Week in Review for week ending 01/20/17

General Assembly – House Republican Leadership
New House Republican Leadership team takes on the serious challenges facing Illinois. Formation of a new House Republican Caucus leadership team was made necessary by the retirement of many members of the 99th General Assembly. House Republican Leader Jim Durkin worked with his colleagues to name members from both the Chicago metropolitan area and Downstate Illinois. The new leaders of the House Republican Leadership team, announced on Wednesday, January 17, are:
  • Deputy Leader Patti Bellock;
  • Deputy Leader Dan Brady;
  • Assistant Leader Norine Hammond;
  • Assistant Leader Chad Hays;
  • Assistant Leader Michael McAuliffe;
  • Assistant Leader Bill Mitchell;
  • Assistant Leader David Reis;
  • Assistant Leader Mike Unes; and 
  • Caucus Chair Tom Demmer.

Budget – Unpaid Bills
Unpaid bill total now well above $11 billion. The total of unpaid bills reported by the Office of the Comptroller is now greater than $11.3 billion. The unpaid-bill total includes bills that are in the Comptroller’s office waiting to be paid, and bills that are still in the various agencies of the State, such as the Department of Healthcare and Family Services, that the Comptroller knows about but which have not yet been forwarded for payment. These are past-due bills that represent services that providers have expended resources for, pursuant to State law, but for which they have not yet been paid.

The unpaid-bill situation reflects the lack of a balanced State budget and ongoing nationwide trends. The cost of medical care is growing faster than almost any other facet of the U.S. economy. Federal mandates require all of the states to provide medical care to low-income residents, and all of the states are facing this trend. Illinois, with unbalanced budgets that now date back well more than a decade, is especially vulnerable to these trends. This total of unpaid bills is increasing pressure upon the General Assembly to search seriously for permanent solutions to the budget crisis.

Chicago – Thompson Center
Republican leaders ask State to look into the sale and redevelopment of Chicago’s Thompson Center. The underutilized James R. Thompson Center has been used as a State of Illinois office building since 1985. The Center occupies space on LaSalle Street in downtown Chicago that real estate experts see as a prime opportunity for potential redevelopment; the current building takes up an entire city block, much of which is dedicated to a soaring but empty atrium.

Legislative Republican leaders, headed by House Republican Leader Jim Durkin and Senate Republican Leader Christine Radogno, have announced a plan to sell the site to benefit Illinois taxpayers and persons who are owed unpaid Illinois debts. Workers in the current 16-story Center could be transferred to other State office locations. The LaSalle Street site could be rebuilt as Class A private-sector office space, with a focus on the Chicago financial industry. In one conceptual drawing released as part of the plan, a 1,700-foot tower rises from the West Loop site. If the proposed tower is built, it would become the tallest building in the U.S. Midwest. The size of potential demand for Class A office space on the site reflects the healthy nature of the markets that could be solicited for rental opportunities.

The Thompson Center could be monetized by sale, lease, or public private partnership. Proponents say the site could generate net proceeds of $200 million. In addition, the demolition of the current building could forestall as much as $326 million in deferred maintenance costs piled up by the State during many years of minimal maintenance.

Economy – Crowdfunding
National group praises implementation of Illinois crowdfunding law. Crowdfunding is an alternative gathering place for equity capital to come together to float new business firms and create jobs. This week, the national online magazine Crowdfund Insider praised a new Illinois law that enables Illinois investors to use this new pathway. Crowdfunding can be a good way to raise funds for startup businesses that have both a high public profile and significant start-up capital needs. Examples include gyms and physical health centers, wineries and microbreweries, restaurants and eateries, brownfield remediators, and urban real estate redevelopers.

The Illinois crowdfunding law requires that both the investor and the business firm be domiciled in Illinois. The new Illinois crowdfunding law, HB 3429, was approved by the Illinois General Assembly in 2015. The bill, now P.A. 99-182, went into full effect in 2016.

Education – Lead in School Water
Governor Rauner signs new law requiring lead testing of many schools’ water supplies. The General Assembly last week passed a new law that imposes a testing requirement upon the operators of Illinois schools and day care centers. Passage of SB 550 came in the wake of a major U.S. scandal in 2016, the discovery of toxic lead in public water supplies consumed by residents of the city of Flint, Michigan. The new bill was signed into law as P.A. 99-922.

Schools that are subject to the testing requirement include all school districts that operate one or more school buildings used by students younger than or up to grade 5. The tests, which cost as little as $15 per sample, could help reassure Illinois parents and educators that children are safe from toxic lead in water. Younger children are especially susceptible to potential neurological damage from dissolved lead in drinking water.

The new law will require any school or day care center that receives a report showing that their water tests at 5 parts per billion or above to notify all parents or guardians of children enrolled in the facility. While the new law does not mandate that the school or day care center remediate the toxic water, educational leaders have told the General Assembly that if a school’s water supply is publicly known to be compromised, the school will be virtually certain to take action to reduce the harm – typically by shutting off drinking fountains and taking parallel actions.

Education – Substitute Teachers
Shortage of substitute teachers hampers Illinois public schools. A study performed by the Illinois Association of Regional Superintendents of Schools generated some numbers to describe the current shortage. Illinois schools, as a group, face about 16,500 teacher absences in an average week. The absences are due to teacher sickness, family leave, and other factors.

