July 12, 2013

Illinois, Livingston Co. Staff To Tour Closed Prison

State officials are set to visit the closed Dwight Correctional Center next week as the Livingston County sheriff tries to get permission to use a portion of the facility to house hundreds of inmates.

Sheriff Martin Meredith tells The (Kankakee) Daily Journal that the July 18 meeting will also include county officials.

Meredith wants Livingston County to take over a cell house in the prison that was once the only maximum-security lockup for women. Under his plan, the county would house up to 300 prisoners from the federal prison system, Cook County and elsewhere.

The roughly 950-prisoner facility was one of several that closed earlier this year as part of the state's cost-cutting moves.

Pat Quinn
(Seth Perlman/AP)
July 09, 2013

Quinn: Inaction On Pension "Lets Down Taxpayers"

Illinois legislators gathered all day on Tuesday to deal with a new gun law, and then promptly adjourned without taking action on the state's pensions.

That sets the stage for another showdown between Gov. Pat Quinn and the General Assembly.

The Chicago Democrat set Tuesday as a deadline for a bipartisan pension panel to report back with a plan. That was even as members of the so-called conference committee formed last month called his deadline arbitrary and irresponsible.

Lawmakers involved in pension talks say they are edging closer to a deal, but they are not there quite yet. They say there is no hurry to get done right now - a new law wouldn't take effect until next year.

Senate President John Cullerton (D-Chicago) said as much as legislators want to pass a pension overhaul, it is complicated.

"We passed a bill, we're not lazy,” Cullerton said. “We passed a bill with two-thirds vote. The House passed a bill, they're not lazy. We just didn't have an agreement cause it's so complicated, and so it's going to take a while."

Although legislators were already making their way back to their districts, Gov. Quinn wasn't ready to concede defeat:

"Well, we'll give them until midnight, you know I think it's important that they have the full amount of time to enact it," he said.

Quinn said there will be consequences for lawmakers, but he has declined to say exactly what he would do.

However, he did not deny the possibility of cutting legislative salaries from a budget bill. He has yet to sign legislation that would put parts of the state budget in place. If he doesn not sign it, the comptroller will not be able to issue paychecks to numerous state employees.

Illinois is already more than a week into the fiscal year.

Pat Quinn
(Seth Perlman/AP)
July 08, 2013

Quinn, Deadlines And Legislative Deadlock

Lawmakers have said they won't meet Gov. Pat Quinn's July 9 deadline to fix the state's pension system. It has become standard practice for the governor to set a deadline, and lawmakers to miss it.

The governor has been talking tough about lawmakers and the state's nearly $100 billion in pension liabilities.

"They better have it done," Quinn said on July 1. "Otherwise, there will be consequences."

But it is not clear what those consequences will be, and Quinn has declined to be too harsh in his threats.

"If they don't do their job, they have a lot of explaining to do to the people of Illinois," Quinn said on June 27.

Political studies professor Chris Mooney, from the University of Illinois Springfield, said a lot of people have taken this as a sign that Quinn is ineffective.

"It's like the parent that tells the kid, 'If you touch that, you're going to your room. Oh oh uh, if you touch that again, you're going to your room,'" Mooney said. "(The) kid realizes pretty quick that the parent's not going to do anything about it."

On the other hand, Mooney said one could also argue that but for Quinn's deadlines and hectoring on pensions, lawmakers would not be dealing with the issue in as urgent or public a manner as they are this summer.

The next legislative hearing on pensions is scheduled Monday afternoon in Springfield.


July 07, 2013

Gov. Quinn Rejects Pension Panel's Invite

Gov. Pat Quinn says he won't testify before a bipartisan pension panel Monday in Springfield.

The Chicago Democrat told reporters Sunday that staff from his budget office would attend.

The committee tasked with finding a solution to the nearly $100 billion problem had invited Quinn to testify.

The group was formed last month since lawmakers remained at odds over two reform plans. The committee held two public hearings in Chicago.

Committee chairman state Sen. Kwame Raoul sent Quinn a letter dated Friday and obtained Sunday by The Associated Press. In it, Raoul says the committee has been working well together and members appreciate details they've received from Quinn's budget office.

Quinn gave the panel a Tuesday deadline to come up with a fix. Committee members say that's arbitrary and irresponsible.

 Illinois Comptroller Judy Baar Topinka
(Seth Perlman/AP)
July 01, 2013

Illinois Ends Fiscal Year $6.1 Billion In Red

Illinois finished the fiscal year on Sunday $6.1 billion in the red.

But Comptroller Judy Baar Topinka said Monday that the backlog of unpaid bills to schools, agencies, hospitals and businesses is expected to grow another $1.4 billion by next month.

The state collected $1.3 billion in unexpected tax revenue this spring from residents selling assets before new tax laws took effect.

Topinka says putting that money towards unpaid bills allowed the state to end the fiscal year in a better position than it otherwise would have.

However, she is warning that the windfall is a one-time occurrence and it does nothing to address the state's budget problems.

The comptroller's office estimates unpaid bills will rise to $7.5 billion in August and to nearly $9 billion by December.

July 01, 2013

Fewer Illinois State Workers Retiring This Fiscal Year

New numbers show that fewer Illinois state employees will have retired during the fiscal year that ends Sunday compared with the previous fiscal year.

About 3,100 employees will have retired in fiscal year 2012, compared with the 4,700 state employees who took their pensions during the previous fiscal year, according to the State Employee Retirement Systems.

"It's definitely fallen off," SERS Executive Director Tim Blair, told Lee Enterprises' Springfield Bureau.

