Thursday, September 18, 2014

Income stagnant in Illinois

The state’s median income has not increased since 2008, according to numbers from the U.S. Census Bureau.

The median household income for Illinois in 2013 was $56, 210—the same as it was in 2008, the year that the U.S. financial collapse began. Illinois’ median household income is slightly higher than the national of almost $52,000, which has stayed relatively flat over the same time period. Stateline, an initiative of the Pew Charitable Trusts, crunched the state numbers into this handy map for state comparisons. Meanwhile, the average income for the state's top 5 percent of earners is $363,159. That number has increased by 6.4 percent since 2008.

According to Pew's analysis, most of Illinois' neighboring states saw an increase in median income. The exceptions were Indiana, which had a .9 percent decrease, Wisconsin, which had a 1.2 percent decrease and Michigan, which had a .7 percent decrease. However, the average household income for the top five percent of earners went up in all three states. Out of Illinois' neighbors, Iowa saw the largest increase for overall income at 6.6 percent. The state also saw a 16 percent jump for the top 5 percent of earners.

The states that saw the most growth nationwide, North Dakota and Wyoming, are also experiencing a natural gas and oil boom. In North Dakota the median income increased by 20 percent to $55,759, and in Wyoming it went up by 10 percent to $58,752.

For more on earnings and the income gap in Illinois, see Illinois Issues June 2014.

Tuesday, September 02, 2014

State accepting patient applications for medical marijuana

The Illinois department of Public Health began accepting applications from patients and caregivers for the medical marijuana pilot program today.

The state will take applications from patients with last names beginning with the letters A through L. The application period for those with names starting with the letters M through Z is scheduled to begin on November 1.

Here are the links to IDPH's online application process and a Frequently Asked Questions pamphlet.

Tuesday, August 19, 2014

Some questions for our readers

By Jamey Dunn 

As you may have noticed, things have been pretty quiet here at the Illinois Issues blog.

The cause for my lapse in posting is that the magazine is merging with WUIS, the public radio station also based at the University of Illinois Springfield. I have stepped into the role of interim executive editor. Between editorial duties and working on the transition, I have not found a lot of time for blogging. If you read the magazine, you might have caught my column explaining things. If not, here it is. 

Merging with WUIS expands our capacity (both on the editorial and business side of things) and creates a team of smart, informed and hard-working professionals who can focus in on public policy reporting. Statehouse journalist Brian Mackey will be a regular contributor to the magazine and will take over the State of the State column. You will see stories from WUIS Statehouse Bureau Chief Amanda Vinicky and from WUIS’ Education Desk and Harvest Desk, which focuses on food, fuel and the environment. If you listen to NPR in Illinois, you will hear companion pieces to the print stories we bring to you each month. Our staff will also have more ability to do long-range planning, take on special projects, connect with you on social media and host engagement events, such as public forums.

Illinois Issues will be able to use resources already available to WUIS to update our web presence—a move that is long overdue. That means we may find a new home online, and the format of what we do may change. Because of that, I am asking for your help. Please reach out and let us know why you read our blog. When do you read it? How do you get here? What do you like? What could you live without? What do you find the most useful? What would you like to see that we are not currently doing? If you have thoughts to share about the magazine or how you might want to get our long form content online, we would be happy to hear them, too. We want to make sure that as we rework some things, we are serving the needs of you, our readers. You can reach me at Or you can leave a comment on this post.

I apologize for the lack of posts here. I will try to keep things going with some shorter updates. You can also get your Illinois Issues fix with our July/August environmental issue, which includes a story on the dwindling numbers of monarch butterflies. Our back-to-school September issue will focus on education, and we are planning some thought-provoking election pieces for the October issue. Thank you for reading and please hang in there as we work our way through some changes. If we move the blog, I will keep you in the loop. Whatever tweaks we might make, we are dedicated to maintaining our core mission of providing in-depth impartial reporting on the topics that matter to you.

Tuesday, July 22, 2014

Despite court rulings, Obamacare subsidies to continue in Illinois

By Jamey Dunn

Dueling court rulings handed down today put the future of a key piece of Obamacare into question, but for now, nothing will change about the way the law is implemented in Illinois.

A three judge panel in Washington D.C. ruled this morning that under the Patient Protection and Affordable Care Act, federal subsidies to bring down the cost of insurance should only be available to residents of states that operate their own online insurance exchange. Under the decisions, Illinois and 35 other states would lose the subsidies. Illinois partnered with the feds on, but the website still relies on the federal exchange to sign patients up for coverage.

Just hours after the U.S. Court of Appeals for the D.C. Circuit weighed in, The Fourth Circuit Court of Appeals in Virginia issued a diverging opinion on a similar case. That panel of judges said that the wording of the law was unclear, but the majority agreed that the law allows for the subsidies to be dispersed through the federal exchange.

In Illinois, 217,000 people obtained insurance through the exchange. More than three quarters of those qualified for a subsidy. Health officials in Illinois say that those approximately 168,000 will not lose their subsides as an immediate result of the rulings. “We are monitoring today’s appeals court decisions in which two courts have rendered differing rulings. The bottom line for now is that nothing has changed, and the subsidies created under the law to help people cover the cost of their health care remain in effect. Get Covered Illinois is focused on preparing for the enrollment period for year two that will start this fall,” Jennifer Koehler, executive director of Get Covered Illinois, said in a written statement.

President Barack Obama’s administration says it plans to ask the full panel of judges at the D.C. appeals court to consider the issue. That group is made up of seven judges appointed by Democrats and four appointed by Republicans. Two other judges, one appointed by a Democrat and one by a Republican, could sit in on the case. It is possible that the issue may end up before the U.S. Supreme Court. The court previously upheld the law, but allowed states to opt out of a massive Medicaid expansion called for by the Affordable Care Act. Illinois lawmakers approved and Gov. Pat Quinn signed into law the expansion in Illinois.
State online insurance exchanges 
Source: The Henry J. Kaiser Family Foundation, KFF State Health

Illinois ranks low in statehouse reporters per capita

A recent study found that Illinois has fewer than one statehouse reporter for every 500,000 residents.

The Pew Research Journalism project took a look at statehouse press corps in all 50 states. The population of a state was generally predictive of the size of the reporting pool based in its capitol building. However, when Pew's researchers diced the numbers a different way, they found that states with larger populations had fewer reporters per 500,000 residents than many smaller states. Illinois has 0.9 statehouse reporters per 500,000 residents.

From Pew:

 The state with the highest rate of full-time reporters per 500,000 residents (at 10.4) is tiny Vermont, which at about 625,000 residents, is the second smallest state in the nation by population. The smallest, Wyoming, ranks third when population is factored in, with 5.3 statehouse reporters per half million people. Several other states with modest populations round out the top tier: Alaska (5.6); Montana (4.0) and Rhode Island and Idaho (tied at 3.8). The median state rate is 1.3 reporters per 500,000 residents. 

Conversely, some of the largest states—with some of the largest statehouse press contingents—end up at or near the bottom in the rankings. California is second in overall number of full-time reporters (43) covering statehouse news for a population of more than 37 million. But that works out to only 0.6 journalists per 500,000 residents—the lowest rate in the nation. Texas, which ranks No. 1 at 53 full-time statehouse reporters, finishes in the bottom half of states by the same measure (1.1 reporters).

Thursday, July 10, 2014

Statehouse news coverage in Illinois follows national trends

By Jamey Dunn

Who Reports from U.S. Statehouses? A new report on statehouse press corps found that as the number of full-time reporters shrinks, new media outlets and political communication staffs seek to fill the gaps in coverage.

The Pew Research Journalism Project surveyed statehouse media outlets, political communications staff and experts on government in all 50 states. (Disclosure: I participated as a respondent in the survey.) The group found that nearly 1,600 reporters are based in state capitol buildings covering state governments across the country. The majority of those journalists, 851, are assigned to cover state government part time, while 741 are on the state government beat—covering legislatures, governors and state agencies— full time. State populations are generally predictive of the size of their statehouse press corps. Pew found that of the 10 most populous states only two, Georgia and North Carolina, were not among the 10 largest press corps. At the time of the survey, Illinois had 22 full-time statehouse reporters. Texas had the most at 53 and South Dakota had the fewest with two.

Less than a third of all newspapers in the country assign a reporter, either full or part-time, to the statehouse. The vast majority of television stations, 86 percent, do not assign a reporter to the state capitol. Still, the largest share, 38 percent, of reporters based in state capitol buildings work for newspapers, and newspaper reporters make up 43 percent of full-time statehouse journalists. Television comes in second at 19 percent of all reporters covering state government. Nontraditional outlets, such as digital-only sources, make up 16 percent. Wire services make up 9 percent of reporters assigned to state capitols across the country, and most of those journalists work for the Associated Press. Radio reporters make up 8 percent. University entities and “additional sectors” rounded out the totals with 7 percent and 6 percent, respectively. (Pews figures total more than 100 percent because of rounding.)

