Ready, set, shovel

By Bethany Jaeger
Shovels could break ground within a few weeks as the state signs contracts for new road construction jobs. Gov. Pat Quinn signed into law a capital spending plan that his office said would create or retain as many as 439,000 jobs throughout the next six years.

“By advancing this now, we can still have an impact during this construction season. We should not let a minute go to waste,” Senate Minority Leader Christine Radogno said in a statement. At a bill-signing ceremony in Chicago Monday afternoon, she added: “These last several years, successes in Illinois government have been few and far between. But what we have here today is a major success. It’s a beautiful thing.”


Trade group members are on the edge of their seats waiting for projects to start, according to Beth Tatro, director of external programs the Illinois Road and Transportation Builders Association based in Itasca. “We’re at the point right now where our companies are starving,” she said. “This has been an early Christmas present.”

But time is tight for projects to begin this month. Engineers have to design the work, the department has to seek bids for contracts to do the work and then they’ll start building. “If the project is already on the shelf, as soon as we get the money, we can build them,” Tatro said. If some of the projects were designed three years ago, engineers might have to review the plans and adjust the costs.

According to the Illinois Department of Transportation, about $448 million in highway projects already have been let. And an additional $310 million would be obligated for highway projects this fiscal year. The distribution of money for downstate mass transit projects, however, has not yet been decided, according to the department.

In addition to improving transportation-related infrastructure such as roads, bridges and mass transit, the $31 billion capital plan will finance projects that build new schools, make schools and homes more energy efficient and support vocational and early childhood facilities. Environmental and economic development projects also are slated to help clean up contaminated sites, deploy broadband Internet technologies, support jobs in economically depressed areas and help build affordable housing units for veterans and people with disabilities. Another goal is to expand high-speed rail between Chicago and St. Louis.

The capital plan, however, does not mean the state has an operating budget. The lack of a state operating budget for the fiscal year that started July 1 has led to ongoing layoffs and service reductions for community service agencies. Without a spending plan in place this week, some state employees could not receive their full paychecks on time.

The governor indicated last Friday that he would postpone his campaign to enact a temporary income tax hike until this fall, which would allow incumbent legislators to know whether they have serious primary election challengers in 2010. Quinn also indicated last week that he would, despite early opposition, consider a five-month budget to at least keep the state operating until the legislature returns for its annual fall session in November.

The legislature will return to the Capitol Tuesday afternoon. Legislative leaders are scheduled to meet with the governor Tuesday morning.

“The General Assembly must pass a balanced budget that makes essential cuts and cost efficiencies, while also providing for our most vulnerable and needy residents,” Quinn said in a statement Monday.

The governor previously said he would not sign the capital plan into law without an operating budget on his desk because without it, bond rating agencies were likely to downgrade the state’s bond status, which would make it more expensive for the state to borrow.

Financing the statewide construction program
The flow of revenue to pay for projects outlined in the program, Illinois Jobs Now!, comes from a variety of fee increases and gaming expansions. Driving-related fees for vehicle titles, license plates and drivers’ licenses combine with expanded sales taxes on candy, some tea and coffee drinks, hygiene products and wine and beer.

The revenue bill is House Bill 255.

The spending bill is HB 312.

The bonding bill is HB 2400.

The state would garner 80 percent of the revenue generated by new sales taxes on candy and grooming products, which will include soaps, shampoo, toothpaste, mouthwash, deodorants and suntan lotions and sunscreens that don’t require prescriptions.

A more controversial and, potentially, legally challenging revenue source would be the legalization of video poker in places that serve alcohol. Numerous bars, clubs and riverboats throughout the state already have video poker machines, but hundreds illegally pay winners under-the-table. The new state law would legalize the payouts and then tax the profits, generating up to $300 million a year once fully implemented, according to the governor’s office.

Supporters, including coin machine operators and beverage and hospitality associations, said it’s a voluntary tax that averts the need to raise other general state taxes to pay for critical construction projects. Opponents have said video poker increases the likelihood of gambling addictions and social problems that go along with them. A portion of the revenue will go to gambling addiction services.

Each restaurant, bar, veterans’ hall, truck stop would be stripped of existing machines and would have to install up to five standardized machines that would be connected to and regulated by state gaming authorities. But before they could install the machines, the county or municipality would first have to submit the question of whether to allow legalized video poker to voters. A majority of voters would have to say OK.

The new law also allows the state to partner with a private management firm to run the Illinois Lottery, although the state would still own and maintain control of the asset. And Illinois could start a pilot project for up to four years to allow people 18 and older to buy Lotto and Mega Million lottery tickets online, mainly in an effort to target people who don’t often play the lottery. But the pilot program would first need federal approval from the U.S. Department of Justice. The University of Illinois will conduct a study about the effect of families buying lottery tickets in a report due to the state in January 2011.

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Budget not the only thing in limbo

By Hilary Russell
Just as the state’s operating budget is in limbo with five days left in the fiscal year, many substantive bills were left in the lurch at the end of the regularly scheduled spring session. The following is a list of measures that Illinois Issues magazine covered in our monthly “legislative checklist” throughout the spring. See the full list in the July/August print edition. In the meantime, here is a list of bills that stalled but that could come up in this fall’s or next spring’s legislative sessions:



HJRCA 31 The constitutional amendment sponsored by Rep. Jack Franks, a Morengo Democrat, would give voters the option to remove a sitting governor from office. The resolution would require voters to decide whether they wanted to change the state’s Constitution to include a so-called “recall” provision. The bill passed the House, but it didn’t get called for a final vote in the Senate. Senate President John Cullerton recently said he would not call the measure for a vote until Gov. Pat Quinn signed another ethics reform measure, HB 7, which would cap the amount individuals, businesses and political organizations could contribute to candidates. Franks’ recall measure doesn’t have to be approved until May 2010, and he said he expects that it would pass without problems before then.

HB 2643, SB 1292 Newly hired state employees and teachers would receive less generous pension benefits than current employees. Quinn proposed the so-called two-tiered pension plan as a way to save the state money in the next fiscal year and to reduce the mounting pension liabilities in the long run. But public employee union members strongly oppose the idea and argue it ultimately won’t save the money projected by the governor’s office. The legislation, sponsored by Rep. Kevin McCarthy, an Orland Park Democrat, and Sen. Don Harmon, an Oak Park Democrat, stalled in both chambers.

SB 1381 A bill allowing the limited use of medical marijuana, sponsored by Sen. Bill Haine, an Alton Democrat, narrowly passed in the Senate, marking the first time in Illinois’ legislative history that such a proposal won approval. The clock ran out before House sponsor Rep. Lou Lang, a Skokie Democrat, presented it to the full chamber. Lang said he didn’t have enough votes to pass it and that he plans to lobby for the bill and could call it in the future.

SB 744, sponsored by Sen. Terry Link, proposed opening new casinos in Chicago, Danville, Rockford and Waukegan, as well as adding gaming positions at existing riverboats and allowing slot machines at horse racing tracks. According to Link, a Waukegan Democrat, the gaming package could generate as much as $1 billion a year. While the Senate approved the measure, the House sponsor, Lang, said he chose not to call the bill and would like to make changes so the bill would not specify where the gaming facilities would have to be built.

HB 2234 would recognize civil unions and give same-sex partners some of the same legal rights, including power-of-attorney, as married couples. Rep. Greg Harris, a Chicago Democrat, sponsored the legislation. It narrowly passed out of committee but wasn’t called on the floor because, Harris said, he didn’t have enough votes to ensure passage. He added that new legislation in Iowa that now legitimizes same-sex marriage could help pave the way for passage of Illinois’ bill in the future; however, Harris’ civil unions measure would not be the same as same-sex marriage.

HB 397 redefines stalking. The measure amends the 1961 criminal code by defining stalking as a behavior intended to terrorize or endanger another person through intimidation or threats. Rep. Dan Brady, a Bloomington Republican, sponsored the measure. The bill stalled in the House. Brady said the measure is undergoing further negotiations between the state’s attorney’s office and the attorney general’s office. He expects to present it again during the 2010 spring session.

HB 2633, sponsored by Democratic Rep. Julie Hamos of Evanston, called for stricter rules to define how and when inmates in minimum- and maximum-security prisons were transferred to Tamms Correctional Center in Alexander County. Questions about the treatment and living conditions of the prisoners prompted Hamos to write the bill, which she said is on hold because a new director recently took over the center. She said she wants to wait to see what kind of changes will come about as a result.

