County Board votes down health fees for non-profit

Cathy Ward

via FACEBOOK at 8:50PM Sept 16, 2015

THANKS TO A PACKED HOUSE OF BOONE COUNTY FRIENDS, THE COUNTY BOARD TURNED DOWN THE HEALTH DEPARTMENT'S REQUEST TO ADD FEES TO NON-PROFIT GROUPS. I'm so very proud of those of you who came. The vote was 6 against the fees, two people abstained, one left before the vote, so officially 6-3. It's a terrific honor to represent you, the lifeblood of our county.

THANKS TO A PACKED HOUSE OF BOONE COUNTY FRIENDS, THE COUNTY BOARD TURNED DOWN THE HEALTH DEPARTMENT'S REQUEST TO ADD FEES TO NON-PROFIT GROUPS. I'm so very proud of those of you who came. The vote was 6 against the fees, two people abstained, one left before the vote, so officially 6-3. It's a terrific honor to represent you, the lifeblood of our county. Just to keep the record straight, Sherry Giesecke, Paul Larson and Sherry Branson voted to add on the new fee to non-profits. Ken Freeman, Craig Schultz, Brad Stark, Jeff Carlisle, Bob Walberg and I voted no. Denny Ellingson and Ray Larson abstained and Karl Johnson left early in the meeting before the vote.

Here is the issue which was voted on.

Boone County to consider fees for nonprofits serving food at fundraisers - News - Rockford Register Star - Rockford, IL

By Ben Stanley
BELVIDERE — Nonprofit groups in Boone County may soon have to pay fees to the Health Department to serve food at fundraisers.

For years the Boone County Health Department waived food-permit charges for nonprofits, but the County Board recently backed a measure that changes course. The county is looking to implement permit fees for nonprofits but at a significantly reduced rate.

The County Board will consider the proposal at 6 p.m. Wednesday at the Boone County Administration building. If approved, nonprofits would have to pay 50 percent of the permit fee normally charged to organizations.

Opponents of the proposal say charitable organizations will feel the pinch.

"By the time you (factor in) buying the food and everything, a lot of fundraisers don’t produce that much money," said Marion Thornberry, legislative director of the Illinois State Grange and moderator for St. John's United Church of Christ in Belvidere. The money raised "goes right back into the county to help the homeless and the needy in one way shape or form."

An annual permit allows a group to serve food at essentially as many fundraisers as it wants as long as it meets inspection standards. The price of the permit is based on several factors, including the level of risk associated with the types of foods organizations plan to serve.

According to Health Department records of food permits issued to nonprofits from Sept. 4, 2014, to Sept. 4, 2015, the average price of an annual or seasonal food permit was $216. If the new measure passes, nonprofits would be on the hook, on average, for $108 a year.

Bill Hatfield, director of environmental health for the Health Department, said the maximum fee the county can charge for a high-risk annual food permit is $450, which means the most a nonprofit would have to pay for a permit would be $225.

The new fees are estimated to bring in $9,000 a year.

Health Department officials believe they're one of the only counties in the state still waiving the fees for nonprofits; Winnebago County does not.

“One of the things that’s getting overlooked here is this is a user fee," Hatfield said. "A not-for-profit is choosing to drive down the food highway, and there’s rules, and inspections. They could choose to drive down a road that is not food. They could sell sports equipment. They could sell Popsicle sticks. They could do whatever kind of fundraiser they want and not even have to worry about a food permit. But they’re choosing to do food, and the general public needs to have assurance that the food that’s being offered meets the public health code ... and there are expenses involved."

Page 2 of 2 - Hatfield said the cost of health inspections has risen over the past 40 years as health codes expanded and more stringent rules were put in place.

"We have utilities, building expenses, electrical expenses, benefits, wages. There’s talking on the phone, there’s making permits, there’s issuing permits, there’s making notes in the files, there’s getting things ready to do the inspections, there's the cost of gas, there's time spent on site … most people just want to say, 'well that inspector’s getting $20 an hour and it took him a half-hour to do the inspection, my fee should be $10.' There’s a lot of things involved in the service that are not readily seen."

The Health Department receives tax money and government grants to operate each year, but it has been losing revenue. The county's tax base is dwindling as costs are rising. While waiting on frozen-by-the-budget-stalemate state funding, the department has been digging into its rainy-day fund to, among other things, support its staff.

In its fiscal 2015 budget, the department is projected to expend nearly $60,000 more than it will collect in revenue.

"The money we lose is going to continue to get higher," Administrator Cynthia Frank said. "We totally base what we charge for a permit on what it costs us. That’s how we come up with the fee. But now it’s gone up. So now we are losing even more money than we were before. And there’s more not-for-profits (obtaining free permits) ... we've got to get a handle on it."

But many nonprofits also rely on government funding, so additional expenses — such as permit fees on fundraisers — aren't exactly good news.

“My perspective on the situation is that they’re crazy" at the Health Department, Thornberry said.

Charging nonprofits for food permits will limit their resources, he explained, as well as their ability to effectively care for disadvantaged populations.

"If the nonprofits don’t support the homeless and don’t care for the homeless, who’s going to do that? If the nonprofits stop doing that stuff, it’s going to come back on the county."

Ben Stanley: 815-987-1369; bstanley@rrstar.com; @ben_j_stanley

Mr. Ward also had an opinion piece on the issue.

Hundreds of Boone County volunteers in nonprofit groups will get a clear picture of how much they are valued when the the Boone County Board votes Wednesday on a proposed fee for any food permits for these groups.

The Boone County Health Department is again seeking to impose a fee, snatching a portion of the profits, when church groups, community groups, school groups have dinners, breakfasts, ice cream socials, spaghetti dinners, etc., as fundraising activities.

The agency tried this a couple years ago, but the proposal was defeated; some board members even suggested at the time that the department be eliminated and services be contracted out to other counties. At the time, County Board member Ron Wait, who was a state representative for years, noted that counties are not required to have health departments.

So the department is back again seeking the fee with a new board that, so far, has not seen a fee hike it didn't like.

The proposal has had easy passage from the Health Board; County Board member Sherry Branson and new Health Board member Barb Thrun voted no. At the County Board committee level, only I voted no; Paul Larson, Sherry Giesecke and Ray Larson voted yes.

