CAPITOL RECAP: Comptroller braces Illinoisans for rough fiscal year ahead

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UPDATED WEDNESDAY, JULY 8

By Capitol News Illinois

SPRINGFIELD  – The state of Illinois, like most states, began a new fiscal year on July 1 and the person in charge of managing the state’s bank accounts said she fears it could be one of the most difficult years in modern memory.

“This is going to be, I think, by far perhaps the most challenging year that I've had to manage as comptroller,” state Comptroller Susana Mendoza said in an interview Wednesday, July 1. “And that's saying something because, you know, I had to navigate the state through what was, when I took office, the worst fiscal crisis that our state had ever experienced, that two-year budget impasse.”

The difference between then and now, she said, was that during the budget impasse, the state still had revenues flowing in, just no legal authority to spend it. But in the face of the COVID-19 pandemic, and the near shutdown of the state’s economy that it forced, Illinois now isn’t seeing anything close to the revenues it will need to fund the new budget.

The financial impact of the pandemic started to appear in state revenues in April and May. Before then, Mendoza noted, Illinois was in relatively good shape with a nominally balanced budget in place and revenues coming in greater than expected. The state was even making progress on paying down its backlog of past-due bills.

But that all changed in April after Gov. JB Pritzker extended the tax filing deadline to July 15, which took a big bite out of revenues the state normally would have seen that month. Meanwhile, the state’s unemployment rate shot up to an unprecedented 17.2 percent in April as employers throughout Illinois were forced to shut down or scale back operations due to the novel coronavirus.

As of Wednesday, according to the comptroller’s website, the bill backlog stood at $5.4 billion. But Mendoza said that figure doesn’t tell the whole story because in order to keep the state running, it borrowed roughly $2.7 billion.

However, the plan for paying back that money, and any more the state may need to borrow this fiscal year, hinges on the idea that Congress will pass another economic relief package that will include significant relief for states — something it has not done yet and is still the subject of partisan wrangling on Capitol Hill.

Mendoza said there is no way for Illinois to make it through this new fiscal year without making draconian budget cuts if Congress doesn’t come through with that aid.

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JUDGE RULES ON PRITZKER ORDERS: All of Gov. JB Pritzker’s executive orders since April 8 pertaining to the novel coronavirus pandemic are void because he exceeded his authority when he used his emergency powers for more than 30 days, a Clay County judge ruled Thursday, July 2.

The Illinois Department of Public Health instead has “supreme authority” to close businesses and restrict residents’ activities in a public health crisis, Circuit Court Judge Michael McHaney added.

His decision, which he expanded to apply to all Illinoisans, is the latest ruling in Xenia Republican Rep. Darren Bailey’s lawsuit. He argued in his April 23 filing that the governor could not issue successive disaster proclamations to manage COVID-19.

The attorney general’s office is likely to ask a higher court to reconsider the order. Thomas DeVore, Bailey’s attorney, said business occupancy limitations and other restrictions can no longer be enforced.

An official in the governor’s office, though, said the judge’s ruling is one “contradicted by multiple other” judges. She added “it is not a final judgement and has no injunction.” Phase 4 of the reopening plan is in effect, she said.

McHaney did not agree with all of the points Bailey alleged, however. He rejected the argument that COVID-19 did not satisfy the definition of a “disaster,” as outlined in the law Pritzker cited in his executive orders.

“One problem with the governor’s approach was that he acted as though he knew better how people should behave,” Bailey said in a statement. “Instead of presenting facts and calling on people to respond in a collaborative way, hard and fast rules were imposed.”

Bailey entered the court Thursday afternoon and walked out to applause from a group of supporters who, the representative said, came from across Illinois. Several were wearing grey shirts that said, “My governor is an idiot.”

The ruling in his lawsuit, he told reporters after the hearing, is beneficial for all Americans — governors’ COVID-19 responses should not be unilateral. Instead, he suggested, local departments of health should make determinations “county by county.”

