Budget postpones tax debate until after election

By Jamey Dunn

The Senate approved the budget bills passed by the House earlier this week, essentially delaying the debate over a tax increase or deep cuts until after the November election.

This session, lawmakers had the challenge of crafting a budget with about $2 billion less revenue because the temporary income tax increase will begin to step down halfway through next fiscal year. The only options seemed to be deep cuts, new revenue or some combination of the two. Democrats eventually presented a third option, which relies on borrowing from special funds and increasing the state’s backlog of overdue bills

Chicago Democratic Sen. Heather Steans, who sponsored some of the budget bills in the Senate, said that the state could make it through the entire fiscal year on the spending approved today. “This budget is a full-year budget that can be executed for a full year without requiring any sort of a revenue vote. No tax increase is required for this budget.” But she said that if lawmakers do not approve any new revenues before the end of Fiscal Year 2015, many programs, such as in-home care for the elderly, would have to be cut. “We are going to have a huge issue that we cannot contend with without either mass cuts or revenue.” Steans said that there are about $700 million in new projected budget pressures that “are not probably totally funded” under the plan.

Republicans accused Democrats of setting the state up for a budget emergency, so they can push through an extension of the tax increase after the election. “This is an irresponsible budget seeking to create a crisis because you failed at convincing the people this year that there’s a sufficient crisis to require a tax increase. So now, you’re taking another stab at creating a crisis by making this huge cliff,” said Sen. Matt Murphy, a Palatine Republican.

Democrats say that they picked the least harmful option that was politically possible. “This maintenance budget allows us to provide level funding for key priorities and services. The effect of the budget is to avert doomsday cuts by deferrals, borrowing and increasing our backlog of bills,” Senate President John Cullerton said in a prepared statement. “Admittedly, this budget reverses some of the progress that we have made in recent years. Since we passed the income tax increase in 2011, we have paid down $3.6 billion in old bills and fully funded our ballooning pension payments. We have paid off $8 billion in pension debt. We have saved billions with responsible budget cuts and that demonstrated that we can be good stewards of taxpayer dollars.”

They FY 15 budget relies on $650 million in borrowing from state funds outside of the general operating budget. It would flat fund most areas of the budget with a slight increase in K-12 education. It would give larger agencies some lump sum appropriations so that they can have the flexibility to try to patch any holes that might spring up. The budget bills:

• House Bill 6093 contains K-12 spending.
• HB6094 contains higher education spending.
• HB 6095 contains general operating services spending.
• HB 6096 contains human services spending and required spending, including pension payments.
• HB 6097 contains public safety spending 
• HB 3793 contains capital projects, including school construction, and about half of the back pay owed to state workers. 
• Senate Bill 220 contains budget implementation provisions 
• SB 274 contains the authority for inter-fund borrowing and lawmaker’s pay. A mechanism in the bill would keep Gov. Pat Quinn from being able to cut off legislative pay, a move he made to try and push lawmakers to act on pension reform last summer. The bill would also put a freeze on legislative pay increases. 

Gov. Pat Quinn called the plan “incomplete” in a written statement he released after the Senate passed the spending bills. “The General Assembly didn't get the job done on the budget. ... In March, I submitted a balanced budget plan that continued paying down the state's bills, protected education and public safety and secured Illinois’ long-term financial future,” the statement said. Quinn called for an extension of the tax rates in his budget address earlier this year. “Instead, the General Assembly sent me an incomplete budget that does not pay down the bills but instead postpones the tough decisions. I will do my job. I will work to minimize the impact of cuts in vital services while continuing to cut waste and maintain our hard-won fiscal gains. There’s more work to do to continue moving Illinois forward.” 

Steans and Park Ridge Democratic Sen. Dan Kotowski, who also sponsored budget bills, would not say if they intended to revisit the income tax rates after November. But they did say that they believe more revenue is needed. However, on the topic of the tax rates, Cullerton did not mince words. “In order to return to [the state’s] path of fiscal progress, we will have to bring revenues in line with our growing liabilities. While a vote on our tax rates has been deferred, rising costs and pressures will force the issue at a later date.” Cullerton has said that he has the votes in the Senate to keep the current income tax rates of 5 percent for individuals and 7 percent for corporations. But House Speaker Madigan said that he was a long way off from being able to pass an extension of the rates in the House. If lawmakers do not opt to extend the current rates, they will step down to 3.75 percent for individuals and 5.25 percent for corporations in January.

Republicans took issue with giving Quinn the power to sweep funds in an election year. They also cried foul over areas of spending in the budget, such as money going toward a summer jobs program to prevent violence. The governor has recently come under fire for the Neighborhood Recovery Initiative (NRI). The program was funded primarily from discretionary funding that Quinn could access. NRI was the subject of a scathing audit that found that the program did not use a competitive bidding process to select the providers and dole out grants but instead relied on recommendations from Chicago aldermen. Documentation from providers implementing NRI was seriously lacking and at least $2 million was never accounted for. Contracts for NRI were agreed upon just before the 2010 election and Republicans have accused Quinn of using the program as a “political slush fund.”

Democrats argued that the problems in the program have been cleaned up and that violence prevention continues to be an important priority. They criticized Republicans for not presenting their own detailed plan for coping with the loss of revenue in FY 15. “There’s no place to really pretend in this budget. It is what it is. It’s very straight forward it’s very clear,” said Kotowski of the plan. “It’s clear where the pressures exist. It’s clear the actions that we’re taking to live within the means already provided by taxpayers.”

In his traditional end-of-session floor speech, House Speaker Michael Madigan noted that lawmakers have been faced with many tough issues in recent years. “This has been a difficult session, a very difficult session. Over the last few years, nothing seems to be simple; nothing seems to be easy. It’s just one difficult complicated issue after another.”

The legislature is not scheduled to return for fall veto session until November 19th.

Roads and bridges capital bill
The Senate sent a “mini” capital bill with road and bridge constructions projects to Quinn’s desk. House Bill 3794 calls for $1.1 billion in construction spending, $1 billion of which would go to road and bridge projects included in IDOT’s 5-year plan. The remaining $100 million would go to local street repair projects.

The bill does not list projects because they would be determined by IDOT. The department would prioritize projects that are ready to go in the summer construction season. The money for construction would come from funding sources approved as part of the 1999 Illinois First capital program. Borrowing for the plan has been paid off, but the increased fees and taxes remain. The Senate approved the bill with no debate.

Budget "middle road" paved with short-term fixes

By Jamey Dunn

The House passed what some have dubbed a “middle of the road” budget, which keeps many areas of state government funded at current levels.

