Week in Review: McCombie in as new leader, Veto, Thanksgiving


Illinois House Republican Caucus Elects State Rep. Tony McCombie as Leader. The Illinois House Republican Caucus elected Tony McCombie as the House Republican Leader for the upcoming 103rd General Assembly. The vote took place on Tuesday, November 15 at an internal caucus meeting in Springfield. 

Before becoming State Representative, McCombie served as the Mayor of Savanna, where she was known for balanced budgets and a solid administrative background. McCombie’s first election for State Representative in 2016 taught her what a tough campaign fight is, as she defeated an incumbent Democrat. McCombie has previously chaired the House Republican campaign organization and is the Republican Spokesperson on the Restorative Justice Committee.

“The House Republican Caucus is focused on helping Illinois families by offering common sense solutions to the many problems our state faces,” said McCombie. “We will be a unified force that will grow our party by sticking to our core values and ending the corruption that has pervaded state government.”

Inauguration for the 103rd General Assembly will occur on January 11th, 2023.

House Republican Leader Jim Durkin to step down from leadership position. Representative Jim Durkin has served as the House Republican Leader since August 2013. As leader of the caucus for more than nine years, Durkin worked with his three fellow General Assembly caucus leaders and with three successive governors of Illinois.

During Durkin’s time as House Republican Leader, Illinois enacted changes to its tax, budget, and pension laws that enabled the State to maintain its standing as an issuer of creditworthy debt securities. With the help of Durkin’s leadership, Illinois enacted the path-breaking “Invest in Kids” program, the state-sponsored private-sector scholarship program that encourages private giving for educational opportunity. Countless State programs were created, maintained, or reformed under Durkin’s legislative leadership.

Leader Durkin announced his decision on November 9, releasing the following statement:

“It has been the honor of a lifetime to serve as Leader of the House Republican caucus, but it's time for the Illinois Republican Party to rebuild with new leaders who can bring independents back to the party that are needed to bring change to the state. With that, I will not be seeking re-election as minority leader. I am proud of the work the House Republican caucus has accomplished under my tenure, and thank everyone who played a part along the way. I began this journey as a voice of moderation and conclude this journey the same way I started, a voice of moderation.”

Veto session begins. The Constitution of Illinois directs the General Assembly to return every fall for veto session. This session will examine the bills that the Governor has vetoed. By law, the General Assembly can accept or override the Governor’s specific recommendations for change on the bills and appropriations that the General Assembly has passed. The General Assembly can also override the Governor on any bills in which the Governor has responded with a total veto. Veto overrides require a three-fifths majority of both houses of the General Assembly.

The veto session is limited to six session days, observed on Tuesday, Wednesday, and Thursday of two separate weeks in the closing months of the year. This is the maximum number of days; if the presiding officers of the House and Senate choose to do so, they can cancel some of these session days. By tradition, the first veto session week is the week before Thanksgiving, and the second is the week after Thanksgiving. By federal law, Thanksgiving will be observed this year on Thursday, November 24; and so the first week of Veto Session was held this week, and the second week will be held starting on Tuesday, November 29.

CGFA meeting and budget report. The Commission on Government Forecasting and Accountability (CGFA), the budget-watchdog arm of the Illinois General Assembly, released their FY 2023 Economic Forecast and Revenue Estimate Update this week. The document will serve as preliminary planning information for the incoming 103rdGeneral Assembly as they prepare for the spring 2023 session. Agencies within the Pritzker administration are likely to be preparing “supplemental requests” asking for additional infusions of taxpayer funds, and the General Assembly needs to know if any money will be available. Long-term budget projections from CGFA will let the General Assembly know whether or not it is wise to pass additional appropriations bills.

Although these numbers are based on current economic conditions that could change at any time, the CGFA Revenue Update contained relatively optimistic economic numbers for Illinois. Employment has almost fully recovered from the catastrophic downturn imposed by the 2020 COVID-19 pandemic and work-from-home/layoff/shut-down orders. After spiking up to 17.4%, Illinois unemployment had dropped to 4.6%. Paced by payroll taxes on working Illinoisans, State income tax revenues have grown throughout the first four months of FY23. Overall general funds receipts are up $1.35 billion over this four-month period relative to one year earlier, with the increase paced by individual income tax receipts (up $790 million, year over year, during this four-month period).

However, these positive trends may not be sustainable. State consumer consumption patterns, responding by inflation, are leading to a decline in the rate of increases in retail sales and in State sales tax receipts. Fewer consumers are purchasing new motor vehicles and other “big ticket” consumer goods. Powered upward by the U.S. Federal Reserve, global and U.S. interest rates – including mortgage rates on home purchases – are rising. In past cycles of this type, an interest-rate trend as steep as the one currently charted at CGFA indicates a significant possibility of imminent economic recession. Should Illinois fall into recession, the 4.6% unemployment rate would increase and State tax receipts would drop sharply. CGFA’s overall projection shows awareness of this possibility range, which their economic analysts call the “pessimistic scenario.”

