Illinois Public Media News
Champaign City Council members have unanimously rejected the use of pension obligation bonds as a way to avoid service cuts during tight financial times.
Council members sided with administrators, deciding that using a low-interest loan to fund police and fire pensions carried too much uncertainty. City Finance Director Richard Schnuer said the investment risk was just too high. Council member Deb Frank Feinen said she made up her mind after reading a memo from Schnuer, and doing a quick web search on the bonds.
"When our financial adviser sits before us and talks about governments being risk averse, he's right, and there's a reason for it," Feinen said. "We're not individuals. I'm not playing with my home finances. Instead, I have a wider obligation not to take the easy way out."
Schuner also said issuing the bonds could affect Champaign's triple-A credit rating, making it harder for the city to issue debt in the future. Council member Tom Bruno said the city should only consider such an option if it wants to place today's financial burden on future generations.
"This is the year we should be feeling the pain," Bruno said. "Because this is the year that the recession has really hit the municipalities with a loss of revenues. I wish it wasn't a painful year. But if there's going to be painful years, maybe it ought to be this year, and not when my kids are my age."
Council member Mike LaDue said the city has managed its debt conservatively in the height of a recession. And he said those kinds of decisions, and not the issuing of the pension bonds, have allowed the city to take on a project like drainage improvements along John Street, where several homes have experienced flooding.
Champaign Mayoral Candidate Don Gerard said the pension obligation bonds would have been an option had Schnuer started researching the idea about 10 months earlier, when interest rates were about 2-percent.
"This will go right down the chute, but it's a shame that a year ago this wasn't looked at," Gerard said. "Because a year ago, it could have been a great opportunity. And I think the budget is something that we've been looking at for two years. These type of options should have been looked at a year ago. I'm very disappointed that they weren't."
The plan to use the bonds lost 8-0, but Mayor Jerry Schweighart said the discussion will likely go on for one more night. He and Gerard will debate one another Wednesday evening.
The debate, organized by the Junior League of Champaign-Urbana, begins at 6:30 at the Champaign Public Library.
University of Illinois Trustees could postpone their decision next week on constructing a wind turbine on the Urbana campus.
Audit and Budget Committee chair Ed McMillan said it is likely the U of I will seek another extension of the grant covering $2-million of the project. Trustees will meet March 23 on the Springfield campus. Urbana Mayor Laurel Prussing addressed the committee Monday, citing citizen concerns about noise pollution and shadows. She said the U of I has failed to address those areas, and meet with the public.
"The city does support alternative energy, but these things have to be very carefully placed," Prussing said. "And this is in violation right now of the Urbana wind turbine ordinance, and we'd like to see it corrected so it would be in a good place. And we're also concerned about the total cost."
Cost for the turbine project exceed $5-million. The head of a University of Illinois Student group pushing for turbine construction says delaying the project by a few more months, after two prior extensions, won't be a large setback. Student Sustainability Committee Chair Suhail Barot predicts the turbine will remain at its current site, by the U of I's South Farms.
"I think the university's position is correct in terms of its zoning," he said. "And it terms of the overall concerns, I think issues outstanding will be resolved."
Barot said students have more doubled their financial commitment to the project through sustainability fees, and not completing the turbine soon jeopardizes losing the grant from the Illinois Clean Energy Community Foundation. He said the U of I should feel 'morally responsible' for putting up the turbine.
Prussing said the university has also failed to consider wear and tear to township roads from the project, and suggests the U of I consider investing in an existing wind farm.
More talks between the Republican and Democratic leaders of the Indiana House might be inching the two sides closer to resolving the now three-week-long boycott by Democratic legislators.
The lack of any firm breakthrough, however, meant most Democratic members skipped Monday's floor session, continuing to leave the House with too few members to conduct business and the Democratic leader saying the boycott would continue Tuesday.
Republican Speaker Brian Bosma and Democratic leader Patrick Bauer said Monday they spoke by phone several times over the weekend. Bauer called them "fairly good talks," while Bosma said "perhaps" progress was made.
