Saturday, June 30, 2012

Quinn vetoes money for prisons

By Jamey Dunn

Gov. Pat Quinn singed the state budget today, rejecting some of the money lawmakers included to keep state facilities open.

Quinn cut a total of $57 million from the budget that lawmakers approved in May.

Most of the cuts came from money that lawmakers included in the budget to keep state facilities open. “They’re going to be closed. I do believe that we have to see our budget as what our priorities are,” Quinn said in Chicago today. He vetoed $19.4 million for the super-maximum security prison near Tamms and $21.2 million for the women’s prison in Dwight. In addition to the prisons, he plans to close three transition centers meant to help inmates reenter society. The two prisons and the transition centers are scheduled for closure on August 31. He also cut $8.9 million for a youth prison in Joliet and $6.6 million for a youth prison in Murphysboro. The facility in Joliet is slated for closure on November 30, and the Murphysboro facility is scheduled to be closed on August 31.

Quinn said his administration plans to close the Tinley Park Mental Health Center and the Singer Mental Health Center in Rockford. His administration has already begun the process of shutting down the Jacksonville center and the Warren G. Murray Mental Developmental Center in Centralia. Lawmakers gave Quinn the flexibility in the budget to use the money allocated for those centers on a plan to transition residents to new homes if he opted to shut down the institutions. “These are difficult decisions but necessary,” Quinn said of the facility closures.

He voiced displeasure over cuts lawmakers made in the budget for the Department of Children and Family Services. "I’m not happy that the General Assembly cut the budget for the Department of Children and Family Services in my opinion by way, way too much, $50 million. I think that the cuts that I have made, $57 million, in this budget should be considered for reallocation when the General Assembly comes back.” He called on legislators to put some of the money he cut into DCFS. The governor has the power to cut money from the budget with his veto pen but cannot restore spending.

He noted that the budget reduces discretionary spending from last year’s levels. “We still have to maintain our priorities for children, for education, for public safety, for health care, for human services, but we have to do so in a lean and accountable manner,” he said. Quinn said the budget would pay off $1.3 billion of the state’s overdue bills. The total estimated backlog of bills owed by the state is about $8 billion.

 He again called for pension reform. Legislative leaders have decided to take a break from negotiations, which had stalled, but say they plan to start meeting again in a few weeks. “A large amount of the money that’s spent in the budget is devoted to paying for public pensions. This is something that we still have to grapple with to reform. I've had meeting after meeting, and I plan to have even more meetings to get our legislators to understand that we cannot continue on the path we are on with respect to public pensions.”

Quinn said that more budget changes are likely to come as he works with the legislature throughout the 2013 fiscal year, which begins tomorrow. During his time as governor, he has continually described the budget as a work in process. “A budget is not a one-day exercise. It’s 365 days in a fiscal year.”

Thursday, June 28, 2012

U.S. Supreme Court ruling on health care law lets states opt out of Medicaid expansion

By Jamey Dunn

The U.S. Supreme Court upheld most of the key pieces of the federal Patient Protection and Affordable Care Act but left the door open for states to opt out of the law's massive expansion of the Medicaid program.

 The court upheld the provision known as the personal mandate  geared at getting everyone in the country who can afford health insurance to buy it. The ruling said the mandate is constitutionally protected because the penalty for not complying with the law is actually a tax. In its main argument for the law, the Obama administration had put forth that the law is protected under the Commerce Clause of the U.S. Constitution, but the court rejected that contention.

The court ruled that the government does not have the power to force citizens to buy health insurance under the Commerce Clause. President Barack Obama’s administration had argued that the mandate fell under the federal government’s power to regulate interstate commerce. The court found that giving Congress the power to regulate inactivity — in this case not purchasing insurance — was a step too far. “The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Every day, individuals do not do an infinite number of things. In some cases they decide not to do something; in others they simply fail to do it. Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and — under the government’s theory — empower Congress to make those decisions for him,” wrote U.S. Supreme Court Chief Justice Roberts in the majority opinion.

Roberts wrote that just because the administration argued that buying insurance would have a positive outcome on commerce by potentially decreasing costs for everyone in the marketplace doesn’t give Congress the power to compel people to do it. “People, for reasons of their own, often fail to do things that would be good for them or good for society. Those failures — joined with the similar failures of others — can readily have a substantial effect on interstate commerce. Under the government’s logic, that authorizes Congress to use its commerce power to compel citizens to act as the government would have them act.”

However, the ruling said that the law presents uninsured American a choice: Get health insurance or pay a tax. “Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’ constitutional power to tax.” Roberts conceded that the tax is intended to compel action from consumers, but he wrote that such a move has been a component of taxation throughout the nation’s history. “None of this is to say that the payment is not intended to affect individual conduct. Although the payment will raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods in order to foster the growth of domestic industry.”

The ruling limited the federal government’s power to push states to accept the large Medicaid expansion that is part of the law. Under the Affordable Care Act, states are required to expand Medicaid coverage to all people under age 65 with incomes below 133 percent of the federal poverty line in 2014. Currently, states are only required to cover certain populations, such as children, parents, the elderly and the disabled. The federal government would cover 100 percent of expansion costs for two years and then gradually step down some of its support.

As written, the law required that states take on this expansion or lose all federal matching funds. The court struck down that provision, saying it offered states a false choice. “As for the Medicaid expansion, that portion of the Affordable Care Act violates the Constitution by threatening existing Medicaid funding. Congress has no authority to order the states to regulate according to its instructions. Congress may offer the states grants and require the states to comply with accompanying conditions, but the states must have a genuine choice whether to accept the offer. The states are given no such choice in this case: They must either accept a basic change in the nature of Medicaid or risk losing all Medicaid funding.” Roberts wrote that now states have the option to decline the expansion. “States may now choose to reject the expansion; that is the whole point. But that does not mean all or even any will. Some states may indeed decline to participate, either because they are unsure they will be able to afford their share of the new funding obligations, or because they are unwilling to commit the administrative resources necessary to support the expansion. Other states, however, may voluntarily sign up, finding the idea of expanding Medicaid coverage attractive, particularly given the level of federal funding the act offers at the outset.”

Robert Rich, director of the University of Illinois' Institute of Government and Public Affairs, said he is not surprised the court curtailed the federal government’s reach on this issue. “This ruling says carrots are OK; sticks are not,” he said. “I think it’s consistent with where the Supreme Court has come down on federalism in the past.”

Rep. Sara Feigenholtz, a Chicago Democrat, is optimistic that many states, including Illinois, will agree to the expansion. “I think that it’s going to be a rare case when a state says no,” she said. Feigenholtz, who spearheaded recent efforts to cut the state’s Medicaid liability by $2.7 billion, acknowledged that the law has become a political hot potato on both the state and federal level. “Yes, it is a states' rights issue, but I would hope that at the end of the day cooler heads prevail.”

Roberts distanced opinion from any commentary on the merits of the law. “We do not consider whether the act embodies sound policies. That judgment is entrusted to the nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions.” But the political fight over the federal health care reform law seems far from over.

Squabbling between the two parties has led to Illinois putting the creation of its online insurance marketplace, also part of the affordable care act, on hold until after today’s decision. Rep. Frank Mautino, a Spring Valley Democrat, told the Associated Press this week that the state will likely not meet the deadline to create its own insurance exchange and would instead have to partner with the feds on an exchange. Mautino chairs the committee that was established to create the state’s exchange.

Republicans on the state and federal level stepped up after today's ruling to blast the law, dubbed “Obamacare,” and call for its repeal. “While I respect the court’s decision, the health care law threatens our economic recovery by raising taxes, imposing new regulations and creating a drag on the economy,” Illinois Republican Sen. Mark Kirk, said in a written statement. “Congress should repeal the health care law and replace it with common sense, centrist reforms that give Americans the right to buy insurance across state lines and expand coverage without raising taxes, while blocking the government from coming between patients and their doctors.”

Illinois House Minority Leader Tom Cross, who pushed back against efforts to implement the law on the state level, said in a written statement: “We have made tremendous efforts this year in Illinois to reduce our state-run health care program because we could no longer afford to provide the services that were once promised. Today’s Supreme Court decision affirms a federal law that has the potential to pile billions of dollars of additional expenses into our state budget that we cannot afford. We are encouraging Congress to repeal Obamacare at the federal level as soon as possible, and provide Illinois the ability to administer an efficient Medicaid program."

Comptroller Judy Baar Topinka warned that the ruling will cost Illinois when residents who are eligible for Medicaid but never signed up rush to the program to avoid paying the penalty for not being insured. “There is no doubt that this will cost the state; the only question is how much?” Topinka said. “We have thousands of residents around the state that are eligible for Medicaid but have never enrolled for one reason or another. We expect they will increasingly come forward, and I urge lawmakers to start saving now for those added costs.”

Topinka estimated that the growth in Medicaid costs could total $2.4 billion over the next six years. “Illinois is a textbook example of what can happen if financial challenges are not proactively addressed,” Topinka said. “The state needs to learn from experience and take steps today to address the increased Medicaid costs that will occur in coming months and years.”

