A Losing Bet On Casinos

Just hours after the Illinois Gaming Board awarded the state’s coveted 10th casino license to the Chicago suburb of Des Plaines last week, State Sen. Terry Link (D-Waukegan) began rallying for the state to add more.

“We will be looking into an expansion of gaming in the next session,” Link told the Lake County News-Sun. “We want to do a capital bill. This would be one of the avenues in which to do it.”

Such proposals should come as no surprise. For some time, Illinois state lawmakers have looked to gaming expansion as an easy way to fetch big bucks.

But is this smart public policy?

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Families USA: More Medicaid Spending Would Stimulate IL Economy

Although hospital surgeries and emergency room visits dropped slightly in the third quarter of this year compared with the same period in 2007, health care consumption is generally considered recession proof. If people are sick, they go get checked out, regardless of the economic climate. That’s problematic in an economic crunch, because as revenue sources dry up, it’s often state and federal medical programs that are first on the chopping block. Illinois currently owes a whopping $4.5 billion to health care providers, including more than $2 billion in Medicaid reimbursement. While state officials advanced a crucial $1.4 billion borrowing plan earlier this month, it won’t begin to cover the state’s medical debt. And Illinois isn’t alone, according to the Washington Post:

Already, 19 states—including Maryland and Virginia—and the District of Columbia have lowered payments to hospitals and nursing homes, eliminated coverage for some treatments, and forced some recipients out of the insurance program completely.

Barack Obama’s transition team has signaled that extra help for Medicaid will be included as part of his administration’s economic stimulus proposal. And like spending on neighborhood stabilization -- which we covered last week -- it makes both moral and economic sense to prioritize Medicaid payments.

A new study by Families USA underscores the point.

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Spending The Stimulus

It’s no secret that Illinois government is a bit unstable these days. Not only is the General Assembly holding impeachment hearings of Gov. Rod Blagojevich but the state has run up a huge budget deficit and both parties elected new Senate leaders last month. By January 21 of next year, things might be a bit more settled. If not, how the state spends crucial federal assistance could become a big issue.

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Column

A Fork In The Road: The Promise Of Advanced Manufacturing

“If you are going through hell, keep going.” – Winston Churchill

Every day, we see the painful downward spiral of an economy dominated by speculation and paper profits intended to maximize short-term return at the expense of our nation’s long-term health. In the current global financial crisis, we feel the effects of that philosophy in ways that threaten serious destabilization. We now must rebuild what 25 years of failure has taken from us: a vibrant, healthy middle class that honors labor, creates real wealth, grows strong communities, and helps to lift our fellow citizens out of poverty. We must rapidly implement new and innovative solutions to heal our environment rather than hasten its demise. Specifically, we must re-discover, re-invent, and re-build manufacturing in the knowledge economy.

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Giannoulias: IL One Of Two States Under "Negative Credit Watch"

State Treasurer Alexi Giannoulias appeared on CNBC's Squawk Box yesterday to discuss "The Blagojevich Effect" -- specifically, how the governor's arrest last week cost taxpayers $20 million by driving up the interest rate on the state's short-term bond deal.  During the discussion, Giannoulias dropped a nugget I hadn't heard yet: Illinois is one of only two states in the country under a "negative credit watch" by the rating agency Standard & Poor's.  California is the only other state with this honor (which is not the kind of company we want to be keeping).

Also, notice how the hosts have some fun with Alexi at the end, signing off, "Thanks, governor."  Watch:

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Short-Term Bond Deal Reached

Although Gov. Rod Blagojevich’s arrest initially threw the deal into limbo, state officials came to an agreement last night to move forward with a crucial $1.4 billion borrowing plan. While not a fiscal panacea, the bond obligations will provide Medicaid reimbursements that have been held up for months and will help cover the $4 billion pile of backlogged bills owed to state vendors. Reuters has more:

The federal charges filed against Blagojevich last week, accusing him of trying to sell political favors for campaign contributions and jobs, forced the debt sale to be postponed from Thursday to Tuesday. Madigan raised questions about certifying the debt sale while the governor’s legal problems hung over the state.

