Friday, December 21, 2012

Pension reform plan could cut next year's payment by nearly $2 billion

By Jamey Dunn

Supporters of a new pension reform proposal say it would shave almost $2 billion off the pension payments required by the state next year.

Northbrook Democratic Rep.Elaine Nekritz and Rep. Daniel Biss, an Evanston Democrat, released an analysis of actuarial numbers provided from the state’s pension funds on their proposal, House Bill 6258. The bill would cap the amount of retirement income eligible for cost of living adjustments and delay COLAs until retirees turn 67 or have been retired for five years, whichever happens first. It would also increase the retirement age for employees younger than 46 and increase employee contributions by 2 percentage points. Nekritz and Biss said the measure grew out of talks among rank-and-file House members after negotiations among legislative leaders stalled.

According to the figures released today, the plan would immediately reduce the state’s unfunded pension liability from an estimated $95 billion to $67 billion. Several components of the bill would contribute to shrinking the liability, but Biss said that the changes to the COLAs would be the most significant upfront savings.

The report also said that if school districts had to pick up the costs of retirement benefits that are currently covered by the state, the cost would represent an estimated .52 percent of their overall payroll. HB 6258 contains a cost shift to schools outside of Chicago, as well as to universities and community colleges. The so-called cost shift was the main area of disagreement that held up previous plans. Biss said he was a bit surprised that the cost would be so low. However, those opposed to the cost shift have voiced concern over the idea, no matter what how little it might cost schools or how gradually it would be phased in. They say it would mean an increase in property taxes, and they are worried about unexpected spikes in retirement costs if the pension systems’ investments fail to perform as predicted. The price to universities under the plan would be a larger portion of their total payroll, but Biss said it would never grow to more than 4 percent.

Public employee unions released a report earlier this week that illustrates the flip-side to those estimated cost savings, which amount to reductions in pension income for current and future retirees. According an analysis from the union coalition We Are One, the proposed changes in COLAs and the retirement age would mean that employees younger than 35 would see their retirement benefits reduced by 40 percent by the age of 80. Employees between the ages of 40 and 45 would see the value of their benefits by age 80 reduced by nearly a quarter.

“We have yet to see the governor or legislators produce a pensions proposal that meets the basic standard of being constitutional, much less a plan that is any way fair to the hundreds of thousands of Illinoisans who are either currently receiving a pension or those who are paying into a pension that they expect to receive in the future,” said Illinois Education Association President Cinda Klickna. She said unions believe HB 6258 is unconstitutional.

But Biss argued that no one could predict how judges will interpret the provision in the state’s Constitution that protects pension benefits. “There’s a wide variety of diverging views on the subject,” he said. “There are as many different constitutional theories on this issue as there are [reform] proposals.” Biss said the best lawmakers can do is pass a plan that they think is solid public policy and has the greatest chance of holding up in court.

The unions pitched their own plan, which would raise billions in new revenues by eliminating corporate tax breaks and asking employees to increase their contributions by 2 percentage points. “You cannot solve this problem with less money, period. You just simply can’t. You can’t cut your way out of it,” said Toby Trimmer, director of political activity for the Illinois Federation of Teachers. “And the only thing that has at this stage of the game been presented to us over the course of the last year or so has been an approach to try to cut their way out of it through our members’ benefits, and you just can’t do it.” Trimmer said plans that rely only on benefit reductions that would be made without the approval of unions are “unconstitutional” and “morally unfair.”

Biss said that he is open to the idea of looking for new revenues and wants to work with the unions on the proposal. “That’s an almost $100 billion hole. Yes, you have to go wherever you can to fill it.” He said the only options for lawmakers are raising new revenue, cutting retiree benefits or cutting other spending in the state budget. “I’m a big believer in balance, and I think we have to do all three.” However, Biss noted that much of the revenue from the income tax increase is being spent on pension payments, and legislators have made recent budget cuts. “So it seems to me that the next rational step to take is on benefit reform.”

Wednesday, December 19, 2012

State employees would pay more under union-backed pension plan

By Jamey Dunn 

Union officials pitched a pension reform plan today that would ask state workers to pay more for their benefits.

Under a plan proposed by the We Are One Coalition, a group of unions that represent a variety of state workers including teachers, health care professionals and university employees, workers would contribute more in exchange for legislators making an “iron-clad guarantee” to make the required pension contribution each year. “Teachers and administrators and 80 percent of all state workers do not collect Social Security [benefits]. ... The workers have made their pension payments, from the 9.4 percent paid by teachers to the 12 percent paid by the police. The reason we are in this mess today is the persistent failure of elected leaders to budget and pay the systems year after year,” Illinois Education Association President Cinda Klickna said. Employees would contribute 2 percent more of their paychecks toward their retirement benefits. The portion of their incomes that employees pay now varies across the state’s five pension systems. The group says that increase would bring $350 million more into the systems annually.

Union officials said that no proposals considered so far meet the constitutional requirements that protect public employee retirement benefits. “Any proposal which fails to deal with the pension funding and does not pass constitutional muster is not real. It’s only prolonging the state’s fiscal woes,” said Joanna Webb-Gauvin, the legislative director for the American Federation of State, County and Municipal Employees Council 31.

The coalition is calling for a “pension summit” to negotiate an agreed-upon plan that Klickna said unions want to see passed during the new legislative session, which starts in January. Gov. Pat Quinn responded to the proposal: “We always want to look at everything. I think it’s useful to look at everybody’s ideas. We’ve been doing that, really, for more than a year. If there are some good concepts there, we can incorporate them. But I think this is not a time to delay or postpone.”

“We want an end to the gridlock as well,” said Toby Trimmer, director of political activity for the Illinois Federation of Teachers. ... We want to sit down at the table, but we want a seat at the table. We don’t want to be on a platter.”

Union representatives said Quinn’s public outreach efforts, which paint the situation as an option between cutting pension benefits or cutting education and human services, are unfair because they do not consider other areas of spending, such as tax breaks. The coalition is proposing the elimination of $2 billion in tax benefits for businesses. “Today, the state of Illinois has a massive pension problem, the root cause of which can be expressed in one single word: revenue. Past governors and legislators took money the state owed the pension systems and spent it elsewhere. Fixing the problem requires that the money that was diverted must be replaced,” Klickna said. The group did not have actuarial figures on the impact their proposal would have on the system, or whether it would eventually result in a fully funded system.

