Wednesday, November 30, 2011

Lawmakers say budget deal fixed mistakes

By Jamey Dunn

A plan the General Assembly approved yesterday to shift money to and from various funds would correct what some lawmakers say were errors in the original budget they passed last spring.

The agreement that Gov. Pat Quinn and the legislative leaders reached yesterday was primarily meant to halt the looming closures of seven state facilities and the layoffs of almost 2,000 employees. However, additional money would be filtered toward human services programs, such as addiction treatment, mental health services and programs to combat homelessness. The plan would be paid for with money from Quinn's budget vetoes and transfers from state funds outside the General Revenue Fund.

Sara Moscato Howe, chief executive officer of the Illinois Alcohol and Drug Dependence Association, said that the original budget cut allocations for addiction treatment further than the House budgeting committee for human services intended. “We were reduced by about 25 percent when the budget came out in July, and that was not the intention of the legislature,” Moscato Howe said.

“It was essentially a math problem,” said Chicago Democratic Rep. Sara Feigenholtz, who heads the human services budgeting committee in the House. She said the committee was working off of last fiscal year’s spending numbers without accounting for an infusion of funds late in the fiscal year by Quinn to ensure that addiction treatment was funded through the end of FY 2011. “We found ourselves $28 million in the hole.” Feigenholtz said that the lump sum budgeting process that lawmakers resorted to for the first two years Quinn was in office made it difficult to track when and where Quinn may have shifted money. “Hopefully, now that we’re line-iteming our budgets again, these kinds of errors will not occur again.”

Feigenholtz said a cut to mental health services was also inadvertent, resulting from a much less complicated mistake. “The mental health cuts were a typographical error, frankly.” She said House members meant for the funding level to be approximately $143 million, but “somebody hit an extra one” and turned the number into $114 million. The House passed a trailer bill last spring to correct the issue, Feigenholtz said, but the Senate did not take it up for a floor vote. She said that before yesterday's vote to reallocate funds, the human services budget “was heading in the opposite direction than the committee had intended to move.”

Moscato Howe said addiction treatment providers had cut programs, laid off workers and extended waiting lists in the last six months because of what is now being described as an accidental cut. “We’ve been cut every single year. Without this restoration, we were down 50 percent from where we were in FY [20]09.” She said that addiction treatment has never been funded to a level that could offer “treatment on demand,” but she said new funds should help cut wait times for patients.

Feigenholtz said she hopes human services will stop being a primary target for cuts. While human services have seen some cuts during the current budget crisis, providers have also had several brushes with the possibly of debilitating cuts, only to have them scaled back at the 11th hour. “Human service providers, just like any businesses in this state, deserve predictability,” she said. “We have to get them off this roller coaster.”

Those hoping for more education dollars were disappointed by the plan approved yesterday. No funds would be put back into general state aid, which was cut under the House budget passed last spring, or school transportation funding, which was cut by Quinn’s vetoes.

“It would be wonderful if we could [restore general state aid funds],” David Vaught, Quinn’s budget director said. “That’s a policy objective of the governor he’d very much like to see addressed. …We’ve got a lot more to do on the education priorities.

“One hundred million dollars was vetoed out of the budget for education by the governor, and none of it was restored,” said Rep. Roger Eddy, who is a school superintendent in Hutsonville. “It was cut more than the other budgets.”

Eddy, who is the ranking Republican on the House education budgeting committee, pushed for more transportation spending in the FY 2012 that budget after Quinn had cut them from the FY 2011 budget. “All we’re doing is reimbursing districts for what’s required," Eddy said. But Quinn removed the money with his veto pen.

Eddy said that during negotiations for yesterday's deal,  downstate lawmakers went through a list of funds looking for the approximately $30 million they believe is needed to go toward transportation, and they offered to give up more than $20 million out of funds that are vital to downstate Illinois. Eddy pointed specifically to $4.5 million moved out of a tourism promotions fund, $6 million from the Downstate Public Transit Fund, $1.4 million from a conservation fund and $1 million from a fund meant to address the digital divide that were included in the overall budget plan that passed yesterday.

“It’s almost like a bait and switch,” Eddy said. “Bottom line is, I’m not sure we would have agreed to taking that money out of downstate funds if it wasn’t going to go toward education.”

Vaught said Quinn’s administration negotiated with Republicans in both the House and Senate. “This agreement was put together with both sides of the aisle,” he said. “We did something that they haven’t been able to do in Washington -- you know, actually get both parties to agree to do spending changes and reductions.”

Pension fund
One fund transfer, out of a fund that feeds the State University Retirement System, raised eyebrows yesterday. Money from that fund, which contains dollars brought in from unclaimed property, normally goes into SURS, and then any shortfall from the required payment is covered through general revenue funds. The original budget did not appropriate $95 million from that fund. According to Senate Democratic staff, the money was sitting idle and would not go into SURS without legislation to move it. Lawmakers voted to push the $95 million into SURS and shifted the $95 million from general revenue funds to other spending in yesterday’s plan. So after that shell game, the total amount of money that would have ended up in the pension system -- without lawmakers voting to add more -- is still there.

Tuesday, November 29, 2011

Tax plan fails while budget plan sails

By Jamey Dunn

In a session day that one legislative leader described as “ a mixed bag,” lawmakers approved a budget deal to keep state facilities open but failed to pass a tax incentive package geared at keeping businesses in the state.

 Legislators returned to the Statehouse today for a single session day that was scheduled for the explicit purpose of approving a tax break plan meant to appease the CME group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, and Sears. Both businesses have threatened to leave the state in recent months.

 But the two chambers were unable to agree on a bill. Yesterday, a House committee approved Senate Bill 397, scaled back version of previous plans that had been floated. However the Senate approved House Bill 1883 this afternoon. (Each chamber amended a bill from the other chamber and added its plan.) The Senate measure mirrors the House version except for a few important areas that became the sticking points that prevented lawmakers from finding an agreement that could clear both chambers today.

 “We just don’t have an agreement yet as far as I know,” said Senate President John Cullerton.

HB 1883, like  SB 397, offers about $200 million in tax breaks to CME and Sears. Both bills also include an extension of the research and envelopment tax credit and a reinstatement of the net operating loss provision in 2012 for losses up to $100,000.

However, the proposal from the Senate offers more tax breaks for individuals. Under SB 397 the earned income tax credit would increase from 5 percent of the federal credit to 7.5 percent in 2012 and 10 percent in 2013. The House version only calls for an increase of 7.5 percent. The Senate plan would link the personal tax exemption to the federal exemption, while the House plan would only tack on a flat $50 to the exemption. The House shot down HB 1883, with 99 “no” votes and only 8 “yes” votes. Cullerton said he doubts that the Senate would approve SB 397 because of the lower earned income tax credit.

Rep. John Bradley, who worked on SB 397, said many in the his chamber think the proposal from the Senate is too costly. He said his plan relies on a tax credit that is being fazed out and would not dip into general revenue funds in the near future. “We had created a package that we felt was sustainable without getting into general revenue funds,” he said. Bradley, a Marion Democrat, said the Senate’s larger earned income tax credit would cost about $50 million more than the House plan annually, and the personal exemption would be about $25 million a year.

Bradley announced on the House floor that he did not have enough support to pass his own plan. “At this point and time,we have reached a temporary impasse. This is not going to happen tonight,” Bradley said.  “We are prepared to come back as soon as there is an agreement and as soon as we are able to work this out in order to save the two companies that are threatening to leave and in order to try to provide relief to working families and relief to small business in Illinois. Unfortunately, that day is not today. Whether it’s tomorrow the next day or next week, we’re prepared to come back as soon as this is settled.”

“I think there’s ample time,” Gov. Pat Quinn said as he was leaving the Capitol this evening to catch a plane. Clearly the House and the Senate are deeply divided on the issue.”  Quinn said he thinks lawmakers should “take a step back.”

He added: “If you’re going to have any kind of tax relief package, it must have significant relief for working families — raising kids, working hard. That’s my fundamental bedrock principle. And unless that happens, there won’t be any action.” Quinn supported the Senate version of the tax plan.

“We are disappointed that today, the legislature was not able to reach agreement and pass a package that will help us remain an Illinois company,” Sears spokesman Chris Brathwaite said in a written statement.  “It is our hope that lawmakers will achieve a compromise very soon as our timeline for making a decision about our future by the end of the year has not changed.  We sincerely appreciate the efforts of many members of the General Assembly over the last several months on our behalf.”
The General Assembly did approve budget changes late this evening that are meant to avert the seven state facility closures and nearly 2,000 layoffs that Quinn announced in September.

