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CAPITOL RECAP: Graduated Tax Fails; Cuts, Tax Hikes or Both Could Follow

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Capitol News Illinois

Backers of a graduated income tax constitutional amendment conceded defeat Wednesday, Nov. 4, for Gov. JB Pritzker’s marquee policy proposal which was projected to bring in more than $3 billion annually to state coffers.

With 98 percent of precincts reporting, voters had rejected the amendment by a 55 percent to 45 percent margin. The Associated Press called the race for the “No” camp, as a large number of outstanding mail ballots were almost certainly not enough to make up for the deficit of approximately 500,000 votes.

In his daily COVID-19 briefing in Chicago, an agitated Pritzker lashed out against the Republican Party, warned of cuts to public safety and human services and said several other options were on the table for addressing state budget deficits that have been ongoing for decades.

“Illinois’ fiscal problems haven't gone away. We now sit at a crossroads,” Pritzker said. “Our state finances still require fundamental structural change. In the coming days I'll be talking with the leaders in the General Assembly about our path forward. But here's what we know for sure: I promised to be a governor who balances the budget and pays the bills that my predecessor left behind. I promised to make sure that our kids get a good education that we invest in job creation and that we build a better future for Illinois. There will be cuts, and they will be painful.”

The failure of the amendment marks the end of a fight led by Pritzker which began legislatively in April 2019 and even before that politically when Pritzker was running for governor in 2017 and 2018.

Pritzker spent $58 million of his own personal fortune to promote the amendment, while billionaire Ken Griffin, the state’s wealthiest person and founder of the hedge fund Citadel, dropped more than $53 million into an effort to defeat the tax change.

The governor had billed the graduated income tax proposal – which would have imposed higher tax rates on higher income earners – as the best of three options, the others being a 20 percent increase to the state’s flat tax or 15 percent across-the-board cuts to state spending.

Complicating matters is a global pandemic that has ripped a hole in state finances. Even before COVID-19 redefined the state’s revenue picture, Pritzker had pegged the state’s structural, year-after-year budget deficit at about $3.2 billion. Considering lost revenues due to COVID-19 and associated economic restrictions, that deficit could exceed $7 billion with the graduated tax’s failure, Pritzker predicted in April.

The state’s path forward could include some combination of cuts and tax increases, as well as borrowing from the federal government’s Municipal Liquidity Facility program which was authorized in the state’s budget for fiscal year 2021.

“Everything is on the table,” Pritzker said.

* * *

RETENTION OF JUSTICE FAILS: For the first time since Illinois adopted judicial retention elections in 1964, an Illinois Supreme Court justice lost a retention bid to stay on the state’s highest court.

Justice Thomas Kilbride failed to win at least 60 percent of the ‘yes’ vote in his district, earning only 56.4 percent of the vote, according to unofficial results. Kilbride conceded from the race in an email statement issued around 11:30 p.m. on Tuesday night.

Kilbride is part of the 4-3 Democratic majority on the seven-person Supreme Court. He represents the 3rd Judicial District, which includes 21 counties across north-central Illinois. Democratic justices have maintained a majority on the Illinois Supreme Court since 1969.

Kilbride’s retention was opposed by Citizens for Judicial Fairness, a campaign committee that raised millions backing his removal, with hopes of electing a Republican to the 3rd District seat in 2022.

“We call on the Supreme Court to listen to the people as they consider a potential interim replacement to serve until 2022,” Jim Nowlan, chairman of the Judicial Fairness committee, which opposed the retention effort said in a statement.

Since this is the first time a Supreme Court justice has lost retention, the court has never before faced the issue of replacing a candidate who has failed to gain retention.

Under article 6, sections 3 and 12, of the Illinois Constitution, the state Supreme Court must appoint an interim justice to fill the vacant seat, by a vote of at least four justices, until the next election in 2022.

The justices typically do not reveal the breakdown of their vote.

A court spokesman said he did not know when the court would appoint an interim justice to fill Kilbride’s seat.

The state constitution does not set a specific time frame for when the Supreme Court must vote on an appointment after a vacancy on the court occurs.

The constitution states that the “person appointed to fill a vacancy 60 or more days prior to the next primary election to nominate Judges shall serve until the vacancy is filled for a term at the next general or judicial election.”

Both Kilbride and Justice Lloyd Karmeier, who is retiring, have terms that end on Dec. 6.