The study cites statistics from the American Journalism Review, which tallied up statehouse newspaper reporters five times between 1998 and 2009. Each time the number of reporters dropped, and the largest decrease came between 2003 and 2009, when the overall number of newspaper reporters saw a large decline. Statehouse bureaus shrank at a slightly larger margin, 35 percent, than newsrooms, 30 percent. “It does suggest, if nothing else, that statehouse jobs are certainly no more immune to the cutbacks then anything else,” said Mark Jurkowitz, associate director of the Pew Research Center’s Journalism Project. For more on the cutbacks in Illinois, see Illinois Issues October 2008.

The survey found that traditional news sources are turning to consolidation and collaboration. One-time rivals are now working together and sharing information. For example, the Miami Herald and the Tampa Bay Times now share a bureau in Tallahassee and coordinate their coverage of Florida state government. Students are also playing a big role in statehouse coverage. One of seven people reporting from a state capitol pressroom is a college student. This finding holds true in Illinois, with statehouse bureaus taking on Public Affairs Reporting interns during the spring legislative session since the programwas founded in the 1970s. Jurkowitz said that it is impossible to tell if interns are being used to make up for recent cuts in staff because there is no historical documentation on the number of statehouse interns nationwide.

Pew found that one in six statehouse reporters work for “nontraditional” outlets, such as nonprofit organizations, niche publications and digital-only news sources. According to the study, the largest statehouse bureau in the country, which has 15 reporters, is operated by the Texas Tribune, a nonprofit primarily digital operation. Most of these outlets are relatively new, such as The Illinois News Network, which is based out of the conservative-leaning think tank the Illinois Policy Institute. But some are longstanding news sources, such as Rich Miller’s Capitol Fax. Pew found that many such organizations have an ideological bent or market paid subscription content to “insiders” seeking information on state governments because it relates to their occupation.

Political communication staffs now provide information that more closely resembles news coverage. “The legislative offices themselves are getting much more into the business of directly communicating with the public and circumventing the media,” Jurkowitz said. In Illinois, the Senate Democrats and House Republicans are both good examples of this trend. A slideshow highlighting new laws created by Senate Democratic communication staff went viral earlier this year, receiving more than 1 million views. Both caucuses frequently capture video of their members and distribute it online, post information to websites that resemble news outlets and stay active on social media. Former journalists serve as high-level staffers for both caucuses. For more on they ways Illinois officials use social media, see Illinois Issues November 2013.

Newspaper Statehouse Reporters DeclineCitizens can also access live-streaming video and audio of legislative session and most hearings on the Illinois General Assembly’s website. Jurkowitz called all this direct communication from officials a “mixed blessing” because it provides the public with more information, but it often comes with a hefty dose of political spin.

“I do think there’s been a loss in general across the country, and that’s very concerning to me,” Patrick Marley, who covers the Wisconsin Statehouse for the Milwaukee Journal Sentinel, told Pew “We have scads of reporters in Washington covering every bit of news that Congress makes. State legislators have more effect on people’s daily lives. We need to have eyes on them, lots of eyes.” Jurkowitz said Pew’s research indicates that state governments may be doing more heavy policy lifting than they have in the past. He said a separate Pew study found that almost half of state governments enacted more laws in 2012 than Congress did in 2011 and 2012 combined.

As Congress continues to be gripped by gridlock, states have been left to tackle high profile policy issues, such as immigration and health care. For example, states are playing a large role in the implementation of the Affordable Care Act and a ruling from the U.S. Supreme court allowed them to opt out of a massive Medicaid expansion—a key component of the law. In many cases, state lawmakers voted on whether to adopt the expansion. In some states, governors made that call. “Obviously, we know that not a lot of activity is going on here at the federal level,” he said. “I think we’ve seen a lot of the big national public policy debates actually play out at the state level.”

Thursday, July 03, 2014

Options for a pension reform Plan B may be limited

By Jamey Dunn

The Illinois Supreme court issued a ruling Thursday on state employee health care that bodes ill for supporters of the recently passed cuts to public employee retirement benefits.

The court ruled that health care benefits for retirees fall under the pension protection clause—the very sentence of the state’s Constitution that many supporters of pension reform had hoped the justices would be willing to overlook. The pension clause states: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

The ruling indicates that the justices are inclined to side with public employees and retirees. In the 6-1 opinion, Justice Charles Freeman wrote: “Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.” Justice Anne Burke wrote the dissenting opinion. In it, she did not question the protection of the pension clause, but she argued that retiree health care benefits did not fall under that protection.

Some lawmakers seem to see the ruling as writing on the wall for the pension reform law, which is still working its way through the legal system. “Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says,” Senate President John Cullerton said in a prepared statement. “The court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve. The clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.” Cullerton added: “If the court’s decision is predictive, the challenge of reforming our pension systems will remain. As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution.”

Kent Redfield, an emeritus professor at the University of Illinois Springfield, said that while the ruling pertains to a different case, the language used is clear. “You could find some way to parse some of it, but it’s really, really difficult. There’s no logical way to get to upholding Senate Bill 1 (the pension reform legislation) based on the clear content of this ruling and the way they’ve construed the pensions clause.”

Others disagree that the ruling is a harbinger of the pension law’s death. Rep. Elaine Nekritz, who was key player in getting SB 1 passed, said that the justifications the law makes for reducing benefits were not part of the retiree health care case. She said that the court has yet to consider those points. The law lays out the dire fiscal situation that the state is in and claims that state elected officials need special powers to curtail the estimated $100 billion unfunded liability and save the state from a budget disaster. However, one line in today’s decision seems to blow a hole in that argument. “In light of the constitutional debates, we have concluded that the [pension] provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.” 

Supporters also claim that a reduction in the amount that employee would pay into the system represents a consideration they are being given for a change to the contract that is their membership in a pensions system. Nekritz said that the ruling is clear that benefits are protected, but she says it is unclear if that protection is absolute. “Does it really mean that we can do nothing, or are there some things that we can do based on the legal arguments that we make under Senate Bill 1?”

Those arguments aside, if the Illinois Supreme Court rejects the new pension law, what options do legislators have?

Cullerton had proposed offering employees a choice between receiving subsidized health care coverage or keeping their current pensions benefits. If they had chosen health care, they would have seen a reduction in their retirement income including a cut to the expensive compounded interest cost of living adjustments (COLAs) retirees currently receive. Cullerton said that this scheme could potentially fulfill a legal standard of giving employees consideration for a reduction in benefits. The Senate approved the plan, but it was never called for a vote in the House.

However, that plan was based on the idea that health benefits were not protected by the Constitution—a concept that runs counter to today’s ruling. “The concept of consideration is still viable. The court has not rejected it or defined what the limits are. It’s just hard to see what you can give up in exchange,” Redfield said. “It’s hard to see what other major carrot you can offer to people in terms of giving up their COLA.”

Skokie Democratic Rep. Lou Lang introduced legislation that would extend the current income tax rates, which are due to start rolling back on January 1, to pay down the unfunded liability.

But Lang’s plan also calls for larger contributions from employees and an increase in the retirement age. Both of these provisions could be seen as a reduction in benefits by the court. Much of the revenue from the temporary income tax increase has gone toward making the required annual pension payment after lawmakers voted to skip payments and short payments for several years in the past.

There have also been proposals to change the pension payment schedule to even out the cost of the annual payment. The state is currently on a system that resulted in large balloon payments, much like a subprime mortgage. Some such plans also call for funding the system at 80 percent as opposed to 95 percent or 100 percent. Redfield said that a proposal that changes the payment structures would need to be combined with changes to the state’s revenue structure, such as expanding the sales tax base to some services, budget cuts or both. “As a stand alone, then it looks like an excuse to keep doing what we’re doing,” he said.

Republican candidate for governor Bruce Rauner has advocated for moving employees’ future benefits to a system that looks more like a 401-K. That plan would go even further than SB1, so it is unlikely that it would be upheld if SB 1 were rejected. But it is possible that the court’s ruling might strengthen his case for offering a defined contribution plan to newly-hired employees. “It may embolden Rauner to say well we’ve got to get everybody going forward into a defined contribution [plan],” Redfield said. However, such a proposal would have no impact on the unfunded liability for current employee and retiree benefits. It also means the state would likely have to start contributing to Social Security benefits for positions that do not currently offer them.

