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What just happened?

Thursday, Sep 11, 2008 - Posted by Rich Miller

* Best lede of the day…

In a move aimed at insulating themselves from pre-election charges of being a do-nothing legislature, members of the Illinois House Wednesday took steps toward putting a statewide construction program on the books

* Rather than focus all that much on the details of the Lottery lease, the big debate yesterday was over why the House Democrats had provided a revenue stream for the capital projects package, but no actual capital projects

But the House bill under consideration did not specify which capital projects the lottery lease money would fund.

“When are you going to pass the jobs bill? When are you going to invest in building schools and hospitals and fixing our roads and our bridges and investing in the public transportation needs of our state?” said Governor Blagojevich.

But Flynn-Currie says the House bill could not be specific about spending because no state has ever leased its lottery.

“We don’t know at this moment whether the idea of leasing the lottery will hold water. We probably won’t know for six or eight months whether we have a done deal,” said Flynn-Currie.

That’s true, but the story behind the story which you probably won’t see in the newspapers is that the House Democrats don’t want to give the House Republicans any juicy projects before the November elections. They also would rather deal with a new Senate President, rather than sit down with Emil Jones before he retires.

* And this is the usual Statehouse stuff

But the House didn’t pass a spending plan for construction projects. Many House members complained they were only doing half the job.

“The audacity of anyone calling this a capital bill is insulting,” said House Minority Leader Tom Cross, R-Oswego.

Cross urged leaders to sit down and work out a spending plan by October or this would be the “biggest political hoax we’ve seen so far this year.” He then voted for the lease idea. [emphasis added]

That tidbit about somebody railing against a bill and then voting for it is often left out of these types of stories, so kudos to Finke.

* This is also the usual stuff

“At least it’s a starting point,” said state Rep. Pat Verschoore, D-Milan, a regular critic of the lottery lease who voted for the lease to move the construction program forward. “We just need a capital bill and it looks like it’s the only way we’re going to get one.”

“Madigan wants it,” is a good enough reason for most House Dems.

* More on yesterday’s action

State legislators Wednesday agreed to tap into $221 million in special funds to save the jobs of state workers facing layoffs and to keep open state parks slated for closure.

The move by House members brings cuts Gov. Rod Blagojevich announced last month one step closer to be being undone. Funding would be restored for Department of Children and Family Services workers, alcohol and substance abuse counselors and for state historic sites and parks.

* I’m kind of surprised that this didn’t get more play today

A separate measure approved by the House, although by fewer members, would ensure that Medicaid providers would receive more timely reimbursements from the state, but the $371 million to do so would not be covered by the fund sweeps. Hannig said the House wants to work with the governor to find another funding source for the Medicaid payments. Most of the state dollars would capture federal matching funds.

* And now comes the Senate’s move

The Senate is not slated to return back to Springfield until November, though some lawmakers, like state Rep. Pat Verschoore, D-Milan, think the cash-strapped agencies will pressure for a special Senate session before then.

Even if the Senate OKs the plan, it still needs the governor’s approval.

“We have several concerns with the proposed legislation,” said gubernatorial spokeswoman Kelley Quinn, who said the funds might not have enough money to support the sweeps.

* The Senate will also have to deal with this

The Illinois House on Wednesday overwhelmingly rejected Gov. Rod Blagojevich’s attempt to rewrite ethics legislation aimed at preventing him from giving state contracts to campaign donors.

The high-profile smackdown in Springfield came hours after the embattled governor argued in Chicago that lawmakers should embrace amendments he inserted into the bill to improve and toughen it.

House lawmakers instead voted 110-3 to override Blagojevich’s proposed changes, accusing him of trying to kill the ban on pay-to-pay politics rather than enhance it.

The bill’s fate is still uncertain. If the state Senate does not also reject the governor’s changes, the legislation dies.

* More on that topic

If the measure isn’t voted on in the Senate within 15 days, the entire bill and the changes die. Senate Democrats have said until they see what the House does, they don’t have plans to return to work until November.

