Illinois Government Consultants Incorporated

Mayoral candidate U.S. Rep. Danny Davis today assailed Mayor Richard Daley’s style of running City Hall and said he would make Chicago government more transparent and open if he’s elected next year.

“I’d have a far more transparent shop,” Davis said. “I’d have greater involvement and participation coming from these advisory groups and committees that I’d like to set up and have function and operate with.”

Davis listed several reforms he’d make as mayor, although he provided few details about how he’d actually make the changes. The veteran West Side congressman said that as mayor, he’d settle pending lawsuits surrounding convicted former Chicago police Cmdr. Jon Burge, prevent “backdoor decisions” such as Daley’s determination to close Meigs Field and ensure tax increment financing money is used to help struggling communities.

He also said he’d look into restructuring the city’s parking meter deal and already is “bringing together attorneys” to examine the contract and see whether it can be renegotiated — something that others who have taken a look determined is difficult, if not impossible. The city already has spent much of the $1.15 billion it reaped from leasing the meters.

“If there isn’t (a way to renegotiate the deal) then, of course, it would have to stand and, of course, you’d have to find other ways to generate the revenue that you need that could be coming from the parking meter deal,” Davis said.

Source:  The Chicago Tribune

In March, the General Assembly and Gov. Pat Quinn saved Illinois an estimated $220 billion in pension costs over the next 25 years by passing sweeping pension-benefit reductions for future public employees whose retirements are state-funded.

But by doing so, they may have shifted a big chunk of retirement costs to school districts, local governments and the taxpayers who support them.

The cut to benefits is so severe that future teachers probably will have to be put in the federal Social Security system, according to a consultant’s report for the Teachers’ Retirement System.

“It seems likely that, at some point in the future, the TRS second tier plan will no longer meet the requirements for FICA (Social Security) tax exemption,” says the report from Buck Consultants.

Teachers now don’t participate in Social Security. Their pensions — paid for by their own contributions, funding from state government and investment income — meet the minimum standard, or “safe harbor,” for retirement income. That allows teachers to be exempted from the Social Security system.

“In eight years, it’s possible that people — it’s probably more than probable — aren’t going to be accruing a benefit that would make the minimum,” said TRS general counsel Tom Gray. “The IRS and the Social Security Administration are going to be aware of it. There’s a big interest by the IRS and the Social Security Administration in collecting taxes and Social Security taxes from state and local governments.”

The federal government periodically reviews pension plans to ensure they qualify for exemption of employees from Social Security, Gray said.

If not, “they’ll (the Internal Revenue Service) call up the Social Security Administration and say, ‘Start collecting,’” Gray said.

Unintended consequences

If the new retirement benefits don’t meet the standards, the school districts, not the state, will have to pay the 6.2 percent employer contribution to Social Security. Teachers also would have to pay a 6.2 percent payroll tax in addition to the 9.4 percent of their paychecks they already contribute to their pensions.

The pension-reduction bill was passed in a single day in March, over the objections of public employee unions, who some members of both political parties and the state’s major business interests say enjoy gold-plated pensions.

Legislators and governors have underfunded or skipped pension payments for decades, which has led to Illinois’ state-funded pensions being underfunded by $78 billion.

When the changes were approved, representatives of Illinois’ two major teachers’ unions, the Illinois Education Association and the Illinois Federation of Teachers, pointed out that the state’s retirement costs are less per teacher than if they participated in Social Security.

“You’re seeing the unintended consequences of legislation that was rushed through in 12 hours,” said Illinois Education Association spokesman Charles McBarron. “There’s now the possibility of a huge unfunded mandate being foisted on school districts and the taxpayers in those districts.”

The issue could extend to other future public employees who will have second-tier pensions and who don’t participate in Social Security, Gray said.

Andrew Bodewes, TRS’s director of government affairs, told the House Personnel and Pension Committee in November that future teachers may have to go into Social Security when the committee considered a bill reducing pension benefits for future police officers and firefighters. The bill passed both legislative chambers and is awaiting action by Quinn.

“There can be federal repercussions if we do this wrong,” Bodewes told the committee. “If we go too deep, we may well find we greatly increase the cost. The federal government is a lot less lenient when it comes to not paying your retirement contributions.”

Never happened before

The number of teachers who could be affected and the cost of Social Security taxes are unclear, according to Gray and the TRS consultants.

“It is also uncertain how the process will work if the benefit formula for a group of employees fails but others are still OK,” the Buck Consultants report says. “Are taxes paid only for that employee group, for the whole second tier … or for the whole plan?”

