Archive for February, 2008
February 13th, 2008
A committee of lawmakers decided Wednesday to put off consideration of Gov. Rod Blagojevich’s latest health care plan until after his big speech next week. The Joint Committee on Administrative Rules decided against voting on the governor’s request to make his “emergency” healthcare program permanent.
The governor’s top healthcare aides were all dressed up, but with nowhere to go. The committee refused to hear testimony from Barry Maram, director of the state Department of Healthcare and Family Services, and other department officials.
The impending vote stems from the governor’s decision in November to sidestep and implement the health care plan — a component of the governor’s larger push for universal health care — by declaring an “emergency” rule.
The committee, who under state law has the power to review the governor’s administrative rules, rejected the so-called emergency in a 9-2 vote, and Blagojevich responded by claiming its ruling was not binding.
On Wednesday, the governor’s department asked the committee to consider rules that would make the program permanent. The commitee, which includes Republicans and Democrats of both chambers, voted 10-0 to take up the issue again on Feb. 26, after the governor gives his budget address on Feb. 20.
One committee member said after the vote that lawmakers are eager to hear how the governor intends to pay for the health care expansion.
February 13th, 2008
The feud between Gov. Rod Blagojevich and House Speaker Michael Madigan all but consumed state government last year, dragging out consideration of major initiatives from the state budget to a bailout for mass transit systems.
If action on Wednesday was any indication, when Madigan opened a new front in the political war, posturing and gridlock will continue well into this year too.
Madigan on Wednesday spread word to House committee chairs that certain bills will not advance unless they include a provision effectively pre-empting the governor’s authority to craft rules around those bills once they become law.
It was a direct assault on the governor, who in November used an “emergency” rule to sidestep the Legislature and unilaterally implement a phase of his plan for universal health care. The governor first tried to maneuver his plan through the Legislature — the conventional route for major spending initiatives — but lawmakers rejected it.
A special committee of lawmakers, who under state law have the power to review the governor’s administrative rules, rejected that “emergency” rule. The governor responded that he believed the committee’s role is merely advisory and that it did not have the power to reject his rule.
A suburban attorney filed a lawsuit challenging the governor’s decision to ignore the committee’s decision, and a court is reviewing the matter. The legal controversy is not new. Former GOP Gov. Jim Thompson argued in 1980 that the committee’s power to reject a governor’s rules is unconstitutional.
Madigan’s new strategy apparently is intended to kill the governor’s rule-making authority altogether, or at least when it comes to certain bills, by requiring such bills to cover all the details that the governor might otherwise cover in the course of an administrative rule.
A rule sought by the governor cannot conflict with the law it is linked to. If the Legislature addresses every conceivable detail in the actual bill, there would be nothing left for the governor to address with a rule.
The governor’s rule-making authority would be effectively neutralized.
Madigan spokesman Steve Brown said all “appropriate” bills must now include an amendment requiring lawmakers to include details that have been traditionally left for the purview of the governor’s rules.
“Our interest is to help (the administration) implement their policies, and so bills that would require rules, we will amend them so that’s prohibited,” he told me. “It will spell everything out in the legislation.”
He added, “The administration wishes those to all be in the law, and that’s what these amendments will require the agencies to do.”
But will Madigan succeed in implementing his new strategy, thereby prompting wholesale change in how Illinois laws are made, or will he succeed only in aggravating the governor?
It’s not clear. Senate President Emil Jones Jr., a Chicago Democrat like Blagojevich and Madigan, sided with the governor during last year’s protracted battle of wills. If Jones continues to watch Blagojevich’s back this year, it’s unlikely the Senate will sign off on bills stuffed with all the additional language Madigan intends to stuff them with.
If Jones balks at Madigan’s strategy and the speaker refuses to budge, there will be more gridlock at the Capitol.
The development came the same day lawmakers returned to Springfield after a month-long break. Committee hearings were thrown into flux as legislators tried to figure out what this meant to bills already drafted and ready for a vote.
