Week in Review: Energy bill, FOID, jobs & more


Omnibus energy bill signed. After approval by both houses of the General Assembly, SB 2408 was signed into law on Wednesday, September 15. A key element of the energy bill and its approval was the continued operation of two nuclear power plants (Byron and Dresden). In return for electric rate guarantees contained in the bill, owner Exelon has made a binding pledge to keep these two plants open for at least five years. This pledge directly affects more than 1,530 employees of the two plants, together with the communities that are directly supported by their operations.
On the other hand, the rate guarantees contained in this legislation will also have an impact on Illinois jobs. In addition, as a necessary element of the horse-trading needed to get the bill supported by some of the most powerful interests in Springfield, the bill also enacted language to create a phased shutdown of all of the electric-power turbines in the state that burn carbon-based fuel – coal or natural gas – to generate power. Under the terms of SB 2408, by 2030 the coal and gas plants that have not already shut down will have to start to do so, with the natural gas turbine plants going first. A complex schedule is laid out for the coal plants, with Illinois’ two newest coal-fired generating plants (Prairie State in Marissa and CWLP’s Dallman 4 in Springfield) given a partial reprieve until 2045. Eventually, however, they too will have to shut down. The costs of all of these shutdowns will have to be borne by local ratepayers.

SB 2408 was approved by a House vote of 83-33-0 and a Senate concurrence vote of 37-17-3. In response to the bill’s passage, nuclear plant owner Exelon announced they had accepted their side of the changed law, and would purchase nuclear fuel to re-stock the two threatened reactor complexes. Byron, Dresden and other nuclear power plants nationwide generate “green” power that does not release carbon dioxide into the earth’s atmosphere.

U.S. Department of Agriculture publishes pre-harvest crop report. With Illinois corn on the verge of harvest, the weekly report for mid-September showed dry conditions for farm machinery. More than half of all Illinois corn fields were reporting “mature” crop status, which meant that the corn was ready to be picked. In a quality measurement, 91% of Illinois corn was ranked fair, good, or excellent (29% fair, 41% good, and 21% excellent).

In Illinois’ other main cash crop, the soybeans were turning color and dropping their leaves. Almost 90% of Illinois bean fields were ranked at least fair in harvest quality (28% fair, 41% good, and 20% excellent). As in previous years, some corn and bean fields are stressed by weeds and crop blights. The USDA report was published to cover conditions throughout Illinois as of Sunday, September 12.

State of Illinois borrows $360 million. Last week, Illinois sold and Wall Street bought $360 million in Build Illinois bonds, which are a type of State debt used for allocation to infrastructure. State infrastructure spending includes “horizontal” infrastructure, typically roads, bridges and other transportation projects. It also includes “vertical” infrastructure, typically school buildings, higher education buildings, and State buildings such as prisons and State Park visitor centers. Build Illinois bonds are backed by State sales tax moneys, which are continuously paid by consumers who buy goods and taxable services from shops.

As one of the lower-rated U.S. states in terms of credit quality, Illinois most pay a premium in relation to other public-sector borrowers to get financiers to loan money to it. However, this interest-rate premium has shrunk in recent months, pressured by the overall global zero-interest-rate environment. Illinois’ Build Illinois debt offering went to market last week offering interest rates that were 45 basis points (0.45%/year) higher than comparable interest rates paid by states that boast an AAA credit rating. In contrast with states such as Indiana, Illinois has a BBB+ rating from firms such as Fitch Ratings.

Audit criticizes careless cash flow at Illinois Department of Employment Security. One of the largest expense items of the State is the Unemployment Insurance Trust Fund, a State fund that is used to pay unemployment benefits to persons undergoing temporary unemployment. In spring 2020, during the COVID-19 pandemic, Congress changed the rules and ordered all 50 states to make generous payments under a wide variety of new pathways, including pathways to “gig workers” and other people who were legally classified as contractors and did not fit into traditional definitions of unemployment.

Under orders from Congress, the Illinois Department of Employment Security (IDES) quickly paid out more than $5 billion in emergency unemployment insurance money to online recipients. Much of this money went to contractors whose affiliate firms had not filed wage information with IDES for use to verify and calculate the amounts of money to be mailed out to recipients. An audit has now found that at least $155 million in unemployment insurance payments, made to Illinois recipients through June 2020, were based on wage claims submitted by beneficiaries and not independently verified by IDES. As a result, much of this money may have been paid out improperly. The finding was made by the Legislative Audit Commission, a nonpartisan panel of the Illinois General Assembly The Commission called for further auditing activity of unemployment insurance payouts during the 2020-21 COVID-19 pandemic.

COVID-19 pandemic continues; outbreaks in schools lead to widespread vaccine mandates. More than 125 outbreaks of the contagious disease have been reported in Illinois schools. As a response to these reports, Gov. Pritzker has issued a universal-facemask rule that applies to all Illinois schools – public and private. The Pritzker facemask rule ignores the traditional distinctions carved out in Illinois law and policy between public and private schools, and also runs counter to previous assurances from the Governor’s office that individual school districts would be allowed to make facemask decisions on their own. Gov. Pritzker and his office have asserted, in response, that children under the age of 12 are not allowed to legally be vaccinated against coronavirus, and that authorities around the world have been caught flat-footed by the new ‘Delta’ and other variants of the fast-mutating virus.

Following promulgation of the new Pritzker orders, the Illinois State Board of Education (ISBE) has begun taking steps to sanction certain private schools for alleged failure to follow government orders. House Republican Leader Jim Durkin and other House Republicans are raising serious questions and concerns about these acts of public-sector punishment of the private sector. Durkin’s HR 451 is one of the measures filed in Springfield urging the ISBE to stop sanctioning schools, including nonpublic schools, for exercising their right to independent judgements over the threat levels presented by this complex viral pandemic.

