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Illinois Becomes Moody’s Lowest-Rated State After Downgrade

Monday, January 9th, 2012

(Updates with comptroller’s comments in ninth paragraph.)

Jan. 6 (Bloomberg) — Illinois had its general-obligation bond rating reduced by Moody’s Investors Service to A2 from A1, making it the company’s lowest-graded U.S. state.

The downgrade to the sixth-highest level came after a legislative session that “took no steps to implement lasting solutions to its severe pension under-funding or to its chronic bill payment delays,” Moody’s said in a report. Illinois, it said, has “weak management practices.”

Moody’s revised its outlook on the debt to stable from negative, citing the state’s power over revenue and spending, and laws that establish the priority of payment for general- obligation bonds. The downgrade affects $32 billion of debt, according to the statement.

“Although the state has taken positive steps toward fiscal stability, swift bipartisan action to implement further cost reductions and reforms in the upcoming legislative session are needed to stabilize the budget,” Kelly Kraft, a spokeswoman for Democratic Governor Pat Quinn, said in a statement.

The state’s unfunded pension liability in 2010 was $85 billion, and the system has assets to pay 45 percent of promised benefits, according to a study by Bloomberg Rankings. It is the lowest so-called funded ratio of any U.S. state.

‘Calculated Decision’

Last January, Illinois lawmakers approved record increases in personal and corporate-income taxes, generating about $7 billion in annual income. On Dec. 13, they approved breaks for CME Group Inc., which operates the Chicago Mercantile Exchange and Board of Trade; Chicago Board Options Exchange; and Sears Holdings Corp. after threats the companies might leave.

“The state had to make a calculated decision with respect to certain large employers,” Ted Hampton, a senior analyst at Moody’s who co-authored the report, said in a telephone interview. “Imposing tax increases is politically difficult.”

The higher levies addressed about half Illinois’s projected deficit. The state has about $7 billion in unpaid bills, and lawmakers rejected Quinn’s proposal in May to borrow to pay them. Quinn is to present his fiscal 2013 budget Feb. 22.

“Illinois leaders have a responsibility to hear the message being sent,” Republican Comptroller Judy Baar Topinka said in a statement. “The only way out of this mess is to keep cutting spending, provide for a better business climate and, for once, let growth outpace spending. ”

Looking to Sell

An Illinois general-obligation bond maturing in January 2015 traded yesterday at an average yield of 2.07 percent, according to Municipal Securities Rulemaking Board data compiled by Bloomberg. Similarly rated general-obligation debt maturing in three years yielded 1.44 percent, according to a Bloomberg Fair Value index.

Illinois, the fifth-most-populous U.S. state, plans to sell $800 million in taxable and tax-exempt general-obligation bonds as soon as Jan. 11. With the downgrade, Moody’s rates Illinois one step lower than California, at A1.

“There is no fear of the state missing a bond payment,” Topinka said in her statement. “The first payment we make each month is to our bondholders.”

Illinois still has an A+ rating from Standard & Poor’s, its fifth-highest. That’s two grades better than California, at A-.

S&P affirmed its rating, citing the “deep and diverse” Illinois economy that’s anchored by Chicago, the third-largest U.S. city, according to a statement.

Source: Bloomberg BusinessWeek

Illinois gets $186 million for rail project

Wednesday, January 4th, 2012

CHICAGO — The Illinois Department of Transportation is getting $186 million for its high-speed rail project.

U.S. Transportation Secretary LaHood awarded the money to IDOT on Wednesday. LaHood’s office says the cash will be used to extend construction of the rail corridor to Joliet. That’ll allow for 110-mph service along nearly 70 percent of the route.

Construction is already under way on the Chicago-St. Louis rail corridor. Work on the extension to Joliet will begin this spring.

LaHood says the Department of Transportation has invested more than $1 billion to create high-speed rail service in the Great Lakes-Midwest region. He says the project will ultimately reduce travel times and congestion while creating jobs and increasing business opportunities.

