Week in Review for 7/21/14 -7/25/14

Capital – Transportation Bills 
Capital bills become law: $1.1 billion to be spent on transportation projects. The 2014 capital plan centers on $1.0 billion for shovel-ready Illinois Department of Transportation projects, primarily road resurfacing and bridge renewal and repair. $100 million is included for grants to local governments for local capital projects; it is expected that these will also mostly be transportation projects, although the definition of road and street work on the local level also includes other infrastructure repairs such as the rebuilding of local sidewalks and curbs.

The bills that enacted this calendar-year 2014, fiscal year 2015 (FY15) package were HB 3794 and SB 3224. They were signed into law on Tuesday, July 22 as Public Act 98-0780 and Public Act 98-0781, respectively.

The monies set aside from these bills are expected to be spent on transportation infrastructure during the current fiscal year, and some may flow during the late summer of 2014 during the pre-frost construction season. The need for capital development initiatives are intensified by especially harsh winters and the additional funds needed to keep up with the State’s ongoing transportation maintenance needs.

The Department of Transportation has distributed a list of the road projects that will be covered by this 2014 capital program.

Chicago – Red Light Cameras
Investigation indicates up to 9,000 innocent drivers may have been tagged for $100 red-light violations. The city has promised to review what they admit are 9,000 questionable red-light tickets in light of a recent investigation that looked at more than 4 million recorded camera clicks and showed “spikes” in the numbers of violations automatically tagged and recorded. These unusual “spikes” created a suspicion that some of the alleged violations that occurred during this period that were tagged and adjudicated may have not have occurred.

This, in turn, means that some of the many drivers who were sent red-light-camera tickets after their vehicles passed through an intersection during a “spike” period could be innocent. A “Chicago Tribune” story on the red-light-camera violation spike review can be found here: The story was published on Wednesday, July 23.

Debt Rating
Standard & Poor’s threatens further downgrade to State’s general obligation debt rating. In recent years, the State of Illinois’s debt rating has edged closer to the sub-BBB levels commonly known as ”junk bond” territory. S&P currently ranks Illinois’ G.O. debt as “A-“, the lowest level currently experienced by any of the 50 states, but has taken steps to add a “negative outlook” to this rating in the light of the Governor’s signature of an unbalanced budget for fiscal year 2015 (begun on July 1, 2015). In addition, the State Comptroller reports that Illinois is currently sitting on an estimated $4.6 billion in unpaid bills (see “State Budget” section).

Reductions in the State’s debt rating by New York City’s S&P and its competitors, Fitch Ratings and Moody’s, hurt Illinois and its taxpayers by requiring the State to pay higher interest rates on the monies it borrows for operating purposes. These higher rates may be stretched out against taxpayers for 20 or more years, during the lives of the loans on which interest is being charged. A news alert from “Crain’s Chicago Business,” distributed on Wednesday, July 23, summarizes the story.

Economy - Jobs
Illinois continues to lag in net new job creation. During the slow recovery from the nationwide economic downtown, American job creators – primarily in the private sector – have created a net of 7.8 million new jobs. These are jobs created since the worst point of the downturn in June 2009, when the recovery began. However, only 170,000 of these jobs have been crated in Illinois, a percentage number that is 41st among the 50 states and sharply inferior to job creation numbers in other ‘Top 10’ states such as Florida (580,000 new jobs), Michigan (300,000 new jobs) and Texas (1,270,000 new jobs).

The 2009-13 job creation period coincides with the period during which time Illinoisans have had to pay individual income taxes at a rate of 5.0%. These tax rates were enacted in January 2009 by SB 2505. The U.S. Department of Labor report, released on Friday, July 18, can be found here.

Education – School Safety
General Assembly encourages school polling places to declare a pupils’ day off on election days. Responding to concerns raised by parents, the new law encourages school districts to close facilities on days when ballots are being cast, or to select that day as one of the teachers’ institute days created by many school-teacher contracts. The measure is aimed at preventing students from sharing space with voters who do not otherwise comply with the security requirements for entry into the school building.