Under the new plan, the facilities would remain open through the current fiscal year, paving the way for the governor’s plan to close some state facilities in what he describes as a slower and more deliberative manner.

“[The legislation] will enable us to create a sensible, reasonable, responsive and effective plan for moving people from state operated facilities into the community,” said Rep. Barbara Flynn Currie, who sponsored the budget plan in the House. Currie, a Chicago Democrat, said the proposal would not put state spending over the caps set with the income tax approved in January.

The plan combines money from the governor’s budget vetoes with cash transferred from various state funds and Medicaid reimbursements brought in from the federal government. The total amount of dollars shifted would be more than $270 million, and a strategy called “churning” is projected to bring in an additional $136 million in Medicaid dollars from the feds.  Just over $200 million is slated to keep state facilitates open. Additional money would be spent on human services and other programs that Quinn and some lawmakers did not want to see cut in the budget that was approved in the spring, including:

  • $30 million for mental health programs.
  • $4.7 million for programs to combat homelessness.
  • $8 million for indigent burials.
  • $28 million for substance abuse programs.
  • $33 million for Monetary Award Program grants for college students.
Opponents voiced frustration over the funds that were not restored. Rep. Roger Eddy, who is a school superintendent in Hutsonville, said it was “unfair” that money for transportation, which has been drastically cut in recent years, was not restored when state law requires schools to provide transportation.  Eddy, a  Republican, said the transportation cut hits downstate school districts harder than Chicago districts, which are mostly represented by Democrats. Eddy said downstate legislators agreed to shift money from funds for spending that did not end up in the final bill. “That money wasn’t used exactly the way we thought it was going to be used.” The plan passed with no debate in the Senate.

Kelly Kraft, a spokesperson for Quinn’s budget office, said Quinn is working to avoid all layoffs announced under his original closure plan. However, she said the state might have to work out agreements with unions for employees who have already been laid off.

“That, I think, was a great victory for the public that we are able to have adequate human services,” Quinn said. “Think back [to] last summer of how dire this was. We were able to, I think, rescue the people of Illinois from a budget disaster.”

Republican Leader Christine Radogno, who called the session a “mixed bag,” said Quinn should have been more actively involved in the tax plan. She said when the two chambers battle over an issue, as they have tended to do recently, Quinn should work to diffuse the situation and find a compromise. She said a deal was not reached today because of "a failure of leadership."

Monday, November 28, 2011

Lawmakers look at public campaign financing and corporate tax breaks

By Jamey Dunn

Illinois lawmakers might approve tax cuts to help keep businesses in the state, but they apparently are a long way off from shelling out state dollars to finance political races.

A task force created under the law that set campaign donation limits in Illinois is delving into other potential campaign finance reforms. Today during a legislative hearing, the group looked at public funding of campaigns.

Rep. Elaine Nekritz, a Northbrook Democrat, told the task force that she doesn’t think the recently enacted contribution limits will change much in the state. “While I voted for the campaign [contribution] limits … I don’t really think that they do anything to take money out of campaigns, and out of politics, and out of influence of government. So, I would say, ‘Yes, we did that.’ But that’s been done since the 1970s at the federal level, and I don’t see anything that’s removed the influence of money or reduced the amount of expenditures on campaigns on the federal level,” she said. “So I don’t think that there’s any need to wait to see what the impact will be in the state of Illinois.”

Nekrtiz said that she supports spending limits. However, she said “the U.S. Supreme Court is not headed in that direction. So we have to find an alternate method to get that done, and I think the next best thing is to create incentives for candidates to control spending.”

She said that during the current budget crisis, money is probably too tight for the state to offer public funds to political candidates. But she said lawmakers should have a plan for when the state is on better financial footing. “It’s critical that we have the dialogue and be prepared [for] such time as we can come up with a source of funding for public financing.”

However, Kent Redfield, an emeritus political science professor at the University of Illinois Springfield, said any plan to publicly fund governor or General Assembly races would not find enough support to become a reality. “If you are trying to get a system to substitute public money for private money, I don’t think there’s a political will to do that. The cost is just way too high, and I’m not even sure that it’s good public policy to try and do that. You’d be spending so much money to affect a very small number of races, and the rest of it would be going to people who were either going to lose or win regardless of how much money was there.” Redfield said many candidates in close races likely would not take public funds because then they would be tied to a set amount of spending. “There are states that finance their gubernatorial races through public finance, and there’s longstanding traditions, and it would be really bad form not to take the money. They tend to be smaller states where it’s a lot cheaper to run. But to institute that kind of system in Illinois would be very difficult.”

The federal government offers public funding for presidential races, and at least a dozen states have some sort of public funding system for elected offices.

Redfield said that instead,  Illinois should offer smaller grants to candidates who raise money from small contributions, which often come from private citizens. Redfield said such grants would “encourage candidates to raise money in small amounts and provide resources for people who otherwise would not be able to run.”

He added, “Those are positive things for the system, but they’re not game changes in terms of who control the House or the Senate.”

Redfield did advocate for public funding for judicial races, saying that the state’s judiciary may have “crisis of credibility” in its future. “The more that you get big private interests that are interested in the outcome of a judicial decision engaged in political campaigns, the more you’re going to call the independence of the judiciary into question, and that’s very corrosive. If people don’t accept the legitimacy of the courts, the foundation of the whole system is gone.”

Meanwhile, the House Revenue and Finance Committee approved a plan today that is geared at keeping two businesses in the state.

Senate Bill 397 would offer about $100 million in tax breaks to the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, and Sears, both of which have recently threatened to leave the state. Other breaks meant to benefit the business community at large, such as an extension of the research and development tax credit, are also in the bill.

The plan also includes an increase to the earned income tax credit and a $50 bump in the personal income tax exemption. The proposal would cost an estimated $250 million annually, which is scaled back from a plan floated last week that would have eventually cost the state about $850 million a year. A vote on the package is expected in the House tomorrow.

State will let couples in civil unions file joint tax returns

By Jamey Dunn

UPDATED: Equality Illinois released a statement regarding the Illinois Department of Revenue's decision on state tax returns. See below.

Illinois couples in civil unions will now be required to file their state tax returns in the same way as married couples. The new plan is a reversal from a previous policy, under which couples in civil unions could not file state taxes together.

The Illinois Department of Revenue had decided that such couples would have to file separately because they could not file their federal taxes together. Sue Hofer, spokesperson for the Illinois Department of Revenue, said the agency looked to New York, which legalized same sex marriage this year, when trying to find a way to allow couples in civil unions to file joint state taxes.

Hofer said partners in a civil union would fill out the federal form as if they were married, and then fill out the state form as a married couple.  The federal return would be sent only to the state, along with the state form, to be used as a dummy to base the state return upon. Those in civil unions would still have to file separate federal returns as single because the federal government does not recognize their partnerships. Couples who do not wish to file a joint return would still file as married but would be able to file separate state returns.

Hofer said joint filing for state taxes will not result in large tax benefits for couples -- the substantial benefit comes at the federal level for couples with disparate incomes. If one person has a much smaller income, it can move the household into a lower tax bracket than the individual was in. “In Illinois because we are a flat tax state, you really aren’t going to see any significant change to your taxes. … With the state, everybody pays a 5 percent flat tax. But there will be some benefits.” She said that exemptions such as for property taxes or education expenses, could be applied a couple’s total income instead of just an individual’s earnings.

Randy Hannig, director of public policy for Equality Illinois, declined to comment specifically on the change because he said the group had not received an official announcement from the department. However, he said he is “cautiously optimistic.” UPDATE: From a prepared statement released by Equality Illinois Monday night: "Since the beginning of June when same-sex couples first started entering into civil unions, no one could speak with certainty about how this new status would affect state tax policy," said Hannig. "We immediately reached out to the Illinois Department of Revenue and started the process of figuring out a solid solution to this problem. Illinois law specifies that couples in a civil union are afforded the same rights and benefits as married spouses, so why should same-sex couples' state tax status be any different?” Illinois is the 10th state, including the District of Columbia, to allow same sex couples to file joint tax returns, according to Equality Illinois.