Source: The Springfield Journal - The Oldest Newspaper in Illinois

Cullerton: Statewide ban on cell phones in cars ‘might be inevitable’

Tuesday, January 3rd, 2012

In this Sept. 20, 2011 file photo, a phone is held in a car in Brunswick, Maine. Texting, emailing or chatting on a cellphone while driving is simply too dangerous to be allowed, federal safety investigators declared Tuesday, Dec. 13, 2011, urging all states to impose total bans except for emergencies. (AP Photo/Pat Wellenbach, File)

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It “might be inevitable” that Illinois eventually bans the use of cellular phones while people are in cars, Senate President John Cullerton, D-Chicago, said Tuesday.

However, Cullerton said it won’t happen immediately.

“There’s no question it’s a distraction from driving,” Cullerton said of talking on a cell phone. “There’s not a big difference between whether you’re holding a phone or whether you’re not holding a phone. It’s the distraction in talking to someone that’s not in the car with you. It’s not what’s in your hand, it’s what’s in your head.”

Cullerton, who has sponsored or supported bills dealing with child passenger safety, seat-belt usage and requiring the use of motorcycle helmets, said he probably won’t sponsor a phone ban for drivers in the coming legislative session, which begins Jan. 31.

“These are the kinds of things you take incrementally,” he said. “I’ve kind of gotten away from being the main sponsor. … I think that’s something which I’ll leave to the other senators.”

The National Transportation Safety Board called for a ban Dec. 12 on all cell phone use in vehicles, including with hands-free devices and wireless headsets. No state has such a ban today.

Also Tuesday, Cullerton said he believes the state could pay off its backlog of unpaid bills by selling roughly $6 billion in bonds. The borrowing would be paid off with general revenue funds over the next seven years, he said.

Republicans have balked at such proposals, saying that it amounts to more borrowing in an already debt-ridden state.

“We have not been for that and will continue not to be,” Senate Minority Leader Christine Radogno, R-Lemont, said in December.

Democrats respond that Illinois already owes the money. It isn’t fair to, in effect, borrow the money from non-profits, local governments, schools and others who are owed money, they say.

“It’s not new borrowing. It’s being responsible,” Cullerton said. “It would force us to find $1 billion in cuts a year over the next seven years.”

Illinois has 129,000 unpaid bills totaling $3.36 billion in the general revenue fund, plus $970 million owed to schools for a total of $4.33 billion owed out of GRF, according to Comptroller Judy Baar Topinka’s office. The oldest bill is dated Sept. 1, 2011.

When Medicaid bills being held by the Department of Healthcare and Family Services, corporate tax refunds and employee health insurance debts are added in, the comptroller believes the total owed is roughly $8.3 billion.

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Cullerton on other issues

* Pension reform will be on the Senate’s agenda. Senate President John Cullerton said Tuesday he believes that unilaterally changing benefits for current employees is unconstitutional, so a House bill that would increase contribution rates for employees and set up a three-tiered pension system won’t pass muster before the courts.

He hopes to negotiate a solution with public employee unions this year.

* Cullerton believes a gambling expansion bill could still become law, even though Gov. Pat Quinn opposes the one that sits in the Senate, which has passed both chambers. Quinn has outlined a proposal he can support, Cullerton said, so it will be up to the House and the governor to work out a deal.

* Cullerton would like to see a fairer corporate income tax. Two-thirds of Illinois corporations pay no tax while those that do have complained about the increase in the rate that passed a year ago.

* Cullerton also announced changes in the staff of the Senate and Senate Democrats.

– Dave Gross will replace Andy Manar, who is running for the Senate, as chief of staff for Senate Democrats. Gross will earn $179,500, which is what he previously made at Southern Illinois University, according to a Cullerton spokeswoman.

– If approved by the full Senate, Illinois Commerce Commission executive director Tim Anderson will replace Jill Rock as secretary of the Senate at a salary of $130,795. Twenty-one candidates were considered for the position. The field was narrowed by a committee of former secretaries of the Senate and former state Sen. Patrick Welch, Cullerton said.

Anderson has been at the ICC post since 2006.

– Cullerton’s deputy press secretary, John Patterson, will replace Toby Trimmer as the Senate Democrats’ director of communications at a salary of $95,000.

