State of the State address takes aim at laws that swell taxes, government spending. Prevailing wage law, project labor agreements, and unfunded mandates are elements of the “big picture” of Illinois public-sector spending. Gov. Rauner’s agenda, presented to the General Assembly in his State of the State address on Wednesday, February 4, called for comprehensive reforms to the “iron triangle” of public-sector career executives, government labor unions, and elected officials who are friendly to both groups. The Chicago Tribune covered the story.
Governor Rauner looked repeatedly at Illinois tax and labor law as a factor in the Prairie State’s poor economic performance. States that neighbor Illinois, led by Indiana, Michigan, and Wisconsin, have enacted reforms to their states’ tax laws and labor laws. Reforms enacted in Indiana and Michigan include offering a choice to workers on whether or not to join unions at their workplaces. Rauner pointed out the comprehensively better economic performance enjoyed by these states, and presented an example of a typical firm – Modern Forge, formerly of Blue Island – that has joined many of its fellow small businesses in moving to Indiana. “We must avoid slipping further behind,” he warned, calling for dramatic changes in the laws of Illinois to match its neighbors.
The governor called for additional support for Illinois elementary, secondary, and higher education. He pledged to reform the education bureaucracy and to prioritize early education programs, elementary and secondary education in geographically challenged areas of the State, and to return Illinois support to historic levels for credential-oriented programs within community colleges. Rauner’s pledge included fighting to lift the current cap on Illinois charter schools.
Rauner called for major changes in the face of elected government in Springfield. He strongly requested approval by the General Assembly, for submission to the people of Illinois, of constitutional amendments to limit the terms of Illinois elected officials and merge the offices of Illinois comptroller and treasurer.
Rauner’s office has posted a video of his speech online and welcomes social-media discussion of the points made in it using the hashtag #ILTurnaround.
College of DuPage – Rep. Jeanne Ives
Jeanne Ives joined by Bellock, Breen, and other lawmakers as they demand a look at college’s spending. Property owners who are taxed by the College of DuPage have responded with dismay and outrage to repeated reports to lavish spending at the community college. These reactions reached a crescendo upon reports that the College’s board has approved, and then reapproved, a $763,000 “golden parachute” buyout payment for the college’s controversial president.
In response to these reports, Ives has sponsored an Illinois House resolution, HR 55, directing the Illinois Auditor General to conduct a performance audit of the State moneys provided to the College of DuPage in FY11, FY12, FY13, and FY14. These four fiscal years reflect the time in office of President Robert Breuder. Ives has been joined by 54 House cosponsors. The resolution has been referred to the House Rules Committee.
Continuing her work, Ives and her colleagues announced on Monday, February 2 that they are putting together a package of bills that are expected to call a halt to the ability of many taxpayer-funded units of local government to offer lucrative buyout packages to their executives.
Medical Cannabis
Licenses awarded to growers, dispensaries. After a multistage program of background checks and security verifications, a lineup of licenses has been awarded to for-profit business operations that have been approved to grow and sell small quantities of cannabis for strictly defined medical reasons. The license actions were announced on Monday, February 2.
Licenses are required for the action of growing cannabis, in strictly guarded indoor locations throughout Illinois, and the action of dispensing small quantities of the substance to approved patients. Patients with State-issued patient cards, or who are qualified to use a patient’s card as a caregiving member of the patient’s household, will have the right to enter a security-guarded dispensary and purchase cannabis and cannabis-infused products for medical purposes. The number of dispensary licenses and cultivation licenses issued this week by the State is strictly limited, and dispensaries will not be encouraged to advertise or compete with each other.
An additional period of time will be required for approved licensees to physically start up their operations. It is expected that small quantities of cannabis will be made available to card-carrying patients well before the end of 2015. More than 1,000 patients have been approved for cards, with thousands of additional registrations currently in the pipeline. Patients are not eligible to receive cannabis cards unless they have been diagnosed with a limited number of strictly defined medical conditions and complied with all of the elements of the patient registration process. The application must be independently approved by a physician with whom the patient has a longstanding relationship.
Measles – Day Care
Growing measles outbreak hits Illinois day care center. Test results positive for the contagious viral illness were reported from a Palatine children’s learning center on Thursday, February 5. The Cook County Department of Public Health provided details here. The positive test results followed earlier reports of another patient, possibly an adult, testing positive for measles on January 27. The earlier report was also located in Chicago’s northwest suburbs.
Measles can be a fatal illness if it accompanied by complications, such as pneumonia, bronchitis, and brain inflammation (encephalitis). Approximately 1 of every 1,000 cases of juvenile measles progresses to encephalitis. Parents continue to be strongly encouraged to have their young children vaccinated with MMR vaccine at age 12 months for measles, mumps and rubella. While many people have turned a blind eye up until now toward the growing phenomenon of unvaccinated U.S. children, outbreaks of measles throughout the United States (including Disneyland) in 2014-15 have led to many medical professionals discouraging parents from presenting their children for health care and treatment with them until vaccinations take place on schedule.
