BRADY, BARICKMAN HOLD SCHOOL FUNDING FAIRNESS MEETING
On Monday, April 1, State Senators Bill Brady and Jason Barickman, both of Bloomington, held a meeting with local superintendents to discuss fairness in school funding. The lawmakers and superintendents reviewed a study, released by the Senate Republican Caucus, that refuted House Speaker Michael Madigan’s claim that downstate districts receive a “free lunch” through teacher pension payments.
The State Senate Republican analysis showed a funding disparity for downstate schools to the tune of more than $660 million a year. The study revealed that the value of the benefits received through state pension payments on behalf of downstate and suburban school districts is more than offset by special adjustments to state school funding formulas that skew those formulas to benefit Chicago public schools.
At a press conference that accompanied the meeting Senator Brady said, “I understand that Chicago has troubles as well, but all Illinois students should be treated fairly and equitably across the board and the current funding levels are far from achieving this goal.”
STATE SELLS CONSTRUCTION BONDS
On April 2, Illinois sold a total of $800 million in bonds for construction projects, getting a 3.92% interest rate on $450 million of tax-exempt bonds, which matches a 20-year low the state received in January of 2012. On the second set of bonds, Illinois received a 4.97% rate on $350 million in taxable bonds, which was better than the 5.29% the state received in Jan. 2012 on similar bonds.
Despite the relatively low rates, Illinois continues to pay a higher interest rate than states with better credit ratings.
STATE’S RECOVERY IN PERIL?
Some economic indicators are showing signs that Illinois’ recovery may be on shaky ground. Warning signs, according to a University of Illinois “flash index” released at the beginning of April showed that while the state's economy continues to expand, the rate of that expansion slowed slightly in March.
The U of I report coincides with the latest unemployment report, which showed unemployment is higher in 10 out of 12 metropolitan areas, when comparing Feb. 2013 to Feb. 2012. Statewide, unemployment rose to 9.5% in February, from 9% the previous month and 8.9% in February 2012.
LOCAL GOVERNMENTS WORRIED ABOUT REVENUE SHARING
A recent suggestion from Governor Quinn that the state work to close its budget gap by freezing local revenue sharing dollars at the same level as 2012 has drawn criticism from a number of municipalities who are gearing up to oppose the plan.
Recently, Arlington Heights officials warned they would lose as much as $863,000 in increased funding if the plan is adopted. The Quinn administration estimates the freeze would reserve about $68 million for the state budget and amount to about $5.30 per resident for each municipality. However, the Illinois Municipal League, which represents many city governments, has put the cost at closer to $11.50 per resident and says it would allow the state to divert $148 million.
QUINN RESUMES EARLY RELEASE
Late in March Illinois’ Department of Corrections released the first inmates under a revised early release program. It was the first early release in three years. The revised program grants non-violent offenders up to 180 days of early release credit if they meet specified criteria.
In late 2009 and early 2010 early release of prisoners was suspended after the Associated Press uncovered a series of problems with the program. The investigation revealed that under the controversial “Meritorious Good Time-Push” program the Department of Corrections was releasing prisoners, some of whom had a history of violent crimes, after an average stay of only 16 days.
FIRST STEPS TOWARD HEALTH EXCHANGES
In anticipation of the launch of the federal Affordable Care Act (Obamacare), insurance companies have begun submitting plans to a state panel for review.
Health insurance “exchanges” are a key component of the federal healthcare law. The exchanges are designed to offer individuals and small businesses one-stop shopping for health insurance. Insurance plans are to be available for comparison beginning Oct. 1 and coverage would start in 2014.
The state anticipates that up to 400 different plans will be submitted for review to be included on the health exchange website. However, some of the state’s largest insurance companies are still weighing whether or not to participate in the Illinois exchange. Plans available through the exchange will be required to meet a base level of coverage and meet strict financial restrictions. The state estimates it will be September before the website goes live and consumers can begin comparing plans.
MEDICAID REFORM AND EXPANSION
A recent pair of editorials from the Chicago Tribune took a look at Illinois’ efforts to remove ineligible recipients from the state Medicaid program and issued a warning to lawmakers not to rush to approve a massive expansion of Medicaid.
The first editorial summarized early results of an audit ordered under bi-partisan Medicaid reforms adopted in 2012.
The Tribune wrote: "The initial results of this audit are ... astonishing: Of the first 20,500 recipients screened by an outside contractor, the auditors recommend that 13,709 be removed from the rolls. Yes, that's two-thirds of the first group screened, flagged as ineligible to receive their current Medicaid benefits."
The editorial references a statement from the Department of Healthcare and Family Services Director Julie Hamos that this represented "low-hanging fruit," because the individuals had already been red-flagged as suspicious.
So, the Tribune editorial asks: "Why didn't state officials pluck this low-hanging fruit long ago?"
The second editorial looks at a major Medicaid expansion contained in Senate Bill 26, which passed the Senate in February with no Republicans supporting it. The bill is currently before the Illinois House.
Although the federal government is expected to pick up the bulk of the cost for the expansion, the state's Dept. of Healthcare and Family Services (HFS) has indicated the cumulative cost to the state could exceed $2.9 billion by 2020. The measure voluntarily expands the state’s Medicaid program eligibility to nearly 350,000 additional individuals, who are between the ages of 19 and 64 who are under 138% of the Federal Poverty Level.