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Illinois Cultural News
(Articles appear from the newest to the oldest. To read the articles in the time line in which they were posted, scroll down to find the oldest in the tread and read upwards from oldest to newest.)
Illinois Senate's Grand Bargain by Joyce Geiler
The Democratic and Republican leaders of the Illinois Senate are demonstrating their seriousness about attempting to break the state’s 18-month budget deadlock by what is being called the “grand bargain.” Democratic Senate President John Cullerton and Minority Leader Christine Radogno negotiated a multi-part plan to end the nearly two-year budget battle between Democrats and GOP Gov. Bruce Rauner. They have introduced 13 measures that include non-budget-related sweeteners for both sides, have already assigned public committee hearings and promise to act on the package by month’s end.
The sweeping, bipartisan package would put in place a budget for the remainder of the fiscal year as well as authorize an income tax increase and $7 billion in borrowing to pay down the state's growing list of overdue bills. It includes legislation to freeze local property taxes and to tighten rules on when injured workers may make claims under the workers’ compensation law. The deal also offers pension reforms, a minimum wage hike, an expansion of legal gambling, and local government consolidation. It would also provide the distressed Chicago Public Schools with aid promised last year if state pension reforms were approved.
The package was portrayed by Senate leaders as a framework and potential roadmap to work from in an attempt to break the budget logjam. The Senate also voted unanimously last week to limit, by Senate rule, its leaders to 10 years. Senator Radogno promises to expand the idea with a constitutional amendment in the future.
Here’s a look at some of the specific pieces of legislation in the proposed package.
Income tax increase: The personal income tax would jump from 3.75 percent to 4.95 percent, a plan that should generate $4.1 billion a year. Democrats argue that, along with spending cuts, the tax increase could eliminate what the governor’s office estimates will be a $5.3 billion deficit on the June 30 end of the fiscal year.
Other taxes: The state would also impose a penny-per-ounce tax on sugary drinks.
Borrowing to pay down debt: The legislation would allow Illinois to borrow $7 billion by selling bonds to pay off overdue bills, which now total $10.7 billion. The loan would get the state back to paying vendors and service providers within 30 days of receiving their bills. The state is currently as much as 18 months behind in paying state contractors and service providers forcing some organizations to halt services. With the infusion of funding the cycle would be reduced to 30 days. The debt would be repaid over a seven-year term. The state would further chip away at the backlog by earmarking $900 million in expected revenues from an expansion of gambling (in a separate bill) to pay down the tab.
Covering costs: The plan includes $694 million to cover expenses for the first half of 2017 for seven agencies, including prisons and the Human Services Department. The six-month, temporary budget agreed to last summer expired January 1 and the state is currently back to operating without appropriations.
Pension reform: The proposal would eliminate the General Assembly Retirement System (pensions) for future legislators. The measure would move Chicago’s responsibility for paying the employer’s portion of teachers’ pensions to the state, a $215 million obligation for 2017 alone. That would remedy a long-running complaint about fairness from cash-strapped city officials, since the state already picks up the employer portion for teachers outside the city. The measure aims to save up to $1 billion a year by offering what Senator Cullerton has termed “consideration” — essentially a choice between how future pay raises figure into retirement income or whether pensioners receive cost-of-living adjustments in retirement.
Employees who fall into the state's tier one plan who started before 2011 would be offered a choice. They would be asked to forgo the 3% compounding COLA (cost-of-living) increase in retirement and accept what tier 2 employees get – the lower of a 3% non-compounding or half the rate of inflation. They would also be asked to postpone COLA increase for five years into their retirement or until they hit 67. In exchange, tier one employees would receive a constitutional guarantee that future raises would count toward their pensions, a lump sum refund worth 10% of their contributions to the pension systems so far, and a 10% reduction in what they pay toward their pensions going forward. If they decline the offer, future pay raises won't count toward their pensionable income. Up to 5% of tier one employees could also opt for a 401(k)-style retirement plan. The plan caps end-of-career pension spiking.
It would cover three of the state's five funds: the ones that cover state university employees, teachers and lawmakers, and it would also include the Chicago Teachers Fund. The general state employees fund is not included because of pending litigation over their lack of a contract. The judges' fund is also excluded because the courts will decide the legality of the reforms.
The cash-strapped state owes $8.8 billion to the state's five pension funds in fiscal 2018. That's up 12.7% from the $7.8 billion the state is paying in fiscal 2017, which began July 1. The state's unfunded liabilities rose to $126.5 billion in fiscal 2016 from $112.9 billion a year earlier and the funded ratio deteriorated to 39.2% from 40.9%. The changes could shave between $700 million to $1 billion annually off the state's annual contribution, which now consumes nearly one-quarter of its general fund.
Supporters of the "consideration" plan believe it can survive the state constitution's pension clause that bans the state from impairing or diminishing promised pension benefits. A prior attempt to cut benefits was shot down by the state Supreme Court in May 2015. High court opinions have left the door open to the "consideration" model because contract laws allow for a change if it's mutually agreed to by the parties and it provides some perk to offset a cut. Critics contend the proposal is illegal because employee pensions would be impaired whether they accept or reject the proposed change.
Gambling expansion: Similar to a proposal from previous years, the plan would create a land-based casino in Chicago and add riverboat casinos in Lake County, Rockford, the south suburbs of Chicago, Danville, and in Williamson County in southern Illinois, as well as permitting slot machines at horse racing tracks in Arlington Heights, Cicero and Collinsville.
Workers’ compensation: Democrats have argued they made important changes to the injured-workers program in 2011 and that the insurance industry hadn’t caught up to those cost-saving measures. This plan would further restrict claims when injuries are accidents, set maximum compensation rates, and limit physical therapy, among other things.
Minimum wage: The minimum wage would increase from $8.25 an hour to $9 on July 1, then by 50 cents each year until 2021, when it will be $11. According to the U.S. Labor Department, minimum wage exceeds $8.25 in 21 places outside Illinois, including the District of Columbia, which is the highest at $11.50. Small businesses would qualify for a tax credit to help offset the impact.
Local government consolidation: Another bill in the package would smooth the way for local voters to dissolve township districts or approve their merger with nearby townships. Also, city and county boards would have more authority to absorb a township. Kane, Lake, and Will Counties could also absorb drainage districts.
The big question now is whether Gov. Bruce Rauner or House Speaker Michael Madigan will embrace the Senate's approach or impede it to continue their standoff.
Read more here.
The Democratic and Republican leaders of the Illinois Senate are demonstrating their seriousness about attempting to break the state’s 18-month budget deadlock by what is being called the “grand bargain.” Democratic Senate President John Cullerton and Minority Leader Christine Radogno negotiated a multi-part plan to end the nearly two-year budget battle between Democrats and GOP Gov. Bruce Rauner. They have introduced 13 measures that include non-budget-related sweeteners for both sides, have already assigned public committee hearings and promise to act on the package by month’s end.
The sweeping, bipartisan package would put in place a budget for the remainder of the fiscal year as well as authorize an income tax increase and $7 billion in borrowing to pay down the state's growing list of overdue bills. It includes legislation to freeze local property taxes and to tighten rules on when injured workers may make claims under the workers’ compensation law. The deal also offers pension reforms, a minimum wage hike, an expansion of legal gambling, and local government consolidation. It would also provide the distressed Chicago Public Schools with aid promised last year if state pension reforms were approved.
The package was portrayed by Senate leaders as a framework and potential roadmap to work from in an attempt to break the budget logjam. The Senate also voted unanimously last week to limit, by Senate rule, its leaders to 10 years. Senator Radogno promises to expand the idea with a constitutional amendment in the future.
Here’s a look at some of the specific pieces of legislation in the proposed package.
Income tax increase: The personal income tax would jump from 3.75 percent to 4.95 percent, a plan that should generate $4.1 billion a year. Democrats argue that, along with spending cuts, the tax increase could eliminate what the governor’s office estimates will be a $5.3 billion deficit on the June 30 end of the fiscal year.
