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Quinn wants dropout age raised to 18

2012-01-27T16:50:00.001-06:00

By Jamey Dunn

Following a call to action that President Barack Obama made in his State of the Union Address, Gov. Pat Quinn today proposed raising the dropout age for Illinois high school students.

“When students don’t walk away from their education, more of them walk the stage to get their diploma. When students are not allowed to drop out, they do better. So tonight, I'm proposing that every state -- every state -- requires that all students stay in high school until they graduate or turn 18,” Obama said in his address before Congress on Tuesday.

In Illinois, students can drop out at 17. According the National Conference of State Legislatures, 29 states allow students to drop out of school before they turn 18. Quinn plans to propose a bill during his State of the State address next week to change the age in Illinois, and he hopes to see it passed within the year. “Every child in Illinois deserves a quality education that will serve them throughout their lives,” Quinn said in a prepared statement. “The best way to ensure that our children have the chance to achieve and succeed is to make sure they stay in school long enough to earn their diploma.”

Illinois high school students could drop out at age 16 until lawmakers voted to increase the age to 17 in 2005. According to the Illinois State Board of Education, the statewide dropout rate in 2004 was 4 percent, and the rate today is 2.7 percent.

“I would anticipate if it was raised to 18, we would see another decrease in the dropout rate,” said Matt Vanover, spokesperson for the ISBE.Vanover said that moving the age up from 16 made a difference. “You get the driver’s license, and all of sudden you think, 'I don’t need school, and I don’t want to stick around for two years,’” he said. “Two years is an eternity in a teenager’s mind.” He said that the closer that students get to being able to see the light at the end of the tunnel, the more likely they are to stick it out and graduate.

Vanover said that without a high school diploma, young adults have little chance at finding a job that can support a family. “Anything that we can do to ensure that students are going to be in school, we’re going to be for it. We know that if you do drop out, the chances to succeed in life just plummet.”

Charles McBarron, spokesperson for the Illinois Education Association, said that the teachers union supports the concept of raising the dropout age. However, he said that may not be enough to ensure that students get a solid education. “It probably requires more than just keeping them in the building. We have to find way of engaging them.”

Rep. Roger Eddy, a Hutsonville Republican, agreed. “If it was as easy as Obama said, it would be wonderful,” said Eddy, who is a school superintendent in Hutsonville. “To accomplish something with it, we’re going to really have to look at what we do to provide students with a meaningful experiences.”

Eddy said that vocational courses or workplace readiness programs might connect with students who are not succeeding in a traditional academic setting. “To serve the needs of all students, we do have to understand that some students aren’t going to college.”He said that in some areas where dropout rates are highest, students may face challenges that schools cannot easily overcome, such as homelessness or violence.

Eddy added that levels of truancy enforcement vary throughout the state, and an increase in the dropout age would require consistent enforcement to be effective. “It’s really hard for the school to be the police, too.”

GOPUSA ILLINOIS Daily Clips - January 27, 2012

2012-01-27T10:56:00.002-06:00

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GOPUSA ILLINOIS Daily Clips - January 26, 2012

2012-01-26T12:11:00.001-06:00

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Part 3: A look at pension reform across the country

2012-01-25T18:08:00.001-06:00

By Jamey Dunn

All four legislative leaders and Gov. Pat Quinn have said that pension reform is a priority in the upcoming legislative session, but their opinions differ on what would be best for the state and legal under the Illinois Constitution. Recent reforms in other states could provide models as lawmakers move forward. This is the final installment in a three-part series that looks at different aspects of reform in other states.

While labor issues in some states have turned into ugly fights that involved sit-ins and heated rhetoric, one state managed to work out pension changes through negotiations with its unions.

In Vermont, state officials sat down with labor leaders and worked out a deal that will save the state about $15 million a year, which was about 10 percent of the state’s budget deficit at the time the deal was struck. Employees will contribute more of their pay toward their retirement costs. It varies for different workers, but it will mean about 1 percent more of their salaries would go to their pensions. Workers will have to wait longer to retire, but will see a bump in benefits. The deal also includes a two-year 3 percent pay cut for state employees, a first in Vermont.

Employees in many states have had to pay more for their retirement benefits. In 2010, 11 states increased the amount employees must contribute to their retirement. In 2011, it happened 16 more times, although some of the same states that had raised contribution levels the previous year made the move again. “If you were to look across the country in cases where required pension contributions has been raised by employees you would find a range for different reasons,” said Keith Brainard, research director for National Association of State Retirement Administrators.

He said, “It’s more the absence of something — the absence of a constitutional provision, the lack of a statute” that allows states to increase contributions. According the National Conference of State Legislatures, 12 of the 2011 increases applied to at least some current employees. However, David Draine, senior researcher for Pew Center on the States, said: “We’ve seen more states considering — though not necessarily going for it — models where employees can keep their current benefits but have to pay more for them.”

That is what House Minority Leader Tom Cross said needs to happen in Illinois. Under Cross’ proposal, Senate Bill 17, workers who want to stay in the current benefit system would have to pay more. “You’ve got to truly pay for the cost of your benefits,” Cross said at a recent news conference.

What sets Vermont apart is that state workers — not legislators — approved the increased contributions through their unions.

“I think what happened in Vermont is that the governor and others sat down with labor and said, ‘We’ve got this problem. There’s only so much money to go around, and something’s got to give,'” Brainard said. The state is facing a deficit, a pension funding shortfall and, according to Vermont Public Radio, 25 percent of Vermont state workers will be eligible to retire by 2015. Other key factors in the negotiations may be the fact that Vermont is a small state and has a tradition of public civic engagement.

Brainard said Vermont is an example where defined benefits plans can continue to be workable and states do not have to switch to 401(k)-type defined contribution plans to tackle their pension problems.

Senate President John Cullerton said he would like to see Illinois negotiate a deal with its unions. “We can affect current employees … with laws that have a contractual basis. If there’s a reduction in benefit, there has to be a corresponding consideration, and there has to be acceptance," Cullerton said at a recent news conference.

Cullerton believes that any changes imposed by the state to benefits for current employees would be unconstitutional. Cullerton said Cross’ bill is unconstitutional and lacks the support to pass. “It hasn’t even been called, so apparently they don’t have enough votes for it.” He said that pension reform is also a priority of his, but that it should be achieved through negotiations with unions. “Politically, it would be real, for some people, just easy I guess to pass a bill, claim you did something, have it [blocked by the courts], spend millions of dollars in legal fees and then two years later find out it is unconstitutional.”

That is what former Vermont Treasurer Jeb Spaulding, who worked on the agreement in his state, wanted to avoid. “It would have been a Pyrrhic victory if we forced through a plan that was enjoined or overturned and we didn’t have any savings at all,” Spaulding told Stateline.

owever, Brainard said states such as Illinois might have little to offer unions besides the avoidance of negative outcomes. “I think Illinois is almost in a class by itself in terms of its chronic neglect of its pension plan.” He said. “The best they might have to offer in a lot of cases is that they would forestall attrition and layoffs.”

Illinois union officials say they want to be at the table for any talk of pension changes, but they say that workers should not have to pay for the underfunding of the pension system after lawmakers and governors skipped required contributions year after year. The only way to solve the pension funding problem is for the unions that represent public employees — whose retirement security is dependent on the health of the pension funds and whose deferred compensation makes up 100 percent of the funds’ assets — to be full partners in discussions that are appropriately structured and focused on the real problem, funding,” Anders Lindall, spokesman for the American Federation of State County and Municipal Employees Council 31, said in a prepared statement.

Brainard said that Illinois' constitutional provision creates a “higher hurdle” to pension changes. However, he said, “I would not consider any single provision to be absolutely iron clad, with the one exception of benefits earned to date.”

Both Brainard and Draine agreed that states also need to consider the role that pension benefits play in recruitment

“A lot of the focus has been on the pension side of things,” Draine said. “States do need to balance the need to control costs with the need to recruit and retain a public sector work force.”Brainard said the promise of retirement security can help to attract quality workers and keep them on the job. “You have to find a set of solutions that will get you a work force capable of delivering the results that your constitutions want and deserve, and you have to do that at a cost that’s sustainable over the long term.”

GOPUSA ILLINOIS Daily Clips - January 25, 2012

2012-01-25T12:17:00.001-06:00

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Part 2: A look at pension reform across the country

2012-01-24T16:47:00.001-06:00

By Jamey Dunn

All four legislative leaders and Gov. Pat Quinn have said that pension reform is a priority in the upcoming legislative session, but their opinions differ on what would be best for the state and legal under the Illinois Constitution. Recent reforms in other states could provide models as lawmakers move forward. This is the second installment of a three-part series that looks at different aspects of reform in other states.

While Gov. Pat Quinn has been coy in the past about his stance on pension changes, he has voiced strong support for passing pension reform legislation in 2012. “For all the beneficiaries in the system, it’s important that we maintain the integrity the stability of the system, otherwise there won’t be any pensions for anybody,” Quinn said earlier this month.

The governor created a special working group of legislators headed up by close adviser and former chief of staff Jerry Stermer to take on the issue and come up with recommendations for change. Quinn has not addressed whether he supports changing benefits for employees hired before a previous round of reforms went into effect last year. He has only said he does not want to make any changes that are unconstitutional.

However, the governor’s top budget adviser, David Vaught, said that reductions to cost of living adjustments given to retirees would likely be part of the discussion. “Some people say the [cost of living adjustment] is not protected constitutionally.”

Two recent court cases may have opened the door to more states considering reducing or outright eliminating cost of living adjustments for retirees.

According to the National Conference of State Legislatures, 17 states have taken actions in the last two years that would reduce COLA benefits. Most states making such changes, including Illinois, have reduced COLAs for future employees. However, in 2010, Colorado, Minnesota and South Dakota all reduced the cost of living increases given to their current retirees, and other states are taking notice. “It was new news in 2010 when three states made changes to their COLA that affected existing retired members," said Keith Brainard, research director for National Association of State Retirement Administrators. Since then, New Jersey and Rhode Island have both put a freeze on COLA benefits until their pension systems get on sound financial footing.

Last summer, judges in Colorado and Minnesota tossed out court challenges from retired state workers, allowing the COLA reductions to stand.The states said that the COLAs were not part of contractually guaranteed benefits, while the workers argued that reducing them would violate both state and federal protections for contracts. “The big legal question that has resulted in these court cases is to what extent are future COLAs … promised and protected benefits,” said David Draine, senior researcher for Pew Center on the States.

Denver District Judge Robert Hyatt ruled that lawmakers could not touch the base pension benefits promised to retirees but that cost of living increases were not a protected by contract law. One reason that states with budget problems or underfunded pensions might be quick to jump on the COLA cutting bandwagon is that cuts to COLA increases for current retirees produce almost immediate savings, while other pension changes can take years to produce substantial savings.

Social Security benefits and pension benefits for federal workers contain a cost of living increase that is tied to inflation. But with deficit reduction talks taking place on the national level, they too are under fire. There are proposals to link them to a more conservative inflation projection, which would effectively cut the size of future increases.

The rulings in Colorado and Minnesota do not apply to other states, and judges elsewhere, including California and West Virginia, have ruled that COLAs cannot be reduced. However, Brainard said the rulings do indicate that some judges are willing to take into consideration the dire situation that some pension systems are in and may allow lawmakers to use more discretion if they are “making a reasonable effort to share the burden equally — that is you’re not taking it out on only one group.” In the case of Denver, the money saved from COLA reductions is slated to go back into the pension system to help shore it up, instead of being spent in areas that lawmakers might consider more popular with voters. “You’ll see this wiggle room that the judges seem to have found,” Brainard said.

Quinn has also proposed calling on universities and school boards to pay a portion of the retirement costs for the workers they employ. “Our pension payment this year looks like about $5.2 billion, and of that, about a fifth, 20 percent, is actually state employees. More than half are school teachers in school districts and also the university employees, as well. So we’re going to come up with a good program that makes sure that everyone who is involved in this program has some investment in it,” Quinn said at a recent news conference.

Skeptics of the plan say it would lead to detrimental cuts to education and potentially spur property tax increases as local governments look for a way to cover the cost of teachers’ pensions. Quinn said that the employers that negotiate the salaries on which pensions are based should bear some of the responsibility of the costs. “I think we have to be very prudent that we don’t hurt any of our current education efforts. But at the same time, you don’t want to have a system where those who are negotiating with employees don’t have a stake in the outcome. If they just want to shift the burden onto the state, then sometimes, they don’t maybe negotiate as well as they should. … Everyone who has employees in the pension system should contribute something to the pensions.”

House Minority Leader Tom Cross said such a proposal would not do enough to address the state’s pension problems. “The pro might be that they have some skin in the game, but the reality is, we’re going to have to address what people contribute. That is a component that you cannot escape. It is a very real part of the solution,” Cross said at a recent news conference. “It can’t be just an issue of cost shifting or nibbling around the edges. This thing is beyond nibbling around the edges.”

Maryland Gov. Martin O’Malley pitched a proposal this month that follows in the lines of Quinn’s statements. Under O’Malley’s plan, local governments would pick up half of the cost of teachers' retirement benefits, including Social Security contributions. Currently, districts pay about one third of the cost. If O’Malley’s plan were approved, local governments would pay almost $240 million more, but they would get some funding — from the proposed elimination of a tax break for top earners — to help with the transition.

“It sounds a little bit like taking money out of one pocket and paying it to another, … although, there is something to be said for linking the benefit obligation [to bargaining decisions],” Brainard said. “From the outside perspective, it’s all sort of coming from the same pot, and that is the taxpayers.”He said that the share that local public entities pay for their worker’s retirement costs vary from state to state. However, he said that the split is more an issue of cost sharing between state and local governments than it is a component of pension reform.

Yesterday's post explores so-called hybrid pension systems.

Check back tomorrow for a look at a state that achieved pension changes by working with unions.

