2022-30 General Assembly map cycle: case to be heard by federal court in first full week of December.
After the first new map was unveiled, House and Senate Republicans promptly filed a lawsuit in federal court. A second map soon appeared, but it had many of the same problems as the first map. The fact pattern presented in the lawsuit showed many reasons why the current Illinois General Assembly map is unconstitutional, and thus illegal. The Hispanic voting rights group MALDEF has filed in statewide alliance with this Republican lawsuit. Their participation is of high significance as the guardians of one of Illinois’ most significant minority groups and its many communities of interest. Hispanic voting rights are explicitly protected by the federal Voting Rights Act.
The NAACP also filed in alliance, although the historically significant African-American advocacy group did not present a statewide claim for relief – they filed on behalf of a single municipality/community of interest, East St. Louis. The historically Black community was divided by the new map, with the apparent goal of using East St. Louis’s voters of color to “pad out” the Democrats’ vote tallies in other districts in Southern Illinois’ Metro-East region. The rights of East St. Louis, as a historically African-American community of interest, are also protected by the federal Voting Rights Act.
The lawsuit seeking to strike down the partisan General Assembly map has been accepted by the federal court in Chicago. A three-judge panel, drawn from the court’s bench, will hear arguments on the week of Monday, December 6, 2021. Fast movement on this trial will be necessary in order to be able to achieve potential relief for the 2022 primary and general election voting seasons.
House and Senate Republicans, and their plaintiff-allies, have submitted specific changes to the Democrats’ partisan map. The changes, if adopted by the court, would alleviate some of the worst problems created by the new map as enacted. The alternative map document was filed with the federal court on Wednesday, November 10.
Rep. Tim Butler (House Redistricting Spokesperson) issued the following statement after plaintiffs filed a legislative map with the court to remedy Democrats’ constitution violating map:
“As ordered by a federal court, plaintiffs filed a legislative map with the court that remedies Democrats’ violations of constitutionally-protected voting rights,” said Butler. “Last month the court declared that Democrats’ first legislative map was unconstitutional and directed the parties to submit plans to remedy violations of the federal Voting Rights Act asserted against Democrats’ second map. The plaintiffs’ remedial map increases the number of majority-Latino House districts within Cook County, as measured by citizen voting age population, from four under the Democrat map to eleven and adds a majority-Latino House district in Aurora. The remedial map also adds a majority-Black House district in the Metro East area. This remedial map will restore communities cracked by Democrats in their illegal attempt to keep a partisan advantage.”
BUDGET
Five-year plan released; continuation seen in State of Illinois structural deficit. The State of Illinois continues to run a structural deficit in which funds going out exceed the moneys coming in through taxes paid by Illinois residents. Tax revenues are tied to the size of the overall Illinois economy, which is growing slower than the U.S. or the global economies as wholes. Furthermore, several legally mandated Illinois budget-spending items – particularly the costs of teacher pensions, employee pensions, and Medicaid health care costs – continue to grow faster than the Illinois, U.S., or global economies.
The Governor’s Office of Management and Budget (GOMB) is statutorily mandated to help the Governor and the General Assembly prepare for the State’s future fiscal changes by publishing a five-year, forward-looking fiscal outlook. GOMB published their outlook this week for a five-year period that includes FY23 through FY27. This is the five-year period that will begin at the start of the next full fiscal year on July 1, 2022.
This week’s five-year forecast indicates that Illinois taxpayers can expect to see deficits over this period. Illinois is expected to take in approximately $3.7 billion less than anticipated outflows, including spending that is required by existing contracts or covenants or by law. Democratic leaders promptly seized upon this week’s fiscal forecast and report as “good news,” claiming that it looks forward to a deficit that will be nearly $5 billion less than had been predicted in an earlier projection. This viewpoint ignores the fact that large budget deficits continue to be anticipated despite the billions of dollars injected into Illinois’ coffers through the various federal stimulus packages that have been enacted over the past two years. To be sure, the future deficits will have to be addressed while balancing the State’s ever increasing spending obligations. The future deficits projected in this report do not include any significant future economic downturns, unanticipated surges in inflation or hyperinflation, or changes in federal policy. These factors could further multiply these deficits.
To make matters worse, Democrats have single-handedly designated, for immediate spending, $5 billion to $6 billion of Illinois’ allotment of $8.1 billion in American Rescue Plan (ARPA) four-year funds. This will spend two-thirds – 60% to 70% - of Illinois’ four-year cash infusion in the first twelve months of the duration of the program. Furthermore, none of this spending addresses a separate spending program and liability, the troubled Illinois Unemployment Insurance (UI) program. The Illinois UI program, which makes payments to persons who have been laid off from their jobs, is insolvent with respect to its own trust-fund resources and has built up a liability of $4.4 billion. Under current State and federal law, any section of this liability that is not relieved through the injection of ARPA funds will have to be paid off through additional employer taxes and reduced unemployment benefits for workers.
