook County Sheriff Tom Dart and Cook County State’s Attorney Anita Alvarez. It is expected to include:

1. Licensing requirements for cemetery owners and staff that would be overseen by the Illinois Department of Financial and Professional Regulation.
2. Cemetery maintenance and record-keeping standards.
3. Increased criminal penalties for disturbing a grave site, which already is a felony.
4. Recourse for families to seek financial compensation if their relatives’ graves were affected by the Burr Oak scandal.

Legislators voiced concern that other cemeteries in Illinois might have severe maintenance problems and called on citizens to report any suspicious activities or neglect to local authorities.

Citizens will soon have a forum to air their concerns. A task force originally created to address collapse of the state’s pre-need funeral trust also will look into potential reforms of cemetery regulation and licensing. Rep. Dan Brady, a Bloomington Republican and licensed funeral director, said hearings could start by the end of the month and would allow victims of the Burr Oak scheme, law enforcement officials and industry insiders to testify and to offer input on possible reforms.

Sen. Donne Trotter, a Chicago Democrat who said he has 27 family members buried at Burr Oak, said it could be difficult for lawmakers to address such an emotionally raw issue that has personally affected many among their ranks. “There are no easy answers,” he said. “There can’t be — ’cause who would have thought?”

As for the four charged with disturbing graves at Burr Oak, Trotter added: “There’s not a jail cell or holding that’s cruel enough. There’s not a hell hot enough for these individuals to go to.”

12-month budget deal within reach

By Bethany Jaeger, with Jamey Dunn contributing
The top four legislative leaders and the governor have a general agreement to work toward a full 12-month budget, as opposed to a partial-year budget that would last only five months, without raising income taxes.

But even with a general agreement, the state still is likely to face a deficit that the legislature would have to address this fall or winter, possibly during its annual fall “veto” session. The size of that deficit, however, is still unknown or, at least, debatable. The governor’s most recent estimate is a $9.2 billion gap in revenues versus spending.

The leaders met twice with the governor Tuesday. Senate Minority Leader Christine Radogno said after the second meeting that while the state would still have a massive backlog of unpaid bills, the revenue outlook could improve with activity from the federal stimulus package, the statewide construction program enacted Monday and other longer-term reforms to Medicaid and pension liabilities sought by Republicans.

“So we have to wait and see how the reforms and how the stimulus elements come together, and that may improve our revenue position,” she said. “I don’t know that. But I do know, as of tonight, we should avoid having a meltdown in state government.”

Not all were so sure. “They’re close," said Rep. Art Turner, a Chicago Democrat, "but … close counts in horseshoes. This is politics. We still haven’t gotten there, yet.”

The new fiscal year started July 1. Layoff notices to state employees went out July 7. Numerous human services providers that get state funding have reduced programs and laid off their own employees because their shoestring budgets can’t survive without knowing when they would receive their next state payments.

The general agreement among legislative leaders includes enacting a 12-month budget that relies on revenue from refinancing state debt (Senate Bill 1609, which already was enacted), sweeping dedicated funds (SB 1433) and borrowing more money. The short-term borrowing scheme has changed from its original version. Instead of floating $2.2 billion in bonds, the state would float $3.6 billion. The governor also would still have to cut an additional $1 billion in spending. The legislature would give him wide discretion to cut as he saw fit.

The short-term borrowing would help the state make its $4 billion payment into the public employee pension system this fiscal year. The borrowing would free up money that would be used to prevent severe cuts to community-based services. While numbers vary, one estimate by a House Democrat is that the new budget deal could result in service providers receiving about a 13 percent cut, as opposed to a 50 percent cut, as previously approved. The governor vetoed that measure (SB 1197).

Human services
So instead of the so-called 50 percent budget for human services, providers would get about 87 percent of what they received in state support last fiscal year.

“We’re getting very close to what [the governor] was looking for,” said House Minority Leader Tom Cross.

But, he added, the situation has been painted as more severe than it needed to be. “I think the approach a month ago was to attempt to scare legislators into a tax increase. I didn’t think that was a good approach,” Cross said. “I think at the end of the day, [cuts to human services] will not be nearly as severely as the governor portrayed six weeks ago.”

Both minority leaders and Senate President John Cullerton added that state employees and service providers now need reassurance that they’ll still get paid. “Unfortunately, some people come to believe that they’re going to be shut down, that their not-for-profit agencies are not going to be able to operate,” Cullerton said. “And that’s been unfortunate because that was never the case, never had to be the case.”

Under the new version of a budget deal, about $2.2 billion of the short-term borrowing scheme would benefit human services. Quinn would be able to decide how to spend the additional $1.3 billion that the legislature is expected to add to the borrowing scheme Wednesday.

Income tax update
An income tax increase temporarily is off the table. Quinn recently said he would delay his campaign for a tax increase until the fall or winter. Fewer votes would be needed in January. And some legislators have requested the governor “tone down the rhetoric” for the next few months, which would allow them to find out whether they face serious opponents in the 2010 elections before being called to vote on a tax increase.

But the idea of a tax hike still has support, particularly among Senate Democrats.

