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Capitol Fax

Rich Miller's commentary on State Government

Almost every reporter who covered the unveiling of new budget-cutting recommendations by the governor's Taxpayer Action Board last week claimed the "TAB" had found a half billion dollars in reductions for the coming fiscal year. It was reported that way because that's what the board's chairman, Illinois Taxpayers Federation President Tom Johnson, said.

Johnson's comment demonstrate how amorphous, politically difficult and fiscally suspect many of these proposals really are. If you do the math, the board's report actually claims budgetary savings this coming year could be as high as $1 billion if all its recommendations are implemented.

There was, apparently, a major internal push-back from some of the more experienced budget experts on the citizens board. Former George Ryan budget director Steve Schnorf - who also served under Jim Edgar and is one of the smartest budget gurus I've ever met - and the very highly regarded former Democratic state Rep. Woods Bowman were two of four signatories to a harshly critical "Minority Report" letter drafted by Schnorf.

"You can, and I believe you will, get some savings from the suggestions in this report," Schnorf wrote to Gov. Pat Quinn in his dissent. "It probably won't equal billions and it certainly won't all happen over 12-18 months. Good luck."

Indeed. Look closer and you'll see that half of the touted billion dollar savings in next fiscal year comes from two items which are already being done, and then some. The board suggested a 2-3 percent across the board cut of almost all state spending. But the governor ordered agencies last week to begin preparations for a whopping 25 percent across the board cut. The board's proposal looks tiny and almost harmless in comparison.

The board also wants a freeze in the state's operating budget. But the General Assembly approved a budget last month which funds state programs at an average of 50 percent of the current fiscal year's appropriations. That's much more than a freeze.

The rest of the savings come from things like Medicaid managed care, which supposedly would save $95 million in the first year - a far cry from the $3 billion in savings that the Senate Republicans have been claiming and the Chicago Tribune has been touting.

Other savings, like reducing the prison population by freeing inmates charged with nonviolent drug and property crimes ($30-65 million) carry huge political risk for the governor.

"My best personal estimate is that you will be able to save very little, if any, money [next fiscal year]," Schnorf wrote, claiming he'd be "thrilled" to find $200 million in "actual, achievable" savings in the coming fiscal year, which begins July 1st. Other than across the board cuts and freezes, he's likely correct.

However, this report is a good thing in that it shows without doubt that there is just no way for Illinois to fully cut itself out of this awful budget mess.

After the federal stimulus cash is factored in, Illinois still faces a $7 billion budget hole in the coming fiscal year. Yet after two months of work and a horde of consultants, the governor's commission only came up with $1 billion in "cuts."

The obvious problem is that if all the board's recommendations were followed and they all worked as advertised, the state would still be left with a massive $6 billion hole to fill.

And then there's the very real problem of what happens after the billions in federal stimulus dollars are spent. The state put that cash right into its spending base. When the stimulus money is gone, the state will have yet another horrific hole to fill.

And what about the out years? The report's claimed savings in future years rely heavily on reopening the state's collective bargaining agreement with AFSCME and other unions. However, the four-year union contract is just a year old. "Based on my personal experiences," Schnorf wrote, "your largest union will not agree" to reopen negotiations on that contract. He ought to know.

"Take everything we say to you with some grain of salt," Schnorf wrote, adding. "our suggestions aren't the ordained word, handed down from on high." Let's hope everyone keeps that sound advice in mind as the process moves forward. There are more cuts to be made that the board missed, but even those won't completely solve the problem.

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

We Have a Dream.

To live in the country. To have space to breathe between our home and out neighbors home. To develop a hobby farm with small animals and a garden. To create an environment for our child to participate in 4-H. To hopefully bring our small business with us which is conducive to a wooded area. To live closer to aging parents.

We have worked five years on our dream, as money was available. We have five acres of non-tillable land. We have tried to be fiscally responsible in realizing our dream, which means it will take time. We have invested thousands of dollars in our dream so far.

