Illinois Issues blog

Ryan asks judge to reconsider charges

Author: Illinois Issues Statehouse bureau

By Jamey Dunn

Former Gov. George Ryan is seeking to have some of the charges from his 2006 conviction on corruption thrown out based on a recent U.S. Supreme Court ruling.

The ruling scaled back a category of fraud, which requires public officials to provide “honest services.” Prosecutors now have to prove that an official received a bribe, kickback or some financial benefit when failing to provide honest service to the public. Prior to the court’s decision, prosecutors often used the statute to go after officials and executives who engaged in corrupt acts, such as lying to shareholders or not disclosing a conflict of interest, even if it did not result in a tangible benefit for the accused.

The ruling would not apply to all of the former governor’s crimes, but Ryan’s lawyers claim it would apply to mail fraud and racketeering convictions. They have asked the judge who presided over his trial to consider tossing these charges. His lawyers say the time he has served would satisfy his sentence for the remaining charges of lying to the FBI and tax violations. They asked that he be released on bail while U.S. District Judge Rebecca Pallmeyer considers their request.

The Illinois Supreme Court upheld Ryan’s conviction in 2008. He is serving his 6 1/2-year sentence in a federal prison at Terre Haute, Ind., where he has been since November 2007. He is due for release in 2013. His requests for a pardon from former President George W. Bush and President Barack Obama proved unsuccessful.

Federal prosecutors tweaked some of the charges against former Gov. Rod Blagojevich shortly before his corruption trial to avoid the U.S. Supreme Court ruling on honest services having a possible impact on the case.

Brady unveils recovery plan

Author: Illinois Issues Statehouse bureau

By Jamey Dunn

State Sen. Bill Brady, the Republican candidate for governor, laid out his plan for economic recovery today. He and Gov. Pat Quinn agree that job creation is the biggest issue of the campaign and even back some similar proposals. But their disagreements center on what may be the second biggest issue of the race: taxes.

Brady’s plan has four goals. The first is to create a “stable tax environment.”

As he has said before, he wants to repeal the sales tax on gasoline and the estate tax. He also wants to make permanent a research and development tax credit that the General Assembly extended this year.

He estimates that cutting the sales and estate taxes would cost the state $650 million to $1 billion. He says the economic growth those two cuts would spur means they would pay for themselves in a “year or two.” In the meantime, he would have to cut that amount if he wants to uphold his pledge of presenting a plan for a balanced budget to legislators next year.

Brady said discussion of an income tax increase, such as Quinn’s proposed 1-percentage-point hike, creates uncertainty for businesses and may encourage them to leave the state.

Besides pledging not to raise taxes, he wants to offer business a tax credit for hiring new workers. Quinn pitched a similar plan for small businesses, which is currently in effect. Any business with fewer than 50 employees that hires a new employee between July 1, 2010 and June 30, 2011 is eligible for a $2,500 tax credit. The total number of credits that can be doled out is capped at $50 million, enough for 20,000 new jobs.

Brady would offer $3,750 tax credit to all businesses for each new hire; $2,500 in the first year and $1,250 in the second year.

He would also create several panels to help him “engage in long-term strategic planning.” This second part of Brady’s plan includes naming a council of economic advisers and a task force to investigate the economic challenges facing communities on the state’s borders, which would be headed by Jason Plummer, Brady’s running mate.

Brady’s third goal is to make Illinois more competitive with other states. He says he wants to do that by making “significant changes” to the worker’s compensation system in Illinois and capping damages awarded for pain and suffering in medical malpractice cases at $500,000. Although the Illinois Supreme Court has struck down similar caps three times, Brady said he doesn’t think Democrats made a “sincere effort” to draft a bill that would hold up to a constitutional challenge. However, he could not describe what aspects of former bills he would change.

Finally, Brady says he wants to bring “transparency and accountability” to the budgeting process. He has said he cannot provide a detailed budget until after he is governor and can audit the state’s finances. Brady blamed his absence of details on a lack of transparency from the Quinn administration. He said he would appoint a jobs ombudsman to help businesses navigate state regulations. He also wants to prohibit new spending or programs without dedicated funding sources and “measurable” outcomes.

