By Ashley Griffin
The Illinois State Police are weighing a consolidation that could result in the layoffs of dozens of communications personnel.
Under Gov. Pat Quinn’s budget plan, the state police would consolidate its 20 communications centers down to four centers.
In a committee hearing Wednesday afternoon, state police Director Hiram Grau testified that the agency now has the technology for such a reduction.
“I should tell you that the Illinois state troopers have been considering [consolidation] since 1995. Back then, the technology wasn’t there, but today, the technology is,” Grau said. “Based on the technology that’s available, we need to make sound decisions and operate as fiscally responsibly as we can. So we looked at the technology, and we think we can consolidate from 20 communications centers down to four. We’re asking for the approval and the money to make that happen.”
But the move will not result in immediate savings. Grau said the consolidation of the centers could cost the state nearly $13 million in capital funding upfront but would save the state money in the long run. The plan would come with up to 40 layoffs among the current 150 communications personnel but would not leave any districts without communications services. Although some layoffs may occur in communications departments, Grau said that two new cadet classes to train state troopers would be added later this year and another one is anticipated for early 2013. They would be funded from general revenue funds.
However, some argued that it is essential to have communication staff who know the area they cover.
“Some of the things our telecommunicators say why we should have 20 dispatch call centers are that they know their district, they know the terrain, they often take calls from people driving through the area on the interstate who don’t know where they are. Being familiar with the area, telecommunicators can help them identify their location, so the police can respond,” said John Coleman, who said he spoke on behalf of the American Federation of State County and Municipal Employees.
Coleman said communications workers sometimes assist callers who need help if a state trooper is not immediately available.
“With the short staffing, there are not always officers available in the headquarters when people come to look for help, so its usually the telecommunicators when there is no officer there who can keep the headquarters open and get a quick response from someone who is in trouble.”
But lawmakers said the state’s current budget situation puts such consolidations on the table.
“I don’t think individual troopers probably are wanting to see their local radio centers closed. However, in these economic times, I think everyone can understand the efficiencies of doing that,” said Rep. Jerry Mitchell, a Republican from Sterling.
Wednesday, March 07, 2012
Senate approves same revenue projection as House
The Illinois Senate today approved a revenue estimate that mirrors one the House approved last week.
Today’s action puts the General Assembly on course to cut from the governor’s proposed spending plan. Both chambers agreed to spend no more than $33.7 billion in Fiscal Year 2013, but Quinn’s budget is based on a $33.9 billion revenue projection.
Last year, the chambers did not agree on an estimate. Senate Democrats favored a revenue projection from the Commission on Government Forecasting and Accountability that was almost $1 billion more than the House’s number. But the House got a jump on the Senate and approved its budget first. In the end, it was the House’s budget that went to Quinn’s desk, although some new spending was tacked on in the legislature's fall veto session.
“Starting with the same number this year should definitely make it easier to reconcile our budget proposals in the end,” said Park Ridge Democratic Sen. Dan Kotowski, a chairman of one of the chamber's two budgeting committees.
The estimate was approved with overwhelming support. However, Senate Minority Leader Christine Radogno emphasized that Republicans agree with the $33.7 million figure as an estimate for how much money there will be next fiscal year but do not necessarily agree that all of it should be spent. She said cuts would be needed to allow the income tax increase implemented last year to begin to phase out on schedule in Fiscal Year 2015. “It’s hurting Illinois families, and the jobs climate,” Radogno said.
Quinn takes issue with the lower revenue estimate. “The governor's FY 2013 revenue projections utilized economic forecasts from nationally recognized forecasting firms, with final revenue estimates developed by state agencies using detailed historical tax collection data and employment records,” Kelly Kraft, a spokeswoman for Quinn’s budget office, said in a written statement. “A difference of more than $200 million will lead to even further reductions during a time when many legislators call for cuts, but when cuts are proposed they say, ‘Don't cut here.’”
Today’s action puts the General Assembly on course to cut from the governor’s proposed spending plan. Both chambers agreed to spend no more than $33.7 billion in Fiscal Year 2013, but Quinn’s budget is based on a $33.9 billion revenue projection.
Last year, the chambers did not agree on an estimate. Senate Democrats favored a revenue projection from the Commission on Government Forecasting and Accountability that was almost $1 billion more than the House’s number. But the House got a jump on the Senate and approved its budget first. In the end, it was the House’s budget that went to Quinn’s desk, although some new spending was tacked on in the legislature's fall veto session.
“Starting with the same number this year should definitely make it easier to reconcile our budget proposals in the end,” said Park Ridge Democratic Sen. Dan Kotowski, a chairman of one of the chamber's two budgeting committees.
The estimate was approved with overwhelming support. However, Senate Minority Leader Christine Radogno emphasized that Republicans agree with the $33.7 million figure as an estimate for how much money there will be next fiscal year but do not necessarily agree that all of it should be spent. She said cuts would be needed to allow the income tax increase implemented last year to begin to phase out on schedule in Fiscal Year 2015. “It’s hurting Illinois families, and the jobs climate,” Radogno said.
Quinn takes issue with the lower revenue estimate. “The governor's FY 2013 revenue projections utilized economic forecasts from nationally recognized forecasting firms, with final revenue estimates developed by state agencies using detailed historical tax collection data and employment records,” Kelly Kraft, a spokeswoman for Quinn’s budget office, said in a written statement. “A difference of more than $200 million will lead to even further reductions during a time when many legislators call for cuts, but when cuts are proposed they say, ‘Don't cut here.’”
Under flat budget, SIU tuition would likely rise
By Jamey Dunn
Southern Illinois University President Glenn Poshard said today that the Southern Illinois University system could cope with flat funding next fiscal year. But under Gov. Pat Quinn’s budget plan, a tuition increase would likely be in the cards.
Poshard said that a decade ago, SIU got $247 million in state funds for operations, compared with $219 million for operations last year. “We are actually grateful this year for a flat-funded budget,” Poshard told a Senate budgeting committee this evening.
Quinn’s spending plan would hold SIU funding practically level and calls for the school to get about $218 million in general revenue funds for FY 2013. “That’s what the governor has said that we’re going to get, so we’re not fighting that,” Poshard said.
He said the university system is still coping with late payments from the state and maintenance projects that have been put off. “Our need for addressing deferred … maintenance is greater than ever.” He said that the state owes the university about $112 million for the current fiscal year, and more than $500 million in maintenance has been delayed across the SIU campuses in recent years. Poshard said he is concerned about SIU’s “inability” to replace faculty and staff after they retire. “SIU is the economic engine for southern Illinois, which has the highest unemployment rate in the state,” he said. “We have made the necessary cuts to keep our head above water by reducing our workforce by 206 full-time people and hundreds of part-time positions over the last two years. That hurts the university, and that hurts the region.”
With no new funding from the state, the university president said incoming freshman next summer at SIU would likely see a 4.8 percent tuition increase and a 1.8 percent increase in fees. The SIU Board of Trustees is scheduled to vote on the proposed increase in May. Poshard said he thinks it will be approved. Sen. Pam Althoff, a McHenry Republican, was critical of growing tuition rates at the state’s public universities. “I have grave concerns with regard to the continual increase of tuition costs.”
Althoff asked how universities justify giving tuition waivers to family members of faculty and staff, even as tuition rates increase for other students. Poshard responded, “If the state declines operationally, then we have no choice but to raise the tuition.” He said the waivers are necessary to make Illinois competitive when competing with other schools for employees. House Bill 5531, which was approved by a House committee last week, would eliminate discounted tuition for university employees. “If you’re going to go out on the market and you’re going to try to get the best faculty member that you can bring to your university, it’s going to cost you,” Poshard said. He added that new faculty members often bring millions of dollars in research grants with them when they come to a university.
Poshard said he is concerned that despite Quinn’s spending proposal, universities will see cuts in Fiscal Year 2013. He said that proposals to push pension costs onto school districts and universities would result in a reduction of resources for operating costs. Poshard said he supports a proposal from two University of Illinois professors that would require employees to pay more and call upon universities to cover some of their retirement costs. “They have come up with what I consider to be the very best effort that has been put on the table so far.” However, union officials and some legislators say that requiring employees to pay more for their pensions violates the state’s Constitution.
For information on the budgets of other Illinois universities, see Illinois Issues' February 29 blog.
Southern Illinois University President Glenn Poshard said today that the Southern Illinois University system could cope with flat funding next fiscal year. But under Gov. Pat Quinn’s budget plan, a tuition increase would likely be in the cards.
Poshard said that a decade ago, SIU got $247 million in state funds for operations, compared with $219 million for operations last year. “We are actually grateful this year for a flat-funded budget,” Poshard told a Senate budgeting committee this evening.
Quinn’s spending plan would hold SIU funding practically level and calls for the school to get about $218 million in general revenue funds for FY 2013. “That’s what the governor has said that we’re going to get, so we’re not fighting that,” Poshard said.
He said the university system is still coping with late payments from the state and maintenance projects that have been put off. “Our need for addressing deferred … maintenance is greater than ever.” He said that the state owes the university about $112 million for the current fiscal year, and more than $500 million in maintenance has been delayed across the SIU campuses in recent years. Poshard said he is concerned about SIU’s “inability” to replace faculty and staff after they retire. “SIU is the economic engine for southern Illinois, which has the highest unemployment rate in the state,” he said. “We have made the necessary cuts to keep our head above water by reducing our workforce by 206 full-time people and hundreds of part-time positions over the last two years. That hurts the university, and that hurts the region.”
With no new funding from the state, the university president said incoming freshman next summer at SIU would likely see a 4.8 percent tuition increase and a 1.8 percent increase in fees. The SIU Board of Trustees is scheduled to vote on the proposed increase in May. Poshard said he thinks it will be approved. Sen. Pam Althoff, a McHenry Republican, was critical of growing tuition rates at the state’s public universities. “I have grave concerns with regard to the continual increase of tuition costs.”
Althoff asked how universities justify giving tuition waivers to family members of faculty and staff, even as tuition rates increase for other students. Poshard responded, “If the state declines operationally, then we have no choice but to raise the tuition.” He said the waivers are necessary to make Illinois competitive when competing with other schools for employees. House Bill 5531, which was approved by a House committee last week, would eliminate discounted tuition for university employees. “If you’re going to go out on the market and you’re going to try to get the best faculty member that you can bring to your university, it’s going to cost you,” Poshard said. He added that new faculty members often bring millions of dollars in research grants with them when they come to a university.
Poshard said he is concerned that despite Quinn’s spending proposal, universities will see cuts in Fiscal Year 2013. He said that proposals to push pension costs onto school districts and universities would result in a reduction of resources for operating costs. Poshard said he supports a proposal from two University of Illinois professors that would require employees to pay more and call upon universities to cover some of their retirement costs. “They have come up with what I consider to be the very best effort that has been put on the table so far.” However, union officials and some legislators say that requiring employees to pay more for their pensions violates the state’s Constitution.
For information on the budgets of other Illinois universities, see Illinois Issues' February 29 blog.
Tuesday, March 06, 2012
DNR supports admission fees at state parks
By Jamey Dunn
Hikers, hunters, vacationing families and outdoors enthusiasts may soon have to pay a fee for entrance to the state’s parks.
House Bill 5789 would allow the Department of Natural Resources to set fees for people driving and walking into Illinois state parks. A House committee approved the legislation this afternoon.
Jay Curtis, chief of staff for the Illinois Department of Natural Resources, said the need for new revenue has grown out of a decade of under funding the department. However, Curtis said he overstated the problem when he recently said that his agency is on the brink of closing its doors. “What I was really saying was that we need to find an alternative funding mechanism for the agency to make it sustainable. We all know the [general revenue funds are] being stretched thin and rightfully so. I mean, there’s a lot of needs all over the state,” he said. “What we’re trying to do this session is find a way to fund this agency outside of [the general revenue fund].”
Curtis said that in the past, DNR has tried to “slow down” bills that would allow entrance fees at state parks, but this year, the department supports the idea. “We’re one of only seven states right now in the United States that does not have an entrance fee [for parks] of some sort.”
The bill does not set specific fee levels, and Curtis said the department is still in the early stages of determining what the fees might be. However, he estimates they could bring in $8 million to $12 million for DNR. Curtis said the department is still working on other ideas to find funding outside of the General Revenue Fund. Gov. Pat Quinn’s budget proposal calls for $45.3 million for DNR, which would be a 13 percent cut from last year’s budget. Curtis says it is years of cuts and fund sweeps, not Quinn’s proposal, that created the need for the fees.
Rep. Mary Flowers, a Chicago Democrat, voiced concern for families who may not be able to afford entry into parks. “These are very difficult times for people across the nation and certainly across the state,” Flowers said at today’s committee hearing. “Sometimes you just need a place to go.”
Rep. JoAnn Osmond, the bill's sponsor, responded, “Unless we can get the money to get them safe, we’re not going to be in position where we can keep our parks open."
Osmond, an Antioch Republican, pointed to the Adeline Jay Geo-Karis Illinois Beach Park in her district. The park, located in Zion, suffered damage during storms last July that knocked over several trees and left many of them leaning. Parts of the park have since been closed because the trees present a safety hazard. Osmond said DNR hopes to reopen all of the park by April 1.
“Our parks are a place where people can go — and especially at a time when there’s such budget problems for people in their homes — to find a place that’s cheap, inexpensive, but good for their family,” Curtis said. “A $5 to $10 fee for entrance, there would be people in the state that it could have an effect on, but by and large, just about everyone could afford that entrance [fee.] It’s still a cheaper option than going to Six Flags or taking the trip to Florida that people can’t afford right now.”
He added, “The alternative is struggling to have a sustainable park system in the future.”
Marc Miller, director of the Illinois Department of Natural Resources, has vowed not to close any state parks.
For more on the deterioration of Illinois' state parks, see Illinois Issues July/August 2011.
Hikers, hunters, vacationing families and outdoors enthusiasts may soon have to pay a fee for entrance to the state’s parks.
House Bill 5789 would allow the Department of Natural Resources to set fees for people driving and walking into Illinois state parks. A House committee approved the legislation this afternoon.
Jay Curtis, chief of staff for the Illinois Department of Natural Resources, said the need for new revenue has grown out of a decade of under funding the department. However, Curtis said he overstated the problem when he recently said that his agency is on the brink of closing its doors. “What I was really saying was that we need to find an alternative funding mechanism for the agency to make it sustainable. We all know the [general revenue funds are] being stretched thin and rightfully so. I mean, there’s a lot of needs all over the state,” he said. “What we’re trying to do this session is find a way to fund this agency outside of [the general revenue fund].”
Curtis said that in the past, DNR has tried to “slow down” bills that would allow entrance fees at state parks, but this year, the department supports the idea. “We’re one of only seven states right now in the United States that does not have an entrance fee [for parks] of some sort.”
The bill does not set specific fee levels, and Curtis said the department is still in the early stages of determining what the fees might be. However, he estimates they could bring in $8 million to $12 million for DNR. Curtis said the department is still working on other ideas to find funding outside of the General Revenue Fund. Gov. Pat Quinn’s budget proposal calls for $45.3 million for DNR, which would be a 13 percent cut from last year’s budget. Curtis says it is years of cuts and fund sweeps, not Quinn’s proposal, that created the need for the fees.
Rep. Mary Flowers, a Chicago Democrat, voiced concern for families who may not be able to afford entry into parks. “These are very difficult times for people across the nation and certainly across the state,” Flowers said at today’s committee hearing. “Sometimes you just need a place to go.”
Rep. JoAnn Osmond, the bill's sponsor, responded, “Unless we can get the money to get them safe, we’re not going to be in position where we can keep our parks open."
Osmond, an Antioch Republican, pointed to the Adeline Jay Geo-Karis Illinois Beach Park in her district. The park, located in Zion, suffered damage during storms last July that knocked over several trees and left many of them leaning. Parts of the park have since been closed because the trees present a safety hazard. Osmond said DNR hopes to reopen all of the park by April 1.
“Our parks are a place where people can go — and especially at a time when there’s such budget problems for people in their homes — to find a place that’s cheap, inexpensive, but good for their family,” Curtis said. “A $5 to $10 fee for entrance, there would be people in the state that it could have an effect on, but by and large, just about everyone could afford that entrance [fee.] It’s still a cheaper option than going to Six Flags or taking the trip to Florida that people can’t afford right now.”
