Chesney’s Weekly Roundup- week ending October 19, 2019

JOBS

Illinois unemployment rate down.  A net 4,800 new Illinois payroll jobs were created in September 2019.  The jobless rate fell from 4.0% in August to 3.9% in September, signaling so-called “full employment.”  These numbers are statewide numbers that do not take account of pockets of higher unemployment in specific regions within Illinois

The Illinois Department of Employment Security report did not signal healthiness across all economic sectors within Illinois.  Job creation was concentrated in services.  There was a net loss of 1,000 manufacturing jobs within the month of September 2019, in parallel with a slowing industrial job economy throughout the Midwest.  New jobs were created in trade, transportation, utilities, professional services, and business services.  Many of the jobs in these sectors are created in good-paying places of employment, but with respect to Illinois these sectors tend to be concentrated in the greater Chicago metropolitan area.  Economic observers need to continue to monitor the status of job creation and job growth in Illinois’ Downstate communities.

TRANSPORTATION

Bill filed to abolish red light cameras in Illinois.  The cameras, called “automated traffic law enforcement systems,” take pictures of vehicles and their license plates as they pass through intersections, school zones, and parks.  The cameras gather what are accepted by traffic courts as valid evidence that someone has committed a violation of traffic laws within a municipal jurisdiction.  After the license plate has been matched with the legal address of the principal driver of the vehicle, a violation notice is mailed to the address.  Violation notices mailed out in this way have resulted in payments of more than $1 billion from drivers in Illinois over the past 10 years.

Red light cameras have many problems.  The machines cannot tell who is actually driving the vehicle, and so the violator is deemed to be the person to whom the vehicle has been licensed.   Even more concerning, to many, is the commingling of public interest and private interest in law enforcement.  In a typical red-light-camera system, a private-sector contractor that collects a piece of the moneys received from alleged violators operates the system.  Current criminal investigations, within some local governments in Illinois, indicate some of the things that red-light-camera firms can do, and allegedly have done in some parts of Illinois, in order to get lucrative red-light-camera contracts with municipalities.  

Aware of these problems, Representative Grant Wehrli has introduced HB 3909, which would repeal red-light-camera enforcement in Illinois.  Nothing in HB 3909 would stand in the way of police officers observing traffic, making traffic stops, and issuing written citations based on their own personal witness.

BUDGET

General Assembly publishes FY20 Budget Summary.  The document, from the General Assembly’s Commission on Government Forecasting and Accountability (COGFA), serves as a preliminary fiscal annual report to Illinois’ appropriations and financial commitments in fiscal year 2020 (FY20), the spending period that began on July 1, 2019.  The report includes narrative summaries of fiscal challenges facing Illinois, including Medicaid and employee health care costs.  Bills the General Assembly enacted that will have a fiscal impact are summarized.  The volume concludes with a description of the State’s current debt status, including bonded debt and unfunded pension liabilities. 

ENERGY

Major Illinois coal mine to shut down.  Millions of tons of coal have come out of the Arclar Complex in eastern Saline County, near Harrisburg, since production began in 1997.  The Peabody Energy mine and preparation plant employ about 225 men and women in southern Illinois.  However, owners announced this week that the Wildcat Hills Mine and the associated Arclar Complex are shutting down in mid-December.  Changes in the U.S. energy industry, particularly in the generation of electrical power, are leading to permanent shifts in demand for coal.  

Exceptionally productive, the Wildcat Hills miners had a thick vein of Pennsylvanian-strata coal to work with.  The miners dug 1.4 million tons of coal in 2018.  Near the mine and surface complex is Southeastern Illinois College, which offers retraining opportunities in nearly 80 certification and degree programs, and additional specialized training programs and opportunities, for persons who lives have been affected by this shutdown.

GENERAL ASSEMBLY

Representative Ugaste files bill to repeal automatic legislator pay hike.  In the 1980s, the General Assembly enacted a law to sweeten its pay with annual cost-of-living adjustments.  Although many Illinois workers do not get annual COLA increases in their own pay, they are required to support these annual legislator pay hikes with their tax dollars.

Representative Dan Ugaste recently filed HB 3910, which would phase out and end General Assembly cost-of-living pay adjustments on or after July 1, 2020.  Enacting this bill would also reduce the future cost of General Assembly legislative pension benefits, which are tied to lawmakers’ pay.

PENSIONS

Proposal could consolidate local police/fire pension funds.  The 649 separate pension funds that underwrite the retirement benefits paid to police officers and firefighters throughout all of Illinois (other than Chicago) are the subject of a recent recommendation by the Pension Consolidation Feasibility Task Force. This panel has looked at all of these pension funds, which as a group have piled up unfunded liabilities of approximately $11.5 billion, and is recommending that all of them be consolidated into a single master statewide pension fund for these first-responder service officers.  Legislation to implement this consolidation will be presented to the General Assembly in the fall veto session, which will begin on October 28.

Proponents say that consolidating these pension funds will increase the professional money management of the funds involved, and will increase the scope of opportunities this sector will be able to target for investments.  Skeptics point out that the State has consolidated many of its pension systems already.  For example a single State fund and system, the Teachers Retirement System (TRS), handles all of the pension promises made to educators in the elementary and secondary sectors throughout Illinois (other than Chicago).  However, this consolidation did not lead to an improved fiscal outcome for Illinois teachers’ pension fund management and status.  At the end of fiscal year 2018, TRS had unfunded liabilities of $75.3 billion.  This unfunded-liability estimate was based on an assumption that the fund would be able to earn a future rate of return of 7.00% on its invested assets; based on current historically-low global interest rates, it may be necessary to make further cuts in this assumed future rate of return and accept an even higher figure in unfunded liabilities.  

VETERANS

Veterans to be offered opportunity to look at firefighter training.  An event to be held at the State Fire Service Institute at Urbana-Champaign on Sunday, October 27, will present opportunities in firefighting to veterans of the United States armed services.  Men and women entering firefighting service in today’s Illinois are trained for a wide variety of first-response tasks, all of which welcome the skill sets of our veterans.  

This October 2019 event will repeat a presentation inaugurated by the Institute and offered to U.S. veterans in 2018.  The goal of the Fire Institute’s organizers is to bring experienced vets-to-firefighters service professionals into contact with potential trainees, so that questions can be asked and answered about firefighter training and careers.