Wednesday, December 19, 2007

“Promises with a price”

We knew it was bad, but we have one more study that says it’s really bad. The Pew Center on the States published a report comparing all 50 states that says, “Illinois has double the trouble.” This state has one of the poorest-funded pension systems in the country, and it repeatedly fails to set aside enough money to pay for public employee pensions. The second whammy is that Illinois also has failed to put aside money for health care benefits promised to state retirees. The Civic Committee of the Commercial Club of Chicago estimates that price tag reaches $48 billion. (I wrote about the long-term cost of retiree health benefits in April 2007.)

Here’s the Pew Foundation’s fact sheet for Illinois.

It’ll only get worse because of rising health care costs and increasing numbers of state retirees, which was the subject of the Illinois comptroller’s January Fiscal Focus.

Oddly enough, the Illinois House approved a non-binding resolution six months ago that urges Illinois to resolve pension reform and debt before the legislative session adjourns for good in 2007. Well, the session never adjourned, so I guess they don’t have to solve anything this year.

Tuesday, December 18, 2007

Mattoon wins: Too good to be true?

The energy industry selected Mattoon in east Central Illinois to host the more than $1 billion project billed as the “world’s first near-zero-emissions coal-fired power plant,” but the feds have yet to sign on to the project that they’re supposed to fund.

FutureGen, as it’s called, is expected to receive international attention for the first-of-its-kind technology to research a cleaner source of energy while capturing harmful carbon dioxide emissions underground. The hundreds of jobs created would also be a huge economic boon for the region and the state. But the project’s future remained in question Tuesday because the U.S. Department of Energy hadn’t yet issued its final decision, which is necessary. And the department issued a statement saying the project already is over budget. More information won’t be available until next month.

Energy Department officials did not attend the press conference (seen live on the Internet) held in Washington, D.C., by the FutureGen Alliance, a nonprofit group of energy companies that’s in a public-private partnership with the feds. The Alliance announced Mattoon as the winner despite federal wishes to hold off on the announcement.

The Energy Department’s absence speaks volumes considering the government (a.k.a. taxpayers) is slated to foot most of the bill: 74 percent compared to the industry’s 26 percent. A November report includes a section about what would happen if the feds didn’t share the burden. “In the absence of DOE funding (the No-Action Alternative), the Alliance may still elect to construct and operate the proposed power plant if it can obtain the additional funding and required permits. However, in the absence of DOE participation, it is unlikely the FutureGen Project would be implemented.” The report later adds, “The No-Action Alternative is considered a ‘No-Build’ Alternative.” [Emphasis added]

FutureGen Alliance officials said during the press conference that politics did not come into play, but skeptics have wondered from the beginning whether President George W. Bush’s home state of Texas would win the bid. Texas is the other state with two cities on the short list for the FutureGen project. Tuscola in east central Illinois also was in the running but wasn’t selected by the Alliance.

The Alliance board unanimously selected Mattoon, population 18,000, after a rigorous process of comparing more than 100 criteria because the town “offered the best chance of success for this project,” said Lucy Swartz, head of the site selection process. “The site is move-in ready, and that was very important for the Alliance to reduce any risks that might be involved with acquiring the land.” It was also chosen for its secure and adequate water supply, its geology that would allow safe storage of carbon dioxide 8,000 feet underground and its location in 444 acres of rural land with a place to inject the gas emissions. The property tax benefits and community support also helped.

The problem is that costs have risen from an estimated $904 million in 2004 to $1.75 billion in 2007.

Construction on the plant would start in 2009, and it wouldn’t be operational until 2012, but the timeline has adjusted a few times. Once in full swing, the plant would be able to power about 150,000 average homes, according to the Alliance’s site.

Friday, December 14, 2007

Back and forth

As frustration over the continued tit-for-tat between the governor and the speaker festers, the public has the added question of whether they can trust the governor and the General Assembly to build new casinos or riverboats without scandal. And can they trust them to distribute the revenue to public services in a fair way? So far, not so good.

House Speaker Michael Madigan tried to cancel session scheduled for Monday and Tuesday, but lawmakers could be called back to Springfield the week before Christmas anyway even if there's no gaming or mass transit plan to advance.

The speaker said in a letter to lawmakers, "In light of certain subsequent developments this week, the legislative process will be better served by holding session on these topics at a later date." Without naming Chris Kelly's federal indictment on tax fraud and illegal gambling announced Thursday, Madigan said in the letter, "The current environment underscores the critical need to create a genuinely independent Illinois Gaming Board," which was supposed to be talked about in Monday's session.

A few minutes after Madigan's letter became public, Gov. Rod Blagojevich's office released this statement: "Sadly, it's not surprising that Speaker Madigan would, at the last minute, cancel a scheduled session to consider a plan to fund the [Chicago Transit Authority]. That unfortunately has been more the rule than the exception over the last three months." The statement also indicates the governor could call a special session for next week. Spokeswoman Abby Ottenhoff said in a follow-up e-mail that the governor's office expects to talk to legislative leaders over the weekend and will be in a better position to talk about timing on Monday.

Thursday, December 13, 2007

Inner circle

A federal investigation stung another member of Gov. Rod Blagojevich’s inner circle without mentioning the governor. Christopher Kelly, the governor’s close friend, former campaign manager and early advisor on gaming issues, was federally indicted for tax fraud by allegedly hiding more than $1 million of income over five years. The indictment says he used corporate funds from his roofing and consulting firms to pay illegal gambling debt and bookies.

The governor issued a statement: “Chris Kelly is my friend. I am saddened to hear these allegations about Chris's personal life. I know the pain it must be causing him and his family. My thoughts and my prayers are with them during this difficult time. In fairness to Chris, I believe it is important to let the legal process play out and not rush to judgment.”

Kelly’s indictment was coupled with an expansion of a separate investigation that indicted Antoin “Tony” Rezko, Blagojevich fundraiser and businessman, in October 2006. Rezko pleaded not guilty to allegations that he received kickbacks and illegal fees from investment firms seeking business with the state.

Pay now or later?

State Comptroller Dan Hynes wrote a letter to the editor that published in Springfield’s State Journal-Register that continues his effort to force conversation about the state’s delayed Medicaid bills. The topic is old, yet there could be an increased interest, some say urgency, to fix the problem in light of Gov. Rod Blagojevich’s recent statements that he’ll continue to push to expand a state health care program to 147,000 people without legislative approval.

Another 147,000 people in a Medicaid program means more bills to pay and, without adequate cash coming in to pay those bills, more debt. The comptroller’s point for rekindling the debate relates to “Section 25” of the State Finance Act (scroll down to the bottom to “fiscal year limitations”). State agencies are allowed to — and often do — defer medical bills until they can pay them with next year’s revenues. And they don’t have to notify the General Assembly to do so. The comptroller’s letter to the editor says, “In essence, then, the General Assembly has given the governor a blank check for health care spending.”

Hynes adds that the “loophole” also misrepresents the state’s current fiscal condition. His office says currently, Medicaid bills aren’t as backlogged as they have been, but the backlog exceeded $2 billion two years ago according to a March report. (You can see a here chart dating back to 1990.) Health care providers are currently waiting an average of two months for payment from the Department of Healthcare and Family Services. The agency can make expedited payments to doctors and hospitals that care for a lot of Medicaid patients, but everyone else has to wait as a result, says Carol Knowles, the comptroller’s spokeswoman. Because of Section 25, there’s no limit to how long agencies can hold their medical bills (other types of bills have to be paid by August 31 each year).

The comptroller wants to eliminate that. “For years I have urged the elimination of the Section 25 loophole, arguing that its existence allows state leaders to deny the true costs of state-provided health care and to sidestep requirements that the state maintain a balanced budget,” Hynes says in his letter.

He drafted legislation last spring that would have tightened the Section 25 rule and required the state to pay medical bills within four months of the new fiscal year. The October 31 deadline would give a little leeway in case of a cash flow problem or a complicated billing process at the end of the previous fiscal year.

Democratic Rep. Will Davis of Homewood sponsored the measure and says the objective was to try to avoid constantly carrying a deficit. Despite gaining bipartisan support, it went nowhere. Davis says the measure was still a legitimate effort and important issue for his community, where some providers care for mostly Medicaid patients. “Some people have tried to make it be a political issue between [the comptroller] and the governor. I really don’t think it’s political. It has a definite impact on my community and how people are being served in my community.”

Sen. Christine Radogno, a Lemont Republican and Deputy Minority Leader, says there’s consensus that Section 25 gives too much flexibility to the administration and that it should be tightened. Senate Republicans also sponsored a package of measures dealing with fiscal responsibility even before the governor’s recent actions to advance his health care plan without legislative approval. Radogno says she’ll try again but realizes it could share the same fate as a lot of good government and ethics measures. “None of that kind of stuff is moving.”

