Archive for February, 2008
February 20th, 2008
Burzynski’s press release:
SPRINGFIELD, Ill. – Responding to the governor’s budget address on Wednesday, State Senator Brad Burzynski (R-Clare) said that as a state with the largest debt in its history, the people of Illinois deserve better than continuing a tradition of irresponsible spending.
“When you have a fiscal situation as dire we’re facing, you have to show restraint in spending,” Burzynski said. “To put the state back on track, we have to stop spending money that’s not there. We’re capable of a better budget than this.”
Despite acknowledging the state’s 2008 budget is $750 million out of balance, Governor Rod Blagojevich continued to push for more spending, borrowing, taxes and selling of state assets in the upcoming fiscal year while putting additional burdens on Illinois businesses. The governor’s budget included $917 million in tax hikes, $21.5 billion in borrowing and selling up to $12 billion of taxpayer-owned assets.
Burzynski said the governor’s plan to push ahead with a $2 billion healthcare increase isn’t the answer.
“We had the highest backlog of unpaid bills in state history, $1.7 billion according to the Office of the Comptroller,” Burzynski said. “Our first priority must be to eliminate any new spending and program expansions in the budget and stop being a deadbeat government.”
Burzynski also added that the governor and his allies in the Senate should focus on encouraging businesses to flourish – not go out of state. While the governor has proposed a one-time rebate of $300 million for businesses, he wants to hit them with more than $650 million in taxes each year.
“If you really want to secure the financial future of our state, then you need to find ways to add more jobs,” Burzynski said. “And part of that includes encouraging the business community to grow stronger. We shouldn’t be lagging behind our neighboring state in providing our citizens with opportunities.”
Currently, Illinois has lost more than 60,000 jobs in the manufacturing sector during the governor’s tenure and ranks 45th in the nation for job creation. If Illinois had kept pace with the national average for job growth, 213,000 more people would be employed today – meaning more than half a billion dollars from natural sales and income tax revenue growth.
“This is an important time to move Illinois forward,” Burzynski said. “In the past we have worked to find solutions, but we can’t do this alone.”
February 20th, 2008
Syverson’s press release:
SPRINGFIELD, IL – State Sen. Dave Syverson (R-Rockford) said Illinois families and taxpayers deserve better than the budget unveiled Wednesday by Gov. Rod Blagojevich – a budget that would continue Illinois down the path of rising debt and unemployment.
“This is more of the same ‘government by gimmick’ that we’ve seen from this Governor during the past five years,” said Syverson, the Republican Spokesperson on the Senate Appropriations Committee. “Once again, he’s seeking to impose costly new programs at a time we can’t even afford the services we already provide. And once again, he wants to pay for it by pushing the burden onto our children and grandchildren through greater borrowing and fiscal quick-fixes.”
Syverson noted that the budget hinges on several controversial proposals that lawmakers have voiced skepticism about in the past, including a leasing of the state Lottery to generate cash, raids of dedicated state funds, and billions of dollars in new borrowing that would add $1,300 in pension debt for every man, woman and child in Illinois.
Also included in the budget – more than $2 billion in new programs and spending at a time Illinois faces, by the Governor’s own numbers, a $750 million deficit.
“There should be no new programs – period – until our current programs are paid for,” Syverson said. “There is wide consensus on both sides of the political aisle that Illinois doesn’t have a revenue problem right now – we have a spending problem. The Governor is pushing ahead with costly new programs we simply cannot afford. Illinois already has $1.7 billion in unpaid bills owed to service providers across the state. The explosion of spending contained in this budget will compound that problem, and make it even more difficult for service providers here in Winnebago County to get the money that’s owed to them.”
Syverson also expressed skepticism at the more than $650 million in tax hikes on the Illinois economy contained in the Governor’s proposal.
“Under Gov. Blagojevich, Illinois has fallen to 45th in the nation in job growth since 2003,” Syverson said. “We trail every one of our neighboring states in job growth, and have lost more than 60,000 good-paying manufacturing jobs since the Governor took office. The job-killing tax hikes contained in this budget are precisely the reason we’ve lost so many jobs, and why Illinois small businesses are struggling to compete.”
