Question of the day
Friday, Feb 6, 2015 - Posted by Rich Miller
* Gov. Bruce Rauner’s administration has just contracted with his new CFO Donna Arduin’s consulting firm for $30,000 a month…
Sole Source Only Justification: The Governor’s Office of Management and Budget is giving notice of its intent to enter into a sole economically feasible source contract with Arduin Associates, Inc. to provide consulting services for continued implementation and necessary adjustment of the State’s 2015 budget to assist in preparing the State’s 2016 budget.
Total Amount of Award: $120,000.00
Length of Initial Term: 4 [months]
Contract Begin Date: 02/02/2015
Contract End Date: 05/31/2015
* Ms. Arduin…
* The Question: Caption?
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* Remember this Tribune story from the other day?…
Starting in 2017, Illinois and other states that also expanded their programs are required to start paying a small portion of the bill, rising to no more than 10 percent of the total tab. State health officials estimated in 2012 that Illinois’ portion of the expansion would cost $573 million from 2017 through 2020.
But far more people signed up in 2014, the expansion’s first year, than the state expected. Based on multiple interviews and a Tribune analysis of government data, Illinois will pay at least $907 million from 2017 through 2020 because of those new members. The tab could surge even higher, though.
A document sent by Quinn’s office to the federal government over the summer significantly raised the per-person estimated cost, bumping the state’s total outlay to $2 billion, using 2014 enrollment numbers, more than three times the original estimate.
* The story was accompanied by this startling graph…
The $882 figure was from a June, 2014 waiver proposal drafted by Gov. Quinn’s office, not the Department of Healthcare and Family Services. That’s crucial to what we’ll get to in a moment.
* The Tribune editorial board thundered from on high…
Two years from now, when Illinois taxpayers start covering a portion of the expansion costs, they’ll be paying far more than the $573 million they were told they’d have to pay from 2017 through 2020. The real cost will be at least $907 million. And a document sent to the federal government last summer by the office of then-Gov. Pat Quinn said that number could swell to $2 billion.
Chalk it up as one more failure of past management that Gov. Bruce Rauner faces Wednesday as he delivers his State of the State address.
* But can those numbers really be correct? Are we looking at almost doubling the per member, per month cost? I reached out to Samantha Olds Frey. Samantha probably knows more about Illinois’ Medicaid program than anyone alive. From her bio…
Samantha Olds is the Executive Director of the Illinois Association of Medicaid Health Plans. Prior to joining the association, Samantha was Speaker Michael J. Madigan’s Human Services & Medicaid budget analyst. During her tenure on the Speaker’s staff, Samantha helped negotiate and craft the Medicaid Reform Act of 2010, the $2.7 billion Medicaid reform package known as the SMART Act of 2012, and the Medicaid Expansion package authorized by the Affordable Care Act in 2013.
The Illinois Association of Medicaid Health Plans represents pretty much all insurers.
* Sam and I talked the other day and she sent me a rebuttal to the Tribune the next morning. I asked her to flesh it out a little more and she sent me this today…
Good Afternoon Rich,
I feel like I am saying the same thing over and over again. Simply that the $882 was not a real number and that the cost is significantly lower than that. I can try to explain more if you would like. It is just that there are a lot of Medicaid experts that I have spoken with and no one has quite been able to get to that high of a cost. We truly do believe it was a number created for negotiation purposes. It was also a projection and not based off of actual costs. In other words, the $882 was the ceiling of what could happen. However, we now have data and are seeing that what actually did happen was that ACA adults cost roughly $300 or less per month. (To put this in context, my exchange plan costs $333 and offers fewer benefits than the Medicaid program.)
1) The estimated cost of $454 to $882 does not in anyway reflect the true costs of Medicaid PMPM [per member, per month] nor does it reflect the cost of ACA individuals. The $882 amount was created by the Governor’s office and not HFS. At this point it is unclear what went into developing the $882. All we know is that in no way shape or form is it tracking with the true cost of the program. I am not a waiver expert, but it is my understanding that in the process of negotiating a waiver the state puts forth as high of costs as possible for the purpose of having a strong starting point. I am also aware that the Chicago Tribune was well aware that the $882 was not reflective of what HFS is seeing as the true cost of ACA adults.
2) I have attached 2 documents that will better reflect that cost. The first is a spreadsheet that tracks the cost of Medicaid since FY03. The other demonstrates what health plans are paid to serve the ACA population. When you look at the averages you see that we are right around $300 per member per month. It is also important to note that this is an average of averages. We have members that cost $100 and disabled seniors that cost thousands.
It is my understanding that the cost of an ACA adult will be roughly $300 per member per month. In fact, HFS is tracking a cost of roughly $230 per member per month right now. However, as the year goes on it is normal to see the later months have a higher cost than the earlier months. Due to this naturally occurring process I suspect we will see a cost of $300 per member per month or slightly lower by the end of the fiscal year. This is 1/3rd the cost of the Tribune’s projections.
3) The $882 was used to put the state in a good position to negotiate with the federal government. It included everything and the kitchen sink in order to draw in more federal resources for the program. It is my understanding that this is normal in negotiations on both the public and private side.
To put it simply, the $882 is not reflective of the cost of the program and it is my understanding that the Department explained this to the Tribune. Medicaid Managed Care Organizations and HFS believe that the average cost of a newly eligible or ACA adult is $300 or less per member per month.
As always, thank you for all that you do and let me know if I can provide any more information.
Warmest regards,
Samantha Olds Frey
Emphasis added to show that, according to Olds Frey, the cost is only about a third of the projected per member per month costs claimed in the Tribune story.
* And as far as the Tribune’s earlier praise for Indiana’s Medicaid cost sharing ideas? Well, Olds Frey had this to say…
Cost sharing for Medicaid clients actually costs the state money. The administrative costs of collecting co-pays and premiums is incredibly high. This is especially true in the Medicaid program when you have union workers spending hours to collect a $20 premium.
Cost sharing for Medicaid clients decreases the quality of care. There is evidence all over the place that shows even a simple $2 co-pay decreases the likelihood of a Medicaid client seeking preventative care. Clearly a copay does not keep a client from getting sick though. Further evidence of this is that most Medicaid MCOs have eliminated copays because they want their clients to seek preventative care out as soon as possible.
