Illinois Legislative Report – From I4A’s Legislative Liaisons

MEMORANDUM

TO: ECIAAA Corporate Board Members, ECIAAA Advisory Council Members, and PSA 05 Service Provider Directors

FROM: Susan C. Real, Executive Director

DATE: June 1, 2016

RE: Illinois Legislative Report – From I4A’s Legislative Liaisons

Terry Steczo & Maureen Mulhall, Government Strategy Associates

Legislation Update

With the legislative adjournment date now having passed here is the status of some bills that have been of interest to I4A:

 

SB 2038 – appropriates $700 million to partially finance various human services programs that have gone without state finding since last summer. The appropriation is funded using $450 million from as fund dedicated to human services and another $250 million from other special funds. It provides 46% of what human services programs had expected to receive had the state budget taken effect last July 1. The bill received near unanimous support from the General Assembly but the Governor has not yet stated his intentions.

HB 4351 - sets forth the criteria individuals must meet to have equal access to services under the Community Care Program and override the proposed Community Reinvestment Program. It passed the General Assembly on partisan roll calls. Of note is that the vote in the House was by less that the three-fifths that will be required to override a gubernatorial veto.

HB 581 - Creates the Social Services Contract Notice Act. It provides that a grant agreement, service agreement, or contract between a State agency and an authorized service provider for the provision of social services may be terminated by either party for any or no reason upon 30 days' prior written notice. The bill was approved by the House with 71 votes and the Senate with 39 votes and will soon be before the Governor for his consideration.

HB 6027 - Requires the Department of Human Services to establish a Healthy Local Food Incentives Program to double the purchasing power of Illinois residents with limited access to fresh fruits and vegetables, subject to appropriation. The bill passed the House and Senate unanimously and will be sent to the Governor..

Still At Loggerheads

As the gavel came down, sort of, on the spring session of the General Assembly the only certainty seemed to be that the state of Illinois would enter Fiscal Year 2017 without a budget it place. Like “Groundhog Day” the issues remain the same day after day, the arguments remain the same, the apparent dislike of the combatants to each other remains the same, as does the outcome of all of the animosity and vitriol ... nothing.

For the last seventeen months both sides of this fracas have shown that even beyond the philosophical gap are the lack of trust among the participants is staggering. When trust disappears then even progress measured in inches let alone miles is difficult. It means, in terms not too dissimilar than what we see on the federal level, ideas from one side are automatically reject for no reason other than because the other side proposed them. Take for example the idea of a possible stopgap budget proposal that would allow the state to start the fiscal year with some meager spending plan in place. When first proposed by Senate President John Cullerton at a leaders meeting last week it not only was rejected by the Governor and Republican leaders but vilified Cullerton in their comments afterward, suggesting that the idea was brought forward to blow up the negotiating process. Then yesterday, barely one week later, the Governor proposes his own stopgap plan and criticizes the other side for not being enthusiastic. This is but one instance in a process where both sides have acted and reacted the same way on most of the issues involved. What is also obvious is that both sides have become solidified in their positions making the job of finding common ground more difficult. Republicans are hunkered down behind the Governor and their legislative leaders, Sen. Christine Radogno and Rep. Jim Durkin. Likewise, Democrats have closed ranks behind Speaker Michael Madigan and President Cullerton. There have been very few defections, Interestingly, on Memorial Day the General Assembly overrode, for the first time in his term, one of Governor Rauner’s vetoes. Three Republican House members and one Senator joined legislative Democrats in doing so. Immediately the State House was awash in rumors that there may have been a break in Republican ranks. Soon thereafter, however, those “defectors” let it be known that their votes represented a blip rather than a splinter.

In the meantime everyone can expect more of the same. The House last week sent a budget to the Senate in Senate Bill 2048 without adequate revenues that is estimated to be $7 billion in deficit. It included only items that have not been the subject of state continuing appropriations (debt service, pension payments, and state employee health care), consent decrees or court cases. Because there is no budget in place for FY 2016 the spending in these cases continues as if the budget for FY 2015 is in place, and that budget included revenues from the income tax surcharge that has long since expired. The Senate, feeling that the House plan was too problematic, defeated Senate Bill 2048 overwhelmingly late yesterday evening. Over the Memorial Day weekend the Governor had signaled his intention to veto the bill had it reached his desk. The Governor and Republican have rejected the Senate’s attempt to put a short term budget on the table and Democrats have rejected the Republican efforts to do the same. And then the clock struck midnight and the spring legislative session was over ... but not quite. Just before the final gavel the Senate approved a stand-alone education funding bill that the Governor has persistently requested. The Senate version, however, was millions higher than what the Governor had requested. In the end it was all for naught because the House did to the Senate education funding bill what the Senate did to its budget and defeated it overwhelmingly.

Earlier yesterday, after suggestions of a temporary budget had been rejected, the Speaker announced that the deliberations of the working groups would continue, especially the tax and revenue group, and that the House would reconvene in Springfield every Wednesday at least though the month of June. President Cullerton, late in the evening yesterday, announced that he hoped that over the next few weeks an interim budget agreement could be reached which sounded somewhat hopeful. After the enmity of the last eighteen months it was encouraging to hear some slight positivity in the pronouncements.