A spokesperson for Attorney General Kwame Raoul said officials are “reviewing” McHaney’s order and “evaluating our options.”

* * *

COVID-19 HEALTH STATISTICS: The state’s rolling seven-day COVID-19 test positivity rate ticked downward to 2.5 percent Tuesday, July 7, as the state remained among the lowest in the Midwest in the metric.

That number was driven downward by one-tenth of a percent due to a 2.2 percent one-day positivity rate for tests reported in the previous 24 hours. There were 597 new COVID-19 cases reported by the Illinois Department of Public Health on Tuesday among 26,994 test results.

There were also another 37 reported COVID-19-related deaths – a drastic spike from Sunday’s and Monday’s total of six each that fit an IDPH pattern of low weekend numbers ahead of a higher Tuesday result.

That brought the total number of deaths related to the virus to 7,063 among 148,452 confirmed cases since the pandemic arrived in Illinois. There have been more than 1.8 million tests completed in the state.

Hospitalization metrics remained near their pandemic lows at the end of Monday as well. As of 11:59 p.m. Monday, there were 1,385 people hospitalized with COVID-19, the fourth straight day that number was below 1,400 as it decreased slightly from the day before.

Of those patients, 320 were in intensive care unit beds – the second-lowest one-day total since the state began reporting the data daily on April 12. There were 153 COVID-19 patients on ventilators, an increase of two from the day prior when that metric saw its single-day low.

At least one confirmed case of COVID-19 has now been reported in all of 102 Illinois counties, as Scott County reported its first case over the holiday weekend. It’s the first positive case among 547 tested, according to IDPH data.

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GRADUATED TAX AMENDMENT: Days after the governor donated $51.5 million of his personal fortune to a committee supporting a graduated income tax constitutional amendment, a new coalition has begun an effort to defeat the measure.

At stake is Gov. JB Pritzker’s signature policy proposal – a constitutional amendment scrapping the state’s protection of a flat-rate income tax for a new structure allowing lawmakers to tax different levels of income at fluctuating tax rates. A rate structure that would take effect if the amendment passes is expected to bring in more than $1 billion in additional state revenue this fiscal year and more than $3 billion annually when it is implemented for a full fiscal year.

Pritzker’s whopping check, reported over the July 4 holiday weekend, went to the Vote Yes for Fairness ballot initiative committee, to which he had already donated $5 million. The only other donation to the committee was for $250, so the governor is basically self-funding the committee’s push for the constitutional change from his estimated $3.4 billion fortune.

On Tuesday, July 7, in four cities, a group of business-tied organizations – including the Illinois Chamber of Commerce, Illinois Farm Bureau, National Federation of Independent Business-Illinois and the Technology and Manufacturing Association – called concurrent news conferences in four cities to make their case against the proposal.

Todd Maisch, president of the Illinois Chamber, said at the news conference the coalition – which he is hopeful will grow to include several more business groups – was “not prepared” to address how much it was willing to spend on the fight.

“However, there will be resources,” he said. “But again, the important thing is we don't need to match the proponent spending. We only have to go ahead and be competitive. We don't need to spend dollar for dollar because this is, frankly, an unpopular idea once voters figure out what's really going on. … If the proponents were certain that they had this in the bag, would they have written a $51 million check? I don't think so.”

The news conference prompted a swift pushback from pro-amendment groups, including from Vote Yes for Fair Tax, another committee backed by community and advocacy groups, labor organizations and faith groups.

“Working people overwhelmingly support the fair tax amendment because everyone who makes under $250,000 will get a tax cut or pay no more,” John Bouman, the group’s chairman, said in a news release.

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ILLINOIS ECONOMY: The Illinois economy shrank at an annual rate of 5.4 percent during the first quarter of 2020 compared to the previous quarter, according to federal data released Tuesday, July 7, an indicator of just how severely the COVID-19 pandemic affected commercial activity.

The gross domestic product figures for the January-through-March period represent the total value of goods produced and services provided during the quarter.