At the same time, many parents are concerned about what they see as bullying nudges from “the system” to vaccinate their children. The child vaccination schedule approved by many public health experts is now much more complicated and time-consuming than many parents remember when they were children.
Unfortunately, persons who have not yet been vaccinated for a disease can become carriers and can infect others. Widespread refusal to vaccinate adults and young children with measles can create a dangerous situation for infants who have not yet reached an age where they can be safely vaccinated. The five infants infected in the Palatine outbreak are all reported to have not yet reached their first birthday.
Because measles is an extremely contagious viral disease, persons who suspect they have measles, and parents of persons who are suspected to have measles, should know whether or not they have been vaccinated. If they have not yet been vaccinated, public health experts urge them not to present themselves at places where young children are being cared for or where health care is provided. They should describe their symptoms to a health care provider by telephone, wireless, or Internet, and follow advice and instructions. Symptoms of measles include fever, red and sore eyes, runny nose, cough, and a visually characteristic rash. Images of the rash can be seen by researching the disease online.
Budget – Child Care
Key Illinois child care program running out of funds. The FY15 budget signed by former Governor Quinn contained several key underfundings. One of the underfunded programs is Illinois’ Child Care Assistance Program (CCAP). This program, operated by the Department of Human Services (DHS), provides subsidized day care to approximately 176,000 low-income working families. The program is aimed at enabling family heads to enter the Illinois workforce if they would not otherwise be able to do so because of their child care responsibilities. The program is of particular importance in the lives of many Illinois single-parent households. Households are asked to sit down with a social worker to contribute a sliding-scale portion of their income to a subsidy payment meant to meet the day care centers’ total fees. As this program is income-eligibility-based, not all households qualify for the program.
The FY15 funding shortfall in CCAP is a cruel blow to thousands of Illinois daycare providers who have enrolled eligible children and who depend on DHS payments in order to continue to meet their day-to-day expenses. CCAP money is running out far short of the end of the fiscal year on June 30, 2015. In addition to pleas for additional CCAP funds from DHS, the General Assembly is hearing the concerns of day care providers, including home daycare providers and small businesspeople, who are sharing their belief that the lack of reimbursement from the State could drive many of them out of business. 32,000 Illinois day care providers are recipients of reimbursement subsidies from CCAP. Many daycare providers specialize in CCAP-eligible children, and their shutdown could lead to significant layoffs and could leave tens of thousands of Illinois households without recourse. WQAD-TV (Quad Cities) has the story.
Chicago – CME Group
Another longtime pillar of Chicago economy set for partial shutdown. The CME Group, a Chicago-based global firm specializing in the trading of financial assets, agricultural products, and derivatives, announced on Thursday, February 5 that they plan to turn out the lights and shut down more than half of their remaining open-outcry trading floor space by this summer. The announcement was covered by Crain’s Chicago Business.
The announcement marks the somber end of the line for a colorful way of life that originated in the physical trading on Chicago’s LaSalle Street of rights to future delivery (hence the name “futures”) of corn, pork bellies, and other key Illinois agricultural products. The Chicago Mercantile Exchange, one of the firms that fathered today’s CME Group, was founded as a cluster of “trading pits.” The CME Group’s announcement will bring darkness to 17 of the firm’s 31 remaining floor pits. Most of the Group’s futures trading has already moved to electronic platforms. A specialty subgroup of financial trading, options trading, did not bear the brunt of this announcement. Traders who wish to trade options by open outcry will be allowed to continue to do so.
Chicago – Tourism
Bright spot in Illinois economy. Chicago’s city hall announced on Wednesday, February 4 that a record-breaking number of tourists and visitors came to Chicago in 2014, with the number of visits breaking 50 million for the first time. Most of the visitors were Americans visiting for pleasure, leisure, and culture (37.3 million), with 11.3 million U.S. arrivals for business travel and 1.5 million visits to Chicago from abroad. Chicago tourism has now topped its pre-Great Recession peak of 46 million annual visitors per year.
Announcing a new “Chicago Epic” campaign, the city called for Chicago to target 55 million visits by 2020. From 2010 through 2014, an increase of 10 million in annual tourist visits to Chicago has generated approximately 9,400 new jobs. State tax-based general funds are not used for Chicago convention and tourism promotion, which is funded by supplemental taxes on rentals of local hotel and motel rooms, restaurant meals, taxicab rides, and similar services often used by Chicago tourists and visitors.
Economy – CGFA Monthly Briefing
CGFA finds continued slow growth in Illinois economy, no respite from budget crunch. The Commission on Government Forecasting and Accountability’s (CGFA) “Monthly Briefing,” describing State economic trends and revenue numbers in January 2015, was released on Tuesday, February 3.
