Week in Review: Budget, AVR, Sports Betting & More

CGFA releases revenue numbers for January 2020. The Commission on Government Forecasting and Accountability (CGFA) tracks incoming State revenues in order to help lawmakers keep to the balanced budget that Illinois is constitutionally required to maintain.

The January 2020 CGFA revenue report contains a feature article describing the current gambling industries of Illinois, and the numbers they generated in calendar year 2019. Illinois now has more than 33,000 video gaming terminals that generate net income of more than $1.6 billion/year. More than $400 million/year of this money goes to the State to help generate funds for capital and infrastructure reinvestment. Net income from video gaming terminals has now passed the adjusted gross receipts generated from game play at casino riverboat slot machines and table games.

The revenue report also describes cash flow into Illinois general funds. Base January general funds revenues increased by $60 million. While the larger economically related sources took a pause from year to date positive performance in January, stronger federal sources coupled with higher transfers resulted in the monthly increase. Cash flows were marked by declining money from income tax payments to the State, increased funds given to Illinois from the federal government, and largely stable revenues from sales taxes and other sources. Income tax payments had seen a one-time bump from the late-calendar-year 2019 tax amnesty program, but this revenue source no longer operated in January 2020. Cigarette tax revenues, once a significant source of State revenue, continued their severe decline as more and more Illinoisans quit smoking or turn to alternate ways to consume nicotine. Cigarette tax receipts accounted for less than 1% of total State general-funds tax revenues in January 2020.

House Republican Leader Jim Durkin files House Qualifications Challenge Petition against appointed Rep. Delgado. As House Republican Leader and a duly elected member of the Illinois House, Leader Durkin this week exercised his right under House Rule 85 to challenge the appointment of Eva Dina Delgado to the 3rd Representative District for the reasons articulated below.

Grounds for Legally Improper Appointment
Under House Rule 85, the petitioner shall set forth the grounds for why the appointment is legally improper.

On October 25, 2019, former State Representative Luis Arroyo from the 3rd District was arrested on a federal bribery charge following an undercover investigation by the Federal Bureau of Investigation (“FBI”). According to the charging document, Rep. Arroyo was recorded by federal agents bribing an Illinois State Senator in return for an official government action. The charging document summarized the allegations in detail. Mr. Arroyo gave a $2,500 bribe to a Senator in return for the Senator’s support of sweepstakes legislation. The bribe was to continue for approximately 6 to 12 months, with $2,500 to be given to the Senator each month.

Pursuant to that alleged illegal activity, several members of the Illinois House filed a petition, pursuant to House Rule 91, to create a Special Investigative Committee that would be empowered to bring disciplinary charges against Rep. Arroyo and potentially remove him from his elected position. Speaker of the House Michael Madigan filed a petition and subsequently created the Special Investigative Committee.

The Special Investigative Committee was formed in an attempt to deal with an attack on the integrity of the Illinois House of Representatives by a member who allegedly bribed a fellow member of the General Assembly in an attempt to influence legislation. That alleged illegal activity cast a pall over the House, and all subsequent actions involving Mr. Arroyo involving the 3rd House District is tainted by the alleged illegal activity.

On November 1, 2019, Rep. Arroyo resigned as a result of his arrest by the Federal government for bribery of a fellow member of the General Assembly.

Prior to the actions of the committee established to fill the appointment, Speaker Madigan announced on November 11, 2019 that if Mr. Arroyo is involved with the choosing of his replacement, the Speaker would initiate actions to challenge the qualifications of the person appointed to the vacant position. Madigan issued the following statement:

“I wrote to the Democratic committee members responsible for filling the vacancy in the 3rd Representative District, and asked them to conduct their process without the participation of the 36th Ward,” said Madigan in a statement. “Any process that includes the participation of the 36th Ward – whether by direct vote or by proxy – would call the legitimacy of the appointment into question, and the qualifications of their candidate would be challenged by the full Illinois House of Representatives.”

Illinois Governor J.B. Pritzker issued the following statement, along the same lines as the Speaker:

“(Arroyo’s) effort to influence the choice of his successor is unacceptable, given the charges against him,” said Pritzker in a statement. “Any engagement by the current 36th Ward committeeman would taint a successor, and I call on the House of Representatives not to seat the person who is selected if the 36th Ward committeeman participates.”

In addition to his former position as State Representative, Mr. Arroyo is also the elected Democrat Committeeman of the 36th Ward in the City of Chicago. As detailed by the Illinois Election Code, Cook County Committeemen choose the replacement for a legislator who is unable to complete their term of office. Therefore, Mr. Arroyo had a hand in picking his successor, with the largest weighted vote of all those who would have the responsibility of filling the appointment. Mr. Arroyo’s percentage of weighted vote was 36%, making his preference for the office the likely appointee.

