Check out what's happening in the NewQuestCity Forums for Illinois .

The jugglers and the clowns do their ward map thing!
01/19/2012

The good news is that it looks like the City Council's going to adopt a ward map without a special election, to be followed by a lawsuit, that could cost $30-or-so million.

The bad news is that Mayor Emanuel's not going to use any of these savings to add staff to the libraries and reopen them on Sundays and Mondays like libraries in such civilized societies as, oh, the mayor's hometown of Wilmette.…

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Beer that you wear, if you're lucky
01/19/2012

The annual winter onslaught of Facebook photos from friends' vacations to Los Angeles, New Orleans, or some decadent tropical destination never really irks me. You're sitting poolside in 72-degree weather—the temperature is always noted—drinking a Bloody Mary and reeking of suntan lotion? Good for you, I guess.…

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See Kanye live at the Double Door (on video)
01/19/2012

No performers like people watching old videos of them as teenagers just starting out, but Kanye doesn't seem to have much in the way of shame, so he's probably not super upset that someone's dug up footage of him performing at the Double Door in 1996 and posted it to hip-hop blog DDotOmen.com. Or at least I haven't seen him going all-caps on Twitter about it.…

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Now online: All Watched Over by Machines of Loving Grace (part 3)
01/19/2012

This is the last of a series of essays on Adam Curtis’s essay series All Watched Over by Machines of Loving Grace, which you can watch for free here. I previously wrote about the series here and here.

One of Curtis’s most distinctive traits as a storyteller is to introduce all his subjects, whether they’re living or dead, as though they were fictional characters.…

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Our treacherous food stamp president
01/19/2012

With primary season under way, I worried that the participants in last night's debate in South Carolina might stoop to some old-fashioned demagoguery in their appeal to Republican voters. That would have seemed especially egregious on Martin Luther King Jr. Day.…

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Fiction Week: Treasure Island!!!
01/19/2012

I'm a bit claustrophobic, so when I'm on an eight and a half hour flight, as I was over the holidays, I don't spend my time watching in-flight movies. The headphones just make me feel more enclosed.…

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Nathan Salsburg stands up with Affirmed
01/19/2012

Louisville resident Nathan Salsburg dedicates much of his time to good works. He produces a radio program called Root Hog or Die for East Village Radio, and he works for the Alan Lomax Archive / Association for Cultural Equity as an archivist and producer, overseeing the production of CDs and online offerings.…

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12 O'Clock Track: Enslaved by Owls, "Divine Mission"
01/19/2012

I learned about the one-man sci-fi doom project of New Hampshire's Timothy Lang-Grannan a couple years ago via WFMU's blog, where Lang-Grannan is quoted as saying, "People tell me my music sounds like a combination of Vangelis and Burzum." This particular track, from the 2010 album VI, sounds pretty evil, but only if the notion of evil were conceived in the mind of a Muppet.…

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Spy vs. spy
01/19/2012

All eyes are on South Carolina, but today's a big day politically in Wisconsin. It's the day opponents of Republican governor Scott Walker must turn in their petitions to recall governor Scott Walker.…

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Quinn and Rutherford spar over borrowing
01/18/2012

By Jamey Dunn

State Treasurer Dan Rutherford said today he will not keep quiet about his thoughts on state borrowing or Illinois’ dire financial situation.

Last week, Gov. Pat Quinn voiced frustration over Rutherford’s recent comments on the state’s debt and financial standing. Rutherford called Illinois the “most bankrupt state in the nation” and has publicly warned Wall Street investors not to buy more of the state's debt.

Quinn told reporters in Chicago that he is “disappointed” in Rutherford for not being more cooperative on billions in borrowing that Quinn has proposed to pay off some of the state’s backlog of overdue bills. “I used to be state treasurer, and I know you can work with a governor,” Quinn said. “I’m a little disappointed in Treasurer Rutherford.”

Quinn has argued that the interest costs on loans would be cheaper than the interest the state is required by law to pay vendors on late bills. “I think if we do it in a good public finance way, we can save the taxpayers millions of dollars and help our business get paid the vouchers and invoices that they have quicker.” The plan has failed to gain traction in the legislature.

When asked if Rutherford’s public negative comments created fears that could lead to a credit rating downgrade for the state, Quinn recalled an old security slogan. “My father was in the United States Navy. Loose lips sink ships, and I think maybe Treasurer Rutherford should commit that to memory.”