Health care advocates heralded the ruling as a victory and pushed for Illinois to implement the law. “Today’s Supreme Court decision helps to strengthen our nation’s tattered social fabric and provides hope that constitutional law and democracy matters,” Jim Duffett, executive director of the Campaign for Better Health Care, said in a written statement. “It is time for the obstructionists in the Republican Party in Congress and in Springfield, and a handful of insurance-industry backed Democrats in Springfield, to stop their crusade against Obamacare. It is time to put America and Illinois first, act like adults, and do something positive for a change that will help small businesses and hard-working Americans by implementing Obamacare. Meanwhile, we are urging Gov. [Pat] Quinn to immediately sign an executive order and begin implementing the new insurance marketplace so Illinois' hard-working families and small businesses will continue to enjoy the benefits of access to affordable, quality health care.”

Quinn today continued to call on state lawmakers to approve legislation to begin the creation of an exchange. However, he said that Illinois would likely partner with the federal government to create its exchange instead of doing it independently. “What we learned today is, the legal cloud has been eliminated. The U.S. Supreme Court, the highest court in our land, has said the Affordable Care Act is the law of the land, and we in Illinois plan to carry it out and make sure that people who need health care coverage, health insurance, are covered. That’s our goal.”

Quinn said he wants the state to adopt the Medicaid expansion in the law. “The state of Illinois is going forward with the president of our country, President Barack Obama, to expand using Medicaid [to offer health care to] those who would be covered under the Affordable Care Act. That is the law. We’re not backing down. We want to go forward. This is fully funded by the federal government beginning in 2014 and ultimately 90 percent funded." He said he hopes the state will "insure as many people as we can in Illinois who have fallen through the cracks.”  

Despite the heated rhetoric, Feigenholtz said she thinks the state can successfully implement the law, which she says will make life better for many. “I think millions of people across the state and people across this country will have greater access to affordable high quality health care.” She added: “I am frankly a little disappointed that we haven’t moved forward on this. But I think that today brings new hope. ... I think we can work through this. Hopefully tomorrow is designed to be better than yesterday.”

Wednesday, June 27, 2012

Guardians of Jacksonville residents ask for more transparency

A building on the campus of Jacksonville Developmental Center
By Jamey Dunn

As Gov. Pat Quinn’s administration starts to move people out of the Jacksonville Development Center, guardians of residents are calling for more oversight and an investigation into a former resident’s recent injury.

The American Federation of State County and Municipal Employees Council 31, which represents many of the workers at developmental centers, claims that a former Jacksonville resident suffered a broken leg, which required surgery, after being moved into a community setting. AFSCME claims that Quinn’s administration has moved residents out of Jacksonville with 48 hours notice and no previous visits to determine if residents will be comfortable in their new homes.

Quinn’s administration has said that the injury was the result of an accident, but critics question whether it was caused by a rushed transition plan. They are calling for an investigation into the incident. “I just don’t believe in coincidences. I just don’t believe there was a well-thought out plan for here,” said Rep. Jim Watson, a Republican from Jacksonville. “That’s what we’re asking is: Demonstrate to us, prove to us, that you really did think this out for this individual because I think this is an indicator that maybe it’s not working so well.”

Watson opposes the closure of the Jacksonville center, but he said he understands that Quinn plans to move ahead. Lawmakers appropriated money to keep the facility open, but they gave Quinn the flexibility to use the money on the transition if he decides to stick by his closure plan. “You’ve got a line item in the budget. You don’t have to rush this,” Watson said.

Parents and guardians of Jacksonville residents met with Quinn’s staff today to voice their concerns. “It seems like a haphazard approach has been used. There have been broken promises, not much in the way of transparency, and it seems like the whole truth is not being told to parents and guardians,” said one letter delivered to Quinn by the group today.

In addition to asking for an investigation of the injury, guardians asked that a special oversight panel be created to monitor the transitions of residents who are wards of the state. “It’s just rushed. It’s not in the best interest of [the residents.] The ones who are being moved out first are the wards of the state. There is no one looking out for them. These are people without family members. The oversight committee would be able to look at the transition procedures and make sure that they were done in a safe and adequate way,” said David Iacono-Harris, whose son lives at Jacksonville. He said such a panel would be made up of parents, advocates, caregivers and representatives from the Department of Human Services. “A whole mix of people, so we can actually see what is happening. And it hasn’t been pretty yet.” However, a spokeswoman for DHS said that the Office of the State Guardian is already fulfilling that role. She added that the department is looking into the reported injury.

Quinn’s staff listened to the guardians but reiterated the governor’s intent to close Jacksonville. “There’s no question that we share your interest in making sure that your loved ones are respected and cared for as this transition unfolds,” Ryan Croke, Quinn’s deputy chief of staff, told the group.

“We want to hear from the families. This is a collaborative process. But the bottom line here, the most important thing here, is that we want to improve life, the quality of life, for these people with developmental disabilities. Transitioning them into community based settings taking a focused person-based approach is the way to do that,” said Annie Thompson, a spokeswoman for Quinn.

But parents complained that the administration is not communicating with them. “I’ve not been contacted by anybody yet for a transition plan,” said Robyn Pannier, whose son, Benjamin, lives at the Jacksonville center.

While they group said it wants more oversight, ultimately most of them do not want to see the facility closed. Pannier, who said her 36-year-old son has the mentality of a 7-year-old, said that she does not think he will thrive in a community setting. “You wouldn’t take your 7-year-old child and put him in apartment with people to come in once in a while to check on him and help them out.” She said her son was arrested twice when he lived at smaller facilities because the staff could not handle him. “Community living does not work for us. Been there and done it. Ain’t doing it again.”

Tony Paulauski, executive director of the Arc of Illinois, said that the transition plan DHS is using could become a template for other states. “I think it’s a national model. It’s that good.” The advocacy group, based in Frankfort, recently gave Quinn an award for his efforts to move the state away from caring for the developmentally disabled in institutional settings. Paulauski said there are many positive examples of former developmental center residents benefitting from community care. “I’ve heard about some really neat success stories.” He pointed to a former resident who lives closer to his mother, and as a result, got to see her three time in one weekend and a former resident who got to indulged in his love for fishing. Those things would have been impossible in their former living situation, where “rules and regulations are like [those in] nursing home," he said.

Paulauski said that parents who are concerned have opportunities, such as informational sessions put on by DHS, to learn more. He attributes previous failures to placements that were not tailored to meet individual needs. “It’s a lot different than before. ... It’s not just a bed someplace.” He said that more than a dozen states have eliminated their institutions for the developmentally disabled and predicts that number will reach 25 in the next five years. “So this is going to happen in Illinois.” Paulauski said that parents and guardians need to accept the change and work to get over their fears. He said it is difficult but said that families that have already been through the transition could help. “There’s no doubt that everybody can live in the community with the proper supports.”

But Watson said it is Quinn who needs to be more proactive. He said the governor should establish a more hands-on approach when it comes to communicating with families and ensuring his plan is safe. “He needs to find out and not just take anybody’s word for it that, oh, it was done OK. He needs to dig down and drill down and find out. Because ... it’s his decision at the end of the day.”

For more on the debate over caring for the states developmentally disabled population, see Illinois Issues February 2012.

Monday, June 25, 2012

Quinn signs law reinstating prison 'good-time' releases

By Jamey Dunn

UPDATE: Gov Pat Quinn said on October 2 that the soonest the early release program would go into effect would be sometime after the end of this year. The Department of Corrections plans to have rules drafted for the program before the end of October.

Gov. Pat Quinn signed a bill that will allow Illinois prisoners to earn time off their sentences for good behavior. While Quinn says he is satisfied that the new law contains necessary reforms, some are concerned that the state lacks the manpower to monitor prisoners once they are let out.

“Ensuring public safety is my top priority,” Quinn said in a written statement. “This is good criminal justice policy and good public safety policy that will manage our prison population and make non-violent offenders less likely to commit crime in the future.” Quinn had suspended the Meritorious Good Time program after the Associated Press revealed that inmates, some of them violent offenders, were being released under the program after serving only a few weeks of their sentences.

The Department of Corrections had instated a policy dubbed MGT Push, which waived the a longstanding waiting period and allowed inmates to apply their credit immediately. This decision was made behind closed doors and was not publicized. The fallout from the MGT Push program was a scandal for Quinn as he was running for the governor’s office in 2010. Quinn pulled together a group of staff members and experts who released a report in 2010 suggesting reforms that should take place before early release was reinstated. However, Quinn dropped the issue,  and the program remained suspended for years while the state’s prisons faced overcrowding.

Advocates said that the suspension of an early release program was particularly hard on lower security prisons, where inmates that would likely be eligible for early release are housed. The John Howard Association, a Chicago-based prison watchdog group, found prisoners housed in a flooded basement in one of the state’s minimum-security prisons and housed in rooms with broken windows that let in birds, roaches mice and other pests at another minimum security facility. (For more on this, see Illinois Issues January 2012.)

“As of May 2012, Illinois housed more than 48,000 inmates in a prison system designed for about 34,000. While almost every facility struggles with its population, the worst crowding is in the state's minimum and medium security prisons, which house mostly low-level offenders. This kind of crowding endangers not only inmates, but also the thousands of staff that work in the state's correctional institutions,” said a written statement from the John Howard Association. The group called Quinn signing Senate Bill 2621 a “significant victory” that will help address the overcrowding at Illinois prisons and help to incentivize good behavior and participation in programs that reduce recidivism. “Every facility I’ve gone to, there’s been some staff member or administrator talking about not having this ability,” said John Maki, executive director of the John Howard Association.