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Soft landing for some Quinnsters
Friday, Feb 6, 2015 - Posted by Rich Miller
* Greg Hinz reports on some former Quinn administration PR types…
Abdon Pallasch, who was a deputy budget director, now is the new communications director for Cook County Sheriff Tom Dart.
The Illinois Department of Revenue’s Sue Hofer and health care spokesman Mike Claffey are at City Hall. She’s the new spokesman for Mayor Rahm Emanuel’s budget office, he’s at the Department of Transportation.
Katie Hickey has gone to work for City Treasurer Kurt Summers.
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More bad news for Schock
Friday, Feb 6, 2015 - Posted by Rich Miller
* As if Congressman Aaron Schock doesn’t have enough problems this week. He may have to move soon. From Peoria Public Radio…
Congressman Aaron Schock’s legally-documented residence in the 18th District is listed for sale as a foreclosure.
The congressman’s home address is listed as 222 W. Detweiller Drive on his Federal Election Commission filing dated Tuesday. But a foreclosure listing has been up for more than a week, and the 35 photos posted of the property show what appears to be a vacant home.
The person listed as the last owner is William Boyd.
The five bedroom, six bath home is listed for $2.3 million. The 7,236 square feet of living space is listed as a single family residence, but it’s believed the Congressman has been renting a carriage house portion of the property not registered as a stand alone address.
…Adding… From a PPR reporter…
An update to our story: Congressman Schock says he is still renting the carriage house on the property, only now he pays rent to the bank rather than the previous owner.
* Meanwhile, a lefty blogger put a whole lot of nasty red herrings into his story, but the gist is that a couple of years ago Schock allegedly sold a house to a Cat exec who had contributed a few bucks to Schock’s campaign. The contention is that Schock allegedly sold the place for more than it may have been worth…
Congressman Schock on October 16, 2012 sold his home to the Bahajs for $925,000… Zillow estimates that the house was worth approximately $695,000 that month.
Zillow ain’t always accurate. Just sayin…
I’m not sure at all about that blog piece, campers. I see some real problems with it, including the blogger’s bizarre vitriol. But I figured some of you would post it in comments because it’s being linked all over the place and some have already e-mailed me about it, so I wanted to head you off. Let that one be for now.
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Doing the budget dance
Friday, Feb 6, 2015 - Posted by Rich Miller
* The state’s $300 million shortfall for child care programs took on a human face yesterday during a Senate hearing…
Chandra Ankoor is a 24-year-old single mother from Springfield. While she is working, she sends her three daughters to child care that is partially paid for with the help of the state.
If it weren’t for this assistance, she says it would cost her every dollar she makes, and then some, to afford the cost of child care.
“I will have to look at three little girls’ faces and tell them that there’s no where else for them to go. And I’m facing going from working three or four jobs to possibly being homeless,” Ankoor said.
* So, what to do? An outline from the AP...
Representatives from the governor’s office said Rauner wants lawmakers to grant him wider authority than he currently has to maintain underfunded portions of the budget by reallocating money from other areas that aren’t “critical priorities.” Rauner’s budget director Tim Nuding said the governor’s office wanted the flexibility to address all problems in the current year’s budget.
“We don’t have the … authority to spend another dime until the legislature gives us the authority to do it,” Nuding said. […]
The idea is proving unpopular with some members of the Democratic-run General Assembly, who are concerned about which areas Rauner might cut to reallocate funding elsewhere. They’re also accusing the Winnetka Republican of using some programs, such as subsidized day care, as pawns as he tries to pressure Democrats to give him the broader authority he wants. Rauner has pledged to manage the state’s budget crisis without raising taxes.
* More on the scope of Rauner’s original request…
“It is very broad, what has been put on the table and asked for, very unusual. We have done emergency budget acts before to give flexibility to previous governors (but) nothing in the terms of what has been requested,” said state Sen. Heather Steans, a Chicago Democrat and chairwoman of a Senate budget panel.
* Even so…
House Speaker Michael Madigan, D-Chicago, on Wednesday noted that it would not be unprecedented to give Rauner that authority.
“Prior governors received extraordinary authority from the legislature — (Govs. Jim) Thompson and (Jim) Edgar — in the short term to reduce spending and reduce the level of appropriation,” Madigan said. “I’d be open to those ideas.”
Likewise, Senate President John Cullerton, D-Chicago, said the legislature took similar action during the 1992, 2010 and 2011 budget years.
“Gov. Rauner has asked legislative leadership to work with him on legislation to address the projected $1.5 billion gap in the current fiscal year state budget,” Cullerton said.
He added that the administration is “refining” its request for additional powers.
* Meanwhile…
Republicans said the child care program is just one of many shortfalls they expect to see from the budget mess and Rauner wants the ability to address those programs, too.
State Sen. Chapin Rose, R-Mahomet, said rehabilitation service programs are underfunded and looking for help.
State Sen. Tim Bivins, a Republican from Dixon, said court reporters are also underfunded and could be out of cash by March, creating problems in the court system.
And then, of course, the coming payroll crisis at the state’s prisons.
* WUIS on the governor’s negotiating posture…
Rauner’s people told the committee that keeping the child care program afloat is his top priority, but they warned that it is not the only thing in trouble. “This will not be the last crisis that comes before this committee in FY 15,” Nuding said. He said that the Department of Corrections could be unable to make payroll at some prisons in March or April.
Goldberg and Nuding would not commit to supporting standalone funding for the day care program if a deal cannot be struck on getting their boss control over the budget. And why would they? If they agree to fund programs near and dear to Democrats even if Rauner doesn’t get what he wants, then what leverage will he have in negotiations? That may seem callous, but it is how budgeting often works.
Rauner stands the chance to gain control over the current budget before he even presents his ideas for next fiscal year. From a purely operational perspective, he would be able to move money around and possibly tap special funds to patch the current deeply flawed budget and keep state government going. He would also be able to begin shaping the budget, albeit in limited ways, to his agenda almost immediately. On this issue and the budgeting process at large, one has to wonder if Rauner may be thinking of a quote from his friend Chicago Mayor Rahm Emanuel (which is a riff on a quote from Winston Churchill): “You never let a serious crisis go to waste. And what I mean by that — it’s an opportunity to do things you think you could not do before.”
