Week in Review for April 26, 2019

House Republicans continue pushback against Pritzker tax hike. The graduated income tax proposed by Governor JB Pritzker would enable future governors of Illinois and Illinois General Assemblies to enact any tax rate they want upon any specific slice of Illinois taxpayers. The authors of the Illinois Constitution of 1970 included specific ironclad language in that document that requires all income taxes imposed upon individuals to be at a single, flat, fixed rate. It is this provision of the Constitution that the proposal would repeal.

Repeal of the proposal will open the door to an immediate, multi-billion-dollar Illinois income tax increase, to be followed at frequent intervals by further increases as advocates take advantage of the opportunities created by the new law to maximize State revenue. Nothing in the 2019 income tax proposal takes any steps to reduce government expenditures, reduce the costs of State-managed pension plans, or save money in other ways.

House Republicans are taking the lead in opposition to this tax proposal. HR 153 states the unanimous opposition of the House Republican Caucus to any proposal in Springfield to allow the creation of a graduated income tax in Illinois. In recent days, House Republicans have worked with Illinoisans throughout the State to inform them of this proposal and its threat to the Illinois private sector. Thousands of Illinoisans have signed our petition against the proposal.

“One Chicago” proposal to create comprehensive transit center in South Loop. The development would house residences, office space, and a multi-arm transit center. Built on a currently-underused open area that was once used by the Illinois Central Railroad as a train yard for freight and passenger cars, the 34-acre space is described by the Chicagoland Chamber of Commerce as a massively underutilized capital asset. The investment of an estimated $19 billion could create $120 billion in new jobs, taxes, and other economic benefits over a 40-year period.

Full creation of the promoted “One Chicago” would include moving a significant share of Chicago’s metropolitan-based passenger train service, including long-distance (Amtrak) service, commuter service and Orange Line electric train service, from other locations to the new complex. Supporters of the proposal assert that creating the “One Chicago” transit complex would generate a transit density sufficient to finance a dedicated downtown Chicago tramway or high-speed bus line, long advocated for by transit supporters. Existing busway space on the downtown Illinois Central right-of-way could be used for the dedicated routeway. The “One Chicago” proposal was released on Thursday, April 18.

DRUGS Representative Wehrli proposes Opioid Overdose Reduction Act. House Bill 3833, to be referred to as Alex’s Law, is meant to enable the greater dissemination and availability of specialty chemicals, known as “opioid antagonists,” that can be administered to someone who has taken a potentially fatal quantity of opioid drugs. This Overdose Reduction Act authorizes the post-prescription secondary distribution, in some very limited cases, of these prescription drug antagonists and their administration under the Act to a patient who is experiencing an opioid overdose. The administrators of the drug will be personnel of a community-based health disease prevention agency or social service program, and they will have to undergo specified training before being granted the right to administer the antagonist. Police first responders already have access to opioid antagonists and can give them to patients, and police officers have used this access to save the lives of hundreds of Illinois residents.

Representative Grant Wehrli introduced the Opioid Overdose Reduction Act earlier this month as part of the discussions of the overall public health issues of the 101st General Assembly.

School administrative costs, consolidation issue discussed. Illinois has 852 separate school districts, many of them rural districts that serve township areas in Downstate Illinois. The smallest districts have as few as 100 students. Some Illinois districts cannot field independent athletic teams, particularly in football, and have had to merge their teams. However, each independent Illinois school district has a proud history and is a symbol of its community. Even if some of the young adults from a community have grown up and moved away, this means that the adults who remain are those who are especially committed to the preservation of that community and its identity.

Some advocates, including people on both sides of the ideological spectrum, think more Illinois school districts should look at their futures. Professional educators sometimes point out challenges that face smaller districts in preparing their students for higher education. Advocates for taxpayers’ rights point out that consolidating independent school districts can reduce administrative payrolls and lead to lower property tax extensions.