HB 288 proposes that public schools could give students a few moments before class begins to observe a moment of reflection. The bill is sponsored by Rep. John Fritchey, a Chicago Democrat, and Sen. Bill Haine, an Alton Democrat. The moment of reflection would be determined on a school-by-school basis. Fritchey’s definition of a moment of reflection would replace the existing Student Reflection and Student Prayer Act, which requires every school to have a moment of silence during which students could either reflect on the day ahead or pray. Because the law lacked consequences for not observing the moment of silence, some schools observed it while others did not.

Controversy has surrounded the moment of silence issue because federal court deemed it unconstitutional to require public school students to pray during school hours.

The law invited a lawsuit. Fritchey, who voted against the original moment of silence bill, proposed the new version that would remove the “student prayer act” from the name and allow teachers to choose whether to honor the moment.

Haine said the role of the government is to encourage freedom of expression, not force it on individuals who may hold different beliefs, but he said he didn’t know if he could get enough votes for the bill to pass next session.

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Down to the wire

By Jamey Dunn and Bethany Jaeger, with Hilary Russell contributing
Some of yesterday’s moving parts actually started revolving around each other late in the day Thursday. The Illinois Senate approved two major revenue enhancements, one a sizable tax hike and another a major gaming expansion. That immediately put the onus on the House, which was in the middle of trying to advance an “insurance budget” to fund agency programs at bare bones levels.



Income tax increases and education funding
The momentum started in the Senate. Democrats tweaked a bill that was intended to address education funding, which would include an income tax increase of 2 percentage points for individuals. It would increase from 3 percent to 5 percent. Different versions of the measure have long been presented by Sen. James Meeks, a Chicago Democrat, but never found the support to pass. However, a looming deadline and $7 billion budget deficit this fiscal year has created new possibilities for an old concept.

One difference this time around is that the plan would only raise the corporate income tax rate from 4.8 percent to 5 percent, a much smaller increase than previously sought. It also would expand the sales tax to include services.

Senate President John Cullerton said the tax restructuring would help solve some of the chronic budget woes, but the plan would still come up $2 billion short of what the state needs to fully fund pensions and to maintain current spending levels. A vote for the tax plan, he said, inherently would be a vote for $2 billion in budget cuts.

House Bill 174 (the "new 750"), would provide some targeted tax relief. It would raise the personal exemption and increase the earned income tax credit over two years to protect low-income residents. It also would provide property tax relief, which attracted Democratic Senators.

Over time, the tax plan would funnel more money into education and higher education, something Meeks wanted for years to address funding disparities between school districts throughout the state.

Republicans opposed the tax increase and sales tax expansion, describing it as a mistake during a recession. Sen. Matt Murphy, a Palatine Republican, said: “There’s a lot of different ways we can go at this if we go line-by-line through this budget, and I know because I’ve done it. This will cause more Illinoisans to lose their jobs, without a doubt.”

The bill passed with only Democratic votes. Sen. Dan Kotowski, a Park Ridge Democrat, gave an emotional speech about making his last-minute choice to vote for the bill. He said he had been praying about his decision and cast the vote that he knew would make his family proud. He said he had been telling leadership that he would vote “present,” but he changed his mind during floor debate. After the vote, Kotowski encouraged some House Republicans to follow suit.

Cullerton said that passing the bill in the Senate may help House Democrats feel safer about changing their minds. However, he said that the bill would need Republican support to pass. “When one chamber starts and passes a bill, they see that we’re still walking around — we’ve got a different version of what the governor has — that there’s a way to do this. So I think it’s a good start.”

But Gov. Pat Quinn is still backing the income tax proposal that has been introduced in the House. “I think the [temporary income tax] plan we have here in the House is probably the one we’ll have to go with. It’s straightforward. It’s pretty simple. It’s for two years. And the whole idea is for at least at this time to hold off dire catastrophes.”

Gaming
Momentum to consider alternative revenue sources continued with a Senate vote to expand gaming by adding four new facilities, including new gaming facilities in Chicago, Waukegan, Rockford and Danville. Existing gaming facilities, including horse tracks, also could start operating more slot machines. Senate Bill 744 would generate at least $150 million upon issuing the licenses, according to Sen. Terry Link, a Waukegan Democrat. Once the new facilities were up and running and the economy improved, he said the package could generate up to $1 billion a year.

Building new casinos and riverboats has been tried numerous times in the past few years, and similar proposals haven’t advanced in the House. But, Link said: “They need money and here’s a good way to give them money. So I think it's future is a lot better tonight.”

Rep. Bill Black, a Danville Republican who would receive a gaming facility in his district through Link’s bill, said the state may need an income tax increase. Then again, he said: “When you’re drowning and a life preserver floats by, your impulse is to grab it. When you have a community that’s so desperate for investment and jobs, you turn to things you normally wouldn’t even consider. I would support the riverboat. I don’t have the luxury to say I don’t.”

Bare bones budget
The so-called “insurance budget” advanced by House Democrats as a back-up plan would fund state agencies at about 80 percent of the level they were funded at last year, which would be about 50 percent of the governor’s proposed budget.

Majority Leader Barbara Flynn Currie tried early in the day to advance a temporary income tax increase. That wasn’t gaining enough votes. So late Saturday night, Currie tried to at least approve the “insurance budget” to keep the lights on, so to speak. Without it, agencies would be funded at 32 percent of Quinn’s proposed budget.

But after word spread that senators approved an income tax increase across the rotunda, several House Democrats started to peal off support for a bare bones budget. Rep. Sara Feigenholtz, a Chicago Democrat and vocal advocate of human services, urged fellow lawmakers to hold off on a bare bones budget to “continue to fight for more solutions.”

Currie said she would prefer either version of an income tax over a bare bones budget, but it was a way to ensure something landed on the governor’s desk just in case chaos ensued Sunday, the last day of the regularly scheduled session.

If all else fails, Currie said she would call the bare bones budget again before Sunday’s midnight deadline. Here’s what it would do:

On the revenue side:

• Sweep $356 million from dedicated funds four times throughout the year.
• Refinance debt to get a 4 percent interest rate and save $600 million next year, saving $237 million over the life of the bonds.
• Along with tapping into federal funds and starting other efficiencies, it would generate about $1 billion.

On the spending side:

• State agencies could receive lump sums at half the funding level proposed by the governor.
• The administration would have to figure out how to spread the money around and to cut certain grant programs.

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Capital plan heads to the House

By Bethany Jaeger, Hilary Russell and Jamey Dunn
Senate President John Cullerton said he delivered on an inaugural promise to approve a major infrastructure program this spring. The $26 billion capital program, which would rely on tax and fee increases and new gaming revenues, won Senate approval and now heads to the House in what many legislators hope will continue to be a bipartisan effort.



If approved by the House, the new plan would build onto a $3 billion “mini-capital” program approved earlier this year. Combining state, local and federal funding in both the mini- and the full-capital plans would mean a $29 billion investment into roads, bridges, mass transit, schools, universities and community colleges, parks, libraries, museums, water systems and technology projects.

But not all the spending was earmarked in today’s capital plan. Legislators still would have to negotiate how and where the last $1.5 billion would be spent. The General Assembly also still has to negotiate how to balance an operating budget that is projected to be $11.6 billion out of whack over two fiscal years. But that is separate from the capital program.

Cullerton and Senate Minority Leader Christine Radogno stood together in a news conference after the chamber approved the construction. While several Republicans and a couple of Democrats opposed the revenue ideas (here’s the vote of 47-12), the spending plan received unanimous support.

“If you look at the totals of the votes, perhaps we could have done this with just Democrats,” Cullerton said, “but then we’d have acrimony, and it wouldn’t bode well for the future, and it wouldn’t bode well for the [operating] budget.”

Radogno said the four caucuses worked together to ensure a fair distribution of the money throughout all regions of the state. “That is not always easy to do. Then you cross-cut that with partisan politics. It is not easy to come up with something fair and balanced, and I truly believe that this is a fair and balanced product.”

Radogno added that while the revenue package is “not ideal,” it is “real revenue,” as opposed to borrowing without having money to repay the debt. “This proposal doesn’t do that. It pays for what we’re going to be getting.”

Sen. Martin Sandoval, a Chicago Democrat who has urged for more money for Chicago-area transportation systems, claimed victory because the capital program would include a more equitable split of money between northeastern Illinois and downstate. While some of the money would be distributed through a traditional formula for road projects that tends to give more money to downstate road projects, about $3.5 billion would go to new road and transit projects through discretionary spending. Cullerton said, “When it’s all said and done on roads, it’s probably 50-50 throughout the entire state.”

