Week in Review 4/7/14 through 4/11/14

Illinois Taxes
Key Democrat Tax Hike Proposals Stall in General Assembly.  With time running out for constitutional amendments aimed at changing Illinois income tax laws, two major Democrat-sponsored tax hike proposals failed to advance in Springfield this week.

SJRCA 40 (Harmon), the so-called “fair tax” constitutional amendment, would abolish the Illinois individual income flat tax (current rate: 5.0 percent) and replace it with a graduated rate with higher taxes for most middle-class and upper-middle-class taxpayers and families.

HJRCA 51 (Madigan) would impose an additional 3.0 percent surtax upon upper income earners and small businesses. The surtax and individual income liability levels would be inscribed into the Constitution and would not be adjustable by statute.

Both amendments failed to move out of their house of origin by the spring break of the General Assembly.  The Speaker’s office blamed Republicans for the failure of Speaker Madigan’s tax hike proposal. House Republican Leader Jim Durkin issued the following statement in response:

“I find the announcement by the Speaker’s office a bit confusing. Speaker Madigan holds the 71 votes required to pass his constitutional amendment, apparently support from his own members fell short.  There is clearly a bi-partisan coalition that knows we can’t tax our way to prosperity and job creation.  His amendment offered no help to the nearly 570,000 unemployed Illinoisans looking for a job.  It’s my hope the coalition can defeat the onslaught of job crushing proposals such as a graduated tax and the permanency of the ‘temporary’ income tax on families and employers.  Republicans will continue to stand up for the taxpayers of Illinois.”

The tax hike amendments’ failure to advance does not, however, affect the largest Democrat tax hike proposal of all – Governor Quinn’s demand that the General Assembly make the “temporary” 67 percent income tax hike permanent – a move supported by Speaker Madigan and Senate President Cullerton.

Chicago – Pensions
General Assembly approves Chicago pension reform bill.  SB 1922, as amended in the House, reduces the future pension benefits to be paid to, and increases the future pension contributions to be paid by, several significant sectors of city of Chicago workers. The bill does not cover other sectors of Chicago workers: police officers, firefighters, and teachers. The House vote on Tuesday, April 8, was 73-41-1. A concurrence vote of 31-23-2 by the Senate on the same day sent the measure to the Governor for final action.

Proponents of this bill expressed concern that lack of action could lead to cuts in Chicago’s debt rating. These bond rating cuts, if continued, could threaten the city with insolvency and even bankruptcy – a trajectory parallel to the one suffered by the troubled city of Detroit, which filed for bankruptcy in 2013. Opponents agreed that Chicago could be headed towards a fiscal cliff, but expressed the fear that the significant property taxes that could be imposed by the city as part of the SB 1922 pension package could drive productive residents out of the city and lead to the same result through another pathway.  

Budget – Accountability & Transparency
Grant funding transparency advances.  HB 3820, the Grant Accountability and Transparency Act, would move towards a remedy for some of the most questionable areas of State spending.  The bipartisan bill, co-sponsored by Rep. Patti Bellock, would impose minimal, standardized transparency standards upon many State grant recipients.

Investigative work by Patti Bellock and legislative staff has discovered that grant monies are often disbursed without standardized cash flow monitoring and controls. State grants currently total approximately $46.9 billion/year – an amount actually greater than the State’s annual general funds budget because it includes a significant pass-through of federal funds.

The lack of monitoring has led to fiscal consequences. One of the relatively constant features of State grant spending is a lack of consistency in the reporting requirements and transparency imposed upon recipients and professionals, including (but not limited to) private-sector nonprofit grant recipients.  Often, no matter what is the specific issue for which the grant was given, the grant recipient always reports back to the State that “this is a very complex problem” and “we need more money.”

HB 3820 is meant to be a key element in Illinois’ continued push for grant reform. Transparency, consistency, and objectivity in grant feedback are essential elements in getting the State’s budget under control. The House vote of 89-13-1 on Thursday sent this measure on to the Senate for further action.