A situation in which a state reduced pension benefits and found itself not meeting minimum old-age benefit standards set by the IRS and the Social Security Administration “has never happened in history,” Gray said.

When Social Security began under President Franklin Roosevelt, state and local government employees did not participate. In 1954, the law was changed so that teachers could opt in or out. The next year, Illinois entered into an agreement with the federal government for Illinois teachers to opt out, according to TRS spokesman Dave Urbanek.

A Social Security Administration spokeswoman referred questions to IRS officials, who did not return a call seeking comment last week. Mary Fergus, a spokeswoman for the Illinois Board of Education said, “It’s something we’ll be looking at down the road. It’s too early to comment.”

Kelly Kraft, a spokeswoman for the governor’s budget office, said, “In the next few weeks, budget director David Vaught plans to meet with TRS to discuss and further understand their concerns regarding pension reform.

“The pension reform bill will save taxpayers over $200 billion during the next 35 years. Further pension reform is needed, and the Quinn administration will continue to pursue a negotiation approach to make that happen.”

***

Why the second-tier benefits won’t be enough

Internal Revenue Service Revenue Procedure 91-40 sets out formulas to determine whether state and local government pension plans provide benefits high enough for participants to be exempt from Social Security. It sets minimum standards for:

–Salary definitions

–Benefit formula accrual percentages

–Accrued benefits

The 2010 pension reforms, which affect every Illinois public employee who starts work after Jan. 1 and whose pension is state-funded, cap the maximum salary upon which a pension can be based. In January, that salary is $106,900. That means any money earned over that amount will not be factored in when a public employee’s pension is calculated.

Under state law, the maximum pensionable salary grows by 3 percent or one-half of the urban consumer price index each year, whichever is less. TRS projects that teachers’ salaries will increase by 3.5 percent annually. Some day, many teacher salaries will exceed the maximum pensionable salary and their pension accruals will not meet the minimum “safe harbor” benefit, disqualifying them from being exempt from the Social Security system.

While it may take two decades or more for the average teacher salary to rise above the maximum pensionable salary, employees’ retirement accruals will fall behind much sooner — in as few as eight years, according to TRS general counsel Tom Gray.

“The exact time depends on several factors, including employee age, salary increases and change in the CPI,” according to Buck Consultants.

On the web

IRS Revenue Procedure 91-40: http://www.irs.gov/pub/irs-tege/rp91_40.pdf

Pension reform bill: http://ilga.gov/legislation/publicacts/96/096-0889.htm

Source:  The State Journal Register - The Oldest Newspaper in Illinois

The Obama administration plans to announce Monday that it will make $206 million in bonus Medicaid payments to 15 states — with more than a fourth of the total going to Alabama — for signing up children who are eligible for public health insurance but had previously failed to enroll.

The payments, which were established when Congress and President Obama reauthorized the Children’s Health Insurance Program in 2009, are aimed at one of the most persistent frustrations in government health care: the inability to enroll an estimated 4.7 million children who would be eligible for subsidized coverage if their families could be found and alerted. Two of every three uninsured children are thought to meet the income criteria for government insurance programs.

Kathleen Sebelius, the secretary of health and human services, has called the matter “a moral obligation” and has challenged health care providers, state and local governments and community groups to seek out eligible children.

The stubbornness of the problem is one reason the government expects millions of people to remain uninsured even after 2014, when the new health care law requires most Americans to have coverage and vastly expands government programs to make it affordable.

The bonus grants are distributed according to a formula. To qualify, states must have adopted at least five of eight measures aimed at streamlining enrollment for children in public insurance programs and have recorded Medicaid caseload increases that could not be attributed solely to a worsening economy. Thirty-two states did not even apply for the grants. Three of the 18 that did apply did not qualify for payments.

Alabama will receive a $55 million bonus, more than twice as much as any other state, for having 133,000 more children on its Medicaid rolls than projected by a formulated base line, according to the Department of Health and Human Services. The 15 states that will receive bonuses reported a total of 874,347 children above the baseline, which factors in population growth and, to some degree, demand driven by the economy.

To make enrollment easier, Alabama has eliminated asset tests for children, ended requirements for an in-person interview and allowed children to remain eligible for a year without renewal. It also sends out renewal forms with blanks filled in when data is known, and allows applicants to verify their forms with an electronic signature. The state has adopted “express lane eligibility” so that Medicaid application processors can use income findings from other safety net programs to validate eligibility.

“We are absolutely ecstatic about the $55 million,” said Lee A. Rawlinson, Alabama’s deputy Medicaid commissioner. “It just could not have come at a better time for the state. And had we not had all these streamlining efforts we would never have been able to get to these applications and get all these children awarded.”

