In Spite of Court Orders, Many Providers of State-Financed Services Report They are Not Being Paid
With regard to a case involving the operation of networks of residential care services for persons with developmental disabilities, a federal judge has ordered that the state pay the networks, and the Comptroller has reported that Illinois does not have the money to immediately comply. Approximately 10,000 persons with developmental disabilities are affected.
Based on policies supported by the majority party in the General Assembly, the State is spending general funds – money raised by income taxes, sales taxes, and other non-dedicated sources of revenue – at a rate of between $37.4 billion and $38.2 billion per year. Many policymakers, headed by Governor Bruce Rauner, are asking the General Assembly to look at the underlying policies that generate this level of spending.
Illinois House Meets, Again Fails to Take Budget Action
The summer session day of the Illinois General Assembly was held on Tuesday, August 25. Although this was the 14th such House summer session day called by the House Speaker since the “adjournment” of the state legislature on May 31st, no workable State budget has been produced and the Speaker’s leadership team did no work this week to generate one.
In its session on the 25th, the House heard from witnesses who described growing challenges to them based on the failure of the State to set aside funds for roads and street repair, child care services and other essential public infrastructure and programs.
New Law Forbids Hospitals, Providers from Billing Sexual Assault Survivors for Outpatient Services
HB 3848 was signed into law on Monday, August 24. It creates a billing protocol and a voucher system for hospital emergency and forensic outpatient services provided to sexual assault survivors. Under this system, these outpatient services will be billed to the State of Illinois or to the survivor’s insurance system, if any.
Additional language within HB 3848 forbids a provider of health care services to a sexual assault survivor from carrying out certain enumerated aggressive billing and collection procedures for all other non-outpatient services that may have been provided to a survivor, including inpatient services and follow-up healthcare. Prohibited collection procedures include references to collection agencies or attorneys. House Republican Representative Patti Bellock was a co-sponsor of HB 3848, which was approved in the Illinois House by a vote of 111-0-0. This was good, common sense legislation that I was proud to support.
Sandack Attends Leadership Academy
Since 1995, more than 675 lawmakers have graduated from the Bowhay Institute. State legislators from Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin are chosen to participate through a competitive, nonpartisan selection process. Members of the Alberta, Manitoba, Ontario and Saskatchewan legislative assemblies are selected by their caucuses to take part in the program. It was an incredibly informative conference, and I gained some very valuable insight.
Department of Employment Security (IDES) Announces Drop in Illinois’ July Jobless Rate
The key number dropped to 5.8% in July 2015, down from 5.9% in June 2015 and substantially down from the year-earlier rate of 6.7% in July 2014. However, Illinois unemployment rates remained substantially higher than the nationwide total in July. The overall U.S. jobless number was 5.3% in July. The new numbers were released on Thursday, August 20.
“Since the beginning of this year,” reported IDES director Jeff Mays, “Illinois has gained only a quarter of the job growth seen by the rest of the country.” Based upon current trend lines and slow private sector re-hiring patterns, Illinois should complete its task of recovering from jobs lost in the 2008-09 economic downturn on or about September 2016 – seven years after the official end of the downturn. IDES tracks jobless rates, operates a workforce-based website that matches jobs to applicants and operates the State’s unemployment insurance program.
Other U.S. states, including Midwestern states such as Indiana and Iowa, have rapidly added jobs during the 2009-15 recovery and enjoy unemployment rates much lower than Illinois. The federal Bureau of Labor Statistics reports that for July 2015, the unemployment rate was 4.7% in Indiana, 3.8% in Iowa, 5.2% in Kentucky and 4.6% in Wisconsin.
Caterpillar to Lay Off 300 in Peoria Area
The announcement made on Tuesday, August 25, was part of an overall cutback of 475 customer service managers and support staff. The Peoria-based global machinery manufacturer stated that the layoffs, which would be carried out as part of a program to consolidate customer service responsibilities, would be implemented over a period of several months.
Caterpillar’s announcement closely followed reports of a significant economic downturn in China. The sale of construction equipment and mining/quarrying machinery to Asian customers had been a bright spot in Caterpillar’s overall business picture, and Wall Street commentators suggested this week that the Chinese stock market crash could reduce demand for Caterpillar products and services.
