Wednesday, August 29, 2012

Quinn: Credit downgrade bolsters calls for pension reform

By Jamey Dunn

The rating agency Standard & Poor’s reduced Illinois’ credit rating today, citing the state’s underfunded pension systems and continued budget worries.

The agency moved Illinois from an “A+” to an “A” rating. The rating agency also gave the state a “negative” outlook for the future. “The downgrade reflects the state's weak pension funding levels and lack of action on reform measures intended to improve funding levels and diminish cost pressures associated with annual contributions,” Standard & Poor's credit analyst Robin Prunty said in a prepared statement. “The downgrade also reflects continued financial weakness despite significant measures in the past two years to improve structural budget performance.”

S&P said that the negative outlook was based upon the potential for growth in the state’s unfunded pension liability, which stands at $83 billion. The agency also noted that the 2015 phaseout of the recent income tax increase could weaken the state's fiscal standing. Illinois now has the second lowest bond rating from S&P in the country. The state with the lowest, California, received a “positive” outlook from the agency.

A lower bond rating can lead to a higher interest rate for Illinois when it looks to borrow, something it does regularly to fund capital projects. Higher rates means borrowing will cost more.

However, Moody’s rating agency in January gave Illinois its lowest credit rating of any state, and on a bond sale later that same month, the state got the best interest rates it had seen since the 1970s. Quinn brushed off the downgrade when questioned by reporters at the time, pointing to steady ratings from S&P and Fitch Ratings. “Positive feedback like we have seen today from investors demonstrates the strong confidence investors have in Illinois,” David Vaught, then-director of the Governor’s Office of Management and Budget, said in a written statement released by Quinn's budget office to tout the January bond sale. “These bond bids make clear that investors know we are taking steps to correct the decades of fiscal mismanagement in our state, and they understand we continue to take major steps to reform pensions and control skyrocketing Medicaid costs in an effort to return Illinois to sound financial footing.”

In recent months, Quinn has used the possibility of further downgrades as a call to action for lawmakers who have yet to produce a pension overhaul that has the needed backing to pass in both chambers. “Today’s action is no surprise. Over and over again this summer, I made clear that if we do not act on pension reform, the state of Illinois would suffer the consequences. Now it has. Eliminating our $83 billion unfunded pension liability is vital to getting our financial house in order. Today’s action by Standard & Poor’s is more evidence that we must act,” the governor said in a prepared statement.

After a recent special legislative session that Quinn called to address pension reform produced nothing of substance, negotiations appeared to be at a standstill. Quinn said today that he plans to invite the four legislative leaders to a meeting to discuss pensions in September.

Tuesday, August 28, 2012

Quinn vetoes gambling expansion, citing ethics concerns

By Jamey Dunn
Gov. Pat Quinn shot down a gambling expansion bill today, but supporters hope to revisit the issue after the general election.

The move from Quinn today came as no shock to the bill’s sponsor. Quinn has kept quiet on what he intended to do, but he has been publicly critical of the bill. “The actions of the governor are disappointing, but they’re certainly not surprising,” said Skokie Democratic Rep. Lou Lang.

Senate Bill 1849 would have created licenses for five new casinos statewide: in Chicago, Park City, Danville, Rockford and in the south suburbs of Chicago. The location of the fifth casino would have been up to Illinois Gaming Board. The bill includes slot machines at horse racing tracks and would allow individual casinos to increase their gaming positions from the current limit of 1,200 to 1,600.

Quinn threatened to veto a similar expansion, SB 744, last year, calling it a “massive" gambling expansion. Senate President John Cullerton used a procedural move to block the measure from making it to Quinn’s desk. Quinn has also voiced opposition to allowing slot machines at horse racing tracks. The governor said in today’s veto message that he saw some positive changes in SB 1849, such as reductions in the scale of the gambling expansion from what was proposed in SB 744. However, he said that the newer bill did not have strong enough ethical standards. “The most glaring deficiency of Senate Bill 1849 is the absence of strict ethical standards and comprehensive regulatory oversight. Illinois should never settle for a gaming bill that includes loopholes for mobsters,” he wrote.

 “We don’t have any corruption in Illinois gaming. Where is his evidence that there is any mafia in Illinois gaming today? There isn’t any,” Lang said.

Quinn made several suggestions in his veto message for improving the measure, such as banning campaign contributions from gaming licensees and casino managers. Lang said he was willing to include any of the governor’s requested ethics measures and asked Quinn to provide him any provisions he wanted included before the legislation was called for a floor vote. “He wouldn’t give me any language, and so we proceeded and passed a bill,” Lang said. He said that Quinn had another opportunity to add in the ethics measures he wanted with his veto pen but opted not to. “The fact that he vetoed the bill instead of amendatory vetoed the bill tells you everything you need to know.”

 Lang added, “I have to draw the conclusion that he was never interested in gaming.”

When asked why he did not make his own changes to the bill, Quinn said: “It just has too many defects. It’s one thing if you had to make some technical changes here and there, but this bill just falls way short of what the people of Illinois need when it comes to ethics in government.” He said he planned to work with lawmakers to craft “a better bill,” which he described as “one that can meet all the requirements of integrity and also make sure the money goes to schools and education.”

However, Lang said that he thinks it is possible to  rally enough support for an override in the legislature's November veto session, despite a comment from House Speaker Michael Madigan to the contrary. “Speaker Madigan was only making a prediction,” Lang said.

“I’m very saddened,” said Waukegan Democratic Sen. Terry Link, who also sponsored the bill. “This is just ridiculous. Again, we have done everything possible to make this work, and again, the goal line has changed.”

An override would have to start in the Senate, and Link said he has not yet made up his mind. He said he plans to decide in the time between the general election and veto session. “We’ve got a three-week window in there, and we’ll be doing a lot of phone calling then,” He said. “People will be either comfortable or happy or sad or whatever they are.”

Link admitted, “It will be in the back of my mind for the next two months.”

Quinn used his veto message to again urge lawmakers to take up the issue of pension reform. A recent special session on pensions produced no substantial results. “Illinois cannot gamble its way out of our fiscal challenges. Even a casino on every street corner cannot repair the state’s $83 billion unfunded pension liability. I urge the members of the Illinois House and Senate to address the most pressing issue of our time — comprehensive public pension reform.”

Monday, August 27, 2012

Quinn vetoes plastic bag recycling plan, leaving door open for local bans and taxes

By Jamey Dunn

Gov. Pat Quinn shot down a bill that would have created a statewide recycling pilot program for plastic bags, but supporters of the measure are skeptical about the issue being addressed on the local level.

Under Senate Bill 3442, plastic bag manufacturers would have been required to register with the state and pay fees that would have gone toward a statewide recycling program. Retailers would have been barred from buying bags from producers not registered with the state, and manufacturers would have had to offer recycling collection for plastic bags and plastic films in 90 percent of the state’s counties by 2014. The program would have sunset after four years.

“This is an industry-driven private approach to a public policy problem that could be solved without taxpayer financing,” says Crystal Lake Republican Rep. Michael Tryon, a sponsor of the bill. The U.S. Environmental Protection Agency estimates Americans use 380 billion plastic bags and wraps a year. Illinois generates 494,280 tons of plastic film annually. But the measure also would have closed off options to local municipalities, such as charging fees for bags or banning their use altogether. Champaign is one city that was recently considering levying a per-bag fee to try to get consumers to cut down on using the bags.

Quinn said in his veto message that he agrees with the intent of the bill, but that it went too far in limiting what local governments could do to address the problem. “This bill is more restrictive on municipalities than any other plastic bag regulation in the country, which creates a roadblock for locals to choose the policies that fit the needs of the area. Communities throughout the country experienced great success with different types of policies, as can be seen in the numerous municipalities in California that enacted an outright ban on plastic bags.”

Sen. Terry Link, a sponsor of the bill, said the plan was modeled after a pilot program in Lake County. He said the legislation was the result of five years of negotiations with manufacturers, retailers and other interested groups. “I’m kind of perturbed today — in plain words. I put a lot of work into this, and a lot of people put a lot of work into this.” Link, a Waukegan Democrat, said he is uncertain about whether he will push for an override of Quinn’s veto. The measure passed with bipartisan support in both legislative chambers and had more than enough supporters to override Quinn’s veto. However, three House members who voted in favor of the bill — including the recently ousted former Rep. Derrick Smith — have since left the body. Link said he will gauge the changes of a successful override when lawmakers return for their veto session, which is scheduled for November after the general election.