He added, “The alternative is struggling to have a sustainable park system in the future.”
Marc Miller, director of the Illinois Department of Natural Resources, has vowed not to close any state parks.
For more on the deterioration of Illinois' state parks, see Illinois Issues July/August 2011.
Committee fails to vote on nursing home staffing
By Ashley Griffin
The debate over expanding staffing at some Illinois nursing homes will continue after a legislative committee failed to make a decision today.
The Joint Committee on Administrative Rules was scheduled to take up a staffing rule this morning, but lawmakers say they did not receive the information they needed from the Illinois Department of Public Health in time to take a vote. The issue at hand is a requirement in a 2010 nursing home reform law that nurses supply 20 percent of direct care to patients by 2014. Some nursing homes say the care can be administered by nurses with less training than registered nurses, but the new rule would require that registered nurses provide direct care.
Lawmakers on the committee complained that the IDPH did not provide them with info about the proposed rule until 5 p.m. Monday night. “I was definitely disappointed in how the procedure occurred. I thought this was a very important issue, something that has to be resolved in the state, and because the department pretty much was not inclined to work with all the parties that were involved, the action that occurred today occurred,” said Sen. Andre Thapedi, a Democrat from Chicago. JCAR took a vote today that in effect puts the rule on hold until the committee can take it up again. Members said they would likely revisit the issue next month.
David Vinkler, associate state director of advocacy and outreach for AARP Illinois, believes that it is a good sign that JCAR and the department of public health are willing to work together. But he also believes that the ruling should not be put off. “Nursing homes really need changes. This should not be delayed until next month,” Vinkler said.
Protesters who held up signs in the hall outside of the committee hearing were disappointed that the rule was not approved today, and some blamed the IDPH. “I feel very disheartened about today’s vote. I think it was [the IDPH] that made the decision to advise everyone of the changes that they wanted so late that they couldn’t vote, so [IDPH Assistant Director Teresa] Garate’s department screwed us,” said Jim Rhodes, a member of the Illinois Jane Addams Senior Caucus. “She wanted to make the changes so late that they couldn’t vote in honesty, and so we shouldn’t blame JCAR or the JCAR committee. They could not vote in honesty on these rules because they didn’t get them until last night at 5:30. It’s just ridiculous.”
Garate said IDPH was trying to work with JCAR members up until today’s meeting. “We were trying to appease some of the concerns and feedback that we had received from JCAR on the version of the rules we submitted, and that is why we submitted even more revisions on Friday and yesterday. Because they felt the members of JCAR did not have sufficient time to review our revisions, they were not ready to take a vote,” Garate said. “We plan to submit revised language by the end of the week.”
The debate over expanding staffing at some Illinois nursing homes will continue after a legislative committee failed to make a decision today.
The Joint Committee on Administrative Rules was scheduled to take up a staffing rule this morning, but lawmakers say they did not receive the information they needed from the Illinois Department of Public Health in time to take a vote. The issue at hand is a requirement in a 2010 nursing home reform law that nurses supply 20 percent of direct care to patients by 2014. Some nursing homes say the care can be administered by nurses with less training than registered nurses, but the new rule would require that registered nurses provide direct care.
Lawmakers on the committee complained that the IDPH did not provide them with info about the proposed rule until 5 p.m. Monday night. “I was definitely disappointed in how the procedure occurred. I thought this was a very important issue, something that has to be resolved in the state, and because the department pretty much was not inclined to work with all the parties that were involved, the action that occurred today occurred,” said Sen. Andre Thapedi, a Democrat from Chicago. JCAR took a vote today that in effect puts the rule on hold until the committee can take it up again. Members said they would likely revisit the issue next month.
David Vinkler, associate state director of advocacy and outreach for AARP Illinois, believes that it is a good sign that JCAR and the department of public health are willing to work together. But he also believes that the ruling should not be put off. “Nursing homes really need changes. This should not be delayed until next month,” Vinkler said.
Protesters who held up signs in the hall outside of the committee hearing were disappointed that the rule was not approved today, and some blamed the IDPH. “I feel very disheartened about today’s vote. I think it was [the IDPH] that made the decision to advise everyone of the changes that they wanted so late that they couldn’t vote, so [IDPH Assistant Director Teresa] Garate’s department screwed us,” said Jim Rhodes, a member of the Illinois Jane Addams Senior Caucus. “She wanted to make the changes so late that they couldn’t vote in honesty, and so we shouldn’t blame JCAR or the JCAR committee. They could not vote in honesty on these rules because they didn’t get them until last night at 5:30. It’s just ridiculous.”
Garate said IDPH was trying to work with JCAR members up until today’s meeting. “We were trying to appease some of the concerns and feedback that we had received from JCAR on the version of the rules we submitted, and that is why we submitted even more revisions on Friday and yesterday. Because they felt the members of JCAR did not have sufficient time to review our revisions, they were not ready to take a vote,” Garate said. “We plan to submit revised language by the end of the week.”
Monday, March 05, 2012
Rule would make some nursing homes hire more RNs
By Ashley Griffin
Nursing home reform approved in 2010 sought to address problems in some of the state’s long term care facilities by increasing staffing levels. But sponsors of the legislation say that some for-profit nursing homes have found a loophole in the law.
In the wake of a series of Chicago Tribune investigations that exposed abuse and neglect that resulted in the deaths of some nursing home patients, the reforms pushed to increase staffing levels at nursing homes and tighten existing criminal background checks of incoming nurses and patients. The law requires that by 2014, patients receive a minimum of 3.8 hours of direct care a day. That number is up from the 2.5 hours required before the law. The reforms also require that .75 hours — 46 minutes a day — of that care be provided by a nurse.
But the 2010 legislation does not distinguish between registered nurses (RNs) and licensed practical nurses (LPNs), who do not have to undergo as much training as RNs. A new rule expected to come up Tuesday before the bipartisan Joint Committee on Administrative Rules would require facilities to use RNs for 20 percent of direct care.
Lawmakers who worked on the reforms said that was their intent. “There can be no true nursing home reform without addressing the issue of RN staffing ratios,” says Sen. Jacqueline Collins, a Democrat from Chicago, in a prepared statement.
However, many for profit nursing homes argue that they cannot afford to hire enough RNs to fulfill such a demand. “We are not against improving staffing, but we are against putting in a requirement that sets nursing homes up to fail,” Pat Comstock, executive director of the Health Care Council of Illinois, told the State Journal-Register. Comstock did not return a call from Illinois Issues.
Sen. Heather Steans, who was a sponsor of the reforms, said that a revenue stream was built in to pay for higher staffing levels. “I very much urge the JCAR members to support and pass the rule. I think it will very much help improve the quality of care in our nursing homes. We also passed the bed tax, which was primarily to fund the increased staffing we are putting into place, so funding has been put in place for that,” Steans said.
According to David Vinkler, associate state director for AARP Illinois, which supports the proposal to increase the number of hours a register nurse should spend with a patient, Illinois is in the top five states for the number of bed sores cases for high risk patients and No. 24 for quality of life and quality care. He said registered nurses are vital to the nursing patients. “They [registered nurses] are the only ones who can assess the patient and adjust their care. They can make changes quickly,” said Vinkler. “We all have heard the stories about abuse and neglect in nursing homes. We need a change, I think at the end of the day, the fact that Illinois nursing homes don’t have enough RNs' staff is ridiculous.”
Some members of JCAR say they support the higher RN staffing levels. “I intend to vote in favor,” said Rep. Gregory Harris, a Democrat from Chicago who serves on the JCAR committee. “I believe this is the right thing to do in public policy. We as lawmakers have to advocate for those who are not able to advocate for themselves.”
Harris said the 20 percent requirement is what the bill sponsors wanted, but not all committee members are sure about tomorrow’s outcome. “I have some real concerns about the rule,” said Sen. Dale Righter, a Republican from Mattoon, who also serves on JCAR. Righter says he will weigh what both sides have to say Tuesday.
The JCAR hearing is scheduled for 9:30 a.m.
Nursing home reform approved in 2010 sought to address problems in some of the state’s long term care facilities by increasing staffing levels. But sponsors of the legislation say that some for-profit nursing homes have found a loophole in the law.
In the wake of a series of Chicago Tribune investigations that exposed abuse and neglect that resulted in the deaths of some nursing home patients, the reforms pushed to increase staffing levels at nursing homes and tighten existing criminal background checks of incoming nurses and patients. The law requires that by 2014, patients receive a minimum of 3.8 hours of direct care a day. That number is up from the 2.5 hours required before the law. The reforms also require that .75 hours — 46 minutes a day — of that care be provided by a nurse.
But the 2010 legislation does not distinguish between registered nurses (RNs) and licensed practical nurses (LPNs), who do not have to undergo as much training as RNs. A new rule expected to come up Tuesday before the bipartisan Joint Committee on Administrative Rules would require facilities to use RNs for 20 percent of direct care.
Lawmakers who worked on the reforms said that was their intent. “There can be no true nursing home reform without addressing the issue of RN staffing ratios,” says Sen. Jacqueline Collins, a Democrat from Chicago, in a prepared statement.
However, many for profit nursing homes argue that they cannot afford to hire enough RNs to fulfill such a demand. “We are not against improving staffing, but we are against putting in a requirement that sets nursing homes up to fail,” Pat Comstock, executive director of the Health Care Council of Illinois, told the State Journal-Register. Comstock did not return a call from Illinois Issues.
Sen. Heather Steans, who was a sponsor of the reforms, said that a revenue stream was built in to pay for higher staffing levels. “I very much urge the JCAR members to support and pass the rule. I think it will very much help improve the quality of care in our nursing homes. We also passed the bed tax, which was primarily to fund the increased staffing we are putting into place, so funding has been put in place for that,” Steans said.
According to David Vinkler, associate state director for AARP Illinois, which supports the proposal to increase the number of hours a register nurse should spend with a patient, Illinois is in the top five states for the number of bed sores cases for high risk patients and No. 24 for quality of life and quality care. He said registered nurses are vital to the nursing patients. “They [registered nurses] are the only ones who can assess the patient and adjust their care. They can make changes quickly,” said Vinkler. “We all have heard the stories about abuse and neglect in nursing homes. We need a change, I think at the end of the day, the fact that Illinois nursing homes don’t have enough RNs' staff is ridiculous.”
Some members of JCAR say they support the higher RN staffing levels. “I intend to vote in favor,” said Rep. Gregory Harris, a Democrat from Chicago who serves on the JCAR committee. “I believe this is the right thing to do in public policy. We as lawmakers have to advocate for those who are not able to advocate for themselves.”
Harris said the 20 percent requirement is what the bill sponsors wanted, but not all committee members are sure about tomorrow’s outcome. “I have some real concerns about the rule,” said Sen. Dale Righter, a Republican from Mattoon, who also serves on JCAR. Righter says he will weigh what both sides have to say Tuesday.
The JCAR hearing is scheduled for 9:30 a.m.
Thursday, March 01, 2012
House passes spending cap
By Jamey Dunn
The Illinois House is on track to cut from Gov. Pat Quinn’s proposed budget in the same way that it did last year.
The chamber today approved an estimate of what the state would have available to spend for the Fiscal Year 2013 budget, and the number was about $200 million less than Gov. Pat Quinn’s revenue estimate. The House estimate of general revenue funds that will be available for FY 2013 is $33.7 billion, and Quinn’s, $33.9 billion. “I thought we needed to take a conservative approach. I think we needed to give ourselves some breathing room,” said John Bradley, a Marion Democrat.
The resolution setting the estimate and committing the chamber not to approve a budget with more than $33.7 in spending passed with bipartisan support. The House approved an identical joint resolution, which will head over to the Senate for consideration. Last year the House only passed its own resolution and left the Senate behind in the budgeting process.
Opponents say setting a spending cap limits flexibility and could lend to unnecessary cuts. William McNary, co-director of Citizen Action Illinois, said the state should work off of projections but not set a cap. He said that lawmakers should instead base spending decisions on the need for and effectiveness of programs. “Upfront hard spending caps put the cart before the horse. It would arbitrarily set an appropriations number and try to get the need to fit to this number. ” He added: “One way to find over $200 million immediately is to use the [Commission on Government Forecasting and Accountability] revenue estimate. They’ve been historically reliable.” COGFA’s projection is $50 million more than Quinn’s.
This year’s House estimate is much more in line with the governor’s numbers than last year’s House projection, which was $750 million less than Quinn’s revenue estimate. “Last year we were below the numbers of [Commission on Government Forecasting and Accountability] and the Department of Revenue and [the Office of Management and Budget] and we were right. And so I would rather err on the side of safety and caution, then to be high and get into trouble at the end of the year--worse than what the state’s already in,” Bradley, who is the chair of the Houses’ revenue committee—which produce both the estimates from last year and this year.
Supporters of last year's admittedly conservative estimate said that any additional money would go toward paying off the backlog of overdue bills. The state has paid off about $1 billion of those bills with additional revenues. However, Illinois is projected to complete the current fiscal year with a deficit of about $500 million. One possible trigger for the deficit is the repayment of more than $600 million in interfund borrowing.
This year, some lawmakers support the idea of setting aside revenue before any operating expenses are paid and spending it on the backlog. The idea is similar to the way lawmakers paid the pension payment and debt service last year. “I would personally be in favor of taking money off the top to begin the process of paying off the backlog of bills,” Bradley said.
But such a move would add to the list of growing costs that are putting pressure on state spending. “We know the pension payment is up. We know we have Medicaid pressures, and we know we have general operating pressures. And we’ve only estimated about $500 million additional [revenue] from what was available last year, and you may have as much as $4 billion of additional pressure, not including the backlog of bills,” he said. Quinn proposed closing corporate tax loopholes to help pay off the bills. If lawmakers fail to close such loopholes, Quin also proposed spending about $160 million less than his projection and using the extra cash to pay down bills.
“The governor's FY 2013 revenue projections utilized economic forecasts from nationally recognized forecasting firms with final revenue estimates developed by state agencies using detailed historical tax collection data and employment records,” Kelly Kraft, a spokeswoman for Quinn’s budget office, said in a written statement. “A difference of more than $200 million will lead to even further reductions during a time when many legislators call for cuts, but when cuts are proposed they say, ‘Don't cut here.’”
Rep. Ed Sullivan, a Mundelein Republican, warned that the state must get a handle on spending before last year's income tax increase is set to begin phasing out in FY 2015. “We have to address the structural problems that we have because in FY 15, [FY] 16 we’re on a cliff if we don’t start building in numbers to get rid of the tax increase. Or is the governor just saying, ‘We’ll make that tax increase permanent?’” Sullivan said that despite some large growth in expenses, such as a pension payment that will be about $1 billion more, Republicans do not want spending for FY 2013 to total more than the FY 2012 spending.
He said some Republicans are frustrated that additional spending for the current fiscal year was approved last fall. “Last year we made this leap of faith,” and then the legislature passed additional spending bills. “The next step [in the budgeting process for FY 2013] is the big step, and the next step is the trust that we’re going to build between the caucuses,” he said.
Bradley said that the House plans to handle the budgeting process in a similar manner as last year, when the projected revenue was carved up and assigned to different areas of state spending, such as education or human services. The budgeting committees for those sectors were then asked to craft a spending plan based on the amount they were assigned.
The Illinois House is on track to cut from Gov. Pat Quinn’s proposed budget in the same way that it did last year.
The chamber today approved an estimate of what the state would have available to spend for the Fiscal Year 2013 budget, and the number was about $200 million less than Gov. Pat Quinn’s revenue estimate. The House estimate of general revenue funds that will be available for FY 2013 is $33.7 billion, and Quinn’s, $33.9 billion. “I thought we needed to take a conservative approach. I think we needed to give ourselves some breathing room,” said John Bradley, a Marion Democrat.
The resolution setting the estimate and committing the chamber not to approve a budget with more than $33.7 in spending passed with bipartisan support. The House approved an identical joint resolution, which will head over to the Senate for consideration. Last year the House only passed its own resolution and left the Senate behind in the budgeting process.