Oregon, which will receive a $15 million bonus, made many of the same refinements, while also extending coverage to more children. “Without these efforts to make enrollment simplified, the resources we put into outreach and marketing would be wasted,” said Cathy H. Kaufmann, administrator of Oregon Healthy Kids, which encompasses both Medicaid and the Children’s Health Insurance Program. “We’d have driven thousands of people to the front door but many of them wouldn’t be able to get in.”

Because of the formula’s requirements, none of the money will go to California, Texas or Florida, which account for nearly 40 percent of all uninsured children. Nor will any go to the four states that do the best job of signing up eligible children — Massachusetts, Vermont, Maine and Hawaii.

A study published in the journal Health Affairs estimated the national participation rate among children eligible for Medicaid and the Children’s Health Insurance Program at 82 percent in 2008. Thirteen states had rates below 80 percent, with Nevada at only 55 percent. Ms. Sebelius said in an interview that it would be “a huge win for kids” if the rate could be pushed to 90 percent.

A third of all children are now insured by two programs, compared with 10 percent of nonelderly adults, according to the Kaiser Family Foundation. Medicaid covers 24 million children, most of them living below the poverty line, and the Children’s Health Insurance Program, or CHIP, picks up nearly eight million in families with slightly higher incomes.

The programs’ costs are shared by the federal government and the states. Washington sets income-based eligibility thresholds, which states can exceed.

But in times of economic distress, the pressure on states, which must balance their budgets, is to reduce costs in the revenue-draining programs. One traditional method for doing so has been to make enrollment cumbersome and to devote minimal resources to marketing.

“We’ve long had a problem, more in some states than others, with an application process that is riddled with red tape,” said Cindy Mann, who oversees the federal Medicaid program.

The bonus grants are intended to make it worth a state’s while to enroll and retain eligible children. That has been crucial, officials said, at a time when job losses have increased the number of people who qualify for assistance.

Recessionary pressures drove total Medicaid enrollment to 50 million in 2009, up 2.4 million over 2008, with half the increase among children.

“We’re still fighting a bit of an uphill battle at this particular juncture,” Ms. Sebelius said. “What’s been encouraging is that even in this time of economic downturn, states continue to push enrollment in CHIP and Medicaid.”

Because of expanded eligibility and simplified enrollment, the percentage of children without insurance has actually declined this decade, even as the percentage of uninsured adults has soared, according to a study by John Holahan, director of the Urban Institute Health Policy Center. He estimated that about 10 percent of children were uninsured in 2009, the lowest rate in more than a quarter-century. That compares with 23 percent of nonelderly adults.

The Children’s Health Insurance Program reauthorization, a Democratic initiative that passed with modest Republican support, also authorized grants to states and community groups to help identify eligible children. The Department of Health and Human Services awarded $40 million in such grants last year, along with $75 million to 10 states in the first round of bonus payments.

Alabama was the big winner last year, too. Other states receiving bonus payments this year are Alaska, Colorado, Illinois, Iowa, Kansas, Louisiana, Maryland, Michigan, New Jersey, New Mexico, Ohio, Washington and Wisconsin.

Source:  The New York Times

Former White House chief-of-staff Rahm Emanuel early Thursday survived the pivotal first round of a residency challenge that will determine whether his name remains on the ballot for mayor of Chicago.

“The name of Rahm Emanuel shall appear and shall be printed on the ballot,” Hearing officer Joe Morris wrote.

Morris recommended that the Chicago Board of Election Commissioners keep Emanuel on the ballot, even though he moved his family to Washington D.C. and rented out his Ravenswood home to a tenant who refused to leave.

Morris accepted Emanuel’s argument that it was not his burden to prove he had established residency but rather the burden of objectors to prove he had “abandoned” his Chicago residency when he moved full-time to the capitol to be President Obama’s chief of staff.

“The heart of the question of the candidate’s residence is not whether the candidate established residence in the Chicago in 2010, but rather if, at some point prior to, or during, but in any event affecting, the period from and after February 22, 2010, he abandoned it,” Morris wrote.

Emanuel’s clear intention to return to the city after his service to Obama outweigh’s his not “having a place to sleep” in Chicago for purposes of qualifying as a resident, Morris wrote.

Morris’ non-binding recommendation – filed about 1:50 a.m. Thursday – sets the stage for an Election Board vote later Thursday, followed by a court challenge that will almost certainly end with the Illinois Supreme Court.

Emanuel was pleased with Morris’ findings.