It also would be super hard to eliminate Section 25 for two reasons: One, the first year could actually cost a lot of money and time for state agencies that have to process their medical bills by a certain date if they don’t have enough cash. The Department of Healthcare and Family Services, for instance, said in a fiscal note to the General Assembly that an unintended consequence could be that cash-flow problems in the agency could require medical providers to file a claim with the state’s Court of Claims. And two, lawmakers would have to have the political will to end the practice of deferring bills. As it stands, if they push off $2 billion of bills into the future, that frees up $2 billion they can spend now on initiatives in their districts.

“It helps them avoid the tough decisions,” Knowles says. “The first year of undertaking a change like this would be very painful and difficult for the state, but the consequences of not doing are much greater.”

Monday, December 10, 2007

The chips may fall, but ...

The Illinois House will convene in Springfield next Monday to debate a major gaming proposal announced in Chicago this morning. Two new casinos, one in Chicago and one elsewhere in the state, could unlock months of political stalemates, according to sponsors Reps. Lou Lang of Skokie and Bob Molaro of Chicago (I heard their press conference on the Internet through Capitol Fax). Or, that same plan could be a dud if it isn’t quickly followed up by separate but related plans to fund road and school construction projects and mass transit and education subsidies.

House Speaker Michael Madigan wrote a letter to legislators and labeled the gaming plan as a “compromise,” but even if all four legislative leaders and the governor agreed on the latest version, there’s a whole lot of back-and-forth that needs to happen before they agree on ways to distribute that money. It’s generally agreed that revenue will be split, with the largest chunk paying for road and school construction projects and the rest for increased education spending. However, Lang said they still have to decide whether the governor or the legislative leaders will have discretion in which projects get funded. And considering trust hasn’t been strong this year, that decision could take a while. In a phone conversation Monday, Lang said, “[The leaders] have yet to come to members and say, ‘Hey, we’re going to get a capital bill. You get X. Where’s your list?’ None of those things have happened yet.”

While Republicans will have this week to suggest tweaks to the gaming legislation, Lang said he’s “very confident” that this proposal or something like it will pass the House. Whether the Senate could support it is unknown. Cindy Davidsmeyer, spokeswoman for Senate President Emil Jones Jr., said in an e-mail that the leadership could support some issues but that it needs to see the actual language before moving forward. She also said session next week is possible, but nothing’s set in stone.

Major parts of the gaming plan include reissuing a legally challenged “10th license” that was previously marked for Rosemont. The plan also would create an 11th license. Chicago would get one of them to build a land-based casino owned by the city and operated by a private investor. All casinos in the state would be governed by a completely new, independent Gaming Board, Racing Board and Director of Gaming Enforcement. They’d work with ethics officers to oversee the bidding process for the two new licenses and manage the nine existing licenses.

Other details include:
- The owners of the two new licenses would have to open 25 percent of their ownership to minorities and women for as little as $5,000.
- The nine existing riverboats would gain a total of 3,500 new positions for a fee.
- The five racetracks would pay a fee to add slot machines.
- The Illinois Gaming Board would have to dedicate $5 million for compulsive gaming programs and kiosks.

If you’re curious about the pros and cons of legalized gambling and about what other states do with the money, check out the analysis provided by the National Conference of State Legislatures.

Friday, December 07, 2007


Flags will be at half-staff today, the 66th anniversary of the attack on Pearl Harbor. It always hits home. I spent more than a year of my undergraduate studies interviewing World War II veterans for a marketing research book for the University of Illinois Food and Brand Lab (then in Champaign-Urbana, now at Cornell University in New York). I spent about two hours interviewing each veteran, typically in his 80s. It was heartbreaking to see them cry when they talked about the number of friends they lost while overseas, and they never really told you all the details of the things they went through. It was difficult to see the widows and widowers sit in their homes, remembering those details and being surrounded by black-and-white pictures of the time.

What feels even worse is to consider statistics about the number of veterans who don’t even have homes. The U.S. Department of Veterans Affairs reports that about one third of the nation’s homeless are veterans. That’s at least 195,000 people on any given night. About 45 percent of them have a form of mental illness. Many more also suffer from substance abuse.

The federal VA system has numerous initiatives to address homeless veterans. In Illinois, the Veterans Cash scratch-off lottery game does generate about $3 million a year, some of which helps pay for homeless initiatives. But many veterans either feel ashamed to ask for help or don’t know they qualify for the programs or benefits.

The need will only grow as more men and women come home from serving in Iraq and Afghanistan. For example, the need has already affected the state’s program G-I Loan for Heroes that administers low-interest mortgages and helps with down payments for veterans. The Illinois Housing Development Authority says 275 veterans have applied, leading the administration to double the available money from $15 million to $30 million since it started. And according to Tammy Duckworth, director of the Illinois Department of Veterans’ Affairs, there’s potential to secure another $15 million.

“This program would not be as wildly successful as it is if there was not a desperate need among our veterans of that age group, those young guys coming home, the 20- to 40-year-olds,” Duckworth said at a Springfield policy luncheon last month. “I just think it’s ironic that the people who fought and were willing to lay down their lives for other people to pursue their American dreams are the ones who are having some of the toughest time accessing their American dreams for themselves and for their family members.”

Here’s more from the National Alliance to End Homelessness.

Thursday, November 29, 2007

The 12th month

The Illinois House is working on a plan to expand gaming as a way to pay for a long-awaited infrastructure projects around the state. That plan is highly anticipated because it has potential to unlock the entire, gridlocked legislation session of 2007. Downstate lawmakers say they won't vote to subsidize Chicago-area mass transit until a statewide capital plan materializes.

But while gaming negotiators say there are only a few issues to work out before a gaming bill comes through, there’s another set of negotiations that could potentially further delay an actual deal. As spelled out by Rep. Lou Lang, a Skokie Democrat and House Gaming Committee chair, Thursday, the challenge is never ending: “So there’s going to be $X billion in capital. What’s on the list? Who gets what? When do they get it? How do they get it? What’s the priority? How do you make sure that people get what they’ve been promised?”

Once those questions are answered, there’s still the question of whether those plans would have any future in the Senate. Lang said after Thursday’s special session that he didn’t know.

Those types of incremental steps have drawn out the entire session, all 12 month’s worth. Yes, Gov. Rod Blagojevich again threatened to call state lawmakers into special sessions throughout December if they can’t agree on how to subsidize Chicago-area mass transit and finance the statewide infrastructure plan. “There is the possibility we could have special sessions every day as we get closer and closer to Christmas,” Blagojevich said outside his Capitol office Thursday afternoon. December marks the seventh month of overtime session.

House Speaker Michael Madigan told his members to expect a four-day notice if they were to be called back to Springfield in December.

If the governor does resort to calling special sessions, there’s a chance lawmakers would simply “gavel in” and “gavel out,” or convene and then adjourn without doing any actual business until a deal is made. That’s been the case in many of the 18 special sessions so far this year. The governor’s office says at least they’re in the same building and more likely to meet. “They’ve made little noticeable progress over the past several weeks when they were not in session,” said Abby Ottenhoff, Blagojevich’s spokeswoman, in an e-mail. “When they are in session, they are at least talking and working toward a solution.”

Wednesday, November 28, 2007

No action sets the stage for another show

Compromise would be a welcomed word during this 6th month of overtime session, but Wednesday’s special session — the 17th called by Gov. Rod Blagojevich this year — exemplified the “you show me yours, I’ll show you mine” game played by legislative leaders and caucuses, said Rep. Bob Molaro, a Chicago Democrat. He provided comic relief with a candid and blunt analysis during a committee hearing Wednesday night.

The daily news is that the House shot down a mass transit plan that was backed by the governor and drafted by House Republicans. It was altered by House Democrats, and House Speaker Michael Madigan urged lawmakers to support it as an “act of compromise.” But the bigger picture is that the mass transit plan was doomed from the start. By letting it die in the House, the speaker demonstrated that yet another one of the governor’s plans failed.

It’s all come down to two issues: 1) How to save Chicago-area mass transit from cutting services and raising fares and 2) how to finance an infrastructure program for roads, bridges and schools statewide.

“There’s a lack of trust on many fronts,” said Sen. John Sullivan, a Rushville Democrat. He was one of nine senators who reiterated Wednesday that he wouldn’t vote for a mass transit plan without a capital plan. “We need an assurance that both of these issues will be addressed, and the only way we see to do that is if they’re done at the same time.”

Madigan said he’s continuing to negotiate on a capital plan, which would rely on gaming expansion to pay for the bonds. But he said he refuses to tie gaming to mass transit. On the other hand, once a gaming-for-capital plan drops, downstate members of both political parties would be more likely to approve a mass transit plan.