“The governor has got to understand that this is not a secret." Rutherford said today that Quinn and others cannot hide from the reality of the budget — especially new information from Moody’s Investor Services that the state’s required pension payment next fiscal year, estimated to be about $5.3 billion, will be more than $1 billion higher than the payment for the current fiscal year. Moody’s estimates that the payment will account for about 14 percent of general revenue fund spending for Fiscal Year 2013. The bond credit rating agency described the state’s pension obligation as a “credit negative.”

“When Moody’s just came out within the last week talking about this new revelation about the greater payments that are going to be necessary in our pension funds, that’s no secret, governor. Everybody knows it. We’ve got to address it.” He said that when lawmakers passed a tax increase in January, they should have leveraged the prospect of new revenue to force cuts and pensions reform as part of an overall plan. “They didn’t put together the rest of the deal. … They blew it here in Springfield.”

Rutherford said he is willing to work with Quinn on short term borrowing — to be repaid within a year — to address cash-flow issues. But he said he would continue to be a vocal opponent of any other new borrowing. “Don’t loan my state any more money, they are addicted to debt.”

Rutherford clarified his statement about the state being bankrupt, noting that Congress has not voted to allow states to default. However, Rutherford said if the state were a private entity, it would be facing bankruptcy. He said he does not support proposals to allow states to default because vendors who have done business with the state would potentially get short changed. “If someone sold bread to the Pontiac penitentiary, that vendor should get the dollar for dollar, rather than [price] negotiated by a federal bankruptcy judge and get 80 cents on the dollar.”

Rutherford made his comments today at a news event announcing the start of an online auction to sell unclaimed property. After unclaimed property left in safety deposit boxes is held by banks for five years, it is passed on to the treasurer’s office, which then tries to locate the rightful owners. If the owners cannot be found, the state auctions off the property. Rutherford said the state has been searching for the owners of everything in the current auction for at least five years.

If owners come forward after an item has been sold, they are still entitled to the cash amount that the item was appraised for. Rutherford said of unclaimed property, much of which is kept in a vault under the state Capitol building, “it never becomes the property of the state. As the treasurer, I’m only the caretaker.” The online auction started today and will close  December 11. Rutherford said holding the auction online will bring the cost to the state down from about $29,000 to about $2,000.

Until recently, Amazon and other large online retailers either cut ties in states that tried require them to collect taxes or fought the issue in court. Amazon lost its legal battle in New York and currently collects taxes there. However, the company worked out a deal with California lawmakers that has led to Amazon actively lobbying for a law to address the issue nationally. If a national solution does not pass, Amazon has agreed to collect taxes in California next year.

U.S. Sen. Richard Durbin has backed a national solution for years, but retailers, both online and brick and mortar, say a new version of the Illinois Democrat's plan has a real shot at approval in Congress.

Bricks-and-mortar retailers maintain that not collecting the taxes gives online sellers an advantage because they can offer what seems to be a lower price. Illinois residents who buy goods from non-collecting Internet retailers still owe the tax and are required to declare their purchases on their income tax returns. This was the first year that the Illinois Department of Revenue included a line on tax returns specifically for online purchases. According to the department, residents declared their purchases on about 270,000 returns, bringing in an estimated $11 million in revenue for the state. Those advocating for Durbin’s plan say that is a fraction of the revenue that could come in if online retailers were required by Congress to collect the tax.

David Vite, president of the Retail Merchants Association, says expecting customers to keep track of their online purchases — as well as differentiate between a seller such as Target that does collect the sales tax because it has stores in the state and one such as Amazon that doesn’t — isn’t realistic, and the consequences for getting it wrong are too dire. “They are confronted with possible perjury charges. They are filing a false income tax return. That’s not fair to the customer. That’s not fair to the citizens,” he said.

The U.S. Supreme Court ruling that bars states from making out-of-state retailers collect taxes focused on mail order purchases and did not address online sales because it was made 1992, long before e-commerce was a consideration. The court did open the door in its opinions for Congress to revisit the topic. “The underlying issue is not only one that Congress may be better qualified to resolve but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions. … Accordingly, Congress is now free to decide whether, when, and to what extent the states may burden interstate mail order concerns with a duty to collect use taxes.”

A new plan, called the Marketplace Fairness Act in the U.S. Senate and the Marketplace Equity Act in the U.S. House, would allow states to require tax collection if they take steps to streamline taxes and make the process simpler for retailers, which would likely be collecting taxes across multiple states. Previous versions would have required states to sign onto a universal Streamlined Sales Tax Agreement.

