Wednesday, June 30, 2010

Medicaid funds may not come through

By Jamey Dunn

As many states, including Illinois, are poised to begin their new fiscal years tomorrow, governors are urging the U.S. Congress to approve billions in Medicaid funds that are already built into the states' budgets.

The American Recovery and Reinvestment Act temporarily raised federal matching funds on some Medicaid services from 50 cents on the dollar to 62. This increase is set to expire on December 31. A plan to extend the rate for six more months has passed both the U.S. House and Senate in different bills and has President Barack Obama’s backing.

However, the newest version of the plan was rolled into the embattled unemployment benefits extension bill, which may not pass before Congress takes a break from July 4 to July 14.

Illinois’ budget plan counted on that extension happening. Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Florida, Oregon, Hawaii, Idaho, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Washington, and Washington, D.C., were planning on getting the extension as well.

“I think we were right to assume the extension. But now that extension is in peril,”
said Pennsylvania Gov. Ed Rendell. His state would lose about $850 million in federal Medicaid funds if the bill is not passed.

Instead of presenting his budget cuts today, as reported Monday, Illinois Gov. Pat Quinn joined 10 other governors from across the country to call on Congress to extend the higher reimbursement rate by six months.

All the governors involved said they have made historic cuts to their budgets, and ending the higher rate would force them to cut into basic essential services such as education. “We have cut so much in so many areas, we would have to look at things we have never put on the table,” Michigan Gov. Jennifer Granholm, whose state will be out more than $500 million. She said if she cut all prescription drug assistance and long-term care facility funding in Michigan, it would only fill about half the potential hole.

New York Gov. David Paterson, who has already vetoed funding to programs he introduced when he was a state legislator, has threatened to veto education spending and legislative member initiatives if the extension doesn’t pass and legislators fail to address what would be about a $1 billion void in New York’s budget.

“It has broken our hearts to make these cuts. … Now, when we have reached the margin of our means, we ask for some assistance,” he said.

Quinn said the $750 million that Illinois was counting on for the next fiscal year could mean the difference between having a job and unemployment for some Illinoisans. “Our providers, many of them will be forced to shut down and lay off workers,” he said.

He said it was imprudent of Congress to cut back on funding during a time when more people need help covering their medical costs.

California Gov. Arnold Schwarzenegger, whose state would get about $1.8 billion from the proposed extension, agreed. He said it is wrong for Congress to mandate coverage levels but refuse to give states more funding when a recession makes demand go up.
“The federal government cannot have it both ways. … It’s simply unfair and will have devastating consequences.”

Medical providers may find it unfair as well. In order to get the elevated match, states had to operate on a 30-day payment cycle. States such as Illinois, which is months behind on payments to schools and social service providers, might not keep the providers at the top of the priority list without this incentive.

In the end, all of these states, because of shortfalls, planned their budgets around a substantial revenue source that had no guarantees of coming through. Now, they may have to rush to solve the problem. Some plan to call special legislative sessions in the next few weeks. Some governors, such as Paterson, will use components of the budget to try and cajole legislators into facing the issues.

Quinn’s Office of Management and Budget has yet to return inquiries about how Illinois will handle the possibility of about $7o0 million missing from the budget. It appears Quinn still hasn’t accepted the idea that $4 billion in borrowing he proposed to make the required pension payment may not become a reality. This new development could give him more reason to call the legislature back for a special session.

Quinn is scheduled to present his plan tomorrow morning for the lump-sum budget passed by the General Assembly. Tomorrow is the first day of the new fiscal year, and Illinois is heading into it billions short on funds but with no lack of uncertainty.

Monday, June 28, 2010

Supreme Court rules against Chicago handgun ban

By Jamey Dunn

In the wake of a recent drastic spike in gun violence, the U.S. Supreme Court ruled in favor of Chicago residents seeking to own handguns.

The city has banned handguns since 1982. The decision comes two years after the court struck down a similar ban in Washington, D.C., but that ruling didn't apply to any areas not under the jurisdiction of the federal government. Today's ruling determined that states and municipalities could not take away residents’ Second Amendment rights but does not bar the city from regulating gun ownership.