Health Board official Bill Hatfield says they need the money to help balance the budget, even though figures show more than $500,000 in the combined reserves. He also says the fee will not even cover the costs of the work done to supervise these events. However, sometimes the only work done is to file the permit sheet.

Besides, Boone County residents already pay for the services of the Health Department every time we pay taxes. That's their job! The department also receives many grants, which is also taxpayer money.

When asked how much each nonprofit group would have to pay, Hatfield said: “What is the speed limit in Illinois?” I guess that smart-aleck reply to a legitimate question was meant to mean that each permit could carry a different fee.

Hatfield also claimed that the Boone County Health Department is a nonprofit group. However that is an apples-to-oranges comparison because Health Department staff members are certainly paid (Hatfield's annual salary is more than $62,000, plus health benefits, vacation and holiday pay) while volunteers in nonprofits usually pay for the privilege of serving on these groups with time, gas, dues, buying tickets.

At a time when distrust of many government activities is apparent, it seems a poor time for any board to raise fees for people working hard to help their communities. It will be certainly hard to convince these volunteers of the statement “We're from the government. We're here to help.”

The County Board will meet at 6:30 p.m. at the Logan Avenue Administration Building.  (Wednesday, September 16, 2015)

Much of the attention to the issue was caused by several stories in the Belvidere Daily Republican by Lisa Rodgers.

Committee votes in favor 3-1 for food permit fees for non-profits

Committee votes in favor 3-1 for food permit fees for non-profits

Posted by RVPEditor / In Belvidere Daily Republican, Public Meetings

By Lisa Rodgers

Reporter

BOONE COUNTY: Once again the Boone County Board is being asked to approve food permit fees for nonprofit (NFP) organizations.

The Boone County Board denied a previous request. Originating from Boone County Health Department (BCHD) staff followed by approval by the Boone County Board of Health, the request was forwarded to Boone County Health and Human Services Committee for discussion and vote.

On Sept. 3, the Health and Human Services Committee (HHS) had its monthly meeting and on their agenda was the fee request from the BCHD.  Committee members present were Chairman Paul Larson, Sherry Giesecke, Raymond Larson, and Cathy Ward, Ex-Official Bob Walberg, and Vice-Chairman Sherry Branson was absent.

Discussion began and at the onset Cathy Ward stated she had just come from a Keen Age meeting prior to the HHS Committee meeting.  Ward brought forth that she had heard the laws were changing and that rhubarb might now be permissible.

Public Health Administrator Cynthia Frank and Director of Environmental Health Bill Hatfield were seated at the table and included in the discussion.  Neither Frank nor Hatfield responded either confirming or refuting Ward’s statement.

“Taxpayers are publically subsidizing the NFP’s by not having fees on the food permits.  The health department is losing revenue.  Based on the NFP applications the health department has lost $18,370 in total fees not collected.  This would have been collected without a waiver.  It is a total loss of revenue,” Hatfield said.

Further discussion continued and the amount with a resolution of 50 percent of the regular fee was proposed.

Votes as cast: Chairman Paul Larson-Yes; Sherry Giesecke-Yes; Raymond Larson-Yes; Cathy Ward-No; Vice-Chairman Sherry Branson-Absent.

It should be noted there was dissent from the audience stating that Chairman Paul Larson should not have voted.  It was stated he should only vote in a tie.  Vote stood as cast.

With approval, the request now moves to county board for a vote on Sept. 16.  Only the full Boone County Board has the authority to either approve or deny the request of fees.

Cathy Ward who was the only “No” vote had the following comment, “Once again the Boone County Health Department wants to snatch a part of the proceeds from volunteer groups working hard to help our county and community by seeking a fee for each food permit issued for not-for-profit groups. I opposed this a couple years ago when they proposed this and still do.”

When asked how much the fee would be, Boone County official Bill Hatfield replied,
“What is the speed limit in Illinois?’

The Health Department receives money every time we pay property taxes. They also receive grants to run their departments.

Hatfield says the health department is a not-for-profit group, too.

Part of the problem here is the public relations disaster this department has created through the years, and now if this passes, it will be harder still to convince the good people (regarding the health department) of our county that ‘We’re from the government. We’re here to help’,” said Cathy Ward Boone County Board Member District 3.

At the same time fees are being requested from the BCHD, Illinois State Legislators introduced and approved legislation effective Jan. 1, 2016 to amend the Food Handling Regulation Enforcement Act 410 ILCS 625/ and offer exemption from the law for non-profits in regards to fundraisers. While conducting research on Sept. 3, the following website forrager.com/law/illinois/ provided information:

http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=099-0191.

At three separate meetings that included BCHD staff Aug. 31, Sept. 2 and Sept. 3 no information/comments were provided in regards to the new law effective Jan. 2016.

The next Boone County Board meeting will be held Sept. 16 at 6:30 p.m. at 1204 Logan Ave. in Belvidere in the Administrative Building.

Reference:  Committee votes in favor 3-1 for food permit fees for non-profits

 