Other taxes: The state would also impose a penny-per-ounce tax on sugary drinks.
Borrowing to pay down debt: The legislation would allow Illinois to borrow $7 billion by selling bonds to pay off overdue bills, which now total $10.7 billion. The loan would get the state back to paying vendors and service providers within 30 days of receiving their bills. The state is currently as much as 18 months behind in paying state contractors and service providers forcing some organizations to halt services. With the infusion of funding the cycle would be reduced to 30 days. The debt would be repaid over a seven-year term. The state would further chip away at the backlog by earmarking $900 million in expected revenues from an expansion of gambling (in a separate bill) to pay down the tab.
Covering costs: The plan includes $694 million to cover expenses for the first half of 2017 for seven agencies, including prisons and the Human Services Department. The six-month, temporary budget agreed to last summer expired January 1 and the state is currently back to operating without appropriations.
Pension reform: The proposal would eliminate the General Assembly Retirement System (pensions) for future legislators. The measure would move Chicago’s responsibility for paying the employer’s portion of teachers’ pensions to the state, a $215 million obligation for 2017 alone. That would remedy a long-running complaint about fairness from cash-strapped city officials, since the state already picks up the employer portion for teachers outside the city. The measure aims to save up to $1 billion a year by offering what Senator Cullerton has termed “consideration” — essentially a choice between how future pay raises figure into retirement income or whether pensioners receive cost-of-living adjustments in retirement.
Employees who fall into the state's tier one plan who started before 2011 would be offered a choice. They would be asked to forgo the 3% compounding COLA (cost-of-living) increase in retirement and accept what tier 2 employees get – the lower of a 3% non-compounding or half the rate of inflation. They would also be asked to postpone COLA increase for five years into their retirement or until they hit 67. In exchange, tier one employees would receive a constitutional guarantee that future raises would count toward their pensions, a lump sum refund worth 10% of their contributions to the pension systems so far, and a 10% reduction in what they pay toward their pensions going forward. If they decline the offer, future pay raises won't count toward their pensionable income. Up to 5% of tier one employees could also opt for a 401(k)-style retirement plan. The plan caps end-of-career pension spiking.
It would cover three of the state's five funds: the ones that cover state university employees, teachers and lawmakers, and it would also include the Chicago Teachers Fund. The general state employees fund is not included because of pending litigation over their lack of a contract. The judges' fund is also excluded because the courts will decide the legality of the reforms.
The cash-strapped state owes $8.8 billion to the state's five pension funds in fiscal 2018. That's up 12.7% from the $7.8 billion the state is paying in fiscal 2017, which began July 1. The state's unfunded liabilities rose to $126.5 billion in fiscal 2016 from $112.9 billion a year earlier and the funded ratio deteriorated to 39.2% from 40.9%. The changes could shave between $700 million to $1 billion annually off the state's annual contribution, which now consumes nearly one-quarter of its general fund.
Supporters of the "consideration" plan believe it can survive the state constitution's pension clause that bans the state from impairing or diminishing promised pension benefits. A prior attempt to cut benefits was shot down by the state Supreme Court in May 2015. High court opinions have left the door open to the "consideration" model because contract laws allow for a change if it's mutually agreed to by the parties and it provides some perk to offset a cut. Critics contend the proposal is illegal because employee pensions would be impaired whether they accept or reject the proposed change.
Gambling expansion: Similar to a proposal from previous years, the plan would create a land-based casino in Chicago and add riverboat casinos in Lake County, Rockford, the south suburbs of Chicago, Danville, and in Williamson County in southern Illinois, as well as permitting slot machines at horse racing tracks in Arlington Heights, Cicero and Collinsville.
Workers’ compensation: Democrats have argued they made important changes to the injured-workers program in 2011 and that the insurance industry hadn’t caught up to those cost-saving measures. This plan would further restrict claims when injuries are accidents, set maximum compensation rates, and limit physical therapy, among other things.
Minimum wage: The minimum wage would increase from $8.25 an hour to $9 on July 1, then by 50 cents each year until 2021, when it will be $11. According to the U.S. Labor Department, minimum wage exceeds $8.25 in 21 places outside Illinois, including the District of Columbia, which is the highest at $11.50. Small businesses would qualify for a tax credit to help offset the impact.
Local government consolidation: Another bill in the package would smooth the way for local voters to dissolve township districts or approve their merger with nearby townships. Also, city and county boards would have more authority to absorb a township. Kane, Lake, and Will Counties could also absorb drainage districts.
The big question now is whether Gov. Bruce Rauner or House Speaker Michael Madigan will embrace the Senate's approach or impede it to continue their standoff.
Read more here.
Christian Principles in the Scrap Metal Business by Joyce Geiler
Can Christian principles work in the business mountain? Apparently United Scrap Metal of Cicero, Illinois thinks so.
Amy Arend joined United Scrap Metal in 2013 because of the way the company leadership ran the business. On Arend’s first day, the company’s founder Marsha Serlin told her three things she needed to do to be successful in the scrap metal industry:
1. Pick up when you say you’re going to
2. Pay what you say you’re going to pay
3. Never steal from anyone
Arend, who is a Christian, believed in what the company wanted to achieve and felt United’s morals aligned with hers. As a senior recycling consultant, she’s interested in making the world more environmentally-friendly and bringing transparency to an industry that bears a reputation for being corrupt and deceptive. Part of her job is engaging with industry associations. Three years ago, she went to a Technology and Manufacturing Association prayer breakfast thinking it could be a chance to proclaim her faith in a secular environment. She discovered that manufacturers were not only open about what they’re doing in their work but that they are open about their faith, too. Two years later she became the group’s chairman and her only agenda was to honor Christ with her work. The scripture verse that moves her is Colossians 3:23: “Whatever you do, work at it with all your heart, as working for the Lord, not for men.”
Read more here.
Who is this company that encourages Christian principles? United Scrap Metal (USM), founded in 1978, is a provider of innovative recycling solutions. The company purchases, processes and markets recyclable commodities, moving 18 million tons of scrap metal per month with a constant commitment to high integrity. Their team of 300 dedicated employees serves more than 2,500 commercial clients coast to coast. United Scrap Metal's many awards and positive media coverage has made the company one of the most recognized firms in the industry. It is a certified Women Business Enterprise, which means that women own and control at least 51% of the business. Its certification allows companies with whom they do business to claim minority benefits since most local, state, and federal government purchasing agencies track and have programs for doing business with women-owned vendor companies.
Giving back to the community is a core value at United Scrap Metal, which dedicates time, manpower and finances to non-profit organizations. Many of their customers join them in community and charitable initiatives. In addition to their partnership with Ronald McDonald House Charities of Chicagoland and Northwest Indiana, United’s website lists 35 other charitable organizations they serve. http://www.unitedscrap.com/
Another example of Christian principles applied to business may be observed in Technology and Manufacturing Association, a non-profit association based in Shaumburg, Illinois that was formed with the philosophy that eight small manufacturing companies could better themselves through association with each other. Since then, TMA has evolved into Illinois’ Premier Manufacturing Association, with over 1,000 precision manufacturing and supplier members that are bettering the industry through association.
Christians in Manufacturing is a committee of TMA members who organize the Annual Prayer Breakfast, a yearly event which includes a keynote speaker, testimonials, scripture reading, music, fellowship, and a meal. Over 100 members of the association attend from all manufacturing sectors. In 2016, the Christians in Manufacturing committee added to their biblical testimony when the company began its first annual serving event, which took place at the Northern Illinois Food Bank. http://www.tmaillinois.org/about-tma/
Can Christian principles work in the business mountain? Apparently United Scrap Metal of Cicero, Illinois thinks so.
