Illinois Public Media News
Illinois Democrats edged closer to a vote on raising income taxes during a lame-duck session of the state Legislature, as the governor met with legislative leaders Tuesday and lawmakers considered measures that would put new restrictions on state spending.
Senate President John Cullerton, D-Chicago, said Democratic leaders want the House to approve a version of the tax increase that passed in the Senate nearly two years ago. That plan would boost the personal income tax rate to 5 percent, from the current 3 percent.
Meanwhile, a new report from a University of Illinois think tank concludes that the state's budget crisis is even deeper than most people realize. The deficit is usually placed at $12 billion with a possibility that it will reach $15 billion, but the Institute of Government and Public Affairs says the shortfall is really $17 billion and climbing.
"It is hard to overstate the depth of the fiscal hole the state is in," the report said. "If nothing is done soon, the state of Illinois faces a very bleak future."
Cullerton and House Speaker Michael Madigan, D-Chicago, want some Republican support for a tax increase. That would help insulate Democrats from the potential public outcry over higher taxes. So far, however, Republican leaders have opposed any tax talk.
Democrats are pushing several measures that might help attract GOP support and blunt public criticism.
Madigan, for instance, is sponsoring two constitutional amendments. One would limit government spending growth to the same level of growth that Illinois taxpayers see in their own paychecks. The other would make it harder for state and local government to approve costly benefit increases in pension plans.
Both amendments have been approved in committee and now await action on the House floor.
Democrats also are trying to reach deals on Medicaid costs, school management and worker's compensation.
Together, the measures could be used to argue that Democrats are serious about handling tax money more responsibly if an increase is approved.
"I think what we have to do is pay our bills," Cullerton told reporters after meeting with Madigan and Gov. Pat Quinn. "I think we have to make sure our bond rating is improved and people see that, going forward, we can pay our bills. If people look at it from that perspective, I think it's something that they would accept."
A new Legislature will be sworn in Jan. 12. It may be easier to pass a tax increase before then, while Democrats still have a large majority and some outgoing members can act without worrying about a future voter backlash.
Democratic leaders, however, won't say whether they're prepared to try to pass a tax during the lame-duck session if they can't pick up any Republican support.
A spokeswoman said House Republican Leader Tom Cross met with the governor Tuesday morning and Quinn discussed raising income taxes by just half a percentage point and using that revenue to pay off $14 billion in new debt. Spokeswoman Sara Wojcicki said Quinn offered few details and that Cross reiterated his calls for government spending reforms before considering higher taxes.
There was little evidence Tuesday to suggest that Democrats and Republicans were coming to any accord.
The governor and Democratic leaders did not include top Republicans in their meeting. Republicans opposed Madigan's constitutional amendments to control spending, arguing either that they don't go far enough or they go too far. And a Senate committee voted along party lines to borrow roughly $4 billion and use the money to make the state's annual contribution to government pensions.
The economy may still be slowly improving in Illinois, but the author of a monthly gauge of the state's economic performance says it's far from healthy.
For the seventh consecutive month, the University of Illinois Flash Index went up. In December, the index measured 94.9, up .7 from November, but 100 is the break-even point between growth and contraction, and economist Fred Giertz said the slow growth has not been very noticeable.
Giertz said unemployment remains a problem, even though the state's jobless rate is slightly under the national average -- a rare occurrence.
"It may just be an aberration, or it may be that our industries, especially agriculture, are doing fairly well," Giertz said. "Some of the exporting industries are doing alright, and we were not really devastated by the crisis with real estate or things of that sort."
Giertz is also not too concerned that Illinois or the nation will see a return of inflation in the near term. Rising commodity prices, bailout legislation and the Federal Reserve's decision to enact "quantitative easing" have prompted some to warn of an effect on overall consumer prices. But Giertz does not detect any unwillingness in financial markets to lend money at the current very-low interest rates.
"The fact that people ware willing to lend money for the long term at relatively low interest rates suggests that people don't think there's going to be a lot inflation on the horizon," Giertz said. "The Federal Reserve is very wary of the possibility (of inflation). They've made mistakes in the past and I think their intention is to start reining things in once the economy gets going again."
Giertz said there is some good news in the weak Flash Index numbers. He said revenue from sales taxes was up in December, marking a better holiday shopping season than many retailers had expected. The Index uses revenue reports from state income, sales and business taxes to calculate its measurement.
Illinois Gov. Pat Quinn has signed legislation affecting the pension system for law enforcement officers and firefighters.