Great rhubarb over rhubarb in Boone County
By Lisa Rodgers
Reporter
BOONE COUNTY – According to Webster’s Dictionary and Daily Writing Tips (www.dailywriting tips.com/rhubarb-is-not-just-a-vegetable/), the word rhubarb may be used in the context of a vegetable, controversy, murmurous background noise, and in baseball.
Quotes provided from the Boone County Health Department (BCHD) were obtained from a public meeting of the Boone County Board of Health (BCBH) on Aug. 31 and from a meeting held Sept. 2 at the BCHD where the Belvidere Daily Republican was invited discuss rhubarb.
In attendance Sept. 2 was Public Health Administrator Cynthia Frank, Director of Environmental Health Bill Hatfield, Boone County Board of Health Member Marshall Newhouse, and Ellen Genrich who was required to attend as they were informed they were on the record.
Rhubarb (the vegetable) is the rhubarb (the controversy) in Boone County. And with this rhubarb (controversy) comes a rhubarb (murmurous background noise).
Where is the confusion originating? Is rhubarb pie permitted or prohibited? Recently at a NFP fundraiser, the rhubarb (vegetable and controversy) emerged once again.
Credible sources from the Boone County Community have complained, expressed anger, frustration as well as mistrust with the BCHD.
Members of non-for-profit’s (NFP’s) who have been issued a food permit said, “We have been informed that any type of rhubarb is prohibited due to ‘rhubarb being poisonous’ and that ‘the restriction is being mandated by the State of Illinois’.
“No information has been provided by the BCHD when the permit was issued in regards to what is at our event. We were informed of the rhubarb restriction at the time of the event and inspection,” said anonymous NFP sources.
On Aug. 31, an explanation was provided to the board/public when the rhubarb issue was raised in public comment about a recent NFP event.
“I received a phone call about the confusion and in about an hour the matter was resolved to everyone’s satisfaction. This was an isolated occurrence and it has been resolved,” Hatfield said.
On Sept. 2, when asked if he stood by his comment that this was an “isolated occurrence” Hatfield responded, “There was no occurrence. We have spoken to them and the matter was resolved in about an hour,” Hatfield said.
On Sept. 2, when different NFP’s were discussed as to having experienced similar problems over rhubarb it was explained.
“I have no written documentation in any of my paperwork from my inspectors in regards to an issue with rhubarb and have not received any phone calls/emails or complaints. I am unaware of any problems,” Hatfield said.
“Rhubarb pie, jams, and jellies are permitted in Boone County if produced in a properly permitted commercial kitchen and may be served at a NFP event or sold at a farmers market,” Hatfield continued in his explanation.
“For the two years I served on the Boone County Board, Hatfield claimed he had no complaints in regards to rhubarb or other issues. Nothing was documented in the reports, but fines could be verified.
Hatfield and I had numerous conflicts over the inappropriate and conflicting actions of the Health Department personnel. This can be verified by the minuets of Health and Human Service Committee meetings and County Board meetings,” said Marion L. Thornberry, former Boone County Board Member District 3 and Legislative Director, Illinois State Grange.
“Based on my conversations I am going to request a line item be added to the agenda of the next BCBH meeting to request a public meeting between the BCHD and the NFP’s in attempt to establish trust and remove any confusion of what is permissible,” Newhouse said on Sept. 2.
Despite all the rhubarb over rhubarb over the existing law there is exciting news for those who wish to have bake sales in Boone County.
While conducting research on Sept. 3, the following website forrager.com/law/illinois/ provided information on an amendment effective Jan. 1, 2016 to the current Food Handling Regulation Enforcement Act that currently profit and NFP are subject too.
Unfortunately, the State of Illinois still considers rhubarb to be a Potentially Hazardous Food due to low acidity.
“A home kitchen operation does not include a person who produces or packages non-potentially hazardous baked goods for sale by a religious, charitable, or nonprofit organization for fundraising purposes; the production or packaging of non-potentially hazardous baked goods for these purposes is exempt from the requirements of this Act,” according to www.ilga.gov/legislation/publicacts/fulltext.asp….
The next Boone County Board of Health public meeting is Monday, Sept. 28 at noon at 1204 Logan Ave. in Belvidere in the BCHD Conference Room.

Reference:  (23) Great rhubarb over rhubarb in Boone County By... - Belvidere Daily Republican

The Koch Brothers' Magic Trick | Fred Wertheimer

 

In August, 2015, Charles and David Koch gathered their fellow billionaires and multimillionaires at a semi-annual meeting of the Koch network "to save" the country, in the words of Charles Koch.

It was not exactly the same kind of meeting that occurred in July 1776 when the Founding Fathers gathered in Philadelphia to create a nation or at Gettysburg in November 1863 when President Lincoln declared to the nation that "government of the people, by the people, for the people, shall not perish from the earth."

Charles Koch, however, apparently felt it was of comparable significance declaring to the "Super Rich" participants gathered for the meeting, and the Presidential candidates who had been summoned, that they were engaged in "a life or death struggle for our country."

Charles Koch said that if the Koch network failed to convince a "majority of Americans behind the [Koch] vision, then we're done for."

Charles Koch and his brother David Koch are each worth more than $40 billion, according to Forbes magazine. Together, they bring a combined total of more than $80 billion to their crusade "to save" the country.

According to a New York Times article (January 15, 2015), "The political network overseen by the conservative billionaires Charles G. and David H. Koch plans to spend close to $900 million on the 2016 campaign, an unparalleled effort by coordinated outside groups to shape a presidential election that is already on track to be the most expensive in history."

At the August 2015 meeting, the Koch network backed off some, stating that the $889 million would be spent on issue advocacy, education grants and political activity. Much of the issue advocacy run by groups in recent years, however, has involved campaign-related expenditures.

While no one knows just how much the Koch network will end up spending in the 2016 elections, according to the Times article, "In 2012, the Kochs' network spent just under $400 million, an astonishing sum at the time. The $889 million spending goal for 2016 would put it on track to spend nearly as much as the campaigns of each party's presidential nominee."

The Kochs could easily fund this venture by themselves, but that is not how the Kochs became the sixth and seventh richest individuals in the country, according to Forbes.

A portion of the funds they plan to spend during the 2016 election cycle will come from the Kochs' own resources. The rest of the funds will come from the billionaires and multimillionaires who help finance the Koch network.

We will not know, however, the sources and how much each gave.

That is because the Kochs operate in secret in our political system. They use nonprofit, tax-exempt groups to hide most of the donors funding their network. (Freedom Partners Action Fund, a Koch network Super PAC which discloses its donors, spent $23.4 million in the 2014 election cycle, according to the Center for Responsive Politics).

If the Kochs are successful, their investment in the 2016 election cycle will bring the two brothers extraordinary power and influence over government decisions. Since the Kochs control the spending of these massive funds -- or the delivery of the benefits - the power and influence will accrue directly to them, regardless of the other donors supporting the network.

This is a magic trick worthy of the Magic Hall Of Fame.

It is also the overriding campaign finance story of the 2016 election.

Koch Industries is the second largest privately held company in the United States, with annual revenues of $115 billion, according to Forbes. The company has economic interests in oil, natural gas, coal, chemicals, minerals, fertilizer, pulp and paper and commodities trading, among others. The stakes the company has in government policies include climate change, energy, environmental regulation, other government regulations and tax laws, among others.

This "experiment" in "democracy" is unheard of in American history. Two unelected private citizens with huge financial stakes in government actions and decisions are planning to control the spending of an unheard of amount of money in order to obtain the government they want.

The Supreme Court majority had no idea about the political shambles that would result from its 5 to 4 decision in Citizens United (or even worse, the Court majority did). The Court has given the country a new political system increasingly focused on billionaires, millionaires, Super PACs, corporations and nonprofit corporations.