But Quinn said later that there is no money for Brady’s cuts. He said that businesses looking to set up shop in Illinois are most concerned with the quality of the state’s infrastructure and workforce. “I think he’s not being honest with the people running around the state saying he’s going to cut all these taxes. Well, how’s he going to pay for education, health care, public safety and helping our veterans?” Quinn has proposed property tax cuts if his plan for an income tax increases is approved.

Brady said that as a small business owner, he knows what businesses are looking for in Illinois. “I understand the importance of education. I understand the importance of infrastructure. I understand the importance of deregulation.”

Illinois' race for education funds spurred reforms

Author: Illinois Issues Statehouse bureau

By Jamey Dunn


Losing both rounds in the Race to the Top federal grant competition was a frustrating experience, but Illinois is better for having tried, according to state schools Superintendent Christopher Koch.

In the first round of the competition, the U.S. Department of Education doled out $4.35 billion to two states. Illinois placed fifth with a score of 423.8 out of 500. In phase two, 10 states got $3.4 billion, and Illinois was 15th with a score of 426.6.

Koch said the Illinois State Board of Education worked hard to get more school districts and unions to sign on for phase two. The state’s participation levels were criticized in the first phase. (For more on this effort, see Illinois Issues, September 2010, page 13.)

He said some local officials were concerned about allowing the federal government to have too much control over education. Expanding programs based on federal grants that expire was also an issue. Schools were concerned about where the money would come from when the grants ran out.

Koch added it is difficult for Illinois to compete with states that have fewer districts. In some of the winning states, each county is a school district. By comparison, Illinois has 102 counties and 869 school districts. Two of the winners, the District of Columbia and Hawaii, each have just one district. “We have to just sell it to local boards and local school districts and local unions again and again and again. It just requires an awful lot of selling.”

Koch said the schools participating represent 82 percent of students in Illinois.

ISBE officials focused on the areas that lost points on the first round while doing little to change parts of the application that scored well. However, a completely new panel scored the second round. Koch said some of the areas of the application that impressed the judges in the first round failed to do so in the second. “It makes it hard because we were responding to the first application.” He added that because the judges do not compare the states and not all the same judges scored every state, some states had lower participation levels than Illinois but scored higher on that section of the application. “My take on this is that it depends on the team [of judges] you’ve got. … It sort if makes it more like a Race to the Top lottery.”

While the loss was disappointing, Koch said, competing in Race to the Top did spur important reforms that he said would have not happened as quickly on their own, such legislation that requires higher standards for principal certification. “I think that overall, that we are better for having gone through this process. … These are the right reforms.”

Funding for education jobs

Chicago Mayor Richard Daley and U.S. Sen. Richard Durbin announced in Chicago today that the federal government has released $415 million to help save education jobs in Illinois. Officials can begin allocating the money today. Koch called for the General Assembly to appropriate the funds in a special session, but Gov. Pat Quinn has said a special session is unnecessary, so it likely will not happen. Durbin estimates it will save 5,700 education jobs in the state.

Tax cuts don't add up

Author: Illinois Issues Statehouse bureau

By Jamey Dunn

Gov. Pat Quinn has incorporated a new component to his proposal for the state budget: property tax relief.

Quinn’s original budget proposal included a 1-percentage-point income tax increase, which he said would go wholly to fund education. At the time, the governor was proposing a $1.3 billion cut to education as the only alternative to the tax, which he said would be necessary to replace federal stimulus funds that will not be coming this fiscal year. Quinn’s budget office estimated the tax increase would bring in $2.8 billion. Some of the money was also meant to go toward paying down the millions in overdue bills the state owes schools.

Quinn has been bringing up the point for months that cutting school funding could lead to higher property taxes. “If you don’t have the state fully supporting education the way it should, local property taxes go up. That’s a[n] iron law. That happens. If the state doesn’t pay for schools, then local property taxes end up paying for schools,” Quinn said at a Chicago news conference.

When pressed by reporters on the issue yesterday, Quinn said he would require local school districts to cut property taxes if his so-called “surcharge for education” income tax increase passed.

Today, Quinn emphasized a concept that is not new. “I think, from my viewpoint, we’ve got to reduce reliance on property taxes to fund education in Illinois. That is an imperative if we want to have a stronger economy and have better education. The state of Illinois, according to our Constitution, has the primary responsibility for funding schools.”