Under the new proposal, states could sign onto the agreement or take less sweeping steps to simplify tax collection, such as agreeing to a universal classification of items for taxing purposes. Currently, a snack cake may be classified for taxing purposes as food in one state and candy in another, or a scarf might be clothing in one state and an accessory in another. These different classifications might also be taxed at different rates. The goal is to build a classification system that applies nationwide. “The Market Place Equity Act would be easier to comply with for the state of Illinois,” Vite said.

The act is currently held up in Congress over concerns about what size businesses it should apply to. Lawmakers are considering an exemption for small business. Talks on the exemption size range from businesses bringing in $500,000 each year to up to $1 million. Some retailers, such as eBay, say that a small business exemption in the law should be larger, potentially up to $30 million.

“The idea that small business retailers on the Internet are a threat to the survival of small business storefronts is ridiculous. The threat to small independent retailers is coming from giant multibillion-dollar competitors online and offline, which has been the case for nearly half a century,” Tod Cohen, vice president and deputy general counsel of government relations for eBay, told a U.S. House committee this week according to a written transcript. “You hear a lot about fairness in this debate. Some have claimed that a 'level playing field' means all retailers using the Internet should be held to the same remote sales tax standard. However, sameness is not fairness. Small businesses retailers face many competitive disadvantages when compared to larger retailers. They have proportionally higher costs of doing business, including providing employee benefits. And one must especially consider the costs of shipping when considering the playing field for small e-commerce businesses. Shipping prices, as with other costs, are directly related to sales volumes and how close the retailers [are] to the customer.”

But Amazon and others oppose such a large exemption. “Fairness among sellers should be created and maintained. Sellers should compete on a level playing field. Congress should not exempt too many sellers from collection, for these sellers will obtain a lasting unlevel playing field versus Main Street and other retailers. Congress should rectify the current imbalance and avoid a future imbalance,” Paul Misener, vice president for global public policy for Amazon.com, told the House committee this week, according to the written transcript. “With today’s computing and communications technology, widespread collection no longer would be an unconstitutional burden on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect.”

Vite said he doubts the commitment of retailers who want a high threshold for exemption. “I’m not sure they’re serious about getting anything done yet. Amazon is.” Vite and others are hopeful that a solution can be reached soon, whether it is the new plan, which has bipartisan support, or a version of Durbin’s previous proposals. “Whichever one passes, we’re happy with,” he said. “The Marketplace Equity Act is probably the [plan] that has the most likelihood of passing.”

For more on the effort to collect sales tax on online purchases, see Illinois Issues April 2011

Sara Moscato Howe, chief executive officer of the Illinois Alcohol and Drug Dependence Association, said that the original budget cut allocations for addiction treatment further than the House budgeting committee for human services intended. “We were reduced by about 25 percent when the budget came out in July, and that was not the intention of the legislature,” Moscato Howe said.

“It was essentially a math problem,” said Chicago Democratic Rep. Sara Feigenholtz, who heads the human services budgeting committee in the House. She said the committee was working off of last fiscal year’s spending numbers without accounting for an infusion of funds late in the fiscal year by Quinn to ensure that addiction treatment was funded through the end of FY 2011. “We found ourselves $28 million in the hole.” Feigenholtz said that the lump sum budgeting process that lawmakers resorted to for the first two years Quinn was in office made it difficult to track when and where Quinn may have shifted money. “Hopefully, now that we’re line-iteming our budgets again, these kinds of errors will not occur again.”

Feigenholtz said a cut to mental health services was also inadvertent, resulting from a much less complicated mistake. “The mental health cuts were a typographical error, frankly.” She said House members meant for the funding level to be approximately $143 million, but “somebody hit an extra one” and turned the number into $114 million. The House passed a trailer bill last spring to correct the issue, Feigenholtz said, but the Senate did not take it up for a floor vote. She said that before yesterday's vote to reallocate funds, the human services budget “was heading in the opposite direction than the committee had intended to move.”

Moscato Howe said addiction treatment providers had cut programs, laid off workers and extended waiting lists in the last six months because of what is now being described as an accidental cut. “We’ve been cut every single year. Without this restoration, we were down 50 percent from where we were in FY [20]09.” She said that addiction treatment has never been funded to a level that could offer “treatment on demand,” but she said new funds should help cut wait times for patients.

Feigenholtz said she hopes human services will stop being a primary target for cuts. While human services have seen some cuts during the current budget crisis, providers have also had several brushes with the possibly of debilitating cuts, only to have them scaled back at the 11th hour. “Human service providers, just like any businesses in this state, deserve predictability,” she said. “We have to get them off this roller coaster.”