Sen. James Meeks, a Chicago Democrat, did not support the revenue portion. Cullerton later said that he met with Meeks several times to address his concerns about minority representation in unions and construction jobs. Cullerton said he looks to fund a vocational training program when the leaders negotiate the final $1.5 billion of the capital program.

It’s been 10 years since Illinois had such a major infrastructure package, and the last six years of gridlock between former Gov. Rod Blagojevich and the legislature took a toll. Numerous legislators commented about reviving a bipartisan spirit after a span of dysfunction, and “what a difference a year makes.” Cullerton ended by saying: “This is just back to normal. I’ve been here 30 years — 24 of them were normal.”

Here’s a breakdown of the revenue-makers:

Gaming

• Two separate types of gaming would generate about $375 million. That includes legalizing video gaming machines in places where alcohol is served. The state would tax and regulate the machines and garner revenue.
• A second program would allow the state to hire a private company to manage the Illinois Lottery for up to 10 years. It also would sell lottery tickets online, with the goal of marketing to people who don’t currently play the Lottery. It would make Illinois the first state in the nation to allow “Internet lottery,” which would be contingent on approval from the U.S. Justice Department.
• But creating new methods to access gambling is similar to playing with fire, according to Anita Bedell, executive director of Illinois Church Action and Alcohol Addiction Problems, who likened the programs to granting easy access to underage players.

Taxes

• It would reclassify soft drinks, candy, beauty and some hygiene products for sales tax purposes and generate up to $150 million.
• The sales tax on alcohol also would increase for wine (from 73 cents to $1.39 per gallon), spirits (from $4.50 to $8.55 per gallon) and beer (from 18.5 cents to 23.1 cents per gallon). It would generate about $113 million a year. Opponents said taxing alcoholic beverages is not a constant source of revenue for the state.

Driving-related fees
Increased fees would bring in more than $330 million a year. The increases would include:

• Title certificate fees from $65 to $95.
• Registration fees from $15 to $25.
• Driver’s license fees from $10 to $30.
• Fines for semitrailers that are over the approved weight.

FYI:
Revenue bill is HB 255.
Spending bill is HB 312.
Bonding bill is HB 2400.

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Revenue first, spending second for capital plan

By Bethany Jaeger
Senate Democrats and Republicans are inching closer to an agreement on at least half of the capital plan: the revenue side. Measures to raise about $1 billion of the state's share through various tax and fee increases, as well as two gaming-related revenue ideas, could advance early this week. The spending side of the roughly $26 billion construction plan, however, will take longer to negotiate.


Senate Democrats met behind closed doors Sunday evening, setting up what's scheduled to be the last two weeks of the spring legislative session. The goal remains to adjourn two days early on May 29, said Rikeesha Phelon, spokeswoman for Senate President John Cullerton. Expect the Senate to act on capital construction package and ethics reforms this week. Negotiations on an operating budget, so far, have been separate.

The construction program for roads, bridges, schools and infrastructure projects would rely on a series of revenue sources, the largest being about $375 million from the legalization of video poker machines in bars, truck stops and other establishments where alcohol is served, according to a Democratic source. The second largest source, about $331 million, would come from increased driving-related fees.

The plan also would allow a private company to manage the Illinois Lottery and allow tickets to be sold online, bringing in about $150 million. Additional revenue sources would include $150 million from expanded taxes on candy, non-carbonated drinks and some health and beauty aid products, as well as $114 million from expanded taxes on wine (13 cents a bottle), liquor (80 cents a bottle) and beer (about 2 cents a six pack). An increase on the state's motor fuel tax is no longer on the table.

Senate Minority Leader Christine Radogno said her caucus wants the two gaming-related measures in one bill and the other revenue sources in another bill to separate the votes. “It’s primarily to address the fact that there are people in all four caucuses that would never under any circumstances vote for gaming," she said. Cullerton is considering the request, Phelon said.

We'll have much more this week.

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End-of-session preview 2009

The legislature is preparing for a two-week push to accomplish three major issues — the state operating budget, a major construction program and a government reform initiative — for a potential May 29 adjournment. That’s the goal, according to Senate President John Cullerton.

All four legislative leaders met behind closed doors this afternoon to talk about a major capital construction program, which is expected to roll out next week. Earlier in the day, House Republicans held an unprecedented open-door meeting (caucuses usually meet behind closed doors and don’t invite the media) to talk about government reforms with Patrick Collins, chairman of the Reform Commission.



The Senate will come back Sunday evening, while the House is scheduled to return to the Capitol Monday evening. Here's where things stand, as of Friday evening:

Budget
Preparation to negotiate details of an operating budget, which is projected to have a deficit between $9 billion and $12 billion, is expected to start in earnest early next week. The process could be a little different than previous years in an attempt to increase transparency, but we’ll have more on that later.

Capital plan
By Jamey Dunn
The four legislative leaders seem to be nearing an agreement on revenue sources for a major infrastructure program. A vote could come next week.

Cullerton said that the money for the plan would come from several proposals and that no one source would dominate. “It’s a combination — it’s a potpourri — of funding sources for the capital bill.”

We wrote about some revenue ideas earlier this week. Cullerton said some of the details could change. He said that beer and not just wine and spirits, as previously mentioned, could be included in a liquor tax increase. He added that a proposal to sell lottery tickets online would have to be cleared with the U.S. Department of Justice.

Senate Minority Leader Christine Radogno said that legalizing video gaming and taxing it as a revenue source could actually reduce the number of video poker consoles in the state. She said the legislative Commission on Government Forecasting and Accountability estimated about 65,000 machines could be operating throughout the state, while one proposal would reduce that to about 45,000. However, the actual number of existing machines is unknown, according to the commission.

“I think the idea is to limit them, not to have them on every street corner,” Radogno said. “I mean, they’re already out there, and we want to make sure that the state’s getting the revenue that we could get from the activity that’s already going on.”

Rep. Frank Mautino, a Spring Valley Democrat, already has a video poker measure advancing through the legislature.

That’s the revenue side. The spending side invites a whole new set of complications. “We want to be sure that everyone’s comfortable with the spending before we vote for the revenue side of it,” Radogno said. “So, there’s a lot of detail that has to be worked out there. There’s not gong to be any hidden allocations. No lump sums.”

She said that the leaders have been talking about funneling a large potion of the money through existing programs with established criteria in an attempt to take some of the bickering out of the highly political process.

Ethics
By Bethany Jaeger
Legislation drafted by Gov. Pat Quinn’s Illinois Reform Commission is expected to be ready for debate later next week, and campaign finance limits likely are in the mix.

Sen. Don Harmon, an assistant majority leader from Oak Park, has been working with Patrick Collins, chairman of the commission and former assistant U.S. attorney. While some items such as Freedom of Information Act reforms are expected to sail through the legislative process, more controversial items likely would be introduced in competing bills and debated.

Campaign contribution limits are one example. Lawmakers would debate various proposals and take up-or-down votes on each, according to Harmon.

The Reform Commission recommended capping individual donations at $2,400 and corporate or political organizations’ donations at $5,000. But Harmon said the controversy is “not whether there should be campaign contribution limits — but the size.” Some legislators think that a $2,400 cap is too low and that it would require them to spend too much time raising campaign cash in smaller increments.

A $10,000 limit per calendar year, on the other hand, may be a more comfortable level for many legislators, Harmon said. Some Senate Democrats don’t like basing the limit on a calendar year, but, Harmon said, “We need limits that are meaningful, and the calendar year seems to be an understandable measurement and could enhance the likelihood of enforcement.”

Here are some of the contribution limit bills waiting for action:

• Radogno has proposed SB 1548, a $10,000 limit for individuals, corporations, unions and clubs or political organizations.
• Chicago Democratic Sen. Kwame Raoul, however, would limit individual donations to $7,500 and corporate donations to $20,000, under SB 2257.
• Democratic Rep. Harry Osterman of Chicago introduced HB 24, which resembles the Illinois Reform Commission’s recommendations to mirror federal limits: $2,400 for individuals and $5,000 for political organizations.
• Sen. Heather Steans, a Chicago Democrat, is behind SB 1768, which would establish limits for individuals and political action committees, but it also would cap the amount statewide political campaigns could transfer to candidates at $30,000.