Quinn signed the law Thursday. His office says it will stabilize pension systems and protect retirement benefits for the officers and firefighters. However Chicago Mayor Richard Daley says he's disappointed Quinn signed the law, saying it will burden Chicago taxpayers.
The new law will affect those hired on or after Jan. 1. Quinn's office also says it will help municipalities fund pensions.
Daley's office says the new law will increase the city's annual police and fire pension contribution from an projected $309 million in 2015 to about $856 million. The new law normalizes retirement ages, sets a maximum pension and begins monthly cost-of-living adjustments at age 60 for retirees and survivors.
Energy company Dynegy will be closing its Vermilion Power facility near Oakwood by the end of March.
Company spokesman David Byford said mothballing the more than 50-year old facility largely comes down to economics.
"We have higher fuel costs at Vermilion because the plant is not located on a rail line," Byford said. "And that would be coupled with market conditions that would include reduced power demand and lower power prices that don't favor continued operations."
During a year-long review, Byford said company heads looked at options for the plant, including alternative fuel supply arrangements. But he said the price of fuel for supplying the plant with its coal also proved to be too much.
"We took a year exploring numerous options for the plant that included looking at alternative fuel supply arrangements," Byford said. "But in the end, we're still faced with poor plant economics."
Byford said the plant is no longer being used all the time, and he said a regional power grid ensures a reliable power supply to the area. The precise closure date for the plant is not known, but it is expected near the end of the first quarter of 2011. The company said the next step is for Dynegy to develop plans for suspending operations in a safe and reliable manner. The plant has about 50 employees, and Byford said it is not yet known whether they will be offered jobs elsewhere in the company.
Once again, unemployment is down from a year ago, in all 12 of Illinois' major metropolitan areas.
The Illinois Department of Employment Security reported that November was the third month in a row that unemployment has declined in all 12 metro areas from a year ago. It's the fourth month of such declines for the Champaign-Urbana and Danville areas, and the fifth consecutive month of declines for the Decatur area.
In Champaign-Urbana, the November unemployment rate was 8.2 percent, down from 8.9 percent. In Danville the rate was 11 percent, down from 11.7 percent, and in Decatur, the rate was also 11 percent, down from 12.1 percent.
November unemployment ranged from 7.1 percent in the Bloomington-Normal area to a high of 13.7 percent percent in Rockford.
Figures for 18 east-central Illinois counties showed jobless numbers improved from a year ago in every county but Douglas. November unemployment for Douglas County was 9.2 percent, up from 9 percent percent a year ago.
While the unemployment rates are better than a year ago, the total numbers of non-farm jobs have gone down in Danville and Decatur, and are unchanged in Champaign-Urbana.
Statewide, only Rockford and the Illinois side of the Quad Cities showed an increase in non-farm jobs from November of last year. IDES spokesman Tom Austin says the unemployment rate and the survey of non-farm jobs are compiled separately and do not always correlate. He says that among the contributing factors are workers who find jobs outside of their county or metro area.
Illinois' statewide unemployment rate was 9.2 percent. That's just below the 9.3 percent national average.
(Additional reporting from the Associated Press)
A marathon strike at Decatur's Huston Patterson plant has dragged on for months, and there does not appear to be an agreement in sight between union officials and the printing company.
Workers began picketing on June 30 outside the company's headquarters to protest contract changes that took affect in August after their old contract expired. The modified contract includes a 15-percent wage cut, mandatory overtime, and reductions in healthcare benefits. Pat Shields is president of the Graphic Communications Conference International Brotherhood of Teamsters Local 219M. He said many of the picketing workers have a 15-to-30 year history with the company and have no intention of standing down.
"Our only demand is to sit down and negotiate," Shields said. "We want to talk, and we have no pre-conditions others than let's sit and talk."
Shields contended that the company refuses to negotiate directly with the union, which is why a federal mediator is in place to open up dialogue between the two sides.
William Kaucher is with the District Council 4, the umbrella organization that oversees Decatur's printers union. Kaucher said he does not understand why the company's president and CEO, Thomas Kowa, will not negotiate with union members in Decatur. Kaucher said he successfully worked with Kowa a few years ago on a contract for employees at the Sigma Graphics printing company in Ottawa, Il., and negotiations over that deal lasted a day.
"He claims financial hardship," Kaucher said. "The guy's can understand that right now, but why would you change work rules that have been in place when it doesn't affect the bottom line? What this comes down to is this is more dictating than negotiating."
Kowa declined a request for comment.
