"Trifecta" heads to the governor

The House on Thursday night nearly unanimously approved the $9 billion plan for federal stimulus funds, transportation projects and supplemental spending for state operations. The Senate approved the package earlier in the day. The spending plans now head to Gov. Pat Quinn’s desk, satisfying the governor’s request for the General Assembly to approve a small version of a capital plan for roads and bridges before lawmakers left on a two-week spring break.



House Republicans early in the day weren’t on board because it wasn’t clear how the money would be spent, said House Minority Leader Tom Cross. However, working with Quinn’s office throughout the day, he said his caucus finally got a list. “The governor was very helpful, both himself personally and his staff, in trying to make this happen,” he said.

“Today’s actions are a great example of what we can accomplish when we come together with a common purpose,” Quinn said in a statement.

Senate President John Cullerton, however, foreshadowed the difficulty in securing the three-fifths majority needed to do a larger capital program based on tax and fee increases later.

Cigarette tax advances
By Jamey Dunn
A timely example of that difficulty in advancing any tax increase occurred early in the evening. After missing the mark by one vote the first time, a $1 sales tax increase on each pack of cigarettes advanced through the Senate Thursday when a second vote was taken.

Senate Bill 44, which would phase the tax increase in over two years, had 29 in favor, 28 opposed and one voting present. It took a last-minute, closed-door meeting between Cullerton and House Speaker Michael Madigan before the vote was retaken, resulting in the 30 votes needed to pass. Twenty-six members still voted against it.

Cullerton said that the bill has support from Madigan and Gov. Pat Quinn, but he added that the close vote indicates a difficult road ahead for future tax increases. “This was the first bill that required people to actually vote for a tax,” he said. “And you can see it’s not easy for people to do that. Unfortunately, we’re probably going to have to do a lot more.”

The bill heads to the House, which will reconvene Friday morning. The Senate finished its business and headed home for spring break.

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"Trifecta" spending plan on its way — UPDATED

By Bethany Jaeger
UPDATE: The Illinois Senate unanimously approved the $9 billion package to release federal stimulus funds, state bonds for road and transit repairs and supplemental spending for state operations. Senate Minority Leader Christine Radogno applauded the "true bipartisan cooperation" it took to get there. The package now heads to the House, which can either accept or reject it. It won't be able to change it.

ORIGINAL POST: The Illinois Senate this morning advanced a spending plan worth slightly more than $9 billion that is designed to jump start the flow of state and federal dollars for construction plans, state operations and federal stimulus programs.


Democrats and Republicans in a morning Senate committee applauded the plan as a “good first step” toward a bigger capital plan for road and school construction projects, but that’s tied to a string of potential and controversial funding sources, including tax and fee increases.

Before hopping on board, Republicans sought a provision to ensure that the money would flow based on an existing five-year transportation plan, not based on political preferences. Senate Minority Leader Christine Radogno said during a morning committee that given the distrust between the legislative and executive branches during the last few years of former Gov. Rod Blagojevich’s administration, Republicans wanted assurances. This really kind of puts a public face on the private conversations that have been going on,” she said, adding that the plan was a “very good, positive step forward” for Illinois.

Senate President John Cullerton said: “We let the engineers decide, not the politicians. It has nothing to do with Blagojevich or past scores to settle. We’re just trying to do it on the square.”

For instance, $150 million would be doled out based on a traditional formula, where Chicago-area districts get 45 percent of the funding and downstate districts get 55 percent of that funding. Another sum of $450 million would be distributed based on an existing five-year plan for construction projects, which Illinois Department of Transportation engineers rank by another formula.

Labor groups represented by the AFL-CIO and some operating engineers support the plan; however, one Springfield-based chapter of the operating engineers union opposes it because the state-funded capital plan would only designate $8 million to the central Illinois district that includes Sangamon County. But Cullerton pointed out that the central Illinois district would get $54 million of federal stimulus funds.

Federal stimulus funds will distribute money for everything from weatherization to education. However, the plan advanced by the Senate today would take some money out of the portion that would have gone to public education and use it for state operating expenses. Then the state would use incoming federal stimulus funds to eventually backfill the amount for education. According to Sen. Donne Trotter, chief budget negotiator for the Senate Democrats, education, in the end, would come out about even. That is, after all, the intent of the federal stimulus, he said.

“The stimulus package was never intended for us to grow anything. It was to ensure that we didn’t have to cut anything, and that’s what we’re utilizing those dollars for.”

The full package now heads to the full Senate, where a vote is expected this afternoon. If approved, it would head to the House later today or tomorrow.