A Republican-backed proposal to allow state vouchers to help parents send their children to private schools has been among the sticking points of education- and labor-related bills that Democrats say they found objectionable and prompted them to leave for Illinois on Feb. 22.
Bauer told reporters Monday that he believed an agreement could be close on amending the voucher bill to further limit its scope, but he didn't provide details.
"I just haven't gotten that all nailed down yet completely," Bauer said. "I think they're amenable to cut out some of the huge fiscal hit on that."
The Republican sponsor of the bill has proposed capping the number of vouchers to 7,500 during the program's first year and 15,000 during the second year.
Bauer said Democrats still had unresolved concerns about a bill on government construction project wages, which includes provisions ending requirements that nonunion companies sign onto agreements involving union rules.
Bill sponsor Rep. Bill Davis, R-Portland, said he would support modifying the bill so that the state's prevailing construction wage law, which now applies to government projects of $150,000 or more, would start at $500,000 rather than the proposed $1 million level. He said he also would agree to delete a proposed complete exemption for public school and state university projects.
Bosma didn't seem certain that the amendments to those bills would be enough to bring back the boycotting Democrats.
"Every time we get there, there seems to be one more thing," Bosma said. "I'm just not exactly sure what they need at this point."
Rep. Terry Goodin of Austin, one of two Democrats representing his party on the House floor Monday, said he thought Bosma would have resolved the impasse by now.
University of Illinois President Michael Hogan said a voluntary employee reduction program on the Urbana campus went so well that it should be considered at the Springfield and Chicago campuses.
Faculty and staff were given a chance last year to resign or retire, and walk away with half of their salary, up to a maximum of $75,000. More than 480 employees left the U of I last spring to take the buyout, while 81 of those employees returned on a part-time basis. In addition, 70 professors are expected to leave in August.
The U of I's Associate Provost for Human Resources, Elyne Cole, said the number of employees who agreed to leave their jobs was "higher than expected." She said the university is expected to save $19 million annually because of the program, and those savings will trickle down to departments where cuts were made.
"It reduces the workforce both in terms of numbers and our overall salary obligations that we have for employees," Cole said. "And it will allow those units to make better decisions about how to use their resources."
While Hogan acknowledges the program's success in saving money, he said there have been costs attributed to those savings.
"You're losing teachers and you're losing workers," Hogan said. "So, that's one reason they do the re-hiring of retirees because you can still save money and get the service performed a little cheaper while you're building of cash reserves that could maybe help you make a permanent hire."
During a meeting Monday with the audit and budget committee, Hogan commented about a recently policy adopted by the U of I's Board of Trustees aimed at limiting tuition increases to no more than the rate of inflation. He said this will leave the university still looking for money for pay raises and won't strengthen the university's financial situation.
The state currently owes the U of I nearly $440 million in unpaid bills.
Children of longtime public university employees do not have to pay full tuition if they attend a state school.
As long as a parent has put in at least seven years of service, the children pay half price, but Senate Republican Leader Christine Radogno wants to do away with the perk. Radogno said during difficult financial times, it cannot be justified. She said it is unfair that a nurse working at a university hospital gets the benefit when a nurse at a private hospital does not.
"Even within the university community, it's not even universally applied," Radogno said. "It's applied based on your family status, which generally we try to stay away from that. So, if you happen to have children, you get extra pay."
Radogno said that does not make sense, and she doesn't buy university claims that it is an important recruiting tool.
Schools say that lawmakers have continually looked to higher education to help fill the state's budget hole, and that has already meant reduced benefits for university employees. Illinois State University spokesman Jay Groves said Illinois exports a lot of its high school graduates to neighboring states. He said the perk helps entice employees' children, their partial tuition and fees to stay in Illinois.
"You know she might be assuming that if students did not have that benefit, that they would go to public universities anyway, and that is not a given," Groves said. "So that is money taken away from the public universities if the student decided to go out of state or to a private institution."
If it gains traction in the legislature, Radogno's proposal would only apply to future hires. Current university workers would be grandfathered in and have the chance to keep the tuition break.