This money was spent locally for gravel, cement, chain saws, blacktop, fuel, building materials and hardware, and restaurants. Our dream includes raising small animals which would be hard to do living in a subdivision or town. To raise small animals, we would need more building material along with services from a veterinary business, feed supply business, farmer with hay or straw, etc. In our dream these services would provide new money for the local economy. Would it hurt if a few more rural families moved here to add to the tax base locally and for the West Carroll School District?

In retirement, we could grow our small business which would be an added draw to the Mt. Carroll Community for tourismas people come to see the millthey would need restaurants, gas, who knows?

With the proposed changes in the zoning law, requiring 40 acres to build a homewe would be unable to move to the country and bring business with us. The proponents of this change site the "potential" loss of farmland as prime motivation for the change. What if a person who buys 40 acres and builds a house on 2 acres and does not farm the other 39? That is their right. How will that save farmland?

I read articles about the need to develop tourism in the county. Doesn't that mean showcasing our rural atmosphere? How can we do that effectively from town or a subdivision? Carroll County is different from our neighboring counties in that there is equally hilly ground as farmable ground. Why not let the hilly ground be used to its best advantage? America has always been called the land of opportunity.

Carroll County is currently one of the few remaining places that a person with modest means can buy 5 acres and live out their dream. In America is this an unreasonable dream? Maybe, someday, this might be your dream. Please don't take our dream away.

Roger and Bonnie Bork

Create Jobs for Americans

A while ago I read that Bill Gates and Mayor Michael Bloomberg were planning on donating a total of $500 million to reduce the incidence of smoking in developing countries, especially China. I haven't seen any recent information on this subject, but I believe they made a commitment to this ridiculous project.

Why are they concerned with the habits of the Chinese people? Do the Chinese worry about our health when they send all of those tainted products to the U.S.? Do the Chinese concern themselves with our economy when they flood our country with their products and eliminate U.S. jobs?

It is admirable for Bill and Mike to give back to society some of the many millions they have earned, but they should concern themselves with the plight of all the Americans who have lost their jobs because of the cheap goods manufactured in China and exported to the U.S. With U.S. unemployment projected to approach 10% in 2009, they should be investing the $500 million in the U.S. to create jobs for Americans, the same American workers who made them wealthy.

Donald A. Moskowitz

Londonderry, NH

Real Reform Needed

Albert Einstein once said, "The definition of insanity is doing the same thing over and over again and expecting different results". How many times can we elect the same group of politicians and expect anything different.

The legislature once again failed to address, the needs of the health care and school systems, the state pension under funding, provide a balanced budget, any true political reform, and so many others. Even though the democrats have majorities in both houses and the governor's mansion, they could not solve any of the above problems. Of course, the republicans are happy to blame the dems for their lack of accomplishments. But, they did little when they had the opportunity before the Ryan debacle.

The legislators were able to work together to accomplish two things. They were able to accomplish protecting their own seats and concentrating even more power to a few party leaders. HB723 passed nearly unanimously in both houses and will restrict the voters' rights. Without getting too technical, the bill ensures even more legislative elections will go uncontested. And the "reform" they passed gives the leaders even more influence in what contested elections remain. Maybe their next step will be to eliminate elections completely.

Thankfully, there is hope. The Illinois Green Party became an established party in 2006 and some of the ILGP candidates in 2008 received nearly 30% when they contested some legislative races. Maybe that is why the current legislators want to eliminate the competition. Citizens who are interested in real reform and answers to many of the current problems caused by the "politics as usual" perpetuated by the republicans and democrats can get information on the Illinois Green Party at http://ilgp.org. We finally have a chance to end the insanity.

Dan Kairis

Co-ordinating Committee

Illinois Green Party

Taken to Heart

On the June 3rd. issue of the Advocate, I had a letter to the editor published regarding the nomination of Judge Sonia Sotomayor to the United States Supreme Court. The letter's intent was to highlight the hypocrisy of the Republican Party and the personal attacks by the far right against the Judge. In the same issue, Publisher Tom Kocal, criticized my views on the "Heart of the Matter" column.