While Madigan said he was “disappointed” Wednesday night, the failure of the "compromise" plan could revive another measure that the speaker prefers, Rep. Julie Hamos’ measure. It previously failed but is preferred by Madigan for its “regional approach” with a sales tax increase in the Chicago area, as opposed to the compromise plan that would have taken money from the state’s general revenue from the sales tax on gas.

Hamos’ measure was framed as the lesser of two evils in debate Wednesday night — Molaro joked that it was “the greatest bill that never passed" — but the governor repeatedly vowed to veto the measure because it raises general taxes. Hamos pointed out, however, that lawmakers will have to make some tough votes whether they vote to save mass transit by increasing the sales taxes in Chicago or by diverting general revenue from the sales tax on gas.

I’ve given up on timetables and deadlines for legislative action, but pressure points will start to pop in December if lawmakers don’t deal with at least mass transit. Besides risking angering Chicago-area voters who would be affected by fare increases, lawmakers from all parts of the state risk being stuck in Springfield during the thick of campaign season due to the early primary election, February 5.

Lawmakers return to the Statehouse Thursday, when the governor called another special session Thursday to focus on mass transit funding with a capital plan.

Monday, November 26, 2007

Mass transit compromise begs questions

Two major questions remain unanswered after House Speaker Michael Madigan issued a letter pledging support for a mass transit compromise. The plan would prevent drastic service cuts in the Chicago area and boost funding for downstate services (it would increase the state assistance for downstate transit agencies from 55 percent of operating costs to 70 percent. See my November article for more on that).

Hot-button questions for Wednesday’s special session:

1) Madigan agreed to the general idea of diverting the state’s portion of the sales tax on gasoline in Cook County to meet the region’s transit needs, but here's the question: How will the state plug the estimated $385 million hole in the general revenue fund, which is like the state’s main checkbook?

2) How likely are downstate lawmakers to support this newfound compromise if it isn’t coupled with a long-awaited capital plan to address mass transit, roads, bridges and schools?

Madigan’s letter cited a “genuine crisis,” and said, “This compromise will put an end to the piecemeal cash infusions, months of anxiety for transit riders and workers, and the incessant, and unfortunate, legislative drama that has surrounded this issue for the past several months.”

That would be the day, but the compromise will include changes and will open the door for more troublesome negotiations in the future.

According to Madigan, the House will advance the legislation supported by Gov. Rod Blagojevich and House Minority Leader Tom Cross, but it’ll include amendments. The speaker vowed those changes would not increase the general sales tax in the Chicago region or allow the Chicago City Council raise its real estate transfer tax, as proposed in Rep. Julie Hamos’ legislation. Blagojevich opposes that plan. According to the letter, the compromise legislation will include such pension reforms as requiring higher employee contributions, increasing the retirement age and limiting some health care benefits.

As far as plugging the hole in the state’s general fund, Madigan’s spokesman, Steve Brown, mentioned the governor’s proposal to end some corporate tax breaks. “The speaker has been supportive of closing corporate loopholes in the past,” Brown said. “I suspect it’ll be something that will be addressed down the road. I don’t envision that being addressed this week.” He said the state Constitution limits the legislature to discussing a specific topic designated by the special session.

According to Cross’ spokesman, David Dring, the House Republican Caucus perceives Madigan’s letter as a positive step, but members hope the speaker won’t stop working with them on a capital plan. Dring said the House GOP Caucus also will discuss Wednesday how members feel about ways to plug the general revenue hole. Previous ideas have included increasing the tax on cigarettes, which Dring said wasn’t so popular. But there’s also transferring money from other state funds or slightly increasing fares for the CTA, Metra and Pace services.

Either way, Wednesday could generate more questions than answers.

Tuesday, November 20, 2007

Mass transit special session

Lawmakers will return to Springfield November 28 to focus on mass transit as required by Gov. Rod Blagojevich’s proclamation of another special session Monday, but Republican leaders aren’t happy about it.

Senate Minority Leader Frank Watson said Monday afternoon, “I have no idea what this is about.” Watson said that the effort has been focused on a compromise plan to fund road and school construction projects, which some downstate lawmakers said is necessary for them to support a Chicago-area mass transit deal. “For [the governor] to call a special session dealing with mass transit and mass transit only is a troubling sign — because my attitude is we’re not going to deal with just mass transit. Capital has to be a part of this,” Watson said. “And I’m disappointed that if he’s going to call a special session, let’s deal with the whole package instead of just one or the other.”

According to House Minority Leader Tom Cross, he, Watson and House Speaker Michael Madigan were already scheduled to meet in Springfield two days next week. “We’ve got a lot of work to do on capital bill, but we’re slowly but surely I think moving forward,” Cross said.

The governor said in his letter to the General Assembly that he supports legislation that would “redirect revenue” from the Chicago-area sales tax on gasoline to the Regional Transportation Authority. “It does not raise taxes. It redirects them,” Blagojevich wrote. He added that the gas tax revenue would be replaced by “closing corporate loopholes,” or ending certain corporate tax credits.

Watson said he opposes that idea, saying such neighboring states as Indiana already benefit from Illinois’ tax policy. “These kinds of loopholes he talks about closing aren’t tax loopholes — these are incentives in many cases.”

The governor’s letter suggests there’s room for negotiation, but that’s unlikely given his opposition to the plan backed by Madigan. Blagojevich wrote, “I am open to other ideas so long as it is not another t ax increase on people.” That still rules out the proposal sponsored by Democratic Rep. Julie Hamos of Evanston that narrowly failed over the summer and that would have raised Chicago-area sales taxes and real estate transfer taxes to aid mass transit.

Wednesday, November 14, 2007

Time for Plan C

Scooting around the Illinois General Assembly didn’t work this time for Gov. Rod Blagojevich. A bipartisan legislative committee shot down his emergency plan to expand state-sponsored health insurance to 147,000 Illinois adults Tuesday. The rule would have covered those adults who make up to 400 percent of the federal poverty level, or about $82,000 for a family of four. The committee voted 9-2 to reject and suspend that emergency rule on the grounds that it was too broad, didn’t warrant an emergency and bypassed the legislative process.

The governor did try to work such legislation through the General Assembly this summer, but the measure hasn’t gone anywhere since July. So instead, the Blagojevich Administration tried expanding the program through the Joint Committee on Administrative Rules, a 12-member committee with an equal number of Democrats and Republicans.

Two of the GOP committee members — Rep. Brent Hasssert of Romeoville and Rep. Rosemary Mulligan of Des Plaines — supported the governor’s emergency ruling. Nine others rejected it. Sen. James Clayborne of Belleville was absent.

But the rejection came with a recommendation. In its ruling, the committee said one part of the governor’s proposal does warrant emergency action in light of federal rule changes that will kick 15,000 to 20,000 adults off of the State Children’s Health Insurance Program next year. “We said in our recommendation that if they would simply issue a new emergency rule that just dealt with SCHIP, we would all support that,” said Rep. Lou Lang, a Skokie Democrat. “The department flack refused to do it, and so you have to wonder if they really feel any part of it is an emergency.”

As for the administration’s next step, Department of Healthcare and Family Services spokeswoman Ruth Igoe would only say the department is “reviewing our options and timelines available to us.” She did add that immediate action is warranted. “Our staff noted [Tuesday] that health care is an emergency for a lot of people in Illinois, and we believe this was an emergency. And we believe we have the authority to provide health care for these people. But at this point, we’re reviewing our options and the timelines available to us.”

The administration does have a fallback. It filed the same proposal as a regular rule, but that process takes a lot longer because it requires 45 days for public comment and another 45 days for JCAR review.

Lang said the committee will review that proposal, too, but the governor can’t keep trying to spend millions on new health care programs without legislative oversight. “While we all support a better health care system, we have something under our Constitution called the Illinois General Assembly. If governor wants to continue to try to bypass the legislative process in his effort to create a new health care system for Illinois, I think he’s got some real problems ahead of him.”

According to the department, expanding the state’s FamilyCare program to cover those 147,000 adults would cost about $43 million for this fiscal year, which ends in June 2008. Those costs were disputed by Rep. John Fritchey, a Chicago Democrat who also sits on JCAR. See the Gatehouse story from November 10.

And see more background in my October article, “Booster Shot?”.

Tuesday, November 13, 2007

Medical malpractice returns

Consider a can of worms reopened. A Cook County Circuit Court judge struck down a state law limiting the amount patients can receive in cases alleging medical malpractice. Currently, the law caps jury awards for pain and suffering at $500,000 for doctors and $1 million for hospitals.

In Tuesday’s ruling, Judge Diane Larsen says the state’s 2005 medical malpractice law is unconstitutional because it violates the separation of powers and patients’ rights. “The basic argument is that it’s the judicial system that gets to decide what counts as an acceptable remedy and that the legislature is invading that province by enacting a cap,” says Professor David Hyman at the University of Illinois Law School, where he teaches civil procedure and health care regulation.