Amy Arend joined United Scrap Metal in 2013 because of the way the company leadership ran the business. On Arend’s first day, the company’s founder Marsha Serlin told her three things she needed to do to be successful in the scrap metal industry:
1. Pick up when you say you’re going to
2. Pay what you say you’re going to pay
3. Never steal from anyone
Arend, who is a Christian, believed in what the company wanted to achieve and felt United’s morals aligned with hers. As a senior recycling consultant, she’s interested in making the world more environmentally-friendly and bringing transparency to an industry that bears a reputation for being corrupt and deceptive. Part of her job is engaging with industry associations. Three years ago, she went to a Technology and Manufacturing Association prayer breakfast thinking it could be a chance to proclaim her faith in a secular environment. She discovered that manufacturers were not only open about what they’re doing in their work but that they are open about their faith, too. Two years later she became the group’s chairman and her only agenda was to honor Christ with her work. The scripture verse that moves her is Colossians 3:23: “Whatever you do, work at it with all your heart, as working for the Lord, not for men.”
Read more here.
Who is this company that encourages Christian principles? United Scrap Metal (USM), founded in 1978, is a provider of innovative recycling solutions. The company purchases, processes and markets recyclable commodities, moving 18 million tons of scrap metal per month with a constant commitment to high integrity. Their team of 300 dedicated employees serves more than 2,500 commercial clients coast to coast. United Scrap Metal's many awards and positive media coverage has made the company one of the most recognized firms in the industry. It is a certified Women Business Enterprise, which means that women own and control at least 51% of the business. Its certification allows companies with whom they do business to claim minority benefits since most local, state, and federal government purchasing agencies track and have programs for doing business with women-owned vendor companies.
Giving back to the community is a core value at United Scrap Metal, which dedicates time, manpower and finances to non-profit organizations. Many of their customers join them in community and charitable initiatives. In addition to their partnership with Ronald McDonald House Charities of Chicagoland and Northwest Indiana, United’s website lists 35 other charitable organizations they serve. http://www.unitedscrap.com/
Another example of Christian principles applied to business may be observed in Technology and Manufacturing Association, a non-profit association based in Shaumburg, Illinois that was formed with the philosophy that eight small manufacturing companies could better themselves through association with each other. Since then, TMA has evolved into Illinois’ Premier Manufacturing Association, with over 1,000 precision manufacturing and supplier members that are bettering the industry through association.
Christians in Manufacturing is a committee of TMA members who organize the Annual Prayer Breakfast, a yearly event which includes a keynote speaker, testimonials, scripture reading, music, fellowship, and a meal. Over 100 members of the association attend from all manufacturing sectors. In 2016, the Christians in Manufacturing committee added to their biblical testimony when the company began its first annual serving event, which took place at the Northern Illinois Food Bank. http://www.tmaillinois.org/about-tma/
Exelon Bailout: Pros and Cons by Joyce Geiler
Many Illinoisans are rejoicing that Governor Rauner has signed the Future Energy Jobs Bill (SB 1585), also known as the Exelon Bailout. In addition to $235 million per year in tax-funded subsidies funded by the Illinois state budget for Exelon to prop up nuclear plants in the Quad Cities and Clinton, Illinois, the plan provides hundreds of millions of dollars in energy-efficiency programs and assistance to low-income energy users. Rauner stated, "I was unwilling to gamble with these communities, gamble with thousands of good-paying jobs and gamble with our energy future. While this legislation isn't perfect, it allows us to protect jobs, ratepayers and taxpayers." The law ensures the plants in Cordova and Clinton stay open for 10 years, caps the increase in ratepayer bills at an average of 25 cents a month for the 13-year life of the deal and allows for expansion of alternative power generators, such as wind and solar. Exelon said in a statement that the measure "safeguards the state's top source of clean energy, protects and creates thousands of jobs and strengthens the Illinois economy, while preserving competitive rates." All these statements are positive, but was the use of legislative power the only way to obtain these benefits? Read more here.
Here is some of the history of the complicated bill that changed rapidly in order to gain Rauner’s apporval:
Commonwealth Edison, headquartered in Chicago, is an Exelon company. Exelon has been trying for some time to orchestrate a deal to pass far-reaching legislation to prop up what it says are financially struggling nuclear power plants, threatening to close them and eliminate about 1,500 jobs if lawmakers didn't act. Exelon bolstered its strategy this year by teaming up with subsidiary ComEd to try to win approval for tacking a surcharge onto electricity bills that would make the nuclear plants profitable. They wrapped the proposal into a larger bill that would make sweeping changes to the state's energy system and accommodate alternative energy advocates. The companies sold it as a path toward reducing the state's carbon emissions and a win for energy customers, saying the legislation would only raise ratepayer's bills by about 25 cents per month while ensuring stability and improving Illinois' energy markets. Learn more here.
ComEd wanted to begin charging households and small businesses based on how much power they consume at peak demand times of the day rather than how much they consume overall during the course of a month. Rauner's administration said that was a nonstarter so that controversial part of the proposal was deleted from the legislation. Exelon and ComEd agreed to remove demand rates and keep the plants open for at least 10 years instead of the six years previously proposed. They also committed to working with downstate utility Ameren on inserting a guarantee into the legislation that would, by law, protect both consumers and large employers from any significant rate increase. Although ComEd has made some concessions, the vast majority of manufacturers in the state will still be left paying higher rates to finance ComEd's program. Supporting the new compromises (not all of which are listed in this article) are the Sierra Club, Natural Resources Defense Council, Environmental Defense Fund and the Citizens Utility Board.
More information available here.
Critics of the proposal say Exelon's math is wrong and ratepayers would be on the hook for an average of $3 per month during the first 10 years and more beyond then. They contend the changes would amount to a total rate hike of $7.7 billion over 10 years that would be paid by government, businesses and consumers. Learn more.
Americans for Prosperity, which recently applauded the Illinois House for its decision not to take up a constitutional amendment to create a progressive income tax and its passage of a property tax freeze in the Illinois House with a bipartisan 71-vote majority, urged lawmakers to oppose subsidies for Exelon. Review here.
BEST coalition, a 501C4 nonprofit organization comprised of business and consumer groups focused on developing Better Energy Solutions for Tomorrow, contributes more facts to the discussion. The latest version of Exelon’s bailout bill (SB 1585) includes a statewide subsidy for the company’s Illinois nuclear plants, a potential bailout for uneconomic coal plants in southern Illinois and increased costs for energy efficiency programs. In 2015, Illinois generated 40.7% more power than the state needed and the surplus was sold to other states, a trend which continues. Because of increasing efficiency and a declining industrial base, Illinois demand shrunk 3.8% since 2011 and 5.8% since 2015. If the government subsidizes nuclear plants in Illinois’, Illinois ratepayers will effectively be paying more so that ratepayers in other states that use Illinois’ surplus power will pay less. Exelon cites a report generated by the state to make an argument that electric prices will increase if their nuclear plants are not subsidized. But the key assumptions in that 2014 report all proved to be wrong. Demand is shrinking, not rising as was predicted. Natural gas prices continue to fall. The report assumed 2019 natural gas prices would range from $4.79 to $7.65, but 2019 natural gas contracts are currently available for $2.85 or less. Because demand is declining, subsidies will be needed as long as plants are expected to remain open. Exelon has already hinted that further subsidies will be needed for other nuclear plants. More here.
Some would argue that the place for electric rate discussions is with the Illinois Commerce Commission whose mission is to balance the interests of consumers and utilities to ensure adequate, efficient, reliable, safe and least-cost public utility services rather than decision making by legislators who may be compromised by campaign contributions from large corporations. https://www.icc.illinois.gov/
According to this site, Exelon made nearly two million in campaign contributions and lobbying in 2016. Although they contributed to the National Republican Congressional Committee, the second largest recipient of Exelon campaign contributions in the 2016 election cycle was the Democratic Party including $142,550 contributed to the Democratic Party of Illinois.
