AFSCME reports $650K, Stand for Children, Griffin Family Close Behind

Cross posted from ICPR's blog, The Race is On:

AFSCME filed their pre-election report, showing $640K in receipts since July 1. What won't get press is how much of that they gave to Gov. Quinn. So far? None. Quinn took flak for extending a union agreement at the same time (and with the same staff) that the union was considering its endorsement. Of course, there's still time for the money to flow.

The House Republicans sent $25K to Dwight Kay. And took in $10K from Dave Lenkowski. Lenkowski is running for state House against incumbent Democrat Sara Feigenholtz in a Chicago district. Lenkowski previously reported $25K from Ken Griffin and less than $3K in other fundraising.

Koch Industries gave the Manufacturers PAC $10K today, on top of $3K last July. Koch was the subject of a New Yorker profile a few weeks ago, and many Democratic groups have used the family as a counter-point to Republican jabs at George Soros.

ActBlue continues to report receipts of money from individuals, even though it's those individuals, and not ActBlue, who determine who gets the money. Money from ActBlue is often listed as if it's from ActBlue, not the actual donors.

Bill Brady reports $25K from J&J Ventures. The donation ties for largest from the Central Illinois food vending company; in April, they gave $25K to the Senate Democratic Victory Fund.

Ken and Anna Griffin showed up again yesterday with $50K each to Bill Brady. So far, they've given about $500K in the last two weeks. Stand for Children haven't appeared in a few days, but net of internal transfers and mistaken reports, they're at almost $600K this month. We'll compile a list of the top donors in the next coming days.

For people who complain that the candidates at the top of the ticket don’t' inspire much confidence, know that there is a political committee called Leadership 2011 in Illinois. They filed today that they will not be participating in the November election. More's the pity.

To comment, please visit ICPR's blog.

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Overtime costs Corrections

By Bethany Jaeger
Gov. Pat Quinn plans to lay off as many as 1,000 prison workers at the same time a lengthy state audit reveals that overtime costs within the Illinois Department of Corrections increased from $19.2 million to $37 million two years ago because of staffing shortages.


The review by Illinois Auditor General Bill Holland’s office only pertains to fiscal years 2007 and 2008, when the corrections department was managed by a former director and under the administration of a former governor. Former director Roger Walker was appointed by then-Gov. Rod Blagojevich. Walker was replaced in June by Gov. Pat Quinn’s appointee, Michael Randle.

Holland said the deficiencies, including everything from spending more than authorized by the General Assembly to failing to spend money earmarked for hiring new frontline staff, does not paint a “pretty picture.”

“This goes to the heart of the failure of the management of the department,” he said, adding that because there have not been dramatic changes in the management since the two years in the audit, the foundation going forward is weak. “I think the new director has got some real soul searching to do with his management team.”

One problem cited in the audit was that the department violated the legislature’s intent by not spending extra money dedicated to hire new frontline staff. The General Assembly authorized spending $11.7 million to hire 231 new staff in fiscal year 2007, but only 154 new staff were hired. The next year, the legislature allotted $12 million to hire 500 new employees, but only six were reported as being hired. Instead, according to the audit, the department used the money to pay for existing staff, which also included more expensive overtime costs.

At the same time, the department reported that it lost 324 employees in fiscal year 2007 and 455 employees in fiscal year ’08.

The audit also states that mandatory overtime costs from inadequate staffing levels cost more money — overtime costs increased from $19.2 million in FY07 to more than $37 million the following year. The audit identified 126 employees working at various correctional centers that had worked so many extra hours during FY08 that they earned more $100,000, when their normal salary rates ranged from $40,000 to $75,000 a year. At Stateville Correctional Center, alone, overtime costs topped $13.7 million in FY08.

Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees, which represents many prison workers, said the most recent tab for understaffing at all Illinois prisons was more than $60 million in fiscal year 2009, which just ended June 30. “That’s a five-fold increase over just a few years ago,” he said.

“On its face it may seem counter intuitive,” Lindall added, “but it’s simple math that hiring new staff at the lowest end of the salary scale and paying them straight time is far cheaper than paying time and a half to more senior employees.”

According to the audit, the Blagojevich administration ordered the department not to hire new front line staff in fiscal year ’08.

“There were clearly directions from the Blagojevich administration that certainly did not help the day-to-day operations of the department,” Holland said. However, he added, 19 of the findings were repeated from the last two-year audit. And 28 new findings were added.

“These were not immaterial findings,” Holland continued. “These were findings of great significance that related from the top to the bottom of financial management of the Department of Corrections. And clearly it demonstrated that there was a failure on the part of the management of the Illinois Department of Corrections.”

Januari Smith, spokeswoman for the corrections department, said in an e-mail that the department already is looking to reduce overtime costs while also preparing for potential layoffs planned by Quinn. “A cadet class graduated from the academy last week and will be on the job soon. As well, another cadet class will begin in mid-August. Those staff affected by layoffs may be eligible for vacancies at other facilities across the state.”

Smith added that other corrective action is challenged by current budget constraints. “IDOC has limited resources and is working with antiquated systems. It’s a challenge to keep up with increasing requirements and a decreasing staff.”

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Governor: Budget plan won't fund the full fiscal year

By Bethany Jaeger
Gov. Pat Quinn started using his unprecedented discretion to spread around about $3.4 billion largely to prevent drastic cuts to human services, followed by health care, education and public safety programs. At the same time, he continued to outline general areas of state operations that will get cut by $1 billion total. However, he said the reductions won’t free up enough money to satisfy such spending needs as financial aid for needy college students and health care liabilities for state employees and retirees.

During a Chicago news conference Friday afternoon, the governor’s office said the revised operating budget also does nothing to address the exceptionally high $3.9 billion backlog in unpaid bills. As a result, Quinn said he will continue to urge lawmakers to consider a temporary income tax increase to get through the rest of this fiscal year when they return to the Capitol in October.


Quinn said the roughly $26.1 billion spending plan would run out of money before the fiscal year ends next June. “We are aware of the fact that we are going to come up short this fiscal year.”

The General Assembly approved the spending plan July 15, giving the governor wide discretion in spending lump sums for each state agency. Legislators also approved a $3.4 billion short-term borrowing plan to make the state’s contribution into the public employee pension system, freeing up that same amount to put towards state operations. Of that, $2.2 billion is dedicated to community-based human services, while another $1.2 billion is up to the governor to divvy out. The plan also charged the governor with cutting an additional $1 billion.

Quinn said on Friday that he decided to spread the cuts out in a way that would maximize federal matching funds, as well as federal stimulus dollars. And he said he chose to fund health-related initiatives that focus on disease prevention and that could reduce demand for more expensive services later, including home health programs that allow senior citizens to remain in their homes rather than be sent to more expensive nursing homes.

The general areas of reductions have not changed since announced last month. The administration still plans to cut $185 million from state operations. The administration already sent out layoff notices earlier this month. Some employees will lose their jobs. Others will fill vacancies. Lawmakers and executive branch workers also will have to take one furlough day a month. The administration wants unionized employees to consider such concessions, but that would require the unions to open their active contracts that provide for annual pay raises.

“Do we really need the pay raise for union employees in the coming fiscal year, given all the things that have happened in this fiscal year?” Quinn said. “That’s $125 million. If the union said, ‘Well, we’ll take a pay freeze. We understand that we don’t want to, but we’re going to do that,’ then they can help save a lot of jobs.”