The ruling does not negate the state law. But it does open the door for the issue to make its way to the Illinois Supreme Court, which could overturn the law and has done so twice before with caps on damages in a broader sense.

State Sen. Susan Garret, a Lake Forest Democrat and original sponsor of the 2005 law, said she was a little surprised by the ruling. “When we crafted this legislation, I was under the assumption that it had passed constitutional muster.”

Then again, she said most physicians anticipated the court challenge. “So, for some it’ll be disappointing. For some it’ll be an opportunity to say, ‘We told you so.’ But I think we have to abet this and make sure it goes through the process.”

The 2005 debate over “med mal” spanned more than a year and posed trial lawyers against medical groups and the insurance industry, as well as Democrats against Republicans, in aggressive lobbying campaigns. For background, see an article I wrote in 2004.

The debate is just as polarizing today as it was then, demonstrated by the immediate and opposing statements released after the court ruling Tuesday. The Illinois Trial Lawyers Association applauds the judge’s decision and slams “record profits of insurance companies” as the problem fueling rising medical malpractice premiums. “One thing is clear: Our state constitution does not allow those who have been most seriously injured as a result of medical negligence to have their rights taken away in order to give bonuses to insurance companies,” association president Bruce Kohen
said in a statement.

The Illinois State Medical Society and ISMIE Mutual Insurance Company, the state’s largest medical insurer that’s owned and operated by doctors, backed the 2005 “caps” legislation and opposed the judge’s decision. “This is only ‘round one’ in the battle to uphold these reforms, which have been crucial in slowing the number of doctors fleeing our state and helping in the recruitment of specialists,” said Dr. Rodney Osborn, medical society president. “Getting rid of the 2005 medical litigation reforms now would be like benching your starting lineup in the toughest game of the season. We can’t afford to forfeit patients’ access to care.”

In April, ISMIE announced an $18.4 million dividends program for policyholders because of the company’s improved financial picture after the caps on non-economic damages became law.

The Illinois Hospital Association agrees with the doctors and still uses the word “crisis” to describe the effect of high malpractice insurance premiums that it says deter doctors from practicing in Illinois. “This comprehensive law is helping restore predictability to Illinois’ broken liability system that has been driving up costs for hospitals and physicians to unsustainable levels and that has jeopardized the state’s health care system,” wrote Ken Robbins, association president, in a statement.

Tuesday, November 06, 2007

"Tings are OK"

That's House Speaker Michael Madigan using his best Chicago accent to jokingly gauge the progress of leaders’ meeting with Gov. Rod Blagojevich Tuesday in Springfield to discuss the expansion of gaming for new revenue. Turning on the serious tone, Madigan said, “We had a good meeting, and it appears that we’re making progress. Not everything is resolved. There are differences, which I’m not going to get into.”

The four leaders of both parties met with Blagojevich in the Statehouse Tuesday afternoon and all reported progress, although they wouldn’t talk specifics. And it may take more than the seven to 10 days originally said to be the timeline for agreeing on how much to expand gaming and how to pay for Chicago mass transit, statewide construction projects and education.

The proposals on the table but not quite agreed upon include:
- A land-based casino owned by the city of Chicago, although they have to nail down a way to share the revenue between the city and the state
- One riverboat elsewhere in the state, although there’s no indication where that second boat would go
- Slots at horseracing tracks, although they aren’t releasing a number of new positions that would be allowed
- An independent gaming board, desired by House Speaker Michael Madigan, House Minority Leader Tom Cross and Senate Minority Leader Frank Watson, although it has some opposition or concerns about who would appoint the new gaming board members
- A 70-30 split of the revenue — 70 percent of the new gaming revenue would pay for road and school construction, while 30 percent would provide new education funding per Senate President Emil Jones Jr.’s desire, although the leaders haven’t yet agreed on how much revenue would be generated in the first place

Regarding the split of money, Watson said, “The bigger the capital bill, the better, as far as I’m concerned, but I’m not opposed to the 30 percent that’s being allocated to education.”

He also said he could vote for slots at the tracks, but added, “I’m not sure I’ve got members who can. That’s the biggest problem.”

And the revised timeline, per Watson, is that seven to 10 days may have been the original goal, but “I think we’re talking more time than that.”

The leaders scheduled a telephone conference for Thursday.

George Ryan reports to jail Wednesday

Former Gov. George Ryan and friend Lawrence Warner are ordered to report to federal prison Wednesday after the U.S. Supreme Court denied their plea to remain free while trying to appeal their 2006 corruption conviction before the nation’s highest court. Ryan will start his 6 ½-year prison sentence in a federal facility near Oxford, Wis., while Warner will start his 3 ½-year sentence in Colorado. They both remained free for more than a year-and-a-half after being convicted for racketeering and fraud for using public office for private gain during Ryan’s years as secretary of state (1991 to 1999) and as governor (1999 to 2003).

One day prior, the U.S. Department of Justice’s solicitor general thought Ryan and Warner should not remain free pending an appeal to the Supreme Court.

Last month, a full panel of the 7th Circuit Court of Appeals affirmed that they would not receive a retrial.

Former Gov. James Thompson, Ryan’s lawyer, responded to the Supreme Court's denial Tuesday in a Chicago press conference (posted on the Web). He said that the defense team is disappointed, but Ryan will report to jail as ordered.

“We knew the petition for bail was a long-shot,” Thompson said. “No Supreme Court justice has granted bail under the provisions of the Bail Reform Act for over 30 years. So, obviously, this was always a likely outcome.

“We are exerting, as we do for any client of Winston & Strawn, every effort on Gov. Ryan’s behalf. And we file an appeal to the Supreme Court of the United States on the merits of his conviction.”

Friday, November 02, 2007

The $27 million deal

The end of the seemingly endless legislative session could be near if all goes by Thursday night’s seven-to-10-day promise. It started when Chicago-area mass transit officials announced a temporary budget solution that averts a “doomsday” scenario that would have terminated 600 workers and drastically increased fares on Sunday. The “solution” was a fiasco that didn’t peak until 3 p.m. Friday when the federal government approved a plan announced by Gov. Rod Blagojevich just hours before. But it’s not just a Chicago-area issue. The budget fix, even if only temporary, has statewide importance because it opens the door for a much-delayed agreement between the state’s top legislative leaders and the governor on long-awaited plans to fund road and school construction projects across the state.

Jim Reilly, chairman of the Regional Transportation Authority in northeastern Illinois, said the federal government had to approve the plan to divert $27 million in federal capital dollars to cover the agency’s operating expenses. The grant — not a loan — is supposed to be enough for the RTA, the Chicago Transit Authority and suburban Pace bus services to operate through the end of the year.

According to Blagojevich, the diversion of federal capital dollars for operating costs has been done in the past. Blagojevich said he plans to replace those federal funds with available state capital bond money. “By replacing converted federal capital money with state capital money, there will be no loss to either CTA or Pace’s capital plan,” he wrote in a release before talking to reporters outside of his Statehouse office.

Ron Huberman, executive director of the Chicago Transit Authority, said at the Capitol that the scheme does avert a doomsday scenario, but it doesn’t solve the structural deficit that plagues the agency’s pension system and angers its union workers. Chicago Federation of Labor president Dennis Gannon added that the pension problem will only make the mass transit system worse if not addressed in the long term.

Reilly of the RTA said he trusts the legislative leaders to come up with a long-term solution. “I believe that commitment,” he said, crediting House Minority Leader Tom Cross for becoming a mediator of sorts between House Speaker Michael Madigan, the governor and his ally, Senate President Emil Jones Jr., and Senate Minority Leader Frank Watson.

On the House floor, Cross said, “This may not be the best solution, but it’s what is here and now and available, and I support it in the interest of keeping the system running.”

The next step to ending the sixth months of overtime session is to draft an agreed capital program for road and school construction around the state. That, however, involves the expansion of gaming, a contentious and complicated subject. The legislative leaders are on opposite sides of the spectrum in terms of the size and scope of the revenue sought. There’s also disagreement on the spending side. The Senate version approved in September includes money for education and mass transit, neither of which Madigan wants to tie to gaming. Cross bears the burden of ironing out their differences.

“We have a lot to discuss,” he said from the floor. “As far as I’m concerned, what came over from the Senate isn’t what we’re going to work off of. We will start over.”

Cross and Madigan will meet frequently over the next seven to 10 days, but the House and Senate members left Springfield Friday and won’t be called back until the pending gaming and capital plans are ready.

Thursday, November 01, 2007

Wait for it ... wait for it ...

The worries of Chicago-area mass transit riders, Illinois public schools and human service providers culminated at the state Capitol Thursday, but they were all put on hold for seven to 10 days. Gov. Rod Blagojevich said Thursday night outside of his Statehouse office that he would announce a short-term plan Friday that would save Chicago-area mass transit from severe cuts in services and in payroll.