The unions' overall plan is similar to one they pitched last summer that was met with little to no attention from Quinn and lawmakers. However, a recent report from Moody’s Investor Services lends come credibility to the unions’ argument about the need for revenue. “Despite a diverse economy with above-average wealth, lackluster demographic and economic characteristics indicate that even with continued U.S. economic improvement, the state's existing tax structure will not provide enough revenue to address the rising cost of pension benefits and other state expenses,” the bond-rating agency stated. It changed the state’s fiscal outlook last week from stable to negative, in part because of inaction on the pension issue.

At an event in Cicero announcing grants for early childhood education today, Quinn again pitted retirement costs against school funding. “In order to have good education, including early childhood education, we have to reform our pension systems because in a few short years our state will actually be spending more money on pensions for former government employees than we spend on education for our children and our students,” he said. “I’m optimistic we can come up with a sound plan that meets all constitutional tests, that’s fair to the workers -- they’ll have a decent retirement -- that’s is also fair to the taxpayers and most of all the children of Illinois. We can’t let them down, and we must address pension reform right away.”

Many of the tax breaks on the group’s list perennially pop up as options for new revenue. Quinn himself recently pitched some of them as a way to supplement the state’s underfunded capital construction plan. “Too often, states agree to weaken their revenue systems based on vague corporate claims of ‘job-killing taxes’ or a state’s lack of ‘business-friendliness’ without any evidence of the actual tax burdens of companies. This overemphasis on lowering taxes ignores the relatively small role impact taxes have on states’ economic development climates and neglects the very important role those taxes play in funding the services and infrastructure that actually do attract investment and jobs. Once written into law, these tax breaks are rarely if ever reviewed to see if they fulfilled their intentions,” stated a report released by the union coalition today.

“It’s unfortunate that they’re trotting out these old ideas that the General Assembly has continually turned thumbs down on,” said Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers’ Association. He noted that virtually all corporate tax breaks the state offers could be eliminated, and it still would not solve the pension systems’ underfunding problem. “How much more do they have to pay? It comes down to, you can’t keep raising taxes on the few employers that are remaining here because you are going to run them out of state.” Denzler said the manufacturing sector has seen growth recently for the first time in years and that eliminating some of the tax breaks on the coalition’s list could imperil that progress. “Coming out of a recession, manufacturing has been one of the bright spots.”

He said manufacturing jobs and research-and-development jobs often pay well enough to keep a family firmly in the middle class, and many are held by members of private sector unions. “It’s interesting [this is] coming from the unions. Without good manufacturing companies, you lose a lot of union members. If you’re going to have big manufacturing companies and small manufacturing companies leave, you’re going to lose a lot of your private-sector union employees,” he said.

Denzler said business leaders are willing to discuss changes to the tax code as part of an overall conversation that would include other issues that contribute to their costs, such as the state’s worker’s compensation system. He said ideas such as expanding the state's sales tax base to some services while lowering the overall rate could be a good place to start negotiations about reworking Illinois' tax structure.

Friday, December 14, 2012

State faces credit downgrade and underfunded capital plan

By Jamey Dunn

Illinois continues to struggle with fiscal challenges as another credit downgrade looms, and Gov. Pat Quinn reveals a funding shortfall in the state’s capital construction program.

Moody’s Investor services downgraded the state’s bond rating in January, making Illinois the lowest rated state in the country, according to the bond-rating agency. Yesterday, Moody’s issued a warning by changing the state’s credit outlook from stable to negative. The change is not a downgrade of the state’s rating, but such a move can often be a precursor to a downgrade. “This is kind of like the teacher having the parent discussion saying if the student doesn’t get it right, we’re going to have to give him this grade for the future. It’s like an intervention. If we don’t get it right, it’s going to go down,” said Illinois Treasurer Dan Rutherford.

The rating agency zeroed in on the state’s massively underfunded pension system and the lack of action from lawmakers to address the problem. “The negative outlook reflects our view that the state's pension funding pressures are likely to persist and perhaps worsen in the near term,” said the ratings report from Moody’s. “If the legislature in coming weeks or months enacts significant pension reforms, they are almost certain to be challenged, given the state's constitutional protection of retiree benefits. Political pressures, coupled with the threat of litigation, may mean that any reforms enacted have only a marginal effect on liabilities.” However, the agency also noted the state’s billions in unpaid bills and other budget woes. “The state's existing tax structure will not provide enough revenue to address the rising cost of pension benefits and other state expenses. In addition, the state's payment backlog remains high.”

Quinn’s administration is focusing on Moody’s scrutiny of the pensions system. “The problem is unless we reform our pensions system we will continue to have problems from the credit rating agencies downgrading our credit, and that’s not helpful for building jobs in Illinois. We want to build roads and repair roads, improve our bridges and take care of our rail systems. All of that is requiring us to issue bonds, and if our bond rating is declining that’s very bad for jobs,” Quinn told reporters in Chicago today. “So I think it’s important for the legislature to understand that until we address the pension reform challenge, we will continue to have problems with our bond rating.” He added, “If we repair the pension situation, we can have a stronger economy a better credit rating and a better future.”

Rutherford noted that lawmakers are interested in taking up a host of issues during the January lame-duck session—including same-sex marriage, gambling expansion and legislation to give immigrants, who are in the country illegally, access to driver’s licenses. But he said pension reform should take priority over all of those issues. “I understand all of those are important for certain constituencies, but for the future of the state of Illinois, there is absolutely nothing more important than [pensions reform.]”

Quinn also discussed proposals to bring in more revenue for the state’s capital construction plan, which he says is underfunded. One of the major funding sources for the plan, which passed in 2009, is video poker. Legalizing video poker took longer than expected and is just starting to roll out in bars and restaurants across the state. Several local governments also opted out of having legal video poker in their jurisdictions. For more on why revenues from video gaming fell short, see Illinois Issues April 2010. 

