Governor calls for General Assembly to enact laws to bring prosperity to all citizens and all parts of Illinois.
In the midst of budget standoff that has lasted more than seven months, Gov. Rauner delivered Illinois’ annual State of the State address Wednesday. During the address, the Governor briefly touched upon his administration’s accomplishments in his first year in office which they believe saved Illinois $938 million. According to the Governor, these savings were achieved by reducing state spending by $500 million; saving $188 million through unemployment insurance fraud reduction; and saving $250 million through reforms within the Department of Healthcare and Family Services. The Governor also touted implementing a revolving door ban on state officials becoming lobbyists and reforming the EDGE credit to eliminate special deals.
In his annual address to the General Assembly, Gov. Bruce Rauner told lawmakers that “Illinois’ economy has been split in two – one part with modest growth, the other in decline.” Some neighborhoods, suburbs, and workplaces located within 90 minutes of O’Hare have partly participated in global recovery from the severe economic downtown of 2008-2009. Gov. Rauner reminded lawmakers that the remainder of the state, including areas traditionally oriented towards industry and manufacturing, have not benefitted from this global recovery. These regions need to see changes in Illinois laws and policies that will be sufficient to help communities throughout the state share in economic growth and opportunity.
Pointing out that “factory workers in Texas are now making more than Illinois folks, even without adjusting for the cost of living,” Rauner renewed his call for serious discussion, debate, and enactment of his Turnaround Agenda. Job-creating elements of the agenda include workers’ compensation reform, mandate relief for local governments, changes in relationships between the public sector and labor unions, and property tax relief. Striking a bipartisan note, the Governor called attention to elements of the Agenda that have, in the past, been supported by a wide variety of leaders.
The Governor noted that in order to improve the quality of life for all residents, Illinois needs to increase the economic opportunity for all individuals. This requires excellent education and vocational training combined with multiple career opportunities made available by companies competing to hire workers. The Governor stated that despite the natural benefits that Illinois has to offer, including economic and strategic viability, Illinois is failing its citizens by promoting an economic status quo that benefits politicians and trial attorneys at the expense of the middle class. This failed economic policy forces people and businesses out of Illinois which exacerbates the middle class deterioration while depleting the state of much needed taxes dollars that could be used to promote and protect infrastructure and programs for the most vulnerable citizens. The Governor’s proposal to address these problems is his Turnaround and Transformation agendas.
In closing, the Governor admitted that the last year was difficult but wants to build off the bipartisan progress that resulted in Criminal Justice Reforms, Police Reforms, and Unemployment Insurance changes to jumpstart mutual participation to achieve a grand compromise to move Illinois forward.
As is always the case, immediately after the State of the State, each caucus leader spoke to the media. Senate Republican Leader Christine Radogno and House Republican Leader Jim Durkin made it clear that Illinois requires the structural reforms contained within the Governor’s Turnaround and Transformation agendas rather than relying on just raising taxes. They echoed the Governor’s belief that raising taxes without real institutional reform will continue Illinois’ political, structural, and financial downward spiral.
House Speaker Michael Madigan organized some human service program advocates to present their concerns regarding the lack of a state budget to the media during his press conference. Speaker Madigan reiterated that he is willing to work with the Governor, but he believes that discussions should only include budget matters and he has doubts about the Governor’s sincerity of bipartisanship when he continues to advocate for changes that are in direct conflict with Democratic Caucus core principles.
During the State of the State, Governor Rauner trumpeted his tentative bipartisan agreement to support Senate President John Cullerton’s pension proposal. In somewhat of a surprise development, the Senate majority caucus voiced their hesitancy to pass their pension proposal with the Governor’s support before a budget solution is in place.
State Rep. Keith Wheeler (R-Oswego), a 25-year small business owner of an information technology consulting firm, applauded Governor Bruce Rauner’s action today to create the new Illinois Department of Innovation and Technology (DoIT). The agency will transform the state’s information technology functions into one agency to provide better service to Illinois residents and businesses.
Illinois consolidates its redundant information technology functions into new Department. After studying existing redundancies in State of Illinois management operations, Gov. Bruce Rauner issued an executive order. The order directs that State information-technology (IT) operations be moved from the various departments of which they were parts to form the new Illinois Department of Innovation and Technology. These operations currently employ approximately 1,700 State personnel specializing in information technology solutions and maintenance. Executive Order 16-01 was issued on Monday, Jan. 25.