Opponents say setting a spending cap limits flexibility and could lend to unnecessary cuts. William McNary, co-director of Citizen Action Illinois, said the state should work off of projections but not set a cap. He said that lawmakers should instead base spending decisions on the need for and effectiveness of programs. “Upfront hard spending caps put the cart before the horse. It would arbitrarily set an appropriations number and try to get the need to fit to this number. ” He added: “One way to find over $200 million immediately is to use the [Commission on Government Forecasting and Accountability] revenue estimate. They’ve been historically reliable.” COGFA’s projection is $50 million more than Quinn’s.
This year’s House estimate is much more in line with the governor’s numbers than last year’s House projection, which was $750 million less than Quinn’s revenue estimate. “Last year we were below the numbers of [Commission on Government Forecasting and Accountability] and the Department of Revenue and [the Office of Management and Budget] and we were right. And so I would rather err on the side of safety and caution, then to be high and get into trouble at the end of the year--worse than what the state’s already in,” Bradley, who is the chair of the Houses’ revenue committee—which produce both the estimates from last year and this year.
Supporters of last year's admittedly conservative estimate said that any additional money would go toward paying off the backlog of overdue bills. The state has paid off about $1 billion of those bills with additional revenues. However, Illinois is projected to complete the current fiscal year with a deficit of about $500 million. One possible trigger for the deficit is the repayment of more than $600 million in interfund borrowing.
This year, some lawmakers support the idea of setting aside revenue before any operating expenses are paid and spending it on the backlog. The idea is similar to the way lawmakers paid the pension payment and debt service last year. “I would personally be in favor of taking money off the top to begin the process of paying off the backlog of bills,” Bradley said.
But such a move would add to the list of growing costs that are putting pressure on state spending. “We know the pension payment is up. We know we have Medicaid pressures, and we know we have general operating pressures. And we’ve only estimated about $500 million additional [revenue] from what was available last year, and you may have as much as $4 billion of additional pressure, not including the backlog of bills,” he said. Quinn proposed closing corporate tax loopholes to help pay off the bills. If lawmakers fail to close such loopholes, Quin also proposed spending about $160 million less than his projection and using the extra cash to pay down bills.
“The governor's FY 2013 revenue projections utilized economic forecasts from nationally recognized forecasting firms with final revenue estimates developed by state agencies using detailed historical tax collection data and employment records,” Kelly Kraft, a spokeswoman for Quinn’s budget office, said in a written statement. “A difference of more than $200 million will lead to even further reductions during a time when many legislators call for cuts, but when cuts are proposed they say, ‘Don't cut here.’”
Rep. Ed Sullivan, a Mundelein Republican, warned that the state must get a handle on spending before last year's income tax increase is set to begin phasing out in FY 2015. “We have to address the structural problems that we have because in FY 15, [FY] 16 we’re on a cliff if we don’t start building in numbers to get rid of the tax increase. Or is the governor just saying, ‘We’ll make that tax increase permanent?’” Sullivan said that despite some large growth in expenses, such as a pension payment that will be about $1 billion more, Republicans do not want spending for FY 2013 to total more than the FY 2012 spending.
He said some Republicans are frustrated that additional spending for the current fiscal year was approved last fall. “Last year we made this leap of faith,” and then the legislature passed additional spending bills. “The next step [in the budgeting process for FY 2013] is the big step, and the next step is the trust that we’re going to build between the caucuses,” he said.
Bradley said that the House plans to handle the budgeting process in a similar manner as last year, when the projected revenue was carved up and assigned to different areas of state spending, such as education or human services. The budgeting committees for those sectors were then asked to craft a spending plan based on the amount they were assigned.
Wednesday, February 29, 2012
Universities seek additional state funds
By Ashley Griffin
State university officials asked Wednesday for more money than Gov. Pat Quinn has proposed in his Fiscal Year 2013 budget.
Testifying before an Illinois Senate committee, officials from Illinois State University, Eastern Illinois University and Western Illinois University sought more money to offer more need-based scholarships to students who come from families with modest incomes, to make basic repairs on their campuses or just to maintain university buildings.
“We are requesting an excess of a $10 million increase in our state appropriations, primarily because the dollars the university is receiving today are less than they were in 1999,” said Illinois State University president Al Bowman. “We’ve got significant deferred maintenance issues, and we need a way to cover our cost increases that doesn’t continue to put these cost on the backs of students and their families.”
In Quinn’s proposed budget, ISU would receive $78.9 million in operating funds from the state. If the proposed $10 million were approved, ISU would see a 13 percent increase. If the funds are not provided, students there could see a “modest” tuition increase, according to Bowman.
“Well, I guess I would be surprised if the request did go through,” Bowman said. “The aggressive proposal that we put on the table was really designed to sort of demonstrate to the state what the real needs are. We recognize that the potential for a significant increase in state funding is simply not there. That’s the reality; that doesn’t change what the need is.”
Eastern Illinois University sought a 1.5 percent increase for inflation and for academic programs in clean energy and alternative energy.
“We know that it is a constrained environment, so we made a realistic request for some increases that we think will uphold the quality at what we do at Eastern,” said president William Perry. ““I’m expecting something like level funding. We will work with that, and we’ll do a great job for our students.”
Despite Quinn’s recommended $46 million operating appropriation, the university has decided to make a recommendation to increase tuition, pending an approval from the board of trustees on Friday. “We are making our tuition increase recommendation to our board kind of independent of what the state appropriation will be. I’m working under a general assumption that’s it’s not going to change too much either up or down,” Perry said.
Western Illinois University asked for a $14 million increase in addition to the $58 million in operating funds recommended by Quinn. Some of the funds would go to the engineering program and the nursing program on campus. Students there also could see a slight hike in their tuition if the increase is not approved.
Some lawmakers said they are unsure about the possible outcomes even if some of the universities receive the additional funds.
“We are evaluating everything line item by line item, we have a very limited amount of money, and we need to make sure we live within our means” said Sen. Dan Kotowski, a Democrat from Park Ridge. “Everything needs to be looked at right now the same way a family looks at it, the same way a business looks at it. How much money is actual available to spend on programs that are making a difference?”
State university officials asked Wednesday for more money than Gov. Pat Quinn has proposed in his Fiscal Year 2013 budget.
Testifying before an Illinois Senate committee, officials from Illinois State University, Eastern Illinois University and Western Illinois University sought more money to offer more need-based scholarships to students who come from families with modest incomes, to make basic repairs on their campuses or just to maintain university buildings.
“We are requesting an excess of a $10 million increase in our state appropriations, primarily because the dollars the university is receiving today are less than they were in 1999,” said Illinois State University president Al Bowman. “We’ve got significant deferred maintenance issues, and we need a way to cover our cost increases that doesn’t continue to put these cost on the backs of students and their families.”
In Quinn’s proposed budget, ISU would receive $78.9 million in operating funds from the state. If the proposed $10 million were approved, ISU would see a 13 percent increase. If the funds are not provided, students there could see a “modest” tuition increase, according to Bowman.
“Well, I guess I would be surprised if the request did go through,” Bowman said. “The aggressive proposal that we put on the table was really designed to sort of demonstrate to the state what the real needs are. We recognize that the potential for a significant increase in state funding is simply not there. That’s the reality; that doesn’t change what the need is.”
Eastern Illinois University sought a 1.5 percent increase for inflation and for academic programs in clean energy and alternative energy.
“We know that it is a constrained environment, so we made a realistic request for some increases that we think will uphold the quality at what we do at Eastern,” said president William Perry. ““I’m expecting something like level funding. We will work with that, and we’ll do a great job for our students.”
Despite Quinn’s recommended $46 million operating appropriation, the university has decided to make a recommendation to increase tuition, pending an approval from the board of trustees on Friday. “We are making our tuition increase recommendation to our board kind of independent of what the state appropriation will be. I’m working under a general assumption that’s it’s not going to change too much either up or down,” Perry said.
Western Illinois University asked for a $14 million increase in addition to the $58 million in operating funds recommended by Quinn. Some of the funds would go to the engineering program and the nursing program on campus. Students there also could see a slight hike in their tuition if the increase is not approved.
Some lawmakers said they are unsure about the possible outcomes even if some of the universities receive the additional funds.
“We are evaluating everything line item by line item, we have a very limited amount of money, and we need to make sure we live within our means” said Sen. Dan Kotowski, a Democrat from Park Ridge. “Everything needs to be looked at right now the same way a family looks at it, the same way a business looks at it. How much money is actual available to spend on programs that are making a difference?”
Tuesday, February 28, 2012
State could fail to reach the foundation funding level for education for the second year in a row
By Jamey Dunn
Under the current budget, schools will miss a general state aid payment in June. Under Gov. Pat Quinn’s budget for next year, they can expect a similar outcome.
General state aid for education in the Fiscal Year 2012 budget fell 5 percent short of covering the foundation level of $6,119 per student paid to many schools. Lawmakers chose to hold off the reduction so it would kick in at the end of the current fiscal year.
State Superintendent Christopher Koch says that means most school districts will see a reduction in their first June payment, and no schools will get a second payment in June. But Koch said that districts should not be caught by surprise when the check doesn’t come. “The have known it for a long time. In fact, districts requested that we hold it off until the last month,” Koch said. “They’re trying to get through the school year as much as possible on what they can, and then they’re going to shoulder June’s payments to be less. But they’re quite aware of it.”
Overall, payments for general state aid, which is the largest area of state education spending, are being sent out on time. “They’ve been on time consistently, which is really good. Even through the worst of the recession, we’ve kept those payments coming. Now other payments, that’s not the case.” Payments for mandated categorical grants, for such programs as special education and student transportation -- which are the second largest area of state funding for education -- are lagging behind. “Those have gotten a little better though, and we’re not as far back as we were a year ago. I look at incremental progress, but we’re still not in great shape,” Koch said. Some mandated categorical payments are only caught up through the first quarter of the current fiscal year, which ends June 30.
Quinn is proposing to hold general state aid flat next fiscal year. Koch said the state would not be able to maintain the foundation level of $6,119 per student under the governor’s budget. Koch said that instead of simply reducing the level, lawmakers chose to take an action the state board is describing at prorating general state aid. So the foundation level did not change, but the actual payments were cut. That way wealthier schools, who receive a flat grant, would also see their aid cut. “It’s a fairness issue of everyone taking a hit versus just districts that are under general state aid taking the hit.” Under Quinn’s proposal general state aid would fall 8 percent short of meeting the foundation level.
Koch said that the recession has put a squeeze on state dollars because local districts have less money, so that state must pay more to maintain the funding levels determined by the general state aid formula. The state board is asking for an additional $201 million above Quinn’s proposed spending level for general state aid. Under the board’s proposal, general state aid payments would fall 4 percent short of the foundation level. “Asking for an increase in this climate is not an easy thing to do, but it takes a lot of money in the GSA formula to make it work. It’s working. It’s compensating for the increased poverty and the property values [that] have not rebounded yet in this state, the home values for example. So when those do, it will take less money. But right now, the recession has been hard on the formula.” Koch said it would take about $400 million more than Quinn’s proposed spending to fully fund the foundation level.
Rep. Daniel Biss, an Evanston Democrat, said that instead of using complicated accounting tactics to make sure that cuts are spread out evenly among the spectrum of wealthy to impoverished school districts, the state should rethink the formula it uses to determine funding. “This is just the latest in a long series of very clear evidence that we, the General Assembly, ought to look under the hood of the funding formula a lot more comprehensively,” Biss said. Koch said in response that he would support a funding plan where money follows children in the system.
The state board also asked for additional dollars, $64 million total, for programs such as advanced placement classes and bilingual education. State Rep. Roger Eddy, a Hutsonville Republican, questioned proposed spending in other areas if the state cannot afford to make its general state aid payments. “The documents I’ve read from the State Board of Education in the past … in order of priorities the general state aid foundation level is number one,” says Eddy, who is also a Hutsonville superintendent. “I’m tying to figure out how, if that is the priority [and] we have available funds, why is it not going into that if it’s not funded at the level promised?”
Koch said the increases the board is asking for outside of general state aid are needed to implement programs that are mandated by law, including the recent education reforms approved by the General Assembly. “There’s other mandates. The General Assembly passed additional requirements for preschool bilingual programs. Well, that’s a lot more kids,” he said. “We are not asking for anything that is not a requirement. There’s not fluff in our budget. Everything there has a statute in behind it or some requirement on schools districts or on us to deliver on. We’ve been prioritizing among priorities for a long time now.”
UPDATE: Quinn said he is looking for ways get schools their full general state aid payments in June. “I’m not giving up on that,” Quinn told reporters at a news conference in Berwyn.
He said sales tax revenues are better than expected this year, and some of that money could help stave off cuts. “We’ve got some revenue that we were happy to get because our sales tax this year, this fiscal year, performed better than expected,” Quinn said. “It seems to me we ought to take a look at investing that money in learning and education this fiscal year and definitely next fiscal year.”
Under the current budget, schools will miss a general state aid payment in June. Under Gov. Pat Quinn’s budget for next year, they can expect a similar outcome.
General state aid for education in the Fiscal Year 2012 budget fell 5 percent short of covering the foundation level of $6,119 per student paid to many schools. Lawmakers chose to hold off the reduction so it would kick in at the end of the current fiscal year.
State Superintendent Christopher Koch says that means most school districts will see a reduction in their first June payment, and no schools will get a second payment in June. But Koch said that districts should not be caught by surprise when the check doesn’t come. “The have known it for a long time. In fact, districts requested that we hold it off until the last month,” Koch said. “They’re trying to get through the school year as much as possible on what they can, and then they’re going to shoulder June’s payments to be less. But they’re quite aware of it.”
Overall, payments for general state aid, which is the largest area of state education spending, are being sent out on time. “They’ve been on time consistently, which is really good. Even through the worst of the recession, we’ve kept those payments coming. Now other payments, that’s not the case.” Payments for mandated categorical grants, for such programs as special education and student transportation -- which are the second largest area of state funding for education -- are lagging behind. “Those have gotten a little better though, and we’re not as far back as we were a year ago. I look at incremental progress, but we’re still not in great shape,” Koch said. Some mandated categorical payments are only caught up through the first quarter of the current fiscal year, which ends June 30.
Quinn is proposing to hold general state aid flat next fiscal year. Koch said the state would not be able to maintain the foundation level of $6,119 per student under the governor’s budget. Koch said that instead of simply reducing the level, lawmakers chose to take an action the state board is describing at prorating general state aid. So the foundation level did not change, but the actual payments were cut. That way wealthier schools, who receive a flat grant, would also see their aid cut. “It’s a fairness issue of everyone taking a hit versus just districts that are under general state aid taking the hit.” Under Quinn’s proposal general state aid would fall 8 percent short of meeting the foundation level.
Koch said that the recession has put a squeeze on state dollars because local districts have less money, so that state must pay more to maintain the funding levels determined by the general state aid formula. The state board is asking for an additional $201 million above Quinn’s proposed spending level for general state aid. Under the board’s proposal, general state aid payments would fall 4 percent short of the foundation level. “Asking for an increase in this climate is not an easy thing to do, but it takes a lot of money in the GSA formula to make it work. It’s working. It’s compensating for the increased poverty and the property values [that] have not rebounded yet in this state, the home values for example. So when those do, it will take less money. But right now, the recession has been hard on the formula.” Koch said it would take about $400 million more than Quinn’s proposed spending to fully fund the foundation level.
Rep. Daniel Biss, an Evanston Democrat, said that instead of using complicated accounting tactics to make sure that cuts are spread out evenly among the spectrum of wealthy to impoverished school districts, the state should rethink the formula it uses to determine funding. “This is just the latest in a long series of very clear evidence that we, the General Assembly, ought to look under the hood of the funding formula a lot more comprehensively,” Biss said. Koch said in response that he would support a funding plan where money follows children in the system.
The state board also asked for additional dollars, $64 million total, for programs such as advanced placement classes and bilingual education. State Rep. Roger Eddy, a Hutsonville Republican, questioned proposed spending in other areas if the state cannot afford to make its general state aid payments. “The documents I’ve read from the State Board of Education in the past … in order of priorities the general state aid foundation level is number one,” says Eddy, who is also a Hutsonville superintendent. “I’m tying to figure out how, if that is the priority [and] we have available funds, why is it not going into that if it’s not funded at the level promised?”
Koch said the increases the board is asking for outside of general state aid are needed to implement programs that are mandated by law, including the recent education reforms approved by the General Assembly. “There’s other mandates. The General Assembly passed additional requirements for preschool bilingual programs. Well, that’s a lot more kids,” he said. “We are not asking for anything that is not a requirement. There’s not fluff in our budget. Everything there has a statute in behind it or some requirement on schools districts or on us to deliver on. We’ve been prioritizing among priorities for a long time now.”
