Week in Review for 3/7/16 - 3/11/16

Budget – House in Recess; Republicans Protest
House Democrats take month-long vacation while budget impasse continues; Republicans file letter of protest. Illinois has moved well into its ninth month without a budget plan to control state spending. More than $7 billion in unpaid bills have piled up, but the Democrat-controlled Illinois House this week completed the first of what are expected to be four weeks of spring recess. House Republicans have rejected the recess motion made by the majority party and have lodged a demand that the lawmakers stay in Springfield to continue negotiations on a budget compromise.

“It’s egregious that the House would take a one-month break in the middle of the heart of our regularly scheduled session, especially when there’s so much work that’s unresolved,” asserted Rep. Tom Demmer. On the final session day before the recess (March 3), Demmer lodged a motion on the Illinois House floor for the lawmaking body to remain in session. However, the House Democrat majority presiding officer ruled the motion out of order without a floor vote, and the members of the House Democrat caucus headed for the parking lot. House Republicans continue to protest the refusal of the majority party members to do their jobs and help solve Illinois’ budget crisis, and have filed an official Dissent and Protest of the ruling of the chair for placement in the House Journal.

The Illinois House is expected to resume session on Monday, April 4. House Republicans continue to be willing to work in a bipartisan manner to reach a solution to the current budget impasse and fiscal crisis.

Budget – Comptroller Report
Comptroller Leslie Munger continues to report on budget situation. As the State enters its ninth month without a budget to control cash flows and spending, Comptroller Munger reports rapid piling-up of bills in spending categories (such as Medicaid) controlled by court orders and consent decrees. Other areas of essential state spending, such as money for state universities, human services programs, and student-oriented Monetary Award Program (MAP) grants, are going without. Munger’s “The Ledger”, posted online, currently tracks more than $7.5 billion in unpaid state bills.

As Illinois’ total of unpaid bills passes $7 billion, Comptroller Munger has suggested what she considers to be essential elements to be considered by the General Assembly to prevent crises like these from recurring in the near future. Her multi-step package proposal includes having the State consider moving itself from an annual budget cycle to a two-year budget cycle; creating an “overspending alert system” for spending lines (including spending lines controlled by court orders and consent decrees) in which spending is exceeding budgeted amounts, and taking action to control the number of specialty funds that form subsets of State coffers, such as the Lobbyist Registration Administration Fund. Illinois currently has approximately 500 specialty funds despite its near-insolvent financial condition.

Downstate – Federal Flood Assistance
FEMA denies Illinois’ request for federal assistance for December floods. The State of Illinois was notified Thursday that its request for federal assistance to help people, businesses and local governments in several Illinois counties recover from flooding has been denied. In a letter notifying the State of the denial, FEMA Administrator W. Craig Fugate said the damage from the floods and severe storms “was not of such severity and magnitude as to be beyond the capabilities of the State, affected local governments, and voluntary agencies.”

On Feb. 26 the State submitted a request for two types of federal assistance: Individual Assistance to help people and businesses recover and Public Assistance to provide reimbursement to local governments for some of their disaster-related expenses. Both forms of federal assistance were denied.

“This is yet another example of how the federal government’s population-based threshold for determining assistance works against states with large metropolitan areas,” said James K. Joseph, director of the Illinois Emergency Management Agency. “We will be reaching out to our emergency management partners in the affected counties to see if there is any additional information that would support an appeal of the denial of either type of assistance.”

Counties included in the State’s request for federal assistance for people and businesses were Alexander, Christian, Clinton, Douglas, Iroquois, Jersey, Madison, Randolph, Sangamon and St. Clair. Counties included in the state’s request for federal assistance for local governments were Alexander, Bureau, Calhoun, Cass, Cumberland, Jackson, Jersey, Madison, Menard, Monroe, Morgan, Moultrie, Pike, Randolph, St. Clair and Vermilion.

Drugs – “Bath Salts”
Rep. Bourne joins local law enforcement to tackle synthetic drug epidemic. Representative Avery Bourne has introduced HB 6112 which aims to strengthen and broaden the current ban on synthetic drugs in Illinois. These synthetic drugs, classified as cathinones, more commonly known as “bath salts,” are highly intoxicating and unpredictable in their effects. They were also technically legal until 2011.