The idea that education should be funded predominately by state dollars and not local property taxes has long been a topic of debate. It was the thrust of the Senate Bill 750 plan, which the tax increase that passed in the Senate last year was based upon. However, that plan, which stalled in the House, includes a 2-percentage-point income tax increase and broadening sales tax to include some services.

Here is how Quinn explains his plan: “What I would envision is, the amount of money that the school districts get, additional new money from the state, a portion of that would be abated in property tax abatements — reductions — to the families and businesses and farmers of Illinois. … If you get additional new money from Springfield, from the state government, then I think part of the bargain has to be that the local school districts at least roll back a portion of their property taxes. … They end up getting more money. … They’ll get more money for education, and the taxpayers will get lower property taxes.”

But Quinn’s plan is scaled back on the revenue side. Promising more funding for education and a cut in taxes during an unprecedented budget deficit while facing a huge stack of unpaid bills may be unrealistic. Quinn’s proposed income tax increase would barely make a dent in the estimated $13 billion budget deficit.

Quinn’s Republican opponent in the governor’s race, Sen. Bill Brady, has claimed that he can balance the budget in one year, while avoiding mass teacher layoffs and property tax hikes. His plan also includes a billion dollars in tax cuts.

Kent Redfield, an emeritus professor at the University of Illinois Springfield and director of the Sunshine Project, a nonprofit campaign contribution database connected to the Illinois Campaign for Political Reform, doubts that large tax reductions will come if Brady is elected. “We’re not going to have a huge tax cut because we will have a Democratic Senate. And we can’t afford it anyway.”

Requests to Quinn’s budget office for more specifics on his proposal were met with referral back to tape of the news conference that Quinn held in Chicago earlier today, where he took questions on the plan but did not get into the numbers.

While proposals to cut taxes may play well on the campaign trails for both candidates, it appears that the money for such plans is just not there — even with an income tax increase. The state’s budget gap is just too big.

Blagojevich retrial expected in January

Author: Illinois Issues Statehouse bureau

Gov. Rod Blagojevich will not face a retrial on corruption charges until January. His brother, Robert Blagojevich, will not face another trial at all.

Federal prosecutors dropped the four corruption counts against Robert that stemmed from four months he spent heading up his brother’s fundraising efforts in 2008.

Robert testified during the first trial, but the former governor did not. The jury was unable to reach agreement on any of the counts against Robert. Members of the jury have since told reporters they think he got caught up in an ongoing scheme and may not have intended to break the law.

Judge James Zagel said he plans to set a trial date for the former governor to begin no earlier than January 4. Blagojevichwas convicted on one count of lying to federal agents, but the jury was unable to reach a unanimous decision on 23 other charges.

Illinois loses out on Race to the Top funds

Author: Illinois Issues Statehouse bureau

By Jamey Dunn

Illinois has lost its bid for a potential $400 million in federal education funding.

The U.S. Department of Education announced the 10 winners in the final round of the competitive grant program Race to the Top, and Illinois was not on the list. The District of Columbia, Florida, Georgia, Hawaii, Maryland, Massachusetts, New York, North Carolina, Ohio, and Rhode Island will split $3.4 billion.

Illinois went on to compete in the second round of the program after failing to win any funding in the first phase. In that round, Illinois ranked fifth out of 41 applicants, but only the top two states, Tennessee and Delaware, received grants.

State Superintendent Chris Koch said that Illinois made improvements to its application for phase two based on the phase one review process. He said one of the biggest hurdles the state faced was getting districts and teachers' unions to sign on. “It is hard for Illinois, given the number of districts that we have.” (For more on the phase two application process, see the upcoming September issue of Illinois Issues.)

Koch said the competition did spur some important changes in Illinois, such as legislation to increase the number of charter schools in the state, revamp teacher assessments and update administrator training programs. “We do feel the state of Illinois is better for having gone though this process,” he said.

When the Department of Education releases Illinois' reviewed application tomorrow, the State Board of Education will get a better idea of why its bid did not win.

Koch said the state education budget was not planned around getting the grant, and he still hopes to implement many of the ideas included in the state’s Race to the Top application. But some programs may be scaled back and will take much longer to roll out, since there are few education dollars to go around.

However, there is hope for Illinois that another phase of federal grants could be on the horizon.

