As I have discussed in previous weeks, the Governor and General Assembly will face many difficult and painful choices in the coming months as we deal with pension and Medicaid liabilities which are major cost centers in our state budget.  Setting our fiscal house in order for the short and long terms will not be an easy task….but each year the tough choices are put off, the alternatives only become more bleak.

I am honored to serve as a member of the Joint House and Senate Medicaid Committee, as well as with a bipartisan group of House members who are working to craft viable concepts to bring down current pension costs and reduce our unfunded liabilities.

Listed below are general topics of discussion among advocates and the legislature that eventually could be part of reform legislation:

Medicaid

• There are 3 major components of Medicaid cost: eligibility, provider payments and “optional” services offered. (The Federal Government considers such services as pharmacy benefits, hospice care, intermediate care for developmentally disabled, home- and community-based waiver services, among others as “optional”)
• The Department of Healthcare and Family Services is looking at the following areas, among others:
  • Reducing fragmentation of services to clients and increased care coordination
  • Better case management and care coordination for Seniors and People with Disabilities who are 15% of the client load, but account for 55% of costs
  • Moving from fee-for-service to managed care
  • Reforming payment methodologies for hospitals, nursing homes and other providers
  • Moving persons from more-expensive institutional care to community-based settings when appropriate
  • Reducing fraud and abuse, and upgrading eligibility determination systems
• As I said last week, FY13 cash outlay for Medicaid will be $8.5 Billion (with another $4.7 Billion in unpaid bills). When the Governor presents his budget message next week, we will see how significantly the department’s proposal reduces costs, or if more drastic changes to eligibility, provider payments or service changes will be required.

Pensions

• There are two elements involved in the issue of public pension reform: current year obligations and long-term funding of the currently (approximately) $88 Billion in unfunded pension liability for the 5 state operated retirement systems.
• The calculation of normal cost, shifts in actuarial assumptions, market fluctuations and the future value of money make any decision tremendously complex….and there is always the concern that shifting one section of the funding formulas could have unintended consequences for the employer, current employees and retirees so great care must be taken in implementing different strategies. Among the topics that are being discussed within the broader topic of current costs and benefit levels are (and I must stress that all of these are in the talking and evaluation stages still):
  • Cost sharing of normal cost between employers and employees
  • Hybrid plans (consisting of both defined benefit and defined contribution plans)
  • Salary caps for defined benefit plans with defined contribution thereafter (consistent with Social Security caps)
  • Retirement age
  • Final average salary calculation
  • Cost of living adjustment calculations
  • Cash balance plans
  • Transfer of employer share from the State taxpayer to the actual employer (mainly school districts outside of the City of Chicago)
• The following areas are among those being discussed when considering the unfunded liabilities of the plans (again all in the talking and evaluation stages):
  • Pension Stabilization Fund to reduce the unfunded liability with guaranteed revenue streams
  • “Hammers” to force the State to make required contributions such as independent quasi-governmental entities, constitutional amendment, 2/3 vote requirement to change appropriation, etc.
  • Revisions to the funding targets and schedules and underlying market valuation fluctuations
  • Differing amortization and/or smoothing models
• It is also important that as we evaluate these changes, we must be certain that we act within the various portions of the U.S. constitution and laws and State Constitution regarding diminishment of earned pension benefits, contract law and anywise otherwise illegal impairments to avoid long and costly court battles.

I look forward to updating you on the proposals as they come forward from the Governor’s Budget Address next week along with the subsequent legislative budget process, offer my evaluations, and as always seek your advice and suggestions. I can be reached in Chicago at 773 348 3434, in Springfield at 217 782 3835 or greg@gregharris.org

Governor Quinn just completed his annual State of the State speech to a joint session of the House and Senate, and the constitutional officers of Illinois.  As I listened, I was reminded that there are a great many good things that have happened in Illinois, but that shadow of our still precarious fiscal situation looms over everything else.