Under the State’s charts of organization that existed up until this week, each of the more than 100 State departments, bureaus, and agencies that operate under the overall supervision of the Governor had the right to operate separate, free-standing IT offices. Over time, this created significant barriers to operational productivity. Different offices developed more than 1,000 separate and incompatible software solutions, at least one of which dates back to 1974. Once adopted, these platforms became embedded into operations.
The Governor has instructed the executive personnel of the new Department to centralize and consolidate all information technology decisions and spending. This is the standard model recommended by IT management professionals and utilized by 29 other U.S. states. With Rauner’s executive order, Illinois has become the 30th state to set up a consolidated department of information technology. The head of the new Department, Hardik Bhatt, is Illinois’ Chief Information Officer.
Rauner and Bhatt have stated that one of their first priorities will be to use this consolidation as an opportunity to reduce the vulnerability of the State’s electronic infrastructure to hacking and other cyberattacks, including cyberattacks originating from terrorists and other sources outside the U.S.
Department of Employment Security (DES) reports that December 2015 jobless rate rose by 0.2% over November.
The year-end unemployment rate of 5.9% was 0.9% higher than the nationwide rate of 5.0%, and reflected a decline of 16,300 jobs in Illinois. This decline coincided with a month in which overall U.S. total employment rose by 292,000 jobs. IDES reports that Illinois had 3,000 fewer nonfarm payroll jobs in December 2015 than were filled by working Illinois residents twelve months earlier. These figures show that the Illinois job recovery from the 2018-14 downturn, after moving forward very slowly for multiple years, completely stalled in 2015.
Cross-tabs contained within the Department’s report made clear that much of the weakness had been concentrated in the retail sector, defined for unemployment-reporting purposes as “Trade, Transportation and Utilities.” Seasonally adjusted trade/transportation jobs declined by 12,100 from November 2015, making this the weakest sector in this Illinois month-to-month report. Retail job creation continued to be affected by the continued transition of significant subsets of Christmas retail activity to non-traditional distribution pathways. On a year-to-year basis, however, the weakest Illinois sector continued to be manufacturing, with Illinois factories maintaining 14,000 fewer manufacturing jobs in December 2015 than had been on Illinois payrolls in December 2014.
The Department also reported on where joblessness was concentrated in the final calendar month of 2015. Metro areas with unemployment significantly higher than the 5.9% statewide rate included Carbondale (6.5%), Danville (7.4%), Decatur (7.4%), Kankakee (7.0%), Peoria (7.0%) and Rockford (7.2%). Joblessness, as in previous months, was disproportionately felt in Downstate cities and metropolitan areas traditionally oriented toward manufacturing and industry.
Illinois’ 5.9% jobless rate continued to be significantly higher than the rates posted in many neighboring states. The December 2015 rates in states that border on Illinois were as follows: Indiana, 4.4%; Iowa, 3.4%; Kentucky, 5.3%; Missouri, 4.4%; and Wisconsin, 4.3%. During the same 12-month period that Illinois lost 3,000 net nonfarm payroll jobs, Indiana generated 57,100 net new jobs, Iowa generated 25,600 net new jobs, Kentucky generated 40,200 net new jobs, and Missouri generated 26,000 net new jobs.
$6.6 billion in unpaid State bills could lead to further debt downgrade.
In a report published Tuesday, Jan. 26, the credit-rating firm Moody’s pointed to Illinois’ $6.6 billion in unpaid bills as of Dec. 31, 2015. Moody’s, the world’s largest debt-rating firm, has previously downgraded Illinois’ credit rating six separate times since 2003. Illinois is currently rated by Moody’s as Baa1 with a negative outlook. This rating, three notches above “junk bond” level, is typically interpreted by markets as signaling that Illinois bonds carry a relatively low investment-quality ranking. Moody’s labeled the unpaid-bills “a clear indicator of weak liquidity and governance.”