Meanwhile Gov. Pat Quinn is emphatically sticking by his opinion that SB 1 is constitutional. “We believe the pension reform law is constitutional. This landmark law was urgently needed to resolve the state’s $100 billion pension crisis. It was also urgently needed to ensure that teachers, university employees and state workers who have faithfully contributed to the pension system have retirement security,” said a written statement from his office. “We’re confident the courts will uphold this critical law that stabilizes the state’s pension funds while squarely addressing the most pressing fiscal crisis of our time by eliminating the state's unfunded pension debt.”

Redfield said that there will likely be many suggestions for a Plan B on pension reform in the coming months. “I think people will be floating lots of ideas that probably aren’t feasible and really won’t address the short-term problems—between now and November,” he said. “There’s nothing politically to be gained by standing up and saying ‘you know, we really, really screwed up, and we have no options but to raise your taxes.’”

 But he said that new revenues and cuts to state services to cover the cost of the pension systems might be the only real option available to address the problem if the court rejects SB 1. If that happens, the state will almost certainly face another credit downgrade if it fails to act to address the liability. The current budget is based on $650 million in borrowing that has to be paid back. In Fiscal Year 2016, the tax rate will be lower for the entire fiscal year instead of just half of it. FY16 could turn out to be one doozy of a budget for lawmakers and whomever is the governor to sort out. “You want to be around for a historic session for the General Assembly? I think everybody has a front row seat,” Redfield says.

Thursday, June 26, 2014

Legislative inaction threatens some corporate tax breaks

By Caitlin Rydinsky

After lawmakers were unable to agree on changes to the state’s business tax policies, some Illinois companies could lose a sales tax break set to expire this summer.

The Manufacturer’s Purchase Credit is a tax incentive that businesses can receive when they purchase equipment from companies within the state and use that equipment in Illinois. This benefit is set to expire in August. A rollback would impact about 500 businesses. According to expenditure reports from the Illinois comptroller’s office, the state spent almost $35,000 on the credit in fiscal year 2013. Mark Denzler, president and chief operating officer of the Illinois Manufacturers' Association, said that the expiration could result in employee layoffs and increased prices for some goods.

Lawmakers on a special House committee have been evaluating business tax breaks in the state. But, so far, they have been unable to come to an agreement on what should be done. The spring session ended without the legislature sending a business tax plan to Gov. Pat Quinn’s desk. Speaker Michael Madigan introduced legislation in the last days of session that would have extended the manufacturer’s purchase credit for six months. The plan also would have changed the high profile Economic and Development for a Growing Economy credit. The House passed the bill on the last day of spring session, but it was not brought up for a vote in the Senate. Democratic senators who sponsor the legislation said that they wanted to have more time to consider it.

“We are going to continue to work on things. The reaction is that this is something that needs to be reworked,” Madigan’s spokesman Steve Brown said. Lawmakers are expected to revisit the issue during the fall veto session. If they cannot reach consensus, the state’s Research and Development Tax Credit could be the next casualty. It is set to expire next year.

Arlington Heights Republican Rep. David Harris, who is on the committee, said that he thinks legislators will vote on the manufacturing credit during the veto session. But he said that other issues, such as the EDGE credit, the Franchise Tax and the Research and Development Tax Credit, would likely fall on the next General Assembly to address. Members of the next General Assembly are scheduled to be sworn into office in January.

Denzler is optimistic that legislators will restore the manufacturing credit in the veto session. But he said that their inability to reach agreement on many of the policies considered by the committee creates an unstable situation for businesses. “It just kind of continues the path of uncertainty and unpredictability.”

Tuesday, June 10, 2014

Rep. Derrick Smith convicted on corruption charges

Chicago Democratic Rep. Derrick Smith was convicted of accepting a bribe in exchange for official duties.

Smith was caught on tape as part of a federal sting negotiating a $7,000 bribe in exchange for writing a letter of recommendation for a day care center he believed was seeking a $50,000 state grant. The day care center was not actually seeking the grant — instead federal prosecutors used an informant who had been a campaign worker for Smith to broker the deal and deliver the bribe money. Perhaps some of the most damning evidence against Smith was an audio recording of him counting the cash.

Smith was found guilty on one count of bribery and one count of extortion. Both are felonies.

Smith’s lawyers argued that he was not seeking to commit a crime and would not have taken a bribe if the federal informant had not continued to push him in that direction. According to court documents, the informant discussed the bribe with Smith for three months before moving forward with it. “We gave it a good fight,” Smith told reporters after the verdict was handed down. “It’s God’s will. God knows the truth about it all. The jurors just didn’t see what God saw.” Prosecutors say they received information that Smith would be willing to take bribes and argue that it would have been negligent for them not to investigate the claims.

After Smith was arrested in 2012, the House voted to expel him. But he was re-elected and returned to his seat in 2013. Smith, who was defeated in the Democratic primary this year, automatically loses his seat due to the convictions.

Monday, June 09, 2014

Illinois bans plastic microbeads

By Caitlin Rydinsky 

Illinois is the first state in the nation to ban potentially hazardous plastic beads from common hygiene products.

Gov. Pat Quinn signed Senate Bill 2727 into law over the weekend. The law would phase out the small plastic beads that are used in some exfoliating body scrubs and whitening toothpastes. Manufacturers will have to stop including the beads in products by 2017, and stores can no longer sell products with them after 2018. The use of the beads in prescription medicines, such as toothpastes or acne washes, will be eliminated in 2019. Consumers can identify products containing the plastic pieces by checking for polyethylene or polypropylene in the ingredients list.

The plastic pieces are designed to roll down the drain easily after use. However, the beads, which are about the size of a grain of salt, are too small to be caught by water filtration systems. So, they end up in bodies of water. “Banning microbeads will help ensure clean waters across Illinois and set an example for our nation to follow,” Governor Quinn said in a prepared statement. “Lake Michigan and the many rivers and lakes across our state are among our most important natural resources. We must do everything necessary to safeguard them.”

The issue was brought to the attention of lawmakers after a study of the Great Lakes performed by environmental groups found the plastic beads polluting the water. The study found twice the beads in Lake Erie samples than in some parts of the ocean. Fish are eating the beads, which are brightly colored and small enough to be mistaken as microbes. The other remaining plastic pieces end up floating on top of the water or sinking to the floor after they absorb pollutants within the water. Once the plastic pieces are in the water, it is too difficult to eliminate them all because of their small size.

Big names in the personal hygiene industry, such as Johnson & Johnson and Unilevar, have already acknowledged the dangers of the beads and support replacing them with more natural items, such as ground nut shells, salt, rice, sugar, or silica. Backers of the ban say it is needed to ensure that the companies follow through and to cover any producers that have not signed on to phasing out the beads.

“Lake Michigan is a critically important natural resource for our state, and its health affects recreation, tourism and the flourishing of aquatic plant and animal species,” Sen. Heather Steans, who sponsored the bill, said in a written statement. “I’m proud that Illinois is an environmental leader, taking the first step away from plastic microbeads toward natural exfoliates, and I’m optimistic that we’ve started a nationwide movement to protect not just the Great Lakes, but other bodies of water with high concentrations of microbeads.”

New York and California have similar legislation waiting to be signed into law and other states surrounding the Great Lakes, such as Wisconsin, Ohio, Minnesota and Michigan have introduced bills that would eliminate the products from their states.

Tuesday, June 03, 2014

End-of-session roundup

By Jamey Dunn

The fast pace of the end of the regular legislative session can make things kind of a blur, and much of the focus tends to fall on the budget. But lawmakers considered several other issues in the final days of May.

What passed 
Voters could be asked several questions on the November ballot. In addition to two constitutional amendments approved by lawmakers—and potentially two amendments proposed through citizen initiatives—three advisory referendum questions might also be presented to voters. The questions are not legally binding and only gauge voters’ opinions on policy. (For more on the proposed constitutional amendments, see this month's Illinois Issues.)

House Bill 3816 calls for an advisory question on whether personal income over $1 million should be taxed an additional 3 percent to raise money for schools.

HB 5755 calls for a question asking voters whether insurance plans that cover prescriptions should be required to cover prescription birth control. The requirement has been state law since 2004, but supporters say they want voters to weigh in because the contraception coverage provisions in the Affordable Care Act are currently being challenged in court.

HB 3814 would seek input from voters on the state’s minimum wage. The measure contains a ballot question that asks if the minimum wage should be increased from the current $8.25 per hour to $10 per hour by 2015.

HB 0008 would create protections for expectant mothers in the workplace. The legislation would require employers to make “reasonable accommodations” so women can stay on the job while pregnant without threatening their safety or the safety of their unborn children. Gov. Pat Quinn supports the bill and is expected to sign it into law.

SB 2187 would allow psychologists to prescribe medication when working collaboratively with a doctor. The legislation would require that psychologists apply for a special license to be allowed to prescribe medication.

