Budget/Old Bills
·
Despite the influx of higher than anticipated revenues in fiscal
year 2013, the Comptroller’s office reported on the week of August 12 that the
backlog of unpaid State bills remains a problem for state vendors, with efforts
to solve the problem facing stagnation. At the end of June 2013, the
increase in FY13 revenues had allowed the backlog to be paid down to $6.1
billion, compared to $7.5 billion a year earlier. However, the increased
spending levels contained in the final FY13 and FY14 budgets have consumed all
available revenue and remaining spending pressures, such as pensions, have not
been addressed. As a result, the Comptroller has stated that the backlog
at the end of July 2013 stood at $6.8 billion, and this backlog is expected to increase
to $7.5 billion at the end of August 2013. By December 31, 2013, the
backlog of old bills is expected to reach $9 billion.
·
Speed cameras could bring tens of
millions to cash-starved city coffers annually.
The Illinois General Assembly recently enacted
legislation authorizing Chicago to install automated cameras to take images of
motor vehicles driving through city speed zones. Widely flouted speed limits include zones
posted around city parks and schools.
Under the city ordinance and state law, the driver or owner of a vehicle
that is photographed driving 11 mph or more over the posted speed limit will
get a $100 ticket by mail. Violations of
6 mph – 11 mph will draw a $35 ticket.
At least 50 cameras are likely to be operating by year’s end. A study performed by Chicago’s speed-camera affiliates
and reported by the Chicago Tribune on Monday, August 12, indicates that the
new enforcement powers could bring in revenues of as much as $40 million to $60
million per year in fines imposed upon drivers operating vehicles within
Chicago.
Congress
·
Former Congressman sentenced. Representative Jesse Jackson, Jr., who represented Illinois’ 2nd
District in Congress from December 1995 until November 2012, was sentenced on
Wednesday, August 14 to serve 30 months in federal prison. The charge was wire fraud/mail fraud in
connection with the diversion of $750,000 of funds from Jackson’s campaign account,
containing monies earmarked for the congressman’s re-election. The diverted monies were used for purposes
that included a $43,000 Rolex wristwatch.
Jackson’s wife Sandi Jackson was sentenced to serve 12 months in federal
prison for a related offense. Illinois 2nd
District includes small sections of Downstate Illinois and the city of Chicago,
but centers on a group of Chicago suburbs in southern Cook County. A former member of the Illinois House, Robin
Kelly (D-Matteson) has been elected to replace Jackson.
Domestic Violence
·
General Assembly bipartisan bill
package signed to reduce domestic violence.
HB 958 increases
penalties for persons convicted of felony repeat domestic violence; HB 3236
extends the life of the Task Force to Eradicate Domestic Violence; and HB 3300
creates an alternative method for insurance companies and victims of domestic
violence to communicate outside the sight of their abusers. These three bills were signed on Tuesday,
August 6.
Representative Rich Brauer (R-Petersburg) described this domestic-violence
package to Illinoisans through the House Republicans’ daily “In the Know”
Internet web resource. Brauer presented
these new domestic violence laws in his “In the Know” column for Tuesday,
August 13. The “In the Know” column can
be read every weekday throughout Illinois by visiting www.intheknowillinois.com.
Gambling
·
New video gaming industry scores
success: $106 million earned in first half of 2013.
Even as new video gaming machines continue to stream online in truck
stops, taverns, and adult gathering places throughout Illinois, existing video
gaming machines have drawn eager customers in transactions electronically
recorded by the Illinois Gaming Board.
The Board’s report for the first half of 2013, published Sunday, August
11, indicates that gamblers lost $106 million playing 8,830 machines at 1,800 licensed locations in the six-month
period. This money was shared between
the owners of the premises where the gaming took place, the machine operators,
and the State and local governments that taxed the gaming transactions. 2,000 license applications, representing
thousands of additional machines, are pending.
General Assembly
·
Pay stoppage continues.
The current date set by the court to hear arguments in the lawsuit by
Democrats Madigan and Cullerton, leaders of the majority party in the General
Assembly, is September 18. The lawsuit
against the Governor and Comptroller is meant to pry paychecks for the General
Assembly’s 177 members, although money for the paychecks has been vetoed by the
Governor. On Thursday, August 8, Madigan
and Cullerton asked a Cook County judge to speed up his resolution of the case
once the arguments are heard. This move
does not, however, advance the September 18 date for oral arguments. Pending resolution of this case, members of
the Illinois House and the Illinois Senate continue to serve without pay.
Governor
·
Questions continue about ties between
politicians and Illinois public transportation boards.
