Friday, August 24, 2012

Illinois State Treasurer Dan Rutherford Reacts to Moody’s Financial Warning for Illinois

SPRINGFIELD – August 24, 2012 – “Moody’s Investors Service in their August 23 bulletin declared that the Illinois legislature’s failure to enact pension reforms during last week’s special session is ‘credit negative’ for Illinois (A2 stable) and they warned that ‘inaction on the state’s pension liabilities will further strain this lowest-rated US state’s finances’.”

“It looks like Illinois could be heading for another credit downgrade, which will only cost taxpayers more. I have continuously warned the General Assembly and the governor that failure to act on the state pension crisis will create more financial problems in this state that is already the lowest-rated credit in the United States. I will continue to urge the General Assembly and the governor to work towards comprehensive reforms that would repair Illinois’ fiscal health and ensure the viability of our state retirees’ pensions.”

“Revenues realized from the 2011 income tax increase have already been consumed by the large, escalating cost of the state’s pension systems. Illinois’ available resources can neither pay off its massive debt nor cover the cost of providing needed state services to all of its citizens. Comprehensive, constitutional, and fair pension reforms are required to reverse this situation.”

Thursday, August 23, 2012

Governor Quinn Announces Woodward Inc. to Expand in Rockford Area, Add 660 Jobs

Aerospace and Energy Firm to Invest More Than $200 Million in its
Corporate Campuses

LOVES PARK, IL – August 23, 2012. Governor Pat Quinn today joined executives at aerospace and energy firm Woodward Inc. to announce the company’s plans to invest more than $200 million to build a manufacturing plant and offices in Loves Park, Illinois and produce a new aircraft turbine product line. The expansion will create more than 660 jobs over the next five years. As part of his efforts to further strengthen the Illinois economy, Governor Quinn personally courted this expansion, meeting with Woodward’s CEO in recent months and touring the 142-year-old company’s existing facilities in Loves Park. Woodward plans to double its workforce in the Rockford area by 2021.

“The Rockford region’s highly skilled workforce makes Illinois an ideal place for companies like Woodward that are looking to grow,” said Governor Quinn. “Woodward’s expansion is a great example of how we are creating jobs, fueling key sectors of the economy and stimulating growth throughout the state.”

“Our success in gaining new business created numerous investment opportunities,” said Woodward Chairman and CEO Thomas A. Gendron. “Ultimately, we decided to remain and grow in the Rockford region due to the strong support of Gov. Quinn, the proximity of the new site to our current campus and the quality of both the aerospace engineering and manufacturing talent.”

The new campus will house Woodward’s Aircraft Turbine Systems business. The project includes development of approximately 300,000 square-feet of production and office space on 60 acres. This will be Woodward’s second facility in the Rock River region. The company, which is headquartered in Fort Collins, Colorado, plans to break ground on the new facility this fall, with initial occupancy planned for late 2013.

"I applaud Woodward, Inc.’s decision to expand its aerospace supply operation in Illinois,” said U.S. Senator Dick Durbin (D-IL). “Earlier this year, when I spoke to CEO Tom Gendron by phone and then met with him while visiting the Loves Park campus, one thing was clear: Winnebago County is the perfect fit for this rapidly growing company. With an established, skilled workforce, the community made a strong case that it is the best location for the company’s second aerospace campus. Woodward’s large scale growth will mean more economic activity far outside the doors of its facilities as new workers help the area’s economy thrive again."

"The state of Illinois is a committed partner in the technological advancement of the region’s aerospace industry,” said DCEO Director David Vaught. “Woodward’s decision to bring a new production line to Illinois comes as growth in the state’s manufacturing sector accelerates, and it puts Illinois in an even stronger position as an aerospace hub.”

To bolster the company’s investment, the Department of Commerce and Economic Opportunity (DCEO) is providing a targeted investment package which includes Economic Development for a Growing Economy (EDGE) corporate income tax credits. The potential value of the tax credits, which are based on job creation and retention, is currently $45 million. The state is also providing $578,000 in Employer Training Investment Program (ETIP) job training funds, $3 million in capital grants for site improvements and $500,000 in Business Development Public Infrastructure Program funds to the city of Loves Park.