Governor Quinn reminded us that we have taken major strides down the path of pension reform, enacted changes to guarantee the sustainability and affordability of Workman’s Comp and Unemployment Insurance, overhauled McCormick Place and restored Chicago as a premier convention and trade show destination, rebuilt 5,948 highways and 842 bridges, are laying 4,100 miles of fiber optics to increase high-speed internet capacity, are funding major rebuilding of the CTA Red Line on the North Side, built and renovated more than 400 school and university buildings across our State.

In the last year we have passed nursing home safety legislation, passed major education reform, abolished the death penalty, celebrated civil unions and passed new ethics, campaign finance reform and recall laws, renewed the R&D Tax Credit and expanded the Earned Income Tax Credit for working families.

In his speech, the Governor said he will be proposing an “Illinois Jobs Now Agenda” which will consist of the following components:

• Abolishing the natural gas utility tax
• Establishing a Child Tax Credit ($100 per year to a family of four)
• Veterans Employment Tax Credit (for unemployed Iraq and Afghanistan veterans)
• Invest in early childhood education
• Change the minimum school attendance age to 18
• Significant increase to MAP grants

No details were provided in either our advance briefing before the speech or during the speech itself on what the details of these programs will be, what the cost will be or how they will be paid for.  Those will become clear as the days pass, and hopefully will become finalized when the Governor presents his budget to the General Assembly on February 22.

As a reporter for Channel 2 asked me after the speech, “Aren’t there elephants in the room that weren’t discussed?”  Yes. They are;

1)      The $8.5 billion backlog of bills owed to our healthcare providers, schools, childcare providers, nursing homes, transit agencies and other state vendors,

2)      The multi-billion pension payments that the state must make to compensate for the loss of asset value of our pension funds in the economic downturn, on top of making up for the so-called “pension holidays” taken by the government to balance earlier budgets (while the employees contributed their full share), along with the decision of whether state taxpayers should continue to pay the pension obligations of local governments, and

3)      The substantial increases in our Medicaid liability.  As eligibility has expanded over the years and more famlies lost their jobs and health insurance, we have seen tremendous increases of utilization of the Medicaid programs to provide healthcare for more and more Illinoisans who have no other option.  To reduce costs, there are 3 major components that can be addressed: eligibility, provider rates, and elimination or reduction of services provided.

Even as elephants go, those are big ones. And in the coming months, the legislature is going to be called upon to make heart wrenching decisions to restore our state’s financial integrity. There will be winners and losers. There will no easy or happy decisions.

I remain committed to providing you as many facts and as much insight as I can before I am called upon to cast my vote on these issues and to solicit your opinions and advice. I can always be reached in Chicago at 773 348 3434, at the Capitol at 217 782 3835 or at greg@gregharris.org

As Chairman of the House Committee on Human Services, I have called hearings this Friday along with the State Government and Administration Committee into a report of the Executive Inspector General and the DCFS Inspector General which details the perpetration of “large-scale fraud” against numerous state agencies from 2008-2011 in the range of $18 million.  The hearing will begin at 10 a.m. in the 6^th Floor Joint House Senate Hearing Room of the Bilandic State Office Building. The Hearing Notice can be found here: http://ilga.gov/house/committees/hearing.asp?CommitteeID=893&GA=97

Live audio and video feeds of the Hearing should be available on the day of the Hearing at this location:  http://ilga.gov/house/audvid.asp

This fraud is especially worrying given its size, duration and scope across many different departments of State Government, which show both a failure of individuals and a failure of systems to adequately oversee grant programs and detect ongoing fraud and abuse over a period of years. According to the report of the Inspectors General, the $18 million in fraud detected so far were perpetrated by one individual and his affiliated companies and entities doing business through multiple state agencies.

The nature of the fraud included forgery, improper payment and excessive funds for unknown services, billing for administrative expenses in excess of legal limits, ghost employees, suspicious and fraudulent grant reports and falsified credentials, among others.