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

Illinois Tollway drivers may pay for $12B in projects

Friday, July 29th, 2011

Tolls could be going up next year for Illinois Tollway drivers.

Officials announced Thursday a plan to increase tolls to pay for a $12 billion project to repair and expand Chicago-area expressways.

Tolls would increase from 80 cents to $1.50 for cash-paying vehicles. For I-Pass users, tolls would rise from 40 cents to 75 cents.

The Tollways wants the rates to take effect Jan. 1. Public hearings will be held next month and the tollway board could vote on the plan Aug. 25.

The 15-year construction project would rebuild the Jane Addams Tollway to Rockford, fix 20 miles of the Tri-State Tollway and add an interchange in the south suburbs. The plan includes converting the Elgin-O’Hare expressway into a tollway with access to O’Hare International Airport.

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

Governor to sign school athletes concussions measure

Thursday, July 28th, 2011

Student athletes from elementary to high school will get better safeguards against concussion injuries under a law Gov. Pat Quinn is set to enact.

A 10 a.m. signing ceremony was set for Thursday at Chicago’s Soldier Field.

The law requires student athletes with concussions to get medical approval before resuming play. It also requires education for coaches, parents, referees and players about concussion symptoms.

Several other states have enacted similar laws.

Repeat concussions and returning to play too soon raises risks for permanent brain damage.

Many athletic directors in the state support the law because it will put schools all on the same page. But some worry about lack of funds to pay for trained staff to monitor athletes and make sure they’re removed from play after a suspected concussion.

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

Post office closures could include 13 in central Illinois

Wednesday, July 27th, 2011

The announcement Tuesday that the U.S. Postal Service is considering closing one of every 10 of its retail outlets could mean changes in as many as 200 small communities in Illinois, including more than a dozen in the Springfield area.

The Capitol Station, in the Capitol Complex in Springfield, is among central Illinois locations being reviewed for possible closure.

The Postal Service said it will study 3,653 local offices, branches and stations across the country for possible closing, but may replace many of those with “Village Post Offices,” in which some postal services are offered in local stores, libraries or government offices. 

Although none of the postal employees contacted by The State Journal-Register in communities on the list would comment for the record, they didn’t seem surprised their facilities would be reviewed.

At the Glenarm post office, about 5 miles south of Chatham, the two women working Tuesday morning said they hadn’t received official word that the post office was being considered for closing. Glenarm has had a post office since at least 1914.

Some don’t see the possible loss of the post office as a bad thing.

“I don’t really see any detriment to that,” said Darrell Adcock, who lives in Loami, but operates Adcock Auction Service in Glenarm and Auburn. “If they close the post office, they’d start delivery, right?”

He said his Auburn office, where he spends most of his time, is only a block from the post office there, and he finds it more convenient to use the Auburn facility.

Changes coming

So far, the facilities are merely under review. No closing decisions have been made.

“It’s no secret that the Postal Service is looking to change the way we do a lot of things,” Postmaster General Patrick Donahoe said. “We do feel that we are still relevant to the American public and the economy, but we have to make some tough choices.” 

Coming under review doesn’t necessarily mean an office will close. The post office said in January it was reviewing 1,400 offices for closing. Only 280 have been closed to date, while 200 more have finished the review process and will remain open.  Another 620 are still in the review process, and 300 will move to the new review list.

Once an office is selected for review and a notice posted, customers served by the office will have 60 days to file comments, said Postal Service spokesman Jim Mruk. If an office is to be closed, any customer will be able to appeal to the independent Postal Regulatory Commission.

Mruk said the review study will look at things such as retail traffic, revenue, the number of customers served and what alternative postal access is available to them.

Delivery if needed

Some of the facilities may be replaced with what the Postal Service calls its Village Post Office concept.

“If we can find a local business interested in offering limited services — but some of our more popular services, such as stamp purchases and mailing flat-rate packages — we would do that,” Mruk said. “If they are large enough, they could offer post office box rental.”

Already some 70,000 locations, such as supermarkets and department stores, sell stamps. And Mruk said that 80 percent of retail postal services, including stamp purchases, can be done online.