“The big deal about this case is that it applies to every municipality and every state government in the U.S.,” said Richard Pearson, executive director of the Illinois State Rifle Association. The association was a plaintiff in the case.

Mayor Richard Daley said the city plans to rewrite the ban in an attempt to make it legal.
"I'm disappointed by the decision, but it's not surprising," Daley said at a Chicago news conference. "We're still reviewing the entire decision, but it means that Chicago's current handgun ban is unenforceable, so we're working to rewrite our ordinance in a reasonable and responsible way to protect Second Amendment rights and protect Chicagoans from gun violence."

He also told the Chicago Tribune the ruling would prompt new regulation, and city officials are looking at ordinances passed in D.C. after that city’s ban was struck down. Some options up for consideration would be a gun database, which would track firearms from their manufacture through each step ending in sales to owners. Another possibility is requiring ballistic “fingerprints” of weapons to make it easier for law enforcement to match bullets with the guns that fired them.

Lawrence Solum, a professor of law and philosophy at the University of Illinois College of Law, says the rulings on both the Chicago and D.C. bans leave such options in a legal gray area.

“The Supreme Court provided absolutely no guidance to lower courts in the many legal challenges — some of which are already in progress — to gun control ordinances and statutes that are less restrictive than the 'handgun bans' invalidated [by these rulings]. It seems almost certain that the lower federal courts will apply a variety of inconsistent standards. This means that the Second Amendment will surely return to the Supreme Court in the next two or three years, as these cases work there way through the system,” he said in a written statement.

“We think it probably is just the start of the fight,” Pearson said. He added that the ruling might make legislators think twice about gun control laws and the potential court challenges they face. “When lawmakers anywhere start to pass a firearms law, they have to consider the Supreme Court ruling. It put the Second Amendment along with other rights, on an equal standing.”

Meanwhile proponents and critics of the ban both point to the recent uptick in violence in Chicago — almost 30 people shot last weekend, leading to three deaths, and more than 50 shot and 10 killed the previous weekend — to support their points. Those in favor of the ban say more guns will equal more gun crimes. Opponents say the violence shows the ban is not working and law-abiding citizens should be allowed handguns to protect themselves.

Chicago's gun registration program will accept handgun registrations today. While they have received several inquiries, no one had filled out the paperwork as of this afternoon.

Quinn to release budget plans Wednesday

By Jamey Dunn

Gov. Pat Quinn says he plans to release his plans for the budget, including where he will make cuts, on Wednesday, the last day of the current fiscal year.

Quinn says his top priorities are education and health care, which typically account for more than half of all general revenue spending. He said he also wants to protect public safety from deep cuts. If this holds true, it could mean human services, which make up more than 20 percent of spending from general revenues, could be facing cuts come Wednesday.

Quinn called out legislators for not giving specifics in the budget they approved last month.

“The General Assembly basically did not want to make any decisions on the budget they passed, a lump sum budget, and gave all those decisions to me, the governor," he said

Quinn is attempting to pressure the Senate to return to Springfield and pass about S4 billion in borrowing to make the state's required employee pension payment for fiscal year 2011. So far, there has been no indication that will happen. Quinn will not say if he intends to call legislators back in a special session attempt to get the borrowing passed.

Thursday, June 24, 2010

Quinn signs STAR bonds

By Jamey Dunn

Gov. Pat Quinn approved a controversial economic stimulus plan today that is meant to bring development to an area of southern Illinois with double-digit unemployment rates.

Senate Bill 2093 will allow Holland Construction Services to use Sales Tax and Revenue (STAR) bonds to fund up to half of the construction of a planned 400-acre shopping and entertainment complex near Marion. That will mean the sales tax dollars generated by the estimated $378 million development would help to fund its creation instead of going to state government. Fifteen percent of any new property tax revenue from the complex would go to area schools.

“We have a lot of folks in southern Illinois who need a job. And we want to help them get that job and keep that job,” Quinn said at a Marion news conference. “This legislation is going to help us create jobs — and real jobs that you can depend on; you can support a family on.”

