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Protected: SUBSCRIBERS ONLY - Supplement to today’s edition and a Statehouse roundup

Thursday, Mar 31, 2011

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- Posted by Rich Miller   Comments Off      


House Bill 14: Setting the Record Straight

Thursday, Mar 31, 2011

[The following is a paid advertisement.]

Myth: HB14 allows Illinois utilities to automatically raise rates every year.

Fact: That is not the case. Under HB14, utilities are required to submit to more frequent oversight (annual) and still are subject to stakeholder challenge and ICC prudence reviews over 8 ½ months.

Myth: HB14 eliminates much of the oversight currently provided by the ICC.

Fact: HB14 actually strengthens oversight because it makes the regulatory process a more frequent annual process that is transparent, allows discovery, holds utilities accountable for every dollar they invest and jobs they create. The ICC retains responsibility for reviewing utilities’ costs and setting rates.

Myth: HB14 provides utilities with higher-than-needed profits.

Fact: Under the Public Utilities Act, utilities are allowed to earn a reasonable rate of return. This is done through determining a return on the equity invested (ROE) for the utility. This rate has varied from rate case to rate case. This proposal only changes the way the ROE is set and is consistent with past ICC approved ROEs. Utilities still must establish that they managed work prudently at reasonable cost and stakeholder challenge and ICC prudence reviews remain.

Learn the facts. Visit SmartEnergyIL.com

- Posted by Advertising Department   Comments Off      


Question of the day

Thursday, Mar 31, 2011

* The setup

Hallucinogenic powders with names like “Ivory Wave,” “White Lightning” and “Zoom” may soon be illegal in Illinois.

The Illinois House Wednesday passed House Bill 2089, which would make the substance MDPV – the key psychoactive ingredient in those powders – illegal.

“These substances are legal in many states, although they have effects similar to cocaine and methamphetamine,” said the sponsor, Rep. Wayne Rosenthal, R-Morrisonville. “They’re sold in convenience stores as ‘bath salts,’ ‘plant food,’ but a 1-ounce package … is sold for $60, and it’s just below the street value of cocaine.”

According to Ivory Wave’s website, the powders sell for $36.31 for 500 milligrams, which is less than 2 percent of one ounce. Bath salts for foot baths typically sell for between $2 and $5 an ounce.

The street value of a comparable amount of cocaine is $80 to $100, according to Montgomery County Sheriff Jim Vazzi, who brought the proposal to Rosenthal.

* The Question: Should this substance be banned? Take the poll and then explain your answer in comments, please. Thanks.


- Posted by Rich Miller   38 Comments      


Stop accepting the numbers as truth

Thursday, Mar 31, 2011

* It blows my mind that almost nobody is considering a recount of Chicago’s miserable census results. The city is down 200,000 people, but when you drill down, the numbers just don’t look right to me and to others I’ve consulted. Yet, the media is meekly accepting the figures as carved in stone or something. From a Sun-Times editorial

Admit it.

The news that Chicago was the only top 10 big city in the nation to see its population shrink over the last decade had you asking yourself:

What am I still doing there?

Or is it just us?

Detroit appealed its count 10 years ago and added 50,000 people. It’s planning yet another recount. New York City is likely to ask for a recount as well.

Yet, Mayor Daley is silent and the media just accepts the figures as gospel.

* For crying out loud, even Murphysboro is doing a recount. Suburban Westmont is also considering an appeal. It’s a pretty common thing. The city would have to pick up the cost, but the state might be convinced to kick in since Illinois narrowly missed out on keeping its 19 congressional seats intact.

Here are just a handful of stories from around the country about recounts…

* Davenport mayor presses for census recount

* Plainfield, NJ Seeking Census Recount

* White County [TN] is considering a possible Census recount

* WEST PALM BEACH, Fla. — West Palm Beach wants a recount after its latest U.S. census figures left the city about 80 residents short of 100,000.

* Little Flock, Ark. Mayor Challenges Census Bureau Count

* NC towns appealing census data due to fears of losing funding

* Roswell, NM to appeal census count

It’s time to at least consider it.

- Posted by Rich Miller   66 Comments      


Madigan issues not so veiled threat

Thursday, Mar 31, 2011

* I told subscribers weeks ago that we might expect the General Assembly to use the long-dormant conference committee process to iron out differences between the House and Senate budget proposals. Senate President John Cullerton was the one who brought it up to me, but yesterday House Speaker Michael Madigan broached the topic as well, and in a way that appeared to be a shot at Cullerton

Reconciling those, and therefore the different chamber’s budget bills, could be troublesome.

Madigan laid out one possibility Wednesday during the Elementary and Secondary Education Appropriations Committee. When the Senate and the House can’t come to some kind of agreement on a specific bill, five members from each chamber meet and try to hammer out the details in a conference committee.