Critics of Link’s plan say it would have done little to keep bags off streets and out of landfills and waterways. They cite the low level of current recycling rates, even though several large retail chains already offer on site recycling collection. In Illinois, an estimated 1.5 percent of plastic bags are returned for recycling, .7 percent of commercial and industrial plastic films are returned for recycling and only .3 percent of other plastic films, such as those used in consumer packaging, are returned for recycling. “I share concerns that this program would not increase the rate of recycling beyond the natural growth. Local authorities and the environmental community strongly oppose this program because the metrics are simply not aggressive enough and home rule preemption prevents more stringent local regulation,” Quinn wrote.

While Link frames the measure as a compromise worked out to bring the industry on board, environmental groups say it is a preemptive strike by businesses and manufacturers to keep cities from banning bags or enacting fees. “Business groups want to prevent Illinois cities from doing the bag-use reduction programs that are happening in other states,” said Jennifer Walling, executive director of the Illinois Environmental Council. “That's the real goal of this legislation.” An analysis of the bill that a coalition of environmental groups sent to Quinn claims that many of the goals in the measure, such as the reach of recycling programs into 90 percent of counties, have "likely" already been met through voluntary recycling programs at large retail chains.

 Link said that local governments have had years to address the issue, and little has been done. “Where were all these cities who are, in the 12th hour, complaining about it? They had years to make ordinances and put them into effect.”

For more on what other state's and municipalities are doing to address plastic waste pollution, see Illinois Issues July/August 2010.

Wednesday, August 22, 2012

Quinn plans to act on gambling expansion bill next week

By Jamey Dunn

Gov. Pat Quinn said that he does not plan to make a decision on a gambling expansion bill until his final day to act, which is Tuesday.

“I’ve been really looking at that bill. I will look at it really through the weekend. I probably won’t have a final answer until Tuesday,” Quinn told reporters in Chicago today. “It is a complicated measure. It’s about as thick as the Chicago phone book. And we're going through it line by line, and we have to because we found some things that need close intention.” Quinn said his biggest concerns when looking at the bill are “ethics and integrity,” as well as “oversight of gamblers and gambling interests — casinos and casino owners.” The governor has called for a ban on campaign contributions from individuals with gaming interests, such as casino and racetrack owners.

The sponsor of Senate Bill 1849, Rep. Lou Lang, said he believes that such a ban would be unconstitutional. However, the Skokie Democrat said he would support legislation calling for such a ban if it would help to win Quinn’s support of his legislation.

SB 1849 would allow for five new casinos statewide: in Chicago, Park City, Danville, Rockford and in the south suburbs of Chicago. The location of the fifth casino would be decided by the Illinois Gaming Board. 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 has spoken out against. The measure would also allow casinos to up their gaming positions from the current limit of 1,200 to 1,600. Quinn threatened to veto a similar expansion last year, calling it “massive." He has also voiced opposition to allowing slot machines at horse racing tracks.

Lang said that Quinn has never given him a clear description of the ethics measures he would like so see. “I’ve offered to meet with the governor anywhere, any time any place to discuss gaming issues and as of yet me offer has been ignored,” he said last week. “It’s impossible for me to draft legislation or make change in the bill to satisfy the governor, when the governor won’t tell me what those changes are. He’s made some vague references in the press about campaign donations and ethics.”

Quinn also said today,:“I always believe that the money should go to education. We have to make sure if we’re going to have any kind of gambling that the resources and revenues be used for important things that make a difference in our society.” SB 1849 would funnel money to other areas, such as agricultural programs and paying off some of the state’s billions in overdue bills owed to vendors, schools and providers.

 Lang said that if Quinn does choose to sign the bill next week, “I’ll be the most surprised person in the Capitol.” House Speaker Michael Madigan said last week that he does not think there will be an override if Quinn vetoes the measure. But Lang disagrees. “I’m prepared for any eventuality. I’m prepared for a signature, a veto or an amendatory veto, and I think we’ll be able to override.”

Tuesday, August 21, 2012

Thousands in Illinois likely eligible for deferred deportation program

By Jamey Dunn 

A new policy from President Barack Obama’s administration opens the door for thousand of undocumented young residents of the state to temporarily avoid the fear of deportation.

Since August 16, undocumented youths can apply for a program called Deferred Action for Childhood Arrivals, which offers two-year renewable reprieves from deportation. To qualify, applicants must be able to prove that they are 30 or younger, that they came to the country before they turned 16 and that they are students, graduates or have served in the military. Those applying must have must have clean criminal records.

Applicants may also be eligible for work permits. Fred Tsao, policy director for the Illinois Coalition for Immigrant and Refugee Rights (ICIRR), said an August 16 Chicago event to assist potential applicants, which the group helped organize,  had an estimated attendance of 13,000 people. He said that the crowd was so big that organizers had to turn some people away. Tsao said that about 7,500 people received advice, and 1,500 received assistance with processing their applications. Less than a week after the policy went into effect, Tsao says “The response has been powerful.”

ICIRR estimates that about 75,000 people in the state may be eligible for a deferment. “They may also be granted a work permit,” he said. “If you are granted a work permit, you can get a social security number, which means, of course, you can work legally.” In Illinois, it also means you can get a driver's license.

The Pew Hispanic Center estimates that up to 1.7 million of the approximately 4.4 million undocumented immigrants in the country who are 30 or younger could potentially qualify for the program. The application charge for the program is $465, which is the cost to apply for a work permit. Tsao cautions that, while many who receive the deferment may get a work permit, some will not. “It’s not automatic.” Work permits will be temporary and renewable.

Obama put the policy in place through his executive powers after years of fruitless efforts at passing the DREAM Act, which would have offered many young immigrants a path to citizenship. “Now, let's be clear — this is not amnesty, this is not immunity. This is not a path to citizenship. It's not a permanent fix. This is a temporary stopgap measure that lets us focus our resources wisely while giving a degree of relief and hope to talented, driven, patriotic young people. It is the right thing to do,” Obama said when he announced the program.

 “The initiative is an opening for undocumented immigrants to — on a trial basis — be here, study and work all under lawful auspices. It is an opportunity, as well, to challenge the perception of undocumented [immigrants] particularly of undocumented youth, who in nearly all cases are people who are eager to be Americans, in fact as well as in spirit,” Tsao said.

Critics call the policy a cynical attempt at pandering from a president in a close re-election race. “Congress has never said the president has he power to do what he’s doing, but states are apparently expected to cough up billions and billions of taxpayer dollars to provide one benefit after another to a group of people that are here illegally,” said Dan Stein, president of the Federation for American Immigration Reform. Nebraska Gov. Dave Heineman and Arizona Gov. Jan Brewer have announced that residents receiving deferrals in their states would not be eligible for any state benefits, such as driver's licenses.

Stein called the program “unconstitutional” and a “gross abuse” of the president’s power. “The big problem with this status is that it appears to be dependent on the president getting re-elected,” he said.

“It is a definite concern that the policy may change as a result of the election,” said Tsao. But he said that the program is a result of the grassroots advocacy lead by young people, who have been holding demonstrations, lobbying their elected officials and taking the risk of “coming out” as undocumented. “This intuitive was won largely as a result of young people coming forward, putting themselves at risk. ...It’s going to take just as much courage to keep this initiative won, regardless of who is president.”

Tsao recommends that those considering applying for the program seek out an immigration lawyer or advocacy group. “We are recommending that these young people consult with attorneys or authorized not-for-profit organizations that practice immigration law, if only because some of them may actually qualify for more permanent benefits. They may just not realize it,” he said.

 For more information on the program, see the ICIRR’s dedicated website, and the Chicago-based Heartland Alliance National Immigrant Justice Center’s website,

Friday, August 17, 2012

After having no luck with lawmakers, Quinn says he will take pension reform to the people

 By Jamey Dunn

A one-day special legislative session to address the state’s struggling pension systems produced plenty of finger pointing but no reforms.