Illinois House Committee Discusses Bill that Could Provide for Municipal Bankruptcy
Many taxpayers and even some municipal leaders would like Illinois law to grant the option of bankruptcy to Illinois local governments as a last resort. This year I filed and championed HB 4214, a measure that would provide local governments with a bankruptcy option. While the measure did not advance in the 2015 spring session, continued fiscal pressures on units of Illinois local government – particularly unfunded pension liabilities – have kept this issue on the table in the summer of 2015. On Tuesday, August 25, the House Personnel and Pensions Committee held a hearing on the issue in Springfield. The committee heard from advocates who called for consideration of this option as a way to grant relief to local property taxpayers. In some cases such as Detroit, owners of real estate in failing cities have been trapped in a death spiral of mushrooming fixed costs, property disinvestment, and soaring tax bills on depreciating real property. You can hear a portion of my committee comments here.
Chicago-Area Price Spike May be Receding
A sharp movement upward in the Chicago-area prices of most gasoline-based motor fuels may be stabilizing in the wake of an announcement by local refiner BP plc that they are taking steps to resume full operations in Whiting, Indiana. A balky distillation unit is being restarted, with output set to ramp up over time toward the resumption of full production by the key refinery. The Whiting plant is fitted to distill and refine the low-ozone “non-attainment gas” that, by federal law, must be sold throughout the ten-county Chicago-Northwest Indiana metropolitan area. BP released the news of progress at the Whiting plant on Tuesday, August 25.
Any reduction in supplies of this specialty Chicago-area gasoline will swiftly cause increases in the prices of Chicago-area gasoline and gas-based motor fuels, including gasohol. The Whiting incident, first reported on Tuesday, August 18, led to sharp increases in pump prices throughout the Chicago area. Some pump prices in the city of Chicago were well above $4.00 per gallon. Chicago motor fuel prices include taxes charged by the State of Illinois, the Regional Transportation Authority (RTA), Cook County and the city.
The Chicago-area nonattainment zone is mapped here. Gasoline and gasoline-based motor fuels sold within this ten-county area must conform to federal guidelines set by the U.S. Environmental Protection Agency (USEPA) for the reduction of ozone.
O’Hare Airport Closes Diagonal Runway
The runway had been slated for closure as part of the airport’s expansion program. Airport management and the Federal Aviation Administration (FAA) had cited the strip of concrete for intersecting other runways and leading to possible public-safety hazards. The Chicago Aviation Commission, operator of O’Hare, quietly closed the runway on the night of Wednesday, August 21. Traffic formerly active on this runway has been diverted to other airport runways.
Advocates for keeping that runway in operation had pointed to the potential offered by the veteran diagonal runway in sharing the noise of takeoffs and landings over a wider footprint of properties surrounding the busy international airport. O’Hare’s current plan to concentrate its operations on east-west runways will, by contrast, concentrate airport noise on owners and properties located east and west of the airport. Another diagonal runway is slated for closure in 2020.
The de-certified runway has not yet been physically torn up or demolished. House Republican Representative Michael McAuliffe is co-sponsoring a bill, SB 637, which would forbid this runway from being demolished or rendered impossible for future use. SB 637 was approved by the Senate in spring of 2015 and is currently in the House on the order of Second Reading.
State Sells Five Surplus Aircraft, Reduces Deficit
Governor Rauner announced the sale on Tuesday, August 25. The sale marked the successful conclusion of one of the Governor’s policy initiatives, which implemented his campaign promise to ground much of the State’s former “shuttle fleet” that used to carry public-sector executives back and forth between Chicago and Springfield.
In April 2014, the former administration tried to sell nine of the State’s planes, but no legitimate buyers met the set minimum bids for three of the largest aircraft. The Rauner administration re-priced and successfully re-offered the planes for disposal. The series of sales netted $3.5 million for State taxpayers - $2.5 million for the planes and $1.0 million in unneeded, foregone maintenance and operations costs.