The Week in Review - September 9-13


·         August numbers show growing State general funds revenues.  Through the first two months of Fiscal Year 2014 (July-August 2013), general funds revenues are up $444 million compared to the same time period in FY13.  “General funds” are the funds replenished by the State’s largest taxes, such as sales and income taxes, which pay for much of the operating expenses of State government.  Budget experts pay close attention to general funds trends because these are the monies that cause pain when they fall short, as with outstanding debts to health care providers that have billed the State.  The new numbers are included in a summary presented to the General Assembly by the Commission on Government Forecasting and Accountability (CGFA).

Most of this growth is attributed to a $397 million one-time transfer from the Income Tax Refund Fund.  A surplus had built up in the fund, which was transferred by law to the General Revenue Fund.  Sales tax receipts have also performed better than expected, growing by $108 million in the first two months of FY14.  Personal income tax receipts are up by $68 million compared to the same period in FY13.  Continued growth in revenue receipts over the remainder of the fiscal year will be necessary to support spending levels contained in the FY14 budget bills, as these bills (which were signed into law by Gov. Quinn) have appropriated all of the $35.446 billion estimated to be available for the fiscal year. 


·         City Council committee moves bill to abolish Chicago gun registration law.  In Illinois’ largest city, owners of legal firearms have been required since 1968 to register them with city police and to report their loss if stolen.  The registration has to specify the identity and type of the gun being registered.  The registration requirement was enacted in Chicago as a response to widespread rioting in that year, as well as the assassinations of the Rev. Martin Luther King Jr. and Sen. Robert F. Kennedy. 

Universal gun registration has traditionally been opposed by gun-rights advocates as a possible precursor to confiscation of one or more types of guns.  For example, if a hypothetical future law were to outlaw the private possession of so-called assault weapons, the existence of a universal gun registry would inform law enforcement of where are the guns to be confiscated.  On Tuesday, September 10, the city council’s Public Safety Committee approved a new ordinance to abolish the registration law. 

Recent court decisions have strengthened the status of the federal Second Amendment, and sharply reduced the power of Chicago and other municipalities to enforce local laws that restrict gun rights.  This Chicago ordinance is seen by gun-rights advocates as a partial response to this changing picture.


·         Illinois State Fair counts 961,142 attendees for 2013, a 10-year record.  The Fair was held in Springfield from Thursday, August 8 through Sunday, August 18.  The attendance numbers, announced in late August, were up 5 percent from August 2012 and were the highest for the State Fair since 1.2 million were counted in 2002.  Changes in attendee counting practices led to a sharp decline in 2003 and following years.  The 2013 State Fair “Sale of Champions,” a series of fundraising events in which prize-winning animals are auctioned for junior producers and agricultural education programs, raised $222,650, with records set in seven individual animal categories.  In 2014, the Fair will be held on August 7 through 17.


·         More Illinoisans working for foreign-owned firms.  New figures released by the Quinn administration indicate that the number of Illinois employees working for foreign employers and foreign-owned firms actually increased by approximately 25% during the Great Recession, from 280,000 to 350,000.  The increase came at a time of widespread job losses and stagnating overall job creation in Illinois, with the Prairie State repeatedly posting unemployment rates above 9 percent (this rate was 9.2 percent in July 2013, the most recent month for which figures are available). 

Illinois remains a job center for global logistics, with airport, railroad, and highway infrastructure converging in the Chicago metropolitan area.  Many foreign-owned firms, especially firms exporting goods from Europe or Asia to the United States and Canada, look to Illinois as a centralized distribution point.


·         Preparations continue for fracking operations in southeastern Illinois.  The Illinois Oil and Gas Association offered a presentation to Southern Illinois business leaders on Illinois “fracking” opportunities in Effingham on Saturday, September 7.  With thick beds of the kind of shale looked for by oil and gas geologists, southern and southeastern Illinois is fertile ground for horizontal drilling operations that use the high-volume sand-and-water technique known as “fracking.”  Engineers in other states, such as North Dakota and Texas, have learned to fracture previously impermeable shale layers to extract the hydrocarbons locked within. 

Local officials, in southeastern Illinois localities such as White County and its county seat of Carmi, are preparing for the challenges to public infrastructure that will come with fracking operations and the associated movement of workers and heavy off-road vehicles.   Representative David Reis, who represents a large section of the potential “fracking belt,” helped write the State’s current fracking bill and get it enacted into law.  The law was signed in summer 2013 as P.A. 98-22.   


·         Illinois’ 10 licensed riverboat casinos announce plan to move from 22-hour days to 24-hour days.  The proposal was announced by the Illinois Casino Gaming Association on Tuesday, September 10.  Illinois riverboat casinos’ move to keep the lights on 24/7 elicited concerns from some advocates, who asserted that round-the-clock slot machine operations could create an incentive to some compulsive gamblers to nurse a particular machine.  Casinos say they must respond to current State law allowing 24-hour slots operations at licensed truck stops.  Slot machines at truck stops were legalized under the new Video Gaming Act, which swung into full operation in 2013.  Ten riverboat casinos offer large-scale gaming floors throughout Illinois, with five casinos located in metropolitan Chicago and five Downstate.  The Downstate riverboats are located in Alton, East Peoria, East St. Louis, Metropolis, and Rock Island.      