GOPUSA ILLINOIS Daily Clips - January 24, 2012

2012-01-24T11:50:00.000-06:00

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Pension reform across the country

2012-01-23T16:42:00.001-06:00

By Jamey Dunn

All four legislative leaders and Gov. Pat Quinn have said that pension reform is a priority in the upcoming legislative session, but their opinions differ on what would be best for the state and legal under the Illinois’ Constitution. Recent reforms in other states could provide models as lawmakers move forward. This three-part series will look at different aspects of reform in other states.

As Illinois looks at its seriously underfunded retirement system for state workers, it is not alone. A recent Pew Center on the States study found that at a 51 percent funding level, Illinois has the most under-funded pension system in the nation as of Fiscal Year 2009. However, 30 other states were also under the recommended 80 percent funding level. In FY 2008, 22 states fell below that funding level. Overall, state pensions were funded at a 78 percent level in fiscal year 2009, which is down from 84 percent in FY 2008.

“We’ve talked about pension reform in this state until we’re blue in the face. We know what needs to be done. We know that other states have done what we need to do, like Rhode Island,” House Minority Leader Tom Cross said during a recent news conference.

It is fitting that Cross would cite Rhode Island as an example, since it is the only state that has in recent years taken some controversial pension reform steps similar to a proposal from Cross. David Draine, senior researcher for the Pew Center on the States, called Rhode Island’s reforms “the only [recent] example of a state that really changed the terms of pension benefits for current employees.”

The plan, approved by Rhode Island lawmakers and signed into law late last year, would freeze cost of living increases for current retirees. Current workers would keep all of their benefits to date, but they would be shifted to a so called-hybrid plan for future benefits. Part of their retirement investment would go into a defined benefits plan and part of it would go into a defined contribution plan, much like a 401(k). Some of the payout would be guaranteed, and some of it would be tied to the performance of investments. The retirement age would also increase for many workers.

Rhode Island had one of the largest funding gaps in the country relative to its size. The state operated its fund on a pay-as-you-go basis from the 1930s until the 1970s. “Pension systems with really severe problems often started out as 'pay-as-you-go' plans, in which retirees derived their benefits from current state revenues, not any pool of accumulated cash. Inevitably, the number of retirees grew, relative to the number of currentemployees, and the checks going out the door took up a larger and larger portion of state revenues,” said a study of state pensions from the Pew Center on the States. “You’re paying for the sins of the past,” Frank Karpinski, executive director of the Rhode Island system, told Pew.

If the reforms in Rhode Island survive the expected court challenges, they are projected to reduce the state’s more than $7 billion unfunded liability by $3 billion. That plan passed with the bipartisanship that Cross is seeking for pension reform in Illinois. It was backed by the Democratic state treasurer and independent governor. However, unlike Illinois, Rhode Island does not have a provision in its constitution protecting pension benefits.

Rhode Island Treasurer Gina Raimondo, who created plan for change and traveled the state for almost a year to promote it, said that the debate was not marked by the anti-union rancor that characterized labor disputes in states such as Wisconsin. But a backlash has begun. “This would be different if it was given to us. No one gave us anything. We paid for these pensions,” Michael Downey — president of Council 94, Rhode Island's largest public employees union — told Rhode Island Public Radio. Downey said the unions are gearing up for a court challenge as well as a political battle. “When you are retired and you go to check your monthly statement, you won't forget this. You'll remember this. Will it be remembered in the polls? I'm sure it will,” he said.

The main similarity that the Rhode Island plan has to Cross’ proposal is that it would change the benefit structure for employees hired before its creation. Under Cross’ plan, workers would keep previously earned benefits but then would have to choose between paying more for their current benefit level, having their benefits reduced or moving to a 401K-type plan known as a defined contributions program. Illinois currently has a defined benefits plan that guarantees employees a specific level of benefits no matter what happens to the pension funds’ investments. Instead of requiring employees to choose between defined benefits or defined contributions, plans like the one passed in Rhode Island rely on a combination of both.

So-called hybrid pension plans have become popular in recent years. In addition to Rhode Island, Florida, Georgia, Indiana, Michigan, Ohio, Oregon, Utah and Washington all have hybrid style pension plans. Under these plans, employees do not chose between a defined benefits and defined contribution plan but participate in both. Most typically, employee contributions are placed into a 401(k)-type savings plan while state funds pay out defined benefits. While hybrid plans have been getting recent attention, the majority of states still have defined benefits plans.

“Currently, [the hybrid] plan design is receiving increased attention as states find that closing a traditional defined benefit pension plan to new employees could increase — rather than reduce — costs, and that providing only a 401(k)-type plan does not meet retirement security, human resource or fiscal needs,” said a report from the National Association of State Retirement Administrators. Legal issues aside, transitioning from a defined benefits to a defined contribution plan can be tricky because those who have retired under the defined benefits plan will still get their benefits. If there are no new enrollees in a defined benefits plan, it cuts off a large source of funding to the plan, and the state often has to make up the difference.

“It is difficult — usually impossible — to save money certainly in the near term by closing down a pension plan and moving to a defined contribution plan,” said Keith Brainard, research director for National Association of State Retirement Administrators.

Check back tomorrow for a look at the legal battles in other states over scaling back cost of living increases for retirees.

GOPUSA ILLINOIS Daily Clips - January 23, 2012

2012-01-23T07:38:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - January 22, 2012

2012-01-22T11:41:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - January 21, 2012

2012-01-21T06:50:00.000-06:00

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GOPUSA ILLINOIS Daily Clips - January 20, 2012

2012-01-20T12:08:00.001-06:00

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Quinn plans to close Jacksonville and Tinley Park facilities

2012-01-19T17:24:00.001-06:00

By Jamey Dunn

Gov. Pat Quinn today announced plans to close the Tinley Park Mental Health Center and the Jacksonville Developmental Center as part of a larger proposal to close several state institutions.

Quinn previously proposed the closure of seven state facilities because he said there was not enough money in the Fiscal Year 2012 budget to keep them open. Lawmakers worked out a budget deal in November to keep the institutions open through the end of FY 2012, but Quinn said he planned to move ahead with closures after the end of the fiscal year.

Under the plan, 600 of the about 2,000 people with developmental disabilities currently in state institutions would be moved into community care settings over the next two and a half years, up to four state centers for the developmentally disabled would be closed and two state mental health centers would also be shuttered.

“My administration is committed to increasing community care options and improving the quality of life for people with developmental disabilities and mental health conditions,” Gov. Pat Quinn said in a prepared statement. “The approach we are taking will allow for the safe transition of care for some of our most vulnerable citizens to community care settings. I want to thank the members of the public, the General Assembly and advocates who worked with my administration to meet this challenge and help our state move forward.”

Under the governor’s proposal, the Tinley Park Mental Health Center would shut down in July 2012 and the Jacksonville Developmental Center would close in October 2012.

The Tinley Park Center primarily serves so-called acute care patients, who typically stay between 24 hours to 21 days. The administration plans to halt admissions at Tinley in time for all patients to complete treatment before the closure, but no date has been chosen yet. “The [Department of Mental Health], however, is actively securing additional beds at community providers and hospitals in the area surrounding Tinley Park [Mental Health Center] to ensure that services in the area are not interrupted,” said a summary of the plan issued by Quinn’s office.

According to the governor’s office, several factors were weighed when considering which facilities to close, including the age of the facility, the amount of deferred maintenance and repairs, the level and quality of care and the economic impact.

But Rep. Jim Watson, a Republican from Jacksonville, said that he thinks administration officials knew what facilities they wanted to close and created the rubric to fit those institutions. “It was pretty obvious that they developed criteria to get the outcome they wanted.” Watson was part of a working group that took up the issue of which facilities should be on the chopping block. “I think that they picked facilities that were largely downstate geographically where he did not fare well and then picked them in mainly Republican districts.”

Watson noted that Tinley Park us in northern Illinois, but he said it made the list because Quinn has been considering closing it for a while. Both of the facilities announced today were also on the list for closure under the governor’s previous plan.

Unions representing the workers and families of residents at the state’s developmental center say Quinn has not included them in talks over closure decisions. Watson said he thinks that Quinn is listening to advocates on just one side of the issue. “As a governor, don’t you have to be responsive to both sides of the issue and the entire state?” he asked. Watson was critical of Quinn for being in Washington, D.C., when the word came down about planned facility closures today. “I think it’s reflective [of his mindset on the issue] that the governor today is in [Washington,] D.C., when he makes an announcement that affects the lives of thousands of Illinoisans.”

Union officials complained earlier this week about working group meetings that were held outside of the public view and said Quinn was moving forward without their input. “Mental health and developmental centers provide essential health care services in communities across Illinois. When these facilities are threatened, what’s at stake is life or death for men and women who need intensive developmental services or treatment in mental health crisis and have nowhere else to go. The closure push appears based on politics and budget considerations, not what’s best for individuals, families and communities. It’s grossly irresponsible to plot to close these facilities behind closed doors,” Henry Bayer, executive director of AFSCME Council 31, said in a written statement.

“The governor’s office has not reached out to us at all,” said Rita Burke, president of the Illinois League of Advocates for the Developmentally Disabled, which represents parent organizations from the state facilities. “My concern about these particular people making decisions that are monumental in meaning in scope for families is that I don’t believe that they are intimately knowledgeable about the facilities or about the residents.” She said that the quota-driven nature of the plan could force people into the community against their will or into situations that do not provide an appropriate level of care.

Advocates for delivering care in smaller settings argue that receiving services in one’s home or a home-like setting with fewer residents allows developmentally disabled adults more freedom, flexibility and the ability to be a part of their community through activities, such as holding a job or volunteering. “Community-based care is about quality of life,” Kevin Casey, director of the Division of Developmental Disabilities, said in a prepared statement. “Through this careful, deliberate process, Illinois will improve quality of life for hundreds of people with developmental disabilities, while realizing significant savings through the closure of a costly state facility.” The Department of Human Services said it would conduct thorough assessments, so residents of facilities would be matched with the services they need when they are outside of institutions. The plan is to move 20 residents per month out of institutional care.

Supporters also highlight the potential cost savings that could come from closing facilities and serving those with developmental disabilities and mental health needs in community settings. According to the Department of Human Services, operations at the Jacksonville Developmental Center cost about $29.7 million annually. Under Quinn’s plan, the state would invest about $16.2 million in community care and save about $11.7 million. Tinley Park Mental Health Center has an annual operating cost of about $20.6 million. The state would invest $9.8 million in community mental health programs and save about $8.1 million.

But Watson said that losing the economic stimulus that the facilities provide to the local communities is not worth savings that seem somewhat meager when compared with the overall state budget. “Is this financial or is this philosophical?” he asked.

“If the Department of Commerce and Economic Opportunity could make an investment of $12 million and get an economic impact of $47 million, they would do it in a heartbeat,” Watson said of the plan to close the facility in Jacksonville.

For more on the state's shift away from institutional care, see the upcoming February issue of Illinois Issues.

Comptroller: State's stack of unpaid bills isn't growing smaller

2012-01-18T16:35:00.000-06:00

By Jamey Dunn

Even after a tax increase, Illinois has not made much progress on the total of overdue payments it still owes to vendors, medical providers and others.

According to Comptroller Judy Baar Topinka’s quarterly report, the comptroller’s office had almost $4.3 billion in late bills as of December. Topinka said that number, combined with approximately $2 billion in Medicaid bills being held at state agencies and other late payments such as corporate tax refunds, brings the total backlog to about $8.5 billion.

“Even if current revenue projections hold, the backlog at [the comptroller's office] is not expected to change much from last year,” the report said. Topinka said that the bulk of new revenues from the tax increase is not being used to pay down old bills. “It think everybody assumes that if we’re going to have the largest tax increase in the state of Illinois, that this was going to apply to unpaid bills,” Topinka said.

Kelly Kraft, spokesperson for Gov. Pat Quinn’s budget office, said growing demand for programs is sucking up revenues. “It is important to talk about program growth and need. People will see the increase in spending, but it is not because a new program or something of that nature has been created. It is because of growth in demand. For instance Medicaid costs are growing at 6 percent a year. Growth rates like these are unsustainable that is why further reforms are a must.”

Topinka agreed that growing Medicaid spending is a concern. She said that the economic crash has caused more people to be eligible for the program, and so-called baby boomers will likely need more medical care as they age. “You’ve seen the Medicaid rolls blossom,” she said.

The state has also seen federal funds dip as stimulus dollars have stopped coming in. According to the report, Illinois has gotten $1.6 billion less — about a 55 percent drop — in federal funds this fiscal year.

As part of the state budget plan approved in the spring, Illinois is slated to push billions in Medicaid spending into next fiscal year. “The [General Assembly] significantly under-budgeted Medicaid [appropriations] for [Fiscal Year 20]12, so processing has been slowed down so cash is available throughout the [current fiscal year], right through June 30th. If the entire Medicaid [appropriation] is spent by, say, April 1st, then health care providers would not receive any payments until the new [fiscal year] starts,” Kelly Kraft, spokesperson for Gov. Pat Quinn’s budget office, explained in a written statement.

Topinka said she is concerned about the state being able to pay those bills once they are sent to her office. She said that if all of the $2 billion is sent at once, “I don’t know how [we will pay it.]”

Perhaps the one bright spot in the comptroller's report was that Illinois has paid off all of its bills from FY 2011. However, $5.15 billion in FY 2012 revenues was used to pay down the FY 2011 bills. Topinka said this practice of kicking such a large chunk of obligations into the next fiscal year, once seen as a move to be made only during a fiscal emergency, has recently become a standard budgeting tactic. “Now it is perpetual emergency, and literally, the nonpayment of vendors is almost like a line item in the budget,” Topinka said. “We almost work on the basis that the private sector is going to carry the load for the state.”

She said that if a substantial effort is not made to address the backlog, Illinois will likely see a similar stack of unpaid bills next fiscal year. “So here we sit — same time, same channel, different year, but it’s the same problem.”