Agreed.
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* Sun-Times…
The Illinois Senate on Thursday passed an increase in the state’s minimum wage to $11 by 2019, one day after Gov. Bruce Rauner used his State of the State speech to pitch a lower, more gradual increase.
The bill by Sen. Kimberly Lightford, D-Maywood, passed 35-18 and now moves to the House. It increases the minimum wage from $8.25 to $9 by July 1. The wage would then increase by 50 cents every year until it reaches the $11 ceiling. It also includes a tax credit for businesses with fewer than 50 employees. .
* The Tribune claimed the vote could be merely a symbolic gesture…
Senate Republicans criticized the move, saying it was a slight to a governor who indicated he wanted to work with Democrats to raise the wage during his tenure. Rauner says any increase in the wage should be packaged with business-friendly measures such as an overhaul in the workers’ compensation system and limits to lawsuits.
“I would just ask that you take the governor on his word that this is something he is going to deal with, and then we can continue the conversation,” said Sen. Kyle McCarter, R-Lebanon.
Support for an increase remains questionable in the House, where a similar measure stalled last fall. Speaker Michael Madigan, D-Chicago, said he supports the effort and is working to gather votes.
* Some in the business community, however, are pointing to a San Francisco bookstore whose owner supported the living wage concept that is now going out of business. From a letter to its customers…
In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018. Although all of us at Borderlands support the concept of a living wage in principal and we believe that it’s possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st. The cafe will continue to operate until at least the end of this year.
Many businesses can make adjustments to allow for increased wages. The cafe side of Borderlands, for example, should have no difficulty at all. Viability is simply a matter of increasing prices. And, since all the other cafes in the city will be under the same pressure, all the prices will float upwards. But books are a special case because the price is set by the publisher and printed on the book. Furthermore, for years part of the challenge for brick-and-mortar bookstores is that companies like Amazon.com have made it difficult to get people to pay retail prices. So it is inconceivable to adjust our prices upwards to cover increased wages.
The change in minimum wage will mean our payroll will increase roughly 39%. That increase will in turn bring up our total operating expenses by 18%. To make up for that expense, we would need to increase our sales by a minimum of 20%. We do not believe that is a realistic possibility for a bookstore in San Francisco at this time.
$11 an hour ain’t $15 an hour, but you get the drift.
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Strong finance showing for Kirk
Friday, Feb 6, 2015 - Posted by Rich Miller
* Sen. Mark Kirk had a very good fourth quarter…
Kirk raised $621,998 in the quarter that ended Dec. 31, more than twice what he pulled in during the third quarter and a sign that he is serious when he says he expects to run for re-election next year.
A copy of Kirk’s campaign disclosure form is not yet available, but a source familiar with it says it includes donations from 500 individuals and 120 political action committees and other groups. With the new money, the senator will have just over $2 million on hand in his campaign bank account.
Kirk certainly will have to raise a ton more. Insiders expect the 2016 race to cost well over $10 million, and perhaps twice that figure if he faces a top challenge in the GOP primary. But $2 million is certainly a nice place to be more than a year before anyone votes.
* He’s gonna need it and more. National Journal just released its poll of DC “insiders” and Kirk was rated as the second-most vulnerable Senator by both Democrats (26 percent, compared to 27 for Harry Reid) and Republicans (25 percent, compared to 42 for Reid). Comments by some of the Democratic insiders…
“Navy blue state, presidential year, Illinois native at the top of the Dem ticket. Good luck with that, Mark.”
“Illinois presidential turnout is going to make Kirk’s reelection really tough.”
“Recently embarrassed himself on climate change. If he continues to act like he shouldn’t be there, he won’t be.”
“If [Democratic Rep. Tammy] Duckworth runs, Kirk’s No. 1 out the door.”
From the Republicans…
“Illinois, presidential year, health concerns—doesn’t get much worse than that.”
I’m still not convinced that he’s a goner. Having a wealthy Republican governor adds a different dimension to state politics here. But if Rauner’s numbers tank, and Hillary does as well as expected here, and Kirk draws a strong opponent, then, yeah, he’s got his work cut out for him.
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Could this be one reason why?
Friday, Feb 6, 2015 - Posted by Rich Miller
* Gov. Bruce Rauner as quoted by WAWV TV, in Indiana’s Wabash Valley, just across the border from Marshall, IL…
“We’ve been cutting school funding in Illinois for a long time. We’re number 50 out of 50 states,” he said. “We’re dead last on state support for education. That’s wrong and I want to change it.”
I believe he’s referring to here is state support as a percentage of all education spending, including local spending. We’ve been at or near the bottom of that ranking for decades.
That’s kind of a misleading figure because just about all states require local school districts to pick up the full employer pension payment. Illinois picks up that tab, but doesn’t count it as part of its support for schools, which is odd.
* Anyway…
Republican Gov. Bruce Rauner’s call for a two-year freeze on property taxes stems from a a simple truth: Nobody wants to pay more of the most-hated tax of all.
The new governor’s populist proposal figures to be embraced by businesses and homeowners, who have long complained that their property taxes are too high and crave a respite from years of increases.
But local officials whose schools and government operations rely on property taxes worry how they will get by if Rauner’s proposal for a freeze goes through.
“Well, people will try to argue that,” Rauner said at a stop to discuss his initiatives in downstate Troy on Thursday. “But here’s the issue: Our property taxes are too high. We’ve got to bring them down.”
So, if he successfully manages to freeze local levies for two years, and manages to increase state spending on pre-K-12, then Illinois may move up that aforementioned ranking of state support as a percentage of all education spending.
Or maybe I’m reading too much into this.
Your thoughts?
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The long game on unions has come to Illinois
Friday, Feb 6, 2015 - Posted by Rich Miller
* The governor does have a clever retort…
After Gov. Bruce Rauner’s speech [in Mt. Vernon] on Thursday, where he called for improving the state’s business climate, several people began a loud chant, yelling in repetition “union buster” towards the governor as he exited.
During the brief speech inside the Holiday Inn, Rauner said people have been suggesting, based on recent policy statements, that he “hates unions.”
“I don’t hate unions,” he said. “Join a union. Don’t join a union. It’s all good with me.” […]
The governor said his grandfather was a “big union guy”, and he believes one “should be free to join one or not.”