Criminal Law – Victims’ Rights
Victims’ rights constitutional amendment approved by General Assembly; will appear on November 2014 ballot.  The 59-0-0 vote on Thursday by the Senate was the final step necessary to direct the Secretary of State to place HJRCA 1 on the ballot for ratification as soon as six months from now. The amendment contains new language, agreed to by states’ attorneys, that creates a standard cooperative pathway between prosecution offices and any counsel hired by crime victims to help defend their interests. It also elevates some existing victims’ rights up above the level they now enjoy under State law or court procedure and gives formal legal standing to individuals and their counsel in cases when the individual is a victim. Victims are given the enforceable right to receive key information about the disposition of the defendants accused of victimizing them.

The Senate’s unanimous vote followed a similar tally (111-2-0) in the House on Wednesday, April 2nd. When officially added to the Illinois statewide ballot, the amendment will face the voters in November. It will require support from either a simple majority of all of those voting in the election, or a three-fifths majority of those voting on the specific question, in order to be officially added to the Illinois Constitution.

Criminal Law – Chicago
The Criminal Justice Information Authority (CJIA) is State watchdog over faulty local crime statistics.  A front-page story published on Tuesday, April 8 in the Chicago Tribune described alleged underreporting of Chicago police reports summarizing certain categories of violent city street crime.  Underreported criminal categories included aggravated assault and aggravated battery, crimes that typically involve the discharge of a firearm. The underreporting allegedly aided in the creation of a partially faulty impression that there had been, in 2013, a sharp drop in violent crime on the streets of Illinois’ largest city.

The Criminal Justice Information Authority has been asked by the General Assembly to improve the accuracy with which Illinois crimes are reported and tallied. The CJIA is already in operation as a liaison between local police departments and the federal government as a pass-through agency that assists with the application and disbursement of federal grants and other aid to local Illinois police departments. Improving crime-reporting accuracy is essential because of the impact of all crime, especially street crime, on local property values and quality of life.

Education – School Aid Formula
Senate discusses changes to State school aid formula.  The debate on SB 16 is currently in the Senate; the bill has not yet come over to the House.

Many teachers, educators, parents, and education reformers are dissatisfied with the present school aid formula, a complex algorithm that is simultaneously attacked for not providing enough money to economically challenged school districts, and for not providing significant general school aid resources to districts with significant numbers of economically successful residents who pay heavy income and property taxes.

One dilemma facing school aid reformers is the well-organized existence of advocacy organizations for certain enhanced-aid pupil groups and their educators. Advocates for these groups tend to call for increased funding without reference to the needs of other challenged groups.

Concerns have been raised about SB 16, which creates several new complex school aid distribution formulas that partially replace certain existing formulas, and wholly replace other formulas.  Discussions are likely to continue and intensify before the measure gets to the Illinois House.

Constitutional voting-rights amendment advances.  HJRCA 52 provides that no person shall be denied the right to register to vote or to cast a ballot in an election based on race, color, ethnicity, status as a member of a language minority, national origin, religion, sex, sexual orientation, or income. The voting rights amendment was adopted by both houses of the General Assembly this week. Its ratification would require a three-fifths majority of those voting on the question, or a simple majority of the total vote in the election, for inclusion in the Constitution of Illinois.

General Assembly – House Action
337 House bills sent over to the Senate in 2014 spring session.  Bills introduced by House members in the spring of 2014 must, under usual rules, pass the House no later than April 11 in order to be considered by the state Senate.  As of Friday, April 11, the House has debated and approved 337 separate measures.  Journals listing the actions of the House on each session day can be found here: http://www.ilga.gov/house/journals/default.asp.  

Illinoisans are constantly contacting their lawmakers with ideas for new legislation. As of Friday, April 11 2,438 House bills have been introduced for consideration since New Year’s Day. Most of these bills did not get out of committee or were not approved by the full House in spring 2014.  

Similarly, the Senate met their deadline to pass bills over to the House. 1,022 Senate bills have been introduced since the beginning of 2014, although not all of them will advance to the House.  The House and Senate will start looking at the other chambers’ bills on April 29.

