CTBA Weekly Review

August 21, 2007

Springfield Update - FY 2008 Budget

Still Waiting on Governor Action 

Last week Governor Blagojevich held a press conference with Senate President Jones to announce he was going to cut $500 million from the budget in member initiatives (or "pork") and special interest spending.  He said he intends to use that money to increase "healthcare security for half a million people." 

Health Care for All?

The governor has the power to line item veto anything in the budget.  However the constitution limits what he can do with that money.  He is not allowed to just move money from one part of the budget to another.  What he is allowed to do is use his two percent funds transfer authority to move money, but, under the constitution, the programs must be related.  That means he cannot use that two percent transfer authority to create a new health care program.  That would require legislative approval in both chambers.

That translates to this, the governor would have to line item veto member initiatives involving the Department of Healthcare and Family Services and then use that money to fund related programs.  He cannot veto money going to a park and then use it to fund health care. 

That means the governor cannot create an entire new health care initiative like the Illinois Covered plan he announced in March.  What he can do is expand current programs like Cervical Cancer Screening and All Kids.  This would require new rules for coverage expansion of programs administered by the Department of Health and Family Services (HFS).  The programs affected would be the Family Care and Assist, Primary Care, Rx, Breast and Cervical Cancer Screening and Treatment, Working Families Premium Assistance and All Kids. 

These new program rules would have to pass the Joint Committee on Administrative Rules (JCAR).   In order for JCAR to block any of the governor's plans, at least eight out of the 12 members must vote to do so. 

To make things more interesting there is a dispute between JCAR and HFS staff about whether all the programs listed above would need new rules.  This could be a court case in the making. 

Also state and local officials like Comptroller Hynes, House Speaker Madigan and Chicago Mayor Daley have questioned the legality of the governor's plan. 

See the members of JCAR here

View the HFS website here

What "Pork"?

Last week we discussed just what the "pork" was in the budget.  You can visit that analysis here.  To recap, this budget has an estimated $200 million in member projects or "pork".  The House Democrats and Republicans as well as the Senate Republicans spelled out by line item their initiatives in the budget.  The Senate Democrats did not.  Because the Senate Democrats did not line item their "pork" it remains unclear if it will be vetoed by the Governor along with everyone else's.

As for the term "pork," while it might make a good story, we really don't have to change the state's name to "Illinoink".  In the aggregate, the cost of all projects designated "pork" in the budget is roughly $200 million.  Additionally, the "pork" is not necessarily wasteful spending, but state dollars that go to local communities for things that taxpayers want and need like fire trucks, parks, and school technology grants. 

Some examples of the "pork" are $32,000 to pay for tornado sirens for the Village of Edinburg, $50,000 to Rock Island for a new nursing home and $20,000 to Cornerstone Chicago to fund a halfway house.  As stated last week,

any expenditure of public money that isn't legitimate is inexcusable.  But many of these projects are slated to fund vital community services.  It is questionable to call them unnecessary pork that needs trimmed from the budget. 

What's Next?

Since his press conference last Tuesday afternoon, the Governor has yet to spell out what he will veto in the budget.  There's rumor around Springfield that he could begin that today. 

A vote to override any line item veto would require a super majority in the House and Senate.  However, Senate President Jones has used the term "case closed" when speaking about the budget, saying he will not call for a veto override in his chamber.  Thus, even if the House overrides the Governor's vetoed line items, it would go nowhere in the Senate and all vetoed items would stand.

Still unresolved issues surround the capital bill and transit funding.

What YOU Can Still Do

Is There Still Hope?

In fact there is still hope for something good to happen this year.  The state desperately needs revenue to fund the capital program and come up with a fix for transit.  Additionally, if revenue growth falls short of projections next year, the state will not have enough revenue to fund this budget in its entirety.  Also, remember we still owe over $2 billion in unpaid Medical bills and haven't come up with a solution to the state's pension funding problem.  Lastly, the $575 million slated for education is not guaranteed next year.  