Those hoping for more education dollars were disappointed by the plan approved yesterday. No funds would be put back into general state aid, which was cut under the House budget passed last spring, or school transportation funding, which was cut by Quinn’s vetoes.

“It would be wonderful if we could [restore general state aid funds],” David Vaught, Quinn’s budget director said. “That’s a policy objective of the governor he’d very much like to see addressed. …We’ve got a lot more to do on the education priorities.

“One hundred million dollars was vetoed out of the budget for education by the governor, and none of it was restored,” said Rep. Roger Eddy, who is a school superintendent in Hutsonville. “It was cut more than the other budgets.”

Eddy, who is the ranking Republican on the House education budgeting committee, pushed for more transportation spending in the FY 2012 that budget after Quinn had cut them from the FY 2011 budget. “All we’re doing is reimbursing districts for what’s required," Eddy said. But Quinn removed the money with his veto pen.

Eddy said that during negotiations for yesterday's deal,  downstate lawmakers went through a list of funds looking for the approximately $30 million they believe is needed to go toward transportation, and they offered to give up more than $20 million out of funds that are vital to downstate Illinois. Eddy pointed specifically to $4.5 million moved out of a tourism promotions fund, $6 million from the Downstate Public Transit Fund, $1.4 million from a conservation fund and $1 million from a fund meant to address the digital divide that were included in the overall budget plan that passed yesterday.

“It’s almost like a bait and switch,” Eddy said. “Bottom line is, I’m not sure we would have agreed to taking that money out of downstate funds if it wasn’t going to go toward education.”

Vaught said Quinn’s administration negotiated with Republicans in both the House and Senate. “This agreement was put together with both sides of the aisle,” he said. “We did something that they haven’t been able to do in Washington -- you know, actually get both parties to agree to do spending changes and reductions.”

Pension fund
One fund transfer, out of a fund that feeds the State University Retirement System, raised eyebrows yesterday. Money from that fund, which contains dollars brought in from unclaimed property, normally goes into SURS, and then any shortfall from the required payment is covered through general revenue funds. The original budget did not appropriate $95 million from that fund. According to Senate Democratic staff, the money was sitting idle and would not go into SURS without legislation to move it. Lawmakers voted to push the $95 million into SURS and shifted the $95 million from general revenue funds to other spending in yesterday’s plan. So after that shell game, the total amount of money that would have ended up in the pension system -- without lawmakers voting to add more -- is still there.

Illinois couples in civil unions will now be required to file their state tax returns in the same way as married couples. The new plan is a reversal from a previous policy, under which couples in civil unions could not file state taxes together.

The Illinois Department of Revenue had decided that such couples would have to file separately because they could not file their federal taxes together. Sue Hofer, spokesperson for the Illinois Department of Revenue, said the agency looked to New York, which legalized same sex marriage this year, when trying to find a way to allow couples in civil unions to file joint state taxes.

Hofer said partners in a civil union would fill out the federal form as if they were married, and then fill out the state form as a married couple.  The federal return would be sent only to the state, along with the state form, to be used as a dummy to base the state return upon. Those in civil unions would still have to file separate federal returns as single because the federal government does not recognize their partnerships. Couples who do not wish to file a joint return would still file as married but would be able to file separate state returns.

Hofer said joint filing for state taxes will not result in large tax benefits for couples -- the substantial benefit comes at the federal level for couples with disparate incomes. If one person has a much smaller income, it can move the household into a lower tax bracket than the individual was in. “In Illinois because we are a flat tax state, you really aren’t going to see any significant change to your taxes. … With the state, everybody pays a 5 percent flat tax. But there will be some benefits.” She said that exemptions such as for property taxes or education expenses, could be applied a couple’s total income instead of just an individual’s earnings.

Randy Hannig, director of public policy for Equality Illinois, declined to comment specifically on the change because he said the group had not received an official announcement from the department. However, he said he is “cautiously optimistic.” UPDATE: From a prepared statement released by Equality Illinois Monday night: "Since the beginning of June when same-sex couples first started entering into civil unions, no one could speak with certainty about how this new status would affect state tax policy," said Hannig. "We immediately reached out to the Illinois Department of Revenue and started the process of figuring out a solid solution to this problem. Illinois law specifies that couples in a civil union are afforded the same rights and benefits as married spouses, so why should same-sex couples' state tax status be any different?” Illinois is the 10th state, including the District of Columbia, to allow same sex couples to file joint tax returns, according to Equality Illinois.