Radogno also has legislation that would eliminate full tuition waivers known as General Assembly scholarships. Lawmakers can award them at their discretion, and there have been cases of abuse. Governor Pat Quinn also supports ending that program.
University of Illinois board of trustees chair Christopher Kennedy addresses the U of I community in the Beckman auditorium to discuss the importance of research at the university to the economic development of Illinois and the nation. He explains why advancing efforts to secure new research opportunities will have a positive effect on the economy.
Wisconsin's public workers no longer have collective bargaining rights. Lawmakers stripped them away Thursday, and the move's causing a firestorm in pro-labor circles. But Illinois' neighbor to the north isn't the only one seeing an epic battle over workers rights.
Thousands of union members flooded streets outside the Indiana Statehouse Thursday. The demonstrators hoped to stop measures they fear are worse than those in Wisconsin.
It's usually a two hour drive from the Northwest Indiana city of Portage to Indianapolis. Yesterday morning, I-65 was covered in snow, so the trip was more like a slick, three-hour Odyssey. This is did not dampen the spirits of a busload of steelworkers when they arrived at the Indiana Statehouse.
The vice president of Local 6787, Pete Trinidad, said he came down to lend his voice. "We disagree with what our politicians are doing down here. And if we don't come down and have our voice heard then they are going to say, 'Well, you didn't say anything so we just went ahead and did it.' We didn't want that to happen."
In some ways - the stakes are higher for organized labor in Indiana than they are in Wisconsin. You see, the issue of public workers' collective bargaining rights is old-hat in the Hoosier state. Indiana's Republican governor, Mitch Daniels, stripped state workers of such rights back in 2005.
GOP legislators took control of both chambers this year - and they took their own swipe at organized labor. The first bill Republicans introduced this session would strip public school teachers of most collective bargaining rights. Another bill would make Indiana a so-called right to work state. Basically, companies would no longer require union membership as a condition of employment.
Republicans say this would make Indiana more economically competitive. Union member Pete Trinidad doesn't don't by it, so he took part in yesterday's demonstration, one of the largest in Indiana's history. Trinidad says the GOP's first bill targeted teachers - but it won't stop there. "They try to choose on spot and start a crack and the crack goes all the way across. We can't do that. We're all together in this."
Dozens of speakers addressed the crowd that lined up near the Indiana Statehouse. And despite the chilly temps, chanting continued for hours.
But inside the Capitol - things were quiet. One reason is that House Democrats have boycotted the past three weeks of this session. They don't have enough votes to stop the GOP's agenda, but without Democrats, the House can't do its work because there's no quorum.
But a Senate Democrat from was there - eager to take jabs at Republicans.
"What happened in Wisconsin yesterday was terrible," said Lonnie Randolph, a veteran Democratic state senator from East Chicago. "Indiana, Wisconsin, Ohio. That's not by chance all this is happening. If they weaken labor, they weaken the biggest contributor and supporter of the Democratic party."
Randolph saw the crowd outside. He says Republicans are overreaching.
"They've waken up a sleeping giant in my opinion," Randolph continued. "The people that came down here today 20,000-plus, these are just average, everyday people with families. They're just barely making it from pay check to pay check. And what you're doing you're hitting them in the pocket. This is going to go on until the people get some relief."
It turns out the pro-union demonstrators were preaching to the converted Thursday, because Republican leaders weren't in the Indiana Capitol, either. They called the day off. Not because of the demonstration - but because the Big Ten basketball tournament is in town and they didn't want to deal with a congested downtown Indy.
Maybe it's a fitting demonstration of their confidence they'll prevail. Brian Bosma, the House Majority's Republican leader, said as much in recent days. "There's always room for compromise. I'm not going to concede to a list of demands. I'm not conceding to that. I'm never going to concede to that particularly when it's only 37 people telling the remaining 63 what to do."
Bosma said pro-union Democrats are missing something: Republicans have power - and they ought to. They got the most votes in this historically Republican-leaning state.