Another troubling part of the Governor’s budget for Syverson is a 30 percent diversion from the state’s Road Fund, which will mean Rockford-area projects already waiting for funding will be put off even further.
February 20th, 2008
Jefferson’s press release:
SPRINGFIELD, IL– State Rep. Chuck Jefferson, D-Rockford, responded to the governor’s State of the State Address on Wednesday cautiously, recognizing the difficulties that lay ahead for the General Assembly and the State of Illinois.
The governor addressed the economic challenges facing our nation and purposed a state economic stimulus plan that mirrors the national plan. It would include a tax credit for families with children under the age of 18, a 20% tax break for big corporations that pay corporate taxes, and a capital bill.
“Many of the Governor’s proposals are lofty and it is especially important right now that the state take measures to be fiscally responsible,” Jefferson said. “In an uncertain economy with a massive budget shortfall, we need to tread very carefully before funding new initiatives. It is my priority to talk with constituents about budgetary and legislative proposals that arise in the coming months to make sure the people of Rockford have a voice in this process.”Once again, the Governor promised to focus on increasing health care programs but did not say how the state would pay for them. In the past, options to fund such increases have been cuts to other programs and tax increases on small businesses. While the governor plans to pursue a 20% tax break for corporations, Jefferson said he will continue to be fiscally responsible and stand up for small businesses to ensure that our local economy will not be devastated by the Governor’s plans.
Governor Blagojevich announced his intention to pursue a much needed capital bill. The capital bill would include $25 billion in projects across the state and several large projects for Central Illinois. The proposed bill would create 700,000 jobs throughout the state. The Governor proposed to pay for these projects by once again leasing the lottery.
“A capital plan will be an investment into the state of Illinois by creating good jobs and stimulating our economy,” Jefferson said. “It will make our state more attractive to businesses because of improved infrastructure and better schools for our kids. It is important that, in the face of economic downturn in the state and nation, we act responsibly to improve education, roads and job opportunities.”
February 20th, 2008
Gov. Blagojevich today put aside his big-spending vision and proposed something of a maintenance budget for the fiscal year beginning July 1. Here is a copy of the governor’s budget plan.
But while the governor’s budget plan lacks the huge spending and tax increases he sought last year, it nonetheless rests of several tenuous assumptions and no doubt will meet stiff resistance from lawmakers.
For instance, Blagojevich is again seeking to privatize the state lottery to generate cash necessary to support his spending priorities. But this year, he wants to lease just 80 percent of the lottery — allowing the state to keep 20 percent — rather than part with the entire asset.
His budget assumes this 80/20 lottery lease would raise $7 billion for the state over the long term. Still, the governor’s lease/sale plan last year won little traction — if any at all — among lawmakers. These dollars would be the central revenue support for a capital construction plan the governor also proposed on Wednesday.
Here is the capital budget. Here are the highlights:
The governor’s plan provides $1.9 billion in state funds and $1.9
billion in local matching funds for construction and maintenance of
schools, including $1.75 billion in school construction projects and
$150 million for school construction maintenance projects, plus $30
million to fund a new early childhood facilities program. The program
proposes $642 million to expand and make capital improvements
and repairs at the state’s public universities, $200 million to support
the capital needs of the state’s private colleges and universities and
$250 million for the state’s community college system to construct
new buildings, repair existing facilities, and replace temporary
facilities.
The $14.4 billion highway portion of the Capital Budget funds bridge
repair needs, maintenance and improvements to the state’s system
of roads, highways and interstates, and provides for new system
expansion projects; $250 million of this will provide direct assistance
to local communities to make improvements to transportation
infrastructure. Funding for rail totals $160 million, which will be used
to improve rail tracks and signals, enhance Amtrak stations,
purchase new rail passenger equipment, and make improvements to
rail freight facilities. Capital funding for airport projects total more
than $300 million for airport improvements throughout Illinois.
Illinois Works Capital Program invests $2.7 billion in funding for mass
transit agencies to purchase buses and rail cars, build train stations,
bus garages and rail yards, and reconstruct commuter rail bridges
and elevated rail structures, among other projects.