At the core of the Court's new political system are the three basic elements that resulted in the historic Watergate campaign finance scandals: unlimited contributions, secret money and corporate funds.

These same elements are unfolding in the 2016 elections.

The "Super Rich" are funding, with unlimited contributions, individual-candidate Super PACs that operate as arms of the presidential candidates they support. The Super PACs have one basic purpose: to allow a presidential candidate to circumvent and thereby eviscerate the $2,700 per donor, per election, candidate contribution limit with huge contributions made to the Super PAC supporting the presidential candidate.

If the 2012 presidential election was the first year of the individual-candidate Super PAC, then the 2016 presidential election is the first year they were joined by individual-candidate nonprofit corporations - which are supposed to be "social welfare" organizations.

Eight presidential candidates are associated with these kinds of nonprofit corporations which also have one basic purpose: to allow donors to make unlimited, secret contributions to support the candidate.

Unlimited, secret contributions are the most dangerous kind of influence-buying money in American politics. They provide widespread opportunities for government corruption since they are invisible and the buyers and sellers of government actions cannot be held accountable for corrupt practices.

In the face of this corrupt system, however, citizens are not helpless.

Major campaign finance scandals resulted in effective, major reforms in the 1970s, 1990s and 2000s.

Today, we have systemic corruption in the wake of Citizens United and transactional corruption scandals are bound to follow. Ordinary Americans can fight back and win effective reforms, as they have done successfully in the past.

Fundamental changes to improve the system can be made, even in the face of the Supreme Court's destructive decision.

A reform agenda can be enacted to counter what is happening today that includes:

• A public financing system for presidential and congressional elections in which citizens choose candidates to receive public funds by providing small contributions that are matched with multiple public funds;

• New campaign finance disclosure requirements to close the gaping loopholes under which the "Super Rich" are injecting hundreds of millions of dollars in secret contributions into our elections;

• New anti-coordination restrictions to shut down individual-candidate Super PACs, and the new individual-candidate nonprofit groups, and to strengthen the coordination restrictions applicable to other outside spending groups; and

• A new, real campaign finance enforcement agency to replace the dysfunctional and failed FEC.

These changes would empower ordinary Americans by making their small contributions more valuable to candidates, dilute the impact of big money, provide an alternative way for candidates to finance their campaigns and reduce dependency on influence-seeking donors.

The changes would also end the use of individual-candidate Super PACs and nonprofits to eviscerate candidate contribution limits, end secret money in our elections and end a system where campaigns and political operatives know they can violate the campaign finance laws with impunity.

This agenda is impossible to enact today.

But campaign finance reform is always impossible to enact - until it is enacted, as it will be again.

Important work lies ahead for concerned citizens and groups to set the stage to strike when the opportunities arise. That work is currently underway in many ways, such as the 21st Century Democracy Agenda created by reform groups.

At his event last August, Charles Koch compared the efforts of the Koch network with the American Revolution, the anti-slavery movement, the women's suffrage movement and the civil rights movement.

This is an absurd comparison.

The movements described by Koch involved issues of enormous moral justice and social consequence, and sprung from ordinary Americans doing extraordinary things. They did not come from two multibillionaires rallying their fellow billionaires and multi-millionaires "to save" the nation.

The Koch brothers apparently believe it is their calling to determine what is best for more than 300 million of us.

We choose instead to go with Abraham Lincoln who said, "Government of the people, by the people, for the people, shall not perish from the earth."

Follow Fred Wertheimer on Twitter: www.twitter.com/FredWertheimer

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The Koch Brothers' Magic Trick | Fred Wertheimer

UAW, Fiat Chrysler reach tentative labor pact - Yahoo News

 

By Bernie Woodall and Joseph White

 

DETROIT (Reuters) - Fiat Chrysler Automobiles <FCHA.MI> <FCAU.N> and the United Auto Workers union reached a tentative agreement for a new labor contract for the company's 40,000 unionized workers in the United States, the union and the company said Tuesday evening.

UAW President Dennis Williams and FCA Chief Executive Officer Sergio Marchionne scheduled a press conference in Detroit at 7:15 p.m. EDT (2315 GMT) to discuss the agreement. The two sides released no details.

The deal will now go to FCA unionized workers for ratification.

“Expectations are very high for raises for everyone," Kristin Dziczek, labor analyst with the Center for Automotive Research, said Tuesday before the agreement was announced.

Veteran UAW workers, who make about $28 per hour, have not had a wage hike in a decade. More recently hired factory workers earn so-called second-tier wages that topped out at $19.28 in the old contract. Those workers have pushed UAW leaders to narrow that gap or set a clear path to eliminating it.

View gallery

UAW President Dennis Williams addresses their Special Bargaining Convention held at COBO Hall in Det …

At FCA, about 45 percent of the hourly UAW workers earn lower-tier wages.

The surge in profits for the once-struggling Detroit automakers, FCA, Ford Motor Co <F.N> and General Motors Co <GM.N> has also fed pressure from rank-and-file UAW members for substantial raises.

FCA’s North American operating profit in the second quarter reported on July 30 was $1.35 billion, up 37 percent from the previous year.

If the UAW secured significant pay hikes it could help the union's efforts to organize non-union auto plants in the southern United States, and possibly embolden workers in other industries where pay has stagnated in the face of economic uncertainty and global competition.

“The stakes go well beyond Detroit and the automotive industry," said Harley Shaiken, a labor expert at the University of California-Berkeley.

Williams had also pushed publicly for the automakers to consider a proposal to pool their respective company health plans into a single group to curb rising costs. It was not known whether FCA agreed to that proposal in any form.

The terms of the deal with Fiat Chrysler, if ratified, will set the pattern for subsequent labor agreements at General Motors and Ford, the UAW has said. The union has extended contracts at Ford and GM pending the outcome of talks at FCA.

(Reporting by Bernie Woodall and Joe White; Additional reporting by Nick Carey in Chicago; Editing by Lisa Von Ahn and Lisa Shumaker)

UAW, Fiat Chrysler reach tentative labor pact - Yahoo News

CBPP Projections Show Long-Term Budget Outlook Has Improved Significantly Since 2010 But Remains Challenging | Center on Budget and Policy Priorities

9/14, 2015

by

Richard Kogan, Paul N. Van de Water, and Cecile Murray

Under current budget policies, the nation’s fiscal outlook is stable for the rest of this decade and then worsens gradually, according to CBPP’s new long-term budget projections.

