* US Attorney’s Office, Northern District of Illinois…
The owner of a debt collection company spent tens of thousands of dollars in an effort to corruptly influence and obtain business from court clerks in Florida and Illinois, including the Cook County Circuit Court Clerk, according to a federal indictment returned in Chicago.
DONALD DONAGHER, JR., 67, of Mechanicsburg, Pa., and Palm Beach Gardens, Fla., was the owner and Chief Executive Officer of Harrisburg, Pa.-based PENN CREDIT CORPORATION. From 2009 to 2016, Donagher and Penn Credit provided money and services to benefit the court clerks and related individuals and entities, corruptly seeking favorable treatment in the awarding of the courts’ debt collection work, the indictment states. The efforts included payments to certain clerks’ campaign committees, donations to charities supported by certain clerks, financial sponsorship of events hosted by certain clerks, and free or discounted “robocalls” made by Penn Credit on behalf of certain clerks’ campaigns, according to the indictment.
The indictment was returned Thursday in U.S. District Court in Chicago. It charges Donagher and Penn Credit with one count of conspiracy to commit federal program bribery, and five counts of federal program bribery. Arraignment in federal court in Chicago has not yet been scheduled.
The indictment was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; Gabriel L. Grchan, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Patrick M. Blanchard, Cook County Inspector General. The government is represented by Assistant U.S. Attorneys Heather K. McShain and Ankur Srivastava.
According to the charges, Donagher in June 2011 caused Penn Credit to pay $5,000 to a scholarship fund named for the Cook County Circuit Court Clerk. Later that summer, Penn Credit began collecting debt for the Clerk’s Office, the indictment states. On Aug. 19, 2011 – less than three weeks after Penn Credit began its work for Cook County – Donagher sent an email to Penn Credit employees and an Illinois lobbyist, advising that Donagher had promised the Cook County Clerk “10k of ‘early’ money,” the indictment states. The following month, Donagher caused a $10,000 contribution to be made in his name “towards the fundraising efforts of Contributions to Friends of [the Cook County Circuit Court Clerk],” the indictment states. The indictment further states that, several months later, Penn Credit made hundreds of thousands of phone calls on behalf of the Cook County Circuit Court Clerk without invoicing or receiving payment from the Clerk’s campaign.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The conspiracy charge is punishable by up to five years in prison, while the maximum sentence for federal program bribery is ten years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The indictment is here.
*** UPDATE *** Press release…
STATEMENT BY PENN CREDIT AND DON DONAGHER
DENYING ALL CHARGES IN FEDERAL INDICTMENT
CHICAGO, IL (March 15, 2019): The allegations against Don Donagher and Penn Credit are false and the Department of Justice should not have brought this case. Mr. Donagher and Penn Credit acted legally and in good faith, and we will prove that in court.
The indictment presents a novel and meritless theory based on conduct that allegedly occurred long ago. First, the government has charged Mr. Donagher with bribery related offenses, but it has not charged any public official or even claim that a public official was a supposed co-conspirator. Second, unlike the long line of corruption cases that have been prosecuted in Chicago, this case has none of the standard hallmarks of bribery and corruption. There are no allegations of secret cash payments. There are no allegations of concealed payments to shell companies. There are no allegations of lavish gifts or free vacations. In fact, there are no allegations that Mr. Donagher did anything to personally enrich any public official. Simply put, none of the usual indicia of corrupt activity are present in this case. Instead, the Department of Justice is attempting to criminalize entirely lawful, publicly-disclosed campaign contributions and laudatory donations to various charities, a scholarship fund and the partial sponsoring of a Women’s History Month event.
Moreover, Penn Credit never sought and never received any improper benefit from any public official. Indeed, the contracts Penn Credit received from Cook County and other government entities were awarded to it purely on the merits.
For example, regarding the Cook County contract, a county-wide committee, which included members of the State’s Attorney’s Office, objectively rated the proposals submitted by Penn Credit and its competitors, and that county-wide committee rated Penn Credit to be the most qualified company for the contract. And that superior rating was borne out by Penn Credit’s documented performance on behalf of Cook County — Penn Credit significantly increased collections and revenue for the county and dramatically outperformed its competitors by every objective measure. Thus, Penn Credit consistently received “excellent” marks for its debt collection work, not just for the Clerk’s Office, but for its superior services to all County Departments under the contract.
Mr. Donagher has a well-earned reputation for philanthropy and generosity, having donated millions of dollars to a wide variety of charitable causes around the country. The company has an unblemished record as a corporate citizen and leading employer in its community.
Theodore T. Poulos, counsel to Don Donagher and Penn Credit, said, “Donating to political campaigns and charities hoping to engender good will is not a crime. That happens every day in this country.”
Mr. Donagher and Penn Credit will enter pleas of not guilty and will vigorously defend themselves against these unsupported charges. We look forward to our day in court.
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Question of the day
Friday, Mar 15, 2019 - Posted by Rich Miller
* Steve Lord at the Aurora Beacon-News…
The Fermi National Accelerator broke ground Friday on a project that takes it into the future as one of the world’s premier particle physics laboratories.
The Proton Improvement Plan II, known as PIP-II, is a brand new leading-edge superconducting linear accelerator.
“It’s a new heart for Fermilab,” said Mike Weis, the Fermilab site office manager for the U.S. Department of Energy. “That’s really what we’re doing here.”
Weis was one of 19 speakers Friday at a groundbreaking for PIP-II which included a host of dignitaries, scientists and International representatives of participants in the project.
The governor was in attendance…
* The Question: Caption?
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* Civic Federation…
The Governor said the new [graduated income tax] would bring in an additional $3.4 billion per year. That is exactly enough to cover an annual operating deficit estimated at $3.2 billion plus an extra $200 million—the amount recently proposed by the administration to bolster the State’s severely underfunded retirement systems. However, the Civic Federation has not been able to replicate the $3.4 billion number and the Governor’s Office has not yet provided information about the methodology used to arrive at the figure.
* I asked what result the group had come up with and was told today that their numbers crunchers hadn’t yet completed the calculations…
The Civic Federation has not published a revenue estimate because we are still working to gather complete information. We plan to complete our analysis and update our blog when we have additional information.
They were apparently waiting on the same info I was.
The Illinois Policy Institute is claiming that its own numbers crunchers found the graduated tax would yield $2.4 billion in the first full fiscal year. The group has FOIA’d the methodology info, but the governor’s office said yesterday it would need five more days to respond.
* As I noted above, I’ve been asking for the same information, and the governor’s office just sent this to me…
The Governor’s Office of Budget and Management worked with the Department of Revenue to arrive at a realistic projection for the amount generated by the fair income tax.
The team includes longtime respected experts like Deputy Governor Dan Hynes, who served as the state’s comptroller for 12 years; Department of Revenue Director David Harris, a former Republican lawmaker who served in a leadership role for many years on both the revenue and appropriations committees; GOMB Director Alexis Sturm, who has worked in government finance for more than 20 years; and GOMB Chief of Staff Cameron Mock, who has worked in government finance for nearly a decade.
A breakdown of how many tax filers are in each income bracket can be found below.
To reach the 2021 projection, the team used data from the 2016 tax year, the most recent year for which complete data is available. They assumed filers’ income for 2021 would have grown at the most recent respective 5-year compound annual growth rate (CAGR), and to ensure the estimate was conservative, included a one-year income stagnation in the event of a slowing economy.
The team assumed that local governments would receive 6 percent of the new revenue through LGDF and that $230 million of the new revenue would be used for property tax relief and child tax credits.
The team assumed that 10 percent of filers with net income more than $1 million and less than $2 million would try to capture a lower marginal rate. This is an extremely conservative assumption. In reality, only filers who have a net income between $1,000,000 and $1,009,305 would pay more in taxes than they would receive in income above $1,000,000 when the 7.95 percent rate is applied to all their income.
* Click the pic for a larger image…
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* From the Illinois Human Rights Act…
Freedom from Unlawful Discrimination. To secure for all individuals within Illinois the freedom from discrimination against any individual because of his or her race, color, religion, sex, national origin, ancestry, age, order of protection status, marital status, physical or mental disability, military status, sexual orientation, pregnancy, or unfavorable discharge from military service in connection with employment, real estate transactions, access to financial credit, and the availability of public accommodations.
* HB 246…
Amends the School Code. With regard to the textbook block grant program, provides that the textbooks authorized to be purchased must include the roles and contributions of all people protected under the Illinois Human Rights Act and must be non-discriminatory as to any of the characteristics under the Act. Provides that textbooks purchased with grant funds must be non-discriminatory.
The Human Rights Act is a hugely important, hard-won law that’s been slowly expanded over the years. In my opinion, students ought to learn about the people covered by this law (and about the law itself, for that matter).
* Except…
But it is unlikely that the bill would have any immediate impact, even if it is signed into law. That’s because it only applies to textbooks purchased through the state’s textbook block grant program, which has not received any funding for the last five years, and which the State Board of Education has not requested funding for in the upcoming budget.
So much for that.
* This sentence is what set so many people off…
Provides that in public schools only, the teaching of history of the United States shall include a study of the roles and contributions of lesbian, gay, bisexual, and transgender people in the history of this country and this State.
That part has nothing to do with the textbook grant program, so it has to be taught one way or another.
* WICS…
Rep. Anna Moeller, an Elgin Democrat who’s sponsoring the bill, said the measure would help depict an accurate understanding of LGBTQ figures in the classroom.