Over $1.0 billion will provide access to capital in communities
throughout Illinois to stimulate job growth, provide affordable
housing, improve community healthcare centers, make investments
in energy, improve infrastructure, develop new industries and
technologies, and attract new businesses to Illinois.
The governor’s energy plan, a component of Illinois Works, will
reduce Illinois’ dependence on foreign oil and gas, stabilize gasoline
and home heating prices, create jobs, and reduce energy use while
protecting the environment. The energy plan includes the
development and construction of ethanol, cellulosic and biodiesel
production facilities, construction assistance for up to 10 new coal
gasification plants, and the addition of 900 more E-85 pumps at
fueling stations statewide by 2010.
The governor is not seeking an increase in the income or sales tax rate, but he does propose raising a series of user fees. For instance, the Department of Natural Resources would charge “a consultation fee … for performing threatened and endangered species or natural area reviews, which are currently done for free,” under his budget. “Another example will be charging for work done on processing floodway permits, which will allow the Water Resources Program to recover its direct costs.”
Blagojevich aides said during a morning briefing that they could not immediately produce a list of all fee increases in the governor’s budget plan.
The budget does not call for entrance fees at state parks, despite published reports indicating his budget might include them.
Blagojevich also proposes selling $16 billion in bonds to bolster public pension systems — another plan that failed to gain traction last year.
The governor proposed another $300 million in spending on Illinois public schools, but he did not specify how exactly he would like the state to allocate those dollars.
The governor’s plan acknowledges that the current budget, which runs through June 30, has a $750 million deficit. Blagojevich’s budget director went out of her way to blame lawmakers for this budget hole, saying their revenue forecast was too optimistic when they approved the budget last summer. The budget plan says this hole could be filled through “fund transfers and loophole closures.” Otherwise, said Blagojevich budget aide John Filan, the state will need to cut spending.
Nonetheless, the governor’s budget plan assumes new revenue totaling $1.7 billion in the next fiscal year, which begins July 1. Blagojevich aides could not provide an exact accounting of this figure, but said it includes $300 million in new revenue from higher taxes on riverboat casinos and $575 million from the sale of the state’s 10th casino license, which has long been mired in litigation. It also includes $140 million from closing corporate tax “loopholes” and $40 million from the sale of unspecified state assets.
UPDATE 1
There are two basis prongs of Blagojevich’s budget plan: tax breaks for families and businesses, and a capital plan for Illinois infrastructure. His plan for universal health care apparently is on hold; he offered no specific plan in this budget.
The address he just delivered was as modest as his actual budget proposal. It was the most conciliatory State of the State/budget address of his administration.
Gone was the super-charged rhetoric that defined his previous speeches. He did not vilify businesses for “not paying their fair share” in taxes, as he did last year. He did not attack the State Board of Education as a “Soviet-style bureaucracy,” as he did in a previous year.
Instead, he said he looked forward to working with lawmakers and highlighted the resounding defeat last year of his own legislative agenda. He joked that he now understands the meaning of the Hank Williams tune, “I’m So Lonesome I Could Cry.”
He told lawmakers, referring to his failed plan last year for a gross receipts tax, “Needless to say, I’m not asking you to do that again.”
At one point, the famously self-centered and single-minded governor had to this to say about how best to pay for a capital plan: “I’m flexible.”
He challenged lawmakers directly at just one point, saying it’s their responsibility to send him a capital plan he can sign.
UPDATE 2
Blagojevich’s critics are not impressed. Local Republicans called the governor’s budget more of the same — feel-good programs the state can’t afford (tax credits), borrowing (bonding to bolster public pension systems) and selling assets (the lottery).
Doug Whitley, president of the Illinois Chamber of Commerce, noted that the budget plan includes a new tax on business payroll — a tax Blagojevich unsuccessfully sought last year. Whitley said businesses would rather not pay the payroll tax than get the proposed tax credits.