Woodward is an independent designer, manufacturer and service provider of control solutions for the aerospace and energy markets. The company has more than 6,000 employees in 10 countries, including approximately 1,500 employees at its Loves Park facility.

Under Governor Quinn’s leadership, the state of Illinois has worked diligently to identify, recruit and grow companies with the potential to bring jobs and economic growth to Illinois. Illinois has added 140,400 private sector jobs, including 44,600 jobs in the manufacturing industry, since January 2010, when job growth returned to the state following a two-year period of decline during the recession.

For more information on why Illinois is the right place for business, visit


Tuesday, August 21, 2012

Sen Bill Brady (R) Editorial: Pension Reform Stalled by Lack of Leadership

Lawmakers were called back to Springfield Aug. 17 to address pension reform. Not surprisingly, no pension reform was passed.

An ongoing lack of leadership from top state officials means that the pension reform proposals currently on the table will not provide the kind of comprehensive reform we need to make sure these systems will be viable and have sufficient funds to pay the benefits promised to workers under the Illinois constitution.

The House of Representatives and the Governor chose to ignore a plan that had already been passed by the Senate. That plan would have resulted in savings of $20 billion to $30 billion. Instead, the House chose to take a preliminary vote on a different plan that would only affect the General Assembly Retirement System and reduce the savings to $110 million. Passing the legislative plan would have been foolhardy – like throwing a nickel in the bucket and calling it reform.

A major concern of mine for many years, pension reform should be about safeguarding the viability our public retirement systems for current and future retirees, while also protecting our state’s fiscal health and our taxpayers’ wallets.

I am a member of the bipartisan, bicameral Pension Work Group that has been working for many months to develop a comprehensive solution. We have found common ground on major reform issues, but became divided on the Governor’s proposed liability shift.

The Governor called us back to the Capital City, but never told us exactly what he hoped to achieve during the special session. He appears to favor a plan that would shift major pension liabilities from the income tax to local property taxes, but he must know it will be difficult to find enough votes to support the “cost-shift provision” that he and many other Democrat state officials favor.

When lawmakers left Springfield at the end of May, there was general agreement among the Governor and legislative leaders of the broad outlines of pension changes. However, no final agreement could be reached when pension reforms became linked to shifting the cost for teacher pensions to local property taxpayers, rather than state income taxes.

I do not support the shift to property taxes to cover past pension liabilities because it would not save taxpayers’ money.

The Governor’s plans to shift the liabilities for teacher pensions from the state to local school districts outside Chicago, to community colleges and to public universities, is a major sticking point in the reform process because of the inherent property tax increase for homeowners and businesses to fund the new responsibility for local taxing bodies. It will also inevitably result in tuition increases for university and community colleges to cover additional costs.

One proposal would be to phase in the liability shift over 12 years. Some think that’s a reasonable approach, but it is problematic because there are too many variables. We don’t know how large the liability-shift will get because we don’t know how many will elect reforms, future returns on investment, or future mortality tables.

There is a need for more accountability/responsibility on part of school districts in setting pensionable salaries but, again, it must be done in a way that protects property taxpayers.

This is not a new problem. Illinois’ public retirement systems are consistently ranked as the most underfunded in the nation. The state’s staggering $83 billion in unfunded pension liabilities (which could rise as high as $140 billion under different actuarial and accounting standards) is a threat to our fiscal solvency. The credit rating agencies cite Illinois’ pension debt and its bill backlog as the state’s two worst problems. Illinois will get downgraded again if pensions are not fixed soon.

Without change, payments will continue to rise over the next 30 years, crowding out other priorities. Pensions are now about 17% of Illinois’ general funds budget and will take up a bigger piece of the pie each year unless reforms are enacted.

As a member of the pension reform working group, I believe we were very close to a framework for reform that would have ensured the vitality of our retirement systems, safeguarded the pension benefits of state employees and teachers and protected the wallets of our taxpayers.

Instead, the Democrats have thrown a poison pill into the bill that would have increased real estate taxes for homeowners and small businesses and raised tuition for our college and university students.

