Week in Review for 3/31/14 through 4/4/14

Republican Leaders Unveil Jobs Plan
Jump Starting Illinois’ Economy: Putting People Back to Work.  Illinois House Republican Leader Jim Durkin (R-Western Springs) and Senate Republican Leader Christine Radogno (R-Lemont) have introduced a comprehensive legislative package of bills to help jump start Illinois’ economy and create jobs.  

“Last week Democrats proposed three different tax increases to generate new revenues for the state.  Unfortunately, none of these proposals do anything to help the nearly 570,000 individuals collecting unemployment in Illinois to find the jobs that they want and need.  We can’t tax our way into prosperity.  To solve our long term financial problems we need to grow our economy,” said Durkin.

“House and Senate Republicans crafted this plan after seeking input from business leaders with the goal of encouraging business development and job growth in Illinois at very little cost to the taxpayers.”

Senate Republican Leader Christine Radogno said, “We have to put an end to the parade of tax increases.  We’ve heard everything from extending their 67% income tax increase, a progressive tax increase and an income tax surcharge to a tax on soda pop and higher business fees.  All of those will cost families in Illinois and further threaten our jobs climate.  Illinois is already facing the 2nd highest unemployment in the nation and lagging behind all of our neighboring states in job creation.  We cannot continue to have this climate of uncertainty.”

Another key component of the jobs plan would be to establish primary causation for workers’ compensation to lower costs and make Illinois’ employers more competitive with neighboring states.

“Illinois continues to be an outlier,” Leader Radogno said.  “If we can rein in our workers’ compensation costs with common sense changes that ensure workers are provided for but bring costs in line with neighboring states – everyone will benefit.  More people will be put to work if we can align the law to reflect what most people think – workers’ compensation should be for injuries occurring on the job.”

Other provisions of the Illinois House and Senate Republicans Jobs Plan include:

  • Making the Research and Development tax credit permanent. 
  • Authorize DCEO to establish 50 new Enterprise Zones. 
  • Reduce the cost of setting up an LLC in Illinois from $750 (currently) to $39. 
  • Expand the reach of science, technology, engineering, and math education opportunities in Illinois by creating STEM academies within the confines of local schools. 


The Democrats’ Tax & Spend Agenda
Illinois Democrats push more taxes, record spending.  Within a week of the Governor’s budget address, Democrats have floated five separate tax hike proposals.  It’s clear that they want to raise taxes… again.

Our top priority must be improving Illinois’ economy and creating jobs, but with nearly 570,000 people out of work, the Democrats have again failed to understand that working families and businesses need tax relief and economic stability.

The 2011 “temporary” tax hike was sold to Illinois taxpayers as a way to pay off old bills and balance the State’s budget.  Governor Quinn himself said: “We have some temporary tax increases that are designed to pay our bills, get Illinois back on fiscal sound footing and make sure that our state has a strong economy.”

And look where we are now.

In 2011, Illinois had an $8.5 billion backlog of unpaid bills.  In the same year, Democrats passed a 67% tax hike, costing Illinoisans an extra $31 billion.  But in 2014, Illinois still has $7 billion in unpaid bills and $127 billion in debt.

Illinois’ 8.7% unemployment rate (Jan. 2014) is the second-worst jobless rate among the 50 states.  We’ve lost more than 68,000 jobs on Quinn’s watch.  High taxes are driving families and jobs out of Illinois.  We have the second-highest record of out-migration of any state.  Nearly 278,000 people left the state in 2012.

The Democrats’ 2011 “temporary” income tax increase will take more than $31 billion from the pockets of working families and small businesses.  The question taxpayers should be asking is “where did the money go?”

It didn’t go to our schools to improve the quality of education for our children.  In fact, Governor Quinn and his Democrat allies cut education funding by $600 million.  Our schools are receiving less state aid and fewer transportation dollars, while property taxes continue to rise.

“Why?” you may ask.  Because the Democrats used our tax dollars to pay for their ever-expanding social welfare programs.

A decade ago, spending on K-12 education was higher than the budget for Illinois public aid. Today, welfare spending is double what we send to our schools.

Under Obamacare, Illinois’ Medicaid rolls are surging by 430,000 enrollees.  By the end of FY15, Medicaid enrollment is expected to reach 3.2 million with a cost of $12.7 billion.  One-quarter of Illinois’ population will be on state assistance, eating up one-third of our general funds budget.

Governor Quinn claimed that spending has decreased since FY08.  In fact, just the opposite is true.  According to the Governor’s own budget books, GRF spending in FY08 totaled $30.3 billion.  For FY15, the Governor has proposed GRF spending of $38.1 billion, an increase of nearly $8 billion (26 percent).

Illinois doesn’t have a revenue problem.  It has a spending problem.  Hardworking taxpayers can’t afford another tax increase.

What we need are comprehensive fiscal reforms that cut spending and focus on tax relief for working families and small businesses to help create jobs and get our economy back on track.

