Progress Illinois

Two weeks ago, state lawmakers wrapped up the fall veto session and headed home with hopes that Illinois' financial crisis wouldn't follow them back to their own districts. So far, the bad budget news has trickled in slowly enough that many have been able to distance themselves from the severity of the state's financial situation. But they won't be able to dodge blame forever. For example, adding millions in school reimbursements to the growing pile of unpaid bills is weighing heavy on cash-strapped districts. And in places like the Central Illinois town of Pekin, the backlog -- coupled with other uncertainties and cutbacks -- is growing too big to sweep under the rug. The Pekin Daily Times explains:

The state has a multi-billion-dollar deficit. Inflation is down so far that school districts are limited in how much they can raise taxes to bring in new revenue. Corporate Personal Property Replacement Taxes and sales taxes are down.

General state aid funding for schools is running three months behind. Programs like special education and transportation will not be funded at the full levels. The state has not yet received an application for additional federal American Recovery and Reinvestment Act funding, which was used in lieu of state-generated general state aid payments.

Illinois State Board of Education Chair Jesse Ruiz summed it up best when warned that if the state doesn't generate new revenue for schools next year, "we fall off the cliff."

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If there's one thing observers of Illinois politics can agree on, it's that next year's state budget deficit is going to be extraordinary. Not only are billions in federal stimulus money scheduled to dry up, but state officials will soon have to pay out $3.5 billion in pension notes and cover $3.9 billion in unpaid obligations from the current fiscal year. Compounding the problem are tanking revenues and the need to pay back $205 million in short-term loans used to cover college aid.  Now the projected 2011 shortfall has hit a whopping $12.8 billion, according to the Voices for Illinois Children's (VFIC) latest policy memo.

VFIC puts the staggering deficit in perspective:

How much is $12.8 billion? This amount is equivalent to total state General Funds spending for the State Board of Education and the departments of Human Services, Children and Family Services, and Public Health. The entire General Funds budget — aside from mandatory spending for pension costs, debt service, and other statutory transfers — is about $26 billion. Closing a $12.8 billion gap without new revenue would require devastating spending cuts, on top of those enacted this year. If such reductions were applied across the board, they would slash 50 percent of funding from every state program; if not distributed equally, many specific cuts would run far deeper.

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This morning we flagged an ominous warning from State Sen. Donnie Trotter (D-Chicago), who predicted that "drastic cuts" to state services are on the horizon. With the backlog of bills already topping $3.7 billion and an estimated $11 billion shortfall looming over next year, there's no question that Illinois is running on fumes at the moment.  During a roundtable on WTTW's Chicago Tonight yesterday, Chicago Democratic Reps. Art Turner and Greg Harris pointed out the backdoor cuts that are already occurring across the state as a result of the General Assembly's failure to pass a responsible budget this year.  To illustrate the ripple effect, Turner reported that there is a severe shortage of amenities -- such as walkers -- at Stroger Hospital in Cook County, spurring some local residents to search for donations.

Host Carol Marin later asked the panel -- which included GOP Reps. Jim Durkin (Western Springs) and Suzie Bassi (Palatine) -- "Does it feel like the state's on fire and nobody can find the hose?" Watch an excerpt from their conversation:

TURNER: Absolutely. I have a relative that was just admitted to the hospital who informed me that he did not get a wash cloth, toothbrush, or any welcome to the hospital kit. And here was there for three days. It wasn't until they found out that his parents were there that they brought out the gowns and things. I went by to visit him and the nurse told me that the vendor has not been paid. So they're not dispensing walkers, slippers. My neighbor is a physical therapist and she's actually collecting walkers in the community to take to the hospital.

MARIN: Do you hear this from other constituents, Rep. Harris?

HARRIS: We hear service organizations are not able to pay their employees and take holidays because the state is not able to pay its bills. And they're behind in paying people in a timely manner who are doing the after-school programs for our children. It's only going to get worse until all of us take responsibility for what we need to do and bite the bullet.

"The numbers keep getting worse," Turner said elsewhere in the segment. "We have not seen a baseline for how bad it is." 