A plan that would only have affected members of the General Assembly Retirement System failed to get the support needed to pass. Senate Bill 3168 would have forced members of the General Assembly pension system, which includes lawmakers and constitutional officers, to choose between keeping their 3 percent compounded-interest cost-of-living increases or hanging onto their state-subsidized retiree health care. The bill also would have eliminated pensions for any new members of the system. The House voted to adopt an amendment containing the language of the bill, which required only the majority of those lawmakers present, but supporters did not get the 60 “yes” votes needed to pass the bill. The measure was not called for a final vote.

No new pension reform proposals emerged from the Senate, which adjourned before the House began debating SB 3168. During the spring session, the Senate approved House Bill 1447, which would apply to members of the General Assembly and state workers. Supporters pitched that bill as the last resort of the day because no agreement could be reached on any other proposals. “The pensions committee has passed out three very comprehensive bills over the last two years. None of them have been able to pass in this chamber,” said Northbrook Democratic Rep. Elaine Nekritz, who served on a pension working group that tried to come up with legislation that would pass during the regular session. “We need to do something to demonstrate that the General Assembly can do something to take action on this issue. ... We do need to be taking this step because of what it says to the public about our willingness to take action.”

Chicago Democratic Rep. Barbara Flynn Currie agreed. “Where have those proposals gone? Nowhere. They’ve gone to the dustbin. Because there is not consensus for comprehensive pension reform today.” Currie argued that lawmakers could take a small first step by reducing their own benefits. “This at least begins reform right here at home.” Republican opponents said that the vote was just meant to give Democrats a way to claim that they had taken action on pension reform. “This is a bill that provides cover in a political campaign. It’s a political vote,” said House Minority Leader Tom Cross.

The governor’s budget office estimates that the measure affecting lawmakers would save $111 million between its effective date next year and 2045. The total unfunded pension liability is estimated at $83 billion. Republicans argue that it might actually be more because they say the return on investment estimates for the systems are not realistic. Those opposed to the measure say that, when the savings are compared with the entire liability, it would make no real progress. “Frankly, I would be hard-pressed to look voters in the face and explain why I voted for this bill,” said Rep. Dwight Kay, a Glen Carbon Democrat.

“In the context of the overall problem, I think we all agree that this does absolutely nothing,” Cross said. He and many of his fellow Republicans called on Gov. Pat Quinn to keep lawmakers in special session until a pension plan passes. “We will stay here for as long as it takes.” Cross said. “But it needs to be done in a very very comprehensive manner. This doesn’t even come close.”

Quinn has other ideas.

“I was disappointed with the legislature today,” Quinn said after both chambers adjourned. He said that he does not plan to call lawmakers back for a special session in the immediate future. Instead, Quinn said he plans to launch a “grassroots” campaign to reach out to voters and business groups and urge them to put pressure on lawmakers. “I think there’s a lot of explaining to do to the voters and taxpayers back home if members of the Illinois House of Representatives are voting now on something as fundamental as reforming their own public pension system,” Quinn said. “It’s pretty clear to me that we’re not going to continue to engage with Republican leaders who are not sincere about voting for public pensions reform. We’re not going to let them just deny and delay. I think it’s time to get the people involved.” Quinn said that Republican legislative leaders rejected every proposal he pitched to them this morning.

But Republican leaders say that it is Democrats who are either not genuinely interested in passing reform or bungling the job. “You’ve got two Democrat[ic legislative] leaders who don’t want to really do it and a governor that really doesn’t know how to do it and so when you’ve got those two things going on, it’s pretty difficult to get to the goal line.”

 Quinn has always been a fan of grassroots movements, and the idea harks back to his time as a political organizer and gadfly before he served as state treasurer, lieutenant governor and governor. He has had success, such as a movement that culminated in “the cutback amendment,” which reduced the number of lawmakers in the House. However, he has not had much luck with rallying people to influence the legislature since he has taken office as governor. He appealed to citizens when he opposed smart-grid legislation that he said would result in unfair electric-rate increases for consumers. Quinn launched a website for public comment and encouraged people to contact their lawmakers, but legislators voted to override his veto of the bill. When asked how this campaign would be different than that one, Quinn just said, “You’ll see.” A Quinn spokesperson said the governor plans to reveal more details about his campaign next week.

House expels Smith, but he could return

By Jamey Dunn

The Illinois House expelled Derrick Smith today, but the embattled former representative could return to the ranks of the body if voters choose to vote him in this November.

The vote to expel Smith, who allegedly took a bribe in exchange for an official act, came as no surprise. The House disciplinary committee that recommended expulsion voted unanimously that Smith was at fault, and all but one member recommended expelling him. Smith was not present at the disciplinary hearing or during today’s vote. One hundred members voted in favor of kicking Smith out, while six voted against it. Three lawmakers voted “present.” The vote took effect immediately, and Smith’s name was removed from the House roll. It is the first time House members have expelled one of their own since 1905.

Smith was arrested in March and is accused of taking a $7,000 bribe in exchange for writing a letter of recommendation for a daycare center he believed was seeking a state grant. Smith was the subject of a federal sting, and the daycare was not actually seeking the grant. “Using one’s office for personal gain not for the public good is an affront to the core reputation of every legislator. To act in this way is to me a stunning violation of the oath of office each of us has promised to uphold. I can think of no greater breach of the public trust,” said Rep. Barbara Flynn Currie, who served on the committee that recommended expelling Smith. Several House members said that if Smith had gone under oath and denied that he had taken a bribe, today’s vote likely would have not occurred. Since the disciplinary committee had little evidence to work with other than the criminal complaint against Smith, Currie said it would have been difficult to refute the claims Smith could have made.

Elmhurst Republican Rep. Dennis Reboletti said that House members should take the information in the criminal complaint at “face value” because Smith never denied any of the allegations against him. “When you get down to the heart of the matter, Rep. Smith chose not to testify in front of us. He chose not to deny that those conversations [regarding the alleged bribe] in that affidavit ... ever took place. He had three opportunities in front of our special investigative committee to do so,” said Reboletti, who served on a preliminary committee that decided whether there was enough evidence to proceed with disciplinary action against Smith. Smith was allowed to plead the Fifth Amendment, which protects against self-incrimination, and choose not to testify in front of any of the House members. However, unlike in criminal court, House members were able to take his choice not to testify into consideration when decided whether to expel him from the chamber.

Those opposed to booting Smith did not defend his alleged actions, but they urged the lawmakers to wait until there was more evidence. They said that Smith had likely opted not to testify under oath because his lawyer advised him not to. Rep. Mary Flowers, a Chicago Democrat, called the proceedings “a dog and pony show.” She said that expelling somebody over unproven allegations sets a dangerous precedent. Flowers also noted that today’s vote means that lawmakers may have few options to get rid of Smith if he is elected to the House in November.

If Smith wins his bid in the general election, the House cannot expel him again over the same offense. He won his primary election race in the 10th House District with 77 percent of the vote. “He’s still on the ballot. And it is ‘we the people’, the people of his district that will have the say. They will be the ones to say if Mr. Smith will come back to this House or not,” she said. “There’s nothing that we will do here today that will stop him from coming back. And then what?”

Rep. Jim Durkin, who helped argue the case against Smith in front of the disciplinary committee, said that since Smith is the subject of an ongoing investigation, there is a possibility that he might face other criminal charges in the future. Durkin, a Republican from Western Springs, said if that were to happen, Smith could be expelled over another charge. “My hunch is that this case is not completely done,” he said. “If that is not the case [and he wins the election,] then Rep. Smith will be sworn in and seated next January because we can’t remove him for the charges for which we removed him today. However, Durkin said that the charge against Smith is so serious that it was necessary to take action and not wait until after the election.

Smith told reporters at a Chicago news conference that he was “sad” about today's vote. But he said there is a silver lining. "I am happy because through this ordeal, I have been able to learn who my friends are," Smith said. He said he plans to remain on the ballot. Many Democrats, including Smith’s former political ally Secretary of State Jesse White, have thrown support behind his opponent, third-party candidate Lance Tyson.

Thursday, August 16, 2012

Senate Republicans split on 'partial' pension reform

By Jamey Dunn

Republican legislative leaders predict little will come of tomorrow’s special session on pension reform.

House Speaker Michael Madigan said yesterday that any hope that a bill will pass lies with a meeting scheduled tomorrow between House Minority Leader Tom Cross and Gov. Pat Quinn.