“While the decision rests with the Commissioners, I am encouraged by this recommendation,” said Emanuel in a statement.  “It affirms what I have said all along – that the only reason I left town was to serve President Obama and that I always intended to return.  Chicago voters should ultimately have the right to decide the election – and to vote for me, or against me.” 

But Burt Odelson, the main attorney for the objectors, said he always expected he would have to win the case in court.

“I expected more of a hearing officer regarding the decision but it was not unexpected. We will have to get into court system to prevail where there is no fear of repercussions.”

  State law requires mayoral candidates to “have resided” in the city for the year prior to Election Day. The only exception is for active-duty members of the military.

Even after renting out his Chicago home, Emanuel, a former congressman, continued to pay the property tax bill, vote from that address and list it on his Illinois driver’s license and checking account.

During marathon testimony last week, Emanuel repeatedly emphasized that he left 100 boxes of treasured family possessions in the basement of his Ravenswood home, even after renting it out to Rob and Lori Halpin. Those boxes serve as evidence of his intent to return to Chicago, Emanuel said.

Lori Halpin denied ever seeing those boxes, only to let Emanuel’s attorneys into her home, where they found the family heirlooms in a basement crawlspace.

Emanuel’s legal team then returned to the residency hearing with pictures carefully scrutinized by Morris.

Morris is the bow-tied conservative Republican who presided over three days of hearings in the Emanuel residency case.

He bent over backwards to be fair to nearly two dozen citizen objectors whose questions to Emanuel were repetitive at best and, at worst, seemed to come out of left field. (When Morris pointed out to one objector that he was “bending over backwards” to be fair to him, the objector shouted back, “Your bodily posture does not interest me!”)

The hearings attracted national attention, in part because of the spectacle of having a former White House chief of staff who once dictated negotiating terms to Congressional leaders and auto industry executives sitting in the basement of the Cook County administration building answering questions from private citizens for nearly 12 hours.

Earlier this week, Emanuel said he was confident he would survive the residency challenge because of what he called the “compelling points” that he and his attorneys made last week.

“I had just gotten elected to Congress. The only reason I left was to work as President Obama’s chief of staff at the president’s request,” Emanuel said.

“[Wife] Amy and I own the home. We pay property taxes at that home. We vote from that home and [have] our driver’s license address indicating that is our home, holding our checking account here in Chicago. We had stuff in the basement of our home. We have e-mails indicating that we were returning. The people of Chicago deserve the right to make the choice of who they want to vote [for] for mayor.”

Odelson has argued that Emanuel gave up his residency when he rented out his house and that his “intent” to return to Chicago does not suffice. He argues that the law requires “physical presence” in the city for year preceding the Feb. 22 election.

Odelson said he would appeal if, as expected, the three-member election board affirms Morris’ ruling.

Source:  The Chicago Sun-Times

The Illinois Department of Transportation has reached agreement with Amtrak and the Union Pacific Railroad to allow $1.1 billion in improvements for high-speed passenger rail between St. Louis and Chicago.

The agreement, signed Wednesday, was the final step required for grants awarded last January to be released, according to Warren Flatau, spokesman for the Federal Railroad Administration.

Billions of dollars in federal grants for high-speed rail had been tied up across the nation while states and private railroads, which are supposed to provide rights of way, negotiated agreements aimed at ensuring adequate room for both freight and passenger trains. Rail companies had balked at proposals that they would have to pay financial penalties if passenger trains don’t run on time.

Flatau said he believes Illinois is the first state to negotiate an agreement with the Union Pacific, the nation’s largest railroad.

“It’s a wonderful day for Illinoisans as we celebrate a milestone achievement toward becoming the first state in the nation to bring high-speed rail to fruition,” said Gov. Pat Quinn in a written statement.

U.S. Sen. Richard Durbin, D-Springfield, also sounded pleased.

“I’m proud that Illinois continues to lead the country in its pursuit of high-speed rail service,” Durbin said in a prepared statement released by the Illinois Department of Transportation on Wednesday afternoon.

Figures at odds

But the figures contained in the news release are at odds with previous figures cited by the government and contained in the grant application Illinois submitted in October 2009.

According to the press release, the improvements will cut travel time between Chicago and St. Louis by as much as 48 minutes so that the trip could be made in 4 hours, 32 minutes.

But the grant application says that high-speed trains would make the trip in 4 hours, 10 minutes. Furthermore, when the federal government announced the grants nearly a year ago, the White House press office issued a release stating that speeds would reach as high as 110 mph.

“These higher speeds, coupled with improvements resulting in increased on-time performance, will decrease travel time from Chicago to St. Louis to approximately four hours, allowing customers to reach their destination 30 percent faster compared to current rail service, and 10 percent faster than driving between the two cities,” says the unsigned release, dated Jan. 27, 2010.