Hofer said the department will work in the coming weeks to get the word out about the change so couples in civil unions know what to do when filing their returns early next year. “We realize we had to make a decisions before the end of the year,” she said. “We will be talking with advocates and folks that this will impact.”

Rep. Greg Harris, a sponsor of the law that legalized civil unions in the state, said he did not know whether the department had created a final policy on the issue. “I do know in having talked to tax partners in a number of major law firms ... that this change would bring us in line with what other states do,” Harris said. He said the problems the department had in sorting out tax policy for couples in civil unions highlight a disparity that exists at the federal level. Harris, a Chicago Democrat, said because the federal government does not recognize civil unions, couples will miss out on tax benefits and have to jump through “additional hoops” to file state taxes together. “There’s still an inequality in the way relationships between same sex couples are treated and the way relationships between opposite sex couples are treated.”

Tuesday, November 22, 2011

Study: Illinois is no longer a model for higher education

By Jamey Dunn

A new study found that Illinois’ higher education system, once one of the best in the country, has lost substantial ground in recent years

A Story of Decline: Performance and Policy in Illinois Higher Education found that between 1998 and 2008, there was a 10 percent drop in the number of high school graduates who enroll in college within four years of graduation and an 8.5 percent decline in the number of students who enroll in college directly after graduating.

Researchers at the University of Pennsylvania’s Institute for Research on Higher Education also found many factors that could lead to a college degree becoming less affordable in the state. “From 1999 to 2009, median family income in Illinois fell by 7 [percent] in constant dollars while tuition increased by 100 [percent] at public four-year universities and by 38 [percent] at public two-year colleges. At the same time, state support for need-based grants dropped from $1,036 to $745 per undergraduate full-time student, a decline of 28 [percent.]”

The study found racial disparities among Illinois college students. “Blacks and Hispanics and individuals with low incomes are far less likely than other Illinoisans to enroll in college or, if they do enroll, to earn degrees. For example, as of 2009, only 36 [percent] of black students and 44 [percent] of Hispanic students attending four-year colleges and universities were graduating within six years, compared with 66 [percent] of white students and 69 [percent] of Asian-American students,” said the report.

The report pointed to a lack of universal priorities in the state’s higher education planning, as well as the existence of few incentives for schools to increase performance in areas such as graduation rates and closing learning gaps. “The Illinois legislature, for its part, is seen as partisan and lacking consistent and substantive leadership for higher education. State leaders we interviewed, including state legislators, questioned the legislature’s ability to establish shared goals and priorities for higher education,” said the study. The study said that recent governors have not made higher education a priority, and political corruption has only made matters worse.

George Reid, executive director of the Illinois Board of Higher Education, said that the study is outdated. “My take on that study is that it might have been accurate two or three years ago, but it definitely does not characterize higher education in Illinois today.”

Reid said the Illinois Public Agenda for College and Career Success, a master plan released by the board in 2008, is an integral part of the turnaround. Reid said many of the problems pointed out in the University of Pennsylvania study are included in the agenda, along with the state’s plan to address them. “The legislature and [Gov. Pat Quinn] and all of us are now singing from the same hymn book,” he said.

Reid said the board is working to address the performance gaps found in Illinois’ higher education system. “We know we have two states of Illinois.” He said one state is filled with residents who have financial security. However, Reid said, “we have this underside of Illinois where people are not doing well — where they don’t have a job, and their economic outlook is not good. … What we found out in the public agenda is that if you have a college degree, that is the gateway of rising out of that underside.”

The authors of the report agree that education is the key to closing that so-called prosperity gap. However, they say the agenda needs more focus. “There are so many recommendations without a clear sense of the priorities,” said Laura Perna, a professor at the University of Pennsylvania and an author of the report. She said that especially during a budget crisis, state leaders must agree on a set of realistic priorities if the higher education system is to be led in a coherent direction.

The report cites funding cuts as part of the problem, and said the often staggering totals of overdue payments to universities have eroded trust between academic leadership and lawmakers. However, the report also said that the decline began before Illinois’ current budget crisis. “The state is also facing substantial fiscal shortfalls, but it is important to note that the decline in higher education performance began before the recent budget challenges; it is likely that increased funding alone will not improve performance.”

Illinois is looking to create financial incentives for schools to improve performance. In August, Quinn signed House Bill 1503, which is the first step to linking funding and school performance. The bill calls for a commission to create metrics to measure the performance of higher education institutions. Chicago Democratic Sen. Edward Maloney said that work on the metrics has been productive and he expects them to be released sometime next month. He said that one important detail has been to ensure that schools are not measured in an across-the-board manner, but that the system takes into account each institution's unique circumstances and mission. He said one way this might be accomplished is giving schools more credit for positive outcomes for students who have been determined as “at risk.”

Maloney, chairman of the Senate Higher Education Committee, said that the amount of funding linked to performance would likely be small at first. He said that one of the biggest challenges to the plan is the state budget. Maloney said the idea is to reward schools that are doing well, not punish schools that are under-achieving. But he said if higher education funding is cut or even holds steady, the end result would be punitive — taking away money from current funding levels — instead of a positive incentive — getting bonus funds for good performance. “The higher ed community has celebrated flat funding as a victory. That is unfortunate, but that’s where we’re at.”

Perna and her research partner, Joni Finney, who is also a professor at the University of Pennsylvania, looked at Illinois as part of a series of five state studies and plan to release data on other states in the near future. The project focuses on the possible causes of higher education outcomes in different states. Perna said that other states are struggling with issues similar to those facing Illinois. However, she said that the findings in Illinois are particularly disheartening because the state was performing very well in recent years. According to the study, Illinois was a leader on enrollment rates and college affordability during the mid-90s. “Illinois was once a state that people looked to as the model for higher education performance, as well as public policy and government, and it's not really any longer,” Perna said. She said that Illinois' more positive performance history is an indicator that higher education in the state could bounce back. “The potential is there, but there’s been a serious erosion. … Some profound things have to change.”

Wednesday, November 16, 2011

Several tax breaks are on the table

By Jamey Dunn 

Illinois lawmakers took a look at ways to change tax policy in the state as part of a package to keep companies that have threatened to leave.

Threats to leave the state from the CME group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, spurred work on a package that could offer tax relief to CME, other businesses and Illinois families.

Lawmakers are considering a number of tax tweaks meant to spur economic growth, including:

  • Changing the way the state calculates the tax bill for CME and other exchanges in the state by reducing the percentage of sales that are taxable. Currently, CME’s income tax is calculated based on all of its sales even though online trading leads to many of the sales going to customers outside Illinois The Illinois Department of Revenue estimates that this change would cost the state about $85 million in revenue.
  • Extending the research and development tax credit. The Department of Revenue estimates that this would cost about $40 million a year.
  • Increasing the Earned Income Tax Credit for working families from 5 percent of the federal credit to 15 percent over two years. According to the Department of Revenue, the increase would cost about $112 million annually.The department estimates 900,000 households or 2.5 million residents would benefit from the credit.
  • Reinstating the Net Operating Loss Credit that allows businesses to write off losses. It was temporarily removed under the tax increase passed in January. The Department of Revenue estimates that this would eat up about $275 million each year.
  • Reducing to $100 the fees companies must pay to become corporations, which can range from $500 to $750. The change would cost about $12 million in state and local revenue.

The plan would be paid for in part by decoupling from a federal tax incentive meant to encourage businesses to buy equipment. The plan allows businesses to deduct more of the costs of such purchases upfront, instead of spreading it out over several years. Illinois links its practices to the federal tax code, but if it were to “decouple” from the feds on this policy, the Department of Revenue estimates that it would mean an additional $571 million in revenue for Fiscal Year 2012, and another $354 million next fiscal year. These estimates are based on applying a decoupling retroactively back to January.

Many who testified today at committee hearing on the package said that such a retroactive action would be unfair to businesses that bought equipment under the current rules. John Stevens—owner of Stevens Implement Company, a John Deere dealership in Petersburg— said his sales have gone up 10 percent in the last year, and the increase has allowed him to hire more staff. The tax incentive, known as bonus depreciation, is “one of the major reasons we have seen our sales increase in 2011.”

Stevens said the change would pull the rug out from under companies that have made large purchases in “good faith” under the bonus depreciation plan. “Large investments like this must be planned well in advance to engineer, schedule and finance while considering all tax implications.”

