The Bellock Bulletin: December 11

FY16 Budget

·         Legislative leaders meet with Governor Rauner for second round of budget talks.  The second week of budget talks took place behind closed doors in Chicago on Tuesday, December 8.  The meeting yielded some mild optimism and word that more talks — including among the Governor’s and legislative staff — are planned for the near future.

The leaders agreed to meet again next week to further discuss the major outstanding budget and budget-related issues facing Illinois.  The State continues to operate in FY16 (began July 1, 2015) without a constitutional balanced budget. 

·         $3.1 billion “other state funds” appropriation bill signed by Governor.  The enactment of SB 2039 appropriated $3.1 billion in what are called “other state funds” which are funds continue to flow into Illinois from taxes and fees other than sales, income, and other general-revenue taxes.  An example of this cash flow is the hundreds of millions of dollars paid annually by motorists who buy diesel fuel and gasoline for their cars and light trucks in Illinois.  Release of this money has been “frozen” so far this year due to the lack of an approved balanced budget.    

Passage of SB 2039 into law unblocked these program lines and allowed the money to flow.  The move released funds for streets, roads, and highways; 9-1-1 call centers; firefighter training; lottery payouts; and other moneys for local first-responders and local governments.  The bipartisan House vote of 107-1-1 was one of the key moves sending this bill to the Governor for his signature.  Governor Bruce Rauner signed SB 2039 on Monday, December 7.

Domestic Violence Shelters

·        Comptroller Munger to expedite payments for domestic violence shelters.  Illinois Comptroller Leslie Geissler Munger on Monday said legislation passed by the General Assembly and signed by the Governor will allow her office to swiftly process payments for local governments, 911 emergency phone services, Lottery winners and domestic violence shelters.

Approved by the House last week, SB2039 unanimously passed the Senate Monday, and was signed by Governor Bruce Rauner.

"I have directed our staff to process payments for domestic violence shelters, local governments, 911 services and Lottery winners as soon we receive the necessary vouchers," Munger said. "Domestic violence shelters have entered their sixth month without payments and are turning away women and children. Local governments also provide critical services to our families and communities. I am committed to ensuring these organizations and local governments are paid promptly so they can avoid further hardship."

Munger noted that payments for local governments, 911 services, and the Lottery can be made swiftly because the necessary dollars are set aside in independent state funds dedicated to those purposes. However, domestic violence shelter payments come from the state's General Revenue Fund, which currently has a nearly $7 billion bill backlog. To provide relief to those social service organizations, Munger has directed that domestic violence shelter payments be prioritized and paid upon receipt of a voucher from a state agency.

Munger encouraged shelters and other vendors with payment questions to contact the Budget Hotline she established at 1-855-IL-ASK-US. She applauded the General Assembly and Governor for reaching an agreement on the newly authorized funding, and encouraged all involved to build on that momentum.

Economy – Jobs

·         Notices filed of impending layoffs totaling 1,900 jobs.  Chicago-area reductions in positions in the plants and offices slated to close include 821 industrial catering jobs at the O’Hare Airport operations of Gate Gourmet; 444 workers for General Mills, which is closing its West Chicago packaged-foods plant; and up to 326 Chicago-based employees of the formerly-independent Orbitz Worldwide, a travel website recently purchased by Expedia.  

The list of Downstate job losses is headed by the closure of non-emergency room inpatient services at St. Mary’s Hospital in Streator, Illinois.  350 jobs will be lost from this transition, many of them specialized health-care positions.  The employment-reduction notices listed by the State of Illinois on Wednesday, December 9 represent filings made in November by business firms subject to the Illinois Worker Adjustment and Retraining Notification Act.  The WARN Act requires that the owner of a place of business at which there are 75 or more employees provide the State with 60 days’ advance notice of a pending plant closure or major layoff.  The November 2015 WARN report can be found here.