In those seven to 10 days, Blagojevich said he and the legislative leaders — three of whom stood next to him Thursday night — would urge the Regional Transportation Authority to avoid cutting Chicagoland mass transit services November 4. He said that’s because he and the Illinois General Assembly could tie up major differences in the capital program for road and school construction financed by a gaming expansion. And tying that up would allow for Republicans and downstate lawmakers to approve a mass transit bill primarily for Chicago, he said.

He was joined by Senate President Emil Jones Jr. and the two Republican leaders, Tom Cross in the House and Frank Watson in the Senate.

Quote Blagojevich: “There’s broad consensus among Senate President Jones, Republican Leader Watson, Republican Leader Cross and myself that the practical reality is that in order to solve the mass transit problem long-term for the Chicagoland area, we need an infrastructure, capital construction program to get the downstate members to vote for a Chicago issue and to get the Republican members to support a Chicago issue.”

The missing force was House Speaker Michael Madigan, who arrived late and left early from the leaders’ meeting. Afterwards, Madigan said little other than that the House would wait to hear the governor’s announcement before voting on the mass transit proposal that would increase the regional sales tax and real estate transfer tax in Cook County and restructure the governance of the Chicago Transit Authority.

“We’re going to wait to hear from the governor to see if he has produced more money for another short-term, one-week to 10-day bailout,” Madigan said before walking away.

Downstairs from the leaders’ meeting, Chicago Transit Authority executive director Ron Huberman told a House committee that the agency can’t risk accepting another short-term solution. But that depends on whether he, as well as the mass transit riders and other service providers waiting for state money, believe the governor’s promise that everything will fall into place within seven to 10 days.

Jones said the RTA and the CTA officials will testify to a Senate committee Friday.

Schools held hostage?
One more issue tangled in this mess is state aid payments for public schools.

School districts across the state are still waiting for increases in state aid payments promised to them when the legislature approved a state budget in August. (They’ve been getting their fiscal year 2007 levels since August.) The piece of legislation needed for the state to distribute the new money — including an increase in per-student spending and an increase in reimbursements for special education teachers — is another victim of the political standoff on capital and mass transit funding.

“Enough is enough.” That was the message delivered by state Rep. Roger Eddy, a Hutsonville Republican, on behalf of fellow House Republicans and school superintendents earlier Thursday in a Statehouse news conference.

Without the legislation to release the new money, Eddy said not only will schools miss out on the promised increased funding, but some districts actually will lose money. The Illinois State Board of Education would have to recalculate general state aid payments using last year’s numbers.

“In fact, 726 school districts, as of today, when the calculation is recalculated, will actually receive less money in state aid payments beginning with the November 10 payment,” Eddy said.

For instance, Jeff Patchett, superintendent of Oblong Community Unit School District 4 in east central Illinois, said that his district, which is already on the federal financial warning list, would lose out on $8,571 in state aid per month without legislative action. If the legislation to implement the payments were approved, then the district’s state aid payments would increase by more than $21,000 per month.

Logistically, the House could vote on one ”budget implementation bill” (a.k.a. BIMP) already approved by the Senate. Instead, the House advanced a new, more comprehensive BIMP bill that Democratic budget negotiator Rep. Gary Hannig of Litchfield said is more in sync with the approved budget than the one approved by the Senate month’s ago.

The House and Senate are back in session Friday, and the leaders are expected to meet again. Jones said the leaders could continue to meet in Springfield and Chicago over the next seven to 10 days. Mass transit riders, school officials and service providers will be holding their breath in the meantime.

Recall the governor?

It’s no secret state Rep. Jack Franks, a Woodstock Democrat, often disagrees with Gov. Rod Blagojevich, also a Democrat. But Franks said Thursday that he’s been so disturbed by the governor’s actions in his first and second terms that he drafted legislation to change the state Constitution to allow voters the ability to recall an elected official after they voted him or her into office.

“I don’t think I would have written it but for what’s going on in Illinois this year,” Franks said at a Statehouse news conference. “You talk about the perfect storm. It’s like this governor is the poster child for recall.”

This comes after the Chicago Tribune asked readers whether they think Illinois voters should be able to remove a public official from office, Blagojevich specifically. The Tribune then published results that showed a majority of the 1,200 readers who responded did support a recall of Blagojevich.

Lt. Gov. Pat Quinn stood by Franks Thursday but would not say he supports the legislation simply to get Blagojevich out of office. Rather, Quinn said he supports, and thinks voters support, the principle of recall as a tool for public accountability. And this year, being a “very disappointing year,” could serve as a vehicle for a grassroots campaign to put the question to voters in November 2008, he said, adding that it’s an ideal time because a presidential election year typically attracts a lot more voters.

In particular, Quinn said he was disappointed by the governor’s proposed gross receipts tax on businesses, the stalled ethics reform and the governor’s lack of leadership on skyrocketing electricity rates after a state law expired.

“This whole year has been so disappointing with the gridlock and the failure to respond to the public interest that I think it underlines the need for having extraordinary tools of democracy, direct democracy, like recall,” Quinn said.

In order for Quinn and Franks to secure a question on the November 2008 ballot, they would have to win approval from three-fifths of both legislative chambers. It also would require six months of public debate before being posed to voters. Three-fifths of voters then would have to say, "Yes, recall the official and elect this person in his or her place."

If it were posed to voters and approved in 2008, then it would take effect in the April 2009 elections. That would be the last year of Blagojevich’s second term. And the lieutenant governor would not necessarily be the person listed on the ballot as the candidate to replace the governor.

Franks said the recall provision would top his legislative agenda in January. “This is a perfect example, this session, why we need to have the ability to remember that the citizens control the government and that we are public servants and not their masters.”

Wednesday, October 31, 2007

Juvenile justice reform

Steven Guerra, the governor’s deputy chief of staff for social services, helped kick off the first conference of its kind in Illinois Wednesday morning in Springfield. He spoke at the 1st Annual Collaborative Juvenile Justice Conference, where he said juvenile justice is a “life and death” situation for him, that he was one of the “street kids” once shot at three times but, luckily, unharmed.

“I am one of the kids that actually, you guys caught,” he told hundreds of juvenile justice officials at the President Abraham Lincoln Hotel and Conference Center. “Were it not for you, certainly like a lot of my friends, I would have been caught up in what we now know is a cradle prison pipeline.”

His comments mirror the results of a report also released Wednesday that says Illinois falls below national standards in helping kids stay out of the juvenile justice system. That’s partially because the kids often lack adequate legal representation and, in 70 percent of the cases, agree to plea bargains (or plead guilty) rather than take the time to fully consider how the case should proceed. The study was released by the Children and Family Justice Center of the Northwestern Law School and the National Juvenile Defender Center. (Here’s the executive summary.)

The three-day conference where Guerra spoke focuses on the condition of Illinois’s system, including the status of the relatively new state Department of Juvenile Justice and such other alternative youth programs as Redeploy Illinois.

The conference did not paint a rosy picture, but did offer a road map for collaboration. A harsh analysis of state and national systems was spelled out by featured speaker Bart Lubow, a director with the Baltimore-based Annie E. Casey Foundation. It’s an advocacy group started by the founder of UPS shipping services that studies policies and funds programs to help disadvantaged families and kids.

Lubow called the existing national juvenile justice system “the country’s most underachieving and disappointing reform agenda to date.” He said what went wrong was that “we have created a segregated system of justice that primarily serves kids of color or kids who are too poor to buy their way out of it.”

He cited research to demonstrate that states can get kids out of detention centers and into the court system where they are more likely to have successful outcomes, and states can reform their justice systems by shifting the focus away from detention and towards intervention at a much lower cost than it’s doing now. But the trick, he said, is to stop throwing money at new programs in an attempt to improve the effectiveness of the system. He said change has to start with the adults running those systems, and that includes refocusing how officials view the children they’re supposed to help.

“We unfortunately have viewed them for far too long through a lens that is distorted by race, class and place bias. That is, by being biased towards the places where kids come from,” Lubow said. “We talk all the time in juvenile justice about a dysfunctional neighborhoods and dysfunctional families. Dysfunctional is a code word. What we refuse to do, what we have been unable to do because of the distortions in our lenses is to, in fact, recognize the strengths and … redirect our resources to building upon the assets that exist in those communities and within those families.”

The conference touched on a wider array of topics and trends, available from the Juvenile Justice Initiative.

Monday, October 29, 2007


I'm sorry to say blogging will be light until later this week. My hard drive crashed again. I hope to catch up soon.

Friday, October 26, 2007

Get ready, early birds

The Illinois State Board of Elections expects to receive double the number of petition paper filings Monday than it would normally receive in an election year. It’s happening about six weeks earlier than normal, too.

