Week in Review for 1/26/15 - 1/30/15

Governor Bruce Rauner – State of the State address preparations
Governor’s message: Turnaround necessary.  Preparations continue for the State of the State address to be delivered by Governor Bruce Rauner to the General Assembly on Wednesday, February 4.  The Governor and his executive staff have published an advocacy platform, “The Illinois Turnaround,” that sets forth the broad goals he will be looking for in State policymaking.  Gov. Rauner has fleshed out the points made in this package in a series of speeches delivered in key Illinois cities.

Posted directly to the Internet for readers of crowdsourced news platform Buzzfeed on Thursday, the “Illinois Turnaround” platform aims to “return Illinois to a place people want to live, work, invest, and flourish.”  Quoting data from the U.S. Census Bureau showing major net out-migration from Illinois, the platform calls for making significant improvements to Illinois’ lawsuit climate, job-creation environment, property taxes, and the burdens of unfunded mandates on businesses and local governments.

“The Illinois Turnaround” points out that neighboring states, such as Indiana and Wisconsin, have not experienced comparable 10-year patterns of net job loss and outmigration.  These are states that, unlike Illinois, have maintained or re-created an enterprise-oriented growth climate.  They have successfully pushed to re-create themselves as homes for job creation and young families.

Governor Rauner and his executive staff are signaling that they are looking for choke points in the Illinois economy in which specific interest groups are extracting costs from productive citizens and not providing adequate recompense.  Charts published in “The Illinois Turnaround” make clear that the Governor is looking for major improvements in public-sector productivity.  The themes set forth in “The Illinois Turnaround” are likely to play a role in the points made in next week’s Springfield address.  

Governor Bruce Rauner – State departments  
Five department heads appointed.  The turnaround-oriented governor announced his appointment of five new heads of State departments on Friday, January 23.  The departments are Central Management Services, Financial and Professional Regulation, Human Rights, Labor, and State Police.   Interim directors will remain in their day-to-day supervisory positions pending confirmation of these new appointments by the Illinois Senate.

The new head of the Department of Financial and Professional Regulation (DFPR), lawyer Bryan Schneider, is a veteran of Illinois House Republican staff service.  After serving as the House Republicans’ general counsel, Schneider moved to the private sector as an executive-level practitioner for Deerfield-based Walgreens.  Schneider has also served as Chairman of the State Board of Elections.  Dually trained to practice law and accountancy, Schneider will head a key agency that oversees the professional licensing of qualified Illinois professionals.    

Economic Growth – CGFA survey
CGFA, Moody’s Analytics issue mixed judgment on Illinois economy.  The “State of Illinois Economic Forecast: January 2015” was written by the consultancy firm of Moody’s Analytics under contract with the General Assembly’s Commission on Government Forecasting and Accountability (CGFA).   In keeping with its name, CGFA looks to cooperate with the private sector to forecast the future economic trends of Illinois.  Information gathered in this manner is essential to forecast future tax revenues and budget needs, and to enable the State to move towards meeting its constitutional responsibility of a balanced budget.

The material gathered for the “Forecast” was valid as of the start of this calendar year.  The trends described in this report, however, are long-term trends that are not expected to lose their validity.  While the Prairie State continues to lag behind the economies of many neighboring states, the consultancy firm uncovered economic sectors and geographic areas with continuing and growing strength.  In many cases, the areas identified by Moody’s will already be familiar to Illinoisans.

Economic sectors showing strength in Illinois include Internet technology, financial services, wireless communications, and air transport.  Strong geographic areas center on Chicago’s downtown and North Side, with the River North area continuing a rapid growth trajectory that began in the 1990s.  Moody’s also points out continued strength in Lake County.  In both cases, activity in specific recovery sectors is being spurred by highly targeted financial lending operations.  Many lenders are reluctant to engage in the non-targeted lending patterns characteristic of the pre-2008 period.  Lending and economic growth is being targeted to sectors and geographic areas that are seen as being characterized by talent, access to customers and capital, and transportation resources.