GOPUSA ILLINOIS Daily Clips - January 18, 2012

2012-01-18T12:09:00.000-06:00

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2012-01-17T10:30:00.000-06:00

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2012-01-16T08:37:00.001-06:00

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2012-01-15T10:18:00.001-06:00

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2012-01-14T11:51:00.000-06:00

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2012-01-13T12:03:00.001-06:00

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Push for pension changes grows, but players are far from agreement

2012-01-12T16:25:00.002-06:00

By Jamey Dunn

As lawmakers prepare to return for session in the coming months, Gov. Pat Quinn and the four legislative leaders all count changes to the public employee pension system as a top priority, However, agreement across the aisle and between the two chambers on what needs to be done seems, for now, to be in short supply.

Since taking office Gov. Pat Quinn has been careful when he speaks of pension changes for workers who were hired before changes that went into effect last year. Quinn supported the plan, approved in early 2010, that reduced benefits for employees hired after its passage. But as some lawmakers pushed for further reform, Quinn only said he would not support anything that was unconstitutional, without defining what sort of proposals would fall into that category.

This week, Quinn declared that changes to the pension system are at the top of his agenda for 2012. “We have to reform the public pension system of our state in order to have good finances, proper finances, and definitely enough money for education and health care and public safety — things that count,” Quinn told reporters in Chicago. “We’re going to get this done once and for all.”

Quinn’s budget director, David Vaught, said many ideas to change the system are on the table.

Both Quinn and Vaught have noted that the bulk of pension costs come from the Teacher’s Retirement System. “More than half of the money that we contribute every year is for teachers who are outside of the city of Chicago,” Quinn said. Senate President John Cullerton has pitched the idea of asking local school districts to pay teachers’ pension costs, and Quinn seems to be warming to that concept. Vaught said asking universities to pay retirement costs for those in the State Universities Retirement System could also be a possibility. Quinn’s office estimates that about 2.7 billion in general revenue funds would go to the Teachers’ Retirement System next fiscal year out of the $4.1 billion of general revenue funds that will have to be spent on pensions. Including money from other funds, next fiscal year’s pension payment is estimated at more than $5 billion.

Vaught said that cost-of-living increases given to retirees could be a target. “Some people say the [cost of living adjustment] is not protected constitutionally.”

Vaught said of Quinn, “He’s not coming around to anything that’s unconstitutional, and he’s said that repeatedly.”

But, for now, constitutionality is in the eye of the beholder. House Minority Leader Tom Cross has the most aggressive plan on the table, Senate Bill 512. Under Cross’s proposal, workers would keep all the benefits they have earned to date. Going forward, they could opt to either pay more for the same benefits that have now, take a cut in benefits and retire later or join what is called a defined contribution plan, which is similar to a 401k. Cross has yet to call his bill for a floor vote in the House. “We’ve talked about pension reform in the state until we’re blue in the face. We know what needs to be done.” Cross said that asking school districts and universities to pay would not solve the problem.

However, Cullerton said Cross’ bill is unconstitutional and lacks the support to pass. “It hasn’t even been called, so apparently they don’t have enough votes for it.” He said that pension reform is also a priority of his, but that it should be achieved through negotiations with unions. “Politically, it would be real, for some people, just easy I guess to pass a bill, claim you did something, have it [blocked by the courts], spend millions of dollars in legal fees and then two years later find out it is unconstitutional.”

Cullerton added, “We can affect current employees … with laws that have a contractual basis. If there’s a reduction in benefit, there has to be a corresponding consideration and there has to be acceptance.”

Quinn has called for the creation of a working group to address the pension issue. It will be made up of lawmakers appointed by the legislative leaders and led by longtime Quinn adviser Jerry Stermer. Quinn said he wants to use the same collaborative model for negotiations that produced education reforms and workers’ compensation reform laws. “This working group that we’re convening, it's going to start form zero in the sense of everybody has a chance to some in with their ideas,” he said. “I think it’s very important that no one who comes to the pension reform feeling that there’s some particular bill we’ve already adopted.”

Union officials argue that the pensions systems are facing problems because they have been underfunded by legislators. “The problem is not the cost of the modest benefits earned by teachers, police, caregivers and other public employees. The problem is the failure of politicians over decades to make adequate employer contributions,” Anders Lindall, spokesman for the American Federation of State County and Municipal Employees Council 31, said in a written statement. Lindall said that union representatives should be involved in any conversations about changes to the system. “The only way to solve the pension funding problem is for the unions that represent public employees — whose retirement security is dependent on the health of the pension funds and whose deferred compensation comprises 100 percent of the funds’ assets — to be full partners in discussions that are appropriately structured and focused on the real problem, funding.”

Quinn said his goal is to pass pension legislation by the end of this year. “Our time has come. Our rendezvous with pension reality will come this year.”

GOPUSA ILLINOIS Daily Clips - January 12, 2012

2012-01-12T12:11:00.000-06:00

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Humans services spending restored as part of larger budget deal

2012-01-11T17:04:00.000-06:00

By Ashley Griffin

As part of legislation that will keep some state institutions open through the current fiscal year, the Illinois General Assembly also approved more spending for some human services programs.

With all eyes on a plan to halt state facility closures and avert 1,900 layoff, the General Assembly was able to quietly restore millions to some human services programs statewide in cash-stricken times.

Teen Parent Services, which helps low-income parents younger than 20 receive their GEDs and offers parent training classes, received $1.4 million under Senate Bill 2412.“Redeploy Illinois,” a program designed to provide services to youth 13 to 18 years old who are in the juvenile system and are at high risk of being committed to the Department of Corrections, received $2.4 million.

Legislators also allocated $1.4 million to the state’s Homeless Prevention program. Sen. Heather Steans, one of the sponsors of the bill, said that if programs to address homelessness did not receive funding now, it would lead to larger problems and costs for the state because more people would end up in emergency rooms, institutionalized and on the streets. “We were making sure it was getting maintained, not cut out completely,” said Steans, a Chicago Democrat. Senate Democrats pushed for more human services spending last summer but lost when the House and Gov. Pat Quinn refused to go along with the plan.

The Homeless Prevention program was designed to help provide rental assistance, utility assistance and supportive services to individuals and families who are at risk of being evicted or entering foreclosure on their homes. For the past five years, the program has provided counseling, job preparation and assistance with rent or security deposits. It is administered by six centers in the Chicago area and more than 75 sites statewide that aim to help families remain in their homes by offering various programs such a one-month rental-assistance program and emergency funds for families.

According to the Department of Human Service’s website, the program served more than 14,000 households in Fiscal Year 2007. The state’s economic downturn has brought a growing demand for social services and left the state climbing to the top of the nation’s largest inventory of foreclosed homes. A May 2011 RealtyTrac report showed the Chicago metropolitan area had 118,776 homes in foreclosure.

“I think there’s a lot of cold people in the street in the winter months, and homeless families have it the worst. … At the end of the day, it didn’t make a whole lot of sense to make an inhuman line item to cut the program,” said Rep. Sara Feigenholtz, a Democrat from Chicago. Currently, more than 14,000 Illinoisans experience homelessness each night, according to a report from the National Alliance to End Homelessness.

Although some legislators pushed for the increase in spending for human services, a recent budget projection from Quinn revealed the state plans to spend $507 million more than it will take in during the current fiscal year. The state is also set to hit $7 billion in overdue bills to vendors — including human service providers — by the end of FY 2012. As part of the projection, Quinn called for a 9 percent cut to state spending, with the exception of education and health care, paving the way for potentially large human services cuts in FY 2013.

While Feigenholtz acknowledges that FY 2012 was a difficult budget year, she said the state must address the backlog of bills, and she predicted that the next budget could possibly send major cuts to human services. “We have to start paying our bills and stop spending,” Feigenholtz said. “As bad as last year was, it may be a walk in the park compared to this year budget.”

GOPUSA ILLINOIS Daily Clips - January 11, 2012

2012-01-11T11:38:00.000-06:00

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Quinn signs tax breaks; says he is ready to take on pension changes

2012-01-10T16:37:00.001-06:00

By Jamey Dunn

Gov. Pat Quinn today signed a tax break for low-income workers and said changes to the public employee pension systems are a top priority for him in 2012.

Quinn signed Senate Bill 400, which will increase the Earned Income Tax Credit (EITC) from 5 percent to 10 percent of the federal credit over two years. The increase will start for tax year 2012, moving it up to 7.5 percent of the federal credit, so it will not apply in the coming months as Illinoisans are filing their 2011 income tax returns.

According to Quinn about 935,000 households will benefit from the credit. He said a single mother earning $12,800 a year would save about $150 on her taxes, and a family of five with a household income of $30,000 would save about $199 this year. “It’s very important here in Illinois that we help parents raising children, parents who are working, and they are working hard and they are living from check to check every month. We want to make sure that those paychecks have enough money for the family to pay its bills and raise their children right. So that’s really our mission in Illinois, to help everyday people raising children living form paycheck to paycheck,” Quinn said today at a bill signing event.

Supporters of the increase argue that it will also help to spur local economies. “That family is not going to admire money in a bank vault, especially now. They are going to go out and spend the money in their local economy, creating jobs for local businesses in particular,” Quinn said. “There are some who think that the Earned Income Tax Credit and tax relief for working families is not part of job creation, and they’re just plain wrong.”

Rhonda Jones, a single mother who has three children in college and two more in high school, said she has often spent money from the EITC on necessities, such as car repair, children’s clothes or food. “The Earned Income Tax Credit has helped me out of a lot of jams when I have found it hard to make ends meet,” she said at today’s bill signing.

The new law also increases the $2,000 personal tax exemption by $50 and links it to federal inflation. Sponsor Sen. Toi Hutchinson said if the exemption had been indexed to inflation when the income tax was first created, the exemption would be more than $6,000 today. “That would be $24,000 for a family of four that would be untaxed — $24,000 off the top — had they been a little more progressive when they instituted the income tax in the beginning,” Hutchinson said. “Because we didn’t think that far, we’re doing it today. So, yes, it can seem insignificant right now; the point is indexing so that it keeps up with the times.”

Some Republicans traditionally opposed to new spending supported the EITC increase.“This is an opportunity to help people grab the bottom lung of the ladder, to start to get away from the dependency of welfare and get to work,” Sen. Matt Murphy of Palatine said during floor debate of the plan This is a reasonable piece of tax relief for most who get that tax credit. It’ something that I’d like to see—on both sided of the aisle—us support because it is the right thing to do.” .

But opponents of the credit, which was part of a package that also offered tax breaks to businesses threatening to leave the state, said Illinois cannot afford to hand out tax cuts. Quinn signed the corporate tax break bill late last year. The overall package is expected to cost about $300 million next fiscal year and $350 million in fiscal year 2014. According to Quinn’s budget office, the bill he signed today will cost $55 million in FY 2013 and $105 million in FY 2014. “Where will the money come from when we have $8 billion in unpaid bills, we have debt, our credit score is going down the tubes, we’re listed as the 48th worst-run state in the union? Where will the money come from?” asked Sen. Chris Lauzen, an Aurora Republican. Quinn’s own budget analysis shows that the state ending the current fiscal year with a $507 million deficit, and Moody’s Investor Services downgraded the state’s credit rating to the worst in the nation last week. Two other rating agencies did not downgrade Illinois but gave firm warnings about the possibility of future downgrades.

Quinn defended the cost of the credit today. “We can certainly afford this. It think we can’t afford not to do this. … I really think the EITC more than pays for itself in terms of economic growth and jobs.”

However, he added, “It is important that we take this year, 2012, and do some hard things when it comes to the finances for Illinois, and that begins with pension reform.” Quinn said he is willing to touch the third rail of pension reform, benefits for workers who were hired before benefit changes that went into effect last year. “Now we have to address the issues of our current employees but do it in a way that’s constitutional and fair and definitely something that involves everybody.”

Union officials maintain that changes to employee benefits hired before the pension revamp would be unconstitutional. Senate President John Cullerton has also questioned the constitutionality of such proposals.

Quinn said he wants to address growing pension costs to free up revenue for spending on education, public safety and health care. “This is a major mountain to climb this year, and I’m willing to lead the expedition,” Quinn said. “We’re going to get this done once and for all. ... For 30 years, three decades, governors and legislatures didn’t do enough. They let it go. It’s time now to tighten up and get it done.” He has formed working groups to take on the issue and wants to hear from all stakeholders involved. Quinn refused to comment on what specific changes he would support. “I think it’s important not to say what we’re going to do until everybody has a chance to speak.”

GOPUSA ILLINOIS Daily Clips - January 10, 2012

2012-01-10T12:05:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - January 9, 2012

2012-01-09T11:13:00.000-06:00

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2012-01-08T09:01:00.001-06:00

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2012-01-07T12:12:00.001-06:00

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Moody's downgrades Illinois' credit rating

2012-01-06T16:57:00.001-06:00

By Jamey Dunn

Recent efforts to close the state's budget gap, including a temporary income tax increase, were not enough to save Illinois from a credit rating downgrade.

Moody’s Investor Services lowered Illinois’ bond rating today. (You must login to see all rating agencies' reports.) The downgrade was from an “A1” rating to an “A2” rating and made Illinois the agency’s lowest rated state. “The downgrade of the state's long-term debt follows a legislative session in which the state took no steps to implement lasting solutions to its severe pension under-funding or to its chronic bill payment delays. Failure to address these challenges undermines near- to intermediate-term prospects for fiscal recovery. It remains to be seen whether the state has the political willingness to impose durable policies leading to fiscal strength,” said the Moody’s report.