Some school systems have worked with their local election districts to transfer polling places to other public locations. In election districts where voters continue to vote in schools, many school districts and individual schools have already taken steps to ensure the safety of pupils on Election Day. Security steps adopted by many schools include setting aside a separate entrance for the use of voters, and locking doors to create physical separation between the assembly hall used as the place of election and the remainder of the school.

The new law was approved by the House as HB 3199. It was signed into law on Friday, July 18, as Public Act 98-773.

Guns – Concealed Carry 
Attorney General asks courts to allow review board to revisit CCL cases. The concealed carry license (CCL) law requires Illinois residents to go through an application process in order to exercise their right to a license to carry a concealed handgun (CCL). As defined by State law, this right is not absolute; the license can be denied by a review panel within the office of the Illinois State Police at the request of local police with jurisdiction over the address of the CCL applicant, if local law enforcement believes the applicant presents a danger to himself, others, or to public safety.

More than 200 Illinois CCL applicants have not achieved licensure and have commenced litigation against the current application process. On Tuesday, July 22, the office of the state Attorney General announced that Illinois’ highest-ranking law enforcement officer would ask Illinois courts to allow these cases to be revisited by the Illinois Concealed Carry Licensing Review Board.

The State Police earlier in July, on their own initiative, took steps to grant administrative-law due-process rights to CCL applicants. A State Police summary of the concealed application process can be found here. However, many gun advocates believe that this application process, even with these modifications, fails to fully enable Illinois residents to enjoy what they see as their absolute constitutional right to carry a concealed weapon.

Human Services – Murray Developmental Center
Judge’s decision, unless overturned on appeal, could lead to closure for Centralia institute. The State-operated residential care facility treats persons with developmental disabilities. 250 residents of the Centralia, Illinois-based Warren G. Murray Developmental Center could be required to move to group-care facilities should Murray close. Parents and family guardians of the patients have fought the threatened closure, pointing out that many Murray residents have been diagnosed with two or more separate conditions that render their lives especially challenging. The Murray Center has operated for more than 40 years in south-central Centralia, located in Downstate Illinois east of St. Louis.

Residential care facilities are operated by the Illinois Department of Human Services. The Pat Quinn administration has taken steps, including the 2013 closure of Jacksonville Developmental Center, to reduce the number of persons in State-operated residential care and to transfer remaining patients to group care. DHS has been reducing patient headcounts and employee rolls at the facility since April 2013, but advocates assert that the remaining residents could suffer irreparable harm from being transferred. After hearing closing arguments in January, a federal court in Chicago considered the case for six months and issued a decision in favor of the administration on Tuesday, July 22. The case could be appealed to federal appellate court.

Local Government
Representative Tom Demmer wins county fiscal transparency. After approximately $53 million disappeared from Dixon, Ill. coffers, local residents demanded that the Illinois General Assembly take action to prevent a repeat episode. After a series of criminal acts that began to be discovered in April 2012, investigators discovered the small city’s comptroller had stolen the money. About three-quarters of the loss was later made up in a settlement from the city’s auditors and bankers, who admitted no guilt but paid a settlement based upon assertions by the city that they should have uncovered the illegal cash flow.

Local lawmaker Tom Demmer, who carefully studied this episode and its aftermath, concluded that one problem was insufficient intercommunications between Illinois local governments and their auditors. HB 5503 (Demmer/Connelley) will change this paradigm with respect to counties. It will mandate auditors to take active steps to report on their audit findings to Illinois county governments under conditions that will allow (and encourage) the members of the county board to ask questions about the audit. The bill was signed into law as Public Act 98-738 on Wednesday, July 16.

Medical Cannabis 
New law adds juveniles with neurological challenges to list of cannabis patients. The new Compassionate Use of Medical Cannabis Pilot Program Act (P.A. 98-122) authorizes a limited number of patients, those who have been diagnosed with a controlled and defined list of health conditions, to use medical cannabis in treating the condition. Possession of a card will admit a patient, or his or her caregiver, to a dispensary to purchase limited quantities of cannabis and cannabis products for therapeutic consumption. No patient will be allowed to submit a valid application for a card until they have received a recommendation from a health care provider with whom they already have an established relationship.