The Moody’s survey offers mixed encouragement to many other geographic area and economic sectors of Illinois.  Larger cities in Downstate Illinois with a traditional economic profile oriented towards manufacturing, such as Decatur, Peoria, and the Quad Cities, are not benefitted by a targeting pattern of this type.  The Moody’s consultants continue to point out several key negative factors that affect Illinois’ standing as a place to create jobs, including a structural budget deficit, a continuing legal challenge to pension reform, a demographic profile oriented towards aging residents with significant health care needs, and ongoing momentum towards lower gains in average Illinois household income.

Unemployment – 6.2% jobless rate
Jobless rate drops to 6.2%; Department of Employment Security (DES) monitors situation.  The U.S. Bureau of Labor Statistics reports that the civilian unemployment rate ticked down by 0.2% in December 2014, from 6.4% to 6.2%. The comparable rate twelve months ago, in December 2013, was 8.9%.  While progress from month to month has been slow, the overall 12-month drop of 2.7% in this key economic statistic signals more favorable economic conditions in much of Illinois, particularly the greater Chicago area.  A report published on Thursday, January 29 shows the job picture was especially good in Champaign-Urbana, Danville, and Lake County.  The numbers represented substantial improvements from Illinois’ jobless peak, 11.4% in January 2010.

Illinois has not yet fully recovered from the economic downturn that began in 2008.  The jobless number in December 2007 was 5.5%, with less than 368,000 civilians unemployed in Illinois.  At no time since 2008 have there been less than 400,000 jobless Illinois residents searching for a paycheck.  In addition, the total labor force and raw headcount of employed Illinoisans have fallen and not yet recovered.  In December 2007, after seasonal adjustment, more than 6.35 million Illinois residents were working and collecting a paycheck.  In December 2015, after eight years of technological advancement, Illinois’ ranks of employed people had dropped to 6,141,882, a net loss of more than 200,000 paychecks over the eight-year period.

Illinois unemployment and jobless-aid benefits are overseen by the Department of Employment Security (IDES). Newly-appointed Director Jeff Mays and his team operate Illinois JobLink, the recently-installed automated system to match Illinois job-seekers with positions wanted.  The translation of DES’s job-matching capabilities to an automated platform is one of the factors that has enabled the Department to reduce its operating budget by 26 percent over a four-year period from FY12 to FY15.

Illinois House
House organizes itself for 2015-16 work, adopts rules.  The 118 members of the Illinois House have to follow the Rules of the House as their procedural code when working for their constituents in Springfield. New Rules for the 99th General Assembly were adopted on Wednesday, January 28 as House Resolution 63 (HR 63).  These rules will be in effect until the current House’s term expires in January 2017.

The Rules contain significant provisions that speak to the fate of many of the thousands of bills introduced in the new General Assembly.  The Rules are traditionally written by the Speaker of the House, the leadership team of the majority party, and the Speaker’s top staff aides.   Key provisions in the new Rules include a lineup of the “standing” committees of the House.  Each bill has to go through a committee before being heard on the House floor.  New committees for 2015-16 include panels on Community College Access and Affordability, Education/School Curriculum, Education/Charter School Policy, Education/Licensing Oversight, Judiciary/Criminal Law, and Juvenile Justice/System-Involved Youth.

In addition to the 48 committees created by these Rules, the House may set up Special Committees at any time to deal with new issues of urgent importance.  In addition, from time to time the Illinois House and the Illinois Senate may set up Joint Committees.    

The vote on the new rules was 70-44-0, with House Republicans voting “no.”  House Republicans presented an alternative rules code, HR 73, which contained many provisions better suited to protecting the public interest.  In particular, the HR 73 rules would have discouraged the Springfield custom of “midnight budgeting.”  The Republican House rules code, if it had been adopted, would have required that all Illinois bills that spend taxpayers’ money be posted and published for a significant period of time for public discussion and debate before being enacted into law.  The majority party did not choose to allow HR 73 to be considered by the full House.    

College of DuPage
Representative Jeanne Ives leads citizen inquiry into college management.   The Glen Ellyn-based College of DuPage is a community college that serves a significant portion of the Chicago suburbs, including areas outside DuPage in Cook County and Will County.  Like other community colleges, the College of DuPage charges property taxes to homeowners and other property owners in its jurisdictional area.