A longer-term proposal, on the other hand, is changing the way the legislature redraws congressional districts. Redistricting is being discussed but not lumped in as part of the end-of-session rush. Reform ideas, which include using a computerized process similar to Iowa’s, are likely to be debated in public hearings throughout this summer or, potentially, a special legislative session in September.

Another controversial issue that could be pushed back is the commission’s recommendation to grant state’s attorneys authority to wiretap conversations as part of public corruption investigations. Federal prosecutors have that power, while state’s attorneys do not (although they can wiretap for other kind of investigations).

A former state’s attorney, Democratic Sen. Bill Haine of Alton, sees red flags in the proposal. State’s attorneys are elected on a partisan basis, while federal attorneys are appointed by the president and confirmed by the U.S. Senate. Federal prosecutors also answer to the U.S. Department of Justice and the U.S. attorney general, which Haine said provides a checks-and-balances system. “So before we vest local politically elected prosecutors with the vast powers of the United States government, we should have a clear idea of where we are going to draw the line and what the checks and balances are. Just giving wiretapping authority, warrentless wiretapping authority or additional wiretapping authority without looking at how we’re going to have checks and balances on that authority, I think, is a mistake.”

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Video gaming advances

by Jamey Dunn
A bill that would expand gambling to help pay for new schools passed in a House committee today.

The measure, sponsored by Rep. Frank Mautino, a Spring Valley Democrat, would allow establishments where liquor is served, fraternal organizations, veterans' clubs and truck stops to have video gaming machines such as video poker. Many places already have the machines, but they can't legally pay out winnings. If approved, the state would require establishments that offered video poker to be licensed and would legalize betting on the games. The machines also would be taxed, with revenue going toward school construction projects and local governments.



Mautino said he did not make racetracks or off-track betting facilities eligible to operate video poker machines because he wanted to keep the bill simple in hopes of increasing its chances of passage. “For years this bill has been around, and it gets involved in the giant end-of-session bills, which usually collapse under their own weight,” he said.

Here's a break down of some of the numbers associated with the measure:

• 25 percent The percentage of net profits from the video gaming machines that would be taxed.
• 20 percent The amount that would go toward building schools.
• 5 percent The amount that would go to local governments.

• $2 The maximum wager per hand.
• $500 The maximum payout per hand.

• 21 The minimum age to play.
• $5,000 The maximum fine an establishment would pay for allowing someone under 21 to gamble.

• 25 The percent of licensing fees and fines that would go toward treating gambling addiction.
• 75 The percent that would go toward regulating the process.

Anita Bedell, speaking on behalf of the Illinois Church Action on Alcohol and Addiction Problems, said that making gambling so convenient would lead to more widespread addiction. “These machines are like the crack cocaine of [gambling] addiction,” she said. “The problem is people don't have to get in their car and drive to Las Vegas or a casino or a race track. They can just go down the street to a truck stop, or a restaurant or a bar.”

House Speaker Michael Madigan said last week that he does not want to consider any gaming expansions this session.

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Gaming on or off the table?

By Bethany Jaeger, with Jamey Dunn contributing
The proposal to build three new gambling facilities in northern Illinois (Chicago, Rockford and Waukegan) and expand existing gaming operations reemerged in a new version today. Sen. Terry Link, a Waukegan Democrat, introduced SB 744, which is expected to be debated next week when the legislature returns to the Capitol.




Such expansive gaming bills have built momentum only to collapse in previous years, particularly as lawmakers struggled to agree on a way to finance a major capital construction program. This time, Link’s version would build three new land-based casinos rather than riverboats. And Senate President John Cullerton has said he would not rely on a gaming bill to fund a capital plan because it gets too loaded down by politics.

Gaming, however, is not on House Speaker Michael Madigan’s agenda. “I’m not interested in working on gaming legislation,” he said today during an unrelated Statehouse news conference. “I did that about a year ago, and given that experience, I’m not interested in revisiting that.”

House Minority Leader Tom Cross supports some gaming expansions as a new revenue source, including revenue that could help pay for a construction program. After meeting with Gov. Pat Quinn and Senate Minority Leader Christine Radogno this afternoon, Cross said that the speaker is ruling out gaming as a way to push legislators toward tax increases. “He’s forcing people to look at sales or income tax as the only option to fund things, which I think is a huge mistake in this economy,” he said.

Madigan repeated today that he would support an income tax increase but not increased spending. “I’m prepared to vote for an increase in the income tax to balance the budget and pay the bills but not grow the government,” he said. “This government has grown for six years at an accelerated pace, and now we’re looking at an operating deficit of around $10 billion. And so I don’t think given the history of six years, given the size of the operating deficit, that this is time to grow the government.”

Radogno, like other Senate members, said she hasn’t given up on gaming as a revenue source. “We certainly have some gaming right now, and there’s been support for it in the past. So, I’m still open.”

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Starting points, but no consensus, yet

By Hilary Russell and Jamey Dunn
It's the time of year when legislative leaders continue to say everything is on the table, but nothing seems to be falling to the ground.

The Senate’s special Deficit Reduction Committee ended today without any clearer answers about solving the state’s financial crisis than when the committee started meeting a month ago. Gov. Pat Quinn also held a meeting with Republican leaders and business leaders today in the Statehouse in an attempt to find some consensus.

Neither provided a common ground. But they did provide more "starting points."



“We had a really good discussion and dialogue,” Quinn said. “I’m sure not everyone is of the same mind, but I think it’s healthy to have a discussion about our economic crisis. The statistics yesterday were extremely sobering.” The state’s unemployment rate reached 8.6 percent, according to the Illinois Department of Employment Security.

The meeting included House Minority Leader Tom Cross of Oswego, Senate Minority Leader Christine Radogno of Lemont and business leaders, including the Tooling and Manufacturing Association and the Illinois Chamber of Commerce.

The special Senate committee charged with finding consensus about where to cut spending out of the state budget with little consensus. Here's the report.

“What we did not come up with in the past four weeks — and this was not the intent of this committee — we did not come up with the final solution,” said Sen. Donne Trotter, co-chair of the committee and a Chicago Democrat. “We did, in fact, meet and define some parameters in which we should start this appropriation process as we go forward with the strong intent to be out of here by May 31.”

Republicans want to cut spending and avoid raising taxes.

“We heard many people from this committee who passionately and sincerely believe that raising taxes is essential,” said co-chair Sen. Matt Murphy, a Palatine Republican. “Speaking for myself, … I think the proposal to raise taxes is profoundly misguided. Raising taxes in Illinois will cost more Illinoisans their jobs. Period. With 8.6 percent unemployment, we cannot afford to lose any more jobs.”

Quinn proposed a 1.5 percentage point increase in the state income tax as part of his budget plan for next fiscal year, which is projected to have up to a $12.4 billion deficit.

Democrats, in turn, said cutting spending is not nearly enough to fill the gap.

“I hope we can also agree that we cannot solely cut our way out of this deficit,” said Sen. John Sullivan, a Rushville Democrat. “The cuts will be, to say the least, drastic and devastating, and when you talk about making some of the cuts that would be necessary to balance this budget, we would be laying off thousands of people across the state of Illinois to do that.”

One way to increase the number of jobs available is for the legislature to pass a capital bill; the problem reverts to how to pay for it.

Quinn proposes funding the capital plan through fee increases and some new tax revenues. Republicans oppose that idea and support gaming as a funding source.

One example is to legalize video gaming. Sullivan said revisiting gaming as a funding source for a capital plan, however, is a mistake. He said that two previous capital bills that included gaming advanced through the Senate with bipartisan support, but they stalled in the House. “We tried it. It didn’t work. There wasn’t enough support in both chambers for it to become law,” he said. “So, why are we still having that discussion?”

Sullivan suggested that lawmakers move on to an income tax increase or come up with some new suggestions for funding sources.

Watch for Republicans to release some proposals next week. In the meantime, Murphy said that some of the broad suggestions made by the committee such as Medicaid and pension reforms are important starting points. The one thing everyone seems to agree on is the need to pass a capital plan. “We just have to get around to doing it and stop making excuses,” Murphy said.
Quinn remains opposed to gambling expansion. " I think it's a bad bet. Take a look at some of the stocks at these gambling firms. I don't think you'd want to buy those penny stocks today.”

Video gaming advances in the House
By Bethany Jaeger
Meanwhile, a House committee advanced a bill that would legalize video poker machines and tax them, potentially generating between $300 million and $500 million a year, according to Rep. Frank Mautino, the Democratic sponsor. He would dedicate the revenue to school construction projects, starting with a list of 23 schools that have been waiting for money that the state promised to them since 2002.