University of Illinois economist Fred Giertz said in an interview that virtually all of the decline occurred in the final weeks of March, after Gov. JB Pritzker issued a statewide stay-at-home order that forced many businesses, schools and other employers to shut down or scale back operations.

“All the evidence suggests that the first two months of January-February were not impacted very much by the virus issue, but then they have a huge impact and in March even though the formal shutdown didn't begin until the last week or so of March,” he said.

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Nearly all sectors of the economy took significant hits during the quarter led by arts, entertainment and recreation, which took the biggest hit with a 36 percent rate of decline. Accommodations and food service fell at a rate of more than 27 percent.

Other sectors taking big hits included finance and insurance, down 10.6 percent, and transportation and warehousing, which includes airline and rail transportation, which fell at a 9.8 percent rate.

The only bright spot in the report was the agricultural sector – one area of the economy that was not affected by the stay-at-home order – which grew quarter-to-quarter at a rate of 183 percent.

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BALLOT ACCESS LAWSUIT: Illinois’ chief election authority told a federal appeals court Monday, July 6, it wants to continue its appeal of looser election rules for third-party candidates.

If an appeals court agrees, the matter is unlikely to be settled before the July 20 petition filing deadline granted by Rebecca Pallmeyer, chief judge of the Northern District of Illinois. She extended the cutoff established by statute in response to a lawsuit challenging the constitutionality of the state’s election rules during COVID-19.

While the appeals court’s decision is unlikely to affect ballot access for third parties in the current general election cycle, its decision could have implications on future elections as the state continues to grapple with the COVID-19 pandemic.

In its court filing, the Illinois State Board of Elections acknowledged that date is “quickly approaching,” but points out “it has not passed.” The issue presented in the case — “a District Court’s authority to rewrite Illinois’ statutory requirements that govern how the board conducts an orderly election during the COVID-19 global pandemic” — is one that might resurface.

The novel coronavirus is present in Illinois, the board argued, and will remain so for an “unknown” amount of time.” Because confirmed cases are rising in a number of other states and might climb in the Land of Lincoln, “it is possible it could last beyond the 2020 election and into future elections,” according to the document.

The State Board of Elections is asking the 7th ­­U.S. Court of Appeals to agree the case should proceed and to set a schedule for both sides to file their arguments. It wrote in its document it does not want oral arguments.

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REP. TURNER RETIRES: State Rep. Arthur Turner, D-Chicago, announced his retirement from the Illinois House effective Friday, July 3.

Turner, a deputy majority leader in the House, had served in the 9th District on the west side of Chicago  since 2010. It’s a seat that was formerly held by his father, Arthur Lee Turner, who held it for about 30 years and now operates a lobbying firm in Chicago.

“I will forever be grateful for the privilege of serving the people of Illinois and the opportunity to ensure that the voices of my community were heard loud and clear in state government,” Turner said in a resignation letter submitted to Secretary of State Jesse White on Friday.

Turner did not file for re-election in 2020, so the resignation cuts his final term short by about a half of a year. The timing of his announcement also means Democratic Party officials in the district will have to appoint a successor before the fall veto session.

Lakesia Collins, a Chicago Democrat, won a crowded March primary to replace Turner as the Democrat on the November ballot. She received 46 percent – or more than 7,000 votes – topping seven candidates, including Turner’s brother Aaron Turner.

Collins is a nursing home organizer for the Service Employees International Union, or SEIU.  

The retiring Turner did not state what he intends to do after leaving the House. His office did not immediately respond to a request for comment.

* * *

GOP LEGAL CHALLENGE DENIED: A federal judge on Thursday, July 2, denied a request for a temporary restraining order that would have allowed Illinois Republican Party groups to host large fundraising events.

In the lawsuit, the state GOP argued that Gov. JB Pritzker’s 50-person cap  on gathering sizes — which was a 10-person cap when the lawsuit was filed — does not apply to religious organizations, and the governor “declined to enforce” his order against protesters demanding an end to systemic racism.

