Rep. Wheeler's Weekly Roundup: October 21

State Government – Cutting the Red Tape Initiative
·         Governor Rauner issues executive order creating Illinois Competitiveness Council.  Governor Bruce Rauner has announced a comprehensive plan to promote economic growth and job creation by cutting the red tape in Illinois. He signed Executive Order 16-13 to review all agency rules and regulations by the newly-created Illinois Competitiveness Council.

“For years, Illinois has added layers and layers of burdensome rules and regulations to a never-ending bureaucracy,” Governor Rauner said. “It’s an endless line of red tape that creates a barrier for small businesses and entrepreneurs. By cutting the red tape, we are creating an environment where they can succeed.”

The Illinois Competitiveness Council will be comprised of a representative of each of Illinois’ regulatory state agencies. Its goal is to save Illinoisans at least $250 million in direct license fee costs over the next decade, and save Illinois taxpayers and business owners at least 4 million pages in paperwork. It will work to ensure current regulations are up to date and relevant to today’s industries and practices; ensure the language in rules are easy to understand; reduce the amount of unduly burdensome requirements on businesses, social service providers, and citizens through both time and cost; and ensure there is a clear need for the regulation.

“Illinois is currently a patchwork of duplicative, contradictory and outdated regulations,” said U-Jung Choe, Chairwoman of the Illinois Competitive Council. “The Illinois Competitiveness Council will take an all-encompassing look at the state’s policies, rules and regulations to cultivate an atmosphere that makes it easier for small businesses and entrepreneurs to grow and flourish.”

In addition, the Illinois Competitiveness Council will look for recommendations to improve Illinois’ licensing environment to promote job growth and job creation. Currently, the Illinois Department of Financial and Professional Regulation (IDFPR) has more than a million active licenses in more than 200 license categories, however for nearly a third, IDFPR has issued fewer than 100 licenses. The growth of these licenses has increased 184 percent in the last 20 years.

"Clearing out red tape liberates everyone -- teachers, doctors, small businesses, and public servants,” said Philip Howard, founder of the Common Good, a nonpartisan reform coalition. “It's hard to compete in a fast-moving world when hacking through a bureaucratic jungle. Modernizing regulation will make government better and Illinois more competitive.”

Kentucky, Indiana, Colorado, and Massachusetts have all successfully reviewed their rules and cut red tape to give their citizens a more competitive advantage over Illinois citizens. Burdensome and unnecessary regulations, policies and licensing requirements disproportionately impact small businesses, particularly minority-owned businesses.

In order to have the greatest impact, the Illinois Competitiveness Council is seeking input from the public on which rules and regulations are the biggest hindrance to people and businesses. Anyone can submit feedback to cut the red tape at www.illinois.gov/cut.

The Cutting the Red Tape Initiative follows actions by House Republicans to look closely at the burden imposed on small businesses and the private sector by the State’s existing administrative rules.  HB 3887, a bill sponsored in 2015 by Rep. Keith Wheeler, asked the State’s agencies to start up a five-year cycle to scrutinize all existing State administrative rules for their impact upon small business.  HB 3887 was signed by Governor Rauner as P.A. 99-370.  One of the goals accomplished by this week’s executive order was to create an institutional process to speed up and start implementing the scrutiny cycle created by this 2015 law. 

Budget – Almost $10 Billion in Unpaid Bills
·         Latest figures show further worsening of Illinois financial position.  The red-ink figure posted by Comptroller Leslie Geissler Munger, which has fluctuated between $8 billion and $9 billion for an extended period of time, has now definitively soared above $9 billion.  Illinois’s unpaid-bill level had moved above $9.9 billion as of Wednesday, October 19.  Further fluctuations can be expected as bills are presented and parts of the backlog are paid.

The Illinois Comptroller is the official who manages the cash flows of the State.  As the keeper of the State’s checkbook, she is empowered to make payments reflecting all of the cash on hand.  She and her staff frequently recalculate and report the State’s General Funds Payables Backlog as a way of informing the public, especially those members of the public who have not yet received their payments, of the true cash-flow position of the State. 

Wall Street and credit-monitoring firms also watch the State’s cash flows and cash-flow position.  Less than three weeks ago, Standard & Poor’s lowered their rating of Illinois general-obligation debt to ‘BBB’ (triple-B) with a negative outlook.  This level stands only two notches above what is called “junk-bond” level.  “Junk bond” securities are debt securities that cannot be considered to be of investment-grade quality.        