UPDATE: Quinn said he is looking for ways get schools their full general state aid payments in June. “I’m not giving up on that,” Quinn told reporters at a news conference in Berwyn.
He said sales tax revenues are better than expected this year, and some of that money could help stave off cuts. “We’ve got some revenue that we were happy to get because our sales tax this year, this fiscal year, performed better than expected,” Quinn said. “It seems to me we ought to take a look at investing that money in learning and education this fiscal year and definitely next fiscal year.”
Friday, February 24, 2012
Closing mental health facilities could cause other problems, opponents say
By Ashley Griffin
Opponents of Gov. Pat Quinn's plan to close two state mental health centers say the money-saving move could lead to other problems.
In an effort to reduce state spending, Quinn announced during Wednesday’s budget address his plan to close the Tinley Park Mental Health Center and the Singer Mental Health Center in Rockford. The announcement to close the two facilities is part of a larger plan that includes cutting or consolidating about 60 other state facilities in hopes of saving $425 million and eliminating 1,160 jobs.
The governor’s office cited numerous factors in determining which facilities to close, included the age of the facility, the level of quality care and the economic impact on the areas. No plan has been released on what will happen to patients at the centers.
Some lawmakers are not happy with the proposed cuts.
“It will have a devastating affect on Rockford. At this point if it closes there is no place for them to go,” said Sen. Dave Syverson, a Republican from Rockford whose district contains the Singer center.
“You are taking a hatchet approach to human service. It's not the appropriate way. It ends up disturbing families, disturbing communities, and instead of that we need to be looking at doing a complete review of the services in Illinois.
According to Svyerson, he believes instead of closing the Singer center, a partnership should be formed with the private sector to help lessen the costs at Singer.
Several other lawmakers said they do no support the closings without a plan of action.
“He’s [Quinn] got to realize that he creates some obstacle for us when he attacks state employees the way he did in today’s budget, by forcing surprise closures of these facilities that no one knows how we are going to manage. That will create some obstacles for us,” said Sen. Bill Brady, a Republican from Bloomington who also serves on Quinn’s working group on employee pension reform.
Illinois is not the only state making significant cuts from their mental health programs. According to a report released last March by the National Alliance on Mental Illness (NAMI), Illinois ranked fourth in the most cuts in general funds from their mental health budget between 2009-2011, trimming $113.7 million.
A November report from NAMI states: “In Illinois, a state that has cut $187 million from its mental health budget in recent years, three of the state’s nine psychiatric hospitals are slated to close. Up to 5,000 children and adults with serious mental illness could be cut off from needed services. The situation has gotten so bad that Cook County Sheriff Tom Dart announced in May 2011 that he was considering filing a lawsuit against the state, “accusing it of allowing the jail to essentially become a dumping ground for people with serious mental health problems.”
Both reports found that massive cuts to health services could have a negative impact on public safety because some people with serious mental illnesses can be more violent than the rest of the population.
Greg Sullivan, executive director for the Illinois Sheriff’s Association, also agrees that losing the mental health facilities is not a good idea. People with mental illnesses should receive the proper treatment, he said, and if they don’t, there could be negative consequences.
“These people are not criminals. They need treatment. … It's going to be a huge problem if these facilities close,” Sullivan said. “If we did this to a heart patient who needed treatment, we would be sued.”
Both centers found themselves on the chopping block a year ago, but in a dramatic last-minute save from the legislature's bipartisan Commission on Government Forecasting and Accountability that heard testimony from various interest groups, funds were provided to keep the facilities open for the reminder of the current fiscal year.
The Tinley Park center, which operates as an acute care center that usually admits patients for 21 days, has a 75-bed capacity and 195 staff. The cost to operate it is $19.8 million, and the closure date is set for July 2.
At the Singer center, the operating cost is $14 million. Its bed capacity is 76, with a staff of 176. The closure date is set for October 31.
Opponents of Gov. Pat Quinn's plan to close two state mental health centers say the money-saving move could lead to other problems.
In an effort to reduce state spending, Quinn announced during Wednesday’s budget address his plan to close the Tinley Park Mental Health Center and the Singer Mental Health Center in Rockford. The announcement to close the two facilities is part of a larger plan that includes cutting or consolidating about 60 other state facilities in hopes of saving $425 million and eliminating 1,160 jobs.
The governor’s office cited numerous factors in determining which facilities to close, included the age of the facility, the level of quality care and the economic impact on the areas. No plan has been released on what will happen to patients at the centers.
Some lawmakers are not happy with the proposed cuts.
“It will have a devastating affect on Rockford. At this point if it closes there is no place for them to go,” said Sen. Dave Syverson, a Republican from Rockford whose district contains the Singer center.
“You are taking a hatchet approach to human service. It's not the appropriate way. It ends up disturbing families, disturbing communities, and instead of that we need to be looking at doing a complete review of the services in Illinois.
According to Svyerson, he believes instead of closing the Singer center, a partnership should be formed with the private sector to help lessen the costs at Singer.
Several other lawmakers said they do no support the closings without a plan of action.
“He’s [Quinn] got to realize that he creates some obstacle for us when he attacks state employees the way he did in today’s budget, by forcing surprise closures of these facilities that no one knows how we are going to manage. That will create some obstacles for us,” said Sen. Bill Brady, a Republican from Bloomington who also serves on Quinn’s working group on employee pension reform.
Illinois is not the only state making significant cuts from their mental health programs. According to a report released last March by the National Alliance on Mental Illness (NAMI), Illinois ranked fourth in the most cuts in general funds from their mental health budget between 2009-2011, trimming $113.7 million.
A November report from NAMI states: “In Illinois, a state that has cut $187 million from its mental health budget in recent years, three of the state’s nine psychiatric hospitals are slated to close. Up to 5,000 children and adults with serious mental illness could be cut off from needed services. The situation has gotten so bad that Cook County Sheriff Tom Dart announced in May 2011 that he was considering filing a lawsuit against the state, “accusing it of allowing the jail to essentially become a dumping ground for people with serious mental health problems.”
Both reports found that massive cuts to health services could have a negative impact on public safety because some people with serious mental illnesses can be more violent than the rest of the population.
Greg Sullivan, executive director for the Illinois Sheriff’s Association, also agrees that losing the mental health facilities is not a good idea. People with mental illnesses should receive the proper treatment, he said, and if they don’t, there could be negative consequences.
“These people are not criminals. They need treatment. … It's going to be a huge problem if these facilities close,” Sullivan said. “If we did this to a heart patient who needed treatment, we would be sued.”
Both centers found themselves on the chopping block a year ago, but in a dramatic last-minute save from the legislature's bipartisan Commission on Government Forecasting and Accountability that heard testimony from various interest groups, funds were provided to keep the facilities open for the reminder of the current fiscal year.
The Tinley Park center, which operates as an acute care center that usually admits patients for 21 days, has a 75-bed capacity and 195 staff. The cost to operate it is $19.8 million, and the closure date is set for July 2.
At the Singer center, the operating cost is $14 million. Its bed capacity is 76, with a staff of 176. The closure date is set for October 31.
Wednesday, February 22, 2012
Governor's budget proposal was specific on spending but not on reforms
By Jamey Dunn
Gov. Pat Quinn set a dour tone as he kicked off the budgeting process today but shared few details on what he cites as his two biggest goals for the year.
“This budget contains truths that may not be what you want to hear, but these are truths that you need to know,” Quinn said in the opening lines of his budget address. “And I believe you can handle the truth.”
Quinn said he plans to close two developmental disability centers, two mental health centers and either close or consolidate 59 other state facilities. Fourteen of the proposed closures include developmental centers, mental health centers and corrections facilities. ( For a list of these institutions, see yesterday's blog.) The rest are consolidations within state agencies. Quinn said that overall, he is calling for $425 million less in spending by state agencies than the current fiscal year.
“I think he did a very good job of setting out what the problems of the state budget are. He delivered a very strong message,” House Speaker Michael Madigan told Illinois Lawmakers after Quinn’s speech. “He topped it all off by saying to them, ‘Don’t expect to go home until we get our job done,’ which was a legitimate request from a governor to the legislature.”
Quinn laid out the need for pension and Medicaid reform in no uncertain terms. He called for a $2.7 billion reduction in Medicaid spending and set a deadline for a bipartisan pension working group to make its recommendation by April 17. He told lawmakers, “Don’t plan on going home for the summer” if Medicaid spending is not addressed. Another group of legislators is working to hammer out recommendations for Medicaid reform.
House Minority Leader Tom Cross said there is enough time in the spring legislative session to tackle the two difficult issues. “We don’t have a choice.”
“The first step is to educate the public on how tough these decisions are. And I think he did that today. That makes it easier for the legislators to end up voting for some of these tough issues,” Senate President John Cullerton told Illinois Lawmakers.
Cullerton said that Quinn is letting the working groups negotiate behind the scenes. “The governor can’t propose a solution yet because we’ve got to wait and see what everybody wants to do collaboratively,” he said.
The House led the budgeting process last year, but Madigan said he wants Quinn to be involved this year. “The governor must sign that bill in order for it to be effective, and so the sooner that he joins the group, the better.”
But some Republicans we’re disappointed that Quinn didn’t give specifics today. “He’s the governor. He’s the leader,” Cross said. He said he wants more specifics on what pension reforms Quinn would support. “Are you for having the employees pay a little more? Are you for cost shifting [to local school districts and universities?] Are you for addressing the [cost of living increases?] He’s said they're all on the table, but what does he want? I mean this is not new stuff.”
Quinn was specific about some new spending he would like to see included in the budget. He proposed a $50 million bump to the Monetary Assistance Program (MAP) grants for college students and $20 million in additional spending for early childhood education.
“We cannot increase spending. Period. The end. Right now, we just can’t do it. So those things ought to be off the table, and we can focus on the big issues at hand,” said Senate Minority Leader Christine Radogno.
Quinn also called for closing tax loopholes to help pay down the state’s backlog of overdue bills to vendors, social services providers and schools.
Unlike past years, the governor did not pitch a borrowing plan to pay off the state’s bills. Sen. John Sullivan, a Rushville Democrat, said he hopes that once Medicaid and pension reforms are addressed, Republicans may be more receptive to borrowing or some other solution to pay down the bills. He said when he has tried to find support across the aisle for borrowing proposals he has sponsored in the past, Republican senators say that pension and Medicaid reform have to be part of the negotiations.
Quinn proposed closing tax loopholes to help pay down the state’s backlog of overdue bills to vendors, social services providers and schools. However, if the lawmakers choose not to do that, or no other plan is approved to pay off the bills, Quinn’s proposal calls for $163 million in unspent revenue to go toward a backlog that is about $8 billion. “It’s kind of a drop in the bucket as far as what it’s really going to do to address the issue,” Sullivan said.
The governor called for lawmakers to do a comprehensive assessment of tax breaks — a suggestion that came up on both sides of the aisle while lawmakers debated a tax breaks package passed in December that focused on appeasing a few businesses that were threatening to leave the state. “For too long, we’ve had a revenue code that looks like Swiss cheese, with plenty of loopholes for the powerful. Many of these loopholes are passed on politics, not economics,” Quinn said in his address.
Quinn pointed to a specific tax exemption for oil companies that drill in the ocean and sit on the intercontinental shelf. There is a federal exclusion for such companies, and since Illinois’ tax code mirrors the federal code in most instances, there is a state exemption as well. Quinn said that eliminating this exemption and requiring oil companies that make profits in Illinois to pay a state income tax would bring in about $75 million a year. Quinn said revenues brought in from ending such exemptions could also be used to give tax credits to families.
“I’m absolutely exhausted after a decade … of every governor talking about closing corporate loopholes,” said Doug Whitley, president of the Illinois Chamber of Commerce. “I think it’s kind of a fool's errand. … If those oil rigs were in southern Illinois, I would say: ‘Fine. Tax them.’”
Whitley said there are not may corporate tax breaks left to close. He said besides the net operating loss, which lawmakers put back in place under the tax breaks deal reached late last year, there are about $400 million in exemptions to the corporate income tax. “The real loopholes in the tax code are individual loopholes. Loopholes for citizens,” he said. Whitley pointed to the property tax and the fact that the state exempts some foods and medicines from sales taxes.
Whitley was positive about Quinn’s speech overall. “Generally speaking, I thought the governor had a good talk today. … I don’t think that he needed to show all of his cards in this speech. He simply said, 'Let's play the game.'” He said now the question is, “Can legislators spend hundreds of hours together and end up with a [budget] that they can agree on that does in fact save hundreds of million of dollars?”
Gov. Pat Quinn set a dour tone as he kicked off the budgeting process today but shared few details on what he cites as his two biggest goals for the year.
“This budget contains truths that may not be what you want to hear, but these are truths that you need to know,” Quinn said in the opening lines of his budget address. “And I believe you can handle the truth.”
Quinn said he plans to close two developmental disability centers, two mental health centers and either close or consolidate 59 other state facilities. Fourteen of the proposed closures include developmental centers, mental health centers and corrections facilities. ( For a list of these institutions, see yesterday's blog.) The rest are consolidations within state agencies. Quinn said that overall, he is calling for $425 million less in spending by state agencies than the current fiscal year.
“I think he did a very good job of setting out what the problems of the state budget are. He delivered a very strong message,” House Speaker Michael Madigan told Illinois Lawmakers after Quinn’s speech. “He topped it all off by saying to them, ‘Don’t expect to go home until we get our job done,’ which was a legitimate request from a governor to the legislature.”
Quinn laid out the need for pension and Medicaid reform in no uncertain terms. He called for a $2.7 billion reduction in Medicaid spending and set a deadline for a bipartisan pension working group to make its recommendation by April 17. He told lawmakers, “Don’t plan on going home for the summer” if Medicaid spending is not addressed. Another group of legislators is working to hammer out recommendations for Medicaid reform.
House Minority Leader Tom Cross said there is enough time in the spring legislative session to tackle the two difficult issues. “We don’t have a choice.”
“The first step is to educate the public on how tough these decisions are. And I think he did that today. That makes it easier for the legislators to end up voting for some of these tough issues,” Senate President John Cullerton told Illinois Lawmakers.
Cullerton said that Quinn is letting the working groups negotiate behind the scenes. “The governor can’t propose a solution yet because we’ve got to wait and see what everybody wants to do collaboratively,” he said.
The House led the budgeting process last year, but Madigan said he wants Quinn to be involved this year. “The governor must sign that bill in order for it to be effective, and so the sooner that he joins the group, the better.”
But some Republicans we’re disappointed that Quinn didn’t give specifics today. “He’s the governor. He’s the leader,” Cross said. He said he wants more specifics on what pension reforms Quinn would support. “Are you for having the employees pay a little more? Are you for cost shifting [to local school districts and universities?] Are you for addressing the [cost of living increases?] He’s said they're all on the table, but what does he want? I mean this is not new stuff.”
Quinn was specific about some new spending he would like to see included in the budget. He proposed a $50 million bump to the Monetary Assistance Program (MAP) grants for college students and $20 million in additional spending for early childhood education.
“We cannot increase spending. Period. The end. Right now, we just can’t do it. So those things ought to be off the table, and we can focus on the big issues at hand,” said Senate Minority Leader Christine Radogno.
Quinn also called for closing tax loopholes to help pay down the state’s backlog of overdue bills to vendors, social services providers and schools.
Unlike past years, the governor did not pitch a borrowing plan to pay off the state’s bills. Sen. John Sullivan, a Rushville Democrat, said he hopes that once Medicaid and pension reforms are addressed, Republicans may be more receptive to borrowing or some other solution to pay down the bills. He said when he has tried to find support across the aisle for borrowing proposals he has sponsored in the past, Republican senators say that pension and Medicaid reform have to be part of the negotiations.
Quinn proposed closing tax loopholes to help pay down the state’s backlog of overdue bills to vendors, social services providers and schools. However, if the lawmakers choose not to do that, or no other plan is approved to pay off the bills, Quinn’s proposal calls for $163 million in unspent revenue to go toward a backlog that is about $8 billion. “It’s kind of a drop in the bucket as far as what it’s really going to do to address the issue,” Sullivan said.