Fitch, another bond rating agency, affirmed Illinois' “A” rating yesterday. Standard and Poor’s also held its rating of the state flat at an “A+” in a report released today. Under the Fitch rating, Illinois is only second to California for the lowest rating in the country. Fitch gave the state a “stable” outlook but cited concerns similar to Moody’s: the growing pension liability, billions in unpaid bills and lack of a clear budget plan when the income tax increase is set to begin rolling back. Standard & Poor’s gave the state a “negative” outlook. “If Illinois does not make meaningful changes to further align revenue and spending and address its accumulated deficit (accounts payable and general fund liabilities) for fiscal years 2012 and 2013, we could lower the rating this year,” the agency’s report said. Standard and Poor's analysts said if Illinois can begin to address the unfunded pension liability and balance the budget, the outlook may change to “stable,” but there is little chance the state would see a ratings upgrade in the next year.

The ratings came as a result of the state planning a sale of about $800 million in bonds for capital construction projects. All three rating agencies viewed the recent tax increase as a positive step toward stabilizing the budget. However, it was not enough in the eyes of Moody’s analysts to deter a downgrade. The lower rating does not come as a total surprise because Moody’s did slap the state with a “negative” outlook last year and pointed to the state’s backlog of unpaid bills as the cause. Moody’s report said Illinois could improve its credit rating by enacting “a credible, comprehensive long-term pension funding plan” and paying down the backlog. The agency also called for “a legal framework or plan to prevent renewed buildup of late bills.” However, the report said a phase out to the tax increase without a solid plan to keep the budget balanced could result in further downgrades.

Gov. Pat Quinn’s budget office said the downgrade emphasizes the need to focus on pension and Medicaid reform and balancing the budget. “We are encouraged both Fitch and Standard & Poor’s affirmed the state’s long term bond rating. These actions indicate the state has taken positive steps to address its decades old budget challenges by reducing spending and enacting Medicaid, pension, worker’s compensation and education reforms,” said a prepared statement from the budget office.“The downgrade by Moody’s underscores that although the state has taken positive steps toward fiscal stability, as Standard & Poor’s and Fitch indicate by holding our rating steady, swift bipartisan action to implement further cost reductions and reforms in the upcoming legislative session are needed to stabilize the budget.”

As part of a three-year budget projection, Quinn proposed approximately 9 percent cuts to all areas of state government besides education and health care for fiscal year 2013. “We’re going to have to tighten the belt again this year,” Quinn told reporters in Chicago today.

Republican legislative leaders said the downgrade marks the need for substantial reforms. “Today’s downgrade in our bond rating is obviously very bad news for our state, and it proves that the General Assembly and the governor must do some very substantive things this spring that show we are committed to fundamentally changing the way we structure our budget now and going forward. Enacting major pension reform and Medicaid reforms must be at the top of the list. Obviously the practice of nibbling around the edges on reform and other budget strategies has not convinced these bond rating agencies that we are on the road to recovery. We must be bold and deliberate this spring," House Minority Leader Tom Cross and Senate Minority Leader Christine Radogno said in a joint statement.

Although Quinn's projection showed a deficit of more than $800 million in FY 2015, the year the tax increase begins to phase out, the governor said it was to soon to focus on the issue. “I don’t think there’s a lot of need right now to be talking about that. I think we have to take one year at a time. Our goal this year in 2012 is to grow the economy, create more, have more exports help businesses expand and grow. … Robust economic growth is the key to getting a better budget.”

Quinn has also renewed his call for borrowing to pay down the state’s backlog of unpaid bills, which totals about $7 billion, according to his budget office. The governor’s repeated calls to refinance the debt by borrowing to pay it off now and then paying back borrowed funds over time at a lower interest rate have for the most part fallen on deaf ears in the legislature. Republican U.S. Sen. Mark Kirk weighed in today against Quinn’s borrowing proposal. “Moody's' decision to downgrade Illinois debt echoes the judgment of my Sovereign Debt Advisory Board report last year. Governor Quinn is planning to borrow $800 million more in the near future, with higher and higher interest costs paid by Illinois taxpayers. We are reaping the results of years of irresponsible spending and debt,” Kirk said in a prepared statement.

GOPUSA ILLINOIS Daily Clips - January 6, 2012

2012-01-06T11:29:00.000-06:00

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Rating agency says Illinois has more budget work to do

2012-01-05T15:58:00.001-06:00

By Jamey Dunn

One bond rating agency says that if Illinois does not do more to balance its budget before the recent tax increase begins to phase out, the state could face another hit to its credit score.

Fitch Ratings held Illinois’ rating steady at “A” with a stable outlook. (You must log in to see the report.) However, the rating means Illinois continues to be the second lowest rated state in the nation, behind California. The rating came as Illinois looks to sell bonds for capital construction projects. The state’s bond rating are used to determine the interest rates it must pay on debt.

An analysis from Fitch says Illinois has taken some steps in the right direction to close the budget gap, such as the recent income tax increase. However, the analysis notes that the state will still end the current budget year with a deficit of more than $500 million. The rating agency says that Illinois has more work to do to address long-term problems. “While the actions taken were positive, significant challenges remain. The tax increases are temporary and will begin to phase out in 2015. Even if the state has achieved budget balance by that point, it will once again be faced with a significant budget balancing decision to make severe expense reductions that it has been unwilling to make up to this point, identify new revenues or make permanent the tax increases. In addition, there is limited ability within the existing budgetary framework to reduce the accounts payable backlog in a meaningful way without reliance on debt issuance, which has yet to be authorized,” the report said.

Fitch analysts agree with Quinn that the projected pension payment of $5.2 billion, which is a 27 percent increase over the FY 2012 payment, and increased Medicaid costs, including bills that were pushed to next fiscal year, will put pressure on the FY 2013 budget. Quinn wants to keep education and health care spending flat next fiscal year, which his budget office says will require an approximate 9 percent cut to all other areas of state government.

Even with cuts next fiscal year and generally flat spending levels in the next two fiscal years, Quinn’s budget office projects a more than $800 million deficit in FY2015, which is when the recent income tax increase begins to phase out. Fitch’s report says that if Quinn and lawmakers wait too long to address the issue of the tax increase phase out, the state’s credit rating could be downgraded. “Deterioration in the state's financial position, as evidenced by excessive use of non-recurring revenues or additional payment deferrals in the budget, could lead to negative rating action. Also, pushing up against the expiration of temporary tax increases in fiscal 2015 without a solution in place would put extreme pressure on the budget and likely lead to a [negative] rating action,” the report said.

“We hear and acknowledge from rating agencies and investors that additional bipartisan action to implement further cost reductions and reforms is needed in this upcoming legislative session to achieve fiscal stability in our state,” said Kelly Kraft, Quinn’s budget spokesperson. Kraft said that Quinn is considering potential Medicaid and pension changes that would create savings and also hoping for increased revenues from economic growth to help stabilize the budget before FY 2015.

Karen Krop, the primary analyst on Fitch’s report, said that Illinois must take steps to address the issue by the FY 2014 budget year at the latest. “When you get into 2014 budget, one would hope that they would be talking about how they are going to deal with that in the coming year.” But Krop noted that Illinois officials have a history of “waiting until the last minute” to address difficult situations. “If the income tax had been raised sooner, we wouldn’t have this accounts payable problem,” she said.

The rating agency has yet to embrace Quinn’s plan to borrow money to pay off the backlog of unpaid bills. According to Fitch’s report, the state was able to pay off $1 billion in late bills with revenues from the tax increase, which brought the total down to $5.2 billion. But the report says the state expects an increase the amount of unpaid bills in the remaining months of the current fiscal year.

Krop said that Illinois is unlikely to see its bond rating improve until it addressed the backlog. The report calls for “a comprehensive approach to reducing the accounts payable backlog that does not significantly exacerbate the state's already high debt position.”Krop said that doesn’t rule out borrowing, but that Illinois should make cuts and other budgeting efforts and borrow as little as it can to make up the difference. She noted that paying off the bills would create an economic boost for Illinois. At 6.2 percent of 2010 personal income, Fitch classifies the state’s debt level as “moderate but above average.” Krop said Quinn’s previous proposal to borrow $8 billion, to pay late bills and other costs, would have pushed that level into the “high” range. “It’s clearly a problem that needs to be solved. There’s been this overhang accumulating for a few years,” she said. “The question of how to resolve it is kind of up to the state.”

GOPUSA ILLINOIS Daily Clips - January 5, 2012

2012-01-05T12:05:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - January 4, 2012

2012-01-04T11:10:00.001-06:00

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Budget projection anticipates cuts

2012-01-03T19:19:00.001-06:00

By Jamey Dunn

A three-year budget projection that Gov. Pat Quinn’s office released today calls for cuts in most areas of state government.

The plan lays out a proposed 9 percent decrease in Fiscal Year 2013 to all areas of state spending other than education and health care, which would both remain funded at FY 2012 levels for the next three fiscal years. According to the report, all levels of education — from early childhood education to universities and community colleges — will escape the ax under Quinn’s proposed budget plan.

David Vaught, Quinn’s budget director, emphasized that the analysis released today is a projection, and the level of cuts to each area of government may differ when Quinn presents his budget, but 9 percent is generally what Quinn is looking at. “There will be adjustments up and down,” Vaught said.

He added, “They’re pretty serious cuts.”

The report, which is required under recent budget reforms, said that the cuts are due in part to the squeeze that pension and Medicaid costs will put on next year's budget. The FY 2012 budget pushed about $2 billion in Medicaid costs into next fiscal year, and at $5.3 billion, the required pension payment in FY 2013 is projected to be $1 billion more than last year’s payment.

Quinn has called for rate cuts to some Medicaid providers instead of slowing down the reimbursement cycle, which is the reason why so many FY 2012 Medicaid bills will be paid next fiscal year. “We don’t think that’s a good solution, and we think it just puts off the problem.” The report says Quinn plans to focus on pension reform in the coming fiscal year. “He’s not coming around to anything that’s unconstitutional, and he’s said that repeatedly,” Vaught said. However, he said that other options, such as targeting cost-of-living adjustments in pension benefits or shifting pensions costs to school districts and universities could be on the table.

Vaught said that next year’s budget could result in more staff reductions but would not say if that meant layoffs or simply not hiring to fill positions that open up. He said that agencies have been informed of the level of cuts the governor expects, and they will began presenting their ideas for implementing cuts to Quinn’s budget office next week.

According to the projections, the state will end the current fiscal year with a $507 million deficit. In FY 2015, the year the recent income tax increase is set to begin phasing out, Quinn’s office predicts a deficit of $818 million. Vaught said the projected deficit illustrates the need to turn the state’s economy around. “It shows you that economic growth is hugely important.” He said that supporters of the tax increase planned that the decision of whether to extend it once it is slated to taper off would be a subject of public debate and an issue for the 2014 gubernatorial election. “[The projections] tell us what we’ve got to work with.”

Vaught said today’s report is intended to start the conversation of the budgeting process with legislators, agencies and other interested parties. The report emphasizes that tough budget decisions are needed to get Illinois back on track. “FY 13 will bring challenges. Shortfalls of billions of dollars mean a government must change. Such changes are difficult and cannot be accomplished overnight or even in one fiscal year.” However, Vaught appeared hopeful. “We see a way to get Illinois out of the woods.”

GOPUSA ILLINOIS Daily Clips - January 3, 2012

2012-01-03T10:54:00.000-06:00

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GOPUSA ILLINOIS Daily Clips - January 2, 2012

2012-01-02T08:48:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - January 1, 2012

2012-01-01T09:43:00.000-06:00

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GOPUSA ILLINOIS Daily Clips - December 31, 2011

2011-12-31T09:28:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 30, 2011

2011-12-30T11:42:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 29, 2011

2011-12-29T09:54:00.001-06:00

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2011 in review

2011-12-28T20:14:00.001-06:00

By Jamey Dunn

It was a busy year at the Statehouse as Illinois legislators passed an income tax increase, a significant change to the state’s criminal justice system and reforms to two important state systems, among other bills.

Death penalty
Perhaps the most pivotal change to come this year was the abolition of Illinois’ death penalty. Because of the state’s checkered past of false convictions, proponents argued that the state could not in good conscience reinstate the death penalty. More than a decade ago, George Ryan called for a moratorium on capital punishment after several death row inmates were exonerated. Ryan also commuted the sentences of 167 death-row inmates to life in prison before leaving office in 2003.

Opponents argued that law enforcement officers need the threat of the death penalty as a bargaining chip when negotiating plea deals or trying to get a confession. Others argued that state should have the option for the “worst of the worst” offenders. “Seven out of 10 of those people on death row when Gov. Ryan commuted their sentences didn’t contest their own guilt,” said Sen. William Haine, a Democrat and former prosecutor from Alton.

Former Democratic Rep. Susana Mendoza said she was conflicted about supporting the abolition because she supported the death penalty, but she said her decision to vote for the repeal came after she put aside her own emotions and acknowledged how flawed Illinois’ system has been. “We’ve come horrifyingly close to executing innocent men, and it could happen again,” Mendoza said.

After taking public feedback, Gov. Pat Quinn signed the bill and communicated the sentences of all the inmates on death row. The passage of the plan resulted in some savings for the state as well as the elimination of some positions in the office of the state appellate defender's office.

Tax increase
Early this year lawmakers voted to increase the income tax rate for the first time since 1989. Legislators voted to make that increase permanent in 1993. This year's temporary income tax hike raised the personal rate from 3 percent to 5 percent and the corporate tax from 4.8 percent to 7 percent.

Supporters said that the increase was necessary to get the state’s fiscal house in order. “This mess is a mess that is the responsibility of all of us. … It’s too late. It’s time for us to be adults, face the crisis and figure out together a solution,” said Rep. Barbara Flynn Currie, a Chicago Democrat. However, Republicans argued that Democrats did not do enough to cut the budget. Rep. Roger Eddy, a Hutsonville Republican, said that GOP calls for spending cuts have been ignored for years. “The time to be adults was eight years ago, when we were expanding programs,” he said. The measure also includes spending caps for the next four fiscal years.

The limits would be $36.8 billion in Fiscal Year 2012, $37.5 billion in FY 2013, $38.3 billion in FY 2014 and $39.1 billion in FY 2015. If legislators spend more, the tax increases will be nullified.