The law places new restrictions on who can get credit for good behavior. It allows the DOC to consider an inmate’s entire criminal history and not just the crime he or she is currently serving time for committing —which is a change from the previous MGT program. Credit will be earned with good behavior as well as participation in programs, such as GED courses or life-skills classes, both in county jail and state prison. DOC will be required to report on the program both to the public and the legislature. Offenders must serve at least 60 days of their sentences in state custody before being awarded “sentence credit” and the maximum amount of time an inmate will be able to shave off of his or her sentence is 180 days. “We were very mindful of the criticism that came out of the Meritorious Good Time Push fallout. There’s some pretty significant transparency built into this law,” said Maki, whose group worked with lawmakers on the legislation.

 “This sentence credit law increases accountability in the state’s prison system by setting new guidelines in place that further strengthen the department’s ability to manage the state’s prison population. This law gives the department the discretion necessary to ensure that sentence credit is responsibly awarded only to eligible non-violent inmates who demonstrate positive behavior while incarcerated. This law gives [the] DOC the important discretion that it did not have before and, in turn, creates a secure system to incentivize good behavior,” Stacey Solano, a spokeswoman for the DOC, said in a written statement. Solano said the DOC does not yet have a timeline in place for when the program will be up and running. The department still needs to adopt rules and prepare for the changes in the law.

However, some are concerned that the DOC is understaffed and will not have enough parole officers to monitor those who are eventually released under the new law. “If they don’t hire more parole officers, there’s no way they could keep up with this,” said Gerald Raines, acting president of the Fraternal Order of Police Illinois Department of Corrections Lodge #263 based in Joliet. Raines said that parole officers are already spread too thin and lack the equipment they need to monitor all the parolees assigned to them. He said there is a shortage of vehicles, and officers sometimes must double up, making it next to impossible to cover the geographic areas they are assigned to. “There is not enough time in the day for them to do it because the state doesn’t want them to have overtime.”

He also said that the program would not go that far in reducing the state’s prison population. “It’s not going to relieve the overcrowding as much as they think it is, especially if they go ahead and close these institutions and the [adult transition centers] that he is talking about closing.” Quinn’s administration has confirmed that he plans to move forward with his proposal to close a super-maximum-security prison near Tamms, a women’s prison in Dwight and several halfway houses throughout the state. Inmates from Tamms and Dwight would be moved to other prisons, and the the DOC has acknowledged that the closure of the adult transition centers, which help inmates transition to life outside of prison, could result in some prisoners being sent back behind bars.

Rains said that he thinks reinstating an early release program is a good idea. “If they get the adequate amount of parole agents out there and everybody has the tools they need to work with, it would be great.” But he says the DOC would need to hire more parole officers and buy more equipment, including cars, computers and bulletproof vests, to ensure that parolees released under the program are properly monitored. “Somebody needs to check on them, and [parolees] need to know that they are going to check on them.” He said even if offenders are put on electronic monitoring, officers play a role. “They still have to have agents go and check where they are going to stay and break down the rules to them and go to check on them from time to time.”

 The DOC says it is restructuring its parole department in a way that would put the focus on more dangerous offenders or those more likely to reoffend. “Public safety is always our top priority, and the department is in the process of reorganizing the parole division, which will allow for a higher level of supervision for those who are paroled as a result of sentence credit,” Solano said.

Maki said that DOC will have to administer the program in a mindful way, especially since it is working with limited resources and little potential for substantial new spending in the near future. “Illinois is in a difficult spot,” he said. “It’s not going to open the floodgates. You’re not going to see thousands and thousands of inmates go out. That’s how we’re going to ensure we don’t overrun parole.” However, he said that the state should rethink some polices, such as sentencing laws, and considering prioritizing programs that are alternatives to incarceration, as well as programs offered to offenders once they are released. “I think this is the first step. A solution is going to be broad-based comprehensive prison reform.”

Thursday, June 21, 2012

Legislative leaders plan to put off pension talks

By Jamey Dunn

Legislative leaders are taking a break from their work on pension reform.

Republicans and Democrats have deadlocked of the issue of shifting pension costs to school districts, universities and community colleges. Republicans say that such a shift would result in increased property taxes. Democrats say that schools, which determine the salary that their employees' pensions are based on, should pay retirement costs instead of setting the pay and passing the pension bill off to the state.

They point to the fact that Chicago pays most of the cost for its teachers’ pensions. Quinn argued that a very gradual shift, over as many as 15 years, could be absorbed by schools without property tax increases. Republicans say that such a shift should be looked at in the overall context of school funding issues and is not necessary to enact pension reform that would begin to address the state’s estimated $85 billion unfunded liability.

Leaders have reportedly decided to take a five-week break from talks to study the cost shift and school funding issues.

Gov. Pat Quinn, who previously called for a bill to be approved by then end of June, urged them not to drag their feet. “I’m impatient with that. I don’t think politics should be what decides this issue,’ Quinn told reporters in Chicago today. “I’m pushing as hard as I can on [this] issue. I did it over and over again today, yesterday, and I’ll do it tomorrow, and I’ll do it every day to alert those who are in the legislation this is not something that you can run in place on. This is a time for action.”

Quinn was vague on the odds of the state experiencing a bond rating downgrade in the meantime. If rating agencies downgrade the state’s credit rating, it could cost more to borrow. Supporters of pension reform have used the specter of a potential downgrade to try and push action on pension reform. “I think there are some good things we have done this year ... so I think the credit [rating] agencies will recognize that,” Quinn said, referring to Medicaid reforms and state budget cuts. However, bond rating agencies have pointed to the state’s underfunded pension system as a possible reason for another downgrade. “Those are good things, but having said that, as long as this pension issue remains out there and not acted upon by the General Assembly ... as long as that is out there, it’s certainly going to affect the decision on our credit rating,” Quinn said.

Quinn signs bill to cut state funding of retiree health care benefits

By Jamey Dunn

Retired state employees will soon likely have to pay premiums for their health care, but there is no way for them to know yet how much they will have to shell out.

Gov. Pat Quinn signed Senate Bill 1313 today, which removes guaranteed subsides for retiree health care. Currently, most retired state workers do not pay premiums for their coverage. However, they do have other out-of-pocket costs, such as co-payments. Supporters of the bill say that the cost of the benefit was putting a strain on the budget and a burden on taxpayers. “Close to 80,000 state retirees do not pay a premium for their health care; we simply cannot afford that anymore,” said House Republican Leader Tom Cross. “I commend the governor and other leaders in the General Assembly for supporting this important reform that will bring more fiscal stability to the state. These new premiums will be negotiated by the administration and labor unions, who will come to an agreement that is fair for the taxpayers and the retirees.” According to Quinn, the benefit costs about $800 million annually.

However, it is nearly impossible to predict what this law would save the state. While it goes into effect in July 1, it is only the start of a multi-step process. Under SB 1313, Central Management Systems would choose an amount that the state would pay for retiree health care. That number would then go through the collective bargaining process and would have to be approved by the Joint Committee on Administrative Rules. Quinn has said he plans to have employees pay on a sliding scale based on their income. So, currently retirees cannot predict what they might be asked to pay in the future.

Quinn said the change will make the retiree health care program sustainable. “Those who have faithfully served the state deserve access to quality health care, and insurance costs should be more balanced and based on actual retirement income,” Quinn said in a written statement. “We also have a duty to taxpayers to ensure these plans are cost-efficient and put Illinois on the path to fiscal stability.”

But opponents say the law will make life difficult for retirees who are living on a fixed income and did not plan for the change. “This bill jeopardizes affordable health care for state and university retirees, Virginia Yates, president of AFSCME Retirees Chapter 31, said in a written statement. The governor saying his action ‘preserves health benefits’ is political double talk, and his claim that our health coverage is ‘free’ is false. In fact, seniors like me and 114,000 other retirees and dependents already pay $3,000 a year or more in co-pays, deductibles and premiums. By cutting retiree health care at the same time he’s handing out hundreds of millions in tax giveaways to big corporations, Governor Quinn shows his priorities are out of touch.” 

Wednesday, June 20, 2012

Unions and lawmakers push back on facility closures

By Jamey Dunn

State employee unions and some lawmakers are voicing their disappointment as Gov. Pat Quinn moves forward with the closure several state facilities.

 Quinn’s administration confirmed that plans to close a super-maximum-security prison near Tamms, a women’s prison in Dwight, a juvenile justice center in Murphysboro and a juvenile justice center in Joliet are moving forward. Three centers used to transition inmates back into society would also be closed. The facilities are scheduled to close by August 31, except the juvenile justice center in Joliet, which is scheduled for closure on October 31. (For a comprehensive look at the debate over closing Tamms, see Illinois Issues, June 2102.)

Lawmakers included money in the budget to fund all state facilities through the next fiscal year, and the Commission on Government Forecasting and Accountability, a legislative panel, refused to sign off on the closures when members voted during the regular session. However, the ultimate decision belongs to Quinn.