Cross called Madigan’s remarks “disingenuous” and said all four legislative leaders have been invited to the meeting. “Let’s quit the games. This is kind of the old Mike Madigan school [of thought] We’ve read the book. We’ve seen the movie. This a problem that we all need to solve, and everyone needs to be an adult. Everybody needs to get in a room and work it out. I think we should have been in a room working it out weeks ago. We didn’t. We’ll be there tomorrow. We’re willing to stay as long as it takes,” Cross said. “This is very serious. That approach that the speaker used is really one of the reasons we’re in this mess. It’s politics after politics after politics.”

Cross has said that Quinn should keep lawmakers in session until a solution can be reached. Cross does not support any of the pension proposals that are likely to be up for consideration tomorrow. Madigan yesterday said House Bill 1447, which the Senate approved, would be “progress.” That measure would only apply to state workers or members of the General Assembly. Under the proposal, employees and retirees would have to choose between keeping either a 3 percent annual cost-of-living increase based on compounded interest or state-subsidized health care benefits. Current employees who choose to keep the compounded cost-of-living adjustment would also not be able to factor any future raises into calculating their pension benefits. But Cross said he will not support a plan that leaves out teachers and university employees. “We believe that we need to do something substantive, and we need to do something real, and this nibbling around the edges and then claiming, ‘We have pension reform and that we fixed it’ again is an old playbook. We saw it with campaign finance [reform]. We saw it with workers' compensation. We want something real. I think we have one shot at it.”

Senate Minority Leader Christine Radogno originally voted in favor of HB1447 but backed away from the proposal today. “When it was passed, we were pretty clear that we thought that it was inadequate in terms of the fact that it only covered two of the five systems,” Radogno said. She cited concerns over estimates that could put the unfunded liability pension at a higher figure than the oft-cited $83 billion. “That bill clearly is not enough.” Radogno agreed with Cross that passage of the bill in the House could stall efforts at more comprehensive proposals. “The concern is that it will stop forward progress because a lawsuit will immediately be filed, in which case probably the party in power would say, ‘Well, we’ve got to wait until that unfolds and see what happens.’ So it’s just inadequate on too many fronts at this point.”

But not all of her GOP colleagues see it that way. Sen. Bill Brady, a Bloomington Republican, called HB1447 a “half measure,” but he said that if it is the only option that can gain enough backing to pass, he would support it. “Something’s got to be done,” Brady said. “This is the only solution on the table. Rome’s burning, and we need some incremental solution for this problem.” Brady does not share Cross’ and Radogno’s concerns that passing the bill would freeze efforts to reform the other systems. “I would argue that if we pass this, it will lead to passage [of reform] in the other systems.”

Sen. Matt Murphy agreed. “For those that say that it’s not enough and passing this doesn’t qualify as real reform, I agree wholeheartedly.” However, Murphy, a Palatine Republican, said he doesn’t think passing HB 1447 would hurt the reform process, and he said he would support it. “Personally, I don’t think the fact that we pass some pension reform means anybody thinks we’re done. I don’t think we’re done with just this bill, and I don’t think it takes the pressure off to solve the rest of the problem,” he said. “I think you can take what you can get now and then don’t slow the momentum. Use it as a springboard to finishing the job on the other systems.”

Wednesday, August 15, 2012

Madigan says there will be no override if Quinn vetoes gambling expansion

Jamey Dunn

House Speaker Michael Madigan said that if Gov. Pat Quinn vetoes a gaming expansion measure passed at the end of the spring legislative session, it may be the end of the line for the bill.

When asked whether he thought that there would be a successful override if Quinn rejects Senate Bill 1849, Madigan simply said, “No.”

Quinn has yet to act on the bill, but he has been publicly critical of it, saying it does not contain ethics  provisions that he thinks are necessary. He said earlier this week that he is still weighing his choice.

The expansion would mean five new 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, which Quinn has opposed, but does not allow for slots at the Illinois State Fairgrounds or Chicago airports, which Quinn was very vocal in opposing.

The governor has not been receptive to broad gaming expansions in the past. He proposed a drastic trim back of a gambling bill, which lawmakers approved last year. Supporters of the plan in the Senate used a parliamentary procedure to keep the bill from ever reaching Quinn's desk.

"I think the [House] speaker is wrong. I think we'll have votes in the House and in the Senate to override a gubernatorial veto," said Skokie Democrat Lou Lang, who sponsored both gambling expansion bills. "Now, [Quinn] hasn't vetoed the gaming bill yet. Maybe he'll surprise us and sign it. And if he does, I'll be the most surprised person in the Capitol. But I'm prepared for any eventuality."

Lang said the bill he sponsored has strong ethics provisions, but he also said he is open to the governor's suggestions. "I'm prepared to give the governor virtually anything he wants."

Governor's Day at the fair turns into loud protest

By Jamey Dunn

Gov. Pat Quinn found few allies today in his push to reform the pension systems for retired state workers.

Quinn faced a wall of sound from union protesters as he spoke on Governor’s Day at the Illinois State Fair this afternoon. His speech was barely audible over loud booing and chants of “Respect Illinois workers.” Several protesters shouted out “Keep your promises” as the governor tried to make himself heard over the crowd. A plane circled overhead carrying a banner that read “Gov. Quinn — unfair to workers.”

The event, usually meant to be a sort of pep rally for the party holding the governor’s office, instead served to display deep divides among Illinois Democrats over pension reform, the closure of state facilities and budget cuts that Quinn has said necessitated  layoffs of state workers and a freeze on contractual raises.

Since lawmakers are scheduled to be in special session on Friday to debate pension reform, it was the issue of the day. House Speaker Michael Madigan laid the success or failure of pension reform in Friday’s special session at the feet of Quinn and House Minority Leader Tom Cross. He said the two are scheduled to meet Friday morning “So hopefully, we’ll get some resolve out of those discussions between Governor Quinn and Leader Cross,” Madigan said at a Democratic party breakfast this morning.

Quinn drew some protesters to the morning event, where union members handed out fliers and called out, “Act like a Democrat, Pat!” But it was little, compared to the pushback at the state fair, where protesters followed him on his way to the event booing and chanting and even crowded around him while he stopped for a snack.

“If you want to be governor of Illinois and you want to step into the arena, you’d better have a tough hide. I have a lot of people who may call me names, but I think there’s a lot of people in Illinois who agree with what I am trying to do, which is to make sure we invest in our children and have good education. And sometimes you have to make reforms like in the pension that are difficult but necessary for everyday people to have a good state,” Quinn said this morning. “We’re going to reform the pensions, and I know some of the state workers don’t like that, but they’re going to have accept what the voters — I think — at large want.”

Skokie Rep. Lou Lang, a member of Democratic leadership in the House, said that he applauds the union members for making their voices heard at the fair. However, Lang said: “I understand their concerns, and in many ways, I agree with them and may be voting with them. That still does not mean that we should not give the governor his due respect as the governor [and] as a person who has supported the things that matter to the men and women of organized labor for a very long time.”

Lang said he was disappointed that the party did not present more of a unified front today. But he also said that the scene was illustrative of the party’s history. “It was a bunch of Democrats getting together. And Democrats are pretty noisy when they get together, and we don’t always agree. I’m sure the Republican rally tomorrow will be a lot more homogenized, and I’m sure the Republican rally tomorrow will be a lot quieter. But having said all that, this is what the Democratic Party is. It’s what it’s about. It’s what it’s always been about. I’m proud of what happened today.”

Madigan, who is also the chair of the Democratic Party in Illinois, brushed off the acrimony over pension reform and other issues, saying he did not think it would do permanent damage to his party in the state. “We’re trying to balance the budget. We’re trying to improve the fiscal condition of the state of Illinois. People from organized labor are representing their people, and they ought to do that. ... It’s just a natural conflict that’s going to be there. I don’t think there’s any long-term adverse implications that are going to come out of it,” he said at the morning event. “Promises were made. But if you don’t have the money to pay the promise, I think you have to step back, bring everybody together, talk reality and look toward how we can restore some fiscal stability to the [pension] systems and to the state of Illinois.”

Madigan said that House Bill 1147, which would only apply to state workers and legislators and avoids the issue of shifting pension costs to local school systems and universities, would be progress. He said he presented a comprehensive reform plan during the regular session, but it was not approved by the House.

