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Capitol Fax

Rich Miller's commentary on State Government

Republican State Sen. Bill Brady kicked off his new gubernatorial campaign the other day by claiming that Illinois' horrific budget deficit can be "managed." But a new report by the governor's office makes that claim even less realistic than it already was.

As you already know, Democratic Comptroller Dan Hynes has estimated the state's budget deficit could reach $9 billion next fiscal year, not including aid from the federal stimulus package. We can toss those numbers out the window now, but this is all Brady had to go on when he announced his campaign, so let's look at it anyway.

Brady told WGN Radio the day before his official campaign kickoff that the budget deficit was about $4-5 billion "on an annual basis." That's pretty much exactly what Comptroller Hynes projected. Hynes included $4 billion or so in unpaid bills from this fiscal year in his $9 billion deficit projection for next fiscal year, which begins July 1st.

But Brady insisted that the budget deficit could be managed. "The first thing we need to do is to deal with that $4-5 billion deficit. And you can manage that. When you've got a $53-plus billion budget, you need to manage it," Brady said.

Brady did the math and concluded that the state budget broke down to $4,000 for every man, woman and child in Illinois. "If the people who are elected into office can't balance a budget taking $4,000 from every man, woman and child, then maybe we ought to find someone who can," Brady said.

What Brady didn't say, of course, was that the $53 billion budget figure he cited was for all funds, including federal funds. The state's operating budget - the part that Illinois government actually controls - is about $28 billion. Health care programs and education spending account for all but $3 billion of that total. So, there's really no way to "manage" the state out of even a $4 billion deficit without big slashes in spending for schools and Medicaid recipients and providers.

Most importantly, there are about 100 days or so remaining in the current fiscal year, which ends June 30th. So getting ourselves out of this fiscal year's deficit crisis with the game almost over would require unimaginable cuts. As I've written elsewhere, you'd essentially have to shut the government down.

Brady also claimed that Illinois could pay for a capital construction program without raising taxes like the motor fuel tax, a proposal made by some legislative Democrats. He'd do this by stopping all transfers from the state's Road Fund, which he says is over $1 billion a year. That's mostly true. But reversing those Road Fund transfers means that the state would have to either eliminate or slash programs paid for by the Road Fund, which includes the State Police, or blow a billion dollar hole in the rest of the state budget. The problem, in other words, would be worse.

And here's where it gets worse.

Much worse.

The governor's office is now estimating the combined state budget deficit to be $11.5 billion. Income and sales taxes are crashing, to the tune of over $3 billion. Medicaid costs, employee wages and benefits including pension costs are skyrocketing.

In short, it's a horror show.

But, if we can't cut our way out of this mess, we certainly can't fully tax our way out of it, either.

Gov. Pat Quinn wants to make the income tax burden as "progressive" as possible, so as of this writing Quinn's tax hike plan is expected to avoid taxing anyone at all under the federal poverty line. Plus, nobody making less than $57,000 a year would see any income tax hike.

So even though the governor wants to raise the income tax by 1.5 percentage points, which is a 50 percent increase, he won't get nearly the sort of revenue that an across-the-board hike would give him. That means cuts, and some of them will be painful.

There are other innovative ways to help balance the budget that don't involve painful cuts or tax increases. But none of those ideas gets you to $11.5 billion. Not even close.

Forget about the political rhetoric and get ready to pay more for less.

Rich Miller also publishes Capitol Fax, a daily political newsletter, and thecapitolfaxblog.com.

Senate Week In Review

March 9-13, 2008, A view from the Illinois Senate Republican Press Office

SPRINGFIELD ­ State lawmakers spent hours in committees during the week of March 9-13 to meet the deadline for committee action, and Republican legislative leaders pushed for a statewide capital investment plan to create jobs and address the state's transportation and construction needs, according to State Sen. Tim Bivins (R-Dixon).

Republican legislative leaders Christine Radogno (R-Lemont) and Tom Cross (R-Oswego) met March 11 to outline their ideas for a public works program. They focused on initiating negotiations between the four legislative caucuses to generate a bipartisan package that could be supported by the Governor and lawmakers from both parties.

Bivins said that the state needs a capital plan, but there is widespread opposition to funding it with a tax increase. Radogno and Cross are proposing a funding alternative that wouldn't place additional strain on taxpayers, but would instead use increased revenues from a gaming expansion.