[Rep. John Fritchey] said Senate leaders have repeatedly promised to call an override for a vote in that chamber and hopes they live up to that commitment.

* The ethics bill wasn’t the only veto override yesterday. If and/or when the Senate returns, they’ll have to deal with bill like these…

HB 1432:
Insurance coverage of sexual assault services
Originally passed 94-20-0 in the House and 56-0 in the Senate
The House overrode the changes, 77-36, on September 10, 2008
Original intent: It would require insurance companies to pay for treatment of anorexia nervosa and bulimia nervosa in addition to other mental health services they already cover.
Governor’s changes: The governor would add treatment and services for sexual abuse victims, as well as for their parents, children, spouses, siblings, domestic or same-sex partners if they die or commit suicide from the abuse.

HB 953:
Insurance coverage of autism services
Originally passed the House 100-7-0 and the Senate 48-4-3
The House overrode the changes, 84-29, September 10, 2008
Original intent: It would expand mandatory insurance coverage of mental health services to also cover marriage counseling or therapy.
Governor’s changes: It would require insurance companies to reimburse families for diagnosis and treatment of autism spectrum disorders for children younger than 21. The benefit would max out at $36,000 a year but would be annually adjusted for inflation. Families still would have to pay a co-payment and deductible as usual for their policies, but they could not be dropped from their policies simply because their children were diagnosed with a form of autism.

* Related…

* Blagojevich/ Madigan cartoon

* Illinois House approves lottery lease for construction program

* State lawmakers move forward with lottery lease

* House votes to lease Illinois lottery to finance construction

* ll. House OKs Privatizing State Lottery

* Legislator introduces bill to keep Wright’s Dana-Thomas House and other historic sites open

* Blagojevich says lawmakers may weaken ethics

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  1. - Leave a light on George - Thursday, Sep 11, 08 @ 10:54 am:

    So who were the three who voted against the ethics bill overide? One I assume was Jay Hoffman and understand why. But who and why did the other two?

  2. - Rich Miller - Thursday, Sep 11, 08 @ 11:05 am:

    ===So who were the three who voted against the ethics bill overide?===

    Hoffman, Granberg, Collins.

  3. - wordslinger - Thursday, Sep 11, 08 @ 11:19 am:

    How can you call something a hoax and then vote for it? Where’s JJ to explain when you need him?

  4. - BehindTheScenes - Thursday, Sep 11, 08 @ 11:24 am:

    O-K, so they voted to lease the lottery. Is there a major Blago contributor waiting in the wings, or is it up for bids? If they’re bidding it, how can it be worth $10B, with crowds and revenues steadily declining in Las Vegas? Is there something else going on here we haven’t heard about yet?

  5. - Six Degrees of Separation - Thursday, Sep 11, 08 @ 11:26 am:

    Channeling JJ,

    Sometimes the hoax you know is better than the hoax you don’t know.

  6. - muon - Thursday, Sep 11, 08 @ 11:35 am:

    A lottery concession could be structured to net more money to the state for education, but this version does not. Last year the state took in about $670 M from the lottery, and the bill only sets aside $600 M, an 11% cut. The state’s operation of the lottery has been growing about 1% per year, and even if the concession grows at 3% per year it will take 38 years to reach $600 M and won’t catch the projected return of the state operation. In the meantime the initial $3 B used to make up the difference will be depleted in 14 years assuming investments yielding 8.5%.

  7. - Scooby - Thursday, Sep 11, 08 @ 12:01 pm:

    The assumption made by OMB and the HDems is that the lottery will grow at 6% for the first ten years under concession and then at 3% for each year after that. Given those assumptions the $3 billion trust fund will stay solvent with a rate of return of just over 6%.

  8. - Truthful James - Thursday, Sep 11, 08 @ 1:00 pm:

    The Lottery Lease should be called the incumbent protection act

    1. It is as regressive a tax as the sales tax. The lowest income play the most and with the sales tax at least grocery costs do not have the state tax.