Natalie Bauer, a spokeswoman for Illinois Attorney General Lisa Madigan, said the new language was found to be acceptable by bond attorneys working on the deal, clearing the way for Madigan to certify the deal.

(H/T Archpundit)

Unlike Other States, Illinois Unemployment Fund Flush

When the New York Times reported on Sunday about the increasing number of states whose unemployment funds are drying up, we wondered how Illinois’ accounts are doing. What we found was a bright spot in an otherwise dreary fiscal landscape: the Prairie State’s unemployment fund is flush with cash.

That’s right, flush. The Illinois’ unemployment insurance trust fund had $1.6 billion on hand at the end of November, compared with $1.9 billion last year. Even with the economy in dire straits and a growing number of people dipping into the fund, the state is prepared, the Department of Employment Security’s Greg Rivara tells us.

That being said, the Times found that our neighbors to the east aren’t doing as well:

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Dan Swinney's Got A Plan

Amid all the twelve-figure bailouts and theoretical arguments about how to repair the American economy, I was so relieved to hear Dan Swinney's comments last Sunday as a guest on Bruce DuMont's Beyond The Beltway.  Swinney is a labor guy and, as such, has a very practical, on-the-ground perspective when it comes to reversing our economic troubles and regaining competitiveness on the global stage.  He sees the big picture and, unlike many, is focused on the "opportunity" in this crisis. But at the same time he has started small -- specifically, with a high school on Chicago's West Side. 

As we wrote in a feature article last summer, Austin Polytechnical Academy seeks to train local teenagers as skilled laborers who can fill vacant, high-paying positions in the city's industrial sector.  The school, which opened its doors in the fall of 2007, is part of the Chicago Public Schools' Renaissance 2010 program and there are several other similar institutions scheduled to pop up around the city in the coming years.

While there was already plenty of support for Swinney's model before the financial meltdown, interest in replicating it elsewhere is rapidly growing these days.  As Swinney explains in the clip below, Barack Obama has endorsed the idea and representatives from the National Education Association and the California Teachers Association rolled through Chicago this week to take a look at his pilot project in the hopes of launching something similar on the West Coast.  Watch:

As you can see, Swinney's perspective is extremely easy to wrap your head around.  We've lost a lot of the unskilled labor opportunities to assembly lines elsewhere.  And we're not going to get those jobs back.  But if America invests in training students in advanced, skilled work -- with support from the private sector -- we can become a world leader in what he describes as "complicated products."

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Illinois Has $831 Million In Ready-To-Go Infrastructure Projects

At Barack Obama’s press conference last Tuesday, ABC 7’s Andy Shaw told him that across the country “mayors and county board presidents and governors are facing hemorrhaging budgets and … are wondering, to paraphrase the late, great Mike Royko, ‘Where’s ours?’” In his response, the president-elect made clear -- and rightfully so -- that the Prairie State won’t be in line for any extra goodies. Nonetheless, Illinois should certainly be near the front of the line when it comes to assistance and investment.

A new report from the National Governors’ Association (NGA) has outlined $18 billion worth of ready-to-go capital projects that would give state economies a jolt and put folks back to work. As the Stateline graph below shows, Illinois ranks fifth nationwide, with $831 million worth of road, schools, and other infrastructure initiatives that could be started up within 90 days of receiving necessary funding:

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A Bailout For Main Street

Just three days after Dick Durbin relaunched his effort to let judges alter the terms of distressed mortgages in bankruptcy cases, a coalition of activists rallied outside the senior Illinois senator’s Chicago office to commend his efforts and push him to offer more expansive assistance.

Organized by Chicago Jobs With Justice (JWJ), a group of around 50 gathered to hear testimony from Antoinette Chambers, a West Side resident facing eviction from her apartment because her landlord is being foreclosed upon. The coalition also delivered a letter to a Durbin staffer (right) calling on Congress to support his bankruptcy bill, impose a freeze on all mortgage foreclosures, and pass a job-creating stimulus package as outlined by the Institute for Policy Studies.

“This is a letter,” said James Thindwa, JWJ’s executive director, “that we’re sending to Senator Durbin to thank him, to acknowledge his good efforts, and to ask him to do more and push other members of the U.S. Senate and the Congress at large to really understand what an emergency this is.”

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