“The realization is that some of the things in the governor’s budget proposal are going to fail,” Mautino said shortly after his bill sailed through committee. “And so there have to be other alternatives that are out there. I don’t think the speaker’s interested in a big gambling package, but here’s something that we have to make a decision to either get rid of it or tax it — because they’re producing this money one way or the other.

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Similar concepts, new context

One week before Gov. Pat Quinn proposes his first state budget to the General Assembly, legislators and advocates of all stripes are revisiting a lot of issues they tried but failed to enact during the Blagojevich Administration. This time, there’s a new context:

1. Legislators and Statehouse insiders trust Quinn more than they trusted Blagojevich.
2. Senate President John Cullerton has a better working and personal relationship with House Speaker Michael Madigan than did former Senate President Emil Jones Jr.
3. The economic and fiscal crises have sparked a new sense of urgency to find quick fixes at the same time they have inspired a willingness (however reluctant) to pursue more long-term reforms.

Whether the new context and new players actually will foster consensus and meaningful changes to revenue and spending, however, is yet to be seen. At this point in the spring session, it’s still all talk. Here are a few examples:

Gaming for capital
Republican leaders oppose increasing the state sales tax on gasoline to pay for a major construction program. Instead, they rekindled ideas to fund a capital program for schools, mass transit and infrastructure projects by expanding gaming. Their goal is to avoid raising any state taxes in a recession.

“Right now is absolutely not the time to be raising taxes on people who are struggling themselves,” said Senate Minority Leader Christine Radogno.

She and House Minority Leader Tom Cross propose expanding gaming to generate $1 billion in new revenue, which would help finance a $25 billion capital program. (They propose bonding about $12 billion, tapping $11 billion in the dedicated Road Fund to pay for transportation projects and leveraging about $3.5 billion from federal and local matching funds.)

Their gaming ideas include recurring proposals to allow a Chicago casino, expand positions at existing gaming facilities and enter a public-private partnership so that private investors manage the Illinois Lottery while the state continues to own it. Newer ideas include allowing video poker, as proposed in HB 4329, which is sponsored by one of Madigan’s assistant majority leaders, Rep. Frank Mautino of Spring Valley. Republicans also mentioned allowing Lottery tickets to be sold online, a proposal previously advanced by Cullerton.

Madigan took gaming off the table last year, but his spokesman, Steve Brown, said this is a new year. However, he said gaming tends to be a regressive source of revenue that usually generates a bunch of hype before falling by the wayside.

Senate Majority Leader James Clayborne said gaming for capital is still on the table in his chamber.

Tax reforms for education and economy
Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, reintroduced a concept of increasing the state income tax rate and expanding the state sales taxes to cover services. The goal is to reform the way the state pays for public education and to reduce the burden on local property taxes.

Cutting back on state spending during a recession may sound logical, Martire said, but “it is quite clearly the absolute worst thing the state of Illinois could do.”

He joined two leaders in the Illinois Legislative Black Caucus to cite new evidence from Mark Zandi, Moody’s Economy.com’s chief economist, that the idea could help reduce the length of the economic recession in Illinois by preserving thousands of jobs and helping taxpayers spend money in their local economies.

The plan has been proposed in various forms before and would increase state income taxes, expand state sales taxes and provide targeted tax relief to low- and middle-income taxpayers. He added that broadening the sales tax to apply to services could reduce its rate, although it would be a hard sell to Cook County residents who already pay some of the highest sales tax rates in the country.

Sen. James Meeks, a Chicago Democrat and longtime sponsor of education funding reform measures, said Blagojevich is no longer in a position to threaten to veto tax reforms, and Cullerton has been a co-sponsor of such reforms. However, he added, his peers in the Senate likely would not support an income tax increase if it didn’t lead to education funding reform and property tax relief.

GOP budget reforms
By Hilary Russell
House Republicans flatly disagree and say Illinois has a spending problem, according to House Minority Leader Tom Cross.

He joined his GOP Caucus members and John Tillman, chief executive officer of the Chicago-based Illinois Policy Institute, a nonpartisan research organization, to propose budget reforms that would help reduce the $9 billion deficit and increase accountability. Introduced today in a Statehouse news conference, the proposals include:

The Sunshine Act (HB 4134) would create a volunteer commission of four legislators and four members of the public to review each of the state’s executive branch programs. The bill is sponsored by Rep. David Reis, a Willow Hill Republican. The state does not have an accurate list of existing programs, making it difficult for lawmakers to keep track of them, GOP members said.

Reis is also sponsoring the Stimulus Watch Act, which would require the General Assembly’s approval to use federal stimulus funds to create new state programs. Once the funds run out for a particular program, it would end.

“Pay as You Go Spending” (HB 3189), sponsored by Rep. Mike Connelly, a Lisle Republican, would implement a start and end date for new state spending programs. Just to add a program another must be eliminated.

Rep. Darlene Senger, a Naperville Republican, is co-sponsoring a constitutional amendment that would change the required number of votes to raise taxes. Currently, a majority of 60 votes in the House and 30 in the Senate is needed to increase fees or taxes. Senger’s proposal would increase the required number of votes to a “supermajority,” or 71 votes in the House and 36 in the Senate, making it more difficult to pass tax bills.

Rep. Lou Lang, a Skokie Democrat, said that the Republican’s timing was more showboating for their constituents than offering real solutions. “I find it very interesting that whenever there is a public policy decision to be made and the facts are clear that many people look for a political peg to take the chance to hang their hat on rather than take any political risk whatsoever.”

Gun control vs. gun rights
By Jamey Dunn
On the same day that thousands of people came to the Capitol building to participate in the annual gun owner lobbying day, every gun control measure voted on in a House committee advanced to the floor. A feeling of déjà vu was in the air.

Two of the gun control measures that passed through the committee today were proposed last session by the same two Democrat sponsors from Chicago. House Bill 12, sponsored by Rep. Luis Arroyo, would limit handgun purchases to one per person per month. House Bill 165 , proposed by Rep. Edward Acevedo, would ban semi-automatic assault weapons.

Other measures before the committee included House Bill 179, proposed by Chicago Democrat Rep. Deborah Graham, which would require that guns must either be equipped with gun locks or stored in lock boxes around minors. House Bill 180, also sponsored by Graham, would make gun dealers register with the Illinois State Police, who could then do spot checks on the dealers.

Rep. Brandon Phelps, a Democrat from Harrisburg, supports gun rights and is pushing for a few different bills that would allow counties to decide if they wanted to allow concealed carry of guns. One concealed carry bill sponsored by Sen. John Jones, a Republican from Mount Vernon, did not make it out of the Senate Public Health Committee yesterday.

Special elections
Two special election bills were killed today in a partisan showdown in the House Executive Committee. The hearing only included Cross’ special election bill and one proposed by Rep. Jack Franks, a Democrat from Woodstock. Both votes split along party lines. Republicans on the committee were visibly miffed and protested the demise of the bills.

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Speaker: Gaming is dead

House Speaker Michael Madigan deflated all momentum behind a capital bill this afternoon with one statement: “Given the conditions that exist here in Springfield, I think that the proposed expansion of gaming is a dead issue.” And the state’s operating budget remains unbalanced, as the House continues to reject ideas that would plug what the governor describes as a $2 billion hole. While the House is expected to vote next week to restore some of the governor’s $1.4 billion in cuts, they’re unlikely to support revenue ideas to pay for them.

Madigan spoke in a Statehouse news conference shortly after the full chamber rejected the Senate’s gaming proposal, which would have allowed a new land-based casino in Chicago, a state-owned casino and a new riverboat somewhere in the state. It also would have allowed slot machines at horse race tracks.

The multibillion dollar revenue source was the crux of a $34 billion capital construction plan. Without it, Illinois enters its ninth year without a major capital plan and without federal matching funds earmarked for transportation projects.

“This is another example of the speaker’s shenanigans to thwart the capital bill, which would put hundreds of thousands of people to work, and to impose an income tax on the people of Illinois next year,” the governor’s office wrote in an e-mail. The governor is not giving up on capital, said his spokesman Brian Williamsen in a phone conversation.

In a characteristically methodical way, the speaker led his caucus in rejecting most of the funding source of the capital plan. Yet Madigan added that he would not declare a capital plan dead, just gaming.