Legislators from southern Illinois, who pushed for putting funds in the budget to keep state institutions open, struck back at Quinn. “We all know that Illinois is facing a huge financial crisis that will require government to cut back and reduce spending. But if the governor wants to show he is serious about getting the state to live within its means, he should focus on all of the waste and mismanagement that occurs in Springfield and Chicago on a daily basis before handing out pink slips to all the employees at Tamms,” Rep. Brandon Phelps, a Democrat from Harrisburg, said in a written statement.

Union officials are also trying to push Quinn to change his mind. “The decision to close state facilities should not be based on political expediency. The budget sent to you by the General Assembly represents a positive intersection of fiscal and ethical issues: All of the proposed closures have dire consequences for the safety and well-being of real human beings — and all of them can be prevented. We urge you to take immediate action to stop the closures by publicly stating your intention to keep facilities open and maintain the funding levels designated by the General Assembly,” Henry Bayer, executive director of the American Federation of State County and Municipal Employees Council 31, wrote in a letter recently sent to Quinn. Lawmakers opposed to the closures and corrections workers also held a news conference outside of Lt. Gov. Sheila Simon’s Carbondale office today.

But Quinn’s administration says it has already participated in the listening portion of the process. “The governor’s decision to close several facilities was made after careful consideration and extensive deliberation with the Department of Corrections and the Department of Juvenile Justice. While we have heard many voices and participated fully in the COGFA process, the fact remains that the state can no longer afford these facilities if we truly want to address the state's budget challenges that have been created over decades of fiscal mismanagement,” Kelly Kraft, a spokeswoman for Quinn’s budget office, said in a prepared statement. Kraft said increased Medicaid and pension costs have squeezed out other spending and made the closures a budgeting necessity.

According to Quinn’s office, the closure will affect about 720 employees, but those workers will have a chance to move to positions at other state institutions. "We have also directed our two jobs agencies  —  the Departments of Commerce and Economic Opportunity and Employment Security  — to be on the ground in the affected communities to guide these employees through their transitions. They have a comprehensive and coordinated set of resources to provide direct, customized assistance to those facing unemployment to ensure they are matched with available job opportunities in the region or the training needed to secure a job,” said a written statement from Quinn’s office. “Both agencies will work with all employees by conducting workshops that will guide them through the unemployment application process, as well as assist with job search. DCEO and IDES websites will continually be updated with upcoming job fair information, available workshops and other changes that may impact employees.”

Illinois not alone in underfunding retiree benefits

 By Jamey Dunn

According to a new study, Illinois’ management of retiree pension and health care benefits is “cause for serious concern,” but the state is not alone.

The study from the Pew Center on the States ranked Illinois among a dozen states whose unfunded pension and health care liabilities raise red flags. The other states on the list were Arkansas, California, Connecticut, Hawaii, Louisiana, Mississippi, Montana, New Hampshire, New Jersey, New Mexico and Rhode Island. The analysis was a follow up to the center’s 2011 report, The Widening Gap, which looked at state’s pension plans for Fiscal Year 2009. The new study focuses on FY 2010. In the initial 2011 report, Illinois ranked as the state with the lowest pension funding level in the country, and the state held that unfortunate distinction again in FY 2010.

Illinois may be the worst, but it is far from alone when it comes to unfunded pension liability. The unfunded liability for state employee retirement systems nationwide totaled $757 billion in FY 2010, up from $660 billion in FY 2009. Experts say pension systems should be funded at 80 percent, but 34 states failed to make that mark. Illinois’ system was funded at 45 percent in FY 2010. Connecticut, Kentucky, and Rhode Island were all under 55 percent funded in FY2010.

David Draine, senior researcher for the Pew Center on the States, said that generally, the states struggling the most have skipped or shorted their annual pension payments. Illinois is among these states. “When states fail to make a required contribution and their unfunded liabilities grow, they pay for it later.” He pointed to New York and New Jersey. The Garden State skipped payments in recent years and now has a liability that is much larger than New York’s, even though New York’s pension system is much larger than New Jersey’s. New Jersey’s unfunded liability is $36 billion. New Jersey failed to consistently pay into its system from 2005 to 2010. But the state has taken some recent steps to address its funding problem. “New Jersey lawmakers approved pension benefit cuts in 2010 and 2011, including increasing employee and taxpayer contributions, reducing annual cost-of-living increases for current and future retirees, raising the retirement age from 60 to 65 for new employees, and cutting final compensation for new employees,” the report said.

As a contrast, New York made payments from 2005 to 2010, and its pension system was 94 percent funded in fiscal year 2010. However, that is a slip from when it was 100 percent funded in FY 2009.

Draine said that the pension funding problem is due to a combination of lawmakers increasing benefits with no way to pay for them, states skipping annual payments and pension fund investments suffering in the economic downturn.

Ron Snell, senior fellow at the National Conference of State Legislatures, said states have responded to their pension funding problems with “unprecedented” changes to their employee retirement systems. For the most part, states have cut benefits for employees hired after the change. Such changes would not affect those states' current unfunded liabilities. However, Snell said some states have targeted cost of living adjustments for current retirees, which would reduce the liabilities. Illinois lawmakers are considering reducing COLAs for current retirees. (For more on pension changes across the county, see this series on the Illinois Issues Blog: part 1, part 2 and part 3.)

Snell said it is hard to predict whether courts will uphold changes to benefits for current retirees or for employees hired before benefit cuts were voted in. “It’s a little early to be able to do a headcount on that.” He said courts in four states have upheld cuts to COLAs, but there will likely be appeals in three of those cases. He added that other high profile reform, such as recent sweeping pension reforms enacted in Rhode Island, will face court challenges, as well. “It will be several years before we have an answer.”

 The report also highlights underfunding of retiree health care benefits. In FY 2009, states had underfunded retiree health care by $627 billion. That number increased to $649 billion in FY 2010. Nationally, retiree health care is funded at about 5 percent.

According to the report, Illinois has an almost $44 billion liability for retiree health coverage. This spring, the General Assembly passed Senate Bill 1313, which could lower the state's contribution to retiree health care going forward. Retired employees would then pick up some of the costs through premiums. Gov. Pat Quinn was a vocal supporter of the proposal but has yet to act on the bill.

Draine said states have “by and large fallen short” on funding retiree health care.

Small-business groups battle over health care law

By Jamey Dunn

With a U.S. Supreme Court ruling on the new federal health care law looming, some Illinois small-business owners are pushing Gov. Pat Quinn to move forward on establishing an insurance exchange in the state.

David Whittaker, chairman of the health care committee for the Illinois Black Chamber of Commerce, said Quinn should issue an executive order to establish some of the basic components of the exchange, including the makeup of the board that would oversee it. Lawmakers failed to pass legislation in the spring session to set up the exchange.

“It is time for action and leadership. We cannot wait any longer,” said Whittaker. “We need this in Illinois, no matter what the Supreme Court may say later this month.” If Quinn were to issue an order, legislation would still be needed to codify many of the details. An online health insurance exchange would allow customers to comparison shop when looking for health insurance coverage. While most states are waiting for the ruling on whether the federal Affordable Care Act is constitutional before they set up exchanges, some states, including New York, California and Rhode Island, are moving ahead.

The Supreme Court is expected to issue a ruling on the law in the next 10 days. At the heart of the challenge  is the mandate that most Americans purchase health insurance or face a financial penalty collected by the Internal Revenue Service. The case against the law claims that the mandate is an unconstitutional overreach. If the court agrees with that claim, justices must also decide whether the rest of the law can stand without the mandate. For more on the case and the provisions of the law, see this post from Illinois Issues' series on health care.

According to a survey released Wednesday, many small business owners do not want to see the law shot down. Half of respondents said they want the law to go into effect with either no changes or some minor changes, and 34 percent said it should be overturned. More than half, 63 percent, said they would use a health insurance exchange to buy insurance for employees or they would consider using an exchange. The survey of 800 business owners with 100 or fewer employees in Florida, Illinois, Louisiana, Michigan, Missouri, New York, Texas and Virginia has a margin of error of plus or minus 3.5 percentage points.

Of the 100 Illinois respondents, 22 percent said that they would like the law to be overturned. More than half, 63 percent, said the law should be upheld. However, 48 percent said that the law needs some minor changes. The poll was released by an advocacy group run by small-business owners called the Small Business Majority.

 However, the National Federation of Independent Businesses, which represents small businesses nationwide, is the lead plaintiff in the case against the Affordable Care Act. NFIB joins 26 states in challenging the law. “If we win — and we think we will — NFIB and small business will have protected and saved a fundamental element of our freedom as Americans. It should come as no surprise that we were the group with the guts to take the risk and do the right things. After all, that’s what America’s small business owners do every day,” said Jean Card, vice president of media and communications for NFIB. The group also lobbied against the law when it was being considered in Congress and is now pushing for its repeal.

Jim Duffett, executive director of the Illinois-based Campaign for Better Health Care, said that he thinks the NFIB’s opposition is more about the group’s political views than what is good for small businesses. “I think there’s a strong political philosophical difference,” he said.

Duffett said that many people are misinformed about what the law would actually do and that President Barack Obama’s administration dropped the ball on educating the public. “The White House did not do a good job of really taking this to people.”