The payroll tax is designed to fund the expanded health care, a program the governor calls Illinois Covered. From the governor’s budget:
Illinois Employer Assessment – The costs of
Illinois Covered will be fully funded in fiscal year
2009 and thereafter, entirely through its own
revenue sources including the enactment of an
employer healthcare assessment. The proposed
employer assessment, to commence January 1,
2009, will require that all employers of more than
10 employees who spend less than 4 percent of
their payroll costs providing healthcare to
employees pay an assessment of 3 percent each
pay period. The Employer Assessment is
estimated to generate $417 million in fiscal year
2009 and nearly $1 billion per year when fully
annualized.
February 19th, 2008
A downstate newspaper reported today that Gov. Rod Blagojevich may propose entrance fees at state parks as part of the budget he announces on Wednesday.
Rep. Dave Winters, R-Shirland, said if the governor proposes entrance fees for Rock Cut and other state parks, he would consider the proposal. He said such a user fee could help support the Illinois Department of Natural Resources, whose budget, he said, has diminished under Blagojevich.
Winters also said he would need to look around at Wisconsin and other neighboring states to see whether they charge fees at their state parks.
“I do know that Wisconsin does have entry fees to at least some of their state parks,” Winters said. “The first thing we want to do is look for comparables — see what other states do around us.”
He added, “It is a user fee, so those who don’t use state parks aren’t going to get hit with that increase. I’m certainly not against it to start with. It may well be a way to support DNR, and we have seen tremendous cuts in their maintenance budgets and staffing levels. It’s probably one of the agencies that has been hit the most, so it may be an appropriate fee.”
On the other hand, Sen. Dave Syverson, R-Rockford, said the idea of imposing entrance fees comes up almost every year when state officials consider a budget. Syverson said such fees would likely affect people wanting to visit Rock Cut State Park.
“The issue isn’t whether or not they can afford to do it this,” he said. “The issue is why does the taxpayer have to pay to fund and maintain the parks, and then (pay) fees over and above that to use their own parks?”
February 19th, 2008
The Capitol used to have a reliable rhythm.
Early each spring, the governor would announce his budget plan. Lawmakers would spend the spring debating the governor’s plan, as well as their own myriad plans. And by May 31, the official end of spring session, they all would either have a deal or be close to one. Once they finalized the deal, they would all go home for the summer. The budget they approved generally contained most of what the governor sought when the session began.
That rhythm is gone.
Gov. Blagojevich and lawmakers spent last year in a bitter fight over the budget and other matters that dragged session from the spring straight into this year. There were many firsts, from the governor suing the House speaker over procedural matters, to the Senate president violating an agreement he made with other legislative leaders to stick with them even if it meant overriding the governor’s wishes on the state budget, to the governor cutting more than $400 million in spending from that budget and claiming he could somehow unilaterally re-appropriate the spending on his own priorities.
This year promises to be yet another step toward the chaos of last year. The governor’s annual State of the State/budget address, the spring session’s formal kickoff, is Wednesday. But House Speaker Michael Madigan and Comptroller Dan Hynes, two of his fellow Chicago Democrats, have already moved to put the governor’s back against a wall — before he has a chance to get both feet on the ground.
Madigan and Hynes have attempted to redefine, or at least reframe, the spring session. Read more about Madigan’s strategy here, and about Hynes’ move here.
By the time state officials settled on a new state budget last fall, it little resembled the one Blagojevich introduced last spring. The governor’s ambitious plan for universal health care did not pass. Neither did his plan for a gross receipts tax on Illinois businesses (it would have been the largest tax hike in state history). Lawmakers took the budget in another direction. Blagojevich retaliated by cutting more than $400 million of their earmarks and other spending.
When Blagojevich announces his next budget plan on Wednesday, the question will be: How much does his budget plan even matter?
UPDATE 1
So much for keeping lawmakers in the loop on his budget plans. In a befuddling break from tradition, the governor’s office has not scheduled briefings for the staff of any legislative caucus.
Spokespersons for the four legislative caucuses — Senate Democrats, Senate Republicans, House Democrats and House Republicans — say the governor’s office has not alerted their budget staff to any briefing before the governor’s budget address on Wednesday.
In past years, budget staff for each of the four caucuses were briefed before the address. The staff are responsible for analyzing and explaining the governor’s budget plans to their respective lawmakers. Without a briefing, and the budget documents that come with a briefing, the staff obviously cannot do this.