The plan is a pilot program exclusive to this project. However, critics say it is only a matter of time before other areas want to do the same.

In the days leading up to the passage of the bill, Mount Vernon Mayor Mary Jane Chesley came to Springfield and testified that her city, about 40 miles away, would be hurt by the plan. She and Sen. John Jones, a Republican from Mount Vernon, asked that the town be included in the legislation, but the General Assembly did not comply.

Detractors say Illinois cannot afford to lose large chunks of tax revenue during a budget crisis, especially if projects similar to the one near Marion are eventually allowed to spring up throughout the state. The Illinois Department of Revenue estimated that STAR bond district alone would cost the state $287.5 million to $437.5 million in future sales taxes revenues.

But those in favor of the plan say the lost revenue is a tolerable trade-off for new business in an area that has historically relied on coal mines, many of which now closed, as a major employer and which has been hit hard by the recent financial turmoil.

Rep. John Bradley, a Marion Democrat, said people in his region have hoped for new jobs for years. “When I was a little boy growing up in southern Illinois watching the coal mines close, and as I grew up and we got older, we saw Maytag close and Circuit City leave, we always wondered if this day would come. We knew if we worked together, and we took a leap of faith, and we joined hands as a region, that we could do it.”

K-12 to take almost $300 million in cuts

By Jamey Dunn

The Illinois State Board of Education approved almost $300 million in cuts to K-12 education today.

The board had anticipated a $480 million shortfall from last year’s budget, based on the budget approved by the General Assembly. But Gov. Pat Quinn did allocate $194 million to bilingual and early childhood education, which the board had listed among its proposed cuts.

“There are federal requirements for districts to provide bilingual education and the state is strongly committed to providing early childhood programs,” Kelly Kraft, a spokesperson for Quinn’s Office of Management and Budget, said in a written statement.

The budget will maintain the foundation spending level at $6,119 per student.

“Those are the primary funds that districts really rely on, so that’s important,” said Mary Fergus, a spokesperson for the state board. She said the board wanted to avoid cutting programs that receive matching federal funds because that would result in losing those dollars, as well.

“What we had to do was go to some of our more flexible but still critical and important programs,” she said.

The budget zeros out funding for more than a dozen programs, including: arts and foreign language, agricultural education, advanced placement classes, alternative schools for at-risk kids and school breakfast.

While some might consider the numbers grim, Fergus said the one positive is that schools can now start planning their budgets and making decisions such as whether to rehire some of the thousands of teachers and staff who were given pinks slips earlier this spring.

She said that the board cannot yet predict how many educational employees will remain jobless in the fall, but she thinks earlier estimates of more than 13,000 layoffs will prove to be accurate.

Wednesday, June 23, 2010

Asian carp found near Lake Michigan

By Jamey Dunn

A single live bighead Asian carp was found yesterday beyond an electronic barrier meant to keep the invasive species out of the Great Lakes. The discovery could revive a legal battle to close Chicago’s navigational locks in an effort to stop a possible migration.

The Illinois Department of Natural (IDNR) Resources announced today that a commercial fisherman, contracted by the department to search for carp, caught the almost-20-pound male specimen in Lake Calumet—about 6 miles from Lake Michigan. This is the first carp found beyond the barrier.

Michigan Attorney General Mike Cox unsuccessfully appealed to the U.S. Supreme Court to close the locks to keep the fish out of Lake Michigan. He said thousands of jobs depend on the environmental health of the lake. Invasive animals can severely damage ecosystems they pervade as they compete with existing organisms for resources.

Cox called on President Barack Obama to intervene. "Our worst fears were realized with the discovery of Asian carp near the Great Lakes," Cox said in a written statement. "Responsibility for this potential economic and ecological disaster rests solely with President Obama. He must take action immediately by ordering the locks closed and producing an emergency plan to stop Asian carp from entering Lake Michigan."

Cox added that his agency is considering further legal action.