The original 2013 Act, which is in the process of being implemented, only allowed patients over age 18 to get the cards. Parents of children with significant, treatment-resistant epilepsy asked that their family members also be included in the patient eligibility list. The General Assembly this spring enacted a bill that adds seizures, including (but not limited to) those characteristic of epilepsy to the list of conditions that serve as eligibility criteria for an application for a medical cannabis patient card, and allows minors under the age of 18 and suffer from seizures to participate in the program. Juvenile patients in this category will be allowed to consume medical cannabis infused products; their cards will not authorize the purchase of cannabis for smoking. The bill, SB 2636, was signed into law as Public Act 98-775. House Republican Leader Jim Durkin and Representative David Leitch were senior co-sponsors of the measure.

Progress on implementation of the underlying medical cannabis act continues. It is expected that license applications will start getting accepted early this fall, with sales to approved patients commencing in calendar year 2015.

O’Hare Airport
Chicago to install new O’Hare noise monitors in city, surrounding suburbs. On Tuesday, July 22, the City of Chicago announced efforts to acquire and install eight new permanent airport noise monitors in Chicago neighborhoods and suburban communities located near O'Hare International Airport. The evidence collected from the monitors will be used to determine whether a widened circle of property owners are eligible for subsidized soundproofing of their buildings due to noise caused by aircraft takeoffs and landings at the Midwest’s busiest airport. Specific locations of the eight additional noise monitors have not yet been selected. The project will be funded through approved airport funds and will not use local taxpayer dollars.

This development falls in line with recent efforts by Reps. Michael McAuliffe (R-Chicago) and Dennis Reboletti (R-Elmhurst) who earlier this year pushed for legislation that would require the State to conduct a new study of O’Hare airport noise in response to elevated complaints since new runways took effect last October.

Last week, Rep. McAuliffe began circulating a petition that asks the federal government to hold hearings so residents of communities surrounding the airport can express the true impact of how increased air traffic has diminished their quality of life and environment. The petition also requests a comprehensive noise and environmental impact study to collect and measure the impact of airport takeoff and landing noise at the airport. The petition concludes by calling for immediate noise relief for families through the swift expansion of existing sound insulation programs. Nothing in the petition attacks O’Hare Airport or the jobs that it creates for Illinois.

A “Chicago Tribune” story on the new monitors can be found here.

State Budget
Comptroller Topinka reports $2.4 billion in June 2014 unpaid bills; believes more debt lies hidden. In her monthly spreadsheet, “Monthly Money Matters”, released on Sunday, July 20, Comptroller Judy Barr Topinka reports that the State has not paid more than $2.4 billion in outstanding bills meant to be paid from State general funds. In addition to this red ink in her office, the Comptroller believes that another $2.2 billion in further outstanding bills are being sequestered in the offices of various State departments, and have not yet been transferred to the Comptroller’s office for eventual payment. If both categories of past-due debts are combined, the Comptroller believes the true picture facing the State and its taxpayers would be approximately $4.6 billion in red ink.

The past-due payments include more than $694 million designated for payment from the Common School Fund and the Education Assistance Fund. Most of these monies are due to Illinois local school districts, and the non-payments further affect these units of local education and their taxpayers.

Illinois has been slow-paying its bills since the start of the 2008 economic downturn, with past-due numbers well above $1 billion throughout this period despite a constitutional pledge that the State “balance its budget” (Illinois Constitution, Article VIII, subsection 2(b)).

Transportation – Road Salt
Road officials warn of pending shortage of road salt. While summer temperatures may make the winter of 2014-15 seem to be a long way off, officials responsible for procuring road salt to make next winter’s Illinois roads drivable need to be making their logistical arrangements now. They are finding spot shortages of salt, which combined with high prices for the salt that is offered for sale could create problems in early 2015.

The salt shortage applies not only to the de-icing supplies the State purchases on its own account, but to a program that Illinois has operated for many years in which the State uses its size as a purchaser to buy and resell (at cost) truckloads of salt to local county road departments and other units of local government. At least 600 units of local government cooperate with the State to ensure adequate annual supplies, and units that voluntarily refrain from participating in the program sometimes have to buy small salt shipments under spot market conditions for very high prices.

The nationwide harsh winter of 2013-14 is blamed for the supply situation. U.S. salt mines generally produce the same amounts of salt year after year, and inventory cushions were severely depleted this spring.

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