Chicago – Lead in Park Drinking Water
·         Many park drinking fountains shut off in Illinois’ largest city.  Many of the traditional drinking fountains in many city of Chicago parks and playgrounds are being shut off this fall, and are not likely to be turned back on next spring.  More than 400 Chicago Park District drinking fountains have been shut off after tests showed unsafe levels of lead in their water flow.  The park district characterizes “unsafe” as lead levels that exceed 15 parts per billion.

Many older plumbing piping and fixtures, including piping and fixtures used in public drinking fountains in places like parks and schools, are made out of lead or use leaden pipefitting materials, such as lead solder.  Lead has previously been found in water from drinking fountains operated in Chicago public schools, suburban public schools, and parochial schools operated by the Chicago Catholic Archdiocese.  The expensive, labor-intensive process of tearing out and replacing old pipes and fittings is the only way to remediate these water flows and restore safety to threatened water supplies.       

Criminal Law – Inmate Segregation
·         Illinois Department of Corrections (IDOC) announces plan to reduce reliance upon disciplinary segregation.  The new IDOC plan, discussed at a public hearing on Wednesday, October 19, would ask IDOC personnel to take steps to reduce the number of inmates placed in segregation.  It would also increase the residual privileges granted to inmates in segregation; for example, under the plan, each segregation cell would have to have “visual access to natural light.”  The plan would require weekly visits to all segregation units by a mental health professional and a chaplain. 

Under the proposed policy, IDOC headquarters personnel – the Director of IDOC or a deputy director – would have to review all individual cases in which an inmate is segregated for an indeterminate length of time or for longer than a year.  IDOC field personnel are already reducing their use of disciplinary segregation.  The number of prisoners in this status has dropped from 2,157 on Jan. 1, 2015, to 1,336 on September 30, 2016.

Health Care – Affordable Care Act
·         Sharp ACA price increases in store for Illinois consumers in 2017.  The price hikes will affect purchasers of individual and household health insurance on the “Get Covered Illinois” Obamacare marketplace.  Price hikes have now been approved by State and federal regulators, and will be presented to customers seeking coverage for calendar year 2017.  The average rate increase will be 45% for coverage classified as relatively low-cost within the “silver tier.” 

Insurance firms, in seeking permission to raise their prices for Illinois Affordable Care Act (ACA) marketplace policies, presented evidence showing that the prices they have to pay for medical services and prescription pharmaceuticals have increased sharply since 2016 rates were approved.  The firms have also pointed to “risk corridor” payments that they had anticipated receiving from the federal government as compensation for a patient base that was sicker and demanded more health care services than had been anticipated. 

After no “risk corridor” payments were received, the health care insurance providers remaining active in the Illinois market stated that they had no choice but to increase rates to raise revenues sufficient to replace the missing cash flow.  The Illinois Department of Insurance published a table of approved ACA health coverage rates on Friday, October 14. 

Health Care – Drug Take-Back Day
·         Safe disposal of Rx drugs helps combat opioid epidemic.  Surveys of prescription drug abusers tell us that a majority of those with opioid addictions started by stealing unused prescription medication from friends and family.

The Illinois Medical Society (ISMS) has taken action to educate Illinois physicians and the public on ways to curb this epidemic. Last week, in partnership with ISMIE Mutual Insurance Company, ISMS distributed more than 11,000 kits promoting the importance of disposing of unused medications. The disposal kit contains information for doctors and patient materials highlighting the importance of proper disposal and what should be done with unused medications. The kit is also accessible for free download by anyone at www.isms.org/Take-BackThe ISMS has also teamed up with U.S. Drug Enforcement Administration’s (DEA) to promote its semi-annual Drug Take-back day on October 22.

This Take-back initiative addresses a vital public safety and public health issue. Medicines that languish in home cabinets are highly susceptible to diversion, misuse, and abuse. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet. In addition, Americans are now advised that their usual methods for disposing of unused medicines—flushing them down the toilet or throwing them in the trash—both pose potential safety and health hazards.

Help combat the opioid epidemic and keep your family safe by disposing of unused medication properly. Find a Take-Back location near you.

Higher Education – State Farm Center
·         November ceremony to mark completion of UIUC arena remodel.  The primary indoor sports arena used by the University of Illinois at Urbana-Champaign (UIUC), the State Farm Center, will be rededicated on November 29, as the Fighting Illini men’s basketball team plays N.C. State. 