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This week property tax bills hit mailboxes across Cook County and many property owners were justifiably outraged by their skyrocketing rates. Elected officials all tried to dodge responsibility for their role, including Mayor Daley, who certainly deserves his fair share of criticism (after all, his extensive tax increment financing system deprived local taking bodies of $552 million last year alone.) The mayor tried unsuccessfully to pass the buck to Assessor Jim Houlihan. Houlihan, in turn, pointed to House Speaker Michael Madigan (D-Chicago) for opposing an extension of the 7 percent tax cap, which sunset this year. But it's the SouthownStar's Phil Kadner who hits the nail on the head, noting that the state's regressive tax policy is the real culprit:

All Daley has to do to lower property tax bills in Chicago is to tell the school board (which he controls) to cut the school system's levy in half. He's not going to do that, of course [...]

Why hasn't that happened?

Because new tax money would have to be generated to replace the lost money from the property tax. The Legislature would have to increase the income tax, the state sales tax and maybe both.

Some folks would say that makes for a fairer system because those taxes are based on income, the amount of money people earn and on how much they spend.

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The long wait for campaign finance reform in Illinois may soon be over. Last night, the reform coalition CHANGE Illinois agreed to support SB 1466, the bill introduced by House Speaker Michael Madigan (D-Chicago) that would overhaul how politicians finance their campaigns. The House quickly passed the measure -- 66 to 49 -- largely along party lines. And this afternoon, the Senate approved the bill by a 36-22 vote.

The bill leaves intact many of the useful provisions included in HB 7, the ethics measure that passed both chambers earlier this year but was ultimately vetoed by Gov. Pat Quinn with the encouragement of all four legislative leaders. Individual contributions are to be capped at $5,000; corporations, unions, and other groups will face a $10,000 limit under the bill; and political action committees (PACs) will max out their giving at $50,000. Any public contribution of $1,000 or more will also require disclosure within two business days.

Reformers also successfully pushed for some other improvements.

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Chicago International Charter Schools (CICS) teachers made history last summer by becoming the first charter school employees to unionize in Chicago.  Today, they made it official and ratified their first contract. Teachers at three of CICS' Civitas campuses -- Ralph Ellison, Northtown Academy, and Wrightwood -- have struck a three-year deal. Among the contract highlights are a commitment to cap classroom sizes at 29 and to formalize community and teacher input. Also, the 140 Civitas teachers will see their wages increase over the next three years, their evaluations will be standardized, and staff will have due process in disciplinary or dismissal cases. (Catalyst has a more detailed run-down here.)

When the General Assembly lifted the state's charter cap last June, they cleared the way to doubling the number of outsourced public schools. While Civitas' landmark contract is limited to only three of the dozens of charter schools in Chicago, the expectations for transparency and public input in these institutions -- which rely almost exclusively on tax dollars -- are certain to set a new tone. As Randi Weingarten, president of the American Federation of Teachers, sees it, the agreement is a key step in keeping innovation, not cost cutting, as the driver of the privatization model.

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Last year, The Chicago Reporter launched an investigation revealing gaps in supportive services -- from counseling to financial assistance -- for some 90,000 Illinois children whose parents are behind bars. One of the most personally devastating holes was the lack of contact between the incarcerated and their children, a majority of whom live at least a three hours away by car from where their parents are locked up. As The Reporter noted, many are starting to use alternatives to travel, like a Lutheran Social Services Program that helps inmates record messages to their children. They revealed the deep connections that come of the simple communication:

“It really don’t matter what book I read to them, they love it to death,” said [inmate Rodney] Strohmayer. His 4-year-old daughter and 3-year-old son in Sterling, Ill., have been getting tapes for the past four months. His daughter walks around all day and night, “playing this tape over and over again,” Strohmayer said. This time they will get Dr. Seuss’ “Green Eggs and Ham.”

The program doesn’t just help the children; it has had a profound effect on Strohmayer himself. His incarceration helped him understand how much his children mean to him, and knowing that he has a family to go home to makes it easier.