Comprehensive reform is vital to the fiscal health of this state, and I stand ready to work whenever, wherever and with whomever to put us quickly back on a path toward a bipartisan and comprehensive restructuring of benefits and funding of the state’s five public retirement systems.

Tuesday, August 14, 2012

Gov Quinn's OMB Report Says Universities Will Lose More Funding if Pension Cost Shifting to Higher Ed, Doesn't Happen

CHICAGO - August 13, 2012. In a meeting today with the Executives’ Club of Chicago, Governor Pat Quinn shared new data showing that higher education in Illinois is likely to receive more significant funding reductions in the coming years if comprehensive pension reform is not enacted. According to an analysis conducted by the Governor’s Office of Management and Budget (OMB), approximately 26,000 students may not have the needed resources to go to college in five years due to projected reductions to MAP grant funding.

The governor discussed the need for pension reform today with business leaders and CEOs who often stress their need for a stable business climate and a strong, well-trained workforce. Governor Quinn is urging legislators to restore fiscal stability to Illinois and pass comprehensive pension reform during special session on August 17.

“A strong higher education system drives economic development and is essential to moving Illinois forward,” Governor Quinn said. “We must rise to the occasion, act responsibly and get the job done on pension reform for the people of Illinois."

If comprehensive pension reform is not enacted, funding for state universities, community colleges and college scholarships for needy students with merit could be reduced by more than $280 million by FY 2018. Higher education has seen steady reductions in recent years as fast-rising pension costs continue to squeeze out critical services.

Pension reform that includes a gradual normal cost realignment will alleviate funding pressure for state universities and community colleges, who have also written in support of a phased-in cost realignment. According to the data, universities and community colleges will face reductions that greatly exceed any normal cost expenses they would gradually assume under the governor’s pension reform plan.

For example, under the governor’s plan, state universities and community colleges are projected to assume $21.3 million in new normal pension costs in FY 2014. If comprehensive pension reform with a normal cost realignment is not enacted, the analysis shows that state universities and community colleges could see more than $60 million in reductions in FY 2014.

Currently, Illinois’ pension system faces $83 billion in unfunded liability – the worst in the nation. This deficit is expected to grow to more than $92 billion by the end of FY 2013 unless major reforms are enacted. Governor Quinn has proposed a comprehensive pension reform plan that will eliminate the unfunded liability over the next 30 years.
State universities and community colleges help shape the future of Illinois by fostering innovation and economic growth. Illinois' higher education institutions provide students with more opportunities and prepare them for the workforce, to ensure that businesses have access to strong workforce talent.

The analysis is attached. For more information on the need for pension reform and to contact your legislator, please visit


Monday, August 6, 2012

Cong Aaron Schock (R-IL) Intoduces Legislation to Resolve Looming Physician Shortage

Washington, DC – Congressman Aaron Schock (R-IL) has introduced bipartisan legislation to address the physician shortage facing the United States. The Resident Physician Shortage Reduction and Graduate Medical Education Accountability Act, H.R. 6352, will create 15,000 new Graduate Medical Education (GME) slots around the country. The Association of American Medical Colleges estimates that in 2015, the country will have 62,900 fewer doctors than needed.

“The US is already facing the reality of having a significant shortfall in trained doctors and medical professionals, and this shortage will only continue to grow if we don’t begin to address the problem now. Its estimated by 2015, the country will have over 62,000 fewer doctors than needed,” said Congressman Aaron Schock. “The primary way our country can address the physician shortage is by ensuring we increase the number of Graduate Medical Education slots. By doing so, we are increasing the number of medical school graduates who will receive hands on training in a patient setting to gain the experience needed to become a practicing physician.”

“I commend Congressman Schock for his leadership in addressing the physician shortage crisis,” said Paul Macek, President and CEO of Proctor Healthcare. “All the trends show the US is heading down a dangerous path with fewer doctors practicing medicine, which has already begun to leave the US without the thousands of doctors that are needed to meet the demands of our growing population. H.R. 6352 is the type of solution that will help ensure students pursuing the field of medicine will gain the expertise they need once they graduate while encouraging more students to practice medicine.”

