Political Update from S4

Subject: Political Update from S4

Welcome to this week’s update on political news from the capital, Illinois, New York, New Jersey, Ohio, Indiana, and Minnesota!
Treasury Secretary Jack Lew announced the country can most likely make it until at least late October before defaulting on debt or needing an increase in the debt limit to make payments. Lawmakers will need to address the issue when they return for Fall session.Read more.

Rep. Mark Meadows, a Republican from North Carolina, filed a motion to remove House Speaker John Boehner from his post this week. The motion failed miserably, but Rep. Meadows said he wanted to create a “family conversation” among the party. A motion to vacate the chair, as it is called, has never succeeded in the House, and was only attempted once in the history of our government. 105 years ago. Read more.

Officials from the 12 countries working on the Trans-Pacific Partnership (TPP) trade deal have been meeting in Hawaii and are hoping to hammer out the final details of the deal today, but there are still some major obstacles. The US is pushing for 12-year exclusivity rights on biologic drugs (one of the newest innovations in pharmaceuticals), but Australia and other countries fear such a long period will allows prices to remain too high and want it reduced to five years. A final news conference is scheduled for 6:30 PM Central/7:30pm Eastern tonight. Read more.

The Affordable Care Act repeal amendment did not make it into the Senate’s six-year highway funding bill, but reauthorizing the Export-Import Bank did. Conservatives celebrated the expiration of the bank’s charter and are outraged that it might be voted back in place, but President Obama has made it clear that any transportation bill on his desk had better have an Ex-Im reauthorization attached to it.

The Senate passed its bill, but the House is still lukewarm toward it and is on recess until September 8th. This leaves the Ex-Im bank in limbo until at least then. Even if the bank is reauthorized, it will need help from the chairman of the Senate Banking Committee, Sen. Richard Shelby, because only two out of five seats on the bank’s board of directors are currently occupied, and the charter requires a quorum of three votes to approve transactions over $10 million. Sen. Shelby’s opinion of the bank is clear: it has “outlived its usefulness and should be allowed to expire.” Read more.

In the meantime, a new three-month highway funding bill passed both houses this week. The bill includes a measure allowing the Veterans Affairs Department (VA) to move $4 billion to cover a budget shortfall, without which the department would likely need to start closing VA hospitals. Read more.

Sens. Joni Ernst, James Lankford, and Rand Paul drafted legislation to defund Planned Parenthood, and over 20 other Republicans, including Majority Leader Mitch McConnell, have signed on as cosponsors. Democrats are united in their opposition to the measure so far. Some conservatives are taking their opinions of Planned Parenthood to the next level, threatening to let the government shut down rather than allow any funding to go to the organization. Presidential candidate Sen. Ted Cruz is one of the most vocal of these legislators, and he is encouraging his Republican colleagues to refuse to pass any appropriations bills that do not eliminate Planned Parenthood’s funding. Read more.

Florida senator and presidential candidate Marco Rubio has been active in attacking the Obama administration on its Iran policies, but he has been conspicuously absent from the Senate floor. Sen. Rubio has missed more votes than any other candidate since announcing his presidential bid in April, followed by Sens. Lindsey Graham and Ted Cruz. Sen. Rand Paul is holding down the opposite end of the spectrum, having missed just two votes.

HHS announced it will dramatically expand funding to states and community health centers for medication-assisted treatment for opioid abuse. The new funding will be provided through the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Health Resources and Services Administration (HRSA). SAMHSA will award up to $11 million a year to 11 states (Washington, Iowa, Vermont, Kentucky, Maryland, Indiana, Wisconsin, Wyoming, New Jersey, Massachusetts, and Missouri) to increase access to comprehensive medication-assisted treatment for opioid use disorders for up to three years. HRSA will make an additional $100 million available to expand and improve the delivery of substance abuse services, focusing on medication-assisted treatment for opioid abuse. In addition to these new funding avenues, CMS is offering Medicaid programs the option to receive federal funding to reimburse for substance use disorder treatment through a demonstration project. Read the press release.

Sen. Rand Paul’s presidential campaign is floundering amid low staffing and funding levels, brought on in part by the candidate’s unwillingness to court powerful donors on their terms – he even turned down an invitation to an event put on by the Koch brothers. On top of the campaign’s logistical problems, Sen. Paul’s message of unconventional and fresh ideas is being drowned out by other GOP candidates with more money (like Jeb Bush) and more headlines (like Donald Trump). Read more.

