Winger's Weekly Wrap-Up

Budget – FY16
Illinois budget impasse sets modern record among 50 U.S. states. With the coming of April 2016, the FY16 budget impasse entered its tenth month. According to the National Conference of State Legislators (NCSL), which maintains a database of the actions of legislative bodies nationwide, this is the longest time that any U.S. state has gone without a budget in the history of modern governmental activity.

There has been no state budget in place since June 30, 2015, the last day of FY15. The General Assembly was not able to pass a constitutional balanced budget in spring 2015 for FY16, and their subsequent meetings have not resolved the impasse. While some facets of State spending have completely stopped, other areas – especially areas of social spending controlled by court orders, consent decrees, and continuing appropriations – are generating increasing liabilities for taxpayers. Comptroller Leslie Munger has warned lawmakers that at current rates the State and its taxpayers will face a backlog of $10 billon in unpaid bills by the time the current fiscal year ends on June 30, 2016.

Census – population
Population of Illinois, Chicago area dropped in FY15. The decline was tracked by the U.S. Census Bureau. During the twelve-month period ending in June 2015, Illinois lost almost 22,200 residents. During this period, the six-county area that makes up the most widely-accepted description of the metropolitan Chicago area dropped by more than 5,400 people. The decline was led by Downstate Illinois, which lost almost 16,800 residents, and Cook County, which lost almost 10,500 people. The five so-called “collar counties” grouped around Chicago gained almost 5,100 residents.

Illinois’ most populous county, Cook County was, of all 50 states, the U.S. county that lost the most net residents during this year-long span. Cook County’s demographic performance underperformed another Midwestern county that had for many years led in this category, Michigan’s Wayne County (which is centered on the troubled city of Detroit). The Prairie State’s negative picture was accentuated by net outmigration, with more than 67,000 more people moving out of Illinois than moving in. Births outweighed deaths by more than 45,000 Illinoisans, but this was not enough to overcome the negative outmigration numbers.

The U.S. census figures have been correlated by economic observers with additional data points indicating relatively low levels of growth, or negative growth, in Illinois job creation, consumer consumption, retail sales, and tax revenues. Illinois this week entered its tenth month of “operations” without a State budget, in part because leaders have been unable to reconcile skyrocketing Illinois public-sector costs with a declining private-sector economy.

Economy – unemployment
Illinois jobless rate rises from 6.3% to 6.4%. The most-widely-tracked measurement of joblessness, called “U-3,” ticked upward in Illinois in February 2016 from 6.3% to 6.4%. The announcement, made on Thursday, March 24, further widened the gap between Illinois and nationwide unemployment rates. The overall U.S. U-3 jobless rate stood at 4.9% in February 2016, 150 basis points lower than the unemployment rate in Illinois. “Illinois remains one of only three states that have not recovered jobs lost from the 2001 recession,” said Jeff Mays, director of the Illinois Department of Employment Security (IDES). In cooperation with the federal Bureau of Labor Statistics, IDES gathers and publishes month-by-month jobless data in Illinois.

There was some good news for Illinois in the February 2016 report. Employers created a net addition of 18,100 new Illinois jobs in the second month of 2016, signaling continued slow job growth in Illinois. The increased unemployment rate was partly caused by persons returning to or newly entering the Illinois work force and not yet hired, rather than net new layoffs. With almost 6 million (5,993,800) jobs, the Illinois February 2016 nonfarm payroll exceeded the 2008 peak for the first time. However, the anemic jobs peak reached in January 2008 in Illinois was actually lower than the number of jobs Illinois had prior to the next earlier recession, a downtown associated with the catastrophe of September 11, 2001. It was this pre-2001 jobs peak (6,055,100 jobs in September 2000) that Illinois has not yet matched.

As in previous months, the U-3 jobless count does not encompass the entire picture of unemployment in Illinois. Jobless numbers that include discouraged workers, persons marginally attached to the labor force, and involuntary part-time workers (U-4 through U-6) are typically not tracked on a month-by-month basis in the U.S. states. However, these workers and their stories are also part of the overall story of Illinois unemployment.

State government – Illinois Department of Innovation and Technology
New State department moves forward in push to consolidate in-house IT functions. The Illinois Department of Innovation and Technology, created by Bruce Rauner executive order in January 2016, has been asked to consolidate the information technology (IT) functions performed by a wide variety of State agencies and departments. In a joint appearance on Wednesday, March 30, the Governor asked several of his department heads and senior staff to explain to the public what they are doing to increase the IT productivity of their departments.

Historically, almost every agency had their own IT staff and in-house technology standards. In many cases, this led to the selection of incompatible software platforms; in some cases, some State agencies are still using repeatedly-updated platforms that have roots in code written as far back as the 1970s. In some cases, these platforms continue to require the same data points to be added repeatedly to redundant databases, or require the use of obsolescent or obsolete technologies such as computer tapes. Individual agency IT staff members are now moving into the new Department, where they will have the chance to work together. Consultants have told the Rauner administration and the General Assembly that, over time, the rationalization of IT technology will lead to growing productivity benefits for the State of Illinois and its taxpayers.

Spring in Illinois
Ag educators, extension agents once again point farmers to cover crops. Traditional secondary crops used by farmers for livestock feed and weed control, such as red clover and cereal rye, have been avoided by many Illinois farmers for years. The invention of specialty herbicides and the concentration of Illinois arable land on the two major crops used in Midwestern food science and industry, corn and soybeans, have made cover crops seem superfluous. However, this traditional practice of old-time farmers is regaining ground in central Illinois, including on acreage rated on the highest-productivity scales for growing cash crops. Additional reasons for planting cover crops, such as the preservation of soil nutrients and reduction of silt runoff, are being added to the decision to plant cover crops in addition to corn and beans.

The Illinois Nutrient Loss Reduction Strategy, an overall plan developed by the Illinois Environmental Protection Agency and implemented by agriculture educators and soil-and-water conservation districts statewide, aims at continuous reductions in the quantity of nitrogen fertilizers, phosphorus fertilizers, and other agricultural chemicals added to Illinois waterway runoff. The development of comparatively new cover crops, such as canola with its bright yellow flowers, is also part of the changing mix of incentives facing farmers.