Quinn supports a plan from Rep. Elaine Nekritz, a Northbrook Democrat, that would apply to all state retirees. Nekritz’s bill would phase in a controversial cost shift to schools and universities more slowly than a plan that failed to gain Republican support at the end of regular session. “I really would like to see both leaders in the House of Representatives put 30 votes on a bill sponsored by Rep. Elaine Nekrtiz,” Quinn said. “It’s a good bill. It’s a reasonable bill. It will reform the pensions and do it once and for all in Illinois.”

Cross supports neither plan. He is opposed to proposals that would ask downstate and suburban schools and universities to assume the retirement costs for their workers. Cross said supporters claim that the cost would be 6 percent to 9 percent of payroll for most schools. However, he said that there are many factors that could make the numbers spike. “That’s a floor, and given the unfunded liability numbers out there, given the potential for market drops, given the potential for change in interest rates assumption, or [if] the General Assembly doesn’t make payments, that number climbs significantly,” Cross said at a Chicago news conference yesterday. Cross and other Republicans say a cost shift could result n increased property taxes and layoffs. Cross said he does not back a proposal that leaves out schools and universities. “If we do that bill, the day it becomes law, we’ll see litigation. It’s inevitable that we’re going to see litigation, and once that litigation starts, it’s our belief that we will cease the discussions on pension reform until the conclusion of a lawsuit.”

 Cross said Quinn should keep lawmakers in session until a deal can be reached. “This needs to happen. It doesn’t need to happen after the election. It needs to happen now. ... And so, call us back to special session. And people are going to yell and scream, and they’re going to complain, and it’ll be chaotic down there [in Springfield]. But my approach is.,you put us in a room, lock the key, and when we’re done, you let us out.”

Despite the lack of agreement, Quinn remains optimistic that things could still fall in line to pass a bill on Friday. “I think each of the leaders is waiting for the other to move forward. And I hope we can in the next couple of days get everybody to jump aboard at the same time. Hold hands and let’s go together.”

Monday, August 13, 2012

Unions pitch their own pension reform plan

By Jamey Dunn

Union officials laid out the broad strokes of their own pension reform plan today. 

Cinda Klickna, president of the Illinois Education Association, described the plan backed by We Are One Illinois—a coalition of public employee unions, which includes the Illinois AFL-CIO, the American Federation of State, Country and Municipal Employees, Service Employees International Union and unions representing teachers, police, firefighters and transportation workers. Klickna said that group seeks a guarantee that the state will make the required pension contribution. Under the proposal, the priority of the pension payment would only be second to the state’s creditors. Union officials argue that legislation that is currently up for consideration does not do enough to ensure that lawmakers make the annual pension payments. They point to skipped pension payments as the primary cause of the state’s more then $80 billion unfunded pension liability. “The pension crisis was caused by past governors and legislators that failed that people of the state,” Klickna said.

The group also is proposing that lawmakers reevaluate corporate tax breaks, such as the package of tax cuts recently passed to benefit Sears and the CME group. The collation is focusing on a group of tax breaks, the elimination of which they say could save the $80.7 billion over the next 34 years. On the list are tax exemptions for paper and ink given to news outlets, a tax exemption for foreign dividends and a tax break given to retailers for collecting the state’s sales tax. “We cannot longer afford to let these big corporations off the hook will vital services continue to be slashed,” said Henry Bayer, executive director of AFSCME Council 31. “We need to reform our tax system. It’s long, long overdue. ... We need to focus on where the money is -- what we can afford and what’s fair.”

All of the tax breaks have the backing of relatively powerful lobbying groups and could be a tough sell to legislators who are concerned about giving the appearance of being pro jobs and business friendly in the wake of the economic downturn.

The union coalition is also asking that any changes would not affect current retirees. In exchange for those three considerations, the group says that current workers would pay more toward the cost of retirement. Klickna said that such an increase would need to be negotiated, but she said the amount would likely vary across the different pension systems. “The employees didn’t cause the crisis, but we’re going on record today to say our members are willing to help fix it if the state will guarantee that the politicians will never again divert our pension money to other expenses,” Michael Carrigan, president of the Illinois AFL-CIO, said in a prepared statement.

The move comes as lawmakers are scheduled to return to Springfield this Friday to take up the pensions issue during a special session called by Gov. Pat Quinn. However, Quinn’s camp does not seem responsive to the plan. “This is nothing new, and all has been discussed before,” Brooke Anderson, a spokeswoman for Quinn, said in an emailed response to Illinois Issues. “This proposal would not solve the state's pension challenges, nor is it feasible.”

 House Speaker Michael Madigan reportedly plans to call House Bill 1447, which the Senate approved on the last day of the spring legislative session. The measure would require employees and retirees to choose between keeping either a cost-of-living increase based on compounded interest or state-subsidized health care benefits. Current employees who chose to keep the compounded cost-of-living adjustment would also not be able to factor any future raises into calculating their pension benefits.

Unions maintain that the pension reform plan is unconstitutional and presents workers and retirees with a false choice between two bad outcomes. “If I had to chose between my [COLA] and my insurance, it would be like asking me to cut off my right hand or my left hand,” said Barbara Gilhaus, a retired teacher. Gilhaus said she gets about $28,000 annually from her pension.

Supporters of the plan to offer employees a choice between health care and compounded COLAs say it passes constitutional muster because it allows employees to decide what benefits that may want to trade off to keep others. Quinn also recently signed Senate Bill 1313, which will result in retirees paying more for their health care coverage. While the state still plans to kick in to cover some of the health care costs for retirees, some retirees will have to start being premiums under the plan.

HB 1477 only applies to state workers and members of the General Assembly. Democrats and Republicans cannot agree on whether universities, community colleges and downstate and suburban schools should have to pick up the cost of their employees' retirement. There are multiple bills on the table that would sift the costs to schools over several years. But so far, Republicans have staunchly opposed them, and Democrats have been unwilling to back off the issue. Leaving the retirement benefits of teachers and university employees out of any pension vote that may happen on Friday would allow lawmakers to revisit the issue of the cost shift after the general election.

Friday, August 10, 2012

Quinn's veto could snuff out plans for coal-to-gas plant

By Jamey Dunn

Gov. Pat Quinn rejected legislation that would have cleared the way for a coal and petroleum coke gasification plant on the southeast side of Chicago.

Last summer, Quinn approved a plan to build the plant, which would be owned by Leucadia National Corp. Construction and built on a polluted brownfield site on the southeast side of Chicago. The project was scheduled to begin in 2015, but Quinn’s veto of Senate Bill 3766 puts the future of the plant in question.

Two utility companies that originally signed onto the project, Peoples Gas and North Shore Gas, bowed out. The two remaining utilities, Ameren and Nicor Gas, have argued that they would be stuck with too large of a share of the cost of construction. Both utilities would be required to buy gas from the plant, but they do not want to cover the construction expenses that the two utilities that left the project would have paid. The Illinois Commerce Commission sided with Ameren and Nicor and rejected contracts that would have locked the utilities into a 30-year deal with the Leucadia plant, which has been dubbed the Chicago Clean Energy project. Senate Bill 3766 would have overridden the ICC’s ruling, but Quinn vetoed the bill this afternoon. Leucadia representatives have said that the project would not move forward without approval of the bill.

Business organizations and consumer advocates argued that the project would increase natural gas rates for customers across the state. ‘We’re not universally opposed to projects like these. However, Leucadia forced suburban and downstate to pay more than their fair share, and that’s unacceptable for consumers,” Bryan McDaniel, director of government affairs for Citizens Utility Board, said in a written statement. “CUB applauds Gov. Quinn’s continued leadership on behalf of consumers across Illinois.”

 The controversy put Quinn in an awkward position. He supported the plant and the jobs it would bring to an economically depressed area of the state. However, he founded CUB and has presented himself as a consumer advocate for decades.

 In his veto message, Quinn said he still supports the project but that it must be revamped. “In September of 2011, two of the gas utilities opted out of procuring the synthetic gas, leaving the remaining two utilities with far greater purchase obligations. In response, the developers argued before the Illinois Commerce Commission that Ameren and Nicor customers should be paying for 95 percent of the costs of the facility, while only receiving 84 percent of its output. That is not a fair deal for ratepayers. We can do better,” Quinn’s message stated. “In addition, our country is in the midst of a natural gas boom, which is coupled with dramatically decreasing demand. As a result, current natural gas prices are at historic lows, and many indicators suggest prices will remain low for years to come. These new facts require further scrutiny, and a revisiting of the economics of this 30-year project. I support the Chicago Clean Energy project, but it must be implemented in a way that protects the consumers of Illinois.”