HB 0105 would make sweeping changes to election rules in Illinois. It would extend in-person early voting hours and remove the requirement that early voters present identification. Voters would also be allowed to register on election day. The legislation would also allow in-person absentee voting on college campuses on election day. Quinn has said he plans to sign the bill.

SB 0352 would allow the state to collect sales taxes from online businesses, such as Groupon, that sell promotional deals and coupons. The move comes after the Illinois Supreme Court struck down the state’s attempt to tax online retailers, such as Amazon, through their connections with Internet marketers based in Illinois.

SB2352 would create an independent ombudsman to oversee the Illinois Department of Juvenile Justice. The department has entered into a legal consent decree that requires it to improve education, mental health treatment and safety for detainees. Experts who created recommendations for the department found that juvenile detention centers were not offering the education required by law and lacked adequate mental health staffing. Fifteen percent of youth in the state’s system reported, as part of a Justice Department survey, that they had been sexually assaulted by other inmates or staff.

What failed
SB 0649 would have cut the Department of Natural Resources out of setting the rules for fracking in the state, but the bill lacked the votes needed to pass. Supporters said that IDNR is taking too long to set the rules for the controversial method of extracting oil and natural gas. Opponents argued that the department needs time to ensure that the rules protect the water supply and Illinois residents.

SB 2694 The Senate voted to reject changes made in the House to a bill that was geared toward protecting adults from online revenge. The proposal would have made it a felony to post online sexual images without the permission of the subject of the photo or video. The lead sponsors from each chamber could not agree on the final language so the legislation fizzled out on the last day of session. According to the National Conference of State Legislatures, eight states have so-called revenge porn laws. Anti-stalking laws in some other states also cover such scenarios.

HB 3836 would have broken the Abraham Lincoln Presidential Library and Museum away from the Illinois Historic Preservation Agency. Under the plan, the Springfield-based museum and library would have become its own state agency. The House approved the bill, but the Senate did not vote on it.

SB 0016 would have changed the way the state gives money to schools. The legislation calls for more of state funding to be distributed based on local need. The Senate approved the plan, but the House did not take it up for a vote.

Saturday, May 31, 2014

Efforts to change business tax climate fall short

By Caitlin Rydinsky

A last minute push to change a highly scrutinized tax credit used by large corporations failed to move forward in the Senate.

House Speaker Michael Madigan, who sponsored Senate Bill 364, said the measure would allow smaller businesses more opportunities to gain the Economic Development for a Growing Economy (EDGE) tax credit and improve job development in areas that have high poverty and unemployment.

In recent years, a handful of larger business have requested special versions of the tax credit from the legislature in order to keep them from moving out of the state. Some that received the credit did not hire new employees, and some even laid employees off. Rep. Jack Franks, a Democrat from Marengo, said “I found that particularly distasteful in previous EDGE deals where employers would be able to claim retention of employees while at the same time actually reducing head count, then we would subsidize the termination of tax paying Illinoisans.”

Supporters in the House said the bill was a good step toward stopping the state from giving special breaks to companies that can afford to lobby them and broadening the availability to EDGE credits for employers with less than 100 employees by eliminating a $1 million capital spending requirement. The legislation came after a special house committee that was weighing the tax climate for Illinois businesses was unable to reach a consensus on any substantial recommendations. “We had been hopeful of a broader based bill, but we ran out of time in this session and the purpose of the legislation is to have that available as we continue discussions over the summer and fall sessions,” Madigan said. “I happen to think it’s a real good opportunity for Illinois to make some significant, meaningful change in the business tax credit that will help Illinois business going forward.”

Rep. David Harris, an Arlington Heights Republican, said that a provision in the bill that requires companies seeking special edge credits to make financial disclosures would likely put a damper on them coming to lawmakers for a tailored tax break. “They have to provide information which is so onerous to companies, so distasteful for a company, that they would say ‘uh-huh I’m not putting that kind of information out there for the public to see.’ It effectively stops the company, unless they are going to do everything in the bill and my sense is no company would want to do, it effectively stops that special company from coming to us. It stops us from having to pick winners and losers,” Harris said.

But Barrington Hills Republican Rep. David McSweeney said lawmakers should be focusing on other ways to improve the business climate within the state of Illinois. “We should be cutting corporate tax rates and cutting tax rates for individuals and small businesses,” he said. “This continues the program that the government is going to pick winners and losers. We’re much better off cutting tax rates across the board.”

The House approved the bill on the final day of the spring legislative session, but the Senate did not bring it up for a vote. Decatur Democratic Sen. Andy Manar, a sponsor of the bill, said: “It’s a comprehensive piece of legislation that was introduced in the final weeks of session. I would expect that the Senate President [John Cullerton], the sponsor of the bill and the Senate would want to have thorough review before the Senate takes it up.” Although the legislation was not called for a vote in the Senate, Democrats said the legislation is still “on the table” and could be considered over the summer or in fall veto session.

Friday, May 30, 2014

Budget postpones tax debate until after election

By Jamey Dunn

The Senate approved the budget bills passed by the House earlier this week, essentially delaying the debate over a tax increase or deep cuts until after the November election.

This session, lawmakers had the challenge of crafting a budget with about $2 billion less revenue because the temporary income tax increase will begin to step down halfway through next fiscal year. The only options seemed to be deep cuts, new revenue or some combination of the two. Democrats eventually presented a third option, which relies on borrowing from special funds and increasing the state’s backlog of overdue bills

Chicago Democratic Sen. Heather Steans, who sponsored some of the budget bills in the Senate, said that the state could make it through the entire fiscal year on the spending approved today. “This budget is a full-year budget that can be executed for a full year without requiring any sort of a revenue vote. No tax increase is required for this budget.” But she said that if lawmakers do not approve any new revenues before the end of Fiscal Year 2015, many programs, such as in-home care for the elderly, would have to be cut. “We are going to have a huge issue that we cannot contend with without either mass cuts or revenue.” Steans said that there are about $700 million in new projected budget pressures that “are not probably totally funded” under the plan.

Republicans accused Democrats of setting the state up for a budget emergency, so they can push through an extension of the tax increase after the election. “This is an irresponsible budget seeking to create a crisis because you failed at convincing the people this year that there’s a sufficient crisis to require a tax increase. So now, you’re taking another stab at creating a crisis by making this huge cliff,” said Sen. Matt Murphy, a Palatine Republican.

Democrats say that they picked the least harmful option that was politically possible. “This maintenance budget allows us to provide level funding for key priorities and services. The effect of the budget is to avert doomsday cuts by deferrals, borrowing and increasing our backlog of bills,” Senate President John Cullerton said in a prepared statement. “Admittedly, this budget reverses some of the progress that we have made in recent years. Since we passed the income tax increase in 2011, we have paid down $3.6 billion in old bills and fully funded our ballooning pension payments. We have paid off $8 billion in pension debt. We have saved billions with responsible budget cuts and that demonstrated that we can be good stewards of taxpayer dollars.”

They FY 15 budget relies on $650 million in borrowing from state funds outside of the general operating budget. It would flat fund most areas of the budget with a slight increase in K-12 education. It would give larger agencies some lump sum appropriations so that they can have the flexibility to try to patch any holes that might spring up. The budget bills:
  • House Bill 6093 contains K-12 spending.
  • HB6094 contains higher education spending.
  • HB 6095 contains general operating services spending.
  • HB 6096 contains human services spending and required spending, including pension payments.
  • HB 6097 contains public safety spending 
  • HB 3793 contains capital projects, including school construction, and about half of the back pay owed to state workers. 
  • Senate Bill 220 contains budget implementation provisions 
  • SB 274 contains the authority for inter-fund borrowing and lawmaker’s pay. A mechanism in the bill would keep Gov. Pat Quinn from being able to cut off legislative pay, a move he made to try and push lawmakers to act on pension reform last summer. The bill would also put a freeze on legislative pay increases. 
Gov. Pat Quinn called the plan “incomplete” in a written statement he released after the Senate passed the spending bills. “The General Assembly didn't get the job done on the budget. ... In March, I submitted a balanced budget plan that continued paying down the state's bills, protected education and public safety and secured Illinois’ long-term financial future,” the statement said. Quinn called for an extension of the tax rates in his budget address earlier this year. “Instead, the General Assembly sent me an incomplete budget that does not pay down the bills but instead postpones the tough decisions. I will do my job. I will work to minimize the impact of cuts in vital services while continuing to cut waste and maintain our hard-won fiscal gains. There’s more work to do to continue moving Illinois forward.” 