That all means all the support this year for a modest income tax increase is still in play. 

Many still support a modest increase in the state's income tax.  Speaker Madigan has said he's in favor of it, organized labor is strongly behind it and over 500 groups have signed the A+ Illinois letter to the Governor supporting it.  View the letter

Income Tax Options: read a CTBA analysis on potential uses of, and revenue generate by, increasing the state income tax by 1% or 2%.

Call your legislators!  Use the A+ Illinois toll-free legislative hotline.  Keep the pressure on lawmakers not to leave Springfield until a modest increase in the income tax is passed to fund essential public services like education. 

Even if you've called before, lawmakers need to hear from you NOW.

Call:

1-800-651-0315

You can also email your legislators.  Find their emails at

http://capwiz.com/aplusillinois/state/main/?state=IL 

Resources

CTBA analysis on the pension funding problem

FY 2008 Deficit Picture

Fact Sheet on School Funding and EFAB

For more information contact Chrissy Mancini at cmancini@ctbaonline.org

Illinois Retirement Security Initiative

Don't Forget About Pensions!

As budget negotiations hedge on, IRSI urges that we not forget about Illinois $40.7 billion pension crisis. 

For an overview addressing; How the situation got so bad? What has been done to address the problem? and What must be done now? Read DON'T FORGET ABOUT PENSIONS!

Overview of Spring 2007 Pension Legislation

For more information contact Jourlande Gabriel, Director of the Illinois Retirement Security Initiative at jgabriel@ctbaonline.org

Visit the IRSI website for more information about state worker's pensions at http://www.ctbaonline.org/pensions.htm 

"The Illinois Retirement Security Initiative is a project of the Center for Tax and Budget Accountability. The goal of the Illinois Retirement Security Initiative is to ensure public retirement benefits in the state are adequately financed and designed to attract high quality employees to the public sector.  The Initiative will research, formulate and advocate for public policies towards that end."

State School Payments

Comptroller Hynes Weighs In About Missed School Payments

Thus far, schools have missed $340 million in state aid payments.  The Comptroller had this to say about the missed school payments:

"The clock is ticking. Schools are starting their fall semester. Every day, more and more people are suffering financial hardship because without a budget, they can't receive the payments they've been promised," Hynes said. "The Governor must act immediately to provide relief to school districts and to all of the vendors who have provided goods and services and deserve to be paid."

"The Governor's had a week to finalize the budget. He and his staff should be working round-the-clock to get it done as quickly as possible," Hynes said.

In the aggregate, hundreds of millions of dollars in payments that typically would go out in August have been delayed because of the lack of a budget. In addition to the school aid payments, worker's compensation payments of nearly $600,000, Law Enforcement training grants of $2.5 million, addiction prevention grants of $268,000, maternal and child health grants of $42,000 and highway and bridge construction and repair funds of $4.7 million, cannot be paid due to the lack of legal spending authority.

To read the entire Comptroller's statement click here

To read the Comptroller's statement on state worker's paychecks and the AFSCME complaint click here

Early Childhood Education and the FY 2008 Budget

Passed Budget Cuts Recommended Funding by Half

A recent Economic Policy Institute report proves the importance of early childhood education.  Robert G. Lynch examined the costs and benefits of high quality per K programs and their positive impact overtime on federal and state budgets, crime costs and earnings.  He found that in Illinois, the result of investing in universal, high quality pre K programs over the next forty years would:

*Save Illinois $6.2 billion from crime reduction,

*Increase compensation for Illinois workers by $17.9 billion, and

*Save $7.7 billion in the Illinois budget.

Studies prove that investing in early childhood education provides a wide array of significant benefits to children, families, and society as a whole. According to EPI, children who participate in high-quality prekindergarten programs require less special education and are less likely to repeat a grade or need child welfare services. Once these children enter the labor force, their incomes are higher, along with the taxes they will pay back to society.  Both as juveniles and as adults, these children are also less likely to engage in criminal activity.

