Week in Review for 3/17/14 through 3/21/14

Budget Address
Gov. Quinn to address General Assembly on Wednesday, March 26.  The address, delayed from the originally scheduled Feb. 19th date, requires the Governor to lay out his administration’s spending plan for the $34.5 billion in estimated general revenues in fiscal year 2015 (FY15).

The state Constitution requires the Governor and the General Assembly to agree on a balanced-budget document prior to the start of each fiscal year, and to enact appropriations that fit into the budget.  The House and Senate have approved HJR 80, formalizing the official estimate of $34.5 billion in projected FY15 general funds receipts, and the House appropriations committees have already begun discussing FY15 budget challenges in advance of the Governor’s address.

Charter Schools
House majority takes step to abolish the Charter School Commission.  The Commission, under current State law, creates a governance structure for the fast-growing network of charter schools throughout Illinois.  Charter schools are increasingly preferred alternatives to public schools in many communities because they provide opportunities for school choice to local parents.

HB 3754 would abolish the Charter School Commission and return the governance of charter schools back to the State Board of Education (ISBE).  The ISBE spends most of its time overseeing the more than 860 public school districts operating in Illinois and advocates for charter schools have expressed concern that this abolition would put this governance into potentially indifferent hands.  Thursday’s House vote on HB 3754 was 78-33-1, sending the measure to the state Senate.

Disaster Relief – Illinois Tornadoes
House Republicans call on Congress to reform “outdated and unfair” federal disaster declaration process.  State Reps. Sommer, Hays, Unes, Anthony, Meier and Harms introduced legislation Wednesday calling on Congress to update the federal disaster declaration process, following FEMA’s recent denial of assistance to local governments in communities hard hit by the November 17 tornadoes.

“This is an unfair system in desperate need of reform,” Sommer said. “The federal government should be supporting the hard work of the first responders and local officials in Washington and the other communities in which cleanup and rebuilding is continuing months after the tornadoes.”

The disaster declaration process relies on a population-based formula to calculate what a state’s threshold is for federal assistance. Because Illinois is the fifth-largest state in the nation, it has a much higher threshold than other states. But because the tornado outbreak affected primarily small, rural communities the damage did not reach the federal requirement, leaving devastated towns and villages to fend for themselves when it came to meeting the costs of the cleanup.

“For families in Gifford and other devastated communities to be told that their town doesn’t qualify for funding to help repair and rebuild their infrastructure, schools and other public buildings was literally adding insult to injury. The problem is the current formula FEMA uses to determine eligibility, which will disqualify communities in Illinois every time unless the tornado hits downtown Chicago, the largest population base,” Hays said. “We have worked with our Congressional delegation on a plan that will make the formula more fair. Now, we need the House and Senate in Washington to pass it.”

HR 922 calls on Congress “to correct this outdated and unfair system,” by passing reform legislation introduced by the Illinois congressional delegation in January. The Fairness in Federal Disaster Declarations Act of 2014 requires the Administrator of the Federal Emergency Management Agency to amend the rules concerning the factors FEMA considers when evaluating a governor's request for a major disaster declaration. The change will allow for assistance to be awarded to Illinois’ smaller, rural communities when disaster strikes.

“This is a common sense reform to bring fairness to a process that we all viewed locally as being fundamentally unfair to our region,” Unes said.

Disaster Relief – 2013 Floods
$128 million allocated.  The U.S. Department of Housing and Urban Development (HUD) announced on Tuesday that it had allocated $128 million for community flood relief. The grants are slated to help Illinois local communities rebuild infrastructure damaged in the flood events of spring and summer 2013.  Cook County, which represents more than 2 million residents of suburban Chicago, will receive the largest allocation of federal HUD grant money.  Monies allocated from the Community Development Block Grant disaster relief program will help fund functions such as repaving streets, rebuilding drainage infrastructure, and refurbishing buildings damaged by the high water.

Energy – Fracking
Technology with potential to expand Illinois energy production survives advisory referendum battle.  In the primary election held on Tuesday, March 18, voters in historically energy-rich Johnson County were asked to approve or disapprove an advisory referendum that contained terms intended to discourage the exploration and development of energy resources by means of the technology known as “fracking.” 58 percent of Johnson County voters rejected the proposition to disallow fracking for oil and natural gas.  Although the advisory referendum did not have force of law, rejection of the proposal marked a further clearing of the pathway for fracking activities in southern Illinois.