Under current law, the state will lose nearly $2 billion in revenue next fiscal year when the income tax increase begins to roll back. The income tax rates are set step down from 5 percent for individuals to 3.75 percent and from 7 percent for corporations to 5.25 percent half way through Fiscal Year 2015. Earlier this month, the House voted to approve a nearly $38 billion budget, which would have required an extension of the current income tax rates to fund. However, House Speaker Michael Madigan later said that there were not enough votes in his chamber to extend the current rates. The House then rejected a so-called “doomsday budget plan,” with only five members voting in favor of the bill. That proposal would have made deep cuts to education and human services.

On Tuesday, the House approved with little debate a budget that would spend about $35 billion and not require an extension of the tax rate. After the bills passed, Madigan used a parliamentary procedure to block them from going directly to the Senate. Senate and House Democrats are working together on the plan in the hopes of getting it through both chambers before the regular legislative session is scheduled to adjourn at midnight on Saturday.

Debate on the bills was lacking in the House in part because lawmakers on both sides of the aisle were uncertain about the details of the budget. For example, none of the key budgeting players in the chamber were able to give a definitive answer on the total spending number for the plan. All the responses were between $35 billion and $36 billion, but nobody knew the number spot on.

The bills were worked out in House budgeting committees, but many Republicans on those committees said they were not included in negotiations. Complaints aired by Republicans on the floor were primarily about the process and not the specifics of the budget itself, which they say they got this morning. “This is not a good budgeting process when you don’t know what you’re talking about. You don’t know what you’re advancing,” said Rep. Ron Sandack, a Downers Grove Republican.

“I guess that the speed-reading classes that you’ve taken are paying off over there. Thank God. But the process has been a complete joke,” Elmhurst Republican Rep. Dennis Reboletti said to Democrats on the House floor. “You do this every year, and then you’re surprised that we’re not working with you, or that we’re angry or frustrated.” Democrats said they tried to include Republicans, but that many did not attend meetings held budgeting committees yesterday. They say that because Republicans have been unwilling to vote for budgets in recent years, they likely would not have been in favor of the plan, no matter what the process.

Those Democrats who crafted the proposal were able to keep the budget relatively flat by tapping into some well-worn creative budgeting tactics, such as delaying payment for some spending obligations, adjusting revenue estimates up and borrowing from funds outside of general spending. Democrats say that the moves freed up about $2 billion. Most of the tactics are short-term solutions or one-time sources of funding. Republicans, who had previously accused Democrats of exaggerating how painful a budget would be to try to pass an extension of the income tax rates, reacted with sarcasm to the plan unveiled today. “Magically, hundreds of millions of dollars extra have been found. Shocking. I am so surprised that now we’ve looked under the couch cushions and found a little bit of extra walking-around money to sprinkle around the budget,” Reboletti said.

But flat funding does not mean that the budget picture is rosy. The bill backlog would grow substantially and there would be layoffs under the plan, according to those who worked most closely on it. “As the year goes on, things are going to get tighter and tighter in our departments,” said Rep. Greg Harris, who chairs the House human services budgeting committee. Harris said that the budget would likely increase the state’s stack of unpaid bills by “a couple billions of dollars” and would result in “thousands” of layoffs of state workers. The backlog is expected to be about $5.6 billion by the end of the current fiscal year.

The House breaks down the budgeting process into general areas of K-12 education, human services, general services, higher education and public safety. The only of these areas that would see a funding increase would be K-12 education, which would go up $167 million over the current fiscal year. The increase would be needed to keep General State Aid to schools prorated at just under 89 percent and to pay for student assessments that are part of the state’s transition to the Common Core curriculum standards. While K-12 education will see a slight increase, Homewood Democratic Rep. William Davis, who is the chair of the House K-12 education budgeting committee, said that it is not enough to meet the need in many Illinois schools. “Is this the budget that I wanted? Absolutely not,” he said. General State Aid to schools has not been fully funded for the last three years.

Harris said that as the fiscal year wears on, state agencies would start to feel the squeeze of trying to stick to flat funding, while the cost of doing business grows. He said that services required by law our under court orders would likely start to crowd out other programs. “It’s going to be after January 1 that you see the problems beginning to add up.” Harris said that if nothing changes, the budget would be in an even worse place in Fiscal Year 2016. “Next fiscal year, we’re going to be in a terrible spot because next year we will have lost a full year’s worth of revenue.”

House approves minimum wage ballot question

By Jamey Dunn 

The House passed legislation that would allow voters to weigh in on the state’s minimum wage.

House Bill 3814 would place a question on the November general election ballot asking voters if the state’s minimum wage for workers over 18 years old should be raised to $10 an hour by 2015. Democratic legislative leaders and Gov. Pat Quinn back an increase, but House Speaker Michael Madigan said last month that he did not have the vote to pass one. “It became apparent that there were some significant differences in opinion regarding this issue,” Madigan said on the House floor Tuesday. The referendum would not be legally binding, making it little more than a poll of voters on the issue. However, Madigan said that the results of a ballot questions could provide supporters with “evidence” that they could use to get an increase passed in the future. “It’s clear that we need to do more to help reduce economic inequality,” he said. “There’s just no way to support a family on a minimum wage of $8.25 an hour.” 

Senate President John Cullerton has said that he has the support to pass a wage increase in his chamber, so it is likely that the ballot question would pass in the Senate. Quinn has repeatedly called for an increase, so it seems probable that he would sign the bill. Also, such a ballot question might help with Democratic get-out-the-vote efforts in November— especially considering that the national party and President Barack Obama have been focusing on the issue recently.

Republicans said that a minimum wage increase could hurt job growth in the state. Some argued that lawmakers were shirking their responsibility by putting the question to voters. “Folks, do we really want to become California? The California legislature can’t make a tough decision without saying, ‘Oh, we’ve got to put it on the ballot,’” said Rep. David Harris “We, the legislature, are supposed to decide on these tough public policy issues.” However, a group of Republicans from both chambers introduced legislation to include an advisory ballot question about a proposed extension of the current income tax rates. “We’re asking the Democrat majority, ‘Before you break your promise and make your job-killing tax hike permanent, why not ask the people how they feel,” said Palatine Republican Sen. Matt Murphy. When the proposal came up on the floor during the debate over the minimum wage question, Madigan said, “On this side of the aisle, we’re working our way through the question of extending the income tax increase.” Madigan says he is lobbying House Democrats to extend the current tax rates, which are scheduled to begin stepping down next fiscal year. He told reporters yesterday that the plan is “significantly” short of the support needed to pass.