Depending on what form the proposal takes, expanded gaming could generate from $1 billion to $1.5 billion ­ enough to leverage $25 billion in job-creating construction investments. Lawmakers are exploring numerous possibilities, including an expansion of the positions at existing riverboats; a Chicago-based casino; gaming at horse racing tracks; video poker; an Internet lottery; modification of the current smoking ban as it applies to riverboats; and a professional management contract for the state's Lottery.

Both leaders said that any allocations from a capital plan must be fair to all areas of the state, the projects should be based on the needs of the state, and any projects that have been promised must be funded.

Also this week, a Senate committee rejected a proposal that would allow residents to carry concealed weapons. Senate Bill 1976 would have allowed qualified gun owners to apply for concealed carry permits, to be issued by Illinois county sheriffs. However, on March 10, members of a Senate panel largely comprised of Chicago-area lawmakers shot down the proposal.

Concealed carry laws have long been supported by downstate lawmakers, but are vigorously opposed by most Chicago and suburban legislators. Supporters pledged to continue to pursue the legislation, which has also been introduced in the House of Representatives. Illinois is one of only two states without any form of concealed carry law.

To increase transparency and promote taxpayer accountability, the Senate Education Committee approved legislation that would require the State Board of Education to make publicly available an itemized breakdown of all public educators' and administrators' salaries. Currently, lawmakers and the public are restricted from seeing exactly when and how salary increases take place.

Senate Bill 2270 requires school districts to provide the State Board of Education with an itemized salary compensation report for every certified employee in the district, including teachers, principals and the superintendent. The report would include all compensation, including paid sick and vacation day payouts, annuities and all other forms of compensation. The schools would also be required to present the report at a school board meeting, post it on the district's Internet Web site and submit the report to the Regional Superintendent. The State Board of Education would also be required to publish the report on its Web site.

The Illinois Civic Federation and the Illinois Policy Institute this week released their recommendations to bring prosperity back to Illinois. Both organizations agree with Senate Republicans ­ Illinois has a spending problem, not a revenue problem. Since 2003, the state has consistently created and expanded programs using one-time revenues and short- term gimmicks, including raiding the pension systems, borrowing, raiding special state funds and selling state assets.

The Illinois Civic Federation urged legislative leaders and Gov. Quinn to cap or reduce state spending; warned against income tax increases for new spending; and urged lawmakers to consider a capital improvement proposal that identifies and prioritizes projects before capital funds are appropriated.

The Illinois Policy Institute wants to increase government transparency and oversight, cut wasteful spending and impose new, more stringent limitations on tax and fee increases.

Legislation approved by Senate committees this week includes:

Arbitration (SB 1715): Establishes a time frame within which an initial agreement must be reached or conciliation and arbitration attempted.

Business tax exemption (SB 1923): States that businesses that intend to establish a new wind power facility in Illinois may be considered "high impact businesses" and qualify for certain occupation tax exemptions.

Cancer treatment (SB 1683): Sets forth new guidelines for use of cancer treatment drugs.

Cigarette tax (SB 44): Increases the tax on cigarettes by $1 per pack to raise approximately $250 million annually.

Credit cards (SB 1524): Prohibits colleges from selling or transferring student data to credit card issuers.

Crime (SB 1885): Provides that a student with a pending juvenile or criminal proceeding alleging the commission of a felony may be immediately transferred to an alternative program.

Employers (SB 1547): Requires employers who fail to pay commission in final compensation to pay three times the amount not paid.

Excessive idling (SB 2104): Sets fines for an excessive idling violation at $90 for the first conviction and $500 for a second or subsequent conviction within a 12-month period.

Firefighters (SB 1642): Requires disabled firefighters receiving benefits to have annual examinations.

Flu immunization (SB 1736): Requires hospitals to adopt a flu and pneumonia immunization policy for patients 65 and older.

Foster care rates (SB 1576): Increases foster care rates to bring the state in line with national methodology.

Graduation (SB 1796): Establishes the Illinois Hope and Opportunity Pathways through Education (IHOPE) Program to develop a comprehensive system to re-enroll significant numbers of high school dropouts in programs that will enable them to earn their high school diploma.

Illinois Cares Rx (SB 2069): Expands the Illinois Cares Rx program (formerly SeniorCare) to 239% of the federal poverty line (FPL).

Insurance (SB 240): Exempts certain religious groups from insurance laws. (SB 2287): States that no insurer or administrator may require a healthcare provider to agree to a written contractor policy containing any language that directly or indirectly limits the ability of that provider to seek legal redress in any court of law.

Judicial protection (SB 1582): Restricts the disclosure of the home residence or telephone number of a judge or a judicial candidate.