For the first time in Illinois, Democratic candidates for president, delegates and alternate delegates to the Democratic National Nominating Convention will file their petitions the same day as candidates for federal, state and county offices. The Illinois General Assembly also moved the primary election from March 18 to February 5 to aid a presidential bid of Illinois’ “favorite son,” U.S. Sen. Barack Obama.

Petition filings start at 8 a.m. Monday, but candidates are expected to line up early in an attempt to be the first candidate listed on the ’08 ballot. The filing period ends November 5. We’ll have more Monday.

Thursday, October 25, 2007

Unlucky sevens

Former Gov. George Ryan could go to federal prison within seven days — correction: by November 7 — pursuant to a decision by the federal 7th Circuit Court of Appeals.

On Thursday, the full court affirmed that Ryan would not receive a retrial for his federal corruption conviction last April. Ryan requested the full panel of judges review an August ruling by a three-judge panel that determined he should not receive another trial. According to Thursday’s court order, even the three dissenting judges wrote that they agreed “the evidence of the defendants’ guilt was overwhelming.” But they disagreed over whether the management of the jury during the six-month trial harmed the case.

Ryan and his friend, Chicago businessman Larry Warner, were found guilty of using public office for private gain during Ryan’s years as secretary of state (1991 to 1999) and as governor (1999 to 2003). The Kankakee Republican has remained free during the appeals process and could ask to remain free if he takes his case to the last resort: the U.S. Supreme Court.

Back to the Capitol in 7
The Illinois House could vote on controversial mass transit funding just two days before threatened service cuts and fare increases.

Members will return to Springfield to conduct business one week from today. This comes after House Minority Leader Tom Cross met with House Speaker Michael Madigan in Chicago Wednesday to discuss ways to save mass transit from financial turmoil. But the leaders aren’t necessarily on the same page about whether a mass transit plan should rely on revenue from increased taxes, expanded gaming, other sources or all of the above.

The minority leader still prefers alternatives to tax increases. “Tom Cross and a majority of our caucus does not feel that now is the time to be increasing taxes on people, especially in light of what is being proposed by the Cook County board president and the mayor of Chicago,” said David Dring, Cross’ spokesman.

Alternatives include allowing a Chicago casino and the expansion of positions at existing casinos to help mass transit and to pay for a major capital construction plan. Dring said Cross also proposed diverting $300 million of the revenue from the state sales tax on gasoline to aid mass transit, and he’s proposing a menu of items to replace that money, such as increasing fees on auto titles and raising transit fares by 10 percent to 15 percent. “That is something we just thought about because that would be less money you would have to take from the sales tax on gas,” Dring said, adding a 15 percent fare increase would be “much more modest” than the fare increases planned by the Regional Transportation Authority if the agency doesn’t receive long-term state help by November 4.

Madigan, on the other hand, “did not seem to warm up to our idea of the sales tax on gas,” Dring said.

The speaker is open to a Chicago casino to pay for a road and school construction projects but only under certain circumstances, such as whether the revenue would stay in Chicago or be divvyed up all over the state, said Madigan spokesman, Steve Brown. However, the speaker still doesn’t want to rely on gaming legislation to save mass transit. “He has said that he doesn’t plan to hold transit riders hostage to the casino interests or the gambling interests,” Brown said.

In fact, Madigan still plans to push for a plan that would include a small sales tax increase in Chicago for the sake of mass transit. Lawmakers could vote for a second time on that measure next week. It previously fell short of the necessary votes in September.

Lawmakers were told to be prepared to work at the Capitol Thursday, November 1, Friday, November 2 and potentially Monday, November 5. And the governor repeated his statement Wednesday that he would call the General Assembly into another special session in mid-December to address the so-called 7 percent solution to Chicago-area property taxes. See the background here.

Wednesday, October 24, 2007

Video competition: Phone vs. Cable

The phone giant AT&T officially can compete with cable companies on a statewide level to offer high-tech video services to customers. But that doesn’t guarantee the company will build out those services in all areas of the state any time soon. See Crain’s Chicago Business story here.

This comes after the Illinois General Assembly approved changes to state law in May. The new state law allows such phone companies as AT&T and Verizon to offer video services anywhere in the state without having to go through each individual municipality as cable companies previously had to do.

Three of four members on the Illinois Commerce Commission, a state panel, voted Wednesday to approve AT&T’s application to provide the video services (the fourth commissioner was absent). But the law stops short of giving the commission the ability to regulate what happens after the application is approved, says Beth Bosch, commission spokeswoman.

The measure originally sparked controversy but was rewritten with consumer protections that allowed the bill to win near-unanimous support in the Illinois House and Senate. Among the biggest changes is the requirement for video service providers to extend a certain percentage of their services to low-income neighborhoods within three years of earning the so-called statewide video franchise.

The new law expires in six years, meaning the General Assembly will have five years to evaluate whether it actually creates competition as touted. The law does bring Illinois in line with Indiana, which approved a statewide video franchise in March 2006.

For more background, check out my previous telecom blogs, and for a lot more context and potential outlook, see my May 2006 article, “A playbook for competition.”

Tuesday, October 23, 2007

Comptroller: "Follow the money"

The public, the media and anyone with Internet access has a new tool to search for connections between people who donate money to political campaigns and people who win state contracts. Illinois Comptroller Dan Hynes’ office designed a new Web site, called Open Book, which combines records from his office with records from the State Board of Elections’ office. That allows people to search state contractors side by side with campaign contributors.

Hynes said at a Statehouse news conference Tuesday that he also hopes the new search engine will apply more pressure on lawmakers, particularly Gov. Rod Blagojevich and Senate President Emil Jones Jr., to advance ethics legislation drafted by Hynes. Known as House Bill 1, the measure would ban and criminalize so-called pay-to-play politics (a.k.a. granting state contracts in exchange for political campaign contributions). It gained unanimous support in the House and lined up 46 sponsors in the Senate, but it’s never been called for a vote.

“In the absence of a statutory ban on contributions from those who have state contracts, what we can do is create more transparency, more awareness, better information for watchdog groups, the media, citizens, so that people know who’s doing what,” Hynes said. “And perhaps that information will create pressure to enact the right legislation that will prohibit it, or, as one of my colleagues said, shame people out of not awarding contracts to contributors or getting contributions from contractors.”

A search takes a few seconds and starts with entering a person’s name or business in the blank. The database comes up two columns, one for state contracts and one for political contributions. It also lists the person’s or company’s address and how much was donated to any political campaign in each fiscal year back to 1999. It does this by tapping into the comptroller’s accounting records of contract information and into campaign disclosure reports filed twice a year with the State Board of Elections. Previously, matching contractors with campaign donors required multiple searches on the separate Web sites of each state agency.

“Open Book creates a one-stop shop where you plug in one name, one field and get all of those answers at once,” said David Morrison, deputy director of the Chicago-based Illinois Campaign for Political Reform, which started one of the first searchable, online databases for campaign contributions with Kent Redfield, director of the Sunshine Project for campaign finance research based at the University of Illinois at Springfield. “It’s a really terrific system that I think has the potential of unleashing thousands of ants all over the state to crawl over the problem with pay-to-play contracting,” Morrison said. The Chicago-based watchdog group the Better Government Association also came to support the unveiling of the site.

Redfield added that more disclosure is important to prevent conflicts of interest, whether actual or perceived, from eating away at public confidence in the system. He says the costs of corruption include turning people away from participating in government and wasting tax dollars to curry political favors.

Then Redfield pointed directly to the governor, who has said in the past that he favors more sweeping ethics reform than the measure urged by Hynes. The governor’s spokeswoman, Rebecca Rausch, said Blagojevich supports anything that increases transparency to state government, in terms of the comptroller’s new Web site. But as far as supporting the ethics reform measure backed by Hynes, Blagojevich is holding out for a measure that he deems more comprehensive.

In response to Hynes’ statement that House Bill 1 could be the first step with more legislation following, Rausch said, “Why not do it right the first time? Why set the bar low? It’s taken many, many, many years to pass the first round of ethics reform in 2003. We shouldn’t squander the opportunity to do something sweeping and across the board now.”

Redfield says the governor still could do more. “The governor could do what the comptroller has done through executive order this afternoon. It should not be sufficient for the governor’s spokesman to say, ‘Well, we’re in favor of broad reform.’ These are the sorts of things that should be in law, that can be done by executive order.”

Hynes and the other constitutional officers issued executive orders to ban campaign contributions from people holding state contracts that are worth more than $10,000, as in Hynes' case. Secretary of State Jesse White said his office also prohibits campaign contributions from his own employees and the employees’ families.

For more background on previous attempts to reform state ethics laws, check out an April 2005 column by Pat Guinane, former Statehouse bureau chief for Illinois Issues.