Madigan: tax extension is "significantly" short of votes needed to pass

By Jamey Dunn with Caitlin Rydinksy contributing  

House Speaker Michael Madigan said that an extension of the current income tax rates is “significantly” short of the votes needed to pass in his chamber despite Gov. Pat Quinn addressing a House Democratic caucus meeting Monday evening.

Quinn met with House Democrats behind closed doors for more than two hours Monday. The governor is advocating for an extension of the current income tax rates of rates of 5 percent for individuals and 7 percent for corporations. As the law stands, the rates would step down to 3.75 for individuals and 5.25 for corporations half way through Fiscal Year 2015. Supporters of extending the current rates argue that allowing the rates to sunset would cause devastating cuts to education and other core areas of state government. As part of his tax plan, Quinn also wants to send an annual $500 property tax rebate to homeowners in the state. “I think we need to make sure that we properly invest in our schools. Our state over relies right now on property tax to fund education. I think we have to do better. We have to use a tax based on ability to pay, the income tax, to properly fund our schools. I spoke about that quite a bit in the caucus,” Quinn said after he addressed the Democrats.

Upon exiting the meeting, many Democrats described it as “cordial” and said that their colleagues had plenty of questions for Quinn. Rep. Elaine Nekritz, a Northbrook Democrat, described the caucus meeting as “tense.” Nekritz said she would support an extension of the current rates if it was coupled with some larger budget reforms, such as the creation of a rainy day fund. “We have a variety of opinions and thoughts on the direction that we ought to be taking, and there was a lot of that aired,” Nekritz said of the caucus. “This is a very very difficult decision for members, so I think that it just creates tension.”

Madigan said that he is working to pass the tax rates extension solely with Democratic support. No Republicans voted in favor of the temporary increase when it was approved in 2011. House Minority Leader Jim Durkin said that he does not plan on putting any votes on an extension of the rates. “Our caucus is firmly against it.” Durkin said that Republicans would make a tax vote a campaign issue for Democrats running for reelection. “It’s kind of a defining issue between the parties,” he said. “Remember, this [tax increase] was temporary three and a half years ago.”

Madigan said that Quinn worked hard to present his case, but he doesn’t know yet if any minds were changed. “I thought he did an excellent job of presenting his position, arguing for his position, taking questions. He took every question. He answered every question. He got very animated on a lot of his answers because, at times, he wasn’t hearing what he wanted to hear,” Madigan said. “I think it’s significant that there was opposition expressed from all sectors of our caucus. I’m going to continue to work to find 60 Democrats to vote for the governor’s bill. We are significantly away from 60 today.” When asked how he would get the votes, Madigan said, “It’s going to take a great deal of persuasion.” He refused to answer questions about possible alternative revenue sources or what would happen with the budget if he cannot get the votes for the extension.

Quinn’s tone was more optimistic. “You’re always building a majority on any issue; it’s a building of a majority to get to 60. I think we’re doing our very best to get that majority. I think my philosophy in life is hope for the best and work for it. So, we’re working real hard on getting those 60 votes in the House of Representatives. Obviously, we have to keep on working until we get there.”

Lawmakers who are likely targets of lobbying efforts from Quinn and Madigan were coy when approached by reporters after hearing Quinn’s arguments. Rep. Sam Yingling, a Democrat from Round Lake Beach, would not comment when asked about his reactions as he excited the meeting. Yingling is signed on as a cosponsor of a bill that would roll back the tax rates to the levels they were at before the increase. Another suburban Democrat, Rep. Fred Crespo, said his constituents are “very concerned” about the possibility of the tax rates being extended. Crespo, who is from Hoffman Estates, has previously opposed extending the rates. “There’s a lot of conversations going on, and we’ll just have to wait and see,” said Crespo. “You know, every day’s a different day.”

House approves budget bills without revenue source to cover costs

By Jamey Dunn

The House today approved budget bills for next fiscal year that would spend billions more than the amount of revenue the state would bring in under current law. UPDATE: House Speaker Michael Madigan has filed a motion that will effectively prevent the more than 70 budget bills passed today from automatically going to the Senate. Madigan told the Chicago Tribune that the move was needed in case the House wanted to further amend the bills. 

Earlier in the spring session, both chambers voted on a $34.4 billion revenue projection. Now many House Democrats are backing a plan that would require more. Spending was broken down into more than 70 bills. This gave lawmakers the chance to strategically pick and choose what areas of the budget they wanted to vote to support. It also made for more than 9 hours of debate. Republicans spent much of the time crying foul. They argued that the spending bills are unconstitutional because they were approved without matching revenues. The state’s Constitution calls for a balanced budget. “We are voting today for an unconstitutional budget, plain and simple,” said House Minority Leader Jim Durkin. “The state of Illinois needs to live within its means, and we must stop this reckless pattern of insane spending.”

Rep. Ron Sandack, a Downers Grove Republican, described the process as “a shame, a sham and something I am embarrassed to be a part of.” During the debate for almost every bill, Republicans decried voting for spending that they say would require making the temporary tax increase permanent. The current income tax rates are 5 percent for individuals and 7 percent for corporations. As the law stands, the rates would step down to 3.75 for individuals and 5.25 for corporations half way through Fiscal Year 2015. At one point during the debate, Durkin used a procedural move to try to force an end to the day’s session and slow down the process, but his motion was voted down. Democrats criticized Republicans for not presenting an alternative budget plan. “Here’s our plan. Stop spending money,” Sandack said in response.

Democrats who supported the legislation argued that lawmakers should move the appropriations bills through the process while the revenue side of the budget is still in the works because the end of session is rapidly approaching. Adjournment is scheduled for May 31. “There’s some discussion going on the revenue side. Obviously that’s not going very well,” said Hoffman Estates Democrat Rep. Fred Crespo, who presented several of the bills on the floor today. “There’s less than a week and a half left is session, and we need to come up with appropriations.”

The Democrats who presented the bills on the floor acknowledged today that the budget would need more revenue to support the plan, but they were careful to focus on their individual bills and not talk about the tax increase on the floor. Chicago Democratic Rep. Greg Harris, who chairs the human services budgeting committee, said that lawmakers must make the responsible choice to take care of those in need, such as the elderly and the disabled. He added that the funding levels would also be necessary to comply with state and federal law and several court orders that require certain services be provided.