"St. John's Hospital in Springfield, Illinois applauds Congressman Aaron Schock's leadership in introducing the 'Resident Physician Shortage Reduction and Graduate Medical Education Accountability Act,'" said Robert Ritz, President and CEO of St. John's Hospital. "This important legislation will add 15,000 much needed Medicare-sponsored residency positions over a five-year period and is an essential step in ensuring access to care for Medicare beneficiaries and others who need health care. We are particularly pleased that the legislation recognizes and addresses the chronic underfunding of residency training at community-based hospitals like St. John's."

“Midwestern University supports the expansion of graduate medical education in hospitals across the country to address physician shortages,” notes Kathleen H. Goeppinger, PhD, President & CEO of Midwestern University. “We applaud the efforts of Rep. Aaron Schock in proposing this legislation to address this critical need.”

“OSF Healthcare System supports the education of new physicians and has for many decades. The education that occurs at hospitals is invaluable to the training that physicians needs,” said Tara Canty, COO, Accountable Care, OSF Healthcare System. “Medical students and resident physicians under the direct supervision of board certified physicians are able to actually experience what patients and their loved ones need in various clinical situations. The hospital setting rounds out the classroom and simulation preparation that is so critical to successful physician education. There is a cost associated with this training which really is an investment in our future and our country’s future. It is encouraging to see Congress take up a bill in support of continued funding and expansion of funding for physician hospital training.”

Background Information
Resident Physician Shortage Reduction and Graduate Medical Education Accountability Act, H.R. 6352, ensures there will be a sufficient physician workforce to meet the health needs of the American population. 10,000 Baby Boomers are expected to retire every day for the next 20 years. In order to ensure there will be enough physicians trained to care for the Baby Boomer generation, H.R. 6352 increases the number of Graduate Medical Education (GME) slots by 15,000 over the next 5 years.

If enacted into law, this would be the first increase in GME slots in nearly 15 years. GME slots are funded primarily by Medicare for the purpose of training medical school graduates in patient settings. In order for these young doctors to become fully accredited physicians, they must undergo a residency program in a specific specialty that lasts from three to seven years. During this time, the medical residents care for patients under the supervision of physician faculty while also participating in both educational and research programs. After successfully completing their residency program, a doctor is eligible to take his or her board certification exam in order to practice medicine independently.

Schock’s bill allows the Secretary of Health and Human Services to issue 3,000 new slots a year over 5 years. Hospitals will be allowed to apply for the slots through one of two pools, but no hospital will be able to earn more than 75 slots. This limit ensures smaller and rural hospitals are able to compete for the slots in the same manner as larger hospitals and hospital systems. The first path a hospital can choose is through a “cap relief pool.” A hospital is awarded new slots on the basis of how long they have trained residents out of their own bottom line (“residents trained over the cap”) as well as how many total residents have been trained over the cap. This criteria rewards hospitals for training new medical doctors despite the current freeze on medical residency slots. 1,000 slots per year will be available through the cap relief pool. The second pool is the “priority pool” which awards GME slots through a priority criteria. The criteria, as outlined in the bill, gives hospitals a second pathway to apply for the slots. There will be 2,000 slots available through this second option. A hospital can choose to apply for slots through one or both pathways but is limited to receiving 75 slots annually.

H.R. 6352 also provides accountability to the American taxpayer by requiring teaching hospitals to report the full cost of their medical residency programs. Under current law, it is unclear what the total impact of these programs are. H.R. 6352 will require hospitals to report the true costs of their program, such as the cost of a medical resident’s laboratory/ research training. Schock’s bill also requires the nonpartisan Government Accountability Office (GAO) to update a report on specialties in which there is a physician shortage and issue a new report on ways to increase diversity in the health care workforce.

Thursday, August 2, 2012

Schock and Rubio Team Up to Eliminate Federal Tax on Olympic Medals

American Olympic Athletes Owe Uncle Sam Cash for Success

Washington, DC – Congressman Aaron Schock (R-IL) today introduced The Olympic Tax Elimination Act. Legislation that would exempt U.S. Olympic medal winners from paying federal taxes on the medals they receive in London. Schock has teamed up with Senator Marco Rubio (R-FL) to introduce companion legislation in the House. As the law stands now, Olympic medalist receive honorariums in the form of cash payments of $25,000 for gold, $15,000 for silver, and $10,000 for bronze. The Internal Revenue Service (IRS) collects 35 percent of those respective earnings.

