Week in Review for week ending July 22, 2017

Governor Rauner calls on State Senate to send him education funding bill. Earlier this week, Governor Bruce Rauner called on members of the Illinois Senate to send him Senate Bill 1, the education funding bill. Democrats in the Illinois Senate are using a procedural quirk to keep the bill from advancing. If the bill is not sent to Governor Rauner’s desk soon, public schools throughout the state may not open in time for the new school year.

In squatting on this bill, Democrats are taking away critical resources from school districts across the state. When the bill does reach his desk, Governor Rauner plans to issue an amendatory veto that will result in higher state funding for almost every school district in Illinois. The bill includes a bailout of Chicago’s broken teacher pension system, so Governor Rauner plans to amend SB 1 to remove this from the bill and instead provide adequate and equitable funding for students in Illinois no matter their zip code.

The governor’s amendatory veto also will adjust the bill so that it is more closely aligned with the original ideals proposed by the governor’s School Funding Reform Commission – which has bipartisan support. These reforms include mandating that the majority of all money in SB 1 will go to statewide school districts serving a majority of students from families with low income. This marks a historic change that will, over time, fix education inequity in Illinois.

“We have a chance to make history and adopt a new school funding plan that, for the first time, ensures all school districts in Illinois are equitably and adequately funded. Unfortunately, Democrats want to turn this historic opportunity into a bailout for the CPS pension system,” said Governor Rauner. “The point of this school reform bill is to help low income students across the state, including those in Chicago, get the education they deserve – not to bailout CPS’s mismanaged teacher pension system.”

As written, SB 1 is a bailout for the decades of financial mismanagement at CPS. The bill directs millions of dollars to CPS and away from other deserving districts. Under SB 1, as compared to the Governor’s plan, the other 851 school districts in Illinois will receive less of the FY18 budget money while CPS receives credit for a $506 million historical pension payment. The CPS hold harmless includes both the $250 million block grant credit and $221 million for normal pension costs and retiree health care credit.

“The General Assembly under Speaker Madigan has failed to adequately or equitably fund our schools for decades. It has hurt generations of Illinois children who live in low income communities,” said Governor Rauner. “It’s not right to give CPS more than its equitable share at the expense of other struggling school districts. That’s not reform. It is the same old rigged politics that created this disgraceful system we are trying to fix. ”

A new webpage launched by the governor shows how much more money each school district will receive after the governor issues his amendatory veto.

Sign the Petition to send SB1 to the Governor. Illinois Lieutenant Governor Evelyn Sanguinetti urges Illinoisans to sign her petition calling on the Illinois Senate to immediately send SB1, the education funding bill, to the Governor for his action. Not doing so puts public schools at risk of not opening on time. The link to the petition is here.

Classrooms or pensions? Where do you want your tax dollars directed? Where would you rather your hard-earned tax dollars be directed, into the classroom for kids or to prop up Chicago’s mismanaged pension system?

A new 32% income tax increase just went into effect on July 1 and Chicago politicians want to use it to bail out a pension system they failed to fund instead of using it to educate children across the state. The once bipartisan SB1 was a plan that would have equitably funded all schools in Illinois, ensuring each and every child was treated fairly. However in the waning moments of regular session, Chicago interests hijacked the bill and earmarked the majority of new funding to CPS and its mismanaged pension system. Under the provisions of SB 1, 64% of all new funds ($495 million of the $778 million) for education are directed to CPS, despite the fact that they only have 19% of the state's students.

An effort to get a clean bipartisan equitable funding formula back on track emerged with HB 4069. Every district is treated fairly and benefits at the highest level under HB 4069. To see how your schools benefit click here.

Governor Rauner Issues State Disaster Proclamation for Lake, McHenry, Kane Counties for Flooding. As reports indicate potential record flooding in the coming days, Governor Bruce Rauner issued a state disaster proclamation for Lake, McHenry and Kane counties to ensure continued state support to communities as they recover from the recent heavy rains. Rauner’s disaster proclamation comes as the state has already coordinated the delivery of 350,000 sandbags as requested by Lake County and is sending another 250,000 sandbags and plastic to an Illinois Department of Transportation yard in northern Illinois.

Governor Rauner also directed Illinois Emergency Management Agency (IEMA) Director James K. Joseph to activate the State Emergency Operations Center (SEOC) as needed over the weekend and into next week to coordinate any requests for assistance from flood-impacted communities.

“These counties were hit with flash and river flooding caused by more than seven inches of rain over a couple of days,” Governor Rauner said. “The first responders have done a tremendous job protecting public health and safety. IEMA has been working closely with the emergency managers in these counties. This proclamation will ensure that we continue to provide whatever assistance is needed now and in the coming days as they begin recovery efforts.”

“IEMA and state agencies currently are working together with the affected counties to proactively identify potential resource needs and allocate the necessary state resources,” said Joseph.