The former Assembly Hall, which has welcomed orange-and-blue-clad fans for decades, had fallen short of the standards now enjoyed by major indoor arenas in Division I schools.  First operational in 1963, it is the primary home of University of Illinois men’s and women’s basketball.  The hall is also used for other major UIUC indoor sports teams and events.  Over a three-year period, friends of the University have supported major renovation work on the facility.  The remodeled State Farm Center now contains new team facilities, including locker rooms.  Sports fans will find arena air conditioning, a state-of-the-art video board, new seats and concession areas, and a wide variety of differentiated seating opportunities including hospitality club spaces.  The Mannie Jackson Illinois Basketball Hall of Fame will be located inside the west lobby.       

State Farm played an instrumental role in financing the $170 million renovation project.  The University of Illinois athletics department granted 30-year naming rights over the arena to State Farm in 2013.    

Jobs – September 2016 Unemployment Rate
·         Illinois’ jobless rate holds at 5.5%; manufacturing jobs continue multi-year decline.  The jobs report posted by the Illinois Department of Employment Security (IDES) includes the net creation of 7,400 new Illinois payroll jobs in September. As in previous months, new job creation was concentrated inside the services sector.  7,800 net new jobs were created in professional, business, education, health, and other services sectors.  There was a net loss of 800 jobs in manufacturing. 

The 5.5% unemployment rate was 0.4% higher than the nationwide rate of 5.1%.  It continues to reflect the removal of Illinoisans from the labor market, either by ceasing to search for work or by leaving the state.  Fewer people are working in payroll jobs in Illinois in September 2016 than the number working in the month of Illinois’ historic job peak, September 2000.  As was the case sixteen years ago, Illinois once again has more than 6 million workers collecting paychecks (then: 6.05 million; now: 6.02 million).  Today, however, less than one-tenth of this year’s Illinois workers are factory workers.  Employee headcount in the Illinois manufacturing sector was 567,900 in September 2016.  The IDES report was released on Thursday, October 20.    

Taxes – Illinois Telecom Taxes
·         Tax Foundation looks at Illinois wireless bills, finds high taxes and fees. The nonpartisan Tax Foundation, a Washington, D.C.-based think tank, has conducted a study of proliferating tax-and-fee add-ons to the wireless telephone bills paid by U.S. consumers.  Wireless phone services are taxed much more heavily than most goods and services we buy.  While most taxable goods and services are taxed at a single-digit rate, the Tax Foundation found that 18.6% of the average American wireless phone bill consists of fees and taxes.  A typical American household now pays $225 per year in wireless taxes, fees, and government surcharges.

The tax burden of maintaining wireless phone service is even higher in Illinois, where the average bill is 24.5% tax and fees.  Under federal and State law, Illinois wireless phone customers must pay taxes and fees to State, federal, and local governments.  The fees are paid into a variety of funds and used for a variety of purposes.  Local wireless phone tax revenues are typically used for the operating expenses of units of local government, while a major federal wireless phone fee is allocated to a program that tries to widen access to wireless phones for low-income households.  A significant portion of the State’s tax and fee structure on wireless phone service is allocated to operate, maintain, and expand 9-1-1 emergency-response services.

The state-by-state Tax Foundation survey found that the collective tax rate paid for wireless phone service by Illinoisans is the 4th highest among the 50 states.  Many states classified as high-tax states, such as California and New Jersey, charge much lower wireless taxes than does Illinois.  All of Illinois’ five neighboring states charge lower wireless taxes than Illinois, with rates particularly favorable to phone owners in Wisconsin (15.3%, as opposed to Illinois’ 24.5%).  

Illinois, as a state, imposes several different taxes on wireless phone service.  Proceeds of the telecommunications excise tax are divided between the General Revenue Fund, the Common School Fund, the School Infrastructure Fund, and the Tax Compliance and Administration Fund.  The money is divided by a complex formula that is embedded inside the State’s Telecommunications Excise Tax Act.  Additional fees, such as the State’s 9-1-1 fee, are taxed and listed separately on each wireless phone bill.       

Fall in Illinois – Specialty Crops
·         Horseradish, pumpkins, and squash among Illinois specialty crops featured.   The Illinois Department of Agriculture this week announced the award of more than $520,000 in grants to develop the status of Illinois specialty agriculture.  Much of the money will be paid to programs overseen by higher education researchers at Illinois’ public universities.  They are working with Illinois specialty crops, such as horseradish, vine crops, and wine grapes, to improve yields and fight back against pests.  Vine crops include pumpkins, squash, and gourds, which have been grown in Illinois since well before the time of European explorers.  More than 106,000 Illinois acres are used to grow specialty crops, with a particular emphasis on pumpkins and squash in the Peoria area.  Illinois grows more pumpkin than any other state.    

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