Over the next four weeks one of two things will occur as the state heads toward the beginning of its new fiscal year. One the positive side, the leaders and working groups may finally find accommodation that can at least find the way to a temporary, interim budget plan that can get the state through at least the first six months. On the negative side, if the encouraging tones of yesterday become the acrimony of tomorrow then the June sessions will be nothing more than an opportunity for the circular firing squad to have another chance to aim and fire.

Hoping “Working Groups” are the Key

Last year a group of legislators from both parties and both chambers of the General Assembly, frustrated with the lack of progress on the budget and other issues, got together to see if they could come up with some agreements that they could all agree on and show prove to their leaders and to the Governor that compromise was possible and achievable. The efforts last year ended abruptly toward mid-May when the Governor issued an ultimatum forbidding participation by Republican legislators. But, with little to lose after the eleven month budget impasse, those working groups are meeting once again, this time with the blessing of the powers that be. There was some early concern that House Democrats would not be participatory this time but that apparently is not the case.

These working groups comprised of legislators and other interested parties have been meeting daily, including weekends; each dealing with a particular topic. Subject matters include such items as taxes and revenue, bidding and procurement reform, workers compensation reform, pension reform and local collective bargaining reform ... each one an issue that will require creativity and a willingness to find a common ground in order to assist in ending a budget stalemate that seems to have no rational way of ending. There is added pressure attached to the policy related groups due to the Governor’s insistence that he will consider no budget or revenue items without his policy requests addressed first.

During the last week of session there were constant rumors relating to the progress of the various working groups and the apparent ebb and flow that go along with any process that includes negotiations. Aside from generalities the content of the group discussions has been kept under wraps, and so well that it has been impossible to determine the exact nature of the conversations and any progress that has been achieved ... with one exception. A few weeks ago the budget and revenue working group delivered a document to the legislative leaders and the Governor that outlined a possible plan to create a balanced budget with a mix of new revenue and cuts. When the details of the plan were leaked it was emphasized that the components contained in the document were not recommendations, rather the working group’s focus was to determine whether or not creating a balanced budget was possible. It apparently is. The fact that the Governor’s Budget Director Tim Nuding participated in the group suggests that if and when there is a resolution of the other issues what this group submitted could be close to a final plan:

Increase the state income tax to 4.8%

Expand sales/service taxes

Eliminating unspecified corporate tax breaks

Spending cuts of $2.5 billion to include:

Medicaid - $400 million

Pensions - $750 million – ending late career pension spikes and requiring schools and universities to pick up pension costs for salaries exceeding $180,000.

No state payback for the $450 million in special funds borrowing from last year

Additionally the state would borrow $5 billion to pay down backlog of bills. The loan would be paid back over five years and make the state’s rising debt more manageable. The inability to reach a budget agreement in the near future will continue to swell the debt and would no doubt require a higher level of borrowing ... if this scenario is close to what the actual final resolution might be.

In addition there is the ever present annual rumor/effort to consider gaming expansion. The possibility is always there, especially in these tight fiscal times, but the reality of finding the right mix that makes everyone happy and that can amass the number of votes to pass is almost impossible.

With legislative overtime now on the clock the other working groups will continue to discuss and negotiate and try to do what their leaders haven’t been able to during the last eighteen months. Here’s hoping.

One Amendment, Maybe Two, Set for Fall Ballot

After sifting through 89 various proposals to amend the Illinois Constitution only one got through the legislative process and will appear on the November ballot. Repeal the Lieutenant Governor’s Office? Nope. Combine the Treasurer’s and Comptroller’s Offices? Nope. Term Limits? Nope. Reapportionment Reform? Nope. Education Funding Reform? Nope. Protecting the Road Fund? Yep.

HJR-CA 36 was a proposed amendment will prohibit the diversion of monies from the Road Fund to the state General Revenue Fund. Revenue from gas taxes, registration fees, etc. goes into the Fund for the purpose of road and other transportation related expenditures. But former Governors and the General Assembly have periodically reached in and diverted these funds for other purposes. Some legislators and their constituents, especially downstaters, get apoplectic every time it happens. They finally will have the opportunity to convince Illinoisans that this resource pool should be protected and used for its stated purpose. If the Amendment is approved it could make state budget decisions, if there ever is a budget, more difficult because of the lessened “flexibility”.

A second Constitutional Amendment, a citizen initiative proposal that deals with legislative redistricting could be on the ballot if it survives a court test. This is the second go-round for a possible ballot initiative on redistricting initiated through a petition drive. An effort in 2014 was bounced by the courts because it did not meet the constitutional requirement for citizen initiatives.

The Illinois Constitution only allows a citizen initiative on issues relating to the Legislative Article. Even then the Constitution limits such questions to “structural and procedural” changes. In 2014 the courts ruled that attempt didn’t meet the requirements because it went beyond a “structural and procedural” change but if another were drafted differently then it could pass muster. The backers of the amendment did make some modifications and have been able to surpass the signature requirement to access the ballot. Opponents of the proposition have once again filed suit and in the next few months a final determination will be made as to whether it meets the constitutional test.

Session Schedule/Deadline Dates

Here are relevant dates for the 2016 legislative session:

Overtime/Continuous Session - TBA Fall Veto Session (if necessary) - TBA January 11 – 99th General Assembly Ends

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