Local taxpayers, led by State Representative Jeanne Ives, have asked questions for a significant period of time about the governance of the public college, which is governed by an elected board of trustees and has been led by President Robert L. Breuder.  These concerns appear to be shared by one member of the elected board; six members of the board majority (who do not appear to share this attitude) have repeatedly responded to these questions by going into executive session.  As a lawmaker, Ives has taken the lead in working with her taxpayer-neighbors to advise the board that their right to go into secret sessions is strictly limited by State statute.  Accusations have been made that Breuder has mismanaged the College.  Recently-built assets of the College include a six-room boutique hotel and two gourmet restaurants, presented in planning documents as a “Culinary and Hospitality Center”.

Substantial press coverage indicates that the Board majority’s actions and secrecy have compounded the damage to public trust uncovered by these questions.  Breuder’s annual salary is $292,739, and the total annual value of his compensation package is $469,365.  These levels, voted for Breuder by a majority of the community college Board, are the highest compensation levels enjoyed by any Illinois community college president. In response to criticisms led by Ives and other community leaders, the Board recently decided, in secret session, to buy out the President’s contract.  Breuder has been offered a taxpayer-financed buyout payment of more than $750,000.

On Wednesday, January 28, Rep. Ives introduced House Resolution 55, which calls on the Illinois Auditor General to audit all state funds which were provided to College of DuPage in the last four years. The resolution cites the “payment of College of DuPage funds to a company owned by an employee and the seeking of state funds for a project that had yet to be identified,” as being among the taxpayer concerns that justify such an audit. The bipartisan resolution has 54 co-sponsors. It was referred to the House Rules Committee.

In an editorial published on Thursday, January 29, the Chicago Tribune quoted Ives as a leader of her community’s taxpayer watchdogs.  The editorial called for six members of the community college Board, all supporters of the controversial buyout deal and secret Board sessions, to resign.  

DCFS scandal
U.S. Department of Justice to look into Illinois juvenile residential treatment centers.  An investigative report, published in December 2014, by the Chicago Tribune detailed numerous problems at state-monitored facilities for Illinois juveniles assigned to supervision.  Persons in this category include wards of the state.  In some cases, challenged youths are assigned by juvenile courts to live in residential treatment centers.  These centers, overseen by Illinois’ Department of Children and Family Services (DCFS), are supposed to provide their residents with intensive supervision and behavioral modification.  However, the “Tribune’s” reporters uncovered numerous stories of assaults, property crimes, drug-related crimes, and sex crimes associated with these centers and their residents.  A series of stories painted a vivid picture of residential treatment center juveniles being victimized, and victimizing others.  One troubled residential center for female residents, Rock River Academy in Rockford, was reported on Thursday, January 29, to be shutting down.

Reports indicate that the U.S. Department of Justice could be stepping in.  The assignment of a federal team of investigators, and possible prosecutors, could indicate that this scandal has moved to a new level.  One outcome could be pressure from the federal government upon DCFS to modify its supervision of Illinois residential treatment centers.  This could include pressure upon DCFS to sign a legal agreement to increase its supervisory intensity, including an increased allocation of Illinois’ taxpayer funds to this budget area.  The Tribune’s article, published Friday, January 23, has been posted here.

Energy – fracking
Low global prices for crude oil could delay fracking boom in southern Illinois.  Consultants that specialize in challenges facing the energy industry believe that with prices fluctuating around $50/barrel, current market conditions may not justify making major investments in the drilling of Illinois shale for crude oil at this time.  Crude-rich shale has been the focus of U.S. shale drilling efforts throughout the 2010s, including the subset of shale drilling known as “fracking.”  A fracking team, by injecting large quantities of high-pressure water, specialty sand, and chemicals deep underground, is able to force tightly-knit particles of sedimentary shale apart and enable the pumping of fossil fuel.

After a lengthy discussion and debate, the State of Illinois adopted administrative rules in December 2014 enabling the legal issuance of drilling permits by Illinois’ Department of Natural Resources (DNR) to fracking teams.  However, the time when these permits became available for issuance coincided with a historic drop in the global price of crude oil.  U.S. states that adopted fracking rules far quicker than Illinois are now producing millions of barrels of annual crude oil production.  States in this category include North Dakota and Texas.  Critics say that Illinois may have “missed out” on the fracking boom, at least for now.