Hofer said the department will work in the coming weeks to get the word out about the change so couples in civil unions know what to do when filing their returns early next year. “We realize we had to make a decisions before the end of the year,” she said. “We will be talking with advocates and folks that this will impact.”

Rep. Greg Harris, a sponsor of the law that legalized civil unions in the state, said he did not know whether the department had created a final policy on the issue. “I do know in having talked to tax partners in a number of major law firms ... that this change would bring us in line with what other states do,” Harris said. He said the problems the department had in sorting out tax policy for couples in civil unions highlight a disparity that exists at the federal level. Harris, a Chicago Democrat, said because the federal government does not recognize civil unions, couples will miss out on tax benefits and have to jump through “additional hoops” to file state taxes together. “There’s still an inequality in the way relationships between same sex couples are treated and the way relationships between opposite sex couples are treated.”

Maloney, chairman of the Senate Higher Education Committee, said that the amount of funding linked to performance would likely be small at first. He said that one of the biggest challenges to the plan is the state budget. Maloney said the idea is to reward schools that are doing well, not punish schools that are under-achieving. But he said if higher education funding is cut or even holds steady, the end result would be punitive — taking away money from current funding levels — instead of a positive incentive — getting bonus funds for good performance. “The higher ed community has celebrated flat funding as a victory. That is unfortunate, but that’s where we’re at.”

Perna and her research partner, Joni Finney, who is also a professor at the University of Pennsylvania, looked at Illinois as part of a series of five state studies and plan to release data on other states in the near future. The project focuses on the possible causes of higher education outcomes in different states. Perna said that other states are struggling with issues similar to those facing Illinois. However, she said that the findings in Illinois are particularly disheartening because the state was performing very well in recent years. According to the study, Illinois was a leader on enrollment rates and college affordability during the mid-90s. “Illinois was once a state that people looked to as the model for higher education performance, as well as public policy and government, and it's not really any longer,” Perna said. She said that Illinois' more positive performance history is an indicator that higher education in the state could bounce back. “The potential is there, but there’s been a serious erosion. … Some profound things have to change.”

01/18/2012

By Jamey Dunn

Recent efforts to close the state's budget gap, including a temporary income tax increase, were not enough to save Illinois from a credit rating downgrade.

Moody’s Investor Services lowered Illinois’ bond rating today. (You must login to see all rating agencies' reports.) The downgrade was from an “A1” rating to an “A2” rating and made Illinois the agency’s lowest rated state. “The downgrade of the state's long-term debt follows a legislative session in which the state took no steps to implement lasting solutions to its severe pension under-funding or to its chronic bill payment delays. Failure to address these challenges undermines near- to intermediate-term prospects for fiscal recovery. It remains to be seen whether the state has the political willingness to impose durable policies leading to fiscal strength,” said the Moody’s report.

Fitch, another bond rating agency, affirmed Illinois' “A” rating yesterday. Standard and Poor’s also held its rating of the state flat at an “A+” in a report released today. Under the Fitch rating, Illinois is only second to California for the lowest rating in the country. Fitch gave the state a “stable” outlook but cited concerns similar to Moody’s: the growing pension liability, billions in unpaid bills and lack of a clear budget plan when the income tax increase is set to begin rolling back. Standard & Poor’s gave the state a “negative” outlook. “If Illinois does not make meaningful changes to further align revenue and spending and address its accumulated deficit (accounts payable and general fund liabilities) for fiscal years 2012 and 2013, we could lower the rating this year,” the agency’s report said. Standard and Poor's analysts said if Illinois can begin to address the unfunded pension liability and balance the budget, the outlook may change to “stable,” but there is little chance the state would see a ratings upgrade in the next year.

The ratings came as a result of the state planning a sale of about $800 million in bonds for capital construction projects. All three rating agencies viewed the recent tax increase as a positive step toward stabilizing the budget. However, it was not enough in the eyes of Moody’s analysts to deter a downgrade. The lower rating does not come as a total surprise because Moody’s did slap the state with a “negative” outlook last year and pointed to the state’s backlog of unpaid bills as the cause. Moody’s report said Illinois could improve its credit rating by enacting “a credible, comprehensive long-term pension funding plan” and paying down the backlog. The agency also called for “a legal framework or plan to prevent renewed buildup of late bills.” However, the report said a phase out to the tax increase without a solid plan to keep the budget balanced could result in further downgrades.