Higher Education
Improving job-oriented educational pathways in Illinois.  Illinois’ 49 community colleges and campuses already operate numerous job-oriented programs and offer many courses intended to work with students looking to maintain, expand, and establish their job skills. HB 4910, sponsored by Rep. David McSweeney, takes this push to the next level by working with the community college community to set up advanced manufacturing technology partnership boards.
The template for these boards is set forth in the bill, but much flexibility is included to allow each individual college to tweak its board to meet the circumstances of each college district. The boards will be private-public partnerships that will work cooperatively to ensure that qualified graduates of an advanced manufacturing program will be well-situated to find immediate employment.

HB 4910 follows growing recognition by the manufacturing community that almost every 21st-century production process will require a skilled workforce possessing a specific, targeted skill set.  The unanimous House vote sent the measure to the state Senate for further action.    

Transportation – Road Plan
State of Illinois unveils multi-year transportation improvement plan.  The plan will lead to the repair or rehabilitation of 1,845 miles of highway and 384 bridges across Illinois. The largest single allocation, $309 million, is slated to help construct a new Quad Cities bridge to carry Interstate 74 over the Mississippi River at Moline, Illinois. The Illinois Department of Transportation (IDOT) unveiled the new multi-year plan on Wednesday, April 9.

The multi-year spending plan, while centering on roads and bridges, also covers other areas of infrastructure and transportation repairs and improvements. $1.85 billion is allocated to public transportation, of which the largest single parcel of aid, $585 million, will be allocated to purchasing 160 new passenger railroad cars for the unique Metra Electric commuter rail line that serves south suburban Cook County. $800 million is allocated to airports and airfields.

Federal aid will outweigh Illinois taxpayers’ funds for many of these projects. Long-term planning is required in order to submit detailed applications to the federal Department of Transportation (USDOT) for matching funds.  Discussions will continue during the spring recess on the possible introduction of a supplemental capital bill to provide funding for some of the State and local transportation projects not fully funded in this plan.

Transportation – RTA
General Assembly discusses report calling for RTA mergers.  The Northeastern Illinois Public Transit Task Force, which began its discussion in August 2013, issued a report to the Governor and the General Assembly on Monday, March 31.  Headlines followed the Task Force’s recommendation that the three service boards of greater Chicago mass transit, the Chicago Transit Authority (CTA), the Suburban Bus Board (Pace) and the Commuter Rail Board (Metra).

Chicago-area mass transit operates more than 650 million annual passenger trips.  It is a vital element in the commuter, shopping, and recreational life of millions of residents of the metropolitan area.  Members of the Task Force, in their report, asked if these transit agencies should continue to operate completely independently of each other, given that similar agencies have been merged in other large U.S. cities. For example, most New York City transit has been folded into the consolidated Metropolitan Transit Agency (MTA).      

Transportation – Taxicabs/Uber
House approves bill to regulate ridesharing industry; supporters and opponents expect further negotiations in Senate.  HB 4075, which was approved by a vote of 80-26-0 on Thursday, imposes new regulatory controls and regulations on the ridesharing industry.

Some of the new regulatory controls, such as mandatory insurance, appear to protect the interests of other drivers who will share the road with future ridesharing drivers; and other changes to existing law appear to be oriented to protecting the interests of another stakeholder, the commercial taxicab industry. Fewer and fewer future residents of large cities like Chicago are expected to own individual private motor vehicles, as is already the case in the world’s largest cities such as New York, Tokyo, London, and Paris.

Many ridesharing customers have communicated with their State legislators in recent days concerning this measure. Concerns about the bill remain, and tough negotiations are expected in the Senate.

Transportation – East-West Passenger Train
House Calls for Look at New Passenger Train Route.  The new route would operate from a northwest hub in the Quad Cities (Davenport/Rock Island-Moline), and a southeast hub in Danville, Illinois. Illinois passenger train service was cut back sharply in 1971 with the creation of the federal Amtrak system and few of the abandoned routes have been reinstated since.

In response to constituent demand, the House adopted HJR 72 (Moffitt) earlier this week.  The joint resolution pledges support for the development of an East-West passenger rail corridor across Downstate Illinois. The proposed corridor would utilize existing freight train lines for much of its length and could serve as many as four of the eight most populous metropolitan areas in Illinois. The proposed route for the cross-Downstate route serves Peoria, Bloomington/Normal, and Champaign/Urbana, and knits together three existing Chicago-based Amtrak lines.