Week in Review for week ending June 2, 2017

Budget – General Assembly
Democrats fail to enact budget. Here we go again. We've reached the May 31st session deadline and once again, the Democrat-controlled General Assembly has failed to do its job.

This week marked 700 days without a State budget. This is the longest period without a budget of any state in modern U.S. history.

No balanced budget, no meaningful reforms to get Illinois back on track.

Democrats have spent months hurling insults and unfounded accusations against Republicans to distract from their own fiscal irresponsibility.

The majority party has blamed the Governor and House Republicans for the lack of a balanced budget. And yet, for the second year in a row, the Democratic-controlled legislature has failed to send a budget, balanced or not, to the Governor.

We've been subjected to Democratic Deputy Majority Leader Lou Lang's daily "Lang Lecture Series" consisting of nothing more than passing the buck, playing the blame game instead of owning up to the cold, hard fact that Democrats don't want reform. Democrats are the party that refuses to negotiate with Republicans to pass a truly balanced budget.

Leader Lang himself said on at least three occasions that there likely won't be a budget passed before the end of the Governor's first term.

"It's entirely possible that we won't have a budget during the Governor's term in office," Lang said. (WCIA - May 18, 2016)

Lang: "We may or may not have a budget during the entire term of Bruce Rauner." (Daily Herald - May 23, 2016)

Lang: "It would not surprise me if we went the full four years of the Rauner term without a full budget in place." (Chicago Tribune - November 9, 2016)

So there you have it. For more than a year now, the deputy majority leader has been saying Democrats have no interest in working with Republicans to pass a balanced budget.

Let's look at the facts. One party had absolute control of state government for 12 years. Democrats passed unbalanced budget after unbalanced budget during those years. They increased spending, raised taxes, raided pensions, used gimmicks and one-time revenues to falsely claim their budgets were balanced, when in reality, our revenues have not matched our expenditures for more than 15 years.

This budgetary impasse is a crisis of their making. The FY16 Democrat Budget was $4.6 billion out of balance. The FY17 Democrat Budget (SB 2048) was $7 billion out of balance. It passed the House with the slimmest of margins but was so bad that the Senate Democrats killed it on a vote of 17-31-0.

Even after these horribly unbalanced, highly partisan budgets were defeated, Republicans worked with Democrats to pass an FY17 stopgap budget – that included, for the first time in 7 years, full funding for K-12 education, putting an end to their practice of “proration."

It is an absolute falsehood to claim Republicans haven't done our job. And it is an utter embarrassment that the Democrat-controlled General Assembly has once again failed to do its job.

So now we're at the end of another legislative session without a budget, without property tax relief for families and seniors, without lowering the cost of doing business to make Illinois more competitive, and without common sense reforms that will save Illinois taxpayers billions of dollars a year.

We need a full-year, truly balanced budget that meets the needs of Illinois families. A budget that ensures spending cuts are proportional to new revenues along with meaningful reforms that will move our state forward.

Education, human services, public safety – these programs need stability – the stability that only a real, long-term, fully balanced budget will provide.

No more games. No more gimmicks. We have one month left to get the job done.

Budget – Debt Rating
Illinois debt downgraded again by two of three major credit agencies. The downgrades imposed by Moody’s and Standard & Poor’s, move Illinois to the brink of “junk bond” status. The rating status, which in Moody’s terminology is “Baa3” and in S&P’s wording is “BBB-“, comes with a “negative outlook,” a formal warning by both debt-rating firms that a further demotion of Illinois’ status to non-investment-grade is both possible and relatively imminent. The moves, announced on Thursday, June 1, followed the Democrat-controlled General Assembly’s failure to enact a FY18 budget by the May 31st deadline.

Should Illinois’ debt be demoted to below investment-grade status, the consequences would go beyond higher interest costs to Illinois taxpayers. Many segments of the investment industry, such as pension funds, are partially or totally barred from taking positions in non-investment-grade securities. The State of Illinois might find itself increasingly unable to sell debt at all, a fate which is already affecting the non-investment-grade bonds issued by Chicago Public Schools. Furthermore, economic experts warn that a further reduction in Illinois’ debt to below investment grade would serve as a signal to the global private sector that Illinois is diminishing its commitment to policies that make the State an acceptable place to invest money and create jobs.

Chicago – Thompson Center
General Assembly approves sale of JRTC. However, the majority party voted for provisions, inserted into the bill, to hand much of the profits to the city of Chicago. SB 886 contains provisions to allow the State to sell one of its principal pieces of property, the city block in downtown Chicago that currently contains the James R. Thompson Center. The 1.2 million-square-foot office building is currently home to 2,200 State of Illinois workers. However, the 1985 building has not been maintained and requires hundreds of millions of dollars in overdue upkeep and maintenance.