Illinois is currently carrying $27 billion in general obligation debt in global bond markets. Downgrades to Illinois’ credit rating increase the rates of interest that Illinois is required to pay, further increasing costs to taxpayers of building Illinois’ roads, bridges, and other tangible infrastructure. In Illinois’ most recent sale of GO bonds on Jan. 14, the State and its taxpayers were required to pledge to pay interest rates averaging 1.61% higher than comparable interest rates faced by AAA-rated states such as Indiana.
House Republican Leader Durkin calls for active enforcement of balanced budget requirement.
The Unbalanced Budget Response Act, a new Act introduced by Republican Leader Jim Durkin, creates an alternate cash-flow structure if the FY16 and FY17 budgets are not balanced. Under the fiscal structure outlined in HB 4521, if the General Assembly enacts unbalanced FY16 or FY17 budgets or if no budgets are enacted, the Governor would be given the power to establish contingency reserves using previously appropriated funds. Some of the moneys in these reserves could be transferred to other agencies to meet immediate and urgent spending responsibilities, while other appropriations would remain unspent until the budgets become re-balanced.
Enactment and enforcement of HB 4521 will make it possible for Illinois to fulfill its constitutional balanced budget duties in reality and in real-time. State agencies would be given power to adopt emergency rules as necessary to reduce their spending rates in line with these gubernatorial sequestrations. The powers to be granted to the state agencies are similar to emergency powers that were granted, on a bipartisan basis, to former Gov. Pat Quinn during a budget crisis in 2009. HB 4521 was filed in the House on this past Tuesday.
No new talks planned.
In fact, talk increasingly swirls at the Capitol about the possibility that a budget won’t be in place until after the fiscal year ends in June.
On a related note, the Rauner Administration has declared an impasse in negotiations with state government’s largest employee union, AFSCME. The Administration has asked the Labor Board to determine if there is, in fact, an impasse, which would trigger the Administration’s “best and final” offer. Should that offer be rejected, the union would likely strike.
The Illinois House reconvened on Wednesday, Jan. 27, to hear Gov. Bruce Rauner’s State of the State Address. This was followed by discussion on new bills introduced by members for committee consideration and floor debate during the 2016 spring session. At the top of every list of discussion, however, was the continued impasse affecting the FY16 budget.
On Thursday, Jan. 28, Illinois House and Senate Democrats passed SB 2043. The bill, as amended in the House, was a measure appropriating more than $700 million in unfunded money for higher education. If the bill were to become law, it would add to the existing total of $6.6 billion in State unpaid bills. Gov. Rauner has stated that he will veto SB 2043. The bill did not break the impasse in the FY16 budget process.
New Bills Will Drop Soon
The deadline for submitting legislation drafting requests to the General Assembly’s Legislative Reference Bureau was Friday. The deadline for introduction of new bills in the House is Feb. 11 and the Senate bill introduction deadline is Feb. 19.
What is the MCIP?
The Manufacturing Careers Internship Program (MCIP) is designed to help bridge the critical shortage of young adults entering manufacturing. It helps employers find and hire young adults interested in manufacturing, and provides recent high school graduates ages 18 – 24 with the opportunity to “try out” manufacturing before starting a manufacturing career.
What does it Cost?
There is no direct cost to participating employers. The MCIP is a collaborative partnership between the Kane County Workforce Network, Business and Career Services (BCS) and Medusa / Caps Consulting Group. It is funded through a grant from the Department of Labor through the Illinois Department of Commerce and Economic Development. BCS is the employer of record for the interns, and covers employment insurance and worker’s liability.
What are the Benefits to Employers?
The MCIP builds and leverages alliances with local organizations including:
1) Kane County Workforce Network
2) Aurora Regional Chamber of Commerce
3) Waubonsee Community College
4) Business and Career Services
5) Medusa/Caps Consulting
Jan. 25-Feb. 11 Aurora MCIP Bootcamp Starts (includes plant tours and OSHA certification)
Feb. 9 Manufacturer’s MCIP Internship Selection
Feb. 11 “Draft Day” – Intern assignments made
Feb 22 Internship Program starts (six weeks)
For more information contact:
MCIP Outreach Services Sid Hussaini 224-339-0699 firstname.lastname@example.org
Youth Services Manager Eddie Perez 224-538-1039 email@example.com
MCIP Program Manager Rand Haas 630-351-9795 firstname.lastname@example.org
For video overview go to: www.worknetncc.com