ECONOMIC DEVELOPMENT OMNIBUS
A major economic development incentive package was signed into law on July 25. Approved on the final day of the legislative session, Senate Bill 20 will create and provide jobs for people throughout the state.
Senate Bill 20 paves the way for the South Suburban Airport near Peotone, as well as establishes a long list of incentives and authorizations for a number of other projects across Illinois. The bill allows the Illinois Department of Transportation to create a public-private partnership to build the new airport, and also includes other notable projects like the construction of a new arena for DePaul University near Chicago’s McCormick Place, improvements at the Rosemont Convention Center, and development of a Cronus Fertilizer Plant near Tuscola.
MEDICAID EXPANSION SIGNED BY GOVERNOR
Legislation to expand the state’s Medicaid program and add nearly 350,000 more people to the Medicaid rolls was signed into law this week. The legislation was part of the federal Affordable Care Act (Obamacare) that had been deemed optional by a Supreme Court ruling.
Senate Bill 26 will make adults whose incomes are less than 138% of the Federal Poverty Level eligible for Medicaid beginning January 1, 2014. This expansion comes in addition to the 250,000 people previously added to the rolls as a result of a Cook County waiver to allow early implementation of Obamacare.
The Medicaid expansion, which was made optional thanks to a U.S. Supreme Court Decision last year, underlined key differences between the two parties in the General Assembly. In signing the Medicaid measure, the Governor and his allies pointed with pride to the swelling Medicaid rolls as an example of the state’s commitment to expanded healthcare for the poor.
But Republicans have worried that the state is embarking on a costly new expansion that will be difficult to maintain in future years. They reminded their colleagues that even as Washington waves dollars bills in front of their eyes, the program is neither free nor affordable in a state that teeters on the edge of bankruptcy.
Medicaid costs are the fastest growing expense in the state budget. The system is already growing by more than 130,000 persons annually and now accounts for half of all births in the state. If the 350,000 persons made Medicaid-eligible under Senate Bill 26 were to live in one place, they would constitute the second largest city in Illinois, with more than 150,000 persons to spare.
The estimated cumulative cost of the expansion by 2020 could exceed $2.9 billion, including about $575 million in direct costs and another $2.3 billion in indirect costs, because as many as 168,000 previously eligible persons are expected to enroll and the state must pay 50% of the cost for those individuals.
While the state could legally scale back benefits if the federal government reduces its contribution in the future, opponents also expressed concerns that, in practice, it is almost impossible to reduce benefits once they have been granted.
NEW LAW TARGETS TRANSIT BOARD PENSIONS
A bill signed into law this week will prohibit future members of several Chicago-area mass transit boards from receiving pension benefits or health insurance benefits.
House Bill 140 eliminates the generous health care and pension benefits given to the appointees of the Regional Transportation Authority (RTA) Board, Suburban Bus Board (Pace), Commuter Rail Board (Metra) and Chicago Transit Authority (CTA) Board who oversee Chicago-area mass transit operations. Those currently in office will still keep their benefits; however, if current officeholders accept a reappointment, they will lose the benefits they had accrued.
Illinois’ obvious pension funding problems, combined with recent scandals at Metra and other transit agencies, prompted lawmakers to reevaluate what many consider to be the overly-lucrative pension benefits given to the part-time appointees. Most recently media reports surfaced with allegations that former Metra CEO Alex Clifford collected a $718,000 severance package after being forced from the organization for refusing to cooperate with political patronage requests.