Here are some more highlights of the “trifecta,” dubbed by Trotter:

Federal stimulus funds = $6.7 billion

• $1.7 billion to pay down the state’s Medicaid bills, including an enhanced federal reimbursement rate of about 61 percent for 27 months.
• $500 million for high-speed rail.
• $300 million for a Chicago-area project to reduce freight and vehicular traffic congestion.
• $285 for Amtrak improvements.
• $40 million for transit.

Other funds are earmarked for low-income housing, developmental disability and mental health services, programs for women and children, youth services, criminal justice and domestic violence grants, weatherization jobs and training, environmental protection, water treatment and education.

Read more in Illinois Issues this month.


$3 billion state bonding program for transportation projects

• $2 billion bonded from the dedicated Road Fund to repair roads and bridges.
• $1 billion bonded from the state’s general fund for transit maintenance projects.
• $150 million for emergency pothole repair on state and local roads.
• $40 million for Chicago-area transportation agencies to release funds that previously were suspended under a previous capital program.

Supplemental spending for FY09 operating budget = $109 million

• $363 million to reopen closed historic sites through June 30.
• $25 million for services for women and children, capturing more federal matching funds.
• $20 million for flood relief.
• $10 million for line-of-duty awards.
• $6.7 million for court reporters.

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FutureGen confusion

By Jamey Dunn
With speculation running rampant about how federal stimulus funds will be spent, it seems that Illinois lawmakers and the U.S. Department of Energy may not be on the same page when it comes to FutureGen, a one-of-its kind project slated for Mattoon that got the kibosh at the last minute in late 2007.



Supporters of the near-zero-emission power plant that would use Illinois coal say they are waiting on Energy Secretary Steven Chu to sign the record of decision, a statement that says the plant has met all required environmental standards for construction. “I think this is the best project to move quickly in coal research, good for Illinois, good for the United States and the world,” said U.S. Sen. Dick Durbin, who appeared in Springfield last week. “And so what we’re looking for is [Secretary Chu’s] signature on something called a record of decision. And if he would sign that document, we’d be ready to move forward. And so I’m going to do everything I can to urge him to do so.”

Meanwhile, John Grasser, a spokesman for the department’s Fossil Energy Division, says the project has been restructured, so the record of decision no longer matters. “The original FutureGen does not exist right now as a federal project. The record of decision is moot.”

Regardless of the record of decision, FutureGen is eligible for the $1 billion in grants included in the stimulus package for fossil fuel research. The money could be given to one project or split up over several. Chu could hand it out as he sees fit, or several projects may be given the opportunity to compete for the money. According to a timeline on the federal stimulus Web site, agencies must start reporting on these competitive grants by May 20. Even if FutureGen got all the funding, it would not be enough to cover the plant’s estimated $1.8 billion dollar price tag.

Warren Ribley, new director of the Illinois Department of Commerce and Economic Opportunity, says that FutureGen has a good chance to receive funding, partially because the project has potential to stimulate the economy almost immediately.

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Prepare for the stimulus

By Bethany Jaeger, with Jamey Dunn contributing
Jack Lavin prefers not to be called this state’s “stimulus czar,” but his first two days on the job as Gov. Pat Quinn’s chief operating officer (corrected) have been dominated by projections of the amount of money Illinois will capture from the $787 billion federal stimulus package.

But Lavin also responded to concerns that his appointment could be clouded by his past ties to former Gov. Rod Blagojevich and convicted felon Tony Rezko. Rezko was one of the people who recommended Lavin for his previous job as director of the Illinois Department of Commerce and Economic Opportunity during Blagojevich’s administration. Lavin and Quinn reportedly have been friends. Lavin pointed to his record. Here’s what he had to say:

I worked for those two men. They made some bad decisions. I had no part in any of those decisions, and I think my track record at DCEO speaks for itself. And it was a track record of working with business leaders, labor leaders, local governments, local mayors, legislators on both sides of the aisle, the congressional delegation. If you ask them, they will all say that we treated people with respect and integrity. We returned their calls, and that’s just the kind of thing and the kind of collaboration and partnership that we had at DCEO that we need now across all agencies, and working with the legislature, to be on the road to economic recovery.

Lavin testified to a special Senate committee this evening that Illinois could receive about $7 billion for programs and state operations, as well as about $2 billion for transportation-related and capital projects.

While the National Governor’s Association and the National Conference of State Legislatures ranks Illinois 6th in the nation for the amount of money it's estimated to receive in stimulus funds (projected to be about $8.8 billion), it’s clear that the incoming money won’t stretch far enough to cure the state’s $9 billion budget deficit next fiscal year. Estimates also are very fluid and vary.