The building’s footprint, which is bounded by LaSalle, Lake, Clark, and Randolph Streets, could be re-used for development. A new building on the site could house private-sector workers, and its owner or operator would pay property taxes to Chicago Public Schools and other public-sector entities that face financial challenges in 2017. As a State building, the Thompson Center currently does not pay property taxes.

The square-block footprint of the Thompson Center is seen as a desirable development opportunity. The parcel of property currently occupied by the aging office building is seen as offering the opportunity to earn a potential one-time payment of $300 million from a developer or development team, representing the inherent value of the property location adjusted for associated costs of demolition and office removal. However, a loophole in the city of Chicago zoning law currently allows the city to effectively “veto” the development of the site.

SB 886, as approved by the Democrat majority, wields this potential veto in such a way as to require a potential Thompson Center developer to pay a large portion of this potential $300 million to the city of Chicago as compensation for the zoning adjustments that will be required to finance and implement the redevelopment. House Republicans voted against SB 886, which was approved by the House on Tuesday, May 30 by a vote of 67-48-0.

Criminal Law – Chicago Violence
House passes Durkin bill to reduce Chicago’s gun violence. SB 1722 follows continued patterns of lethal violence in many neighborhoods within Chicago. One of Illinois’ strongest laws to control lethal gun violence is the Criminal Code law against “unlawful use of a weapon,” a legal term that covers a wide variety of acts in which a gun is carried by a previously adjudicated defendant or in the commission of a criminal act. Police officers and leadership in Illinois’ largest city say, however, that they have real problems under current law with bringing a criminal UUW case against a known gang member. The minimum sentencing for this offense can be so low that the offense goes to the back of the queue in a system that contains a limited number of slots for bringing charges and winning a conviction and sentence.

House Republican Leader Jim Durkin’s “safe neighborhoods” bill is meant to break this dilemma and make it possible to bring these cases to justice. The comprehensive sentencing-reform language contained in SB 1722 increases the minimum sentences and recommended sentences for unlawful use of a weapon by a felon and for aggravated unlawful use of a weapon. At the same time, the bill creates a new First Time Weapon Offender Diversion Program for first-time nonviolent offenders charged with weapons possession. The new program will be open to individuals 20 and under, and will give these individuals a chance to avoid prison under strict court supervision.

Aggravated and repeat UUW offenses are so closely correlated with Chicago criminal gang membership that Chicago Police Chief Eddie Johnson testified to the House that the measure could help cut violence by 50% in his jurisdiction. This bill was written in bipartisan negotiations between House Republican Leader Durkin and other key Senators and Representatives, as well as senior law enforcement officers and leaders from Chicago and other jurisdictions. The House vote to approve SB 1722 as amended was 70-41-1, with the Senate concurring 36-12-0.

Downstate – Lincoln Museum
General Assembly approves making Lincoln Library and Museum autonomous. The Abraham Lincoln Presidential Library and Museum, the “crown jewel” of Lincoln historic sites, is located in the state capital in Springfield. Since its opening, the Lincoln Presidential Library and Museum has been part of the Illinois Historic Preservation Agency. Friends of the presidential center have long asserted that due to its importance, the Lincoln Library should be an autonomous State agency with its own board of directors. HB 136 completes this move and was approved by the General Assembly this week.

Supporters of HB 136 assert that with an independent board of directors directly appointed by the Governor, the Lincoln Library and Museum will be in a better position to prioritize the fundraising work of its 501(c)(3) affiliate partners and will be able to reduce its dependence on State taxpayers. With the help of partners, the Lincoln Library mounts frequent public exhibitions and shows on the life of Lincoln and the history of Illinois.

Education Funding
Democrats pass massive bailout for Chicago Public Schools. On the final day of the scheduled spring session, House Democrats rushed a vote on a new school funding formula, Senate Bill 1, which would provide Chicago Public Schools (CPS) with a $500 million bailout while offering empty promises to the rest of the state’s public schools.

The Democrats’ bailout bill would provide CPS with a more than $500 million windfall that will only continue to grow in future years. With the State already owing Illinois schools more than $1 billion this year and no way identified to pay for the new formula, Republicans stood in opposition to SB 1.

The new evidence-based funding model provides a blueprint to overhaul our broken state funding formula. The evidence-based funding model is significant to Illinois for many reasons, not the least of which is that it was specifically designed to drive much-needed funding to school districts that are the farthest away from adequacy. The model, as it was initially envisioned, was meant to focus more dollars on districts that are the least adequately funded.

Unfortunately, the House amendment to SB 1 further corrupts the evidence-based model and skews its results in favor of driving money to one school district.

SB 1 would cost approximately $700 million in new state dollars to implement in FY18. Not only is that amount unachievable given the fiscal crisis facing Illinois, but CPS would receive nearly $500 million or 70 percent of the new funding. The other 851 Illinois school districts would receive just $200 million or 30 percent of the new funds, despite have 77 percent of total students.

Supporting a bill that we simply can’t afford, a bill that bails out Chicago while shortchanging our schools, would be insincere to educators and unfair to the taxpayers of this state.