The idea is strongly opposed by the American Federation of State, County and Municipal Employees Council 31, the largest public employee union. Officials have met with the administration to bargain over the impact of layoffs, but they have not negotiated whether unionized employees will take furlough days, according to Anders Lindall, Council 31 spokesman.

“Should the administration make a proposal, we’re obligated to listen and prepared to do so,” he said in an e-mail. “But the height of this terrible recession is the worst possible time to reduce services to Illinois residents, whether by furlough or layoff of the frontline employees who make those services happen.”

Jerry Stermer, Quinn’s chief of staff, said frontline employees such as Department of Corrections officers will not be subject to furlough days because they would be replaced by fellow workers who would be paid for overtime. Stermer said the administration within the week would release more details about which employees would have to take unpaid days off.

Other general areas of spending reductions include grants to local agencies and governments, which would be reduced by $250 million.

Even after the cuts, the administration contends that Medicaid funding will fall $600 million short of the need, and financial aid for low-income college students will be reduced by $225 million.

“Some legislators screamed to the heavens, ‘Cut, cut, cut,’” Quinn said. “We have cut. We have cut from here to Kingdom Come. I don’t like college scholarships being cut $225 million. That’s our future.”

On the other hand, the administration does plan to put more money toward some education programs, human services and other public health and safety initiatives.

As part of the $3.4 billion borrowing scheme, Quinn must dedicate $2.2 billion to human services. Here’s how he said he would spend it:
- $1.4 billion for grants to programs that serve people with developmental disabilities, drug and alcohol addictions and mental health needs.
- $342 million for Department on Aging community care program, aimed at keeping seniors in their homes.
- $272 million for the Department of Children and Family Services for court-ordered services.
- $27 million for community adult education and GED services.
- $18 million for Chicago-area mass transit subsidies and free rides for seniors and people with disabilities.

The remaining $1.2 billion is slated to be split among programs related to health, education, disease prevention and public transportation. Some examples include:
- $300 million for Medicaid.
- $700 million for group health insurance for state employees and retirees.
- $85 million for early childhood education (brining it up to about 90 percent of last year’s funding levels). See our July 21 blog for background.
- $11 million for bilingual education (bringing it up to about 90 percent of what they were operating at before).
- $17 million for HIV/AIDS community-based programs (“pretty much full strength” funding levels compared with last year).
- $9 million for breast and cervical cancer screening programs.
- $13 million for Amtrak.

Stermer said while the new spending plan authorizes $26 billion in spending from the general revenue fund, it falls $1.4 billion short of funding services at last year’s levels and does nothing to address the $3.9 billion backlog of unpaid bills.

The cuts that are being implemented now may not be the last, he said. “We may have to make additional cuts as time goes on if we cannot make resolution with the General Assembly as to the unmet needs.”

He referred to the administration’s belief that an income tax increase will be necessary to get through the rest of the fiscal year.

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12-month budget deal within reach

By Bethany Jaeger, with Jamey Dunn contributing
The top four legislative leaders and the governor have a general agreement to work toward a full 12-month budget, as opposed to a partial-year budget that would last only five months, without raising income taxes.

But even with a general agreement, the state still is likely to face a deficit that the legislature would have to address this fall or winter, possibly during its annual fall “veto” session. The size of that deficit, however, is still unknown or, at least, debatable. The governor’s most recent estimate is a $9.2 billion gap in revenues versus spending.

The leaders met twice with the governor Tuesday. Senate Minority Leader Christine Radogno said after the second meeting that while the state would still have a massive backlog of unpaid bills, the revenue outlook could improve with activity from the federal stimulus package, the statewide construction program enacted Monday and other longer-term reforms to Medicaid and pension liabilities sought by Republicans. “So we have to wait and see how the reforms and how the stimulus elements come together, and that may improve our revenue position,” she said. “I don’t know that. But I do know, as of tonight, we should avoid having a meltdown in state government.”

Not all were so sure. “They’re close," said Rep. Art Turner, a Chicago Democrat, "but … close counts in horseshoes. This is politics. We still haven’t gotten there, yet.”

The new fiscal year started July 1. Layoff notices to state employees went out July 7. Numerous human services providers that get state funding have reduced programs and laid off their own employees because their shoestring budgets can’t survive without knowing when they would receive their next state payments.

The general agreement among legislative leaders includes enacting a 12-month budget that relies on revenue from refinancing state debt (Senate Bill 1609, which already was enacted), sweeping dedicated funds (SB 1433) and borrowing more money. The short-term borrowing scheme has changed from its original version. Instead of floating $2.2 billion in bonds, the state would float $3.6 billion. The governor also would still have to cut an additional $1 billion in spending. The legislature would give him wide discretion to cut as he saw fit.

The short-term borrowing would help the state make its $4 billion payment into the public employee pension system this fiscal year. Borrowing would free up money that would be used to prevent severe cuts to community-based services. While numbers vary, one estimate by a House Democrat is that the new budget deal could result in service providers receiving about a 13 percent cut, as opposed to a 50 percent cut, as previously approved. The governor vetoed that measure (SB 1197).

Human services

So instead of the so-called 50 percent budget for human services, providers would get about 87 percent of what they received in state support last fiscal year.

“We’re getting very close to what [the governor] was looking for,” said House Minority Leader Tom Cross. But, he added, the situation has been painted as more severe than it needed to be. “I think the approach a month ago was to attempt to scare legislators into a tax increase. I didn’t think that was a good approach,” Cross said. “I think at the end of the day, [cuts to human services] will not be nearly as severely as the governor portrayed six weeks ago.”

Both Republican leaders and Senate President John Cullerton added that state employees and service providers now need reassurance that they’ll still get paid. “Unfortunately, some people come to believe that they’re going to be shut down, that their not-for-profit agencies are not going to be able to operate,” Cullerton said. “And that’s been unfortunate because that was never the case, never had to be the case.”

Under the new version of a budget deal, about $2.2 billion of the short-term borrowing scheme would benefit human services. Quinn would be able to decide how to spend the additional $1.3 billion that the legislature is expected to add to the borrowing scheme Wednesday.

Income tax update

An income tax increase temporarily is off the table. Quinn recently said he would delay his campaign for a tax increase until the fall or winter. Fewer votes would be needed in January. And some legislators have requested the governor “tone down the rhetoric” for the next few months, which would allow them to find out whether they face serious opponents in the 2010 elections before being called to vote on a tax increase.

But the idea of a tax hike still has support, particularly among Senate Democrats. “It’s not dead,” said Sen. Terry Link, a Waukegan Democrat. “It may be on pause, but it’s definitely not dead.” Sooner or later, he added, state government will have to have a “revenue infusion” to keep operating.

Cullerton gave a sneak peak into his campaign for a tax increase when he seeks support from Republicans. He said if the legislature had approved an income tax increase this year, the state could have used the revenue to pay its backlogged bills rather than borrowing money to do so. “That would be a conservative, responsible response to a fiscal crisis,” he said. “That’s what our income tax increase could be characterized as.”

After spending most of the day in closed-door meetings, some legislators headed to the Major League Baseball All Star baseball game in St. Louis, where President Barack Obama was scheduled to toss the ceremonial opening pitch.

The legislative leaders are scheduled to meet again at 11 a.m. Wednesday. And they expect to take action on parts of the budget deal as early as Wednesday afternoon.