Overall U.S. economic growth in calendar year 2014 was 2.4%, which is faster than the stagnating levels experienced in much of Europe but slower than the high-single-figure growth rates that continue to be posted in China, India, and other developing countries of East and South Asia. While U.S. consumer sentiment remains high, retail sales (particularly retail sales through traditional bricks-and-mortar-type retailers) remain constrained both in Illinois and across the U.S.
Economic trends continued to weigh on State general funds revenues in January, particularly revenues from State corporate income taxes and from levies on casino riverboats. In addition, the scheduled change in personal and corporate income tax rates that took effect January 1 will further constrain and hold back the Illinois general funds picture going forward in the second half of FY15. The State individual income tax rate has dropped from 5.0 percent to 3.75 percent. As a result, overall base Illinois general funds revenues fell $363 million in January 2015 on a year-over-year basis, with $124 million of the decline attributed to a drop in personal income tax receipts net of refunds. The budget crunch continues.
Illinois House - Committees
House committee lineup takes shape. 48 standing committees will scrutinize bills presented to the Illinois House in 2015-16. Some of these committees will have highly specialized responsibilities and may meet only one to five times over the course of this two-year period, whereas others will meet weekly whenever the Illinois House is in session. Each committee has a chairperson, a vice-chairperson, and a spokesperson. The chair and vice-chair are named by the Speaker of the majority party, and the spokesperson is named by House Minority Leader Jim Durkin.
Bills that a committee may hear are required, by the rules of the House, to be “posted” before hearing. The Illinois House website lists the committees and their postings. In addition, each posting of a bill is electronically noted on the webpage assigned to that bill. Persons interested in any individual House bill or issue are urged to check the postings for that bill or the group of bills relevant to that issue. A typical posting, for a meeting to be held on Feb. 18 by the House Consumer Protection Committee, is shown here.
Most committee hearings are held in Springfield, but nothing in House rules requires a panel to meet in the capital city. In some cases a committee may meet in Chicago or elsewhere in Illinois, particularly if it will be hearing testimony related to a particular issue or subject matter.
Illinois House – Rep. Norine Hammond
Downstate lawmaker joins House Republican leadership team. Representative Norine Hammond joined the House in December 2010. She was elected to her third full term in November 2014. On Friday, January 30, Hammond was named by Leader Jim Durkin to join his leadership team as an Assistant Minority Leader.
Hammond has more than 18 years of experience in Illinois legislative affairs. She worked as district aide to the late Rep. Rich Myers for 14 years. After Hammond’s appointment as state representative, she stepped up her fight for Illinois agriculture, higher education, and job creation. The spread-out 93rd District, which Hammond represents, contains all or part of eight counties in west-central Illinois.
Lake County – Hospira
Key Lake County employer changes hands. The transaction, in which Lake Forest-based Hospira was sold to international health care giant Pfizer, will pay Hospira shareholders more than $15 billion. Equity owners will be paid $90/share. The total cost of the acquisition to Pfizer will be approximately $17 billion. Hospira specializes in pharmaceutical substances and treatments that must be injected or infused into a patient’s bloodstream or lymphatic system rather than swallowed as a pill. The firm has also staked out a market presence in generic biotechnology drugs, a market niche that has been labeled “biosimilars.”
Hospira originated as the hospital products division of Abbott Laboratories. Their health-care lines of enterprise made it possible for the firm to enter the fast-growing field of medication management systems. As of fiscal year 2014, the firm had about 15,000 worldwide employees.
Minimum Wage
Partisan Senate majority passes minimum wage increase; bill moves to House. SB 11 would increase the standard Illinois minimum wage, applicable to most employment positions, from $8.25 an hour (current rate) to $11.00 an hour over a 5-year period. The Senate vote was 35-15-1.
A separate Chicago minimum wage increase is held harmless by SB 11, which means enactment of this bill would complete the “decoupling” of the minimum wage in Chicago from the minimum wage in the suburbs and in Downstate Illinois. A temporary tax credit is created which supporters say could provide some relief for small businesses that are negatively affected by the enactment of this bill.
SB 11 did not contain workers’ compensation reform or any of the other labor-market reforms coupled to minimum-wage action by Governor Bruce Rauner in his State of the State address as part of an overall Illinois economic-turnaround strategy.
Snow – Chicagoland
Major snowstorm hits northeastern Illinois. The snowfall hit a peak on Sunday, February 1, and Monday, February 2. 19.3 inches were recorded at Chicago’s O’Hare International Airport, where thousands of flights were cancelled. Weather records indicated this was the fifth heaviest single snowfall in Chicago’s history. Many institutions, including Chicago Public Schools, were forced to temporarily close their doors in response to the snowstorm.
Significant economic effects were expected as a result of lost work time and diminished retail activity. A State Incident Response Center was activated by Governor Bruce Rauner to coordinate the work of existing State agencies, including the Illinois Emergency Management Agency, and help local officials respond to blizzard-like conditions.
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