Proponents say there are no guarantees that natural gas prices will stay as low as they are now. They say having a consistent source of natural gas in the state for the next 30 years would help protect customers from volatility. “Prices fluctuate — gas station prices — and so do natural gas prices, as well,” Chicago Democratic Sen. Donne Trotter, who sponsored the legislation enabling the project, said in July. Hoyt Hudson, project manager of Chicago Clean Energy, wrote in guest column published in the State Journal-Register, “The Chicago Clean Energy project guarantees a predictable price in one of the nation’s most volatile commodity markets — natural gas — while creating thousands of jobs and providing consumers with clean energy.”

“After earning strong, bi-partisan support for this bill from the Illinois House and Senate, and having enjoyed support from communities throughout Illinois, we are deeply disappointed in the governor's decision,” said a prepared statement from Chicago Clean Energy. “We know that this $3 billion investment in Illinois was good for the state's economy, its environment, its workers and its consumers. While we find the governor's decision unfortunate, we look forward to continuing our work at our other facilities throughout the country."

 Trotter and Hudson could not be reached for comment.

Thursday, August 09, 2012

Governor says reporters should not tour prisons

By Jamey Dunn

Gov. Pat Quinn said today that he stands behind the Illinois Department of Corrections denying a reporter entry into state prisons.

When asked whether reporters should be granted tours of prisons, Quinn said: “I don’t believe in that. ...When it comes to our security of our prisons, I go with the correctional office [and] the director that I have in the Department of Corrections. Security comes first, and it isn’t a country club.” The question came after a report from WBEZ Chicago that DoC denied a reporter’s request to tour a minimum security prison in Vienna to investigate reports of prisoners living in squalid conditions. According to WBEZ, Quinn’s administration told reporter Rob Wildeboer that he could not go into the prison because of security concerns. The department has denied other requests by reporters to tour prisons, including a request from Illinois Issues in April to tour the super-maximum-security prison near Tamms. (For more on Tamms, see Illinois Issues June 2102.) Quinn has recently come under fire for a lack of transparency in the DoC.

Quinn said that he plans to look into reports of dangerous living conditions in the Vienna facility.

The governor has also temporarily halted any transfers of prisoner related to his plans to close seven corrections facilities. The American Federation of State, County and Municipal Employees Council 31 has sued to block the closures, claiming that they will create unsafe working conditions for its members. The union is suing to stop the closure of Tamms, as well as a women’s prison in Dwight. It is also suing to keep open adult transition centers in Decatur, Carbondale and Chicago and youth prisons in Joliet and Murphysboro. Quinn has stopped closure plans until another hearing is held next week.

“The state remains committed to our closure plans; however, as we will be back in court August 17, we have agreed to stop inmate transfers related to the closures for the time being. We offered to properly hear AFSCME’s grievances on an expedited basis, and we now look forward to resolving this matter as quickly as possible through the arbitration process set out in the collective bargaining agreement,” Quinn spokeswoman Kelly Kraft said in a written statement.

Quinn pushes forward on pension reform

By Jamey Dunn 

Gov. Pat Quinn continues to push for pension reform and says he will decide on a controversial energy policy bill tomorrow.

“It shouldn’t take that long really. It’s something that everybody’s talked about all year,” Quinn said. “We just cannot postpone this matter any longer. It isn’t an election calendar that we’re looking at here, I think some members may be in the legislature. But we’re dealing with the bond rating agencies.” He said that if lawmakers don’t pass pension reform soon, the state may face a downgrade of its credit rating. “If we don’t act, we’re asking for trouble.”

Lawmakers are scheduled to return for a special session to address pension reform on August 17. Quinn said the legislative pension working group met Wednesday and plans to hold more meetings leading up to session next week. “We’re pretty close, I think, on what needs to be done.” However, Quinn seems to be the only player in the negotiations who is taking such an optimistic view.

The governor is throwing his support behind legislation sponsored by Northbrook Democrat Rep. Elaine Nekritz, a member of a legislative working group negotiating pension reform. Nekritz filed her plan, House Bill 6209, last week. It is similar to a version of Senate Bill 1673, which was under consideration at the end of the regular legislative session. The major difference is that it would make a shift of pension costs from the state to colleges and school districts outside of Chicago more gradual. Many Democrats believe that schools should pick up the cost for their employees' retirement benefits, but Republicans argue that shifting the expense would mean layoffs and increased property taxes.

However, House Minority Leader Tom Cross continues to oppose the cost shift to schools “The bottom line is that a pension cost shift is exactly that — a cost shift, not reform. We remain in total support of comprehensive pension reform of our pension systems. We have been and are willing to work with the other legislators and the governor to come up with a comprehensive solution as soon as possible,” said a prepared statement from Cross spokeswoman Sara Wojcicki Jimenez.

Quinn said that it is “curious” that Republicans do not support the plan because “ a lot of the interest groups that tend to support the Republican candidates” back Nekritz’s proposal. House Speaker Michael Madigan reportedly plans to call another bill, HB1447, for a vote. The Senate passed the bill on the last day of regular session. It only applies to the General Assembly and state workers, so it dodges the touchy subject of a cost shift altogether. Quinn has continually called for a “comprehensive” plan that applies to all the pension systems in the state. “I think it’s important that we get a good start. ... I think it would be a good thing if the House addresses [HB 1447], but I also want them to address Elaine Nekritz’s bill, which is really a comprehensive bill that will cover everything. It think that’s the best way to go.”

On that issue, Cross and Quinn say they agree. Cross also backs a “comprehensive” solution that would affect all workers, including teachers.

Nekritz has another bill, HB 6210, which she said could be a “companion” to HB 1447. It applies to university workers, community college employees and teachers. The measure also contains a cost shift. As they stand now, Nekritz’s bills cannot be passed in a single day. But Quinn thinks there are other ways to get the job done. “There’s a lot of different parliamentary techniques you can use in order to get a vote done in one day. That may be one of the ways to go.” One option would be to put the language of the legislation into another bill that has already been moved through much of the legislative process. Nekritz said she introduced her measures to start a conversation but is uncertain of the likelihood of their passage. “I think the plan is to put this out for discussion purposes,” she said on Monday.

Both bills have immediate effective dates, so they would require a three-fifths majority to pass in 2012. While Quinn said that he wants reform as soon as possible so the state can start to reduce its pension liability, he conceded that it might not happen. “I would hope to have three-fifths of both houses voting [yes], but if it was a majority, that’s definitely significant progress. We may have to adjust certain of the bills if there’s only a majority available.” If a three-fifths majority cannot be found, the earliest any reforms could go into effect would be June 1, 2013.

Quinn also said he plans to make his decision on Senate Bill 3766 by tomorrow. That measure would override a ruling from the Illinois Commerce Commission and clear the way for the construction of a coal gasification plant on Chicago’s southeast side. Without the bill, Leucadia National Corp., financial backer of the project, says it will not go forward. However, the plant is opposed by several environmental groups and business organizations, who say it will increase the price of natural gas for customers statewide. “I’ve been working on that one. That bill — I have my stuff with me, my files. So tonight, I’ll look at it and make a decision by tomorrow. That’s a complicated matter. You’ve just got to look at it from top to bottom.” Quinn is in an awkward position because the Citizens Utility Board, a consumer watchdog group he founded, opposes the bill, but the governor has backed the Leucadia project in the past.

Wednesday, August 08, 2012

States seeking revenue could spark a boom in Internet gambling

By Jamey Dunn

Illinois paved the way for states selling lottery tickets online. Now some experts believe that the U.S.  Department of Justice ruling that allowed for such online sales will open the door for other forms of online gambling to sweep across the nation.

 “We’re going to have Internet gambling that everybody acknowledges is Internet gambling, and it’s going to be in less than 10 years,” I. Nelson Rose, a law professor and gaming consultant, said today at the National Conference of State Legislatures' legislative summit in Chicago. Rose said the Justice Department ruling, which Illinois and New York requested, allows for many new forms of online gaming — such as poker and even versions of popular games such as the Internet Phenomena Angry Birds, with added wagering components.