“At this time there is not intention to close the locks,” said Mike White, director of programs for the Great Lakes and Ohio River division of the U.S. Army Corps of Engineers. “At this time we see no reason, relative to the threat that has been identified, to take any step toward permanent lock closure.”

John Rogner, assistant director of the IDNR, agreed that one fish does not necessarily mean the threat has become more significant. He said carp DNA has been detected beyond the barrier, but no fish have been found, so the assumption has been that if there are fish, they are few in number. He said the discovery of only one carp would support that theory.

Rogner said the first task is to find out whether the fish is part of a greater population of carp. Tests may be able to determine if the fish has been in the lake for a while, or if it was recently introduced. Researchers also may also be able to find out if it was born in the wild or captivity. People dumping bait or stocking fishing areas can accidentally introduce Asian carp to waterways.

“We set out on a fact-finding mission, and we have found what we were looking for. This is important evidence, and the more information we have about where Asian carp are, the better chance we have of keeping them out of the Great Lakes,” he said.

The IDNR plans to step up its search for Asian carp both in the Calumet area and other spots throughout the Chicago Area Waterway System, as well as efforts to remove the fish downstate before they can reach the barrier. They will also begin a risk assessment analysis to help determine whether more action is needed to prevent the fish from reaching the Great Lakes.

Tuesday, June 22, 2010

Feds still want Thomson

By Jamey Dunn

Federal officials reiterated their intent today to purchase an Illinois prison by the end of the year, even if it may not be used to house terror suspects.

U.S. Sen. Dick Durbin and Gov. Pat Quinn announced in December that President Barack Obama’s administration intended to buy Thomson Correctional Center as part of a plan to fulfill Obama’s campaign vow to close the embattled federal Guantanamo Bay detention center. Inmates from Guantanamo would be housed in a dedicated area of Thomson, while the rest of it would be used for federal convicts.

Thomson, which is in northwest Illinois, has been virtually empty since its completion in 2001.

The plan stalled after losing support in Congress. A Senate committee approved a defense spending plan in May that lacked funding for the portion of the prison that would hold former Guantanamo detainees and be administered by the Defense Department and .

However, a letter from a Justice Department official sent to Durbin and Quinn on Monday lays out the Bureau of Prison’s (BOP) intentions to continue with the portion of the plan that would use Thomson as a federal prison.

“BOP plans to make certain modifications to the facility and hire and train a full complement of staff while the Defense Department continues to work with Congress to obtain authorization and funding for a portion of the Thomson facility.”

The bureau would have full run of the facility after it is purchased. Basically the part of the plan that involves housing terror suspects, which was the highly politicized and controversial aspect, has been put on the back burner, but the feds say they still need the prison. Illinois lawmakers who were opposed to the Guantanamo closure but also looking for any kind of financial stimulus in an economically hard hit area are probably breathing sighs of relief at the plan moving forward without that aspect, at least for the time being.

According to Quinn and Durbin, the sale would create about 3,000 jobs, half of which they expect to go to locals.

The BOP has more than 209,000 inmates in custody, up from 202,000 last year. Illinois faces its own crowding problem that has many prisons filled to double capacity, while a facility like Thomson has only seen a handful of prisoners because of a lack of funds.

Critics of the sale say Illinois should open Thomson to alleviate its own corrections system. Rep Jim Sacia, a Republican from nearby Pecatonica, said he has been trying every avenue to do just that since he got into office eight years ago, but the money just wasn’t and still isn't there. “If we couldn’t afford to open it then, don’t you dare get on your high horse and tell me we can afford to open it today,” he says.

According to the Department of Corrections, Thomson has been completely empty of prisoners and staff since the department shut it down May 1. Illinois and the federal government are conducting appraisals of the facility in anticipation of the sale.

Monday, June 21, 2010

Quinn signs payday loan regulation

By Jamey Dunn

Gov. Pat Quinn signed legislation today that is intended to keep payday lenders from slipping through a regulatory loophole.

The bill changes both the Consumer Installment Loan Act and the Payday Loan Reform Act. The General Assembly passed the latter in 2005 to place tighter controls on payday lenders.