AFSCME lawsuit

If things fall into place tomorrow, then some groups of state workers would be paid up to a few days late. In an attempt to ensure that state workers continue to get paid if things fall apart and a budget is not in place, the American Federation of State, County and Municipal Employees Council 31 filed a lawsuit today in St. Clair County.

The union made a similar move in 2007 when the legislature failed to produce a budget by the end of the fiscal year. AFSCME spokesman Anders Lindall said, “Unfortunately, we’re in the same boat.” The lawsuit would apply to all state employees.

“The fundamental legal principles are the same for any state employee,” Lindall said. “If you work, you are entitled to be paid in full and on time for that work.” He added that if lawmakers can agree on a budget in the next few days, the suit would not be necessary.

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Layoff notices go out

By Bethany Jaeger
Gov. Pat Quinn said about 2,600 layoffs are needed to help reduce state spending by $1 billion. At the same time he outlined the cuts in Chicago Tuesday, Quinn also vetoed another portion of the state budget. He said the General Assembly sent him a spending plan that “just spends too much money.”

“I think the best way to operate with the budget that I was given by the General Assembly a week ago is to veto it in its entirety because it doesn't cut spending as it should,” he said in a Chicago news conference. He later added: “We're not playing tennis here. We're playing with people's lives.”

Quinn vetoed House Bill 2145, which authorized $3.8 billion in spending on state operations, because it didn't follow the principle of shared sacrifice, he said. “There were too many instances of entities getting the same budget they did the year before or a very modest reduction, where others are taking very painful cuts. I don't believe that that's fair, and I don't think the people, the taxpayers of Illinois think that's fair.”

Of his $1 billion in cuts, he proposed 12 furlough days, or unpaid days off, for all state employees, including unionized workers and those in the executive and legislative branches. The 2,600 layoffs would spread across all state agencies. He said the furlough days would save about $108 million. Without them, he would seek an additional 2,500 layoffs.

The list of cuts proposed by the governor also would include:

• $150 million - Moving Medicaid patients to managed care health plans so they have medical "homes" and reducing IllinoisCares Rx, a prescription drug program started by former Gov. Rod Blagojevich.
• $250 million - Reducing grants to local agencies, local governments and programs by 10 percent across most state agencies, except the Department of Veterans' Affairs.
• $175 million - Maintaining last year's funding levels for education, while preserving the investment needed to secure all federal stimulus dollars.
• $125 million - Laying off about 1,000 Department of Corrections employees and possibly closing some prisons (he previously mentioned letting non-violent criminal offenders out of jail early).
• $100 million - Requiring all state agencies to reserve some spending for an even rainier day.
• $25 million - Reducing spending in other state offices and departments not under the governor's control.

“We're all in this together,” Quinn said. “So whether you're the governor of Illinois or a member of the legislature or somewhere in the state bureaucracy, we have to cut costs, cut costs, cut costs.”

But a large chunk of the governor's cuts would require negotiations with public employee unions, which would mean reopening active labor contracts to implement furlough days and to reconsider pay raises scheduled for this year. Quinn said those raises account for about $125 million.

Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, said yesterday, “We have a duty to listen to anything that the administration proposes, and we've indicated a willingness to do that.” However, he added, furloughs have the same effect of service cuts, and layoffs could result in more expensive overtime pay.

Furloughs are the “least painful way of going,” Quinn said. “We want to limit layoffs wherever possible. That's why the use of the furlough can help preserve jobs on the state.” Despite furloughs, he added the state would still have to lay off about 2,600 workers and that Illinois only has as many employees today as it did in 1973. The roughly 58,000 workers is one of the nation's lowest ratios of state employees per state resident. “But having said that," Quinn said, "we still have to do these very difficult cuts because we simply don't have the money.”

The dramatic cuts are nothing new to many legislators. The governor has been making similar warnings since the spring legislative session. However, some Republican lawmakers said they're still waiting for the governor to act on other types of reforms before they'll consider a tax increase, which Quinn maintains is the other major way to avoid such deep budget cuts.

For instance, Rep. Franco Coladipietro, a Blooomingdale Republican, said the governor and the General Assembly need to address initiatives that affect not just this year's budget, but budgets several years down the road. He cited job growth, as well as more significant ethics and public employee pension reforms. “Passing a tax increase right now with making no changes to the structural budget process in Illinois only puts us in a position where we'll be in the same exact position three years from now,” he said. “And it doesn't change anything.”

Coladipietro was one suburban Chicago legislator at a closed-door meeting with the governor yesterday. Quinn also previously met with female legislators. He said he plans to meet with downstate legislators in Springfield later this week, and he's scheduled to meet Monday with legislative leaders in the Executive Mansion.

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Quinn: Legislature should return next week

By Bethany Jaeger, Jamey Dunn and Hilary Russell
Gov. Pat Quinn’s administration is starting a full-court press to pressure state lawmakers into approving an income tax increase to help avoid catastrophic cuts, highlighting cuts to human services. The General Assembly approved a bare bones budget at the end of May that would only fund community services by half and, according to the governor’s office, would still carry a $9.2 billion deficit. But the same question remains that loomed May 31: How will Quinn recruit nearly 30 more representatives to support a tax increase when they rejected the idea two weeks ago?

All four top Democratic and Republican leaders are scheduled to meet with Quinn in Chicago tomorrow, when they could talk about whether the General Assembly will be called back to Springfield next week, as Quinn urged. That would leave about one week before the new fiscal year starts and when an operating budget would need to be in place.




Quinn still urges the need to enact a state income tax increase. However, his proposal to temporarily increase the state income tax fell 18 votes short in the House May 31. He now needs to gain 29 more votes to get up to the supermajority needed after May 31.

While enough Democrats in the Senate approved two versions of an income tax increase last month, House Democrats have said they need Republican support before they’d be able to approve new revenue sources. Republicans, however, continue to demand major reforms to the state’s public employee pension system, Medicaid program and other efficiencies before they’ll consider a tax increase.

House Minority Leader Tom Cross’s spokeswoman, Sara Wojcicki, said the GOP Caucus has a series of reform measures (about 31 bills), most of which have been bottled up by Democratic leadership. For instance, House Republicans would target the practice of rolling over the current year’s bills to the next fiscal year, allowing officials to claim the budget is balanced when it actually doesn’t cover expenses. House Bill 4095 would require the state to set new accounting benchmarks before an operating budget could be deemed “balanced.” House Bill 4097 would ban the state from rolling over payments to Medicaid providers and state employee and retiree health benefits.

Patty Schuh, spokeswoman for Senate Minority Leader Christine Radogno, says her caucus has proposed reforms during the past six years and hasn’t seen progress, including during the last few weeks of meetings between legislative leaders and the governor. “There have been long discussions. Other than that, we haven’t seen much.”

She adds that Radogno believes the cuts to human services highlighted by Quinn’s administration today would be “irresponsible” and that the budget should be looked at in its entirety, not just in one service delivery area.

The legislature has yet to send the so-called bare bones budget to the governor’s desk. But Quinn’s chief of staff, Jerry Stermer, said agencies and community service providers have to act as if the budget situation won’t change before July 1.

Stermer met with human service providers this morning in Chicago and said that the bare bones budget would still fall $9.2 billion short of normal spending levels. He said that would result in layoffs of more than 100,000 people working for community-based social services and up to 10,000 state workers.