For updates on the current situation, visit the Ready Illinois website at www.ready.illinois.gov.

FAQs for Residents Affected by Flooding:

What does the state disaster proclamation mean for me?
The state disaster proclamation ensures all available state resources are available to help municipal and county officials respond to and recover from the disaster. The proclamation also is necessary for the state to seek federal assistance.

Assistance available to residents at this point includes services from the American Red Cross, Salvation Army and other non-profit organizations, including shelters, food and flood clean-up kits. Please contact your county emergency management agency (EMA) to see if other types of assistance are available in your area.

My home was flooded. What should I do now?
  • Contact your county emergency management agency (EMA) to report damage to your home. For a list of county EMAs, visit www.Ready.Illinois.gov.
  • If you have flood insurance, contact your insurance company to report your damage.
  • Even if you don’t have flood insurance, you should still contact your insurance company to ensure all potential assistance has been sought.
  • Take pictures of the damage and make a list of any possessions damaged or destroyed.
  • Keep receipts for costs incurred during the flood, such as receipts for hotels, clean-up, replacement and repair.
  • Be safe when cleaning your home or making repairs.
Can I apply for federal assistance right now?
Federal assistance is not available at this time. However, county and state officials are working together to gather information needed to determine if the state may be eligible for federal assistance.

Are there state assistance programs available?
The state of Illinois does not have disaster assistance programs. Such assistance is only available under a federal disaster declaration.

What is the state doing to get assistance for people affected by flooding?
As waters recede, county emergency management officials will begin collecting initial damage information from affected residents. For that reason, it’s important for you to make your county EMA aware of your damage.

Once IEMA receives that information, a determination will be made on whether a more formal damage assessment should be conducted that could support a state request for federal assistance.

What would a federal disaster declaration mean to me?
Federal approval of the Individuals and Households Program assistance would enable residents affected by flooding to apply for:
  • Grants from FEMA
  • Low-interest loans from the U.S. Small Business Administration.
For more information, visit www.Ready.Illinois.gov or contact your local emergency management agency.

With new state budget in place, S&P removes Illinois from credit watch. A credit ratings agency has removed Illinois from a credit watch since legislators approved a budget and ended a more than two-year impasse.

S&P Global Ratings said last week the outlook on debt ratings is stable.

Illinois has the lowest credit rating of any state and agencies had warned of another downgrade to "junk" status if lawmakers didn't approve a budget. The stalemate between Republican Gov. Bruce Rauner and the Democrat-controlled Legislature began in 2015. This month, legislators approved a budget with an income tax increase over Rauner's vetoes.

S&P said the odds of Illinois' credit falling to below investment grade in the next year has "substantially diminished," but Illinois will "suffer an extended fiscal hangover" from the stalemate.

Fitch Ratings keeps Illinois' credit rating at investment grade. Illinois on Monday once again escaped a credit downgrade as Fitch Ratings affirmed the state's BBB low investment-grade rating, citing the enactment of a budget for the first time in two years.

The move followed S&P's decision last Wednesday not to saddle Illinois with the first-ever junk rating for a U.S. state by keeping its rating at BBB-minus, which is one notch above junk.

Fitch attributed its rating affirmation to the legislature's enactment earlier this month of a fiscal 2018 budget and permanent income tax rate increases over the governor's vetoes. It said the two factors should "significantly reduce the near-term liquidity stress that had threatened the state's investment-grade rating."

Moody’s affirms Illinois’ credit rating a notch above “junk” status. A major credit rating agency says Illinois' rating won't be lowered to "junk" but warns the state still faces serious financial challenges and long-term risks.

Moody's Investors Service on Thursday affirmed Illinois' current rating with a negative outlook, saying a downgrade remains possible in the next two years.

Moody's put Illinois under review for a downgrade earlier this month, after the state entered its third fiscal year without a budget. That would've made Illinois the first U.S. state to have a rating below investment grade, and cost taxpayers millions of dollars more.

Moody’s said the passage of a state budget for the first time in two years “alleviated liquidity pressure and moved the state closer to fiscal balance.”

On Thursday, the ratings agency affirmed Illinois’ rating of Baa3 — still one notch above “junk.” More importantly, Moody’s noted there are still big challenges ahead and there’s still a possibility of a downgrade within the next year or two.

“The state’s unfunded pension liabilities, which we estimate at $251 billion for the fiscal year ended June 30, 2016, are the highest of any state and will keep growing in coming years despite some reforms included in the budget,” Moody’s said in a release.

Illinois’ credit ratings stand at one notch above “junk” status with all major ratings agencies. The ratings are important because they help determine the interest rates at which the state borrows money; the worse the rating, the more taxpayers pay.