Steans and Park Ridge Democratic Sen. Dan Kotowski, who also sponsored budget bills, would not say if they intended to revisit the income tax rates after November. But they did say that they believe more revenue is needed. However, on the topic of the tax rates, Cullerton did not mince words. “In order to return to [the state’s] path of fiscal progress, we will have to bring revenues in line with our growing liabilities. While a vote on our tax rates has been deferred, rising costs and pressures will force the issue at a later date.” Cullerton has said that he has the votes in the Senate to keep the current income tax rates of 5 percent for individuals and 7 percent for corporations. But House Speaker Madigan said that he was a long way off from being able to pass an extension of the rates in the House. If lawmakers do not opt to extend the current rates, they will step down to 3.75 percent for individuals and 5.25 percent for corporations in January.

Republicans took issue with giving Quinn the power to sweep funds in an election year. They also cried foul over areas of spending in the budget, such as money going toward a summer jobs program to prevent violence. The governor has recently come under fire for the Neighborhood Recovery Initiative (NRI). The program was funded primarily from discretionary funding that Quinn could access. NRI was the subject of a scathing audit that found that the program did not use a competitive bidding process to select the providers and dole out grants but instead relied on recommendations from Chicago aldermen. Documentation from providers implementing NRI was seriously lacking and at least $2 million was never accounted for. Contracts for NRI were agreed upon just before the 2010 election and Republicans have accused Quinn of using the program as a “political slush fund.”

Democrats argued that the problems in the program have been cleaned up and that violence prevention continues to be an important priority. They criticized Republicans for not presenting their own detailed plan for coping with the loss of revenue in FY 15. “There’s no place to really pretend in this budget. It is what it is. It’s very straight forward it’s very clear,” said Kotowski of the plan. “It’s clear where the pressures exist. It’s clear the actions that we’re taking to live within the means already provided by taxpayers.”

In his traditional end-of-session floor speech, House Speaker Michael Madigan noted that lawmakers have been faced with many tough issues in recent years. “This has been a difficult session, a very difficult session. Over the last few years, nothing seems to be simple; nothing seems to be easy. It’s just one difficult complicated issue after another.”

The legislature is not scheduled to return for fall veto session until November 19th.

Roads and bridges capital bill
The Senate sent a “mini” capital bill with road and bridge constructions projects to Quinn’s desk. House Bill 3794 calls for $1.1 billion in construction spending, $1 billion of which would go to road and bridge projects included in IDOT’s 5-year plan. The remaining $100 million would go to local street repair projects.

The bill does not list projects because they would be determined by IDOT. The department would prioritize projects that are ready to go in the summer construction season. The money for construction would come from funding sources approved as part of the 1999 Illinois First capital program. Borrowing for the plan has been paid off, but the increased fees and taxes remain. The Senate approved the bill with no debate.

House passes "mini" capital plan for roads and bridges

By Jamey Dunn

The House approved more than $1 billion in capital construction spending, the bulk of which would be spent by the Illinois Department of Transportation on “shovel ready” projects.

House Bill 3794 calls for $1.1 billion in construction spending, $1 billion of which would go to road and bridge projects included in IDOT’s 5-year plan. The bill does not list the projects because they would be determined by IDOT, but sponsor Rep. Luis Arroyo said that the department plans to prioritize projects that are ready to go during the summer construction season. The remaining $100 million would go to local street repair projects. The money for construction would come from funding sources approved as part of the 1999 Illinois First capital program. Borrowing for the plan has been paid off, but the increased fees and taxes remain. “Some of that debt has been retired. It’s been paid off, and the revenue stream that was used to support it is now available,” said House Speaker Michael Madigan.

The plan passed with bipartisan support. House Minority Leader Jim Durkin said that after the particularly harsh winter, the state’s roads need work. “Illinois roads were clobbered.” He said that while Republicans opposed other construction projects passed in the House yesterday, this pared-down plan is “responsible” because the spending will be decided by IDOT instead of legislators. “It’s a smaller bill, but this is going to get us through the end of the year.”

But some lawmakers questioned spending money that could otherwise go into the general revenue fund on a rushed capital bill that does not include anything other than road and bridge projects. “I think this is the wrong time to do this, and I think this is the wrong approach,” said Northbrook Democrat Rep. Elaine Nekritz. and Proponents argued that this plan can be accomplished now to get people to work in the coming months, and the issue of a larger capital plan could be revisited later. “Bottom line, this is going to put people to work. Those people will pay taxes, and some of those taxes will come to the state of Illinois,” said Madigan.

Thursday, May 29, 2014

House approves increased revenue estimate for next fiscal year

By Jamey Dunn

The House approved an increased estimate of the revenue the state will bring in next fiscal year. The new projection will match the spending that the chamber has approved over the last few days.

In February, the House passed a revenue projection of $34.495 billion with no opposition. Today, that projection was revised up to $35.352 billion over the opposition of Republicans in the chamber. In recent years, the House has approved a revenue estimate and then approved a budget based on that estimate. This year, things happened the other way around. “The process is kind of bass-ackwards here,” said Rep. David Harris, a Republican from Arlington Heights. “We have spent the money, so now we have to come up with a revenue estimate to meet the spending.”

A large portion of the difference between the estimates comes from $650 million that would be borrowed from funds outside of the state’s general operating budget. (For more on these special funds and how they play into the budgeting process, see Illinois Issues, April 2012.) Republicans argued that using money borrowed from other funds means that the state would have to raise more revenue to pay the money back later. “This is an unbalanced budget; this is a fund sweep; and this is a future tax increase,” said Rep. David McSweeney, a Republican from Barrington Hills.

 Marion Democratic Rep. John Bradley, who sponsored the resolution, noted that there are not enough votes to pass legislation maintaining the current income tax rates, which are due to begin stepping down in the middle of next fiscal year. The chamber also voted down a budget with no new revenues and deep cuts. “We are trying to cobble together a budget to get through the next fiscal year, and the next governor, whoever that may be, has got a real fiscal cliff to deal with,” Bradley said on the House floor. “But this budget—this budget—gets us through the next year without the devastating cuts that people were against and without the tax extension that people were against.” Bradley called upon his colleagues to “be realistic” and pass what he called the most responsible budget possible “in this climate given the fact that everybody’s against everything.”

Committee evaluating business taxes releases report, but reaches no consensus

By Caitlin Rydinsky

A House committee released a report Wednesday evaluating the tax climate for business in the state, but the group struggled to find common ground on several major issues.

The House’s Revenue and Finance Committee and State Government Administration Committee spent months assessing the tax incentives the state offers businesses months after House Speaker Michael Madigan requested a review at the end of last year. Madigan made the call after several businesses approached the legislature seeking specially tailored versions of the economic development for a growing economy (EDGE) tax credit.

The report looked at various taxes and tax credits, but the 28 committee members were unable to reach a consensus on several of the tax breaks they scrutinized. Some they agreed needed further evaluation were the franchise tax, the economic development for a growing economy (EDGE) tax credit and fees for limited liability corporations. Marion Democrat Rep. John Bradley, who chairs the revenue committee, said that the group found that the collection of some fees and taxes was not being enforced by the state. “The franchise tax are not being audited by the state; companies are not paying the fees and having no consequences, or they are placing taxable stock in other states in order to avoid paying taxes.”

Bradley and other lawmakers agreed it was not benefiting the current economy of the state, and said in the report “although the committee members have not reached a consensus on how to replace the current corporate franchise tax revenue, the working groups have agreed to repeal the corporate franchise tax.” Lawmakers and advocates for the industry and businesses felt that the bipartisan report could potentially provide more competitiveness between companies large and small and generate job growth. Representatives of the business community had generally positive reactions to the report. “I think it’s a very impressive report, and there hasn’t been a legislatively generated report of this sophistication in I don’t know how long,”said Dan Johnson, president and lobbyist of Progressive Public Affairs a company that represents small businesses and not-for profits. “It’s a very thorough report and on that it’s great. And I hope that there’s some action taken in the next few days.” However, members of the committees were unsure if their proposals would become legislation in the near future. “We made recommendations that are being presented in a bipartisan manner,  and it will be up to leadership to decide what, if anything, would be part of a final package and make those decisions,” said Bradley of the findings.

While the EDGE credit is the incentive that likely spurred the group’s hearings on the issue, it was unable to reach any agreement on changing the credit. “No consensus was reached in regard to changes needed to the EDGE credit; however, all members feel that it is imperative to ensure that Illinois remains competitive in today’s economy,“ the report said. The credit has become controversial as several large businesses have threatened to leave the state if lawmakers would not adapt an EDGE credit specifically to them. Some who got the credit, which is meant to spur job growth, made layoffs after. Marengo Democratic Rep. Jack Franks said, “I wanted to focus on the small businesses that really are the job creators in the state of Illinois that have not been able to avail themselves of the EDGE credits.” Franks is the chair of the state government administration committee.