 Quinn supports the federal law, but he has not said what he will do if it is overturned. He has also ignored calls to establish the exchange through his executive power. “I hope they affirm the Affordable Care Act, and that’s what I go to bed at night praying for. It will make our country better,” Quinn said at a news conference this week. “If bad things happen, obviously we’ll talk about it then. But I think it’s important that we have a positive mental attitude.”

Monday, June 18, 2012

No middle ground found in pension talks

By Jamey Dunn

Gov. Pat Quinn signed legislation today that will add a level of oversight to the state’s pension systems, but it seems as if little progress has been made in negotiations over comprehensive pension reform.

Quinn signed Senate Bill 179, which creates the position of a state actuary within the auditor general’s office. The actuary will review estimates that each pension system makes about its returns on investments. “It’s an independent person who has that authority to make sure that the actuarial assumptions of each retirement system are correct. We want that not to be higher than it should be or lower than it should be. We want a second set of eyes to make sure that it’s accurate,” Quinn told reporters in Chicago today.

Supporters said the actuary will give lawmakers another source of information to draw upon when making decisions related to the pension systems or pension benefits. Lawmakers compared it to the budgeting process, where they have access to information from both the Governor’s Office of Management and Budget and the legislative Commission on Government Forecasting and Accountability. “[The actuary is] not going to go back to ground zero and redo the estimates. It really is a second look over the shoulder from the actuaries of the systems from the systems themselves.. … This really is just a second pair of eyes,’ said Chicago Democratic Rep. Barbara Flynn Currie, a sponsor of the bill. “We do the same thing in budget making. You can’t be sure what the next fiscal year is going to bring, so you make some kind of judgment call. And we just want to make sure that the judgment calls that we’re getting from the systems are as close to reality as the human mind can make them.”

At today’s news conference, Quinn leaned hard on Republicans today to accept a cost shift that would ultimately result in school districts paying the retirement costs for their employees. “We need to kind of close that discussion so we can put that final plan into the bill,” Quinn said.

Republicans called the provision a “poison pill” when it was included in a pension reform bill, and it was the issue that caused a stalemate on pension reform in the closing days of the spring legislative session. Republicans say that reform can be achieved without the cost shift. “We are, and obviously have been, committed to pension reform — the cost shift is not a vital component to this package that will save tens of billions of dollars in our unfunded liability,” Sarah Wojcicki Jimenez, a spokeswoman for House Minority leader Tom Cross, said in a written statement.

Republicans say the shift to local districts would result in property tax increases across the state as cash strapped schools try to find the money to cover the costs. But Quinn said the cost shift is needed so that school districts are accountable for the pension benefits their employees earn based on their salaries, which are decided by the districts. He said a shift that is phased in over as many as 15 years would not result in property tax increases. “When you look at the facts, it’s pretty clear that if you phase in a requirement that local school districts have to pay the future retirement costs of those who work for them — for those who they negotiate contracts with over a period of time — if you phase in that requirement of having to pay for their future retirement costs say over 12 years to 15 years, there is, I think, to my mind an imperceptible impact on property taxes. There is no impact on property taxes. And that’s just a fact.”

In the closing days of the session, Quinn backed a bill that did not have the cost shift and said the issue could be revisited later. But the measure did not find enough support in the House to pass. Quinn now seems to have lost patience with the negotiations that have been going on since lawmakers left Springfield at the end of the regular session. “All four leaders believe in the fundamental principle of accountability and responsibility. That’s just public finance 101, and I think everybody agrees with that. It’s implementing this phase in — that seems to be the key point,” Quinn said. “It’s beyond me how you could let this one issue hold up a fundamental overhaul of our public pension system that has been in the waiting for three decades. …We have a reasonable plan that, frankly, a lot of folks have worked so hard on this year, and it’s got one last provision to work on [and to] negotiate.”

Patty Schuh, a spokeswoman for Senate Minority Leader Christine Radogno, said that Republicans are not the holdup when it comes to pension reform passing. “We are and have been committed to pension reform in the state of Illinois. We’ve pushed it. We’ve been for a variety of proposals that are out there.” She said that Quinn has changed his tune about the importance of the cost shift. She noted that it was an “afterthought” in the governor’s own pension reform framework, which mentioned the cost shift but did not provide details on how it would be implemented.

 “The cost shift is not an integral part of this pension reform discussion. We have $60 billion to $80 billion in pension savings, true savings, on the table, and we ought to be capturing those savings and making the reforms that are necessary. Then at the appropriate time, we can have the discussion on school funding, and that’s where the cost shift discussion needs to be,” Schuh said. Both spokeswomen said that legislative leaders plan to meet with Quinn’s staff again on Thursday.

 Quinn today also said he is not pleased with cuts to human services in the budget lawmakers approved last month. He is particularly upset about reductions to the Department of Children and Family Services that he called “just not acceptable.” “I’m not happy with the work of the General Assembly in this area,” he said. “We will have more to say about that when we lay out our decisions on the budget, but we have to make sure that children come first in Illinois all the time.” Quinn said he plans to make his decisions regarding the budget before the new fiscal year begins on July 1. He can sign off on it, veto it outright or make reductions using a line item veto.

Thursday, June 14, 2012

Some Medicaid patients will soon feel the pinch of cuts

By Jamey Dunn

It’s official. Some Illinois residents on Medicaid will lose coverage or see their benefits rolled back after Gov. Pat Quinn signed a package of Medicaid reform legislation today.

Hundreds of thousands of letters have already been sent out by the Department of Healthcare and Family Services to notify Medicaid patents that they will no longer be covered for certain care, or in some cases, will no longer be offered Medicaid benefits. Most of the cuts will take effect at the start of the new fiscal year on July 1.

The changes include a reduction in the amount of household income that adults can make and be eligible for the FamilyCare program. Only those who make less than 133 percent of the federal poverty level, which is $30,660 for a family of four, will keep their coverage.

The law also eliminates the Illinois Cares Rx program, which helps low-income seniors pay for their medication.

Under Senate Bill 2840, Medicaid will no longer cover dental care for adults except in emergency situations. Group therapy for nursing home residents will also be eliminated. The department will limit access to certain services. Medicaid patients will only be allowed four prescriptions a month and eye glasses every two years. Prior approval from the department will be needed to replace or repair medical equipment, such as wheelchairs.

DHFS plans to hire an outside company to review the state’s Medicaid rolls and purge any recipients who are not eligible.

Supporters of the changes said they are needed to save the Medicaid program. Lawmakers voted last year to push billions in Medicaid bills from the current fiscal year into Fiscal Year 2013. A projection from the Civic Federation predicted that if no action were taken, the backlog of unpaid Medicaid bills would have reached $12 billion by 2017. “One of our most important missions in Springfield this year was to save Medicaid from the brink of collapse,” Gov. Pat Quinn said in a written statement. “I applaud the members of our working group and of the General Assembly, who worked together in a bipartisan manner to tackle a grave crisis. As a result, we preserved our health care program that millions of our most vulnerable rely upon.” Senate Bill 3397, which Quinn signed today, will phase out the practice of paying for Medicaid bills from one fiscal year out of revenues from future fiscal years. Illinois joins several other states that have made Medicaid cuts and reforms in recent years.

But advocates said cuts to services and tightening eligibility should have been a last resort. Jim Duffett, executive director of the Campaign for Better Health Care, said lawmakers should not have isolated Medicaid from the rest of the budget when making spending decisions. Quinn called on lawmakers to make a $2.7 billion reduction to the Medicaid liability. Duffett said Medicaid cuts should have instead been weighed against other spending, such as tax breaks for businesses. “We as a state have to decide what are our priorities.”

He argued that when implementing the plan, the state should first focus on taking away coverage from those who are not eligible, such as people who are not residents of the state, and then phase in a roll back in coverage for current Medicaid patients. “It’s just: boom!” he said. Duffett said the state is looking at its bottom line and not at what will happen to patients who will lose coverage at the end of the month. “Whatever their calculations are in terms of what they need to start saving is exactly what they’re doing. ... This is very aggressive.” He said officials should also be considering unintended consequences, such as patients losing coverage resorting to more expensive care in emergency rooms.
But Quinn said that the state has to move forward quickly with the changes. “It is difficult. There’s no question. But there are reductions and efficiencies that I think will serve everyone well. Everybody will have to understand that if we didn’t take the action today, we wouldn’t have a Medicaid system. … So we really had to act with dispatch and do some very difficult changes but necessary for the public,” Quinn told reporters in Peoria today.

Hospitals and nursing homes will see the rates they are paid for treating Medicaid patients reduced. Hospitals will see a rate cut of 3.5 percent. Nursing homes and other providers will see an average rate cut of 2.7 percent. Doctors, dentists, clinics, safety-net hospitals and critical access rural hospitals are exempt from rate cuts. The cuts and efficiencies to the Medicaid program combined with the reductions to provider rates will save the state an estimated $1.6 billion.

 The plan also relies on a $1-a-pack cigarette tax increase that goes into effect on June 24. The increase is expected to bring in $700 million with federal matching funds. The plan also includes a revamped hospital assessment, an accounting practice used to capture federal dollars and distribute money to the state’s hospitals. The new assessment will bring the state $100 million more in federal funds.