State Rep. Jeanne Ives (R-Wheaton) notes that the SB 1585 ignores the Free Market. The policy proposals are not market driven solutions to energy production and are instead costly to all classes of ratepayers and should be rejected. The new rates approved in this bill will fund already profitable companies and favored green energy companies. Exelon’s net income was $2.25 billion in 2015. Hypocritically, prior to beginning the discussion of this subsidy bill Exelon argued in Ohio against subsidies for its competitors. Compared to natural gas, nuclear power already receives 4 times more subsidies at the federal level and wind is subsidized 18 times more than nuclear power. Subsidizing anything leads to inefficiencies in the market. Wind power has been subsidized since 1992 and still has not developed a profitable business model.
Ives comments that “It should be noted that we did not bail out US Steel Co. when they laid off 2080 employees in Granite City, IL in 2015. Last year we lost 6200 manufacturing jobs that were not saved with a subsidy. So far in 2016, 7900 manufacturing jobs have left Illinois – no subsidy for those workers either. And this legislature took no action when coal lost significant jobs, about 6500 in 2003 and we did nothing for the 1200 coal mining employees who lost their jobs in the last 18 months.”
Solar and wind power mandates are strengthened in this bill so that the bill was approved by “green” advocates. Germany and England are already learning that the more renewable fuels (solar and wind) they dispatch to their electric grids, the more coal they must burn to back up the intermittent generation from wind and solar sources. The goal of 25% renewable use in Illinois by 2025 is unachievable without large and aggressive rate increases. Recent analysis shows that over a 25-year life, the amount of energy produced by a solar system at Illinois latitudes does not rise to the amount of energy used to fabricate the solar cells and install the system. Forcing solar in Illinois causes more energy to be expended in China (from the fabrication of solar systems) than could be recovered over the life of the system in Illinois. This bill disregards the movement away from wind and solar that is happening in Europe because a modern economy cannot be run on dilute and intermittent energy like wind and solar.
Rep. Ives feels that “Illinois should trust the free market to determine what energy is produced and at what price. The free market built this nation and can be better trusted than politicians and special interests. Illinoisans deserve energy that is cheap, reliable and pollutant free. Politicians in state government continue to obscure the path toward those objectives in order to keep political insiders happy.”
Read more here.
Indeed, jobs have been saved in Illinois, but at what price? And was there another way to save them without government interference with the free market?
Many Illinoisans are rejoicing that Governor Rauner has signed the Future Energy Jobs Bill (SB 1585), also known as the Exelon Bailout. In addition to $235 million per year in tax-funded subsidies funded by the Illinois state budget for Exelon to prop up nuclear plants in the Quad Cities and Clinton, Illinois, the plan provides hundreds of millions of dollars in energy-efficiency programs and assistance to low-income energy users. Rauner stated, "I was unwilling to gamble with these communities, gamble with thousands of good-paying jobs and gamble with our energy future. While this legislation isn't perfect, it allows us to protect jobs, ratepayers and taxpayers." The law ensures the plants in Cordova and Clinton stay open for 10 years, caps the increase in ratepayer bills at an average of 25 cents a month for the 13-year life of the deal and allows for expansion of alternative power generators, such as wind and solar. Exelon said in a statement that the measure "safeguards the state's top source of clean energy, protects and creates thousands of jobs and strengthens the Illinois economy, while preserving competitive rates." All these statements are positive, but was the use of legislative power the only way to obtain these benefits? Read more here.
Here is some of the history of the complicated bill that changed rapidly in order to gain Rauner’s apporval:
Commonwealth Edison, headquartered in Chicago, is an Exelon company. Exelon has been trying for some time to orchestrate a deal to pass far-reaching legislation to prop up what it says are financially struggling nuclear power plants, threatening to close them and eliminate about 1,500 jobs if lawmakers didn't act. Exelon bolstered its strategy this year by teaming up with subsidiary ComEd to try to win approval for tacking a surcharge onto electricity bills that would make the nuclear plants profitable. They wrapped the proposal into a larger bill that would make sweeping changes to the state's energy system and accommodate alternative energy advocates. The companies sold it as a path toward reducing the state's carbon emissions and a win for energy customers, saying the legislation would only raise ratepayer's bills by about 25 cents per month while ensuring stability and improving Illinois' energy markets. Learn more here.
ComEd wanted to begin charging households and small businesses based on how much power they consume at peak demand times of the day rather than how much they consume overall during the course of a month. Rauner's administration said that was a nonstarter so that controversial part of the proposal was deleted from the legislation. Exelon and ComEd agreed to remove demand rates and keep the plants open for at least 10 years instead of the six years previously proposed. They also committed to working with downstate utility Ameren on inserting a guarantee into the legislation that would, by law, protect both consumers and large employers from any significant rate increase. Although ComEd has made some concessions, the vast majority of manufacturers in the state will still be left paying higher rates to finance ComEd's program. Supporting the new compromises (not all of which are listed in this article) are the Sierra Club, Natural Resources Defense Council, Environmental Defense Fund and the Citizens Utility Board.
More information available here.
Critics of the proposal say Exelon's math is wrong and ratepayers would be on the hook for an average of $3 per month during the first 10 years and more beyond then. They contend the changes would amount to a total rate hike of $7.7 billion over 10 years that would be paid by government, businesses and consumers. Learn more.
Americans for Prosperity, which recently applauded the Illinois House for its decision not to take up a constitutional amendment to create a progressive income tax and its passage of a property tax freeze in the Illinois House with a bipartisan 71-vote majority, urged lawmakers to oppose subsidies for Exelon. Review here.
BEST coalition, a 501C4 nonprofit organization comprised of business and consumer groups focused on developing Better Energy Solutions for Tomorrow, contributes more facts to the discussion. The latest version of Exelon’s bailout bill (SB 1585) includes a statewide subsidy for the company’s Illinois nuclear plants, a potential bailout for uneconomic coal plants in southern Illinois and increased costs for energy efficiency programs. In 2015, Illinois generated 40.7% more power than the state needed and the surplus was sold to other states, a trend which continues. Because of increasing efficiency and a declining industrial base, Illinois demand shrunk 3.8% since 2011 and 5.8% since 2015. If the government subsidizes nuclear plants in Illinois’, Illinois ratepayers will effectively be paying more so that ratepayers in other states that use Illinois’ surplus power will pay less. Exelon cites a report generated by the state to make an argument that electric prices will increase if their nuclear plants are not subsidized. But the key assumptions in that 2014 report all proved to be wrong. Demand is shrinking, not rising as was predicted. Natural gas prices continue to fall. The report assumed 2019 natural gas prices would range from $4.79 to $7.65, but 2019 natural gas contracts are currently available for $2.85 or less. Because demand is declining, subsidies will be needed as long as plants are expected to remain open. Exelon has already hinted that further subsidies will be needed for other nuclear plants. More here.
Some would argue that the place for electric rate discussions is with the Illinois Commerce Commission whose mission is to balance the interests of consumers and utilities to ensure adequate, efficient, reliable, safe and least-cost public utility services rather than decision making by legislators who may be compromised by campaign contributions from large corporations. https://www.icc.illinois.gov/
According to this site, Exelon made nearly two million in campaign contributions and lobbying in 2016. Although they contributed to the National Republican Congressional Committee, the second largest recipient of Exelon campaign contributions in the 2016 election cycle was the Democratic Party including $142,550 contributed to the Democratic Party of Illinois.
State Rep. Jeanne Ives (R-Wheaton) notes that the SB 1585 ignores the Free Market. The policy proposals are not market driven solutions to energy production and are instead costly to all classes of ratepayers and should be rejected. The new rates approved in this bill will fund already profitable companies and favored green energy companies. Exelon’s net income was $2.25 billion in 2015. Hypocritically, prior to beginning the discussion of this subsidy bill Exelon argued in Ohio against subsidies for its competitors. Compared to natural gas, nuclear power already receives 4 times more subsidies at the federal level and wind is subsidized 18 times more than nuclear power. Subsidizing anything leads to inefficiencies in the market. Wind power has been subsidized since 1992 and still has not developed a profitable business model.