The governor called for lawmakers to do a comprehensive assessment of tax breaks — a suggestion that came up on both sides of the aisle while lawmakers debated a tax breaks package passed in December that focused on appeasing a few businesses that were threatening to leave the state. “For too long, we’ve had a revenue code that looks like Swiss cheese, with plenty of loopholes for the powerful. Many of these loopholes are passed on politics, not economics,” Quinn said in his address.
Quinn pointed to a specific tax exemption for oil companies that drill in the ocean and sit on the intercontinental shelf. There is a federal exclusion for such companies, and since Illinois’ tax code mirrors the federal code in most instances, there is a state exemption as well. Quinn said that eliminating this exemption and requiring oil companies that make profits in Illinois to pay a state income tax would bring in about $75 million a year. Quinn said revenues brought in from ending such exemptions could also be used to give tax credits to families.
“I’m absolutely exhausted after a decade … of every governor talking about closing corporate loopholes,” said Doug Whitley, president of the Illinois Chamber of Commerce. “I think it’s kind of a fool's errand. … If those oil rigs were in southern Illinois, I would say: ‘Fine. Tax them.’”
Whitley said there are not may corporate tax breaks left to close. He said besides the net operating loss, which lawmakers put back in place under the tax breaks deal reached late last year, there are about $400 million in exemptions to the corporate income tax. “The real loopholes in the tax code are individual loopholes. Loopholes for citizens,” he said. Whitley pointed to the property tax and the fact that the state exempts some foods and medicines from sales taxes.
Whitley was positive about Quinn’s speech overall. “Generally speaking, I thought the governor had a good talk today. … I don’t think that he needed to show all of his cards in this speech. He simply said, 'Let's play the game.'” He said now the question is, “Can legislators spend hundreds of hours together and end up with a [budget] that they can agree on that does in fact save hundreds of million of dollars?”
Tuesday, February 21, 2012
Aside from facility closings, Quinn's budget proposal is expected to be short on details
By Jamey Dunn
Gov. Pat Quinn’s budget proposal on Wednesday will call for the closure of more than a dozen state facilities, but will likely run short on specifics about reforming the state’s costly Medicaid and pension systems.
Top members of Quinn’s staff said in a budget briefing this evening that the governor plans to propose closing14 state facilities, including prisons, youth prisons, mental health centers, centers for the developmentally disabled and adult transition centers, which work to get newly released inmates back on their feet. The list includes:
Lawmakers and advocates alike balked at Quinn’s long list of proposed closures. “This is an absolute nightmare. I was afraid Governor Quinn’s budget would put the Murray Center in its sights. Does the administration have an idea what this will do to the patients, families and the city of Centralia? I have met with the administration officials and thought that they would have some legitimate long-term strategy on this issue – but they do not,” Sen. John Jones, a Mt. Vernon Republican, said in a prepared statement. “Since they initially floated this idea last year, the economy in Centralia has slumped. Well, now that these plans are at least laid out, it’s time to dig in, and I vow to oppose the closure plans.”
Quinn has said he plans to transition residents and patients in mental health and developmental care into community based setting that would be less costly and provide a better quality of care. A budget document from Quinn’s office said that his Fiscal Year 2013 budget will include money to transition people from institutions to community care.
The plan calls for moving about half of the fewer than 400 Tamms inmates to the maximum-security wing of the Pontiac Correctional Center. Tamms holds especially violent or disruptive prisoners who have been deemed too dangerous to house in the general prison population. According to budget documents from Quinn's office, the other half would be “relocated accordingly.” The about 1,000 inmates currently locked up at the Dwight prison, which is a women’s facility, would be moved to the Logan Correctional Center in Lincoln, which would be converted to an all female prison. Male prisoners from Logan would be moved to the Lincoln Correctional Center, which would be converted to an all male center.
Dwight is currently the state’s only level-one maximum security lockup for female prisoners. It is the processing center for female prisoners and also houses lower security inmates. “Dwight not a perfect place, but compared to other facilities in the DOC, there’s a lot going right with Dwight,” said John Maki, executive director of the prison watchdog group John Howard Association. Maki said that he does not envision any workable scenario for closing Dwight. “This would be impossible. This is not a serious proposal.”
Quinn’s budget staff said former inmates would still receive the services, such as vocational training and addiction treatment, provided by the adult transition centers. “Instead of doing that from these adult transition centers located all over the state…they’re going to do it on electronic detention,” said David Vaught, Quinn’s budget director.”
Quinn’s budget proposal will also call for elimination of 24 out of the 90 Department of Human Services offices through consolidation. The plan also calls for the elimination of four Department of Child and Family Services offices from which Vaught said employees would be transferred. “They’re not going to reduce employees. They’re not going to reduce services," Vaught said of the consolidations. The proposal calls for the elimination of one of the state’s two agriculture laboratories, as well. A lab in Centralia would close, and a lab in Galesburg would remain open. “Everybody in the state is going to be affected by this downsizing of state government and this closing of state facilities,” Vaught said.
Jack Lavin, Quinn’s chief of staff said, “Every year, we say, ‘This is the toughest budget,’ and I’m saying again this year, ‘This is the toughest budget we’ve ever faced.’”
However, Quinn also plans to call for some new spending. The governor wants a $20 million increase for early childhood education and a $50 million increase for the Monetary Award Program (MAP) grants for college students. Both areas have been cut in recent budget years. The governor also plans to revisit tax cut proposals pitched in his State of the State address as ways to spur economic growth in the state. Quinn also plans to propose new capital spending on schools, water systems and deferred maintenance at state facilities. His budget staff said that he does not have a specific estimate for how much new capital borrowing would be needed for such projects. They said new revenues would be needed to fund the projects but did not point to any one source. “We need to make sure that it’s not just about cutting. It’s about building and growing,” Lavin said of Quinn’s proposal.
What Quinn likely won’t give many details on are the two biggest budget issues he is looking to tackle this year: reforms to the Medicaid and public employee pension systems.
Quinn wants to hold Medicaid spending flat, which would mean staving off an estimated $2.7 billion in costs for FY 13. Stermer said that Quinn wants to work with legislators so see what changes can be made to state laws. He pointed to the list of services provided and said the governor wants to partner with legislators and reevaluate all services that are not required by the federal government. He said the state needs to step up implementation of managed care programs and focus on providing the consistent medical care people need to stay healthy. “We need to convert this whole thing to a wellness program,” he said. “We’re not just going to wait for people to go from provider to provider to provider and just pay the bills.” He called pushing Medicaid costs into future budget years — as lawmakers did with about $2 billion Medicaid bills that will carry over into next fiscal year — “a recipe for collapse of the Medicaid program.”
As for pension reform, Stermer said the working group he is heading is trying to tackle the issue, and any reforms they propose would be vetted by the standard legislative process. So it is unlikely Quinn will pitch anything too specific Wednesday. “We’re doing something very very akin to formal negotiations with stakeholders,” Stermer said.
Quinn is scheduled to present his budget Wednesday at noon.
Gov. Pat Quinn’s budget proposal on Wednesday will call for the closure of more than a dozen state facilities, but will likely run short on specifics about reforming the state’s costly Medicaid and pension systems.
Top members of Quinn’s staff said in a budget briefing this evening that the governor plans to propose closing14 state facilities, including prisons, youth prisons, mental health centers, centers for the developmentally disabled and adult transition centers, which work to get newly released inmates back on their feet. The list includes:
- Tamms "super-max" prison
- Dwight Correctional Center
- Singer Mental Health Center in Rockford
- Murray Developmental Center in Centralia
- Jacksonville Developmental Center
- Tinley Park Mental Health Center
- Joliet Juvenile Justice Center
- Murphysboro Juvenile Justice Center
Lawmakers and advocates alike balked at Quinn’s long list of proposed closures. “This is an absolute nightmare. I was afraid Governor Quinn’s budget would put the Murray Center in its sights. Does the administration have an idea what this will do to the patients, families and the city of Centralia? I have met with the administration officials and thought that they would have some legitimate long-term strategy on this issue – but they do not,” Sen. John Jones, a Mt. Vernon Republican, said in a prepared statement. “Since they initially floated this idea last year, the economy in Centralia has slumped. Well, now that these plans are at least laid out, it’s time to dig in, and I vow to oppose the closure plans.”
Quinn has said he plans to transition residents and patients in mental health and developmental care into community based setting that would be less costly and provide a better quality of care. A budget document from Quinn’s office said that his Fiscal Year 2013 budget will include money to transition people from institutions to community care.
The plan calls for moving about half of the fewer than 400 Tamms inmates to the maximum-security wing of the Pontiac Correctional Center. Tamms holds especially violent or disruptive prisoners who have been deemed too dangerous to house in the general prison population. According to budget documents from Quinn's office, the other half would be “relocated accordingly.” The about 1,000 inmates currently locked up at the Dwight prison, which is a women’s facility, would be moved to the Logan Correctional Center in Lincoln, which would be converted to an all female prison. Male prisoners from Logan would be moved to the Lincoln Correctional Center, which would be converted to an all male center.
Dwight is currently the state’s only level-one maximum security lockup for female prisoners. It is the processing center for female prisoners and also houses lower security inmates. “Dwight not a perfect place, but compared to other facilities in the DOC, there’s a lot going right with Dwight,” said John Maki, executive director of the prison watchdog group John Howard Association. Maki said that he does not envision any workable scenario for closing Dwight. “This would be impossible. This is not a serious proposal.”
Quinn’s budget staff said former inmates would still receive the services, such as vocational training and addiction treatment, provided by the adult transition centers. “Instead of doing that from these adult transition centers located all over the state…they’re going to do it on electronic detention,” said David Vaught, Quinn’s budget director.”
Quinn’s budget proposal will also call for elimination of 24 out of the 90 Department of Human Services offices through consolidation. The plan also calls for the elimination of four Department of Child and Family Services offices from which Vaught said employees would be transferred. “They’re not going to reduce employees. They’re not going to reduce services," Vaught said of the consolidations. The proposal calls for the elimination of one of the state’s two agriculture laboratories, as well. A lab in Centralia would close, and a lab in Galesburg would remain open. “Everybody in the state is going to be affected by this downsizing of state government and this closing of state facilities,” Vaught said.
Jack Lavin, Quinn’s chief of staff said, “Every year, we say, ‘This is the toughest budget,’ and I’m saying again this year, ‘This is the toughest budget we’ve ever faced.’”
However, Quinn also plans to call for some new spending. The governor wants a $20 million increase for early childhood education and a $50 million increase for the Monetary Award Program (MAP) grants for college students. Both areas have been cut in recent budget years. The governor also plans to revisit tax cut proposals pitched in his State of the State address as ways to spur economic growth in the state. Quinn also plans to propose new capital spending on schools, water systems and deferred maintenance at state facilities. His budget staff said that he does not have a specific estimate for how much new capital borrowing would be needed for such projects. They said new revenues would be needed to fund the projects but did not point to any one source. “We need to make sure that it’s not just about cutting. It’s about building and growing,” Lavin said of Quinn’s proposal.
What Quinn likely won’t give many details on are the two biggest budget issues he is looking to tackle this year: reforms to the Medicaid and public employee pension systems.
Quinn wants to hold Medicaid spending flat, which would mean staving off an estimated $2.7 billion in costs for FY 13. Stermer said that Quinn wants to work with legislators so see what changes can be made to state laws. He pointed to the list of services provided and said the governor wants to partner with legislators and reevaluate all services that are not required by the federal government. He said the state needs to step up implementation of managed care programs and focus on providing the consistent medical care people need to stay healthy. “We need to convert this whole thing to a wellness program,” he said. “We’re not just going to wait for people to go from provider to provider to provider and just pay the bills.” He called pushing Medicaid costs into future budget years — as lawmakers did with about $2 billion Medicaid bills that will carry over into next fiscal year — “a recipe for collapse of the Medicaid program.”
As for pension reform, Stermer said the working group he is heading is trying to tackle the issue, and any reforms they propose would be vetted by the standard legislative process. So it is unlikely Quinn will pitch anything too specific Wednesday. “We’re doing something very very akin to formal negotiations with stakeholders,” Stermer said.
Quinn is scheduled to present his budget Wednesday at noon.
Republicans: Pension shift would be a cut to education
By Ashley Griffin
While Gov. Pat Quinn says he plans to increase education spending under his budget proposal, some Republicans leaders say an idea he has pitched to reform the state employee pension systems would result in a potential $1 billion cut for downstate schools.
Quinn, Speaker of the House, Michael Madigan and Senate President John Cullerton have all publicly tossed around the idea of having school districts outside of Chicago pick up some of the cost of their teachers' pensions.
While Quinn plans to propose about a 1 percent increase in education spending during his budget address Wednesday, Republicans say his pension idea could lead to higher property taxes or possible layoffs. Quinn has said that schools should pay some of the pension obligation but hasn’t released any details about the idea.
“At this point, its an idea. We are not sure what and how they want to do this, but at the end of the day we are talking about shifting a $1 billion to local school districts. … So you are going to lose teachers or have a massive property tax hike,” said Sen. Ed Sullivan, a Republican from Mundelein.
With little details on the portion of costs school districts might have to pick up under such a plan and no tangible legislation in sight, some Republican leaders fear the worst for local districts.
“My school district, Wauconda, which is in the northern part of the legislative district, I am told it would take a hit of about $2.24 million [that] would be shifted onto that school district and that does mean massive layoffs or much higher property taxes,” said Rep. Kent Gaffney, a Republican from Lake Barrington.
During a Tuesday night budget briefing, Quinn’s budget officials did not give specifics on his plans for revamping the pension system; but they did emphasize how much teacher’s pensions make up the overall pension cost to the state.
Jerry Stermer, senior advisor to the governor, said that the Teachers' Retirement System (TRS) accounts for 51 percent for the overall pension cost, or $2.7 billion of the more than $5 billion the state has to pay pensions in Fiscal Year 2013.
“It’s been clearer and clearer to people that some employers are not directly responsible for the cost of paying retiree benefits,” said Jerry Stermer, who also heads a working group that he says is trying to negotiate changes to the system.
Stermer’s says his group is meeting with stakeholders on pension reform, and any ideas would have to go through the legislative process. So don’t expect specifics on pension changes during the governor’s budget speech scheduled for Wednesday at noon.
While Gov. Pat Quinn says he plans to increase education spending under his budget proposal, some Republicans leaders say an idea he has pitched to reform the state employee pension systems would result in a potential $1 billion cut for downstate schools.
Quinn, Speaker of the House, Michael Madigan and Senate President John Cullerton have all publicly tossed around the idea of having school districts outside of Chicago pick up some of the cost of their teachers' pensions.
While Quinn plans to propose about a 1 percent increase in education spending during his budget address Wednesday, Republicans say his pension idea could lead to higher property taxes or possible layoffs. Quinn has said that schools should pay some of the pension obligation but hasn’t released any details about the idea.
“At this point, its an idea. We are not sure what and how they want to do this, but at the end of the day we are talking about shifting a $1 billion to local school districts. … So you are going to lose teachers or have a massive property tax hike,” said Sen. Ed Sullivan, a Republican from Mundelein.
With little details on the portion of costs school districts might have to pick up under such a plan and no tangible legislation in sight, some Republican leaders fear the worst for local districts.
“My school district, Wauconda, which is in the northern part of the legislative district, I am told it would take a hit of about $2.24 million [that] would be shifted onto that school district and that does mean massive layoffs or much higher property taxes,” said Rep. Kent Gaffney, a Republican from Lake Barrington.
During a Tuesday night budget briefing, Quinn’s budget officials did not give specifics on his plans for revamping the pension system; but they did emphasize how much teacher’s pensions make up the overall pension cost to the state.
Jerry Stermer, senior advisor to the governor, said that the Teachers' Retirement System (TRS) accounts for 51 percent for the overall pension cost, or $2.7 billion of the more than $5 billion the state has to pay pensions in Fiscal Year 2013.
“It’s been clearer and clearer to people that some employers are not directly responsible for the cost of paying retiree benefits,” said Jerry Stermer, who also heads a working group that he says is trying to negotiate changes to the system.
Stermer’s says his group is meeting with stakeholders on pension reform, and any ideas would have to go through the legislative process. So don’t expect specifics on pension changes during the governor’s budget speech scheduled for Wednesday at noon.