Fox News Chicago reported that the governor has floated several revenue options via a memo to lawmakers to help close an estimated $250 million to $300 million gap. Quinn said today that some of the proposals on the memo come from his office and some come from legislators themselves. “There are some things I have talked about over many years of closing corporate loopholes and other loopholes that don’t produce economic growth or jobs. I think we ought to close loopholes and use that money to create jobs to help build more roads, repair our roads.” One proposal Quinn is backing is an idea he pitched in his budget proposal this year. He supports eliminating a specific tax exemption for oil companies that drill in the ocean and sit on the intercontinental shelf. There is a federal exclusion for such companies, and since Illinois’ tax code mirrors the federal code in most instances, there is a state exemption as well. At the time of his address, he estimated that eliminating such an exemption could bring in $75 million annually.

However, Quinn said he does not support increasing the tax on gas. “If we’re going to have safe roads, we’ve got to make sure we invest in in road construction and road repair and bridge repair. We’re not going to do that through a gas tax. I’m opposed to raising the gas tax.”

Wednesday, December 12, 2012

Quinn says public safety is his top priority for concealed carry law

By Jamey Dunn

Gov. Pat Quinn said any concealed carry bill in Illinois would have to contain safety restrictions to get his approval.

“The court did say for the reasons of public safety that reasonable limitations can be applied...and I think it’s important that we stress that. Public safety comes first,” Quinn told reporters in Chicago today.

After a federal court ordered the General Assembly yesterday to approve a concealed carry law within 180 days, supporters said they would not be as willing to compromise on a more restrictive bill. “We just wanted them to work with us in the past, and they never wanted to,” Rep. Brandon Phelps, a Harrisburg Democrat, said of those who did not back his concealed carry legislation. After Quinn stated publicly that he would veto the bill, Phelps’ bill legislation did not get enough votes to pass when it was called on the House last year. His proposal required training for a concealed carry permit and put limits on where guns would be allowed. But now that a court has signed off on concealed carry, Phelps and others say they will likely present a less restrictive plan. “You can’t argue with the courts,” he said.

Quinn did not get specific on what he wants to see in a bill, but he said public safety is his priority. “We’re going to take a look at everything: not only bills that have been introduced in Illinois, but the laws that exist in other states. We want to get the very best law that protects public safety. That’s where I’m coming from, and I’m going to insist on that, and,frankly, you don’t have a law until you have the governor’s signature.” Quinn said it is up to Attorney General Lisa Madigan to decide whether to appeal the ruling. “I’ll trust her judgment.”

The governor used the news of the ruling to again call for the ban of assault weapons and high-capacity ammunition clips in Illinois “We are not going to have people marching along Michigan Avenue or any other avenue in the state of Illinois with military style assault weapons, weapons that are designed to kill people,” Quinn said today. During the veto session, the legislature overturned a veto that Quinn used to tack such a ban onto another bill. After that vote, he said he planned to back such a proposal through the legislative process.

Quinn commented on another court ruling today. The Illinois Supreme Court yesterday lifted a court order that had been preventing the governor to move ahead on a plan to close several Illinois Department of Corrections facilities. “I’m happy the court ruled in our favor, and now we’ll carry out what the court told us.”

While the Senate voted to override Quinn’s vetoes of the money for the facilities, the House let the vetoes stand. Quinn used his veto pen to remove $19.4 million for the super-maximum security prison near Tamms and $21.2 million for the women’s prison in Dwight from the budget passed by lawmakers in the spring session. In addition to the prisons, he plans to close three transition centers meant to help inmates re-enter society. He also cut $8.9 million for a youth prison in Joliet and $6.6 million for a youth prison in Murphysboro. Quinn said without the money to fund them, the facilities cannot remain open. “We’ll follow the proper legal process in order to go through the court system, but the bottom line is last week the Illinois General Assembly did not override my veto, I vetoed money for these prisons and other facilities,” Quinn said today.

 But the Quinn administration has not released a timeline for the closures and the American Federation of State, County and Municipal Employees Council 31 plans to continue its appeal, which is pending in a lower court. “AFSCME members are extremely disappointed in this ruling. The injunction is vital to upholding the union’s right to seek judicial review of an arbitrator’s findings on crucial health and safety concerns. Nonetheless, we intend to vigorously pursue that appeal. This ruling doesn’t change the fact that closing any prison will worsen severe overcrowding throughout the correctional system, making the remaining prisons more dangerous for employees, inmates and ultimately the public,” Anders Lindall, spokesman for AFSCME Council 31, said in a written statement.

Tuesday, December 11, 2012

Court clears the way for concealed carry in 2013

By Jamey Dunn

A federal court ordered the Illinois legislature to craft a law allowing the concealed carry of guns in the state.

Today’s ruling from the Seventh Circuit Court of Appeals said that Illinois failed to “justify the most restrictive gun law of any of the 50 states.” Illinois is the only state that does not allow for concealed carry of weapons by residents. However, as the ruling notes, some states, such as New York, have concealed carry laws that strictly regulate the granting of permits and places where guns are allowed. “Illinois has lots of options for protecting its people from being shot without having to eliminate all possibility of armed self-defense in public,” said the opinion. “There is no suggestion that some unique characteristic of criminal activity in Illinois justifies the state’s taking a different approach from the other 49 states. If the Illinois approach were demonstrably superior, one would expect at least one or two other states to have emulated it.”

The ruling called upon the General Assembly to approve a concealed carry law in 180 days. “It’s pretty much a mandate that Illinois has 180 days to pass a conceal carry bill for the state of Illinois,"’ said Rep. Brandon Phelps, a Harrisburg Democrat, who sponsored a concealed carry bill that failed in the House last year. Phelps said he warned those who did not support the bill that a court case could lead to a much less restrictive concealed carry option. “I said at the end of my speech [on the House floor] that everybody that voted ‘no’ on this is going to wish that we had this.”

House Bill 148 would not have allowed gun owners to carry firearms in certain restricted areas, such as schools and bars. Phelps said that bill will be scrapped and a new piece of legislation is currently being drafted. He said it would not be ready for the January lame duck session, but he hopes to introduce it to the new General Assembly in January or February of next year. Pro-gun groups and supporters of concealed carry said they will be less eager to compromise on such issues going forward.