Mr. Arroyo gave his proxy votes to Alderman Ariel Reboyras to be used towards choosing Ms. Delgado. Although Mr. Arroyo was not present for the actual vote, his decision to give his votes to be voted by proxy had the same effect as if he was present at the actual vote to fill the vacancy.

On November 15, 2019, Ms. Delgado was chosen to replace Rep. Arroyo by the committee established to fill the position. Mr. Arroyo’s votes were used to appoint Ms. Delgado.

By allowing Mr. Arroyo a role in the selection of his replacement, it calls into question the integrity of the process and the House itself.

The candidates who were vying to replace Rep. Arroyo and who were not chosen, were victims of a corrupt process.

The public’s distrust of its government due to illegal actions of its officials hinders the ability of the government to provide the services it is constitutionally tasked with carrying out. Everything it does, even if legitimate and legal, will be viewed in a negative light should the individuals who are arrested for illegal activities have a part in the selection process.

A clean break from the arrested legislator is required to re-establish the General Assembly’s trust with its constituents. Had the votes of Mr. Arroyo not been part of the selection process, the appointment would not be called into question.

As a member of the Illinois House of Representatives, Leader Durkin seeks a determination that Eva Dina Delgado is unqualified to serve in the House. Upon such a determination by the full House, Ms. Delgado shall be removed as a State Representative in the House of Representatives.

On January 31, 2020, the Chicago Sun-Times reported that Madigan spokesman Steve Brown said “the Speaker’s previous comments were speculative and he didn’t know that the Speaker ever planned to file an objection.”

Under House Rule 85, qualifications challenges must be brought within 90 days after the day the challenged member takes his or her oath of office as a member of the House, or within 90 days after the day the petitioner first learns of the information on which the challenge is based, whichever occurs later.

Leader Durkin, who filed one of the two challenge petitions against Rep. Delgado this week, wanted to wait to file the challenge until after Mr. Arroyo’s arraignment and expected guilty plea. However, on Tuesday, February 4, Arroyo instead plead not guilty to the federal charge.

Leader Durkin’s spokesperson issued the following statement following the filing of the challenge petition:

“In order to protect the integrity of the House Chamber, we anticipated that Speaker Madigan would make the decision to follow through on his commitment of filing the qualifications challenge paperwork. When it became known on January 31st that he would not do so, Leader Durkin decided to do the Speaker’s work for him and file the petition himself. It is now up to the Speaker to immediately form the committee and begin the investigation that the Speaker said he wanted in November.”

Illinois House committees convene for spring 2020; preparations for Budget Week. House committees held a full schedule of meeting activity during the second week of the 2020 spring legislative session. Fifteen separate hearings were posted by various committees. The full list of House committees can be found here. General Assembly action will continue on Budget Week, with House lawmakers convening on Tuesday, February 18 and preparing to hear the Governor’s budget address on Wednesday, February 19.

Troubled Automatic Voter Registration (AVR) system faces skeptical lawmakers. The program, operated by the Secretary of State’s office, was set up to create a smooth pathway to voter registration for persons who have official contacts with the Secretary of State’s office – contacts such as applying for, or renewing, a driver’s license. Recent weeks have seen many reports of serious problems with the AVR system – persons old enough to drive, but too young to vote, whose names were put into the voter-registration system; persons with the legal right to live in Illinois and to drive on our roads, but not citizens, who were given voting cards; and persons who specifically asked NOT to be registered to vote, but who were registered anyway.

With these and other problems in mind, the House Executive Committee held a Springfield hearing on Wednesday, February 5 on the AVR program. Assistant Republican Leader Tim Butler, who has taken the lead in gathering ongoing oversight information on this program’s problems, worked with his colleagues to question Secretary of State personnel on the program and its current failings.

Gaming Board releases rules on future of Illinois sports betting. The Illinois Gaming Board (IGB) is the State agency tasked to oversee the sports betting windows and online betting platforms that will be allowed to take bets within Illinois on sporting events. Under the sports betting law and rules, betting windows at several existing Illinois casinos will open first. Applications from casino riverboats in Alton, Des Plaines, and Elgin have been filed. These are applicants that have already undergone regulatory and security scrutiny in their capacity as owners of existing operations. After extensive security checks have been performed on the contracting firms, called “suppliers,” that the casinos have hired or will hire to help open the windows and operate sports betting services, Illinois sports betting activity will be authorized open for business.

Under the rules timetables put forth by the Gaming Board, the next step will be to open betting windows connected to Illinois’ horse racetracks. This is a much more extensive process, as each racetrack is affiliated with approximately 10 “off-track-betting” parlors located in strategic locations throughout the state. The process of granting permission to Illinois racetrack sports betting windows means inspecting all of these sites for security and legal compliance issues. One of the key features of the new Illinois sports betting law is to put in place effective methods to prevent juveniles from placing bets on sporting events. Illinois sports betting windows also have to be able to turn away everyone who has added their name to the State’s voluntary gambler “self-exclusion” list.

