Week in Review for April 28, 2018

Leaders Durkin, Brady Call For Adoption Of Revenue Estimate. Illinois House Republican Leader Jim Durkin and Illinois Senate Republican Leader Bill Brady filed joint resolutions Thursday to adopt a revenue estimate in order to begin the budgeting process for fiscal year 2019.

“It is our constitutional duty to taxpayers across Illinois to spend within our means – something we have not done in decades here at the Capitol,” Durkin said. “The rejection of certifying a revenue estimate in Springfield is not acceptable and is legislative malpractice. We owe it to Illinois taxpayers to take this first step in finally balancing the state’s checkbook and putting Illinois on the right track towards fiscal stability.”

House Joint Resolution 124 adopts a revenue estimate of $37.672 billion for fiscal year 2019, based on the estimate provided by the Commission on Government Forecasting and Accountability (COGFA).

“This resolution, and the need for a revenue estimate, is an important step forward as it will help the budgeteers that are currently meeting to work toward a balanced budget,” said Senate Republican Leader Bill Brady.

A revenue estimate is required by state law:

“The House and Senate by joint resolution shall adopt or modify such estimates as may be appropriate. The joint resolution shall constitute the General Assembly’s estimate, under paragraph B of Section 2 of Article VIII of the Constitution, of funds estimated to be available during the next fiscal year (25 ILCS 155/4(a)).”

It is also required by Subsection (b) of Section 2 of Article VIII of the Constitution of Illinois:

“Appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.”

The editorial board of the State Journal-Register, the Springfield state capital paper that closely covers state government, joined the call for adoption of a revenue estimate in an editorial published on Thursday, April 26.

Gov. Rauner announces $16 million federal grant to fight opioid abuse. The grant money will be paid through the Illinois Department of Human Services (IDHS) to medical service providers who help fight opioid abuse and provide treatments. States hit by opioid abuse are getting help from Congress through the 21stCentury Cures Act.

The abuse of opioid drugs, including heroin and fentanyl, played a role in the deaths of an estimated 2,000 Illinois residents in 2017. Much of the grant money is earmarked for new treatment and recovery services, including medication-assisted treatment. Medication-assisted treatments for opioids include limited allocations to patients of medications that reduce withdrawal symptoms, such as methadone and buprenorphine. Persons recently released from prison or county jail who are diagnosed as being at risk for recidivism will be offered treatment options. Some of the grant money will be used to strengthen enforcement of the Illinois Prescription Monitoring Program, the State program to monitor and enforce the prescription status of opioid painkillers.

The grant will supplement efforts already underway to make universal the first responder access to naloxone, the opioid agonist that if administered in a timely manner can save the life of a victim who is in an overdose situation. In its ongoing outreach to paramedic forces and other first responders, IDHS has learned that funds like these have trained nearly 18,000 responders to administer naloxone.

Increasing support for apprenticeship pathway to jobs. In coordinated visits, Gov. Bruce Rauner and Lt. Gov. Evelyn Sanguinetti toured Continental Tire’s world headquarters in Hanover, Germany and the firm’s Illinois tire-manufacturing plant in Mt. Vernon. The Rauner administration is looking to expand our state’s infrastructure of apprenticeship opportunities, a pathway to work training that is already in active use in many German-managed industrial firms. In Mt. Vernon, Sanguinetti spoke to apprentices at the factory who are learning job skills as they prepare to fully enter the Illinois workforce.

Illinois is pushing toward leadership in apprenticeship opportunities. Over the past four years, Illinois school funding has increased by more than $1.2 billion. Some of these funds have been invested to expand apprenticeship programs in Illinois high schools. Many Illinois community colleges have developed task forces with local employers to adjust their curricula in the direction of apprenticeship pathways and job-oriented work certification programs. Future automated workplaces will demand a well-trained Illinois workforce. Current numbers show that Illinois has enjoyed a net gain of 18,200 manufacturing jobs over the most-recently-reported 12-month period of employment in the Prairie State. The Illinois Department of Employment Security figures cover the period from March 2017 to March 2018.

House advances bill to provide guidance to persons in schools who are affected by dyslexia. House Bill 4369, sponsored by Rep. Keith Sommer, directs the Illinois State Board of Education (ISBE) to develop an online handbook to provide guidance on dyslexia and its challenges and issues in an educational setting. The handbook will be written for the use of pupils, parents/guardians, teachers, and non-teacher educational personnel. The directive calls upon the State Board to conduct continued monitoring of educational best-practices policy on dyslexia issues and to update the online handbook at least once in every 4 years. The measure was approved unanimously by the House on Tuesday, April 24.

House passes bill to extend sales tax incentive to mine Illinois coal. HB 4415 extends the lifespan of an exemption from Illinois ales taxes for equipment used to explore, mine, haul, and process Illinois coal, and to reclaim and remediate grounds used for coal mining. The bill will help keep Illinois coal mines in operation. High-sulfur Illinois coal faces heavy competition from other states, including lower-sulfur coal from Wyoming. Twelve House Republicans co-sponsored the bill and helped it pass through the Illinois House. The House vote of 108-1-0, taken on Monday, April 23, sent the measure to the Senate for further discussion and debate.

Blue Collar Jobs Act would put Illinois workers back on the job. State Rep. Keith Wheeler has introduced House Bill 5864, the Blue Collar Jobs Act, to incentivize construction projects in the state of Illinois and create jobs for the middle class.