Guns/Concealed Carry

·         In “People v. Aguilar” decision, Illinois Supreme Court upholds Second Amendment rights of Illinois residents and strikes down Illinois’ unlawful use of a weapon (UUW) law.  The decision by the State’s highest court, filed on Thursday, September 12, relies heavily on a key federal appellate court decision from 2012 that applied the federal Second Amendment to Illinois.  The federal “Moore v. Madigan” decision was one of the elements leading to the enactment, in June 2013, of the State’s new concealed carry law.  Under concealed carry, Illinois residents will be able to obtain a license to carry a firearm on a public street or in a motor vehicle.  

The September 2013 “People v. Aguilar” decision applies this principle to Illinois criminal law.  By striking down key sections of the State’s UUW law, it directs the Illinois General Assembly and Illinois law enforcement to prioritize Illinois gun rights and to refrain from infringing them except under narrowly crafted circumstances aimed at achieving essential elements of public policy.   

·         Gun owners express concern about new State Police rules.  After carefully reading new rules released by the Illinois State Police, the designated State agency with responsibility for implementing the new concealed carry rights law, concerned gun owners began to raise questions this week about what they see as time-consuming and unnecessary hurdles placed in the way of trained and experienced gun owners who already know how to shoot safely and want to apply for a license to exercise their right to concealed carry. 

Under the new rules, no one will be allowed to be a concealed carry instructor unless they demand that all of their pupils receive at least 8 hours of additional firearm safety instruction; and most future pupils will be required to take 16 hours of firearm safety instruction.   The cost of this instruction is expected to be many hundreds of dollars for each applicant and is expected, should these rules stand, to be a severe disincentive to persons who would otherwise apply for a concealed carry license.

Health Care

·         House committee to hold hearing on Medicaid reform.   The hearing by the House Appropriations/Human Services Committee will be held on Tuesday, September 17 in Chicago.  The subject will be the Quinn administration’s compliance with laws requiring various Medicaid reforms be implemented to slow down exponential growth in the expenses of the system.  Medicaid covers an increasing share of the total medical expenses of Illinois; more than 60 percent of patients in residential care, such as nursing homes, are enrolled in the program.   As their future adequate care depends upon the program being operated in an efficient manner, the Committee will look into ongoing questions of Medicaid reform implementation, particularly the progress being made in scrutinizing the eligibility of existing Medicaid patients for continued enrollment in the program.  

Recent actions by the Quinn administration have raised questions about the ability of the State to carry out the promised reforms.  The FY14 budget was prepared under the assumption that these reforms would be made and savings would be found in some health care areas to balance the soaring health care expenditures in others.  The House Republican Caucus’ point person on Medicaid reform, Rep. Patricia Bellock (R-Westmont), is taking the lead in preparing questions for this hearing.  The hearing was publicly announced on Monday, September 9.  


·         New foreclosure notices plunge in greater Chicago on year-over-year basis.  The decline in foreclosure notices in August 2013, reported by private-sector RealtyTrac, was down 59 percent from August 2012.  The owners and occupants of 6,674 properties received these legally required notices, which constitute commencement by a creditor of a legal action intended to reclaim possession of a real property that is in default in its payments on a mortgage or other debt.  The RealtyTrac numbers were publicly reported on Thursday, September 12.  The sharp drop in these foreclosure notices indicates that pressure may be easing on owners and occupants of properties throughout greater Chicago, including homes and other residential property.   Reports from real estate professionals indicate that property values may have stabilized after the sharp declines associated with the crash of 2008-12.

Similar news has come forth in comparable cities throughout the United States, and in some metropolitan areas property values have begun to rise sharply.  Property values are reported to be buoyant in some areas of the U.S., particularly on the East and West Coasts.  Illinois property values continue to lag nationwide trends in a pattern associated with the overall economic and job-creating underperformance of the State.


·         400 jobs scheduled to move from Gurnee to Kenosha, Wisconsin.  Kenall Manufacturing Company, a manufacturer of commercial lighting, credited recent changes in Wisconsin state tax law for the pending announcement.  Kenall’s decision was reported by Crain’s Chicago Business on Wednesday, September 11.  Enacted in 2011, the new Badger State tax schedule is expected to reduce Wisconsin-based manufacturers’ income tax rates from 7.9% to 0.4% over a multi-year period. 

In contrast to Wisconsin, the Illinois General  Assembly in 2011 enacted a “temporary” income tax hike that increased rates paid by Illinois corporations from 7.3% to 9.5%.  The 2011 Illinois corporate income tax rate, which includes a personal property replacement tax that is distributed to local governments, is significantly higher than the comparable marginal rates paid by businesses in neighboring states such as Indiana, Kentucky, Missouri, and Wisconsin.