Week In Review: August 14

Amazon Opens Fulfillment Center in Joliet

The online retailing firm, which stockpiles and forwards much (but not all) of the goods sold on its website, has opened its first sorting and order fulfillment center in Illinois. The 500,000-square-foot Joliet-based facility will carry out chores that are intended to increase the proportion of goods that can be delivered to Chicago-area customers on the day an electronic order is placed. The fulfillment center’s capabilities go well beyond those of a traditional warehouse.

The fulfillment center will specialize in the warehousing, sorting, and delivery preparation of books, small electronics, and consumer goods. The site’s startup has created an estimated 1,000 Illinois jobs. The company has suggested that if the State is able to improve its business climate, they may open multiple fulfillment centers and other facilities in the Chicago area by 2017.

House Republicans Successfully Push Passage of “Federal Funds” Measure

As the Fiscal Year 16 budget showdown continues, House Republicans took the lead last week in keeping a federal-only pass through bill on track, ensuring approximately $5 billion in federal dollars will flow to state agencies and service providers. SB 2042, as amended in the House on Wednesday, August 12, will appropriate federal funds given to Illinois for specific state programs mandated or strongly encouraged by Washington, D.C. The Governor has signaled his support for a “federal funds” budget bill.

Despite unanimous bipartisan passage in the Senate, the original SB 2042 almost failed in the House due to a late amendment added by House Democrats that attempted to hold these federally-funded programs “hostage” to the overall budget impasse. In the end, the majority party yielded and allowed the original federal funds appropriation bill to be voted on by the full House with a handful of Republican suggested additions related to homeland security. AP political writer John O’Connor wrote a good article that explained the issue very well.

Governor’s Office Begins to Cut Fiscal Year 2016 Spending

In the absence of an FY16 budget, Illinois faces an immediate FY16 spending situation right now and a worsening crisis. The Governor and his office have begun to take unilateral action, utilizing the emergency rulemaking authority possessed by State agencies, to cut spending. Rules to reduce taxpayer spending on medical hospital reimbursements, Medicaid-paid medical transportation (ambulance services), State-subsidized child care services, and the operations of the Illinois Labor Relations Board have been promulgated in the first weeks of the FY16 budget impasse.

The Joint Committee on Administrative Rules (JCAR), an arm of the Illinois General Assembly for which I serve as the Republican Spokesperson, considered these budget-cutting rules at their meeting on Tuesday, August 11. JCAR did not take steps to block these rules, which will remain in effect.

Illinois continues to operate without a budget for FY16. While many sections of State government are approaching crisis conditions, many others are operating normally due to various court cases, consent decrees and continuing appropriations. Many observersbelieve that because most state functions continue to operate as usual, there is very little public pressure on the legislature to resolve the crisis.

Controversial Gourmet Restaurant at College of DuPage to Close

The “Waterleaf” restaurant, a high-end eatery and training center located at the main campus of the College of DuPage, has been implicated in many revelations of out-of-control spending by retiring college president Richard Breuder and top aides. Waterleaf has been operated as part of the COD’s Culinary and Hospitality Center, located on the College’s Glen Ellyn campus.

While the luxury place for fine eating and drinking was described to College of DuPage taxpayers and students as a place for training aspiring chefs, caterers, and specialized food preparers, 2015 news accounts indicate that the eatery was not very successful at achieving these policy goals. The tablecloth restaurant appears to have been oriented, instead, towards use as an eating club and executive amenity for Breuder and his friends. The retiring college president has gone on leave of absence, and the newly-elected COD Board of Trustees, controlled by the “Clean Slate” faction, is actively investigating his policies and leadership. The trustees voted on Thursday, August 13 to close down the controversial restaurant.

H.J Heinz and Kraft Foods Merge and Consolidate; 700 Positions in Chicago Affected

The merger of two major packaged-food firms, H.J. Heinz and the former Kraft Foods, into Kraft Heinz is affecting the Chicago area. Kraft Heinz has stated they are eliminating 700 positions located in Northfield, Illinois, the former headquarters of Kraft when it was an independent company. The reduction in force is part of the overall elimination of 2,500 jobs at the company.

The Northfield action is expected to affect more than one-third of the Kraft Heinz workforce at Northfield, which had been approximately 1,900. Kraft Heinz is best-known among consumers for familiar brands such as Velveeta processed cheese, Jell-O desserts, and Heinz condiments and ketchup.

New Law Toughens Rules Intended to Reduce and Prevent Athletic Concussions

The Youth Sports Concussion Safety Act mandates that schools with athletic programs develop rapid-response concussion emergency action plans that will enable medical help to be obtained and prompt care available in cases of actual or suspected head injuries. Parallel mandates are placed on youth sports leagues and on park districts that organize youth sports activities. The Illinois High School Association (IHSA) and other affected groups will develop rules and policies to implement the new law, which went into effect immediately and will apply to the 2015 high school football season.

The new law is the result of passage of SB 3 in spring 2015 by the Illinois General Assembly. The bill was signed into law on Monday, August 3 by Governor Bruce Rauner. The House vote on SB 3 in May 2015 was 104-1-1, with almost all House Republicans voting in support of the measure.

Illinois State Fair Opens in Springfield

The annual Illinois State Fair opened on Thursday, August 13 and will continue until Sunday, August 23. Held at the State Fairgrounds on the north side of Springfield, the gathering features entertainment, festival food, rides and attractions. State fairs have been held since 1853, with the exception of the years during World War II. In a typical year, between 0.5 million and 1.0 million fairgoers attend the festivities.

House Passes Bill to Provide Emergency Debt Service Relief

SB 2042, as amended in the House, contains a tweak to appropriations laws governing the operations of the Chicago-based authority that governs McCormick Place, the Metropolitan Pier and Exposition Authority. In the absence of a budget, a “tweak” to the MPEA’s law is necessary to allow the MPEA to put funds into readiness to carry out its debt servicing requirements. The vote on Wednesday, August 12, to pass SB 2042 was 98-0-0.

The MPEA has borrowed substantial sums of money in order to expand McCormick Place, rebuild Navy Pier, and carry out financing for an arena and hospitality space adjacent to the convention center. Debt on these borrowings will be due on Dec. 15, and monies are required to be set aside monthly to prepare for this December payment. Citing uncertainties about this financing chain Standard & Poor’s, the New York City bond rating house, sharply reduced the MPEA’s debt rating on Wednesday, August 5.