Capitol Fax.com - Your Illinois News Radar » 2006

Thursday, Dec 7, 2006 - Posted by Rich Miller

Let’s say, just for argument’s sake, that Barack Obama runs for president and wins. The governor would then appoint Obama’s successor. Who should that Democrat be?

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Local officials partly to blame?

Thursday, Dec 7, 2006 - Posted by Rich Miller

The Decatur Herald & Review’s editorial board ponders the lasting impact of last week’s devastating ice storm.

…Ameren officials could have done a better job of telling residents exactly what to expect. The fact is that Ameren could have sounded a more dire alarm earlier and told residents without power the severity of the problem. […]

It may have been because of Ameren’s apparent lack of alarm, but the response by county, city and state officials was also unnecessarily delayed.

The Illinois Emergency Management Agency is willing to help in disasters like this, but their philosophy is to only go into a community when asked. That makes sense, since local officials should know best when help is needed.

But one has to wonder why it took until Monday for Decatur Mayor Paul Osborne and Macon County Emergency Services Director Phil Anello to ask for help. The National Guard units that are now helping out in Decatur spent the weekend assisting folks in East St. Louis. Obviously, there was help available.

And the repercussions for Ameren are just beginning.

In action Wednesday, the Illinois Commerce Commission began gathering information to launch an investigation of Ameren’s much-criticized recovery effort, which has left tens of thousands of Illinoisans without electricity for the second time in a year.

“No utility can totally prepare for this type of storm, but we have an obligation and responsibility to question whether Ameren fully planned its response and recovery from a logistical standpoint,” said ICC member Erin O’Connell-Diaz.

While regulators prepare to launch their probe into the embattled company, House Speaker Michael Madigan’s office said Wednesday he will press ahead with a plan to block the company from raising rates by up to 55 percent on Jan. 2.

Madigan’s action comes despite Ameren’s statement last week that the ice and snow storm that brought down tree limbs and power lines in much of its downstate territory serves as a reminder of why state lawmakers should not freeze electric rates for another three years.

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Is the feud over?

Thursday, Dec 7, 2006 - Posted by Rich Miller

Margaret Mell’s illness and tragic death appears to have forced Gov. Blagojevich and Alderman Mell to bury the hatchet.

Governor Blagojevich was a pallbearer Wednesday, and according to close advisors, his bitter family feud with Alderman Mell over political and financial differences has been on the mend in recent weeks as the family came together in the final weeks of Mrs. Mell’s illness.

“I think there was a realization by everybody that life is way too short to be spent being at odds,” said Ald. Bill Banks, family friend.

“All families have troubles at times, and I hope for them that things have gotten better. I think that is important,” said State Rep. Tom Cross, family friend.

The entire family reportedly got together for the first time in two years on Thanksgiving when it was clear that Mrs. Mell wouldn’t make it to another holiday. The governor took an active role in comforting Alderman Mell after the service, so it is likely that Mell will be attending the second Blagojevich inauguration next month, and his aldermanic friends predict that he will stay in the city council for awhile, because City Hall provides him with a lot of support and comfort.

And during his eulogy, Ald. Mell seemed to indicate that the peace was permanent, in order to honor his wife’s memory.

It’s not the same house to walk into. But you know something? Both I and the kids will live the rest of our lives to make her very, very proud of us,” the alderman said.

[Comments closed and deleted at the request of family and friends of the families involved. I didn’t have time to monitor these things when I put this post up and I should’ve known better.]

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$106 billion in liabilities with no ability to pay

Thursday, Dec 7, 2006 - Posted by Rich Miller

The Civic Committee of the Commercial Club released a grim report yesterday about state finances.

Illinois’ growing shortfall in pension and health-care funding is pushing the state toward financial disaster, a report released Wednesday concludes.

The report by an elite group of chief executives from large Chicago-area companies lays out in unusually strong language the hard choices Illinois faces. It calls for significant cost cuts and warns that tax increases, including a hike in the corporate tax rate, may also be required.

“Illinois is headed toward financial implosion,” states the study by the Civic Committee of the Commercial Club, an invitation-only group of about 80 chief executives.

But the governor’s office disputes the numbers.

Gov. Blagojevich’s office disputed a report on state finances by the Civic Committee of the Commercial Club of Chicago, saying its estimate of a $106 billion shortfall is based on “flawed and inaccurate” information.
“There are several flaws with this report, probably due to the fact that the Civic Committee did not seek the state’s consultation in any way,” said Becky Carroll, spokeswoman for the Office of Management and Budget.

Carroll said Medicaid bills owed to providers do not total $1.7 billion, but only $1 billion.

The state also says the unfunded liability for pensions is not as bad as the committee reports, and in fact is $2.1 billion less than pension system actuaries anticipated at the end of fiscal 2006 on Sept. 30.

Here are the debts…

* $46 billion in future pensions for state employees and retirees, plus payments on a $10 billion pension bond issued in 2003.

* $48 billion in unfunded commitments for future health insurance for state employees and retirees.

* $1.7 billion in unpaid bills to Medicaid providers, such as doctors who serve low-income residents.

Proposed remedies include…

* Increasing employee contributions to pensions and implementing a “defined contribution” system, such as a 401(k) program, for future employees.

* Aligning employee and retiree health benefits with those in the private sector, including increasing deductibles and co-payments and converting to a managed-care system.

* Shifting all Medicaid recipients to a managed-care system, which the study says most other states already have done. Only 10 percent of current recipients are on managed care, the study says.

* The study also suggests increasing the personal state income tax from 3 percent to 4 percent and the corporate income tax from 4.8 percent to 6.4 percent. It also recommends expanding the state sales tax to include personal services and entertainment

You can download the entire report here.

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