Monday, February 20, 2012
CapitolView
Charlie Wheeler (Public Affairs Reporting Program, UIS) and Andrew Thomason (Illinois Statehouse News), join moderator Jamey Dunn (Illinois Issues Magazine) to review the week in Illinois politics and government. A production of WSEC-TV/PBS Springfield
Friday, February 17, 2012
Lottery retailers say online sales will be bad for business
By Jamey Dunn
Convenience store owners and other Illinois retailers are worried that a plan to sell lottery tickets online would cut into their profits and possibly lead to layoffs.
Following a decision by the U.S. Justice Department that allows for Internet lottery ticket sales, the state is moving forward with a pilot program to sell tickets for the Lotto and Mega Millions games online. The General Assembly approved the plan in 2009 as a founding source for the state’s capital construction program. Michael Jones, the superintendent of the lottery, said he expects Internet ticket sales to begin this spring, and he hopes to add Powerball ticket to online sales.
But retailers who sell such tickets are concerned that online sales will hurt their businesses. Bill Fleischli of the Illinois Petroleum Marketers Association and the Illinois Association of Convenience Stores said during a news conference today that lottery ticket sales bring customers into gasoline stations and convenience stores, and that prompts sales of other products, such as food and beverages. Since those other sales, and not gasoline sales, typically drive profits for gas stations — sometimes accounting for up to 90 percent of profits — Fleischli said anything that might reduce customer traffic into stores could be particularly damaging to businesses and potentially lead to layoffs. He said online lottery sales could result in 4,000 to 8,000 lost jobs. “And that would affect every county and every city in the state of Illinois,” Fleischli said. He added that lost jobs would mean a reduction in income tax revenues, and lost sales would cut into sales tax revenues.
Jones said that the online program would reach 300,000 to 500,000 Illinois residents who do not play the lottery now. “Our research suggested that it would attract a significant number of new players. ... There’s substantial revenue to be made for the state.” Those representing retailers said they do not want to block online sales, but they do want the implementation of the plan to be slowed down so their interests can be considered. “It can be a complementary and mutually beneficial relationship. It should not be one that pits main street retail against Internet [sales],” said Rob Carr, senior vice president of the Illinois Retail Merchants Association.
Retailers are backing House Bill 5676, which would lock in a 5 percent commission on sales for stores that sell lottery tickets. It also has provisions geared at driving online customers into stores. The bill, sponsored by Rep. Jim Watson, would also create a card, similar to a debit card, that would be required to buy online lottery tickets. The cards could only be purchased with cash, so they would likely have to be bought in stores, which would receive the commission on the sale, but they could be used to buy tickets in stores and online. Store clerks would also verify that purchasers are 18 or older. Fleischli raised concerns about the state being able to confirm the age of online buyers. “Our trained associates have been the gatekeepers for the lottery at preventing youth access because the lottery is an adult product. And we want to continue to be that partner and the gatekeeper,” he said. Prizes under $600 would also have to be collected at a licensed lottery retailer.
Fleischli said he and others representing retailers plan to met with Jones next week to discuss their concerns. The Illinois Lottery did not respond to a request for comment on HB 5676.
Convenience store owners and other Illinois retailers are worried that a plan to sell lottery tickets online would cut into their profits and possibly lead to layoffs.
Following a decision by the U.S. Justice Department that allows for Internet lottery ticket sales, the state is moving forward with a pilot program to sell tickets for the Lotto and Mega Millions games online. The General Assembly approved the plan in 2009 as a founding source for the state’s capital construction program. Michael Jones, the superintendent of the lottery, said he expects Internet ticket sales to begin this spring, and he hopes to add Powerball ticket to online sales.
But retailers who sell such tickets are concerned that online sales will hurt their businesses. Bill Fleischli of the Illinois Petroleum Marketers Association and the Illinois Association of Convenience Stores said during a news conference today that lottery ticket sales bring customers into gasoline stations and convenience stores, and that prompts sales of other products, such as food and beverages. Since those other sales, and not gasoline sales, typically drive profits for gas stations — sometimes accounting for up to 90 percent of profits — Fleischli said anything that might reduce customer traffic into stores could be particularly damaging to businesses and potentially lead to layoffs. He said online lottery sales could result in 4,000 to 8,000 lost jobs. “And that would affect every county and every city in the state of Illinois,” Fleischli said. He added that lost jobs would mean a reduction in income tax revenues, and lost sales would cut into sales tax revenues.
Jones said that the online program would reach 300,000 to 500,000 Illinois residents who do not play the lottery now. “Our research suggested that it would attract a significant number of new players. ... There’s substantial revenue to be made for the state.” Those representing retailers said they do not want to block online sales, but they do want the implementation of the plan to be slowed down so their interests can be considered. “It can be a complementary and mutually beneficial relationship. It should not be one that pits main street retail against Internet [sales],” said Rob Carr, senior vice president of the Illinois Retail Merchants Association.
Retailers are backing House Bill 5676, which would lock in a 5 percent commission on sales for stores that sell lottery tickets. It also has provisions geared at driving online customers into stores. The bill, sponsored by Rep. Jim Watson, would also create a card, similar to a debit card, that would be required to buy online lottery tickets. The cards could only be purchased with cash, so they would likely have to be bought in stores, which would receive the commission on the sale, but they could be used to buy tickets in stores and online. Store clerks would also verify that purchasers are 18 or older. Fleischli raised concerns about the state being able to confirm the age of online buyers. “Our trained associates have been the gatekeepers for the lottery at preventing youth access because the lottery is an adult product. And we want to continue to be that partner and the gatekeeper,” he said. Prizes under $600 would also have to be collected at a licensed lottery retailer.
Fleischli said he and others representing retailers plan to met with Jones next week to discuss their concerns. The Illinois Lottery did not respond to a request for comment on HB 5676.
Thursday, February 16, 2012
Sears tax break allows for layoffs
By Jamey Dunn
One company that will benefit from a tax break brokered to keep jobs in the state announced layoffs today.
Sears told Crain’s Chicago Business that the company plans to lay off 100 people today from various departments at the company’s headquarters in Hoffman Estates. This comes just months after the General Assembly approved a tax break geared toward keeping the company in the state. The tax credit given to Sears is worth $150 million over 10 years. The company is required to maintain jobs and make a $300,000 million capital investment. Under the legislation, the company must have at least 4,250 employees at the corporate headquarters when the tax benefits go into effect next fiscal year and must keep employment numbers at that level. However, Sears currently employs about 6,100 people at the headquarters, which leaves the door open to more potential layoffs.
“Regarding the legislation passed last fall, this has no impact whatsoever on that measure. We are well above the minimum headcount requirements for … the new legislation — 4,250 — which takes effect in 2013. We have about 6,100 people currently working in our HQ. It’s important to know that under the legislation, if we don’t meet our obligations, we receive no benefits. We’re focused on improving our business and continuing to be a strong, contributing member of the Illinois business community,” Kimberly Freely, a spokeswoman for Sears Holdings Corp., said in a prepared statement. Freely confirmed today’s layoffs but did not comment on whether the company plans additional job cuts in the future.
“Obviously we’re not happy with this news. We’re not happy when any corporation cuts jobs,” said Brooke Anderson, a spokeswoman for Gov. Pat Quinn. But, Anderson said, without the tax cut, Sears might have left the state taking all of its more than 6,000 jobs with it. “The only thing surprising about [the layoff] announcement is that anyone is surprised,” said Rep. Jack Franks, a Marengo Democrat. Franks warned that the legislation allowed for layoffs when it was up for debate late last year.
Today, he pointed to the companies recent troubles, including disappointing holiday sales that the company said would lead to the closure of up to 120 stores. Sears announced 79 store closures at the end of last year, but none of the stores were located in Illinois. “We’re going to give [Sears] money to fire tax-paying Illinoisans,” Franks said. “If you’re going to help job creators, you ought to actually help job creators. Sears is not a job creator. Sears is the great terminator.”
While Franks said he opposed the Sears provision, he did vote in favor of Senate Bill 400, which contained the break for Sears as well as one for the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade. During floor debate, Franks requested that the Sears provisions be put into a separate bill, but he said he voted in favor of the measure because he supported a cut to the estate tax that was also included in the package. “I thought that the other things in the bill were by and large pretty good,” he said. The bill included several tax breaks for businesses, including an extension of a research and development tax credit and a credit for smaller businesses that had net operating losses.
Franks is sponsoring HB 3934, which would create a panel comprising business experts within the Department of Revenue that would approve future tax incentives like the one given to Sears. Franks said the group would look at the overall business performance of those seeking tax help to make sure that they are good investments for the state. He also said he plans to support a bill that would require businesses receiving tax breaks to maintain employee levels based on the headcount when lawmakers approve the tax breaks.
Rikeesha Phelon, spokeswoman for Senate President John Cullerton, echoed Anderson’s claim that the tax deal may have prevented a much larger job loss that would have occurred if Sears had left the state. However, Phelon said: “Sears hasn't violated the agreement, but their recent decision doesn't encourage good faith. If they do not fulfill their obligations in the future, the tax benefit will become void.”
One company that will benefit from a tax break brokered to keep jobs in the state announced layoffs today.
Sears told Crain’s Chicago Business that the company plans to lay off 100 people today from various departments at the company’s headquarters in Hoffman Estates. This comes just months after the General Assembly approved a tax break geared toward keeping the company in the state. The tax credit given to Sears is worth $150 million over 10 years. The company is required to maintain jobs and make a $300,000 million capital investment. Under the legislation, the company must have at least 4,250 employees at the corporate headquarters when the tax benefits go into effect next fiscal year and must keep employment numbers at that level. However, Sears currently employs about 6,100 people at the headquarters, which leaves the door open to more potential layoffs.
“Regarding the legislation passed last fall, this has no impact whatsoever on that measure. We are well above the minimum headcount requirements for … the new legislation — 4,250 — which takes effect in 2013. We have about 6,100 people currently working in our HQ. It’s important to know that under the legislation, if we don’t meet our obligations, we receive no benefits. We’re focused on improving our business and continuing to be a strong, contributing member of the Illinois business community,” Kimberly Freely, a spokeswoman for Sears Holdings Corp., said in a prepared statement. Freely confirmed today’s layoffs but did not comment on whether the company plans additional job cuts in the future.
“Obviously we’re not happy with this news. We’re not happy when any corporation cuts jobs,” said Brooke Anderson, a spokeswoman for Gov. Pat Quinn. But, Anderson said, without the tax cut, Sears might have left the state taking all of its more than 6,000 jobs with it. “The only thing surprising about [the layoff] announcement is that anyone is surprised,” said Rep. Jack Franks, a Marengo Democrat. Franks warned that the legislation allowed for layoffs when it was up for debate late last year.
Today, he pointed to the companies recent troubles, including disappointing holiday sales that the company said would lead to the closure of up to 120 stores. Sears announced 79 store closures at the end of last year, but none of the stores were located in Illinois. “We’re going to give [Sears] money to fire tax-paying Illinoisans,” Franks said. “If you’re going to help job creators, you ought to actually help job creators. Sears is not a job creator. Sears is the great terminator.”
While Franks said he opposed the Sears provision, he did vote in favor of Senate Bill 400, which contained the break for Sears as well as one for the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade. During floor debate, Franks requested that the Sears provisions be put into a separate bill, but he said he voted in favor of the measure because he supported a cut to the estate tax that was also included in the package. “I thought that the other things in the bill were by and large pretty good,” he said. The bill included several tax breaks for businesses, including an extension of a research and development tax credit and a credit for smaller businesses that had net operating losses.
Franks is sponsoring HB 3934, which would create a panel comprising business experts within the Department of Revenue that would approve future tax incentives like the one given to Sears. Franks said the group would look at the overall business performance of those seeking tax help to make sure that they are good investments for the state. He also said he plans to support a bill that would require businesses receiving tax breaks to maintain employee levels based on the headcount when lawmakers approve the tax breaks.
Rikeesha Phelon, spokeswoman for Senate President John Cullerton, echoed Anderson’s claim that the tax deal may have prevented a much larger job loss that would have occurred if Sears had left the state. However, Phelon said: “Sears hasn't violated the agreement, but their recent decision doesn't encourage good faith. If they do not fulfill their obligations in the future, the tax benefit will become void.”
Wednesday, February 15, 2012
Quinn's staff expects more revenue for upcoming budget
By Jamey Dunn
Gov. Pat Quinn’s budget team indicated today that he would likely have more money to work with in his upcoming budget than initially thought.
Budget Director David Vaught told a Senate budget committee in Chicago today that there would be “some revision” in the revenue estimate that was part of a three-year budget projection released in January. That document called for about $33.1 billion in total revenues. Vaught did not give specifics on how the numbers would change before Quinn's budget speech, which is scheduled to take place in a week, but he said revenues are “trending up.”
Vaught told the committee that Quinn does not intend to make the 9 percent cuts to all areas of spending that the January projection called for. Vaught said Quinn is not planning “across the board reductions of this size and scope in all areas.” But he added, “We will have them in some areas.” Quinn has said that he does not want to reduce spending on education and health care. Vaught reiterated Quinn’s desire to reform the Medicaid and pension systems this year, calling the growing costs of both “the squeeze” on other spending. Vaught said another goal for the year is to bring down the cost of health care to the state for retired public employees. He said a previous proposal to charge premiums to some retirees over a set income level would likely be up for consideration again. He also emphasized the need to address the backlog of bills but did not share details on what, if any, new ideas Quinn may present in his speech. Quinn has supported borrowing to pay down the backlog, but so far, that plan has found a chilly reception from many lawmakers.
Vaught added that Quinn plans to look at health care and human services as two separate areas of the budget this year because advocates complained that lumping them together led to human services being cut to keep up with growing Medicaid costs.
Steve Schnorf, a member of the Budgeting for Results Commission and a former director of the Bureau of the Budget under former Gov. George Ryan, warned against a repeat of the fight over revenue estimates that happened last spring as lawmakers started the budgeting process for the current fiscal year. The House created a smaller estimate that the Senate and Quinn disagreed with, but that was what the budget was ultimately based upon. “Starting with an agreed upon revenue number … creates buy-in from all the players,” Schnorf said. “I think that buy-in is important.”
Vaught said that the three-year projection created last year was done hastily and that his office was “a little uncertain” about the revenues that the then newly passed income tax increase would bring in. He said the estimate this year is much more certain.
Today’s hearing was held to discuss the implementation of a new budgeting system, which would focus on the desired goals of programs and allocate money based on the success of programs toward reaching those goals. The system, known as Budgeting for Results, was signed into law by Quinn last year shortly after he presented his budget plan. This will be the first budget proposed under the new law, which requires the governor to create his plan based only from existing revenue. That means that — unlike last year — Quinn cannot pitch new revenue sources and tie spending to them.
Schnorf said that plans like Budgeting for Results aren’t new. “Most administrations have an initiative of some sort like this,” he said. “You go back through the last 30 years of press clippings and you would find initiatives like this announced by administrations.” But Schnorf said he thinks Quinn and lawmakers are committed to make the program work, and he predicted it would not become “sizzle rather than steak.”
However, Schnorf warned lawmakers that if they focus only on tangible goals when making decisions and have an eye for programs that are measured as successful, they might not like the budgeting outcomes. He said that public schools, for example, may not rate as high performers and asked lawmakers: “Does that mean we should take the money away from them and invest the money somewhere else that has a better return on investment?"
He said that promoting successful programs during tight budget times would come at the cost of other programs that may not seem successful under Budgeting for Results measures but are nonetheless important to the state. “In a time of scarcity, the only way you can reward someone for performing well is by punishing someone else,” Schnorf said. “Every dollar you spend is a dollar you don’t have. You have to take it from somewhere else.”
Gov. Pat Quinn’s budget team indicated today that he would likely have more money to work with in his upcoming budget than initially thought.
Budget Director David Vaught told a Senate budget committee in Chicago today that there would be “some revision” in the revenue estimate that was part of a three-year budget projection released in January. That document called for about $33.1 billion in total revenues. Vaught did not give specifics on how the numbers would change before Quinn's budget speech, which is scheduled to take place in a week, but he said revenues are “trending up.”