“Why should you be forced to join a union?” he said. “Join if you want to. God bless you. That’s what America’s about – freedom to choose.”
* Indeed, the governor’s response has been poll-tested here by the Illinois Policy Institute…
The August, 2014 poll of 739 Illinoisans had a margin of error of ±3.6 percent.
And when you put it that way, of course people are gonna support the idea. Freedom to choose is, indeed, the American way. But that’s not what this issue is about. Instead, it’s about allowing people in union shops to get all the benefits of union representation without having to pay any dues to their representatives. And then, ultimately, to bankrupt the unions and drive down everyone’s wages.
* A 2013 article published by the Illinois Policy Institute’s site stresses the long-term nature of this fight, using Michigan’s success as an example of a hard-fought, decades-long battle…
An Olympic champion gets the gold by winning the race just before medals are handed out. But that doesn’t explain everything that put the right runner with the right training in the right race at the right moment. It takes tons of heart, gallons of sweat, hundreds of good decisions and many years. Similarly, Michigan’s story of Right to Work is one of endurance and persistence. […]
For Right to Work to move from impossible to inevitable in Illinois, reformers should focus first on the idea phase to create the environment for a future political phase. Starting with the political phase guarantees setbacks because lawmakers usually won’t stick their necks out for an idea the people won’t get behind. That’s why the Illinois Policy Institute is so critical. Like Mackinac, it understands the power of developing an idea in order to make it politically possible.
Not every impossible idea becomes reality, but strategies exist for transforming impossible ideas into reality. Illinois is becoming surrounded by states that are taking on unions to regain control of their fiscal destinies. Chances are it won’t take as long for the Illinois Policy Institute to make Illinois a Right-to-Work state as it took for Mackinac to win its victory.
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* From IEMA…
– Some of the largest earthquakes ever recorded in North America rocked the mostly rural Central U.S. between December 1811 and February 1812, including parts of southern Illinois. The strongest earthquakes in this series were estimated to be around magnitude 8.0, and were felt as far away as the East Coast.
Today, this multi-state region is heavily populated and highly developed. A similar earthquake now would cause widespread devastation to buildings, utilities, roads, bridges and other infrastructure, as well as result in many injuries and deaths. While damage would be less severe in other parts of Illinois, utility outages, road closures and disruptions to deliveries of essential supplies would significantly impact the lives of most Illinoisans.
Recognizing this serious risk, the Illinois Emergency Management Agency (IEMA) and local emergency management agencies will promote earthquake preparedness throughout February.
“Southern Illinois is adjacent to two earthquake zones, so the risk of a major earthquake is very real,” said IEMA Acting Director Joe Klinger. “We can’t predict when the next devastating earthquake will occur, but we can help people learn how to protect themselves and reduce damage to their homes.”
Klinger said people need to remember to “Drop, Cover and Hold On” when they feel the ground shaking. The phrase prompts people to “Drop” down to the floor, take “Cover” under a sturdy desk, table or other furniture, and “Hold On” to the furniture item and be prepared to move with it until the shaking ends.
There are several steps people can take to help prevent injuries and property damage at home, including:
• Strapping water heaters and large appliances to wall studs
• Anchoring overhead light fixtures
• Fastening shelves to wall studs and securing cabinet doors with latches
• Learning how to shut off gas, water and electricity in case the lines are damaged
* But folks up north have little to fear, according to the Tribune…
Seth Stein, a professor of geological sciences at Northwestern University, has written a book about the New Madrid zone disputing much of the talked-about widespread damage of the 19th century earthquakes that hit Illinois.
In Northern Illinois “the hazard is so small” for earthquakes that taking measures like strapping in large furniture is probably unnecessary, Stein said.
“If you were going to spend a dollar on a restraining strap, I’d buy a lottery ticket,” Stein said.
On the other hand, he said, folks in a place like Carbondale at the southern tip of the state may want to consider taking such steps. Even there, though, “the risk (of a substantial earthquake) is not huge.” […]
Stein says it’s unlikely an earthquake as strong as the ones in the 19th century could hit Illinois again in the next hundreds of years. Even if one did, Northern Illinois would likely face little, if any, damage, he said.
“The more you know about it, the less you worry about it,” Stein said.
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* From a press release…
Governor Bruce Rauner and U.S. Senator Mark Kirk (R-Ill.) [yesterday] released the following statement on the U.S. Department of Energy’s decision to end federal funding of FutureGen, the public-private clean coal project in Meredosia, Ill.:
“We are thoroughly disappointed in the Administration’s decision to hastily end the bipartisan FutureGen project. This decision will block advancements in clean coal and more than 1,000 new jobs in Central Illinois. We will not give up on this state-of-the-art technology and bringing new jobs to the state.”
* The administration’s explanation…
Spokesman Bill Gibbons with the federal agency told The Associated Press the department concluded the project couldn’t meet a September deadline to use its $1 billion in federal stimulus funding.
A spokesman for the FutureGen Alliance said the group has no choice but to shut down because it can’t finish the $1.65 billion project without federal funding.
* Another press release…
U.S. Reps. Rodney Davis (R-Ill.), John Shimkus (R-Ill.) and Aaron Schock (R-Ill.) [yesterday] expressed concern over the U.S. Department of Energy’s decision to end federal funding for FutureGen, a public-private project to retrofit a coal-fired power plant in Meredosia, Ill.
“This week’s announcement by the DOE to abandon FutureGen is another example of wasted stimulus funds and another failed attempt to create ’shovel-ready’ projects,” said Davis. “The administration has failed the people of Central Illinois by wasting hundreds of millions of dollars invested by taxpayers and the private sector. Instead of making it more difficult for companies to create good-paying, energy jobs, the administration should support policies that help companies working to ensure coal remains a viable source of energy for the future.”
“By the Obama Administration’s own estimates, compliance with EPA’s carbon rules hinges on the widespread adoption of carbon capture and sequestration (CCS) technology by coal-fired power plants,” said Shimkus. “It’s incomprehensible that the Administration is, with one hand, requiring coal plants to use CCS while, with the other hand, pulling the plug on a plant designed to demonstrate the technology.”