Kristina Rasmussen, executive vice president for the Illinois Policy Institute, which opposes high-speed rail, said the project is a waste of taxpayer money.

“Four and a half hours?” Rasmussen said. “Man—it’s like we went from high-speed rail to moderate-speed rail to moderately low-speed rail. Sometimes, good government involves stopping and realizing that the path you’ve been going down isn’t the right direction and moving on with other things. In this case, we may be at that point.”

Service to begin in 2014

According to a news release issued Wednesday, three high-speed trains will make the trip each day, and at least 80 percent of the trips must be on time. Service is expected to begin in 2014.

It’s not clear what penalty Union Pacific might face if performance standards aren’t met.

“I know that there are penalties that are spelled out,” Flatau said. “I don’t have specific knowledge, so I wouldn’t want to speculate.”

The Union Pacific isn’t worried, judging by prepared remarks from the company’s top executive.

“Our priority in working out this agreement was to protect Union Pacific’s ability to provide the exceptional freight service our customers need and expect, while helping public agencies invest in improved passenger service,” said Jim Young, Union Pacific chairman and chief executive officer in the state’s news release. “This agreement allows us to deliver on those customer commitments.”

Source: The State Journal Register - The Oldest Newspaper in Illinois

After a years-long battle and a bout of last-minute opposition by Senate Republicans, the House on Wednesday passed a bill that would provide $4.2 billion in compensation and long-term health-care benefits for first responders who became ill from working at Ground Zero in the wake of the Sept. 11, 2001, attacks, sending the measure on to President Obama for his signature.

The bill passed Wednesday evening by a vote of 206 to 60 after House leaders had held open the vote for more than an hour, presumably for members who were still hustling to make their way over to the Capitol on the final day of the 111th Congress’ lame-duck session.

Missing Wednesday’s vote were nearly 170 House members, 100 more than had been missing in action for the previous day’s votes. Thirty Republicans had joined all but one Democrat, Mississippi’s Gene Taylor, in supporting the measure.

The House vote came hours after the Senate passed the bill by unanimous voice vote.

New York Reps. Jerrold Nadler (D), Carolyn Maloney (D) and Peter King (R), who sponsored the House version of the bill, were seen exiting the Senate after the bill passed the upper chamber earlier Wednesday. The trio paused to take a photo together just outside of the Senate chamber, then headed toward the office of House Speaker Nancy Pelosi (D-Calif.) ahead of the House vote.

“We are thrilled. It’s been seven years since Jerry and I introduced the first bill. We’ve had 22 hearings. It’s been a labor of purpose, a labor of love,” Maloney said. “All I wanted for Christmas was the passage of this bill, and that’s what I got.”

“It’s been nine years since the heroes rushed in to try to save people’s lives. Today, the United States redeems its honor,” Nadler said. “Today the United States shows that we are an honorable nation and we pay our debts.”

The bill looked headed toward defeat as recently as this week. But its future brightened Wednesday as Sen. Tom Coburn (R-Okla.), who had been threatening to prevent the measure from reaching the Senate floor, reached a deal with Senate Democrats, according to ABC News and The Post’s Greg Sargent.

The original Senate version of the bill would have provided $6.2 billion in benefits to responders, but the deal reached by Coburn and Democratic leaders would lower the price tag to $4.2 billion, of which $1.5 billion would go to health benefits and $2.7 billion would go to compensation.

New York Democratic Sens. Charles Schumer and Kirsten Gillibrand, who co-sponsored the Senate version of the bill, held a news conference Wednesday heralding the bipartisan deal.

“The Christmas Miracle we’ve been looking for has arrived,” Schumer and Gillibrand said in a statement. “Over the last 24 hours, our Republican colleagues have negotiated in good-faith to forge a workable final package that will protect the health of the men and women who selflessly answered our nation’s call in her hour of greatest need. … We thank our Republican friends for coming together to fulfill America’s moral obligation to the Heroes of 9/11.”

In a floor speech Wednesday, Senate Minority Leader Mitch McConnell (R-Ky.) said he was “delighted” a bipartisan agreement had been reached and praised both the passage of the bill and the efforts of Republicans who worked to amend it, notably Coburn and Sen. Mike Enzi (Wyo.).

“Some have tried to portray this debate as a debate between those who support 9/11 workers and those who don’t,” McConnell said. “This is a gross distortion of the facts. There was never any doubt about supporting the first responders. It was about doing it right.”