Fascinating.
UPDATE 2
Cap Fax Blog weighed in on the no-budget-briefings fiasco, adding:
Reporters, legislators and a whole lot of others are pretty upset today because the governor will not hold any budget briefings tonight. Historically, off-the-record briefings are held the evening before a budget address, which allows reporters to get their stories ready (or simply break the embargo altogether) and allow appropriations staffs to prepare analyses for their respective caucuses.
So, no briefing means no analyses tomorrow, and no analyses means seriously grouchy legislators. I’ve talked to several today (in the House and the Senate in both parties) who all had about the same response: “This is not a good way to start off the session.”
Indeed.
February 18th, 2008
OK, so this probably isn’t the most important endorsement that U.S. Sen. Barack Obama has earned or will earn in his race for the White House. But it certainly is the creamiest.
That’s right, Obama won the endorsement of none other than Ben and Jerry, the co-founders of Ben and Jerry’s. So grab a spoon, people! If Obama wins, maybe they’ll spread some ice cream love.
From an Obama press release:
Ben Cohen and Jerry Greenfield, co-founders of Ben and Jerry’s, publically announced their endorsement of Barack Obama for President today. Joined by U.S. Senator Patrick Leahy, the former John Edwards supporters said they believe Barack Obama is the best candidate to unite America and finally tackle the challenges facing our nation.
“Barack Obama believes that the special interests in Washington shouldn’t drown out the voices and basic needs of Americans,” Greenfield said. “When Barack Obama is President, we will finally have a president who is committed to ensuring all Americans have access to affordable health care and our children get the education they deserve.”
What? Nothing about ice cream for everybody?
February 18th, 2008
You probably already know about U.S. Sen. Barack Obama’s concrete shoe, Tony Rezko.
Obama and Rezko engaged in a kinky real estate deal — Obama bought a mansion on Chicago’s South Side the same day that Rezko’s wife bought an adjacent lot — that is now all the talk on the presidential campaign trail. There’s even a blog dedicated to Rezko.
We may soon be hearing much more about Obama’s ties to Exelon, ComEd’s parent company, too.
A Baltimore Sun columnist reports:
A bigger question is how Obama’s Exelon links might influence his broader electricity policy at the most critical period for U.S. electricity since the 1930s. Exelon, the Illinois version of Baltimore’s Constellation Energy, is one of the country’s biggest megawatt producers, the largest nuclear plant operator and a huge Obama backer through its executives and employees.
Would a President Obama try to reform interstate electricity markets that have soaked consumers in Maryland and other deregulated states, inadequately invested in the future and unjustifiably enriched Exelon, Constellation and other companies? Or would he maintain the Bush administration’s blind eye toward evidence of wholesale-electricity market failure, irregularity and price gouging?
The columnist goes on to scrutinize Obama’s apparent ties to Exelon. Recommended reading, for sure.
UPDATE 1
Bloomberg and the Tribune have more on the Obama/Rezko land deal.
February 18th, 2008
A great pastime at the Capitol is speculating on the objectives and motives of House Speaker Michael Madigan, D-Chicago. Madigan seldom speaks in public and he generally is the last of state leaders to show his cards.
When he does show them, he tends to stake out a contrarian position. By positioning himself opposite other interests, he creates leverage to accomplish his goals — whatever they may be.
This spring session, Madigan was the first to show a card when he spread word last week that no major initiative will clear the House, the chamber that he controls, unless it contains language effectively pre-empting Gov. Rod Blagojevich from attaching rules elaborating on its thrust.
It’s uncanny for Madigan to announce such a radical position before the governor has a chance to set forth his own strategy Wednesday in his State of the State/budget address. Then again, Blagojevich and Madigan are great political adversaries. Together with Senate President Emil Jones Jr., a third Chicago Democrat allied with Blagojevich, the two last year faced off in a battle last so fierce that session literally dragged from the spring straight into this year.