So, Bosma feels the GOP can wait things out, long after the union noise dies down.
Though ... that could take a while - unions plan more demonstrations for next week..
(Photo by Michael Puente/IPR)
A Champaign group committed to fair and reasonably priced health care has filed a complaint against its own insurance carrier.
Champaign County Health Care Consumers says premiums for its five staff members have gone up about 25-percent on average over the last 4 years. Executive Director Claudia Lenhoff said the group's complaint before the Illinois Department of Insurance against PersonalCare also contends the provider is discriminating based on age and gender. Lenhoff said when contacting the company, she's told that the higher premiums are based on usage.
"You see the higher charges for females compared to males, and they usually say that that's because women are going to have more medical expenses, if they're going to have babies and so on," Lenhoff said. "All the women on staff have never had any children. That doesn't effect our usage. And so, we think that these are pricing schemes that PersonalCare has been able to get away with."
Lenhoff said the higher rates have put her organization in financial jeopardy. The group's Allison Jones says her employer is now paying more than $520 month for her coverage.
"I really feel like they're destabilizing my job," she said. "They're putting my job at risk. I see the numbers and I know how much the salary is for someone who works in a non-profit. I feel really greatly that 100% of my insurance premium is paid for. But I know that's just a ticking time bomb. It's not going to last forever."
Meawhile, Lenhoff said her staff is getting a number of calls from others in the community also using PersonalCare whose rates have gone up considerably. She says this and other complaints will prompt the Department of Insurance to contact insurance companies, and let them know they're monitoring their rate increases. And a bill going before an Illinois House committee next week would give that department review authority over rates. Urbana Democrat Naomi Jakobsson is a co-sponsor.
Wisconsin lawmakers voted Thursday to strip nearly all collective bargaining rights from the state's public workers, ending a heated standoff over labor rights and delivering a key victory to Republicans who have targeted unions in efforts to slash government spending nationwide.
The state's Assembly passed Gov. Scott Walker's explosive proposal 53-42 without any Democratic support and four no votes from the GOP. Protesters in the gallery erupted into screams of "Shame! Shame! Shame!" as Republican lawmakers filed out of the chamber and into the speaker's office.
The state's Senate used a procedural move to bypass missing Democrats and move the measure forward Wednesday night, meaning the plan that delivers one of the strongest blows to union power in years now requires only Walker's signature to take effect.
He says he'll sign the measure, which he introduced to plug a $137 million budget shortfall, as quickly as possible - which could be as early as Thursday.
"We were willing to talk, we were willing to work, but in the end at some point the public wants us to move forward," Walker said before the Assembly's vote.
Walker's plan has touched off a national debate over labor rights for public employees and its implementation would be a key victory for Republicans, many of whom have targeted unions amid efforts to slash government spending. Similar bargaining restrictions are making their way through Ohio's Legislature and several other states are debating measures to curb union rights in smaller doses.
In Wisconsin, the proposal has drawn tens of thousands of protesters to the state Capitol for weeks of demonstrations and led 14 Senate Democrats to flee to Illinois to prevent that chamber from having enough members present to pass a plan containing spending provisions.
But a special committee of lawmakers from the Senate and Assembly voted Wednesday to take all spending measures out of the legislation and the full Senate approved it minutes later, setting up Thursday's vote in the Assembly.
Walker has repeatedly argued that collective bargaining is a budget issue, because his proposed changes would give local governments the flexibility to confront the budget cuts needed to close the state's $3.6 billion deficit. He has said without the changes, he may have needed to lay off 1,500 state workers and make other cuts to balance the budget.
The measure forbids most government workers from collectively bargaining for wage increases beyond the rate of inflation unless approved by referendum. It also requires public workers to pay more toward their pensions and double their health insurance contribution, a combination equivalent to an 8 percent pay cut for the average worker.
Police and firefighters are exempt.
UI Holds Forum on Proposed Cuts to Institute of Aviation
The University of Illinois held a public forum Tuesday night to get feedback about a budget recommendation to break up the 65-year-old Institute of Aviation.
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