Illinois Public Media News
An Illinois appellate court ruled Wednesday that lawmakers have to start over if they want to raise taxes and legalize video gambling to pay for a $31 billion statewide construction plan.
A unanimous 1st District appellate court tossed out higher taxes on liquor, candy, and items such as toothpaste, along with video-machine gambling in taverns. They said the law making the changes violated the state Constitution's prohibition on bills that deal with more than one subject.
Gov. Pat Quinn, who vowed an immediate appeal to the state Supreme Court, signed the law in July 2009. It increased revenue to fund a long-awaited plan for building highways, bridges, schools and making other infrastructure improvements. Chicago Blackhawks owner Rocky Wirtz, who also heads one of the state's largest liquor distributorships, sued Quinn and other state officials over the law just before it took effect in September 2009.
"This lawsuit was always about how the legislature passed this bill and the discriminatory tax on wine and spirits," Julia Sznewajs, a spokeperson for Wirtz Beverage Illinois, wrote in a statement. "The decision affirms that and we are gratified by it."
The items taxed at higher rates by the law won't immediately drop in price while all players wait to see how an appeal proceeds.
The legislation legalized video gambling and raised liquor excise taxes and taxes on candy, some beverages, and grooming products. It also allowed for private management of the Illinois Lottery, required financial reports on capital projects from the governor's office, and even commissioned a University of Illinois study on the effect of lottery ticket purchases on families.
Not all of them had to do with state revenue, the court said.
"The wide range of topics in (the law) cannot be considered to possess a 'natural and logical connection,'" the court opinion read.
It also invalidated several companion pieces of legislation, including the mechanism for funding capital construction projects.
Quinn said he would seek a stay of the decision from the Supreme Court, putting the appellate court's decree on hold until the high court could decide the issue.
"Capital bill projects are putting thousands of people to work in every corner of the state, while supporting local business, improving our infrastructure and increasing energy efficiency," the Democratic governor said in a prepared statement.
Both Democratic Senate President John Cullerton of Chicago and House Minority Leader Tom Cross, R-Oswego, issued statements reiterating their commitment to job growth through state-sponsored construction.
Two East Central Illinois lawmakers predict the legislature will still find a way to bail out the capital plan, should Illinois' Supreme Court knock it down or refuse to hear the case.
Democratic Senator Mike Frerichs said given the importance of what's at stake, he is confident that a bipartisan group of lawmakers, with the necessary legal help will make the changes to see it through.
"We had attorneys involved the first time, but I think we'll probably look a little closer, take the opinions of the appellate court justices in mind or the Supreme Court justices in how they rule," Frerichs said. "We should be able to fix it this year."
Frerichs said it is vital that the state do what it can to improve roads and other infrastructure, and building work at the University of Illinois and other college campuses around the state.
Catlin Republican House member Chad Hays said a number of projects are pending in his district that rely on these funds, including more than $800,000 for upgrades to the David S. Palmer Arena, and funds for an education center at Kennekuk County Park. Hays said some of those dollars have already come through.
"Just last week some funding for some energy efficiency upgrades at the Danville YMCA for example were released," Hays said. "So prior to this ruling by the appellate court, some of that money was actually beginning to flow."
Hays said he has staff reviewing the appellate court's opinion, and agrees quick action on a new plan could be needed to protect projects in his district.
Illinois legislators will be back in Springfield next week.
If the Supreme Court upholds the ruling, lawmakers would have to begin anew to adopt video gambling and the tax increases necessary to pay for construction - presumably breaking legislation up into smaller pieces.
A spokeswoman for Attorney General Lisa Madigan, Robyn Zeigler, said in an email that the state will ask the Illinois Supreme Court for an immediate stay of the decision. That will be filed Thursday, Zeigler said.
(Additional reporting from the Associated Press and Illinois Public Radio)
Champaign's City Council has unanimously recommended a series of budget cuts with the condition that the largest ones might be removed from the chopping block after further discussion.
The crowd of about 70 people heard about the city's dismal financial outlook that has already meant $9-million in budget cuts in the last 3 years, and $2-million in the current proposal. Firefighters and other unions say a plan to cut minimum staffing at the west side's station 4 a threat to public safety.