The majority ruling said that Illinoisans have a constitutional right to carry a gun for protection, and that right extends to places outside the home. “Twenty-first century Illinois has no hostile Indians. But a Chicagoan is a good deal more likely to be attacked on a sidewalk in a rough neighborhood than in his apartment on the 35th floor of the Park Tower. A woman who is being stalked or has obtained a protective order against a violent ex-husband is more vulnerable to being attacked while walking to or from her home than when inside. She has a stronger self-defense claim to be allowed to carry a gun in public than the resident of a fancy apartment building (complete with doorman) has a claim to sleep with a loaded gun under her mattress,” Judge Richard Posner wrote.

But in the dissenting opinion, Judge Ann Williams writes that it is unclear that carrying a gun outside of the home for the purposes of self defense is a right protected by the Second Amendment and argues that the court should defer to the judgment of lawmakers when it comes to such a public safety issue. “Guns in public expose all nearby to risk, and the risk of accidental discharge or bad aim has lethal consequences. Allowing public carry of ready-to-use guns means that risk is borne by all in Illinois, including the vast majority of its citizens who choose not to have guns. The State of Illinois has a significant interest in maintaining the safety of its citizens and police officers,” Williams wrote. She concluded that the legislature “acted in its within it’s authority” when Phelp’s bill was voted down.

Attorney General Lisa Madigan said she has not made a decision on whether she will seek an appeal. The court gave 180 days before its decision will be returned to the lower court to be implemented. That time period allows our office to review what legal steps can be taken and enables the legislature to consider whether it wants to take action,” Maura Possley, a spokeswoman for Madigan, said in a written statement. For more on the battle over concealed carry in Illinois, see Illinois Issues March 2012.

TRS officials: We need a year to prep for pension reform

By Jamey Dunn

Officials from the Teachers Retirement System of the state of Illinois say they would need a year to prepare for pensions reform.

David Urbanek, spokesman for TRS, said that the system would need time and additional staff to gear up an outreach campaign to help its members understand potential changes to their pension benefits. The TRS board is considering contingency plans for education efforts that would be needed if lawmakers pass pension reform in the coming months. “Several proposals are pending in the General Assembly that would greatly affect every one of our 366,000 members, and we need to be ready to help them with this important transition should it occur in the future,” said TRS Executive Director Dick Ingram said in a prepared statement. “We would need to enhance and expand our operations and procedures in several departments, especially Member Services, Employer Services and Information Technology.”

Urbanek said that TRS currently has 25 counselors and a call center to assist teachers and other employees in the system. He said TRS would especially have to step up efforts if those workers are faced with a choice between subsidized health care and Cost of Living Adjustments with compounding interest, a provision of one bill that lawmakers are considering. He said such a choice would be very complicated because there are several unknown factors, such as future health care costs and how to handle a situation where both spouses are teachers. “Some people have said ‘you can just put a calculator on the website, and they can figure it out.’ Well, no they can’t,” he said. He noted that the newest proposal includes a 401K-type plan for all newly hired teachers, “which in effect is a tier three [of benefits] and that requires different accounting procedures for those members.”

Urbanek said that if any pension reform legislation passes and is signed into law by Gov. Pat Quinn, “We will start in motion the communications effort to make sure our members understand what has been passed.” He said as the law faces the inevitable court challenge, TRS would “start flushing out the contingency plans to a greater extent.”

The plan could include hiring new employees, or contracting with an outside firm for extra help. He said Ingram has informed lawmakers that TRS would need a year to handle any major changes to the pensions system. “We would need a year to gear up for something,” Urbanek said. “We’re not just talking about something that you can get ready for in two weeks or two months.”

Friday, December 07, 2012

Judge sides with state unions on pay increase

By Jamey Dunn

A judge has ruled that Gov. Pat Quinn must pay the contractual raises he denied to state employees, but the governor plans to appeal the decision.

Cook County Circuit Court Judge Richard Billik ordered Quinn to pay the raises that approximately 30, 000 state employees have been waiting for since July 2011.

"This ruling is a strong affirmation of the union's clear and simple position: Employees must be paid the wages they are owed, and a contract cannot be unilaterally discarded," Henry Bayer, executive director of the American Federation of State, County and Municipal Employees Council 31, said in a written statement.

Quinn said he could not give the raises because the General Assembly did not include the money in the budget. However, more than 1,700 employees at the Illinois Department of Revenue and the Criminal Justice Information Authority received the pay increase in August. Quinn’s administration said both agencies had enough funding to afford the pay increases because of smaller-than-expected personnel costs.

“The Illinois General Assembly did not appropriate money for raises in its Fiscal Year '12 budget. As the governor has said repeatedly, the state cannot pay money it does not have the appropriation authority to spend. We will immediately appeal this ruling,” said a statement from Quinn’s budget office.

But the union called on Quinn to let the ruling stand. "Gov. Quinn has wasted hundreds of thousands of taxpayer dollars with the goal of preventing middle-class public employees from being paid according to their contract and the law. We urge the governor to end his wasteful court battle and move forward to pay employees who have waited far too long,” Bayer said.

Wednesday, December 05, 2012

Quinn's budget cuts stand

By Jamey Dunn

During the Illinois General Assembly's fall session, the House did not take up Gov. Pat Quinn’s budget vetoes, which eliminated funding for several state facilities he plans to close.

Quinn cut a total of $57 million from the budget that lawmakers sent to him, and most of the money was funding for prisons and other Illinois Department of Corrections facilities that the governor says he intends to shutter as part of a cost-savings plan.

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. He also cut $8.9 million for a youth prison in Joliet and $6.6 million for a youth prison in Murphysboro. The Senate voted to override the vetoes last week, but the House did not take a vote on the issue, which all involved said was largely symbolic. Even if the House had voted to reject Quinn’s changes, he would not have been bound to spend the money to keep the facilities open.

Still, downstate legislators in support of keeping the prisons open wanted a chance to argue their case on the House floor before the House ended its veto session today. “I had the best speech ever,” said Rep. Brandon Phelps, a Harrisburg Democrat. He said the closures would hurt areas of Illinois that are already economically depressed. “Tamms is a huge economic engine for that little area down there. It’s just going to be devastating for that area and for my district. The governor always says he is the jobs governor, but he is not proving it right now.” Phelps said that today was the last day to vote on the vetoes.