“One of the greatest joys of the Olympics is to watch our athletes perform at the highest levels of competition and to seem them stand on the podium to be rewarded for their success,” said Congressman Aaron Schock. “Apparently, the sacrifices they make for their success doesn’t stop once they receive their Olympic medals. The federal government has to penalize our athletes by taxing them for the medals they have rightfully earned. This is a classic example of how complicated and costly our tax code has become and why tax reform is badly needed.”

“Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness,” said Senator Marco Rubio. “Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home. I’m proud to work with Aaron Schock to make sure that Olympians who dedicate their lives to athletic excellence are not punished when they achieve it.”

The Olympic Tax Elimination Act, would amend the Internal Revenue Code of 1986 to eliminate the tax on Olympic medals and prize money won by United States athletes. If enacted into law, the gross income of Olympic athletes “shall not include the value of any prize or award won by the taxpayer in athletic competition in the Olympic Games.” This would apply to prizes and awards received after December 31, 2011. A copy of the bill is available here.

Wednesday, August 1, 2012

Farmers in 98 of 102 Illinois Counties Now Eligible for Federal Drought Relief

CHICAGO – August 1, 2012. Governor Pat Quinn today announced that the U.S. Department of Agriculture has declared 98 of 102 Illinois counties as disaster areas. Approval of Governor Quinn’s latest request means federal disaster assistance is now available to help farmers in an additional 50 drought-stricken Illinois counties.

“While harvest has yet to begin, we already see that the drought has caused considerable crop damage,” Governor Quinn said. “This declaration means farmers across Illinois who are suffering production losses can now qualify for federal assistance.”

A combination of extremely hot and dry weather has stunted crop development across the state, especially in corn, which received inadequate moisture to pollinate. According to the Illinois State Water Survey, precipitation throughout Illinois averaged just 12.6 inches from January to June, making the first half of 2012 the sixth-driest on record. In addition, every month this year has had above normal temperatures, and the statewide average of 52.8 degrees for the first six months of the year is the warmest on record.

“As Illinois continues to suffer from severe drought conditions, this disaster declaration will give farmers and producers across our state access to critically needed resources to help them through the growing season,” said U.S. Senator Dick Durbin (D-Ill.). “I will continue to work with United States Agriculture Secretary Vilsack, Governor Quinn and the State of Illinois to identify other opportunities for federal assistance that will help minimize the impact of current drought conditions on Illinois farm families.”

"Today's announcement demonstrates the essential need for expanding assistance to Illinois' farmers suffering from this summer's extreme drought," said a spokesperson for U.S. Sen. Mark Kirk (R-Ill.). "Access to low-interest loans and other emergency assistance programs will benefit the state's agricultural counties and provide farmers additional protection from crop damage."

“The yield losses being projected could cause farmers cash flow problems,” Illinois Department of Agriculture Acting Director Bob Flider said. “The low-interest, emergency loans this declaration triggers would help them recover. They can be used to pay not only production expenses, but also family living expenses.”

Topsoil moisture in Illinois currently is rated as 85 percent being very short and 15 percent being short of moisture. Conditions are most critical in southern Illinois, where the U.S. Drought Monitor classifies the drought as “exceptional,” its highest designation.

Farmers who believe they may be eligible for the assistance should contact their county Farm Service Agency offices. Loan applications are considered on a case-by-case basis, taking into account the extent of losses, security available and applicant’s repayment ability.

In addition to approval of the disaster declaration, Governor Quinn is urging Congress to pass an extension of the federal Farm Bill that includes funding for disaster programs before its August recess. In a letter sent yesterday from the Midwest Governor’s Association to Secretary Vilsack and leaders of Congress, Governor Quinn and governors from three states also ask the federal government to temporarily waive audits of high-dollar crop insurance claims and to develop a comprehensive plan to open up as much federal land as possible for emergency grazing and haying.

For more information on drought assistance, please visit