After racetrack betting will come the rulemaking process for master sports wagering licenses. These will be the highly prized licenses that will enable the owner to offer sports bets over the Internet, using technology such as mobile devices. With regards to this category of licenses, security and self-exclusion challenges are significant, and this process of rules-drafting and license award is expected to take some time.

State gun owners’ advocacy groups sue State Police over FOID card backlog. The lawsuit by the Illinois State Rifle Association (ISRA) and the Second Amendment Foundation was filed on Monday, February 3. Many gun owners have noticed that the State Police is getting slower and slower at responding to Illinois applications to get and renew a Firearm Owners’ Identification (FOID) Card, a required document when purchasing a gun from a registered gun dealer. The FOID Card law has been in place for more than 30 years. It is a “gun control” law unique to Illinois; no other state recognizes the Illinois FOID Card for purposes of gun ownership, and most U.S. states do not require gun owners to maintain identification cards at all.

The ISRA/Second Amendment Foundation lawsuit alleges that there are currently massive problems with the routine application process, the routine FOID card renewal process, and the processes of FOID card enforcement and reinstatement. In recent years, the State of Illinois has “swept” $29.5 million from the dedicated State funds that were supposed to support FOID card issuance and enforcement, and has taken the money to be spent on other things. This has meant that the back office that examines applications, issues the cards, and reissues the cards to persons who have won reinstatement has been starved of necessary funds. “It should not take years for someone to get a FOID application approved,” the ISRA said.

Batinick files guaranteed admissions bill to keep Illinois students in state. State Rep. Mark Batinick has filed legislation aimed at keeping Illinois students in state for college. HB 4088 would create the Rewarding Excellence with Higher Education Guaranteed Admissions Act and grant admission to any state university for any student that scores in the top 10% on either the ACT or SAT.

Representative Batinick filed this legislation after hearing about too many students in his own community who received high test scores, yet were denied admission to Illinois’ own universities. “We have great schools here, and we should be creating better opportunities for our best students so they can stay in Illinois,” Rep. Batinick said. “The future lies in our younger population. If we are going to help turn our state around, we need to take a closer look at our admissions to our state schools.”

According to the Board of Higher Education, 48.4% of Illinois graduates who enroll in four-year institution go to school out of state – a number that has nearly doubled since 2002.

“Too many of our brightest students are leaving for better opportunities in other states” Batinick continued. “When students leave Illinois, a large percentage of them do not return. Our most precious resource is our educated youth and we must reverse this trend.”

Ferrara Candy announces commitment to DeKalb area. State Reps. Tom Demmer and Jeff Keicher issued the following statement upon the announcement last week that the Ferrara Candy Company will move into a new 1.6 million-square-foot distribution center in the ChicagoWest Business Center near Interstate 88 by the end of 2020:

“Today’s announcement from Ferrara brings a significant investment of 1,000 new jobs that will boost our local economy in the DeKalb region, with 500 new jobs in the first phase alone. We have both said that creating jobs is one of our top priorities. As part of the bipartisan state budget and capital bill approved by the General Assembly last year, we were able to enact pro-business reforms that will lay the groundwork for thousands of new jobs for years to come. Specifically, these reforms included the creation of the Blue Collar Jobs Act to attract large-scale construction; reinstatement of the Manufacturer’s Purchase Credit to encourage further investments in manufacturing in Illinois; and elimination of the Franchise Tax. Passage of these pro-business reforms made it possible for DeKalb to land Ferrara to the ChicagoWest Business Center, and the capital bill secured the funding necessary to prepare the site for such a large investment.”

Increased number of U.S. coronavirus cases reported. Wuhan 2019-nCoV coronavirus appears to be highly contagious, and a long latency period means that its patients can sometimes spread the virus before they feel sick or seek medical care. The Illinois Department of Public Health (IDPH) is tracking all of the cases so far reported in Illinois, and seeks a complete list of patients. The agency strongly urges everyone who: (a) has been in mainland China during the past two weeks, and (b) has symptoms of respiratory illness, to contact their health care provider immediately to seek assessment and diagnosis. The IDPH also extends this advice to everyone who: (i) knows someone who may have coronavirus, and (ii) has symptoms of respiratory illness.

The U.S. Centers for Disease Control and Prevention (CDC) is monitoring the worldwide coronavirus outbreak. Thousands of cases have been reported from China, with discussion that the magnitude of the outbreak may be being underreported in that country. The White House has issued an executive order to control entry into the United States of persons who pose a risk of transmitting coronavirus.

Reps. Wehrli, Windhorst on the urgent need for ethics reform. As the spring legislative session gets underway in Springfield, House Republicans are focused on ending corruption in state government. Assistant House Republican Leader Grant Wehrli and State Representative Patrick Windhorst talk about the need to end the culture of corruption and unethical practices that have been plaguing Illinois.

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