Without gaming, he said he’d consider previous revenue ideas, including one proposed by House Minority Leader Tom Cross last year that would offer a limited expansion of gaming at existing casinos or riverboats. The speaker also has his own version of a gaming plan that would reform the Illinois Gaming Board. And he cited a previous measure he supported: a constitutional amendment that would increase the Illinois income tax to fund education and construction needs.

Madigan denied, however, that he would propose an income tax increase after the November elections, as the governor and some Republicans repeatedly have charged. “I am not going to support an increase in the income tax during a lame duck session of the legislature,” Madigan said. He did not, however, rule out next spring. “Next spring is next spring. That’s a long time away.”

Senate Minority Leader Frank Watson said it’s unfortunate the speaker took gaming off the table to fund capital. “Revenue has to be generated to fund a capital bill, and gaming seemed to be the best alternative.” He added that although he’s not happy about it, Madigan’s statement could have a positive side. “I think we’ve been strung along for a long period of time … If this is going to bring closure to at least the revenue source, then, I guess, so be it.”

Watson said his caucus would be willing to consider alternative revenue sources for a capital plan, and he charged the speaker with the responsibility to propose such alternatives.

Capital bill summary: All parties say they’re not going to give up on capital, but none seems to offer alternatives that would serve as a compromise. Gaming was thought to be the compromise between most of the parties, but the House didn’t like the Senate’s procedural method that prevented the House from being able to make any changes to the gaming plan. So the General Assembly went from having what looked like a compromise to what turned out to be another dramatized clash between two chambers, leaving us where we started.

The operating budget is just as anti-climactic at this point. To be clear, the state does have an operating budget in place with most of the $59 billion spending plan activated. Yet the governor’s $1.4 billion in cuts announced Wednesday still leave an unbalanced budget, according to House and Senate GOP. According to the House speaker, “The word balance is one of these things that’s in the eye of the beholder.”

State Medicaid spending often is one area that can be delayed to balance the current year’s budget. Sen. Dale Righter, a Mattoon Republican, explained last night that regardless of the governor’s budget cuts that affect state Medicaid programs, the state still has to reimburse medical providers who care for Medicaid patients. “We still owe those bills. So the governor’s not cutting growth in government when he cuts Medicaid. He’s just pushing bills off into the future,” Righter said.

The rest of the governor’s spending cuts, particularly to human services, could be considered by the House next week. It’s scheduled to return Tuesday through Thursday. The Senate is not, meaning no cuts will be restored unless the Senate also agrees. That could be a while, considering Senate President Emil Jones Jr. said his chamber isn’t scheduled to come back to Springfield until the annual fall session in November. His spokeswoman said they would wait to see what the House did next week before deciding whether to override some of the governor’s vetoes before then.

But, there’s always the chance that the state budget could end up where it started, with relatively flat funding levels for most state services and some decreases for operations. “I could see nothing happening,” Cross said after the House rejected gaming.

The one option remaining on the table in the House is so-called fund sweeps. The Senate and the governor want to allow the governor to transfer about $530 million from dedicated funds to the state’s general fund. It’s been done for years under multiple administrations. Although fund sweeps appears to be the one common ground between all parties, Cross said it’s a) not enough and b) not guaranteed. “If you’re going to end up using fund sweeps, where does it go? Does it go back to pay bills? Does it go to [developmental disabilities]? Does it go to higher ed? To nursing? There’s not enough to take care of all these. So I don’t know. It’s possible at the end of the day nothing happens.”

Madigan said last night that his Democratic members want to define which funds could be swept and where the money would go. They also may want to reduce the amount transferred.

Sen. Donne Trotter, a budget negotiator for his chamber, said there’s actually about $1.9 billion available in the dedicated funds that otherwise is considered “surplus” at the end of each year. He said he’d be willing to consider changing the amount transferred, whether it’s more or less than $530 million. Madigan, however, said fund sweeps historically topped off at $300 million.

Either way, Trotter and many others agree that fund sweeps won’t solve the budget deficit, whether the state operates at $1 billion or $2 billion in the red.

Operating budget summary: There’s a lot of work to do. If the House overrides some of the governor’s budget cuts without approving ways to pay for them, the budget will tilt further out of balance. The level of funding for state services during the second half of the fiscal year could come down to how well the state economy performs and whether legislators agree on ways to plug remaining holes when they reconvene this fall.

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The chips may fall, but ...

The Illinois House will convene in Springfield next Monday to debate a major gaming proposal announced in Chicago this morning. Two new casinos, one in Chicago and one elsewhere in the state, could unlock months of political stalemates, according to sponsors Reps. Lou Lang of Skokie and Bob Molaro of Chicago (I heard their press conference on the Internet through Capitol Fax). Or, that same plan could be a dud if it isn’t quickly followed up by separate but related plans to fund road and school construction projects and mass transit and education subsidies.

House Speaker Michael Madigan wrote a letter to legislators and labeled the gaming plan as a “compromise,” but even if all four legislative leaders and the governor agreed on the latest version, there’s a whole lot of back-and-forth that needs to happen before they agree on ways to distribute that money. It’s generally agreed that revenue will be split, with the largest chunk paying for road and school construction projects and the rest for increased education spending. However, Lang said they still have to decide whether the governor or the legislative leaders will have discretion in which projects get funded. And considering trust hasn’t been strong this year, that decision could take a while. In a phone conversation Monday, Lang said, “[The leaders] have yet to come to members and say, ‘Hey, we’re going to get a capital bill. You get X. Where’s your list?’ None of those things have happened yet.”

While Republicans will have this week to suggest tweaks to the gaming legislation, Lang said he’s “very confident” that this proposal or something like it will pass the House. Whether the Senate could support it is unknown. Cindy Davidsmeyer, spokeswoman for Senate President Emil Jones Jr., said in an e-mail that the leadership could support some issues but that it needs to see the actual language before moving forward. She also said session next week is possible, but nothing’s set in stone.

Major parts of the gaming plan include reissuing a legally challenged “10th license” that was previously marked for Rosemont. The plan also would create an 11th license. Chicago would get one of them to build a land-based casino owned by the city and operated by a private investor. All casinos in the state would be governed by a completely new, independent Gaming Board, Racing Board and Director of Gaming Enforcement. They’d work with ethics officers to oversee the bidding process for the two new licenses and manage the nine existing licenses.

Other details include:
- The owners of the two new licenses would have to open 25 percent of their ownership to minorities and women for as little as $5,000.
- The nine existing riverboats would gain a total of 3,500 new positions for a fee.
- The five racetracks would pay a fee to add slot machines.
- The Illinois Gaming Board would have to dedicate $5 million for compulsive gaming programs and kiosks.

If you’re curious about the pros and cons of legalized gambling and about what other states do with the money, check out the analysis provided by the National Conference of State Legislatures.

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"Tings are OK"

That's House Speaker Michael Madigan using his best Chicago accent to jokingly gauge the progress of leaders’ meeting with Gov. Rod Blagojevich Tuesday in Springfield to discuss the expansion of gaming for new revenue. Turning on the serious tone, Madigan said, “We had a good meeting, and it appears that we’re making progress. Not everything is resolved. There are differences, which I’m not going to get into.”

The four leaders of both parties met with Blagojevich in the Statehouse Tuesday afternoon and all reported progress, although they wouldn’t talk specifics. And it may take more than the seven to 10 days originally said to be the timeline for agreeing on how much to expand gaming and how to pay for Chicago mass transit, statewide construction projects and education.

The proposals on the table but not quite agreed upon include:
- A land-based casino owned by the city of Chicago, although they have to nail down a way to share the revenue between the city and the state
- One riverboat elsewhere in the state, although there’s no indication where that second boat would go
- Slots at horseracing tracks, although they aren’t releasing a number of new positions that would be allowed
- An independent gaming board, desired by House Speaker Michael Madigan, House Minority Leader Tom Cross and Senate Minority Leader Frank Watson, although it has some opposition or concerns about who would appoint the new gaming board members
- A 70-30 split of the revenue — 70 percent of the new gaming revenue would pay for road and school construction, while 30 percent would provide new education funding per Senate President Emil Jones Jr.’s desire, although the leaders haven’t yet agreed on how much revenue would be generated in the first place

Regarding the split of money, Watson said, “The bigger the capital bill, the better, as far as I’m concerned, but I’m not opposed to the 30 percent that’s being allocated to education.”

He also said he could vote for slots at the tracks, but added, “I’m not sure I’ve got members who can. That’s the biggest problem.”

And the revised timeline, per Watson, is that seven to 10 days may have been the original goal, but “I think we’re talking more time than that.”