Quinn had been lobbying hard against an override in both chambers. “Today is a victory for the taxpayers of Illinois. The Illinois House of Representatives sent a strong message about their serious commitment to reducing spending the state cannot afford,” a written statement from Quinn’s office said.

Critics of Tamms say that the prison's high staffing numbers and low number of inmates wastes money. They claim that its policy of extreme isolation for prisoners, who often spend only an hour outside of their cells each day, equates to torture. The treatment of inmates at the prison has been condemned by a number of international human rights organizations, including Amnesty International. Those in favor of closing Tamms argue that it would help other woefully understaffed prisons reach required staffing levels because staff from the closed prisons would be transferred.

But those opposed say the closures will make the state’s already overcrowded prison system even more dangerous. The American Federation of State, County and Municipal Employees sued to keep the prisons open on the basis that the closures would put their employees in danger. So far, one arbitrator has sided with the union, saying the closure violates its contract, and one sided with Quinn, saying that the prisons could be closed safely. It is likely that a court will make the final call.

A spokesman for House Speaker Michael Madigan, Steve Brown, said Madigan did not call the bill because it would have been “at best, a symbolic kind of vote” and that the House was unlikely to reject the cuts because Republicans were not on board. House Minority Leader Tom Cross said yesterday that he would not support an override vote because he believes Quinn plans to shut down the institutions no matter what. “We have a fiscal problem in this state, and we have to recognize that someday, that we don’t have a lot of extra money.”

Quinn is pushing lawmakers to use some of the money from his vetoes to fund the Department of Children and Family Services, which took an almost $90 million hit under the budget crafted by the House. Brown said negotiations over that spending, as well as facility closures, continue. “There’s pretty wide-ranging negotiations going on over changes in the budget,” he said. “The give and take that will continue to go on is probably the most important thing in that area.”

House members propose new plan for state employee pensions

By Jamey Dunn

A group of Illinois House members are pitching a new pension reform plan, which they say they hope will move stalled negations forward.

“There is absolutely no question that the pension issue is the most serious public policy facing the state of Illinois. ... I think there is a frustration, a genuine frustration, on the part of many members of the legislature that there has not been meaningful negotiation, meaningful progress on this most serious issue,” said Rep. David Harris, who has signed on as a sponsor of House Bill 6258. Harris is joined by 20 other House members as sponsors, including one other Republican “I can tell you that there are others on my side of the aisle who feel very strongly that this bill moves us in the right direction,” said Harris, a Republican from Arlington Heights.

 The measure would:
  •  Allow cost of living adjustments on only the first $25,000 of a retiree’s pension, or on only $20,000 for those who receive Social Security benefits. COLAs would not kick in until a retiree turns 67 or five years after retirement, whichever comes first. 
  • Increase the retirement age for employees younger than age 46. Employees from age 40 to 45 would see a one-year increase, employees 35 to 39 would see a three-year increase and employees 34 and younger would see a five-year increase. 
  • Increase the employee contribution by two percentage points, which would be phased in over two years. 
  •  Limit the amount of pensionable income to the Social Security wage base, which will be $113,700 in 2013, or the employee's current salary, whichever is greater. 
  • Create a hybrid 401K-type plan, also called a cash balance plan, for newly hired teachers and university and community college employees, with employer contributions and a guaranteed return on investment rate. Employees unhappy with so-called Tier 2 pension benefit could opt into this plan instead. 
Supporters say that they cannot estimate how much the bill would save until they get actuarial analysis from the state pension systems. Sponsor Rep. Daniel Biss, who developed the cash balance plan, said the bill would eliminate the unfunded liability after 30 years.

Unlike other proposals, the plan does not present employees with a choice of keeping one kind of employee benefit, such as retiree health insurance, or giving up some of the value of their pension benefit. Senate President John Cullerton has in the past said that such consideration must be given to employees for a proposal to pass constitutional muster. “The Senate president is encouraged that members are identifying ways to capture the local share of pension costs from local school districts. However, the larger proposal appears to impose unilateral pension reductions without offering voluntary acceptance by participants. We appreciate the efforts of [Northbrook Democratic Rep.] Elaine Nekritz and her colleagues, but we will take a closer look at the plan to see if it can be squared with the pension clause [of the state Constitution]," said a written statement from Cullerton's office.

Nekritz, who is spearheading the new push for reform, said the group reviewed several opinions on the constitutionality of the changes to the system. “I don’t think anyone can know in advance what the seven supreme court justices will do,” she said. “I think all of us would agree that without some changes, Illinois will be sent into fiscal oblivion, and we have to avoid that.” Backers of the new proposal said that such a choice is confusing to employees and creates uncertainty about how much a plan would save because it would be determined by which option employees picked.

The new plan includes a provision that sponsors say would ensure funding from the state. The pension systems would be able to sue if the state did not make its required contributions. “Right now, there’s no mechanism for anyone to say to the state, ‘You must make that payment,’” said Nekritz. “This would be a mechanism to allow the state pension systems to go into court and enforce that payment.”

The measure would call on school districts outside of Chicago, along with universities and community colleges, to pick up pension costs going forward, but would not require them to pay for the billions in current unfunded liability. The employers would pick up those costs at the rage of .5 percent of payroll per year. Biss, an Evanston Democrat, said of the phase in: “It’s very slow. ... The slowest of any proposal we’ve seen so far.” But Republican leaders do not seem to be warming to a cost shift, no matter how gradual. “I have met with the primary sponsors and welcome their effort to offer new ideas on moving comprehensive pension reform forward,” said Senate Minority Leader Christine Radogno. “As the supporters of this latest plan themselves indicated, we need a thorough actuarial analysis to determine if it could actually solve the problem. Illinois is desperate for pension reform – for the taxpayers and for those who are going to depend on a retirement check. But it has to be comprehensive and it has to work mathematically. And it cannot allow the state to set benefits but send the bill to downstate and suburban homeowners.”

House Minority Leader Tom Cross did say that he thought the measure is a good step in renewing negotiations. “There is a lot of merit to this proposal,” Cross said in a prepared statement. He said he was glad that the choice between COLAs or subsidized health care had been removed.