Hydraulic fracturing or “fracking” injects high-pressure water, sand, and chemicals into beds of tightly-knit shale rock deep below the surface.  The New Albany Shale, a large bed of tight rock, lies approximately 5,000 feet below the surface of much of southern Illinois.  Fracking is credited with opening a new mega-oilfield, the Williston Basin, in western North Dakota.  Fracking crews have also fanned out over Texas, Ohio, Pennsylvania, and other states.

SB 1715, a widely agreed bill, authorized the Illinois Department of Natural Resources to engage in negotiations with selected representatives of the energy production, local government, and environmental communities to draft rules to regulate possible future fracking operations in Illinois.

Gambling Expansion 
Advocate calls for 10,000-position Chicago casino.  Concerns were raised last week when an advocate of Illinois gaming expansion called for the General Assembly to look at building a new casino structure in Chicago that could contain as many as 4,000 to 10,000 gaming positions.    The controversial proposal pulls back on the number of potentially lucrative electronic games and slot machines to be allocated to other applicants, such as Illinois horse racetracks, and appears to be focused on expansion within the City of Chicago.

Significant casino revenue from the proposed Chicago casino would be paid directly to the cash-strapped city, with Mayor Rahm Emanuel asking Springfield for help to meet urgent pension and other budgetary challenges.  Wall Street debt-rating agencies have subjected the troubled city to a succession of fiduciary downgrades, with the bonds of Illinois’ largest city now rated at only three notches above “junk bond” level.  

Concerns have been raised about the challenge of overseeing honest operations over a casino located within Chicago and not fully responsible to State officials.  A 10,000-position casino could contain as much as eight times the number of playing machines and gaming space as a typical 1,200 position Illinois “riverboat” casino.

The expansion proposal could be amended onto SB 1739, which is being maintained as a vehicle bill for potential gambling expansion.

Taxes – Income Tax Surcharge
Proposal introduced in Illinois House to adopt an income tax surcharge.  HJRCA 51 (Madigan), unveiled on Thursday, would impose an additional income tax of 3.0 percent upon Illinois individual incomes of greater than $1.0 million.

Revenues from the income tax surcharge would be allocated to education aid.  Nothing in the proposal, however, would prevent the General Assembly from cutting its allocation of general revenue to school aid in an amount equal to or greater than the new revenues achieved through the proposed surcharge.  The proposal also does not contain any provision for reducing the “temporary” income tax currently being levied upon all Illinois individuals.

As with other constitutional amendments, HJRCA 51 requires a three-fifths majority vote of both houses to be placed on the Illinois ballot this November.  Once on the ballot, it would have to get “yes” votes from a majority of all of those voting in the election, or three-fifths of those voting on the question, to be ratified as part of the Illinois Constitution.

Transportation – Amtrak
Quinn administration picks German firm over Illinois-based Caterpillar as supplier of next-generation passenger locomotive engines.  The specialty diesel engines, which will be procured for installation on up to 35 locomotives to be assembled to pull passenger trains on the Chicago-St. Louis run and other routes, will be assembled by a consortium to be led by Munich, Germany-based Siemens AG.

On Monday, Peoria-based Caterpillar appealed the decision by the Illinois Department of Transportation (IDOT) to award the $226 million contract to Siemens and its Indiana-based consortium partner, Cummins Inc.  The Illinois diesel engine-maker stated that the procurement competition had been operated in such a way as to ensure that Siemens-Cummins would obtain the lucrative contract.

Transportation – RTA
Panel renews call for northeastern Illinois mass transit service boards, including the CTA, Metra and Pace, to be consolidated into Regional Transit Authority (RTA).  With major complaints mounting in the winter of 2013-14 over the on-time performance record of the service boards, including persistent train delays notched by Metra, advocacy efforts are renewing to consolidate the current system, generate possible administrative savings, and create an entity with a single public face that can be held responsible for future concerns.

Although State of Illinois taxpayers fund much of the RTA and its service boards – fares cover less than half of the total operating expenses needed to maintain Chicago-area bus and train operations – the State has, by statute, little control over these operations.  The RTA and its service boards are governed by a complex, interlocking systems of appointed board members and legal tasks and responsibilities.

The 15-member Public Transit Task Force reported on Monday that the current complex governance structure of northeastern Illinois public transit has become obsolete and has created opportunities for public officials to extract rents from niches within the system.  RTA and its service boards comprise four separate boards of directors with 47 directors.  The Task Force, headed by longtime Chicago advocate George Ranney Jr., pointed to the Metropolitan Transportation Agency (MTA) of greater New York City.  The MTA operates tunnels, toll bridges, buses, subway service, and commuter railroad service in twelve counties of southern New York, and its train lines tie New York City with two adjacent, MTA-affiliated counties in Connecticut.