Blair said in a typical year about 2,200 state employees retire.

The retirements come as state lawmakers try to come up with a solution for the state's $97 billion pension crisis. The state had more than 80,000 employees in the 1990s. Now that number is nearly 62,400.

There could be another explanation for the high number of retirements, Blair said. Members of the baby boom generation are aging and retiring and Blair said the retirements could be part of the increase.

"The number of retirements are still heavier than it was before this mess, but it also could be just a demographic thing," he said.

He said he expects the annual retirement figure to hover around 3,000 for now.

"It's probably the new normal," Blair said.

June 29, 2013

Pekin Looks Forward To Pipeline's Economic Boost

Officials in Pekin say an oil pipeline that will travel through the community on its way from Flanagan to Cushing, Okla., will bring 600 workers to town over the next few years.

Pekin Economic Development Director Leigh Ann Matthews says workers building the 36-inch Flanagan South Pipeline will spend money that will boost local businesses. She also told the Pekin Daily Times that pipeline builder Enbridge Inc. has leased a vacant local building to serve as its local hub.

The Canadian company plans to build the nearly 600-mile pipeline to move 600,0 gallons of crude oil a day. Enbridge says crude moving through the new pipeline will eventually make its way to Gulf Coast refineries.

Flanagan is about 30 miles northeast of Bloomington.

June 28, 2013

Student Loan Rates Set To Double On July 1

The interest rate on government-backed student loans is going to jump from 3.4 percent to 6.8 percent Monday.

Republicans, Democrats and the Obama administration could not agree on a plan to keep it from happening. Lawmakers say a deal is still possible after the July 4 recess. But if they don't agree on a plan soon, 7 million students expected to take out new Stafford loans could be stuck with a much bigger bill when they start paying the money back.

It has been one of the more heated debates in Washington this year.

Nella Lipton, a business major at the University of Maryland, says she tried to keep up with the news because she's taking out $10,000 in Stafford loans this school year.

"And it's kind of sad because you hear about everybody defaulting on their loans when they graduate, but I'm just hoping that with my major, I'll be able to get a job," Lipton says.

It upsets her that politicians would add to the stress by not having done something sooner to keep the interest rate from rising.

"They're sort of putting the burden on a younger generation, and once we are old enough to vote and once we're part of the economy and we ... default on our loans, it's going to be a big issue, and they're going to regret it," she says.

"Student loan interest rates shouldn't be a political football every year or every couple of years," says Peter McPherson, president of the Association of Public Land Grant Universities. He says the political impasse over student loan interest rates is serious.

"We need some way to stabilize this process in a way that maintains relatively low interest rates but also has stability," he says.

McPherson, a former deputy secretary with the Treasury Department, says of all the competing plans lawmakers have considered, the Republican plan and President Obama's plan make the most sense over the long term.

Both tie student loan interest rates to the 10-year Treasury rate, which is the market rate the U.S. government pays when it borrows.

"Just a little over 2 percent," McPherson says.

The president's plan would add another percentage point to that, pushing it up to about 3.4 percent — a rate that students would be able to lock in for the life of their loans.

"I think that's probably a realistic way to approach it," McPherson says.

Under the Republican plan, the interest rate for new Stafford loans would start at 5 percent and be allowed to float every year like an adjustable mortgage rate, but would be capped at 8.5 percent. The president's plan offers no such cap.

Why President Obama and Republicans continue to bicker considering that their plans are similar is disappointing — but not surprising, McPherson says.

"In Washington, we have a hard time doing anything short of the crisis, the cliff, the next moment. But I think in these plans, one could find an acceptable answer," he says.

Getting students and their parents to understand all of this, McPherson says, is not easy. These proposals are complicated.

Kyle Siefring, a political science major at the University of Maryland, is applying for his first Stafford loan this school year. He says politicians seemingly couldn't care less about the interest rate students have to pay — for good reason.

"College students don't vote like other people do," he says.

But there's a bigger problem, Siefring says.

"College students aren't the most financially literate people. They see a bill, and they just think about how they're going to pay it, and it's something that they can kind of slip under the table and not necessarily face the consequences right away. It's just something that they can kind of kick down the road," he says.

And that's just like what politicians in Washington do, Siefring says. Congress and the administration are reportedly close to agreeing on a plan to keep interest rates from doubling, but not before the July 1 deadline.


June 20, 2013

Illinois Cigarette Tax Falling Short Of Estimates

State officials say Illinois' $1-per-pack cigarette tax increase isn't bringing in as much money as they'd hoped.

The year-old tax took effect last June and raised the state tax on a pack of cigarettes from 98 cents to $1.98. At the time, officials said the money would bring in desperately needed revenue, while also discouraging people from smoking.

But The (Springfield) State Journal-Register reports the tax is expected to bring in $212 million in extra money for the current fiscal year. That's about 39 percent short of the $350 million that was projected.

Authorities say fewer people are buying cigarettes, which explains the decline.

Total cigarette tax revenue for the year is expected to reach almost $788 million, up 37 percent from the previous year.

June 20, 2013

Illinois Unemployment Rate Falls Again In May

Illinois' unemployment rate fell in May to 9.1 percent. It was the second straight monthly drop after a series of increases earlier this year.

The state Department of Employment Security says Thursday that May's decrease was due in part to gains in construction employment.

The state added a net 3,900 construction jobs during the month. Department Director Jay Rowell says better weather after a cold, wet spring helped.

Employers around the state also added 8,200 professional and business services jobs. That category often includes many temporary positions.

Illinois' jobless rate still remains much higher than the 7.6 nationwide unemployment rate for May that was reported earlier this month.

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