The GOMB report includes numerous items of hard data on current economic consensus projections of economic performance. Assuming continued conditions of worldwide growth and prosperity, the growth rate of Illinois gross domestic product (GDP) production of goods and services is expected to slow from 5.2% in 2022 to 2.2% in 2027. Growth rates will slow because of numerous supply constraints, accompanied by an expected upsurge in consumer inflation. Inflation is also expected to increase the cost of borrowing money, including money to cover a deficit anticipated to equal $418 million in FY23 (July 1, 2022 – June 30, 2023).
The largest single expenditure change expected to affect the FY23 budget, and swell the deficit, is health care, including Medicaid health care for eligible Illinois residents. With a projected increase of $608 million in FY23, Medicaid is the single largest deficit driver in FY23. Inflationary cost pressures could negatively affect this projected figure.
Bipartisan commission monitors October 2021 revenue picture. The Commission on Government Forecasting and Accountability (CGFA) has issued a report on Illinois revenue patterns and current economic trends as of October 2021. The October 2021 Monthly Briefing to members of the Illinois General Assembly describes the new and growing threat of inflation in the Illinois economy. American pricing patterns, which had been stable since the 1980s, broke down during the COVID-19 pandemic and associated governmental deficit spending. CGFA describes the likely effects of inflation on Illinois labor markets, the prices of consumer goods and services, and cash flows into and out of Illinois state government.
The monthly numbers posted by Illinois in October 2021 showed continued healthy revenue trends, with general revenue sources up $1.22 billion over one year earlier. This was especially significant because of the impact of a one-time shift in the Year 2022 State individual income tax payment cycle. In calendar year 2020 for tax year 2019, many year-end tax payments, the moneys that are usually paid in on by April 15, were instead paid in October of the taxpaying year. This one-time individual income tax payment “spike” did not appear in October 2021.
Other revenue sources showed sharp gains in October 2021 over the year-earlier period. Taxable retail sale activities had been held sharply back by partial quarantines and stay-at-home orders, but in October 2021 were up by double digits This led to net new State sales tax revenues of $507 million in the most recently-concluded month, a net increase of 16.3% over October 2020 sales tax receipts. Federal funds were up by almost $1.05 billion, and corporate income taxes advanced by $385 million.
A new source of State revenues, sports wagering taxation, was also discussed in the October 2021 CGFA report. Sports wagering tax revenues are not classified as “general funds.” Money from this source is classified as an income stream dedicated to capital spending and infrastructure repair and replacement. While sports wagering activities and tax revenues grew rapidly from startup in June 2020 to June 2021, the increase has since leveled off. The Illinois Gaming Board (IGB), which monitors and taxes sports wagering, reports that sports played in the summer months (particularly baseball) have not so far been as lucrative for betting purposes as fall and winter sports. Football and basketball have shown the strongest activity trend lines in Illinois, with basketball wagers placed in March 2021 (“March Madness”) the foremost single driver of Illinois sports betting activity.
COVID-19
Vaccine approved for children aged 5 to 11. The Pfizer/BioNTec vaccine has already been approved for use in all persons over the age of 12. Many Illinoisans have already been vaccinated with the Pfizer vaccine, or vaccines made by competitors Moderna and Johnson & Johnson. After submission and study of a new round of data intended to further test the Pfizer vaccine’s safety among younger children, the federal Centers for Disease Control and Prevention(CDC) recommended a juvenile-sized dose of the Pfizer injection last week for use in all children over the age of four.
Acting in cooperation with the CDC, the Illinois Department of Public Health (IDPH) joined in the recommendation. Illinois took steps this week to encourage children to be vaccinated. The Department also oversees compliance for a series of protocols, which can be onerous, when someone physically within a school building – a student, a teacher, or a member of the school’s support staff – tests positive for COVID-19. Those who support these procedures say they are necessary to keep COVID-19 from spreading. Many hope that if a large number of student families choose vaccination, Illinois schools can begin to sharply cut down on these disruptive procedures.
Additional dose and booster shot recommendations. The Illinois Department of Public Health (IDPH) has issued guidelines for COVID-19-related additional doses and booster shots. Medical care providers use different terms to describe the two different injections, with slight differences in the dose strengths based upon the condition and identity of the patient.