 Madigan proposed House Bill 3890 earlier this month. The proposal would remove a requirement that businesses spend $1 million on capital investments to get the EDGE credit. The move would allow smaller companies to take advantage of the EDGE program. Franks said members of the committee are waiting to see what happens with the speaker’s bill. The legislation in its current form, could not make it through the standard legislative process and to the governor’s desk before session is scheduled to adjourn on Saturday. Franks said that he hopes that the committees’ ideas will take the form of bills sometime soon, perhaps in the fall veto session.

Wednesday, May 28, 2014

House votes to restore Medicaid cuts, pay old bills and fund construction projects

By Jamey Dunn

The Illinois House voted Wednesday to restore several cuts to Medicaid and to tack more than $1 billion in spending onto the current fiscal year’s budget.

Senate Bill 741 would rollback several Medicaid program reductions that were cut under sweeping Medicaid reforms approved in 2012. The bill would restore podiatry services and preventative dental care for adults. It would lift the four-prescription limit for people with “severe mental illness.” It would also remove the limit on the number of physical therapy sessions patients can access. The bill allows for more funding for programs that care for children with extensive medical needs, such as those on ventilators. “We are restoring this simply because we have found out from experience that these cuts actually did not save us money. They cost the people of the state of Illinois more money, and they brought suffering and hardship to families. They brought overutilization to our emergency departments and interfered with the delivery of health care to other patients in need,” said Chicago Democratic Rep. Greg Harris, who sponsored the bill. The restorations would cost $221 million upfront. However, the spending would bring in federal matching funds, so Harris said the net cost would be about $125 million in general revenue funding.

Opponents questioned rolling back changes to Medicaid that were put in place to ensure that the system remained sustainable at a time when the state was pushing billions of Medicaid bills from one fiscal year into the next. The reforms now bar the state from shoveling Medicaid bills into future fiscal years. “How are we going to pay for that, and how are we going to sustain the system for the people who need it most?” Rep. Patricia Bellock asked on the House floor.

Those who have advocated to restore the cuts argue that they do not save the state money in the long run because Medicaid patients are forced to skip preventative care but later call on the system once their health deteriorates into an emergency situation. Chicago Democratic Rep. Mary Flowers said that a lack of dental care means missed wages when Medicaid patients stay home from work with tooth pain and missed opportunities when dental problems, such as missing teeth, keep them from making a good first impression at job interviews. “Access to dental services—like filling, cavities, root canals, dentures—means that the most vulnerable in our state will not need to suffer from unnecessary pain,” she said. 

Harris also sponsored House Bill 6060, which would add $1.8 billion in spending during the current fiscal year. Around $1 billion would go toward paying down old bills, and $600 million of that would go to Medicaid, triggering federal matching funds. The backlog stands at about $4.7 billion now. The money comes from new revenue that came in this year above projections for Fiscal Year 2014.

The House also reapproved ongoing capital construction projects for next fiscal year and tacked some new spending on, while they were at it. The new spending includes:

  • $13 million for sewage treatment and water projects. 
  • $10 million grant to the Uptown Theatre in Chicago. 
  • $40 million for school construction projects outside of Chicago. 
  • $35 million to Chicago Public Schools for school construction projects. 
  • $50 million for back pay to state employees in the departments of Public Health, Human Services, Corrections, Juvenile Justice and Natural Resources. The money would cover about half the cost of deferred raises that the state owes employees. 
  • $50 million for the Chicago teachers pension fund. 

 Chicago Democratic Rep. Barbara Flynn Currie, who sponsored HB 3793, said that the money for the additional spending would come from revised revenue estimates for Fiscal Year 2015 and funds left from the sale of the state’s 10th casino license.

 The measure did not have a standard committee hearing and came to the floor just hours after the amendment that contains the spending was filed. “We need to pass this bill if we want to make good on the commitments and promises we have earlier made,” Currie said of the spending that was part of the ongoing capital program. Republicans called the vote on the more than 1,000-page-bill rushed and argued that they did not have time to know what the legislation contained “We’re making a substantive vote with very little time to vet this vote,” said Downers Grove Republican Rep. Ron Sandack. “We seem to continue to do the wrong thing the wrong way, so I guess that’s consistency if nothing else.” 

House Speaker Mike Madigan also released his hold on the House budget bills approved yesterday, and they have been read into the record in the Senate. That means that the Senate could technically pass the budget and—as many in the Statehouse have been speculating—the spring session could adjourn a day early on Friday. However, such rumors always run rampant at this time of year. And so far, that possibility falls into the rumor category.

Tuesday, May 27, 2014

Senate approves changes to school funding formula, but House vote is unlikely

By Caitlin Rydinsky

A change to the way the state doles out school funding passed in the Senate today, but a House floor vote on the bill is not expected before session is scheduled to adjourn later this week.

Sen. Andy Manar, a Bunker Hill Democrat, sponsored Senate Bill 16, which supporters say could make school funding for poor communities more equalized to wealthier communities. A Senate committee spent months evaluating the current funding formula after questions arose about drastic disparities between schools throughout the state. The plan would put more of the money the state sends to local school districts through a filter that would weight funding more heavily toward factors such as whether students live in poverty or are bilingual learners. It would also consider the need of local districts that have less affluent property tax bases for local funding. “Will there be winners and losers under a new funding formula? Absolutely. But those winners and losers will be based on need and resources and not what their zip code is,” said Democratic Sen. John Sullivan of Rushville. “We’ve all said that around here for years that it ought to be based on not where you live, but what resources you have, and Senate Bill 16 addresses that.”

Republicans argued that the bill opens schools to vulnerability in funding because it would not hold the state to the current per-pupil required funding level, which is known as the “foundation level.” “Statewide, if this bill becomes law, the one objective measuring stick that we have to say, are we funding to the degree that we say we would, will be changed. It would be traumatic,” said Republican Sen. Dale Righter  of Mattoon. “Understand under Senate Bill 16 that number is no longer locked in statute.”

Lawmakers agreed that the state’s education funding formula needs to be changed, but Republicans questioned whether this legislation is the right way to go. Manar said when asked of the debate, “I was quite shocked at their defense of the status quo at the debate and it’s as if (Republicans) are immune or numb to the reality of what is going on in the state today. There’s no reason to pause, there’s no reason.”

Republicans said that they are wary that the process politicized, and some noted that the issue of distributing school funding has always been a difficult one to resolve. “Look at it from our standpoint as the minority party: are we headed in a direction of something political or are we really seriously trying to do something about this? I would like to do something about it. ... Everything that happens around here is political, and I think there’s a little politics involved in this. But I also think there is some sincerity in trying to come up with something better.

Manar that evaluating the issue and drafting a bill took time within the Senate, so he does not expect the House to vote on it in the few days left in the spring session. “The idea that the House is going to turn [it] around in a couple of days is not logical, nor was (the bill) designed to do that. They should take ample time to do it and make the appropriate changes and hopefully get a product in front of both houses as soon as possible.”

The legislation does not currently have a sponsor within the House, although Manar says he has worked with several Democratic representatives during the drafting of the bill. He says he will wait to see what lawmakers in the House propose after they evaluate the plan The legislation would not take effect until July of 2015 and would allow a phase in period to let schools adjust to the newly proposed funding formula.

Budget "middle road" paved with short-term fixes

By Jamey Dunn

The House passed what some have dubbed a “middle of the road” budget, which keeps many areas of state government funded at current levels.

Under current law, the state will lose nearly $2 billion in revenue next fiscal year when the income tax increase begins to roll back. The income tax rates are set step down from 5 percent for individuals to 3.75 percent and from 7 percent for corporations to 5.25 percent half way through Fiscal Year 2015. Earlier this month, the House voted to approve a nearly $38 billion budget, which would have required an extension of the current income tax rates to fund. However, House Speaker Michael Madigan later said that there were not enough votes in his chamber to extend the current rates. The House then rejected a so-called “doomsday budget plan,” with only five members voting in favor of the bill. That proposal would have made deep cuts to education and human services.

On Tuesday, the House approved with little debate a budget that would spend about $35 billion and not require an extension of the tax rate. After the bills passed, Madigan used a parliamentary procedure to block them from going directly to the Senate. Senate and House Democrats are working together on the plan in the hopes of getting it through both chambers before the regular legislative session is scheduled to adjourn at midnight on Saturday.

Debate on the bills was lacking in the House in part because lawmakers on both sides of the aisle were uncertain about the details of the budget. For example, none of the key budgeting players in the chamber were able to give a definitive answer on the total spending number for the plan. All the responses were between $35 billion and $36 billion, but nobody knew the number spot on.

The bills were worked out in House budgeting committees, but many Republicans on those committees said they were not included in negotiations. Complaints aired by Republicans on the floor were primarily about the process and not the specifics of the budget itself, which they say they got this morning. “This is not a good budgeting process when you don’t know what you’re talking about. You don’t know what you’re advancing,” said Rep. Ron Sandack, a Downers Grove Republican.