“The DOEs determination that the FutureGen Project is no longer viable is yet another example of the Obama Administration’s failure to deliver on promises made to the American people during debate of the $1 trillion stimulus.” said Schock. “What is clear is that the administration’s regulatory hostilities to coal-fired power have made it more difficult for investors to regard opportunities like FutureGen as either viable or profitable.”
* Bloomberg…
The Energy Department spent $202 million on the Meredosia, Illinois, plant about 90 miles north of St. Louis.
Investors, however, remain wary of carbon capture projects, which are unproven even as the federal government has spent billions of dollars to make the technology economically viable.
The projects aren’t a “destination for serious financial commitment,” Christine Tezak, an energy analyst at ClearView Energy Partners LLC in Washington, said in an e-mail.
That’s bad news for tackling climate change. While wind and solar power gain market share, they still represent just a fraction of power production. Coal produced about 38 percent of the electricity used in the U.S. in November, the last month figures are available, according to the U.S. Energy Information Administration, which tracks and analyzes federal energy data.
“If we are to have any hope of avoiding the worst aspects of climate change, we need CCS on a whole host of things” from coal plants to factories, Thompson said, referring to carbon capture and storage or sequestration.
* US Sen. Dick Durbin…
U.S. Senator Dick Durbin (D-IL) today released the following statement after learning that the Department of Energy has been forced to cancel federal funding for the FutureGen project due to the FutureGen Alliance’s failure to find agreement with the private partners before the expiration of the $1 billion in funding that was secured for the public-private partnership as part of the American Recovery and Reinvestment Act.
“The Secretary of Energy informed me that because the FutureGen Alliance was unable to secure the private financing necessary to meet the conditions of the project, the Department of Energy has been forced to end their participation. This is a huge disappointment for both Central Illinois and supporters of clean coal technology.
“A decade-long bipartisan effort made certain that federal funding was available for the FutureGen Alliance to engage in a large-scale carbon-capture demonstration project. But, the project has always depended on a private commitment and can’t go forward without it.
“I worked on FutureGen 2.0 believing it would create jobs in Illinois and demonstrate a viable environmentally acceptable use of coal to generate electricity. I am encouraged by the news that the Department of Energy values the injection site in Morgan County as a world class sequestration opportunity. I am hopeful that Illinois will continue to play an integral role in developing this technology.”
Since it was awarded to the State of Illinois in 2007, the FutureGen project has faced a number of challenges including reimagined technology and site relocation. Throughout the course of the project, Durbin has worked to protect the federal funding which required a private contribution organized by the FutureGen Alliance. Recently, the FutureGen Alliance ran into financial hurdles that they have not been able to overcome, such as trouble securing a private-sector loan, difficulty with two major industry partners (Air Liquid and Babcock & Wilcox) and challenges from the Sierra Club and Illinois utilities.
So, there’s a statutory deadline for using that money and Congress hasn’t yet extended the deadline. This could just be a way to prod the House and Senate to pass a bill. But the Bloomberg piece seems to indicate that investors aren’t exactly excited about the whole idea.
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On the road again
Thursday, Feb 5, 2015 - Posted by Rich Miller
* From a press release…
Daily Public Schedule: February 6, 2015
What: Governor Rauner Discusses Plans to Turnaround Illinois
Where: Decatur Club
158 W. Prairie Ave., Decatur
Date: Friday, February 6, 2015
Time: 9 a.m.
What: Governor Rauner Discusses Plans to Turnaround Illinois
Where: Gateway Building
200 Northeast Water St., Peoria
Date: Friday, February 6, 2015
Time: 11:30 a.m.
What: Governor Rauner Discusses Plans to Turnaround Illinois
Where: Oakley Lindsay Center, Community Theater
300 Civic Center Plaza, Quincy
Date: Friday, February 6, 2015
Time: 4:00 p.m.
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* Capital projects aren’t free, and the state obviously can’t pay for them out of existing revenues so we’ll see how all this works out. Erickson with the scoop…
With gasoline selling for less than $2 per gallon throughout much of the state, Gov. Bruce Rauner and his allies in the business community have launched behind-the-scenes talks with state legislative leaders to raise Illinois’ gasoline tax.
Although the governor’s office is not providing details on the negotiations, documents obtained by the Times’ Springfield Bureau outline the workings of a plan designed to finance an estimated $1.8 billion in road building and maintenance projects.
In addition to boosting the gasoline tax by 13 cents a gallon, the outline shows other revenue options on the table include a 2 percent sales tax on food and drugs, increasing the cost of registering and titling cars by $20 annually and boosting the cost of driver’s licenses by $5 a year.
But neither side is ready to discuss the tentative framework publicly. Under one scenario, the increases would be tempered with a decrease in the state’s 6.25 percent sales tax on motor fuel sales to 1.25 percent.
I woudn’t bet too much money on that huge gasoline sales tax reduction. Erickson reports it would cost the state’s General Revenue Fund $700 million. Unless that’s replaced by a different tax hike, it’s not affordable.
*** UPDATE 1 *** From Gov. Rauner’s spokesman Mike Schrimpf…
“The administration has not launched behind-the-scenes talks with legislators to raise the gas tax, or any other taxes or fees to fund a capital program. What’s being circulated by some advocacy groups is not the governor’s plan and does not have his blessing.”
*** UPDATE 2 *** Frpm the Transportation for Illinois Coalition…
“The Transportation for Illinois Coalition is committed to long-term, significant and sustainable investment in Illinois’ critical transportation infrastructure. TFIC is having many discussions around a menu of revenue options that could be used to fund such investment, but there are no negotiations going on at this point.
The Coalition looks forward to presenting a package of funding options and having serious negotiations with the governor and lawmakers to provide a meaningful fix this spring for the network of roads, bridges and transit systems that is so critical to our state’s economic success.”
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Vaccinate your kids!
Thursday, Feb 5, 2015 - Posted by Rich Miller
* Oy…
Public health officials say they are investigating a cluster of measles cases in suburban Chicago.
The Illinois and Cook County public health departments said Thursday morning that the cluster includes five children under age 1 at KinderCare Learning Center in Palatine. Lab test confirm measles in two of the children. Test results are pending for the other three children but they have been diagnosed based on clinical and epidemiological criteria.
Officials say at this time they don’t know the source of the infection.