Wednesday, June 06, 2012

Rep. Derrick Smith faces House hearing

By Jamey Dunn

An Illinois House committee has decided that there is enough evidence for the full House to consider punishing indicted Rep. Derrick Smith.

“We were unanimous that his conduct was a breach of his obligation as a public official and felt it appropriate to send this to the next step,” said Rep. Elaine Nekritz, who was chair of an investigative committee tasked with determining if there was enough evidence to warrant punishment for Smith. Smith, a Chicago Democrat, faces one charge of bribery for allegedly accepting $7,000 from a day care center that  he believed was seeking a state construction grant. In reality, the center was not seeking a grant, and Smith was the subject of a federal sting. A criminal complaint filed against him includes transcripts from a wire worn by an informant. One such transcript is of Smith and the informant counting out the alleged bribe money.

Smith appeared before the House investigative committee in May and read a statement, but he refused to go under oath or answer questions. His attorney, Victor Henderson, took questions from the committee but  would not speak directly to the allegations against Smith. Henderson could not be reached for comment today. Elmhurst Republican Rep. Dennis Reboletti, who also served on the investigative committee, said that the committee was allowed to take Smith's unwillingness to answer their questions into account. “We’re entitled to infer something from his silence,” Reboletti said today at a Chicago news conference.

Now the issue will go before a panel of 12 House members. Rep. Jim Durkin, a Republican from Western Springs, and Skokie Democratic Rep. Lou Lang have been tapped to present the case against Smith. Henderson and Smith will have the option of being present and voicing any objections to the process. The panel will make a recommendation to the full House. They can choose to exonerate, censor, reprimand or expel Smith. Their ruling would then have to be approved by a two-thirds vote in the House. Under House rules, the panel must hold its first meeting within 30 days from today.

Reboletti, a former prosecutor, noted that the burden of evidence for the House to punish one of its members is not as strict as in a criminal trial. “This is not a trial to take away somebody’s liberty. We’re not going to put Rep. Smith in custody. We’re looking at the integrity and the ethics of the House, and so it’s a civil measure based on our House rules.”

 Federal prosecutors made it clear to the investigative committee that they would not share any evidence and also asked the committee not to do any digging on its own because it might interfere with the federal case against Smith. “I think we felt that we had what we were going to get, and we made a decision on the basis of what we had,” said Nekritz, a Northbrook Democrat.

Quinn wants pension reform in June

By Jamey Dunn

Gov. Pat Quinn said today that he would like to see pension reform legislation approved by the end of June.

“We have to sign a budget by the end of the month. I’d like to also sign pension reform," Quinn said today at a Chicago news conference. 

During the regularly scheduled legislative session, which ended Thursday, lawmakers were unable to agree on a plan that could find the needed support to pass in both chambers. Quinn and the four legislative leaders vowed to work out a proposal that they think can pass and return to Springfield over the summer. Quinn said today that he and the leaders are using the next few weeks to gather information. "We need actuaries and accountants and all kinds of experts to help us out here."

He said the group is focusing in on the concept of a cost shift, which would require school districts, universities and community colleges to take over all of some of the retirement costs of their employees. He said they are getting information from local districts, such as budget information and how much they currently pay toward employee retirement cots, to determine how different ideas might affect districts. “People can have different opinions, but you can’t have a different set of facts. We want to have a common set of facts.”

Republicans opposed the cost shift proposed by Democrats, which would have required school districts to eventually take on all future retirement costs for their employees. They argued that such a plan would result in property tax increases across the state. House Minority Leader Tom Cross pitched the idea of having schools pick up the retirement costs associated with any raises given to employees in their final years on the job. He did not call his legislation for a floor vote because he said it did not have the support to pass.

Senate President John Cullerton called for passing a plan that makes changes to retirement benefits for state employees and the General Assembly. The Senate has already approved such legislation, and the plan is free from the controversy of the cost shift. Cullerton said lawmakers should go ahead and pass what they can agree on now, and then revisit changes to the retirement systems for teachers and university employees when a compromise can be reached. "If we pass a bill in a bipartisan fashion that deals with 25 percent of [the pension shortfall] as soon as possible, it would go a long way toward showing the [bond] rating agencies that we are getting serious about this," Cullerton told the Springfield State Journal-Register.

But Quinn seemed unhappy with a piecemeal approach. “We’ve got a lot of ideas out there. I think it’s very important to understand that this issue cannot be delayed. It cannot be a partial solution,” he said today. Quinn said his office received a memo from the bond rating agency Standard & Poor’s that said the group was reviewing the state’s newly passed budget and watching to see what action is taken on pension reform. Rating agencies have threatened to downgrade the state’s credit rating if changes to the pension system are not made. A downgrade could mean that it would cost the state more to borrow.

Quinn also predicted that any proposal that does not ask schools to take on some of the responsibility for retirement costs could not pass in the General Assembly. “We can do this. We’re very close. We’ve agreed on many principles. We have one principle that we agree on, but we have to agree on the implementation of that principle. And we can do this if we work together.” He said that he and the legislative leaders plan to meet again in two weeks.

Tuesday, June 05, 2012

Lawmakers may revisit DNR fees this summer

By Jamey Dunn

Supporters of a plan to increase fees to fund the state's struggling Illinois Department of Natural Resources see the prospect of lawmakers returning this summer to address pension reform as an opportunity.

 A proposal to raise vehicle registration fees by $2, which would bring the cost to $101 annually, had the votes to pass if it would have been called for a vote in the Senate before the midnight Friday adjournment deadline. At that point, the proposal would have needed only a simple majority to be approved. The revenues from the plan would go toward funding the DNR, which faces about $750 million in deferred maintenance at the state’s parks.

But the bill was called for a vote after midnight and under Illinois Constitution needed a three-fifths majority to become effective prior to June 1, 2013. “I can’t put my finger specifically on why this [vote] was 12:05 a.m. because we were ready to go,” said Sen. Toi Hutchinson, a sponsor of Senate Bill 1566. “Had it been 11:48 p.m., that bill would have passed.”

The measure had passed in the House just hours earlier on May 31. “I felt bad that I couldn’t carry it over the finish line,” said Hutchinson, an Olympia Fields Democrat. She said the bill was the product of negotiations from several interest groups and had a broad coalition of backers. “You never see these groups in the same place at the same time. You don’t get the Illinois Coal Association with Sierra Club. You don’t get bicyclists with ABATE. You don’t get the Illinois Oil and Gas Association with the Environmental Law and Policy Center. It just doesn’t happen.”

The proposal would also allow the DNR to charge out-of-state visitors park entrance fees and charge all visitors access fees for certain park features, such as beaches and horse trails. A previous plan of charging entrance fees for all park visitors was scrapped in lieu of the proposed increased vehicle registration fee. “If you live in Illinois and you have an Illinois plate, it’s open season. Go to any park you want to,” Hutchinson said of the plan. DNR officials say they are looking for “sustainable” revenue sources outside of the state’s General Revenue Fund — which is being squeezed by other priorities, such as growing pension costs. DNR is funded from several other funds outside of GRF and some are running low. “What we have is a very sound package that will help DNR get through its next set of issues with the budget. We are essentially running out of time with our other state funds, and these will help us have a sustainable business model," said DNR Director Marc Miller.

Republicans who voted against the bill argues that Democrats have pulled money out of the DNR program to spend elsewhere. “That’s been a policy choice. This wasn’t some irresistible, unchangeable movement that we were faced with, so now we have to go once again and dig even deeper into people’s pockets,” said Sen. Dale Righter, a Mattoon Republican. He said they should cut elsewhere and use that money to save the parks. “That’s not right. At some point you just have to say no. Fund the parks. They are in horrible condition.” Under Gov. Pat Quinn, DNR costs have been shifted out of general revenue fund spending and into other funds.

Chris McCloud, a spokesperson for DNR, said the vote took place on “kind of a disappointing day” for conservation and the department. However, he said that DNR officials are optimistic about making another attempt at passing the plan. “It was not a loss,” he said. Both McCloud and Hutchinson are optimistic that the measure can find the support needed to pass. The bill fell short by three votes on June 1. “It was very clear to us that people understand what’s at stake for this agency and for those people that depend on it. I think we’re going to have another opportunity to put this before the legislature,” McCloud said.

 Hutchinson said lawmakers may have a chance to take up the issue again if they return to session to consider pensions reform legislation. Efforts at pension reform fell short in the regularly scheduled session. Quinn and the four legislative leaders plan to meet tomorrow to try to start work on hashing out a compromise that can pass in both chambers. Quinn said lawmakers would need to return to vote on a proposal in the near future.

McCloud said that DNR is not considering closing any parks yet but is instead trying to use the staff and resources it has as strategically as possible. “I don’t think we’re prepared to go that far at this point,” he said. “Certainly there’s going to have to be some tough choices made if we can’t get some sustainable funding, [but] right now we’re not pushing the panic button.”

Friday, June 01, 2012

Quinn continues to push for pension reform

By Jamey Dunn

After lawmakers failed to approve a pension reform plan during their regular session, Gov. Pat Quinn said today that he plans to meet with legislative leaders next week to hammer out a plan that can pass in both chambers.