If the court meets to appoint a justice before then, the two outgoing justices could be involved in selecting the temporary successor, said Ann Lousin, a constitutional law professor at the University of Illinois Chicago John Marshall Law School.

“If [Kilbride] does sit in on the meeting, he would have a say in his successor,” Lousin said. “He would be one vote out of seven.”

* * *

REPUBLICAN WINS SUPREME COURT SEAT:

Justice David Overstreet, a Republican, defeated his opponent Justice Judy Cates in the only other competitive Illinois Supreme Court race on Tuesday.

Overstreet won roughly 63 percent of the vote, or 358,455 votes, according to unofficial results, earning a seat on the bench representing the 5th Judicial District in southern Illinois, which covers 37 counties in southern Illinois.

Both Overstreet, 54, and Cates, 68, serve on the 5th District Appellate Court — one of five state appellate courts, which are one level below the Illinois Supreme Court and hear appeals from circuit courts.

Cates will retain her seat on the appellate court. She did not respond to a request for comment Wednesday.

Overstreet first joined the bench when he was appointed a circuit court judge in the 2nd Judicial Circuit Court in 2007. Before that, he worked in small, private firms in southern Illinois and Knoxville, Tennessee.

He was elected to the circuit court in 2008, appointed to the appellate court in 2017, and won election to the appellate court in 2018.

Overstreet describes himself as a “constitutional conservative,” while Cates ran as a centrist Democrat who promised to protect the rights of gun owners.

He replaces fellow Republican Lloyd Karmeier, who will retire in December.

* * *

REPUBLICANS TOUT SUCCESS:

As the dust settled after Tuesday’s general election in Illinois, Republicans in the state patted themselves on the back after making gains and winning two key non-legislative races.

“I'm going to give ourselves an A because before Tuesday, the House Republicans were expected to lose up to 11 seats. And right now, we were at a net gain of two,” House Minority Leader Jim Durkin, of Western Springs, said during a news conference Wednesday. “We were outspent five-to-one by Speaker Madigan and we still prevailed.”

The overall number of flipped seats could change, however, as some races remained close with hundreds of thousands of mail-in votes still outstanding statewide. In Illinois, any mail ballot postmarked by Election Day will be counted if received by the election authority by Nov. 17. The state board of elections is scheduled to certify final results on Dec. 4.

According to unofficial, preliminary tallies by the Associated Press Friday afternoon, Republican challengers had taken four seats away from Democrats, but Democrats also took out two incumbent Republicans.

In the Senate, where Democrats currently hold a 40-19 majority, three races remained extremely close on Friday, but Democrats appeared poised to possibly gain one. In District 25, Democrat Karina Villa held a slight lead over Republican Jeannette Ward in a race to replace Republican Sen. Jim Oberweis, who stepped down this year to run for Congress.

Senate Republicans also elected a new leader for their caucus following the election. Sen. Dan McConchie, of Hawthorn Woods, was picked to replace Sen. Bill Brady, of Bloomington. Brady did not seek another term as minority leader.

Republicans also counted as victories the defeat of Gov. JB Pritzker’s proposed graduated income tax constitutional amendment as well as the vote not to retain Democratic Illinois Supreme Court Justice Thomas Kilbride.

Throughout the campaign, Durkin said, Republicans were broadcasting one consistent message.

“Lack of trust with state government in Springfield, corruption, has loomed largely throughout the state of Illinois in our message in the suburbs, but also in the Metro East area,” he said.

* * *

DEMOCRATIC INFIGHTING:

After Republican groups used use an anti-Mike Madigan message fairly successfully in the 2020 general election, high-ranking Democrats are calling on the powerful Illinois House speaker to step down, at least as the chair of the state's Democratic Party.

The first to openly call for Madigan’s replacement after the election was U.S. Sen. Dick Durbin, who won re-election to a fifth term Tuesday night.

“Well I can tell you, all across our state, and the advertising told the story, we paid a heavy price for the speaker’s chairmanship of the Democratic Party,” Durbin said Wednesday during an interview on WTTW-TV’s “Chicago Tonight” program. “Candidates who had little or no connection with him whatsoever were being tarred as Madigan allies who are behind corruption, and so forth and so on. It was really disconcerting to see the price that we paid on that. I hope he takes that to heart and understands that his presence as chairman of our party has not helped.”

The next day, Gov. JB Pritzker was asked to respond to those comments during his daily COVID-19 briefing.