General Assembly – May 31 Adjournment
House, Senate adjourn without completing their work. No budget was enacted for FY18, which begins on July 1, 2017. Democrat House Speaker Michael Madigan did not bring a constitutionally required State budget to the Illinois House floor for an up-or-down vote, and instead announced he would re-convene the House in June continuous session to discuss and debate the State’s worsening fiscal situation. Continuous sessions cost additional money to Illinois taxpayers, in addition to the increased costs imposed on taxpayers from cuts in the State’s credit rating as it continues to try to operate without spending controls.

Health Care – Doctors Leaving Illinois
Study finds young doctors are choosing other states to pursue medical residency. A key life choice faced by new physicians is the matchup between their medical specialty and their place of residency. Resident physicians are the backbone of much of the hands-on medical care of the United States. They have just graduated from medical school, so their training has been carried out in full compliance with the most recent advances in medical science. At the same time, they are completing their training and have not yet been fully certified by the specialist boards that control the type of medicine they will practice. This means that in a hospital or large clinic, they are the doctors who spend the largest percentage of their time in face-to-face contact with patients.

A recent study carried out by Crain’s Chicago Business indicates that, for many 2017 Illinois medical schools, the percentage of medical school graduates who chose to take up an Illinois “match” and are starting out in residency practice within Illinois is dropping significantly. The University of Illinois College of Medicine reports that only 28% of this year’s graduates are staying to practice in Illinois, down from almost 37% last year. The state-funded SIU School of Medicine in Springfield, which was founded for the specific purpose of encouraging young doctors to set up practice in underserved regions of Downstate Illinois, reports an even lower figure for 2017: 21%, down from 30% last year.

Illinois public-sector medical schools report that their student life and ability to encourage medical students to “match” with Illinois hospitals has declined severely in line with overall cuts in public-sector higher education. While medical schools get large percentages of their funding from “teaching hospital” health care reimbursements and the federal government, the absence of State appropriations for their work is reported to have made Illinois look like an unattractive place to commence the practice of medicine.

Local Government – Township Consolidation
Township consolidation bill passes. SB 3 will create a process to be used by township governments to consolidate with one another or with municipalities to which they are conterminous.

Townships are units of local government within counties. They operate everywhere in Illinois except within the city of Chicago. In a few cases, such as the Chicago suburb of Cicero, the town is also a municipality; in most cases, however, the township government has jurisdiction over unincorporated areas within a county. These areas are usually rural areas. Township governments often participate actively in road and highway maintenance within their jurisdictions. As time has passed, however, townships have become lightly populated in relation to other units of Illinois government. Some townships could consolidate with each other, or with conterminous or nearby municipalities, without any loss to the quality of services they provide to their taxpayers.

Illinois has nearly 7,000 units of local government, more than any other state in the nation. This proliferation of units is seen as playing a role in our state’s property tax crisis. Township consolidation is hoped by many to be a good beginning for an ongoing push for overall local government modernization throughout Illinois. SB 3’s enactment by the House and Senate made it possible for this measure to be sent to the Governor Bruce Rauner for final action. The House vote on Wednesday, May 31, was 75-34-1.

State Government – Procurement
House approves procurement reform. SB 8 creates comprehensive procurement reform affecting many facets of the Illinois public sector, including state universities. The bill frees up many Illinois purchasing officers from many obsolete provisions of current State law that increase the cost of obtaining goods and services required by the public sector for its operations. For example, current law forbids the use of an all-electronic process to put out bids and procure goods. SB 8 authorizes the use of electronic procurements.

The overall model followed by many of the provisions of SB 8 is that of a centralized agency procurement process overseen by an executive chief procurement officer (CPO). The CPO is given power to determine, in many purchasing environments, what is in the State’s best interest after receiving recommendations from the agencies. This follows the procurement model used by many larger firms within the private sector.

SB 8, as amended, was approved unanimously by the Illinois House this week, with the Senate’s concurrence.

Telecom – 9-1-1 Service
General Assembly passes legislation to extend 9-1-1 program. The 9-1-1 program, which authorizes and supervises the work of the various offices and switchboards around Illinois that provide 9-1-1 emergency response service, is scheduled to expire on July 1, 2017. SB 1839 would extend the life of this program until December 31, 2020. It would increase the monthly 9-1-1 surcharge paid by telecom customers from 87 cents/month to $1.50/month, effective in January 2018. 9-1-1 centers say the surcharge hike is necessary to cover the increased costs of running the centers.

This legislation also contains language intended to enable a Large Electing Provider that is electing to move away from landline technology, such as AT&T, to provide customers with an alternative voice service for home-based phones. Large telephone firms will be required to continue to provide services that will contain all of the applicable functionalities for voice telephony services described in current telecom standards.

SB 1839 was approved by the House this week on a vote of 81-27-2, with the Senate concurring 53-3-1.

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