"If finances trumps the safety of the citizens and your firefighters, then we find it ironic that the thousands of residents that live from Southwest Champaign to Northwest Champaign and pay arguably the highest taxes will be receiving a reduced level of fire and medical services," Chuck Sullivan of Champaign Firefighters Local 1260 said. "We strongly urge to reconsider your vote this evening and table the idea of reducing firefighter staffing."
Council member Tom Bruno said he would prefer 27 to 25 firefighters, but said the move makes sense.
"We have to be adults about the problem we face and make a cut somewhere," Bruno said. "I think this is a reasonable cut in a package of reasonable cuts - all of which are painful, but there isn't always an easy solution to life's problems."
Some citizens are also concerned about a proposal to close the front desk of the police station from 7 p.m. to 7 a.m. Michael Wilmore with AFSCME Council 31 said it means less communication among officers.
"The cuts that you're talking about in the records department and the front desk are going to be eliminating a lot of people that are the centerpiece of information who give information to the officers in the field." Wilmore said. "Real time information on criminal activity and criminal suspects. If you cut them out, the police in the field are not going to have up to date information. The city will be less safe."
Council member Karen Foster said she will approve the change only as a last resort.
"I've sat with the records department at the police department and I know exactly what they're going through every day," she said. "I just cannot fathom having one police officer come and do all those duties. I just cannot see that."
Foster said she voted for the budget reductions only after talk of seeking out new revenue, and refinancing some of the city's pension debt by issuing municipal bonds, an issue the council will discuss again in March. Champaign City manager Steve Carter said that could save the city about a million dollars in the next year.
The city council also backed a voluntary employee buyout plan similar to one enacted last year at the University of Illinois with hopes that will lessen the need for layoffs in areas like police and public works.
Gov. Pat Quinn signed major reforms to Medicaid into Illinois law on Tuesday, calling it a "landmark achievement" as he was flanked by a bipartisan group of state lawmakers who said the changes aim to reduce costs, pay bills sooner and target fraud.
But some health care advocates said they're concerned because the reforms to the program that provides medical care to the poor include requiring half of all patients on Medicaid be on managed care by 2015.
"It is a landmark achievement, I think, for health care in Illinois," Quinn said.
Quinn said the Medicaid reform efforts are one part of his plan to "stabilize our budget," as Illinois works to plug a deficit that is projected to hit $15 billion in the coming year.
The governor s office estimates the changes will save between $624 million to $774 million over five years. The program's annual budget is $7.6 billion, about one-third of the state's general revenue fund budget. In Illinois, Medicaid is administered by the Department of Healthcare and Family Services and includes about 2.8 million people.
Another cost-saving measure would limit income for future enrollees into Illinois' health care program for children, All Kids, to 300 percent of the federal poverty level.
The law emphasizes HMO-style "managed care" and reduces the use of costly institutions for people with physical and mental disabilities. It would require the state to pay Medicaid bills sooner, reducing late-payment penalties. It also would take steps to ensure ineligible people don't sign up for medical care.
Barbara Dunn, executive director of the Community Health Improvement Center in Decatur, said she has doubts and concerns about plans to require 50 percent of patients to be on managed care by 2015. The center also has offices in Champaign and Mattoon and half of the 19,000 patients it serves are on Medicaid.
"It can work for them but I don't see it as a slam dunk," Dunn said. "I think it's going to be very difficult to do."
Gina Guillemette with the Heartland Alliance in Chicago said she is particularly interested to see how the move to managed care affects populations that the group serves, including the homeless and mentally ill.
"How they proceed is really critical," Guillemette said. "I think that attention to what people's needs are and what best practices are in integrated and coordinated care are really going to be important."
Sen. Heather Steans, D-Chicago, said the bill improves the way government delivers services.
"This is providing better health care outcomes at a reduced cost," Steans said. "We are providing the opportunity to move people out of institutions into home and community-based care settings."
Republicans, like state Sen. Dale Righter of Mattoon, said there was cynicism about any success before work started on the legislation. But the changes are necessary, he said.