Creating a package that can pass will be a difficult task. Legislators on both sides of the aisle support the idea of making some tax changes to spur the economy, but opinions differ on what is needed. Senate President John Cullerton introduced a plan that only targets exchanges, such as CME. Many Republicans did not support the measure, saying it was unfair to help out one large business when many small companies are struggling. Gov. Pat Quinn has backed an increase to the Earned Income Tax Credit since lawmakers were weighing tax increase options shortly after he took office. However, all of these tax breaks will suck up precious revenue in a time when the state is making cuts to education, human services and politically popular programs. The difficulty in weighing all these considerations likely played a part in the issue being pushed out of the regular veto session and into some specially scheduled session time later this month. Another hearing is scheduled on Friday, and the full House is scheduled to return to Springfield to take up a plan on November 29.

For more on the businesses lobbying the General Assembly, see the current Illinois Issues.

Tuesday, November 15, 2011

Catholic Charities to end fight over foster care

By Jamey Dunn

Catholic Charities has given up its fight to administer foster care and adoption services in the state of Illinois.

The Thomas More Society announced today that it plans to drop its lawsuit against the state. The organization argued that the state did not have the right to end contracts with Catholic Charities to provide adoption and foster care services.

The dispute was over placing children in the homes of couples who have a civil union. Church representatives said it went against the organization’s belief system to place children with unmarried couples. Catholic Charities pushed for legislation that would have allowed them to refer couples in a civil union to another adoption and foster care provider, but the measure was shot down in committee. Kendall Marlowe, a spokesperson for the Department of Children and Family Services, said the agency did not renew the contracts because representatives of Catholic Charities voiced the organization’s intention not to comply with the state’s new civil unions law.

Opponents to ending the contracts say that provisions in the civil union law itself should protect religious-based organizations in situations like the one Catholic Charities is facing. “The dismantling of Catholic Charities’ foster care ministry marks a tragic end to 90 years of foster care service by some of the most effective child welfare agencies in Illinois,” Peter Breen of the Thomas More Society, said in a written statement. “The Religious Freedom Protection and Civil Union Act only passed after specific assurances that the law would not impact the work of religious social service agencies. Specific protections for these agencies were written into the law, but unfortunately, Illinois officials refused to abide by those protections. This stands as a stark lesson to the rest of the nation that legislators promising ‘religious protection’ in same sex marriage and civil union laws may not be able to deliver on those promises.”

However, civil rights advocates argue that when an organization—religious or otherwise—goes into business with the state, it must treat everyone equally and fulfill all requirements set out by state law. “When a private organization — even a private religiously affiliated organization — performs what is really quintessentially a government function, such as screening foster homes for licensure or caring for the wards of the state, it must abide by the laws that bind the government. If the religiously affiliated organization does not want to abide by these laws, it should exercise its choice not to accept those government duties,” said Mary Dixon, legislative director for the American Civil Liberties Union of Illinois.

Sangamon County Circuit Judge John Schmidt ruled in August that Catholic Charities was not entitled to new contracts. “No citizen has a recognized legal right to contract with the government,” the opinion said. The Thomas More Society has filed an injunction trying to halt the end of contracts with Catholic Charities affiliates of the dioceses of Springfield, Joliet, Belleville and Peoria. But the group said it now plans to end its legal battle.

Friday, November 11, 2011

Veto session roundup

By Jamey Dunn

While Illinois lawmakers pushed some issues to additional session days scheduled later this month, they did pass a few substantial pieces of legislation.

Regional superintendent pay
The wait for paychecks will end for regional superintendents after Gov. Pat Quinn signs Senate Bill 2147. Quinn vetoed the funds for the administrators’ salaries, and while many have remained on the job, they have not been paid since summer. The measure draws from local revenues to compensate superintendents for one year. The bill also calls for a task force to study a potential consolidation of some of the Regional Offices of Education, which are run by the superintendents. Lawmakers expressed frustration with Quinn for cutting the funding for the superintendents' pay without a plan for who would take over their legally required duties, including school inspection and teacher certification. “We should be ashamed of the position that the governor’s veto has put us in,” said Spring Valley Democratic Rep. Frank Mautino, a sponsor of SB2147.

Quinn has maintained that local governments should pay for their salaries. A spokesperson for Quinn said that he plans to sign the bill.

Speed cameras
The city of Chicago could install cameras to catch speeders around parks and schools if Quinn signs SB965. The cameras would take a picture of the license plates of speeders who then would be mailed a ticket. They would not be charged with a moving violation. The offense would be on par with a parking ticket. And, like a parking ticket, the owner of the car, who may or may not have been driving at the time of the violation, would be responsible for the ticket.

Unemployment insurance
Legislators also approved a plan to address the state’s growing obligation to the federal government for unemployment benefits. The state has been borrowing money for the feds to keep pace with unemployment benefits paid out during the recession. The interest bill would have reached an estimated $240 million, which would have come out of general revenue funds. Under SB72, business will have to pay up to make the trust fund that pays benefits solvent. However, the interest payment and even larger penalties for businesses that would have happened if no action were taken, would be avoided. Companies that have not had any layoffs, nearly half of businesses in Illinois, would pay less. The plan passed with bipartisan support and the backing of the business and labor communities. “Many of us have campaigned that we want to help business out. … Well, here is your bill,” said Sen. Kyle McCarter during floor debate. Quinn also supports the measure. "We are in difficult economic times, and we need to bolster our unemployment insurance program to protect both workers and businesses," Quinn said in a prepared statement. “As we did with our workers’ compensation overhaul this spring, we brought everyone to the table to find a solution.”

For a comprehensive look at the unemployment insurance trust fund, see Illinois Issues November 2010.

House Speaker Michael Madigan said the House plans to return for session on November 29. Senate President Cullerton said his chamber would return before the end of the year to take up issues that were not resolved during the veto session.

Thursday, November 10, 2011

Quinn hopes to slow facility closures

By Jamey Dunn 

Gov. Pat Quinn’s plan to close seven state facilities may soon be put on hold, but layoff notices have already gone out to some workers.

Members of the General Assembly are in talks with Quinn about shifting funds to avoid the looming closures, which Quinn had planned to implement in the closing months of 2011 and the beginning of 2012. Kelly Kraft, Quinn’s budget spokesperson, said she expects an agreement to be reached when lawmakers return for an additional session beginning on November 29. The House announced last night plans to return to the Capitol later this month to work on a business friendly tax incentive plan that didn’t gel during the time frame that legislative leaders set for the General Assembly's fall veto session.

But Quinn has not backed away from the idea of closing state institutions. The new plan calls for the shuttering up to four centers for the developmentally disabled and at least two mental health centers.

The plan would transition about 600 of the 2,000 people with developmental disabilities in state institutions to community care settings.  Michael Gelder, senior health policy adviser to the governor said the transition would take two and a half years. Once the plan gets rolling, he said, about 20 people a month would be transferred according to individual transition plans based on assessments of their needs.

“As appropriations increase, we’ll be able to maintain these facilities over the course of this year. That is our goal,” Gelder said.

Gelder said the plan could result in closing more than two psychiatric hospitals by 2014. “That would be the minimum. We think we could do more with that planned thoughtful approach working with local hospitals and working with other community base service providers to prevent emergency psychiatric admissions that are now treated in our state centers.”

Kraft said the money to keep the facilities open would likely come from Quinn’s budget vetoes, which stand because they did not come up for a vote this week, and transfers from special funds — the same funds targeted by Senate Democrats as a revenue source during their failed attempt to add spending to the budget shortly after it passed. She said federal Medicaid dollars might also be tapped.

Union officials, who represent many workers at state institutions, were not impressed with Quinn’s new plan to close facilities in a slower and more deliberate manner. “Governor Quinn is under fire for his irresponsible push to cut mental health care, force people with severe developmental disabilities out of the homes they have chosen and destroy thousands of middle-class jobs. Spreading that pain out over the coming years doesn’t make it any less wrong,” Anders Lindall, spokesperson for the American Federation of State County and Municipal Employees Council 31, said in a written statement.

The Commission on Government Forecasting and Accountability voted to keep all seven  facilities open. Though many members said they thought some facilities should be closed, they objected to Quinn’s rushed timeline. Republican legislators, including House Majority Leader Tom Cross, have accused Quinn of targeting facilities in Republican districts. These opponents called on the governor to slow down the process and put all state facilities on the table.