    2. As with any privatization scheme (Tollways, parking garages, parking meters, Skyway, etc) the costs to the users/players go up. The Lessor must obtain a private sector rate of return, which is higher than the costs of state borrowing. At least for the others there is a depreciation tax shelter generated by write down of the physical assets. Costs go up as the odds are rigged more in favor of the house.

    3. Traditionally the State must borrow to pay for public works or raise taxes if it uses a pay as you go scheme. From where is the prior revenue stream used to “pay education costs” (but in reality dumped into the General Fund) to come? Obviously, from a substitute tax levy. There is no free lunch. We are getting suckered to sit down at the more expensive table.

    Forget about chicanery in the sale of the lottery, it is the legislature that has run this shell game.

  9. - EmptySuitParade - Thursday, Sep 11, 08 @ 1:58 pm:

    I think we heard StateWideTom’s concession speech on Wednesday….he rants about the lottery, then remembers all those signed MOUs he still can cash in and votes “yes” ….wonder why he did not tell his targets. Sharp move Tomster!

  10. - The Doc - Thursday, Sep 11, 08 @ 2:36 pm:

    “At least it’s a starting point,” said state Rep. Pat Verschoore, D-Milan, a regular critic of the lottery lease who voted for the lease to move the construction program forward. “We just need a capital bill and it looks like it’s the only way we’re going to get one.”

    A microcosm of the short-term and reactionary mindset apparently permeating the legislature like a virus. Let’s pluck the low-hanging fruit because it’s there. And since BFC readily admitted that it’ll be months before construction begins, it provides minimal campaign fodder for those seeking reelection in November. For the relatively miniscule amount of idle construction workers who may be back on the job assuming the spending side is agreed upon, most of them don’t have the luxury of waiting for perhaps a year for that first paycheck.

  11. - muon - Thursday, Sep 11, 08 @ 3:05 pm:

    I understand that the Guv’s original projections were for 6% for 10 years and were used for the HDems as well. I don’t find any basis for that kind of sustained growth from other states or our own experience during the 80’s when lottery income growth was better than today. I think my choice of 3% average growth over the full 50 years is closer to reality.

    It’s also interesting to note that it takes exactly 6% growth in the lottery for 10 years and the pension rate return of 8.5% to keep the numbers over $600 M per year. Sustaining 6% would be impressive, but even the 8.5% investment return could be hard to meet as well. The bill just passed limits many investment choices that the Treasurer might use to achieve the long term portfolio diversity needed to get a high rate.

  12. - Scooby - Thursday, Sep 11, 08 @ 3:23 pm:

    Actually if you had 6% growth of the lottery for ten years the rate of return needed on the investment of the education fund is only a little over 6%, not 8.5%.

  13. - muon - Thursday, Sep 11, 08 @ 3:42 pm:

    I’ll have to disagree. With 6% return on the investment and 6% for 10 years on the concession and 600 M a year transfer out, the fund is depleted in 14 years. The concession doesn’t generate 600 M until year 28.

    In any case even with 8.5% on the investments and 6% growth for ten years, the total to education over 50 years is substantially less than if the state operates the lottery at 1% growth. Ironically, the best way to get the most to education long term under this form of concession is to allow the transfer to education to drop below 600 M in the early years so that the trust fund maintains more principal into the later years.

  14. - Laura - Thursday, Sep 11, 08 @ 4:43 pm:

    Rich, thanks for even mentioning the other AV’s that were overridden yesterday. I truly hope that the members of the House who voted not to accept the Gov’s AV to HB 953 will consider addressing the lack of insurance coverage for kids with autism during the veto session with SB 1900. It’s such a shame that our state’s leaders can’t put aside politics to really help these children and families. The Governor’s AV’s this year were not the only option to get this done so it leaves one pondering, “what’s the real problem?”. Shame on them, they have no idea the devastating effects of this condition on a child, on the entire family. Their actions in this regard causes one to question their humanity. Maybe too long in politics allows one to forget how important our children are, what if their child or grandchild was affected with an ASD? After the vote, when I told my 10 year old with autism what happened, he said, “mom, how will we tell all the families?”.

Sorry, comments for this post are now closed.

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