News from the State House
In This Report:
- Basic Skills Test for Teachers Stirs Concerns
- Local Governments Face Further Cuts in Replacement Tax
- Funding for Child Care Subsidy Approved
- Where to Find State Job Postings
Medicaid Plan Primed for Action This Week
The working group discussing Medicaid reforms appears to have reached agreement on ways to reduce funding by $2.7 billion for Medicaid services. A bill is being drafted for legislative action this week.
The plan is key for the appropriation committees to complete their work and draft a FY2013 budget bill. The House has passed a resolution stating that if the Medicaid expenses were not reduced by $2.7 billion, every other area of the budget would be reduced to make up the difference.
Clearly the working group plan does not cut Medicaid by the target amount since they are relying on increased revenue. The plan includes $700 million from a $1 cigarette tax and federal matching money, as well as $100 million from an additional hospital assessment that will receive a federal match. Also included was more “charity care” by hospitals to qualify for property tax exemptions worth billions of dollars and the $300 million in unexpected state revenue that will receive a federal match.
The cuts of about $1.4 billion, reached through long negotiations, include reductions in provider rates, reduced eligibility from better screening of applicants and lowering of income thresholds, and ending the drug program for 180,000 citizens. There are some 64 changes in current programs and ways the department operates them.
While Governor Quinn had wanted to cut hospital reimbursement rates by up to 9 percent, the new proposal would bring that number down to 3 percent. This is good news for hospitals across the state especially the nearly one third of whom are struggling financially to stay in operation.
The success to this plan and for appropriation committees to not have to reduce their budgets even further will be the cigarette tax. It presents a real dilemma for legislators who understand the impact on retailers and the smoking public. Many citizens who smoke may reduce their usage because of the higher tax but a likely larger group will just buy cigarettes from some other state or spend less on other products and services.
A congressional committee assumes a gross tax revenue decrease of 25 percent of any proposed tobacco excise tax revenue increase to account for decreases in income and payroll tax revenues. In 2008, federal and state taxes on cigarettes amounted to about $22.5 billion which equates to $5.6 billion lost tax revenue and tens of billions more in lost retail sales for other products and services.
Basic Skills Test for Teachers Stirs Concerns
In Illinois, a college student pursuing a career in teaching must pass the Illinois Basic Skills Test reflecting what a junior in high school should know. In September 2010, the State Board of Education (ISBE) raised the passing scores to 75 percent correct answers and consequently saw the number passing the test drop from 86 percent to just 29 percent. The number of minority students passing the test, who were usually from the lowest performing high schools, fell to single digits.
A public debate has been growing about the accuracy of the test and passing score. A panel of 23 Illinois educators reviewed the passing score question in April. ISBE was to discuss a recommendation about lowering the test scores needed for passage at their recent board meeting but postponed the issue until next month.
The justification for raising the test score comes from a report issued by McKinsey and Company, an international management consulting firm that compared the educational system of the United States with other leading countries. They concluded the quality of the educational system cannot exceed the quality of the teacher.
McKinsey found that just 23 percent of potential teachers in the U.S. come from the top third of their high school class and 14 percent of minority teacher candidates come from the top third.
The report also found that countries which were better preparing their children for college and careers recruited the best talent into teaching, paid them while in college (like student athletes), limited the supply of teachers graduating from college so they could find a job, and put a high social prestige upon being a teacher. The best practices also paid teachers like other professionals, provided advancement opportunities, modern classroom conditions and strong principal leadership.
Most of these conditions do not usually occur in the United States. There is little organized effort to recruit top-third high school graduates into the teaching profession. The legislature, however, does appropriate limited funding to help teacher candidates such as the Grow Your Own Teacher, Teach for America and Golden Apple programs.
The current focus on high school preparation for college and career readiness will depend to a large extent upon the skills and knowledge of the person teaching those students. It’s long past time that leaders in this country look at the McKinsey report and start implementing its recommendations. The full report can be found on my website: www.PritchardStateRep.com.
Local Governments Face Further Cuts in Replacement Tax
When personal property taxes were eliminated in the late 1970s, the state created the Corporate Personal Property Replacement Tax (CPPRT) to make up for the lost revenue for schools, municipalities and counties. The state was not supposed to share in this supplemental income tax on corporations doing business in the state of Illinois.
The tax will generate nearly $1.5 billion next year for local units of government but like a kid in a candy shop, legislators cannot resist the temptation to dip into the fund. Every few years they find some expense for local governments that the state had been paying and withhold CPPRT funds to pay for the expense.
Just last year, the costs of the Regional Office of Education (ROE) which had been paid by state general revenue funds were transferred to the CPPRT. This year, proposals are on the table to again pay the ROE’s expenses from the corporate tax along with stipends for county officials and the local employer share of annual public pension costs.
Many legislators, like me, oppose such transfers. Local units of government need the CPPRT for operations due to lower property tax revenues, reductions in state funding for education and fewer state grants for local units of government.
The effects of these changes will be exacerbated for taxing bodies that are located in counties subject to the Property Tax Extension Limitation Law. They will be limited from increasing property tax levies to make up for lost CPPRT receipts.
Changes in the CPPRT distribution formula and in local property tax extensions could also affect the distribution of state school aid money through the state school aid formula.
Funding for Child Care Subsidy Approved
It’s rare for any group rallying in Springfield for action on a particular piece of legislation to actually see passage that day. Such was the case though for 49 child care providers from my district who were attending a rally with thousands of others from around the state.
They were advocating for legislation to transfer funding for subsidized child care. The Governor used what was appropriated for child care to pay for bills in another program. Child care providers had been told to expect payment delays of up to 90 days which many could not financially accept and still maintain daily operations.
SB 2450 transfers spending authority of $73.6 million from an unused Medicaid fund to the child care program line in the budget. Funding to pay Medicaid bills will actually be increased as well. The House approved using $151 million in unexpected revenue this year to pay Medicaid bills which will capture matching funds from the federal government.
The Senate also passed and the Governor signed the bill last week. I was delighted that these constituents, many on their first trip to the capitol, could see results when citizens become engaged in what goes on in Springfield.
Where to Find State Job Postings
Despite the current furor over state worker pensions and health care benefits, you may be looking for work or career advancement with the State of Illinois. Job postings, descriptions and applications are provided through the website: http://work.illinois.gov. This is your best source for information and landing a job.
I notice the State Fire Marshall is currently looking for a storage tank specialist in Northwest Illinois. This person will handle storage tank investigations, inspections, surveillances and mitigations for petroleum related products and hazardous materials.
The website posting discusses candidate educational training and experience requirements. Check it out.
Have a great week.
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