Huston Patterson has replaced workers who are on strike, but Kaucher said any new contract would have to guarantee that those employees regain their jobs.
The number of workers on strike has dropped in recent months, but union officials say they will continue picketing for as long as possible. On Tuesday, the United Council Staff Union of Illinois donated $5,000 to the striking workers. Other strike funds through local unions and contributions from individuals have been used during the last several months to support the Huston Patterson employees.
University of Illinois administrators want its Extension service to develop a campus-level location to better promote its mission and fundraising.
The campus review of Extension has been completed, in a year when some offices have closed and jobs have been cut. But the report does not suggest eliminating any more jobs. In the latest of cost cutting measures entitled 'Stewarding Excellence', Vice Chancellor for Academic Affairs Richard Wheeler said Extension should consider moving from its current location within the school of ACES to a campus level position.
The letter co-signed by Vice President and Interim Chancellor Robert Easter also suggests that would increase U of I Extension's visibility and opportunities for funding. But Wheeler says a lot has yet to be determined, including making sure that any further re-structuring be done while considering USDA regulations.
"Making sure that we are staying within the permissible ranges of that extensive regulatory system, and the funding mechanism for that matter," Wheeler said. "Most of extension money comes from outside the campus, and will be very crucial. But I don't think any of us can anticipate exactly what organization will emerge at the end."
The 'next steps' for U of I Extension also asks that its Interim Dean Robert Hoeft and Associate Chancellor Bill Adams generate a plan to implement these recommendations, which include combining the functions of Public Engagement and Extension into one office to 'bring coherence to an outreach portfolio that has traditionally been diffuse and poorly aligned.'
They are to develop a preliminary report by early spring. Wheeler says there's no clear-cut model from other states for running the extension service. He said the present model has just worked for Illinois, since the programs involve more than agriculture.
Wind Turbine Project Gets Smaller As Urbana Residents Learn About Energy Plan
A plan to generate renewable energy by constructing three wind turbines on the University of Illinois' South Farms site has been scaled down to one turbine located on the corner of Old Church Road and Philo Road.
The project is estimated to cost $4.5 million, and the university said it can only afford to support one tower with that budget.
"It's unlikely we'll be able to do more than one at this time," said Morgan Johnston, the University of Illinois' sustainability and transportation coordinator.
The Illinois Health Facilities and Services Review Board has given Carle Foundation Hospital the green light to build a nine-story patient bed tower that will house the hospital's Heart and Vascular institute.
The $200 million project has been on hold for more than a year because of the sluggish economy, but is now moving forward through the financial backing of bonds and private donations.
Included in the new tower will be work spaces for cardiovascular, neuroscience, and intensive care services to better address emergent, acute, and chronic conditions. The new tower will also include 136 single patient rooms that will replace inadequate rooms from older buildings on the hospital campus that date back to the 1960s and 1970s.
"There is dedicated family space in each of those rooms, and lots and lots of natural light coming in through," said Stephanie Beever, the hospital's vice president of Business Development. "There's lots of glass in this building that our research has shown will actually help patients improve, get better quicker, and hopefully get home quicker."
Revised construction costs for the patient bed tower are $17 million less than what was originally projected a couple of years ago. Officials from Carle estimate that the tower will have a $100 million impact on the local economy.
Up to 250 workers will be hired to work on the constrution of the new tower. ManorCare nursing home in Urbana will be torn down in January to make room for the new patient tower with construction set to begin in March. The project is scheduled to completed in June 2013. It will be located on Coler Street between Park and Church Streets.
The theft of more than $10,000 worth of copper building materials taken last week from the University of Illinois' Natural History Building has prompted university police to look at efforts to protect its other copper-rich buildings.
Skip Frost, the Patrol Division Commander with the University's police department, said the incident was the largest of its kind on campus in recent memory. Frost said the university is in talks with building contractors to figure what can be done to prevent more thefts from happening.
"What we'd like to do and what we're able to do are two different things," Frost explained. "There are so many things that could be done, including securing (copper) in a better fashion, having better key card access, and improving locks, but you can put all those things in there, that does not mean crime is not going to occur."
Copper prices went up in November, and have continued to rise this month, reaching more than $4.00 per pound. Ameren spokesperson Brianne Lindemann said she expects there will be more thefts from homes and businesses as commodity prices for copper go up.
"You need to secure any building that you have," Lindemann cautioned. "You definitely want to keep some lights on. You just want to make sure that those buildings look like somebody has been in there.
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