In 2011, in response to the increased synthetic drug epidemic nationwide, Rep. Wayne Rosenthal passed HB 2089, which placed a ban on certain ingredients in cathinones and provided law enforcement some leverage to crack down on this epidemic. The dynamic nature of these synthetic drugs allows manufacturers to slightly change the chemical ingredients to get around the current ban.

“This issue was brought to my attention by local law enforcement who explained the need for a broader, more inclusive ban on these dangerous substances. This bi-partisan, common sense legislation will allow law enforcement the necessary tools to make our communities safer. This bill broadens the banned substances and also heightens the felony charge. In addition to HB 6112, I am also proud to co-sponsor HB 3660 which allows banned substances to be added by administrative rule as the synthetic drug manufacturers adapt,” explained Bourne.

HB 6112 has been introduced in the Illinois House and has gained bi-partisan support. It has not yet been assigned for a committee hearing.

Economy – Illinois Unemployment Rate Hits 6.3%
Sharp increase in jobless numbers for January 2016. The monthly report by the Department of Employment Security showed that the basic unemployment rate in Illinois has continued to grow and was at 6.3% in January. This marked an increase of 0.2% over the revised December number of 6.1%, a jump of 0.4% over the originally-reported December level of 5.9%, and an increase of 0.6% over the November index of 5.7%. Furthermore, the basic unemployment figure reported by the State of Illinois does not include supplemental numbers that cover involuntary underemployment or people who have dropped out of the labor force.

The current January 2016 numbers show that at the start of this calendar year, Illinois’ basic unemployment rate was 140 basis points higher than the national unemployment rate of 4.9%. The fall of the national unemployment rate below the benchmark level of 5.0% indicates substantial recovery in other states from the severe economic downturn of 2008-09, but based on this index many Illinois communities continue to experience recession-like job conditions.

While manufacturing continues to be a particular weak spot in the Illinois economy (total Illinois manufacturing payroll jobs reported in January 2016 were 6,300 fewer than 12 months earlier), the most recent monthly figures appear to indicate that the current budget crisis could also be having an effect on the overall Illinois economy. On a month-to-month basis, jobs in the Illinois public sector and government dropped 2,600 from December 2015 to January 2016, signaling a serious 30-day trend. In addition, layoffs are taking place in various fields that contract with the State of Illinois to provide a variety of programmatic services, such as non-medically-oriented activity care for senior citizens. The Illinois payroll numbers for what IDES classifies as “Other Services” dropped 2,100 positions over the same 30-day period.

The overall Illinois payroll increased slightly in January 2016 over December, with a net overall increase of 1,500 positions. Job growth was concentrated in the trade, transportation, utilities, educational, and health services sectors. Secondary and tertiary private-sector service areas are expected to continue to generate a wide margin of the new jobs created in Illinois in future months. Despite the slight increase in new jobs created, the base unemployment rate also increased due to the re-entry of some Illinois workers into the labor market.

Economy – Illinois Layoffs
More than 1,600 layoffs included in monthly WARN filing. Many pending layoffs must be reported to the State of Illinois under the Illinois Worker Adjustment and Retraining Notification (WARN) Act, a State law that mandates most employers with 75 or more employees to provide 60-day advance notifications of plant closings and other mass-layoff events.

Layoffs reported to the State in February under the Illinois WARN Act include 203 public-sector positions to be eliminated in Kewanee, in west central Illinois, as a result of the projected shutdown of the Illinois Youth Center detention facility located there. In the private sector, the Ryder logistics center in Rochelle will let 200 workers go on April 30. A total of 172 separations are expected from Computer Systems Institute, a for-profit network of classroom offices that offer career skill-building and English-as-a-second-language instruction and tutoring. Tyson Foods will begin shutting down its Chicago plant on South Ashland Avenue on April 1, leading to the layoff of 170 workers on or soon after April 1. The staged shutdown of the entire South Ashland plant, which makes prepared meals for the hospitality industry, will lead to the cumulative loss of 480 positions.