Ives comments that “It should be noted that we did not bail out US Steel Co. when they laid off 2080 employees in Granite City, IL in 2015. Last year we lost 6200 manufacturing jobs that were not saved with a subsidy. So far in 2016, 7900 manufacturing jobs have left Illinois – no subsidy for those workers either. And this legislature took no action when coal lost significant jobs, about 6500 in 2003 and we did nothing for the 1200 coal mining employees who lost their jobs in the last 18 months.”
Solar and wind power mandates are strengthened in this bill so that the bill was approved by “green” advocates. Germany and England are already learning that the more renewable fuels (solar and wind) they dispatch to their electric grids, the more coal they must burn to back up the intermittent generation from wind and solar sources. The goal of 25% renewable use in Illinois by 2025 is unachievable without large and aggressive rate increases. Recent analysis shows that over a 25-year life, the amount of energy produced by a solar system at Illinois latitudes does not rise to the amount of energy used to fabricate the solar cells and install the system. Forcing solar in Illinois causes more energy to be expended in China (from the fabrication of solar systems) than could be recovered over the life of the system in Illinois. This bill disregards the movement away from wind and solar that is happening in Europe because a modern economy cannot be run on dilute and intermittent energy like wind and solar.
Rep. Ives feels that “Illinois should trust the free market to determine what energy is produced and at what price. The free market built this nation and can be better trusted than politicians and special interests. Illinoisans deserve energy that is cheap, reliable and pollutant free. Politicians in state government continue to obscure the path toward those objectives in order to keep political insiders happy.”
Read more here.
Indeed, jobs have been saved in Illinois, but at what price? And was there another way to save them without government interference with the free market?
Millennials Lead the Exodus out of Illinois by Joyce Geiler
According to Internal Revenue Service data, in 2014, Illinois lost 50,000 more taxpayers and their dependents than it gained through migration. Millennials led the exodus. While more than 70,700 taxpayers under the age of 34 moved into Illinois, more than 89,600 moved out. This amounts to a net loss of almost 19,000 Millennials in 2014, which is more than one-third of the state’s 50,000 net loss across all age groups. Every group of working age adults experienced a net loss in 2014.
The loss was 6,261 working age adults under age 26;
12,644 workers aged 26 – 34 (millennials);
11,365 workers aged 35 - 44;
7, 587 workers aged 45 - 54;
6,759 workers aged 55 - 64;
and 5,700 workers aged 65+.
More information can be found here.
Millennials are the generation born in approximately the 20 years leading up to 2000. A generation is a group of people born around the same time and raised around the same place. People in this birth cohort exhibit similar characteristics, preferences, and values over their lifetimes. Generations exhibit similar characteristics—such as communication, shopping, and motivation preferences—because they experienced similar trends at approximately the same life stage and through similar channels (e.g., online, TV, mobile, etc.). Generation-shaping trends are most influential as people come of age, which means that members of a particular generation will develop and share similar values, beliefs and expectations. The three key trends that shape generations are parenting, technology and economics. Media, sociologists and those interested in market trends may delineate somewhat different ages for the generations but there is still generalized agreement.
Find more information here.
Currently, five generations make up our society. Each of those five generations has an active role in the marketplace. Depending on the specific workplace, the workforce includes four to five generations. Here are the birth years for each generation. More information here.
iGen, Gen Z or Centennials: Born 1996 and later
Millennials or Gen Y: Born 1977 to 1995
Generation X: Born 1965 to 1976
Baby Boomers: Born 1946 to 1964
Traditionalists or Silent Generation: Born 1945 and before
For those interested in detailed information and characteristics of the generations see Here
Why are Millennials getting so much attention?
In the last two years, Millennials have become the largest generation in the U.S. workforce. Millennials are also the fastest-growing generation of customers in the marketplace, bringing the greatest lifetime value. In addition, Millennials exhibit different attitudes toward employment, sales and marketing, which are challenging many conventional strategies and approaches.
More information here
An article in Forbes describes Millennials from the perspective of consumers. They’ve grown up with technology and expect it to work. They are a social generation and use their technology to socialize while consuming. They also prefer to consume in groups rather than shop alone. Millennials have a positive, community-oriented “we can fix it together” mindset. Millennials want everyone to get along, and they think everyone should be able to. They are looking for adventure and are passionate about values, what they see as genuine and authentic. While this is a generalization, it becomes important for businesses and employers to consider these generalizations.
Not only are young taxpayers leaving Illinois, but students are leaving in droves, too. Department of Education data compiled by The New York Times confirm that in 2014, only about 2,100 students came to Illinois from out of state to attend a public university, while more than 16,400 students left Illinois for public universities in other states. This amounts to a net loss of more than 14,300 students to other states. Illinois sends the most college students to neighboring Midwestern states, including Missouri, Iowa, Indiana, Wisconsin and Michigan. Out of all 50 states, only California had more students leave than Illinois, at more than 17,100. But Illinois had a greater net loss. California also gained more than 4,600 students for a net loss of more than 12,500, while Illinois’ net loss was more than 14,300.
The IRS and DOE data are consistent with a recent Paul Simon Public Policy Institute poll, which found that 57 percent of Millennials in Illinois want to leave the state, compared with 47 percent of the general state population. The combined net loss of Millennial taxpayers and students to other states in 2014 amounts to more than 33,000 young Illinoisans. And that’s just for one year. The trend is clear: Young people are leaving Illinois, and policymakers need to ask themselves why the state is so unattractive to these young people. Illinois’ anti-jobs policies, crushing tax burden and looming pension crisis make the state uncompetitive and unattractive.
Illinois needs millennials. In 2015, the Millennial generation surpassed Generation X to become the largest share of the American workforce. That makes the millennial generation particularly fit to fuel current job creation and to cover the state’s tax bill over the long term. Fewer Millennials means fewer working-age adults – or fewer taxpayers – to cover the state’s soaring pension burden, which will be a growing problem as more of Illinois’ population reaches retirement age. Read more here.
According to Internal Revenue Service data, in 2014, Illinois lost 50,000 more taxpayers and their dependents than it gained through migration. Millennials led the exodus. While more than 70,700 taxpayers under the age of 34 moved into Illinois, more than 89,600 moved out. This amounts to a net loss of almost 19,000 Millennials in 2014, which is more than one-third of the state’s 50,000 net loss across all age groups. Every group of working age adults experienced a net loss in 2014.
The loss was 6,261 working age adults under age 26;
12,644 workers aged 26 – 34 (millennials);
11,365 workers aged 35 - 44;
7, 587 workers aged 45 - 54;
6,759 workers aged 55 - 64;
and 5,700 workers aged 65+.
More information can be found here.
Millennials are the generation born in approximately the 20 years leading up to 2000. A generation is a group of people born around the same time and raised around the same place. People in this birth cohort exhibit similar characteristics, preferences, and values over their lifetimes. Generations exhibit similar characteristics—such as communication, shopping, and motivation preferences—because they experienced similar trends at approximately the same life stage and through similar channels (e.g., online, TV, mobile, etc.). Generation-shaping trends are most influential as people come of age, which means that members of a particular generation will develop and share similar values, beliefs and expectations. The three key trends that shape generations are parenting, technology and economics. Media, sociologists and those interested in market trends may delineate somewhat different ages for the generations but there is still generalized agreement.
Find more information here.
Currently, five generations make up our society. Each of those five generations has an active role in the marketplace. Depending on the specific workplace, the workforce includes four to five generations. Here are the birth years for each generation. More information here.
iGen, Gen Z or Centennials: Born 1996 and later
Millennials or Gen Y: Born 1977 to 1995
Generation X: Born 1965 to 1976
Baby Boomers: Born 1946 to 1964
Traditionalists or Silent Generation: Born 1945 and before
For those interested in detailed information and characteristics of the generations see Here
Why are Millennials getting so much attention?