Some political leaders throughout the United States are taking various steps to order people to get vaccinated against COVID-19. These steps include facemask and vaccine orders from President Biden at the national level and from Gov. Pritzker in Illinois. The Pritzker mandate is laid out in Executive Order 2021-18. The Pritzker order covers facemasks and face coverings in all public and private schools serving pre-kindergarten through 12th-grade student and all day care facilities, as well as nursing homes and long-term care facilities.

JCAR issues demand for Pritzker administration to practice school fairness. Mask mandates were on the agenda when the Joint Committee on Administrative Rules (JCAR) met in Chicago on Tuesday, September 14. A bipartisan panel of the General Assembly, JCAR has oversight over the rules, orders, and directives promulgated by the executive branch of Illinois government. JCAR is ordered by State law to pay special attention to State rules and orders that harm small businesses, small municipalities, and not-for-profit corporations of all sorts.

The COVID-19 pandemic has caused many divisions among Illinoisans. The current policy of the Illinois State Board of Education (ISBE) is to lump all schools together, including schools of very different sizes and very different locations within Illinois, and impose blanket orders on all of them. Many critics point out that the orders ignore geography and sets aside all of the things being done by individual schools and their leaders to deal with the pandemic. Furthermore, these orders raise strong suspicion of noncompliance with State law that demands rules fairness for not-for-profit corporations. Many small private schools are not-for-profit entities that fall into this category. In a unanimous bipartisan statement, JCAR ordered ISBE to justify its current policies in writing. The state agency was given 30 days to respond to the request.

Illinois’ Firearms Owner Identification Card law argued before State Supreme Court. Under Illinois law, persons seeking to legally possess a firearm in Illinois must apply for and receive an FOID card from the Illinois State Police. Possession of an FOID card is a requirement that must be met before a firearm can legally be possessed. People who go to sporting-goods stores to purchase firearms are routinely asked to ‘show your FOID card’ as part of the process of making the purchase.

Most U.S. states do not have FOID card laws. Some gun owners and Second Amendment advocates oppose state laws that regulate firearms ownership. A legal case that includes, as one of its elements, the constitutional standing of the FOID card law was argued before the Illinois Supreme Court last week. The case is Thomas Brown v. the Illinois State Police. A decision on the case is expected in fall 2021. Nothing in the case forces the Illinois Supreme Court to directly uphold or throw out the validity of the Illinois FOID law; the case could potentially be decided on the grounds of technical elements within the case.

CGFA publishes annual report on Illinois gambling. As one of Illinois’ fastest growing and most controversial revenue sources, the taxation of Illinois gaming raises many questions for members of the General Assembly. The Commission on Government Forecasting and Accountability (CGFA) publishes an annual report on the state of the gaming industries in Illinois. The September 2021 report summarizes Illinois gaming tax revenue streams during FY21, the fiscal year that ended on June 30, 2021.

Both FY21 and FY20 were affected by the worldwide COVID-19 pandemic. Year-over-year FY21 comparisons may not be completely reliable as a guide to long-term trends. The overall FY21 cash flow picture, however, shows a continuation of the market share movement from riverboat casinos to video gaming parlors. Video gaming tax revenues paid by industry players to the Illinois Capital Projects Fund rose 33% in FY21, from $376 million to $499 million. Stay-at-home orders were lifted and, in FY21, Illinoisans returned to convenience and grocery stores where many Lottery tickets are sold; Lottery transfers to State funds rose almost 24%, from $639 million to $786 million.

A major area where the State lost ground was in the movement of money from Illinois riverboat casinos to the Education Assistance Fund. This Fund is supposed to get everything left over from riverboat casino taxes after a long list of subtractions have been made to pay various entities that have “first calls” upon statutory slices of casino tax revenue. In FY21, with casino gaming activity continuing to be depressed, these first-call slices took everything and there was no money left for this key school fund. Zero riverboat-casino tax dollars were transferred to the Education Assistance Fund in FY21.

Illinois horse racing continued to serve as a negligible generator of State tax revenue in Illinois. All State of Illinois horse racing tax activities combined, including bets on live racing, bets on simulcast video horse racing, and “advance deposit wagering” bets on horse racing from private homes, generated $7 million in FY21 – only 0.5% of the $1,358 million in State gaming tax revenues generated by all gaming activities. In addition, one of the three remaining Illinois horse racetracks – Arlington Racecourse near Chicago – is scheduled to close in FY22.

Illinois transportation infrastructure leads to new job-training opportunity. The Aviation Institute of Maintenance (AIM) has chosen a Bubbly Creek location, on Chicago’s Near Southwest Side, to open what will be the United States’ largest aviation maintenance education facility. The industrial site, located at 3711 S. Ashland Avenue, will create a pathway toward Federal Aviation Administration-recognized certification for the skilled-labor work, including but not limited to crafts used by aircraft mechanics and refitters. The 137,000-square foot Chicago site will be able to support up to 600 students.

Aviation maintenance includes all of the skilled labor and labor crafts needed to keep an aircraft flying. Aircraft and aircraft-engine refits and rebuilds include bending and cutting metal. The site will offer training in computer numerical control (CNC) lathing, machine-shop work and specialized welding, as well as the testing and recertification of a plane’s nervous system – its electricals and its hydraulic controls. Fast-growing demand for air freight as a key element in on-demand production processes and customer deliveries is leading to sharp increases in demand for large-aircraft aviation maintenance. The Virginia-based AIM has chosen a centralized Midwestern location for what will be one of its national flagship training centers. In a structured community college relationship, the new facility is affiliated with Olive-Harvey College within the City Colleges of Chicago, creating affordable tuition pathways. The new AIM facility officially opened on Wednesday, September 15.