I would like to take this opportunity to thank Tom for making my point about the "Media" repeating the Republican talking points. In the write up, Mr. Kocal quoted the Judge as having said back in 2001 that "wise Latina woman with the richness of her experience would more often than not reach a better conclusion than a white male who has not lived that life". Mr. Kocal ­ as is the republican practice of cutting phrases to serve their point of view ­ left two very important words off this quote. The two words are: I HOPE, as in "I hope that a wise Latina woman with the richness of her experience would more often than not reach a better conclusion than a white male who has not lived that life". The "I hope" qualification is always left out of the talking points from the right. As I said before, the Media keeps parroting the republican talking points and depriving the American people of the true and the real issues!

Regarding Mr. Kocal's comments about Senator Kennedy, Robert Bork and Justice Thomas. Despite Senator Kennedy's issues, the people of Massachusetts have elected him time and time again and it is that State business. Of course, Mr. Kocal again fails to point out any of the many great things and sacrifices the Kennedy family have done or continue to do for this country. History is full of incompetent Politicians from all political philosophies who were elected many times over. Regarding Mr. Bork, he would have taken this country back decades on civil right issues. Mr. Bork would have made Scalia, Roberts, Thomas and Alito look like moderates. About Justice Thomas, he was accused of sexual harassment but that was no big deal with Republicans.

As I indicated in my previous letter, elections have consequences. Just look at where we are as a country eight years after the five conservative Justices in the Supreme Court gave the 2000 Presidential election to former President Bush!

Paul Gonzalez

Lake Carroll, IL. 61046

Publisher's Note: Talking points, words of "hope," and justifying incompetence do not change the plain truth. I believe you missed my point, Paul. My apologies.

Manzullo: GM, Chrysler Use Cover of Bankruptcy Court to Destroy Dealers and Stick Taxpayers with Billions

WASHINGTON ­ U.S. Rep. Don Manzullo (R-IL) today said the CEOs of Chrysler and GM are using the bankruptcy system to reduce consumer choice and drive up their vehicles' costs by cutting dealerships, eliminating competition and creating monopolies among their brands. In the process, they are destroying the lives and businesses of thousands of auto dealers and their employees.

Manzullo, who previously called for GM, Chrysler and the President's auto task force to rescind the 1,889 forced closures of dealerships, was outraged by testimony of the automaker CEOs before the Senate Committee on Commerce, Science and Transportation earlier this week. The CEOs don't want consumers to shop for their cars among competing dealers. When questioned, they said their decisions to pull the franchise licenses from the dealerships were necessary to their survival because the multitude of locations forces dealers to uncut one another, driving down a vehicle's residual value. The statements were incorrect because it costs car manufacturers nothing to have multiple dealers: the manufacturers just don't want competition, and their whole goal is to drive up prices.

"The American people need to know why at a time American workers are losing their jobs in droves ­ the CEOs of GM and Chrysler and the President's auto task force think it's a good idea to unnecessarily put another 150,000 Americans on the unemployment lines," Manzullo said. "All this will do is reduce competition and increase the price of GM and Chrysler cars and trucks for consumers, putting them at an even greater competitive disadvantage with the other auto companies."

Unbelievably, Chrysler gave its targeted dealers less than a month to clear all its inventory and wind down operations. On Tuesday, June 9, the 789 Chrysler dealers will lose their franchise agreements and ability to offer dealer incentives and financing. In a letter to the President and the GM and Chrysler CEOs, Manzullo has requested a 60-day extension to allow the targeted Chrysler dealers more time to wind down operations. Furthermore, Manzullo is concerned with the June 12 deadline surviving GM dealers have to sign a new contract that trumps state franchise laws and waives their rights to appeal future GM decisions.

"Many of these dealers represent several generations of hard-working small business owners who have given so much to their employees and their communities over decades of service," Manzullo said. "It's horrible that GM and Chrysler can work a deal with the President's auto task force to shut down these family businesses, send their employees to the unemployment lines, and destroy their legacies. This shouldn't happen in the United States of America."