Worker’s compensation
Worker’s compensation reform was a top priority for all four legislative leaders and the governor at the beginning of the spring 2011 session. Lawmakers approved and Quinn signed a reform package backed by several business groups, but detractors were skeptical about how much money employers would save from the plan. The negotiations over workers’ compensation reform were tense. and at one point the bill’s sponsor — Rep. John Bradley, a Marion Democrat — threatened to call a bill that would have dismantled the entire system.

The legislation that passed in the end reduces the fees paid to doctors for treating employees by 30 percent, creates new rules for the appointment of arbitrators, who decide the outcome of claims, and requires the use of American Medical Association standards when determining workers’ level of impairment from injuries.

Republican opponents to the plan said it asks for too large a sacrifice from the medical community in the form of reduced fees and may not result in substantial savings for businesses. Doug Whitley, president of the Illinois Chamber of Commerce, said lawmakers should not think their work is done just because they made tweaks to the system. “The political leadership has to appreciate, understand, recognize that workers’ compensation is not a static action. … Even if we make progress in Illinois, that doesn’t mean that other states didn’t do things similarly. There’s a keeping-up-with-the-Joneses aspect to this.”

Education reform
Teachers unions, education reform groups, administrators, business leaders and parents' organizations worked together on an education reform package that was generally agreed upon by all groups. The plan changes the way teachers are granted tenure, hired, fired or laid off.

Under the new law, teachers have to receive positive evaluations for three years to receive tenure. Teachers who earn “excellent” reviews in each of their first three years will also earn tenure. Teachers with tenure who receive two unsatisfactory reviews within a seven-year period could have their teaching licenses reviewed by the state superintendent and be required to complete professional development geared toward improving their performance or face having their licenses revoked. Layoffs will no longer be decided on a “last-in-first-out” basis but instead will be determined by qualifications and job performance. Seniority will only be used as a “tie-breaker.” Administrators will be free to hire any candidate for new positions instead of giving preference to teachers transferring within the district. The measure also makes it easier for districts to fire underperforming teachers.

“With this bill, we’re going to ensure that the better teachers stay and the lesser teachers go,” said Palatine Republican Sen. Matt Murphy. Half of teachers’ evaluations will be based on student performance under the new system that starts to kick in at different times for different schools based on size and student performance level. Most schools must switch to the new evaluations by 2016.

Rep. Monique Davis, a Chicago Democrat who cast the lone vote against the legislation in the House, said aspects of the bill that apply only to Chicago Public Schools, such as a greater threshold for going on strike that requires the support of a supermajority of voting union members, were discriminatory. “The intentions are good, but the results will not change a thing. I’m not going to be a union buster,” the former teacher and administrator said during floor debate. Unions outside of Chicago will need the support of half of union members to strike. The measure lengthens negotiations required before a strike and would force both sides to release their demands to the public if an impasse is reached.

Smart grid
The two largest utility companies in the state will be able to increase customers' rates to make improvements to the state's electric grid and add so-called smart grid technologies. The plan allows Ameren and Commonwealth Edison to increase customers’ rates 2.5 percent annually to pay for improvements to the state’s electric grid ranging from basic repairs to poles and lines to cutting-edge technology that could allow utilities to prevent outages and customers to track their energy usage.

The companies are required to invest a total of $3.2 billion in the grid over 10 years. The measure also requires ComEd to create 2,000 new jobs through the plan and Ameren to create 450 jobs. If they do not meet those goals, they will be subject to fines.

Doug Scott, chairman of the Illinois Commerce Commission, which signs off on rate increases and will oversee the utilities under the plan, said the bill strips away too much regulation. “In the normal circumstance, our review serves a check to companies to spend money only on the items they are allowed by law. … We think that this bill significantly weakens that check and provides no real incentive for the companies to control their costs.”

Sponsors of the plan say the upgrades will bring economic development and allow the state’s aging grid to keep pace with modern energy demands. “Sometimes we’ve got to do what we’ve go to do,” said East Moline Democratic Sen. Mike Jacobs, who sponsored the plan. “If we’re going to have success in the 21st century, we need to have a 21st century grid.”

Gov. Pat Quinn adamantly opposed the legislation and vetoed it once it reached his desk. But the General Assembly overrode his veto in the fall session.

Tax breaks
After several businesses threatened to leave the Illinois, lawmakers voted to give tax breaks to some to try and stem job loss in the state. The package will give about $200 million in tax breaks to the CME group, and Sears. The plan contains other breaks meant to help businesses throughout the state — such as an extension of the research and envelopment tax credit and a reinstatement of the net operating loss provision in 2012 for losses up to $100,000. The package also offers tax breaks for individuals in the form of increasing the Earned Income Tax Credit from 5 percent of the federal credit to 10 percent over two years and linking the standard exemption to federal cost of living increases. In total, it is projected to cost about $300 million next fiscal year and $350 million by fiscal year 2014.

Up next
The passage of the tax breaks passage spurred a call from both sides of the aisle in the House to roll back corporate income tax rates. “I think people at the time of the increase of the corporate tax realized that that was not the route to go,” House Minority Leader Tom Cross said. “Business after business potentially will be coming to the state and looking for relief, and doing it on a per-company basis is not the way to go.”

Expect the issue to get plenty of lip service, and maybe even some action, next year.
Other noteworthy pieces of legislation failed to gain in 2011 the support needed to become laws. However, the sponsors of many such bills say they will fight on. Rep. Lou Lang, a Skokie Democrat, will likely spend some time in 2012 trying to hammer out a plan gaming expansion that can pass in both chambers and gain Quinn’s signature. A plan he sponsored passed in 2011, but Quinn said it was too large of an expansion and refused to sign a bill that would allow slot machines at horse racing tracks. Without the slots for the tracks, Lang could not find the support to pass a scaled back gaming package during the fall veto session. Lang has also vowed to continue to push a bill that would allow the chronically ill access to medical marijuana. He has called various versions of such a proposal but has yet to find enough support to pass the plan in the House.

House Republican Leader Tom Cross has been unable to find the support to pass his plan to reduce pension benefits for current state employees, but he has been able to pass bills to try and reign in what many saw as abuses of the system. With a pension payment that is projected to be $5.3 billion — about $1 billion more than last fiscal year — expect to hear more about potential changes to benefits.

Illinois is the last state to allow the concealed carry of firearms, and a sponsor of a bill that would allow it says it “only a matter of time” before it happens here. The legislation failed in the House this year, but sponsor Brandon Phelps is working to drum up the votes and says he is only “five or six votes away” from House approval. “Forty other states are not wrong, I believe, and it’s not the Wild West anywhere else,” said Phelps, a Harrisburg Democrat. There are pending court cases, as well as federal legislation, that could also potentially open up the state to concealed carry.

GOPUSA ILLINOIS Daily Clips - December 28, 2011

2011-12-28T08:44:00.002-06:00

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GOPUSA ILLINOIS Daily Clips - December 27, 2011

2011-12-27T09:51:00.001-06:00

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New year brings new laws

2011-12-22T16:11:00.001-06:00

By Jamey Dunn

As the new year begins, more than 200 new laws will take effect in Illinois. Among them are:

Safety belts
The new law that will likely have the broadest impact on Illinoisans is House Bill 219 (Public Act 97-0016). After January 1, passengers in the back seat of vehicles will be required to wear their safety belts. Passenger of emergency vehicles and taxis will be exempt. Those who do not wear seatbelts will be subject to a fine.

Red lights
Motorcyclists can proceed after waiting a “reasonable” amount of time at a red light if it fails to change according to HB 2860 (PA 97-0627). Traffic signals can sometimes fail to register the weight of a motorcycle and will not change as they would for another vehicle. Motorcyclists in such a situation are required to yield to oncoming traffic.

Crime database
HB 263 (Public Act 97-0154) will require first-degree murderers who have been released from prison to register with the state as part of an online database searchable by the public. Those released 10 years prior to the new law will not be required to register.

Internet threats
Under HB 3281(PA 97-0340) school boards will be able to suspend or expel any student who makes an online threat to another student or school employee.

DNA testing
Those accused of certain crimes, including murder, home invasion and sexual assault will be required to provide a DNA sample. HB 263 (Public Act 97-0154) requires that DNA be destroyed if the arresting charges were dismissed or if the individual was acquitted.

Juvenile sentencing
Judges will be required to consider the least restrictive options when sentencing a juvenile offender. Under HB 83 (PA 97-0362), incarceration must be the last resort after all other options have been exhausted or deemed inappropriate.

Electronic waste
Illinoisans will not be able to toss out old computers, and other electronic waste and landfills will no longer be allowed to accept such unwanted items. Electronic devices that cannot be thrown in the trash under Senate Bill 2106 (PA 97-02870) will include: televisions, keyboards, video game consoles, DVD players, fax machines and MP3 players, such as iPods. Consumers who throw away such items face a $25 to $50 fine, and businesses face a fine of up to $500. Instead of pitching such devices, consumers will have to take them to recycling centers.

Home cooking
People who make foods such as certain baked goods, jams and fruit butters for sale at farmer's markets by themselves or family members can prepare such foods in their home kitchens. The law previously required that so-called “cottage foods” be made in an industrial kitchen. The exemption in SB 840 (PA 97-0393) is for anyone who sells less than $25,000 worth of food in a year.

Lasers
Shining a laser, such as commonly found laser pointers, at an airplane that is in taking off, in flight or landing will be a Class A misdemeanor under HB 167 (PA 97-0153).

For a complete list of the 214 laws that will go into effect on January 1, see Senate Minority Leader Christine Radogno’s website.

GOPUSA ILLINOIS Daily Clips - December 21, 2011

2011-12-21T10:07:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 20, 2011

2011-12-20T09:03:00.000-06:00

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College Illinois' investment process should be public, legislator says

2011-12-19T16:57:00.001-06:00

By Jamey Dunn

One Illinois lawmaker says the first step to repairing the faltering College Illinois prepaid tuition program is making its investment decisions public.

Rep. Jim Durkin recently filed legislation that would require investment decisions for the program to take place in meetings that are open to the public. Such decisions are currently exempted under the Open Meetings Act. Durkin’s bill, House Bill 3923, comes after the Illinois Student Assistance Commission announced it has suspended the sale of College Illinois contracts until reforms to the program can be made.

“I’m not discouraged by what ISAC announced,” Durkin said. “They’ve taken some time to study the issue — new board, new executive director, new chairman — they’ve come to the same conclusions that we have: that we have to fundamentally change the program to keep it a viable option for parents and grandparents in Illinois.”

A recent report from ISAC showed College Illinois had a deficit of $559 million and was underfunded by about 30 percent as of March 2011. A state audit of the program released last summer found problems with the way ISAC chose contractors for investment advice. Durkin, a Republican from Western Springs, also takes issue with the types of investment being made, which have shifted to include investments in hedge funds, private banks and real estate along with the more traditional stock and bond purchases.

Durkin said he is working on a bill that would apply the investment restrictions put upon other state funds to College Illinois. He said such legislation “would require that the tools would be more conservative and not this whole world of alternative investments, which over the last three years the past board embarked on. I think it’s too risky. It’s not what parents signed up for.”

He added, “I do want to move us as far as we can off alternative investments because you either win big or you lose big.”

John Samuels, a spokesperson for ISAC, said that commission staff members are working on recommendations that will be heard at a meeting scheduled for January 29. Then, the commission will send recommendations to Gov. Pat Quinn and the General Assembly. Samuels said he thinks it will take legislation to reform College Illinois. He said that belief, along with the fact that ISAC was in the process of hiring a new actuary to set contract prices, is why contract sales were suspended. “Until we knew what the changes were, we felt it was unfair to sell contracts.”

“We’ve got some time between now and the end of January to discuss what type of legislative changes need to be enacted,” Durkin said. The House is scheduled to return for the spring legislative session on January 31, 2012.

Durkin said that administrators should be included in the conversation because he said that the growing costs of tuition in the state are also contribution to College Illinois’ woes. “The rising cost of [college education] has caused stress upon the value of the funding within the system,” he said.

Durkin said the most important thing is to make sure that College Illinois contracts are honored. He said the future of the programs depends on the public having faith enough in it to buy contracts. “We need to market it better. We need to approach this in a better way. We’re not getting a lot of people signing up for the contracts. … I think we need to present it in a new manner to the people of Illinois and explain to them why it still is a good program.”

For more on the problems facing College Illinois, see Illinois Issues May 2011.

GOPUSA ILLINOIS Daily Clips - December 19, 2011

2011-12-19T11:48:00.002-06:00

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GOPUSA ILLINOIS Daily Clips - December 18, 2011

2011-12-18T11:32:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 17, 2011

2011-12-17T06:21:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 16, 2011

2011-12-16T09:14:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 15, 2011

2011-12-15T11:36:00.001-06:00

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Lawmakers seek to roll back corporate income tax rates

2011-12-14T18:59:00.000-06:00

By Jamey Dunn

Just a day after passing a tax break package that would benefit some businesses, House lawmakers on both sides of the aisle are pushing for a rollback of corporate portion of the recent income tax increase.

“I think people at the time of the increase of the corporate tax realized that that was not the route to go,” House Minority Leader Tom Cross said. “Business after business potentially will be coming to the state and looking for relief, and doing it on a per-company basis is not the way to go.” Under Cross’ plan, House Bill 3918, the corporate rate would drop from the current 7 percent to 6 percent in 2013 and would return to 4.8 percent, the rate before the increase, in 2014. Any unemployment rate increase of more than .3 of a percentage point over a four-month period would trigger a .25 percent reduction in the corporate tax rate as well. However, the rate could not dip below the 4.8 percent mark.

Under current law, the corporate rate will decrease to 5.25 percent in 2015 and go back to 4.8 percent in 2025.

