Week in Review, August 19-23

Budget – Unpaid bills

·         New wave of unpaid State bills.  Efforts by the State to keep up with mushrooming pension obligations mean that other State creditors must wait to be paid from inadequate State resources.  In the House Republicans’ daily “In the Know” resource, Rep. Tom Cross (R-Oswego) pointed out on Tuesday, August 20 that the House Republican Caucus has led efforts to chip away at this load of unpaid debt in fiscal year 2013.  As a result of this pressure for thriftiness and budget- cutting, the State’s revenues exceeded expenditures by $1.4 billion in FY13, enabling the available moneys to be used to pay down the debt.   Unfortunately, the load of unpaid bills had been $7.5 billion at the beginning of this period (July 1, 2012) and was reduced by less than one-fifth during the following 12 months, to $6.1 billion at the end of the fiscal year on June 30, 2013.    

News stories indicate that fiscal pressures are scheduled to worsen in FY14. State spending is increasing as the current majority party gears up to seek reelection, and the current laws governing State-managed pension systems demand that increased sums be allocated from general revenues to meet actuarial full-funding commitments.  The $6.1 billion in unpaid debt is scheduled to increase in FY14.  Those interested in further information about State issues are invited to read “In the Know” every weekday at www.intheknowillinois.com.


·         6 dead, 28 wounded in wave of weekend Chicago shootings.  The roll was compiled by Chicago police during the 48-hour period starting on the evening of Friday, August 16 and continuing into Sunday, August 18.  One of the fatalities occurred on the North Side, three on the West Side and two on the South Side.  Police blotters collaborated to generate totals for the third weekend of August.  


·         “Puppy lemon law” bill signed.   Gov. Quinn’s signature on SB 1639 created a new series of duties upon pet shops.  A purchaser who learns specified forms of bad news about his or her new dog or cat from a licensed veterinarian within specified periods of time after the purchase of the animal is entitled to a remedy.   Remedies authorized under SB 1639 include a full refund, an exchange of the dog or cat for a comparable healthy animal, or certain reasonable veterinary fees.  Limits are placed upon the amount of the veterinary fees that must be provided as a remedy.  Persons interested in learning more about the types of canine or feline illnesses and syndromes that are covered by this bill, and the levels or remedy authorized, should consult with their pet shop, with their veterinarian, or with the Illinois Department of Agriculture, the State agency that will oversee this amendment to the Animal Welfare Act.  The bill became law on Monday, August 19 as P.A. 98-509.  


·         Governor signs gun-control bill over objections of firearms-rights community.  The bill imposes new restrictions upon gun owners and upon the private transfer of firearms.  As signed into law, effective immediately, persons who suffer the loss or theft of a firearm will be required to report the loss or theft to law enforcement within 72 hours.  In addition, on January 1, 2014, a further provision of this new law will go into effect to require non-licensed firearms dealers to perform a dial-up background check of a purchaser’s FOID card status before transferring the firearm.   The State Police are required, by a separate section of this law, to create a new Internet FOID background check system by 2015 that could also be used in transactions like these.  Language within this bill makes clear that the failure of a private seller to check the FOID status of a private buyer of a firearm or firearms could entangle the private seller in any civil legal liability that is incurred by the future possessor of the firearm.  This requirement is separate from, and supplemental to, the existing requirement in State law that a background check take place before a firearm is transferred on the grounds of a gun show.  Transfers of firearms to family members are exempted from this requirement.   HB 1189 was signed into law on Monday, August 19, and became P.A. 98-508.

Health care

·         Controversial bill to ban teenage use of tanning salons signed into law.  The new law forbids commercial tanning salons from allowing persons younger than 18 to purchase time under their lights.   HB 188 was supported by advocates as a way to fight back against the dangerous skin cancer melanoma, which has been connected to ultraviolet light exposure from tanning beds and natural sunlight.  Previous law had allowed persons age 14 to 17 to purchase tanning services with parental permission; the new law overrides parental permission and reduces the customer base for Illinois tanning salons, including many small businesses.  The Illinois House vote of 67-49-0 helped send this measure to Gov. Quinn, who signed it into law on Thursday, August 15 as P.A. 98-349.


·         Unemployment rate increases again in Illinois.  The official U.S. government jobless rate, which reflects the percentage of the Illinois labor force that is completely unemployed and is actively searching for full-time work, rose from 9.1 percent in June 2013 to 9.2 percent in July.  While the increase was statistically insignificant, it solidified Illinois’ status as the industrial state with the highest rate of joblessness in the U.S.   The new figures were released by the state’s Department of Employment Security on Thursday, August 15.

No progress has been made on Illinois joblessness over the past 12 months.  Unemployment was 9.0 percent in July 2011, and has worsened by 0.2 percent since then.  In addition, many additional Illinoisans have dropped out of the labor force or have been forced to accept part-time labor as opposed to the full-time hours they would prefer to work, and these workers are not counted in the 9.2% figure.