“It’s not dead,” said Sen. Terry Link, a Waukegan Democrat. “It may be on pause, but it’s definitely not dead.”

Sooner or later, he added, state government will have to have a “revenue infusion” to keep operating. Cullerton gave a sneak peak into his campaign for a tax increase when he seeks support from Republicans. He said if the legislature had approved an income tax increase this year, the state could have used the revenue to pay its backlogged bills rather than borrowing money to do so. “That would be a conservative, responsible response to a fiscal crisis,” he said. “That’s what our income tax increase could be characterized as.”

After spending most of the day in closed-door meetings, some legislators headed to the Major League Baseball All Star baseball game in St. Louis, where President Barack Obama was scheduled to toss the ceremonial opening pitch. The legislative leaders are scheduled to meet again at 11 a.m. Wednesday. And they expect to take action on parts of the budget deal as early as Wednesday afternoon.

AFSCME lawsuit
If things fall into place tomorrow, then some groups of state workers would be paid up to a few days late.

In an attempt to ensure that state workers continue to get paid if things fall apart and a budget is not in place, the American Federation of State, County and Municipal Employees Council 31 filed a lawsuit today in St. Clair County. The union made a similar move in 2007 when the legislature failed to produce a budget by the end of the fiscal year. AFSCME spokesman Anders Lindall said, “Unfortunately, we’re in the same boat.”

The lawsuit would apply to all state employees. “The fundamental legal principles are the same for any state employee,” Lindall said. “If you work, you are entitled to be paid in full and on time for that work.” He added that if lawmakers can agree on a budget in the next few days, the suit would not be necessary.

Ready, set, shovel

By Bethany Jaeger
Shovels could break ground within a few weeks as the state signs contracts for new road construction jobs. Gov. Pat Quinn signed into law a capital spending plan that his office said would create or retain as many as 439,000 jobs throughout the next six years.

“By advancing this now, we can still have an impact during this construction season. We should not let a minute go to waste,” Senate Minority Leader Christine Radogno said in a statement. At a bill-signing ceremony in Chicago Monday afternoon, she added: “These last several years, successes in Illinois government have been few and far between. But what we have here today is a major success. It’s a beautiful thing.”

Trade group members are on the edge of their seats waiting for projects to start, according to Beth Tatro, director of external programs the Illinois Road and Transportation Builders Association based in Itasca. “We’re at the point right now where our companies are starving,” she said. “This has been an early Christmas present.”

But time is tight for projects to begin this month. Engineers have to design the work, the department has to seek bids for contracts to do the work and then they’ll start building. “If the project is already on the shelf, as soon as we get the money, we can build them,” Tatro said. If some of the projects were designed three years ago, engineers might have to review the plans and adjust the costs.

According to the Illinois Department of Transportation, about $448 million in highway projects already have been let. And an additional $310 million would be obligated for highway projects this fiscal year. The distribution of money for downstate mass transit projects, however, has not yet been decided, according to the department.

In addition to improving transportation-related infrastructure such as roads, bridges and mass transit, the $31 billion capital plan will finance projects that build new schools, make schools and homes more energy efficient and support vocational and early childhood facilities. Environmental and economic development projects also are slated to help clean up contaminated sites, deploy broadband Internet technologies, support jobs in economically depressed areas and help build affordable housing units for veterans and people with disabilities. Another goal is to expand high-speed rail between Chicago and St. Louis.

The capital plan, however, does not mean that Illinois has an operating budget. The lack of a state operating budget for the fiscal year that started July 1 has led to ongoing layoffs and service reductions for community service agencies. Without a spending plan in place this week, some state employees could not receive their full paychecks on time.

The governor indicated last Friday that he would postpone his campaign to enact a temporary income tax hike until this fall, which would allow incumbent legislators to know whether they have serious primary election challengers in 2010. Quinn also indicated last week that he would, despite early opposition, consider a five-month budget to at least keep the state operating until the legislature returns for its annual fall session in November.

The legislature will return to the Capitol Tuesday afternoon. Legislative leaders are scheduled to meet with the governor Tuesday morning.

“The General Assembly must pass a balanced budget that makes essential cuts and cost efficiencies, while also providing for our most vulnerable and needy residents,” Quinn said in a statement Monday.

The governor previously said he would not sign the capital plan into law without an operating budget on his desk because without it, bond rating agencies were likely to downgrade the state’s bond status, which would make it more expensive for the state to borrow.

Financing the statewide construction program
The flow of revenue to pay for projects outlined in the program, Illinois Jobs Now!, comes from a variety of fee increases and gaming expansions. Driving-related fees for vehicle titles, license plates and drivers’ licenses combine with expanded sales taxes on candy, some tea and coffee drinks, hygiene products and wine and beer.

The revenue bill is House Bill 255.

The spending bill is HB 312.

The bonding bill is HB 2400.

The state would garner 80 percent of the revenue generated by new sales taxes on candy and grooming products, which will include soaps, shampoo, toothpaste, mouthwash, deodorants, and suntan lotions and sunscreens that don’t require prescriptions.