Thorntown Township Supervisor Frank Zuccarelli, a choice of Gov. Pat
Quinn to serve on the governing board of the troubled Chicago Transit Authority
(CTA), resigned on Tuesday, August 13 after charges that the board member was a
“double-dipper.” The local government
official’s township pay-and-benefits package, which is a matter of public
record, is $186,418/year. In addition,
Zuccarelli, who had just begun his CTA tenure, had been slated to collect a
transit governing board stipend that would have totaled an additional
$25,000/year.
The Zuccarelli affair followed a string of resignations at the
separate Metra board, the governing board that oversees the operation of diesel
and electric commuter train service in the Chicago suburbs. As of Thursday, August 15, five Metra board
members have left the challenged agency (see “Metra” section, below). Metra is a separate agency from the larger
CTA, but Zuccarelli’s appointment and resignation indicate the possible
presence of common factors involving conflicts of interest at both governing
boards and in Chicago-area public transportation as a whole.
Chicago-area public transit fares cover less than one-half of the
total cost of operating local bus, train, and disability transit service, and
the service is heavily subsidized by tax subsidies paid by Illinois consumers
at motor fuel pumps and retail ship checkout lines in gas and sales taxes.
Higher education
·
Leading New York City credit rating
firm, Moody’s, downgrades debt issued by seven Illinois public universities.
Among the institutions of higher education hit by the downgrade was the
Land of Lincoln’s flagship system of advanced learning, the University of
Illinois. The U of I operates campuses
in Champaign-Urbana, Chicago, and Springfield.
More than $2.2 billion in debts were affected by the downgrades, which
brokers expected to increase the underwriting costs and interest rates when
these universities seek to refinance existing bonds or take on new debt. The multi-billion debt downgrade, and
associated financial costs, could have a negative effect upon tuition pressures
facing trustees, chancellors, and presidents of the affected institutions. The debt downgrade was tied to the negative
overall financial conditions facing the State of Illinois and its pension
funds. One of the five underfunded
State-managed pension funds, the State Universities Retirement System (SURS), pays
defined-benefit pensions to thousands of retired educators. Moody’s downgraded this debt on Friday,
August 9.
Jobs
·
Federal rules changes could help douse
the boilers that fire up 2,000 Illinois jobs from Chicago area through
Downstate. 13 coal-burning electrical generating plants,
operating throughout Illinois, employ approximately 2,000 full-time Illinois
workers. Continued changes in federal
administrative law could, however, make it increasingly challenging for these
facilities to earn enough money to cover their operating costs. Previous revisions to State and federal
rules, including rules governing the emission of byproducts from coal-burning
such as mercury and sulfur dioxide, have decreased the viability of burning
coal within Illinois and led to the closure of several existing generating
plants, such as Fisk Station in Chicago and Meredosia Station in downstate
Illinois. In addition, possible future
regulations involving controls on the venting of carbon dioxide, a massive
byproduct of coal-fired electrical generation, could mark a death knell for
this industry in Illinois.
Larger coal-burning plants, ranging from Waukegan north of Chicago
to Joppa in far southern Illinois, remain in operation for now. A typical coal plant that remains in
operation as of 2013 uses significant-sized turbines to generate up to 1,000
megawatts of electricity. Coal-fired
electricity is an essential element in Illinois peak-load power supply during
Midwestern summer heat waves, when consumer demand for air conditioning spikes
upward. Demand spikes often lead to
widespread electrical blackouts, especially during summer months. Federal regulators counted 679 major
blackouts throughout the United States in 2003-12, a series of events that led
to a cumulative additional national economic burden estimated at $18 billion -
$33 billion per year. However, key
owners of Illinois coal-burning power plants face increasing financial
challenges in achieving the financing necessary for renovations and capital
maintenance of their facilities. In at
least one key incident, the parent holding company of Illinois’ Midwest Generation
filed for bankruptcy in December 2012.
An investigation published on Monday, August 12 by the St. Louis
Post-Dispatch questioned whether coal-fired electrical generating plants have a
long-term future in Illinois.
Local Government/Museums
·
Governor vetoes bill to reduce fiscal
pressures on local government. Most local museums and
aquariums that charge admission and are located in city or county parks operate
on real estate that is owned by the public and are partly supported by local
taxes. This means that any State law
that increases their costs of doing business could, as an unanticipated
outcome, increase the tax extensions that they are forced to levy in order to
continue to operate.
One of these museum mandates is the so-called “free day.” Current State law requires these museums to
operate for free at least 52 days a year (typically, one “free admission” day
is offered every week). In spring 2013,
Illinois museums persuaded the Illinois General Assembly to pass a bill
sponsored by Representative Joe Sosnowski (R-Rockford), HB 1200. This bill
would reduce Illinois tax burdens, especially property tax burdens, by making
the move to reduce “free days” from 52 per year to 26 per year. Although this is a sacrifice, families that
need to come on a “free day” would still be able to do so by timing their visit
to the correct week, rather than just the day of the week.