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Credit Union (noun) – an essential financial cooperative
Thursday, Feb 5, 2015 - Posted by Advertising Department
[The following is a paid advertisement.]
Cooperatives can be formed to support producers such as farmers, purchasers such as independent business owners, and consumers such as electric coops and credit unions. Their primary purpose is to meet members’ needs through affordable goods and services of high quality. Cooperatives such as credit unions may look like other businesses in their operations and, like other businesses, can range in size. However, the cooperative structure is distinctively different regardless of size. As not-for-profit financial cooperatives, credit unions serve individuals with a common goal or interest. They are owned and democratically controlled by the people who use their services. Their board of directors consists of unpaid volunteers, elected by and from the membership. Members are owners who pool funds to help other members. After expenses and reserve requirements are met, net revenue is returned to members via lower loan and higher savings rates, lower costs and fees for services. It is the structure of credit unions, not their size or range of services that is the reason for their tax exempt status - and the reason why almost three million Illinois residents are now among 100 million Americans who count on their local credit union every day to reach their financial goals.
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[The following is a paid advertisement.[
Workers injured on the job deserve the right to reasonable compensation
In 2011, at the strong request of business interests the Workers’ Compensation “Reform” package was signed into law, aimed at lowering costs for employers in Illinois. These changes have had a negative effect on injured workers in Illinois and their ability to receive fair and reasonable compensation when they are injured on the job.
According to a study done by the Oregon Department of Consumer and Business Services, Illinois had a 17 percent reduction in workers’ compensation rates in the past two years – the steepest drop in the nation. However, Illinois employers should have realized a total premium reduction of $1 billion since 2011. Unfortunately, insurance companies have refused to reduce their premiums in accordance with their own industry’s recommendations.
Demands for additional so-called “reforms” will likely take away more rights from injured workers and further increase the insurance industry’s profits. Any future changes in laws should instead look to promote insurance premium transparency, oversight and competition – not further sacrifices by the injured worker.
For more information about workers’ compensation in Illinois, click here.
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‘Overnor Rauner
Thursday, Feb 5, 2015 - Posted by Rich Miller
* Eric Zorn…
“Raisin’ the minimum wage in conjunction with improving the overall jobs climate, will make Illinois more competitive and create a boomin’ economy while increasin’ incomes for hardworkin’ Illinoisans. As we look to make Illinois more competitive, property tax relief is one of our most pressin’ challenges.” … Gov. Bruce Rauner in today’s State of the State address.
In his bid for folksiness, Gov. Rauner dropped so many g’s you’d think he was auditioning for the part of Sheriff Taylor in a Broadway revival of “The Andy Griffith Show.”
It was distracting enough that I went through and counted. Out of 107 words in the speech ending with the “-ing” syllable, Rauner dropped the terminal g 55 times […]
Several times he mixed and matched in a single sentence: “I am personally committed to working closely together with each and every one of you — meeting together, solvin’ problems together, listening and learnin’ from each other.”
So, he dropped his g’s roughly half the time.
It’s such an obviously contrived affectation, and the fact that he can’t consistently pull it off makes it even more irritating.
Lots of Democratic legislators had never heard Rauner give a speech before yesterday, and many were mocking him after the SOTS for his silly mannerism. He may have been in Downstate yesterday, but most people in his audience were from the suburbs and the city.
Not to mention that using bad grammar to sound more folksy to the hicks offends some of us hicks whose parents were conscientious about such matters.
In attempting to build a communications bridge, he may actually be constructing a barrier.
…Adding… Steve Chapman…
Normally, he sounds like a Midwestern suburbanite, or a TV anchorman. Even in this address, he sounded his natural self on every other word. He was clearly doing this deliberately.
Why? For the same reason he wears a Carhartt jacket and a cheap watch — to make voters forget he’s a fabulously rich magnate whose father was a corporate executive and who grew up in a well-to-do North Shore suburb.
But it doesn’t work. It just makes him sound as though he’s afraid to be himself and has to contort himself into a caricature of an ordinary guy.
When it comes to taxes, spending and other government obligations, Rauner will have to expect voters to respond like grownups to hard choices. He will have to expect us to believe what he’s saying. That’s more likely to happen if we don’t hear him speak in such a fake manner. So it wouldn’t hurt for him to stop the posin’.
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* A Senate committee took a quick look at the budget mess today. Let’s start with the $300 million child care shortfall..
Top Rauner aide Rich Goldberg told an Illinois Senate committee Democrats knowingly shorted the program and then-Gov. Pat Quinn did nothing to manage the smaller budget in his final six months in office. That leaves Rauner with his first immediate budget pressure.
“And so we find ourselves in this crisis today,” Goldberg said. “Hardworking families should not have to suffer because of the prior administration’s mistakes.”
Goldberg said the crisis has to be solved without raising taxes or borrowing money from elsewhere in state government.
* And then…
“Some of those prisons are going to start missing payrolls,” Rauner budget chief Tim Nuding said.
Yep.
Worst. Budget. Ever.
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SOTS stuff
Thursday, Feb 5, 2015 - Posted by Rich Miller
* Gov. Rauner didn’t talk much about state income taxes yesterday, but Speaker Madigan was asked about the topic afterward…
Madigan said he will keep an “open mind” when it comes to Rauner’s tax ideas and suggested the governor do the same. Madigan noted many Democrats would support increasing the income tax rate — an idea the speaker said he raised with the governor but Rauner rejected. A Rauner spokesman later said the governor “believes we need to work within the framework of a 3.75 (percent income-tax rate) budget.”
Failing any more money, Madigan said he will work with Rauner to plug the budget hole using a combination of techniques that could include giving the governor more authority to cut spending, or dipping into roughly $600 million in specially designated funds.
“We have budget deficits, there’s no dispute about that. They can’t be eliminated simply by cutting,” Madigan said. “I think there has to be a balance in reduction in spending and (new) revenue.”
Subscribers know more about the spending cut authority and the special funds.
* An interesting point by the Tribune…
And while he urged lawmakers to make “choices about what’s best for the next generation, not the next election,” Rauner also unveiled a series of proposed constitutional amendments, including several he wants voters to consider in 2018 — his re-election year — rather than the next statewide election in 2016.