“This exclusion has denied students the opportunity to obtain a greater and more accurate understanding of world history,” Moeller said. “It also has denied LGBT people their identity and reflection in our school curriculum.” […]
Those opposed to this bill are worried how schools would pay for another curriculum requirement.
They said school districts are already required to do too much without enough state funding.
* Um, that’s not all they said…
State Representative Darren Bailey (R-Louisville), voted no today on House Bill 246 that will mandate school books must include the teaching of the sexual identity of historical figures and that the sexual identities of lesbian, gay, bi-sexual and transgender (LGBT) must be identified.
“I am opposed to yet another mandate on our teachers,” said Rep. Darren Bailey, a former school board member. “There is nothing that prevents the teaching of the lives of historical figures including if they were known to have been homosexuals. But forcing that information on 5 year olds and elementary school children is more of an effort of indoctrination than of learning history about individuals who accomplished important discoveries in science or created great works of art.” […]
Rep. Bailey added, “I also opposed this legislation because it does not provide an ‘opt out’ option for parents who do not wish their children exposed to this kind of information for religious reasons or because their child may not be of a mature enough age to fully understand the meaning and implications of what LGBT actually is.”
* This is the current statute, except for the addition of the words “or she”…
No pupils shall be graduated from the eighth grade of any public school unless he or she has received such instruction in the history of the United States and gives evidence of having a comprehensive knowledge thereof.
It should be interesting to see how the more conservative Downstate school districts approach this if/when it becomes the law of the land.
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Today’s number: 1.4 days in reserve, if that
Friday, Mar 15, 2019 - Posted by Rich Miller
* Illinois News Network…
A lesser-mentioned consequence of the budget battle between Democrats in the General Assembly and then-Gov. Bruce Rauner was the depletion of Illinois’ rainy day fund, which still sits nearly empty.
A state’s rainy day fund is used to avoid having to make cuts or tax hikes in the event of a sudden drop in revenue like what many states saw during the recession. In 2017, Illinois lawmakers voted to drain the state’s Budget Stabilization Fund and include the hundreds of millions of dollars that were in it to keep services going during the budget battle. Today, there’s less than a percentage of Illinois’ annual budget in that fund.
Justin Theal, an officer with Pew Charitable Trusts, said that goes against the national trend. Most other states have been bolstering their funds during times of higher revenue.
“The state had about $10 million in its rainy day fund, or the equivalent of just one-tenth of one day’s worth of operating cost,” he said. “Fiscal Year 2018 saw thirty-two states add nearly $10 billion to their rainy day funds. That’s largely the result of a healthy economy, robust stock market returns, specific state policy actions, and at least a portion of that was due to tax revenue growth from the recent federal tax reform package.”
Illinois also relies on its end-of-year balance, which Pew reports would cover 1.3 days, hence the headline.
Daily operating costs are based on a 365-day year.
* From Pew…
States use reserves and balances to manage budgetary uncertainty, including revenue forecasting errors, budget shortfalls during economic downturns, and other unforeseen emergencies, such as natural disasters. This financial cushion can soften the need for severe spending cuts or tax increases when states need to balance their budgets.
Because reserves and balances are vital to managing unexpected changes and maintaining fiscal health, their levels are tracked closely by bond rating agencies. For example, S&P Global Ratings downgraded Massachusetts’ debt rating in June 2017, citing its “failure to follow through on rebuilding its reserves.” A year later, Massachusetts deposited more than $492 million into its reserve fund. If left unaddressed, credit downgrades can lead to increased state borrowing costs for years to come.
Building up reserves is a sign of fiscal recovery, but there is no one-size-fits-all rule on when, how, and how much to save. States with a history of significant economic or revenue volatility may desire larger cushions. According to a report by The Pew Charitable Trusts, the optimal savings target of state rainy day funds depends on three factors: the defined purpose of funds, the volatility of a state’s tax revenue, and the level of coverage—similar to an insurance policy—that the state seeks to provide for its budget.
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It’s just a bill
Friday, Mar 15, 2019 - Posted by Rich Miller
* Jerry Nowicki at Capitol News Illinois…
According to a report from the Illinois Department of Public Health, an average of 73 women in Illinois died each year from 2008 to 2016 within one year of pregnancy, 72 percent of those deaths were preventable, and 93 percent of violent pregnancy-associated deaths were preventable.
Per the report, African-American women were six times more likely to die of a pregnancy-related condition during that span.
“For African-American women in particular, we’re dying at six times the rate amongst American women, which means we’re dying at Third-World country rates,” state Sen. Toi Hutchinson, D-Olympia Fields, said.
Hutchinson and Castro have introduced, among other reforms, Senate Bill 1909, which would continue Medicaid coverage for new mothers for 12 months after giving birth – currently a mother is covered for only 60 days after a birth.
That bill would also create a pilot program to provide voluntary in-home nursing visits to low-income, first-time pregnant women; mandate quality control guidelines and hemorrhage protocols for birthing facilities; and require insurance plans to cover medically necessary treatment for postpartum complications.
* This bill has gone nowhere in the past…
Supporters are making a case for instituting a new tax on financial transactions in the state of Illinois.
The legislation would require a $1 fee on any financial transaction done in the state with the exception of securities held in a retirement account or a transaction involving a mutual fund.
“Beginning January 1, 2020, a tax is imposed on the privilege of engaging in a financial transaction on any of the following exchanges or boards of trade: the Chicago Stock Exchange; the Chicago Mercantile Exchange; the Chicago Board of Trade; or the Chicago Board Options Exchange,” according to the text of the bill. “The tax is imposed at a rate of $1 for each transaction for which the underlying asset is an agricultural product, a financial instruments contract, or an options contract. The tax shall be paid by the trading facility or, in any other case, by the purchaser involved in the transaction.”
Illinois state Rep. Mary Flowers, D-Chicago, has been the standard bearer for a state-based financial transactions tax for a number of years. She brought Matt Harrington, a self-described financial expert, to explain how the financial transactions tax “could help bring prosperity to our economy.”
* From the Anna Gazette-Democrat…
A Southern Illinois legislator earned unanimous approval from the Illinois House Judiciary Criminal Law Committee on two separate, but related pieces of legislation last week. […]
HB 2308 ensures that a defendant is prohibited from contacting victims or witnesses from jail while awaiting trial.
Windhorst says inmates awaiting trial sometimes use their phone privileges to harass victims while waiting for their court date.
“This is a victims’ rights piece of legislation,” [Rep. Patrick Windhorst, R-Metropolis] said. “HB 2308 will keep incarcerated offenders from being able to contact their victims while awaiting trial.”
HB 2309 also passed the House Judiciary Criminal Law Committee with unanimous support.
Windhorst says the legislation provides that when a petition for an emergency stalking no contact order, a civil no contact order, or an emergency order of protection is filed, the petition shall not be publicly available until the petition is served on the offending individual.
* Other bills…
* Opponents say bill could make Illinois college campuses less safe: Illinois State University receives about 20,000 applications in a given year. In 2018, Woodruff said about 150 potential students disclosed a criminal history. Of those, six were denied entry. Most of those were because of a past sex offense.
* Childcare facilities would have to hold active shooter drills under new bill: The bill was heard in committee Thursday. Committee members raised concerns about the effect such a measure would have on childcare businesses’ insurance costs, regardless of the size of the operation. Mussman promised changes to address those concerns.
* Bill would require single-occupancy bathrooms in Illinois be gender neutral: Bush said she’d bring back an amendment to change the language to clarify some aspects.
* Measure would require minimum number of women on corporate boards: The measure was heard in committee, but the committee didn’t vote on it.
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Stop narrowing the tax base
Friday, Mar 15, 2019 - Posted by Rich Miller
* When you freeze assessments for one favored group of taxpayers, everybody else has to pick up the slack. So, if you want to help young homeowners, stop doing stuff like this…
The Illinois Senate is poised to take up a bill that would make it easier for some seniors to access a state program that limits property tax increases on their homes.
Under current law, people age 65 and older with incomes up to $65,000 can claim the Senior Citizens Assessment Freeze Homestead Exemption, which effectively freezes the taxable valuation of their homes so that their tax bills cannot go up simply because the market value of their home rises.
Senate Bill 1346, which cleared the Senate Revenue Committee on Wednesday, would expand that slightly, starting in the 2019 tax year, by allowing seniors to deduct from their income whatever money they spend on Medicare premiums. That would allow some people with incomes just above the $65,000 cap to claim the exemption.
Sen. Laura Ellman, a Naperville Democrat and lead sponsor of the bill, said it would benefit seniors who are “on the cusp” of the income limit, but she said she couldn’t estimate how many seniors it would benefit.
* Here’s what happened the last time the General Assembly got carried away with helping seniors on their property taxes…
When state lawmakers pushed through a trio of tax breaks in spring 2017, the idea was to ease some of the financial pain caused by Mayor Rahm Emanuel’s series of major property tax hikes on Chicago homeowners, especially senior citizens.
The changes, however, also had an unintended consequence: Thousands of homes in south suburbs such as Harvey and Park Forest fell off the tax rolls, meaning those homeowners no longer pay any property taxes at all, and an even greater number are paying less.