Supporters of the James Zadroga 9/11 Health and Compensation Act of 2010 say that the measure would provide key medical and economic assistance to 9/11 responders over the next decade, and they believe that a vote during the lame-duck session remains the legislation’s best hope for getting passed.

Opponents argued that there should have been more debate on the bill; that it should be funded through spending cuts; or that the bill was unnecessary and would be open to abuse.

Wednesday’s vote marked the second time this month that the Senate took up the bill; earlier, in a 57-to-42 votewith no GOP support, it fell short of the 60 votes it needed to advance under Senate rules.

The House version of the bill passed in September. The original $6.2 billion price tag for the Senate version was less than the $7.4 billion the House version would have cost; the Senate version also made changes to the revenue-raising measures that would fund the bill.

The measure was named for a police detective who worked at Ground Zero and died in 2006 from lung ailments.

House Majority Leader Steny Hoyer (D-Md.) on Tuesday had asked members to remain in Washington in order to stand by to vote on the measure, but many departed early for their Home districts ahead of the winter break.

A City Hall insider for decades, Chicago mayoral candidate Gery Chico has made millions of dollars in the last few years from his law firm that lobbies for clients seeking city business, according to three years of tax returns he released Tuesday.

Chico’s 2009 federal income tax return shows he and his wife, a school consultant, made $2.6 million. The couple paid about $830,000 in federal taxes on their income. They paid more than $900,000 in federal taxes the year before, when they declared $2.9 million in earnings, according to the records.

The Chicos’ income in the last two years more than doubled from the $1.2 million they declared in 2007.

Chico, 54, held several high-ranking positions in Mayor Richard Daley’s administration, including chief of staff and president of the Chicago Public Schools board of trustees, and also has close ties to Ald. Edward Burke, 14th, the powerful chairman of the City Council Finance Committee.

Chico’s law firm, Chico & Nunes, is a registered City Hall lobbyist for more than 40 companies — including large corporations such as Cisco Systems, Exelon Generation and Clear Channel — according to city records.

Chico said that if he is elected mayor, he would sever ties with the law firm but would not ask the firm to give up its business lobbying at City Hall.

“Gery is not going to be in a position, nor would it be appropriate, for him to tell a private business what to do,” said campaign spokeswoman Brooke Anderson.

The firm has about a dozen lawyers, and city records show that five of them are registered as lobbyists. According to the firm’s Web site, several others appear to have government work at the heart of their legal concentrations.

The firm’s other name partner, Marcus Nunes, said that if Chico is elected mayor, the firm will have to make some adjustments, though he said the firm’s business is more than just lobbying City Hall.

“It can’t help but have an impact,” Nunes said. “But we will work around that. We’re pretty diverse.”

Chico’s wife, Sunny Chico, also would be barred from doing business with the city, his campaign said. A former U.S. Department of Education official, she runs a consulting firm that contracts with school systems to provide tutoring, curriculum advice and other services.

From May 2009 through August of this year, her firm, SPC Consulting LLC, was paid $87,000 by CPS for contract and consulting work, according to CPS records.

Last month, SPC started a one-year contract to tutor children in struggling CPS schools. The contract calls for SPC to tutor 100 students for payment of about $2,000 per pupil, though the value of the contract could be significantly less than $200,000 because of student dropout rates, Anderson said.

The Chicos’ tax returns also show they give about $100,000 a year to charity. In 2007 they declared $116,000 in charitable giving, followed by $110,000 in 2008 and $95,000 last year.

Source:  The Chicago Tribune

Illinois will lose one of its 19 seats in the U.S. House of Representatives in 2013, federal officials said Tuesday, kicking off a struggle to redraw the state’s political boundaries that will be dominated by Democrats who already control state government.

National figures unveiled by the U.S. Census Bureau show Illinois’ new population total as of April 2010: 12,830,632. That’s up 3.3 percent from the 2000 census population of 12,419,293.

But that growth once again didn’t keep pace with faster-growing states in the West and South, so Illinois will lose congressional representation for the fourth consecutive census — six seats since 1980.

Now the focus shifts to Springfield, where Democrats will have the strong upper hand in laying out not only new congressional boundaries, but all-important state House and Senate districts for the next decade. Mapmakers will employ political art in drawing legislative districts aimed at passing legal muster while shifting lines to benefit party incumbents and make future gains.

Gov. Pat Quinn’s victory in November means the Democratic-controlled legislature can draw the maps without fear of a governor’s veto, though Republicans are already warning they could use legal challenges as their final recourse.