“There’s a right way to close these places and a wrong way to do it, and I thought this was the wrong way,” said Rep. Kevin McCarthy, an Orland Park Democrat. “We are over-institutionalized in our state. We understand that. We want to move forward.” COGFA plays an advisory role in the process, but according to COGFA co-chair Sen. Jeff Schoenberg, no governor has gone against its recommendations on a facility closure.

While lawmakers argue that they want all facilities up for consideration, many members of COGFA say that it would be impossible to close either the Logan Correctional Center in Lincoln or the Chester Mental health center, which houses the criminally insane. “There are two facilities I think that we just couldn’t close, and it’s incumbent upon us to find the resources. One is Chester, one is Logan [Correctional Center in Lincoln,]” Rep. Michael Tryon, a Crystal Lake Republican, said at a previous COGFA hearing. “[Chester is] the only maximum security facility for the criminally insane and those who are not fit to stand trial. … These are not the kind or prisoners that we should put in Alton [Mental Health Center] or any other facility.”

The proposed plan to close Logan, which Schoenberg said “defies imagination,” involves housing prisoners in the gymnasiums of other prisons.

The new tack described by Gelder did not focus on correctional facilities, although Quinn’s original plan called for closing Logan and the Illinois Youth Center in Murphysboro. “We would rather spend less on maintenance of institutions and more on the people who are served in [them.] So we will move ahead with a planned thoughtful approach — stopping admissions, initiating assessments and completing care plans and transition plans that will enable us to serve and meet the needs of the people that we all want to meet wherever they are in the state,”Gelder said . “We will work with the General Assembly…to identify the facilities and prioritize those facilities. Not everybody is going to agree.”

Although members of Quinn’s administration say he wants to put the breaks on closures, the state sent out layoff notices earlier this month to 200 employees of the Tinley Park Mental Health Center. The layoffs would be effective December 3. Kraft said if legislation to shift funds is passed soon, it would save those workers’ jobs, but the state is obligated by law to give them layoff notices because the money is not there to pay them. If a plan is not approved soon, about 160 workers at the Singer Mental Health Center in Rockford would be the next to get pink slips.

Kraft said there are no plans to reinstate 21 Department of Agriculture employees who have already been laid off under the original closure plan.

COGFA co-chair Rep. Patricia Bellock said hearings held throughout the state on the proposed closures helped to raise awareness among lawmakers about the need to give more patients access to community based care. “Besides the 12 members of COGFA, at all those hearings, the local legislators were there. So now you have 35 or 40 legislators who are familiar with this process in Illinois of institutionalization and are ready to move forward with the [Quinn] administration on this in a serious way,” said Bellock, a Hinsdale Republican.

She added, “This will not go away.”

Wednesday, November 09, 2011

House plans additional session to finish business incentive plan

By Jamey Dunn

UPDATED ON NOVEMBER 10: Speaker Michael Madigan announced on the House floor today that members of the chamber will return for session on November 29. That is a change from last night's announcement of November 21. 

Lawmakers will likely be returning to Springfield later this month to wrap up a plan intended to keep businesses in the state.

As the legislative session was drawing to a close this evening, it was announced on the House floor that legislators should be prepared to return to the Statehouse for session on November 21. Veto session was originally scheduled to last through tomorrow. “It will be an opportunity for the House Revenue Committee to report a tax incentive bill,” House Speaker Michael Madigan said after the announcement. When asked whether the tax incentive package, which began as a plan to keep the CME Group from making good on threats to leave the state, would be addressed, Madigan said, “That’s the plan.”

A spokesperson for Senate President John Cullerton said Cullerton is “surveying his members” to see if they are available for more session days.

Cullerton introduced a bill that would cut taxes for the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade. CME representatives said the recent income tax increase would result in the company owing the state $158 million. Republicans demanded other business friendly provisions and said they would not support a bill that was geared to only one business. Sears is also looking for incentive to stay in the state. Since the introduction of the bill, wish lists from all sides have been piled on, and Madigan seems to be seeking more time to iron out a deal that can pass.

Additional session days would allow sponsors who have been unable to drum up support for their bills more time to try an find “yes” votes.

One such sponsor could be Skokie Democratic Rep. Lou Lang. Senate Bill 1849, a revamped version of a gaming expansion package, failed to pass today in the House. Lang said yesterday that he was seeking a veto-proof majority, but the bill failed to gain even the simple majority needed to move it over to the Senate.

Lang said the new bill was a better version of a gaming package that lawmakers approved last spring. “This bill provides less gaming and more oversight.” He said he took Gov. Pat Quinn’s complaints about SB 744, which Quinn vowed to veto, under consideration when drafting the new plan. But in the end, the sticking point is allowing horse racing tracks to have slot machines. Quinn is opposed and Lang and Waukegan Democratic Sen. Terry Link, who is the gaming point man in his chamber, say a gambling expansion cannot pass in the legislature without them. Quinn’s office did not respond to an inquiry about the governor’s position on SB 1849.

“The first thing that the governor said was, No help for our agribusiness people. No help for central and southern Illinois. 'No help for you. You’re on your own. You’re on your own. Oh, we’ll continue to cut jobs in your communities. We’ll close facilities in your communities,'” Lang said during floor debate. “It would make me angry if I lived in central Illinois.”

Lang attempted to tweak legislative frustration with the governor toward his favor, but in the end, it may have been Quinn’s opposition that pulled off of this new bill at least some of the original 65 “yes” votes for the larger gaming package approved in spring.

Madigan said Quinn’s opposition to slots at horse racing tracks and what most see as an inevitable veto for SB 1849, if it should pass, may have damped support. “That could dissuade people from voting yes.”

“Clearly several people who voted for this in May did not vote for it today. I had several members who voted no last time that told me that they were going to vote yes today,” Lang said. “We’ll get to the bottom of it and figure out if we can find the necessary votes to pass it by tomorrow.”

Lang said legislators should not allow Quinn’s veto threats to sway their votes. “That happens around here a lot. And that would be not a proper way to make legislation. We have a Constitution that provides for three coequal branches of government, and I would hope that legislators would not abdicate their responsibilities under the Constitution worrying about what [the governor] might do if we pass a bill.”

Other issues could bleed into extra session days. House Minority Leader Tom Cross has yet to call, SB 512, his plan to reduce pension benefits for workers hired before reduced benefits kicked in this year. The deadline has passed to override Quinn’s budget vetoes, which include a cut to Medicaid reimbursements for hospitals and an unpopular cut to funding for school transportation. Without a corresponding rate cut, the Medicaid reduction would essentially push bills into next fiscal year. The vetoes stand, so lawmakers may look to make budget tweaks in the near future.

House approves plan to pay school administrators

By Jamey Dunn

School officials who have worked for months without pay are one step closer to getting a paycheck.

The Illinois House today approved Senate Bill 2147, which would pay regional superintendents out of a local revenue stream. The administrators have not received pay since Gov. Pat Quinn vetoed the funding for their salaries last summer. However, many have continued to work. Regional superintendents' duties include inspecting schools, certifying teachers, training bus drivers and conducting background checks on job applicants.

The legislation's sponsor, Rep. Frank Mautino, a Spring Valley Democrat, called the situation “an embarrassment to the state of Illinois, and it needs to be corrected.”

The bill would allow for regional superintendents to be paid for one year, including back pay from the time they have worked without compensation, out of corporate personal property replacement tax revenues. The measure also calls for the creation of a task force that would make recommendations on potential consolidation of the Regional Offices of Education, which are run by the superintendents.

Mautino said that the plan would cost about $13 million. “It’s a one year hit of less than 1 percent, less than a penny on the dollar.” But local representatives of local governments say the real issue is not the price tag, it’s about the state shifting the cost onto local governments of an office created by the legislature.

Joe McCoy, legislative director for the Illinois Municipal League, said the move to pay regional superintendents from local funds falls into a larger pattern of the state looking to shift expenses to local governments during the current budget crisis. He said there is concern that some lawmakers are starting to view money from the personal property replacement tax as a “slush fund of the state of Illinois.”

McCoy said that although the provision that would end payment out of the tax revenue after one year does provide a safeguard, “it doesn’t really address our underlying concern, which is that the state is going to begin to cost shift onto local governments.”

The deadline has passed for lawmakers to override Quinn’s veto, so the bill appears to be the superintendents’ only hope. “We have to act today because an override is no longer an option. Because if we do not, the next time we will meet will be in January, and they will not have been paid for seven months,” Mautino said today on the House floor.