While that’s good news for many, it’s also resulted in tens of millions of dollars in property taxes being shifted onto remaining homeowners and businesses. They are now being hit with even higher bills in an impoverished, long-struggling, largely African-American region where an outsized property tax burden already made it difficult to attract the retail shops and industry needed to reverse economic woes made worse by the Great Recession.
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Chamber president still has hope for Pritzker
Friday, Mar 15, 2019 - Posted by Rich Miller
* Dan Petrella…
With a new governor in office, Democratic lawmakers are charging ahead on legislation Republican Gov. Bruce Rauner blocked as he pursued his pro-business, union-weakening agenda. […]
With Democrats trying again on many issues Rauner prevented from becoming law, some in the business community are on edge as Pritzker also advocates for a graduated income tax plan that would raise rates on the wealthy and on corporations.
“I unfortunately do think that (the votes) are an indication of what the next four years are going to look like,” said Todd Maisch, president and CEO of the Illinois Chamber of Commerce, which was closely aligned with Rauner and opposed legislation on the smoking age, salary history and the minimum wage. “It doesn’t mean every anti-business bill is going to go ahead and pass. I do think that Gov. Pritzker really does want to be seen by the business community as somebody who understands their issues.”
However, Maisch added, “it looks like we’re going to take a few beatings.”
Hang in there, Todd. /s
On a more serious note, it’s interesting to see that Maisch retains some optimism about Gov. Pritzker’s relationship with the business community. I should probably follow up with him on that soon.
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* Peoria Journal Star letters to the editor…
I know very little of JB Pritzker’s personal history but I believe I read during the recent election campaign that he is of the Jewish faith. Consequently, it seems incongruous to me that he could support the right to an abortion.
He is too young to have firsthand remembrance of the World War II holocaust but I am not. Horrific photographs of murdered, innocent Jewish men, women and children are firmly etched in my mind. […]
It is ironic that Hitler is, rightfully so, branded for all time as a monster for the extermination of millions of Jews, Christians and others for being enemies of the Third Reich. Yet Pritzker and other proponents of the extermination of millions of unborn babies are hailed as heroes under the banner of “women’s rights” or “women’s healthcare.”
How sad that abortion rights advocates now legalize extermination at any stage of the baby’s development.
You gotta wonder what goes through an editor’s mind when deciding whether to publish letters like these.
I mean, the governor helped found a Holocaust Museum, for crying out loud.
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PBMs Save Illinois Patients & Payers Nearly $26 Billion
Friday, Mar 15, 2019 - Posted by Advertising Department
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Think of PBMs as your advocates—they’re in your corner, clamping down on prescription drug hikes because your health is non-negotiable. Learn more at OnYourRxSide.org
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* The Tennessean…
Authorities in Illinois have charged the father of the suspect in the deadly Nashville Waffle House shooting, accusing him of illegally giving his son the gun used to kill four people at the restaurant.
Jeffrey Reinking was charged Thursday with unlawful delivery of a firearm. Prosecutors said he gave his son Travis Reinking a gun — despite the fact that his son had recently been hospitalized for mental health issues.
Travis Reinking is schizophrenic, according to a medical expert who evaluated him and testified in court. Illinois prosecutors said he had been treated at the mental health unit of Methodist Medical Center of Illinois.
Illinois state law forbids people from selling or giving guns to anyone who has “been a patient in a mental institution within the past five years.”
* NBC 5…
“Mass shootings have raised public awareness regarding the need to keep firearms out of the hands of persons afflicted with mental illness,” [Tazewell County State’s Attorney Stewart Umholtz] said, noting that doing so in Illinois is a criminal offense. “While I strongly support citizens’ rights under the Second Amendment, I also strongly support holding individuals accountable for the commission of criminal offenses related to firearms.”
The older Reinking has posted bond and is scheduled for arraignment on April 25. He faces up to three years in prison and a fine, if convicted. Telephone calls to his lawyer weren’t immediately returned. […]
Travis Reinking was a onetime crane operator who moved across multiple states and suffered from delusions, sometimes talking about plans to marry singer Taylor Swift, friends and relatives told authorities. He was detained by the Secret Service in July 2017 after venturing into a forbidden area on the White House grounds and demanding to meet President Donald Trump.
* WEEK TV…
Reinking’s attorney disputed the charges.
“Jeff Reinking has not committed a criminal offense. He has been charged under an Illinois statute that prohibits the sale or gift of firearms to someone who has been in a mental institution. But Jeff didn’t sell or gift Travis the guns,” said Joel E. Brown, Reinking’s attorney in a statement to WKRN in Nashville. “The district attorney wants to pound a round peg into a square hole because of the terrible events that happened months after Travis’s weapons were returned to him. Returning Travis’s guns to Travis is not a criminal offense and we will fight it in court.”
* Peoria Journal Star…
In May 2016, a Tazewell County sheriff’s deputy met with Travis Reinking and members of his family, including his father. Travis Reinking said he believed singer Taylor Swift had been stalking him and hacking into his cellphone and Netflix account. Further, the younger Reinking said Swift had arranged to meet him at the Dairy Queen in Morton, but she only yelled at him from across the street before climbing up the side of a building and onto the roof before disappearing. Also in the meeting with the deputy, the family said Travis Reinking had been suicidal. At the end of that meeting, which also was attended by a representative of the Tazewell County Emergency Response Services, Travis Reinking agreed to go into Methodist’s Behavior Health Unit. He was there from May 26 to June 3 of 2016.
In August 2017, after Travis Reinking became a resident of Colorado, the state of Illinois revoked his Firearm Owner’s Identification Card because he was no longer a resident of Illinois. Further, a representative from the Illinois State Police confiscated the card from Travis Reinking and transferred his firearms — including a Bushmaster AR-15 — into the possession of his father. The complaint alleges a county Sheriff’s Department officer “advised” Reinking that the weapons confiscated from Travis in August 2017 and “transferred” to him “were to be kept secured and away from Travis.” […]
Jeffrey Reinking’s attorney said after the charge was filed that the statute defining the crime of giving a firearm to a person whose mental state makes him potentially dangerous does not apply in Reinking’s case.
The weapons “were neither his to sell or give. He never owned the weapons, they were his son’s” who, at the time, had a legal right to have them, said Peoria attorney Joel Brown. “The term ‘give’ is not defined in the statute.”
Jeffrey Reinking “did some research” and concluded his son was entitled to their return, Brown said.
Sheesh. What a mess. Why weren’t his guns confiscated and his FOID card revoked when he was hospitalized?
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* It appears the governor’s Monday meeting with the credit ratings agencies went OK. From S&P Global…
The stable outlook reflects our view that Illinois’ likelihood of experiencing a liquidity crisis in the near term has subsided and therefore, so have the odds of its rating falling below investment grade.
So, no junk bond status anytime soon. At least not from S&P.
* Back to the report…
Outlook
Despite the current bill backlog and estimated deficit to end fiscal 2019, we anticipate that the state will retain sufficient cash flow to provide coverage of all core payments. In our view, the proposed seven-year extension of the pension plans’ amortization alone weakens the state’s pension funding. However, it remains possible that an asset transfer or passage of an income tax increase within the outlook horizon could offset what we would otherwise view as weak budgetary practices proposed in the fiscal 2020 budget. Additionally, we do not expect see a re-emergence of heightened political dysfunction but rather anticipate that the budget process will be more timely and constructive. The state’s strong bond payment provisions also offer some downside insulation to the state ratings. The current GO rating incorporates our view of the state’s longer-term vulnerabilities and remains the lowest possible rating within the investment-grade categories.
We’re just one notch above junk.
* With that in mind…
Illinois’ liquidity position is paramount to the rating. Downward rating pressure would likely ensue if Illinois’ bill backlog continues to climb or its liquidity position weakens to a level that jeopardizes its ability to timely finance core government services. Particularly given the state’s high fixed costs, depleted reserves, and prioritization of government services, we believe it has minimal cushion to weather a recession or other unrealized budget assumptions. If unaddressed, we expect that wider-than-currently forecasted budget gaps would likely exacerbate the state’s already strained liquidity. Given its tenuous fiscal position, near-term progress toward resolving its ongoing structural imbalance is critical to maintaining our investment-grade rating. If Illinois is unwilling or unable to pass a revenue increase within the next two years, absent significant expenditures cuts, we would likely lower the rating. Other key sources of potential downward rating pressure include further measures to reduce annual pension contributions, recognition of asset transfers in a way that undermines pension funding, and substantial growth in the state’s debt burden.
* Overall, though, if we’re all good little boys and girls, we may even see an increase in our credit score…
That said, Illinois’ credit rating is uncommonly low among the states, reflecting a confluence of its daunting long-term liability profile and persistent crisis-like budget environment in recent years. Any upside to its credit quality, however, remains constrained by its poorly funded pension systems and other outsized liabilities. But even with these, the state’s economic base could support a higher rating pending improvement in its fiscal operations and overall budget management.
If Illinois were to make sustainable progress toward structural balance, reducing its bill backlog, and growing reserves, we could raise the rating.
Discuss.
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* Gov. Pritzker was in Quincy today and was asked about whether he supports giving Western Illinois University some emergency state funding, above and beyond what’s in the current budget and what he’s asked to be appropriated next fiscal year. As you know, WIU announced 132 layoffs earlier this month…
We need to look at the availability of funds. As you know I’ve been crusading, in a way, to make sure that we are bringing the right amount of revenue to the state and that we’re finding proper cuts in state government so that we can meet our obligations. We now have a $3.2 billion budget deficit that we’re facing for the coming year. And I’m trying to not only get past that $3.2 billion, but also put us on firm fiscal footing forever and that’s why I put forward a plan for a fair tax for the state to make sure that the wealthiest pay more and 97 percent of the people will pay less.