State employee unions oppose the idea of laying off workers or asking them to take unpaid days off to help stave the severity of budget cuts. Henry Bayer, executive director of the American Federation of State, County and Municipal Employees Council 31, said in Springfield today: “There is nothing that would alleviate the threat of layoffs short of a tax increase. We don’t have a tax increase, there will be substantial layoffs.” He said even if every state employee worked the entire year unpaid, the state would only save $3 billion, far short of the $9 billion deficit projected by the governor’s office. “That may make some people feel good to think they’re inflicting pain on somebody, but that is not a solution to the problem,” Bayer said. “There is only one solution to the problem.” He referred to tax increases.

Other possible consequences of the bare bones budget laid out by Quinn’s office include:

• Giving foster parents half the money they currently receive to help care for foster children.
• Eliminating daycare for more than 5,250 children of low-income working parents.
• Tripling foster children case loads for Department of Children and Family Service workers.
• Closing 15 DCFS field offices.
• Ending addiction treatment for more than 20,800 clients.
• Closing six state-run psychiatric hospitals.
• Eliminating multiple preventative health care services such as vaccinations for children and cancer screening programs.
• Cutting financial aid to college students by $275 million.

Quinn’s office also said Illinois would lose $2 billion in federal matching funds and some stimulus money.

In Springfield, a local chapter of the Service Employees International Union rallied outside the state Capitol in protest. Gail Hamilton, a home health aide, said if the cuts in human services went through, as many as 80,000 parents would have no place to take their children while they worked. And about 40,000 senior citizens would lose access to home health services and, potentially, end up in more costly nursing home care.

The group staked out offices of representatives who voted “no” on raising the income tax last month. Today, it was two Republicans from the Springfield area, Reps. Raymond Poe and Rich Brauer. On Monday, they targeted two downstate Democrats, Reps. Brandon Phelps and John Bradley, as well as Chicago suburban Republican Rep. Beth Coulson. Last week’s focus was all northern Illinois Democrats: Reps. James Brosnahan, Jack Franks, Michael Zalewski and Kevin McCarthy.

Hamilton said conversations with legislators have been “infuriating.”

“They’ll admit to us that they know we need a tax increase, but when it comes down to it, they don’t have the guts to go through with it.”

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Health care scare

By Hilary Russell
State employees who want to decide which doctor they see or what hospital they are admitted to may have to re-think their health care options.

According to the legislative Commission on Government Forecasting and Accountability, state employees collectively would be on the hook for $200 million more for their health insurance plans. The commission met with medical providers today to determine whether existing contracts should be renewed for next fiscal year, which starts July 1.





Gov. Pat Quinn’s administration is seeking a health insurance policy that would charge state employees more in monthly premiums if they chose more flexible plans, as opposed to a managed care policy. For example, employees enrolled in the most flexible plans currently pay about $90 a month. Under the administration’s proposal, that premium would increase to nearly $310.

Retirees also would pay more, under Quinn’s proposed operating budget. If approved by the General Assembly, retirees who are not enrolled in Medicare would see the biggest increase. They currently pay about $13 a month for state health benefits. That would increase to about $583 a month.

“That’s a big change,” said Rep. Frank Mautino, a Spring Valley Democrat. “It’s a change from $13 a month, which is unrealistic, to $7,000 a year. People have worked under that and retired under the premise that the state would pay the predominant share of their insurance. Now the governor’s budget assumes that they will pick up about one third of the cost, and that will come as a big surprise.”

The increase in premiums is, in part, an effort to encourage employees to sign up for less expensive managed care plans. The flexible plans allow patients to see any doctor they prefer, while managed care plans limit patients to see doctors on a pre-approved list.

Rep. Elaine Nekritz, a Northbrook Democrat, said that with the increase comes the question of how to pay for it. “What one doesn’t pick up, the other has to. It’s not going to be easy to tell employees that their premiums just increased 5,000 percent. On the other hand, can we come up with another $200 million? Where does it come from? I don’t know. Ultimately, those are the questions we have to work through in the next six weeks.”

Collectively, the projection for Illinois’ State Employees’ Group Health Insurance Liability tops out at $2.1 billion for the next fiscal year, compared with $1.9 billion last year, according to the Commission on Government Forecasting and Accountability.

Hospital board chair steps down
By Jamey Dunn
Dr. Quentin Young withdrew himself today from consideration as the new chair of the Illinois Health Facilities Planning Board because of a possible conflict of interest.

Last Friday, Gov. Pat Quinn named Young, a health care advocate who previously served as Quinn’s physician, to head the board.

According to a statement from Quinn, Young withdrew his name when he realized that his former practice owns part of a property that rents space to a health care provider. Young still has a stake in the practice, and Illinois law bars the head of the hospital planning board from having financial ties to any institution licensed under the state’s hospital licensing act.

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Legislators eye "adjustments"

By Bethany Jaeger, Jamey Dunn and Hilary Russell
Gov. Pat Quinn wrote his 40-minute Budget Address himself, just one indication of the change under the Capitol dome since the impeachment and removal of former Gov. Rod Blagojevich.


Wearing glasses and a navy blue suit, Quinn opened his speech Wednesday before the General Assembly to a standing ovation from Democrats and Republicans. But the tone soon changed when Quinn described the context in which he proposes a bold spending and revenue plan:

• An integrity crisis — The state citizenry is damaged and embarrassed by the “bipartisan betrayal” of former Govs. George Ryan, a Republican serving in federal prison, and Blagojevich, a Democrat fighting federal corruption allegations.
• A fiscal crisis — The budget deficit is projected to be $11.6 billion by the end of fiscal year 2010, and the state can’t afford to pay nearly $5 billion in overdue bills.
• An economic crisis — Unemployment is rising to nearly 8 percent.

“To be direct and honest, our state is facing its greatest crisis in modern times," Quinn said.

David Merriman, an economist and professor of public administration with the Institute of Government and Public Affairs, said in stark contrast to the budgets proposed by Blagojevich, “Quinn’s proposals are transparent, and the effects are relatively simple to identify. There is little or no smoke and mirrors.”

Senate President John Cullerton said he could see the looks on the faces of Democratic and Republican legislators. “Even if you didn’t agree with everything he said, it was just so gratifying to see the reaction of the members based on the governor’s sincerity and his words.”

Cullerton also pointed to the weighty proposals of an income tax increase, a road and school construction program, a reformed pension system and a slight bump in education funding. “It’s a lot of work, and he’s to be congratulated for making those proposals.”

But that doesn’t mean Quinn will get everything he wants. Legislators of both political parties already are eyeing “adjustments,” in Cullerton’s words, to ensure that an income tax increase is used as a last resort.

“If we cut as much as the governor has proposed, and we guarantee that we have paid our bills, and we guarantee that we have a capital bill, then — and only then — do we look to the income tax and determine whether we need it,” Cullerton said. “And, if so, how much we have to raise it?”

Income taxes
As we said last night, Quinn’s blueprint relies on a state income tax increase of 1.5 percentage points for individuals and 2.4 percentage points for businesses. But some of the new tax revenue would be shaved off to provide a heightened personal tax exemption, from the current $2,000 to $6,000 per individual. The net revenue: about $3.15 billion, according to House Democrats.

That’s one area subject to negotiations. Senate Democrats want to look at a personal exemption that’s lower than Quinn’s proposal or, possibly, phasing it in over a few years. Or, while they eventually could sign on to an income tax increase, they might seek a lower rate.