Budget
State revenues continue slow-growth picture.  The Commission on Government Forecasting and Accountability (CGFA) released their monthly summary of the State’s revenue picture on Wednesday, April 2.  In March 2014, State general fund revenues increased $254 million over March 2013.  This continued a pattern of slow growth in key tax revenues that the State has seen since the start of the nationwide economic recovery.

For FY14, the income tax continues to be the main driver of Illinois revenue growth.  Personal income tax receipts rose $495 million over the comparable months of FY13, with corporate income tax receipts rising by $174 million.  The growth in sales taxes, inheritance taxes, and other general fund revenue sources has been much slower, due to factors such as the continued transition of consumer spending from taxable goods to nontaxable services.

The revenue increases of FY14 are not expected to be repeated in FY15.  On the contrary, revenues are expected to decline due to statutory reductions in income tax rates that are scheduled to take effect on January 1, 2015.  The revenue crunch created by this phasedown of the “temporary” income tax increase is connected to the Democrats’ push for higher Illinois tax revenues in FY15.

House hearings begin on FY15 budget.  One week after Gov. Quinn’s submission of a proposed FY15 budget to the Illinois General Assembly – a record $38.1 billion general funds budget predicated upon the assumption that lawmakers will make permanent the existing 67 percent income tax increase that is scheduled to partly roll back in 2015 – the General Assembly began hearings to question State agencies on their spending plans for FY15.  Materials on the $38.1 billion Quinn budget can be found here.  Legislative hearings on the budget began on Tuesday, April 1 and will continue next week.

Chicago Pensions
Chicago pension reform bill introduced in Springfield.   SB 1922 is the City of Chicago’s pension reform bill for two of its four systems.  The pension systems affected by this reform proposal are restricted to Chicago Municipal and Chicago Laborers, and does not include Chicago Police & Fire or Chicago Teachers.  The measure, proposed as a pension reform agreement between the City and a majority of labor unions, imposes several benefit reforms on actives and retirees, such as reductions in annual COLA adjustments, several COLA pauses, and a reduction in Tier 2 retirement age from 67 to 65 years.  Funding reforms include increased employer contributions, gradual 2.5% employee contribution increases over 5 years, and an actuarially accepted funding schedule mandating 90% funding of the two systems by 2055.  According to the City, the Chicago Municipal system will be insolvent as early as 2023 and the Chicago Laborers system as early as 2024 without reform.

Critics pointed out that the bill falls far short of the dramatic moves necessary to remove the Windy City from the looming threat of a Detroit-style bankruptcy.  The ratio of reforms in the proposal, approximately 70% funding reforms to 30% benefit reforms, are cited as too lopsided in favor of workers, with property taxpayers bearing a disproportionate burden.  The goal of 90% funding by 2055 will require that a series of property tax increases be imposed on Chicago city homeowners and owners of other real property.  Concern was raised that once these tax increases are imposed, they will serve as a further disincentive to live and work in Illinois’ largest city.

Advocates argue the City’s financial situation is so dire that the pension reform proposal is a balanced and fair approach to ensure pension system viability at a reasonable cost to taxpayers, without drastic reductions in City services.  Negotiations with the affected unions resulted in 28 of the 31 affected unions to be in agreement on the pension reform proposals, with AFSCME, CTU and Nurses the only opponents.

Concealed Carry
Concealed carry licensing continues to move forward.  The Illinois State Police and gun rights organizations agree that after many snags and delays, the final process of awarding concealed carry licenses (CCLs) to tens of thousands of Illinois firearms owners is moving forward relatively smoothly.  While the State resisted awarding CCLs for many years, a 2012 court decision and a 2013 law overcame final opposition and led to the creation of a legal pathway for concealed carry, making Illinois the 50th and last state in the U.S. to implement this right.

One of the remaining snags in the program comes with the requirement that applicants present evidence of required training (16 hours for most applicants) provided by a certified CCL trainer.  This proof of training is only as good as the certification of the trainer.  On Tuesday, April 1, the State Police announced they had rejected a batch of 327 CCL applications, all tied to an allegedly uncertified CCL instructor doing business in the Chicago suburb of Bolingbrook.  Prospective CLL applicants are urged to check out their instructor’s certification status before paying the required fees and investing the time in firearm safety training.

Criminal Law – Victims’ Rights
House approves proposed constitutional amendment on victims’ rights.  HJRCA 1 was actively discussed with states’ attorneys and other stakeholders in the Illinois criminal law process.  Approval of this proposed amendment by a three-fifths majority (111-2-0) sends the language to the Senate.  If the proposed amendment is approved by the Senate, it will go to voters for an up-or-down vote in the November 2014 general election.

House debate indicated that many of the crime victims’ rights set forth in this amendment already exist in the Constitution, State statute, or legal practice, but opportunities for victims to assert these rights could be limited in some circumstances.  The constitutional amendment will place these rights on a firmer basis than statute and clarify the standing of crime victims to enjoy the enforceable right to receive key information about the disposition of the defendants accused of victimizing them.  In addition, the amendment clarifies the right of victims to seek private counsel, at their expense, to assert and maintain their rights.  