Some Democrats opposed some or all of the spending. “You’re asking us to spend $4 billion more than what our revenue estimates indicate. You’re asking implicitly and tacitly for a tax increase. So a vote for this budget, is also a vote for a tax increase,” said Marengo Democratic Rep. Jack Franks, who was a vocal opponent of the temporary tax increase when it passed in 2011. “If we’re going to do that tax increase, let’s be honest about it. Let’s vote for it today. Let’s see if they’ve got the votes up for it, and let’s do it. Once we know what the revenues are, then we should be talking about the budget.” But Franks said he has his doubts about whether an extension of the tax rates could pass. “There’s no consensus here on raising taxes. ... We’re promising imaginary money that does not exist.”

Meanwhile, House Speaker Michael Madigan said yesterday that he is lobbying for an extension of current rates. There is also a package of changes to business taxes in the works. So the final revenue plan could be a combination of several things in addition to the income tax. Madigan said yesterday he was open to rolling back the corporate income tax rates as part of a larger “balanced package.”

Gov. Pat Quinn said today that he has been lobbying members of both parties in both chambers for a “responsible budget.” Quinn told reporters at an event in Cicero today: “The month of May is all about getting a responsible budget that invests in the future, invests in the classroom, making sure we have world class education, making sure we have [the] proper amount of money for our health care.” Quinn’s staff said that he was in Springfield meeting with lawmakers before he went to the event. “We’ll get a responsible budget, if we work together and work hard,” Quinn said. “That’s what I’m committed to, morning noon and night, getting a responsible budget that doesn’t go back in time, back to a time where Illinois had all kinds of fiscal problems.”

The plan approved today was largely based on Gov. Pat Quinn’s budget proposal, which calls for an extension of the current income tax rates. The rates are scheduled to begin stepping down in the second half of next fiscal year. The plan would increase spending for K-12 and higher education, as well as human services. The spending includes several line items specifically requested by Quinn, including increased funding to the Monetary Assistance Program (MAP) for low-income college students, additional funding for maternal and early childhood health programs, money to turn two shuttered youth centers into special treatment centers for mentally ill and substance addicted adult inmates and raises for home health care workers.

Still, the plan would not fully fund General State Aid to schools. GSA has been prorated for the last three years. The legislation passed today would fund GSA at 90 percent. Some Republicans argued that if there is going to be a tax increase, more of the money should go to education. The line item for transportation would be funded at 83 percent. “We’re spending more money than at any time in history and the question is where is the money? Cause it doggone sure is not in education,” said Rep. Chad Hays, a Catlin Republican. “Where is the money? This process doesn’t add up.” Lewiston Democratic Rep. William Davis, who is chairman of the House K-12 education budgeting committee, said that K-12 education would be getting a bigger chunk of revenue than other areas of the budget. “Tell me someone in this chamber who doesn’t run on some education platform—that they support education and want to see it fully funded? I think we all agree on that. But I think the reality is that there are always some limitations. We don’t have an unlimited pot of resources that we can use.”

In order to make it to Quinn's desk, the bills would still have to clear the Senate, where Democrats who work on the budgeting process have said they are reluctant to approve spending without the funding to match. Senate President John Cullerton has said that he has the votes to get the tax extension through his chamber, but he wants to wait and see if it can pass in the House first.

Several factors at play in tax vote

By Jamey Dunn

The House plans to vote for spending before it takes up the issue of revenue, but a vote on extending the current income tax rate is just part of the budget picture.

House Speaker Michael Madigan said today that he hopes to first pass the spending portion of the budget, which would presume an extension of the temporary income tax. He said that the move is needed to help lobby lawmakers to approve tax rates needed to fund the budget. “Our purposes in advancing the budget first is to set the bar against which we will work to convince people to vote for the revenue.” House committees approved budget bills today that are based largely on Gov. Pat Quinn’s recommended budget.

Republicans say that the move “puts the cart before the horse.” Elmhurst Republican Rep. Dennis Reboletti said that businesses and families do not make their budgets by first deciding what they would like to buy and then figuring out how to pay for it. “We know what our income is. We make decisions based off of that. We don’t assume that we can buy a new house because we hope to have more money, but not have the additional revenue to pay for it.” Many Republicans argued today that a vote on a budget that spends more than the state expects to take in under current law would be unconstitutional. “It is on its face blatantly unconstitutional,” said Catlin Republican Rep. Chad Hays. “Who on planet earth budgets in this fashion? This is simply not done anywhere by anybody.”

 But Chicago Democratic Rep. Greg Harris, who is chairman of the House human services budgeting committee, said that moving spending bills along is all part of the process and that the order in which it happens is not as important as getting the whole job done. “There are a lot of pieces of the budget which we have to pass,” said Harris. “I think we have until midnight on the 31st of May to reconcile all of this.” He said that if lawmakers can determine what services they think the state should deliver, then when it comes time to make revenue decisions, they can avoid asking for more than is needed. Harris was clear that he does not think that the state can get by on the current revenue projections that allow the income tax to begin stepping down in the second half of Fiscal Year 2015. Harris called the step down “a terrible financial cliff that we would drive the families of Illinois right off of.”

Republicans argue that Democrats are making the budget scenario under the current rates look muckh worse than it would need to be. “We on our side of the aisle feel very strongly that we can craft a workable budget without devastating extreme irresponsible cuts or reductions. We can craft a responsible budget without having the continuation of the tax,” Rep. David Harris, a Republican from Arlington Heights.

The House is expected to start taking votes on spending bills tomorrow. As Democratic leadership in the chamber works to get the support to stop the income tax rates from stepping down, other issues will likely come into play.

Rep. David Harris said that he expects that a comprehensive business tax reform package will emerge before the end of the month. Harris serves on a House committee that has held hearings over the last year on the business tax climate in the state. (House Speaker Michael Madigan presented a bill with changed to the EDGE tax credit to that committee today. See this blog post for the details.) Madigan said to the committee this morning that he would be willing to allow the corporate income tax rates to roll back if the proposal was tied to other changes. “I’m prepared to advance that bill, but as part of a balanced package,” Madigan told the committee.

Business friendly tax breaks tied to an extension of the income tax rates, or possibly just the individual income tax rate, would serve several political purposes. They could provide cover for Democrats who vote for a tax increase as part of an overall “tax reform” package. They could possibly be used to lure Republican votes on the income tax extension. More likely, Republican “no” votes on business friendly concepts could be used for negative campaign advertising and mailers before the November general election.