“This bill is both measurable and meaningful to everybody. It doesn’t cut out a particular segment of businesses in the state of Illinois. It applies to everybody. So this is a way to keep jobs,” said Rep. Dwight Kay, an Edwardsville Republican. HB 3917, filed by House Democrats, would roll the tax rate back to 4.8 percent as of January. Cross said the fact that Democrats and Republicans favor a rollback on the corporate tax makes him think some version could pass in the House. “I applaud them,” Cross said of the Democrats’ measure. “We obviously support that concept and are willing to do that.”

The proposal comes the same week lawmakers approved a tax break package geared toward keeping Sears and the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade, in the state. Both companies had threatened to leave. The package included an extension of tax breaks for Sears that were set to expire and a reconfiguration of the way CME’s corporate income tax bill is figured based on its electronic sales. The plan also included other business friendly provisions, such as a reinstatement of the earned operating loss tax credit, which was suspended when lawmakers approved the income tax increase last January. Business leaders supporting Cross’ proposal called the plan passed this week a “first step” toward making the state more business friendly. They say the second step is cutting tax rates for all other corporations in the state. “In January of 2011 … we advised the members of the General Assembly that the corporate tax increases that were being proposed would be a serious mistake. And indeed, we’ve had a serious backlash and an ongoing discussions about taxes all throughout the year,” said Doug Whitley, president of the Illinois Chamber of Commerce.

The tax cut package passed this week also contained breaks for individuals, including an increase to the Earned Income Tax Credit and a provision that links the personal exemption to federal cost of living increases. Such breaks helped to draw the support of many Democrats, including Gov. Pat Quinn. Individuals saw their tax rates go from 3 percent to 5 percent under the increase earlier this year. The personal rate is set to drop to 3.75 percent in 2015 and 3.25 percent in 2025. There are no tax cuts for individuals in either the House Democratic or House Republican plan to decrease the corporate income tax rate.“We’re very cognizant of the increase to individuals, and we have a bill to roll that back. But the bottom line is, unemployment continues to rise in this state … we need to provide jobs, and that’s the compassionate approach,” Cross said. Cross said it will take budget cuts to defray the cost of his plan, and that is why he is proposing a decrease that is phased in over two years. “Every point you drop the corporate tax, it’s about a $400 million hit. So we were very cognizant of the fact that we have a problem with our budget. And that’s why we drafted it in the way we did. We would of course like to see it rolled back immediately”

Senate President John Cullerton said he supports lowering the tax rate if the taxing base is broadened and the revenue coming in remains the same. He said a tax increase approved by the Senate in 2009 — which would have extended sales taxes to many services but only raised the corporate income tax to 5 percent — would have done the trick. “That provision was rejected by the House, and it did not pass. And as a result, when we negotiated the tax increase [that passed earlier this year], the corporate tax was as high as it was,” Cullerton said.

John Bouman, president of the Chicago-based Sargent Shriver National Center on Poverty Law, said the state simply cannot afford such corporate tax breaks. “I just don’t think we’re in a position in Illinois to be spending large amounts of money either on expenditures or on tax expenditures while we still owe people money, including a lot of corporate tax refunds.” He said lawmakers should view tax cuts, such as $100 million in incentives given to Sears and CME, the same way they would view spending on a program. “Even if it was justified, I just don’t think we’re at a time and place where any big expend from there can be done without offsetting with either revenues or spending cuts.” He gave the example of a group appealing to the General Assembly for $100 million in spending on programs that would benefit children in the state. “Their response would be: ‘Are you nuts? We’re in a crisis here. This might be a very worthy and fair thing to do, but we just don’t have the money.’”

Bouman — who is also a member of the Responsible Budget Coalition, which supported the income tax increase — said the state should instead focus on getting out of its budget hole and paying its billions in overdue bills. “The public supports a balanced approach to this that includes revenue and also includes spending reforms, but it requires a sustained effort on both of those … because we’re not out [of the budget hole] yet. We’re not balanced. The bills aren’t being paid.” He said HB 3917 and HB 3918 do not appear to be “aimed at any kind of coherent economic or tax policy” but are instead “pretty clearly political moves” being made by lawmakers running for reelection.

“We passed just yesterday an economic growth and tax reform measure for 2011,” said Gov. Pat Quinn. He told reporters in Chicago today that he wants to pass another tax reform package next year. However, he said that a tax break shouldn’t come at the cost of education or other core areas of government. Quinn also said that tax breaks for individuals are an important part of economic stimulus. “If you’re only going to have a corporate situation, I think you’re missing the people of Illinois … so we just can’t have it all one way. We’ve got to make sure everything is balanced for everyday people who are the heart and soul of our economy.”

GOPUSA ILLINOIS Daily Clips - December 14, 2011

2011-12-14T10:15:00.001-06:00

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Quinn to get legislation giving tax breaks to companies

2011-12-13T18:16:00.002-06:00

By Jamey Dunn

Two companies threatening to leave the state will likely stick around if Gov. Pat Quinn signs tax breaks the Illinois Senate approved today, but some lawmakers say it isn’t worth the price tag.

The Senate passed two bills today that contain a plan similar to one piece of legislation that the chamber approved two weeks ago. That bill only received eight “yes” votes in the House. “The bill was separated into two pieces to allow folks who feel pretty strongly on one or the other bill to vote their consciences,” said Sen. Toi Hutchinson, sponsor of the package.

Senate Bill 400 offers tax breaks for individuals in the form of increasing the Earned Income Tax Credit from 5 percent of the federal credit to 10 percent over two years and linking the standard exemption to federal cost of living increases. SB 397 has tax breaks for Sears and the CME Group, which owns the Chicago Mercantile Exchange and the Chicago Board of Trade. Sears and the CME group both threatened to leave the state in recent months. A previously approved tax credit for Sears was set to expire. The CME Group argued that it was being taxed unfairly because its income tax bill, which is based on profits made from sales, counted all sales as taking place in Illinois, but the company makes many of its sales online to customers outside of the state. Under the plan that passed today, 27.54 percent of the company's electronic sales would be used to calculate its Illinois tax bill. The package also includes tax changes meant to help businesses throughout the state, such as an extension of a research and development credit and reinstatement of a net operating loss credit. The plan is projected to cost about $300 million next fiscal year and $350 million by fiscal year 2014.

“We are in the position right now where — yes, it’s unfortunate — there are businesses that are coming and holding us over the barrel, and I understand that that leaves a bad taste in a lot of legislators' mouths,” Hutchinson said during floor debate. But Hutchinson, an Olympia Fields Democrat, said the state cannot afford to lose the jobs those companies provide. “Every one of those people who are working live here. They pay sales taxes. They pay income taxes. … We are in a serious situation right now. We did the best we could with the negotiations we had. This is a bill that you can go home and defend.”

Opponents said that the state cannot afford the plan. Many argued that giving tax breaks to companies that threaten to leave favors big business with the means to lobby the legislature and opens the door for a rush of companies threatening to leave unless the state gives them something as well. “These special deals are bad public policy,” said Sen. Kyle McCarter, a Lebanon Republican. “This is a great bill for lobbyists, in fact maybe we can rename this bill the lobbyist dream act. Because every business in this state will and probably should line up to get their money back, and they are going to need a lobbyist.

Gov. Pat Quinn, who supports the plan, said that competing with other sates and offering tax incentives to encourage businesses to remain in the Illinois is part of the current economic climate. “Every state in the union has on the books tax incentive measures that have been passed by their legislatures to try and get jobs from other states, other businesses from other states. We just have to understand that that’s what the reality is.”

Sears has indicated that if Quinn signs the plan, it will stop shopping around for a potential move. James Parasi, chief financial officer for CME, told a House committee Monday that the passage of the plan into law would keep the CME Group in the state for years to come.

Report finds Illinois juvenile justice system is "failing"

2011-12-13T16:51:00.001-06:00

By Jamey Dunn

A new study has found that more than half of youth imprisoned by the Illinois Department of Juvenile Justice ended up back behind bars.

The report, released by the Juvenile Justice Commission today, said: “While precise data is difficult to come by — itself an indication of our current reentry shortcomings — it is clear that well over 50 percent of youth leaving Department of Juvenile Justice (DOJJ) facilities will be reincarcerated in juvenile facilities; many others will be incarcerated in the adult Department of Corrections (DOC) in the future.”

For seven of the last eight years, more than half of the incarcerated juveniles had been locked up over parole violations, such as truancy or curfew offenses. The report said, “On any given day, approximately 40 percent of incarcerated youth are technical parole violators.” The study found that 2 percent of all the incarcerated population was made up of offenders who committed a new crime while on parole. George Timberlake, chair of the commission and a former judge, said that many youth are going back to jail for “typical teenage” behavior.” The report said: "An essential measurement of any juvenile “reentry” system is whether youth returning from incarceration remain safely and successfully within their communities. By this fundamental measure, Illinois is failing."

A 2009 law called for the commission to conduct the study and make recommendations on how DOJJ could do a better job of helping youth offenders become productive members of society. The state commission, which advises the DOJJ, looked into 230 prisoner review board hearings on juvenile cases and the cases of 400 juveniles whose parole had been revoked.

The report said a major problem is that the DOJJ, which was split off from the DOC, continues to use an adult parole system through the DOC. The commission said this one-size-fits all system is only geared toward policing youths’ behavior after release and does nothing to address their needs or help them make connections to schools, services, employment and their communities. “Responding appropriately to the differences between youth and adults does not require absolving youth of accountability for harmful behavior. Instead, it requires skilled professionals charged with moving a youth toward successful and safe return to the community,” the study said. Commissioners said that this failure of the DOJJ parole system to address the needs of youth and its focus on “surveillance” rather than rehabilitation contribute to the high rate of juvenile recidivism.

Timberlake said that parole hearings for youth, conducted by the Illinois Prisoner Review Board, are brief — sometimes lasting only minutes — and the board gave many of parolees the same terms for release. “We found them rushed, to say the least,’ he said. “Often they were the same conditions time after time after time.” He said many children were not aware of their rights, did not have legal representation and did not understand the proceedings. The report found that the proceedings were improperly recorded, and there was no system to review or reassess the board’s decisions. The commission recommended that if a juvenile faces losing parole and going back to a detention center, a court and not the review board should make that decision. Timberlake said that moving such cases in the court system would mean about one more case a day in Cook County, which would have the most cases. He said as time goes on and fewer youth are in the system, because parole changes would help more stay out of detention centers, the number of cases gets even smaller. “When you look at the numbers, it’s very doable now. And when you look at the future, it’s not even a blip on the screen.” The report said that the review board should document its hearings more thoroughly, and a legal advocate should be on hand for youth that do not have a lawyer.

The report also recommended that parole conditions be tailored to each offender and offenders have individual plans to help them get back on their feet. Case plans might include access to mental health treatment, addiction services or family counseling after release. The report said that holding a youth behind bars for one year costs $86,861. Timberlake said that community-based services, such as counseling, cost between $4,000 to $7,000 a year. “The economic ripple effect of incarceration inflates taxpayer costs even more. In human terms, we must do better for our young people and our communities. In fiscal terms, we simply cannot afford to continue business as usual,” the report said.

Arthur Bishop, director of the DOJJ, said that his department is moving in the direction of many of the commission’s recommendations. “This report and these findings are definitely in line with the mission of the Department of Juvenile Justice under this administration, which is a change the culture.” He said that the department is working to move from a “punitive model” to “therapeutic, rehabilitative” process. Bishop said that linking incarcerated youth to community programs before they are released is key to trying to keep them from coming back to prison. “Those youth tend not to commit new crimes. Those youth then can become tax-paying citizens.”

Commissioners and Bishop acknowledge that it may be difficult to find the money needed to execute the commission’s recommendation during the current budget crisis. Bishop said a previous plan from Gov. Pat Quinn to merge DOJJ with the Department of Child and Family Services has been abandoned. But he said DOJJ is working with DCFS and other agencies to provide wrap-around services to youth offenders and their families and to try to recoup federal Medicaid dollars whenever possible. “I think in some ways, we’re not just having to add new money to accomplish this, but use some services more wisely," he said.

“Certain things will cost money up front,” said Julie Biehl, a commission member and director of the Children and Family Justice Center at Northwestern University Law School.

However, she said: “It’s predicted it’s going to be saving money by not reincarcerating kids at the same rate. … Over time, I think you are going to see a tremendous cost savings to the state.”

The commission plans to release a fiscal analysis of its recommendations sometime in the next few months.

GOPUSA ILLINOIS Daily Clips - December 13, 2011

2011-12-13T11:54:00.001-06:00

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Tweaked plan for tax breaks clears the House

2011-12-12T17:18:00.001-06:00

By Jamey Dunn

A package of tax breaks that failed miserably in the House just two weeks ago passed in the chamber today after undergoing some tweaks.

The main change supporters made to the plan was cutting it into two bills. Senate Bill 400 contained tax breaks for individuals, including raising the Earned Income Tax Credit from 5 percent of the federal credit to 10 percent over two years, and linking the standard personal exemption, which is given to all taxpayers, to federal cost-of-living increases. SB 397 included tax breaks tailored to specific businesses, as well as some cuts geared toward improving the business climate in the state.

The two bills passed today with bipartisan support. SB 397 received a whopping 81 “yes” votes, which is a far cry from the 8 “yes” votes that a similar plan passed by the Senate received on November 29. Rep. John Bradley, who sponsored SB 397, said splitting the plan into two bills made all the difference. He said the move allowed lawmakers to vote for the components they felt were most worthy without feeling like they were being log rolled into passing something they opposed.

“These two bills put together are pretty much the same as the single bill that was defeated two weeks ago,” said Rep. David Harris, a Republican from Arlington Heights who worked with Bradley on a lower-cost House plan that was never called for a vote. “I think that such is the nature of Springfield, that we end up having two bills instead of one — two bills that pretty much do the same thing but end up costing more than one.” However, Harris spoke in favor of both bills, saying that the plan was worthwhile, even if it was not ideal.

Bradley said the plan approved today would have no impact during Fiscal Year 2012, would cost less than $300 million in FY 2013 and would cost less than $350 million in FY 2014.