The news is hardly good for the state’s five new GOP congressmen, who rode a national anti-incumbent wave but now face the possibility of being thrown against other Republican representatives or into Democratic-leaning districts for the next election.

“Democrats will get together and draw up a plan, and it will become law before people have a chance to take a look at it,” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University at Carbondale. “I’m afraid it’s going to be an example of legislators picking their constituents rather than constituents picking their politicians.”

But a spokesman for Illinois House Speaker Michael Madigan, the veteran Southwest Side lawmaker who also is state Democratic chairman, said rulings by the federal courts largely control how the map lines for congressional districts can be drawn. Those rulings work to ensure representation for minorities.

“The control of the process will rest in the federal courts because of the (federal) Voting Rights Act,” said Madigan spokesman Steve Brown. “For the not well-informed who think it’s all about creating a Democratic majority, look at the history of the federal laws.”

Though Quinn has said he supports an open and competitive redistricting process, state Republican Chairman Pat Brady is wary that Democrats will try to gain seats that will last a decade in Congress and the statehouse. Brady said the GOP will turn to the courts if they feel the maps violate federal court rulings that have backed compact districts that do not divide communities.

A decade ago, state lawmakers largely complied with a congressional deal agreed upon by former Republican House Speaker Dennis Hastert and former veteran U.S. Rep. William Lipinski, a Chicago Democrat. The deal initially split 18 seats between Democrats and Republicans while forcing two downstate incumbents, Republican John Shimkus and Democrat David Phelps, into a 19th district, which Shimkus won.

Throughout the decade, though, Democrats gained and held a majority of congressional seats. Entering November, Democrats had a 12-7 edge over Republicans in the U.S. House delegation. But the GOP’s national sweep in last month’s election reversed the delegation majority to 11-8 for Republicans in the new Congress that meets in January.

The five incoming Republican congressmen — Bobby Schilling, of the Quad Cities area; central Illinois’ Adam Kinzinger, Robert Dold and Joe Walsh in the north suburbs; and Randy Hultgren in the far southwest suburbs — could find their districts vastly redrawn. And some incumbent Republicans could find more Democrats in districts that were once safe from political challenges.

Privately, some Democrats and Republicans agree that potential scenarios could involve merging parts of Schilling’s district with those of the 18th central Illinois district of Republican U.S. Rep. Aaron Schock of Peoria and the northwestern Illinois 16th District of U.S. Rep. Donald Manzullo of Leaf River. Schilling, of Colona, lives about 65 miles away from both Schock and from Manzullo, making it easier for mapmakers to set up potential head-to-head matches in a largely rural part of the state.

Still, closer to Chicago, elements of Manzullo’s district also could be combined with the North Shore 10th District of Dold and 8th District of Walsh.

Source:  The Chicago Tribune

In a move to protect consumers, the Obama administration said Tuesday that it would require health insurance companies to disclose and justify any rate increases of 10 percent or more next year.

State or federal officials will review such increases to determine if they are unreasonable, the administration said in proposing a regulation to enforce the requirement.

The proposed rule represents a major expansion of federal authority in an area long regulated by states.

Kathleen Sebelius, the secretary of health and human services, said the reviews would “help rein in the kind of excessive and unreasonable rate increases that have made insurance unaffordable for many families.”

The new health care law, signed in March by President Obama, calls for the annual review of “unreasonable increases in premiums for health insurance coverage.”

The law did not define unreasonable — a gap the administration is now trying to fill.

Under the rule issued Tuesday, insurers seeking increases of 10 percent or more in the individual or small-group market next year must publicly disclose the planned increases and the justifications for them.

In recent years, individual and small-group premiums have been rising more than 10 percent a year, on average, and many increases far exceed national measures of medical cost inflation, federal officials said.

The 10 percent threshold may change in later years. Starting in 2012, the federal government will set a threshold for each state, reflecting trends in its insurance and medical costs.

Consumer advocates welcomed the rules as a way to hold insurers accountable for skyrocketing premiums. In the last year, they noted, state officials in California and Connecticut, among other states, have denied big rate increases sought by some insurers.

It was not immediately clear whether the rule would help insurers hold down costs.

Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, said that in their zeal to review premiums, “the administration and Congress have largely ignored factors driving up the cost of coverage.”

These factors, Ms. Ignagni said, include the power of doctors and hospitals to negotiate higher reimbursement rates, new benefit mandates and the tendency of younger, healthier people to drop coverage, leaving sicker people in the insurance pool.

Under the proposed regulation, the federal government will assess each state’s procedures for reviewing insurance rates. If it finds that a state has an “effective rate review system,” the state would conduct the annual reviews of premium increases. But, the administration said, “if a state lacks the resources or authority to do thorough actuarial reviews, the Department of Health and Human Services would do them.”