In Illinois, laws are built on three levels. The state Constitution is the foundation and basic framework. Statutes approved by the Legislature speak to the details left out of the Constitution. And rules implemented by the governor speak to the details left out of statutes. Through rules, the governor’s agencies implement law.
Madigan’s strategy would effectively morph certain bills to cover the nuance typically covered in rules. This, in effect, would make bills much, much longer. And, amid gridlock on top of gridlock, the lawmaking process would become even more convoluted.
February 13th, 2008
Flooding in the Capitol caused by burst pipes, and which has shuttered the building’s main door all this week, apparently was thanks to open doors in the governor’s office.
The State Journal-Register reported today that guards walking the Capitol Sunday night discovered it was particularly cold near the governor’s second floor office.
On Tuesday, Henry Haupt, spokesman for Secretary of State Jesse White, gave this account of what happened:
Between 11:30 p.m. and midnight Sunday, a Capitol security guard was making rounds in the building. He realized it was “really cold” on the north end of the second floor, where there are offices for the governor’s staff and others.
However, the guard did not have a key to get into the area. The guard inquired with Illinois State Police officers stationed at the Executive Mansion about getting into the office suite.
“In the meantime,” Haupt said, “Capitol security was able to gain access without damaging the door.”
Once inside, they saw that doors leading to a balcony over the Capitol’s north entrance were open.
“They said it was extremely cold in there,” Haupt said.
Officers also discovered some ceiling tiles inside the office had been blown off. Capitol maintenance staff replaced the tiles, and state police officers secured the office. The work was finished about 1 a.m.
The governor’s staffers use the balcony to smoke. I once saw the governor’s buddies out there drinking beer at the end of session. Must be nice to have a balcony. Maybe in the future, they’ll securely close the door after they use it.
February 12th, 2008
There is something about Hillary.
As the race for the Democratic presidential nomination drags on, the nation remains transfixed on the senator from New York.
Her words, outfits, decisions and personality are continually picked apart on national talk shows, in newspaper columns and around dinner tables.
It’s not only because she is running for president. There is just something about Hillary.
New Yorker editor Susan Morrison also noticed the way Clinton “pushed different kinds of buttons than other politicians pushed.” So naturally Morrison decided to give 30 respected female scribes a national platform to flesh out her theory.
Well, it’s just another book to add to an ever-growing bookshelf.
This weekend, I popped into my favorite Springfield bookstore. Among the vast 20,000 books, I stumbled across three tall bookshelves devoted to U.S. presidents and yet another devoted to their wives.
I scanned the titles and was not surprised that books about Hillary Clinton dominated the section. I even purchased two of the books because it epitomized the Hillary fascination – “The Case Against Hillary Clinton,” by Peggy Noonan and “The Case For Hillary Clinton,” by Susan Estrich.
The other books claimed to be about her failed healthcare initiative of the ‘90s, about her husband’s sex scandal that nearly cost him the office and about her rise to power. On the surface, the books profess to be about Clinton’s policies, but I would be willing to wager my small monthly paycheck that most of the pages are spent parsing her personality, not her policies.
Similarly, Morrison’s book likely has some high points, if the reviews are any indication, but it is also clear that it hits some real lows — namely, an essay about whether Clinton is a dog or cat person and another about her eating habits based on past lunch choices.
Really? Are those facets of Clinton’s life really that fascinating?
Perhaps they are. Something tells me that we would be really bored if we learned Barack Obama enjoyed peanut butter and jelly sandwiches with the crusts cut off or found out that former Vietnam prisoner-of-war John McCain was a cat person.
Even if we were interested, books like that about male presidential candidates will probably never appear on the shelves of American bookstores.
Clinton has been under a microscope for much of her adult life, and largely, by her own volition.
Since the 2008 presidential race actually began early last year, I have kept a keen ear out when people – and by people, I mean the ones at our favorite coffee shops and around our kitchen tables, not the pundits – begin explaining why they dislike Clinton.
It is rare that someone will provide anything but a superficial criticism. There is probably plenty to not like about Clinton – perhaps her hawkishwar stance or the millions of dollars her healthcare proposals would cost the country.