Policymakers should not ignore the long-run budget problems, which remain challenging.  No deficit or debt crisis looms, however, and promoting further labor market improvements remains the nation’s most immediate economic concern.  Policymakers should therefore avoid too much deficit reduction too soon, which would weaken the economic recovery, and focus deficit-reduction efforts on measures that take effect after the labor market has more fully recovered.

Policymakers should avoid too much deficit reduction too soon.Under our projections of current policies, the federal debt will be virtually flat in relation to the economy for the next several years and then slowly rise.  The ratio of debt to gross domestic product (GDP) — which was 74 percent at the end of fiscal year 2014 — will drop slightly to 73 percent by 2017 but grow to 92 percent by 2040, we project.  That’s a marked improvement over the situation just five years ago (see Figure 1), but policymakers need to take further significant steps to address the problem.

A stable — or declining — debt-to-GDP ratio is a common goal for fiscal stability.  Although a rising debt ratio is advantageous when the economy is operating well below its potential, as it was in the Great Recession and ensuing sluggish recovery, a rising debt ratio in a strong, high-employment economy, in contrast, reflects an unsustainable budget policy that ultimately jeopardizes financial stability and long-term growth.  Policymakers should reduce projected debt-to-GDP ratios through carefully designed policies that strengthen the economic recovery in the near term, while putting in place equitable and balanced deficit reduction that grows in size over time.  (See box.)

These long-run budget projections are not a prediction.  Rather, they show what will likely happen, under reasonable expectations of how the economy will perform in coming decades, if policymakers continue current laws and policies — that is, without reducing projected deficits or  expanding them (by cutting taxes or boosting spending without covering the cost).

Our new projections update those we published in May 2014 to reflect the latest Congressional Budget Office (CBO) ten-year and long-term budget projections, the latest projections by the Social Security and Medicare trustees, changes in budgetary policies, and other recent developments.^[1]  On a comparable basis, our new projections are very similar to last year’s.  The technical note at the end of this paper provides more information about how we made the projections.

Figure 1

&nbs;&nbs;

The Revenue Outlook

Federal revenues are projected to continue at their current level of a bit over 18 percent of GDP in 2016 through 2025.  After 2025, two trends — rising real incomes that push people into higher tax brackets (so-called “real bracket creep”) and growing, taxable withdrawals from tax-favored retirement accounts by an aging population — will help push up revenues gradually as a percentage of GDP.^[2]  By 2040, they are projected to reach 19.4 percent of GDP, close to their level in the final years of the Clinton Administration.  (See Figure 2.)

Figure 2

&nbs;&nbs;

The Spending Outlook

Federal outlays are projected to rise from 20.6 percent of GDP in 2015 to 23.6 percent of GDP in 2040.  Only about one-third of the rise stems from primary, or non-interest, spending — that is, spending on programs that pay benefits to ordinary Americans and carry out the functions of government.  (See Figure 2.)  The bulk of the rise stems from net interest, as interest rates rise from historic lows and the federal debt gradually mounts.

The composition of federal non-interest spending will also change significantly by 2040.  Because of an aging population and rising health care costs, Social Security, Medicare, Medicaid, and health insurance subsidies will grow substantially — both as a percentage of GDP and as a share of total federal spending — while all other programs as a whole will shrink.  Social Security and the major health programs, which today account for 53 percent of non-interest spending, are projected to reach 69 percent of the total in 2040, with all other programs representing a correspondingly smaller share.

Social Security.  Benefits under the Old-Age, Survivors, and Disability Insurance programs (together known as Social Security) will rise slowly but steadily in the next two decades — from a bit under 5 percent of GDP today to just over 6 percent in the 2030s — and then stabilize.  That pattern largely mirrors the aging of the population and is dampened by the scheduled rise in the program’s full retirement age — which was historically 65, is now 66, and will climb to 67 between 2017 and 2022.  (Each year that the full retirement age is raised lowers benefits across the board for future retirees by about 7 percent, regardless of whether they claim benefits early or work until the full retirement age or beyond).^[3]

The Debt-to-GDP Ratio

Generally, the debt-to-GDP ratio should rise only during hard times or major emergencies and then decline during good times.  That enables the government to combat recessions through tax cuts and spending increases and to alleviate hardship during bad times, while creating a presumption against policies that markedly increase the debt during good times.

A stable debt-to-GDP ratio is a key test of fiscal sustainability.  Increases in the dollar amount of debt are not a serious concern as long as the economy is growing at least as fast.  Between 1946 and 1974, for example, debt held by the public grew significantly in dollar terms but — thanks to economic growth — plummeted as a percentage of GDP, from 109 percent to 24 percent.

Some suggest that certain debt-to-GDP ratios have a particular meaning in terms of their effect on the economy.  In reality, there are no absolute thresholds.

Until a few years ago, for instance, many pointed to a 2010 analysis by economists Carmen Reinhart and Kenneth Rogoff suggesting that debt-to-GDP ratios of 90 percent or more are associated with significantly slower economic growth.  But the authors have acknowledged computational errors in their original work and clarified that there is no “magic threshold” for the debt ratio above which countries suddenly pay a marked penalty in terms of slower economic growth.  To the extent that countries with higher levels of debt experience slower growth, there is not much evidence that the high debt caused the slow growth; the reverse is just as likely to be true — that the slow growth caused the high debt — or some combination of the two effects.

Similarly, some analysts call for a debt ratio of 60 percent of GDP or less, a goal that the European Union and the International Monetary Fund (IMF) adopted some years ago.  No economic evidence supports this or any other specific target, however, and IMF staff have made clear that the 60 percent criterion is arbitrary and should not guide near-term fiscal policy in the wake of the recent financial crisis, which drove up government debt worldwide.  IMF recently stated, “Our results do not identify any clear debt threshold above which medium-term growth prospects are dramatically compromised.”^a

All else being equal, a lower debt-to-GDP ratio is preferred because of the additional flexibility it provides policymakers facing economic or financial crises and the lower interest burden it carries.  But all else is never equal.  Lowering the debt ratio comes at a cost, requiring larger spending cuts, higher revenues, or both.  That is why we emphasize the importance of not only the quantity but also the quality of deficit reduction, which should not hinder the economic recovery or cut spending in areas that can boost future productivity or harm vulnerable members of society.