Because the House’s $33.2 billion revenue projection is more conservative than the Senate’s $34.3 billion projection, Madigan said Senate Republicans might be inclined to side with the House in such a meeting.

“In the Senate, I think the people that want to raise the numbers would be the Democrats, and they would have three appointments on that conference committee, and they ought to be out voted,” Madigan said. “The report coming out of the conference committee should be for the numbers contained in the House bill(s).”

Actually, conference committees were used during the early 1990s. But the system got out of hand as lobbyists and members started inserting major legislative changes into long conference committee reports. So, it was stopped.

* But the scenario might not work as Madigan envisions. The Senate Republicans aren’t yet willing to completely abandon their Democratic colleagues and throw in their lot with the Speaker

State Sen. Matt Murphy, R-Palatine, the Senate GOP’s budgeteer, said he’s not sure how a conference committee on budget legislation would play out.

His Republican colleagues in the Senate generally lean toward more conservative budget numbers and didn’t agree with the Senate’s adopted $34.3 billion projection, he said, with a caveat.

“We also felt like a number a little bit higher than what the House came up with is reasonable as well,” he said. “I think it’s a little premature for us to start to weigh in, and choose sides, in a conference committee that I don’t know is even going to happen.”

* Meanwhile, some in the media focused attention on the apparent detente between Madigan and House Republican Leader Tom Cross

A truce broke out in the Illinois House Wednesday as Democrats and Republicans embraced the outline of a budget plan that is more conservative than the one proposed by Gov. Pat Quinn and would cut money for schools.

In a rare side-by-side appearance, House Speaker Michael Madigan, D-Chicago, and House Minority Leader Tom Cross, R-Oswego, acted like old chums rather than political warlords out to crush each other. They led the House in allocating billions of dollars for debt and pension payments and setting out spending plans for areas including education.

Heh

As Madigan and Cross faced reporters, shoulder to shoulder, after a committee hearing, both brushed off the idea that there was ever bad blood between them.

“I don’t think there ever was a problem. Was there, Tom?” said Madigan, who routinely has bottled up Republican bills in the Rules Committee and repeatedly referred to Cross’ caucus as “nonparticipating dropouts.”

“I don’t remember a problem,” said Cross, whose political organization put up billboards throughout northeast Illinois blaming the state’s fiscal problems on Madigan.

“Maybe some journalists thought there was a problem,” Madigan said.

Yeah. OK.

Madigan teamed up with Cross and the Senate Republicans the last time he went up against a free-spending governor and Senate President. Cross eventually broke with Madigan over the capital bill (with Cross siding with Rod Blagojevich and Emil Jones) and the two have not cooperated since then. Until now, that is.

* The school cuts are just part of the package

The latest projection from Springfield is that schools can expect at least $600 million less than last year. […]

Rep. Will Davis, D-Homewood, said there will be $200 million fewer state dollars, and nearly $400 million fewer federal dollars this year. Davis, who will craft the education budget in the House, said he’s been told he can spend no more than $6.8 billion. […]

Although school districts have received less money and delayed payments from the state, ISBE is still advocating for more education funding. The agency recommends $7.6 billion in state funding for fiscal year 2012 budget, more than 5 percent more than the governor’s proposed $7.2 billion.

ISBE is going to be sorely disappointed, and this story about schools hoarding cash reserves won’t help their cause

The statewide total of $8.9 billion unspent at the close of the 2010 budget year is enough to cover the entire state portion of public school budgets across Illinois next academic year, though districts stress that the money isn’t just sitting around for no reason — some of it is meant for future school expenses, building projects and other uses.

They say that while these balances can help stave off staff or program cuts, they cannot eliminate the need for them. Many districts that lay off teachers or cut programs have already spent down their reserves, and school officials say it’s irresponsible to use fund balances, which the state likens to checking or savings account balances, for ongoing expenses.

Fund balances are widely considered prudent by school officials weathering Illinois’ fiscal crisis, but they rile taxpayers who say districts are hoarding their money and should give some of it back by lowering tax bills.

The balances have grown by $3.6 billion since 2004-05 and now average about 40 percent of districts’ main operating revenue, up from 30 percent five years ago. The Illinois State Board of Education’s barometer for healthy fund balances is at least 25 percent — enough to cover three months of expenses.

The Tribune found that 8 of 10 school districts had fund balances exceeding that amount when the books closed on June 30, 2010. Nearly half of districts reported fund balances of 50 percent or higher, and 70 school districts — many in the Chicago area — had balances equaling 100 percent or more, enough to cover a whole year of expenses.

* And we can expect to see much more hand-wringing as reality sets in on the other appropriations committees

Madigan and Cross have settled on a revenue projection about $600 million lower than Quinn’s. After covering various fixed costs, such as pensions, they’re allocating that money to five different broad categories: $6.9 billion for education, $1.2 billion for general services, $2.1 billion for higher education, $12 billion for human services and $1.7 billion for public safety.