"We had many more competitive applications than money to fund them in this round,” U.S. Secretary of Education Arne Duncan said in a written release. “We're very hopeful there will be a Phase Three of Race to the Top and have requested $1.35 billion in next year's budget. In the meantime, we will partner with each and every state that applied to help them find ways to carry out the bold reforms they've proposed in their applications.”

Quinn names new chief of staff

Author: Illinois Issues Statehouse bureau

By Jamey Dunn

Amid continuing controversy over the circumstances surrounding the resignation of his former top aide, Gov. Pat Quinn named a new chief of staff today.

Quinn tapped Michelle Saddler, who has been secretary of the Department of Human Services since last October. Prior to then, she served as director of policy for Quinn. Grace Hou, who was the Department of Human Services assistant secretary for programs, now serves as the agency’s acting secretary. UPDATE: Hou declined the appointment for "personal reasons" according to a written statement from the agency. She remains assistant secretary for programs. Quinn has since named Grace Hong Duffin, former DHS chief of staff, as acting secretary.

Quinn's former chief of staff Jerry Stermer resigned unexpectedly on Sunday. He said he was stepping down after the Chicago Sun-Times reported on an internal probe into campaign-related emails sent from Stermer's state account. Stermer sent three such emails and later reported himself to Quinn’s inspector general, James Wright. Wright issued a report recommending that Attorney General Lisa Madigan file a complaint against Stermer before the state Executive Ethics Commission. A member of Quinn’s staff notified Wright that he was being replaced on the same day he turned in his report.

At the Chicago news conference held to announce Saddler’s appointment, Quinn adamantly denied allegations that there was a connection between the report and the decision to replace Wright. “It is false. It has not a shred of truth.” He said Wright was given notice in the morning on August 13, and that he was not aware that Wright’s report had been issued until that evening.

Quinn said his office had been looking for a new inspector general since March and had interviewed Wright’s replacement, Ricardo Meza, in late June.

“I don’t think [Wright] labored under any assumption that I was going to reappoint him. I, for more than a year, was looking for a replacement,” Quinn said. Wright told the Sun-Times that he did not know Quinn’s reasons for replacing him.

Quinn said he does not interfere with his inspector general’s work and had only met Wright once. “I keep total distance from that office. … I do not interfere in any way shape or form with the office of inspector general. Never have. Never will.”

Stermer likely faced a suspension for his relatively minor ethics violations, according to Quinn. But instead, he opted to resign after the report was leaked to the press. “I feel very badly for Jerry because he is an exemplary public servant. He made a couple of mistakes. … He was willing to take whatever discipline would be administered.”

Quinn called Saddler a “committed idealistic person” who is “hard working” and “honest.”

“I am me,” said Saddler, who also worked for Quinn when he was state treasurer. “I bring all the strengths and shortcomings that a person might have, but I work hard. I believe in honesty all the way. And I believe in partnership. So I look forward to a continued partnership with our legislators, our employees, our providers and our advocacy groups. And of course with all our state agencies and Gov. Quinn.”

Quinn takes hits on exit of top staff member

Author: Illinois Issues Statehouse bureau

By Jamey Dunn

State Sen. Bill Brady, the Republican candidate for governor, took a shot today at Gov. Pat Quinn over the exit of one of his top staff members.

The Chicago Sun-Times reported Quinn’s chief of staff, Jerry Stermer, resigned after the newspaper posed questions about Stermer sending campaign related emails from his government email account. UPDATE: Quinn is scheduled to name a new chief of staff tomorrow afternoon.

It is illegal for public employees in Illinois to handle political tasks on the job or use state resources for campaigning.

Stermer, the former president of the advocacy group Voices for Illinois Children, said in a written statement: “Last year, I inadvertently used my state email account to send three emails that the Office of Executive Inspector General (OEIG) later found to be prohibited under the state's Ethics Act. While my intention was not to do anything wrong, I recognized that a mistake was made and quickly disclosed this information to the Governor's Ethics Officer -- a former Assistant U.S. Attorney -- who recommended that I provide the information to the OEIG for appropriate investigation. I voluntarily provided the information to the OEIG for investigation, and made it clear that I was prepared to accept the consequences for my mistakes.”

According to the Sun-Times, the governor removed Inspector General James Wright on August 13, the same day he was briefed on a report from Wright recommending that Attorney General Lisa Madigan file a complaint against Stermer before the state Executive Ethics Commission.