The Payday Loan Reform defined such loans as lasting only 120 days. The idea being that a customer, who might be in a financial pinch, takes out the loan and pays it off out of his or her next few paychecks.

But according to consumer advocates, some in the industry used that definition as a way to skirt regulation. Extending the terms of payday loans meant they no longer fell under the regulatory power of the 2005 act. Instead, they could be defined as installment loans, which are regularly secured with collateral such as a car title and had no interest caps.

The legislation, which Quinn signed at a Chicago news conference, caps interest levels for installment loans at 99 percent for loans under $4,000 and 36 percent for loans above that threshold.

Payday lenders will not be able to charge more than $15.50 per $100 loaned out every two weeks. Brent Adams, secretary of the Illinois Department of Financial and Professional Regulation, says that is the most important aspect of the law because no matter how a loan is categorized, there will be limits on what lenders can charge for it.

Companies offering loans will have to determine a customer’s ability to repay the debt. They will also no longer be able to penalize customers for paying off loans early or require large lump-sum “balloon” payments at the end of a payment cycle.

During the news conference William McNary, co-director of the advocacy group Citizen Action Illinois, held up a contract for a loan at what he said was made at 700 percent interest. He said the new law will “set the stage for bringing an end to the era of legalized loan sharking here in Illinois.” McNary ripped the contract to pieces while concluding his statement.

Maywood Democratic Sen. Kimberly Lightford and Skokie Democratic Rep. Lou Lang, sponsors of the bill, said the negotiation process was long and arduous, but they were able to garner support from lenders. “The industry, I’ve got to tell you, wow, they’re tough. And we were able to negotiate and bring them all on board,” Lightford said.

However Attorney General Lisa Madigan said those strapped for cash still need to be wary of payday and installment loans and should exhaust all other options first.

“This law will help consumers who find that there is nowhere else to turn except a payday or installment loan. But please remember, extreme caution still has to be exercised when taking out a short-term high-cost loan. … People should only consider those types of loans in an emergency as a last resort.”

The new regulations take effect nine months from today.

Wednesday, June 16, 2010

Pension borrowing appears stalled

By Jamey Dunn

Gov. Pat Quinn said again today that he expects senators to return to the Capitol and pass a borrowing plan before July.

“We have until the end of the month for the Senate to gather their resources and their energy. But that’s what they’re paid for. The citizens of Illinois expect members of the Illinois Senate to vote on bills that affect the common good. So I am going to keep saying what needs to be said, that it’s important for the Senate to do what’s fiscally responsible and help the people of Illinois to save money,” Quinn told reporters after a Chicago news conference.

Quinn said yesterday that he thinks there is enough support in the Senate for a plan to borrow about $4 billion for the state’s required fiscal year 2011 pension payment.

Senate President John Cullerton made it clear when the Senate left town at the end of May that he expected Quinn to be the one to bring more votes onto the plan. He said the bill would not pass without bipartisan support and that it would take at least two Republican votes.

House Speaker Michael Madigan said on the same day that the pension borrowing was not absolutely necessary for the budget to work.

Quinn was able to wrangle at least one of the two Republicans who supported the bill in the House. Elmhurst Rep. Robert Biggins first voted no on the measure but changed his mind after speaking with the governor’s office while the rest of his party was in a caucus meeting. He has since faced backlash and a demotion, as has the other Republican to vote “yes,” Danville Rep. Bill Black. Both are leaving the legislature after this session.

Lynwood Democratic Rep. David Miller, who is also the Democratic candidate for comptroller, changed his mind about borrowing after speaking with Quinn on the House floor soon after casting his original “no” vote.

But two public appeals in two days may be a sign that the governor is having no such luck in private talks with Senate members.

When asked whether he would resort to calling a special session to get the chamber back for a vote Quinn said, “I would hope that wouldn’t have to happen. But we’ll do whatever necessary to make sure the process is working for the people … who deserve an Illinois Senate that listens to them.”

Cullerton spokesperson Rikeesha Phelon said there is no immediate plan for bringing legislators back to Springfield. “The Senate will be back in session when there is evidence of a positive roll call for the borrowing plan,” Phelon said in a written statement.