In the last two years, Millennials have become the largest generation in the U.S. workforce. Millennials are also the fastest-growing generation of customers in the marketplace, bringing the greatest lifetime value. In addition, Millennials exhibit different attitudes toward employment, sales and marketing, which are challenging many conventional strategies and approaches.
More information here
An article in Forbes describes Millennials from the perspective of consumers. They’ve grown up with technology and expect it to work. They are a social generation and use their technology to socialize while consuming. They also prefer to consume in groups rather than shop alone. Millennials have a positive, community-oriented “we can fix it together” mindset. Millennials want everyone to get along, and they think everyone should be able to. They are looking for adventure and are passionate about values, what they see as genuine and authentic. While this is a generalization, it becomes important for businesses and employers to consider these generalizations.
Not only are young taxpayers leaving Illinois, but students are leaving in droves, too. Department of Education data compiled by The New York Times confirm that in 2014, only about 2,100 students came to Illinois from out of state to attend a public university, while more than 16,400 students left Illinois for public universities in other states. This amounts to a net loss of more than 14,300 students to other states. Illinois sends the most college students to neighboring Midwestern states, including Missouri, Iowa, Indiana, Wisconsin and Michigan. Out of all 50 states, only California had more students leave than Illinois, at more than 17,100. But Illinois had a greater net loss. California also gained more than 4,600 students for a net loss of more than 12,500, while Illinois’ net loss was more than 14,300.
The IRS and DOE data are consistent with a recent Paul Simon Public Policy Institute poll, which found that 57 percent of Millennials in Illinois want to leave the state, compared with 47 percent of the general state population. The combined net loss of Millennial taxpayers and students to other states in 2014 amounts to more than 33,000 young Illinoisans. And that’s just for one year. The trend is clear: Young people are leaving Illinois, and policymakers need to ask themselves why the state is so unattractive to these young people. Illinois’ anti-jobs policies, crushing tax burden and looming pension crisis make the state uncompetitive and unattractive.
Illinois needs millennials. In 2015, the Millennial generation surpassed Generation X to become the largest share of the American workforce. That makes the millennial generation particularly fit to fuel current job creation and to cover the state’s tax bill over the long term. Fewer Millennials means fewer working-age adults – or fewer taxpayers – to cover the state’s soaring pension burden, which will be a growing problem as more of Illinois’ population reaches retirement age. Read more here.
Fewer Choices and Higher Premiums for Illinoisans Using Obamacare by Joyce Geiler
Most Illinois residents get health care coverage through their employers or government programs such as Medicare or Medicaid. But in the year 2015, more than 300,000 Illinoisans bought insurance on the Obamacare exchange. In Illinois, rates for 2016 will increase by an average of 44 percent for the lowest-priced individual bronze plans, 45 percent for the lowest-priced silver plans and 55 percent for the lowest-priced gold plans. Higher-level plans, such as gold plans, typically have higher monthly costs and lower out-of-pocket costs than lower-level plans. People who want to buy health insurance on the state's Obamacare exchange can go online to see their options and prices where they will find far fewer choices and significantly higher prices.
In Illinois, a 27-year-old who buys the second-lowest price silver plan on the exchange will pay an average of $298 a month before tax credits — a 43 percent increase over this year. A family of four in Illinois will pay an average of $1,078 a month for the second-lowest price silver plan before tax credits.
There are also far fewer plans to compare. In Cook County, individual consumers will have 38 plans to choose from, down from 71 plans this year. In Lake County, there are 18 plans, down from 49 this year. McHenry County went from 42 plans to 14, DuPage from 48 to 34 and Kane from 48 to 25.
The federal government, however, says with the help of tax credits, 60 percent of Illinois residents who buy on the exchange will still be able to choose plans costing no more than $100 a month. People who qualify for subsidies, for example, won't feel the full effect of the price increases. This year, 75 percent of Illinois residents who bought coverage on the exchange got the tax credits. Does this mean that 15 percent of Illinois residents who got tax credits last year will not get them this year and will have to pay the premiums or pay the fine for not having health insurance? Learn more here.
What is the tax credit? A tax credit can be used to lower the monthly insurance payment (premium) only when enrolling in a plan through the Health Insurance Marketplace (Exchange). The amount of tax credit is based on the income estimate and household information put on the Marketplace application.
If the estimated income falls between 100% and 400% of the federal poverty level for the household size, it qualifies for a premium tax credit.
According to this web link, the Federal Poverty
Levels used for 2016 insurance on the marketplace are $11,880 for individuals and $16,020 for a family of two.
Those making under 400% of the Federal Poverty Level have access to tax credits, those making under 250% FPL are eligible for cost sharing reduction subsidies on silver plans, and those making under 138% (in states that expanded Medicaid) are eligible for Medicaid. The complicated intricacies of credits and subsidies are explained by following this link.
Who pays for the tax credits that Illinoisans receive? Taxpayers pay in a complex web of taxes. Information at this link provides a detailed accounting of where monies come from to pay for Obamacare. It includes more than just individual income taxes. Also included are increased Medicare taxes, a new tax on high income taxpayers, a new annual fee on health insurance providers, a new tax on health insurance policies (people purchasing non-Obamacare policies), a new annual fee on manufacturers and importers of branded drug, a new tax on manufacturers and importers of certain medical devices, a new tax on investment income, a new tax on indoor tanning services as well as other sources.
The Obamacare Marketplace Exchange offers both HMOs and PPOs. Health Maintenance Organization (HMO) plans limit subscribers to a primary care physician through which all health needs are coordinated. This limited flexibility is accompanied by less cost. Preferred Provider Organization (PPO) plans offer a network of providers which offers more flexibility but costs more in deductibles and co-pays. More Information is available here.
Only one insurer, Blue Cross and Blue Shield, is offering PPO plans on the Illinois exchange next year, down from five this year. Blue Cross' networks for its PPO plans are largely the same as they were this year, spokeswoman Colleen Miller said. In some parts of Illinois, deductibles range from about $1,000 to more than $7,000, depending on the type of plan and the county. A deductible is the amount a consumer must pay toward health care costs in a year before the insurance starts covering many expenses. A PPO plan means the consumer is not limited to going through a primary care physician for all services but can go anywhere in the insurance network.
Learn more here.
Most Illinois residents get health care coverage through their employers or government programs such as Medicare or Medicaid. But in the year 2015, more than 300,000 Illinoisans bought insurance on the Obamacare exchange. In Illinois, rates for 2016 will increase by an average of 44 percent for the lowest-priced individual bronze plans, 45 percent for the lowest-priced silver plans and 55 percent for the lowest-priced gold plans. Higher-level plans, such as gold plans, typically have higher monthly costs and lower out-of-pocket costs than lower-level plans. People who want to buy health insurance on the state's Obamacare exchange can go online to see their options and prices where they will find far fewer choices and significantly higher prices.
In Illinois, a 27-year-old who buys the second-lowest price silver plan on the exchange will pay an average of $298 a month before tax credits — a 43 percent increase over this year. A family of four in Illinois will pay an average of $1,078 a month for the second-lowest price silver plan before tax credits.
There are also far fewer plans to compare. In Cook County, individual consumers will have 38 plans to choose from, down from 71 plans this year. In Lake County, there are 18 plans, down from 49 this year. McHenry County went from 42 plans to 14, DuPage from 48 to 34 and Kane from 48 to 25.
The federal government, however, says with the help of tax credits, 60 percent of Illinois residents who buy on the exchange will still be able to choose plans costing no more than $100 a month. People who qualify for subsidies, for example, won't feel the full effect of the price increases. This year, 75 percent of Illinois residents who bought coverage on the exchange got the tax credits. Does this mean that 15 percent of Illinois residents who got tax credits last year will not get them this year and will have to pay the premiums or pay the fine for not having health insurance? Learn more here.