Rep. Barbara Flynn Currie said 2.5 million low-income, working Illinoisans qualified for the Earned Income Tax Credit in 2010. “It’s an incentive; it’s a reward for hard work, not a giveaway.” Currie, who sponsored SB 400, said giving money back to working families would help the state’s economy. “They’re going to spend it and give us back an economic boost.”

Harris agreed but said the increase in the bill was too large when weighed with other budget pressures in the state. “Many on my side of the aisle seem to be uncomfortable with the Earned Income Tax Credit. I would like to remind my colleagues for low-income wage earners … this is not welfare. This is for people who have jobs and who are productive members of society. We on this side of the aisle should not shy away from the Earned Income Tax Credit. At the same time, we should ask the question, ‘How much can we afford?’”

Other Republicans said the tax cuts for individuals simply cost too much and did not include enough relief for middle-class residents. “This state is penniless. I don’t know that anyone disagrees with it. We all want to help people, but I think if we do it we need to do it on a broad-based … basis,” said Rep. Dwight Kay, a Republican from Glen Carbon.

Floor debate on the package was briefly interrupted after protesters in the House gallery unfurled a large banner urging lawmakers not to give in to threats from businesses by offering them tax cuts. The banner hung down into the chamber until House security snatched it away and escorted the protesters out of the gallery.

The push for the bills that passed today started after the CME Group, which owns the Chicago Mercantile Exchange, and Sears threatened to leave the state. The plan includes tax breaks for both companies, as well as southern Illinois manufacturer Champion Labs, which was added to the deal in the last two weeks.

“We spent the summer working on issues regarding reform of the tax code in Illinois, particularly with regards to businesses in the state of Illinois — trying to create a fair system, trying to create a system which made sense,” Bradley said. “Our timeline, though, for acting on this measure was increased substantially by the potential issues with the relocation of two longstanding Illinois companies, Sears and the [CME Group.]”

James Parasi, chief financial officer for CME, told a House committee this morning that the passage of the plan into law would keep the CME group in the state for years to come. And Sears thanked lawmakers for approving the plan. "We thank the House of Representatives for passing legislation today aimed at keeping Sears an Illinois company. This is a major step in the process. We appreciate the House's efforts and are hopeful that when the Senate returns tomorrow, it will follow suit,” Sears spokesman Chris Brathwaite said in a written statement.

Bradley’s bill included some ideas brought up during the summer hearings, including a return of the net operating loss credit for businesses, which lawmakers voted to suspended as part of the recent income tax increase, and an extension of a research and development tax credit. Bradley said those provisions should help small- and medium-size businesses throughout the state. He added that a measure creating a larger exemption for the estate tax would help family farmers when their land and operations are passed down to their heirs. Bradley has vowed to continue legislative efforts to reform the state’s tax code.

Opponents to the tax cuts for businesses said the state cannot spare the revenue in a time when other vital programs such as education are being cut. “I am outraged that the state of Illinois would give the CME group a tax break while education spending in the state is languishing, and quite frankly, in a state of absolute crisis,” said Kit Main, a member of the Chicago-based community organization Northside P.O.W.E.R. and the group Make Wall Street Pay Illinois, told a House Committee this morning.

House Republican Leader Tom Cross, who worked with Bradley on the bills that passed today, acknowledged that many in the House disliked some parts of the plan. “There’s a lot of angst on this bill today, I realize that.” But Cross said lawmakers will take many difficult votes in the future, especially in regards to the state’s budget. He said $1 billion more in pension obligations due next year, as well as a stack of Medicaid bills that will be pushed into FY 201,3 would result in the need for unpopular budget decisions. We no longer have any easy choices,” Cross said during floor debate. “You think today’s tough? You think today is a difficult vote. I can’t imagine what it’s going to be like next year. … You ain’t seen nothing yet.” Cross called for sweeping reforms to the tax code, including a reduction in the corporate income tax rate. “If we are going to accept the fact that this state is in as bad of shape as it is — and it is — and we want companies to stay, the picking and choosing [for tax breaks] has got to stop.” Cross said he was optimistic about the Senate approving the two bills when they are in session tomorrow because they are much like a plan the chamber approved two weeks ago.

A prepared statement from Gov. Pat Quinn indicates that he is on board with the plan. Quinn originally supported increasing the Earned Income Tax Credit to 15 percent of the federal rate, but he said the deal that passed today provides “help for both hard-working families and employers.” He also encouraged the Senate to “take swift action tomorrow.”

GOPUSA ILLINOIS Daily Clips - December 11, 2011

2011-12-11T09:03:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 10, 2011

2011-12-10T09:13:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 9, 2011

2011-12-09T11:05:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 8, 2011

2011-12-08T11:15:00.001-06:00

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Is Blagojevich's sentence enough to deter corruption?

2011-12-07T16:51:00.001-06:00

By Jamey Dunn

Almost three years after his arrest on corruption charges, former Gov. Rod Blagojevich was sentenced to 14 years behind bars today, but some say the work to clean up “pay to play politics” in the state is not done.

“The long Blagojevich nightmare is over,” Andy Shaw, director of the Better Government Association, said in Chicago after the sentence came down today.

While the sentence is shorter than the 15 to 20 years that prosecutors requested for Blagojevich's 18 felony convictions, it is the longest prison term ever doled out for corruption in the state. Blagojevich was reportedly contrite today when he addressed U.S. District Judge James Zagel, saying he was sorry and that he has no one to blame but himself. According to the Chicago-Sun Times, Zagel told Blagojevich, “When it is the governor who goes bad, the fabric of Illinois is torn and disfigured and not easily or quickly repaired.” Blagojevich is must surrender on February 16, 2012. Under federal guidelines, he is required to serve 85 percent, almost 12 years, of his sentence. He was also hit with almost $22,000 in fines and penalties.

However, after the sentencing, Blagojevich vowed to fight on. “This is a time to be strong. This is a time to fight through adversity. This is a time for me to be strong for our children, be strong for Patti,” he told reporters in Chicago. “We’re going to keep fighting on though this adversity, and we’ll see you soon.” Blagojevich dusted off one of his favorite literary works, quoting Rudyard Kipling’s If, a poem he has been citing in speeches for years.

“It’s profoundly sad that we are here for the second time in five years to discuss the conviction and sentencing of a governor of Illinois.” U.S. Attorney Patrick Fitzgerald said today in Chicago. He said the sentence should deter future corruption and that it “sends a strong message that the public has had enough and judges have had enough. This needs to stop.”

Fitzgerald said that an end to corruption in Illinois would come with a change in public sentiment. He said that “to some extent” people are “resigned to corruption.” He encouraged citizens to become whistleblowers and change the climate so that those who would seek money or personal benefit in exchange for a political act “should be afraid to ask.”

Lt. Gov. Shelia Simon said Blagojevich’s sentence does not ensure an end to political malfeasance in the state. "We cannot rely on a prison sentence to deter corruption,” Simon said in a prepared statement. “Illinois needs stronger ethics laws to kill pay-to-play politics. It's time we expose conflicts of interest before they cost taxpayers, and clear the way for true public servants to rebuild trust with the public. Increased transparency, coupled with the threat of serious prison time, can end these shameful courtroom battles. Together we can put this chapter behind us, restore integrity to government and live up to our legacy as the Land of Lincoln.” Simon, who served on an ethics commission that made recommendations to the General Assembly in the wake of Blagojevich’s impeachment and removal from office, said the former governor’s conviction and sentencing provide an opportunity to have “public conversation again” about ethics in the state.

Dick Simpson, a professor and head of the Department of Political Science at the University of Illinois Chicago, agreed with Simon. “I don’t think that the sentence will be enough to deter corruption in the future.” He said that more recommendations from the ethics commission should be enacted. Simpson said that the job of cleaning up Illinois requires an educated public. “I think the most important single [recommendation to act on] would be to reintroduce into the public school system … both civics and the cost of corruption, and those are not taught in most schools anymore.”

He said students should be made aware of both the monetary costs of corruption as well as the human toll. “You can show examples of what happens when you can’t trust the policeman or you can’t trust the inspector and how it undermines trust in government and willingness to pay taxes. It’s not hard to put together a curriculum.”

He added, “Teaching political and civic engagement, rather than just the three branches of government, would be useful.”

He said that locking up offenders would never address the problem on a holistic level. “No amount of sentences would be sufficient. … Catching one crook at a time is not enough. It’s good that we punish people, but it isn’t sufficient.”

Gov. Pat Quinn called his predecessor’s sentence “stiff” but “necessary.” Quinn said there is “more work to do” to implement reforms, including enacting recommendations of the ethics commission. He renewed his call for a change to the state Constitution that would allow for citizens to put ethics measures on the ballot for a popular vote by collecting a enough voters’ signatures. Quinn said such initiatives, if passed, could apply to any level of government in the state. “We should not just have to rely on a legislature, or city councils or county boards [to pass ethics measures.]”

Quinn added, “We need to have a way for people to bypass the insiders to enact reforms that the people, the taxpayers, think are necessary.”

When asked about being Blagojevich’s running mate twice, Quinn said, “I think he let me down like he let down the people of Illinois.”

Other reading:
For more on the lack of civic education in Illinois schools, see Illinois Issues, September 2011.

For more on the history of political corruption in Illinois, see Illinois Issues Blog, December 2008.

For courtroom reporting on the sentencing, see the Chicago-Sun Times and the Chicago Tribune.

GOPUSA ILLINOIS Daily Clips - December 7, 2011

2011-12-07T10:03:00.000-06:00

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GOPUSA ILLINOIS Daily Clips - December 6, 2011

2011-12-06T09:59:00.000-06:00

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Quinn and Rutherford spar over borrowing

2011-12-05T15:37:00.001-06:00

By Jamey Dunn

State Treasurer Dan Rutherford said today he will not keep quiet about his thoughts on state borrowing or Illinois’ dire financial situation.

Last week, Gov. Pat Quinn voiced frustration over Rutherford’s recent comments on the state’s debt and financial standing. Rutherford called Illinois the “most bankrupt state in the nation” and has publicly warned Wall Street investors not to buy more of the state's debt.

Quinn told reporters in Chicago that he is “disappointed” in Rutherford for not being more cooperative on billions in borrowing that Quinn has proposed to pay off some of the state’s backlog of overdue bills. “I used to be state treasurer, and I know you can work with a governor,” Quinn said. “I’m a little disappointed in Treasurer Rutherford.”

Quinn has argued that the interest costs on loans would be cheaper than the interest the state is required by law to pay vendors on late bills. “I think if we do it in a good public finance way, we can save the taxpayers millions of dollars and help our business get paid the vouchers and invoices that they have quicker.” The plan has failed to gain traction in the legislature.

When asked if Rutherford’s public negative comments created fears that could lead to a credit rating downgrade for the state, Quinn recalled an old security slogan. “My father was in the United States Navy. Loose lips sink ships, and I think maybe Treasurer Rutherford should commit that to memory.”

“The governor has got to understand that this is not a secret." Rutherford said today that Quinn and others cannot hide from the reality of the budget — especially new information from Moody’s Investor Services that the state’s required pension payment next fiscal year, estimated to be about $5.3 billion, will be more than $1 billion higher than the payment for the current fiscal year. Moody’s estimates that the payment will account for about 14 percent of general revenue fund spending for Fiscal Year 2013. The bond credit rating agency described the state’s pension obligation as a “credit negative.”

“When Moody’s just came out within the last week talking about this new revelation about the greater payments that are going to be necessary in our pension funds, that’s no secret, governor. Everybody knows it. We’ve got to address it.” He said that when lawmakers passed a tax increase in January, they should have leveraged the prospect of new revenue to force cuts and pensions reform as part of an overall plan. “They didn’t put together the rest of the deal. … They blew it here in Springfield.”

Rutherford said he is willing to work with Quinn on short term borrowing — to be repaid within a year — to address cash-flow issues. But he said he would continue to be a vocal opponent of any other new borrowing. “Don’t loan my state any more money, they are addicted to debt.”

Rutherford clarified his statement about the state being bankrupt, noting that Congress has not voted to allow states to default. However, Rutherford said if the state were a private entity, it would be facing bankruptcy. He said he does not support proposals to allow states to default because vendors who have done business with the state would potentially get short changed. “If someone sold bread to the Pontiac penitentiary, that vendor should get the dollar for dollar, rather than [price] negotiated by a federal bankruptcy judge and get 80 cents on the dollar.”

Rutherford made his comments today at a news event announcing the start of an online auction to sell unclaimed property. After unclaimed property left in safety deposit boxes is held by banks for five years, it is passed on to the treasurer’s office, which then tries to locate the rightful owners. If the owners cannot be found, the state auctions off the property. Rutherford said the state has been searching for the owners of everything in the current auction for at least five years.

If owners come forward after an item has been sold, they are still entitled to the cash amount that the item was appraised for. Rutherford said of unclaimed property, much of which is kept in a vault under the state Capitol building, “it never becomes the property of the state. As the treasurer, I’m only the caretaker.” The online auction started today and will close December 11. Rutherford said holding the auction online will bring the cost to the state down from about $29,000 to about $2,000.

GOPUSA ILLINOIS Daily Clips - December 5, 2011

2011-12-05T11:52:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 4, 2011

2011-12-04T11:19:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - December 3, 2011

2011-12-03T09:49:00.000-06:00

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GOPUSA ILLINOIS Daily Clips - December 2, 2011

2011-12-02T11:55:00.001-06:00

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Advocates hope for federal Internet sales tax solution

2011-12-02T09:27:00.002-06:00

By Jamey Dunn

Illinois retailers are renewing a push for a federal law that would require online vendors to collect taxes on their sales.

Illinois lawmakers passed a law earlier this year that requires online sellers to collect state taxes if they work with marketers located in the state. Amazon.com and Overstock.com severed ties with marketers Illinois, which led to a few of such businesses to leave the state. The U.S. Supreme Court ruled that states cannot require businesses to collect the tax unless they have a physical presence in the state.

