Illinois Public Media News
State employees are starting to find out just how a proposed pension reform bill in Springfield would affect them.
People who are covered under the state's traditional pension plan would pay more into their pensions under the Republican-sponsored bill to start cutting into the deep state pension fund deficit. The State Universities Retirement System (SURS) is one of four systems facing scrutiny after years of state underpayments into their coffers.
Speaking on WILL's Focus program Tuesday morning, SURS director William Mabe said state pension benefits are not overly generous to begin with, especially since SURS members don't receive Social Security for their time working in state government.
He said the bill would let people choose a self-managed retirement plan that would let them avoid the increase.
"If they were to remain in the current plan, their contributions would increase, and they could increase significantly depending on how many people move out of the current plan into the new plan," Mabe said. "It's a very complex piece of legislation that's requiring a lot of analysis. We're having our actuaries look at it and our legal counselors heavily involved in reviewing it."
Mabe said SURS currently has pension liabilities of $30 billion but only $14 billion in assets. There are exceptions to the increased contributions for police and firefighters as well as judges - who may eventually have to rule on whether the bigger bite on employees' paychecks is constitutional.
Schools, college scholarships and health care for the poor would face sharp cuts under a budget approved Friday by the Illinois House in a rare show of cooperation between Democrats and Republicans.
Meanwhile, partisan battles continued at full force in the Senate.
Democrats approved budget measures without giving Republicans a chance to review them. Republicans complained loudly and accused Democrats of spending more than Illinois can afford.
"What you offer is an increase in spending," said Sen. Matt Murphy, R-Palatine. "It guarantees that we will borrow yet again to pay our bills."
Although both the House and Senate passed new state budgets, there are major differences between the two versions. Gov. Pat Quinn has his own proposal, too.
Reaching a deal that can pass both legislative chambers and get the governor's signature could still prove challenging.
"I don't expect that this budget will be the final spending plan," Speaker Michael Madigan, D-Chicago, said shortly after House members voted for painful cuts to state services. "We're not sending any ultimatums by the adoption of this budget today."
The House plan would spend about $25.2 billion from the state's general account for the budget year that begins July 1. That's about $600 million, or 2.4 percent, below the current budget.
It would achieve that reduction mostly by cutting education and human services.
State support for schools would fall by about $169 million, or 2.4 percent. The Monetary Award Program would lose $17 million for college scholarships, a 4.2 percent cut. In human services, Medicaid bills would be paid more slowly, many would be trimmed 1 percent and administrative spending would drop $181 million.
"There was a lot of hand-wringing and a lot of tears" in the appropriations committee that set those amounts, said Rep. Sara Feigenholtz, D-Chicago. "We can go home to our communities and say, 'We done our job, we cut the budget.'"
Some legislators felt the cuts went too far.
The House version of the budget is about $1 billion smaller than the version approved by the Senate on Friday and $2 billion below Quinn's proposal.
A key difference between the House and Senate plans is in revenue projections. Senate Democrats are counting on state government taking in about $1 billion more than the House estimates it will. That additional money allows the Senate to avoid deep human service cuts.
A company that closed a plant in Coles County two years ago is coming back.
Houston-based NCI Building Systems, Inc. operated a plant in Mattoon for about 20 years until it was forced to close in 2009 because of downturns in the economy.
The company manufactures insulated wall systems for large commercial and industrial developments.
Angela Griffin, the president of Coles Together, said the closure left a dent in the community by eliminating about 45-to-50 jobs. She said many of those workers have been able to find new jobs within the last couple of years.
"There may still be some that are on unemployment, and hopefully they can reach back to those people and get them," Griffin said.
She said the company's return is about a $20 million investment in the community, which she estimates will initially lead to about 25 new jobs.
Mattoon beat out four other sites outside of Illinois to host the plant.
"We thought we had lost them for good," she said. "Their industry had taken a big hit, and they had vacant buildings in other states. We thought it was a slim chance that they would bring production back to Central Illinois. So, we were very pleased.
Planned Parenthood of Indiana says it will cover the health care costs of current Medicaid patients for at least another week after losing much of its public funding under a new state law.
The reproductive health care organization said Friday donations will allow it to extend care at least through May 21. Spokeswoman Kate Shepherd says it's received donations from at least 36 states since April 26, the day before the Legislature passed a law to withhold the Medicaid funding.