Few if any of those proposals will pass. Asking for the 2018 date is probably more of a subtle dig at Quinn, Madigan and Cullerton for attempting to gin up turnout with several statewide referenda last year.
* Reboot has more of Speaker Madigan’s response to yesterday’s speech…
“I’ve known Mr. Rauner before he decided to be a candidate for governor. He has a lot of strong views on a lot of public issues. He enunciated a lot of those views in the speech today, which he should do,” Madigan said in a press conference following the speech. “Now those views, those issues, those bills will be before the Legislature and they’ll be disposed of by the Legislature, some favorably, some not favorably. That’s the American democratic process.” […]
Madigan’s press conference was illuminating if only to appreciate how deftly he mixed a pledge to work with Rauner and a warning to the governor about his true feelings on some of the ideas in the speech. Here, for example, is Madigan’s answer when asked about Rauner’s desire to let local communities decide if workers in union workplaces can opt out of union membership.
“Right-to-work and right-to-work zones are a favorite topic of, let’s be kind and call them right-wing thinkers. There are others that disagree with it. It all gets into economics, it gets into putting people to work. I’m for putting people to work,” Madigan said. “That’s the best thing we can do for the state. So am I going to reject it out of hand? No. Do I want to know more about the details? Yes. And we’ll take it with everything else that’s before the Legislature.”
* Sun-Times…
On the whole, Rauner gave one of his most detailed speeches yet. But Democrats still found themselves scratching their heads when it was over — wondering how the governor would find new money for the investments in education. He also wants to hire more correctional officers for the state’s prisons.
“The administration is interested in balanced budgets, they’re interested in restraining the growth of state spending,” Madigan said after the speech. “But today they’re asking for an increase in appropriations for child care and for the Department of Corrections. Not being critical, but this just explains how difficult it is to manage state government when there’s a shortage of resources.”
* SJ-R…
Madigan said the immediate concern should be dealing with the estimated $1.5 billion deficit the state faces in its current budget. Already the state has said money has run out for the program that provides subsidized day care for the poor.
* And…
Senate President John Cullerton, D-Chicago, called Rauner’s first State of the State speech a missed opportunity.
“Unfortunately, too much of the governor’s opportunity was squandered with campaign rhetoric that denigrates the reputation of the state,” Cullerton said in a written statement. “With each speech that Governor Rauner delivers, I am reminded that the new governor has a lot to learn if he is to build on our successes in Medicaid reform, workers compensation, pension reform, cutting the bill backlog and meeting our obligations.”
* Back to the Trib…
Rauner got applause for calling for a minimum wage hike, but drew gasps and laughter from some Democratic lawmakers when he outlined it would be phased in through 2022. Hours earlier, Senate Democrats advanced a bill to raise the rate to $11 an hour by 2019. The full Senate could vote on the measure Thursday, though support remains questionable in the House.
Some Democratic lawmakers? Try “most, if not all.”
* Speaking of the minimum wage…
Rauner’s seven-year minimum wage plan did not get rave reviews from all business groups either, including the Illinois Retail Merchants Association. Rob Karr, the group’s president, said the costs of a minimum wage increase would “fall disproportionately on the retail industry.”
After fumbling the minimum wage issue early in his campaign, Rauner eventually focused on tying a minimum wage increase to business-backed reforms. Still, there is recognition the governor’s agenda is politically daunting, with the state government’s finances reeling.
Ed Wehmer, chief executive of Rosemont-based bank operator Wintrust Financial, said Rauner’s phased-in minimum wage increase and workers’ compensation and medical malpractice reforms are “all good initiatives but maybe not all the most important ones.”
“Illinois has so many issues that Bruce Rauner’s State of the State speech would have to be turned into a mini-series if you wanted to cover them all,” Wehmer said.
* The Tribune followed up with ratings agencies…
(R)ating agencies say the most critical issue for Illinois is to match the state’s tax revenues to spending without hiding deep, festering financial wounds under temporary bandages.
The past is littered with proposals to “right the ship, but they didn’t get there,” said Karen Krop, an analyst for Fitch. “We’re looking for an effective balanced budget and a pension solution.”
* And…
At least one major bond rating agency disagrees with Rauner’s idea.
In a report for the General Assembly’s fiscal forecasting office, Moody’s Analytics said it is not clear whether right-to-work laws affect economic growth.
“The lack of clarity is mainly due to the fact that union strength is just one factor businesses look at when deciding whether to set up shop or relocate,” the report notes.
The report also notes that right-to-work laws could actually hurt Illinois’ long-term economic growth.
That report is here.
* Greg Hinz gets the last word…
It’s true that, if you don’t ask, you don’t get. It’s also true that Rauner the successful private-equity mogul is used to firing off orders and is on a governmental leaning curve. Maybe we’ll learn that he’s one tough guy who will get what he wants. Or maybe he’ll learn that he has something to learn.
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Mess with the bull, get the horn
Thursday, Feb 5, 2015 - Posted by Rich Miller
* I told subscribers about this on Wednesday and Bernie followed up…
State Sen. SAM McCANN, R-Plainview, has paid a price for his almost-run for governor as an independent last year. Of all 20 Republican members of the Senate, he’s the only one without a leadership position.
Democrats hold 39 seats in the chamber, but despite the GOP’s minority status, the party gets to have a spokesperson on each committee. Just like the Democrats who are committee chairs, those spokespeople receive a stipend of $10,327 over the base legislative pay of $67,836 annually.
Senate Republican Leader CHRISTINE RADOGNO of Lemont assigned 18 of her colleagues to be minority spokespeople on one or more committees. But McCann, who was spokesman last session on what was the Agriculture and Conservation Committee, got no such assignment this year.
As noted in Capitol Fax on Wednesday, even freshmen Sen. NEIL ANDERSON, R-Rock Island, is a minority spokesman. Anderson — who became the only Republican to unseat a Senate Democrat in November when he defeated former Sen. MIKE JACOBS, D-East Moline — has that role on the new Agriculture Committee.
I don’t think it was completely about his almost-run for governor. That’s a significant part of it, for sure, but this is also what did him in…
McCann also confirmed Wednesday that he had been for state Sen. DALE RIGHTER, R-Mattoon, instead of Radogno, for leader this session.
“I thought he’d do a better job,” McCann told me.