The anticipation of the federal funds sparks two concerns among legislators. 1) Lawmakers fear that the essentially one-time stimulus funds will build expectations and a false sense of hope that the state could maintain the increased funding levels once the federal money runs run out. 2) It’s widely acknowledged that the stimulus money could help, but it’s not even close to the amount of money that the state and service providers need to completely heal from the recession and consecutive years of deficits. 3) State agencies, particularly the Illinois Department of Transportation and the Illinois Environmental Protection Agency, are concerned about having enough staff on hand to handle stimulus-funded projects. Both said they could hire temporary workers or consultants to get through increased work load.

Lavin said while those concerns are valid, the stimulus package is designed to plug budgetary holes and avert layoffs, particularly in education. And then, in theory, as the state’s economy begins to recover, the state would be able to pay for some of these ongoing costs and new programs. (Some of the stimulus money will help expand or fund existing programs by using existing funding formulas, while other portions will create new programs.)

Higher education officials also expressed the concern that the $2 billion in stimulus funds could lead to a game of shuffle. Judy Irwin, executive director of the Illinois State Board of Higher Education, said there’s a possibility that money could be cut from education in the state budget to make up for shortfalls in other state operations, and then the federal stimulus money would be used to fill in the cuts to education. If that happened, schools would end up not getting much more money than they do now, she said.

Republicans and Democrats voiced concerns that schools in their home districts are expecting large funding increases that they may never see. “The frustration is that there really isn’t going to be a lot of money. …While it looks like there’s a lot of money going to schools, it’s really not going to be there,” said Sen. Dave Syverson, a Rockford Republican.

We’ll have much more about the details of the stimulus funds and how the state decides to divvy up the money. In the meantime, here’s a quick list of highlights, provided by Lavin’s testimony. Also, the state on Friday will launch a stimulus-specific Web site: www.recovery.illinois.gov.

General stimulus highlights for Illinois
About $7 billion for programs and state operations, according to Lavin’s estimates.
That includes funding for existing programs, using existing funding formulas:

• $2.9 billion for Medicaid
• $2 billion for school aid
• $110 million for workforce investment programs (to help people get trained to take on another job)
• $276 million for “green” jobs and weatherization programs

The stimulus also could bring in about $2 billion for infrastructure and capital, including:

• $935 million for rebuilding highways and bridges
• $371 million for transit assistance
• $260 million for wastewater and clean drinking water
• $222 million for public housing
• $24 for education technology
• $110 million energy programs, some of which can be used for operations and some of which can be used for capital

The state also will have a chance to compete for grants, including through the Department on Energy. That’s where Mattoon could compete for funding to rekindle the FutureGen project that got scrapped under President George Bush last year. Other projects of homeland security, broadband infrastructure and Army Corps of Engineers also could be eligible for grants.

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Belt-tightening begins

Gov. Pat Quinn started the process of trimming the fat, ordering all state agencies to further cut their budgets by 1 percent and hold the line on travel, equipment, contracts and hiring. Agencies already were operating on a 3 percent reduction under former Gov. Rod Blagojevich. “We have to make sure that state government is lean and cuts costs wherever it can,” Quinn said this afternoon in the Capitol. He estimated savings at “hundreds of millions” of dollars.

But lean state agencies could challenge the state’s ability to compete for federal transportation funds, according the Associated Press. It reported this afternoon that the Federal Highway Administration sent a letter to Quinn to warn that the Illinois Department of Transportation may be too understaffed to carry out major road construction projects.


Quinn said this afternoon that he had not seen the letter but that Illinois would do whatever it takes to ensure the ready-to-go projects are, in fact, ready to go.

After meeting with House Democrats in the Capitol this afternoon, Quinn reiterated his priorities of health care, education, transportation and public safety; however, he also sent the message to legislators to be prepared to take some tough votes, keep their wish lists in check and consider the fiscal context under which decisions will have to be made.

He also set the tone of a more cooperative budget-making process. Democratic Rep. David Miller of Lynwood said his approach is less antagonistic than it was under Blagojevich. “My opinion will be evaluated for its merits,” Miller said. “It will be looked at closely, and if there are ways that I can come up with trying to decrease the cost to the state, streamline efficiencies, then [Quinn will] be very, very open to it.”

But according to Rep. Julie Hamos, an Evanston Democrat, Quinn simply set the stage for some more belt-tightening and reforms. “We don’t know exactly what that means. Are we cutting programs, or are we raising taxes? He didn’t get specific, but he did talk about being very realistic this year and the tough choices facing us.”