Friday, October 19, 2007

Tax news and something fun (updated)

The Taxpayers’ Federation of Illinois' board of trustees voted to provide “qualified support” to SB 572, Rep. Julie Hamos’s measure to give a much-needed boost to Chicago-area transit and to give some more money for operating costs of downstate public transit systems. I’ll try to post the association’s position statement as soon as it’s available.

Here's the federation's statement supporting Hamos' legislation:
• "TFI supports the pension, healthcare, and governance reforms in the bill. TFI has taken the position that reforms to spending, such as spending on pensions and healthcare, should be prerequisites to any increases in revenue. TFI believes that the reforms agreed to between the Chicago Transit Authority (“CTA”) and the relevant unions to, among other things, increase contribution rates and increase the retirement age to 65 are positive steps to reining in costs. TFI believes these reforms are an example of the types of reforms the State should undertake in the future to reduce its own cost structure."

• "TFI supports the sales tax increases in the bill as reasonable, targeted increases to fund transit needs. Given that transit use is regional to a particular area, TFI believes an increase in the sales taxes in Chicagoland is a reasonable revenue source since it will be targeted primarily on the taxpayers of the area that is serviced by the Regional Transportation Authority (“RTA”)."

• "TFI previously worked with the Illinois Association of Realtors (“IAR”) to obtain the referendum requirement for home rule municipalities. The provision in SB 572 grants an exception to the requirement for the limited instance of this particular tax imposition in Chicago. While TFI is concerned about this exception, we acknowledge and support the fact that the bill does not rescind the overall requirement for home rule municipalities to seek voter approval of the imposition or increase of real estate transfer taxes."

• "TFI also believes that reasonable fare increases designed to reflect the growth in operational costs should be part of any future fiscal considerations of the RTA and its service boards."

Tax climate
The national Tax Federation also released its 2008 State Business Tax Climate Index, which is supposed to rank states based on how “business friendly” they are. The news release says the index “measures how well a state's tax system encourages investment by maintaining a broad tax base and low rates.” It considers the corporate tax, individual income tax, sales tax, unemployment tax and property tax.

Illinois places 28th overall. Here’s Illinois’ rankings in the sub-groups:
Corporate income tax: 29th
Individual income tax: 12th
Sales tax: 32nd
Unemployment insurance tax: 42
And property tax: 40

The report says Illinois, along with Pennsylvania, Indiana, Michigan and Colorado, are in the top 12 for the individual property tax because each state uses a single, low rate. Watch for my November column about Chicago's property tax system.

Illinois placed 27th overall last year and 29th in 2006. That’s down from placing 19th in 2003, the first year the group published the report.

“Good state tax systems levy low, flat rates on the broadest bases possible, and they treat all taxpayers the same,” the federation says. “Variation in the tax treatment of different industries favors on economic activity or decision over another. The more riddled a tax system is with these politically motivated preferences the less likely it is that business decisions will be made in response to market forces.”

Here’s the executive summary of the background paper, and here’s the full background paper. You can access the full report here.

By the way, this is the same group that said Gov. Rod Blagojevich’s failed gross receipts tax idea was the “largest single-year state tax increase this decade.” I mention that in my May feature about the state’s business climate. Watch for more analysis by Charlie Wheeler, director of the Public Affairs Reporting master’s program at the University of Illinois at Springfield, next month.

Something fun
You may be interested to see which presidential candidates align with your views. WQAD News Channel 8 linked to this 11-question survey, which is not scientific, developed by Minnesota Public Radio. It’s here. It's quick and easy, but the site says it's not meant to pick your candidate for you. It's designed to inform the public about the candidates' stances on a variety of issues.

Friday, October 12, 2007

"There's always next year"

The state is starting to look a lot like the Chicago Cubs in dropping the ball and saying it’ll get the job done next year. The Illinois General Assembly finished its annual fall session Friday without addressing two of the big-ticket items that have divided the legislative leaders and the governor all session: capital construction projects and mass transit subsidies. House Speaker Michael Madigan said he’d give his members seven days’ notice before calling them back to Springfield to act on some leftover business from the regular spring session, which, by the way, still hasn’t ended. It was supposed to end in May. Here’s what they did do during the six days of so-called veto session:

Budget overrides The Senate restored $7.9 million of the $470 million cut out of the state budget by Gov. Rod Blagojevich in August. Senate President Emil Jones Jr. said Thursday that the move was to restore dollars that were “inadvertently cut out of the budget.” The move restored the original funding levels for the offices of the attorney general, the auditor general and such other legislative bodies as the Commission on Government Forecasting and Accountability, the Joint Committee on Administrative Rules and the legislative research and information bureaus, as well as the Illinois courts. Budget negotiator and Chicago Democratic Sen. Donne Trotter said the Senate can come back and approve more overrides or a supplemental budget bill when the state’s revenue forecasts improve. (See the Commission on Government Forecasting and Accountability’s monthly report that says sales tax revenue has declined and the latest comparative study that says Illinois has lagged behind most other states in economic growth.)

Property taxes The Senate president was the lone “no” vote when the his chamber overwhelmingly agreed with the House to override the governor’s changes to the so-called 7 percent solution. The program, which started in 2004, caps the taxable amount of residential properties’ assessed values, which started skyrocketing in 2000. As approved by both chambers, this session’s legislation extended the assessment caps another three years and raised the homeowner's exemption, on a sliding scale, to as much as $33,000 from an earlier high of $20,000. The governor used an amendatory veto to change the legislation by extending the homeowners’ exemption limit up to $40,000 and by making the 7 percent rule permanent. Because both chambers overrode the governor’s action, the original legislation immediately became law. Taxpayers can expect to receive their tax bills by November 1. The county can expect to receive payments by December 1. However, such lawmakers as Sen. Terry Link, the Waukegan Democrat who sponsored the legislation, favor making the program permanent. But he and others agreed to override the governor’s changes because a) if they didn’t agree with the House, then the measure would have died, and b) some questioned the constitutionality of the governor’s use of an amendatory veto to make such sweeping changes. Link says he’ll pursue legislation that would make the 7 percent solution permanent.

Moment of silence Rep. Bill Black, a Danville Republican, passionately spoke against the House and Senate approving a mandatory moment of silence to start each school day. “At least in that moment of silence, they can pray that the General Assembly finally sends them the money that they need,” Black said, referring to schools waiting for their belated state aid payments caught up in a political battle between Madigan and Jones, who is aligned with the governor. The moment of silence may be required, but there aren't any penalties for disobeying the rule. It’s immediately effective.

What’s next? There is no schedule for lawmakers to come back to the Capitol, but the House does have a public hearing scheduled for October 17 in Chicago to discuss the gaming-for-capital bill approved by the Senate. It would create three new casinos to pay for road and school construction projects and some mass transit subsidies, but it has been labeled as too aggressive by some House Republicans and by the speaker. It may well be next year before the legislative leaders set aside their differences and agree on capital and mass transit plans.

Thursday, October 04, 2007

Relationships 101

Rep. Tom Cross, the Republican leader in his chamber, had the quote of the day from the House floor before lawmakers finished their first week of the annual fall session.

“Perhaps, at least at the higher level, we’ve had an inability to communicate to get the budget done, to take care of capital, to take care of RTA, to take care of gaming. And I have a suggestion,” he said.

He cited psychologist and author Kate Wachs, who’s been interviewed by such media entities as the Chicago Tribune and Oprah Winfrey.

“She’s a nationally acclaimed relationship expert, and she’s written a book, Relationships for Dummies,” Cross said. “And she has a very good chapter on good communication, the bolts. One of the things she talks about is finding compromises that work for you and your partners. And I thought maybe she could come to a leaders’ meeting.”

Lawmakers return to the Capitol Wednesday, October 10 for three more scheduled days of the fall session. What do we have to look forward to? Lots or little, depending on whether the legislative leaders decide to hold off on major actions until the House holds committees on gaming and mass transit later in October. Until then, we wonder:
- Will Senate President Emil Jones decide to do the same as the House and let his members vote to override some of Gov. Rod Blagojevich’s $460 million in budget cuts?
- Will Jones decide to act on the House version of a property tax assessment cap that phases out in three years or continue to side with the governor and advance language to make the cap permanent?
- Will House Speaker Michael Madigan allow budget implementation bills to be processed so schools can get their delayed state aid payments by November?
- And will the governor make a public appearance in the Capitol before the scheduled last day of the fall session, October 12?

Tuesday, October 02, 2007

A few surprises

The first day of the Illinois General Assembly’s annual fall session played out as expected Tuesday. The only surprise came with the news that Senate Majority Leader Debbie Halvorson, a Crete Democrat, announced she’s running for Congress to replace Rep. Jerry Weller, a Morris Republican. He announced his retirement in September shortly after the Chicago Tribune and other news reports said he failed to fully disclose land holdings in Nicaragua, potentially violating federal ethics rules. Weller said that didn’t play into his decision. It was simply to spend more time with his family.