Thus, it said, “all rate increases that meet or exceed the 10 percent threshold would be reviewed.”

The department will post information about the results of all rate reviews on its Web site, and insurers must post the data prominently on their Web sites.

States are beefing up their ability to review rates, with the help of $46 million in federal grants — the first installment of $250 million that will be distributed over five years.

Under the new federal law, insurers that show “a pattern or practice of excessive or unjustified premium increases” can be excluded from the centralized insurance market, or exchange, to be set up in each state by 2014.

Ms. Sebelius, a former Kansas insurance commissioner, said that shining a spotlight on rates would discourage exorbitant increases.

State officials have repeatedly said that premiums must be not only affordable to consumers, but also adequate to guarantee the solvency of insurance companies.

“From a consumer protection standpoint, the most important thing we do is ensure the solvency of companies,” said Sandy Praeger, the Kansas insurance commissioner and chairwoman of the health committee of the National Association of Insurance Commissioners.

“Closer scrutiny can help hold down rates,” Ms. Praeger said, “but it will not control costs resulting from the overuse or inappropriate use of health care.”

Jay Angoff, the director of the federal Office of Consumer Information and Insurance Oversight, said, “We are not setting an absolute numerical standard for whether a rate is unreasonable.” Instead, the proposed rule lays out factors to be considered.

Under the proposal, a rate increase will be considered unreasonable if it is excessive, unjustified or “unfairly discriminatory.”

A rate increase is defined as excessive if it “causes the premium charged for the health insurance coverage to be unreasonably high in relation to the benefits provided.”

The rule envisions a two-step review process. An insurer must file a “preliminary justification” for an increase of 10 percent or more in the rates for any products sold to individuals or small groups. If state or federal officials find the increase unreasonable, the carrier must then file a final justification.

To justify rate increases, insurers will have to submit data on claims experience, projected medical costs, executive compensation and many other factors.

“The statute does not give us authority to disapprove rates,” Mr. Angoff said. “We do not have that authority. The regulation leaves state laws intact. It does not interfere with state law.”

In some states, rates cannot be put into effect unless the state affirmatively approves them. In other states, insurers must file rates with a state agency before using them, but the state does not approve or disapprove them.

Whether an insurer can carry out a particular rate increase “is entirely a matter of state law,” the rule says.

Moreover, Ms. Sebelius said, “there may be rates well above 10 percent that are justified by underlying cost trends.”

Source:  The New York Times

Mayoral challenger Rahm Emanuel unveiled plans on Monday to implement a health and wellness plan for city employees that would use incentives to drive down costs by as much as $240 million over four years.

“The last thing I thought I was going to deal with is health care, but here we are again,” said Emanuel, chief architect of President Obama’s health reform bill during his nearly two-year stint as White House chief of staff.

“You can wring costs out of the health-care budget by rewarding the positive steps people take. You take your blood pressure medicine, we pay more. If you don’t, you end up picking up more of the cost. The cost-benefit reward is structured in a way that it’s in your own interest to do what’s right for your health.”

Chicago taxpayers spend $500 million a year to provide health care for city employees. That’s nearly 10 percent of the city’s annual budget. Those costs are rising 10 percent a year.

Even more troubling, 4 percent of the city’s work force accounts for 60 percent of the annual expense. They are primarily people with chronic illnesses such as diabetes, high blood pressure, heart disease and asthma. Obesity is also a contributor. So is heavy smoking.

If Emanuel is elected mayor, he plans to implement an incentive-laden health and wellness plan mirroring those pioneered by companies such as Safeway and Johnson & Johnson.

Emanuel noted that Johnson & Johnson managed to reduce employee smoking by two-thirds and cut the rate of high-blood pressure among its workers in half. The company got $3 of savings for every $1 invested in incentives, he said.

The city has tried to make inroads on wellness by using preventive screening programs. But Emanuel argued that participation has fallen short, in part, because lucrative incentives are missing. His reforms would begin by offering all participants in the city’s health plan an enhanced screening to establish benchmarks and long-term goals, including weight loss and exercise. Emanuel’s goal is to reduce health-care costs by $40 million to $60 million a year over four years.

In 1991, former U.S. Attorney Anton R. Valukas reported that fraud, waste and mismanagement in the city’s then-$252 million-a-year health insurance program had cost taxpayers “tens of millions of dollars” since 1985.

This year, Mayor Daley ordered another audit with the potential to save millions by purging ineligible dependents from the insurance rolls.

Source:  The Chicago Sun-Times