High-quality Pre-K programs benefit government by reducing spending on K-12 education, child welfare, and public safety as well as increasing income tax revenues.

Now consider this: The FY 2008 House and Senate passed budget increase early childhood education by $25 million.  However, this is less than half of what was recommended by the Illinois state board of education for early childhood education this year.

The EPI study demonstrates that investment in early childhood education is an effective strategy for generating wealth in Illinois.  Funding early childhood education to the fullest would ultimately reduce education and public safety costs and it would increase income earned and taxes paid.  Now is not the time to cut this funding in Illinois.

To read the full report visit EPI here

For more information about early childhood education please contact Chrissy Mancini at cmancini@ctbaonline.org

Calendar of Events

WHAT? State of Work Illinois Community Forum - Effingham

WHEN? Tuesday August 21, 12:00 to 1:30

WHERE?Crossroads Workforce Center, 1901 S. 4th St., 2nd Floor

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

WHAT?Moving from Poverty to Opportunity Action Forum: Chicago Southside

WHEN? August 22, 2007, 6:30 PM to 9:00 PM

WHERE? The Englewood Corps & Red Shield Center - 945 W. 69th Street - Chicago

For more information, click here to view the flyer.

WHAT? State of Working Illinois Community Forum - Carbondale

WHEN? Tuesday, August 28,  3:00 to 5:00

WHERE? TBA

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

WHAT? Single-Family Development: Community Housing Developers Institute

WHEN? September 11-12, 2007

WHERE? ICAA Training Facility, 3435 Liberty Drive, Springfield, IL
Contact: nate@housingactionil.org or 312-939-6074 x 201 More info: www.housingactionil.org.

WHAT? State Budget Briefing

WHEN? Monday, September 17,  9:00 to 11:00

WHERE? Spertus Institute - 618 S. Michigan, Chicago

The Center for Tax and Budget Accountability and the Donor's Forum host a briefing with key state leaders about this year's budget.

Register online

Contact Chrissy Mancini at cmancini@ctbaonline.org for more information

WHAT? State of Work Illinois Community Forum - Vermilion County

WHEN? Tuesday, September 18, 3:00 to 5:00

WHERE? University of IL Extension - Vermilion County 12190 U.S. Route 150 Oakwood, Il

View a flyer

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

WHAT? Your Pension and You

WHEN? Thursday, September 20, 3:00 to 5:00

WHERE? UIC Medical Center

Contact Carol Humble at JHumble368@aol.com for more information

WHAT?National Association of Social Workers (NASW) IL Chapter's Statewide Conference, "Bridging Health Disparities: Help Starts Here"

WHEN? September 24-26, 2007

WHERE? Holiday Inn Chicago Mart Plaza, Chicago, IL

Click here for more information. 

WHAT? State of Working Illinois Community Forum - Peoria

WHEN?  Tuesday, September 25,  7:30 am to 9:00 am

WHERE? The Central Illinois Workforce Development Board

               One Technology Plaza

               211 Fulton Street, Suite 300

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

WHAT? State of Working Illinois Community Forum - Macomb

WHEN?  Friday, September 28,  10:00 am to 12:00 pm

WHERE? TBA

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

WHAT? Property and Asset Management: Community Housing Developers Institute

WHEN? October 16-17, 2007

WHERE? ICAA Training Facility, 3435 Liberty Drive, Springfield, IL
Contact: nate@housingactionil.org or 312-939-6074 x 201 More info: www.housingactionil.org.

WHAT? Affordable Housing Month

WHEN? November 1-30, 2007

WHERE? Public education events and activities to be held throughout the state
Contact: nate@housingactionil.org or 312-939-6074 x 201 More info: www.housingactionil.org.

Do you have something to share in the Weekly Review?

Please email Chrissy Mancini

Director of Budget and Policy Analysis

at cmancini@ctbaonline.org