Economic and Fiscal Policy Report from the Governor’s Office of Management and Budget. The Governor’s Office of Management and Budget (GOMB) also released updated FY23 revenue projections as part of their annually required Economic and Fiscal Policy Report. GOMB estimates that FY23 revenues will rise by $3.69 billion, which is roughly a $1.2 billion difference compared to CGFA’s estimate. GOMB also outlined additional spending requests and transfers that will take place in the near future. These cash flows include a projected $1.3 billion injection of general revenue funds into the state’s rainy day fund, paying down some additional bonded debt, and meeting some additional supplemental spending requests for FY22. The Governor also proposed dedicating a portion of the newly anticipated general revenue funds towards paying down the remaining $1.345 billion in Unemployment Insurance (UI) Trust Fund debt.

The Governor does not need appropriations authority to make transfers to the rainy day fund, or to more aggressively pay down debt. However, the General Assembly will play a role in appropriating any supplemental spending requests. This includes any pay-down of the debts owed by the UI Trust Fund.

Case against SAFE-T Act to be heard on December 7; lead plaintiffs’ team selected. A case against the State law to abolish cash bail, and to make other “reforms” to Illinois criminal law and procedure, will be heard in court on the first Wednesday in December. Fifty-eight Illinois state’s attorneys, representing more than half of the counties in Illinois, have filed lawsuits against the controversial SAFE-T Act. The lawsuits have been consolidated into one case that will be heard in Kankakee County circuit court. The State’s Attorney of McHenry County has been selected as the lead counsel for the consolidated plaintiffs. Five other county state’s attorneys – the lead prosecutors of Kankakee County, Kendall County, Sangamon County, Vermilion County, and Will County – will also be represented on the plaintiffs’ team.

The December 7 hearing will enable the plaintiff state’s attorneys to present evidence on the unconstitutionality of the SAFE-T Act. Arguments center on the text of the law and the way it was enacted by the Illinois General Assembly. The law was passed by partisan votes of the House and Senate held after midnight during the January 2021 lame duck session of the General Assembly. Persons connected with the lawsuit say they believe the circuit court will rule on the case no later than December 15. Fast action is significant, as the law is slated to become effective on January 1, 2023.

Chicago Public Schools system faces “fiscal cliff.” The warning came this month from Chicago Board of Education President Miguel del Valle and the Chicago school board. Chicago school budget planners are point to a pending $600 million annual deficit. This is money to pay swelling pension costs for non-teacher employees of the Chicago school system. These are workers enrolled in the Municipal Employees’ Annuity and benefit Fund.

Until now, the City of Chicago and its municipal budget have paid the pension costs for this group of employees. Now, however, faced her own swelling budget crisis, Chicago Mayor Lightfoot has taken steps to shift this burden onto the Chicago Board of Education. The annual cost of this commitment is expected to rise from $175 million in 2022 to $600 million by Year 2050.

The problem identified by Chicago school budget planners is exacerbated by the prospect that COVID-19 pandemic relief funds paid to Chicago Public Schools will soon run out. The Chicago school system has gotten by during the pandemic years with the help of a massive one-time aid flow from Congress; but the end of the pandemic, and likely changes in federal budget policy, mean that in the future this money may no longer be there.

Illinois unemployment rate rose to 4.6% in October. The Illinois Department of Employment Security (IDES) announced this week that the unemployment rate increased +0.1 percentage point to 4.6 percent, while nonfarm payrolls increased by +3,600 in October, based on preliminary data provided by the U.S. Bureau of Labor Statistics (BLS) and released by IDES. The September monthly change in payrolls was revised from the preliminary report, from +14,500 to +14,100 jobs. The September unemployment rate was unchanged from the preliminary report, remaining at 4.5 percent. The October payroll jobs estimate and unemployment rate reflect activity for the week including the 12th.

In October, the industry sectors with the largest over-the-month gains in employment include: Trade, Transportation and Utilities (+2,800), Leisure and Hospitality (+2,300), Manufacturing (+1,800), and Professional and Business Services (+1,800). The industry sectors that reported monthly payroll declines included: Government (-8,100) and Information (-100).

The state’s unemployment rate was +0.9 percentage point higher than the national unemployment rate reported for October, which was 3.7 percent, up +0.2 percentage point from the previous month. The Illinois unemployment rate was down -0.7 percentage point from a year ago when it was at 5.3 percent.

First EV school buses made in Illinois. While electric-powered passenger cars are becoming commonplace, the markets for medium-sized vehicles and heavy vehicles continue to be dominated by liquid fuel. This is true despite the fact that many larger vehicles, such as delivery trucks, repair vans, and school buses, have relatively limited areas of operation and do not have to drive far from their charging stations. A new factory in Joliet, Illinois, owned by Lion Electric, specializes in the assembly of electric-powered school buses, and the first EV school buses rolled out in November 2022. This month’s Joliet production marked the first Lion school buses to be made in the United States. Similar buses are already being manufactured in Quebec, Canada.

Thanksgiving travel in Illinois to be busiest since 2005. The estimate comes from the American Automobile Association (AAA), which sees more than 2.4 million Illinois residents prepared to drive, and more than 250,000 Illinoisans buying air travel tickets, over the four-day November holiday period. This will produce travel numbers not seen since before the 2008-09 Great Recession.

Motor fuel prices continue to be high, affecting travel budgets. The current average Illinois price for standard motor fuel, including State and local taxes, is almost $4.10/gallon, with prices generally higher in the Chicago area. The average price for diesel fuel is even higher this week – above $5.33/gallon.