“I guess that the speed-reading classes that you’ve taken are paying off over there. Thank God. But the process has been a complete joke,” Elmhurst Republican Rep. Dennis Reboletti said to Democrats on the House floor. “You do this every year, and then you’re surprised that we’re not working with you, or that we’re angry or frustrated.” Democrats said they tried to include Republicans, but that many did not attend meetings held budgeting committees yesterday. They say that because Republicans have been unwilling to vote for budgets in recent years, they likely would not have been in favor of the plan, no matter what the process.

Those Democrats who crafted the proposal were able to keep the budget relatively flat by tapping into some well-worn creative budgeting tactics, such as delaying payment for some spending obligations, adjusting revenue estimates up and borrowing from funds outside of general spending. Democrats say that the moves freed up about $2 billion. Most of the tactics are short-term solutions or one-time sources of funding. Republicans, who had previously accused Democrats of exaggerating how painful a budget would be to try to pass an extension of the income tax rates, reacted with sarcasm to the plan unveiled today. “Magically, hundreds of millions of dollars extra have been found. Shocking. I am so surprised that now we’ve looked under the couch cushions and found a little bit of extra walking-around money to sprinkle around the budget,” Reboletti said.

But flat funding does not mean that the budget picture is rosy. The bill backlog would grow substantially and there would be layoffs under the plan, according to those who worked most closely on it. “As the year goes on, things are going to get tighter and tighter in our departments,” said Rep. Greg Harris, who chairs the House human services budgeting committee. Harris said that the budget would likely increase the state’s stack of unpaid bills by “a couple billions of dollars” and would result in “thousands” of layoffs of state workers. The backlog is expected to be about $5.6 billion by the end of the current fiscal year.

The House breaks down the budgeting process into general areas of K-12 education, human services, general services, higher education and public safety. The only of these areas that would see a funding increase would be K-12 education, which would go up $167 million over the current fiscal year. The increase would be needed to keep General State Aid to schools prorated at just under 89 percent and to pay for student assessments that are part of the state’s transition to the Common Core curriculum standards. While K-12 education will see a slight increase, Homewood Democratic Rep. William Davis, who is the chair of the House K-12 education budgeting committee, said that it is not enough to meet the need in many Illinois schools. “Is this the budget that I wanted? Absolutely not,” he said. General State Aid to schools has not been fully funded for the last three years.

Harris said that as the fiscal year wears on, state agencies would start to feel the squeeze of trying to stick to flat funding, while the cost of doing business grows. He said that services required by law our under court orders would likely start to crowd out other programs. “It’s going to be after January 1 that you see the problems beginning to add up.” Harris said that if nothing changes, the budget would be in an even worse place in Fiscal Year 2016. “Next fiscal year, we’re going to be in a terrible spot because next year we will have lost a full year’s worth of revenue.”

Sugary drink tax fizzles out

By Caitlin Rydinsky 

Another potential revenue source hit a wall at the Statehouse today as a House committee rejected a proposed tax on sugary drinks.

House Bill 0397 calls for a one-cent-per-ounce tax on sugary beverages. Sponsor Rep. Gabel, an Evanston Democrat, said the bill could potentially raise more than $600 million to ease the state’s loss in revenue from expiration of the temporary income tax. Supporters hoped that increased tax could also help to reverse obesity and health- related issues  by prompting residents to drink fewer sugary beverages. The legislation called for the tax revenue to be used for physical and health education in schools and childcare centers, as well as walking paths and other community initiatives.

The bill failed by a wide margin in the committee, with only two of seven members voting in favor. Opponents argued that the tax would be hard on low- and mid-income families and would jeopardize jobs in the soft drink industry. Mark Denzler, chief executive officer of the Illinois Manufacturing Association, said, “You can’t raise the revenue without losing jobs.” The manufacturers and beverage industry raised concerns that a tax would impact stores and cause Illinoisans to go nearby states to avoid the cost. Denzler said, “If you raise the tax, and this is a tax increase by $2.88 on a case of soda, you will see consumers not necessarily changing their pattern of what they buy, but where they buy.”

Supporters said although the bill failed, they will continue efforts to pass such legislation. “Though we wish the outcome of the hearing had been different, we are glad this bill has started a public debate on the health impacts caused by sugary drinks. The fight will continue for a healthier Illinois,” said Elissa Bassler, executive director of the Illinois Alliance to Prevent Obesity, in a written statement. “The issues regarding obesity-related health impacts such as diabetes, heart disease and stroke are not going away, and we are committed to reversing the obesity epidemic in Illinois.”

Backers of the tax said that it would not limit consumers' ability to have a beverage they want, but it could encourage them to make healthier choices. They argued that while jobs might be lost in the soft drink industry, the legislation would promote growth in other sectors, such as health care and wellness. “I understand the concerns of the tax applied, but I also really want to emphasize the cost and the pain that obesity and diabetes have caused in so many working families,” said Gabel. “Particularly low-income families who don’t have proper medical care and insurance. They end up losing their legs, and so, I think we have to weigh in on these things as well as the creation of jobs in other industries.”

Friday, May 23, 2014

House working on less severe tax-rollback budget plan

By Jamey Dunn with Caitlin Rydinsky contributing 

After an austere budget bill failed miserably on the House floor on Friday, House Speaker Michael Madigan said that Democrats would craft a more workable budget without an extension of the current tax rates.

The proposal failed with only five voting “yes” and 107 members voting against it. All the votes in favor of the $34.8 billion budget came from Democrats. The so-called doomsday budget would have cut education by $570 million and human services by $365 million from the current fiscal year.

Republicans decried the proposal as a stunt and not a legitimate effort to cut the budget in a responsible way. “I think it was something that was another ploy, a tactic, that is in the game plan of the speaker. We’ll have to wait and see what the real meaning was behind that vote,” said Bloomington Republican Rep. Dan Brady, who serves on the House higher education budgeting committee.

Madigan said he was not surprised that most on his side of the aisle rejected the plan. “Democrats generally are not interested in reducing government and providing less government help for people. They’re not interested in that, and so [the] democratic vote on the budget this morning should not be a surprise.” He said that Democrats on the budgeting committees in the House will meet to try and work out a plan that can pass in both chambers and be signed by Gov. Pat Quinn. “My expectation is at the end of the day, there will be at least 60 Democrats, maybe more, that will be supporting a budget which will continue to provide a good level of state services to the people of Illinois without the extension of the income tax increase.”

As the law stands, the income tax rates would step down to 3.75 for individuals and 5.25 for corporations half way through Fiscal Year 2015. A rollback of the rates would take an estimated $1.6 billion in revenue with it. Gov. Pat Quinn and Democratic legislative leaders have said they support for an extension of the rates, which are 5 percent for individuals and 7 percent for corporations. But Madigan told reporters this week that there are not enough Democrats in the House who support keeping the current rates.

One way that plan without a tax rate extension might avoid deep cuts is by reducing the amount of money the state uses to pay down its backlog of overdue bills. Such a move would likely result in schools, social services providers, doctors and others who do business with the state having to wait longer to be reimbursed for their services. The backlog is expected to be about $5.6 billion when the current fiscal year ends on June 30. That number is down from the peak level of $9.9 billion in 2010. In some cases, those owed money by the state where waiting for six months or longer to be reimbursed.

Such a move could earn the plan opponents from both parties. “I know that the amount of the unpaid bills that the sate has outstanding is of concern, not only to me but to other legislators as well, and any budget plan is going to have to have a component that pays off a substantial amount of that debt,” said Rep. Sam Yingling, a Democrat from Round Lake Beach. “I think difficult decisions are going to have to be made. Everybody knows that the state of Illinois has lived far beyond its means for a number of years, and now the state is going to have to come to grasp with the fact that it can’t afford everything its been funding. So difficult decisions are going to have to be made, and not everybody is going to be happy with those decisions.” Yingling does not support an extension of the current tax rates.

Madigan said Friday that he still supports extending the current income tax rates, but he said that getting it done is another matter. He says that only 34 members of his caucus are in favor of extending the current rates. “I’m going to continue to work for the extension of the income tax increase because my view is that the state does need more money to support the programs that are offered by the state, but 34 is a long way from 60.” Madigan said that he does not plan to send Quinn a lump sum budget or pass bills that do not match the revenue coming in, forcing the governor to make cuts.

“There’s certainly not the votes for the tax increase,” said Rep. Jack Franks, a Marengo Democrat. Franks opposes extending the current tax rate. But he says that he thinks there could be an option in between the doomsday option voted down today and the $38 billion in spending the House approved last week. Madigan put a hold on those budget bills, so they did not go over to the Senate after passage. “I think there’s a happy medium; at least there should be a compromise and I’m hoping in the next few days we’ll get closer to it.”