Among agencies involved according to the Inspectors General were the Department of Children and Family Services, the DHS Department of Alcoholism and Substance Abuse, the Illinois State Board of Education, Department of Public Health, Chicago State University.

At a time when the State is struggling to pay the bills of legitimate vendors and ensure the delivery of critically needed services to the public, it is especially grave that the lack of control and oversight allowed abuse of this scope and duration to occur.  I believe we must thoroughly investigate the failures that allowed this particular fraud to happen, the failures that allowed it to proceed for years, and the failures of systems and controls to detect or report the substantial irregularities.  We must also look at how systems and controls are being investigated to determine if similar frauds are or have been perpetrated by others,  and how systems and procedures are being changed to prevent similar occurrences in the future.

I, along with State Government Committee Chairman Jack Franks, have invited the Executive Inspector General and the Inspector General of DCFS to attend and present the findings of their investigation, corrective actions taken, their recommendations to prevent future similar wrongdoings, and their observations as to whether departments have begun to effectively implement those recommendations. We have invited the Departments and agencies named in the report to be present and testify as well. I have also invited the Office of the Attorney General to report on their efforts to recover these funds on behalf of the People of Illinois.

I take the revelations of the Inspector General very seriously, and want to thank them for identifying the abuses detailed in this report. I also believe it is our duty to be sure that every circumstance identified in these reports that allowed such abuses to thrive are eliminated, and that State agencies are looking seriously to see if other similar abuses could have been exploited.  As well, we need to learn from this situation to improve controls and information sharing within and across agencies/departments so that future incidents will be less likely to occur.

You can read the entire report and see all the exhibits here:  http://www2.illinois.gov/oeig/Documents/10-01182_McEwen_et%20al._10.17.11.pdf

As always, your comments and thoughts are welcome. I can be reached in Chicago at 773 348-3434, in Springfield at 217 782 3835 or by email at greg@gregharris.org

        Looking for a new friend to keep you warm and happy this winter?  Consider adopting a new cat from The Tree House Humane Society!  Tree House and Bridgeview Bank Andersonville Branch are teaming up on Saturday, January 21 to introduce you to some loving cats that need a home!  Stop by the Andersonville Branch, 5117 N. Clark St. on Jan. 21 from 11 am to 2 pm. Or, you can always contact Tree House to stop by and be interviewed by some of their cats. Contact

Jenny@TreeHouseAnimals.org.

First and foremost on my legislative agenda for 2012 will be working to pass meaningful, comprehensive and fair reforms to reduce the state’s growing Medicaid and pension liabilities.  I am honored to serve as a member of the bi-partisan Joint House Senate Committees on Medicaid Reform and the Health Insurance Exchange, as well as working with Personnel and Pensions Committee Chair Elaine Nekritz on a bipartisan House working group on public pension reform.

It is important that we implement substantial changes to the traditional Medicaid delivery model in Illinois to improve access, improve health outcomes, decrease costs and eliminate waste and fraud.  Similarly, it is important that Illinois begin to implement the Health Insurance Exchange to expand coverage for families, individuals and small businesses at lower premium costs, with increased access to providers and better health outcomes than our current system is providing.

Along with Medicaid, the state’s contribution to public pensions continues to be a major ongoing issue.  Our bipartisan House working group is looking at potential near-term solutions to reduce the financial impact of the pension obligations on the state budget, as well as long term strategies to guarantee the financial stability and viability of the various public pension plans.

Also, I plan to work on these pieces of legislation this year:

• Cell Phone Theft. Responding to the major escalation in thefts of cell phones and other mobile devices, Rep. Jim Durkin and I have been working with law enforcement, the Illinois Retail Merchants Association and the cell phone industry to crack down on the illicit buyers of stolen phones.

Similar to the pawn shop law, our proposed law will require all retailers who purchase a phone for resale to get positive ID of the seller, along with all identifying numbers on the device. This information would then be made available to law enforcement to trace illegal merchants and merchandise.