What is the tax credit? A tax credit can be used to lower the monthly insurance payment (premium) only when enrolling in a plan through the Health Insurance Marketplace (Exchange). The amount of tax credit is based on the income estimate and household information put on the Marketplace application.
If the estimated income falls between 100% and 400% of the federal poverty level for the household size, it qualifies for a premium tax credit.
According to this web link, the Federal Poverty
Levels used for 2016 insurance on the marketplace are $11,880 for individuals and $16,020 for a family of two.
Those making under 400% of the Federal Poverty Level have access to tax credits, those making under 250% FPL are eligible for cost sharing reduction subsidies on silver plans, and those making under 138% (in states that expanded Medicaid) are eligible for Medicaid. The complicated intricacies of credits and subsidies are explained by following this link.
Who pays for the tax credits that Illinoisans receive? Taxpayers pay in a complex web of taxes. Information at this link provides a detailed accounting of where monies come from to pay for Obamacare. It includes more than just individual income taxes. Also included are increased Medicare taxes, a new tax on high income taxpayers, a new annual fee on health insurance providers, a new tax on health insurance policies (people purchasing non-Obamacare policies), a new annual fee on manufacturers and importers of branded drug, a new tax on manufacturers and importers of certain medical devices, a new tax on investment income, a new tax on indoor tanning services as well as other sources.
The Obamacare Marketplace Exchange offers both HMOs and PPOs. Health Maintenance Organization (HMO) plans limit subscribers to a primary care physician through which all health needs are coordinated. This limited flexibility is accompanied by less cost. Preferred Provider Organization (PPO) plans offer a network of providers which offers more flexibility but costs more in deductibles and co-pays. More Information is available here.
Only one insurer, Blue Cross and Blue Shield, is offering PPO plans on the Illinois exchange next year, down from five this year. Blue Cross' networks for its PPO plans are largely the same as they were this year, spokeswoman Colleen Miller said. In some parts of Illinois, deductibles range from about $1,000 to more than $7,000, depending on the type of plan and the county. A deductible is the amount a consumer must pay toward health care costs in a year before the insurance starts covering many expenses. A PPO plan means the consumer is not limited to going through a primary care physician for all services but can go anywhere in the insurance network.
Learn more here.
The Safe Roads Amendment on November Ballot by Joyce Geiler
Recently Illinois residents received a light blue pamphlet from the Secretary of State regarding a proposed amendment to the Illinois Constitution that will appear on the November 8 ballot. The proposed Safe Road Amendment or "lockbox" adds a new section to the Revenue Article of the Illinois Constitution. It provides that revenue generated from transportation related taxes and fees (transportation funds) will be used exclusively for transportation related purposes. The pamphlet states the amendment as proposed and arguments in favor of and opposed to the amendment. However, even a careful reading of the material does not answer all questions about the proposed amendment and it certainly doesn't speak to the biblical principles for deciding how to vote. This article will explore the natural arguments in an attempt to clarify the implications of the amendment and then submit biblical considerations to guide decision making. Two thorough articles on this proposal are
found by following this link and this link.
Arguments for the Safe Road Amendment are well funded.
Citizens to Protect Road Funding, which is supported largely by the road-building community including contractors and trade unions, argue that 4200 Illinois bridges and fifty percent of the state's roadways have fallen into disrepair and there's no money in the Illinois treasury to correct the situation. Instead of keeping $6 billion in dedicated road funds safely set aside for infrastructure, state lawmakers passed budgets and bills that authorized "sweeping" the road fund over the past ten years to use elsewhere.
Less than half of Road Fund expenditures went for direct road construction in eight of 10 fiscal years, FY 03 through FY 12. For that decade just $11.4 billion out of $25.1 billion in revenues was spent on direct road construction. Almost $900 million went to the secretary of state and more than $700 million to the state police. Another $324 million went to pay workers’ compensation claims, unemployment insurance and related costs. The largest component of non-road spending was debt service, more than $3 billion, to pay principal and interest on bonds sold to finance highway construction, Equally interesting, the largest source of revenue was not state gasoline taxes or license fees, but rather federal aid, $12.2 billion. License fees accounted for $8.1 billion and gas taxes $3.2 billion. In the last couple of years however, no road fund dollars have been allocated to either the state police or to the secretary of state for operating expenses.
There is no organized effort against the Safe Road Amendment.
The general argument against the amendment is that it unnecessarily limits the power of the State and local government to appropriate public revenues for the general welfare in order to protect funding for one particular purpose. Just as state employee pensions get constitutionally-protected priority, with the passage of the Safe Roads Amendment, road and bridge construction would be a constitutionally protected priority. Construction companies will be guaranteed business and revenue forever - or until the amendment would be reversed.
The amendment’s outnumbered critics concede that the state’s infrastructure needs fixing, but argue that walling off one pot of money would make it more difficult for the state to respond to unanticipated disasters, be they natural, such as tornadoes or man-made, like the financial collapse of the Great Recession. While roads are important, they say there are other priorities just as worthwhile as roads and bridges.
“Maintaining safe roads is an important goal, but it’s not more important than maintaining safe schools or maintaining higher education or maintaining services to the mentally ill or providing a reasonable payment schedule for the state’s creditors,” observed Lawrence Msall, president of the Civic Federation, a non-partisan budget watchdog. “It is part of an overall state budget and should be treated as part of an overall budget.”
There are possible unintended consequences.
The proposed amendment states that "the costs of administering laws related to vehicles and transportation shall be limited to direct program expenses." The expenses are listed in the proposal. Other limitations shall also include "the enforcement of traffic, railroad, and motor carrier laws; expenses related to workers' compensation claims" of state transportation agency employees; "the acquisition of land and the erection of buildings for highway purposes, including the acquisition of rights-of-way or for investigation to determine anticipated future highway needs; the making of surveys, plans, specifications, and estimates for the construction and maintenance of flight strips and highways." The flight strips and highways are for providing access to military sites and sources of raw materials for highways.
Would licensing drivers and registering motor vehicles— as the secretary of state does — be covered by “administering” vehicle laws? Would state trooper patrols on Illinois highways be one way of “enforcing” traffic laws?
Would “enforcing” laws also extend to the state’s circuit courts? Almost two out of every three cases filed — 1.9 million out of 2.9 million — involved traffic offenses in 2014, which is the latest year for which complete information is available. The total tab for circuit court operations that year was more than $202 million, while court costs brought in less than $189 million, with local taxpayers footing the bill for the difference. At one time, road funds helped pay court expenses, and though the practice has been abandoned for decades, a fair reading of the amendment would allow lawmakers to resume it, especially if state dollars supplanted much-despised local property taxes.
Look at the amendment’s possible consequences from another angle.
Currently, thousands of Illinoisans pay extra money each year to buy and renew specialty license plates, proclaiming their allegiance to their collegiate alma mater, supporting their favorite Chicago pro sports team, or supporting causes like waterfowl habitat, ovarian cancer research and more. The surcharge, usually $40, goes to the cause, none of which, with the possible exception of the Route 66 commemorative plate, is even remotely related to transportation. In similar fashion, $2 of each license plate fee and $3.25 of each vehicle title fee goes to the Illinois Department of Natural Resources — almost $30 million a year, according to IDNR estimates. Is each dollar spent on a transportation-related purpose?
But the lockbox amendment says “no moneys ... derived from ... license taxes relating to registration, title, or operation or use of vehicles” can be expended other than for transportation. Would its ratification imperil those charitable causes or funding for IDNR? The amendment’s legislative sponsors said during floor debate in the House and again in the Senate that their intent was not to go after the extra revenues from the specialty plates.