Now House appropriations committees are supposed to decide which particular programs get money and which ones don’t. The demand far exceeds the amount of money available.

“We’re going to try to figure out how to stick a 10-inch foot in a 5-inch shoe,” said Rep. Sara Feigenholtz, D-Chicago.

And don’t forget the lobbyists

Meantime, dozens of lobbying groups circulated through the Capitol Wednesday calling on lawmakers to reverse cuts proposed by Quinn.

In a letter distributed to members of the legislature, Southern Illinois Healthcare President Rex Budde, said Quinn’s proposal to reduce Medicaid spending by $552 million could result in delays to bricks and mortar improvements at its hospitals and other facilities as well as cuts in services and physician re-cruitment.

“We urge the General Assembly to reject the proposed Medicaid cut,” Budde noted in the letter.

* And the Tribune editorial board contradicted itself today in an editorial against a Pat Quinn borrowing plan that would capture a higher rate of Medicaid reimbursement

Quinn spokesman Kelly Kraft responds that paying interest costs on another $2 billion in debt might still leave Illinois with a good chunk of the $175 million Medicaid reimbursement. She notes that the Republican proposals couldn’t be enacted soon enough to produce $2 billion in the current fiscal year. And, she says, the higher income tax isn’t producing new money fast enough to meet the other demands on that revenue and also pay these Medicaid bills. We won’t argue. [Emphasis added.]

Um, so the state shouldn’t borrow, but it might be a good idea? I don’t get it.

* Related…

* Press release: Senate Democrats Respond to GOP Budget Suggestions

* John Cullerton: Give new era in state Senate a chance

* House bill would require state contractors to stay in Illinois

* Tuition bills fail; SIUE finances still troubling: Two bills pending before the higher education committee in the state Senate would have frozen public university tuition for two years.

* Press release: Cross and Madigan co-sponsor budget proposal

* Schools stockpile large amounts of money in fund balances - Taxpayers, school administrators debate how much is too much money in reserves

* Inspector General: City wastes $18 million a year on truck drivers

- Posted by Rich Miller   32 Comments      


Can everybody finally settle down now and get to work? Thanks

Thursday, Mar 31, 2011

* Perhaps now all the Nervous Nellies will stop claiming that the sky is falling

News reports that Peoria-based Caterpillar Inc. was thinking of exiting Illinois were misleading, Doug Oberhelman, chairman and chief executive of the construction and mining machine maker, said Wednesday.

The media read too much into his recent letter to Illinois Gov. Pat Quinn, he said.

“The headlines were sensational — they said things like ‘Cat leaving Illinois,’ and lots of other things, which isn’t what the letter said,” Oberhelman said in an address to a U.S. Chamber of Commerce gathering in Washington, D.C.

“I actually said, I’m looking forward to finding ways to invest more in Illinois and to change the business climate,” he said at a summit hosted by the chamber’s Center for Capital Markets Competitiveness.

The business climate in this state is in definite need of improvement. If nothing else, the shock from those nutty headlines might hopefully spur Springfield to act.

* Much of the reporting and commentary on this story has been crazily sensationalistic and just downright horrible. Here’s just one goofy example

Joliet became part of TV news coverage of the Caterpillar story Sunday when Andrew Mihelich, one of the city’s mayoral candidates in Tuesday’s election, held a quickly staged rally in support of the company and invited coverage of the event. Four Chicago TV news crews came to town, and at least two stations aired footage of the event attended by about 40 of the candidate’s supporters, many of whom held up “Mihelich for Mayor” signs and wore Mihelich T-shirts.

No Caterpillar employees were even at that rally

About an hour into the rally at Mihelich campaign headquarters, no Caterpillar workers could be found. But Keith Godsey of Joliet, who said his father is a Caterpillar retiree, was there and said he supported Mihelich’s efforts.

It was pure politics and the media fell for it

Joliet City Councilman Warren Dorris, another Joliet mayoral candidate and a former manager at the Joliet plant, said Sunday that he thought the news coverage of Oberhelman’s letter was overblown.

“I worked for that company for 36 years,” Dorris said Wednesday. “Caterpillar has always challenged the state of Illinois and the governor to improve the business climate of the state.”

Dorris said he was “not surprised at all” by Oberhelman’s comments Wednesday. “His letter was intended to open dialogue. It did that. Unfortunately, some people took it and made political hay.”

Dorris has been critical of Mihelich’s rally, saying it was an attempt by a candidate to gain attention for his campaign.

Dorris is exactly right.

- Posted by Rich Miller   14 Comments      


Protected: SUBSCRIBERS ONLY - Today’s edition of Capitol Fax (use all CAPS in password)

Thursday, Mar 31, 2011

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