Brady responded with a statement today. “This is yet another stunning report involving the administration of Governor Pat Quinn. Today’s revelation suggests that on the very day Pat Quinn was confronted with evidence by the Inspector General of an ethics violation, Pat Quinn put his political interests before citizens yet again and fired the Inspector General himself.

But the Quinn administration claims the report and the replacement of Wright, who was appointed by Former Gov. Rod Blagojevich, were not linked. “Ricardo Meza was appointed by Governor Quinn to head the Office of the Executive Inspector General on August 15, 2010 after a lengthy search process, which began in the Summer of 2009. Ricardo Meza replaced an Inspector General appointed by the previous administration whose term expired in 2008. The replacement was not in response to this or any other specific OEIG report, and these events are in no way connected,” a statement from the governor’s office said.

Kent Redfield,an emeritus professor at the University of Illinois Springfield and director of the Sunshine Project, a nonprofit campaign contribution database connected to the Illinois Campaign for Political Reform, said it would be more useful to Brady’s campaign to frame it as an issue with Quinn’s managerial skills than his ethics. “It’s much easier to make the case that Quinn is incompetent [than corrupt.] … That Quinn’s a nice person but he isn’t up to the job is an easier sell.”

Redfield said Stermer’s offense seemed “minor,” and he was surprised that Quinn thought they warranted a resignation. However, he said: “In this day in age, because everybody believes that everybody is corrupt, you have to bend over backwards not to create this situation.”

Stermer’s departure, along with the losses of other key staff members, might make voters consider whether Quinn’s employees have confidence in their boss’ ability to win the general election, Redfield said. “It certainly is curious, and it is just one more thing that the governor doesn’t need at this point. … At some point, people are going to ask whether this is a rats-deserting-the-sinking-ship sort of thing.”

Delving deeper into budget cuts: part 2

Author: Illinois Issues Statehouse bureau

Because the State Fair, which celebrates agriculture in Illinois, is in full swing this week, I thought I would delve into Gov. Pat Quinn’s $6.5 million in proposed cuts for the Department of Agriculture (Italics are pulled directly from Quinn’s proposal):

($1.1M) Operations Lump Sum
Additional management efficiencies

Jeff Squibb, a spokesman for the Department of Agriculture, said these funds would come from leaving vacant staff positions open and working to bring in more federal money. “We have been working for the past several years to wean the agency off of [state general revenue funds,]” he said.

Squibb said the department would attempt to find such efficiencies as keeping vacant positions open and monitoring office supplies. He says administrators will reassess the budget every month and may eventually have to make cuts to programs and services.

($5.4M) Grants Lump Sum
County Extension Programs
Soil and Water Conservation Districts reduced 42 percent in
administration costs to create efficiencies, while maintaining
capital projects to help control erosion and other conservation
projects in Illinois
State Fair Premiums reduced, resulting in smaller purses for
various contests

Richard Nichols, executive director of the Association of Illinois Soil and Water Conservation Districts, said the 42 percent reduction is from fiscal year 2010 funding levels. The organization could not, he said, maintain the two-person team, one administrative worker and one technical expert, that each district is meant to have as its staff.

“It’s going to be devastating,” he said of the proposed budget reduction. Some districts bring in money from handling permit reviews for the Illinois Environmental Protection Agency, but he  said the money is not coming in like it used to because development has shrunk as a result of the bad economy. He added that some districts receive county funds, but those are being cut, as well, because counties also face budget gaps. “Most on the soil and water conservation districts rely solely on state funding.”

Nichols said that because the districts are units of state government they cannot be consolidated or closed without referendums. So the end result may be that some districts continue to exist but not have employees to help bring in federal funds and advise on conservation projects.
“Some of them are going to go until they run out of money.”

He added that districts bring in “a lot of conservation funding. And, of course, those funds go to pay land-improvement contractors for what they do. So those are jobs we’re losing out on.”

Nichols said that some residents may not realize what their soil and water conservation districts do to prevent erosion, water contamination and flooding. “If they do their job correctly, nobody knows they’re out there. If they do their job correctly, all you see is grass and clean water.”

The University of Illinois Extension program has already undertaken a restructuring plan that will consolidate its 76 administrative units down to 30, each serving between three and five counties.