• Preventative Healthcare. This bill would allow the state’s CHIP program (the program that provides health insurance to people and families with pre-existing conditions) to pay for physicals and other preventative healthcare costs for its members.

• Abusive Payday Lenders. There are now thousands of unlicensed payday loan outfits on the internet who are victimizing Illinois residents with super high interest loans, and illegal and abusive collection tactics.  This law would absolve any Illinois resident from the obligation to pay one of these loans if the lender is not licensed in Illinois and operating illegally.

• Reinsurance Collateralization. This very technical piece of legislation would change the methods by which reinsurers (companies that reinsure insurance companies against catastrophic loss) prove their capitalization and creditworthiness.

• Marriage Equality. I also intend to continue to work on full marriage equality and equal treatment under the law for all Illinois residents.

If you have questions or suggestions, please call me at 773 348 3434 or write me at greg@gregharris.org

While attending the IAA Annual Meeting, a contingent of Champaign County Farm Bureau members were able to visit with CCFB’s adopted legislator, Greg Harris – IL State Rep. Greg Harris hails over District 13, located in Chicago, one of the most diverse districts in the state. Greg has visited Champaign a number of times and has been awarded the CCFB Friend of Agriculture Award. He has a genuine interest in agriculture and Champaign County. We were able to catch up with some CCFB members who visited with Rep. Harris including Mark Pflugmacher, Nancy Strunk, Lin Warfel, and Don Wood.

CCFB: What did you learn during your visit with Greg Harris?

Nancy Strunk – “Harris is a member of JCAR, Joint Committee on Administrative Rules. JCAR is a group of 12, bi-partisan legislators who meet and review up to 4000 pieces of rules and regulations of legislation per month. If legislative rules and regulations impose hardships on the agriculture world we could get a hold of Harris and let him know our concerns. It is very important to have a contact on the JCAR committee.”

Don Wood – “Greg Harris was very interested in agriculture. We talked about his views and the views of his district. Greg was very easy to talk to and eager to learn about our area of farming.

He remembered being here at our farm when Brad Uken brought him out for a visit. He was

interested in the beef cattle operation.”

CCFB – Greg has one of the most diverse districts in the state and it is so different from downstate Illinois. What important agricultural messages did you pass along to Greg when you met with him?

Lin Warfel – “Rep Harris does have some farm background due to his growing up on a farm in Colorado. So, his knowledge about what groups like HSUS and PETA from the farmer point of view is very important. His district has many members of those organizations, and no farmers…. He now understands horse slaughter problems, but still doesn’t think he can support appropriate legislation due to the lack of knowledge of his constituents.”

CCFB – Greg Harris has visited Champaign County and been awarded the CCFB Friend of Agriculture Award. He is familiar with agriculture issues. If you had another 15 minutes of his time what agriculture issue would you talk to him about?

Lin Warfel – “A more definitive discussion about what the state department of Agriculture does, and how important the monitoring functions are.”

CCFB – Is there a particular issue Greg Harris is facing in his district that interests you?

Mark Pflugmacher – “Some of the issues Rep. Harris faces in his district are the same as ours including budget issues, making sure things are getting paid up on time, and the people in his district get funded. The biggest topic we face and everyone in Illinois faces is the budget.”

Lin Warfel – “Chicago faces more severe budget issues with pensions and healthcare than the state. A typical solution is for Chicago legislators to pass on their problems to the state, as in mass transit, k-12 education, community college budgets (9 in Chicago) and others. We need to be alert to that happening!”

Don Wood – “We talked about FFA in his area, how some of the kids rode 1 to 1.5 hours to

get to the agricultural school. He is impressed with the school and with the quality of students that graduated from there. We talked about how little some of his friends and neighbors really know about agriculture, but they are willing to learn more about farming.”

CCFB – Is there anything else you would like to add about your visit?

Mark Pflugmacher – “Rep. Harris understands agriculture issues and has an open door policy of listening to us. He is a good person to have on our side.”