He’s got his rap down for sure. But, um, what cuts is he talking about? He hasn’t really announced any.
The governor said he’s spoken with Western’s president since the layoffs were announced. He said no decisions were made during the meeting, but that he now has a better understanding of what’s going on there.
He also said he is “very close” to naming new trustees for the university. A majority of the board is vacant.
*** UPDATE *** Yeah, it’s not looking good for WIU…
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Question of the day
Thursday, Mar 14, 2019 - Posted by Rich Miller
* SJ-R…
Country music legend Reba McEntire will close the Illinois State Fair with a Sunday night Grandstand show Aug. 18.
McEntire, who will be joined by singer-songwriter Rachel Wammack, has sold more than 56 million albums worldwide, is a member of the Country Music Hall of Fame, and is one of only four entertainers to receive the National Artistic Achievement Award from the U.S. Congress. Her new album, “Stronger than the Truth,” will be available April 5.
* The Question: If you could pick one musical artist/band to perform at the Illinois State Fair, who would it be? Explain.
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PBMs Help Lower Prescription Drug Costs
Thursday, Mar 14, 2019 - Posted by Advertising Department
[The following is a paid advertisement.]
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Tobacco 21 bill will head to governor’s desk
Thursday, Mar 14, 2019 - Posted by Rich Miller
* The rollcall is here. Senate Democrats…
Hoping a new governor results in a better outcome, the Illinois Senate overwhelmingly approved raising to 21 the legal age to buy cigarettes and alternative nicotine products, clearing the way for the proposal to go to Gov. JB Pritzker and become state law.
The 39-16 vote Thursday comes less than a year after the Senate approved an identical proposal only to have it vetoed by then-Gov. Bruce Rauner. Since then, the proposal has steadily picked up support.
“Everyone knows this should already be the law. Thankfully, we’ve got a new governor and a new chance to right past wrongs and make Illinois a healthier state,” said Illinois Senate President John Cullerton, a public health advocate and supporter of the Tobacco 21 legislation.
The key issue, Cullerton said, is preventing young adults from buying cigarettes for younger teenagers, who then become addicted and face a lifetime of increased health problems.
More than 30 Illinois communities have these restrictions in place. Evanston was first nearly five years ago. Others include Chicago, Normal, Barrington and Hoffman Estates.
“We’ve seen this work in Chicago and other numerous communities. I want to thank Mayor Rahm Emanuel for his work to not only improve public health in the city but to support our efforts here to do the same statewide,” Cullerton said. “It’s time for the state to step up and protect our children from this known danger.”
Hawaii, Maine, Oregon, Massachusetts, New Jersey, California and most recently Virginia have all enacted Tobacco 21 legislation. In Virginia, the bipartisan proposal was even backed by one of the nation’s largest tobacco companies.
The Illinois proposal, HB 345, is sponsored in the Senate by Sen. Julie Morrison, a suburban Deerfield Democrat. Lawmakers have 30 days to send the paperwork to Gov. Pritzker’s office. He then has 60 days to sign or veto it.
…Adding… Tribune…
Pritzker’s spending plan for the budget year that begins July 1 includes $65 million in new revenue from proposals to increase the $1.98-per-pack cigarette tax by 32 cents and apply the state’s wholesale tobacco tax to e-cigarettes. The governor’s office did not respond to requests for comment on how raising the legal purchasing age would affect those revenue estimates.
…Adding… From yesterday…
The soonest the Senate could vote on the legislation, House Bill 345, is Tuesday.
Normally, that would be the case. This time was different.
So, how did the House pass a House bill on Tuesday and the Senate pass it in two days when three days of reading are required? Well, it was three days. The Senate read the bill into the record late Tuesday, then immediately referred it to the Assignments Committee, which referred it directly to the floor the next day for 2nd Reading. The Senate skipped a substantive committee hearing because a Senate committee had already passed an identical bill. The legislation was then advanced to 3rd Reading and voted on today.
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Reproductive Health Act roundup
Thursday, Mar 14, 2019 - Posted by Rich Miller
* Illinois Public Radio’s Maureen Foertsch McKinney…
The new Illinois bill would cover reproductive health care, in addition to abortion, including pregnancy, miscarriage, contraception, sterilization, preconception care and any related services. It would repeal a mid ‘90s ban on partial birth abortion and require private health insurers to cover abortions.
Like New York’s law, the Illinois plan would lift a requirement that doctors be the only ones to perform abortions. It would allow other kinds of qualified health care providers, like nurse practitioners, to do the procedure. It would also bring up-to-date the 1975 Illinois abortion law that contained criminal penalties for doctors performing abortions. That could come into play should a conservative U.S. Supreme Court decide to overturn Roe v. Wade, the federal case that removed state prohibitions on abortion.
“People everywhere should have access to the full range of reproductive health and have that available without barriers. This is a healthcare procedure. This is about what the patient and the doctor decide is best for them, and, you know, if that’s considered a progressive notion, so be it,’’ said state Representative Kelly Cassidy, a Chicago Democrat and the bill sponsor.
She says laws on the books about abortion need to be modernized. “The very idea that a health care procedure is discussed and regulated under the criminal code is ridiculous.”
* Rebecca Anzel at Capitol News Illinois…
Illinois’ current abortion statute was passed into law in 1975. Legislators wrote their objective was to “reasonably regulate” abortion procedures to adhere with the U.S. Supreme Court’s decision in Roe v. Wade.
Since then, though, courts have struck down several aspects of the Abortion Law, such as a ban on fetal experimentation, a prohibition on sex-selective abortion procedures, and a provision allowing the husband of a woman seeking the procedure to receive a court order barring her from doing so.
Illinois’ chapter of the American Civil Liberties Union has also pointed out that the state’s law includes a provision allowing doctors to be jailed for performing an abortion procedure.
According to a memo prepared by the Thomas More Society, the Reproductive Health Act goes much further than bringing the state’s law up-to-date.
“A bill intended to repeal only unconstitutional provisions of Illinois law would have been half a page long, not 120 pages,” the memo’s author wrote.
* Rewire…
Another key provision of the Reproductive Health Act would allow advanced practice nurses and clinicians to provide in-clinic abortions. Current law only allows for physicians to provide these procedures while advanced practice nurses are limited to providing medication abortion. Allowing nurse practitioners to provide in-clinic abortions will increase the number of providers in the state, potentially meeting an increased demand should patients from surrounding areas continue to seek care in Illinois, said Liz Higgins, associate medical director of Planned Parenthood of Illinois.
“Adding in-clinic abortions for nurse practitioners would be a huge benefit of this bill,” Higgins said, noting that nurse practitioners already provide a range of reproductive health care, including IUD insertion and other gynecological procedures. “Limiting in-clinic abortions for advanced practice nurses is really just harming our patients by limiting access to health care in a timely manner.”
* In 1995, 4,853 girls under the age of 18 had abortions in Illinois. But with the passage of the Parental Notice of Abortion Act of 1995, that number is now 79 percent lower. That’s a much larger decrease than the 25 percent overall reduction of all abortions from 1995 to 2017…
According to the [1995] law, “Parental consultation is usually in the best interest of the minor and is desirable since the capacity to become pregnant and the capacity for mature judgment concerning the wisdom of an abortion are not necessarily related.”
But the sponsors of this legislation argued Tuesday the state should not legislate “the details of family life.”
“It never made sense to me that a minor can make other decisions — about carrying a pregnancy to term, about adoption, about sophisticated health care — without parental notification, but only if she seeks an abortion do we require this communication,” [Rep. Chris Welch] said. “We cannot pretend as elected officials that we can force ourselves into these situations because some disagree with a minor’s decision about their life.” […]
“It is unbelievable that the ACLU is joining Planned Parenthood in advocating to allow a child to make an irrevocable decision to kill another child without even a consultation with her parents,” [March for Life Chicago Board of Directors President Dawn Fitzpatrick ] said in an email.
* More on that angle…
As for the bill related to the parental notification, [Rep. Grant Wehrli, R-Naperville] asks what happens in a situation where a teenager goes through the process of having an abortion performed all alone and it leads to other complications.
“It is a medical procedure, and I think a parent or a guardian needs to know just in case something isn’t right,” he said. “I mean, something like depression wouldn’t be too surprising.”
* Protests are being held and a Statehouse rally is planned for next Wednesday…
About 500 people packed the Effingham Event Center Tuesday to oppose two bills that would provide greater access to abortion procedures in Illinois. […]
Attendee Michelle Delhaute McGowan, President of In His Hands Orphan Outreach. She said she attended because the proposed legislation greatly affects an orphan and adoption agency she runs.
“We’ve had women who were eight months pregnant when they came to us and both said they would have had an abortion but it was too late,” she said. “If these bills go through, other women in that situation will be able to abort these children that can survive outside of the womb.”
* Elizabeth Bauer at the Federalist…
To begin with, it wholly repeals IL 720, the Illinois Abortion Law of 1975. This law has been amended multiple times, including in 2017 (HB 40), but some minimal protections remained, so that current Illinois law permits post-viability abortions but requires that an attending or referring physician determine that it was “necessary to preserve the life or health of the mother,” in which case the doctor was required to document the particular medical indications for the abortion. It also requires that, if the baby would be capable of survival, the doctor use the abortion method “most likely to preserve the life and health of the fetus” and a second physician be available to provide medical care for any child born alive. These provisions would be entirely removed.