Yet many just don’t like her.
Sometimes politicians are slimy people who betray the public’s trust. Those people deserve our anger and contempt.
But it seems unfair to dislike a politician’s personal attributes, whether it is Clinton and her “Miss Frigidaire” exterior, or Gov. Rod Blagojevich and his perfect hair.
Perhaps if people spent more time dissecting the issues, not the person, then we can truly, as Clinton is wont to say, start the conversation.
What do you think? Is this sort of criticism warranted?
February 11th, 2008
Dan Hynes, the state’s generally low-key comptroller, today moved to undercut any attempt next week by Gov. Rod Blagojevich to paint the state’s fiscal picture as rosy. He said Illinois is poised to “retain its status of having the worst deficit in the nation for the fourth year in a row.”
Hynes issued a “special” report on state finances from 2003 — the year Blagojevich took office as governor — through the current fiscal year. The report’s conclusion:
The fiscal outlook for Illinois is not optimistic. The state has failed to build up reserves or address the underlying structural problems of the state’s budget – in particular, the pension and Medicaid liabilities. At the same time as the economy appears to be slowing, the Governor has promised expansions in health care without a permanent revenue source to pay for them. This lack of reserves – and the Medicaid and pension payments “albatrosses” – will be a drag on the state when it faces an inevitable economic downturn, likely already underway.
Blagojevich is scheduled to deliver his annual state of the state/budget address next week, Feb. 20. Presumably, Hot Rod will not be pointing to the state’s ongoing fiscal problems, which continued under his watch. Hynes apparently is doing his part to let folks know what’s up. He touted his souring report as a “fiscal state of the state.”
It’s just the latest look at the state’s increasingly ugly fiscal situation. More here. I asked the governor’s office for a response to the Hynes special report, but they never got back to me.
Hynes suggests that Illinois, during Blagojevich’s tenure, blew a tremendous opportunity to get its budget in the black during Blagojevich’s tenure.
During this period of national economic growth, most other states took advantage of their increased revenues to stabilize their financial positions. Illinois, when measured on the more comprehensive GAAP (Generally Accepted Accounting Principles) basis, still sustains a deficit, ending fiscal year 2007 nearly $3.6 billion in the red based on preliminary unaudited estimates. While this is an improvement from the record $4.166 billion GAAP deficit recorded in fiscal year 2003, it provides Illinois the dubious opportunity to retain its status of having the worst deficit in the nation for the fourth year in a row.
In greater detail, he first describes the revenue side:
Since the end of the last recession in
2001, Illinois has been unable to regain its fiscal
footing despite impressive and consistent revenue
performance.
The state’s fiscal position bottomed out in fiscal
year 2003 as General Funds revenues from individual
and corporate income taxes fell when compared
to the prior year and sales taxes were flat.
Now for the bill backlog:
The backlog of General Funds bills awaiting payment
in the Comptroller’s Office that spring
peaked at $2.4 billion and the payment delays after
bills were filed with the office reached 51 days.
The state was forced to short-term borrow $1.5
billion in May 2003.
At the end of fiscal year 2003, even in spite of the
short-term borrowing, Illinois was holding $874
million in bills, plus delaying income tax refund
payments and holding bills at state agencies. The
state’s GAAP (Generally Accepted Accounting
Principles) deficit reached an all-time high of
$4.166 billion.
Back to revenue. Hynes says Illinois failed to capitalize on rebounding economy:
However, a rebounding economy provided Illinois
with strong revenue growth. General Funds revenues
in fiscal year 2007 totaled $28.6 billion,
nearly $5.6 billion higher than the amount collected
in fiscal year 2003. This reflects a trend increase
of $1.4 billion a year, or over 5.5% annually.
The kicker:
Yet, financial stability has remained out of reach.
Illinois’ spending in many programmatic areas has
grown, but several key areas of governmental activity
have not been addressed, leaving the state
poorly prepared for the next economic downturn,
a phenomenon that may already be underway.