Still, some are hoping that House Democrats will come around to the idea of keeping the income tax increase. Weekend session has been canceled, so lawmakers from both chambers will presumably head back to their districts for the next two days. “I think that the members, at least in the House, need to come to their senses and realize that you can’t adequately fund education without adequate resources to do so,” said Homewood Democratic Rep. William Davis, who chairs the House’s K-12 education budgeting committee. “Hopefully, members will take the weekend, come to their senses and realize that we need to come back sit down and have real conversations about the priorities of the stat of Illinois and then discuss what it’s going to take to fund those priorities.”

If the House can did pass a budget somewhere in the middle, the real challenge of getting support from the Senate and Quinn would begin. Senate President John Cullerton has said that he has the support to pass an extension of the rates, and Quinn has been lobbying house members hard for a tax vote. Getting more liberal Democrats in the Senate to vote for a budget that cuts or even funds services at a flat level but delays payments to schools and vendors could be difficult.

Quinn based his budget proposal on extending the rates, expecting the sometimes-stubborn governor to back track on the budget during a close election could be unrealistic. Part of Quinn’s proposal also included a $500 rebate for home owners to defer their property tax costs—an initiative the governor was no doubt hoping to tout on the campaign trail.

 Franks said of Quinn: “If there’s no additional revenue coming in, then he can’t spend any extra money. I think he may not like it, but it is going to be what it is.” He added, “Nobody’s going to like the budget.”

Voters may get a say on millionaire tax

By Caitlin Rydinsky

The House voted Friday in favor of allowing Illinoisans to voice their opinion on the November ballot about a proposal to tax income over $1 million at a higher rate.

House Speaker Michael Madigan sponsored House Bill 3816, which would allow for a advisory ballot question to ask voters what they think of a proposed additional three percent tax on income over $1 million. The revenue would be distributed to schools based on the number of students. Madigan proposed the tax as a constitutional amendment but was unable to get the support needed for it to pass. 

Homewood Democratic Rep. William Davis, who is chairman of the House education budgeting committee, said cutting more money from education would hinder the children within schools throughout the state. “This bill is a moderate request of those who earn billions, hundreds of millions, from the people of our state.”

Republican Rep. Mike Bostf Murphysboro questioned if the potential revenue would actually be used for education. He said: “Folks, we taxed the people of the state, and from what I have seen it has not been invested in education of the state. And yet we want a referendum to tax millionaires in the state. It is easy to target the millionaires of the state.” Republicans say that such a tax would result in job lose and a decrease in revenues generated to the state because of closures, layoffs or large businesses not coming to the state. Republicans said that because the original amendment did not have the support to pass, there is no reason to take the issue the public. But Madigan says he is confident that voters would respond differently than lawmakers on the nonbinding ballot question. “I think the Illinois voter is an intelligent and informed voter, and more than willing to participate in the electoral process.” Madigan said that the question would allow voters to help legislators make a decision on the bill after the election.

Rep. Ron Sandack, a Republican from Downers Grove, said that the ballot question and with another proposal from Madigan that would ask voters about increasing the minimum wage are politically motivated to get Democratic voters out to the polls in November. He said that Madigan's  efforts to allow for voter input were sincere,  the two citizens’ initiatives for constitutional amendments would not be facing a court challenge filed by a lawyer with close ties to Madigan. Groups supporting term limits and a change to the way the state draws it legislative districts both collected signatures to put proposed constitutional amendments on the ballot. The groups’ petitions are currently being reviewed by the Illinois State Board of Election.

If the legislation passes the in Senate and is signed by Gov. Pat Quinn, voters will be able to weigh in on the additional tax for the affluent during the November election.

Thursday, May 22, 2014

Lawmakers weigh potential hazards against risk of stifling new technology

By Caitlin Rydinsky 

Faced with the rapid rate of technological development, lawmakers find themselves questioning how soon is too soon to act when it comes to regulating new technologies.

Chicago Democratic Sen. Ira Silverstein's proposal follows those in other states such as Delaware, Maryland, Missouri and Wyoming in attempting to ban the wearing of a new device called Google Glass while driving. This product resembles a pair of glasses, but also allows users to browse the Internet, take pictures or videos, make calls and even check their emails hands free. Wilson White, public policy manager and associate litigation counsel at Google, said their product let consumers “have the Internet there when they want it and away when they don’t.”

Google Glass offers features that could be appealing to drivers, such as a GPS navigation application. The device would also prevent users from having to look down to a phone held in their hands or at a dashboard mount. It is activated and controlled by the user’s voice, head tilts, nods and multiple touches to the side of the glasses. Still, policymakers in several states question whether they would prove to be an distraction for drivers. “That’s my main problem, my main issue with this bill is safety, and I think this technology can hurt people, especially when driving cars. It can distract drivers in a second and cause a wreck and ultimately a tragedy,” Silverstein said. He is sponsoring Senate Bill 2636, which would ban wearing the glasses while driving. Texting and talking on handheld phones while driving are  banned in the state.

Google Glass is still in a customer-testing phase. The devices were only available to developers until this month. Now anyone can buy them for $1,500.

Sen. Daniel Biss, a Democrat from Evanston, knows all too well the difficulties and challenges that arise when trying to regulate advancing technology before it is being widely utilized by citizens. He sponsored a new law that restricts law enforcement's use of aerial drones. “Your knee jerk response would be to regulate, but you probably don’t want to just do it at a knee-jerk level. But again at the same time, you want to have appropriate regulation,” Biss said.

Biss’ legislation bans law enforcement from using drones to gather evidence without a warrant. It does allow for some exceptions, such as in the case of a missing person or a terrorist attack. Biss said that opposition to his proposal caused him to spend a summer learning more about drones and how law enforcement might use them. The next step, he said, was educating his fellow legislators about the issue. “Look [the Senate] has 59 members and across the building [are] 118 more. They all come from different places and different points of view. It takes a while to get people comfortable with something, particularly when the concept is new.”

Sen. Martin Sandoval, a Democrat from Chicago, said that public awareness of the dangers of texting while driving was key to passing a ban on it. “Public outcry and public demand is crucial to passing policy like the texting ban.” Sandoval says a large amount of evidence is needed to get people to see that there is a danger and be willing to put aside their desire for the instant gratification of checking their text messages while they drive.

Chicago Democratic Sen. Toi Hutchinson says that sometimes lawmakers do not have to pass a bill to have an impact on technology. She is a sponsor of SB 3593, which would require cell phones to have a “kill switch” to make them inoperable if stolen. Hutchinson said that she thinks here bill and similar legislation in other states resulted from large manufacturers volunteering to make the changes without any law being implemented. “The industry finally realized they were not going to oppose this bill state by state by state,” she said. Hutchinson still hopes to pass her bill to make sure that the companies stick to their word and that smaller manufacturers also offer the feature.

Because Google Glass is still in the experimental stage, many lawmakers feel it is too early to start regulating it. Rochelle Republican Rep. Tom Demmer borrowed a pair of Google Glass from his staffer, who worked for a developer, and wore them on the House floor on a session day. He said: “We’re jumping the gun on some of the regulations that come with technology. Often times you see technology be introduced, among a small community developer, you know, a tech advanced community, and we don’t really know how it will be adapted by the general public yet.” Demmer says that legislators run the risk of stifling innovation if the rush to restrict the use of new products. “I think we need to be cognizant that those actions we take in terms of regulating technology have an impact on the economy on what kind of businesses start in Illinois, (and) who brings their business in Illinois.” 

Silverstein has started the process of educating lawmakers about Google Glass. A team from Google came this week to meet with the Senate transportation committee and demonstrate their product.

“As far as the legislation, I think it’s a bit premature right now and I think the company, Google, would say they are still developing it and making adjustments on it. So we will see what the end product is and take a look at the legislation,” said Rushville Democratic Sen. John Sullivan, who is on the committee. 

“I don’t think it’s too early” Silverstein said. He said that the widespread use of cellphones while driving illustrates the risk of being distracted by gadgets while behind the wheel. He said that the fact that some drivers are constantly checking their phones indicates that the would be using Google Glass to do the same things, such as texting or reading emails, while driving.

Biss said that lawmakers who want to make sure that new technology is being used in a safe way that protects privacy must do so within a system that is designed to move at a deliberate pace. “Technology is changing incredibly fast right now and we have a legislative process that is designed to be sort of slow. So we have this challenge of how do you react nimbly and quickly to these unbelievable, rapid and radical technological changes in a way that it is consistent with the work things out, talk things through (and) think things over approach of legislation.”

 Although SB 2636 does not seem to be moving forward in the spring legislative session, the issue is unlikely to go away. Those who felt that it is too soon to ban them behind the wheel agreed that as more people use Google Glass and competing products hit the market, it is possible that the General Assembly would weigh in with regulations.