It is possible that when the budget arrives on Quinn’s desk—he says that will likely happen in the last days of the month—it will not contain a specific plan on how to make the pension payment.

Quinn says he will have to “act promptly” to make cuts when he gets the budget because the new fiscal year begins July 1.

Tuesday, June 15, 2010

Quinn signs telecom rewrite

By Jamey Dunn

Gov. Pat Quinn signed a rewrite of the telecommunications law in Chicago today that business leaders and industry insiders say will help bring jobs to Illinois.

The laws will loosen regulations on basic telephone services. The bill also guarantees that the state will not regulate newer technologies, such as cable telephone systems and broadband, for at least three years.

The bill will give companies more flexibility in price and the service packages they offer. Before the change, telecommunications companies had to get approval from the Illinois Commerce Commission (ICC) to change rates or offer a new package of products, such as Internet access coupled with local phone service. They then had to wait up to 45 days after approval to change a rate or launch a new promotion.

They can now do those things immediately. Companies claimed they needed the flexibility to compete in a fast-paced market. If one company releases a new promotion, its competitors would have to wait more than a month to catch up with similar offerings.

When asked whether telecommunications companies’ newfound ability to quickly shift rates and offer different service combinations might upset some consumers, James Zolnierek, director of telecommunication for the ICC, said they could always opt for the most basic packages because those prices are protected by the new law.

“There are safe harbor packages that the prices cannot be increased on. So consumers will always, at least for the life of the bill, will have the choice of going to those safe-harbor packages, where the rates cannot increase. It’s on the more dynamic products like the package services where you buy a lot of features and package it with other products where they will have more flexibility to do things quickly — lower prices, increase prices in some instances,” he said at the Chicago news conference.

Quinn said he would not have supported the bill without such “safe-harbor” protection for “basic, lifeline, low-cost phone service” with fixed prices. “We in Illinois, if we’re going to be prosperous, need to make sure that we have a modern, up-to-date, well-connected telecom system that includes broadband deployment and wireless technologies that are state of the art. But at the same time, we want to protect consumers. People who may be very happy with the phone services they have now, the landline phone. “

Pual La Schiazza, president of AT&T Illinois, says the law will help the industry create jobs, during times that are financially trying for for residents and state government, without any financial support from the public sector. “It will create jobs. It will keep jobs, and it makes Illinois competitive with its neighboring states. … It does incent more broadband investment; it helps to keep and create jobs. But it does it without any subsidies and without any tax credits. It’s good public policy that can be an economic engine for the state of Illinois.”

However consumer advocacy groups such as the Citizens Utility Board, which Quinn helped create, said the law might hinder rural areas’ access to technologies such as broadband.

For a comprehensive look at the telecommunications rewrite, see Rachel Wells’ article in the current (June) Illinois Issues on page 31.

Quinn expects Senate vote at the end of June

By Jamey Dunn

Gov. Pat Quinn fielded some questions after the telecommunications news conference. He told reporters that the General Assembly didn’t do its job on the budget, and he expects the Senate to be back by the end of the month.

“I do believe the General Assembly let the people down by not really engaging in the process the way they should. I think we needed more revenue in our budget. I think we needed the General Assembly to put their names on specific cuts that they were thinking appropriate. But instead, they delegated everything to me. And so I have a lump sum budget,” he said.

Quinn added, “We’re going to have to have some serious cuts in order to make it through.”

The governor said he has not ruled out the plan to borrow about $4 billion to make the state’s required pension payment for the next fiscal year, which begins on July 1. He said he fully expects the Senate to return in the last days of June for a vote. Quinn believes the bill has enough support to pass as soon as legislators get back from their vacations.

“I actually think there’s probably enough votes now. They have to get their vacations and all this and that in order. But I expect them by the end of the month to come together. I mean this is what government is about. If you get sworn into office to protect the common good and carry out the public interest, then you have to be there when it counts.”

Quinn said he hasn’t gotten the other components of budget yet, but he expects they will also come to his desk near the end of the month.