In July 2006, the Register Star was the first to report that Illinois had logged the worst deficit in the nation. We examined audited financial reports from all 50 states and concluded:
The rebounding national economy meant extra cash in the coffers of nearly every state in the union.
Nearly every state, except Illinois.
Illinois was one of three states to finish the 2005 budget year with a deficit — of $3 billion, to be exact — in its central checking account, a Register Star analysis found. Illinois’ deficit was the largest in the nation. Wisconsin and North Carolina are also in the red; every other state finished with a surplus.
A few days later, WGN asked Blagojevich about the $3 billion deficit.
“That is not true,” the governor said. “In fact, we have a balanced budget. The law requires it. You can’t have a budget unless it’s balanced.”
In fact, it was true. A column I wrote explained the state Constitution’s “balanced budget” provision, which states that, “Appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.”
The state does have both a “balanced” budget and a deficit. It’s been that way since before Blagojevich. It remains that way under him.
The state Constitution says lawmakers may not appropriate spending in excess of the cash the state is expected to take in over the budget year. It does not prohibit a deficit.
Each year, lawmakers simply don’t delineate spending on bills the state won’t have enough money to cover. They shove the other bills, primarily those from health-care providers, into the next year.
This is how they comply with the constitution. Last summer, Blagojevich’s administration rolled $3 billion of these bills to the next budget.
This is a ton of info, I know. If you’re still craving more, check out this article by Charlie Wheeler, director of the public affairs reporting program at the University of Illinois at Springfield.
February 8th, 2008
State revenue through the end of this fiscal year may well fall $600 million or more short of expectations, according to the Legislature’s revenue forecasting agency. The year ends June 30.
Yes, $600 million is real money. A shortfall that large could mean serious problems for a state whose backlog of unpaid bills already is endemic. Doctors, hospitals, other health care providers, and other state vendors often wait months to get paid.
The full report is here. Discussion of the projected revenue shortfall begins on page 3.
In summary:
While the FY 2008 budget was implemented with the hopes of recording approximately $1.6 billion in revenue growth–actual performance through January, teamed with a slowing economy, point to revenues falling well short of those expectations. While the Commission will be providing an official estimate at a scheduled March 5th meeting, receipts to date coupled with an anticipated slowing in personal income tax growth could result in overall growth struggling even to reach $1 billion.
The State Journal-Register has more.
What about the next fiscal year, which begins July 1? The revenue picture does not look good. The forecasting agency’s report continues:
Given the current uncertain status of the economy the revenue picture for FY 2009 is far from clear. However, it would appear that limited base growth is the best that can be hoped for. Unfortunately, appetites for expanded health care, education, capital needs, and other worthy programs continue to build. Add to that the continued pension funding pressure, bills incurred but unable to be paid, and the resulting budgetary difficulties continue to build without any signs of slowing.
UPDATE 1
What does all this mean? It’s hard to say.
Certainly, we’ll know much more on Feb. 20, when Gov. Blagojevich announces his budget plan for the next fiscal year. Blagojevich, like many of his fellow Democrats, has a penchant for feel-good, expensive new programs. Remember last year when he proposed (unsuccessfully) his version of universal health care, backed by the largest tax increase in Illinois history?
It’s hard to imagine the governor going a year without a major spending initiative. And he’s not the only one craving more spending. Lawmakers of both political parties typically have their own new spending priorities, which may well be very different (therefore, on top of) the governor’s priorities. They want the state to build new roads, put more money in classrooms, etc.
What do you get when you combine huge appetites for more spending and a general reluctance to raise the income or sales tax, not to mention a governor who refuses to acknowledge the state’s dire fiscal realities? A potential fiscal trainwreck.
February 7th, 2008
First it was slowing state revenue, thanks to the slowing economy. Now it’s slowing interest income on the state’s investments, thanks to the slowing economy.
Over the next two years, that lost interest income could add up to real money, and that could only aggravate the state’s deteriorating fiscal position. So says a letter released Thursday from state Treasurer Alexi Giannoulias.
In the last fiscal year, which ended last June 30, Giannoulias said the state earned nearly $426 million on its investments. But during the current fiscal year, which ends June 30, he predicted the interest income would total less than $400 million.