Gov. Pat Quinn’s budget office said the downgrade emphasizes the need to focus on pension and Medicaid reform and balancing the budget. “We are encouraged both Fitch and Standard & Poor’s affirmed the state’s long term bond rating. These actions indicate the state has taken positive steps to address its decades old budget challenges by reducing spending and enacting Medicaid, pension, worker’s compensation and education reforms,” said a prepared statement from the budget office.“The downgrade by Moody’s underscores that although the state has taken positive steps toward fiscal stability, as Standard & Poor’s and Fitch indicate by holding our rating steady, swift bipartisan action to implement further cost reductions and reforms in the upcoming legislative session are needed to stabilize the budget.”

As part of a three-year budget projection, Quinn proposed approximately 9 percent cuts to all areas of state government besides education and health care for fiscal year 2013. “We’re going to have to tighten the belt again this year,” Quinn told reporters in Chicago today.

Republican legislative leaders said the downgrade marks the need for substantial reforms. “Today’s downgrade in our bond rating is obviously very bad news for our state, and it proves that the General Assembly and the governor must do some very substantive things this spring that show we are committed to fundamentally changing the way we structure our budget now and going forward. Enacting major pension reform and Medicaid reforms must be at the top of the list. Obviously the practice of nibbling around the edges on reform and other budget strategies has not convinced these bond rating agencies that we are on the road to recovery. We must be bold and deliberate this spring," House Minority Leader Tom Cross and Senate Minority Leader Christine Radogno said in a joint statement. 

Although Quinn's projection showed a deficit of more than $800 million in FY 2015, the year the tax increase begins to phase out, the governor said it was to soon to focus on the issue. “I don’t think there’s a lot of need right now to be talking about that. I think we have to take one year at a time. Our goal this year in 2012 is to grow the economy, create more, have more exports help businesses expand and grow. … Robust economic growth is the key to getting a better budget.”

Quinn has also renewed his call for borrowing to pay down the state’s backlog of unpaid bills, which totals about $7 billion, according to his budget office. The governor’s repeated calls to refinance the debt by borrowing to pay it off now and then paying back borrowed funds over time at a lower interest rate have for the most part fallen on deaf ears in the legislature. Republican U.S. Sen. Mark Kirk weighed in today against Quinn’s borrowing proposal. “Moody's' decision to downgrade Illinois debt echoes the judgment of my Sovereign Debt Advisory Board report last year. Governor Quinn is planning to borrow $800 million more in the near future, with higher and higher interest costs paid by Illinois taxpayers. We are reaping the results of years of irresponsible spending and debt,” Kirk said in a prepared statement.

Quinn has called for rate cuts to some Medicaid providers instead of slowing down the reimbursement cycle, which is the reason why so many FY 2012 Medicaid bills will be paid next fiscal year. “We don’t think that’s a good solution, and we think it just puts off the problem.” The report says Quinn plans to focus on pension reform in the coming fiscal year. “He’s not coming around to anything that’s unconstitutional, and he’s said that repeatedly,” Vaught said. However, he said that other options, such as targeting cost-of-living adjustments in pension benefits or shifting pensions costs to school districts and universities could be on the table.

Vaught said that next year’s budget could result in more staff reductions but would not say if that meant layoffs or simply not hiring to fill positions that open up. He said that agencies have been informed of the level of cuts the governor expects, and they will began presenting their ideas for implementing cuts to Quinn’s budget office next week.

According to the projections, the state will end the current fiscal year with a $507 million deficit. In FY 2015, the year the recent income tax increase is set to begin phasing out, Quinn’s office predicts a deficit of $818 million. Vaught said the projected deficit illustrates the need to turn the state’s economy around. “It shows you that economic growth is hugely important.” He said that supporters of the tax increase planned that the decision of whether to extend it once it is slated to taper off would be a subject of public debate and an issue for the 2014 gubernatorial election. “[The projections] tell us what we’ve got to work with.”

Vaught said today’s report is intended to start the conversation of the budgeting process with legislators, agencies and other interested parties. The report emphasizes that tough budget decisions are needed to get Illinois back on track. “FY 13 will bring challenges. Shortfalls of billions of dollars mean a government must change. Such changes are difficult and cannot be accomplished overnight or even in one fiscal year.” However, Vaught appeared hopeful. “We see a way to get Illinois out of the woods.”

SB 840 (PA 97-0393) is for anyone who sells less than $25,000 worth of food in a year.

Lasers 
Shining a laser, such as commonly found laser pointers, at an airplane that is in taking off, in flight or landing will be a Class A misdemeanor under HB 167 (PA 97-0153).