But Rep. David Harris says that he believes that the business tax plan will be separate from an income tax vote. He says that he thinks that the package would address such issues, as the franchise tax, incorporation fees and tax credits for manufacturers when the buy equipment. “I think it will be separate from the tax rate bill,” he said. Harris said that if it is tied to extending income tax rates, he does not think any Republicans would vote for it. “I think if it’s a business related package, they’re going to want some Republicans on the package,” Harris says. “I don’t consider an extension of the income tax [to be] tax reform.” He said that any business tax tweaks would likely be revenue neutral. So if some tax cuts are made larger or some taxes eliminated, other tax breaks may be scrapped or reduced. Some would call it closing tax loopholes. Harris, however, would not call it that. “Let’s not call them loopholes. Let’s call them, perhaps, exemptions or credits that we now give that may no longer be beneficial or helpful, or they don’t achieve the public policy that we initially intended them to achieve.”

Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers’ Association, said that he thinks that the work on a business tax package is a mix of policy and politics. “I think it’s a combination of both. I think there’s some legitimate changes being made.” Denzler said that he has not seen a plan yet. “We’ll just see how things play out. We’ll have to look at a final package. ... I think that there can be some positives for the business community.” But he said that coupling an extension of the tax rates with some tax sweeteners for businesses would fall short of being a game-changing move when it comes to the state’s fiscal policy. “Ultimately, we think we need comprehensive tax reform. Making the income tax increase permanent and adding a few tax incentives is a little bit more of a Band-Aid quite frankly to the whole problem that Illinois faces.”

A few more tax issues could also end up in the mix. In his budget address, Quinn called for property tax relief and an incremental doubling of the Earned Income Tax Credit. Both of these options could be used to soften the blow of a tax rate extension and potentially pull some reluctant votes on to it. Under Quinn’s plan, homeowners would lose their current property tax credit and it would be replaced with a flat $500 refund for each owner occupied property. Quinn’s budget office estimates that such tax relief would cost $1.3 billion annually. The current credit costs about $600 million. While some homeowners currently get a tax credit that is larger than $500, Quinn’s staff said that 92 percent homeowners would be better off under his proposal. Quinn’s plan would also increase the EITC from 10 percent of the federal credit to 20 percent at a rate of 2.5 percentage points per year. The increase would cost more than $200 million annually once it reaches 20 percent. At the time of the address, Quinn and his staff were aggressively packaging his pitch to make the tax increase permanent as a reform of the state’s tax system. His proposal also included a five-year budget “blueprint” that calls for spending caps, a rainy day fund and cutting the state’s bill payment cycle down to 30 days.

When all else fails, pork spending—I mean, local construction projects—may also be an option to get votes on a tax rate extension. Democrats acknowledged today that they are also working on a capital construction bill. Quinn has been calling for a capital bill because the current plan, which was the first in 10 years, is about to run out. While Statehouse observers are always (justifiably) skeptical of the way that capital projects appear to be leveraged for votes, nobody can deny that work on Illinois roads and bridges is necessary and that many state facilities are in dire need of maintenance. What the funding stream for a capital bill would be is unclear at this point. Republicans warned today that it could come with more taxation. “There may be additional taxes out there to accommodate some of our other unmet needs,” said Hinckley Republican Rep. Robert Pritchard.

 Madigan told reporters this morning that he is working the roll call for an extension of the tax rates. He said that he is not trying to strong-arm lawmakers. “We’re not in the business of issuing threats. ...We don’t engage in tactics like that. We try to work with people, persuade people, cajole people,” Madigan said. “We talk in terms of their view of where the sate should be, what the state should be doing for its citizens.” Madigan said.

When asked how many voted he still needed, he said that he was not to the point of knowing exactly how many members he still needs to persuade. While Senate President John Cullerton has predicted that session could adjourn early this year, Madigan indicated today that might not be the case. “There’s two and a half weeks left in the session. And we’ll be here. We’ll be on our job,” he said.

Senate waiting for House support on graduated income tax vote

By Jamey Dunn

Democratic leaders in the Senate do not plan to move forward with a graduated income tax proposal unless there is indication that plan could pass in the House.

Senate President John Cullerton said that he is supportive of the proposed constitutional amendment. But he said he plans to “wait and see” what the House does on the issue because it likely has less support in that chamber. A spokesperson for Cullerton later clarified that he would consider a vote if there was indication that the House would approve the measure.

Oak Park Democratic Sen. Don Harmon, who sponsors the amendment, reportedly planned to call it for a vote this week. Supporters of the amendment are almost out of time. For Harmon’s Senate Joint Constitutional Amendment Resolution 40 to make it to the ballot under the current legislative schedule, it would need to pass in the Senate tomorrow and in the House on Thursday. The final deadline to approve constitutional amendments is May 4, but as of now, both chambers are scheduled to wrap us session this week on Thursday.) Harmon was not available for comment.

Constitutional amendments require the backing of three-fifths of both chambers. House Speaker Michael Madigan told reporters last week that a progressive income tax amendment was “significantly short” of the support needed to pass in the House. The proposal has no public support from Republicans, so all the Democrats in the House would have to vote for it. Rep. Jack Franks, a Democrat from Marengo, is a cosponsor of a resolution opposing a graduated income tax. There is a graduated income tax amendment in the House, too. But it is not as far along in the process as the Senate amendment after it failed to make it out of the House Revenue and Finance Committee in March.

Cullerton said today that his chamber would also take a wait-and-see approach on extending the current income tax rates. “We have two different budgets that we are contemplating.” Cullerton said one version includes an extension of the current rates. The other would allow the tax increase to begin its sunset in 2015 and would require substantial cuts. He said that since Madigan is still working to get the votes for it in the House, a tax rates extension should start in that chamber. “We will wait and see which of the two budgets we have to work with.” When asked if Democrats could vote in favor of the cuts that would be needed to allow the income tax rates to go down, Cullerton said: “It will be difficult, but we have to pass a budget.”

As lawmakers head into the last month of spring session, which ends at midnight on May 31, Cullerton says he hopes that the support can be mustered to pass an increase in the state’s minimum wage. He said that he thinks there is broad backing among voters for such and increase. “Now, the question is whether or not we have the votes for it here.” Madigan said last week that he is also still working to round up the votes needed to pass a minimum wage increase. A possible plan B of putting the issue to voters through a nonbinding referendum has also been floated. If the majority of voters cast a ballot in favor of a minimum wage increase as part of an advisory referendum, it would not actually change wages in the state. But the results of such a vote might help those in favor of an increase in their lobbying efforts. “We’re going to try to see if we can pass the bill, and if we’re short maybe we need to get public input through a referendum question. That would be an alternative if we don’t have enough votes to pass it,” Cullerton said.

Madigan's millionaires tax has its political advantages

By Jamey Dunn

The House revenue and finance committee dove right into the topic of taxes this morning following Gov. Pat Quinn’s budget speech yesterday.