* Zorn…
The House bill, known as the Reproductive Health Act, “would basically enshrine abortion as a positive good in Illinois law,” says a critical memorandum released Feb. 21 by the Thomas More Society, a Chicago-based conservative law firm.
No. It would enshrine access to abortion — abortion rights — as a positive good in Illinois law. It would enshrine female bodily autonomy as a positive good. It would enshrine the idea that the best person to solve the moral dilemmas associated with unwanted or seriously compromised pregnancies is the pregnant woman herself.
I’m thrilled about this legislation because I believe in reproductive choice. I believe it’s none of my business what a woman decides to do after she becomes pregnant. I believe that the very suggestion that women are casually obtaining late-term abortions because — whoops! — they just got around to making the appointment or have decided they really want to fit into that bridesmaid’s dress is offensively misleading and belies the wrenching, usually tragic circumstances.
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Because… Chicago!
Thursday, Mar 14, 2019 - Posted by Rich Miller
* From the governor’s proposed budget…
Waste plastic in our environment is a serious concern posing a grave risk to fish and other wildlife in our water and other natural habitats. An excise tax on plastic bags, as suggested by the Governor’s budget transition committee, is one way Illinois can help to reduce the risk to wildlife. The state can reduce the use of plastic bags in check-out lanes and generate $19 million to $23 million in new revenue with a five-cent-per-bag tax depending on whether or not the City of Chicago, which already has a plastic bag tax, is exempted.
So, the object here is not necessarily to raise revenue (which is a rounding error on a rounding error), but to reduce the use of plastic bags. And because of that, the governor left open the possibility of exempting Chicago because it already has a bag tax and usage is already down.
* Both bills introduced in the House and the Senate exempt the city. And that, predictably, is not going over too well with some folks…
Chicago approved a seven-cent tax on plastic bags that went into effect in early 2017. Under [Sen. Terry Link’s] proposal, cities like Chicago, Oak Park and Evanston, that already enacted a bag tax, would remain exempt from any new state bag fees, and would not have to pay any portion of the current city tax to the state’s General Revenue Fund, essentially forfeiting the state’s potential to collect tax revenue from roughly a quarter of the state’s consumers.
“That’s bullsh*t,” Senator Chapin Rose responded. The Mahomet Republican called the plan “typical for the Democrats.”
“Exempt Chicago and let everyone else pay,” Rose said sarcastically. “Why not when you have supermajorities like this? Make downstate and the suburbs pay so Chicago can take their skim off the top.”
Also…
* And then there’s this…
The retail merchants also want a state bag tax to pre-empt any local ordinances — at least outside Chicago. […]
[Rob Karr of the Illinois Retail Merchants Association] says with so many companies operating in multiple jurisdictions, a patchwork of local rules would be a logistical and accounting nightmare.
In the end, this bag tax might very well turn out to be more trouble than it’s worth.
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* Illinois Policy Institute…
Persistent income tax hikes for decades have not been able to fix the state’s finances […]
Given the state’s income tax history, it is especially concerning that Pritzker’s proposed “fair tax” does not include any protection against future tax hikes for middle-class Illinoisans
A history of persistent income tax hikes? The income tax was increased in 2011, partially rolled back in 2015 and partially restored in 2017. The last time the General Assembly voted to raise the state’s income tax before all that was in 1989.
That’s thirty years ago, folks. In three decades, the income tax was raised once to 5 percent and it’s now at 4.95 percent.
It’s rare because it’s so darned difficult to do. Those who think it’s so easy must’ve missed that excruciating two-year fight over tax rates which ended with a bunch of House Republicans quitting. I mean, it was in all the papers.
* More…
The last state to implement a plan similar to Pritzker’s was Connecticut in 1996. State lawmakers made the same promises of middle-class tax cuts, property tax relief and increased spending on social services. But those promises were broken. The typical Connecticut family saw a 13 percent hike in their income tax rates, property tax burdens increased 35 percent, and the poverty rate increased 47 percent.
What they don’t tell you is that the marginal income tax rate on a typical Connecticut family rose from 4.5 percent all the way up to a totally ridiculous 5 percent in 23 years. Whew. Those poor, put-upon Connecticutans (Connecticutites? Connecticutians?).
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PBM oversight pushed as small pharmacists fume
Thursday, Mar 14, 2019 - Posted by Rich Miller
* Press release from yesterday…
Majority Leader Greg Harris, D-Chicago, is joining state Sen. Andy Manar to announce their efforts to rein in unfair insurance programs and regulate pharmacy benefit managers that dramatically increase out-of-pocket costs for patients at a press conference and rally on Wednesday March 13 at 2 p.m. in the Capitol Rotunda.
“We need to put access to quality, affordable care over the bottom line of corporations,” Harris said. “The status quo is clearly broken when patients are seeing the out-of-pocket cost of their lifesaving medications more than double, simply due to unfair practices that help boost profits at the expense of patients.”
Harris introduced an amendment to House Bill 465, which makes various reforms aimed at lowering prescription drug costs for patients in Illinois. Harris’ measure defines and regulates pharmacy benefit manager (“PBMs”) practices within the State of Illinois; requires pharmacists to inform customers of a less expensive drug product for their prescription; protects consumers entering the emergency room from having coverage of treatment rejected; and prohibits insurers from adopting “copay accumulator programs,” that prevent manufacturer copay cards from reducing out-of-pocket expenses for patients.
“PBMs are billion dollar corporations that are currently operating with no oversight in Illinois,” Harris said. “Over 25 states have begun regulating PBMs including Indiana, Kentucky and Texas. It’s time for us to do the same in Illinois and create protections that will level the playing field and help reduce drug costs for patients.”
* Peter Hancock with Capitol News Illinois…
PBMs generally work on behalf of health insurance plans to negotiate drug prices and develop what are called “formularies” — rules that determine what drugs will be covered for particular conditions, and in some instances, under what conditions those drugs will be covered.
In addition, in the case of high-cost drugs, PBMs will often set a “maximum allowable cost” that limits how much pharmacies will be reimbursed for a particular drug.
Independent pharmacies complain those maximum allowable costs are often less than the wholesale price they pay to manufacturers to obtain the drug. They also allege that certain PBMs have direct ties to large, retail chain pharmacies, such as CVS Health, which operates the nation’s largest chain of retail pharmacies and provides pharmacy benefit management services. […]
“We agree with … Harris that more can be done to address rising drug prices,” [an association that represents PBMs, the Pharmaceutical Care Management Association] said in a statement. “However, legislation HB 465, promotes the special interest agenda of the independent drugstore lobby while having adverse effects on drug costs for Illinois consumers.”
The association has also argued that it is not to blame for the closure of small, independent pharmacies. Those pharmacies, it said, are at a natural competitive disadvantage because they do not have the purchasing power to negotiate the same kind of prices with wholesalers that PBMs can negotiate.
More here.
* WAND TV…
Independent pharmacies in Illinois argue they are paid very little in dispensing fees for prescription drugs and often prices and fees eat up their profits. They warn that unless the legislature takes action many independent pharmacies will disappear which has happened in Lincoln and Logan County.
“If they are allowed to continue this practice, and allowed to stamp out competition, and drive prices up we should only expect that there are going to be fewer pharmacies as time goes on,” said Senator Manar.
In the past year independent pharmacies have closed in Lincoln, Taylorville and Mt. Zion.
* More context…
The Springfield-based Illinois Pharmacists Association says many owners of the state’s more than 500 independent pharmacies and smaller chains are being paid less than the “acquisition cost,” or wholesale cost, of the medicines they dispense to Medicaid patients.
Garth Reynolds, executive director of the association, says pharmacies also have seen their per-prescription “dispensing fee” from Medicaid, a fee designed to cover professional services, drop from $5.50 for generics and $2.40 for name-brand drugs under the previous “fee-for-service” system to the current 45 cents per prescription.
Advocates for managed-care organizations and PBMs say the managers save states money in their Medicaid systems. But advocates for pharmacy owners say Illinois’ less-than-transparent managed-care contracts conceal what may be unfairly high profits by PBMs that are being earned at the expense of independent pharmacies.
And because at least one PBM, CVS Caremark, is owned by the huge chain that operates CVS pharmacies, independent pharmacies say Caremark’s rate cuts may be designed to put independents out of business.
That CVS Caremark issue is huge.
* And this talking point from the PBM industry is probably not helping the industry deal with the lobbying by independent pharmacies…
Repeal any willing pharmacy provisions. Requirements that all pharmacies be included in Part D networks drives up costs and are unnecessary, given the network adequacy requirements. Congress should repeal the provision. A recent study showed that greater use of limited network pharmacies in Part D could generate $35 billion in savings over 10 years.
Everybody has pharmacies in their legislative districts. And many constituents love their local pharmacists. They are a potent force, but they’re rapidly declining.
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It’s just a bill
Thursday, Mar 14, 2019 - Posted by Rich Miller
* I’m wondering if he’d be open to amending this to include statewide candidates and legislative leaders…
A bill making its way through the Illinois Senate would prevent any presidential or vice-presidential candidate from appearing on state election ballots if they do not release their previous five years of tax return documents.