But to truly understand the extraordinary nature of Madigan’s pre-emptive strike, you must consider the actual substance of his plan. By requiring all major bills to include language prohibiting the governor or his agencies from attaching administrative rules, the strategy could potentially shut down the legislative process.
In other words, Madigan has kicked off the session with a strategy that may do nothing but disrupt and delay the legislative process.
If Jones continues to side with Blagojevich through this session, he is unlikely to adopt Madigan’s strategy in the Senate. If the Senate rejects the strategy, and Madigan refuses to budge, it will be impossible for the two chambers to agree on legislation. And even if Jones does capitulate, and both the Senate and House do agree on legislation including the no-rules language, the governor could simply veto the language and send each bill back to lawmakers.
Lawmakers would then need to decide whether to override the governor. But I’m getting way ahead of myself here.
The bottom line is that Madigan does not often bluff. If he does bluff, he is not one to quickly go back on it.
Blagojevich and Jones, for their part, don’t tend to quickly swallow Madigan’s wishes.
UPDATE 1
Rep. Chuck Jefferson. D-Rockford, supports Madigan’s new strategy. Jefferson is a member of Madigan’s leadership team, so this is not surprising.
Jefferson echoed the speaker’s position, articulated last week by House Majority Leader Barbara Flynn Currie, that the governor directly assaulted the Legislature when he declared that the body’s Joint Committee on Administrative Rules, which reviews the governor’s administrative rules, lacks the power to reject his rules.
“I think it’s a good idea if in fact the governor is going to continue to try and pull the political maneuvers to undercut what JCAR is in place to do,” Jefferson said. “I think it’s to the governor’s advantage at this point, but he doesn’t seem to think so.”
UPDATE 2
Rockford GOP Sen. Dave Syverson also supports Madigan’s strategy, at least the concept, he said.
Syverson said state agencies have misinterpreted his bills when they write the rules, but he could not think of any examples. He said he is then forced to pass another bill to clarify the first legislation.
“I agree with the Speaker to the extent that we need to put more in there in regards to the major issues because the governor has taken more leeway to expand definitions … taking it way beyond what the intent was and we need to rein that in,” Syverson said.
“The House version may go too far but the what’s currently in place does not go far enough. There may be some room for compromise, which we hope we can do.”
UPDATE 3
In line with the House Republican party line, Rep. Dave Winters, R-Shirland, disagrees with the House Democrats’ plan. He said rule-writing needs to be done by people with the expertise in that bill, such as those at the state agencies.
“I think the administrative rules should be written by the agencies that are to administer them,” Winters said, “not by a bunch of legislators who are not bureaucrats.”
February 18th, 2008
As Gov. Blagojevich prepares to announce his budget plan on Wednesday, business groups are convinced he will propose a tax on carbon emissions to generate more dollars for state coffers. The State Journal-Register reports:
The (Illinois) chamber fears that Blagojevich will ask lawmakers to approve a tax on carbon emissions from power plants and other industries. While acknowledging it has no details about what Blagojevich plans to propose, the chamber thinks a “carbon tax” could be imposed to generate more than $2.6 billion for cash-strapped state government.
“We are planning as though this will be a major initiative,” Todd Maisch, vice president of the chamber, said Friday. “His (financial) needs are substantial.”
Blagojevich aides refused to confirm — but also did not flatly deny — the plan.
Since taking office in 2003, Blagojevich has looked to Illinois businesses as a source for the revenue he needs to support expanded state spending. That approach topped out last year when he proposed a multi-billion-dollar gross receipts tax on Illinois businesses to cover the cost of a universal health care plan and other spending priorities.
In the SJ-R story, the Illinois Chamber notes that the suspected plan for a carbon tax would be just the latest incarnation of Blagojevich’s desire to more heavily tax businesses:
Maisch said a carbon tax would have the same effect as the ill-fated tax on businesses’ gross receipts that was proposed by Blagojevich last year.
It’s difficult to imagine big-spending Blagojevich going a year without a big-spending initiative. Yet, before state officials consider one dime of new spending, they first must deal with a revenue hole in the existing budget. Crain’s Chicago Business has more.
In other words, the pressure is on Blagojevich, et al., to raise more money — and fast. Hold on to your wallets.
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