For a complete list of the 214 laws that will go into effect on January 1, see Senate Minority Leader Christine Radogno’s website.

01/18/2012

By Jamey Dunn

One Illinois lawmaker says the first step to repairing the faltering College Illinois prepaid tuition program is making its investment decisions public.

Rep. Jim Durkin recently filed legislation that would require investment decisions for the program to take place in meetings that are open to the public. Such decisions are currently exempted under the Open Meetings Act. Durkin’s bill, House Bill 3923, comes after the Illinois Student Assistance Commission announced it has suspended the sale of College Illinois contracts until reforms to the program can be made.

“I’m not discouraged by what ISAC announced,” Durkin said. “They’ve taken some time to study the issue — new board, new executive director, new chairman — they’ve come to the same conclusions that we have: that we have to fundamentally change the program to keep it a viable option for parents and grandparents in Illinois.”

A recent report from ISAC showed College Illinois had a deficit of $559 million and was underfunded by about 30 percent as of March 2011. A state audit of the program released last summer found problems with the way ISAC chose contractors for investment advice. Durkin, a Republican from Western Springs, also takes issue with the types of investment being made, which have shifted to include investments in hedge funds, private banks and real estate along with the more traditional stock and bond purchases.

Durkin said he is working on a bill that would apply the investment restrictions put upon other state funds to College Illinois. He said such legislation “would require that the tools would be more conservative and not this whole world of alternative investments, which over the last three years the past board embarked on. I think it’s too risky. It’s not what parents signed up for.”

He added, “I do want to move us as far as we can off alternative investments because you either win big or you lose big.”

John Samuels, a spokesperson for ISAC, said that commission staff members are working on recommendations that will be heard at a meeting scheduled for January 29. Then, the commission will send recommendations to Gov. Pat Quinn and the General Assembly. Samuels said he thinks it will take legislation to reform College Illinois. He said that belief, along with the fact that ISAC was in the process of hiring a new actuary to set contract prices, is why contract sales were suspended. “Until we knew what the changes were, we felt it was unfair to sell contracts.” 

“We’ve got some time between now and the end of January to discuss what type of legislative changes need to be enacted,” Durkin said. The House is scheduled to return for the spring legislative session on January 31, 2012.

Durkin said that administrators should be included in the conversation because he said that the growing costs of tuition in the state are also contribution to College Illinois’ woes. “The rising cost of [college education] has caused stress upon the value of the funding within the system,” he said.

Durkin said the most important thing is to make sure that College Illinois contracts are honored. He said the future of the programs depends on the public having faith enough in it to buy contracts. “We need to market it better. We need to approach this in a better way. We’re not getting a lot of people signing up for the contracts. … I think we need to present it in a new manner to the people of Illinois and explain to them why it still is a good program.”

For more on the problems facing College Illinois, see Illinois Issues  May 2011.

“We are in the position right now where — yes, it’s unfortunate — there are businesses that are coming and holding us over the barrel, and I understand that that leaves a bad taste in a lot of legislators' mouths,” Hutchinson said during floor debate. But Hutchinson, an Olympia Fields Democrat, said the state cannot afford to lose the jobs those companies provide. “Every one of those people who are working live here. They pay sales taxes. They pay income taxes. … We are in a serious situation right now. We did the best we could with the negotiations we had. This is a bill that you can go home and defend.”

Opponents said that the state cannot afford the plan. Many argued that giving tax breaks to companies that threaten to leave favors big business with the means to lobby the legislature and opens the door for a rush of companies threatening to leave unless the state gives them something as well. “These special deals are bad public policy,” said Sen. Kyle McCarter, a Lebanon Republican. “This is a great bill for lobbyists, in fact maybe we can rename this bill the lobbyist dream act. Because every business in this state will and probably should line up to get their money back, and they are going to need a lobbyist.

Gov. Pat Quinn, who supports the plan, said that competing with other sates and offering tax incentives to encourage businesses to remain in the Illinois is part of the current economic climate. “Every state in the union has on the books tax incentive measures that have been passed by their legislatures to try and get jobs from other states, other businesses from other states. We just have to understand that that’s what the reality is.”

Sears has indicated that if Quinn signs the plan, it will stop shopping around for a potential move. James Parasi, chief financial officer for CME, told a House committee Monday that the passage of the plan into law would keep the CME Group in the state for years to come.

01/18/2012

By Jamey Dunn

Almost three years after his arrest on corruption charges, former Gov. Rod Blagojevich was sentenced to 14 years behind bars today, but some say the work to clean up “pay to play politics” in the state is not done.