But some opponents said the General Assembly should not swoop in to fix a problem that Quinn created. "I don’t know how many times we’re going to have to keep cleaning up the mess that our governor is making. This is the mess that he’s created, and he’s asking us to fix it. We shouldn’t do that for him,” said Rep. Jack Franks, a Marengo Democrat. Franks was critical of Quinn for cutting the superintendents’ pay without a clear plan of who would handle their responsibilities, many of which are required by law. “If he didn’t think that the Regional Offices of Education were necessary, then he should have had their duties transferred to the state superintendent of schools, but he didn’t do that.”

A Senate committee approved the bill this evening, and supporters expect it to come up for a floor vote in that chamber tomorrow.

Tuesday, November 08, 2011

Pension changes still up in the air

By Jamey Dunn

A bill to overhaul pensions benefits for state workers was approved by a House committee tonight, but the measure’s future remains uncertain.

An amended version of Senate Bill 512 would reduce retirement benefits for workers hired before a new benefits system took effect in January. If the measure becomes law and survives court challenges vowed by unions, employees hired under the old system would be allowed to keep all the benefits they earned until the law goes into effect. After the law kicked in, they would have to pay more to keep their current or so-called tier one benefits, switch to the so-called second tier that contains any workers hired after January and offers reduced benefits and a later retirement age, or move their money to a savings plan similar to a 401(k).

Under a previous incarnation of the plan that failed to gain the support needed to pass last spring, the amount employees would have to pay to remain in tier one would have been recalculated every three years in order to reflect the real cost of tier one benefits. The proposal that House Minority Leader Tom Cross presented today would allow for a single recalculation after three years with any increase capped at a 2 percentage points. Cross said the change reflects a willingness to compromise and is meant address complaints that members of tier one would have difficulty planning around required contributions that could change every three years. However, he said without the additional recalculations, members of tier one will likely end up paying less than the actual cost of their retirements.

“The downside is that it doesn’t completely cover the cost of the benefits. I think you’ll hear from people who will say … it should be higher, and that was the rational for the original version. But in the legislative process, we try to hear what people are saying,” said Cross.

Supporters of Cross' plan said the state’s billions in unfunded obligations to the pension system would continue to eat up the budget, leaving little money for core state services such as education and public safety.

“Without reform, we must either watch as pension contributions crowd out all other state services … or accept responsibility for allowing the pension funds to fail,” said Tyrone Fahner, president of the Civic Committee of the Commercial Club of Chicago, one of the driving forces behind the pension reform push.

However, union officials argued that changes to benefits for employees hired under the old plan are unconstitutional.

“Whether it was corporate tax breaks or new programs — for decades these tax breaks and these programs have been paid for in part by putting off or ignoring pension payments due to these good workers," said Michael Carrigan, Illinois AFL-CIO president. “Pensions have become an issue because they weren’t a priority when spending decisions were made over the past decades. Had pensions been adequately funded down throughout the years, the recent economic downturns … could have been weathered.”

Opponents of SB 512 said that reductions in benefits would not automatically create reform in the system and questioned the lack of a guarantee in the bill that the state would make its required contributions. Rep. Karen May said she would like a so-called lock-box provision in the bill that would end the increased contribution levels for workers if the state fails to make its contribution.

May, a Highland Park Democrat, and Rep. Daniel Biss, an Evanston Democrat, said that they thought the proposal needed improvement. Biss said that since the effective date for SB 512 is not until July 2012, with most of the provisions kicking in even later than that date, lawmakers can work until the spring legislative session on a better bill. However, he said as of now, “there is not a clear counter proposal on the table.”

Biss added that he hopes working groups with representatives from all sides of the issue can come up with a more holistic plan. “I’m going to be for a major pension reform bill this spring. Period. If there’s nothing better on the table than Senate Bill 512, I’ll be for 512. I hope that’s not where we are.”

After the hearing, Cross declined to comment on his next move. He claimed in the first week of veto session that he has 30 Republican “yes” votes for the plan and said it was up to bill co-sponsor House Speaker Michael Madigan to supply 30 Democratic supporters and call the bill for a floor vote. When asked yesterday when he planned to call the measure, Madigan replied that the bill belongs to Cross. Senate President John Cullerton has said that he believes that the bill is unconstitutional, but he said he would allow it to come for a vote in his chamber if it passes in the House.

New gaming plan could cut out Quinn

By Jamey Dunn 

A sponsor of legislation to expand gambling in the state said he is looking for enough votes to override a potential veto from Gov. Pat Quinn.

Skokie Democratic Rep. Lou Lang sponsored Senate Bill 744, which the General Assembly passed last spring. Senate President John Cullerton used a procedural move to hold the bill to try to negotiate with Quinn. However, Lang said the strategy did not work. “Throughout the summer, there were many meeting held with the governor, but none of those meetings are what you would call negotiations. There was never a point in time that the governor chose to negotiate,” Lang said. “And so we were left with trying to figure out how to handle this.”

During a news conference shortly before veto session began, Quinn said he would veto SB 744 if it were sent to his desk. He also detailed some suggestions for rewriting the bill. He said he supported new casinos but would not go along with allowing slot machines at horse racing tracks. He also raised concerns about the oversight included in the original plan.

Sen. Terry Link, sponsor of SB 744 in his chamber, introduced another bill, SB 747, during the first week of veto session that he said was based on Quinn's suggestions. Quinn came out strongly against Link's proposal, and the plan has not been called for a floor vote.

Lang said he tired to take Quinn’s thoughts — as well as criticisms from Illinois Gaming Board Chairman Aaron Jaffe, newspaper editorial boards and others — into account when drafting a new gaming expansion bill, SB1849. A House committee approved Lang's bill today.

The measure includes slots at horse racing tracks but does not allow for slots at the Illinois State Fairgrounds or Chicago airports. It would reduce the number of gaming positions available to casinos from 2,000 in the original bill to 1,600. They currently are allowed 1,200 positions. The Chicago-owned casino proposed in the plan would be allowed 4,000 positions. Lang said any unused positions at a facility could potentially be transferred to another casino that would use them. “It is in the benefit of our citizens to have all of those positions used.” Lang said that it would be up to the Gaming Board to create the procedure for transferring positions.

SB 1849 does not include a controversial provision that called for the Gaming Board to issue temporary licenses within 60 days of application to bars and restaurants seeking video gaming. The proposal was meant to spur the board to implement video gaming, which was approved as part of the funding for the state’s capital construction plan. So far, no licenses have been issued and no revenue from video gambling has come in.

Lang said some lawmakers were uncomfortable with issuing the temporary licenses. His new bill calls for the board to begin implementing video poker before any new casinos can be licensed and before horse tracks can get a license for a permanent location for slots. However, they would be able to operate out of a temporary facility, such as a tent. Lang said he wanted to ensure that the board did not “skip over” video poker to begin work on a gaming expansion. “That could be one machine, it could be 10,000 machines, but they’ve got to get it up and running.”

Lang said the legislation should clear up concerns about oversight of the Chicago casino. He said the ultimate authority would belong to the Gaming Board. Quinn complained that the city would be allowed too much regulatory leeway under SB 744.

But Lang’s stated goal of finding 71 “yes” votes in the House — enough supporters to override a veto from Quinn — indicates that he is less worried about pleasing the governor with his bill and more concerned with getting as much support from his fellow lawmakers as possible. While Quinn has yet to take a position on the plan, Lang's goal shows that he is anticipating a veto. A spokesperson for Quinn said his administration is “reviewing the proposal.” Quinn has said numerous times that he opposes allowing slots at horse racing tracks. He has said that such a proposal allows for too much gambling in the state and would lead to the cannibalization of business from existing casinos.

Current casinos owners oppose Lang’s plan for that very reason. “We’re not opposed to a casino in Danville. We’re not opposed to a casino in Rockford, Chicago, the Waukegan area. … We are opposed to the facilities right next door to existing casinos,” said Tom Swoik, executive director of the Illinois Casino gaming association. Swoik said casino owners are not opposed to expansion as long as it is “reasonable” and in “new market areas.”

He added: “The state isn’t going to get the kind of money that they think they are going to get out of this. We’re just transferring gamblers from one area to another.”