Instead, the Administration and Congress should be working on legislation to re-start auto manufacturing and auto sales. Manzullo introduced legislation earlier this year to give Americans a $5,000 voucher to purchase a new vehicle, stimulating auto sales and manufacturing, re-starting the supply chains, and putting millions of Americans back to work. The New Automobile Voucher Act of 2009 (HR 1606) would provide a one-time, $5,000 electronic voucher from the U.S. Treasury at the point of sale of a new vehicle through the end of 2009.

The automobile industry and its suppliers account for 13 million American jobs, 20 percent of all U.S. retail sales, and billions of dollars in state and local sales taxes. The drop in U.S. vehicle sales from 16 million in 2007 to 13 million in 2008 to a projected 8 million in 2009 has been one of the leading causes of America's economic downturn and huge job losses.

Capitol Report

By Jim Sacia, State Representative, 89th District

After a 5:45am wake up call for a radio interview following adjournment at 1:30am, it's now 8:30am on Monday morning and I have Springfield in my rearview mirror. The past seven days are almost a blur. Saturday, May 30th and Sunday, May 31st were each 18 hour work days with more than 13 hours each of actual time spent on the House floor. Did we accomplish anything?

Saturday, May 30th, 11:40pm: As the day progressed, tension on the House Floor increased. We had been in session for nearly 13 hours, acted on numerous bills and had just passed two significant budget bills. Senate Bill 1609, which I supported, simply gives us the authority to refinance our existing bond debt totaling more than $2 billion. By reducing the interest rate we're paying from six percent to four percent, the refinancing will save the state more than $230 million over the life of the loans. That bill is a "no-brainer".

Then came Senate Bill 1433, the "fund sweeps" bill. This is a play right out of the Blagojevich budget playbook. It "sweeps" (or, more accurately "swipes") up to $600 million from every agency that means something to each of you. Yes, it passed with no Republican votes. I would have hated to come home and try to explain a yes vote on that one to you. The rationalization is "we need to take this money from these agencies so we have funding to give to these agencies." Oh, I get itI think. You've got to be kidding me!

Next, we heard that Senate Bill 750, thoroughly revised from the long-known education reform bill, has passed the Senate with a new bill number, House Bill 174. It's now a two-point income tax increase from three percent to five percent. When you do the math, you see that's a 66 2/3rds percent income tax increase. It's now on its way to the House. Will Speaker Madigan call it?

Meanwhile, we debated Senate Bill 1197. This creates a temporary budget that will basically keep the state up and running for six months. The head of each agency will have a specific "lump sum" of dollars to work with. Those dollars won't last long, requiring the General Assembly to return to Springfield.

In our wildest dreams we could never call this a workable solution. After about an hour of debate, the bill was pulled from the record. It was approaching 12:30 am and we adjourned for the night.

Early Sunday afternoon, May 31st, I was on the House floor waiting for session which was delayed as the House Appropriations Committee debated a tax hike bill. Are there the sixty votes needed in the House to pass it?

At 6:30 pm, Senate Bill 2252, Governor Quinn's 50% income tax increase, garners forty two "yes" votes, seventy four "no" votes and two "present" votes. Sixty votes were needed for passage, so we are set up again for a long summer.

We dealt with House Bill 7, so-called ethics reform. The legislation focuses on caps on contributions for political candidates, but to call it reform is almost laughable. You could drive a truck through the loopholes.

With the failure of the fifty percent income tax increase, Senate Bill 1197 (the temporary operating budget) was again brought to the floor and passed with Democrat votes only. The bill provides approximately fifty percent of the funding requested by the Governor for his FY 2010 budget.

What it all means is that the wheels are off the wagon. Once again we will be back in Springfield, hopefully not before veto session in October, but certainly a huge financial crisis continues to face our state. To the Governor's great credit, his integrity and honesty will certainly help the process.

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.

Correction

In the front page caption of the June 3, 2009 issue, the information regarding the baker of the 40th Anniversary cake for Larry Armstrong was incorrect. Sheila Wyeth is actually the Head Cook at Eastland High School. The person who made the cake is Melissa McLain (not McClain). She is the Eastland School District Food Director.The Prairie Advocate apologizes for the error.

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