A federal judge refused this week to temporarily block the law while Planned Parenthood fights it.
Planned Parenthood says it serves about 9,300 Medicaid patients at its 28 Indiana clinics. It's not accepting new Medicaid patients while the court battle continues and some services are being put off until later.
In a year when Wisconsin lawmakers have clamped down on union members' bargaining rights, Illinois legislators passed a measure that makes it harder for teachers unions to go on strike.
But in Illinois, that happened with the unions' consent.
The unions, as well as education advocates, school boards and administrators all signed on to the carefully negotiated measure that was passed by the house Thursday and is now on its way to the governor's desk.
Representative Jehan Gordon, a Peoria Democrat, said it's a first step toward ensuring Illinois children receive the best education.
"Many of the things that we are seeing around the country right now, you find it very difficult for governmental bodies and labor to come together, at the table, and have some of these hard, difficult conversations and find a collective compromise," Gordon said.
Schools will be able to more easily dump poor-performing teachers, even if they have seniority. Teachers will have to earn ratings of "proficient" and "excellent" in order to earn tenure. And the package allows Chicago Public Schools to lengthen the school day and requires teachers and districts make their contract negotiations public during bargaining disputes.
The bill took months to negotiate. Advance Illinois, an education policy group made up of business and civic leaders, was pushing for many of the changes governing seniority and tenure, as was the out-of-state group Stand for Children.
Robin Steans, Advance Illinois' executive director, said the legislation is significant nationally both for what it mandates and for the fact that it was worked out with the support of teachers unions.
"I'm getting calls from my colleagues all around the country about this," said Steans, who was in Springfield for the vote. "They want to see the language. They want to know how we got at this....[Illinois is] part of a bigger national conversation. I think it's fair to say we just jumped to the head of the pack. We got really good, hard stuff done but we got it done without a lot of drama and a lot of noise and a lot of fighting."
Chicago Teachers Union president Karen Lewis helped write the bill, but she says unions essentially had a gun to their head. If they hadn't come to the table, things could have been much worse, Lewis said.
"There's Wisconsin, there's Indiana, there's Pennsylvania, Ohio," Lewis said. "This is going nationwide. We're trying to ameliorate some of the worst parts of what that bill had."
The state's two largest unions lauded the negotiated legislation as "good for kids, fair to adults" when it was first unveiled in mid-April. The state senate passed it then 59-0.
But after initially agreeing to support the law, the more strident Chicago Teachers Union now is balking over what some call technicalities but what Lewis says are attacks on collective bargaining rights.
"We want to be a part of what helps kids," Lewis said. "But the attack on our collective bargaining does not help kids. Anyone who says it does is not being honest."
Lewis is upset about a provision that could impact a lawsuit the union has against Chicago Public Schools over massive teacher layoffs last summer. She's also fighting over how many CTU members would be needed to authorize a strike. Negotiations to resolve those issues are continuing.
Chicago mayor-elect Rahm Emanuel praised the legislation, as did U.S. Secretary of Education Arne Duncan.
Governor Pat Quinn has said he would sign the historic legislation.
Four Illinois state employees whose work was split among agencies were overpaid by $77,000 the last two years, an audit released Thursday shows.
One employee working for the Illinois Department of Financial and Professional Regulation got $36,151 more than specified. Another received and additional $25,662.
Auditor General William Holland's office examined seven cases where department employees did work for other agencies. In four of them, the employees wound up being paid too much. The audit did not indicate how many such" interagency agreements" the agency had.
In three cases, the other agency involved was the governor's budget office.
The case of the $36,000 overpayment happened under former Gov. Rod Blagojevich, said Susan Hofer, spokeswoman for the Department of Financial and Professional Regulation. She couldn't immediately say whether money had been recovered.
The other overpayments occurred when payroll for the agency was being centralized and confusion over the new system might have played a role, she said.
Holland's report also found in several cases that the agency lacked documentation showing an employee did any work for the Department of Financial and Professional Regulation and other cases where there was no explanation of how payment among the participating agencies was determined.
In its response to the audit, the department said it will be more diligent in recognizing possible overpayments and adjusting pay in such cases. Officials said they would try to develop a way to determine how much each agency should pay.
The report also declared that the Department of Financial and Professional Regulation couldn't find $240,000 worth of equipment - mostly computers - the last two years.
The agency told Holland it didn't know whether the computers contained any confidential information.