Halvorson’s announcement is key because she was previously mentioned as a potential contender for the Senate president’s position whenever the current president, Emil Jones Jr., retires. Jones seems to be supportive of Halvorson’s Congressional bid. “It’d be a tremendous loss, but she’d be a great congresswoman,” he said Tuesday.

During a break from the veto session, Halvorson said she opted not to pursue the Senate leadership position because, “It’s not about me. And it’s not about titles. And I found over the weekend it’s about people and about where you can make the biggest impact. And that’s why I’ve chosen to move on to where I believe the issues are much bigger and my help is needed.”

She attended a women’s leadership conference in Washington D.C. over the weekend and said that helped her realize that she could make the biggest difference in such issues as health care and troop levels in Iraq. While in D.C., she also met with current speaker of the U.S. House, Nancy Pelosi, and members of the Democratic Congressional Campaign Committee. Halvorson said the committee assured her that the 11th District race was an important one and that they would be working with her to snag the seat from Republicans. The district covers 11 counties of the southern suburbs of Chicago and parts of north central Illinois and has leaned Republican, but it could be vulnerable to political change as the demographics shift.

“It’s a very large district, but anybody who knows me knows what a fighter I am and what a campaigner,” Halvorson said. “I love a good fight, a good challenge, and I can’t wait to get out there.”

(Former intern Deanese Williams-Harris featured Halvorson in a March article about the senator’s push for young women to receive a vaccine for HPV, a common sexually transmitted disease that can lead to ovarian cancer.)

One potential contender for Weller’s seat mentioned was state Sen. Christine Radogno, a GOP budget negotiator who failed to win the state treasurer’s race last year. But the Lemont Republican said Tuesday that she decided not to run. “One, I like what I’m doing here. Two, I don’t live in that district, and while that’s not a legal requirement, I think that voters deserve to be represented by someone who does live in the district. It’s a different type of district than I have right now. It’s a rural district, 11 counties, as opposed to a more suburban district than I have right now.”

Here’s the not-so-surprising news:
• An overwhelming majority of House members voted to override most of the governor’s budget cuts. But the overrides are unlikely to have a favorable future in the Senate.
• Latino legislators representing the southwest side of Chicago still want the Senate to override the budget cuts, too, to help relieve severely overcrowded schools. Sen. Martin Sandoval, a Chicago Democrat and Latino Caucus member, says there would be enough votes in his chamber if the Senate president would allow a vote to override the governor’s budget cuts.
• However, Jones said this afternoon his stance has not changed and that he does not intend to call the overrides for a vote in his chamber.
• Mass transit advocates still want a long-term funding source to aid the Chicago area’s public transportation systems, but that’s still intertwined in the ongoing debate about whether to add new casinos. A House Gaming Committee hearing isn't scheduled until October 17 in Chicago.
• And the Senate advanced another version of a measure to limit increases to Cook County property tax assessments to 7 percent, the so-called 7 percent rule. This one is supposed to be identical to the governor’s announcement that he wanted to increase the homestead exemption from $20,000 to $40,000 and make the so-called 7 percent rule permanent. That version is unlikely to win over House Speaker Michael Madigan, who has supported phasing out the 7 percent cap over three years.
• Also, the Senate voted to override a governor’s veto and support the original measure that would establish a uniform speed limit of 65 miles per hour for all vehicles traveling on four-lane highways separated by a median. Essentially, it would allow trucks to drive the same speed as cars. The House would also have to override the veto in order for the uniform speed limit to become law.

Monday, October 01, 2007

Can he do that?

The House gathered more anecdotal evidence Monday to argue that Gov. Rod Blagojevich’s $470 million in budget cuts hurt the very people he says he wants to help through health care, education and social services. The six-hour hearing didn’t result in a vote. It simply laid the groundwork for the chamber’s expected override the budget cuts Tuesday, but the Senate is not expected to follow suit.

Monday’s House’s committee of the entire chamber is just one more example of a tit-for-tat battle with the governor’s office to see who can make the other entity seem more heartless during this record budget stalemate.

Bigger picture: The core question remains. The governor says he cut nearly $500 million of so-called pork and unnecessary spending to pay for the expansion of health care programs, and the administration’s press releases suggest a simple shift in state dollars. During the hearing, the governor’s office e-mailed a statement by Deputy Gov. Sheila Nix. “Some projects in the budget are worthwhile, and we are interested in seeing some funded — but not at the expense of health care for families and mammograms for women.”

But funding of the programs is not that clear cut. The state’s general revenue fund is a different pot of money than Medicaid dollars for subsidized health care programs. It’s unclear whether the governor would or could transfer money from one pot to the other.

Abby Ottenhoff, the governor’s spokeswoman, responded in an e-mail with this: “The governor has increased the pool of available revenue to cover any additional cost by cutting other less critical spending from the budget." She didn’t respond to a follow-up question requesting clarification about how the governor was increasing the “pool of available revenue” if he’s simply spending down Medicaid dollars.

The House committee, by the way, had just 79 of 118 members present. And much of the testimony repeated what had been said during the past month of public hearings across the state. The larger issue during the next two weeks of the annual fall session will remain a capital budget to fund road and school construction projects and, potentially, mass transit subsidies. Then again, all of those issues could intertwine if a promise to restore the governor’s budget cuts is held out as an incentive for House members to side with the capital program crafted by the governor’s office and Senate President Emil Jones Jr. That plan as approved by the Senate is so far unacceptable to the House.

Thursday, September 27, 2007

All on board?

When state lawmakers return to Springfield Monday, there could be more momentum behind a gaming-for-capital plan than there was at the beginning of this nearly nine-month session. The pressure is on for lawmakers to approve a capital bill to finance road and school construction projects and a plan to address mass transit shortfalls. Now House Republicans have changed their tune and indicated a willingness to consider the creation of a Chicago casino to pay for a capital plan. That leaves only House Speaker Michael Madigan to hop on the bandwagon of a Chicago casino. That's not expected.

The potential support among House Republicans also is unlikely to shore up enough votes to approve a three-casino plan passed by the Senate earlier this month. That idea was crafted by Gov. Rod Blagojevich and Senate President Emil Jones Jr., who did not seek input from House Democrats or Republicans before sending it to the floor for a vote. Members of both political parties approved the deal. Now it’s waiting to be considered by the House.

Cross, who convened a Chicago meeting about gaming with the three other legislative leaders and the governor Wednesday, said the Senate’s gaming-for-capital plan “needs a lot of work.” “I’m not comfortable with three new licenses,” he said in a phone conversation Thursday. “Our caucus has had some interest in the increased positions, and I think reluctantly, as this process has evolved, is open to the Chicago idea.” He added there are a few House Republicans who like the idea of granting three new gaming licenses because it would give their downstate districts an opportunity to build one of the new riverboats.

Cross said the push for a capital bill isn’t about getting money for individual projects. “The roads need repair, the bridges, the school construction plan, the higher ed facilities — the needs are great. So it’s not individual member projects. It’s just the legitimate needs that exist around the state.” The focus of the caucus will be to agree on a way to generate about $1 billion for the state’s share of a $10 billion capital plan. Cross added, “I think with increased positions and Chicago that you can probably get there.”

Rep. Gary Hannig, a Litchfield Democrat and budget negotiator for his caucus, said lawmakers shouldn’t get their hopes up. Not only is approving three new casinos going to be a tough sell in the House, he said approving new licenses doesn’t produce immediate gratification. He said while the state would get an initial big check in exchange for a new license, it would have no idea when the gambling facility would be up and running or whether its revenue would live up to expectations.

He added the Senate’s revenue estimates from its gaming plan are “very optimistic.” “It really is just anybody’s guess about what this thing in Chicago could generate. I don’t know that we can make those kinds of dollars. And if we don’t, we basically borrowed a big bunch of money and ask some future generation to find a way to pay it off because we gave them an insufficient revenue stream.”

And then there’s Madigan, who may be for a Chicago casino under the right but unlikely circumstances. His spokesman, Steve Brown: “In terms of a city-owned casino that meets all of the city requirements, if that ever came up by itself, I assume the speaker would support it. No expectation it ever will.” He also cited the Senate’s gaming bill as an example of a typical plan that has kernel of an idea but gets bogged down by various demands and falls over on its own weight.

The speaker is considering scheduling public hearings to air out gaming proposals, but there’s no schedule or format for any hearings right now, according to Brown. The House first will focus on some $470 million budget cuts made by the governor last month. The fun begins Monday with a special committee of the entire House. The chamber is expected to override those budget cuts when it convenes for the annual fall session Tuesday.

Throughout the two-week “veto session,” the General Assembly also is expected to consider mass transit subsidies and Chicago property tax relief. But there’s no indication the regular legislative session will end there.