The committee today approved Speaker Michael Madigan’s proposal to tax millionaires at a higher rate to fund education and rejected a measure that would have allowed for a graduated income tax in the state. As protesters flowed into the capitol chanting, “We want a fair tax,” the House revenue and finance committee voted down a proposed constitutional amendment that would allow Illinois to have a graduated income tax. Currently, the state’s Constitution requires a flat income tax.

Committee members cited concerns that the proposed amendment does not include the progressive tax rates structure, but simply would change the Constitution to allow the legislature to approve a graduated tax. “I don’t believe its wise to put simple a strike through amendment on the ballot. I think the better approach is to enumerate what would be asked of the voters,” Riverside Democratic Rep. Michael Zalewski said before he voted against the amendment today.

Supporters of the plan say that it is best not to enshrine tax rates into the Constitution, because the threshold for changing the document is so high. “Actually embodying rates in the Constitution from just a good government and policy standpoint is very problematic because if you’ve got that rate wrong or you’d like a change, now you need a new constitutional amendment. It’s far better the have the rate structure be a creature of legislation so that you can adjust your tax policy over time,” said Ralph Martire, executive director of the Center for Tax and Budget Accountability. Oak Park Democratic Sen. Don Harmon, sponsor of a Senate version of the graduated tax amendment, unveiled proposed rates earlier this week.

Martire said that the concept of taxing the wealthy at a higher rate, which is also at the core of Madigan’s proposal, is a good policy choice because most income growth is occurring amongst higher earners. However, he said that putting the specifics, such as the rate and the $1 million cut off, in the constitution does not allow for the flexibility that would be needed as the economy changes and inflation marches forward. For example, if in the future lawmaker decide that the rate is too high, or that $1 million is not what it used to be in terms of earnings, or that they want some of the money to go to health care instead of education, they will have to gain the support of three-fifths of both chambers and then wait for an election. They then would need to get the support of either three fifths of voters who vote on the question or the majority of voters participating in the election. If some of those details were determined by legislation instead, they could be changed by a simple vote in each chamber and the governor's signature.

Policy debates aside, Madigan’s proposal, which would impose a 3 percent surcharge on income offer $1 million, likely won out for a number of reasons. It would be a much easier vote than voting for the graduated income tax for lawmakers who have few millionaires in their area. Marion Democratic Rep. John Bradley, who is chairman of the committee, said as much before he voted in favor of the proposal. “This is an opportunity for a lot of areas of the state to actually do a lot better with minimal impact on my region.” There seems to be a perception among lawmakers that Madigan’s amendment is ready for primetime, while the graduated tax is not. “The speaker’s amendment is more show ready than this,” Zalewski during committee today. The graduated income tax proposal does not have the needed support to pass in the House. Still, Harmon said he has not given up hope on the graduated tax idea. He told supporters today “do not despair,” and said that the fight has just begun.

Conservative groups and business organizations are opposed to both. However, it does seem that the opposition has been hitting the graduated tax proposal much harder. National groups such as American’s for Prosperity and The Tax Foundation have joined the fray over the graduated tax plan. Of course, it has been around a lot longer so opposition has had more time to build and organize. Todd Maisch, the vice president of government affairs for the Illinois Chamber of Commerce, said at today’s hearing that the flat tax is a “key incentive” for businesses considering Illinois. And that the graduated tax comes from a “soak the rich mentality” that send a negative message to businesses and successful individuals. He also said Madigan’s plan would hit small businesses that file their taxes as individuals.” We think it’s just the wrong public policy to punish them with this surcharge.” If either of these plans is going to pass in the House, it would likely need the support of all Democratic members, something the graduated tax lacks. (For a comprehensive look at the graduated tax proposal and the arguments for and against it, see Illinois Issues January 2014. )

Madigan’s plan would probably be easier for voters to understand if it makes it to the general election ballot. It would also likely be very popular with anyone who is not bringing in $1 million (or close to it) annually because they would not be affected. It could also be useful as campaign ammunition that Quinn could against his opponent, multimillionaire Republican Bruce Rauner, who opposes the plan. The proposal would not conflict with Quinn proposal to make the temporary income tax increase permanent and give homeowners a $500 refund to defer property tax costs. Quinn is also asking to double the Earned Income Tax Credit for low-income workers from 10 to 20 percent. If this proposal and Madigan’s end up working in concert, it would be a rudimentary version of a graduated plan because lower earners would have more of their tax burden deferred and higher earners would pay more. It might have less nuance and flexibility than a graduated tax plan, but it would also be free of the political baggage of claims that it would hurt the middle class (depending on where you think the cut off is for the middle class).

 Martire says that, while he thinks the graduated tax amendment if better policy, the politics of the situation cannot be put aside. “Any legislation or constitutional amendment that moves through a very political process has to take political concerns into account or it wouldn’t be a very sophisticated approach to changing policy,” he said after the hearing. “Illinois is at least moving towards a fairer tax structure and moving toward amending its Constitution to permit a fairer tax structure. Now the questions is whether or not that amendment is going to be the best one that we could have.”

Quinn calls for making temporary income tax increase permanent

By Jamey Dunn with Caitlin Rydinsky contributing 

Gov. Pat Quinn called on lawmakers to make the temporary income tax increase permanent during his budget speech today.

“The truth is, while we've taken some difficult steps to balance the budget, the issue of expiring revenue this year is a real challenge that will require another hard choice,” Quinn said in his speech to lawmakers today. Quinn presented a budget that he says reflects the severity of cuts that would be needed if the current income tax rates, which are 5 percent for individuals and 7 percent for corporations, were allowed to step down in 2015. Under current law, the rates would go to 3.75 for individuals and 5.25 for corporations half way through next fiscal year. The reduction would take more than $1.5 billion in revenues with it. Quinn also presented an alternative budget that would include revenue from extending the tax rates, and it is this second plan that the governor advocates for. “Our plan is specific, concrete and responsible. It balances the budget and doesn't shirk our responsibility to our veterans, to our children, to our working families and to our most vulnerable citizens,” he said. 

Quinn offered property tax relief and an incremental doubling of the Earned Income Tax Credit as potential sweetener that might help the income tax proposal go down with voters. Homeowners would lose their current property tax credit and it would be replaced with a flat $500 refund for each owner occupied property. Quinn’s budget office estimates that such tax relief would cost $1.3 billion annually. The current credit costs about $600 million. While some homeowners currently get a tax credit that is larger than $500, Quinn’s staff said that 92 percent homeowners would be better off under his proposal. Quinn’s plan would also increase the EITC from 10 percent of the federal credit to 20 percent at a rate of 2.5 percentage points per year. The increase would cost more than $200 million annually once it reaches 20 percent. Quinn and his staff are packaging his pitch to make the tax increase permanent as a reform of the state’s tax system. His proposal also included a five-year budget “blueprint” that calls for spending caps, a rainy day fund and cutting the state’s bill payment cycle down to 30 days.