Nancy Strunk – “Rep. Harris seeks out information and is a great contact to have. During the two hour visit we talked about aspects of the legislative process, the state of the state and we were able to make in roads both ways.”

Lin Warfel – “I think our relationship with Rep. Harris is very beneficial to Champaign County, Illinois agriculture, and to the people of his district. Some direct exchanges with perhaps grade schools in his district would be beneficial to both.”

Don Wood – “Champaign County Farm Bureau should plan a bus trip from Rep. Harris’ district to our area to teach Harris’ constituents about farming and our pluses and minuses.”

Rep. Greg Harris • 13^th District

Springfield Update • December 16, 2011

The Ghost Of Christmas Future

A few facts for the week some Illinois corporations got new tax breaks:

• CME Group had record third quarter earnings: net income rising 29% and a one quarter profit of 1/3 of a billion dollars.
• Illinois had a record number of homeless children: 58,000, an increase of 38%.  There are 416 youth beds in Illinois to accommodate them
• We will end FY12 with a backlog of $6.3 billion in unpaid bills.
• The U.S. Census says that 1 in 3 families is now low-income or living below the poverty line
• To pay for all these tax breaks, the “job creators” would need to create 78,960 new $50,000 jobs.

The corporate tax break package (on which I voted ‘no’) includes:

• $85 million per year for CME Group
• $15 million per year for Sears Holdings
• $350,000 per year for Champion Labs
• $35 million per year for Research and Development Tax Credits
• $50 million per year for the Net Operating Loss Deduction
• $2 million per year for live theatre productions
• $45 million to increase the Estate Tax Exclusion
•  5 year extension of the sunsets for other 9 tax credits.

The $431 million in individual and corporate tax breaks will mean bleak cuts for our schools, seniors, youth, hospitals and public safety next year. And the ink was not even dry on those cuts when a c

omplete rollback of all corporate tax increases was proposed that will cost another $770 million a year.

It will be exactly 168 years tomorrow that Charles Dickens first published A Christmas Carol.  It was written during the height of the industrial revolution that had concentrated wealth into the hands of a fortunate few, displacing the many and forcing them into poverty.

The Ghosts who visited Ebenezer Scrooge reminded him of the obligations of society to provide for those most in need.  The lessons of the Ghosts and our obligation to eliminate want, povert

y and provide humanely for the least fortunate are as valid in December of 2011 as they were in December of 1843.

In 2012, let us resolve to remember the lessons of Ebenezer Scrooge.

Rep. Greg Harris • 13^th District

Springfield Update • November 30, 2011

Budget Restorations, Breast Cancer, Corporate Tax Breaks

Budget Restorations:  In yesterday’s session of the General Assembly, we restored funding to many critically needed human service and education programs, funded the MAP Grant program to keep students enrolled in college, and funded state operated facilities for people with mental illness and developmental disabilities (MH&DD).  Besides providing for services for our most vulnerable, these funding reallocations will prevent layoffs and job losses for thousands of workers.

It is important to note that it is our intent to eventually transition clients from state MH&DD facilities to community based care, if they so desire and if community based care can meet their medical and supportive service needs.  It is also important that institutional care remain for those who are most appropriately served in those settings or who wish to remain.  In the meantime, we must make a substantial investment in housing, supportive services and community-based care before moving folks into community settings, or else we will be putting them at severe risk.  A carefully crafted transition plan must be agreed to and in place before we begin moving frail and vulnerable citizens.

It is also important to note that the reallocations and supplemental appropriations listed below remain within our budget cap.  In other words, we are still living within our means.  The sources of the additional funding include: funds freed up by sustaining the Governor’s vetoes, reductions in cost associated with workers comp reform and elimination of the death penalty, some statutory transfers, and strategic use of funds to pay Medicaid bills and obtain millions in federal matching funds.

