Republican Legislators Present Compromise Balanced Budget Plan. House Minority Leader Jim Durkin (R-Western Springs), Senate Republican Caucus Whip Karen McConnaughay (R-St. Charles), Assistant Senate Republican Leader Jason Barickman (R-Bloomington), Sen. Dale Righter (R-Mattoon), Deputy House Republican Leader Patti Bellock (R-Hinsdale) and House Republican Conference Chairperson Tom Demmer (R-Dixon) have introduced a package of bills to end the budget impasse. The bills represent a compromise balanced budget and reforms that address the priorities of both parties, and urged the General Assembly to return to Springfield to vote on this proposal.
“Time is running out before the fiscal year ends, and we must act now! Where is the sense of urgency with Speaker Madigan to end this stalemate? Lawmakers should be in Springfield working around the clock until our job is finished. This comprehensive budget package with structural reforms that we are proposing today is the path forward to breaking the budget impasse,” said Durkin.
The comprehensive proposal includes a truly balanced budget, a four-year hard spending cap, lasting property tax relief, and changes to our regulatory system that will create jobs and grow the economy. The bills also include a $250 million increase for the new school funding formula, and fulfilling commitments to restore child care eligibility to 185% of the federal poverty level and a wage increase to Direct Support Professionals. It also includes term limits on legislative leaders and constitutional officers.
"These proposals continue the important work already done in the Senate, where we'd seen significant progress on these issues. I am confident there is still an opportunity for bipartisan compromise on a balanced budget, as well as the critical reforms that will bring a much-needed economic boost to our state," said State Senator Karen McConnaughay. "We need to act expediently to get Illinois back on a path to fiscal stability and security."
The summary of the bills are as follows:
Budget Bill: Comprehensive budget proposal that includes real spending cuts and a four-year spending cap, while providing funding to state agencies like the Department of Human Services to care for our state’s most vulnerable and the Department of Transportation to continue important infrastructure projects.
Property Tax Relief: Four-year freeze for all taxing districts, but would allow residents, through voter referendum, to lower or increase their taxes. Allows for an exemption on existing debt service payments as requested by Senate Democrats.
Local Government Consolidation: Strengthens and improves the already passed SB 3, and will allow for citizens-initiated consolidation on units of local government.
Education Funding: Changes to the K-12 education funding formula that treats every district equitably that is consistent with the bipartisan framework of the Governor’s School Funding Commission. Funding for early childhood education, K-12 education, community colleges and universities.
Workers’ Comp: Uses previously negotiated language between Senate GOP and Senate Democrats, like changes to the medical fee schedule, but does not reduce benefits to workers or include a causation standard.
Pension Reform: Accepts SB 16, which has previously passed the Senate, including President Cullerton’s consideration model and the state’s pickup of Chicago Public School’s pension payments.
Term Limits: Constitutional amendment to impose 10-year term limits on legislative leaders in the General Assembly and eight-year limit on Constitutional Officers (Governor, Lt. Governor, Attorney General, Comptroller, Treasurer, and Secretary of State)
“We all agree that we need to fix our broken school funding formula right now," said State Senator Jason Barickman. "This legislation contains much of the priorities Democrats advanced in Senate Bill 1, provides meaningful help for Chicago, ensures that no districts lose money, and treats all of our schools fairly and equitably under the evidence based model."
“Passing an unbalanced budget like the Senate Democrats did and the House Democrats choosing to not even take up a budget is beyond unacceptable and a complete failure from the majority party,” State Sen. Dale Righter said. “We must return to Springfield, put party differences aside, work together, and pass an actual budget that is not only balanced, but moves Illinois forward economically and fiscally. The fact we need 3/5 vote now to pass a budget is a good thing in that it forces Democrats to finally work with Republicans in complete good faith to pass a true and real balanced budget – one that is good for schools, social services, and taxpayers.”
“The comprehensive balanced budget we are offering today will provide care for our state’s most vulnerable citizens,” said Deputy Republican Leader Patti Bellock. “With last week’s court ruling on the $2 billion backlog of unpaid Medicaid bills, it is critically important we take immediate action to address this backlog. Our plan includes more than $4 billion in bonding to help pay off old bills. We must address this crisis now. The consequences of not taking action now would be devastating to human services.”
“Our plan will allow for citizens-initiated consolidation of units of local government,” State Rep. Tom Demmer said. “Our nearly 7,000 units of local government contribute to why Illinois residents pay some of the highest local government taxes in the nation, including the 2nd highest in property taxes. On pension reform, we accept Senate Bill 16, which has previously passed the Senate and includes President Cullerton’s consideration model. Pension reform and local government consolidation will save taxpayers billions of dollars.”
GENERAL ASSEMBLY
Governor Rauner Calls Lawmakers Back to Springfield to Pass Compromise Balanced Budget Plan. One day after House and Senate Republicans unveiled a compromise balanced budget plan to end the budget impasse, Governor Bruce Rauner called lawmakers back to Springfield for a 10-day special session from Wednesday, June 21st through the June 30th fiscal year deadline.
"Republicans in the General Assembly have laid out a compromise budget plan that I can sign," Governor Rauner said in a video announcing special session. "It provides a true path to property tax reduction and it reforms the way our state operates to reduce wasteful spending. It will fund our schools and human services, while spurring economic growth and job creation. It is a true compromise - and one I hope the majority in the General Assembly will accept."