Gov. Christie again made his position against legalizing marijuana clear: “If you’re getting high in Colorado today, enjoy it. As of January 2017, I will enforce the federal laws.” This hardline stance is favored by neither his fellow Republican candidates nor the majority of the American population, but Gov. Christie brushed away those concerns and said if it is true, then Congress will pass legislation to legalize it. Read more.

Gov. Rauner vetoed a bill that would have amended the Illinois Public Labor Relations Act to require binding interest arbitration processes to begin if mediation on a collective bargaining agreement between the state and state employees was not successful. Thegovernor said this amendment would prevent his administration from reaching an agreement with AFSCME, the largest public services employee union, and would cost taxpayers billions of dollars.

Earlier in the day, Gov. Rauner’s general counsel sent out a letter about the newly extended AFSCME contract negotiation deadline of September 30th. In the letter, he stated that the administration was never planning to lock out state employees, and that while the latest “tolling agreement” prohibits striking, agencies should prepare for strikes anyway. An AFSCME representative responded and disputed that claim, saying the administration made no promises against a lockout until the new tolling agreement, and they have “actively recruited retired state employees as strike breakers and failed to deny considering the mobilization of the National Guard to break a strike.”

Bottom line: the contract negotiation deadline for the state worker union and the Rauner administration is now September 30th; workers are not allowed to strike, but the administration is preparing in case they do; and the governor vetoed legislation that would have replaced negotiations with arbitration after a certain time period. Senate President John Cullerton plans to hold a vote to override the veto next week.

After weeks of attacks on the subject from Gov. Rauner, Speaker Madigan filed a bill on Tuesday to stop the scheduled pay increase for legislators. The cost-of-living pay adjustment is an automatic increase, but legislators have foregone it for the past several years. Republicans introduced a bill with the same goal earlier this month, but it did not advance. Speaker Madigan’s bill passed within a matter of hours, but its path in the Senate may not be clear. Read more.

Fitch Ratings, a financial ratings agency akin to Moody’s, lowered Chicago Public Schools’ credit rating to junk status after its latest plan to borrow $1.16 billion by selling bonds. Fitch pointed to the $1.1 billion budget deficit for the upcoming school year and CPS’s reliance on borrowing, as well as its bitter relationship with the Chicago Teacher’s Union, as reasons for its decision. Read more.

Sen. Mark Kirk is already facing a tough battle to keep his seat, with Democratic challenger Rep. Tammy Duckworth leading in several polls and a prominent Republican donor publicly telling him to step down this week. The donor, Ron Gidwitz, later tried to retract his comments, but the damage was done.

Gov. Rauner has not formally proposed a tax on advertising, among other services, but several business groups are already gearing up to fight it. During his campaign Gov. Rauner proposed expanding the sales tax to certain services to rake in over $600 million in revenues, almost $38 million of which would come from a tax on advertising. The business groups say this contradicts the governor’s push for a more business-friendly climate, and Illinois would only be the third state in the nation to apply a tax or similar measure to advertising.

Former Gov. Rod Blagojevich plans to appeal the remaining 13 corruption counts against him next week. Five of the original 18 convictions were thrown out last week due to improper instructions given to witnesses during his trial, and Blagojevich’s attorney said they are optimistic about overturning the rest of the charges.

New York
Vice President Joe Biden and Gov. Cuomo jointly announced that La Guardia Airport will be completely rebuilt by 2021. This will not just be a new coat of paint and a floor shine; entire terminals will be moved closer together and connected to the central hub, more taxiing space will be added to prevent delays, and public transportation will be connected. The airport will still operate while this is happening by building new parking garages in one area and starting construction on new terminals where the old garages were. The project is expected to create 8,000 construction jobs and an unspecified number of additional permanent jobs at the expanded stores and restaurants within the airport. Read more.

Some aviation analysts, however, are skeptical about the claims that the new design will reduce congestion and delays. Read more.

Chirlane McCray, Mayor de Blasio’s wife and the chairwoman of the Mayor’s Fund to Advance New York, announced a $30 million grant program that will expand mental health services to low-income residents. Connections to Care, as the program will be called, will train workers in existing community organizations, from preschools to job placement centers, to identify and respond to mental health problems like depression and substance abuse. The idea is to provide much-needed services by trusted peers directly in communities. Read more.