It’s actually not that he voted for Righter, it’s that he pledged to vote for Radogno then voted for Righter. And it was apparently the second time he did that to her.
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*** UPDATED x2 - Resigned *** Uh-oh
Thursday, Feb 5, 2015 - Posted by Rich Miller
* Remember Benjamin Cole? He’s the guy who tried to talk a Washington Post “Style Page” reporter out of doing a story on Congressman Aaron Schock’s fancy new congressional office remodeling.
In a series of Facebook posts obtained by ThinkProgress, the senior adviser for policy and communications to Rep. Aaron Schock (R-IL) posted racial comments and endorsed gentrification of his neighborhood.
Benjamin Cole, a former Baptist pastor and energy industry spokesman, posted a series of videos and comments on October 13, 2013 mocking two African Americans outside his DC apartment. In the first, he compared them to animals escaping from the National Zoo engaged in “mating rituals.” That message included a video of a woman, shouting and seemingly engaged in an argument with someone not visible as she walked. In each of his posts, he used the hashtag “#gentrifytoday.”
The National Zoo was closed that week due to a federal government shutdown.
The posts appeared to have been removed Wednesday.
* One of the Facebook posts…
Oy.
* Meanwhile, the I-Team staked out Schock in DC…
Rep. Aaron Schock, R-Peoria, says he’s never been an “old crusty white guy” - and those are his exact words. The 33-year-old congressman from Peoria claims he’s never seen Downton Abbey on TV and that he didn’t realize his Capitol Hill offices actually looked like something fit for a royal highness. […]
An ABC crew had waited for Schock on Capitol Hill because he wouldn’t respond to messages, questions or calls about the fancy red re-do of his congressional quarters by an interior designer from downstate Illinois.
ABC: “So someone in your office said that it was inspired after Downton Abbey, is that right?”
Schock: “Uh, I learned that when I read it in the newspaper myself, so…”
* Schock then said he would be paying for the remodeling out of his own pocket…
ABC: “What about this decorator though? She’s from your district. Are you going to pay for this? Is this in-kind purchase free service?”
Schock: “No. She is the person who decorated my office four years ago in the Canon building. And I wrote her a personal check for her services.”
ABC: “For how much?”
Schock: “Want to say that it was maybe $6,000. But it was four years ago, but around that. And so, you know, the same thing will happen now. She’s working on the office, so once it’s done, I’m sure I will get an invoice as I did before and we’ll pay.”
* But here is what his staff said earlier this week…
Brahler offered her services for free, according to Schock’s office, although he had to pay for the objects.
So, perhaps a clarification is in order. But the top story about the PR guy shows what happens when the media starts focusing on somebody. It ain’t ever pretty.
*** UPDATE *** Things just took a radical turn for the worse…
Aaron Schock Adviser Made More Racially Charged Comments On Facebook, Wanted White House Mosque For Obama
Haters gonna hate.
/snark
*** UPDATE 2 *** He gone…
A top aide to U.S. Rep. Aaron Schock has resigned today, following reports that he made racially charged comments on his personal Facebook page.
Benjamin Cole has served as the fourth-term Peoria lawmaker’s spokesman — and as a “senior adviser” — since March of 2014.
A series of posts on his personal Facebook page were unearthed Thursday first by a writer for the liberal website Think Progress and then by Buzzfeed that sparked the controversy.
“I am extremely disappointed by the inexcusable and offensive online comments made by a member of my staff,” Schock said in a statement to the Journal Star. “I would expect better from any member of my team. Upon learning about them I met with Mr. Cole and he offered his resignation which I have accepted.”
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What Rauner didn’t say yesterday
Thursday, Feb 5, 2015 - Posted by Rich Miller
* Gov. Bruce Rauner distributed a handout to legislators before his State of the State address yesterday. Click here to read it. Here’s something from the handout that he didn’t talk about yesterday…
Restructure the motor fuel tax to appropriately invest in infrastructure.
Hmm.
* He also didn’t touch on this topic…
Reform teacher tenure
* Nor did he bring up these…
Extend to municipalities bankruptcy protections to help turn around struggling communities.
Empower local voters to control collective bargaining issues in their local governments and take more direct responsibility for their employees’ benefits.
…Adding… The Tribune has a story about the municipal bankruptcy issue.
* He never uttered the word “pension” yesterday, but the topic was covered in his handout…
Protect historically accrued state pension benefits for retirees and current workers, while moving all current workers into the Tier 2 pension plan and/or a 401(k) for their future work. Police and firefighters should receive separate special consideration.
Pursue permanent pension relief through a constitutional amendment.
* The document also fleshes out some issues just a tiny bit more than Rauner did yesterday. For instance…
Freeze property taxes for two years by amending Illinois’ Property Tax Extension Limitation Law. The total property tax extension could not increase above the 2015 levy year, except for new construction or property in a TIF district. Voters would still be allowed to override the freeze via referendum.
That’s the first time he’s pointed to a specific path to freezing property taxes. Commenters who are knowledgeable about this topic are invited to chime in.
* Some more stuff…
Implement true workers’ compensation reform legislation that updates how injuries are apportioned to ensure employers pay for injuries that occur on the job; clarifies the definition of “traveling employees” to ensure a reasonable standard that excludes risks that would impact the general public; and implements American Medical Association guidelines when determining impairment.
Make Illinois unemployment insurance fair for beneficiaries and employers, including legislation that cracks down on benefit fraud for those who voluntarily leave employment but receive benefits and provides a more fair definition of misconduct in the workplace.
Lift the arbitrary cap on public charter schools, reduce funding disparities for public charters and provide more high-quality educational options to students through tax credit scholarships.
Eliminate unnecessary testing and institute a rigorous K-12 student growth measure, using ACT and other national metrics.
Reform the criminal code to ensure sentences are commensurate with the severity of the crime, and reduce penalties for non-violent offenses.
Launch a bipartisan Criminal Justice Reform Commission with a goal to improve public safety and reduce prison population by 25 percent in 10 years.
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* It’s a little hard to hear because it was recorded at the back of the Blue Room, but this is Speaker Madigan’s full press conference yesterday following the governor’s State of the State address…
*** UPDATE *** Some of you are having trouble with the file I uploaded, so try these instead. Part 1…
Part 2…
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