On Tuesday, August 13, Gov. Quinn vetoed HB 1200. The bill had been approved by a three-fifths
majority in both chambers of the General Assembly, however, and with continued
fiscal pressures on local governments and taxpayers it is possible the measure
could be passed again in the November 2013 veto session over the Governor’s
veto. Persons interested in this issue
may wish to monitor this bill on the Illinois General Assembly’s website, www.ilga.gov.
Metra/RTA
·
Five board members resign in ongoing
political-influence scandal. The departure in June 2013 of former Metra
chief executive officer Alex Clifford has led to ongoing questions about the
existence of continued conflicts of interest between powerful statewide
officials and members of the controversial agency’s governing board. Metra is the local government agency with the
responsibility of operating diesel and electric commuter trains throughout the
suburban Chicago area, including five “collar counties” that receive little
other service from the area-wide Regional Transportation Authority (RTA). Inquiries have reached the office of
Illinois House Speaker Mike Madigan, who as of August 2013 remained under
ethics investigation for his role in recommending potential employees to executive
positions within Metra. The fifth of 13
Metra board members to resign, Stanley Rakestraw, left the board on Thursday,
August 15. Rakestraw’s departure
signaled a potential looming crisis in Metra’s operations, as his resignation
left Metra’s board with the minimum of eight members necessary to continue to
carry out the management of the troubled agency.
·
Gov. Quinn appoints inquiry panel to
look into Chicago transit issues. The 15-member committee will include
former U.S. Attorney Patrick Fitzgerald and local transit planning leader
George Ranney, Jr. The committee has
been asked to look into allegations of misconduct and conflict of interest in
all of the operating boards that work under the RTA umbrella, including the
CTA, Metra, and the suburban bus board/paratransit operator PACE. The
panel has been asked to submit preliminary findings and recommendations to the
Illinois General Assembly prior to the November 2013 veto session, and final
findings and recommendations prior to the spring 2014 full session.
Obamacare
·
Chicago Tribune
warning raises questions about costs to Illinois consumers of Affordable Care
Act coverage. In addition to
the income tax increase enacted on many Americans to cover some of the costs of
the looming Affordable Care Act (ACA), known as “Obamacare,” questions are being
raised about possible increases to individual Illinois consumers for the
coverage they will be required to maintain under this new federal law. Many Illinoisans may find that the new,
mandatory health coverage that they will be required to buy under this Act will
actually cost more than the existing private-sector coverage that they may
already have (due in part to the complex new coverage mandates and add-ons).
In a warning published on Wednesday, August
14, the Chicago Tribune raised the possibility that Illinois may join other
states, such as Florida and Ohio, where insurance regulators expect sharp
increases in insurance bills under “Obamacare.”
Florida regulators see a 35 percent jump likely to be imposed in their
state, and in Ohio the comparable increase is expected to be 41 percent. The Illinois Department of Insurance, which
is affiliated with the Office of the Governor of Illinois, has not yet
estimated what the additional savings or additional costs, in relation to
private-sector health care insurance, will be to Illinois patients under the Affordable
Care Act.
·
Additional
costs to Illinois health care customers and taxpayers will be associated with
what is shaping up to be a major push to “sell Obamacare” to U.S. and Illinois
citizens. An investigation by the Wall Street Journal,
published on Thursday, August 15, indicates that the “Obamacare” push will
include more than $1.0 billion in television advertising intended to persuade
Americans to voluntarily comply with the new law. This figure was developed after talks by
reporters with U.S. broadcasters and a broadcasting industry trade group that
tracks ongoing nationwide ad buys.
Compliance is seen as especially challenging by the White House in the
case of younger adults who may be tempted to try to evade the costly mandate
and go without insurance in 2014.
·
Affordable Care
Act mandate may force some Illinoisans to find a new primary medical care
provider. This dilemma
could hit Illinois patients who find that their compliance with the ”Obamacare” mandate will force them to choose an insurance product on the ACA
insurance exchange that will include a list of approved medical care providers
that does not include their current primary care physician. Most modern health insurance policies include
complex limitations on the individual physicians accessible to insured
patients, including, in the case of preferred provider organizations (PPOs) a
rigid “list” of in-network caregivers.
Patients who sign up with a specific PPO are generally restricted to
care offered by individual health care professionals on the PPO list. A Wall Street Journal article published on
Wednesday, August 14 warned of a significant number of ACA patients in Indiana
who are facing separation from their current primary care physicians –
including, in some cases, physicians who have established a doctor-patient
relationship with their patients that have lasted for decades.