A coalition of unions commended the group of House members for moving the “pension conversation forward” but took issue with the specifics of the plan. “We were not consulted in the development of this plan, but our preliminary review suggests that there are significant problems with HB 6258 that need to be worked through. The pension debt was caused by the state's failure to make actuarially adequate pension contributions, not by public employees, but like its predecessors, this proposal essentially balances the pension debt on the backs of teachers, police officers, nurses, caregivers and other public servants, both active and retired. It is also unclear at this juncture whether this proposal is constitutionally or actuarially sound,” said a written statement from the We Are One Coalition. “We intend to thoroughly analyze this proposal's elements and provide a more comprehensive response in the coming weeks.”

Gov. Pat Quinn’s reaction to the bill was positive but vague. “As the governor has said, our focus is enacting comprehensive pension reform by January 9,” said a written statement from Quinn’s office. “As we continue negotiations and discussion on how to achieve comprehensive pension reform as soon as possible, this latest bipartisan proposal sponsored by Rep. Nekritz is a welcome contribution. We have been and will continue to work closely with the legislative leaders and members of the General Assembly until we get the job done on pension reform.”

Nekritz and Biss said their goal is to get legislation approved before the current legislative session ends on January 9, but Nekritz said if that deadline is not made, it does not mean the end of the push for pension reform. “We don’t fall off a cliff on January 9, so we would be able to continue this discussion through the spring session.” Both said they are open to tweaking the bill and hope to get feedback before the legislature is back in session in early January. They said that they think the new plan has momentum in the House because it has grown out of suggestions from rank-and-file legislators. “In order to produce the kind of comprehensive solution that has enough different ingredients to make it acceptable to a majority of the House, I think it makes sense for it to bubble up from the people who are going to have to vote for it,” Biss said.

Tuesday, December 04, 2012

Indicted lawmaker unlikely to face House reprimand in the near future

By Jamey Dunn

There seems to be little appetite in the Illinois House to take any disciplinary action against indicted Chicago Democratic Rep. La Shawn Ford.

Ford is accused of lying to the now-defunct ShoreBank, which was located in Chicago. A federal indictment alleges that Ford, a real estate developer, told the bank that a $500,000 line of credit was for his business but instead used the money on personal expenses, including mortgage payments, campaign costs and gambling debts. Ford, who says he is innocent, faces 17 criminal counts.

But unlike former Rep. Derrick Smith, who is accused of taking a bribe in exchange for helping a business get a state grant, it appears that the charges against Ford are not directly related to his duties as a lawmaker. That may make all the difference in terms of whether Ford will face disciplinary action in the House. “We’re going to digest that and not going to do anything at the moment,” House Minority Tom Cross said of Ford’s indictment. “We’re kind of curious to see what the Democrats are going to do at the moment. We’re evaluating it right now, and we’ll take a look at it. I think there’s a distinction between Ford and Smith in that Smith’s involved his office; we’re not sure Ford’s does.”

The House voted in August to remove Smith from office. However, Smith won the general election for his former seat and plans to return to the House in January when the new legislature is sworn in.

When asked what his thoughts were on the indictment and whether Ford should be disciplined, Steve Brown, spokesman for House Speaker Michael Madigan, said, “I have no thoughts.”

Ford said he plans to stay in his position in the House and declined to discuss the indictment today. “I’ve had a great day in the legislature today,” he said. But Ford did respond in a statement on his website shortly after the indictment was made public. “This has happened quickly; I became aware of this issue not long ago. I believe I am innocent of the charges brought against me today. An indictment is an accusation, not a conviction that the law was broken. I believe I did not break the law, and I look forward to the truth being told and justice being served. My family and I are grateful for all of the support we have received during this time.”

Senate approves driver's licenses for undocumented immigrants

By Jamey Dunn

The Illinois Senate approved a bill today to give driver’s licenses to immigrants who are in the country illegally, but the House may not vote on it until January.

Senate Bill 957 would give immigrants without documentation a chance to get three-year temporary Illinois driver's licenses, which are already available in Illinois to immigrants who lack a Social Security number but have proof that they are in the country legally. The measure passed today with bipartisan support. It received 41 “yes” votes and 14 votes in opposition. Supporters frame the issue as a public safety initiative. “It seems to me that we are better off having folks tested to make sure they know how to drive, make sure that they get driver’s education, make sure that they have vision so that they can see, make sure that they have insurance rather than having so many of them drive illegally because of necessity,” said Senate President John Cullerton.

“We believe that this is a good public safety issue that ensures that our roads are safe for everyone who drives on our roads,” said Lawrence Benito, chief operating officer of the Illinois Coalition for Immigrant and Refugee Rights.

Opponents said they have reservations about having to address an issue related to illegal immigration before Congress addresses immigration reform. “I am in favor of legal immigration but oppose illegal immigration. I also support efforts by the national government to finally and equitably solve the illegal immigration problem in America. However, we have the cart before the horse in the case of granting additional legal privileges to people already breaking our country’s law. The national government should act first, which then paves the way for this action,” said Aurora Republican Sen. Chris Lauzen.

But proponents argued that the state can no longer wait for Congress to act. “There’s no perfect solution. It needs to be dealt with federally. So I think this is a good example of states trying to figure out how to handle a problem that we have,” said Senate Minority Leader Christine Radogno.

“For me, this has been somewhat of a process of evolution, where a number of years ago I was not supportive of this bill. I think a lot of us felt like the federal government would be more aggressive and proactive on the issue of immigration, and clearly they have not,” said House Minority Leader Tom Cross.

The driver’s licenses would look different from a standard-issue Illinois license, and under the legislation, they could not be used as for identification or commercial driving. Failure to buy the liability insurance required by state law would make such a license invalid.

However, Lauzen said he had doubts about whether those getting the licenses would be concerned with the legal requirement for insurance. “And when folks say to us, 'It’s only one law, the immigration law, that’s being broken,' that is simply not accurate for tens of thousands of people who are also employed illegally, many of them driving to work, therefore breaking the traffic laws. Now we’re expected to believe that folks who are already breaking the immigration law, the employment law, the traffic laws, are now going to follow the insurance law,” he said.