“You can print a mailing label, pay for postage and order a pickup from the carrier,” he said.

If there is no home delivery in a community where a post office was tabbed for closing, the Postal Service will either begin delivery services or establish a central collection point for people to pick up mail, Mruk said.

“We won’t have people driving five miles to the nearest post office to pick up their mail,” he said.

The postal service operates 31,871 retail outlets across the country today, down from 38,000 a decade ago. In recent years, business has declined sharply as first-class mail has moved to the Internet. In addition, the recession resulted in a decline in advertising mail, and the agency lost $8 billion last year. 

Lack of use

Most of the offices that face review are in rural areas and have low volumes of business. As many as 3,000 post offices have only two hours of business a day even though they are open longer, said postal vice president Dean Granholm. 

If all the facilities on the list were closed, it would mean a job loss for about 3,000 postmasters, 500 supervisors and another 500 to 1,000 clerks, Granholm said.

Among 3,653 facilities slated for review, 84 percent, or 3,061 post offices had less than $27,500 in annual revenue, or two hours of workload daily.

Over the last four years the Postal Service, which does not receive tax funds for its operations, has cut its staff by about 130,000 and reduced costs by $12 billion.

Area post offices on the review list

Capitol Station (Springfield)

Nilwood

Sawyerville

Alexander

Chestnut

Cornland

Kilbourne

Lake Fork

Lawndale

Glenarm

Rosamond

Tovey

Waggoner

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

S. Illinois congressman’s son takes state House seat

Tuesday, July 26th, 2011

The newest Jerry Costello in Illinois politics says he’s proud of the family name and will strive to live up to it.

Jerry Costello II was sworn in Monday to fill a vacant seat in the Illinois House in a district that includes parts of Monroe, St. Clair, Randolph and Perry counties.

The son of Congressman Jerry Costello is an Army veteran and former police officer who’s worked as a financial adviser. He’ll complete the term of the newly retired state Rep. Dan Reitz. That term expires in January 2013.

The 42-year-old Smithton resident was picked by Democratic leaders from St. Clair, Monroe, Perry and Randolph counties. Costello’s Illinois House district covers all or parts of those counties.

The elder Costello has served in Congress since 1988.

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

Illinois gets $146 million for military construction

Monday, July 25th, 2011

The U.S. Senate has approved more than $146 million for military construction projects in Illinois.

U.S. Sen. Dick Durbin says the projects were included in President Barack Obama’s 2012 budget.

The money has been slated to fund a $10 million training and support facility for the Army National Guard in Normal and changes to the Vietnam Veterans Memorial Army Reserve Center in the southern Chicago suburb of Homewood.

Durbin’s office also says $12.8 million will be used for the Army Reserve Center in Rockford.

The largest chunk of money, more than $107 million, will be used for a new heating system and health clinic at the Great Lakes Naval Station in northern Illinois. 

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

EPA: Illinois gets $5M in grants for cleaner water

Friday, July 22nd, 2011

Several Illinois communities will get nearly $5 million in grants to reduce the amount of pollution running into the state’s waterways.

They’re called Green Infrastructure Grants and entities apply in one of three categories — combined sewer overflow, storm retention and infiltration, and small projects.

The money was announced Thursday by the Illinois Environmental Protection Agency.

More than a dozen communities and entities will get the grants.

They include the city of Joliet, which is getting $820,000 for footing tile separation program, and the city of Danville, which will receive $750,000 for a high school campus improvement project.

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

Republicans sue over Illinois legislative remap

Thursday, July 21st, 2011

Taking aim squarely at the new Decatur-Springfield Illinois House District, Republicans sued in federal court on Wednesday to block the new state legislative map.

A key part of the lawsuit, filed by House Minority Leader Tom Cross, R-Oswego, and Senate Minority Leader Christine Radogno, R-Lemont, in Chicago, alleges that the new 96th Illinois House District was illegally drawn to benefit blacks.

That contrasts with one of the lawsuit’s other major claims – that when legislative Democrats drew the map, they did not create enough districts designed to elect black and Hispanic lawmakers.

