FEMA DENIES FEDERAL ASSISTANCE FOR TORNADO AFFECTED LOCAL GOVERNMENTS
On Thursday January 9, FEMA denied Illinois’ request for federal assistance to aid local governments in nine counties to recover expenses incurred following deadly storms that ripped through Illinois on Nov. 17. Many, including State Senator Bill Brady (R-Bloomington) have spoken out supporting an appeal of that decision.
An application for federal aid was filed on December 19 requesting assistance in recouping costs associated with emergency protective measures, debris removal, and repair or replacement of government-owned facilities. These costs totaled more than $6.1 million as determined by a joint damage assessment conducted by FEMA and the Illinois Emergency Management Agency.
Unfortunately, Illinois failed to meet the minimum threshold of $17.8 million. The threshold is based on state’s population multiplied by $1.35. Unfortunately this formula hurts the chances of receiving aid for a state like Illinois that is geographically large with population-dense urban centers.
While the application for local government assistance was denied, more than $10 million in federal aid has been approved to help people and businesses affected by the severe storms. This total includes more than $2 million in federal grants to help those affected with expenses incurred like temporary housing, home repairs and replacing damaged property. The Small Business Administration has also approved more than $8.7 million in loans for businesses affected by the storm.
GOVERNOR’S BUDGET PROJECTIONS FORECAST DEFICITS
Three-year budget projections required by law were released by the Governor’s budget office this week and showed continued spending growth and massive deficits ahead for Illinois. The projections, which are for fiscal years 2015 through 2017, estimate a nearly $2 billion deficit by the end of next fiscal year and annual deficits of over $4 billion in each of the following two years.
Even more alarming, is a predicted $16 billion bill backlog by Fiscal Year 17, which would result from the cumulative effect of those deficits. The backlog at the end of the last fiscal year was roughly $6 billion.
Every January the Governor’s budget office is required by law to submit three-year revenue and spending projections along with an Economic and Fiscal Policy Report. The figures provide an overview of what lawmakers can expect when the Governor formally submits his budget in February.
The budget office was required to assume that the state will lose the major portion of a 67% income tax hike enacted during a lame duck session in 2011, because it is set to expire automatically. The drop in that revenue coupled with the anticipated spending growth has the potential to create the largest deficits the state has ever seen.
Ever since the tax hike was imposed over Republican objections, Senate Republicans have warned that significant spending reductions were needed to pay off back bills and allow for the tax increase to expire as promised.
ILLINOIS LAST IN ECONOMIC GROWTH
A recent report from the PEW Charitable Trusts paints a rosy picture for increased employment and economic growth nationally in 2014, but it tells a different story for Illinois. The state was placed dead last in a ranking of the 50 states based on projected job creation in the coming year.
The PEW report, citing data from Moody’s Analytics, says that, “after four years of fragile and uneven recovery, the U.S. job machine is likely to kick into high gear in 2014.” Nationally the economy will generate 2.6 million jobs in 2014, 2.2 million more than last year.
The report includes an interactive map showing 572,000 of those new jobs will be created in two states alone, with California adding 264,000 (or 1.80 percent growth) and Texas adding 307,590 jobs (or 2.75 percent growth).
In sharp contrast is Illinois, which comes in last on the list with a prediction from Moody’s that the state will see less than 1 percent job growth in 2014.
STUDY: MEDICAID INCREASES EMERGENCY ROOM USAGE
A recently released study revealing that Medicaid coverage may actually increase emergency room use, especially in non-emergency cases, could further complicated what may already be a contentious budget process in 2014.
The emergency room findings were reported Jan. 2 by a blue-ribbon team of researchers from the National Bureau of Economic Research, the Columbia University School of Social Work, Providence Portland Medical Center, Harvard School of Public Health and the Massachusetts Institute of Technology (MIT) who have been studying the Oregon Medicaid system.
Illinois is struggling to keep up with skyrocketing Medicaid costs, which represent the largest and one of the fastest growing state budget expenditures. Reducing emergency room costs has been a critical component of efforts to rein in Medicaid expenditures.
But, the Oregon study found that access to Medicaid increased emergency room visits by 40% over an 18-month period.
“We find that expanding Medicaid coverage increases emergency department use across a broad range of visit types, including visits that may be most readily treatable in other outpatient settings,” the researchers concluded.
COMPTROLLER SHINES LIGHT ON STATE DEBT
And, in still more state budget news, Illinois Comptroller Judy Baar Topinka's end-of-the year publication Fiscal Focus, a quarterly devoted to all things financially-oriented in Illinois, has some surprising and interesting facts in its cover story about the state's indebtedness.
Titled "$127 Billion, Is Illinois Drowning in Debt?" the story focuses on Illinois debt and the challenges the state faces from credit agencies. Just as a family might go into debt by using credit cards and taking out high interest loans, Illinois has gone into debt by issuing bonds, the Comptroller points out.
BUSINESS BRISK FOR CONCEALED CARRY APPLICATIONS
On just the first day concealed carry permit applications were accepted the Illinois State Police received more than 4,500 applications.
The state’s concealed carry online application site went live Jan. 5. According to the Illinois State Police, the online sign up went smoothly, thanks in part to an early application period that began Dec. 18 and allowed the State Police to test the system and work out problems prior to the formal launch.
It could still be about three months before any permits are issued. The State Police have 90 days to approve or deny completed applications. Those without an electronic version of their fingerprints can expect an additional delay of up to 30 days.
Additionally, law enforcement agencies, including local police and sheriffs, have 30 days after the application has been submitted to object to an individual licensee. While online applications are now being accepted, a paper version may not be available until July.
HYDRAULIC FRACTURING RULES UNDER REVIEW
The public comment period allowing residents to weigh-in on the administrative rules that will govern fracking in Illinois has ended and proposed rules are now under consideration.
Hydraulic fracturing, commonly known as “fracking” or “horizontal drilling” utilizes high-pressure water, sand and chemicals to drill for natural gas and oil. The development of fracking rules has been closely monitored since SB 1715, a bi-partisan measure widely considered to be a national model for regulation of the industry, was signed into law in June.
Two years of negotiations and six months of rule drafting has led to 123 pages of instructions on how to regulate horizontal drilling. Updates on the status of the proposed rules can be found on the IDNR website.