She said the effort to build uniform understanding of the dire fiscal straights — a nearly $9 billion deficit next fiscal year — is necessary. “If we are going to take the very difficult leap to raise taxes, we are all going to have to be on the same team. And we’re going to have to sell it to the people.”

Other than watching for proposals to reform the state’s tax structure, also watch for alternative borrowing schemes. We’ll have more on that in the near future.

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What governors are saying about the stimulus

Thanks to statehouse reporters across the nation, The Morning Call's John Micek in Pennsylvania provides a quick list of governors who are backing the federal stimulus package.

Gov. Pat Quinn is among numerous governors who wrote to President Barack Obama to support his plan. John also complied more state-specific data. Here's his post, including other journalists' descriptions about their governors' level of support:

On Monday, a bunch of governors (of both parties) wrote to President Barack Obama to express their support for the Stim and to urge its passage. As expected, their ranks includes Gov. Ed. Other signatories were:

Gov. Arnold Schwarzenegger, California
Gov. Bill Ritter, Colorado
Gov. M. Jodi Rell, Connecticut
Gov. Jack Markell, Delaware
Gov. Charlie Crist, Florida
Gov. Patrick Quinn, Illinois
Gov. Chester Culver, Iowa
Gov. DeVal Patrick, Massachussetts
Gov. Jennifer Granholm, Michigan
Gov. Jon Corzine, New Jersey
Gov. David Paterson, New York
Gov. Ted Strickland, Ohio
Gov. Brad Henry, Oklahoma
Gov. Thedore Kulongski, Oregon
Gov. Jim Douglas, Vermont
Gov. Tim Kaine, Virginia
Gov. John deJongh, U.S. Virgin Islands


Meanwhile ... here's some more state-specific data.

ARKANSAS:
Gov. Mike Beebe (D) seems excited about the money, especially stuff he could spend on roads

FLORIDA:
Gov. Charlie Crist is in the vanguard of Republicans who have been actively lobbying on behalf of the Stim by doing national television interviews.

KANSAS:
Gov. Kathleen Sebelius (D) came up with a task force to figure out how to spend whatever money they get

LOUISIANA:
Gov. Bobby Jindal is opposed, but will use the $2.5 billion over two years to help offset budget cuts.

KENTUCKY:
Gov. Steve Beshear (D) seems pretty supportive

MARYLAND:
Gov. Martin O'Malley pulled back a budget with somewhere around $2 billion in cuts and Rainy Day Fund transfers in expectation of stimulus cash. Not clear if he's put it back yet in w/a supplemental correcting for stimulus dollars ...

MINNESOTA:
Gov. Tim Pawlenty and his amazing hair are against the stimulus, and say reckless spending will drive up the deficit. But yeah, he's put a placeholder in his state budget for the expected cash.

MONTANA:
Gov. Brian Schweitzer is trying to figure out how to spend the money.

NEVADA:
Gov. Jim Gibbons (R), facing a bear of a budget shortfall, sent a letter saying the $1.3 billion from the feds would help.

NORTH CAROLINA:
Gov. Bev Perdue is supposed to be at the House Democratic Caucus today promoting the Stim. From a press release: "Governor Perdue will urge congressional members to move quickly on a stimulus package that funds infrastructure and other economic development projects and that will put North Carolinians back to work as soon as possible."

OHIO:
Gov. Ted Strickland is counting on $3.4 billion to balance his upcoming budget.

SOUTH DAKOTA:
Gov. Mike Rounds doesn't want the Legislature to depend on the money to pass its budget.

TENNESSEE:
Gov. Phil Bredesen (D) is counting on the money in his budget, or it looks like he will

U.S. VIRGIN ISLANDS:
Gov. John deJongh Jr. is on Capitol Hill lobbying for it today (Friday).

UTAH:
Gov. Jon M. Huntsman (R) hedges a bit: "While we're not reliant on a federal bailout in order to balance our books, this could be considered a type of stimulus that we could benefit from."

VIRGINIA:
Gov. Tim Kaine ... total Kool-Aid drinker. He's DNC chairman. What's he gonna do? Say no? Also, his state is $3 billion the hole, and lawmakers are supposed to adjourn on Feb. 28.

WEST VIRGINIA:
Gov. Joe Manchin says "this country wasn't built on handouts. We didn't become leader of the free world by waiting on someone to give us a handout."
Nonetheless, Manchin's hand is extended, he submitted a list of scores of stimulus-qualifying, infrastructure-type projects totaling nearly $2.3 billion to the new administration.

WISCONSIN:
Gov. Jim Doyle (D) put off releasing his budget until he knows what’s in the stimulus

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