Put very briefly, persons with compromised immune systems (such as persons who have had organ transplants, persons undergoing chemotherapy, and persons with certain diagnosed medical conditions) will get an “additional dose,” and all other persons eligible for shots will get a “booster shot.” With respect to COVID-19 immunity, an additional dose is meant to bring a person with immune challenges up to a base level, while a booster shot is for persons whose immune systems are fully functional to enable them to maintain a base level.
Under current recommendations, booster-shot populations should get the shot 6 months after their initial series of injections if they are: (a) 65 years of age or older, (b) have underling medical conditions, or (c) live or work in high-risk or long-term-care settings. In addition, persons who received the Johnson& Johnson vaccine should get a shot only 2 months later (rather than 6 months). This two-month eligibility window is only for a small minority of Illinois residents. Most Illinois residents who have been vaccinated got six-month shots from Moderna or Pfizer/BioNTech.
These recommendations may soon change. Pfizer asked this week for permission to offer booster shots to people of all ages. Approval for universal booster shots may be imminent.
Right of Conscience Act standing overturned with respect to COVID-19. The Health Care Right of Conscience Act, enacted in 1997, was seen by supporters as a bulwark of individual rights in Illinois. Its broad language was written by a bipartisan General Assembly to compel government authorities to listen to individual Illinoisans, particularly health care workers, in a variety of contexts involving the religious rights and demands of the individual conscience.
Pleading that the COVID-19 emergency required action, General Assembly Democrats enacted legislation in the recent veto session to explicitly remove, or “carve out,” COVID-19 from the rights otherwise granted to individual Illinoisans of conscience with regards to health care treatments. On Monday, November 8, Gov. Pritzker signed the bill into law
Key Illinois service groups, headed by the Fraternal Order of Police, joined Republicans to push back against the new law. They joined in pledges to fight to reaffirm conscience rights in Illinois.
EDUCATION
Public-school enrollments plunge during COVID-19 pandemic. Illinois’ public school districts submit cross-checked enrollment figures to Springfield as part of their state aid payment cycles. Although most districts would like to have as many pupils as possible – state aid payments are tied to enrollments – many Illinois school districts were compelled to report plunging enrollments to the Illinois State Board of Education (ISBE) during the 2020-21 school year. The pupil count fell from 1,957,018 in the year ending in June 2020, to 1,887,316 in the year ending in June 2021. This marked a 3.6% decline.
As the Census 2020 overall numbers showed, Illinois’ overall population is falling. This decline is especially significant among members of birth-year groups who are likely to be young parents pursuing initial school enrollments for their young children. ISBE figures cover all pupils enrolled in public school district programs, from pre-K to 12th grade.
JOBS
Electric vehicle-maker Rivian sells shares of stock for public trading. The event, called an “initial public offering” (IPO), is commonly taken as a benchmark of the transition of a business firm into a new phase of its life cycle. Rivian is moving from being a cash-bleeding researcher-and-developer into being a true startup, with expanding production operations and true sales to anonymous buyers.
Prior to the IPO the electric-vehicle (EV) firm, whose production operations are based in Bloomington-Normal, had already notched forward-looking sales agreements with Amazon to enable the future assembly of a fleet of 100,000 electricity-powered delivery vans. These were not anonymous sales, however; Amazon lead shareholder Jeff Bezos had asked his firm to pre-order the vehicles. In the final quarter of 2021, Rivian is starting to assemble models of the R1S SUV and the R1T pickup. These electric-powered vehicles are meant to match the body lines of traditional family SUVs and small pickups powered by liquid fuel, while also offering EV performance. Unlike delivery vans to Amazon, these are products meant for anonymous sales in a true marketplace.
The Rivian IPO came as the firm had opened its books to customers seeking to pre-order the vehicles. The earliest orders could be filled in calendar year 2023, but there is a substantial waiting list for Rivians. More than 55,000 units have already been pre-ordered by customers.
Demand this week by investors for Rivian common stock led to an overall valuation of the equity of the company of approximately $70 billion, roughly matching the existing valuations of traditional vehicle-makers General Motors and the Ford Motor Company. Trading in Rivian shares began on Wednesday, November 10.
LUNAR ECLIPSE
Lunar eclipse set to be seen over Illinois in early morning hours of Friday, November 19. This rare astronomical phenomenon will happen as the moon is about to set, and the sun about to rise, at the end of the night of November 18-19. The Earth will block the waves of light that usually reach most of the Moon’s surface, and most of our planet’s satellite moon will be thrown into dark shadow. The Moon revolves around the Earth in an elliptical pathway, and at some eclipses it is slightly farther away from Earth and the eclipse is thus slightly longer. Astronomers say this November event will be the longest partial lunar eclipse in nearly 600 years. The weather closer to Illinois may block out this event, however; it is often cloudy in November in Illinois.