Letters                                                  

DCCA only one of many to
support employee purchase
of Spartan Printing

Editor: I am writing this letter to set the record straight on Illinois Department of Commerce and Community Affairs's (DCCA) financial involvement with the Spartan Printing Company ESOP (Illinois Issues, May 1993, "DCCA under Edgar" by Beverly Scobell). The caption under the picture on page 25 of that issue has the financial support from DCCA incorrectly stated as $25,000. In actuality, the $25,000 figure should be credited to the Illinois Development Finance Authority (IDFA) for the ESOP grant pledged to this project to assist the Spartan Printing Company employees in undertaking a buyout feasibility study. The amount pledged by DCCA toward this effort should have read $15,000 of Job Training Partnership Act (JTPA) dollars. These pledges helped our ESOP Committee in raising matching local monies from the city of Sparta and surrounding communities, the two union locals at Spartan Printing Company, area financial institutions, etc. The long list of contributors truly represented a ground swell of support for the ESOP Committee to undertake what would be a long and arduous task.

Our $100,000 "war chest" was used to bring three consultants on board who were helpful "beyond measure" throughout the entire employee buyout process. These consultants were our CPA firm, Arthur Andersen & Co. of St. Louis; our legal counsel, Gallop, Johnson & Neuman, also of St. Louis; and our educational adviser, the Midwest Center for Labor Research of Chicago. The grants pledged by IDFA and DCCA were supplemented by helpful hints and suggestions along the way, but none were so helpful as the continuing assistance the ESOP Committee and, later, the new board of directors received from the Illinois State Treasurer's Office. The Spartan Printing Company ESOP represented nearly 1,100 jobs and involved financial negotiations "well into five figures." Without Pat Quinn's intervention and "behind the scenes" negotiations with World Color Press, the parent company of Spartan Printing controlled by KKR of Wall Street fame, and La Salle Bank of Chicago, the "keystone" financial institution in the ESOP loan package, our local efforts would have been for naught. That's the story, folks, in a nutshell! There are plenty of agencies and individuals who deserve a hearty "Thanks" for their involvement. Let the record show that!

'Granny tax' and
how to get rebate

Editor. There has been a great deal of confusion in Illinois about the partial rebate of the "granny tax." Unfortunately, the otherwise excellent article in Illinois Issues (March 1993) on welfare and medical assistance may have added to the confusion about the rebate.

The article states (p. 21): "Nursing homes are assessed $6.30 per patient per day. Suburban legislators promptly labelled the nursing home assessment a 'granny tax,' predicting the facilities would pass it along to their patients. They did. Meanwhile, to protect the most vulnerable nursing home clients who were not on Medicaid but could ill-afford the tax, the General Assembly included a grant program permitting non-Medicaid long-term care patients to apply for a rebate of the $6.30 tax when paying their state income tax. There would be a 'means test' with the refunds or grants limited to private-pay patients with annual incomes of less than $53,000."

First, the rebate or grant is not obtained when paying the state income tax. Private pay nursing home residents or their representatives must file a "Statement of Eligibility" with the care center. Each quarter the nursing home submits the names of qualified individuals and their eligible bed days to the Illinois Department of Revenue. A few months later, the nursing home resident receives a check from the state based on the number of days in the quarter that he or she has been a private pay patient and in effect has paid the $6.30 per day nursing home tax. According to the Revenue Department, the first quarter grants were distributed to 18,326 individuals for 1,533,431 occupied bed days.

Second, the rebate is not for the full $6.30 per day. The grant varies each quarter but is almost $4 per day. Thus, a private pay resident of a nursing home pays Illinois about $2,300 per year in "granny taxes" and for the year would get a rebate of about $1,500.

Third, the calculation of annual income for eligibility is based on adjusted gross income minus nursing home care expenses. The $53,000 figure noted in the article would be right if nursing home costs were about $3,000 per month or $36,000 per year. The income figure for grant eligibility is $17,025, but this is after nursing home expenses. Thus, a person paying $4,000 per month for the licensed nursing home could have an income of $65,000 per year and still be eligible for the grant ($65,000 - $48,000 = $17,000). Nursing home residents may

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annualize their expenses if they reside in the nursing home for only part of the year. Obviously, they would get the grant only for the days they were in the care center and paid the granny tax.

Fourth, while most nursing home residents who are not private pay are having their care paid by Medicaid, a few receiving skilled nursing care will have their expenses paid for a short time by Medicare Part A. These individuals are also not entitled to the Illinois grant during the time when the national government, through Medicare, is paying for the nursing home care. Contrary to popular belief. Medicare pays for less than 3 percent of patient days in nursing homes. Thus, people in nursing homes are private pay or on Medicaid, but it is important to keep clear the distinction between Medicare and Medicaid.

I realize this is far more information on the rebate than could have been included in the original article. The Department of Revenue in early May issued rebate checks for the quarter ending December 31,1992, so if any individual feels he or she is eligible for the rebate, contact your nursing home immediately and complete a Statement of Eligibility. It only takes a few minutes.

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July 1993/Illinois Issues/9