"This program was on a collision course," Righter said. "It had an unsustainable rate of growth where liabilities were far outstripping the revenues available to pay for it."
Other changes would help ensure that only eligible people enroll in Medicaid. Clients would have to provide additional evidence that they meet income requirements, live in Illinois and, for continuing clients, that they're still eligible.
Jim Duffett, executive director of the Campaign for Better Health Care based in Champaign, said moving patients to Medicaid managed care is a concern.
"We just want to make sure as this process moves forward that there are extra strong consumer protections for people on Medicaid and for the provider community to also be protected," Duffett said.
HFS director Julie Hamos said the state now has a road map to efficient and effective Medicaid.
"This will not be easy," she said. "We are talking about transforming the system.
The Illini Union Bookstore in Champaign recently unveiled a new apparel line from a company pushing to end poverty in Central America.
South Carolina-based Knights Apparel Inc. runs Alta Gracia, a manufacturing plant in the Dominican Republic. The company employs about 120 people at the factory, and pays each of them $2.83/hour, which exceeds the country's prevailing wage of $0.84/hour. In addition to this salary increase, the company has allowed the workers to form a union.
The non-profit group Workers Rights Consortium (WRC) said the company's salary boost is just enough to adequately feed and shelter a family. In a statement, the WRC said it regularly monitors the facility to make sure the building is up to code and workers are treated well.
"Formal monitoring activities - worker interviews, meetings with management, meetings with union leaders, factory inspections, and review of factory records - all take place at least monthly and in most cases weekly," WRC spokeswoman Theresa Haas said. "Less formal communications with workers and managers occur on a daily basis."
President and CEO of Knights Apparel Joe Bozich said the company makes less because its paying higher salaries, but Bozich noted that the Alta Gracia clothes are sold to consumers at prices that are comparable to other well known brands, like Nike and Adidas. Bozich said he believes this is a viable apparel option because of the social value associated with the clothing line.
"There's been a large group of students that have been asking for this," Bozich said. "They have been petitioning for this for a number of years, saying give us a product to buy that meets a higher standards in terms of corporate social responsibility."
Illini Union bookstore manager Brad Bridges began selling the clothes a couple of weeks ago. Bridges said he would consider dropping partnerships with other clothing companies if there is a large demand for the Alta Gracia apparel.
"Human rights are a big issue with a lot of our students, and we want to provide products that come from a fair wage facility," Bridges said. "I'd like for more companies out there to offer an alternative, so we don't have just one product line from one company"
The factory's clothing is currently sold on more than 200 college campuses.
It is still early in the search for the University of Illinois' next chancellor, but the university community started weighing in on the hiring process during a public forum Monday night.
Many of the students and faculty members who were at the meeting said they want a chancellor who will represent their interests while considering the financial challenges facing the university.
"This university if it's not led well," architecture student Jake Vermillion said. "Could be severely and radically changed in a negative way."
The state owes the U of I more than $400 million. Vermillion said he is concerned about how the economic climate could affect the School of Architecture, especially as the university mulls over department cuts and consolidations.
That is a concern that has not escaped the committee tasked with finding the next chancellor. U of I Physics Professor Doug Beck heads that committee. Beck said whoever is chosen should have a strong academic history and be familiar with the difficult issues confronting public education.
"With the budget decreasing, the person has to understand in some detail what the consequences are and what possible mechanisms there are for maintaining or increasing revenue from various sources," Beck said, noting that the new chancellor would manage a $1.8 billion budget.
Another common issue brought up at the forum was a focus by the next chancellor to strengthen the relationship between the university and nearby communities.
University leaders say they hope to wrap up the process of replacing interim Chancellor Robert Easter before the next academic year. Easter replaced Richard Herman, who stepped down in October 2009 after an admissions scandal. The new chancellor would also hold the title of vice president.
School board members in the Champaign district will have more unenviable work ahead of them as talks begin on a new district budget.