The big hit is expected to occur in the next fiscal year, which begins July 1. Giannoulias predicted interest income could drop by roughly half:
The state will feel the full impact of the lower rates and asset size in fiscal year 2009 when we project that interest income will only total between $184 million and $243 million. Previous economic downturns produced declining yields and declining investment balances for up to two years.
Even if the yields return to fiscal year 2007 levels faster than anticipated, total interest income will probably not rise to previous levels because the amount of funds invested will still be smaller. We anticipate that our interest income will not recover to fiscal year 2007 levels for quite some time.
The treasurer concludes:
This anticipated reduction in interest income poses significant challenges for the state’s fiscal outlook going forward, and I urge the Governor and members of the General Assembly to provide the fiscal responsibility and leadership necessary to offset this decline. At the same time, the State Treasurer’s Office will work to further enhance the state portfolio and continue to protect and secure state investments from unnecessary risk.
The interest income is allocated under a statutory formula. In the last fiscal year, the state’s general revenue fund — its central checking account — got 47 percent of the dollars. The rest went to special-purpose funds.
UPDATE 1
The State Journal-Register has more.
UPDATE 2
I should have noted this earlier. State officials are mulling a short-term borrowing plan to help play down a backlog of bills.
February 5th, 2008
Many of Obama’s former colleagues in the Illinois Senate are among the droves of people gathering for his event. They say a President Obama could help Illinois while putting a more progressive face on the nation.
“This would be the greatest thing that could possibly happen to us,” said Sen. Terry Link, D-Vernon Hills. “Here’s a guy that knows Illinois, knows our needs, came out of the General Assembly, has worked with all of us. He knows what we need in roads and transportation. He knows what we need in capital. He knows what we need in schools. He knows the state from top to bottom.”
Sen. Jacqueline Collins, D-Chicago, added: “Of course it would be beneficial to the state, but more importantly it would be beneficial to the world community because of the image of where we’ve moved in the 21st century — where we an elect someone who represents the diversity of America. I think he would give a face to the world community that we have arrived as a society where we can welcome people in that have not been represented in the office of the presidency.”
February 5th, 2008
Obama campaign manager David Plouffe just spoke to the flock of reporters gathered in the press room. He downplayed expectations for the day, saying the campaign would be please if it tied with Clinton for delegates, while predicting the primary fight will drag on well past today.
In future contests, he said the campaign may actually get to spend time in each state voting.
“We think that as we head into the rest of these states in February and March, we’ll have time to spend in them,” he said. “We think we’re better organized. You’re not dealing with a mammoth day.”
Indeed, it seems like people like Clinton less the more they see her — and Obama the more they see him.
Meanwhile, in an interview broadcast on CNN, Obama did his own part to downplay expectations today, saying, “I still think that Sen. Clinton is the favorite.”
February 5th, 2008
Illinois Senate President Emil Jones Jr., D-Chicago, stopped by the grand ballroom at 2:15 p.m. — way early — to get situated.
Another gentleman took Jones through the ballroom and adjacent press room, then gave him a series of directions concerning the door through which he will be arriving later and where he will be standing.
Jones is a political mentor of Obama’s. Jones views Obama as a political son.
I asked Jones what an Obama presidency might mean for Illinois.
“Obama knows the needs of Illinois,” Jones said. “He’s a U.S. senator. He served in Springfield. And so, I’m quite certain having someone in the White House who’s from Illinois will give the state an advantage. I’m sure he will listen to the needs of the (Chicago) mayor, the governor, even his fellow Sen. (Dick) Durbin. So it will be a tremendous asset to the state of Illinois.”
UPDATE 1
Jones also repeated a joke I’ve heard him make previously.
“I plan to be the ambassador to Ireland” during an Obama presidency, he said.
Apparently, this is a snub at all the Irish who have historically dominated Chicago — and, by extension, Illinois — politics. They include Chicago Mayor Richard Daley (former and current) and House Speaker Michael Madigan, D-Chicago.
Jones is African American.
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