“Look, I agree with Sen. Durbin that, you know, opponents were able to tap into voters’ concerns about corruption and their lack of trust in government,” Pritzker said. “There are real challenges there.”

Asked specifically whether he agreed with Durbin that the Democratic Party of Illinois needs new leadership, Pritzker replied, “Yes.”

Democratic U.S. Sen. Tammy Duckworth also issued a statement to the State Journal-Register calling for Madigan to step aside both as speaker and party chairman.

Madigan, meanwhile, issued a statement Thursday indicating he has no plans to step aside.

“I am proud of my record electing Democrats who support workers and families and represent the diversity of our state,” he said in the statement. “Together, we have successfully advanced progressive policies that have made Illinois a strong Democratic state with supermajorities in the legislature. Illinois is the anchor in the ‘blue wall’ that has been reconstructed in the Midwest, and I look forward to continuing our fight for working families as chairman of the Democratic Party of Illinois.”

* * *

COVID-19 UPDATE:

The state reported a one-day record for new cases of COVID-19 Friday, Nov. 6, reaching 10,376. The Illinois Department of Public Health also reported another 49 COVID-19-related deaths as the total death toll grew to 10,079. That’s among 465,540 confirmed cases since the pandemic began.

The state also announced it would begin including probable cases in its daily case counts. That’s due largely to the fact that rapid antigen tests are viewed as probably exposures, whereas molecular tests are considered confirmed exposures. Most of the 8.2 million test results reported thus far are molecular tests, but the number of antigen tests are growing and the U.S. Centers for Disease Control and Prevention have changed guidance on reporting probable tests, which could also include people with symptoms and a known exposure.

“In August, the national case definition was changed so that an antigen test alone would be considered a probable case with the increased use of antigen tests,” Ezike said. “We will get more probable cases and we want to make sure that we capture all of those cases that are diagnosed via antigen test, similar to how the CDC does this, and similar to how other states are calculating this as well, so that we can show our actual true Burden of Disease here in Illinois.”

The number of people hospitalized for COVID-19 in Illinois grew to 4,090, setting a second-wave high for the 12th straight day. Intensive care unit beds increased by 14 from the day prior to 786, while ventilators in use by COVID-19 patients decreased by four from the day prior to 339.

The statewide seven-day rolling average case positivity rate shot up to 9.7 percent, tying its highest point since May 20.

Pritzker once again said further economic rollbacks could be on the horizon if spread doesn’t slow, although he was once again not specific as to what they could entail.

“The only way really that that science has told us that we can limit the number of cases or the epidemiological spread of the disease is by having less interaction and less interaction means cutting off people's ability to interact in various places,” he said.

* * *

CONTACT TRACING:

Gov. JB Pritzker’s administration unveiled a new central location for COVID-19 contact tracing data on the Illinois Department of Public Health’s website Friday.

While the data contain outbreak and exposure information, the location of an outbreak is more difficult to identify than the location of an exposure, according to the governor’s office. New data will be released every Friday.

In the data released Friday, an outbreak is defined as five or more cases that are linked to a specific setting during a 14-day period. Those cases must be from different households with no known links to other potential sources.

Exposure data shows where individuals have visited in the 14 days prior to a diagnosis. The locations are places where exposure may have – not definitely have – occurred.

Per the data, “other” was the most frequent category, as it was a term encompassing such exposures as hair salons, funeral homes and warehouses. That category was cited by 11.6 percent of those contacted, or 4,179 people.

Directly Behind that was restaurants and bars with 3,877, school with 3,794, workplace other than an office at 3,693, a hospital or clinic at 3,106, business or retail at 3,080, an office setting at 2,049, and private homes at 1,301. Grocery stores accounted for 1,243 exposures and colleges 1,085.

Individual cases can show up in multiple categories if a person has visited multiple locations.

As for outbreaks, Pritzker said data show “a pattern of formal group gatherings making up the majority of our confirmed outbreaks.”

Only 10 of 5,478 schools have currently reported COVID-19 outbreaks, he said, noting local health departments will be the best source of information for school data.

Pritzker and IDPH Director Dr. Ngozi Ezike said Illinoisans should answer the phone when contact tracers call, and no private information will be shared for the person who tested positive. Those getting COVID-19 tests should also leave accurate phone numbers.

“So please if you get that call from IL, Illinois COVID Help, please answer the phone and answer the questions,” Ezike said.

* * *

MORE RESTRICTIONS?:

Gov. JB Pritzker warned Thursday, Nov. 5, that additional social and economic restrictions may need to be imposed statewide in the near future if the surge in new COVID-19 cases continues on its current path.