^a Andrea Pescatori, Damiano Sandri, and John Simon, Debt and Growth: Is There a Magic Threshold?, International Monetary Fund WP/14/34, February 2014, p. 4.

Medicare.  Net outlays for Medicare benefits — that is, total payments minus the premiums that enrollees pay — are expected to rise from 3 percent of GDP today to 5 percent of GDP in 2040.  Medicare fundamentally faces the same demographic pressures as Social Security.  But Medicare faces an extra cost pressure: the tendency of medical costs, fueled by technological advances and increased utilization, to outpace GDP growth.  The cost controls and delivery system reforms in the Affordable Care Act (ACA), plus other developments in health care delivery, are expected to curb (though not eliminate) that pressure.  Our projections are based on current law and assume that policymakers will retain the ACA’s cost-control provisions.

Medicaid, CHIP, and health insurance subsidies.  Medicaid — a joint federal and state program — provides acute health care coverage and long-term supports and services to eligible low-income people, while the Children’s Health Insurance Program (CHIP) covers many low-income children through capped grants to states.  The ACA expanded the reach of Medicaid, at state option, and created new state-based marketplaces to enable millions of people without other coverage to buy health insurance at reasonable prices and without exclusions for pre-existing conditions or other restrictions that often made coverage unaffordable.

Figure 3

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In the short term, the ACA expansion of enrollment in state-based marketplaces will push up spending for this trio of programs from 2.2 percent this year to 2.5 percent in 2017.  After 2025, demographic and cost pressures will lead this category of health spending to reach 2.9 percent of GDP in 2040.

The fact that health care costs remain the largest driver of increased future spending should not obscure how dramatically their projected costs have fallen over the last few years.  As Figure 1 shows, in January 2010 we projected that debt would exceed 200 percent of GDP by 2040; we now project less than half that ratio.  Much of the improvement is from lower health care costs:  in January 2010 we projected that Medicare and Medicaid together would cost 11.1 percent of GDP in 2040, but (based on the latest projections from CBO and the Medicare actuaries) we now project that Medicare, Medicaid including the ACA expansion, CHIP, plus the new marketplace subsidies will together cost 7.9 percent of GDP, or about 30 percent lower than the previous estimate.  (See Figure 3.)  This development has substantially improved the long-run fiscal outlook.

Other program spending.  This category includes hundreds of programs for which Congress appropriates funding on an annual basis — known as defense and non-defense discretionary programs — as well as entitlement or mandatory programs such as SNAP (formerly food stamps), pensions for federal civilian and military retirees, veterans’ disability and education benefits, the refundable portions of the Earned Income Tax Credit and certain other tax credits, Supplemental Security Income (SSI) for poor elderly and disabled people, unemployment insurance, Temporary Assistance for Needy Families (TANF), farm price supports, and various smaller programs.

Over the next ten years, this broad category — which spiked to nearly 14 percent of GDP in 2009, during the economic downturn — is projected to fall as a percentage of GDP from 9.2 percent in 2015 to 7.4 percent in 2025.  Both these figures are well below the 11.1 percent average of the last four decades.  Almost all of the drop from 2015 to 2025 occurs in discretionary spending and is concentrated between now and 2021, as the caps and sequestration provisions of the 2011 Budget Control Act (BCA) squeeze defense and non-defense programs alike, and as the war in Afghanistan and similar military operations continue to wind down.  Spending for the mandatory programs in this part of the budget also drifts down as a percentage of GDP, though less precipitously; unlike Social Security and the major health programs, most other mandatory programs do not face particular demographic or cost pressures, and some — such as unemployment insurance and SNAP — shrink naturally as the economy recovers.^[4]

After 2021 (for discretionary programs) and after 2025 (for the entire “other program spending” category), we assume that outlays keep pace with inflation and population growth — in other words, that real spending per person remains constant.  That’s consistent with the historical pattern: we’ve generally found that these categories of spending rise faster than inflation and population growth only a) if Congress affirmatively acts to increase these programs, which is by definition not consistent with a projection of current law or policy; or b) during recessions, when unemployment insurance and similar automatic stabilizers rise temporarily but then fall back to normal levels when the economy recovers.  Keeping pace with inflation and population growth implies a continued downward drift in this spending category as a percentage of GDP, from 7.4 percent in 2025 to 6.2 percent in 2040.^[5]

Interest.  Unlike every other spending category, net interest doesn’t reflect explicit funding decisions by policymakers.  Instead, it’s jointly determined by the amount of borrowing fueled by policymakers’ other spending and revenue decisions (in other words, by the debt) and by the interest rates set in financial markets.

Today, federal net interest costs represent 1.2 percent of GDP, almost matching the historic lows posted in the 1950s through early 1970s, when federal debt was far smaller.  But today’s low interest rates, which are holding down borrowing costs, will not last forever.  As a result, by 2025, net interest costs are expected to climb to 2.7 percent of GDP, even though the debt hardly rises (from 74 percent to 76 percent of GDP) during that period.  By 2040, we expect net interest to reach 3.3 percent of GDP and debt to reach 92 percent of GDP.

Assuring Solvency for Social Security and Medicare

Assuring long-run solvency for the Social Security and Medicare Hospital Insurance (HI) trust funds would substantially improve the long-run budget picture.  Like other organizations’ long-term projections, ours assume that full benefits will continue to be paid even after those trust funds are exhausted.  Nevertheless, the programs lack legal authority to pay full benefits in that situation.  Their trustees project that the HI fund will be exhausted in 2030 and the combined Social Security trust funds in 2034.^[6]  In those years, incoming revenues would support 86 percent of Medicare HI benefits and about three-quarters of Social Security benefits.^[7]

Bringing the Social Security and HI trust funds into financial balance — through tax increases, benefit cuts, or some combination of the two — would forestall much of the projected rise in the debt-to-GDP ratio.  If Social Security and HI expenditures equaled their revenues in each year after the projected depletion of those trust funds, federal debt would peak at 84 percent of GDP in 2033 and decline to 79 percent of GDP by 2040.  The “Trust Fund Solvency” line in Figure 4 assumes that solvency is restored to the trust funds abruptly, through a sudden benefit cut or tax increase once the assets of the trust funds are depleted.  Since, by law, benefit payments cannot exceed amounts available in the trust funds, it is indeed plausible to assume that, one way or another, solvency will be restored to the trust funds.  Phasing in some combination of additional revenues and lower benefits more gradually, starting sooner, might produce slightly lower debt ratios than those shown here.