Pensions
Quinn also wants to restructure the public employee pension system, which we wrote about last week. Business groups have been advocating for pension reform for years. Yet, there’s a concern about Quinn’s plan to divert money away from the amount the state is supposed to pay into those systems through 2011.

Quinn proposes changing benefits for newly hired employees. Among other changes, that would increase the retirement age and require them to pay more into their retirement benefits. At the same time, Quinn proposes shorting the amount the state pays into the pension system by $500 million this year and $2.3 billion next fiscal year (CORRECTION: I misread a chart and mistakenly thought there would be a third year of reduced pension funding. I was wrong. There are only two years, totaling $2.8 billion. I sincerely apologize.). The pension reforms are estimated to save about $160 million by 2045.

Cullerton said while he believes the governor’s pension reforms could save money over time, “we just have to examine the numbers and make sure that those savings that we would get in the future would justify lower payments into those funds right now.”

Public employee unions reject the idea in its entirety. According to Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, retiree benefits average about $18,000 a year. He said the state’s debt should have nothing to do with employees who consistently contribute to their benefits. “Cutting future benefits will not reduce the state’s current debt by a single penny, and skipping payments on the basis of such imagined savings will only compound the current crisis.”

State employees
AFSCME also opposes Quinn’s idea of making current employees, minus public safety, health care and university workers, take four unpaid days off, called furlough days, and pay more into their health care plans.

There’s a contract in place, Lindall said. “The state can’t force changes in any of these areas. Under our contract, they have to negotiate it. If they don’t negotiate those changes, we will enforce our contract in court.”

What else is on the table?
Republicans say everything — from budget cuts to expanded gaming — should be on the table before resorting to an income tax increase.

While Senate Minority Leader Christine Radogno agreed with parts of Quinn’s proposed budget such as pension reforms and the removal of a gas tax increase as a revenue source, she called an income tax increase “premature and irresponsible right now.”

House Minority Leader Tom Cross agreed that Medicaid spending should be reduced and, he added, lawmakers need to ensure they assess all the possibilities for using federal stimulus funds to help fill in the deficit.

Neither GOP leader would say that the state could pay off its debts without raising taxes, but they both said that tax increases should only be considered when all other options have been exhausted. Both also said that Republicans would be less wary of a tax increase if it would have a set end date.

Expanded gaming as a revenue source isn’t dead, either. Rep. Jim Durkin, a Western Springs Republican, said the state still should consider leasing the Illinois Lottery to a private entity to raise money, which has been tried before. Radogno agreed that the state should look to the “voluntary activity of gambling” for increased revenues.

Democrats also have been considering expanding gaming as a revenue source, although Cullerton said he would not intend to expand gaming as a way to pay for a capital construction plan. He did say gaming could be used to lessen the need for an income tax increase.

We'll talk more about capital plans soon.

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Friday follow-up

A few loose ends that we recently wrote about have been tied up today, while few more are about to reopen next week. The Illinois House returns to Springfield Wednesday and Thursday to debate funding for a statewide construction plan and to reverse some of the governor's recent actions.

AFSCME: It’s fair
First, a lot of rallies, meetings and political undertones potentially came to rest Friday as about 37,000 state employees have a new, agreed-upon contract with their top employer, Gov. Rod Blagojevich’s administration. Members of the American Federation of State, County and Municipal Employees Council 31 vocally opposed increases in their health care costs that they say the administration sought. Months of negotiations led the union to request a mediator to bring the two sides closer together.

The result is a four-year contract that gives members a 15.25 percent wage increase during the life of the contract, and retired employees will retain the pension and health benefits they received under the former contract. However, employees are going to pay more for their health insurance premiums, co-payments and deductibles. Cohen said monthly premiums will increase by $12 twice during the next four years. “The state was asking for huge amounts, and we ended up are what we feel are modest amounts,” Cohen said, later adding: “Our members feel it was fair. When they looked at that contract, it wasn’t everything they wanted, but it was fair.”

He said they didn’t get relief from mandatory overtime, which they expect to intensify as more workers are laid off and the remaining employees do “more with less,” an all too familiar phrase.

The governor’s office also said in a statement that the contract was “fair" for both taxpayers and state workers. "Both sides spent months in negotiations, and this contract is the result of that tireless work.”

AFSCME: It’s unfair
Council 31, however, still disagrees with the administration about a separate issue: closing a once troubled facility for people with developmental disabilities. William A. Howe Developmental Center and the Tinley Park Mental Health Center in Chicago's south suburbs were decertified by the federal government for reports of neglect and other deficiencies. The lack of federal certification means the state no longer receives federal money to operate the facilities. But the Illinois Department of Human Services continued to operate and fund the centers without a federal match. We wrote about the centers, as well as some new plans for caring for people with disabilities, in the June Illinois Issues magazine.

AFSCME opposes shuttering the center because it would leave about 800 employees without their state jobs and benefits. About 600 are AFSCME members, said John Cameron, Council 31 spokesman. Some families also opposed the closing because they fear for the continuity of care for their loved ones with few alternatives. The administration announced that it planned to move residents to other state institutions or to community-based services. Yet, Cameron said, this affects people with high needs of services, and the union questions whether the state has enough capacity to support community-based services that already are under-funded and have long waiting lists.

The Illinois Council on Developmental Disabilities said about 15,000 individuals are on a waiting list for such services. However, the council said shutting one door opens another. Instead of placing people with disabilities in more institutions, advocates look to community-based services as a way to improve what they describe as an outdated system. Read more in the organization’s report, “Blueprint for system redesign in Illinois.”

Home for the House days
State Rep. Jim Watson, a Jacksonville Republican and staff sergeant in the U.S. Marine Corps, flew home from Camp Pendleton, Calif., today after serving more than six months in Iraq. Watch Illinois Issues magazine print edition to read more about the work he did to help one province establish its first form of representative government, which the U.S. military just handed over to the Anbar Provincial Council on Labor Day.

Watson arrives home just in time for the Illinois House to reconvene in a special session to discuss funding a capital construction program by leasing the Illinois Lottery to private investors.

But even if the House approves a lottery deal — with some modifications to the governor’s original proposal — it still has to go to the Senate, which isn’t scheduled to come back to Springfield before November. And even if the Senate approved a measure to let the governor lease the lottery, then it still would take months to figure out the amount of money it would generate and the amount of money that the state would have to borrow. Only then would the House draft a spending plan for that money, according to Rep. Gary Hannig, a Litchfield Democrat and deputy majority leader.

But voting on a lottery plan is a first step in that process. Expect the House to include such “safeguards" as requiring the state treasurer and comptroller to sign off on the lottery deal to ensure that it’s a good deal for taxpayers. Hannig also said an ethics portion would “ensure that there’s no temptation to engage in any kind of pay-to-play antics,” and they could limit the amount consultants and lawyers could make from the deal. “Hopefully we can pass this bill next week and send it to the Senate,” Hannig said. “And it isn’t that much different from what they have already passed.”

We’ll see about that.

The House also is expected consider some of the governor’s amendatory vetoes, including the unanimously approved ethics legislation that Blagojevich expanded. And House members could try to approve restoring some of the money the governor cut that resulted in hundreds of layoffs, closed state parks and closed state historic sites. But it would restore some, not all, of the cuts, Hannig said.

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State Employees Get Less Than Teachers Demand

Huntley teachers didn't think 5.43% in the first year and the Cost of Living, plus 0.65% in the next three years was not good enough.