But few from Lauzen’s party back his stance on the bill, which also has bipartisan support in the House. “This will, in my opinion, make our roads safer,” said Cross. Because of procedural requirements, a vote on the bill may not come until the lame-duck session scheduled for early January. Under the standard procedure for passing legislation, a bill must be read three times in each chamber on three separate days. Tomorrow is the second opportunity to read the bill in the House and also the chamber’s last day of scheduled veto session.

Monday, December 03, 2012

Vienna has cleaned up its act, but overcrowding is still a problem

By Jamey Dunn

While the Illinois Department of Corrections has fixed some of the serious maintenance issues at the Vienna Correctional Center, the overcrowding in the prison is hard to overlook.

The minimum security prison in southern Illinois became the subject of scrutiny after the John Howard Association, a Chicago-based prison watchdog group, released a report last year detailing conditions that the report called “deplorable” and “unfit” for the inmates living there. Several news outlets asked to tour that prison and others in the state, but Gov. Pat Quinn’s administration initially denied those requests. Newspapers then ran editorials critical of the lack of transparency. WBEZ Chicago threatened to sue the administration to gain access, and Quinn then relented. DoC announced in October that reporters would be allowed to tour three of the state’s prisons: Vandalia Correctional Center, another minimum security prison plagued by reports of substandard living conditions; Pontiac Correctional Center, a maximum security prison that would absorb prisoners from the super-maximum security prison near Tamms as part of Quinn’s facility closure plan; and the prison in Vienna, where DoC officials led reporters on a tour on Friday.

With an average daily population of a little more than 1,600, the prison now holds twice the number of inmates it was designed to house. However, warden Randy Davis said the facility’s emphasis on education, vocation and recreation makes that number manageable. “Could we drop a couple two or three hundred [prisoners]? Yeah, that would be great. ... Do I think for the most part we are extremely overcrowded? Not really. Not based on the fact that we try to get the inmates out a lot of the institution. We make every effort to get them into recreation, vocational training, education programs. My thing is, I like to see inmates out and about and doing things. It’s easier to operate. You have less problems,” said Davis, who has been warden at the facility since December 2012.

Vienna Correctional Center consists of several building, including six housing halls that were built in the 1970s and resemble dorms, albeit far less cushy than the average college freshman expects today. Most cells in those units hold two prisoners and are about 7 feet by 6 1/2 feet. Some cells hold only one prisoner and have a toilet. Davis said older inmates with health problems are typically assigned to them. Two of the cells entered by reporters had holes in the wall. Davis said there used to be shelves in the cells, but they were removed, and the holes should have been filled. The hole in one cell did not penetrate the wall completely but instead resembled a small cubby. In another unoccupied cell, the hole had been taped over.

The housing units are not air-conditioned, and some inmates complained that they are also not heated well. Inmates can open windows covered with metal screens in their cells. “I’ve had times that it’s been awful cold in here. Awful cold. And you wore [all] your clothes and everything just to try to keep warm and still chatter your teeth,” said Richard Nicholson, who has been at Vienna for two years, serving time for residential burglary. “I wore my hat, my coat and every piece of clothing I had just to keep warm.” He is scheduled for release later this month.

During the day, prisoners in the units have to go outside, but they must be present in their cells for counts that occur four times daily. They have keys to their doors, so they can lock up their belongings. In the yard outside one of the housing units, two prisoners played a bean bag toss game commonly seen at college parties, while two others argued about football. Inmates lifted weights, attended to jobs, such as cleaning, and played basketball. Some hung out in their rooms reading, sleeping or watching television. Some of those who cannot afford a TV sat in the common rooms of the housing units watching the shared set in each building. Each unit has a shared bathroom with three toilets, two urinals and four showers shared by about 60 prisoners. Davis said work had been done to address the leaky pipes and mold problems described in the John Howard report. The shower that a reporter saw had been freshly painted within a few days before the tour. Davis said keeping the bathroom paint fresh and the plumbing in the old building workable is an ongoing battle. “Our plumbers and our pipe fitters stay very busy.”

Davis said he is most proud of the vocational and educational programs, housed in their own dedicated building, which looks a bit like an old brick school. The prison offers several vocational programs, including a body shop, a mechanics program and a cosmetology course. Visitors to the cosmetology program could almost imagine they had stepped into a barbershop outside of the prison’s gates. A row of chairs with salon hair dryer hoods runs down the middle of the room. Posters of people modeling hairstyles hung on the walls. Inmates in the program worked at their stations — which include a large mirror and styling chair along with clips, combs, trimmers and other essentials — cutting, shaving and styling other inmates’ hair with intense focus.

But the vocational and educational programs are not an option for prisoners who never make it past the waiting lists that average 50 to 100 inmates long, depending on the program. About half of the inmates at Vienna are only serving a year or less there. “That is key. That is absolutely where the rubber hits the road. While we don’t control who comes in, when we send people out, we’re hoping they come out better so they don’t come back in,” said DoC Director Tony Godinez. “So we’re re-shifting our program efforts to those individuals that are going to be leaving us soon because it makes more sense to re-divert those program efforts to those individuals — education, vocational studies, drug treatment. Because those are the individuals that are actually leaving soon, that could potentially come back, not the person that’s doing 40 years.” Inmates also work in the prison, but there are only about 650 jobs available.

Building 19, which is one of only two original 1965 buildings left at the facility, gained a level of public infamy after the John Howard report and ensuing news stories, but its conditions have been well-known among Vienna prisoners for some time. If you ask an inmate about 19, odds are he has something to say. The building houses the prison’s intake center, and new prisoners live there until permanent placement at one of the housing units. Davis said inmates typically live there for about 10 days, but he said it sometimes takes longer to place offenders who have gang affiliations because they must be kept away from inmates in rival gangs. About 500 inmates are in the building at any time.

One inmate, who did not want to give his name, said he had been living in Building 19 for his entire six-month sentence, which was scheduled to an end in a few weeks. Davis said that in some cases, inmates with short sentences do spend all their time at Vienna living in Building 19. The John Howard Report was especially critical of the conditions there, detailing disrepair and disgusting living arrangements. “On both floors, windows were broken and without screens. As a result, birds had flown into the living areas and built nests in the light fixtures. Inmates complained that mice, cockroaches and other insects were everywhere.”