While lawmakers still have a long way to go in addressing the problems exposed by The Reporter, a key piece of legislation (HB1995) that could serve as a lifeline for those families is making steady progress. The bill, which was shepherded through the House earlier this month by State Rep. Karen Yarborough (D-Maywood) and is now sponsored by Chicago Democrat Sen. William Delgado, would require the Department of Corrections to create a video conferencing pilot program. The hope is that over the next two years, the program will help quantify the impact of keeping inmates engaged with the outside world. "We have to make our criminal justice system more than a warehouse with a revolving door," Yarborough said at a press conference highlighting the legislation yesterday.

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Over two years removed from the beginning of the subprime mortgage crisis, foreclosure filings continue to stack up. In Illinois alone, 13,000 homeowners received a foreclosure notice last month. Many of the households forced to leave don't even own the homes; the Woodstock Institute believes that 32 percent of 2008 residential foreclosure filings in Chicago were on properties with between two and six units. In other words, renters unfortunate enough to live in a building whose landlord can't make payments must scramble for a new place to live.

But starting today, those very renters will gain some legal protections thanks to the work of housing advocates in Illinois. That's because Public Act 96-0111, otherwise known as the Renter's Bill of Rights, is now in effect. Sponsored by Chicago Democratic State Rep. Will Burns and State Sen. Jaqueline Collins and signed by Gov. Pat Quinn this summer, the law guarantees that, should a new owner step in to run a foreclosed rental building, existing tenants must be informed within 21 days that management of the property has changed hands.Those notices must also include contact information for the new operator of the premises as well as a foreclosure case number, if necessary. And if the tenant is evicted, he or she will have at least 30 days to find a new residence.

The bill that eventually passed both chambers was not flawless. Stripped from it was a clause requiring new habitability standards for any foreclosed property, meaning landlords are not required to maintain an environment that’s “safe, healthful, and fit for occupancy." But it's a step in the right direction, specifically in a state that's trying to solve mounting budgetary and ethics problems.

State legislators headed back to Springfield today to begin the second and final week of the fall veto session. Here's a quick rundown of the issues they are taking up:

Borrowing

In case you hadn't heard, Illinois' tax base might as well be quicksand. According to the Commission on Government Forecasting and Accountability's latest quarterly report, personal income taxes fell 18 percent, corporate income taxes dropped 29 percent, and sales taxes revenues shrunk by 15 percent since July. At the same time, the legislature has passed legislation requiring that the state fund the Monetary Award Program (which provides scholarships to low-income college students) without identifying a revenue source. As a result, Gov. Pat Quinn is looking for another lifeline, this time in the form of a $900 million loan. The Tribune has the specifics:

Lawmakers might put the borrowed money into a special pot that would be used to pay state health-care costs, generating potentially another $400 million in matching federal funds. That also would free up money elsewhere to pay for the scholarships in Illinois’ Monetary Award Program.

Borrowing is normal when revenues are smaller than expected. But Illinois has already taken out $2.25 billion in loans ($1 billion in May and $1.25 billion in August) and also delayed payment on $3.7 billion in backlogged bills to "shore up" its budget. That money, as well as this new short-term borrowing scheme, needs to be repaid by June 30, 2010. In other words, the plan just digs a deeper hole.

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Medicaid "reform" as the cure-all to the state's budget woes is one myth that just won't die. The latest Republican official to predict gigantic cost savings without showing any support for the claim is State Rep. Dennis Reboletti (R-Addison), who suggested Monday on WTTW's Chicago Tonight that Illinois could save "over $1 billion dollars" by moving patients into a private managed care network. Here's the excerpt (you can watch the whole panel here):

REBOLETTI: We have talked about reforming Medicaid and saving over $1 billion dollars.

MARIN: What would be the principal reform off of Medicaid?

REBOLETTI: It would be $1 billion going to managed care. And by doing that we looked at the cost savings we would see. We've seen some cost savings in caucus that would save $1 billion off the top.

For those just getting caught up, here's a quick recap and rebuttal.

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