Gambling – Horse Racing

·         Illinois harness race tracks move one step closer to permanent closure.  Historically, fans of the sport of harness racing – a track-based racing event in which trotting horses circle a small track while pulling a sulky and driver – could go to two separate Chicago-area racing ovals, at west-suburban Maywood and south-suburban Balmoral, to watch harness races.  However, there has been a steady decline in Illinois harness race attendance and wagering activities in recent years.  Both Balmoral and Maywood operated as debtors-in-possession in 2015 as part of a combine that has entered Chapter 11 bankruptcy.  The tracks have, however, continued to post numbers that have led its regulatory body, the Illinois Racing Board, to take action earlier this year to withdraw licensed racing dates from the two courses for 2016.

The lack of approved racing dates will prevent the two tracks from operating next year, and many Illinois horse observers believe there will not be a return to economic conditions at any time in the near future that will allow them to operate.  Plans have been approved to run a 2016 harness racing schedule on a track that will operate as part of the traditionally-thoroughbred-oriented Hawthorne race course west of Chicago.  As part of the Balmoral/Maywood shutdown process, the racetracks have announced plans to lay off 81 of their remaining workers in the coming months.  The racetrack layoffs, announced as part of the November 2015 cycle of job notices required under the Illinois Worker Adjustment and Retraining Notification Act, were announced on Wednesday, December 9.  

House Amendment #1 (Thaddeus Jones) to HB 2663 contains language intended to try to save operations at Balmoral and Maywood.  This legislation would reverse the decision of the Illinois Racing Board and grant 2016 racing dates to the two threatened racetracks.  The House Revenue and Finance Committee held a hearing on HB 2663 in Chicago on Thursday, December 10.

Health – E. Coli Outbreak

·         Illinois E. Coli case linked to national food chain outbreak.  The announcement on Monday, December 7 by the Illinois Department of Public Health marked the first, so-far-unconfirmed, link between Illinois and the nationwide outbreak of intestinal infection by the bacterium Escherichia coli.  E. coli infections produce many of the symptoms of the family of illnesses referred to as “food poisoning.”  In some cases, persons who ingest E. coli bacteria may suffer kidney or neurological damage.  The apparent E. coli outbreak has been diagnosed in patients who have eaten at Chipotle Mexican Grill, a well-known nationwide food chain. 

At least 80 cases of possible Chipotle-related E. coli infections have been reported to the national Centers for Disease Control (CDC) by public-health practitioners from nine states.  Significant numbers of cases have been reported from California, Minnesota, Ohio, Oregon, and Washington State.  Forty-three Chipotle restaurants, located in the Pacific Northwest, were temporarily shut down for cleanup.  Chipotle announced changes in their food-preparation protocols on Friday, December 4.

Illinois State Lottery

·         Lottery payouts resume.  Due to the lack of an FY16 State budget or “other state funds” appropriations up until now, the Illinois State Lottery has been unable to make payments on winning tickets with prizes above $600.  Instead, holders of these tickets were given scrip vouchers, which were promises that a payment would be made later.

The signing of SB 2039 into law has unblocked these funds.  Payments on new winning tickets will be made in full.  Older winning tickets will get payouts as well; holders of IOUs who have submitted claims will have their prizes paid in the order their claims were received.  Persons with unpaid Lottery prizes should contact the Illinois State Lottery for further information on how to submit a claim. 

Pensions – CGFA report

·         Illinois has nearly $113 billion in unfunded pension liability.  The Commission on Government Forecasting and Accountability (CGFA), the budget-watchdog arm of the Illinois General Assembly, has published a “Special Pension Briefing” to set forth the current fiscal health of the State-managed pension systems.  Based on current actuarial projections of future pension payouts, and a prudent assessment of future returns on current assets, the actuarial unfunded liability of State-managed pension systems approximated $112.9 billion as of June 30, 2015, the closing day of FY15. 

Analyses of the unfunded-liability problem often focus on the Teachers’ Retirement System (TRS), the pension fund that backs up benefits pledged to Illinois educators and education professionals in elementary and secondary education.  TRS’s unfunded liabilities totaled $62.7 billion as of the end of FY15.  Other State-managed pension funds, although smaller, are also seriously underfunded.  Two significant State-managed pension funds facing an underfunding situation are the State Employees’ Retirement System (SERS), which oversees pension benefits for full-time State employees, and the State Universities Retirement System (SURS), which handles pensions for professionals who work for State institutions of higher education and their affiliates.       