The leaders scheduled a telephone conference for Thursday.

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The $27 million deal

The end of the seemingly endless legislative session could be near if all goes by Thursday night’s seven-to-10-day promise. It started when Chicago-area mass transit officials announced a temporary budget solution that averts a “doomsday” scenario that would have terminated 600 workers and drastically increased fares on Sunday. The “solution” was a fiasco that didn’t peak until 3 p.m. Friday when the federal government approved a plan announced by Gov. Rod Blagojevich just hours before. But it’s not just a Chicago-area issue. The budget fix, even if only temporary, has statewide importance because it opens the door for a much-delayed agreement between the state’s top legislative leaders and the governor on long-awaited plans to fund road and school construction projects across the state.

Jim Reilly, chairman of the Regional Transportation Authority in northeastern Illinois, said the federal government had to approve the plan to divert $27 million in federal capital dollars to cover the agency’s operating expenses. The grant — not a loan — is supposed to be enough for the RTA, the Chicago Transit Authority and suburban Pace bus services to operate through the end of the year.

According to Blagojevich, the diversion of federal capital dollars for operating costs has been done in the past. Blagojevich said he plans to replace those federal funds with available state capital bond money. “By replacing converted federal capital money with state capital money, there will be no loss to either CTA or Pace’s capital plan,” he wrote in a release before talking to reporters outside of his Statehouse office.

Ron Huberman, executive director of the Chicago Transit Authority, said at the Capitol that the scheme does avert a doomsday scenario, but it doesn’t solve the structural deficit that plagues the agency’s pension system and angers its union workers. Chicago Federation of Labor president Dennis Gannon added that the pension problem will only make the mass transit system worse if not addressed in the long term.

Reilly of the RTA said he trusts the legislative leaders to come up with a long-term solution. “I believe that commitment,” he said, crediting House Minority Leader Tom Cross for becoming a mediator of sorts between House Speaker Michael Madigan, the governor and his ally, Senate President Emil Jones Jr., and Senate Minority Leader Frank Watson.

On the House floor, Cross said, “This may not be the best solution, but it’s what is here and now and available, and I support it in the interest of keeping the system running.”

The next step to ending the sixth months of overtime session is to draft an agreed capital program for road and school construction around the state. That, however, involves the expansion of gaming, a contentious and complicated subject. The legislative leaders are on opposite sides of the spectrum in terms of the size and scope of the revenue sought. There’s also disagreement on the spending side. The Senate version approved in September includes money for education and mass transit, neither of which Madigan wants to tie to gaming. Cross bears the burden of ironing out their differences.

“We have a lot to discuss,” he said from the floor. “As far as I’m concerned, what came over from the Senate isn’t what we’re going to work off of. We will start over.”

Cross and Madigan will meet frequently over the next seven to 10 days, but the House and Senate members left Springfield Friday and won’t be called back until the pending gaming and capital plans are ready.

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Unlucky sevens

Former Gov. George Ryan could go to federal prison within seven days — correction: by November 7 — pursuant to a decision by the federal 7th Circuit Court of Appeals.

On Thursday, the full court affirmed that Ryan would not receive a retrial for his federal corruption conviction last April. Ryan requested the full panel of judges review an August ruling by a three-judge panel that determined he should not receive another trial. According to Thursday’s court order, even the three dissenting judges wrote that they agreed “the evidence of the defendants’ guilt was overwhelming.” But they disagreed over whether the management of the jury during the six-month trial harmed the case.

Ryan and his friend, Chicago businessman Larry Warner, were found guilty of using public office for private gain during Ryan’s years as secretary of state (1991 to 1999) and as governor (1999 to 2003). The Kankakee Republican has remained free during the appeals process and could ask to remain free if he takes his case to the last resort: the U.S. Supreme Court.

Back to the Capitol in 7
The Illinois House could vote on controversial mass transit funding just two days before threatened service cuts and fare increases.

Members will return to Springfield to conduct business one week from today. This comes after House Minority Leader Tom Cross met with House Speaker Michael Madigan in Chicago Wednesday to discuss ways to save mass transit from financial turmoil. But the leaders aren’t necessarily on the same page about whether a mass transit plan should rely on revenue from increased taxes, expanded gaming, other sources or all of the above.

The minority leader still prefers alternatives to tax increases. “Tom Cross and a majority of our caucus does not feel that now is the time to be increasing taxes on people, especially in light of what is being proposed by the Cook County board president and the mayor of Chicago,” said David Dring, Cross’ spokesman.

Alternatives include allowing a Chicago casino and the expansion of positions at existing casinos to help mass transit and to pay for a major capital construction plan. Dring said Cross also proposed diverting $300 million of the revenue from the state sales tax on gasoline to aid mass transit, and he’s proposing a menu of items to replace that money, such as increasing fees on auto titles and raising transit fares by 10 percent to 15 percent. “That is something we just thought about because that would be less money you would have to take from the sales tax on gas,” Dring said, adding a 15 percent fare increase would be “much more modest” than the fare increases planned by the Regional Transportation Authority if the agency doesn’t receive long-term state help by November 4.

Madigan, on the other hand, “did not seem to warm up to our idea of the sales tax on gas,” Dring said.

The speaker is open to a Chicago casino to pay for a road and school construction projects but only under certain circumstances, such as whether the revenue would stay in Chicago or be divvyed up all over the state, said Madigan spokesman, Steve Brown. However, the speaker still doesn’t want to rely on gaming legislation to save mass transit. “He has said that he doesn’t plan to hold transit riders hostage to the casino interests or the gambling interests,” Brown said.

In fact, Madigan still plans to push for a plan that would include a small sales tax increase in Chicago for the sake of mass transit. Lawmakers could vote for a second time on that measure next week. It previously fell short of the necessary votes in September.

Lawmakers were told to be prepared to work at the Capitol Thursday, November 1, Friday, November 2 and potentially Monday, November 5. And the governor repeated his statement Wednesday that he would call the General Assembly into another special session in mid-December to address the so-called 7 percent solution to Chicago-area property taxes. See the background here.

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All on board?

When state lawmakers return to Springfield Monday, there could be more momentum behind a gaming-for-capital plan than there was at the beginning of this nearly nine-month session. The pressure is on for lawmakers to approve a capital bill to finance road and school construction projects and a plan to address mass transit shortfalls. Now House Republicans have changed their tune and indicated a willingness to consider the creation of a Chicago casino to pay for a capital plan. That leaves only House Speaker Michael Madigan to hop on the bandwagon of a Chicago casino. That's not expected.

The potential support among House Republicans also is unlikely to shore up enough votes to approve a three-casino plan passed by the Senate earlier this month. That idea was crafted by Gov. Rod Blagojevich and Senate President Emil Jones Jr., who did not seek input from House Democrats or Republicans before sending it to the floor for a vote. Members of both political parties approved the deal. Now it’s waiting to be considered by the House.

Cross, who convened a Chicago meeting about gaming with the three other legislative leaders and the governor Wednesday, said the Senate’s gaming-for-capital plan “needs a lot of work.” “I’m not comfortable with three new licenses,” he said in a phone conversation Thursday. “Our caucus has had some interest in the increased positions, and I think reluctantly, as this process has evolved, is open to the Chicago idea.” He added there are a few House Republicans who like the idea of granting three new gaming licenses because it would give their downstate districts an opportunity to build one of the new riverboats.

Cross said the push for a capital bill isn’t about getting money for individual projects. “The roads need repair, the bridges, the school construction plan, the higher ed facilities — the needs are great. So it’s not individual member projects. It’s just the legitimate needs that exist around the state.” The focus of the caucus will be to agree on a way to generate about $1 billion for the state’s share of a $10 billion capital plan. Cross added, “I think with increased positions and Chicago that you can probably get there.”

Rep. Gary Hannig, a Litchfield Democrat and budget negotiator for his caucus, said lawmakers shouldn’t get their hopes up. Not only is approving three new casinos going to be a tough sell in the House, he said approving new licenses doesn’t produce immediate gratification. He said while the state would get an initial big check in exchange for a new license, it would have no idea when the gambling facility would be up and running or whether its revenue would live up to expectations.

He added the Senate’s revenue estimates from its gaming plan are “very optimistic.” “It really is just anybody’s guess about what this thing in Chicago could generate. I don’t know that we can make those kinds of dollars. And if we don’t, we basically borrowed a big bunch of money and ask some future generation to find a way to pay it off because we gave them an insufficient revenue stream.”