Hofer said some computers were stolen during a break-in at an agency office, but she couldn't immediately say why that wasn't mentioned in the audit.
Southern Illinois University's Board of Trustees has approved tuition and fee increases for the coming academic year, but despite the added revenue administrators say budgets will still be tight.
President Glenn Poshard said the tuition increase - at 6.9% - is three percent less than the original proposal. He said that means further belt-tightening will be in the works for at least the next year.
"There's no way that I see us letting up on any of the budget management practices that we've put in place," Poshard said. "So, given the fact that that's what we have to continue doing - not filling positions and so on - we'll make it do. But it isn't all that we need, of course."
The newly enacted tuition increase applies to incoming students. The fee increases will apply to all students taking classes this fall and through the next year.\\\
Trustees say they are hopeful that a turnaround in enrollment and changes in other areas will help ease the cost burden on students in the near future.
Champaign's Mayor wants to know more about nearly $50-million in unrestricted funds in the city's budget plan before signing off on one for the next fiscal year.
Don Gerard said the budget line item of $47-million is earmarked for specific public works projects, as well as the city's parking and vehicle funds. But in a year where emergency services are among the possible cuts, Gerard said he wants specifics.
"I heard a lot of people say 'I'm not comfortable with borrowing money, or 'I'm not comfortable with refinancing our pension bonds," he said. "Well, I'm not comfortable with having 47-million dollars unaccounted for and us cutting urban renewal programs. Nor am I comfortable as a taxpayer, as a man with children, in cutting any services relating to our first responders, including the front desk at the police station and browning out a fire station."
Gerard said he expects to have the information on what the funds are allocated for by next Tuesday's full council meeting on May 17th.
The Reverend Eugene Barnes was among members of the public concerned about the city's proposal to transfer $250,000 in reserves from Champaign's urban renewal fund. He said that would impact redevelopment in the Bristol Park neighborhood. Urban renewal makes up part of $2.75 million in one-time transfers from reserve funds in the budget proposal.
The lengthy budget presentation at Tuesday night's study session also included more than $600,000 in reductions, brought on largely through city employees taking a voluntary separation package. City Manager Steve Carter said impacted departments include public works and building safety.
A few city council members also suggest implementing a package liquor tax to bring in some revenue. Council member Karen Foster suggests the city needs the revenue from a liquor tax, saying it would 'equal out the playing field' with the local food and beverage tax. Council member Tom Bruno agrees it is worth a look.
"If we can gauge what the impact of it would be," he said. "And also if we can take into consideration whether or not we will be particularly causing harm to Champaign businesses because of the possibility - and maybe it's only a possibility - that consumers will change their buying habits."
City Finance Director Richard Schnuer said the idea would mean a lot of work for his department, but his staff already collects Champaign's food and beverage, and hotel-motel taxes. The city council expects to sign off on a budget plan by June 21st.
University of Illinois President Michael Hogan says faculty could receive their first pay raise in three years this summer if current state budget proposals become reality.
Hogan told The News-Gazette newspaper in Champaign on Monday that faculty on campuses in Urbana-Champaign, Springfield and Chicago could see raises of less than 4 percent.
That figure is based on current funding proposals that would see the university's state appropriation either remain flat as Gov. Pat Quinn has proposed or be cut by up to 3 percent. The Illinois House and Senate have proposed cuts of 1.1 to 3 percent for the state's public universities.
Hogan said he's concerned by the exit of some key faculty members over the past few years.
State Farm Insurance says it will close two-dozen field offices over the next year in three states, including one in Champaign on West Park Court that employs 20 people.
It is part of an effort to save the company $8 million over the next five years. State Farm did a year-long study leading up to the consolidation plan, and found it could save money by centralizing technology while remaining efficient.
State Farm spokeswoman Missy Lundberg said administrative staff will consolidate to Indianapolis, but she said most employees will not be affected.
"A lot of those 13 hundred employees are what we call mobile claim workers, and they will be staying in those communities," she said. "What that means is that they will maybe work out of their home, maybe work out of a car, maybe work out of an agent's office."
The Bloomington-based company says it hopes to retain all the affected employees.
In addition to the State Farm office in Champaign closing, Illinois branches affected by the consolidation are in Marion, Collinsville, Springfield, Peoria, Moline, Rockford, Elmhurst, Tinley Park, and Arlington Heights.
Offices in Michigan and Indiana will also close.
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