Vaught told the committee that Quinn does not intend to make the 9 percent cuts to all areas of spending that the January projection called for. Vaught said Quinn is not planning “across the board reductions of this size and scope in all areas.” But he added, “We will have them in some areas.” Quinn has said that he does not want to reduce spending on education and health care. Vaught reiterated Quinn’s desire to reform the Medicaid and pension systems this year, calling the growing costs of both “the squeeze” on other spending. Vaught said another goal for the year is to bring down the cost of health care to the state for retired public employees. He said a previous proposal to charge premiums to some retirees over a set income level would likely be up for consideration again. He also emphasized the need to address the backlog of bills but did not share details on what, if any, new ideas Quinn may present in his speech. Quinn has supported borrowing to pay down the backlog, but so far, that plan has found a chilly reception from many lawmakers.
Vaught added that Quinn plans to look at health care and human services as two separate areas of the budget this year because advocates complained that lumping them together led to human services being cut to keep up with growing Medicaid costs.
Steve Schnorf, a member of the Budgeting for Results Commission and a former director of the Bureau of the Budget under former Gov. George Ryan, warned against a repeat of the fight over revenue estimates that happened last spring as lawmakers started the budgeting process for the current fiscal year. The House created a smaller estimate that the Senate and Quinn disagreed with, but that was what the budget was ultimately based upon. “Starting with an agreed upon revenue number … creates buy-in from all the players,” Schnorf said. “I think that buy-in is important.”
Vaught said that the three-year projection created last year was done hastily and that his office was “a little uncertain” about the revenues that the then newly passed income tax increase would bring in. He said the estimate this year is much more certain.
Today’s hearing was held to discuss the implementation of a new budgeting system, which would focus on the desired goals of programs and allocate money based on the success of programs toward reaching those goals. The system, known as Budgeting for Results, was signed into law by Quinn last year shortly after he presented his budget plan. This will be the first budget proposed under the new law, which requires the governor to create his plan based only from existing revenue. That means that — unlike last year — Quinn cannot pitch new revenue sources and tie spending to them.
Schnorf said that plans like Budgeting for Results aren’t new. “Most administrations have an initiative of some sort like this,” he said. “You go back through the last 30 years of press clippings and you would find initiatives like this announced by administrations.” But Schnorf said he thinks Quinn and lawmakers are committed to make the program work, and he predicted it would not become “sizzle rather than steak.”
However, Schnorf warned lawmakers that if they focus only on tangible goals when making decisions and have an eye for programs that are measured as successful, they might not like the budgeting outcomes. He said that public schools, for example, may not rate as high performers and asked lawmakers: “Does that mean we should take the money away from them and invest the money somewhere else that has a better return on investment?"
He said that promoting successful programs during tight budget times would come at the cost of other programs that may not seem successful under Budgeting for Results measures but are nonetheless important to the state. “In a time of scarcity, the only way you can reward someone for performing well is by punishing someone else,” Schnorf said. “Every dollar you spend is a dollar you don’t have. You have to take it from somewhere else.”
Study: Chicago and Illinois among most corrupt places in U.S.
By Ashley Griffin
If you thought Chicago and Illinois were among the most corrupt locales in the nation, you weren’t wrong, according to a report released Wednesday.
According to the report “Chicago and Illinois, Leading the Pack in Corruption,” the Northern District of Illinois, which primarily consists of the Chicago metropolitan area, is the most corrupt federal district in the country, and Illinois ranks as the “third most corrupt” state. The report, released by the University of Illinois Chicago and the University of Illinois’ Institute of Government and Public Affairs, is based on data from the U.S. Department of Justice's Public Integrity Section that dates back from 1976.
“For a long time — going back to at least the Al Capone era — Chicago and Illinois have been known for high levels of public corruption,” Dick Simpson, head of the political science department at the University of Illinois Chicago and an author of the report, said in a prepared statement. “But now, we have the statistics to confirm their dishonorable and notorious reputations.”
In all, the Northern District has had more than 1,500 federal corruption convictions since 1976 and averaged 51 federal corruptions convictions per year. The report states: “The Illinois Northern District, which contains the entire Chicago metropolitan area, accounts for 1,531 of the 1,828 public corruption convictions in Illinois. Therefore, almost 84 percent of the state’s federal public corruption convictions took place in the Northern District. This makes it the federal district with the most public corruption convictions in the nation since 1976.”
New York and California ranked higher than Illinois for total corruption convictions by state. When corruption convictions were looked at on a per capita basis, the District of Columbia and Louisiana held the top spots, and Illinois again came in third.
James Nowlan, a senior fellow at the University of Illinois Institute of Government and Public Affairs, said of the rest of Illinois: “The other districts are much smaller in population, and they have significantly fewer, often very few, convictions for public corruption. A cursory look would suggest that Central and Southern districts are less corrupt than the Northern District.” However, Nowlan said such statistics could be misleading because prominent cases, such as the recent corruption trial of Springfield political insider William Cellini, are often tried in the Northern District, regardless of where they took place.
“We hope this report, imperfect as it is, does have some legs because I think most people in Illinois are distressed by the perception of Illinois,” said Nowlan, who is also one of the authors of the report. “Since the 1880s, Chicago has been known as a place in which people who enter public life often try to do well rather than do good, and so, the Chicago nexus of corruption has been with us more than a century, and it is rooted in machine politics, in which politics is a career for many who enter it.”
Despite such gloomy news, the report does make suggestions on how to address the problem. “Attacking corruption starts with a comprehensive programs of mutually reinforcing reforms. These should include a mix of corruption prevention and enforcement measure, along with public involvement and education,” states the report. It gives six recommendations that include amending the city’s ethic ordinance to cover aldermen and their staff and banning all gifts to all elected officials and public employees, except from family members. The report also supports Gov. Pat Quinn’s recently proposed constitutional amendment that would allow Illinois citizens to adopt ethics reforms by referendum.
“I haven’t seen it [the referendum] in detail, but Illinois has an ethics deficit, and anything we can do to improve our ethical behavior would be good for the state. So it sounds like it gives the citizens an opportunity to provide some input on ethical behavior, codes of ethics or other kinds of ethical programs,” Nowlan said. However, similar proposals from Quinn in the past have gone nowhere in the legislature.
Nowlan said public perception of the most corrupt states was spot on with the report’s findings. He said a yet unpublished national public opinion poll he conducted found Illinois ranked third among states most perceived as corrupt. New York and California also took the top spots in that poll.
Nowlan said the report will be presented today to Chicago Mayor Rahm Emanuel’s ethics commission, but so far, there are no plans to present it to any statewide ethics panels.
If you thought Chicago and Illinois were among the most corrupt locales in the nation, you weren’t wrong, according to a report released Wednesday.
According to the report “Chicago and Illinois, Leading the Pack in Corruption,” the Northern District of Illinois, which primarily consists of the Chicago metropolitan area, is the most corrupt federal district in the country, and Illinois ranks as the “third most corrupt” state. The report, released by the University of Illinois Chicago and the University of Illinois’ Institute of Government and Public Affairs, is based on data from the U.S. Department of Justice's Public Integrity Section that dates back from 1976.
“For a long time — going back to at least the Al Capone era — Chicago and Illinois have been known for high levels of public corruption,” Dick Simpson, head of the political science department at the University of Illinois Chicago and an author of the report, said in a prepared statement. “But now, we have the statistics to confirm their dishonorable and notorious reputations.”
In all, the Northern District has had more than 1,500 federal corruption convictions since 1976 and averaged 51 federal corruptions convictions per year. The report states: “The Illinois Northern District, which contains the entire Chicago metropolitan area, accounts for 1,531 of the 1,828 public corruption convictions in Illinois. Therefore, almost 84 percent of the state’s federal public corruption convictions took place in the Northern District. This makes it the federal district with the most public corruption convictions in the nation since 1976.”
New York and California ranked higher than Illinois for total corruption convictions by state. When corruption convictions were looked at on a per capita basis, the District of Columbia and Louisiana held the top spots, and Illinois again came in third.
James Nowlan, a senior fellow at the University of Illinois Institute of Government and Public Affairs, said of the rest of Illinois: “The other districts are much smaller in population, and they have significantly fewer, often very few, convictions for public corruption. A cursory look would suggest that Central and Southern districts are less corrupt than the Northern District.” However, Nowlan said such statistics could be misleading because prominent cases, such as the recent corruption trial of Springfield political insider William Cellini, are often tried in the Northern District, regardless of where they took place.
“We hope this report, imperfect as it is, does have some legs because I think most people in Illinois are distressed by the perception of Illinois,” said Nowlan, who is also one of the authors of the report. “Since the 1880s, Chicago has been known as a place in which people who enter public life often try to do well rather than do good, and so, the Chicago nexus of corruption has been with us more than a century, and it is rooted in machine politics, in which politics is a career for many who enter it.”
Despite such gloomy news, the report does make suggestions on how to address the problem. “Attacking corruption starts with a comprehensive programs of mutually reinforcing reforms. These should include a mix of corruption prevention and enforcement measure, along with public involvement and education,” states the report. It gives six recommendations that include amending the city’s ethic ordinance to cover aldermen and their staff and banning all gifts to all elected officials and public employees, except from family members. The report also supports Gov. Pat Quinn’s recently proposed constitutional amendment that would allow Illinois citizens to adopt ethics reforms by referendum.
“I haven’t seen it [the referendum] in detail, but Illinois has an ethics deficit, and anything we can do to improve our ethical behavior would be good for the state. So it sounds like it gives the citizens an opportunity to provide some input on ethical behavior, codes of ethics or other kinds of ethical programs,” Nowlan said. However, similar proposals from Quinn in the past have gone nowhere in the legislature.
Nowlan said public perception of the most corrupt states was spot on with the report’s findings. He said a yet unpublished national public opinion poll he conducted found Illinois ranked third among states most perceived as corrupt. New York and California also took the top spots in that poll.
Nowlan said the report will be presented today to Chicago Mayor Rahm Emanuel’s ethics commission, but so far, there are no plans to present it to any statewide ethics panels.
Monday, February 13, 2012
Professors pitch SURS pension reform ideas
By Jamey Dunn
As Gov. Pat Quinn and lawmakers say they want to reform the state’s pension systems, two university professors have presented a proposal to revamp the retirement system for the state’s higher education employees.
Jeffrey Brown, a finance professor at the University of Illinois Urbana-Champaign, and Robert Rich, director of the University of Illinois' Institute of Government and Public Affairs, created a proposal to reform the State University Retirement System (SURS). The plan was released by the Institute of Government and Public Affairs, with which Brown, a pension expert, also is affiliated. The authors said the proposal does not indicate any support from the university. The paper came with the disclaimer, “Any opinions expressed in this paper, as well as any errors, are those of the authors alone.” A call to the university for comment on the plan was not returned.
Rich and Brown looked at retirement plans in other states, as well as the private sector. Brown said they also consulted experts, academic studies, administrators and faculty when crafting their paper. When asked why he chose to tackle such a controversial topic, especially as a university employee who stands to collect SURS benefits someday, Brown said: “Why not? It’s an important issue. We’ve certainly never shied away from these kinds of things before in other contexts.”
The report contends that concerns over the state’s underfunded pension system threaten recruitment efforts at the state’s largest public university system. “Uncertainty about the viability of our public pension system is hurting the ability of public institutions to attract and retain employees. Universities — including our employer, the University of Illinois — compete in a global labor market in an effort to attract and retain many of the world’s leading scholars. The U of I’s ability to maintain its status as a world-class university hinges critically on its ability to make credible promises about employee compensation,” the paper says.
Rich said that he thinks it was important to present an alternative proposal to address what is shaping up to be one of the dominant debates of the spring legislative session. “The pension issue is one of the two most important budget issues facing Illinois; the other is Medicaid, of course. We felt that the debate in the last session of the General Assembly was dominated by Senate Bill 512, and there weren’t really alternatives on the table.” SB 512, sponsored by House Minority Leader Tom Cross, would require state employees to choose between paying substantially more for their current benefits, switching to the reduced Tier 2 benefit system that was approved for employees hired in 2011 and beyond or moving to a defined contributions plan much like a 401(k) account.
The report is critical of the Tier 2 pension plan, saying it is “widely viewed as inadequate.” The authors' plan proposes a so-called hybrid system for new employees, with the option for current employees to join voluntarily. They predict that many in Tier 2 would opt to move to such a hybrid plan.
Under the proposal, new employees could continue to receive defined benefits, but they would be reduced by about one-third. Those employees would also pay into a defined contribution plan, and employers would match contributions up to a capped percentage of employees’ salaries. The author’s say the hybrid plan would not cost more to the state than the current Tier 2 plan.
Brown said that while many argue that private sector employers have moved to defined contribution 401(k) plans, private sector employees still receive defined benefits through the Social Security system. “The SURS system is meant as a replacement for two different systems — the U.S. Social Security system and an employer-based retirement program. The dominant form of retirement plan in the private sector in the U.S. today is a [defined contribution] system plan (such as the 401(k)), but, importantly, it is a [defined contribution] system that is layered on top of a public-provided [defined benefits] system (Social Security). This mix of systems helps to balance the pros and cons of each system individually,” the paper says. The report says that a defined benefits plan allows for certainty because retirees would receive a set benefit that would continue until the end of their lives. However, it says including a defined contribution component “ensures full funding, provides participants with more control and allows individuals to tailor their investment options to match their lifestyle and risk preferences.”
The proposal calls for current employees to pay more for their benefits but recommends that the increase be phased in over time and total no more than an additional 3 percent of pay. University employees currently pay 8 percent of their salaries into SURS. “SB 512 would result in an immediate near-doubling of the contributions required by current [university] employees, a fact that would have substantial negative effects on our ability to attract and retain talented employees,” the plan says. The two professors agree with Quinn and House Speaker Michael Madigan that the university also should contribute to the retirement costs of its employees, but the authors said costs also should be phased in so they are not devastating to university budgets. The report said that the state should not be able to hand off the full costs of the pension system because lawmakers make decisions about pension benefits. It stressed that the state would be solely responsible for the existing pension liabilities.
“We realize that the extent of constitutional protection is controversial and open to some degree of interpretation. However, we believe that this very strong constitutional protection is important to take into account. Thus, we focus on reforms that change the system in ways that we believe may be constitutionally permissible,” the paper said. However, labor leaders and some lawmakers say that the constitution bars the state from requiring workers to pay more for their benefits, and Brown and Rich’s report acknowledged that it may be a problem. “We recognize that there is some debate about the constitutionality of requiring additional pension contributions: On February 3, 2012, a lower court in Arizona (a state with a pension non-impairment clause like Illinois) published an opinion that public employees cannot be required to contribute more without additional benefits. Were a similar ruling to hold in Illinois, these costs would need to be reallocated among the state and the employers.”
The authors say they chose to focus on SURS and not the other state retirement systems because it was the one they know the best. However, Rich and Brown agree that their plan could be tweaked and applied to other retirement systems. Brown said he wanted to highlight the differences between SURS and the other systems. “I thought it was important to establish the fact that higher education in Illinois does have some unique needs. The university system competes in a much more globally competitive labor market than a lot of the other public pension systems do,” Brown said. He said that universities, unlike school districts, have no potential for raising tax revenues to handle the burden if the state decides to shift all or most of the SURS costs to them.
Both authors cautioned against lawmakers pulling pieces of their plan, which they say is a holistic approach, and discarding others. Brown said that any pension reform needs to address several goals, such as reducing costs, sharing funding burden and making sure that the benefits are attractive enough to recruit needed talent. “You’ve got to be careful not to treat this like a menu where you can take one little piece of it. On the other hand, we don’t expect that it’s all or nothing,” He adds, “If you only did one piece of it without addressing the other issues, you could create all kinds of problems.”
Rich said he hopes that some version of the plan will eventually be drafted into legislation and become part of the debate that is likely to occur soon in the General Assembly this session. But so far, there is little feedback from legislative leaders and Quinn.
Cross is still reviewing the plan. According to a prepared statement from Sara Wojcicki Jimenez, his spokeswoman, Cross “is open to looking more in depth at any ideas to reform our systems and is thankful when people and organizations bring them forward. Analyzing them just takes a little time.”
Senate President John Cullerton, who has maintained that any changes to benefits for current workers are unconstitutional, has yet to read the plan. But Ronald Holmes, his spokesman, said in a written statement: “The Senate president is encouraged that the education community has stepped forward and offered ideas to begin tackling pension costs. He's looking forward to reading the report and hearing from other interested parties on how we can achieve a fair and constitutional remedy in the weeks ahead.”