Asked to explain the seeming contradiction, Cross spokeswoman Sara Wojcicki said, “The U.S. Supreme Court has recognized that while race is an important factor to consider, it may not be the predominant factor over all other traditional redistricting principles, such as compactness, communities of interest and political fairness.”

One of the people who helped craft the 96th District said the attack on it is simply political.

“The district in question does meet all of the requirements set forth in the constitution,” said Springfield Ward 3 Ald. Doris Turner, who is weighing a run for the seat. “This appears to be sour grapes on part of the Republicans who are seeking to hold on to districts they currently occupy.

“They can’t on the one hand say there should be more minority representation in certain areas but then speak against it when it does not suit their legislative needs.”

 25 percent minority

The 96th District stretches from Springfield’s east side south to Kincaid and includes most of Decatur. It contains a black voting-age population of roughly 25 percent. It would be impossible to draw a majority-black district in the area.

However, the 96th might be considered a “crossover” or “influence” district, one in which enough minority voters, in combination with some white voters, have a chance to elect a preferred candidate or at least influence the outcome of elections.  Such districts have limited protection under Illinois law, but not federal

The lawmaker who lives in the 96th District, Rep. Adam Brown, R-Decatur, is named as a plaintiff in the case. Brown did not return a phone call seeking comment. He has said he will run in the more Republican friendly 102nd House District.

The lawsuit says there should be 18 House districts with majority-black representation but that Democrats drew only 16. They also argue there should be more Hispanic majority, crossover and influence districts, but don’t say how many.

“We believe the court will determine the number” of Latino districts, said Radogno spokeswoman Patty Schuh. “We do not believe that the Democrat map provides a fair opportunity.”

Democrats say map fair

Democratic legislative leaders and Gov. Pat Quinn have said the map is fair.

“We are taking time to review the complaint and we intend to confer with the attorney general’s office,” said Rikeesha Phelon, a spokeswoman for Senate President John Cullerton, D-Chicago.

Republicans also asked that the court strike down the map because citizens didn’t get enough time to review it and because it unfairly dilutes Republican voting strength throughout the state. Twenty-five Republican incumbents were put in districts with other lawmakers, compared to eight Democrats, the lawsuit says.

“The U.S. Supreme Court has found that mapmakers may not penalize voters because of their First Amendment right to associate with a political party or express their political views,” Wojcicki said.

But the court has never overruled a politically gerrymandered map on those grounds.

“In a series of cases over the past two decades, the U.S. Supreme Court has declined to overturn redistricting schemes even when they are clearly designed to boost one party over the other,” according to “A Media Guide to Redistricting,” by Erika Wood and Myrna Perez, redistricting experts at the Brennan Center for Justice at the New York University School of Law.

Uphill legal battle

Kent Redfield, emeritus professor of political science, said it’s unlikely the Republicans will blaze new legal ground.

“You’d have to have to have a situation where you’re wiping out the Republican Party,” he said. “The chances of a court accepting that argument are not very great.”

Absent as plaintiffs in the lawsuit was any group representing minorities. The Mexican American Legal Defense and Educational Fund, or MALDEF, said it was still studying the map and the Republicans’ lawsuit. The group, which has successfully sued to overturn previous maps, opposed the map during the legislative session.

“We continue to have discussions with MALDEF and other groups,” Schuh said.

State Sen. Martin Sandoval, D-Cicero, said he supports the new map and was critical of the Republicans’ lawsuit.

“They’re Johnny-come-latelies in supporting the Latino community in Illinois,” he said.

The lawsuit will be paid for out of state funds allocated to the four legislative caucuses for redistricting, although Wojcicki did not provide an estimate of how much has been spent on the suit so far.

Background

New election districts for the General Assembly were approved in the closing days of the legislative session by party-line votes in both chambers. Lawmakers must redraw state legislative and U.S. congressional districts every 10 years following the U.S. Census.

 The congressional map

The lawsuit filed Wednesday does not deal with U.S. House districts drawn by Democrats. A lawsuit addressing those districts is expected to be filed later.

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