State Government – Children’s Cabinet
Governor’s Cabinet on Children and Youth convenes for first time. The 19-member panel, created in mid-February by Executive Order 1603, met for the first time in Springfield on Thursday, March 10. Chaired by the Governor, the Cabinet-level panel began looking at and examining ways to change the policy-making structure of Illinois. The Children’s Cabinet brings departmental directors together with key officeholders within the Executive Office of the Governor such as Tim Nuding, Director of the Governor’s Office of Management and Budget. Eighteen states now have youth-oriented gubernatorial cabinet panels.

One of the underlying reasons given by Governor Rauner for creating the panel was that when he came into office at the beginning of 2015, he found that Illinois policymakers had concentrated on short-term problems for an extended period of time. Partly as a result of this crisis-based perspective, these policymakers had created a series of Springfield policy problems that have become almost unmanageable. It is believed that by refocusing Illinois state policymaking toward a long-term perspective, and enforcing this perspective at the highest levels, the Rauner administration and its allies in the General Assembly can begin to show that Illinois can be turned around.

Taxes – Property Taxes
Survey indicates Illinois has 2nd highest property taxes among 50 states. The survey, by consumer finance website WalletHub, indicates that Illinois owners of residential property must pay 2.25% of the annual value of their home in property taxes. New Jersey homeowners must pay 2.29%, and homeowners in 48 other states get to pay a lower percentage of their home’s market value in property taxes. WalletHub’s overall chart shows Illinois to the 51st and worst state in the Union (counting the District of Columbia) to be a taxpayer. Property tax rates make up only part of this Illinois burden.

Illinois’ property tax rate is an added burden for Illinois residents that stands in addition to near-record sales tax rates charged in many Illinois municipalities. The blended sales tax rate charged in cities such as Chicago is significantly higher than the rate charged in many other urban locations within the U.S. Illinois’ “home rule” law grants significant powers to many larger Illinois local governments to raise taxes and fees of all sorts. Illinois school districts are also granted broad powers to levy property taxes on homeowners and other property owners. The Illinois General Assembly has, in turn, used this latitude as a rationale for enacting a wide variety of laws that impose costly and even budget-busting mandates upon Illinois school districts and units of local government.

Veterans have greater access to special courts under Winger proposal. A bill sponsored by State Representative Christine Winger to increase the number of Veterans Courts in Illinois cleared its first hurdle. House Bill 5003 passed out of committee unanimously on March 1.

Veterans Courts focus directly on the needs of former and current members of the armed forces. Currently, there are 12 Veteran Court programs in Illinois. All are limited to veterans with non-violent records who are struggling with substance abuse or mental health issues. Veterans who qualify and successfully comply with court orders get the treatment they need and can have charges dismissed. As of 2014, problem-solving courts including Veteran Treatment Courts kept 1,200 offenders out of prison, saving the state of Illinois nearly $20 million.

Winger’s bill requires the Chief Judge of each judicial circuit to establish a Veterans and Servicemembers Court program. The legislation specifies that the Chief Judge of each circuit has the discretion to decide the format of the program, whether it’s a separate court or a problem solving court, including but not limited to a drug court or mental health court.

“Men and women who have bravely served our country deserve a chance to get their lives back together,” explained Winger. “Many are in their current situation because they were suffering from the effects of their military service.”

Spring in Illinois
As 2016 planting season approaches, McLean County wins 2015 harvest crown. Figures from the Illinois Farm Bureau indicate that among the farmers of Illinois’ 102 counties, growers in McLean County achieved the highest average harvests of corn and soybean harvests per acre last year. Statistics indicate that, in relation to acres planted, yields in the Central Illinois county averaged 199.2 bushels of corn per acre and 64.6 bushels of soybeans per acre.

McLean County, which centers on the twin cities of Bloomington-Normal, is located in the historic “Grande Prairie” section of Illinois. Characterized by intimidating tallgrass when settlers first arrived, the treeless Grande Prairie was the last section of Illinois to be settled. Not until the invention of steel plowshares and other sod-breaking implements, by pioneer blacksmiths such as John Deere, could early farmers break the prairie turf for planting to cash crops. When pioneer growers did so, they found exceptionally fertile soil conditions on the Grande Prairie. The fertility of much of this acreage has been maintained by conscientious family farmers up to the present day.

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