Senate Majority Leader John Flanagan appointed Sen. John DeFrancisco as the new Senate Deputy Majority Leader, now that Sen. Tom Libous has officially vacated his seat due to felony corruption convictions. Sen. Flanagan edged out Sen. DeFrancisco for the Majority Leader post in May when Sen. Dean Skelos resigned amid his own corruption scandal.

Despite the two corruption convictions in the state Senate this year, Gov. Cuomo said this week that there is no need to call a special session on ethics. He says lawmakers have not changed their minds on any pieces of legislation because of the verdicts, “so for the taxpayers to spend a lot of money to bring the legislators back to Albany for the same outcome they had several weeks ago makes no sense.” Read more.

The Federal Emergency Management Agency (FEMA) will grant the MTA and Port Authority of New York and New Jersey an additional $11.1 million in emergency preparedness funding this year. The agencies will receive a total of $42.9 million, intended for preparing against terrorist attacks. Read more.

And after a weeks-long standoff, Gov. Cuomo and Mayor de Blasio reportedly spoke to each other for the first time this week. The mayor said no resolution was reached, but “this is going to be an ongoing thing.”

New Jersey
State Sen. Ray Lesniak, who gained considerable press this past year over his opposition to the Christie administration’s environmental damages settlement with ExxonMobil, will run for governor in 2017. Read more.

The trustees of the state’s three largest pension funds filed an amended complaint against the Christie administration arguing that while the state Supreme Court declared the state cannot be forced to appropriate funds and pay into the pension system at a certain time, the state still owes the money and is not simply off the hook. Read more.

In a separate case, the state Supreme Court will decide whether the state had the right to freeze government workers’ cost-of-living adjustments (COLAs) in 2011, or if it will need to reimburse retirees for the losses and reinstate COLAs. Read more.

Senate President Stephen Sweeney has a solution to the state’s rising public employee pension debt: create a federal government loan program that would allow states to borrow about $50 billion at 1% interest over 30 years from the Federal Reserve. Sen. Sweeney, who may be a gubernatorial candidate in 2017, pointed to the 27 states grappling with funding shortfalls of over $10 billion and said, “If it is in the nation’s interest for the federal government to step in and keep Wall Street and General Motors afloat, it should be able to find ways to protect the pensions of middle-class teachers, police and government employees.” Read more.

The state’s overall structural deficit (the basic imbalance between revenues and expenditures) is now at $10.2 billion, only $500 million less than when Gov. Christie took office in 2010. Read more.

Acting Attorney General John Hoffman announced the state will spend $1.5 million “to fully equip the New Jersey State Police road troopers with body cameras” and will offer an additional $2.5 million to help local police units acquire body cameras. State troopers are expected to start wearing the cameras by mid-2016. Read more.

The city of Dayton went to court for the second time this year to fight against SB 342, the bill that requires a police officer to be present to issue citations based on automated camera information (e.g. red light cameras). The city’s assistant attorney said the requirements “waste police resources and they’re specifically intended to act as a burden as a de facto ban on photo enforcement.” Read more.

ResponsibleOhio submitted 95,000 new petition signatures yesterday to make up for the election officials’ ruling that they were close to 30,000 signatures short last week. The new signatures need to be validated by August 10th, and the November ballot will be finalized by the 25th. Read more.

Gov. Pence vowed to expand charter school opportunities in the state, including opening 22 new charter schools over the next three years. He also lauded the new grant program that will provide an extra $500 per student to charter schools with high ratings and $50 million in construction loans. Despite these funding increases, some national charter school companies say they have better financial support in other states and are unlikely to expand to Indiana. Read more.

Gov. Pence appointed Democrat Jim Schellinger to head Indiana’s economic development agency. Schellinger has served on the agency’s board of directors for the last several years, and he is the CEO of an architecture and interior design company based in Indianapolis. He ran unsuccessfully for governor in 2008, and he and his wife donated $15,000 to Gov. Pence last year. Read more.

As of August 1st, Minnesota’s minimum wage will rise to $9 an hour, the highest in the Midwest. This is the second stage of a three-stage increase initiated in 2014; next August, the minimum wage will rise again to $9.50. Read more.
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