Taxes – Speaker Madigan

·         Speaker Madigan calls for income tax hike.  House Speaker Michael Madigan declared Wednesday that the state income tax rate should be raised back to at least 5 percent to help fund the Democrats’ out-of-control spending.

Following a speech at the City Club of Chicago, Speaker Madigan was asked how high taxes should go.  “Let me avoid creating a headline for tomorrow’s newspaper and say that a good place to begin… would be the level we were at before the income tax expired,” the Speaker said.  “Starting there, you can go in whatever direction you want to go.”

Raising Illinois’ income tax rate back to the previous 5 percent level would equate to a 33 percent tax hike.  It is important to note that Speaker Madigan clearly stated that the 5 percent level would be “a good place to begin…” which suggests the Speaker would like to raise taxes even higher than the record level set by the Democrats’ 2011 temporary income tax hike.

Transportation – Digital Drivers’ Licenses

·         Change in Illinois law could allow digital driver’s licenses on smartphones.  The digital driver’s license would contain the same information as what is found on a plastic driver’s license.  It would display as an app on the license holder’s smartphone.  The Illinois move follows a policy push in the neighboring state of Iowa, where lawmakers have created a pilot program intended to push for the implementation of electronic digital driver’s licenses in the Hawkeye State as soon as 2016.  

The Electronic Driver’s License Task Force, convened this fall to help Illinois to look into this technological possibility, was created this year by SJR 11, sponsored in the Illinois House by Rep. Steven Andersson.  Any movement toward digital driver’s licenses will have to be implemented by the Driver Services division of the Office of the Illinois Secretary of State.  If the resolution creating this Task Force is amended by SJR 36, the Task Force will be asked to report to the General Assembly on its findings no later than May 1, 2016.  

Transportation – Stevenson Expressway

·         IDOT considers adding toll lanes on Stevenson Expressway (I-55).  The freeway that serves much of the city of Chicago, as well as the Chicago area’s southwest suburbs, has become increasingly clogged in recent years.  Owners of greater-Chicago commercial and warehouse space have concentrated much of their operations along Interstate 55.  Many additional employees use I-55 to commute to and from work.  The “Stevenson Expressway” includes all of I-55 that stretches between the north-south Interstate 355 and the Dan Ryan Expressway. 

With current motor fuel tax revenues completely inadequate to construct additional free lanes on the existing expressway, the Illinois Department of Transportation (IDOT) is now formally studying an alternative strategy: the grafting of Express Toll Lanes onto the Stevenson.  Toll lanes such as these, which are carefully marked, have been built in many other cities in the U.S. and abroad.  Motorists that wish to use these lanes are often required to purchase transponders and to deposit electronic payments into accounts with the local toll highway authority.

IDOT has created a webpage to describe the proposed study.  Interested persons may submit comments here.

Winter in Illinois

·         DNR reports on 2015 firearm deer hunting season.  Illinois’ wildlife management agency counted 86,771 tagged deer during the 2015 Firearm Deer Season, a seven-day event that closed on Sunday, December 6.  This was an increase of 13% over the 76,575 deer tagged in the comparable season in late 2014.  Secondary seasons, including the December 11-13 Muzzleloader Season, may lead to additional deer being successfully hunted in Illinois.

·         Safe holiday cooking.  As Christmas approaches, the Illinois Department of Public Health (IDPH) is once again distributing its online safety brochure, “Food Safety During the Holidays.”  With a wide variety of foodstuffs being thawed and cooked for a typical family gathering, the Department is renewing its advice on safe conduct when things to eat are being handled or being processed at room temperature.  The DPH brochure includes a chart showing minimum safe meat-thermometer temperatures for roasted meat and poultry, and a list of minimum standards to be followed in the use or disposal of leftovers.      

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