 "The epic reform of all the most important things we have to do, and really the reform of our lifetimes as far as I'm concerned, is pension reform, and we still have work to do on that," Quinn said. "I think it's important that everyone know that we're racing the clock, that we must get this done as soon as possible. The [bond] rating agencies are poised to decide upon our work, and we must get to work."

Quinn and legislative leaders have voiced concern that bond rating agencies will downgrade the state's credit rating if a change to the pension systems is not accomplished soon. "What's clear from the legislative action yesterday, there's not a majority in either [chamber] yet for a comprehensive solution," Quinn said. "I think we have the elements. We are very close, but we're not there yet. And so, my mission is to focus on that issue so we can get the job done for the people of Illinois. It will make our state a much stronger state." 

Quinn said he thinks that Democrats and Republicans both agree with the "core principle" that local school districts, universities and community colleges have a stake in the cost of retirement benefits for their employees. "It's how to implement that principle that we're still having the negotiations on. Democrats proposed that the schools assume the cost of the pension systems gradually over multiple years.The state would be responsible for the more than $80 billion unfunded liability, but schools would pick up any future liability that might occur. Republicans said the move would result in property tax increases across the state. House Minority Leader Tom Cross had proposed that districts instead cover the retirement costs incurred from raises given to employees in the last years of work. "They can't be able to negotiate the contracts and then hand the bill off to someone else," the governor said.

Quinn would not say whether he plans to sign a gaming expansion bill that may be headed to his desk. The measure has passed in both legislative chambers, but Quinn has voiced concerns about the bill. "I believe in a strong ethical framework of oversight and integrity. No campaign from gambling interests. Those are things I have said over and over again. I'll keep saying them." Sen. Terry Link, a Waukegan Democrat, said he plans to introduce another bill that would bar people working at the top of the gaming industry from donating to state political campaigns.

Quinn said he now needs to review the state budget that passed yesterday. He said he is moving forward on facility closures, even though lawmakers put money in the budget to keep facilities open. "I've already made my position clear on that," he said.

He also would not indicate whether he plans to sign a bill that would reinstate a revamped an early release program that would allow prisoners to earn time off their sentences for good behavior. Quinn previously shut down the state's early release program. The Department of Corrections had waived a waiting period for applying the credit, and some inmates got out after serving just weeks of their sentences. The Associated Press revealed the policy, and it resulted in a scandal for Quinn that followed him into the 2010 gubernatorial race. He has not reinstated the policy since, and critics say it has led to dangerous overcrowding in the state's medium security prisons. "I want to read the bill. A lot of things happen in a flurry here in the last couple of weeks. Before you make judgments on those bills, you have to really look at them with your staff, go over it with a fine-tooth comb," Quinn said.

Legislative action

 By Jamey Dunn

Besides passing a budget and considering pension reform, the General Assembly took action Thursday on several other issues.

 Campaign contributions 
Some good-government advocates are urging Gov. Quinn not to sign a bill that they say would roll back recent campaign finance reforms. Senate Bill 3722 would roll back the donation caps that went recently went into effect if a political group inserts itself into a race and starts spending money independently of candidate. The caps disappear if a such a group, known as a political action committee or superPAC, spends $100,000 or more on a local race or state legislative race and $250,000 or more on a statewide race.

“Gov. Quinn can and should veto this bill and protect the campaign finance system reforms he helped enact in 2009,” said Brian Gladstein, executive director of ICPR. "The governor signed the limits bill just a few years ago as part of what he called his 'year of reform.’ If he signs this bill, a lot of the work he did during that year will be for naught."

Oak Park Democratic Sen. Don Harmon, a sponsor of the bill, said it came in response to a recent U.S. Supreme Court ruling that allows such groups to raise and spend unlimited funds as long as they are not working with a candidate. He said that the limits must be lifted so candidates can keep outside groups from hijacking an election.

Early release 
 The General Assembly also sent a bill to the governor that supporters say would help address overcrowding in the state’s prisons. Senate Bill 2621 passed with bipartisan support. The measure would reinstate an early prison release program for inmates who earn good-time credits.

Gov. Pat Quinn suspended the Meritorious Good Time program after an escalated version got him in political hot water before the 2010 race for the governor’s office. The Department of Corrections quietly waived the requirement that inmates wait 60 days to use good-time credits, resulting in some inmates serving only a few weeks of their sentences. The Associated Press exposed the policy, and Quinn faced backlash during the campaign. He shut down all early release programs, and the topic was considered off the table.

Chicago Democratic Rep. Barbara Flynn Currie, a sponsor of the measure, said that the lack of an early release program has led to overcrowding and unsafe conditions in the state’s prisons. “Some of our inmates are living in really quite miserable conditions,” she said, adding that Illinois is in danger of being ordered by a judge to address its crowding problem. California was ordered to reduce its prison population and was left scrambling trying to find solutions in the midst of a budget crisis.

But lawmakers are hoping he will have a change of heart. The proposal would enact stricter regulations on who would be eligible for good time credits, and the governor’s office and the General Assembly would receive reports on all inmates who were released. A spokesperson for Quinn said he plans to review the bill.

Fees for parks
The Senate shot down a bill to fund upkeep of the state’s public parks.

The Department of Natural Resources says there is billion of dollars in deferred maintenance for the state’s parks. DNR says without dedicated funding, park services would slide further, and there is concern about potential closures. “Good luck going to some [parks] that used to be jewels in this state and finding a toilet that flushes,” said Olympia Fields Democratic Sen. Toi Hutchinson, sponsor of Senate Bill 1566.

The bill would have increased vehicle registration fees by $2. It would have allowed DNR to charge fees for usage of certain areas of parks, such as beaches and horse trails. It would also have allowed the department to charge out-of-state park visitors an entrance fee.

Mattoon Rep. Dale Righter said that Democrats have pulled money out of the DNR program to spend elsewhere. “That’s been a policy choice. This wasn’t some irresistible, unchangeable movement that we were faced with, so now we have to go once again and dig even deeper into people’s pockets.” He said they should cut elsewhere and use that money to save the parks. “That’s not right. At some point you just have to say no. Fund the parks. They are in horrible condition.”

Gaming Bill 

By Ashely Griffin 

This year, Gov. Pat Quinn will find legislation to expand gambling on his desk.

Last year, lawmakers passed a gaming expansion on the last day of the legislative session, but Quinn vowed to veto it, so supporters used a procedural method to keep it from reaching his hands. Sponsors say Senate Bill 1849 this year is an effort to address Quinn’s concerns about last year's bill.

On Thursday, SB1849 passed on the Senate floor, 30-26, after gaining approval from the House last week. The measure aims to open five casinos statewide: in Chicago, Park City, Danville, Rockford and in the south suburbs of Chicago. The exact location of the fifth casino would be up to the Illinois Gaming Board to decide. The bill includes slot machines at horse racing tracks but does not allow for slots at the Illinois State Fairgrounds or Chicago airports, which Quinn previously bashed publicly. The bill also aims to reduce the number of gaming positions available from 2,000 in the original bill to 1,600. Casinos currently are allowed 1,200 positions. The Chicago-owned casino proposed in the plan would be allowed 4,000 positions. Lang said the bill clarifies language about the oversight of the Chicago casino, something Quinn had cited previously as a concern. According to Sen. Terry Link, a Democrat from Waukegan, the expansion could bring anywhere from $300 million to $1 billion dollars in revenue for the state, based on the economy.

Opponents said Link’s revenue estimates are too large and that such a large gaming expansion would be bad for the state. “This bill gives you more gambling, more revenue, more slots, more casinos, more jobs,” said Sen. Tim Bivins, a Republican from Dixon. “It also gives you something else more. It gives you more bankruptcies, more suicides. It gives you more gambling addictions. It gives you more divorces. It gives you more child abuse. It gives you more child neglect. It gives you more embezzlement. It gives you more domestic violence, more theft. It also gives you more overall crime, more exploitation of the poor.”

 Quinn came out strongly against the bill when it passed in the House. “As long as I’m governor, I will not support a gambling bill that falls well short of protecting the people of Illinois. It is clear that this gaming bill still needs significant improvement,” Quinn said.

 But Link plans try to win support from the governor by introducing a new bill that would bar campaign contributions from casinos and add $75 million to the Monetary Award Program, which helps needy students pay for college. Both are concepts that Quinn has publicly supported.

Senate approves House budget after adding education spending

By Jamey Dunn and Ashley Griffin

The Illinois Senate approved the House's budget legislation Thursday after some Democrats demanded additional education spending.

The Senate signed off on the House budget after the House ignored budget bills passed by Senate Democrats. Senate Republicans objected to the spending levels in both bills.

The budget contains funding for state facilities that Gov. Pat Quinn had targeted for closure in his budget proposal in February. Quinn called for shutting down several state institutions, including centers for the developmentally disabled, a mental health center and some correctional facilities. The current legislation also contains funding to retool the state’s controversial supermax prison — where prisoners are kept in isolation for up to 23 hours a day — into a less restrictive system.