But that’s not what the language says, and the Illinois Supreme Court has a habit of reading the text literally. Consider a lesson from almost 150 years ago, embedded in the 1870 Constitution. Determined to prevent the kind of extravagant public works schemes that drove the state and many towns and counties to the brink of insolvency in the mid-19th Century, its framers added extremely tight restrictions on state and local government borrowing that remained in place for 100 years. As a result, the state resorted to creating quasi-public entities, like the Illinois Building Authority, to sell bonds to finance building projects, which then were rented back to the state, thus getting around the constitutional restrictions, but at the cost of higher interest rates.
Local government officials, meanwhile, couldn’t borrow the cash to build needed improvements like sewage treatment systems, public libraries, waterworks, or other 20th century amenities their constituents wanted, so they cleverly circumvented the charter’s borrowing limits by creating new units of government with the sole purpose of providing a particular service, usually funded by property taxes. Today Illinois has some 2,000 of those special units, more than any other state, and citizens still have not been able to delete duplicating tax bases.
A recent poll by the Paul Simon Public Policy Institute showed 80 percent of respondents to be in favor of the proposal, with 13 percent opposed and the rest undecided. The “Safe Roads Amendment” only needs 60 percent support among those who vote on the question or the support of the majority of those who vote in the election to be added to the Constitution. Lawmakers enthusiastically support the plan by counts of 98 to 4 in the House and 55 to 0 in the Senate.
Recently Illinois residents received a light blue pamphlet from the Secretary of State regarding a proposed amendment to the Illinois Constitution that will appear on the November 8 ballot. The proposed Safe Road Amendment or "lockbox" adds a new section to the Revenue Article of the Illinois Constitution. It provides that revenue generated from transportation related taxes and fees (transportation funds) will be used exclusively for transportation related purposes. The pamphlet states the amendment as proposed and arguments in favor of and opposed to the amendment. However, even a careful reading of the material does not answer all questions about the proposed amendment and it certainly doesn't speak to the biblical principles for deciding how to vote. This article will explore the natural arguments in an attempt to clarify the implications of the amendment and then submit biblical considerations to guide decision making. Two thorough articles on this proposal are
found by following this link and this link.
Arguments for the Safe Road Amendment are well funded.
Citizens to Protect Road Funding, which is supported largely by the road-building community including contractors and trade unions, argue that 4200 Illinois bridges and fifty percent of the state's roadways have fallen into disrepair and there's no money in the Illinois treasury to correct the situation. Instead of keeping $6 billion in dedicated road funds safely set aside for infrastructure, state lawmakers passed budgets and bills that authorized "sweeping" the road fund over the past ten years to use elsewhere.
Less than half of Road Fund expenditures went for direct road construction in eight of 10 fiscal years, FY 03 through FY 12. For that decade just $11.4 billion out of $25.1 billion in revenues was spent on direct road construction. Almost $900 million went to the secretary of state and more than $700 million to the state police. Another $324 million went to pay workers’ compensation claims, unemployment insurance and related costs. The largest component of non-road spending was debt service, more than $3 billion, to pay principal and interest on bonds sold to finance highway construction, Equally interesting, the largest source of revenue was not state gasoline taxes or license fees, but rather federal aid, $12.2 billion. License fees accounted for $8.1 billion and gas taxes $3.2 billion. In the last couple of years however, no road fund dollars have been allocated to either the state police or to the secretary of state for operating expenses.
There is no organized effort against the Safe Road Amendment.
The general argument against the amendment is that it unnecessarily limits the power of the State and local government to appropriate public revenues for the general welfare in order to protect funding for one particular purpose. Just as state employee pensions get constitutionally-protected priority, with the passage of the Safe Roads Amendment, road and bridge construction would be a constitutionally protected priority. Construction companies will be guaranteed business and revenue forever - or until the amendment would be reversed.
The amendment’s outnumbered critics concede that the state’s infrastructure needs fixing, but argue that walling off one pot of money would make it more difficult for the state to respond to unanticipated disasters, be they natural, such as tornadoes or man-made, like the financial collapse of the Great Recession. While roads are important, they say there are other priorities just as worthwhile as roads and bridges.
“Maintaining safe roads is an important goal, but it’s not more important than maintaining safe schools or maintaining higher education or maintaining services to the mentally ill or providing a reasonable payment schedule for the state’s creditors,” observed Lawrence Msall, president of the Civic Federation, a non-partisan budget watchdog. “It is part of an overall state budget and should be treated as part of an overall budget.”
There are possible unintended consequences.
The proposed amendment states that "the costs of administering laws related to vehicles and transportation shall be limited to direct program expenses." The expenses are listed in the proposal. Other limitations shall also include "the enforcement of traffic, railroad, and motor carrier laws; expenses related to workers' compensation claims" of state transportation agency employees; "the acquisition of land and the erection of buildings for highway purposes, including the acquisition of rights-of-way or for investigation to determine anticipated future highway needs; the making of surveys, plans, specifications, and estimates for the construction and maintenance of flight strips and highways." The flight strips and highways are for providing access to military sites and sources of raw materials for highways.
Would licensing drivers and registering motor vehicles— as the secretary of state does — be covered by “administering” vehicle laws? Would state trooper patrols on Illinois highways be one way of “enforcing” traffic laws?
Would “enforcing” laws also extend to the state’s circuit courts? Almost two out of every three cases filed — 1.9 million out of 2.9 million — involved traffic offenses in 2014, which is the latest year for which complete information is available. The total tab for circuit court operations that year was more than $202 million, while court costs brought in less than $189 million, with local taxpayers footing the bill for the difference. At one time, road funds helped pay court expenses, and though the practice has been abandoned for decades, a fair reading of the amendment would allow lawmakers to resume it, especially if state dollars supplanted much-despised local property taxes.
Look at the amendment’s possible consequences from another angle.
Currently, thousands of Illinoisans pay extra money each year to buy and renew specialty license plates, proclaiming their allegiance to their collegiate alma mater, supporting their favorite Chicago pro sports team, or supporting causes like waterfowl habitat, ovarian cancer research and more. The surcharge, usually $40, goes to the cause, none of which, with the possible exception of the Route 66 commemorative plate, is even remotely related to transportation. In similar fashion, $2 of each license plate fee and $3.25 of each vehicle title fee goes to the Illinois Department of Natural Resources — almost $30 million a year, according to IDNR estimates. Is each dollar spent on a transportation-related purpose?
But the lockbox amendment says “no moneys ... derived from ... license taxes relating to registration, title, or operation or use of vehicles” can be expended other than for transportation. Would its ratification imperil those charitable causes or funding for IDNR? The amendment’s legislative sponsors said during floor debate in the House and again in the Senate that their intent was not to go after the extra revenues from the specialty plates.
But that’s not what the language says, and the Illinois Supreme Court has a habit of reading the text literally. Consider a lesson from almost 150 years ago, embedded in the 1870 Constitution. Determined to prevent the kind of extravagant public works schemes that drove the state and many towns and counties to the brink of insolvency in the mid-19th Century, its framers added extremely tight restrictions on state and local government borrowing that remained in place for 100 years. As a result, the state resorted to creating quasi-public entities, like the Illinois Building Authority, to sell bonds to finance building projects, which then were rented back to the state, thus getting around the constitutional restrictions, but at the cost of higher interest rates.
Local government officials, meanwhile, couldn’t borrow the cash to build needed improvements like sewage treatment systems, public libraries, waterworks, or other 20th century amenities their constituents wanted, so they cleverly circumvented the charter’s borrowing limits by creating new units of government with the sole purpose of providing a particular service, usually funded by property taxes. Today Illinois has some 2,000 of those special units, more than any other state, and citizens still have not been able to delete duplicating tax bases.
A recent poll by the Paul Simon Public Policy Institute showed 80 percent of respondents to be in favor of the proposal, with 13 percent opposed and the rest undecided. The “Safe Roads Amendment” only needs 60 percent support among those who vote on the question or the support of the majority of those who vote in the election to be added to the Constitution. Lawmakers enthusiastically support the plan by counts of 98 to 4 in the House and 55 to 0 in the Senate.