The Executive Committee passed state Sen. Tony Munoz’s Senate Bill 145 on a 13-4 partisan-line vote Wednesday after a brief discussion as to whether the bill runs afoul of the U.S. Constitution.
For Sen. Dale Righter, a Mattoon Republican, the answer was obvious.
“In my 22 years in the General Assembly, this might be the most clearly unconstitutional legislative proposal I have ever voted on,” he said.
But Jeff Radue, of the progressive advocacy group Indivisible Chicago, read from a statement made by Harvard Constitutional law scholar Lawrence Tribe, who said the mandated release of tax returns would not be unconstitutional.
* The Illinois Municipal League is opposed to this bill…
It started with a suburban homeowner’s desire to keep growing food in her Elmhurst backyard throughout the winter but has blossomed into a thorny battle pitting residents and advocacy groups against local government leaders — all haggling over whether Illinois residents have “the right to garden.”
The three-year fight between the Elmhurst homeowner and the city’s government made its way to the Illinois Senate Wednesday as the local government committee mulled a statewide solution to the underlying dispute.
Sponsored by state Sen. Tom Cullerton, D-Villa Park, Senate Bill 1675 would allow Illinoisans, no matter in what municipality they reside, to construct temporary structures for gardening throughout the colder months, often referred to as “hoop houses.”
Hoop houses come in many shapes and sizes, but are generally foundationless structures enclosed by an opaque plastic membrane to keep in warmth and sunlight.
* SJ-R…
The head of the Abraham Lincoln Presidential Library Foundation would be appointed by the governor and approved by the Illinois Senate under a bill approved Wednesday by the Senate Executive Committee.
The legislation takes aim at the private foundation that has come under fire for spending millions of dollars on a collection of Lincoln artifacts, including a hat that purportedly belonged to Lincoln but whose authenticity has never been proven.
Sen. Andy Manar, D-Bunker Hill, said Senate Bill 481 is intended to “reset” the relationship between the foundation and the Abraham Lincoln Presidential Library and Museum in Springfield. […]
Sen. Jason Barickman, R-Bloomington, voted against the bill. He’s concerned about setting a precedent of the legislature getting involved with appointing people to lead private foundations.
“I’m not even sure where we have the authority to do that,” he said.
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* Yikes…
* What the heck is going on? Here’s Elyssa Cherney in the Tribune…
Most of the crashes occurred when it was dark outside, between 6 p.m. and 6 a.m., according to the police agency. Injuries were reported in nine cases, besides Lambert’s, though state police could not specify who was injured in every instance. Previous years saw far fewer cases, with eight in 2018, 12 in 2017 and five in 2016.
“It is difficult to speculate what may be driving the surge of crashes,” state police Sgt. Delila Garcia said in an emailed statement. It could be a combination of factors, she said, including driving under the influence and driving too fast for conditions. […]
Since Lambert’s death, state police have seemingly stepped up enforcement of Scott’s Law and have sought to raise awareness through social media.
Between Jan. 1 and March, troopers issued 366 tickets for violations, compared with 138 for the same period last year. For all of 2018, troopers issued 881 citations, according to data provided by the agency. In many cases, troopers were parked and doing paperwork after a stop when vehicles whizzed past them, so the officers followed those drivers to write the tickets, said Garcia, the state police sergeant.
Go read the rest.
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Question of the day
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Marni Pyke at the Daily Herald…
Republican Sen. Dan McConchie of Hawthorn Woods said, “there is nothing in this [Pritzker graduated income tax] proposal that would protect taxpayers, especially middle-class families, from future tax increases after the new structure goes into effect.”
There are no such guarantees in the current tax law, but I digress.
* The Question: What constitutional provisions, if any, would you support to “protect” middle-class families from future tax increases after the new graduated tax structure takes effect? Make sure to explain your answer, please. Thanks.
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* David J. Roberts, an associate professor of accountancy at DePaul University, writes in the Tribune that the governor’s graduated income tax proposal is “severely flawed and would have serious negative consequences.” How? Well, the “millionaire’s tax” for starters…
Think of this as a progressive rate structure with a cliff. At the million-dollar threshold, one extra dollar of income puts you over the cliff. Ignoring the effects of any other tax provisions, that one dollar of income would cost $8,565 in additional tax, an incredible marginal rate of 856,500 percent on that dollar. Imagine the efforts that taxpayers would go through to avoid being taxed on extra income if they were close to that threshold. And a tax like this might cause some wealthy individuals to flee Illinois altogether.
“Oh, please, won’t anyone think about the millionaires?!” /s
Loo, somebody obviously didn’t run the numbers. As we’ve already discussed, the tax avoidance window is a mere $9,305…
The cutoff point above which tax avoidance wouldn’t make sense would be $1,009,305. State taxes would be $80,239.75 for an after-tax income of $929,065.25 - exactly what you would’ve paid if you made a million dollars.
Increase that income by just a dollar, to $1,009,306, and your state tax would be $80,239.83, with an after-tax income of $929,066.17 - 92 cents more than you’d have made with a million dollars in earnings. After that, the gravy gets thicker.
* Back to Associate Professor Roberts…
Under the proposal, the same rates apply to both single and joint filers. So, for example, two single individuals who each have $250,000 of net income would each pay at a rate of 4.95 percent on income above $100,000. If they marry one another, their combined $500,000 of net income means that the second $250,000 would be taxed at 7.75 percent. Ignoring the effects of any other tax provisions, this results in $7,065 of extra tax, a giant marriage penalty.
* I asked the Pritzker administration the other day about this “marriage penalty” issue…
Current Illinois tax code does not distinguish between married and single filers.
There’s little to no evidence to support the claim that people base their decision to marry on tax rates.
More married couples - especially low-income married couples - receive marriage bonuses at the federal level because of the structure of the federal tax code.
The wealthy - not low-income working families - are more likely to benefit from a higher income threshold for married filers.
Doesn’t sound like the governor is much interested in this particular topic to me.
* Roberts again…
If the plan would double the size of the rate brackets on a joint return, that would eliminate the marriage penalty, but it would result in much less tax revenue. And it would create big potential marriage bonuses. A single person with high income might marry someone with little or no income, and that couple could benefit from lower brackets.
Um, what? A bunch of rich people are gonna suddenly rush out and marry poor people so they can lower their state income tax bills? That’s… not how real life generally works.
A good rule of thumb is that if you have to stretch reality that much to make a point, you should probably avoid making the point.
Instead, perhaps the Republicans could simply demand during negotiations that married couples be allowed to file separate state tax returns or new married filing jointly rates are devised. That is, if they don’t walk away from the talks.
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It’s just a bill
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Four Senate Republicans voted in favor…
Illinois lawmakers have resurrected and are moving ahead with legislation that would make creating local right-to-work zones at the municipal level a criminal offense.
While reporters in the Capitol building were peppering Gov. J.B. Pritzker with questions about his newly-unveiled progressive tax rates, state Senators voted to send a measure to the House that would make it illegal for local governments to create right-to-work zones in their jurisdictions. Such zones allow employees to refuse union membership and still be employed.
Sponsor Ram Villivalam, D-Chicago, said the bill will support economic development, protect the quality of essential services and confirm a commitment to a highly-trained workforce. […]
The bill, which is similar to one Gov. Bruce Rauner vetoed in 2017, says any local official who supports a [private employer] right-to-work zone will be charged with a Class A misdemeanor. That carries a sentence of up to a year in jail and a fine of up to $5,000.
The roll call is here.
* Interesting roll call here…
…Adding… As you might imagine, the Illinois Family Institute isn’t happy…
This afternoon, the Illinois House of Representatives voted 60-42 to pass HB 246, which would mandate that all students in K-12 public schools be taught about the “roles and contributions” of homosexuals and opposite-sex impersonators and that textbooks purchased include discussions of the roles and contributions of homosexuals and opposite-sex impersonators.
Oy.
* Fracking is back in the news…
Republican state lawmakers from southern Illinois pushed back Tuesday against a bill that would require more public disclosure from oil and gas drilling companies whenever they use hydraulic fracturing, or “fracking” in their operations in the state. […]
Rep. Chris Miller, a Republican from Oakland, in eastern Illinois, argued that the bill, like its earlier predecessor, was intended only to turn public opinion against the oil and gas industry.
“It was bad then. This is bad now,” Miller said. “I personally have signed an oil lease and I know a lot of the things you said were just fear-mongering, trying to create fear and animosity.”
Rau and Gabel, however, said the bill would not impose new requirements on oil and gas producers. They said producers would continue providing state regulators with the same information they provide now. The only difference would be that the information would be made publicly available.
* Other stuff…
* Memo to self: Next time, pick up the phone: While scrolling through my Twitter feed, I saw the column had indeed been read outside the NewsTribune circulation area: “Meanwhile, a columnist who apparently can’t pick up a phone and doesn’t come to Springfield says he somehow has a ‘sense’ for why the legalization bill hasn’t yet been introduced…” Uh-oh.
* Should Young Adults Be Sent To Juvenile Courts?: State Sen. Laura Fine, a Democrat from Glenview, is sponsoring the legislation. She said more than a third of emerging adults in Cook County Jail were charged with misdemeanors. “Many of them get stuck in the jail because they’re either homeless or don’t have a job and they can’t pay their bail,” Fine said. “They’re at an age where, if they did have those proper services, they could be put on another direction in their lives.”