“The long Blagojevich nightmare is over,” Andy Shaw, director of the Better Government Association, said in Chicago after the sentence came down today.

While the sentence is shorter than the 15 to 20 years that prosecutors requested for Blagojevich's 18 felony convictions, it is the longest prison term ever doled out for corruption in the state. Blagojevich was reportedly contrite today when he addressed U.S. District Judge James Zagel, saying he was sorry and that he has no one to blame but himself. According to the Chicago-Sun Times, Zagel told Blagojevich, “When it is the governor who goes bad, the fabric of Illinois is torn and disfigured and not easily or quickly repaired.” Blagojevich is must surrender on February 16, 2012. Under federal guidelines, he is required to serve 85 percent, almost 12 years, of his sentence. He was also hit with almost $22,000 in fines and penalties.

However, after the sentencing, Blagojevich vowed to fight on. “This is a time to be strong. This is a time to fight through adversity. This is a time for me to be strong for our children, be strong for Patti,” he told reporters in Chicago. “We’re going to keep fighting on though this adversity, and we’ll see you soon.” Blagojevich dusted off one of his favorite literary works, quoting Rudyard Kipling’s If, a poem he has been citing in speeches for years.

“It’s profoundly sad that we are here for the second time in five years to discuss the conviction and sentencing of a governor of Illinois.” U.S. Attorney Patrick Fitzgerald said today in Chicago. He said the sentence should deter future corruption and that it “sends a strong message that the public has had enough and judges have had enough. This needs to stop.”

Fitzgerald said that an end to corruption in Illinois would come with a change in public sentiment. He said that “to some extent” people are “resigned to corruption.” He encouraged citizens to become whistleblowers and change the climate so that those who would seek money or personal benefit in exchange for a political act “should be afraid to ask.”

Lt. Gov. Shelia Simon said Blagojevich’s sentence does not ensure an end to political malfeasance in the state. "We cannot rely on a prison sentence to deter corruption,” Simon said in a prepared statement. “Illinois needs stronger ethics laws to kill pay-to-play politics. It's time we expose conflicts of interest before they cost taxpayers, and clear the way for true public servants to rebuild trust with the public. Increased transparency, coupled with the threat of serious prison time, can end these shameful courtroom battles. Together we can put this chapter behind us, restore integrity to government and live up to our legacy as the Land of Lincoln.” Simon, who served on an ethics commission that made recommendations to the General Assembly in the wake of Blagojevich’s impeachment and removal from office, said the former governor’s conviction and sentencing provide an opportunity to have “public conversation again” about ethics in the state.

Dick Simpson, a professor and head of the Department of Political Science at the University of Illinois Chicago, agreed with Simon. “I don’t think that the sentence will be enough to deter corruption in the future.” He said that more recommendations from the ethics commission should be enacted. Simpson said that the job of cleaning up Illinois requires an educated public. “I think the most important single [recommendation to act on] would be to reintroduce into the public school system … both civics and the cost of corruption, and those are not taught in most schools anymore.”

He said students should be made aware of both the monetary costs of corruption as well as the human toll. “You can show examples of what happens when you can’t trust the policeman or you can’t trust the inspector and how it undermines trust in government and willingness to pay taxes. It’s not hard to put together a curriculum.”

He added, “Teaching political and civic engagement, rather than just the three branches of government, would be useful.”

He said that locking up offenders would never address the problem on a holistic level. “No amount of sentences would be sufficient. … Catching one crook at a time is not enough. It’s good that we punish people, but it isn’t sufficient.”

Gov. Pat Quinn called his predecessor’s sentence “stiff” but “necessary.” Quinn said there is “more work to do” to implement reforms, including enacting recommendations of the ethics commission. He renewed his call for a change to the state Constitution that would allow for citizens to put ethics measures on the ballot for a popular vote by collecting a enough voters’ signatures. Quinn said such initiatives, if passed, could apply to any level of government in the state. “We should not just have to rely on a legislature, or city councils or county boards [to pass ethics measures.]”

Quinn added, “We need to have a way for people to bypass the insiders to enact reforms that the people, the taxpayers, think are necessary.”

When asked about being Blagojevich’s running mate twice, Quinn said, “I think he let me down like he let down the people of Illinois.”

Other reading:
For more on the lack of civic education in Illinois schools, see Illinois Issues, September 2011.

For more on the history of political corruption in Illinois, see Illinois Issues Blog, December 2008.

For courtroom reporting on the sentencing, see the Chicago-Sun Times and the Chicago Tribune.

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