Following World War II, there was a wave of school consolidations throughout Downstate Illinois as “one-room schoolhouses” closed their doors and students began riding school buses to class. However, this wave has ended. Only 62 consolidation actions have taken place since 1983. Today’s school district consolidation proposals almost always run into strong opposition from local residents. In some cases, these Downstate communities see their local school districts as cornerstones of their local areas’ ability to survive as separate and distinct places of local identity.

A genuine burden is placed on all Illinois taxpayers by current Illinois educational governance. A study by the Metropolitan Planning Council (MPC) found that more than $1 billion of the money Illinois taxpayers were forced to pay in fiscal year 2014 property taxes were funneled to school-district-level administrative salaries and benefits. This school-district general administrative spending burden, the MPC found, was “by far the most of any state in the nation. On a per-pupil basis, school districts in Illinois spent $518 per pupil for general administration – the second highest [per-pupil cost] in the nation.” The MPC reports that the national average spending level for general administration was $210 in FY14. If Illinois were to be able to reduce its per-pupil school district general administrative cost down to the national average, Illinois taxpayers would enjoy savings of more than $460 million per year.

Illinois unemployment rate up slightly in March. The Illinois Department of Employment Security (IDES) announced last week that the unemployment rate was 4.4% in March. This was a slight increase of 0.1% from the 4.3% jobless rate posted in February 2019, and was 0.6% higher than the 50-state 3.8% unemployment rate posted nationwide during the same month.

Further, the Illinois economy did not produce net new jobs in March 2019. While the manufacturing sector remained strong, with a March 2019 net increase of 1,700 payroll jobs in manufacturing, this strength was offset by weakness in other areas such as professional services (down 4,200 jobs in March 2019). The overall Illinois nonfarm payroll economy covered the paychecks of 2,800 fewer jobs in March 2019 than the payrolls of February 2019. As the majority party continued to push a massive Illinois income tax hike proposal, the March 2019 jobs picture signaled the growing challenges facing the Illinois economy and its working families.

Illinois’ stagnant job-creation numbers were echoed in overall U.S. state population estimates, which indicate that many Illinoisans may be leaving Illinois to seek work in other states such as Florida and Texas. Population estimates from the U.S. Census Bureau, keyed to trends between calendar years 2017 and 2018, show that the Chicago metropolitan area lost more than 22,000 residents in the last calendar year. Many Downstate metropolitan areas also posted year-over-year declines in 2018 relative to 2017.

Discussion of future of Illinois coal-burning electricity plants. Illinois sits atop one of the world’s largest coalfields, a layer of fossilized carbon dating back to past geological ages. For more than a century, much of Illinois’ electricity has been generated from burning coal in turbine boilers. With changes in the price of natural gas and in the prices of sources of so-called renewable electricity, this status is coming under scrutiny. The owners of coal-burning power plants are reporting that their power may, at some point, no longer be competitive in the interstate marketplaces that determine how regulated electricity is priced and sold.

This discussion currently centers on the Vistra Energy fleet of generating plants, a group of eight separate generating facilities that burn coal in central and southern Illinois. With the proclaimed goal of managing a smooth transition from coal to other origins of Illinois electricity, and reducing the harm to people who work at these facilities, Vistra has joined with other advocates to ask the State to create a series of renewable energy credits. Under this proposal, the Illinois Power Agency would award credits to every large utility that installs new renewable energy resources or energy storage resources at the site of electric generators that, on January 1, 2019, burned coal as the primary fuel source. The installation would take place over a five-year period in the calendar years 2020 through 2024. Much of the cost of the credits would be imposed upon Illinois electricity customers as a billing supplement.

An Illinois renewable-energy-credit bill, HB 2713, failed to pass through the House prior to the 3rdReading deadline. Observers expect, however, that the discussion will continue. Vistra believes that 75% of its generating capacity in Downstate Illinois is economically at risk. The Vistra generating system includes plants located in or near the Illinois communities of Bartonville, Baldwin, Canton, Coffeen, Havana, Hennepin, Joppa, and Newton. These generating plants have a nameplate capacity of approximately 7,000 megawatts of electricity, enough to support the lives and workplaces of approximately 2 million Illinoisans. The plants employ about 1,000 Downstate Illinois workers.

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