I wonder if Huntley school teachers would have settled for what AFSCME, the state workers' union is presenting it its members:

3.8% a year for four years

That 15.2% is what reporter Doug Finke of Springfield's State Journal-Register is saying is in the AFSCME deal. “When compounded, (the) total (is) 16.3 percent over the four-year term of the contract,” but the raise does not kick in until January 1st.

The article continues,

“Workers will get two raises totaling 4 percent in calendar 2009, two raises totaling 4 percent in 2010, two raises totaling 6 percent in 2011 and a raise of 1.25 percent on Jan. 1, 2012.”

The memo the Springfield paper obtained brags that the net increase is greater than in the last four-year contract.

It was reported somewhere that Governor Rod Blagojevich's negotiators were pushing to get union members to pay for part of their pension or convert it to something like a 401(k). That did not happen.

The proposal also calls for $6 monthly insurance premium increases during the first two years and a $50 deductible for prescription drugs.

= = = = =
The photo of the Illinois State Capitol was taken from the south. It shows the side on which the Illinois House of Representatives meets.

Posted first at McHenry County Blog, where you can read how Sarah Palin spotlights Barack Obama's biggest sin of omission.

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Legal grounds

The Illinois legislature continued a trend by ignoring the governor’s requests and, instead, focusing on some hot-button issues that grab headlines before the November elections. Gov. Rod Blagojevich called a special legislative session for today to focus on education funding reform, but not a peep was heard during proceedings. “Today is a joke. No agenda. No bill. No plan,” said House Minority Leader Tom Cross. The legislature has nothing to do when no legislation is proposed, added Steve Brown, spokesman for House Speaker Michael Madigan.

Here are two other items that grabbed the spotlight:

A legislative review panel unanimously rejected Gov. Rod Blagojevich’s idea to move about 140 state jobs from Springfield to Harrisburg, three hours apart. But the vote isn’t binding, and the governor maintains that he intends to move the jobs as an economic boost to the southern Illinois town.

But the bipartisan, legislative Commission on Government Forecasting and Accountability’s six-hour hearing last month and the “pounds of evidence” generated might not go to waste, says Sen. Jeff Schoenberg, an Evanston Democrat chairing the commission and author of the law setting a review process for closing state facilities. The legal and economic data provided as a result of this process could be used as evidence in court.

Legal challenges could come from the state legislators representing the Springfield area, as well as the American Federation of State, County and Municipal Employees Council 31 or the local Teamsters union representing the affected employees in the Illinois Department of Transportation’s Division of Public Safety.

Springfield Mayor Tim Davlin adds that the unanimous vote by the commission demonstrates that the public review process works and that it sets a precedent for future moves. “We’re already hearing rumors of other moves, and I think this is just as important as the next one or the one after that,” Davlin said after the committee vote. “I think it’s obvious that this is what this commission was formed for, to take a look at the economic impact. And I think they spoke overwhelmingly.”

The panel voted 12-0 to recommend that the administration not move the Division of Traffic Safety from Springfield to Harrisburg and that it, instead, look for alternative locations within the City of Springfield that would be cheaper than its current lease.

“Does this decision legally inject or confirm what the administration does to the point where it can stop the administration from doing it? According to the law, the answer is no,” Schoenberg says. “However … given the overwhelming volume of evidence that we heard on the economic and legal issues associated with this proposal, I personally think it would be unwise and contrary to the public’s interest.”

Sen. Bill Brady, a Bloomington Republican on the commission, said the process has highlighted questions about the fiscal merit, the political motivations and the human impact on the employees.

The administration, however, is looking at other evidence to the contrary, suggesting the move will save money and help out an economically depressed area. Here’s the governor’s statement, provided by e-mail this afternoon: “We will be moving forward with the geographic relocation of IDOT’s Division of Traffic Safety to Harrisburg, as previously mentioned. We’ll be working with the employees who do not choose to relocate, within the terms of their contracts, to find positions for them in Springfield. We will follow all appropriate timelines and guidelines as we move forward.”

Watch this blog for more about legal questions surrounding the governor’s executive authority.

But as part of a checks and balances system established by the state Constitution, the Commission on Government Forecasting and Accountability may be unable to issue binding recommendations, Schoenberg said. What that means for the IDOT proposal, he said: “The facts of the case point heavily towards the commission’s recommendation. Ultimately, if the executive branch chooses to go in a different direction, there may be someone who takes an exception with that.”

No pay raises
The Senate finally agreed with the House to reject granting about $1.1 million in pay raises to legislators, executive officers and top agency officials. But they still got a 3.8 percent cost-of-living adjustment this fiscal year.

Senate President Emil Jones Jr. and Sens. Donne Trotter and Kwame Raoul, all Chicago Democrats, voted present. The remaining 47 senators on the floor voted to reject the raises recommended by the Compensation Review Board. Raoul voted present because, as he said during floor debate, the board was formed to take the issue of legislative pay raises out of the legislature’s arena. “It should not be my decision as to how much I am compensated.”

Senate Minority Leader Frank Watson called the Compensation Review Board a “cover” that fails to take the issue out of the legislative purview. “State government is in shambles. Nothing is getting done … It’s just not the time for anyone in state government to get a pay increase.”

In the balcony, a group of people wearing turquoise T-shirts visited to urge legislators to refund $43 million in budget cuts affecting substance abuse and treatment services.

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Ready, set, repeat

Reminiscent of last year, a whole host of state policy issues remain up in the air throughout the summer. Inaction mostly rests on the shoulders of Democrats, who are repeating history by agreeing on practically nothing. The main culprits are Gov. Rod Blagojevich and House Speaker Michael Madigan, each of whom blames the other for lack of action. Meanwhile, Illinois is in its ninth year without a capital construction plan, campaign funding reform remains dormant, many state services and agencies are operating with stagnant or decreased funding and long-term costs of health care and pensions continue to compound.

Legislators and the governor will return to Springfield this week with lots to talk about, but little progress is anticipated. Here’s a chronological list of activities with some context.

Today: Comptroller Dan Hynes issued a statement that he would not cut the checks for pay raises for state legislators and officers if they are enacted because the General Assembly never gave him authority to spend the necessary money. “We cannot implement the pay raises without an appropriation. But more importantly, I am of the opinion that this is no time for pay raises,” he said in a release, citing budget cuts for social services and Medicaid providers. The House rejected the pay raises, but the Senate has yet to do so. In the larger scheme of things, the pay raises simply are a battle of public perception. While such state services as substance abuse treatment struggle to meet demand because of $43 million in budget cuts, it would look disingenuous if legislators received their annual 3 percent cost-of-living adjustments at the same time they receive significant pay raises, costing about $1.1 million just for constitutional officers, legislators and top state agency officials, according to the comptroller’s office. That doesn't count pay raises for judges.

Tuesday: Expect Gov. Rod Blagojevich’s idea to move about 140 state employee positions from Springfield three hours south to be rejected by a bipartisan legislative review panel. Expect that rejection to be followed by the governor’s statement that the move is going to go forward, anyway. Lots of union-backed employees will be up in arms again. Meanwhile, they’re still working under last year’s contract with the state while their union, the American Federation of State, County and Municipal Employees Council 31, remains gridlocked (click this link and scroll down) with the administration. Among the key sticking points are employee wages and employee contributions to health care and pension benefits.