“’Helping the middle class’ is a pretty common talking point for elected officials across the country,” said Rep. Wheeler. “While there are a lot of proposals that claim to do that, nothing helps the middle class more than creating good paying jobs. That’s precisely what the Blue Collar Jobs Act does. It sends a message that Illinois is open for business by putting our highly-skilled construction workers to work. It’s a win for the state of Illinois, Illinois businesses, Illinois construction workers and for the permanent workers that would be hired after a new facility is completed.”

The Blue Collar Jobs Act is supported by both labor and business groups and offers tax incentives to companies making significant capital improvements in Illinois based on the withholding tax paid to construction workers. It does this through the creation of four new tax credits, including:
  • High Impact Business construction jobs credit
  • Enterprise Zone construction jobs credit
  • New Construction EDGE Credit
  • River Edge construction jobs credit

“We support prioritizing Illinois construction workers in our state’s economic development toolset through incentives for new construction, expansion, and rehabilitation projects,” said Marc Poulos, Executive Director IN, IL, IA FFC, the labor-management group of the International Union of Operating Engineers, Local 150.

The program will work under the same structure as the current EDGE program:
  • Tax credit value is 50% of Illinois income tax withheld of workers covered under the agreement;
  • Tax credit value rises to 75% of Illinois income tax withheld of workers covered under the agreement in areas designated to be in an underserved area that meets certain poverty, unemployment, and federal assistance rates;
  • Tax credit is issued to the organization that builds, renovates or expands the building just as the EDGE tax credit goes to the company hiring the workers. The tax credit is meant to incentivize the company to construct new buildings or improve existing buildings which can’t be built without the use of Illinois labor.
“The Blue Collar Jobs Act gives growing businesses another reason to make substantial capital investments in Illinois to bring more jobs and opportunities to our state,” said Todd Maisch, President and CEO of the Illinois Chamber of Commerce.

The tax credits only become available after the work has been fully completed. There is no risk to the state for a company not meeting its requirement as the state has already captured the withholding tax prior to the tax credit being issued.

One of world’s largest trade shows will co-locate with Illinois-hosted event. The German-managed Hannover Messe trade show concentrates on the display of industrial processes and solutions. For Chicago purposes, Hannover Messe will co-locate with the International Manufacturing Technology Show 2018 (IMTS2018) to be held in McCormick Place on September 10 through September 15 this year. Hannover Messe describes itself as “the world’s leading industrial trade show.” The IMTS2018 Chicago show was already expected to draw more than 115,000 visitors from more than 120 countries.

Hannover Messe will co-locate with IMTS2018 as Hannover Messe USA. The participation of both IMTS and Hannover Messe will enable the co-located September 2018 trade shows to offer visible evidence of the most recent advances in global industrial technology. An announcement of Hannover Messe’s participation in Chicago and co-location partnership with IMTS2018 was made by Gov. Bruce Rauner on Tuesday, April 24.

Illinois successfully sells general-obligation debt. The sale of $500 million in general-obligation obligations was concluded on Wednesday, April 25. The action “rolled over” existing commitments made by Illinois to maintain its capital infrastructure and conduct other essential long-term elements of public policy. While Illinois’ debt is given a relatively low ranking by international credit-measurement agencies, the obligations continue to be ranked as investment-grade securities. For example, leading bond analytical firm Moody’s Investors Services ranks Illinois general obligation debt at Baa3 with a negative outlook.

In Wednesday’s debt transaction, Illinois and its taxpayers promised to pay a package of yields that scale upwards with the lifespan of each individual packet of bonds sold. The longest-tailed bonds were stamped with an expiration date of 2043 and were sold with a tax-free interest rate of 4.88%. Interest rates on the bond package as a whole averaged 4.55%.

The interest rates of more than 4.5% that Illinois will have to pay are significantly higher than the three-percent-plus rates paid by most public-sector debtors selling tax-exempt fixed-yield securities. Much of the cloud that lies over Illinois’ credit rating and fiscal prospects is driven not by general-obligation debts, such as the instruments sold by Illinois on Wall Street this week, but by other, separate, sets of State commitments relating to unpaid bills and State-managed pensions. While Illinois’ general obligation debt load has remained steady since FY10 at a level that fluctuates between $25 billion and $30 billion, Illinois also has more than $7.3 billion in unpaid bills and more than $130 billion in estimated unfunded pension obligations.

Veterans to be honored. The Illinois Bicentennial Commission, in cooperation with the Illinois Department of Veterans’ Affairs (IDVA), has announced an initiative to honor selected veterans from throughout Illinois. The “Honor 200” initiative authorizes Illinoisans to nominate a friend or neighbor who is: (a) a veteran of the U.S. armed forces, and (b) exemplifies the meaning of selfless service, courage, and compassion. Illinoisans who want to participate in the selection process are invited to submit nominations to IDVA no later than Tuesday, July 31. The nomination must include the nominee’s DD214 proof of honorable discharge, and should also include a written summary of the nominee’s life achievements. The nomination form contains guidance categories to set forth these achievements, including military service dates and a list of the nominee’s military awards and decorations. The “Honor 200” Illinois veterans will be honored on Illinois’s birthday, December 3, 2018.

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