The governor's Republican opponents say he is going back on the promise of a temporary tax increase. “Pat Quinn first promised the working people of Illinois he wouldn’t raise taxes by 67 percent. He broke that promise, taking away nearly a week's worth of pay for Illinois families. Then he promised his tax hike would be temporary. Today he broke that promise too and is doubling down on his failed policies,” Republican candidate for governor Bruce Rauner said in a prepared statement. “After five years of Pat Quinn’s failed leadership, we have record tax hikes, outrageously high unemployment, massive cuts in education and there’s still a giant budget mess in Springfield. It’s now or never to save Illinois. We can balance the budget without more tax increases, if we create a growth economy, and restructure and reform our broken government. That’s what I’ll do as governor.”

They claim that Quinn and other Democrats are trying to make the fiscal situation look worse than it truly is to justify keeping the current tax rates. So what people need to remember at the end of the day [is], it’s still a tax increase. Your income tax is going to go up from where it should have been come January 1,” Senate Minority Leader Christine Radogno said. She said that Quinn’s property tax relief plan is not all it's cracked up to be because it would eliminate the current property tax credit that homeowners already receive. So they would not get $500 in addition to their current break, but in place of it.

House Minority Leader Jim Durkin said after Quinn’s speech, “the Democrats who run this building do not tell the truth about taxes and spending.” He said that spending has increased in recent years. Quinn’s staff is quick to point out that the governor never made any promises about whether he would seek an extension of the tax increase. They say that Quinn has signed budgets with billions of dollars of cuts to discretionary spending, but overall spending totals have increased some years because fixed costs, such as the required payments into the pension systems, have gone up. His campaign issued a statement this morning claiming that Rauner’s “budget plan” would result in devastating cuts to education. Rauner has yet to give details on his vision for the budget, other than saying he wants to the tax increase to roll back and that he is not prepared to take the possibility of taxing retirement income off the table. Quinn said today that he would not support taxing retirement income or charging a sales tax on many “basic” services, such as haircuts.

In his speech, the governor tried to walk a fine line between highlighting the improvements he says have happened during his time in office and making the case that the budget situation is still unstable enough to justify hanging on to the current tax rates. “Illinoia is in stronger financial position now then we were five years ago because of the hard choices we have made,” Quinn said today. Time will tell if this strategy will resonate with voters. Not surprisingly, a recent poll from the Paul Simon Public Policy Institute at Southern Illinois Carbondale found that 60 percent of voters oppose making the tax rates permanent. However, the majority of respondents liked major state services and were opposed to cutting them. Voters were also opposed to taxing retirement income or increasing sales taxes. The only new revenue source that more than half of those polled supported was expanding gambling. 

Democratic lawmakers said today that they do not think voters are really aware of the progress that has been made in terms of the state's budget. “I think voters do not grasp how much progress has been made. It’s unfortunate to me that one budget address will not necessarily emblazon that in people’s minds,” said Northbrook Democratic Rep. Elaine Nekritz, who was one of the key players on recently passed changes to the state’s pensions systems. But she said that while voters may not be as aware of some of the things, such as pension reform and cuts to Medicaid costs, that have been done to help the state climb out of its budget hole, the bond rating agencies that determine the state’s credit rating do seem to have taken notice. “We are getting there. It took us a long time to get in, and I always said it’s going to take us a long time to get out.” Nekritz noted that the property tax relief in Quinn’s plan has the potential to be very popular with voters. “The number one thing I hear from constituents back home is (complaints about) their property taxes.”

The chairmen of House budgeting committees, which are considering deep cuts for their areas of the budget, said they were glad Quinn came out strongly for more revenue. “I have always not shied away from the revenue conversation so I am encourage that the governor wants to look at ways to bring new revenue or additional revenue to the state,” said Lewistown Democratic Rep. William Davis, who is chairman of the House education budgeting committee. He said that K-12 education is currently facing a $900 million cut. Davis said he supports the concept of coupling tax relief for low-income workers and homeowners with a call for new revenue.

Marion Democratic Rep. John Bradley, who is chairman of the House revenue committee, said that he does not think that an extension of the tax rates has enough support to pass in his chamber at this point. “That’s going to be a difficult issue. That was a tough vote before. So I think a lot of people will keep an open mind to it but that’s a long way from happening right now.” He said that lawmakers should be open-minded about Quinn’s ideas. “He threw it out there, and I give him credit for putting ideas out there. So now the legislature will move forward.”

Quinn’s proposal has the backing of the legislative leaders in his party. “I would commend the governor for his political courage and honesty,” House Speaker Michael Madigan told Illinois Public Television’s Jak Tichenor, host of Illinois Lawmakers. Madigan said that he “demanded” property tax relief be included in a proposal to make the tax rates permanent. “I plan to support the governor’s position on the extension of the income tax increase,” said Madigan. “If we wish to continue to provide the level of services which we’ve become accustomed to for education and other purposes, then the income tax increase should be extended.” However, Madigan said he still supports his own “tax on millionaires” to fund education. The proposal is a constitutional amendment that would place a 3 percent surcharge on any income over $1 million. Madigan said he expects that the tax issue will be “resolved” before the spring legislative session ends.

Bradley said that his committee plans to move ahead with Madigan’s millionaire tax proposal “right away.”

 “I think the governor made a really bold stand basically saying ‘we’re going to keep the taxes the way they are, but we’re going to give back a whole bunch of money in property tax relief,’” Senate President John Cullerton told Tichenor. He said the proposal takes the state’s high property tax rates into consideration while also deferring “draconian cuts.” Cullerton said he did not expect Republican support, which he called “unfortunate.”

Judging from the reaction to Quinn's speech from across the aisle, Cullerton’s prediction seems dead on. “The governor is more interested in making the argument that if there is not another massive tax increase that school children would be thrown into mobile homes and would be dying in the streets. That’s the governor’s arguments here. It’s an argument of hysteria. I think the governor, his first job is not to run for governor and create a campaign based on class envy, it’s to govern,” said Sen. Dale Righter, a Republican from Mattoon. He said that Quinn should do a line-by-line review of the budget to find savings. “I think he is going to discover in his own budget there are a lot of areas that he could save money and in then the words he speaks on lower income and middle income Illinoisans can actually come to prevision. Because he will find out he doesn’t have to take more money from families.”

