SPRINGFIELD, IL – Despite the state’s ongoing credit woes, improved market conditions allowed Illinois to achieve a near record-low interest rate on construction bonds sold April 2. But that good news was tempered by a report from the University of Illinois showing that the state’s economic growth continues to lag behind the rest of the nation and has slowed after three years of improvements, State Sen. Sue Rezin (R-Morris) said.
In other legislative news:
• Local governments are raising concerns about a proposal from Gov. Pat Quinn to reduce the their share of state income tax revenues;
• The Quinn administration has begun implementing a revised early-release program for prisoners, after suspending the practice more than three years ago;
• The state is beginning to accept health insurance proposals for inclusion in the Illinois health insurance exchange which will be established as part of the federal Affordable Care Act, commonly known as Obamacare; and
• In a pair of editorials the Chicago Tribune first asks, if scrubbing 13,700 ineligible persons from the Medicaid rolls was “low-hanging fruit,” why did the state wait for an outside consultant before taking action? The publication then urges lawmakers to carefully consider the options before adding hundreds of thousands of new recipients to the Medicaid program.
State Sells Construction Bonds
Illinois sold a total of $800 million in bonds for construction projects on April 2, getting a 3.92% interest rate on $450 million of tax-exempt bonds, which matches a 20-year low the state received in Jan. 2012. On the second set of bonds, Illinois received a 4.97% rate on $350 million in taxable bonds, which was better than the 5.29% the state received in Jan. 2012 on similar bonds.
Despite the relatively low rates, Illinois continues to pay a higher interest rate than states with better credit ratings.
State’s Recovery in Peril?
Warning signs are showing up in the state’s economy, according to a University of Illinois “flash index” released at the beginning of April. The index showed that while the state’s economy continues to expand, the rate of that expansion slowed slightly in March.
The University’s report coincides with the latest unemployment report, which showed unemployment is higher in 10 out of 12 metropolitan areas, when comparing Feb. 2013 to Feb. 2012. Statewide, unemployment rose to 9.5% in February, from 9% the previous month and 8.9% in February, 2012.
Local Governments Worried about Revenue Sharing
Governor Quinn has suggested that the state could help close its budget gap by freezing local revenue sharing dollars at the same level as 2012. Not surprisingly, a number of municipalities are gearing up to oppose the plan.
Recently, Arlington Heights officials warned they would lose as much as $863,000 in increased funding if the plan is adopted. The Quinn administration estimates the freeze would reserve about $68 million for the state budget and amount to about $5.30 per resident for each municipality. However, the Illinois Municipal League, which represents many city governments, has put the cost at closer to $11.50 per resident and says it would allow the state to divert $148 million.
Quinn Resumes Early Release
In late March, the state’s Department of Corrections released the first inmates under a revised early release program. It was the first early release in three years.
Early release of prisoners had been suspended after the Associated Press uncovered a series of problems in late 2009 and early 2010. At the time, it was revealed that under a controversial “Meritorious Good Time-Push” program the Department of Corrections was releasing prisoners, including some with a history of violent crimes, after an average stay of just 16 days.
The revised program grants non-violent offenders up to 180 days of early release credit if they meet specified criteria.
First Steps toward Health Exchanges
Insurance companies have begun submitting plans to a state review panel in anticipation of the launch of the federal Affordable Care Act, sometimes known as “Obamacare.”
A key component of the federal healthcare law is the establishment of insurance “exchanges” designed to offer individuals and small businesses one-stop shopping for health insurance. Insurance plans are to be available for comparison beginning Oct. 1 and coverage would start in 2014.
The state expects up to 400 different plans will be submitted for review and possible inclusion on the health exchange website. However, some of the state’s largest insurance companies are still weighing whether or not to participate in the Illinois exchange. Plans available through the exchange will be required to meet a base level of coverage and meet strict financial restrictions. The state estimates it will be September before the website goes live and consumers can begin comparing plans.
Medicaid Reform and Expansion
In a pair of recent editorials, the Chicago Tribune took a look at the state’s efforts to remove ineligible recipients from the state Medicaid program and then warned lawmakers not to rush to approve a massive Medicaid expansion.
The first editorial summarized early results of an audit ordered under bi-partisan Medicaid reforms adopted in 2012.
The Tribune wrote: “The initial results of this audit are … astonishing: Of the first 20,500 recipients screened by an outside contractor, the auditors recommend that 13,709 be removed from the rolls. Yes, that’s two-thirds of the first group screened, flagged as ineligible to receive their current Medicaid benefits.”
The editorial references a statement from the Department of Healthcare and Family Services Director Julie Hamos that this represented “low-hanging fruit,” because the individuals had already been red-flagged as suspicious.
So, the Tribune editorial asks: “Why didn’t state officials pluck this low-hanging fruit long ago?”
The second editorial looks at a major Medicaid expansion contained in Senate Bill 26, which passed the Senate in February with no Republicans supporting it. The bill is currently before the Illinois House.
Although the federal government is expected to pick up the bulk of the cost for the expansion, the state’s Dept. of Healthcare and Family Services (HFS) has indicated the cumulative cost to the state could exceed $2.9 billion by 2020. The measure voluntarily expands the state’s Medicaid program eligibility to nearly 350,000 additional individuals, who are between the ages of 19 and 64 who are under 138% of the Federal Poverty Level.
Reminder to Apply for the Benefit Access Program Early
Sen. Rezin reminds residents to apply early for the Benefit Access Program, formerly known as the Circuit Breaker Property Tax Relief Grant. Benefits that are now available are Seniors Free Transit Ride, the Persons with Disabilities Free Transit Ride, and the Secretary of State License Plate Discount. Paper applications are no longer available. You can access the application by clicking here. If you need assistance, contact the Senior HelpLine at 1-800-252-8966 or 1-888-206-1327 (TTY), or call Sen. Rezin’s district office at 815-220-8720 with questions.