Last year they had to make roughly $2 million in cuts to staff and other expenses to meet a projected budget deficit. For the fiscal year 2012 budget, Chief Financial Officer Gene Logas said Unit 4 will likely have to shed another $2 million in expenses.
Logas said cuts in staff positions may be inevitable, but core curriculum should not be affected. On the other hand, Logas says some specialized courses with low headcounts - mainly in high schools - may not be offered.
"We're not jamming 30 kids into a classroom or anything like that," Logas said. "It's just that some of those classes that we've been able to allow to take place with very small numbers in the past, those are some of the ones we're going to have to take a hard look at and maybe not be able to offer as many of those."
Logas said he hopes that most of the personnel cuts will be resolved through attrition instead of layoffs - but he noted Unit 4 will have to notify potentially laid-off teachers and other staff in March. He said discussions on the 2012 budget begin with Monday night's school board meeting.
Champaign officials are considering a series of cuts that would affect the city's emergency service departments.
The proposal would not lead to any job cuts to the city's firefighting services, but it would mean closing one firefighting company at Fire Station Four on West John Street, on days when overtime is needed to keep the station running. According to Champaign Firefighters Local 1260 President Chris Zaremba, that would have a dramatic effect on the response time on the city's west side, and could hurt other areas if those firefighters are tied up.
Zaremba said he hopes the public provides feedback on the proposed cuts at the city council study session Tuesday night, and in the days ahead.
"Tuesday night being a study session as opposed to a council meeting, your ability to speak publicly is a lot less," Zaremba said. "What we really want to see and what we're really hoping to see in the near future is not our members come out, but educated citizens come out and express concerns about it."
The recommended budget cuts would lead to the elimination of one person at the police station who staffs the front desk during over night hours from 7 pm to 7 am. City Manager Steve Carter said as a result of the cuts, those inquiring about a towed vehicle or similar service would have to wait until morning. However, he noted that they should be calling METCAD 9-1-1 in the event of a crime or accident.
City Manager Steve Carter suggests that is what mutual aid is for, citing the fire that destroyed the Metropolitan Building in October 2008.
"We have several departments from the surrounding area helping us, and we respond likewise when they don't have adequate staffing," Carter said. "No community can afford by themselves to staff at a level that can address any conceivable emergency situation."
The City Building's information desk would also be closed. The city manager's staff would help route phone calls while the general telephone number would be eliminated.
In total, fifteen city positions would be cut if the $3.5 million reduction plan is approved by the Champaign City Council in March. These cuts would be among the most visible aspects of a spending reduction plan that seeks to eliminate a $2 million gap in the current city budget.
The council votes on the changes in March, but Champaign Fire Chief Doug Forsman said there is no set date when the fire department would make the change, suggesting sales tax receipts could improve later in the year. But Champaign City Finance Director Richard Schnuer said that is unlikely based on the predictions of economists.
"One major revenue source has turned from dropping to now increasing slightly, but our costs are increasing in many ways in which we have limited control," he said.
City staff is also recommending a voluntary separation program. Through it, Carter said it is still possible the city could achieve the savings it is seeking without layoffs.
The city of Champaign is getting ready to release another round of budget cuts - and some city employees may be given the option to leave their jobs.
City manager Steve Carter will tell city council members next week about a proposal for a voluntary separation incentive. If the council approves, some union and non-union employees would be able to get two weeks' salary for each year of service up to 26 weeks if they agree to leave, with a minimum of $10,000.
Carter said he expects about 20 employees would accept the incentive, which will be offered first to people whose jobs are already under threat of being cut.
"Any position, whether through past budget decisions or the ones we're going to be discussing next Tuesday, those will be our top priority (for separation offers)," Carter said. "We have the ability to lay people off, but our preference would be not to. We have really good employees, and if we can find a way to make this more mutual, the better for the organization and for the people."
Carter said police officers and firefighters would not be offered voluntary separation because their positions would likely have to be re-filled. He said the city administration will say what other budget cuts they think should be made in the middle of the current year's budget. The last five year forecast suggested the city needed to cut $1.2 million in recurring costs from this year's spending plan.
University of Illinois trustees have adopted a policy designed to limit tuition increases even as they raise the cost of housing at the school's three campuses.