Quinn spokeswoman Brooke Anderson said in a prepared statement, "everything is on the table to strengthen and stabilize our pension system."
For a look at pension reforms in other states, see our three-part Illinois Issues blog series here, here and here.
As Gov. Pat Quinn and lawmakers say they want to reform the state’s pension systems, two university professors have presented a proposal to revamp the retirement system for the state’s higher education employees.
Jeffrey Brown, a finance professor at the University of Illinois Urbana-Champaign, and Robert Rich, director of the University of Illinois' Institute of Government and Public Affairs, created a proposal to reform the State University Retirement System (SURS). The plan was released by the Institute of Government and Public Affairs, with which Brown, a pension expert, also is affiliated. The authors said the proposal does not indicate any support from the university. The paper came with the disclaimer, “Any opinions expressed in this paper, as well as any errors, are those of the authors alone.” A call to the university for comment on the plan was not returned.
Rich and Brown looked at retirement plans in other states, as well as the private sector. Brown said they also consulted experts, academic studies, administrators and faculty when crafting their paper. When asked why he chose to tackle such a controversial topic, especially as a university employee who stands to collect SURS benefits someday, Brown said: “Why not? It’s an important issue. We’ve certainly never shied away from these kinds of things before in other contexts.”
The report contends that concerns over the state’s underfunded pension system threaten recruitment efforts at the state’s largest public university system. “Uncertainty about the viability of our public pension system is hurting the ability of public institutions to attract and retain employees. Universities — including our employer, the University of Illinois — compete in a global labor market in an effort to attract and retain many of the world’s leading scholars. The U of I’s ability to maintain its status as a world-class university hinges critically on its ability to make credible promises about employee compensation,” the paper says.
Rich said that he thinks it was important to present an alternative proposal to address what is shaping up to be one of the dominant debates of the spring legislative session. “The pension issue is one of the two most important budget issues facing Illinois; the other is Medicaid, of course. We felt that the debate in the last session of the General Assembly was dominated by Senate Bill 512, and there weren’t really alternatives on the table.” SB 512, sponsored by House Minority Leader Tom Cross, would require state employees to choose between paying substantially more for their current benefits, switching to the reduced Tier 2 benefit system that was approved for employees hired in 2011 and beyond or moving to a defined contributions plan much like a 401(k) account.
The report is critical of the Tier 2 pension plan, saying it is “widely viewed as inadequate.” The authors' plan proposes a so-called hybrid system for new employees, with the option for current employees to join voluntarily. They predict that many in Tier 2 would opt to move to such a hybrid plan.
Under the proposal, new employees could continue to receive defined benefits, but they would be reduced by about one-third. Those employees would also pay into a defined contribution plan, and employers would match contributions up to a capped percentage of employees’ salaries. The author’s say the hybrid plan would not cost more to the state than the current Tier 2 plan.
Brown said that while many argue that private sector employers have moved to defined contribution 401(k) plans, private sector employees still receive defined benefits through the Social Security system. “The SURS system is meant as a replacement for two different systems — the U.S. Social Security system and an employer-based retirement program. The dominant form of retirement plan in the private sector in the U.S. today is a [defined contribution] system plan (such as the 401(k)), but, importantly, it is a [defined contribution] system that is layered on top of a public-provided [defined benefits] system (Social Security). This mix of systems helps to balance the pros and cons of each system individually,” the paper says. The report says that a defined benefits plan allows for certainty because retirees would receive a set benefit that would continue until the end of their lives. However, it says including a defined contribution component “ensures full funding, provides participants with more control and allows individuals to tailor their investment options to match their lifestyle and risk preferences.”
The proposal calls for current employees to pay more for their benefits but recommends that the increase be phased in over time and total no more than an additional 3 percent of pay. University employees currently pay 8 percent of their salaries into SURS. “SB 512 would result in an immediate near-doubling of the contributions required by current [university] employees, a fact that would have substantial negative effects on our ability to attract and retain talented employees,” the plan says. The two professors agree with Quinn and House Speaker Michael Madigan that the university also should contribute to the retirement costs of its employees, but the authors said costs also should be phased in so they are not devastating to university budgets. The report said that the state should not be able to hand off the full costs of the pension system because lawmakers make decisions about pension benefits. It stressed that the state would be solely responsible for the existing pension liabilities.
“We realize that the extent of constitutional protection is controversial and open to some degree of interpretation. However, we believe that this very strong constitutional protection is important to take into account. Thus, we focus on reforms that change the system in ways that we believe may be constitutionally permissible,” the paper said. However, labor leaders and some lawmakers say that the constitution bars the state from requiring workers to pay more for their benefits, and Brown and Rich’s report acknowledged that it may be a problem. “We recognize that there is some debate about the constitutionality of requiring additional pension contributions: On February 3, 2012, a lower court in Arizona (a state with a pension non-impairment clause like Illinois) published an opinion that public employees cannot be required to contribute more without additional benefits. Were a similar ruling to hold in Illinois, these costs would need to be reallocated among the state and the employers.”
The authors say they chose to focus on SURS and not the other state retirement systems because it was the one they know the best. However, Rich and Brown agree that their plan could be tweaked and applied to other retirement systems. Brown said he wanted to highlight the differences between SURS and the other systems. “I thought it was important to establish the fact that higher education in Illinois does have some unique needs. The university system competes in a much more globally competitive labor market than a lot of the other public pension systems do,” Brown said. He said that universities, unlike school districts, have no potential for raising tax revenues to handle the burden if the state decides to shift all or most of the SURS costs to them.
Both authors cautioned against lawmakers pulling pieces of their plan, which they say is a holistic approach, and discarding others. Brown said that any pension reform needs to address several goals, such as reducing costs, sharing funding burden and making sure that the benefits are attractive enough to recruit needed talent. “You’ve got to be careful not to treat this like a menu where you can take one little piece of it. On the other hand, we don’t expect that it’s all or nothing,” He adds, “If you only did one piece of it without addressing the other issues, you could create all kinds of problems.”
Rich said he hopes that some version of the plan will eventually be drafted into legislation and become part of the debate that is likely to occur soon in the General Assembly this session. But so far, there is little feedback from legislative leaders and Quinn.
Cross is still reviewing the plan. According to a prepared statement from Sara Wojcicki Jimenez, his spokeswoman, Cross “is open to looking more in depth at any ideas to reform our systems and is thankful when people and organizations bring them forward. Analyzing them just takes a little time.”
Senate President John Cullerton, who has maintained that any changes to benefits for current workers are unconstitutional, has yet to read the plan. But Ronald Holmes, his spokesman, said in a written statement: “The Senate president is encouraged that the education community has stepped forward and offered ideas to begin tackling pension costs. He's looking forward to reading the report and hearing from other interested parties on how we can achieve a fair and constitutional remedy in the weeks ahead.”
Quinn spokeswoman Brooke Anderson said in a prepared statement, "everything is on the table to strengthen and stabilize our pension system."
For a look at pension reforms in other states, see our three-part Illinois Issues blog series here, here and here.
Thursday, February 09, 2012
Illinois to get $1 billion in foreclosure settlement
By Jamey Dunn
Under a national settlement reached by states and five of the nation’s largest banks, Illinois would get $1 billion in relief for borrowers whose homes are in danger of foreclosure.
The $26 billion settlement announced today came in response to the nation’s largest lenders engaging in sloppy and sometimes fraudulent foreclosure practices, such as signing off on documents without verifying information, a practice known as robo-signing. Sketchy and sometimes nonexistent paperwork led to errors, miscommunication and cases of mistaken identity. It created a bureaucratic nightmare for those trying to work with banks to find a way to stay in their homes. (For more on robo-signing and the issues that led up to today’s settlement, see Illinois Issues March 2011.)
“Many companies that handled these foreclosures didn’t give people a fighting chance to hold onto their homes,” President Barack Obama said at a Washington, D.C., news conference today. “In many cases, they didn’t even verify that these foreclosures were actually legit. Some of the people they hired to process foreclosures used fake signatures on fake documents to speed up the foreclosure process. Some of them didn’t read what they were signing at all.”
The settlement was reached between federal regulators, many of the states' attorneys general and Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Bank, formerly GMAC. Illinois Attorney General Lisa Madigan was a key player in the negotiations. “After many months of investigation and negotiation, I’ve concluded that this settlement accomplishes two major goals: It provides timely help for struggling homeowners, and it establishes new rules for mortgage servicing that will protect homeowners in the future,” Madigan said in a prepared statement.
Most of the money will go toward efforts to keep borrowers in their homes. Those who cannot make their payments may be eligible to refinance their homes at better interest rates than their original loans. Homeowners whose houses are “under water,” which means a home is worth less than what the homeowner owes on it, could be eligible to have the amount they owe reduced. Borrowers who lost their homes between 2008 and last year could be eligible for up to $2,000 if they were victims of shoddy foreclosure practices. According to the Chicago-based Woodstock Institute, 400,000 homes are under water in the Chicago area alone, and about 800,000 are in danger of becoming under water if the housing market takes another downward turn. The average Chicago-area homeowner in an under-water house owes about $61,000 more than the home is worth. Banks have three years to dole out benefits from the settlement and face further penalties if they do not.
The deal also sets out new rules for banks and mortgage servicers. They will be required to consider making a deal known as a loan modification with borrowers in danger of losing their homes instead of dismissing such requests outright. Borrowers will be able to appeal if a bank refuses to work with them. While a bank is considering a modification, it cannot foreclose on a home. Previously, homeowners faced such conflicting signals as having a bank agree to a modification, only to turn around and foreclose shortly after. “It’s been a very real concern for borrowers and for housing volunteers, and there’s been a lot of frustration with this [practice],” said Tom Feltner, vice president of the Woodstock Institute. Feltner said that while the settlement will not make all of those touched by the banks negligent practices whole, it is a positive step toward changing the system. Previous efforts, including a federal program to get banks to modify loans, have come up short, but Feltner said the settlement would require banks to “build loan modifications into their business practices.”
Dawn Dannenbring, an organizer for the Bloomington-based community advocacy group Illinois People’s Action, said that although the settlement comes with what seems like a large price tag, it does not make a dent in all the damage caused by the banks. “The $25 billion is just a drop in the bucket.” Some important details of the plan remain unclear, she said. “Who decides who gets the money?” Dannenbring said her group opposes allowing the banks to make such choices. “The banks have already had the opportunity to do right,” she said. One bright spot of the settlement, she said, is that it does not grant banks immunity from investigation and litigation going forward, something that was discussed during negotiations. “We think that is the best part of this settlement deal.”
Obama has created a special task force to investigate the issues surrounding the housing crisis. “We’re going to keep at it until we hold those who broke the law fully accountable,” he said. He emphasized that today’s settlement does not close the book on the housing market collapse. “No compensation, no amount of money, no measure of justice is enough to make it right for a family who has had their piece of the American dream wrongly taken from them. And no action, no matter how meaningful, is going to by itself entirely heal the housing market, but this settlement is a start.”
Madigan echoed his statement. “While the settlement is a big step forward in our efforts, it is not the end. In Illinois, we will continue to take strong legal action against lenders, banks, servicers and others who contributed to the housing and economic collapse,” she said.
Feltner said that Illinoisans who think they might qualify for help through the settlement should talk to a counselor who is certified by the U.S. Department of Housing and Urban Development. “The best advice is free advice. You don’t need to go to an agency offering to help with your foreclosure issues for a fee.” Madigan urged those who have questions or are interested in seeking relief from the settlement to call a toll-free hotline: (866) 544-7151; visit her website, www.illinoisattorneygeneral.gov/consumers/bankforeclosuresettlement.html, or the federal site, www.nationalforeclosuresettlement.com.
Under a national settlement reached by states and five of the nation’s largest banks, Illinois would get $1 billion in relief for borrowers whose homes are in danger of foreclosure.
The $26 billion settlement announced today came in response to the nation’s largest lenders engaging in sloppy and sometimes fraudulent foreclosure practices, such as signing off on documents without verifying information, a practice known as robo-signing. Sketchy and sometimes nonexistent paperwork led to errors, miscommunication and cases of mistaken identity. It created a bureaucratic nightmare for those trying to work with banks to find a way to stay in their homes. (For more on robo-signing and the issues that led up to today’s settlement, see Illinois Issues March 2011.)
“Many companies that handled these foreclosures didn’t give people a fighting chance to hold onto their homes,” President Barack Obama said at a Washington, D.C., news conference today. “In many cases, they didn’t even verify that these foreclosures were actually legit. Some of the people they hired to process foreclosures used fake signatures on fake documents to speed up the foreclosure process. Some of them didn’t read what they were signing at all.”
The settlement was reached between federal regulators, many of the states' attorneys general and Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Bank, formerly GMAC. Illinois Attorney General Lisa Madigan was a key player in the negotiations. “After many months of investigation and negotiation, I’ve concluded that this settlement accomplishes two major goals: It provides timely help for struggling homeowners, and it establishes new rules for mortgage servicing that will protect homeowners in the future,” Madigan said in a prepared statement.
Most of the money will go toward efforts to keep borrowers in their homes. Those who cannot make their payments may be eligible to refinance their homes at better interest rates than their original loans. Homeowners whose houses are “under water,” which means a home is worth less than what the homeowner owes on it, could be eligible to have the amount they owe reduced. Borrowers who lost their homes between 2008 and last year could be eligible for up to $2,000 if they were victims of shoddy foreclosure practices. According to the Chicago-based Woodstock Institute, 400,000 homes are under water in the Chicago area alone, and about 800,000 are in danger of becoming under water if the housing market takes another downward turn. The average Chicago-area homeowner in an under-water house owes about $61,000 more than the home is worth. Banks have three years to dole out benefits from the settlement and face further penalties if they do not.
The deal also sets out new rules for banks and mortgage servicers. They will be required to consider making a deal known as a loan modification with borrowers in danger of losing their homes instead of dismissing such requests outright. Borrowers will be able to appeal if a bank refuses to work with them. While a bank is considering a modification, it cannot foreclose on a home. Previously, homeowners faced such conflicting signals as having a bank agree to a modification, only to turn around and foreclose shortly after. “It’s been a very real concern for borrowers and for housing volunteers, and there’s been a lot of frustration with this [practice],” said Tom Feltner, vice president of the Woodstock Institute. Feltner said that while the settlement will not make all of those touched by the banks negligent practices whole, it is a positive step toward changing the system. Previous efforts, including a federal program to get banks to modify loans, have come up short, but Feltner said the settlement would require banks to “build loan modifications into their business practices.”
Dawn Dannenbring, an organizer for the Bloomington-based community advocacy group Illinois People’s Action, said that although the settlement comes with what seems like a large price tag, it does not make a dent in all the damage caused by the banks. “The $25 billion is just a drop in the bucket.” Some important details of the plan remain unclear, she said. “Who decides who gets the money?” Dannenbring said her group opposes allowing the banks to make such choices. “The banks have already had the opportunity to do right,” she said. One bright spot of the settlement, she said, is that it does not grant banks immunity from investigation and litigation going forward, something that was discussed during negotiations. “We think that is the best part of this settlement deal.”
Obama has created a special task force to investigate the issues surrounding the housing crisis. “We’re going to keep at it until we hold those who broke the law fully accountable,” he said. He emphasized that today’s settlement does not close the book on the housing market collapse. “No compensation, no amount of money, no measure of justice is enough to make it right for a family who has had their piece of the American dream wrongly taken from them. And no action, no matter how meaningful, is going to by itself entirely heal the housing market, but this settlement is a start.”
Madigan echoed his statement. “While the settlement is a big step forward in our efforts, it is not the end. In Illinois, we will continue to take strong legal action against lenders, banks, servicers and others who contributed to the housing and economic collapse,” she said.
Feltner said that Illinoisans who think they might qualify for help through the settlement should talk to a counselor who is certified by the U.S. Department of Housing and Urban Development. “The best advice is free advice. You don’t need to go to an agency offering to help with your foreclosure issues for a fee.” Madigan urged those who have questions or are interested in seeking relief from the settlement to call a toll-free hotline: (866) 544-7151; visit her website, www.illinoisattorneygeneral.gov/consumers/bankforeclosuresettlement.html, or the federal site, www.nationalforeclosuresettlement.com.
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