That warning came as the state passed another grim milestone in the pandemic with 97 virus-related deaths recorded over the previous 24 hours, pushing the statewide total since the pandemic began to 10,030.

Pritzker was not specific about what kinds of additional measures could be imposed, but he alluded to all of the restrictions that were in place during earlier phases of the pandemic, which included mandatory remote learning for all pre-K through 12 schools, stricter limits on the size of public gatherings and capacity limits in retail stores.

“I think we all remember what Phase 3 looked like, or Phase 2 looked like. Those are all things that are under consideration,” Pritzker said.

Currently, all 11 regions of the state are under some level of enhanced mitigation measures, including the closure of bars and restaurants to indoor service, because of rising test positivity rates and hospital usage. As of Thursday, the statewide preliminary seven-day average case positivity rate stood at 9.1 percent while Region 1, in northwest Illinois, was posting the highest rate at 15.8 percent.

A return to increased restrictions can be avoided, Pritzker said, if the trend lines in new cases and hospitalizations are reversed. But he said the only way that will happen is if individuals follow, and local officials enforce, the guidelines currently in place.

“Far too many local governments across the state are failing to enforce any mitigation measures, allowing this continued rise in positivity to balloon out of control,” he said. “It's time to take some responsibility. That's the only way that we will get out of this without having to implement more and more restrictions across more industries and across the entire state.”

The enhanced mitigations already in place, however, appeared to be taking an economic toll on Illinois. The U.S. Department of Labor reported Thursday that 76,338 Illinois workers filed first-time unemployment claims during the week that ended Saturday, Oct. 31. That was an increase of 43 percent over the prior week.

There was also an increase in new claims for Pandemic Unemployment Assistance, the federally-funded benefit program for gig workers and others who don’t normally qualify for traditional unemployment

* * *

PRITZKER PRESSURES LOCAL LEADERS:

As state leaders continue to face pushback from the restaurant industry and even some county and municipal governments regarding COVID-19 mitigation measures, Gov. JB Pritzker on Tuesday, Nov. 3, put pressure squarely on the shoulders of local elected officials.

“The fact is that local officials who are not doing the right thing are the ones who are going to be responsible for the rates of infection going through the roof, and our hospitals getting overrun and people are dying if they don't enforce the rules,” Pritzker said during his daily briefing in Chicago. “That is why those rules exist.”

Beginning Wednesday, all 11 regions of the state’s reopening plan will be under enhanced mitigation orders to control the spread of the virus because they have seen sustained periods of test positivity rates over 8 percent and, in some cases, dangerously rising hospitalization rates. The last region to cross those thresholds was Region 2, in west-central Illinois, where the enhanced mitigation measures take effect Wednesday.

Those mitigations include closing bars and restaurants to indoor service as well as limits on the size of public gatherings and social events.

Officials in Springfield and Sangamon County announced Tuesday that they will take a “phased approach” to enforcing the orders, starting with limiting indoor seating at bars and restaurants to 25 percent of the establishment’s capacity.

In Region 3, which includes Springfield, the test positivity rate stood at 10.6 percent on Oct. 30, the most recent date for which numbers were available.

“We know that that the places that are remaining open, they're having large gatherings and defying these rules are, in fact, spreading locations,” Pritzker said. “These are places that are amplifying the virus across the state. And so, you know, when you've got double-digit positivity rates in your area, as is the case in Springfield, then the local officials need to take the laws that are on the books and the regulations that we've put forward and the orders that we've asked people to follow and enforce them locally.”

* * *

ALL 11 REGIONS MITIGATED:

All 11 of the state’s mitigation regions face stricter COVID-19 based restrictions due to increasing positivity rates, while opposition grows from some bars, restaurants and other small businesses struggling during the pandemic’s economic downturn.

Gov. JB Pritzker said at his daily COVID-19 briefing Monday, Nov. 2, that the past week was one of the worst single-week increases in regional positivity across the state since the spring, with none of the regions experiencing a decrease in their positivity rates. The lowest increase in any region was by 1.2 percentage points, which was in Region 5 in southern Illinois, and the highest was a 3.1 percentage point increase in Region 7, which includes Will and Kankakee counties.

Last week, the Illinois Restaurant Association called on Pritzker to consider alternative mitigations to reduce the hardships that many restaurants are already experiencing. The organization also said it plans to file a legal brief in support of pending lawsuits from restaurants challenging the administration’s executive orders.