Tuesday and Wednesday: Gov. Rod Blagojevich called legislators back to the Capitol to address two major issues: funding for education on Tuesday and funding for capital construction projects Wednesday. But neither session meets until late in the afternoon, giving legislators time throughout the day to attend various events at the annual State Fair in Springfield. Governor’s Day (a.k.a. Democrats’ Day) is Wednesday and Republican Day is Thursday. Watch for political fireworks off stage.

Ongoing: The governor says he’ll “rewrite to do right,” his slogan for changing agreed-upon bills to include his agenda. If the General Assembly rejects his changes, then the underlying bill dies. So far, he’s changed two bills. One would allow all adults up to age 26 to remain on their parents’ health insurance plans. The original intent was limited to college students who took a medical leave or who reduced their course loads to part time because of an illness or injury. They would have been covered for a year on their parents' plans. A second amendatory veto would extend property tax exemptions to all veterans with service-connected disabilities certified by the U. S. Department of Veterans’ Affairs. The original bill regarded a tax increment financing district in the Village of Downs. Blagojevich has said he will continue amending numerous bills in his Rewrite to Do Right campaign, “to take positive action on legislation that has been sent to him by the General Assembly,” according to a statement from Brian Williamsen, his spokesman.

August 29: Later this month marks the deadline for the governor to sign, change or reject ethics reforms sent to his desk in June. His office repeatedly has said he doesn’t think the ethics reforms go far enough. One potential amendment could include banning state contractors from donating to statewide political parties. The original legislation, which received unanimous approval by the General Assembly in May, only prevented state contractors holding contracts worth $50,000 or more from donating to statewide officeholders who sign the contracts.

Also coming up: One of the House Democrats’ point people on education, Rep. Mike Smith of Canton, announced that he’ll host a series of public hearings to consider a proposal to abolish property taxes for school funding by 2010. It’s been floated by Sen. James Meeks, a Chicago Democrat who previously threatened to run against Blagojevich for governor in the absence of education funding reforms. Meeks didn’t run, but he also didn’t get what he wanted. So here we go again. Add education funding reform to a huge pile of politically sensitive Statehouse issues that likely will grab some headlines but will remain stalled, at least before the November elections.

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Illinois targets mortgage lender

By Patrick O’Brien
Illinois is the first state to sue Countrywide Financial, the nation’s largest mortgage lender, for its role in the current foreclosure crisis.

The lawsuit, filed by Illinois Attorney General Lisa Madigan in Cook County today, alleges that the company used “deceptive practices” to lure borrowers into risky subprime loans with high interest rates. It also says the company “loosened the standards for selling its products,” ignoring whether prospective borrowers could repay the loan.

The suit says the company responded to signs that its mortgage business was unstable by making more risky loans and accelerating the practice of ignoring borrowers’ real financial situations.

The company’s practices were particularly harmful to Chicago and the surrounding counties, the suit says.

The Chicago area had the most subprime loans of any metropolitan area in the country, according to a 2006 study by the Chicago Reporter, an investigative magazine. And Countrywide held more of those loans than any other lender. The Chicago area also has one of the highest foreclosure rates in the country.

The attorney general also says her office has received more than 200 complaints about the company since 2005.

In early 2007, the company issued nearly $8 billion in risky subprime loans, which generally are given to borrowers with poorer credit histories and lower incomes than those given standard loans.

Countrywide’s promotional materials on its Web site tout the bank as a leading lender to those with “less than perfect credit.”

The company is currently the subject of lawsuits by former employees and customers, as well as a federal investigation.

Bank of America actually acquired the company in a $4 billion deal today, as approved by shareholders, and it has promised to tighten lending standards.

Countrywide did not return repeated phone calls.

State employee update
By Bethany Jaeger
The largest public employee union, the American Federation for State, County and Municipal Employees Council 31, is requesting a mediator to help bring closure to about 10 months of negotiations with Gov. Rod Blagojevich’s administration. The union represents about 35,000 state employees and held a massive rally in Springfield earlier this week, increasing attention that the union opposes a contract with the state if it were to increase the cost of employees’ health care and retirement benefits.

According to the union, the administration proposes a four-year contract that would do just that without a wage increase.

The existing AFSCME contract is set to expire June 30. The administration is not commenting on negotiations but confirmed AFSCME’s statement that the existing contract will remain active as a mediator steps into negotiations.

Anders Lindall, spokesman for the union, said the two sides first have to agree on the identity of the mediator, who would be an independent third party without a vested interest in either side. While mediators are common in other labor negotiations, Lindall said this is the first time in 10 contracts with the state that the union has had to request a mediator.

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Seven days

By Bethany Jaeger
Illinois starts a new fiscal year in seven days. That means some new state laws take effect July 1. But also, for the first time in history, many public employees could have to work without a contract in place with the administration. Four years ago, the state’s largest public employee union, the American Federation of State, County and Municipal Employees Council 31, negotiated a contract with the administration that spells out how much employees make and how much they pay for such benefits as health care and retirement.

This year’s negotiations between union officials and Gov. Rod Blagojevich’s administration have stretched about seven months, potentially creating the first time that Illinois’ AFSCME Council 31 won’t have an agreement in place before the existing contract expires. “That alone shows the level of contentiousness and the distance between the parties is unprecedented,” says Anders Lindall, union spokesman.

The lion’s share of the disagreement is health care, he says, but it’s complicated by the sagging economy. “It’s higher health care costs, higher pension costs, coupled with pay increases that don’t even keep pace. And at a time when people are being socked at the gas pump, they’re being soaked at the grocery checkout and everywhere else for higher cost of living, to have health care and to have pension funds going through the roof, it’s not acceptable. It’s not [the making] of a fair contract agreement.”

Negotiations continue this week after a few thousand union supporters rallied at the Capitol today. Neither the administration nor union officials would comment on what happens if the contract expires before they reach an agreement. They would only say they’re continuing “good faith negotiations” and are mindful of each other’s concerns.

Local union leaders and members gathered at the Capitol wearing green T-shirts and waving signs that said, “Governor, don’t cut our health care.” Marion Murphy, caseworker for the Illinois Department of Human Services, AFSCME Local 2806, is on the bargaining committee and spoke during the rally. She cited Blagojevich’s priority to ensure all residents can access quality and affordable health care. “But I guess he forgot about us,” she said. “Why should we be left out in the cold? He’s got the All Kids program, but what about our kids?”

The number of vacancies also repeatedly came up, including the speech by Louis Volpi, president of AFSCME Local 1591 and employee of Tinley Park Mental Health Center and Howe Developmental Center. He said during the rally that the administration refuses to fill vacancies even though workers are forced to work overtime, as required by their contracts. His statements reflect a situation I wrote about in Illinois Issues magazine this month. We're waiting to get the actual number of vacancies from the Illinois Department of Human Services.

BUDGET WATCH
The state budget approved by the General Assembly May 31 hasn’t made it to the governor’s desk for review yet, preventing the governor from acting on solutions to what his office says is a $2 billion gap between spending and revenues. The legislature has until June 30 to send it over. Steve Brown, spokesman for House Speaker Michael Madigan, said it’s normal for such a huge bill to take the full 30 days allotted by law to process the legislation.

NEW STATE LAWS
By Patrick O’Brien
Also on July 1, some new state laws go into effect. A few examples follow. The full text of the laws and other information can be found at www.ilga.gov.