Figure 4

&nbs;&nbs;

To summarize, policymakers can avert about three-quarters of the projected 18-point increase in the debt ratio through 2040 by restoring solvency to the trust funds through revenue increases, benefit reductions, or a combination of the two.

Uncertainty of Long-Run Projections

Users of these or any long-run budget projections should keep in mind that they are highly uncertain.  CBO recently estimated, for example, that if productivity in the economy grew by ½ percent a year less or more rapidly than it projects, the debt ratio in 25 years would be about 17 percentage points higher or lower.^[8]  Thus, the debt ratio in 2040 under current budgetary policies could easily be as high as 110 percent of GDP or as low as 76 percent, given our projection of 92 percent.

Likewise, if interest rates over the 2016-2040 period are one-half of a percentage point higher or lower than we project, the debt ratio in 2040 would be roughly 10 percentage points higher or lower than we project, all else equal.  Since other critical variables such as health care costs are also inherently difficult to predict, the actual range of estimating uncertainty surrounding these long-run projections is even greater.

In addition to uncertainty about the economic future, considerable policy uncertainty surrounds our projections.  As the technical note explains, our projections approximate a continuation of current laws and policies.  But consider the “tax extenders,” a set of tax provisions primarily benefiting businesses that policymakers routinely extend for a year or two at a time, most of which expired at the end of 2014.  Suppose that policymakers revive and continue these extenders without offsetting their cost.  Suppose also that policymakers repeal or circumvent the sequestration of discretionary funding, both defense and non-defense, without offsetting those costs, and that war costs continue at current, real levels indefinitely instead of winding down.  Those three additional costs would increase the 2040 debt ratio by 7 percentage points, 8 percentage points, and 5 percentage points, respectively, producing a 2040 debt ratio of 112 percent of GDP rather than 92 percent.

Read more of this report by clicking on the following:   CBPP Projections Show Long-Term Budget Outlook Has Improved Significantly Since 2010 But Remains Challenging | Center on Budget and Policy Priorities

Boone County to consider fees for nonprofits serving food at fundraisers - News - Rockford Register Star - Rockford, IL

 

By Ben Stanley
BELVIDERE — Nonprofit groups in Boone County may soon have to pay fees to the Health Department to serve food at fundraisers.

For years the Boone County Health Department waived food-permit charges for nonprofits, but the County Board recently backed a measure that changes course. The county is looking to implement permit fees for nonprofits but at a significantly reduced rate.

The County Board will consider the proposal at 6 p.m. Wednesday at the Boone County Administration building. If approved, nonprofits would have to pay 50 percent of the permit fee normally charged to organizations.

Opponents of the proposal say charitable organizations will feel the pinch.

"By the time you (factor in) buying the food and everything, a lot of fundraisers don’t produce that much money," said Marion Thornberry, legislative director of the Illinois State Grange and moderator for St. John's United Church of Christ in Belvidere. The money raised "goes right back into the county to help the homeless and the needy in one way shape or form."

An annual permit allows a group to serve food at essentially as many fundraisers as it wants as long as it meets inspection standards. The price of the permit is based on several factors, including the level of risk associated with the types of foods organizations plan to serve.

According to Health Department records of food permits issued to nonprofits from Sept. 4, 2014, to Sept. 4, 2015, the average price of an annual or seasonal food permit was $216. If the new measure passes, nonprofits would be on the hook, on average, for $108 a year.

Bill Hatfield, director of environmental health for the Health Department, said the maximum fee the county can charge for a high-risk annual food permit is $450, which means the most a nonprofit would have to pay for a permit would be $225.

The new fees are estimated to bring in $9,000 a year.

Health Department officials believe they're one of the only counties in the state still waiving the fees for nonprofits; Winnebago County does not.

“One of the things that’s getting overlooked here is this is a user fee," Hatfield said. "A not-for-profit is choosing to drive down the food highway, and there’s rules, and inspections. They could choose to drive down a road that is not food. They could sell sports equipment. They could sell Popsicle sticks. They could do whatever kind of fundraiser they want and not even have to worry about a food permit. But they’re choosing to do food, and the general public needs to have assurance that the food that’s being offered meets the public health code ... and there are expenses involved."

Page 2 of 2 - Hatfield said the cost of health inspections has risen over the past 40 years as health codes expanded and more stringent rules were put in place.

"We have utilities, building expenses, electrical expenses, benefits, wages. There’s talking on the phone, there’s making permits, there’s issuing permits, there’s making notes in the files, there’s getting things ready to do the inspections, there's the cost of gas, there's time spent on site … most people just want to say, 'well that inspector’s getting $20 an hour and it took him a half-hour to do the inspection, my fee should be $10.' There’s a lot of things involved in the service that are not readily seen."

The Health Department receives tax money and government grants to operate each year, but it has been losing revenue. The county's tax base is dwindling as costs are rising. While waiting on frozen-by-the-budget-stalemate state funding, the department has been digging into its rainy-day fund to, among other things, support its staff.

In its fiscal 2015 budget, the department is projected to expend nearly $60,000 more than it will collect in revenue.

"The money we lose is going to continue to get higher," Administrator Cynthia Frank said. "We totally base what we charge for a permit on what it costs us. That’s how we come up with the fee. But now it’s gone up. So now we are losing even more money than we were before. And there’s more not-for-profits (obtaining free permits) ... we've got to get a handle on it."

But many nonprofits also rely on government funding, so additional expenses — such as permit fees on fundraisers — aren't exactly good news.

“My perspective on the situation is that they’re crazy" at the Health Department, Thornberry said.

Charging nonprofits for food permits will limit their resources, he explained, as well as their ability to effectively care for disadvantaged populations.

"If the nonprofits don’t support the homeless and don’t care for the homeless, who’s going to do that? If the nonprofits stop doing that stuff, it’s going to come back on the county."