Listed below are some of the more important reallocations. Please call me to check on individual items that if I do not include them on this partial list:

• Executive Inspector General                                                               $2,000,000
• Department of Revenue to maintain auditors and other services     $15,999,000
• Prisoner Review Board Operations                                                    $   238,100
• Department of Corrections and Department of Juvenile Justice
  • Reallocations to prevent facility closures and maintain personnel (various)
• MAP Grants                                                                                      $33,500,000
• Department of Children and Family Services
  • Reallocations to fund operations, telecommunications, etc.   (various)
• Guardianship and Advocacy Commission for operations                  $   306,700
• Department of Human Rights, restore operations funding                (various)
• Indigent Burial                                                                                    $8,000,000
• Department of Human Services                                                          (various)
  • Restore community mental health funding
  • Restore community substance abuse treatment
  • Increase for School for the Visually Impaired
  • Increase for School for the Deaf
  • Restore Emergency Food and Shelter for the Homeless
  • Restore funding for MH&DD facilities

The full details can be seen in the Budget Implementation (BIMP) bill, SB1311 and the Supplemental Appropriation bill SB2412. You can see them here:

BIMP: http://ilga.gov/legislation/fulltext.asp?DocName=09700SB1311eng&GA=97&SessionId=84&DocTypeId=SB&LegID=57040&DocNum=1311&GAID=11&Session=

Supplemental: http://ilga.gov/legislation/97/SB/PDF/09700SB2412eng.pdf

Breast Cancer Detection:  Once again I am proud to have worked with Susan G. Komen for the Cure and the Metropolitan Chicago Breast Cancer Task Force to take another step in improving detection and diagnosis of breast cancer for low-income women.  As many research studies have documented, minority women in Chicago have mortality rates for breast cancer 62% higher than white women, and only 1/3 of hospitals in our area are detecting breast cancer early.

In the 95^th General Assembly, I sponsored the Reducing Racial Disparities in Breast Cancer Treatment Act, and this year, along with Sen. Mattie Hunter, we took another step in passing SB2502.  This legislation follows upon the recommendations of the research done by Komen and the Task Force and provides enhanced payment to hospitals and other providers who offer digital mammography that meets high quality standards.  This increased reimbursement rate should incentivize providers to upgrade equipment and diagnostic reading to improve earlier detection of cancers.  You may see the bill here: http://ilga.gov/legislation/fulltext.asp?DocName=09500SB1174enr&GA=95&SessionId=51&DocTypeId=SB&LegID=29258&DocNum=1174&GAID=9&Session=

Corporate Tax Breaks: As you have undoubtedly seen in the news, two major Illinois corporations, Sears and the CME Group, have demanded various incentives in return for staying in Illinois.  The House overwhelmingly defeated the first proposal which would have offered $85 million a year to CME and $15 million per year (for 10 years) to Sears.  In addition there were other business and individual tax incentives included in this legislation.  I voted ‘NO’ on this for a number of reasons:

• While these corporations were getting relief in the millions, working families were being offered relief in the range of $100-150.
• These same corporations have already received incentive packages in prior years to remain here, but seem to keep coming back for more
• This package could cost between $300-800 million to the taxpayers of Illinois in future years causing us to cut healthcare, human services, education and public safety further
• There is concern giving these incentives will trigger a flood of “me too” requests. It is more appropriate to craft a comprehensive corporate tax reform strategy than a succession of individual packages.

I continue to remain open to a more sensible package that would help retain jobs in our state, as long as it proportionately helps working families and small businesses and does not create an enormous hole in an already strained budget.

You can see the proposal SB1833 here. The tax incentive provisions are Senate Amendments 7 and 8.   (Ignore the original bill and Senate Amendments 1-6) http://ilga.gov/legislation/fulltext.asp?DocName=09700HB1883&GA=97&SessionId=84&DocTypeId=HB&LegID=59076&DocNum=1883&GAID=11&Session=

As always, I welcome your comments and suggestions. I can be reached at 773 348 3434 or greg@gregharris.org