Minimum wage
SB 1268 (of the 94th General Assembly) The state’s minimum wage rises to $7.75 an hour beginning July 1. About 650,000 Illinoisans will see an increase, according to the governor’s office. The raise is part of a gradual increase of the minimum wage to $8.25 an hour by 2010.

Teen driving
SB 172 (Starts in third paragraph.) Student drivers will have to complete at least six hours of actual, on-the-street driving with a certified instructor when a new law goes into effect next week. It’s part of a reform package enacted last year to address accident rates among teen drivers. This portion of law eliminates the provision that allows students in high-school driver’s education classes to take a written exam after completing three hours of practice driving. It also removes current exemptions that allow the use of driving simulators and driving ranges as a substitute for street driving.

Home care pay increases
HB 4144 State home health care workers who provide housekeeping services will earn $1.70 an hour more beginning July 1, and the law also provides an additional $1.33 per hour for health care insurance for the workers. The total cost to the state is $64 million.

Truth in towing
SB 435 Any towing service that tows or removes a vehicle with the permission of the owner or person in control of the auto has to provide an estimated cost of towing. The document must be signed by both the tow truck driver and the driver of the vehicle.

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"We built too many prisons"

By Patrick O'Brien
A controversial plan to shut down part of the Stateville prison in Joliet became just a bit more contentious after a packed meeting at the Statehouse Wednesday.

Department of Corrections Director Roger Walker told a House committee that the reclassification and transfer of more than 1,000 maximum security prisoners and the relocation of hundreds of employees was being done to justify the state’s $140 million new prison in Thomson.

Walker said that he inherited the newly built prison when he took over the agency and he “had to use it.” The statement caused more than a little discontent from the hundred-plus group of American Federation of State, County and Municipal Employees members who witnessed the testimony. The union is fighting the plan, saying it will cause disruptions for workers’ families and for inmates, leading to more dangerous inmates.

The facility in Thomson was completed in 2001 and remains empty, and the Illinois Department of Corrections plans to transfer 200 inmates from Stateville to open the new facility. Prison workers would also be moving with the inmates, but there will be room for far fewer workers at Thomson than would be dislocated by the plan.

Gov. Rod Blagojevich said the closing of Stateville’s maximum security wing would help the Department of Corrections save $31 million in operating costs by using the newer facility in Thomson.

Stateville was built in 1925, and the state estimated it would cost $108 million to renovate the prison.

Henry Bayer, executive director of the AFSCME council that represents the Stateville employees, said the plan is dangerous because it also transfers maximum-security inmates to crowded prisons in Menard in Randolph County and near Sumner in Lawrence County. The union also accused the agency of reclassifying violent inmates to lower security levels to make it easier to transfer the prisoners to less secure facilities in the state.

Bayer also says the state inflated the amount of money it would take to renovate Stateville to make it easier to shut down a portion of the prison.

Walker said the prison is outdated and that the budget savings will help pay for 765 new positions in the understaffed agency. Bayer said the lack of staff forced correctional workers to log 700,000 hours of mandatory overtime in fiscal year 2007, which he said cost the state $24 million.

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A moronic statement from Ald. Joe Moore

Back to Chicago's North Side: It appears that Ald. Joe Moore, barring a recount showing otherwise, has won reelection in the 49th Ward by 227 votes out of almost 8,000 cast.

Yesterday afternoon I watched WGN-TV's midday news, and Joe Moore made this comment about Tuesday's' election:

Whenever you fight for the common guy, people are going to fight back. My opponent was very well funded by some very powerful special interests, Republican interests....

Lies. Gordon did receive multiple contributions from the Illinois Restaurant Association, as well as the group Chicago Chefs for Choice. The last one must've had something to do with Moore's anti-foie gras legislation.

The former group is a big player in state politics, but seems to split its political spending money pretty evenly between Democrats and Republicans. Chicago Chefs for Choice? I'll see what I can find out, as I do know two conservative Chicago chefs.

Moore's campaign fund is dominated by contributions from the Service Employees International Union. And earlier this month, Moore received $10,000 from the Chicago Federation of Labor, and the same amount from AFSCME Council 31. That's big money for an aldermanic race

It's Moore's campaign that was dominated by special interests, but necessarily not Republican ones.

I haven't the time to add up Moore's and Gordon's contributions, but a quick look at the reports available at the Illinois State Board of Elections site clearly shows to the casual visitor that Moore easily raised more money than his challenger.

Joe Moore, liar.

To comment on this post, or to vote in the Pajamas Media predidential straw poll, click here.

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AFSCME endorses GRT, is AFL-CIO next?

From the Governor's Office:

CHICAGO – Governor Rod R. Blagojevich today welcomed the support of the American Federation of State, County and Municipal Employees (AFSCME) for his ambitious proposal to reform Illinois’ tax system, which closes corporate loopholes and brings greater stability to the state’s fiscal future. The Governor’s plan to establish a Gross Receipts Tax (GRT) on commercial activity has been embraced by many economists because of its broad base and low rates....


....“We believe it is critically important to ensure that the Illinois tax system is fair, stable and produces adequate revenues,” said Henry Bayer, Executive Director of Council 31. “Governor Blagojevich’s proposal for a Gross Receipts Tax meets that test on every count. Contrary to the claims of some in the business community,” Bayer said, “we believe this plan has the potential to provide a real boost for the Illinois economy. We intend to do all we can to help enact it.”

As CapitolFax reported earlier, AFSCME's lukewarm reception to the GRT was standing in the way of an AFL-CIO endorsement of the GRT. That obstacle appears to have been removed now. I doubt an all-out push from the AFL-CIO is all that far behind, especially since former AFL-CIO head Margaret Blackshere chairs the committee paying for all of the Governor's t.v. ads.

What does the AFSCME endorsement mean?

Although it's a small step, the AFSCME endorsement could result in a giant leap if the leash comes off the AFL-CIO. Full engagement of the AFL-CIO means it will be difficult for Speaker Madigan to act as the lone stopper for the Governor's plan, sans a viable alternative.

The ball is now solidly in the court of the business community, represented by the Illinois State Chamber of Commerce, Illinois Manufacturer's Association, Illinois Retail Merchant's Association, Chicagoland Chamber of Commerce, and the Civic Federation.

If Illinois, Inc. truly believes that the GRT is as devastating as they say, they need to offer an alternative route for all of the public pressure in favor of funding education, property tax relief, and to a lesser degree, health and human services.

Madigan can only dam up public demand for so long. Illinois, Inc. needs to stop merely sticking their finger in the dike, stonewalling, and offering up red herring arguments (like the one that says we shouldn't do anything without rolling back pension benefits, which, by the way guys, I'm sure helped Rod get AFSCME on board. Way to go.)

If Illinois, Inc. can't get behind HB 750, or some compromise version thereof, they need to offer up their own reasonable, politically viable, compromise solution to the budget challenges facing the state. Otherwise, GRT is coming.

From The American President:

Lewis (Michael J Fox): People want leadership, Mr. President, and in the absence of genuine leadership, they'll listen to anyone who steps up to the microphone. They want leadership. They're so thirsty for it they'll crawl through the desert toward a mirage, and when they discover there's no water, they'll drink the sand.

President Shephard (Michael Douglas):Lewis, we've had presidents who were beloved, who couldn't find a coherent sentence with two hands and a flashlight. People don't drink the sand because they're thirsty. They drink the sand because they don't know the difference.

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