Local government

·         House Republican-initiated bill increases government openness, mandates public reporting of county pay hikes.  HB 2482 (Cabello/Stadelman), originated by House Republican member John Cabello, was signed into law on Friday, August 16.  The new law requires county officials to include in their annual budgets a detailed statement showing salary and other compensation increases granted that year from county-appropriated funds. The budgetary disclosures will, in turn, give local taxpayers a better idea of where cost pressures are coming from when county budgets increase above the rate of local economic growth or inflation.  HB 2482, with the Governor’s signature, became P.A. 98-419.


·         Mystery of Metra severance package deepens.  One of the public disclosures surrounding Metra, the commuter-train operator that serves as an autonomous agency within the Chicago-area Regional Transportation Authority (RTA), has been the $718,000 severance settlement paid to their short-term CEO, Alex Clifford; two of the conditions of the settlement were that Clifford would not take legal action against the Metra board for terminating his contract and that Clifford would maintain confidentiality about the circumstances surrounding his tenure and removal.

The ample settlement had been “sold” to taxpayers as a necessary investment to prevent budget-busting legal costs of pre-litigation negotiations and potential litigation between Clifford and Metra.  However, auditors on Tuesday, August 20 revealed that Metra simultaneously possessed an insurance policy intended to indemnify Metra’s budget against costs of this type.   The revelation increased the depth of questions surrounding potential political conflicts of interest and corruption at Metra. 

The commuter-train agency, like other RTA operating boards, is funded through fares paid by passengers, motor fuel taxes paid at the gas pump by non-passengers, and a supplemental sales tax levied at the retail counter upon consumers purchasing retail goods in the six-county Metra/RTA service area.   Chicago is one of the highest-taxed municipalities in the United States, and the standing of its public sector in relation to the private sector is blamed for the area’s comparatively poor job-creation performance and economic stagnation in recent years.   


·         Moody’s reduces Cook County bond rating.  In a move that fell in line with previous reductions imposed by Moody’s on the state of Illinois, the city of Chicago, and seven Illinois public universities, the New York City-based debt-ratings service reduced the publicly posted quality rating stamped on Cook County general-obligation debt from Aa3 to A1.  While the bonds of Illinois’s highest-populated county continue to be ranked as investment-grade securities, the move will increase the interest costs that must be paid by Cook County taxpayers and persons who owe costs and fees to the county.  Cook County has a current total of $3.7 billion in general obligation debt outstanding, and this change in debt rating will impact all future moves to refinance this debt or to borrow additional funds.  

Cook County reported an unpaid pension liability of $5.6 billion as of December 31, 2012, and Moody’s called attention to this liability and pointed out that the application of increasingly conservative actuarial assumptions would revalue this liability obligation to $12.7 billion.   


·         Illinois drivers will soon see 70 mph signs on stretches of Downstate limited-access highways.  In one of the key pieces of legislation approved by the General Assembly in May 2013, SB 2356 increased the speed limit on Interstate limited-access highways from 65 mph to 70 mph.  House Republican C.D. Davidsmeyer was a key co-sponsor of this measure in the House.   The 70 mph bill was signed into law on Monday, August 19 as P.A. 98-511.  The new speed limit will not take effect throughout Illinois; the new law provides that eight counties in and around Chicago and the East St. Louis area will be able to enact ordinances to prevent the increases from taking effect in thickly-settled metropolitan areas.  

Enactment of P.A. 98-511 brings Illinois’ speed limits into line with the limits allowed in many neighboring and comparable states, such as Indiana, Iowa, Kentucky, Michigan and Missouri.  The Illinois Department of Transportation (IDOT) will have to adopt rules to implement the increase.  IDOT will also have to paint and hang new signs.  Under IDOT’s future new rules, some urban sections of Downstate superhighway may see continued operation of the 65 mph speed limit for public safety reasons.

·         Illinois bans handheld cellphones while driving a moving motor vehicle.  The offense, which is a “primary stop” violation, will not apply to hands-free, voice-operated, and headset cell phones and calling devices.  When Gov. Quinn signed HB 1247 on Friday, August 16, the new State law supplemented existing State laws that previously outlawed the use of a cellphone or other device to send or actively receive text messages while driving.  The new law is P.A. 98-506.  The fine for this offense will be $75 for a first offense and additional sums for a second or succeeding offense.  Persons found guilty or placed under court supervision will also be required to pay a substantial schedule of additional fines and court costs.  A “primary stop” offense is an offense for which a police officer may make a stop of a moving vehicle and issue a citation if he sees the offense taking place.   Illinois became the 12th state to ban handheld cellphone use while operating a moving motor vehicle.


·         Bill to increase civil court fees, provide legal assistance to veterans signed by Governor.  HB 3111 creates the Access to Justice Act, a new program that will operate a legal advice hotline for veterans seeking legal assistance.  Veterans may also get some court-based legal assistance from this program if resources are available.   The Access to Justice Act was the initiative of state Supreme Court Justice Thomas Kilbride.   Although many Illinois House members voted against adding an additional expense to what is already a lengthy catalog of fees facing persons seeking access to Illinois courts, the bill was approved by the House by a vote of 71-46-0.  It was signed into law on Thursday, August 15, as P.A. 98-351.