Energy – Coal 
House Republicans Successfully Defend Illinois’ Energy Heritage.  HB 5660 is a bill to shut down an existing State program that provides Illinois teachers and students with information about coal mines and miners.  Facts distributed by the program include the more than 47 million tons of coal that were mined throughout central and southern Illinois in 2012.  Approximately 4,000 miners dug the coal, and economists believe that more than 31,000 Illinois jobs are coal-related.  Most Illinois coal is used to generate heat and electricity.

When HB 5660 was debated on Thursday, House Republican members spoke to the importance of coal to the Illinois economy.  Many members from historic coal-mining towns and counties called attention to the importance of coal mining to the heritage of many Illinois communities.  After failing to receive the required 60 votes, HB 5660 was placed on postponed consideration and did not advance.

General Assembly – House Action
As 3rd Reading deadline approaches, Illinois House has passed 205 bills so far in 2014 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 4, the House has debated and approved 205 separate measures.  Journals listing the actions of the House on each session day can be found here.

Illinoisans are constantly contacting their lawmakers with ideas for new legislation.  As of Friday, 2,437 House bills have been introduced for consideration since New Year’s Day.  An unknown number of additional bills will be considered next week, April 7 through 11, which will be the final week for consideration of bills originating in the House this spring.  

Similarly, the Senate has a deadline to pass bills over to the House.  1,320 Senate bills have been introduced since the beginning of 2014, although not all of them will be seen in the House.  The House and Senate will start looking at the other chambers’ bills on Tuesday, April 29.

Higher Education – Smoking Ban 
Illinois House passes bill to ban tobacco, cigarette smoking on public college campuses.  The ban will affect Illinois’ nine public universities and their separate campuses, and will also be effective on all of Illinois’ 39 community college districts.  SB 2202 does not apply to private institutions of higher education, but an increasing number of campuses throughout Illinois are taking action to ban the smoking of tobacco throughout their campuses.  All burning tobacco, including pipes, cigars, and cigarettes, will be affected by the ban.  E-cigarettes are not covered.  The vote on SB 2202 was 67-44-2; the measure had been amended in the House before passage, so further action by the Senate to concur with the House language will be required.

The campus-wide bans created by SB 2202 will supplement the prohibitions already in place statewide under the terms of the Smoke Free Illinois Act.  Some public universities and campuses, such as the Urbana campus of the University of Illinois, have already enacted local ordinances that go beyond the terms of SB 2202.  Supplemental bans in place on some campuses include prohibitions of e-cigarettes and crackdowns on smoking within privately owned motor vehicles parked on campus.  An advocacy group, Americans for Nonsmokers’ Rights, calculated in January 2014 that 1,182 U.S. college and university campuses had adopted campus-wide smoke-free rules.

Poker Runs
House approves legislation for widespread fundraising activity.  HB 4223, a bipartisan bill sponsored by Rep. Rich Brauer (R-Petersburg), was approved by the House on Wednesday on a vote of 109-3-0.  The bill responded to citizens’ groups that have organized “poker runs,” a type of fundraising recreation.  Donors who have bought a space in the poker run travel from place to place and get tokens such as a playing card at each stop, and at the end of the “poker run” the winning donor and the good cause for which the poker run was organized split the proceeds.  

The Illinois Department of Revenue and the Illinois Gaming Board had announced their intent to crack down on “poker runs” as a gambling activity.  After discussions led by Rep. Brauer, it became clear that one way to clean up this snarl would be to move regulation of poker runs from the State of Illinois to local police departments and sheriffs’ offices.  This can be done by classifying a poker run as a raffle, which HB 4223 does.

Video Gaming
Industry passes mark of $100 million in annual State tax revenue.  The Video Gaming Act allowed licensed bars, taverns, restaurants, truck stops, and certain social clubs to apply for permission to install up to five video gaming machines.  Operating much like the slot machines installed in conventional gambling casinos, the machines allow repeated play for paper receipts that can be exchanged for cash at the pay stations of the establishments that host them.

Installation of legal video games began in late 2012.  The video gaming industry is closely regulated by the Illinois Gaming Board, which has scrutinized many license applications and issued a slow stream of new licenses.  The Gaming Board reports that as of January 2014, 14,423 video gaming terminals had gone into legal operation throughout Illinois.  In this month more than $500 million was wagered, and taxes levied on the wagering activity generated $9.6 million in new State revenue and $1.9 million in coupled local tax revenue.

Continued annual video game play at the levels achieved in January 2014 will generate more than $100 million in new annual State tax revenues.  In addition, further growth in licensed Video Gaming Act machines and tax revenues could further add to this total.  Video Gaming Act growth is constrained by a provision of the state law that allows municipalities to ban video games within city limits.  Chicago and other municipalities have so far ‘opted out’ of video gaming.