Reporters did not find such conditions on their tour last week. Most windows had been repaired, although a few were still boarded up here and there. The inmate who spent his six-month sentence in 19 said he was bothered by spiders and mold in the building. Another prisoner, Marcus Johnson, who said he had been in Building 19 since he arrived at Vienna in September, said there had been a mouse crawling in the hollow frame of his bunk bed, but prison workers put out traps and the mouse stopped making its appearances soon after. Nicholson, who lived in Building 19 in 2010, had this to say: “Back then, I’ve got to say that it wasn’t real good. It needed a lot of work. The bathrooms dripped on you whenever you were using them, the piping. I imagine they’ve got that fixed by now. But I would say that building is not really fit for people.” But he said that there had been recent improvements all over the prison. “Lately, they’ve really been cracking down and doing quite a bit.” Davis said that after he was hired last year, there was no time to replace the original 1960s windows before the winter. “We did board up the windows last year,” he said. “We just didn’t have time to get that fixed.” He pointed out that the prison is in a rural area, where even homeowners usually have to deal with some pests. “You’re going to have mice, and you’re going to have bugs.” But he said that the prison has switched pest control vendors since the John Howard visit, and he said he has seen improvement.

However, another section of the report still rings true. “As JHA entered the second floor, we saw hundreds of inmates with nothing to do except pace around the room or huddle around a small television in the corner of the room. A Vienna staff member seemed to recognize the stunned look on our faces. ‘This is a nightmare,’ he said quietly to one of JHA’s staff. ‘This should not be.’” It would be difficult for anyone who walked into Building 19 for the first time not to be a bit shocked at the row after row of metal bunk beds. Reporters were not allowed into a full wing, which typically houses about 100 inmates, but they walked past one. Inside, inmates called out for them to come talk to them and pointed to the room and the dozens of other inmates around them. But even in the wing that reporters entered, where most inmates had gone out for recreation, they got a feeling for what it was like for the residents. On an average weekday, inmates in building 19 get one to two hours of yard recreation. They get an hour in the gym about every three days. Davis said he hopes to convert a large room, now used to store laundry, into an indoor recreational area for 19 because once winter comes, outdoor recreation would be limited. Inmates in building 19 also take their meals in the prison cafeteria. But the rest of their time is spent on their wing of the building, penned up indoors with 100 other men. Most sit on their bunk beds, reading or watching television if they have one.
The hours kept by the prison’s cafeteria are another indicator of the issues caused by crowding. Breakfast service begins at 4:45, lunch at 9:30 and dinner at 3:30. Davis said that schedule is needed to have time to prepare food for and feed the more than 1,600 inmates.

“It’s overcrowded. Living amongst 104 inmates at a time is kind of hard, but that’s something you’ve got to deal with,” Johnson said. “Being amongst that many people, going to the restroom, we’ve got to wait because there’s like five or six sinks and it’s like 30 or 40 or 50 inmates at a time need to use the restroom or even the phone. You know, it’s kind of hard, but we all try to adapt to it.” Johnson said most inmates find something to do, such as reading books, and try to keep to themselves. “But you’ve got a lot of guys. That’s a hundred different personalities that you’ve got to deal with. People have their days where you say one thing, and they want to fly off the hinges.” Johnson is serving a two-year sentence for drug possession, and he said he does not know when he will be assigned to another housing unit. When asked what the hardest part of prison life was, he said: “The hardest? I mean, Building 19. Building 19 is the hardest. If you get me away from as many inmates at one time in one room then I’m all right. But right now, I can’t do nothing but just deal with it.”

Vienna Lt. Michael Turner, the president of the American Federation of State, County and Municipal Employees Local 415, said the parts of the prison that reporters visited on the tour were representative of what the rest of the prison looks like. “What you saw ... is typical. It’s an institution. It’s not a brand new institution. It’s not an ancient institution. It’s one that needs a little TLC daily. We do the best we can to do that. Resources are very, very limited,” he said. Turner said the major issues are,  “in my opinion, I think more than the structure of the institution or the shape the institution is in, the overcrowding and the understaffing.”

Davis said the staff totals about 100, with about 60 corrections officers on duty on a typical weekday. He said the prison is about 70 people short of recommended staffing levels, and that security shifts would not be fully staffed if it weren’t for mandatory overtime for guards. Overtime shifts are 16 hours. “You can’t watch everything. You can’t control everything. You do what you can, and really, that’s all you can do,” Turner said. “Staff are tired. We’ve been doing this consistently since the beginning of the year.”

John Maki, executive director of the John Howard Association, said he is glad that DoC has fixed some of the maintenance issues that his organization highlighted, but he said the real problem is the number of inmates in the prison. “Prison overcrowding, you can’t make repairs in the facility to solve that problem.” He said Vienna was once a model for rehabilitation. “It used to be this crown jewel of the DoC. It was a place where people got educations. With the numbers they have, they can’t provide those services to everyone. It’s just not possible.” However, Maki said the public should not point the finger solely at IDoC. “This is a problem that the Department of Corrections cannot solve.”

The Department of Corrections is working to implement a new program that would allow prisoners to earn up to 180 days off their sentences in exchange for completing classes, working and participating in vocational programs. A similar program, known as the Meritorious Good Time program, was ended in 2010 when Quinn took heat for the DoC allowing inmates out after serving only weeks of their sentences. Advocates, including Maki, have said that shutting down that program contributed to the crowding at Vienna and other lower-security prisons in the state. Godinez said the new program should be up and running by early next year. “February. I hope it’s sooner than that. But we have to do this deliberately. There’s no rush in getting people out. Remember our mission — our core mission — is public safety.”

Maki said the only way to solve the crowding problem is to get lawmakers, law enforcement leaders, advocates and members of the public together “and ask ourselves what kind of prison system do we want to have?” He said that criminals should be punished. But for some, there might be different, cheaper ways than prison sentences. ‘Prison is only one form of punishment, but for low-level offenders, prison is not the appropriate form, and it’s very expensive” He noted that taxpayers are shelling out an estimated $22,000 per prisoner per year for incarceration at Vienna. “This model costs us money.”

As for the conditions of the prison system overall, Godinez said: “We have done the best that we can with the limited resources that we have. ... We’re running on a budget that we had six years ago with 4,000 more inmates and 3,000 less staff.”