Rose said that state lotteries could offer online versions of scratch-off tickets that would be “indistinguishable from a slot machine.” He said that the new interpretation of the 1961 Wire Act gives states substantial leeway when it comes to gaming. Rose said the interpretation found that the act only restricts sports wagering. Anything states opt to do must be legal under state law, or it may fun afoul of federal statues meant to target organized crime, he said, “which means that states can now do anything they want with some limitations.”

Senate President John Cullerton has already floated the idea of online gaming to the Illinois General Assembly. In May, he introduced House Bill 4148, which would create a Division of Internet Gaming within the Illinois Lottery. Cullerton estimated that online gambling could bring in hundreds of million of dollars in revenue for the state. “Certain forms of iGaming, especially poker, rely on large pools of potential players, and states that move swiftly to design a system that captures the widest audience of participants will have an advantage in terms of long-range success,” Cullerton wrote in a letter to legislative leaders and Gov. Pat Quinn. “As a result, it is necessary that Illinois create a legal template that is flexible enough to allow an organized approach to maximizing revenue in an ethical and socially responsible manner, while also establishing logical standards and regulations.”

The bill was never called for a floor vote. Quinn reluctantly supported the legalization of video gaming in bars and restaurants across the state to fund Illinois’ first capital construction program in a decade. However, his administration was slow to implement the plan, which was approved in 2009. The first machines are reportedly arriving in bars and restaurants this week. Quinn has not been receptive to recent gaming expansions passed by the legislature. He has yet to act on a gambling bill that lawmakers approved at the end of May.

Rose and others believe that many states will take the opportunity to delve into online gaming, either through offerings from their lottery programs or by granting licenses to private companies. Rose noted that the popularity of gambling has gone up and down in the country over time. Lotteries were prominent in the colonies and early years of the nation, only to shrink during the mid 19th century. Gambling enjoyed a resurgence in the South after the Civil War and in the western territories, which is why it is associated with the Wild West today. State lotteries began in the 1960s and began to pop up across the country. After one state in a region created a lottery, nearby states often followed suit to avoid losing revenue to their neighbors. “Lotteries exist for a very simple reason: because states and their residents need the revenue,” Margaret DeFrancisco, president and chief operating officer of the Georgia Lottery, said at the summit. The recent recession and the budget shortfalls in many states means that they country may be primed for another. “When there’s an economic downturn or some other motivation it springs up again.”

De Francisco and Rose said the online shopping habits of young people contribute to making the Internet the next frontier for gambling. “Twenty-two-year-olds do not want to go and sit in front of a little metal box with wheels going around,” Rose said. De Francisco said that bricks-and-mortar lottery vendors have “been the bread and butter of our industry and will continue to be.” However, she said online lottery ticket sales give states a chance to target consumers who otherwise might not play.

Some in the gaming industry say the Justice Department ruling leaves the issue too open and that Congress should pass a basic regulatory framework that states must adhere to. “Given the inherently interstate nature of the Internet, we believe there has to be some level of regulation by the federal government,” said Whitaker Askew, vice president of government affairs for the American Gaming Association, which represents casinos, racetracks and several gambling vendors. He said that states should have the power to regulate and tax Internet gaming. He added that state legislatures should have to vote to opt in to legalizing Internet gambling, and those that do not should have the option of keeping it illegal within their borders. Askew said the federal government should only set a bare minimum of regulation that states must uphold to avoid a “regulatory race to the bottom” among states seeking to accommodate gaming operations. While the members of Askew’s association are likely to find themselves in competition with Internet gambling sites, it is also possible that existing casinos may be granted licenses to run online operations.

De Francisco said she and other state administrators are wary of federal regulation. Rose said that the gridlock in Congress means that a federal law is probably not coming any time soon. “I think the federal boat has sailed,” he said. “It just isn’t going happen. It certainly isn’t going to happen this year.”

But some experts believe that states that turn to gambling may make their economies worse. “Gambling’s effect on our economy is like reverse pump priming. It is taking money away from consumer spending and dumping it basically into electronic gambling machines,” said John Kindt, a professor of business and legal policy at the University of Illinois Urbana-Champaign. Kindt said the Justice Department went too far in its interpretation of the Wire Act. “[The Justice Department’s legal opinion is] an amazing document because the net impact is that a bureaucrat has issued a new controversial interpretation of the 1961 Wire Act, which was designed to attack organized crime. It’s a law that has withstood legal challenges for over 60 years. But this one bureaucrat in the Department of Justice has changed 60 years of precedent, reversing it 180 degrees overnight,” he said in a prepared statement. “The effect this legal opinion will have is that it is slowly removing almost all regulatory oversight of gambling. And once gambling is on the Internet, it’s in every living room, office, school and mobile phone.”

 Kindt said that Congress should evaluate the ruling and consider banning Internet gambling. "States are going to do whatever they think they can get away with to expand gambling simply because they need the revenue. The only way to prohibit it is for Congress to completely ban it again because states need more than a little oversight when it comes to certain things that have the potential to destroy their economies. Internet gambling is public enemy No. 1 in that regard. It’s an incredible economic danger that cannot be overstated."

Monday, August 06, 2012

New pension proposals emerge but still no clear solution

By Jamey Dunn

As a special legislative session on pension reforms draws near, one lawmaker has filed new legislation that she hopes will move negotiations forward.

Rep. Elaine Nekrtiz, who serves on a General Assembly pension reform working committee, introduced House Bill 6209 and House Bill 6210.

Gov. Pat Quinn called a special session for August 17. The Illinois House was already scheduled to be in session that day to decide the fate of Chicago Democratic Rep. Derrick Smith, who is accused of taking a bribe. A House disciplinary committee recommended that Smith be kicked out of his seat. Lawmakers plan to take that issue up for a floor vote. But Quinn also wants them to tackle pension reform, and he has called the Senate back on the same day in an effort to push the issue.

Nekritz’s bills are similar to Senate Bill 1673, a proposal she backed at the end of the spring session. Employees would have a choice of either giving up the compounding cost of living adjustments [COLAs] they receive after retirement or sacrificing their state subsidized retiree health care.

Republicans balked at SB 1673 because it would have required school districts, community colleges and universities to pay for their employees’ pension benefits. At present, those entities only pay part a portion of the cost, while the state picks up the bulk of the expense. Republicans said that such a shift would result in layoffs and increased property taxes. They dubbed the provision a “poison pill” that made them unable to support the underlying changes. Democrats say that the cost shift would require school districts to consider pension costs when offering raises. Chicago lawmakers also argue that it is unfair that the city covers the bulk of pension costs for its teachers while the state picks up most of the tab for suburban and downstate districts.

Nekritz’s new plan, House Bill 6209, would shift the cost more gradually than SB 1673. Under the new plan, schools would pay .6 percent of payroll in Fiscal Year 2014, with the cost stepping up by .6 percent each fiscal year through FY 2024. After that time, the cost would step up by .5 percent. The amount schools would have to pay would increase until they had taken over the entire employer cost for retiree benefits. “The concept of the longer phase-in on the cost shift was the results of negotiations, and it never has made its way into bill form,” said Nekritz, a Northbrook Democrat.  

The Senate dodged the cost shift issue by passing HB 1447 on the last day of regular session. The bill only applies to state employees and members of the General Assembly, leaving out teachers and university employees. Nekritz said that HB 6210, which would apply to teachers and university employees, could be a “companion” bill to HB 1447. HB6210 also contains the more gradual cost shift.

But both of Nekritz’s bills would require more than one day of session to pass through both legislative chambers in their current forms, and she is not expecting lawmakers to be in session for multiple days next week. “I think the likelihood of us staying over the weekend is not high.” Both of the bills also have an immediate effective date, which means they would require a three-fifths majority to pass in 2012. It is unlikely that proponents would be able to drum up such support on a controversial issue this close to the November general election.

Nekritz said her intent in presenting the bills was instead to push forward the conversation about pension reform. “The goal is to put this down and say: 'This is the latest thinking. How can we move ahead?'” However, the language in her legislation could be moved into a vehicle bill, which would allow for passage in a single day, and the effective dates also could be changed.