And then there’s Madigan, who may be for a Chicago casino under the right but unlikely circumstances. His spokesman, Steve Brown: “In terms of a city-owned casino that meets all of the city requirements, if that ever came up by itself, I assume the speaker would support it. No expectation it ever will.” He also cited the Senate’s gaming bill as an example of a typical plan that has kernel of an idea but gets bogged down by various demands and falls over on its own weight.

The speaker is considering scheduling public hearings to air out gaming proposals, but there’s no schedule or format for any hearings right now, according to Brown. The House first will focus on some $470 million budget cuts made by the governor last month. The fun begins Monday with a special committee of the entire House. The chamber is expected to override those budget cuts when it convenes for the annual fall session Tuesday.

Throughout the two-week “veto session,” the General Assembly also is expected to consider mass transit subsidies and Chicago property tax relief. But there’s no indication the regular legislative session will end there.

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An exercise in futility?

In a mostly rosy display of bipartisan cooperation (with some thorns in the Senate president’s side), the Senate approved an all-in-one deal to create three new casinos as a way to pay for a capital plan. That $25 billion plan would finance road and school construction projects and provide a one-year subsidy for Chicago mass transit systems. Not everyone was happy. Worse, they predict trouble in the other chamber.

“I think it’s fine and dandy that we can be here and doing this,” said Sen. William Delgado, a Chicago Democrat and Latino Caucus leader. “But this is just an exercise in futility because it’s dead on arrival [in the House].” The House wasn’t represented in the past two weeks of negotiations and isn’t expected to support that large of a gaming expansion.

The Senate version of a gaming plan would license a new land-based casino in Chicago and two new riverboats elsewhere in the state. Side note: Despite an earlier version, this plan would require all casinos to abide by the statewide smoking ban that starts in January.

A large part of the gaming revenue would subsidize mass transit with $425 million over three years. The Regional Transportation Authority, which includes the Chicago Transportation Authority, Metra rail services and Pace suburban bus services, has been threatening to lay off hundreds of workers and cut services if the state doesn’t lend a helping hand. The deal would grant the agency $200 million for operating funds in the first year (downstate would get $30 million). The catch is that if the General Assembly doesn’t come up with a way for the RTA to generate a long-term revenue source, then the RTA does not have to repay the $200 million.

Sen. Rickey Hendon, a Chicago Democrat who sponsored the gaming bill, said this plan would buy time for the General Assembly and the governor to work out a long-term funding solution for mass transit, and it avoids raising the sales tax in the Chicago area. “With this route, if you don’t play, you don’t pay. If you don’t go to the boats, it’s not costing you a nickel,” Hendon said earlier Tuesday. “And I think that’s the best way and the fiscally responsible way, the prudent way, to help the people of this state.”

House Speaker Michael Madigan, on the other hand, favors the regional sales tax for the long-term solution. He has also repeatedly said there’s not enough support in his chamber to approve a deal for new casinos. The House could tweak the Senate’s plan to do a limited expansion of gaming, but that risks being shot down in the Senate again. As Hendon said, “I just hope the House doesn’t tweak so much ‘till it’s dead on arrival when it gets over here.”

The governor said in a Statehouse press conference Tuesday night that he still opposes a regional sales tax increase and favors ending a series of business tax breaks to generate revenue.

So we have the governor, Senate President Emil Jones Jr. and Senate Minority Leader Frank Watson on the same page. But then there’s Madigan and House Minority Leader Tom Cross on a separate page, and they may not even agree with each other on a gaming for capital and mass transit plan. Veto session will provide the next chance to see how close (or if) the four legislative leaders and the governor can come to a compromise.

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All in one: gaming, capital and mass transit

The Senate could consider a new gaming bill that would pay for a capital plan and, potentially, Chicago mass transit all in one. (The governor temporarily saved mass transit last week.) Some Senate Republicans favor the all-in-one strategy, but its fate is uncertain in the House. But House Speaker Michael Madigan wasn’t invited to the Springfield meeting between Senate leadership and Gov. Rod Blagojevich this afternoon. After the meeting, Senate Minority Leader Frank Watson said, “How do you leave out the speaker of the House in this discussion? But that’s what’s happened.”

One gaming proposal outlined by Sen. James DeLeo, a Chicago Democrat and assistant majority leader, would create a new casino in Chicago and two others somewhere in the state. The revenue, an undetermined amount, would help pay for road and school construction projects as well as mass transit. It also would serve as an alternative to the House’s version of a mass transit bill that would increase the sales tax in the Chicago region and allow a real estate transfer tax in the city of Chicago.

But opinions differ about the all-in-one approach. DeLeo says Senate Democrats think the chamber should focus on gaming and capital first. “If we have a capital and gaming bill, we can certainly give the [Regional Transportation Authority] a lot more funding than anticipated. So it’s a better way to go. And we wouldn’t have to do a sales tax.” It also would satisfy the governor’s repeated no-tax pledge for state income or sales taxes.

Sen. Christine Radogno, a Lemont Republican, said she actually agreed with the governor and credited him for opposing the sales tax increase, which she says is regressive and would unfairly apply to food and drugs. Instead, she favors the consideration of more transportation-related fees, such as those for drivers’ licenses and vehicle stickers.

The governor, on the other hand, still favors closing “corporate loopholes,” or ending various tax breaks for businesses. Eric Zorn now with the Chicago Tribune has more here.

The Senate Democrats and Republicans are meeting behind closed doors in their respective caucuses tonight. The chamber is scheduled to convene around 9:30 a.m. Tuesday and break for committees around 11 a.m. or noon. Meanwhile, House Democrats continue to hold a series of budget hearings around the state to build support for overrides of Blagojevich’s budget cuts. One interesting thing I missed before: According to the Center for Tax and Budget Accountability, the governor’s budget cuts total $470 million, not the $463 million announced by the governor’s office.

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Gov: No gaming without health care

On Tuesday we learned that Gov. Rod Blagojevich was willing to delay his plan to provide health insurance for adults. That would help lawmakers break the deadlock and approve a state budget, he said. On Thursday we learned state lawmakers were considering an expansion of gaming to pay for improvement of roads, bridges and schools. Friday’s developments taught us that the governor won’t sign an expansion of gaming without first having a health care bill approved.

Blagojevich’s point person in the House, Democratic Rep. Jay Hoffman of Chicago, spoke for him after a leaders’ meeting in the governor’s Statehouse office. Hoffman said the governor was willing to scale back his health care plan, but “scale back” doesn’t mean reducing the price. “We’re not talking about scaling back the goals,” Hoffman said. “We’re not talking about scaling back any of the means of providing affordable access to health care for everyone. We would look at taking the employer assessment as well as potentially some other revenue and implementing the health care plan beginning June 1, 2008, and over a four-year period.”

The “employer assessment” is a 3 percent tax on businesses that employ more than 10 people but that don’t offer health insurance for them. That’s still expected to generate about $1 billion, which Hoffman said would be available to help kick start the adult insurance plan in 2008, easing the burden on this year’s state budget. A pilot project isn’t an option, he said. Hoffman mentioned such other revenue sources as consolidating state funds and ending more corporate tax breaks.

But still, as the legislative leaders of both political parties look to fund construction projects through a gaming expansion — however they define expansion — they would have to swallow a health care plan in order to get the governor’s signature. “We would work on the health care piece, which is a prerequisite of signing any gaming bill, from other sources of revenue in the state of Illinois,” Hoffman said.

We also learned Friday that state legislators will have the day off Sunday, July 15, the first day since the governor has ordered them to be in Springfield every day since July 5 to negotiate an already delayed budget. But when lawmakers come back Monday, they’ll have 16 days before the current, one-month budget expires and threatens a state shutdown without another budget in place.

The threat of a state shutdown could be a good thing because it could force a compromise, according to Senate Minority Leader Frank Watson. “There’s just constantly more and more people saying, ‘Why should we vote for another one-month budget?’” he said after the budget meeting. “I’m not for shutting the state government down, but to bring some sort of conclusion to this, some people think that may be the only solution.”

House Speaker Michael Madigan agreed all caucuses want to avoid more 30-day budgets. “Those people probably have not contemplated what they would do if they were a leader and it’s the fifth day of August and paychecks aren’t going out,” he said. “I would hope that the end of the spending authority at the end of the month would move people toward a resolution.”

But he had this damper for people hoping to get that gaming bill: “It’s a very wide-ranging discussion. I wouldn’t put a lot of hope on it.”

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