 Laurie Jo Reynolds, an organizer for Tamms Year Ten, a group pushing for the closure of Tamms, said it is unclear whether the plan would allow prisoners to have enough communal time outside of their cells. “We sort of need to know what they’re talking about when they are talking about refurbishing the prison and retooling it,” she said. Reynolds said that adding a yard and a cafeteria would not be enough to make Tamms a workable medium-security prison. She said other changes would be needed, such as the addition of a common day-room area and classrooms where education and rehabilitation programs could be held.

She noted that Tamms was built for isolation, so it would be difficult to move prisoners around in the way that they are moved in a medium- or low-security prison. “There's so many doors between the wing and the pods [where inmates are kept],” she said. “It’s just not as easy of a facility to let people in the yard or take them out to the cafeteria. It doesn’t seem very cost-efficient to rework it into a medium-security [prison].”

Reynolds said it is an important step that those in favor of keeping Tamms open support the idea of it no longer being a super maximum security prison. “The fundamental premise of [the state] needing a supermax has been destroyed. That admission is a victory in itself. Now we need to have a conversation about: ‘Do we need a new medium-security prison, and can we afford a new medium-security prison?’”

Some Senate Democrats said money should not be spent to keep facilities open when the state is cutting human services and education. “We cannot afford to go backwards, and we don’t have to go backwards. This is all called priorities, and I think the Senate has a better grasp on what the priorities are,” said Sen. Donne Trotter, a budget point man on the Democratic side. “In my mind and many down here, keeping facilities open isn’t a priority.”

Some Senate Democrats refused to vote for the House's K-12 education budget the first time the legislation was called for a vote, and the measure failed. “We should be voting no on this bill because the House sent us a budget with further cuts to education. The House sent us a budget that only added back $50 million more in general state aid,” said Sen. Kimberly Lightford, a Democrat from Maywood. “We put a whole a lot of burden on the local school districts and at the same time continuously underfunded them.” (For more on the spending levels in the House budget, see yesterday's blog.)

“Maybe some members did not get the memo that we don’t have any money,” said Sen. Dan Kotowski, a Democrat from Park Ridge “We are out of money.” But Senate President John Cullerton proposed some ways to find new revenue for education spending. House Bill 5440 would add a 5 percent tax to the gross profits of satellite television providers such as Dish Network and Direct TV. Cullerton said cable providers already pay the fee and that the legislation would bring in about $75 million. He also sponsored House Bill 5342, which would close some corporate tax loopholes for oil companies. He estimated that legislation could bring in $100 million. “Closing loopholes is definitely fair, and I think targeting certain tax credits is appropriate,” Cullerton said during a committee hearing on the legislation.

Senate Bill 2365 would dole out the new revenues According to an analysis from the Democrats:
  •  $24.9 million would go toward early childhood education. 
  •  $134.7 million would go into general state aid for schools.
  •  $15.4 million would go to the Monetary Assistance Program for college students.
  •  $24 million would go into the Circuit Breaker program, which provides assistance for the elderly.
Cullerton’s bills passed without Republican votes. “It is just another tax increase. Pass it on to the people who have been nickeled and dimed to death,” said Sen. Dale Righter, Republican from Mattoon. But with the additional education spending, Democrats did not need the Republican votes to pass the bulk of the budget bills. The House's education budget passed on a second floor vote.

Republicans said the budget would set the state up for financial peril when the recently enacted income tax increase starts to roll back in 2015, and they said the spending could prompt a vote to stop the increase from phasing out. “This is yet another brick in the wall of the permanent tax increase,” said Sen. Matt Murphy, a Palatine Republican.

They accused Democrats of running counter to the state’s relatively new Budgeting for Results law by funneling money into programs that do not have proven success. The law is supposed to give preference to programs that can document some level of success at meeting in-house goals. “Either apply this new law in a way that is understandable and explainable, or please stop telling us that it has changed the budgeting process at all,” Murphy said.

The additional education spending would still have to be approved in the House. Trotter said that there is time to get it passed when lawmakers return for session during Fiscal Year 2013, which begins July 1. “Those individuals over there represent the same people we do,” Trotter said. “They’re going to go home, like we are. … And they are going to hear from their constituents that say, 'How could we not fund education?' And I think it’s that kind of pressure that’s going to be put on the [House Speaker Michael Madigan]. The good thing about this legislative process is that we get more than one bite at the apple.”

The strategy is similar to one employed by the Senate last year to get additional human services spending. “Last year, we got a sad, sad budget from the House. They gave us the budget and left town. The Senate felt we had a more responsible budget. We presented it, and it didn’t go anywhere. We came back in the fall in veto session and put in all those things that we said we should have put in in June,” Trotter said.

State pension reform postponed

Jamey Dunn

Backers of state-employee pension reform couldn’t get the support they needed to pass a bill before the General Assembly's spring session was scheduled to adjourn Thursday before midnight.

The process started to show cracks on Wednesday when Republicans refused to support a bill sponsored by House Speaker Michael Madigan. Among other things, Senate Bill 1673 would have shifted pension costs to school districts, universities and community colleges over the course of several years. House Minority Leader Tom Cross said  that would result in statewide property tax increases.

Madigan handed the bill over to Cross on Wednesday night. He said moving the bill forward without the cost shift that he supported came at the request of Gov. Pat Quinn. “I think that there ought to be a shift in responsibility in the normal cost so that going forward ... the people making the spending decisions will be called upon to pay the bills. Today it’s very simple: Spending decisions are made. The bill is sent down to the Teachers Retirement System. The state pays the bill. I think that ought to change,” Madigan said when he announced he was stepping away from the bill.

“I feel like … I’m the partner or the associate that was given a huge file the night before and [told] go try this case for me,” Cross said when he presented the bill in committee Thursday morning.“Try this jury trial tomorrow, and I have not been involved in the preparation of it. I have not put the case together, the file together. But nevertheless, here we are. We will proceed as best we can in all the amount of time we have, and we’ll see how things go.”

 Madigan made it known Thursday that he would not be voting for the measure, and Cross said Quinn was unable to rally enough support among fellow Democrats. Cross said 30 Republicans were willing to vote in favor of his version of the bill, which needed 60 votes to pass.

Democrats argued that having the state pick up pension costs favored wealthier school districts with higher payrolls. The state pays more for their employees' pensions, which are based on the heftier paychecks. “Does your proposal do anything to address that inequity?” Sen. Elaine Nekritz, who served on the pension reform working group, asked Cross during the committee hearing Thursday morning.

“If you have suggestions on that…we’re certainly open to having that conversation,” Cross said.

“We did. It was the cost shift,” quipped Nekritz, a Northbrook Democrat.

When it became apparent that the House was not going to vote on SB 1673, which would have affected state, university and K-12 employees, along with legislators, the Senate approved House Bill 1447, which would reduce benefits only for state employees and members of the General Assembly. However, many senators described the vote as “symbolic” and noted that there is still work to do on pension reform. “We’re all on the same track,” said Senate Minority Leader Christine Radogno. “I very much look forward to finishing the job.”

The vote in the Senate was 30-24 with one senator, Elgin Democrat Mike Noland, voting present.

The proposed reforms to the state employee and General Assembly pension systems did not contain the controversial cost shift, and Senate President John Cullerton said he called them for a vote because they had bipartisan support. “The other two systems, there still are some very contentious issues. We don’t have an agreement on them,” he said. Neither the Senate nor the House bill would have affected judges, who have their own state pension system.

While the Senate vote was more of a gesture than a genuine effort at change, it still upset public employee unions. “We are disappointed that the Illinois Senate voted in favor of legislation that attempts to shift the lion’s share of the burden for Illinois pension debt onto employees and retirees, who have faithfully contributed their share over their working lives. We do not believe that HB 1447 represents a constitutional or fair solution to the problem of pension underfunding,” Illinois AFL-CIO President Michael Carrigan said in a prepared statement on behalf of a union coalition. Carrigan said the unions are willing to continue working with lawmakers to find a solution.

Cross said that Quinn plans to call a special legislative session to take up pension reform after lawmakers regroup and negotiate some changes. “The last couple days, I think we would all agree, have gotten a little tense around here and emotional, and some things have happened, even that, frankly, I haven’t seen in a while. But nevertheless, it got that way. Pension issues and debates create controversy and a lot of emotion … and I think we’re realizing there will never be an easy solution on pensions,” Cross said on the House floor when he announced that he would not call SB 1673 for a vote.

 Cross said those who are negotiating pension reforms may need a little time to cool off before they give it another shot. “It got really ugly the last couple days,” he said. But he warned that Quinn should not wait too long to call lawmakers back to session and that the issue should be dealt with this summer and not pushed off until after the November general election. “We’re right there. I don’t think you want to lose that.” Legislative leadership in both chambers could also call a special session.

Quinn said that he plans to meet with the leaders next week. “As I have repeatedly made clear, inaction on pension reform is not a choice. We must fundamentally reform our pension system, and we must enact bold reform that eliminates the unfunded liability. We have made great headway on stabilizing our pension system, and we are very close to a solution, but we are not there yet,” Quinn said in a prepared statement.

 Madigan said he was disappointed that pension reform did not pass but congratulated House members on their other efforts during the session, such as passing the budget for the next fiscal year and voting to end a controversial legislative scholarship program. “We’re all very disappointed that we did not resolve the pension question before the legislature. However, I think we should all recognize that there were significant accomplishments in this session,” he told House members just before adjournment.