The GOP — along with the Will County Republican Central Committee, Schaumburg Township Republican Organization and Northwest Side GOP Club — argued that applying those exemptions to protestors and religious institutions but not to political parties created an “unconstitutional content-based restriction on speech,” according to a court document.

That, the Republicans claimed, was a violation of their First and 14th Amendment rights under the U.S. Constitution, which grant freedoms of speech and demonstration, as well as equal protections under the law.

U.S. District Court Judge Sara L. Ellis, of the Northern District of Illinois’ Eastern Division, denied the request for a temporary order that would allow the GOP to resume large gatherings, stating that granting the relief “would pose serious risks to public health.”

Illinois GOP Chairman Tim Schneider said lawyers were already working on an appeal.

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EQUAL RIGHTS AMENDMENT: Illinois’ top lawyer wants a U.S. court to compel a federal official to formally acknowledge the Equal Rights Amendment received enough state support to be added to the U.S. Constitution – a largely procedural step that has thus far blocked the amendment from ratification.

The case centers on a decision by U.S. National Archivist David Ferriero, who was effectively ordered by the U.S. Department of Justice to deem passage of the Equal Rights Amendment – which would add protections for women as the 28th Amendment to the nation’s governing document – unsuccessful because multiple states missed a key congressional deadline.

Ferriero, who was appointed archivist by President Barack Obama in 2009, has since insisted that, unless a judge orders him to acknowledge the amendment’s passage, he will not do so.

When Congress introduced and passed the initiative in 1972, it set a seven-year deadline for state ratification, which was later extended to 1982. By then, only 35 states formally approved the language, five of which — South Dakota, Idaho, Kentucky, Nebraska and Tennessee — withdrew their backing in the 1970s.

In the last three years, Nevada, Illinois and Virginia became the last three states to approve the proposal.

In response to Ferriero’s insistence he would not officially certify the Equal Rights Amendment without a judge’s order, Illinois Democratic Attorney General Kwame Raoul, joined by his counterparts in Nevada and Virginia, filed a lawsuit in late January.

The archivist later asked a judge to dismiss the case. The attorneys general argued in a document filed Monday, June 29 that if that request is granted, the “careful balance our founders” established in the constitution between states and the federal government would be “upended.”

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UNEMPLOYMENT CLAIMS: The number of Illinois workers receiving state unemployment benefits fell by more than 29,000 during the last week of June as many businesses resumed operations after 14 weeks under a stay-at-home order brought on by the COVID-19 pandemic.

The U.S. Department of Labor said Thursday, July 2, there were 676,338 people in Illinois receiving continuing unemployment benefits during the week that ended June 27. That was 29,511 fewer than the previous week.

First-time unemployment claims also fell to 45,249, a decrease of 1,027 from the previous week, but still a 463 percent increase over the same week a year ago when only 8,038 initial claims were filed.

In addition to those workers who qualify for traditional unemployment benefits, another 32,587 Illinoisans filed first-time claims for Pandemic Unemployment Assistance, more than triple the number from the week before. PUA is a program funded entirely by the federal government under the CARES Act to extend benefits to independent contractors who aren’t normally covered under traditional state-funded unemployment.

The Department of Labor also reported figures for the Pandemic Emergency Unemployment Compensation program for the week that ended June 13, two weeks earlier than the other unemployment numbers. PEUC is another federally-funded program that extends benefits for up to 13 weeks for people who have exhausted their state-funded benefits. That was down 15 percent from the week before.

First-time PEUC claims during that week in mid-June totaled 32,604, a decrease of 14 percent from the prior week.

 

Capitol News Illinois is a nonprofit news service operated by the Illinois Press Foundation that provides coverage of state government to newspapers throughout Illinois. The mission of Capitol News Illinois is to provide credible and unbiased coverage of state government to the more than 400 daily and weekly newspapers that are members of the Illinois Press Association.

 

 

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