Gambling – video games
Growth trend in Illinois video games continues.  The Illinois Gaming Board reported on Wednesday, January 28 that tax revenues from video games increased by 120% in calendar year 2014, from $75 million in 2013 (the first full year of video gaming) to $165 million in 2014.  The 12-month period was marked by rapid growth in the number of licensed locations cleared to serve as hosts for gaming machines.  A licensed location may host up to five gaming machines owned and operated by a licensed circuit operator.

By December 2014, circuit operators had placed more than 19,000 video gaming machines throughout Illinois.  The machines are located in taverns, restaurants, motor fuel pumping stations, veterans’ posts, fraternal meeting halls, and other places of adult social gathering.  In addition to state tax revenue, the machines remitted $33 million in tax revenues to municipalities that have not “opted out” from the state’s video gaming law.   Approximately 175 municipalities and cities throughout Illinois, headed by Chicago, have not yet approved the placement of video games within municipal limits.

The winnings and tax revenues reaped from these video gaming machines are derived from a gross of $2.4 billion, which is the total amount of money wagered in Illinois video-game machine play in calendar year 2014.  About 75 cents of every dollar, $1.8 billion in all, was paid out in winnings to players.  The remainder is taxed twice, at rates of 25% and 5%, with 25% paid to the state and 5% paid separately to municipalities.  The state’s tax revenues from video gaming are earmarked to cover the cost of current infrastructure improvements throughout Illinois.   The Associated Press and its partner, the Northwest Herald, have the story.

Measles – first Illinois case
The first case of 2015 measles was reported in Illinois this week.  An unnamed adult resident of the Arlington Heights-Palatine area has been diagnosed with the contagious viral illness.  Public health officials told the Chicago Tribune the case was not likely to be connected with an outbreak of measles in California earlier in January 2015.  The California outbreak was connected to a mass exposure at Disneyland.

The Cook County Department of Public Health and the Illinois Department of Public Health (IDPH), which have responsibility for the confirmed case of infection represented by this report, urged possible patients not to take steps that could expose health providers and other Illinois residents to the disease.  Persons with symptoms resembling measles and who have not been vaccinated for the viral illness are urged not to go to an emergency room, rapid-treatment clinic, or doctor’s office.  They should communicate with their health care provider by telephone or Internet.

Republican lawmaker calls for banning convicted terrorists from Illinois classrooms.  The push comes in House Bill 150, for which Representative Charles Meier is the lead sponsor.  Co-sponsors include Reps. Adam Brown and Bill Mitchell.  HB 150, if enacted into law, will ban universities and community colleges from knowingly employing a person who has been convicted of committing or attempting to commit terrorism.  Under Illinois law, terrorism is defined as a wide variety of acts carried out to destroy or damage vital elements of public infrastructure such as computer networks, communications systems, food supplies, water supplies, and fuel and energy supplies.

HB 150 was introduced after the rehiring of a former member of the Symbionese Liberation Army as an instructor at the University of Illinois (Champaign-Urbana) in 2014. James Kilgore was convicted of second-degree murder after his participation in a 1975 bank robbery in Carmichael, California.

“Mr. Cub” remembered
Widespread memories of Hall of Famer Ernie Banks.   The shortstop and first baseman hit 512 home runs for the Chicago Cubs.  Playing from 1953 until 1971, Banks was named to fourteen All-Star Game lineups.  In 1958, he was the National League home run champion, the National League RBI champion, and the National League MVP.  He repeated these RBI and MVP honors in 1959 and, in 1960 as a shortstop, he won a Gold Glove Award.

After his retirement in 1972, Ernie Banks was elected to the Hall of Fame in 1977, his first year of eligibility.  He was selected on 321 of the 383 ballots cast by the Baseball Writers’ Association of America.  His jersey number “14” was retired in 1982, and a statue of him in his batters’ stance was unveiled at Wrigley Field in 2008.  He was awarded the Presidential Medal of Freedom in 2013.

Upon his death on Friday, January 23, Ernie Banks was 83.  A U.S. serviceman during the Korean War years, he was also one of the final living veterans of Negro League Baseball.  As the first African-American to be signed by the Cubs, he became the face of the franchise for more than half a century.  Obituary tributes to “Mr. Cub” on Saturday, January 24, were led by President Barack Obama, Mayor Rahm Emanuel, and Cubs President Tom Ricketts.              

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