When a teacher is absent, school administrators try to deploy a substitute teacher. In most cases, a substitute is available and can be assigned to cover the absence. More than 80% of the classroom absences are filled in a timely manner by the deployment of a substitute teacher, while nearly 20% of the absences cannot be filled. As a result of the statewide shortage of substitute teachers, an average of 600 K-12 classrooms are left without a standard substitute educator in each average Illinois school day.

The substitute-teacher shortage is especially acute in subspecialties that are known to be areas of overall teacher shortage, especially special education and bilingual education. In the words of one educator, “There are no Spanish language teachers 6-12 [i.e. certified to teach in grades 6-12] to be had south of I-80.”

The General Assembly has already taken action to help relieve the situation described in the Regional Superintendents’ study and report. SB 2912 sets forth new efforts to relieve the substitute teacher shortage in Illinois. It will streamline the process for out-of-state educators and retired teachers to begin working as substitute teachers in Illinois. SB 2912 was signed into law on Friday, January 6, as P.A. 99-920.

Health Care – Affordable Care Act
Obamacare options narrow in many central, southern Illinois counties. One of the largest health insurance providers in Downstate Illinois, Health Alliance Medical Plan, announced this week it will no longer accept new exchange customers under the Affordable Care Act (ACA) for 2017. Health Alliance closed its door to new 2017 customers in advance of the overall marketplace deadline of January 31. The insurer’s internal deadline announcement was made on Wednesday, January 18.

In a news release, Health Alliance reported its awareness that many other large health insurers are reducing their risk exposure under the ACA. The firm pointed out that, despite imposing this early signup cutoff upon remaining patients without insurance, it had significantly increased its total headcount of patients enrolled in the Illinois ACA exchange. Health Alliance is covering 25,000 exchange patients this year.

With declining competition for patients enrolled in ACA exchanges, many remaining insurance providers have significantly increased their ACA rates. 2017 rates across all plans on the exchange increased by an average of 44% to 55% for “Bronze” plans, the lowest-priced plans. In addition, ACA patients in many Illinois counties found themselves restricted to narrower ranges of in-coverage service providers.

Higher Education – Chicago State University
Governor Rauner names advisors to help Chicago State University (CSU) maintain operations. The Chicago-based state university has been hit hard by the State budget crisis. State funding for two-year and four-year public colleges and universities came to an end on January 1 after expiration of the so-called “stopgap” six-month budget that covered the first half of FY17. Illinois’ “teaching universities,” headed by CSU, are unusually vulnerable to interruptions in State general fund aid; many of them do not have large endowments or a team of donors, and many of them do not operate research facilities that can bring in grant-based outside funding.

Governor Rauner pledged this week to maintain CSU’s operations. Four new gubernatorial appointments to the university’s board of trustees were headed by former Chicago Public Schools CEO Paul Vallas, who drew favorable recognition for his reorganization activities and budget cuts at the elementary/secondary school level. Vallas headed CPS from 1995 until 2001. The new trustee, who was the Democrats’ nominee for Illinois lieutenant governor in 2014, was characterized as a bipartisan nominee for the position.

CSU’s long-term viability came under question in fall 2016 when only 86 first-year freshmen enrolled at the university on a four-year degree track. Concerns about the university’s operating position may be discouraging potential attendees. The Chicago institution, located on the Far South Side, is a “historically black” university that serves a predominantly African-American student body.

Higher Education – University of Illinois
The University of Illinois announces tuition freeze, growth plans. If the newly unveiled plans are implemented, the University of Illinois’ three campuses will add more than 12,100 students and move toward a new enrollment total of 93,600 learners. A continuation of the university system’s current tuition freeze will be one of the selling points the U of I will use in driving its progress towards this new enrollment total. The U of I’s three campuses are located in Chicago, Springfield, and the flagship campus at Urbana-Champaign.

With its status as a grant-seeking research university, its significant investment endowment, and ongoing ties to major donors, the University of Illinois is less affected than other Illinois state universities by the ongoing state budget crisis. The end of the so-called “stopgap budget” as calendar year 2016 came to a close did affect the university’s cash flow, though. The U of I is looking to recruit more tuition-paying students in future years so as to maintain its overall status as a university that can carry out joint missions in teaching and research.

In addition, some of the new U of I students are expected to be electronic learners enrolled in new university programs, including courses taught from online sources based in Urbana-Champaign. Although these students will be paying tuition and fees to the Illinois system, they could be living anywhere in the world and most of them will not be paying living expenses in Downstate Illinois.

State unveils new mobile app for career planning. The new “IL Reality Check” mobile app is meant to speed up the ability of younger Illinoisans to implement career-planning objectives. The result of a partnership between the Illinois Department of Employment Security (IDES) and the Illinois Department of Innovation and Technology (IDIT), the new app is meant to create a user-friendly platform to disseminate realistic information about future job supplies and prospects in Illinois. A user can question the app about job prospects in relatively fruitful areas, versus employment fields that might seem attractive but are not likely to generate very many new jobs, and get anonymous objective feedback. The user can also submit more general information, such as desired job location, desired salary, and desired education level, and get career suggestions.

IL Reality Check will create a hands-on, step-by-step outline for how a questioner can leverage his or her current age and level of education into the credentials necessary to enjoy a prospective career through training or retraining.

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