LIHEAP (SB 2271):Expands eligibility for the Low Income Home Energy Assistance Program by requiring medical expenses to be considered when determining eligibility.

Mexican-American history (SB 1557): Requires the Study of Mexican-American History curriculum in every public elementary school and high school.

MRSA (SB 105): Requires all state residential facilities, such as mental health hospitals or correctional facilities, to establish MRSA prevention control and reporting procedures.

Multiple sclerosis (SB 1809): Requires insurance coverage for medically necessary preventative physical therapy for multiple sclerosis.

Nuclear power plants (SB 2162): Allows for the construction of new nuclear power plants in Illinois.

Party affiliation (SB 1666): Provides that when voting in a primary election, voters are not required to declare their political party affiliation.

Physician immunity (SB 1487): Allows physician assistants to provide medical care in an emergency situation or in a state or local disaster without the supervision of a physician, and gives them civil immunity, unless there is willful and wanton misconduct.

Political committee (SB 1662): Requires political committees created within 30 days of an election to file their statement of organization within 24 hours of creation.

Public safety (SB 1919): Prohibits healthcare facilities from flushing unused meds into a public wastewater collection system or septic system.

Prevailing wage (SB 1423): Expands prevailing wage to transporters of aggregate material.

Renewable energy (SB 1912): Authorizes bonds for renewable energy projects, so the state can help finance a broad array of energy projects, particularly those eligible for incentives under the new federal stimulus law.

Speed limit (SB 1467): Increases the speed limit for large trucks, buses, RVs and trucks towing other vehicles from 55 miles per hour to 65 miles per hour on rural interstates.

Solar power (SB 1570): Creates the School Wind and Solar Generation Program to fund wind generation projects and solar generation projects for school districts and community college districts.

Special education (SB 1853): Allows a school district to contract for administrative services or alternate facilities in order to maintain special educational facilities as may be needed for children with disabilities.

Storm water management (SB 1489): Requires the Environmental Protection Agency to establish a statewide standard for storm water management programs to transition toward the use of green infrastructure.

Testing waivers (SB 2220): Allows Illinois to issue out-of-state testing waivers, except for basic skills testing.

Textbook publishers (SB 1485): Places restrictions on college textbook publishers, especially on bundling of textbooks.

Therapists (SB 1391): Mandates the State Board of Education to adopt rules to provide for standards for the certification of marital and family therapists employed by school boards.

Veterans (SB 206): Creates a Task Force to determine an appropriate percentage goal for award each fiscal year of the state's total expenditures for contracts awarded under the Procurement Code to disabled veterans.

Workers' compensation (SB 1594): States that an employee who sustained an injury while under the influence of drugs or alcohol, must prove that the injury would have occurred regardless of their intoxication for them to receive workers' comp.

Support Working Citizens

We wish to applaud and thank Mr. Wemstrom for his recent commentary regarding prevailing wage and economic development (March 11, 2009 Letters to the Editor).

It's time to wake up and smell the coffee in Carroll County. Support your working citizens and watch this county grow. It's hard to comprehend how one could not see that opposition would mean further depression of this area.

David and Marilyn Weber

Savanna, IL

GM:

Government Motors

As Joseph White, Pulitzer prize winning expert on the auto industry and senior editor of the Wall Street Journal, said recently, all we tax payers should be congratulating each other. We bailed out General Motors and Chrysler and that put us in the auto business, the Sport of Kings. We're all part owners of GM, as in Government Motors.We're the new DuPonts.

The big problem is, the new board of directors includes 535 members of Congress, plus several agencies of the executive branch. If you're out of a job, or lost your home, or can barely pay your bills, you know how competent they are to run a profitable business. They bankrupted our country. Is it likely they do a better job of running a complex, global company than professionals like Alfred P. Sloan, Roger Smith, Rick Wagoner and the United Auto Workers union did? They, at least, had a profit motive.

Old habits die hard, but old politicians die harder. Within hours of our $6 billion bailout, said White, GMAC and GM were back promoting zero-interest loans, "the auto industry's version of the addictive, easy credit that wrecked the housing market." Such a strategy has only one purpose: to delay the day of reckoning.

The only silver lining is that we can change GM's new board of directors in future elections, if only enough people remember.

Richard O'Connor
Pearl City IL

Cemetery Board Says Thanks

The Lanark Cemetery Board continues with renovation work at the cemetery with the balance of the hundred plus years old hedges now being removed. The City Maintenance crew has undertaken that extensive project, past and present, with the heartfelt thanks of the Board. Without that support of the city crew and their input, with that of the City Council's interest and financial assistance the work could not have gone forward so steadily.