The tuition policy approved Thursday links tuition increases to inflation and other factors.
Students are guaranteed by state law to pay the tuition rate they paid in their freshman year throughout their undergraduate years. But the rate increases for most incoming classes.
This year, tuition increased 9.5 percent and led to complaints from some students and parents. The cost of tuition and housing for a typical undergraduate year at the Urbana-Champaign campus is more than $20,000.
Governor Pat Quinn said he likes 'the basic framework and concept' for the next year's tuition that was outlined Thursday by University of Illinois Chief Financial Officer Walter Knorr.
"I think that has a lot of merit to try and keep tuition pretty much even with inflation and adjusted dollars," Quinn said. "I think carrying that out is a good mission."
Quinn said the state is also putting about $404 million into grants for MAP, or the Monetary Awards program., but he said the demand is at least 50-percent higher that. Quinn added that one of his goals for the next four years is to secure more scholarship money for students who attend Illinois' public universities and community colleges.
Trustees on Thursday also raised the cost of a double dorm room in Urbana-Champaign 4 percent to $9,452 a year. Costs in Springfield and Chicago increased less sharply.
(Additional reporting from the Associated Press)
Mitsubishi Motors North America plans to produce a new model at its plant in Normal, Ill., extending the life of the facility just a month after employees agreed to lower wages the company said were needed to keep it open.
Mitsubishi announced the plans as part of new, global business plan aimed at revitalizing the troubled Japanese automaker.
"One of the main pillars of this (plan) is a transition from region-specific models with all of the specifics that entails - producing for a single market, single group of consumers, a single economy - to more global models that are produced for multiple markets," Mitsubishi spokesman Dan Irvin said. "And the new model will be one of those global models."
The company plans to announce what the new model will be in the next few weeks, he said, but all four models now made at the central Illinois plant - the Galant, Eclipse and Spyder and the Endeavor sport utility vehicle - will be phased out.
Employees and local officials at the plant said they're still waiting for details on the new model and to learn whether it will keep all 1,300 plant employees on the job. But the news that one of the largest and highest-paying area employers will stay open was a relief.
"These jobs are very hard to come by and, again, particularly in this economy when most companies of this nature are just hoping to sustain their current employment levels," city manager Mark Peterson said. "These would be, I hate to say impossible, but almost impossible to replace."
The United Auto Workers said Mitsubishi's announcement was a just reward for tough pay concessions its members had little choice but to accept.
"Considering the economy, the state of the economy right now, I think the decision was pretty clear for a majority of the members," UAW local President Ralph Timan said. "It was a tough decision, and it came with sacrifices."
Two-thirds of the union's almost 1,100 members at the plant voted last month to cut a reported $1.67 an hour from their wages after the company said it needed the concessions to remain competitive.
The Illinois Department of Commerce and Economic Opportunity said at the time that it was talking with Mitsubishi about possible incentives. The agency and company continue to talk but so far no tax breaks or other incentives have been provided spokesman Mike Claffey said.
Like the auto industry in general, Mitsubishi North America has struggled with slow sales. The company's U.S. market share for 2009 was just over one half of one percent - the lowest level since 1985, according to WardsAuto.com, a web site that tracks auto industry data.
The company's new business plan, which it calls Jump 2013, is aimed at producing more vehicles to sell in emerging markets such as China and Brazil. The goal, according to a company release, is to raise sales to 1.37 million vehicles in 2013 from the roughly 1 million it expects it will sell by the end of the current fiscal year in March.
The Normal plant started making the Gallant and the other three models it now manufactures in 2005, Irvin said.
"They've been very good to us for a very long time," he said.
The plant at one point employed far more workers, but 1,200 were laid off in 2004 as part of what Mitsubishi said at the time was its last chance for survival. Those layoffs have been followed by other wage and benefit concessions.
Peterson said Thursday that he's anxiously waiting for details about what the company's new model will mean for job numbers at the 22-year-old plant.
"The questions is: Now that's one model - is that going to sustain all 1,100 existing jobs, and could it mean more out there?" he said.
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