For two weeks, the majority in the General Assembly ignored repeated calls to return to Springfield since adjourning on May 31st without passing a full-year balanced budget. If no action is taken by the General Assembly to pass the compromise balanced budget plan by June 30th, the ramifications for our state will be devastating and long-lasting. In order to find a resolution, Governor Rauner issued 10 proclamations calling for special sessions every day starting Wednesday, June 21 at Noon. The proclamations direct the General Assembly to consider legislation that will reach a balanced budget with changes to our broken system, including property tax relief, job creation, term limits and spending caps. Should the General Assembly enact the compromise balanced budget plan prior to June 30th, the Governor will cancel any remaining special session days.
"We have tough, urgent choices to make, and the legislature must be present to make them," Governor Rauner said. "In the days ahead, let's show the people of Illinois we have their best interests in mind, not our own. And together, we will move our state forward to a better and brighter future."
House Republican Leader Jim Durkin applauded the Governor for calling the special session.
“With the fiscal year coming to a close and the House Democrats’ failure to produce a budget during session warrants the Governor’s action today. We can break this impasse if the House Democrats are willing to negotiate in good faith.”
HIGHER EDUCATION
Moody’s downgrades seven Illinois public universities. Moody’s Investors Service announced sweeping credit downgrades for seven Illinois universities on June 9 over concerns about the state’s nearly two-year budget impasse. Five of those seven – Southern Illinois University, Northern Illinois University, Governors State University, Northeastern Illinois University and Eastern Illinois University – now have junk credit ratings.
Moody’s downgrades come less than a month after S&P’s own mass downgrade of six universities in April.
Eastern Illinois University was the lowest rated university, downgraded from B2 to Caa2 with a negative outlook. That denotes speculative-grade credit quality. It is the lowest of the universities according to a separate Moody’s rating research document.
The University of Illinois’ new rating is A1 with a negative outlook. That’s down from Aa3 negative and still considered superior credit quality.
JOBS
May unemployment rate dips slightly. The Illinois Department of Employment Security (IDES) announced Thursday that the unemployment rate declined -0.1 percentage points to 4.6 percent in May and nonfarm payrolls increased by +2,400 jobs over-the-month, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. April job growth was revised little to show a decrease of -7,300 jobs rather than the preliminary estimate of -7,200 jobs.
May’s modest monthly payroll gain kept over-the-year job growth well below the national average. Payroll growth has been sluggish thus far this year.
“Illinois remains -23,300 jobs short of reaching its prior peak employment reached in September 2000,” said IDES Director Jeff Mays. “If Illinois had grown at the National average over that time, the State would have an additional 650,000 jobs.”
"We hear from companies every week that are concerned by the current business climate in Illinois,” said Illinois Department of Commerce & Economic Opportunity Director Sean McCarthy. “We need to implement common sense reforms that would lead to booming job growth and expansion of opportunities across our state.”
The state’s unemployment rate is +0.3 percentage points higher than the national unemployment rate reported for May 2017, which decreased to 4.3 percent. The Illinois unemployment rate is down -1.3 percentage points from a year ago when it was 5.9 percent. At 4.6 percent, the Illinois jobless rate stands at its lowest level since February 2007, after having decreased for four consecutive months and is down -1.1 percentage points since January 2017.
The number of unemployed workers decreased -2.9 percent from the prior month to 298,100, down -23.0 percent over the same month for the prior year. This brings the number of unemployed workers to its lowest level since December 2006. The labor force decreased -0.3 percent over-the-month and declined by -0.9 percent in May over the prior year. The unemployment rate identifies those individuals who are out of work and are seeking employment. An individual who exhausts or is ineligible for benefits is still reflected in the unemployment rate if they actively seek work.
LOTTERY
Powerball, Mega Millions to drop Illinois due to state’s budget crisis. The popular Powerball lottery and Mega Millions games will drop Illinois at the end of June without a budget agreement, Illinois Lottery officials said Thursday.
Concern over the state’s fiscal condition prompted the Multi-State Lottery Association to drop Powerball in Illinois, according to internal Illinois Lottery communications obtained by the Chicago Sun-Times.
Mega Millions also plans to drop the state unless a budget agreement comes together, state officials confirmed. Without a budget in place, the state isn’t authorized to make payments to Mega Millions or the association.
Greg Smith, acting director of the Illinois Lottery, called the development “disappointing.”
“The Legislature’s inability to pass a budget has led to this development and will result in Illinois Lottery players being denied the opportunity to play these popular games,” Smith said. “This is why it’s so critical the General Assembly deliver a balanced budget to the governor’s desk that he can sign.”
The state reported $99.4 million in Mega Millions sales and $208 million in Powerball sales within the 2016 budget year. Lottery officials indicated that Illinois retains about 40 percent of that money for education funding.
TRANSPORTATION
IDOT will shut down roadwork if no budget is passed by July 1. Roadwork projects across Illinois could be on the chopping block as the state’s historic budget impasse continues.
The Illinois Department of Transportation will shut down roadwork statewide if lawmakers don’t pass a budget by the end of the month, officials announced Wednesday.
“Due to the General Assembly’s refusal to pass a balanced budget, the Illinois Department of Transportation loses its ability to pay contractors starting July 1,” IDOT communications director Guy Tridgell said in an email.
“While we are hopeful the situation is resolved before then, the department is notifying contractors that all construction work is to shut down on June 30. Contractors will be advised to secure work zones to ensure their safety during any potential shutdown. As always, the safety of the traveling public will be the top priority as the department works through this process,” Tridgell said.
Roadwork projects were put in jeopardy by the budget impasse last year as well, but a stopgap bill passed in the final hour secured roadwork funding.
WEEK IN REVIEW
Get the Week in Review emailed directly to your inbox! Sign up today to get a first-hand look at the continuing legislative and fiscal challenges facing policymakers in Springfield.