A more controversial and, potentially, legally challenging revenue source would be the legalization of video poker in places that serve alcohol. Numerous bars, clubs and riverboats throughout the state already have video poker machines, but hundreds illegally pay winners under-the-table. The new state law would legalize the payouts and then tax the profits, generating up to $300 million a year once fully implemented, according to the governor’s office.

Supporters, including coin machine operators and beverage and hospitality associations, said it’s a voluntary tax that averts the need to raise other general state taxes to pay for critical construction projects. Opponents have said video poker increases the likelihood of gambling addictions and social problems that go along with them. A portion of the revenue will go to gambling addiction services.

Each restaurant, bar, veterans’ hall, truck stop would be stripped of existing machines and would have to install up to five standardized machines that would be connected to and regulated by state gaming authorities. But before they could install the machines, the county or municipality would first have to submit the question of whether to allow legalized video poker to voters. A majority of voters would have to say OK.

The new law also allows the state to partner with a private management firm to run the Illinois Lottery, although the state would still own and maintain control of the asset. And Illinois could start a pilot project for up to four years to allow people 18 and older to buy Lotto and Mega Million lottery tickets online, mainly in an effort to target people who don’t often play the lottery. But the pilot program would first need federal approval from the U.S. Department of Justice. The University of Illinois will conduct a study about the effect of families buying lottery tickets in a report due to the state in January 2011.

Burris: No longer in the running

By Bethany Jaeger
No Lisa Madigan. No Roland Burris. The race to be the next U.S. senator from Illinois just narrowed to a more classic competition. The seat has gained national attention for its previous occupant, President Barack Obama.

Madigan, the Illinois attorney general, announced yesterday and Burris announced today that they opted not run in 2010.

“It’s an open seat, and the focus is more going to be more on national issues than would have been the case if Burris were running or if Lisa Madigan essentially would have cleared the field,” said Kent Redfield, political scientist at the University of Illinois at Springfield.

If Madigan would have run, Redfield said she would have been the Democrats’ strongest candidate. “Her not running is a minus for the Democrats, but Burris not running is certainly a plus. There’s no question about that.”

Burris never shed the cloud that hovered over his appointment by former Gov. Rod Blagojevich. The then-governor had just been arrested on federal corruption charges, accused of trying to personally profit from his powers to appoint the state’s next senator. Early polling of 644 likely voters showed that just 5.3 percent of respondents supported Burris as a candidate for a full term. Numerous Illinois officials, including U.S. Sen. Dick Durbin and then-Lt. Gov. Pat Quinn, urged Burris step down. Burris wouldn’t budge. His ambitious style came through in, "Always in the running," our profile of him in Illinois Issues magazine.

Burris said today during a Chicago news conference that fundraising had a lot to do with his decision not to run in 2010. Here’s an excerpt of his announcement:

Life is about choices. Make no mistake, I love serving in the United States Senate. I love serving the people of Illinois, make no mistake.

I’m the only African-American serving in the Senate, and I believe that diversity and representation of all segments of our society is essential to who we are as a nation.

The reality of being a U.S. senator today [is that it] requires not only a significant time commitment to performing the job, but an almost equal commitment to raising funds to run competitively for the office.

Political races have become far too expensive in this country.

I was called to choose between spending my time raising funds or spending my time raising issues for my state. The people … should always come first.

The chronicles of Burris’ statements about whether he spoke to Blagojevich, Blagojevich’s brother or Blagojevich’s inner circle was the never-ending story. First he testified to an Illinois House committee that was investigating cause for the governor's impeachment. He said he only spoke with Lon Monk, Blagojevich’s former chief of staff. Then Burris revealed in a follow-up affidavit that he also spoke with the governor’s brother, as well as three insiders: Doug Scofield, John Wyma and former Deputy Gov. John Harris, who just pleaded guilty to wire fraud in the ongoing Blagojevich corruption case.

Burris most recently avoided perjury charges in Sangamon County, where State’s Attorney John Schmidt said Burris’s statements might have been vague, but there’s no proof that he intentionally mislead the Illinois House committee. Burris still faces a probe by the U.S. Senate.

His bow out of the 2010 election eliminated an easy target for the GOP, Redfield said. “It kind of takes Burris and Blagojevich out of the Senate race.”

Now, likely candidates are taking shape. On the Democratic side, they include state Treasurer Alexi Giannoulias. Redfield says he has the advantage of being the only candidate so far who has run a statewide race before. He also has a significant campaign kitty, with reportedly more than $1 million raised for his potential Senate bid. Two candidates with less name recognition include Cheryle Jackson, chief executive officer of the Chicago Urban League, and Chris Kennedy, head of Chicago’s Merchandise Mart and son of the late U.S. Sen. Robert F. Kennedy. Redfield said Jackson also could have a slight disadvantage by being tied to Blagojevich. She was his communications director during his first term.

On the Republican side, U.S. Rep. Mark Kirk of Hinsdale has been reported as set to run for the Senate seat. Redfield said he brings his national experience to the table, but as a moderate Republican, he would have to work to gain the moderate and independent vote. Andy McKenna, chairman of the Illinois Republican Party and businessman, also has reportedly discussed the idea. He lost his 2006 bid.