But Lang said the bill would bring in roughly $1 billion in licensing fees in addition to future revenues from taxes paid by casinos and racetracks. “I think we’ve made a very good piece of legislation better; one that will raise billions of dollars for the state, one that will pay our old bills,” Lang said. “At a time when our unemployment rate has reached 10 percent, this is something that we must do.”

He said finding the backing for a veto proof majority is “not going to be easy,” and he is not above exploiting recent rifts between the governor and the legislature to rally the votes he needs. “I will use any legal means to get a veto proof majority to pass this bill.” He said Quinn’s proposal to close state facilities, his comments implying that campaign contributions influenced votes to override his veto on a smart grid plan and his refusal to negotiate about gaming caused some animosity toward the governor among lawmakers. “I think when the governor announced two weeks ago that he was not in favor of slot machines at racetracks, it made some people very angry. … I’m going to go to those legislators, and I’m going to get them angry.”

Lang said he hopes to call his bill for a floor vote tomorrow.

Monday, November 07, 2011

Plenty on the table heading into last week of veto session

By Jamey Dunn

When lawmakers return to Springfield to wrap up their veto session this week, borrowing to pay off the state’s backlog of overdue bills may be on the table, as well as several items of unfinished business from the session two weeks ago.

A new plan from Gov. Pat Quinn to borrow $4.5 billion to pay down some of the state’s overdue bills could surface this week. Quinn pitched an $8.75 billion borrowing plan in his fiscal year 2012 budget proposal, but it never gained traction. House Minority Leader Tom Cross said the idea of a smaller borrowing package came up in leader’s meetings last week and that Quinn voiced interest in engaging in some horse trading — Republican votes on a borrowing plan for his support of a business friendly tax incentive package. A spokesperson for Quinn said that the governor pitched the idea as part of an overall “jobs creation” package. Paying vendors could potentially halt layoffs and would inject billions into the state’s economy.

Rushville Democratic Sen. John Sullivan, who sponsored a package of borrowing bills, said legislators are coming around to the idea. “I’ve been talking to a lot of members and colleagues about the issue and trying to explain to them why we need to pay our bills. … And I feel that there has been momentum.” While some lawmakers may be warming to the idea, recent polling shows voters are not. A Paul Simon Public Policy Institute survey of 1,000 Illinois voters found that only 39 percent favored borrowing to address the backlog. The poll had a margin of error of plus or minus 3 percentage points. "If every dime of that borrowing package were dedicated to paying past-due bills and making pension contributions on time, it might be something citizens would be willing to tolerate," institute Director David Yepsen said in a prepared statement. "Even that would be a tough sell, since many voters thought the last round of tax increases were supposed to pay bills on time, and they don't feel that happened."

Sullivan said that he is not working directly with Quinn on a revamped plan, but he said he is willing to tweak his legislation in whatever ways needed to garner support. When Sullivan called a measure to borrow about $6.2 billion for a vote in the spring, it only got 19 “yes” votes. “I definitely think that we’re at a better place now than we were when the plan was introduced,” he said. At least one Republican vote will be needed in his chamber for borrowing legislation to pass.

Business package
Lawmakers will likely consider a second incarnation of a tax incentive package meant to keep large businesses in the state. Senate President John Cullerton sponsored a plan to offer a tax cut to the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, to keep it from moving out of state. Terrence Duffy, chairman and chief operating officer of the CME Group, starting making such threats after realizing that the company would pay more than $150 million in income taxes under the state’s recent income tax increase. During a committee hearing on the measure last week, Republicans said they could not support giving target breaks to one company. They said they wanted a broader relief package that would help out other businesses, too.

A revamped plan could offer relief to Sears, which has also threatened an exit, as well as some generally business friendly sweeteners, such as an extension of a research and development tax credit.

Collective bargaining
House Speaker Michael Madigan pitched a resolution that would allow the legislature to get involved in bargaining union contracts.

Under the plan, both chambers would agree to put a spending cap on how much the governor can offer public employee unions in wage increases under a new contract. Current contracts are set to expire in 2012. “What we’re talking about is about a two-and-a-half-year obligation on spending. Well, I think the legislature has a rightful place in this bargaining,” said Madigan when the resolution was read on the House floor two weeks ago.

Traditionally, the legislature has not been at the forefront of contract negotiations. But lawmakers became frustrated with Quinn after he promised no public union employee layoffs through the end of the current fiscal year. Quinn has since gone back on that promise by backing a plan for layoffs and facility closures. He also froze union pay raises included in contracts. Quinn said both moves are necessary because the legislature did not include enough money in the budget to cover personnel costs and keep basic services running through the end of the fiscal year. Union officials say that Quinn has violated their contract and are taking the state to court.

Cross went one further than Madigan, proposing an amendment that would halt pay increases until the state has had a budget surplus for two years. “Our priority is on the protection of jobs in this state and ensuring that we get our fiscal house in order above all else,” Cross said in a written statement. “We should not enter into any new contracts that guarantee wage and benefit increases at a time when the governor is talking about closing seven state facilities that serve those with mental health needs, at-risk youth, and house dangerous criminals.” The Republican leader has said the facilities Quinn want to shutter are primarily in Republican districts and accused Quinn of playing politics when choosing his closure targets.

Madigan called upon the House Revenue and Finance Committee to set the number for the cap. The committee may also consider Cross’ proposal. The House Revenue and Finance Committee has two hearings scheduled for next week. The first is scheduled for today.

Insurance Exchange
Legislators may also consider a pivotal component of the federal health care reform law. Illinois is working to set up its own insurance exchange, an online marketplace meant to drive down the cost of insurance policies by encouraging competition. Health care advocates are pushing for lawmakers to approve legislation that would determine who would serve on the board overseeing the marketplace and who would ultimately pay for the exchange. “We want the state to move forward, and we are optimistic,” said Jim Duffett, executive director of the Campaign for Better Health Care.

The major sticking point is who will be eligible to sit on the board. Advocacy groups want insurance industry insiders barred from holding any voting power, because they could potentially profit from board decisions. They say those in the industry should hold purely advisory positions. Duffett said the board should be made up of “health care experts, small business owners and consumers.” He likened allowing insurance professionals voting power to letting a fox into the hen house.

Representatives of the industry say their hands-on expertise is needed on the board to shape an exchange that works well in practice. “To suggest that insurance expertise should be prohibited on the board, as some have … we believe is analogous to suggesting that an aeronautical engineer should be prohibited from serving on the board of Boeing Aircraft,” said Phil Lackman, Illinois vice president of government relations for the National Association of Insurance and Financial Advisors.

The House Insurance Committee has a hearing scheduled for Tuesday. “We do believe that there will be some action taken on Tuesday,” Duffett said.

Supporters of a gaming expansion package are still looking for a plan that can pass in the legislature and get Quinn’s support. Quinn is opposed to Senate Bill 744, which passed last spring and would allow for five new casinos and slots at horse racing tracks. Quinn laid out his recommendations days before the veto session started, and Sen. Terry Link, sponsor of SB744, backed a bill that he said was based on those suggestions. Quinn did not agree and opposed the bill. Link held off on calling the legislation, SB747, last week and said he wanted to continue talks with Quinn.

This week, Quinn said that he was not engaged in negotiations on gaming. He said passing an expansion is not one of his priorities, but he is “open minded” about the concept. After meeting with Quinn last week, Cullerton told reporters that he was optimistic about finding a compromise. “I expect we will have a gaming bill going on next week as well. … We had a lot of productive input from the governor in ways in which we could correct the bill that we did pass. I can’t say we’ve narrowed the differences to agreement, but I think we’ve made a lot of progress. A lot of reforms suggested by the gaming board, we can incorporate into the bill.” More than half — 57 percent — of respondents in the Paul Simon Public Policy Institute survey said they backed expanded gambling as a way to bring in more state revenue.

Wednesday, November 02, 2011

Poll: Illinois voters have appetite for reform

By Jamey Dunn

Illinois voters support a variety of reforms to state government, ranging from tweaks to campaign finance rules to term limits for elected officials

The Paul Simon Public Policy Institute at Southern Illinois University in Carbondale today presented results of a survey of 1,000 registered voters — part of the institute’s annual poll. The results have a margin of error of plus or minus 3 percentage points.

Those surveyed strongly backed legislative term limits, with 75 percent saying they support limits of five consecutive two year terms for state representatives and three consecutive four year terms for state senators.