Moody’s also emphasized that the state must reduce its $14 billion bill backlog. There are some provisions to pay back some of that backlog contained within the passed budget bills. Moody’s said that will improve liquidity to allow for a “significant” drop in the backlog to about $8 billion.

Governor Rauner joins elected officials in Lombard for signing of “Charlie’s Law.” On Tuesday, Governor Bruce Rauner joined State Rep. Peter Breen and other elected officials to sign landmark legislation that makes Illinois the first state in the nation to provide insurance coverage of medically-advised treatments for PANDAS (pediatric acute-onset neuropsychiatric disorders associated with streptococcal infections). HB 2721 was signed into law as Public Act 100-0024 and will be known as “Charlie’s Law.”

Breen, chief co-sponsor of HB 2721, invited the Governor to sign the bill at the Lombard home of Kate Drury, whose son Charlie developed severe mental health complications after a case of strep throat, at the age of eight. After the diagnosis, the Drury family had to pay out of pocket for expensive treatments to reset the boy’s autoimmune system. Also present at the signing was Wendy Nawara and her son, also named Charlie, who suffered from PANDAS. Together with other area parents, Kate and Wendy have worked tirelessly to pass HB 2721. “Charlie’s Law” is named for both Kate’s and Wendy’s sons.

“In cases of PANDAS, a strep infection causes the immune system to essentially attack the brain, leading to obsessive-compulsive behavior or other extreme or harmful behaviors,” said Breen. “No child should have to suffer through the neurological effects of this devastating syndrome, just because their families cannot afford the costly treatment regimen. Moving forward, because of the passage of this bill, every insurance company in Illinois will cover medically-recommended treatments for PANDAS.”

Prior to the bill signing, Governor Rauner praised the bipartisanship that was involved in the legislation’s approval in the House and Senate. “Our young people should be the top priority in everything we do in the state of Illinois,” said Rauner. “Today shows what we can get done when we work in a bipartisan basis and move quickly and expeditiously. Illinois will now be the first state in America to guarantee insurance coverage for this vicious disease.”

Job growth remains below national average - June unemployment rate increases slightly. The Illinois Department of Employment Security (IDES) announced Thursday that the unemployment rate increased +0.1 percentage points to 4.7 percent in June and nonfarm payrolls increased by +8,600 jobs over-the-month, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. May job growth was revised up sharply to show an increase of +11,300 jobs rather than the preliminary estimate of +2,400 jobs.

June’s monthly payroll gain kept over-the-year job growth well below the national average. In the first half of 2017, payroll growth is improved over 2016, but growing at half the pace of 2015 for the same six-month period.

“The unemployment rate increase and a decline in construction payroll are troublesome, but the trend of declining labor force is something we cannot ignore,” said IDES Director Jeff Mays. “This was the fourth consecutive over-the-month decline in labor force, which is now at its lowest level since March 2006.”

The state’s unemployment rate is +0.3 percentage points higher than the national unemployment rate reported for June 2017, which increased to 4.4 percent. The Illinois unemployment rate is down -1.2 percentage points from a year ago when it was 5.9 percent. At 4.7 percent, the Illinois jobless rate stands -1.0 percentage points lower than January 2017.

Amazon plans Chicago-area sort center with up to 500 jobs. Crain’s Chicago Business reported this week that Amazon is opening a Chicago-area sort center, its first Illinois hub for smaller packages, where it plans to employ 250 to 500 workers.

The newest facility, to handle parcels smaller than many it moves through distribution centers in Joliet and several other local sites, has a launch scheduled for October in southwest suburban Crest Hill. It's the latest flag planted here since 2015 by the e-commerce monolith, whose projected local employment is heading toward around 8,000.

The 438,150-square-foot building in a Crest Hill industrial park has been under development since late 2015 for a previously undisclosed tenant. Amazon's identity was confirmed by Scott McMaster, the suburb's economic development and zoning manager. He said the city offered no economic incentives.

The 29-acre site is north of Joliet, less than 2 miles from an Interstate 55 interchange and less than 10 miles from Interstate 80, according to Atlanta-based developer Ridgeline Property Group. The property is also near Amazon fulfillment centers in Joliet and Romeoville, and others opening this year in Aurora and Monee.

Cooling stations are ready to help Illinois residents battle the heat. As part of Illinois' Keep Cool Illinois campaign, Governor Rauner has made over 120 state facilities available as cooling centers. The cooling centers will provide Illinoisans a place to stay cool and comfortable during hot summer days.
  • Tollway Oasis locations are open 24 hours a day, 7 days a week. 
  • Department of Human Services cooling centers are open during normal business hours from 8:30AM - 5:00PM, Monday through Friday. 
Find a Cooling Station near you: https://www.illinois.gov/KeepCool/SitePages/CoolingCenters.asp

For more information about DHS Cooling Centers, please call the Illinois Department of Human Services hotline at (800) 843-6154 during normal business hours.

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