* Deadly suburban kennel fire prompts legislators to call for new safety regulations, but some kennel owners are wary: Following a devastating suburban kennel fire earlier this year that claimed the lives of 31 dogs, two state legislators have introduced bills aimed at making such facilities safer. One bill would require kennel operators to install fire alarms that automatically notify emergency responders; the other would require kennels to install sprinklers or some other fire suppression system.
* LGBTQ advocates ‘deeply disturbed’ by bill that would punish doctors for certain procedures: Asked whether it was necessary to make the medical procedures illegal, rather than promoting outreach efforts and ensuring accurate information available, [Rep. Tom Morrison, R-Palatine] said, “I need to give that more thought.”
* Unpacking Pritzker’s Tax Proposals: Bag Tax
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The hollowing out of state government
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Press release…
Children’s Home & Aid works every day to help children and families to thrive. Our deep commitment to their success is fueled by an equally strong commitment to delivering services in a sustainable way. We tackle challenges and do our best to meet the needs in light of the community dynamic, resources, etc. However, there are times when we face hard decisions that call for downsizing or in some situations, program exits. This is just such a time.
Effective immediately, we have started the process of phasing out foster care and intact family services in the Central Region.
The current child welfare environment in the Central Region has posed increasingly difficult challenges and it is clear that our foster care and intact family services are not sustainable for us in Bloomington, Champaign and the surrounding communities.
This difficult decision will impact 19 staff members. We have asked Central region child welfare staff to stay with us to help ensure the smoothest possible transitioning of 170 foster care cases and 11 intact families to other community-based providers. We anticipate completing this process by the end of May.
* Pantagraph…
Children’s Home & Aid has started the process of working with DCFS to transition the families to another agency, [Jassen Strokosch, the agency’s director of communications] said. […]
The two programs are funded by the state but there has been no rate reimbursement increase in two decades, Strokosch said. Children’s Home & Aid has been covering the difference.
“In the last three years, we have averaged losing $150,000 a year on foster care and intact family services,” he said. “We’re losing too much money providing the services … That’s not sustainable.”
In addition, the low reimbursement makes it difficult to attract and retain quality staff, he said.
* Illinois Collaboration on Youth…
When providers are unable to pay enough in wages and benefits to attract and retain a qualified workforce, it is ultimately the children, youth, and families who suffer.
Not only does high workforce turnover divert resources away from service provision toward recruitment and training, it negatively impacts the very people who are supposed to benefit from this work. For example, everyone agrees that children and youth are best raised in permanent, safe, and loving homes, however, high worker turnover is strongly correlated to increased lengths of stay in the child welfare system. This constant changing of caseworkers and supervisors is an impediment to achieving that goal, whether it is to return children to their biological families, develop formal guardianship with extended kin, or find new adoptive homes for them.
From a child’s point of view, a change in caseworker is yet another time when an adult who is supposed to care for them has let them down.
Illinois was once a national leader in child welfare, but today, we rank last in the nation on important measures of child safety and permanency. For too long we have asked providers to do the impossible with shockingly insufficient funding. We cannot continue to ignore their warnings. The child welfare workforce does difficult and demanding work. They deserve to be fairly compensated for it, and to receive adequate supervision and training so they can do their jobs well.
Providers need an emergency rate increase to stop the bleeding. We are seeking approximately $37 million with HB2524/SB1730 to help address the historic underfunding and begin to turn this system around.
But, yeah, let’s do across-the-board state budget cuts. Right.
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* Kyle Thomas at the Illinois State Board of Elections…
As reported orally at prior Board meetings, earlier this year, an effort was made to identify individuals who potentially cast more than one ballot in the General Election of 2016. Utilizing the Statewide voter registration database (IVRS), duplicate registration records were identified where more than one record for that individual had been marked as voted. The results of this effort were forwarded to the election authorities for investigation.
The majority of the records identified were found to have been mistakes made by jurisdiction staff whereby they (some dating back as far as the inception of IVRS), accepted duplicate registration matches for records that were, in fact, for separate individuals. This accounted for 765 of the 1,379 total records identified (each record reflects one voter registration record not one voter). We asked the election authorities to provide us the information on those cases and State Board staff took the steps necessary to unlink the records within the IVRS database. The next largest portion of records, found through the investigations by the election authorities, were record keeping errors at the time of voting. In many of those cases, a voter signed the wrong person’s ballot application (for instance a son may have signed a father’s application mistakenly). This accounted for 357 of the records.
However, the election authorities did report that of the 1,379 total records, 257 registration records appear to be double voting, which involves approximately 130 individual voters. Thus far, 65 of the records have been forwarded on to the appropriate law enforcement authority for further action and the remainder are still under review by the election authority or their internal counsel.
Click here for the accompanying spreadsheet. Lots more info in there. Of the 65 records forwarded so far to law enforcement, 18 were in Champaign County, 8 were in suburban Cook and 7 were in Chicago.
Over 5.5 million people voted in 2016, so this represents a miniscule 0.001 percent (one thousandth of one percent). But races can be super close (the Macon County sheriff’s race is still not decided), so vigilance is necessary. Kudos to the Board for taking a look at this.
Rep. Allen Skillicorn (R-East Dundee) says he filed a Freedom of Information Act request to get the names of the alleged multiple-voters, but was denied.
* The Board’s spokesperson explains the law enforcement referrals…
We compiled that spreadsheet based on our contact with the local authorities, but the local authorities did the investigations and referrals to law enforcement where their legal counsel determined it was warranted. We don’t have legal authority to prosecute – that rests with the state’s attorneys in the jurisdiction in which the alleged offense was committed. We also are prohibited from giving legal advice to local election authorities, so our action here was limited to making the initial referrals to the locals.
* Illinois News Network…
There were seven possible double vote records identified in Sangamon County, but they were found to not be the same person and none were reported to law enforcement.
Sangamon County Clerk Don Gray said he understands the concern.
“We would never tolerate a double vote here in Sangamon County, no county clerk would throughout the entire state of Illinois,” Gray said. “We go through great lengths to ensure that the protocols at the moment of issuing a ballot are followed” […]
[Rep. Allen Skillicorn, R-East Dundee] used the numbers to promote a measure to stiffen penalties for double voting. He also said he wants to get Illinois back into the Interstate Voter Registration Crosscheck system meant to help find voter registration irregularities. Illinois recently pulled out of the multistate Crosscheck program.
Gray said getting back in is not necessary. He said the Electronic Registration Information Center, or ERIC, Illinois and all neighboring states but Indiana are a part of is superior.
Dietrich said the state board is “hopeful that we can create a data-sharing agreement with Indiana for voter list maintenance efforts in both states.”
Crosscheck is worthless and even harmful. The state shouldn’t get back into it.
* Related…
* State Rep. Skillicorn considering 2020 congressional bid
* Rauschenberger says Skillicorn is ‘right fighter for the 14th’ District
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Illinois Small Biz Ranking Tanks Under Pritzker Rates
Wednesday, Mar 13, 2019 - Posted by Advertising Department
[The following is a paid advertisement.]
Small businesses create two-thirds of the new jobs in Illinois. And more than 270,000 Illinoisans are looking for work. But a new report shows just how much Gov. J.B. Pritzker’s tax proposal would harm the state’s most important economic engine.
The nonpartisan Tax Foundation projects Illinois’ business tax climate ranking would plummet to 48th in the nation – and the worst in the region – under Pritzker’s “fair tax” rates. Only California and New Jersey would rank worse.
This massive hit for small businesses is one of the reasons Pritzker’s rates would cost the state at least 30,000 jobs. And it’s no wonder family-owned businesses like Piasa Motor Fuels near Alton, Illinois, would look for relief across state lines. State lawmakers representing districts with strong small business communities should be wary of following the governor’s lead.
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Oppo dump!
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Hmm…
The leader of alternative teacher preparation program known as Teach for America drew sharp criticism from one Democratic state lawmaker Tuesday as he appeared before a House committee seeking continued funding from the state of Illinois. […]
[Aneesh Sohoni, executive director of the Teach for America program in Illinois] said the program recruits young college graduates, particularly students of color, who have degrees in fields other than education, and puts them through an intensive seven-week training program to prepare them for teaching in a classroom. He said it also continues to provide coaching and support for the first two years of that new teacher’s career.
But that is a significantly shorter training period than most teachers receive through traditional programs, which usually require five years of study and student teaching to earn a bachelor’s degree, or at least three semesters to earn an education degree on top of some other bachelor’s degree. […]
State Rep. Katie Stuart, an Edwardsville Democrat and a former math teacher, said she could not believe that Teach for America can provide the same level of professional training as a formal training program at a college or university. She said programs like Teach for America diminish the professionalism of the teaching occupation.
“Part of the reason why we don’t have our young folks going into our colleges and universities saying, ‘You know what, I really want to be a teacher because my teachers really made a difference in my life and I want to be able to do that for others,’ is because we don’t respect the profession,” Stuart said. “And I think many times, organizations like yours take away from what we view as the professionalism of teachers. It disrespects the degree that our education professionals are earning, and it kind of belittles the research that goes behind all of that.”
OK, but if you click here you’ll see a copy of Rep. Stuart’s 1998 resume, which was obtained via FOIA request.