Robert Hoeft, interim associate dean of the Extension and outreach, said the Extension, which is best known for administering 4-H youth agricultural programs, is looking at program cuts. “In the past, we’ve tried to do anything everybody wanted. And we’ve just got ourselves spread so thin. So now we are going to target our programs to high-impact areas. So the things that are nice but don’t really make an impact in the state of Illinois — we are going to eliminate those things.”

Squibb said Extension officials did a good job of preparing residents for the changes. “They held hearings throughout the state; they were very proactive when it came to these budget cuts. …They recognized that in order to maintain some level of service, they were going to have to reduce their own spending.”

Squibb said overall he has not heard complaints at the fair where many in the agriculture community have gathered to compete and showcase farming. He said most people are aware that times are hard for the state and are prepared to see some tough cuts. “I am not saying they are happy. …We’re at a point now where we are cutting worthwhile programs. It is not an instance where we are eliminating — if you’ll pardon the phrase — pork.”

(For information on cuts to the Department of Children and Family services, see the first installment of Delving deeper into the budget cuts.)

Quinn and Brady vague on the budget

Author: Illinois Issues Statehouse bureau

By Jamey Dunn

Both Gov. Pat Quinn and his Republican opponent, state Sen. Bill Brady, have yet to publicly spell out all the details of their plans for the state budget.

Quinn claims he has made about $3 billion in cuts during his time in office, and Brady said he plans to cut a “dime on every dollar of government spending.

“We’ve cut the budget this fiscal year by $1.4 billion. We have laid out the exact blueprint,” Quinn said.

Republicans have called on Quinn in the past to produce a list of his cuts, but he has not obliged. When Quinn laid out agency cuts at the beginning of the 2011 fiscal year, he said the budget was a moving target. He issued new budget numbers for agencies this month.

David Comerford, a spokesman for the Illinois Federation of Teachers, describes Quinn’s plan as “built on quicksand.” He says Quinn must do more to reassure school superintendents that the $415 million that Illinois is set to receive from the federal government to help save education jobs will be spent to bring back teachers who got pink slips in the spring.

Quinn said of the federal funding: “Primarily it is for our K-12. However our education budget in Illinois, it’s somewhat seamless. … In a lot of ways, when we get help from Washington [D.C.] for our grammar schools and high schools, that does help us in other parts of our education budget.”

Comerford said there is still uncertainty surrounding the governor’s budget, and administrators will not know what their budgets will look like until Quinn makes his intentions clear. “We’d like to see people hired back. That’s why this was passed. Certainly a comment like that doesn’t help that situation,” he said in response to Quinn’s statement.

State Superintendent Christopher Koch says a special legislative session will be needed to dole out the money, but Quinn disagrees.

“I think people have a choice. They have a governor who tells the truth before the election. ... The other guy just wants to tell a bunch of fairy tales and raise your taxes, especially your property taxes after the election.”

Meanwhile, Brady has done next to nothing to inform voters of his specific intentions for the budget. He said he can’t build his plan unless he is in the governor’s office with the access to fiscal information and staff that the position entails. “I know we’re going to cut a dime on every dollar. … I don’t have the professionals in place to fully analyze the highest priorities.”

Brady said Quinn has limited access to budget information. “The lack of transparency from this insider government is creating an environment that — you can’t give specifics to those details.”
He has claimed to be able to balance the budget in a year without a tax increase while avoiding massive layoffs in education. That task could prove difficult, since education costs make up about a quarter of all state spending. He said he would consider cutting entire programs and that every state program is on the table for such cuts. “I will demand of every agency to come back with a budget of 90 percent. Show us what your priorities are within that 90 percent,” he said.

While neither candidate has presented a specific plan, that doesn’t stop them from taking jabs at each other's stance on the budget.

Brady said Quinn’s proposal to increase the state income tax from 3 percent to 4 percent would seriously damage the state’s economy and that the governor’s policies have chased jobs and tax revenues out of the state. “The Quinn government has been spending money we don’t have. We need a fiscal conservative to step into state government and live within our means.”

Quinn said failing to pass an income tax increase and making the kind of cuts to education that he says would be necessary under Brady’s plan would result in increased property taxes on the local level. “He doesn’t want to tell people what his budget plan is. We know what it is. It’s to wreck education, wreck health care, wreck public safety and harm the people of Illinois.”