Quinn supports both of Nekrtiz’s bills. “The governor continues to feel that pension reform should be resolved as soon as possible. The governor feels that that there can be no more delay on an issue that is costing taxpayers $12.6 million a day and putting the state at risk of a future downgrade. That’s why he is calling the legislature back for a special session on pension reform, which will give them the opportunity to vote on this critical issue,” Brooke Anderson, a Quinn spokeswoman, said in a prepared statement.

House Minority Leader Tom Cross has reservations about even a gradual cost shift. The Teachers Retirement System may reduce its expected rate of return on investments, which could increase the system’s unfunded liability. A statement from Sara Wojcicki Jimenez said Republicans are concerned that if a change occurred, school districts and colleges would on the hook for a lot more than what is currently being discussed. “The bottom line is that a pension cost shift is exactly that — a cost shift, not reform. We remain in total support of comprehensive pension reform of our pension systems. We have been and are willing to work with the other legislators and the governor to come up with a comprehensive solution as soon as possible,” she said. Jimenez said that the pension working group plans to hold more discussion this week.

However, union officials say they have not been included in negotiations. “We had hoped that the failure of the various unfair bills introduced in the spring would provide an opening for our union coalition to once again sit down with legislative leaders, and particularly the governor, to get serious about solving this problem cooperatively. That hasn’t happened. There have been no such meetings,” said Anders Lindall, spokesman for the American Federation of State County and Municipal Employees, Council 31.

Lindall said these new bills would have negative effects on employees that are similar to the proposal considered at the end of the regular session. “The general concept is to force workers and retirees to choose between losing their health insurance and future pensionable compensation or seeing their COLA gutted. The cost-of-living adjustment is the provision that allows retirees on fixed income to keep pace with rising costs.” He said that unions are “willing to be part of a pension solution that is negotiated collaboratively.” However, Lindall said, “We are strongly opposed to any legislation that’s unfair and unconstitutional in putting practically the entire burden of the pension debt on the backs of employees, and in this case, [current] retirees.”

Thursday, August 02, 2012

AFSCME sues to keep prisons open

By Jamey Dunn

The state’s largest public employee union is suing to block Gov. Pat Quinn’s plans to shut down several correctional facilities on the grounds that the closures would create unsafe working environments for its members.

The American Federation of State, County and Municipal Employees Council 31 is seeking an injunction against the closure of seven facilities. Two of the facilities are prisons, a super-maximum-security prison near Tamms and a women’s prison in Dwight. The union is also suing to keep open adult transition centers in Decatur, Carbondale and Chicago and youth prisons in Joliet and Murphysboro. According to AFSCME, Quinn’s closure plan would result in the transfer of almost 5,000 prisoners, including youth offenders. “Many of the inmates that will be moved are those who have been intentionally segregated in the correctional system because of the danger they pose to guards and to other inmates. Almost a thousand maximum security female inmates will be moved, and several hundred maximum security youth will be moved as well. The insertion of these inmates into the overcrowded prisons of the state will inevitably foment unrest that will put employees, other inmates and the general community at risk,” said AFSCME’s complaint.

According to the complaint, AFSCME is suing to protect its members from the “risk of injury and death” that the group says they would face under Quinn’s plan. “Inmates are being sent to prisons that are too crowded, too short of staff or lacking appropriate security features to safely incarcerate them,” AFSCME Council 31 executive director Henry Bayer said in a prepared statement. “We’re asking the court for an injunction to prevent the state from moving forward with any closure until the related grievances have been resolved.”

Lawmakers approved a budget that contained money to keep facilities open for the current fiscal year, but Quinn used his veto pen to reject the money and has moved forward with closures. “They’re going to be closed. I do believe that we have to see our budget as what our priorities are,” Quinn said when he announced his changes to the budget. He called on lawmakers to instead use the money to defer other cuts that were in the budget, including an $86 million reduction to funding for the Illinois Department of Children and Family Services.  The State-Journal Register reported that the agency recently issued layoff notices to 600 employees as part of a restructuring plan that would result in a net reduction of 375 jobs. The department claimed that the layoffs were a direct result of the budget cut.

Legislators opposed to the closures have asked Quinn to hold off on shutting down the facilities until they have a chance to act on the governor’s vetoes. “Anyone who calls to keep these outdated, half-full, expensive facilities open is calling for the continual waste of taxpayer dollars on facilities the state no longer needs, ” Kelly Kraft, a spokesperson for Quinn, said in a prepared statement. “The overall population is down from last year, and female entries into the system are declining. Inmates will be safely and securely transitioned into appropriate facilities fully capable of securing offenders and resulting in costs savings to Illinois taxpayers. Some will say that money was provided in the budget to keep these facilities open, when in reality, legislators made a choice on how to spend taxpayer dollars: choosing outdated, half-full, expensive prisons over educating our children and keeping them safe.”

Wednesday, August 01, 2012

Illinois becomes second state to bar employers from asking for social network passwords

By Jamey Dunn

Today Illinois became the second state in the nation to bar businesses from asking employees or potential employees for their social media profile passwords.

“It is important that we understand that even though we live in an information world—a very fast paced world where we can get information in split seconds—there’s some information, if [it] belong[s] to the person, that belongs just to the person. That’s their choice. If they want to share it, that’s their business, but privacy is a fundamental right,” Gov. Pat Quinn said today before he signed House Bill 3782 at a Chicago news conference.

According to the National Conference of State Legislatures, more than a dozen other states are considering bills that would restrict employers from asking for information from employees’ profiles on social media networks, such as Facebook and Twitter. Maryland Gov. Martin O'Malley signed his state’s ban in May.

Nationally, some U.S. senators have asked the U.S. Department of Justice to determine if employees who ask for social network information are violating any federal laws. Facebook has come out against employers asking for passwords and users sharing their passwords with others. “If you are a Facebook user, you should never have to share your password, let anyone access your account, or do anything that might jeopardize the security of your account or violate the privacy of your friends. We have worked really hard at Facebook to give you the tools to control who sees your information.

"As a user, you shouldn’t be forced to share your private information and communications just to get a job. And as the friend of a user, you shouldn’t have to worry that your private information or communications will be revealed to someone you don’t know and didn’t intend to share with just because that user is looking for a job,” said a written statement from Erin Egan, Facebook’s chief privacy officer. 

Lori Andrews, director of the Chicago-based Institute for Science, Law and Technology, said that Illinois’ new law puts the state at the “forefront” of online privacy rights. “Over 900 million people are on Facebook. If it were a nation, it would be the third largest nation in the world after India and China, and yet it’s very unclear what your rights are in that venue,” said Andrews, who is also a professor at the Chicago-Kent College of Law.

Andrews said research has shown that about 75 percent of employers browse potential employees’ public social network profiles, and about one third say they have opted not to hire employees based in part on what they found. But Andrews said that allowing businesses to access information on social sites that has not been shared to the general public would open the door to potential discrimination. “It could reveal things about your religious beliefs or your political affiliations or your sexual preferences.” She said that employers might be able to access information about topics such as family medical history or family planning decisions, which are legally barred from asking job applicants about in interviews. “If your employer can go on the private side of your Facebook page, your potential employer might find out that you’re planning to get pregnant or that you liked the American Cancer Society,” she said. “So this bill will protect employees and potential employees by preventing them from having to cough up this very personal information.”

 Illinois’ law will bar employers from asking for passwords to social media accounts or making employees log in to their account and show it to the employer. It will also keep employers from making workers or applicants grant them access to information on the site that is blocked by privacy settings. However, under the new law an employer could ask for user names and view any information that a worker or job candidate chooses to make public.

Senate Minority Leader Christine Radogno, who sponsored the law, said the ban would help to protect young people who are active on social media sites. “This was kind of a fun bill to work on because we pass a lot of bills in Springfield that many people, especially young people, don’t feel really affect their lives or they can relate to personally, and this is one that people definitely relate to and understand. I know I got a lot of ‘likes’ on my Facebook page when we talked about this bill. But Radogno said that as a mother, she felt the obligation to warn young people to be careful about what they post online. “Please remember that they can’t ask for your password, but be discrete and be smart about what you put out there on the Internet because it is still out there and it can affect you.”

The law goes into effect next July 1. Businesses that violate the ban would be subject to a civil penalty of between $100 and $300  for a first offense.