Notice that Stuart earned a BA in Mathematics in May of 1991 and then from August of 1991 through May of 1993 she headed the middle school math program and taught several other classes at St. Paul Lutheran School in New Orleans. She did not earn her teacher certification in Math until May of 1993 - after she’d been teaching and running a math program for two years.
Also, if you click here and here you’ll see two job-seeking letters Stuart sent in 1998 to Edwardsville’s Assistant Superintendent of Personnel and the principal of Edwardsville High School dropping the name of her late father-in-law, who had retired as the district’s superintendent two years earlier.
Now, there’s absolutely nothing wrong with any of that. But it might possibly undercut her otherwise strong argument for teacher professionalism.
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Site Selection ranks Chicago metro 1st in nation
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Site Selection Magazine…
Greater Chicago once again has finished No. 1 in the nation in Site Selection’s annual Top Metros rankings, based on qualified corporate facility investment projects during the previous calendar year. The projects range from the massive distribution cluster in Will County populated by such firms as Diageo and IKEA to the office and manufacturing projects landing in such places as Arlington Heights, Wheeling, Bolingbrook, Elgin, Carol Stream and Naperville from the likes of Faber-Castell, IHerb, G&W Electric and Givaudan Flavors.
But the core of activity is in Cook County, where projects last year came from Facebook, Walgreens, Northrop Grumman and Komatsu, among others. Joining their ranks early this year (with a project to be counted toward the next year-end tally) was Ford Motor Company, which pledged to invest $1 billion and create 500 new jobs at its Chicago Stamping and Assembly plants that will bring total payroll to 5,800. […]
In addition to hosting the second highest concentration of computer science graduates in the U.S. and ranking sixth in the number of STEM workers who live there, Greater Chicago startups lead the nation in venture returns, with an 8.5x multiple on invested capital. Some of that capital has come thanks to the efforts of venture capitalist and billionaire J.B. Pritzker, Penny Pritzker’s brother and the newly elected governor of Illinois.
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Pritzker to opponents: What’s your plan?
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Tribune…
Pritzker, repeating talking points he used last week when launching his tax proposal, said the plan would help the state address its $3.2 billion budget deficit, $8.4 billion backlog of unpaid bills and $134 billion in unfunded pension liabilities. He presented two alternatives: across-the-board spending cuts or an increase in the current flat tax rate. The governor so far has ruled out extending the sales tax to consumer services or taxing retirement income, moves that would put Illinois more in line with other states but are politically unpopular.
Pritkzer’s plan has been met with unified opposition from Republican lawmakers and large business organizations including the Illinois Chamber of Commerce and the Illinois Manufacturers’ Association. They argue that raising taxes on the wealthy will push residents and businesses out of the state.
Rather than just criticize his plan, Pritzker said, opponents should offer “a specific counter-proposal.” So far, none has been forthcoming.
* It’s a different tax, but still on-topic…
Gov. J.B. Pritzker wants to increase the tax on a pack of cigarettes by 32 cents. That’s expected to raise $55 million in revenue, the administration said.
Illinois Association of Convenience Stores Executive Vice President Bill Fleischli represents thousands of convenience stores around the state. He said Pritzker proposal will make Illinois’ taxes on cigarettes about $2.30 a pack in Illinois. He said that would push Illinois’ taxes on cigarettes to the highest in the region, behind Wisconsin. […]
Instead of increasing taxes, Fleischli said the state should find other ways to shore up the budget.
“Look at anything, look at a reduction in spending,” Fleischli said. “Look at other areas, not just the sins. We ought to go someplace else.”
It’s not really fair to expect Fleischli to propose an alternative revenue or spending plan. That’s not what he does. But it is a useful rhetorical device to make the opposition sputter.
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Tobacco 21 roundup
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* I know we discussed this yesterday, but there’s not a lot of news out there, so let’s take a look at the Tobacco 21 coverage…
The state of Illinois is a big step closer to raising the age to buy cigarettes or other tobacco products. The Illinois House yesterday approved the Tobacco 21 plan. It raises the age to buy cigarettes, dip, or vape products to 21. Supporters say the new law would stop older teens from buying tobacco for younger teens.
Interestingly enough, the Senate read the bill into the record late yesterday and could start hearings as early as this week and might possibly even have a floor vote by Thursday. But, that’s a pretty ambitious schedule and the SDems haven’t caucused on this yet. Either way, it’s now in position for a very fast track.
* Tribune…
A spokeswoman for Democratic Gov. J.B. Pritzker did not directly comment on the bill, which still has to get through the Senate, but said the governor “believes in order to help build a healthy society we have to work to prevent young people from smoking.”
“He looks forward to reviewing the legislation to raise the smoking age, spokeswoman Jordan Abudayyeh said in an email.
While the bill would raise the legal age for purchasing cigarettes and vaping products, it would do away with penalties for underage possession. Retailers still would be fined for selling restricted products to underage customers.
“This is a public health issue, not a criminal issue,” said Democratic state Rep. Camille Lilly of Chicago, the bill’s sponsor.
Lilly did a very good job with this bill. I was told the last soft roll call had 72 votes in support. It received 82, which is 21 more than it received last November.
Lots of parents are freaked out these days about the explosive rise in teenage vaping. That could’ve explained a lot of these flips…
Republican state Rep. Jim Durkin, of Western Springs, said he has fought against the issue for many years. Now, he said, he credits his 17-year-old daughter for helping him change his mind about what she called an issue “out of control”.
“She said you guys need to do something. I said Caroline, I’m doing something, I’m changing my mind.”
* Capitol News Illinois…
The bill leaves in penalties for merchants who sell to minors. Bill Fleischli, executive vice president of the Illinois Petroleum Marketers Association and the state’s Association of Convenience Stores, finds fault with this logic.
Fleischli said merchants then become the policers, because law enforcement would be unable to do anything if an officer saw a minor with a cigarette, for example.
Rep. Tim Butler, R-Springfield, who is a chief co-sponsor of the measure, said he knows “this isn’t a perfect bill.”
“For those who wonder about the decriminalization aspect of it, I’d like you to ask a member of our law enforcement how many kids they actually bust for smoking a cigarette every day,” he said. “It doesn’t actually happen today.”
* Illinois News Network…
Republican Toni McCombie said the law is likely to have unintended consequences.
“We have got to quit chipping away at our personal liberties and our tax bases,” she said.
Estimates on the bill say the state would lose up to $40 million per year in tobacco tax revenue, but Lilly said that estimate isn’t accurate because it assumes everyone would suddenly abide by the law. […]
“Research shows that Tobacco 21 laws can make a tremendous impact on the health of our communities as well as reduce healthcare costs from tobacco-related diseases,” said Kathy Drea from the Lung Association. “This law is proven to protect children, reduce smoking rates, save on healthcare costs and save lives. In fact, Chicago saw a 36 percent decline in the use of tobacco products among teens after passing Tobacco 21 in 2016.”
I’m now wondering where Rep. Toni “Personal Liberties” McCombie will be on the cannabis legalization bill. Just sayin…
* Gatehouse…
Republican Rep. C.D. Davidsmeyer of Jacksonville, speaking against the bill, said his concern on the bill is mainly philosophical. Davidsmeyer’s district borders the Mississippi River, which means businesses would be competing with Missouri, which has a lower cigarette tax.
“I believe if a person is old enough to decide who the most powerful person on the planet, the president of the United States, is, I think they’re responsible enough to look at the package of cigarettes or look at the can of chewing tobacco and see that it says it can kill you,” Davidsmeyer said.
So, if an 18-year-old should be allowed to decide whether to smoke cigarettes or vape nictoine, should a 21-year-old be allowed to decide whether to smoke or vape legal cannabis? Rep. Davidsmeyer will be letting us know soon enough.
* From JUUL Labs CEO Kevin Burns…
We applaud the Illinois House of Representatives for passing legislation to raise the purchasing age for all tobacco products, including vapor products, to 21 and we will continue to work with lawmakers in Illinois to get this policy signed into law.
We cannot fulfill our mission to provide the world’s one billion adult smokers with a true alternative to combustible cigarettes, the number one cause of preventable death in this country, if youth-use continues unabated. Tobacco 21 laws fight one of the largest contributors to this problem – sharing by legal-age peers – and they have been shown to dramatically reduce youth-use rates. That is why we are committed to working with lawmakers to enact these effective policies and hope more jurisdictions follow in Illinois’ example.
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Dold clarifies Tribune’s Sterigenics coverage
Wednesday, Mar 13, 2019 - Posted by Rich Miller
* Bruce Dold, the publisher and editor in chief of the Chicago Tribune, wrote an unusual clarification late yesterday afternoon about the Tribune’s Sterigenics coverage. Excerpt…
Some articles have discussed industry research that shows there are other, potentially safer methods that could replace ethylene oxide across the medical equipment industry. To clarify, some devices are currently approved for use only if they are sterilized with ethylene oxide. Under current FDA approvals, Sterigenics and other companies are required to use ethylene oxide to sterilize those devices.
A story published online Jan. 25 and in print the next day has been updated with the following sentence:
Despite readily available alternatives that industry research shows are potentially effective, Sterigenics and Medline Industries note that ethylene oxide is currently the only FDA-approved option to fumigate certain medical equipment used in surgeries and other medical procedures.
A story published online Oct. 26 and in print the next day discussed pollution control at the plant, stating: “Federal officials say the company released uncontrolled amounts of ethylene oxide from building vents for more than 30 years.”
There’s more, so go read the whole thing.
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