David Yepsen, director of the institute, said widespread support for term limits is an indicator of the public’s frustration with their state government. He noted that the Tea Party has supported term limits, and that issue could become the focus of such a populist movement in Illinois. “If I am member of the legislature, I’ve got to be thinking, ‘How do I get the fuse out of this bomb?’” Yepsen said.

He said he thinks term limits cut in on the democratic process by blocking voters from choosing incumbents once their time has run out, regardless of what the popular vote might be. Yepsen said that forcing out lawmakers with institutional knowledge and experience would leave new lawmakers to turn to staff members and lobbyists for the bulk of information. “Staff people have too much power as it is, and lobbyists have too much power as it is.”

However, Yepsen said, “There’s all kinds of reasons why term limits are a bad idea, but voters are so fed up and so exasperated.”

Charles Leonard, visiting professor and polling director for the institute, agreed that term limits may not be the best public policy choice, but he said that if the redistricting process in the state is not changed, that idea could find more supporters. He said because districts are often drawn to protect incumbency, “a lot of people who might otherwise not support term limits may see it as a desperate move to throwing the bums out.”

Respondents also backed several campaign finance reform measures, including changes to the rules for judges:
  •  61.4 percent favored limiting the amount of money that party leaders can give to other candidates.
  • 71.4 percent supported limiting the amount of money that people can contribute for judicial races.
  • 53.6 percent backed giving judicial candidates public funding for their campaigns.
Leonard said after an attempt to unseat Illinois Supreme Court Chief Justice Thomas Kilbride last year resulted in the most expensive retention bid in the state’s history and the last 25 years nationally, voters seem ready for changes in how judges’ campaigns are run. He said such big-spending campaigns bring the issue to a place where most voters cannot ignore it: their television screens. “I think there’s a clamor for the need for judicial reform when judicial races start to bring that sort of sludge into their living rooms that the legislative [races] bring.” Those attempting to oust Kilbride came under fire for controversial television attack ads. “I’m sure that it will turn people off, never mind it being terrible public policy that people who practice before [the court] can give them large sums of money for their retention.”

Leonard said judicial reform might be low hanging fruit for legislators because they could institute a change that does not apply to their own branch of government.

Voters who responded to the poll also supported reworking the way Illinois redraws its legislative maps every 10 years after the census takes place. A plan to overhaul the redistricting process failed in the legislature last year, and the League of Women Voters was unable to capture the needed signatures to get a constitutional amendment on the ballot to change the process. But the institute’s poll found that voters generally agreed with one of the primary components of the league’s proposal. About 65 percent of respondents said they were in favor of having a commission independent from the legislature draw the map. That number increased from 53.5 percent in favor of such a plan in 2010. Yepsen and Leonard agreed that the efforts to change the system, as well as media coverage of the legislature drawing new maps last spring, has put the issue on the voters’ radar. “I think our mass media culture is capable of keeping about four items on the agenda at any time given our short attention span, And it’s up there right now,” Leonard said.

Yepsen said another effort to put a new method on the ballot as a constitutional amendment could be successful, but it would take a lot of money and professional organization. “A ballot initiative in a state this size takes a level of sophistication that a bunch of well-meaning volunteers just simply can’t do.” However, he said attempts to get an amendment on the ballot, such as ones from the league and others, may eventually spur legislative change. “I think just the threat of these constitutional amendments might give reform-minded people in the legislature and legislative leaders reason to do something on their own on these things.”

Leonard noted that only about 15 percent of voters think the state is headed in the right direction. “I think there’s some potential for this dissatisfaction to coalesce around an issue.” Out of all the reforms those polled supported, Leonard said redistricting reform may be the most pivotal to changing state government. “I think it’s our best hope at getting reformed politics. “

Tuesday, November 01, 2011

Operation Board Games investigation winding down with Cellini conviction

By Jamey Dunn 

Springfield businessman William Cellini, a longtime Illinois political insider, was convicted on two federal felony charges today in Chicago.

Cellini was accused of attempting to extort campaign contributions for former Gov. Rod Blagojevich from Thomas Rosenberg, an investment firm owner and movie producer, in exchange for business handling pension investments for the state. Blagojevich was convicted on 17 corruption counts in June.

A jury found Cellini guilty of conspiracy to commit extortion and aiding and abetting bribery. He was found not guilty on two other charges, attempted extortion and mail and wire fraud.

Cellini’s lawyers painted him as and innocent go-between, saying he had nothing to do with any plans to squeeze campaign funds from Rosenberg but only delivered information to him. “We made our points. Obviously I’m very grateful that the jury appears to have agreed and at least has thrown out the most serious charges against Mr. Cellini,” Attorney Dan Webb told reporters in Chicago today.

“Shaking someone down and threatening them with loss of business is a crime,” U.S. Attorney Patrick Fitzgerald said today in Chicago. He said the conviction should make power brokers in Springfield and Chicago think twice before committing any illegal backroom deals. “The fact that Bill Cellini was convicted today sends a very, very loud message there.” Fitzgerald said that the investigation dubbed "Operation Board Games" — which led to the convictions of Blagojevich, his confidante Tony Rezko, Stuart Levine, who testified against Cellini, and others — is not officially closed because some defendants have appealed their convictions. However, he said he was not “predicting anything in the future” in regards to the investigation.  

“I think clearly the whole corruption problems that occurred under the Ryan administration and then under Blagojevich — we have to root out every single manifestation, and that’s what I’ve tried to do since January 29 of 2009,” Gov. Pat Quinn told reporters in Chicago today. “We’ve passed ethics laws. We’ve established strong standards of conduct, and we enforce them,”  Quinn said that “more than anything,” his “mission” is to “clean up Illinois government.”

More info on the Cellini trial see: 

Quinn: Gaming negotiations aren't taking place

By Jamey Dunn 

Gov. Pat Quinn said today that he is not negotiating when it comes to a gaming expansion in Illinois.

Quinn told reporters in Chicago today that lawmakers who want more gambling in the state have two options: Pass a bill based on his ideas; or send him the bill they passed last spring. “I’d be happy to take it, veto out the defects and flaws and put in the good important things and send it back to them,” Quinn said. In the hopes of working out a plan that Quinn and lawmakers could live with, Senate President John Cullerton used a parliamentary procedure to hold the bill from going to the governor’s desk. But when asked today if he was working on a compromise with lawmakers, Quinn said, “I don’t think the word negotiate is appropriate.”

He reiterated his call for Cullerton to send Senate Bill 744 to his desk. “This is rather unusual, to say the least, if you believe in what you voted for. Now if they want to send it to me, we’ll be very happy to apply my framework to their bill. And my framework will emphasize integrity and honesty.”

Quinn said he would support five new casinos but could not back allowing horse racing tracks to have slot machines. He said he wants more oversight of the proposed Chicago casino and he wants an option that would require local governments to opt into legalizing video gaming in some bars and restaurants. Legalized video gaming is one of the founding sources of funding for the state’s capital construction program. Quinn’s proposal would likely reduce potential revenues once the program was implemented. Quinn also wants to give the gaming board unlimited time to vet businesses owners seeking to offer video gaming. SB744 allows for probationary licenses for applicants 60 days after they apply.

Sen. Terry Link presented a bill during the first week of veto session that he says is based on the governor’s ideas. The governor did not agree. “The bill was not our framework," Quinn said today. "Charades and playing games on any subject are inappropriate, in my opinion. The legislature should be serious about its work. They tried to do a kind of a charade their last week, and we called them out on it.”

Link, who also sponsors SB744, said today that he has tried to pass a gaming expansion for years and has backed several different versions of the idea. “These we’re his ideas; these were his thoughts,” he said about the governor. “We weren’t trying to do a charade. We were trying to see if there was a will out there for this [to pass in the legislature. The point is that we’ve tried different ways — with or without the track, with the casinos owning the slots at the tracks. … We’ve tried every which way you could conceivably think of.”

Link, a Waukegan Democrat, said he held the bill, SB747, from a floor vote last week at Quinn's request. “The governor called and didn’t want it and [said] he wants to talk.” But Link said that meeting has not materialized. ‘We have done everything in our power to try to set up [meetings] and discuss these things. I just hope that the governor doesn’t get to this point where he wants to draw a line in the sand.”

Quinn explained today that while he is “open-minded” about gaming, it is not a priority for him.

“It is up to the legislature,” Quinn said. “My interest is not to promote gambling. That is not my foremost goal in Illinois. I don’t think you can gamble your way to prosperity.”