Ben Stanley: 815-987-1369; bstanley@rrstar.com; @ben_j_stanley

Boone County to consider fees for nonprofits serving food at fundraisers - News - Rockford Register Star - Rockford, IL

My View: Red alert for Boone County nonprofits - Opinion - Rockford Register Star - Rockford, IL

By Cathy Ward

Posted Sep. 13, 2015 at 5:33 PM

Hundreds of Boone County volunteers in nonprofit groups will get a clear picture of how much they are valued when the the Boone County Board votes Wednesday on a proposed fee for any food permits for these groups.

The Boone County Health Department is again seeking to impose a fee, snatching a portion of the profits, when church groups, community groups, school groups have dinners, breakfasts, ice cream socials, spaghetti dinners, etc., as fundraising activities.

The agency tried this a couple years ago, but the proposal was defeated; some board members even suggested at the time that the department be eliminated and services be contracted out to other counties. At the time, County Board member Ron Wait, who was a state representative for years, noted that counties are not required to have health departments.

So the department is back again seeking the fee with a new board that, so far, has not seen a fee hike it didn't like.

The proposal has had easy passage from the Health Board; County Board member Sherry Branson and new Health Board member Barb Thrun voted no. At the County Board committee level, only I voted no; Paul Larson, Sherry Giesecke and Ray Larson voted yes.

Health Board official Bill Hatfield says they need the money to help balance the budget, even though figures show more than $500,000 in the combined reserves. He also says the fee will not even cover the costs of the work done to supervise these events. However, sometimes the only work done is to file the permit sheet.

Besides, Boone County residents already pay for the services of the Health Department every time we pay taxes. That's their job! The department also receives many grants, which is also taxpayer money.

When asked how much each nonprofit group would have to pay, Hatfield said: “What is the speed limit in Illinois?” I guess that smart-aleck reply to a legitimate question was meant to mean that each permit could carry a different fee.

Hatfield also claimed that the Boone County Health Department is a nonprofit group. However that is an apples-to-oranges comparison because Health Department staff members are certainly paid (Hatfield's annual salary is more than $62,000, plus health benefits, vacation and holiday pay) while volunteers in nonprofits usually pay for the privilege of serving on these groups with time, gas, dues, buying tickets.

At a time when distrust of many government activities is apparent, it seems a poor time for any board to raise fees for people working hard to help their communities. It will be certainly hard to convince these volunteers of the statement “We're from the government. We're here to help.”

The County Board will meet at 6:30 p.m. at the Logan Avenue Administration Building.  (Wednesday, September 16, 2015)

My View: Red alert for Boone County nonprofits - Opinion - Rockford Register Star - Rockford, IL

AP Exclusive: GOP's Walker proposes vast union restrictions - Yahoo News

 

MADISON, Wis. (AP) — Republican presidential candidate Scott Walker on Monday will call for sweeping restrictions on organized labor in the U.S., seeking to replicate nationwide his successful effort as Wisconsin's governor to curb the power of unions.

 

At a town hall meeting in Las Vegas, Walker will propose eliminating unions for employees of the federal government, making all workplaces right-to-work unless individual states vote otherwise, scrapping the federal agency that oversees unfair labor practices and making it more difficult for unions to organize.

Many of Walker's proposals are focused on unions for workers at all levels of government, while others would also affect private-sector unions. Labor law experts said such an effort, if successful, would substantially reduce the power of organized labor in America.

While Walker could enact some of the proposals via presidential executive order, others would require an act of Congress or changes in federal regulations. The goal, Walker said, is "to achieve fairness and opportunity for American workers."

"This will not be easy," Walker said in a statement to The Associated Press. "Many — including the union bosses and the politicians they puppet — have long benefited from Washington rules that put the needs of special interests before needs of middle-class families."

Experts were taken aback by the scope of Walker's proposals, which seek to undo decades of law and would gut the landmark National Relations Labor Act — adopted in 1935 and signed into law by President Franklin D. Roosevelt at the height of the Great Depression.

"I've never seen anything like this," said Ann Hodges, a professor at the University of Richmond who has studied labor law for more than 40 years. "This will take the breath away from anyone who's worked in labor relations for any length of time. ... It's pretty draconian."

Walker's plan also calls for prohibiting automatic withdrawal of union dues to be used for political purposes and forbidding union organizers to access employees' personal information, such as their phone numbers.

Lee Adler, a labor law expert at Cornell University, said Walker's proposals would eliminate workers' rights and make it more difficult for people to join the middle class.

"Mr. Walker could only be making these type of proposals to satisfy his most backward-looking, wealthy contributors, just as he pursued, as governor, policies advanced by these people that sought to destroy school teachers and other public employees' rights in Wisconsin," he said.

Walker rose to national prominence in 2011, when just six weeks after taking office as governor, he proposed effectively ending collective bargaining for most public workers in Wisconsin. In the face of protests that often numbered in the tens of thousands, Walker muscled the changes through the state legislature — even after Democratic lawmakers fled the state in an unsuccessful effort to stave off his plans.

Democrats responded by forcing Walker into a recall election in 2012, which he won — making him the first governor in U.S. history to do so. He went on to make Wisconsin a right-to-work state earlier this year. Under right-to-work laws, workers can't be required to pay union dues as a condition of employment.

His decision to focus on fighting unions at the national level comes as Walker seeks to gain momentum for a presidential campaign that has fallen behind following billionaire businessman Donald Trump's rise to the top of early opinion polls. And some of Walker's comments drew derision — such as when he said earlier this month that he's not a career politician, even though he's been in office since he was 25 years old.

Walker was all the buzz in Iowa a couple months ago, said attorney Mike Mahaffey, a past state chairman of the Iowa Republican Party. "He does not come up as much as he did two months ago," Mahaffey said. "And that's a problem."

Another former Iowa GOP chairman, Matt Strawn, said while fighting unions may not be the biggest issue on the minds of Iowans, it's a good one for Walker to take on because it reminds them of his victories in neighboring Wisconsin.

Walker, 47, says he intends to be more aggressive in next week's second GOP debate, while insisting he isn't concerned about his standing in the race.

"None of this intimidates us," Walker said at a recent campaign appearance. "I think if people are looking for someone who is truly going to shake things up and wreak havoc on Washington, they want someone who's got real solutions and someone who is truly tested. I'm the only one on that stage that fits the bill."

AP Exclusive: GOP's Walker proposes vast union restrictions - Yahoo News