While the Illinois law may have chased off some businesses, proponents say it helped to draw national attention to the issue. Illinois' law has begun to bring in some tax dollars. According to the Department of Revenue, dozens of Internet retailers have registered with the state. Sue Hofer, a spokesperson for the department, said it does not yet have figures on how much is being collected under the law. “We are making process. It’s not everyone, and it certainly isn’t several of the much larger ones," Hofer said.

Until recently, Amazon and other large online retailers either cut ties in states that tried require them to collect taxes or fought the issue in court. Amazon lost its legal battle in New York and currently collects taxes there. However, the company worked out a deal with California lawmakers that has led to Amazon actively lobbying for a law to address the issue nationally. If a national solution does not pass, Amazon has agreed to collect taxes in California next year.

U.S. Sen. Richard Durbin has backed a national solution for years, but retailers, both online and brick and mortar, say a new version of the Illinois Democrat's plan has a real shot at approval in Congress.

Bricks-and-mortar retailers maintain that not collecting the taxes gives online sellers an advantage because they can offer what seems to be a lower price. Illinois residents who buy goods from non-collecting Internet retailers still owe the tax and are required to declare their purchases on their income tax returns. This was the first year that the Illinois Department of Revenue included a line on tax returns specifically for online purchases. According to the department, residents declared their purchases on about 270,000 returns, bringing in an estimated $11 million in revenue for the state. Those advocating for Durbin’s plan say that is a fraction of the revenue that could come in if online retailers were required by Congress to collect the tax.

David Vite, president of the Retail Merchants Association, says expecting customers to keep track of their online purchases — as well as differentiate between a seller such as Target that does collect the sales tax because it has stores in the state and one such as Amazon that doesn’t — isn’t realistic, and the consequences for getting it wrong are too dire. “They are confronted with possible perjury charges. They are filing a false income tax return. That’s not fair to the customer. That’s not fair to the citizens,” he said.

The U.S. Supreme Court ruling that bars states from making out-of-state retailers collect taxes focused on mail order purchases and did not address online sales because it was made 1992, long before e-commerce was a consideration. The court did open the door in its opinions for Congress to revisit the topic. “The underlying issue is not only one that Congress may be better qualified to resolve but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions. … Accordingly, Congress is now free to decide whether, when, and to what extent the states may burden interstate mail order concerns with a duty to collect use taxes.”

A new plan, called the Marketplace Fairness Act in the U.S. Senate and the Marketplace Equity Act in the U.S. House, would allow states to require tax collection if they take steps to streamline taxes and make the process simpler for retailers, which would likely be collecting taxes across multiple states. Previous versions would have required states to sign onto a universal Streamlined Sales Tax Agreement.

Under the new proposal, states could sign onto the agreement or take less sweeping steps to simplify tax collection, such as agreeing to a universal classification of items for taxing purposes. Currently, a snack cake may be classified for taxing purposes as food in one state and candy in another, or a scarf might be clothing in one state and an accessory in another. These different classifications might also be taxed at different rates. The goal is to build a classification system that applies nationwide. “The Market Place Equity Act would be easier to comply with for the state of Illinois,” Vite said.

The act is currently held up in Congress over concerns about what size businesses it should apply to. Lawmakers are considering an exemption for small business. Talks on the exemption size range from businesses bringing in $500,000 each year to up to $1 million. Some retailers, such as eBay, say that a small business exemption in the law should be larger, potentially up to $30 million.

“The idea that small business retailers on the Internet are a threat to the survival of small business storefronts is ridiculous. The threat to small independent retailers is coming from giant multibillion-dollar competitors online and offline, which has been the case for nearly half a century,” Tod Cohen, vice president and deputy general counsel of government relations for eBay, told a U.S. House committee yesterday according to a written transcript. “You hear a lot about fairness in this debate. Some have claimed that a 'level playing field' means all retailers using the Internet should be held to the same remote sales tax standard. However, sameness is not fairness. Small businesses retailers face many competitive disadvantages when compared to larger retailers. They have proportionally higher costs of doing business, including providing employee benefits. And one must especially consider the costs of shipping when considering the playing field for small e-commerce businesses. Shipping prices, as with other costs, are directly related to sales volumes and how close the retailers [are] to the customer.”

But Amazon and others oppose such a large exemption. “Fairness among sellers should be created and maintained. Sellers should compete on a level playing field. Congress should not exempt too many sellers from collection, for these sellers will obtain a lasting unlevel playing field versus Main Street and other retailers. Congress should rectify the current imbalance and avoid a future imbalance,” Paul Misener, vice president for global public policy for Amazon.com, told the House committee this week, according to the written transcript. “With today’s computing and communications technology, widespread collection no longer would be an unconstitutional burden on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect.”

Vite said he doubts the commitment of retailers who want a high threshold for exemption. “I’m not sure they’re serious about getting anything done yet. Amazon is.” Vite and others are hopeful that a solution can be reached soon, whether it is the new plan, which has bipartisan support, or a version of Durbin’s previous proposals. “Whichever one passes, we’re happy with,” he said. “The Marketplace Equity Act is probably the [plan] that has the most likelihood of passing.”

For more on the effort to collect sales tax on online purchases, see Illinois Issues April 2011

GOPUSA ILLINOIS Daily Clips - December 1, 2011

2011-12-01T09:11:00.004-06:00

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Lawmakers say budget deal fixed mistakes

2011-11-30T18:18:00.002-06:00

By Jamey Dunn

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

GOPUSA ILLINOIS Daily Clips - November 30, 2011

2011-11-30T09:40:00.001-06:00

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Tax plan fails while budget plan sails

2011-11-29T22:35:00.003-06:00

By Jamey Dunn

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

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

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

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

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

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

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

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

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

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

“We are disappointed that today, the legislature was not able to reach agreement and pass a package that will help us remain an Illinois company,” Sears spokesman Chris Brathwaite said in a written statement. “It is our hope that lawmakers will achieve a compromise very soon as our timeline for making a decision about our future by the end of the year has not changed. We sincerely appreciate the efforts of many members of the General Assembly over the last several months on our behalf.”

The General Assembly did approve budget changes late this evening that are meant to avert the seven state facility closures and nearly 2,000 layoffs that Quinn announced in September.

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

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

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

$30 million for mental health programs.
$4.7 million for programs to combat homelessness.
$8 million for indigent burials.
$28 million for substance abuse programs.
$33 million for Monetary Award Program grants for college students.

Opponents voiced frustration over the funds that were not restored. Rep. Roger Eddy, who is a school superintendent in Hutsonville, said it was “unfair” that money for transportation, which has been drastically cut in recent years, was not restored when state law requires schools to provide transportation. Eddy, a Republican, said the transportation cut hits downstate school districts harder than Chicago districts, which are mostly represented by Democrats. Eddy said downstate legislators agreed to shift money from funds for spending that did not end up in the final bill. “That money wasn’t used exactly the way we thought it was going to be used.” The plan passed with no debate in the Senate.

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

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

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

Tax plan fails while budget plan sails

2011-11-29T22:35:00.001-06:00

By Jamey Dunn

The General Assembly did approve budget changes late this evening that are meant to avert the seven state facility closures and nearly 2,000 layoffs that Quinn announced in September.

$30 million for mental health programs.
$4.7 million for programs to combat homelessness.
$8 million for indigent burials.
$28 million for substance abuse programs.
$33 million for Monetary Award Program grants for college students.

GOPUSA ILLINOIS Daily Clips - November 29, 2011

2011-11-29T11:46:00.001-06:00

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Lawmakers look at public campaign financing and corporate tax breaks

2011-11-28T18:50:00.003-06:00

By Jamey Dunn

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

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

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

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

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

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

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

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

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

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

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

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

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

State will let couples in civil unions file joint returns

2011-11-28T18:36:00.000-06:00

By Jamey Dunn

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

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

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

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

Randy Hannig, director of public policy for Equality Illinois, declined to comment specifically on the change because he said the group had not received an official announcement from the department. However, he said he is “cautiously optimistic.”

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

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

State will let couples in civil unions file joint returns

2011-11-28T16:55:00.003-06:00

GOPUSA ILLINOIS Daily Clips - November 28, 2011

2011-11-28T11:20:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 27, 2011

2011-11-27T08:54:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 26, 2011

2011-11-26T08:26:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 25, 2011

2011-11-25T10:05:00.001-06:00

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2011-11-24T09:21:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 23, 2011

2011-11-23T08:44:00.000-06:00

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Study: Illinois is no longer a model of higher education

2011-11-22T18:30:00.002-06:00

By Jamey Dunn

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

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

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

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

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

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

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

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

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

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

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

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

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

GOPUSA ILLINOIS Daily Clips - November 22, 2011

2011-11-22T09:57:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 21, 2011

2011-11-21T09:32:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 20, 2011

2011-11-20T10:35:00.000-06:00

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GOPUSA ILLINOIS Daily Clips - November 19, 2011

2011-11-19T06:43:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 18, 2011

2011-11-18T09:29:00.001-06:00

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GOPUSA ILLINOIS Daily Clips - November 17, 2011

2011-11-17T11:52:00.001-06:00

Articles of interest to Illinois Republicans recently posted by ABC7, NBC5, CBS2, Chicago Tribune, Chicago Sun-Times, Crain's Chicago Business, Daily Herald, Suburban Chicago News, Suburban Life, Pioneer Local, Southtown Star, Rockford Register Star, Bloomington Pantagraph, Peoria Journal Star, Springfield State Journal Register, Belleville News Democrat, Southern Illinoisan, Illinois Review, Public Affairs, Champion News, Illinois Family Institute, Americans For Truth, Chicago Daily Observer, Tom Roeser, Capitol Fax, etc. Since January 1, 2005, GOPUSA ILLINOIS has brought 101,796 such articles and information on many upcoming events to its subscribers' attention each morning, free of charge, and without any advertising. To view the November 17, 2011 GOPUSA ILLINOIS Daily Clips, please visit www.gopillinois.com. Thanks

GOPUSA ILLINOIS Daily Clips - November 16, 2011

2011-11-16T09:25:00.000-06:00

Articles of interest to Illinois Republicans recently posted by ABC7, NBC5, CBS2, Chicago Tribune, Chicago Sun-Times, Crain's Chicago Business, Daily Herald, Suburban Chicago News, Suburban Life, Pioneer Local, Southtown Star, Rockford Register Star, Bloomington Pantagraph, Peoria Journal Star, Springfield State Journal Register, Belleville News Democrat, Southern Illinoisan, Illinois Review, Public Affairs, Champion News, Illinois Family Institute, Americans For Truth, Chicago Daily Observer, Tom Roeser, Capitol Fax, etc. Since January 1, 2005, GOPUSA ILLINOIS has brought 101,727 such articles and information on many upcoming events to its subscribers' attention each morning, free of charge, and without any advertising. To view the November 16, 2011 GOPUSA ILLINOIS Daily Clips, please visit www.gopillinois.com. Thanks

GOPUSA ILLINOIS Daily Clips - November 15, 2011

2011-11-15T11:45:00.001-06:00

Articles of interest to Illinois Republicans recently posted by ABC7, NBC5, CBS2, Chicago Tribune, Chicago Sun-Times, Crain's Chicago Business, Daily Herald, Suburban Chicago News, Suburban Life, Pioneer Local, Southtown Star, Rockford Register Star, Bloomington Pantagraph, Peoria Journal Star, Springfield State Journal Register, Belleville News Democrat, Southern Illinoisan, Illinois Review, Public Affairs, Champion News, Illinois Family Institute, Americans For Truth, Chicago Daily Observer, Tom Roeser, Capitol Fax, etc. Since January 1, 2005, GOPUSA ILLINOIS has brought 101,619 such articles and information on many upcoming events to its subscribers' attention each morning, free of charge, and without any advertising. To view the November 15, 2011 GOPUSA ILLINOIS Daily Clips, please visit www.gopillinois.com. Thanks

GOPUSA ILLINOIS Daily Clips - November 14, 2011

2011-11-14T09:38:00.001-06:00

Articles of interest to Illinois Republicans recently posted by ABC7, NBC5, CBS2, Chicago Tribune, Chicago Sun-Times, Crain's Chicago Business, Daily Herald, Suburban Chicago News, Suburban Life, Pioneer Local, Southtown Star, Rockford Register Star, Bloomington Pantagraph, Peoria Journal Star, Springfield State Journal Register, Belleville News Democrat, Southern Illinoisan, Illinois Review, Public Affairs, Champion News, Illinois Family Institute, Americans For Truth, Chicago Daily Observer, Tom Roeser, Capitol Fax, etc. Since January 1, 2005, GOPUSA ILLINOIS has brought 101,565 such articles and information on many upcoming events to its subscribers' attention each morning, free of charge, and without any advertising. To view the November 14, 2011 GOPUSA ILLINOIS Daily Clips, please visit www.gopillinois.com. Thanks

GOPUSA ILLINOIS Daily Clips - November 13, 2011

2011-11-13T10:47:00.000-06:00

Articles of interest to Illinois Republicans recently posted by ABC7, NBC5, CBS2, Chicago Tribune, Chicago Sun-Times, Crain's Chicago Business, Daily Herald, Suburban Chicago News, Suburban Life, Pioneer Local, Southtown Star, Rockford Register Star, Bloomington Pantagraph, Peoria Journal Star, Springfield State Journal Register, Belleville News Democrat, Southern Illinoisan, Illinois Review, Public Affairs, Champion News, Illinois Family Institute, Americans For Truth, Chicago Daily Observer, Tom Roeser, Capitol Fax, etc. Since January 1, 2005, GOPUSA ILLINOIS has brought 101,495 such articles and information on many upcoming events to its subscribers' attention each morning, free of charge, and without any advertising. To view the November 13, 2011 GOPUSA ILLINOIS Daily Clips, please visit www.gopillinois.com. Thanks