Thank you Lanark representatives. The Lanark Lion's Club, too, has been very generous with money donations and confidence in the time consuming schedule. Their signature theme, community betterment and encouragement is seen in this. Thanks to them for endorsing the program. Two thousand shrubs and hedges have been purchased from the local business, Sweitzer's Nursery, which will be making the preparations and planting to give the cemetery a fresher look and to continue the long time tradition of an attractive cemetery which has so successfully been carried out by the current sexton, Amy Milby, who has been involved in all levels of improvement to this accommodation to the public.

We thank Amy for her forethought and discretion, sometimes in difficult situations also. We thank the Prairie Advocate for providing a means of reaching the public that has taken an interest in refreshing our nearly 150 year old city cemetery.

Lanark Cemetery Board

Appreciation

My reason for writing to you is simply to let you know how much I appreciate the Prairie Advocate. I look forward, every week, to reading the latest news about our local town meetings and agencies, especially news of those issues that will affect the Lanark citizenry. I try to keep abreast of local events by browsing the weekly Calendar of Events column. It is always interesting to read of the individual contributions various persons have made to the community, whether it is through some innovative new company, or academic performance or through athletic achievements.

In particular, I would like to point out several Prairie Advocate features that I most enjoy. Caralee Aschenbrenner's regular column, Please Don't Quote Me, is generally the first article I read. The depth of her knowledge and the style of her writing always inform, amaze, and delight. I hope the people of Lanark realize just what a national treasure we have in Caralee. Sue Langenberg's column almost always makes me laugh out loud; her descriptions of everyday life are right on the mark.

I appreciate the Letters to the Editor section, as it allows me a chance to understand how some of my fellow residents view our world. In short, I am a satisfied Prairie Advocate customer. Thank you for providing us with a paper that gives us the "local scoop".

Sincerely,
Ingrid C. Standish
Lanark, IL

Capitol Report

By Jim Sacia, State Representative, 89th District

As a former school board member (eight years) and president (two years) in Winnebago School District 323, I have always made education funding reform one of my highest priorities. As a State Representative for the past seven years it has been my most sincere effort.

Taking the burden off of property taxes and placing some on the sales tax and some on the state income tax has been the remedy suggested by every blue ribbon panel, committee discussion, bills pending in both the House and Senate and nearly every evaluation of the situation undertaken over the past several decades. We need no more studies. In the end, they all reach the same conclusion: take some of the burden off of property taxes and shift it to sales and income.

I am convinced that if you polled each of the 177 members of the General Assembly about the biggest issues we need to address each and every one of them would place education funding reform in their top three.

It's very difficult to separate school education needs from school building needs. Having been involved in many school funding referendums I understand only too well how divisive the issue can be. In that vein, the General Assembly passed the school facilities sales tax in 2007 as House Bill 410. The idea was borrowed from Iowa where all 99 counties in the state have adopted it. To some it's considered a non-traditional approach to funding educational needs. Non-traditional perhaps, but it merits discussion.

The six school districts in Jo Daviess County are hoping you, the voters, see the positives when you go to the polls to vote on this very significant issue on April 7^th. Compared to the alternative of each school district placing separate referendums on the ballot, the school facilities sales tax initiative makes sense. It's always difficult to get folks on board with a new tax, but for a homeowner in Jo Daviess County, the proposed legislation will provide an opportunity for local property tax relief through the abatement of property taxes levied for school construction and repair projects in the future.

The question that will appear on the ballot asks "Shall Jo Daviess County be authorized to impose a retailers' occupation tax (sales tax) at a rate of 1% to be used exclusively for school facility purposes?"

One of my deepest convictions is that we need to provide property tax relief for homeowners and farmers while maintaining our support for schools' needs, both building and educational.

Pat McCarthy, my good friend and a CPA with O'Connor and Brooks of Galena, shared with me that the most recent statistics available which show that from January 1 through November 30 of 2007, 1% of the sales taxes generated in Jo Daviess County would total $2,085,694. If the ballot question passes, that 1% would be divided among school districts according to the number of students per capita. Pat went on to say he does not favor this proposal and sees sales tax as regressive.

I am convinced something must happen to ease the tax burden on property owners. Where the ultimate answer lies remains the question.

The one definite: as long as we have children to educate, the issue will not go away.

As always, you can reach me, Sally or Barb at 815/232-0774 or e-mail us at jimsacia@aeroinc.net. You can also visit my website at www.jimsacia.com. It's always a pleasure to hear from you.

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