A group of more than a dozen restaurants in Springfield also filed a similar lawsuit against Pritzker on Friday. The new restrictions have also received pushback from some local leaders, including Orland Park Mayor Keith Pekau, who have said they would not enforce them.

“All we're asking is for simple enforcement,” Prtizker said in response to a question about pushback to the new restrictions. “Many, many restaurants and bars are doing the right thing. They're either using outdoor tents, or they're just providing pickup and delivery service or drive through during this difficult period.”

But the governor also said some officials are choosing not to do the right thing.

“I would encourage people to speak to their local leaders and remind them that leadership means making some difficult decisions,” he said.

* * *

BIG GRANTS:

Gov. JB Pritzker on Monday, Nov. 2, touted the number of local businesses that have benefited from federal stimulus funding released by the state — the Business Interruption Grants program and the Local Coronavirus Urgent Remediation Emergency (or Local CURE) Support Program.

“Until we can reduce the upward movement of hospitalizations and bring the rate of spread down, we must keep our economy moving forward, and support our small businesses,” Pritzker said during his briefing. “And I encourage everyone listening to support your local small businesses. These are the heroes who are the lifeblood of our communities, and they are job creators.”

The Illinois Department of Commerce and Economic Opportunity has distributed $95 million in BIG funds to businesses through 4,000 individual grants, and there remains $175 million in program to disburse, according to the governor’s office.

Nearly $50 million has also been distributed from the CURE program, which reimburses local governments for COVID-related expenses. About $31.9 million in CURE funding is in the process of being distributed, with $170 million remaining.

Both the BIG grants and Local CURE funding comes from the federal Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act.

Still, Pritzker said, more is needed in the way of aid to struggling businesses.

“The dollars provided by the federal government aren't nearly enough,” Pritzker said. “So I've simultaneously called for the federal government to deliver more direct assistance for Americans in every state. And I would encourage elected officials across the state to join in on that advocacy.”

* * *

MADIGAN HEARING POSTPONED:

The chairman of a special committee investigating Democratic State House Speaker Michael Madigan’s role in a bribery scheme involving utility giant Commonwealth Edison has postponed the panel’s next meeting, which had been scheduled for Thursday.

Rep. Emanuel “Chris” Welch, D-Hillside, announced Wednesday that the meeting is being delayed, in part because of the worsening COVID-19 pandemic and in part because it is still waiting to receive documents from ComEd.

“The Committee is currently awaiting documents requested from ComEd, which the company has indicated they are working to provide within the coming weeks,” Welch said in a statement Tuesday. “Both Democrats and Republicans believe these documents will provide critical context to our work. While we face a surge in COVID cases across the state and new mitigation guidelines, holding a hearing without these requested documents would not only be unproductive but also an unnecessary risk for members, staff and our communities at large.”

Welch did not announce a new date for the delayed meeting.

Madigan was implicated in the bribery scheme in July when ComEd officials entered a deferred prosecution agreement in federal court in which they admitted to handing out lobbying jobs and contracts to close associates of Madigan’s over a nine-year period in an effort to curry his favor for state legislation that benefitted the company. Madigan has denied any wrongdoing and has not been charged with a crime.

Republicans in the General Assembly, however, say the allegations spelled out in the deferred prosecution agreement amount to “conduct unbecoming of a legislator,” and they filed a petition in the House in August that initiated the disciplinary proceeding.

* * *

OBAMACARE ENROLLMENT:

As the number of COVID-19 cases continues to rise throughout the state, Pritzker used his Tuesday media briefing to encourage Illinoisans who do not have health insurance coverage through their employer or Medicaid to sign up for subsidized coverage through the state-run marketplace under the Affordable Care Act, also known as Obamacare.

Open enrollment in that program began Monday and runs through Dec. 15.

“Since its passage in 2010, the ACA has been an invaluable asset in Illinois’ fight to provide health care to all residents of the state,” Pritzker said.

People can also access a special enrollment period if they formerly had employer-based coverage but lost their job for any reason, Pritzker said.

The ACA plans offer discounts in the form of tax credits for people who qualify based on their income. According to the Illinois Department of Insurance, more than 240,000 Illinois residents received those discounts last year.

This year, the department said, 179 different plans are available through eight different insurance carriers.

People can sign up for coverage by visiting the website GetCoveredIllinois.gov.

 

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

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