Waiting in the dark for doomsday

By Jamey Dunn

Gov. Pat Quinn is not releasing details ahead of his budget speech tomorrow, but Republicans say they expect him to paint a picture that is more negative than it needs to be.

UPDATE 3/26/2014: The Chicago Tribune has reported that Quinn plans to propose making the temporary income tax increase permanent and offering property tax relief for homeowner. The story cites anonymous sources. Quinn's budget staff refuses to share any details of his plan with the press. His budget office did not give reporters a customary budget briefing that typically takes place the night before the speech. However, his campaign released a statement this morning blasting Republican candidate for governor Bruce Rauner for wanting to roll back the tax increase, an indication that Quinn will advocate for keeping the current rates. His campaign says allowing the tax rates to roll back would be devastating to education, making it seem likely that the governor's speech today will focus on funding schools. “Rauner’s sales pitch to run Illinois like a business would run our state straight into the ground,” Deputy Press Secretary Izabela Miltko said. “It's clear his plan would take a sledgehammer to education, lay off tens of thousands of teachers and leave Illinois’ students at a huge disadvantage. His inability to provide real solutions for our state makes it clear he can’t be trusted to run Illinois.” Quinn is required by law to present a budget based on current statute. But there is nothing stopping him from calling on lawmakers to make the tax increase permanent as he does that, as long as his budget document is not based upon the proposal. 

Quinn is breaking from tradition in a few ways when it comes to this year’s budget. He intends to present a five-year plan to lawmakers tomorrow instead of the typical one-year proposal. Quinn asked lawmakers to give him extra time to prepare his budget, pushing the speech until after last week’s primary. Staff was reportedly still putting final tweaks on it through he weekend. Quinn is facing wealthy Republican businessman Bruce Rauner in the November general election, and politics will tinge every aspect of the rollout of his proposal. Rauner has already released an ad attacking Quinn in anticipation of the budget speech and is expected to come to Springfield tomorrow.

While lawmakers on both sides of the aisle have said that they would support longer-range budget planning, some are suspicious of Quinn pitching a budget that might last longer than his time in office. They see the new format as a possible way to spread out accounting tricks over several years and make what will be a difficult budget for Quinn politically an easier sell. “The governor is talking about completely changing the format that he presents this budget in from the way it’s been done in the past, and I think it is an intentional act on his part to confuse and distract,” said Sen. Matt Murphy, a Republican from Palatine. Republicans said that did not expect to receive an advance briefing on the budget. A press briefing is scheduled for tomorrow after the speech. When asked why they were pushing off the briefing, Quinn staffers said that the 5-year plan could be confusing and they wanted to ensure they would have enough time to answer all of reporters’ questions.

Murphy and the rest of his caucus say that Democrats are trying to make the situation look worse than it could be in order to justify continuing the current income tax instead of allowing them to step down as the are scheduled to beginning in 2015. Murphy said that Democrats started off with a more conservative revenue estimate and are ignoring some money that typical come in, such as revenue from unclaimed property. He also said they could consider transferring less money out of the general revenue fund for other spending, and could make a smaller payment to the fund for state employee health insurance. The insurance fund has been shorted in recent budget years. He said that less money could also be dedicated towards bills because there will likely be more revenue than expected at the end of the current fiscal year, and that could be used to pay down the backlog. “The Democrats’ approach this entire spring has been to try to create as dire a picture as possible,” he said. “You can make it a lot more plausible that you can fund core services and still allow the tax rate to go back down as the Democrats promised it would, but they don’t want people to see that. They don’t want that argument out there because they want to continue to get the money that they’ve been getting.”

He presented a few scenarios, one of which he said would actually give the state $13 million more to spend on discretionary costs and one that would require a $700 million cut. Murphy said that Republicans are not necessarily advocating for all of these ideas, but he says they illustrated that there are more options out there besides devastating cuts or a tax increase. “We’re not suggesting that you do this,” he said. “It’s just an exercise to illustrate that they’re kind of gaming the numbers to create a doomsday scenario.” Some of the options Murphy outlined would require changes to law.

Senate Democrats strongly disagree with Murphy and his party’s take on the budget. “These are real numbers. This is the impact that we see. This is the reality that we’ve been dealing with,” Park Ridge Democratic Sen. Dan Kotowski said at a hearing budget earlier this week. Senate Democrats asked state agencies to present the potential fallout from a 20 percent cut. Kotowski said today of Murphy’s scenarios, “That’s just wrong. If you look at the numbers that we presented, the group health [insurance] number represents the actual costs.” He said that under the budget starting point that is currently being used by lawmakers, total obligations to the health insurance plan are being underfunded. He also said that much of the money that is put aside for overdue bills would go toward Medicaid obligations and capture federal matching funds. He also said that Quinn’s plan to present a five-year proposal is a step in the right direction because it allows the governor to indicate his vision for the future instead of potentially using creative accounting to scrape through one tough fiscal year. He said government should adopt more long-term budget planning tactics, which are commonplace in the private sector. “It depoliticizes the budget process because you’re looking at five years.”

Democrats note that levels of state staffing and core services have been cut in recent budget years, and under the $34.495 billion revenue projection approved by both chambers, that trend would continue. That amount is about $1.5 billion less than the revenue projection approved for the current fiscal year. House committees have already been told what numbers they are working with based on the revenue projection and they are considering 14 percent reductions. Chicago Democratic Rep. Greg Harris, who is chairman of the House human services budgeting committee, said that under the revenue projection his committee would have $719 million less to work with this year. He said that all programs that are not mandated by court orders or other requirements could be eliminated “and then we’ll have to cut 200 million more.” Childcare for low-income parents, in-home care for seniors and addiction treatment and prevention programs would all be on the chopping block. Meanwhile, he said that a proportionally equal cut for education would lead to the layoffs of thousands of teachers. “In order to balance the budget and provide the services and undo our backlog of bills, we need to be responsible in how we budget. That means controlling our expenses, but it also means having necessary revenue.” He said that putting off bills and underfunding obligation is not the way to go.

When asked what he hoped to see from Quinn tomorrow, Harris said: “I would like to see just a really bold and powerful explanation of the fiscal realities that face our state and how we must be responsible to pay down our back log of bills. So we need the revenue to do that, to meet our current obligations and to be sure that we are not cutting aid to education, that we’re not discontinuing meals on wheels to seniors, that we are not cutting substance abuse programs.”

Arlington Heights Republican Rep. David Harris said he hopes to hear the opposite. He says he would like Quinn to say that he agrees with the House’s revenue estimate, which he helped craft as part of the House revenue committee, and that the state can live within that amount. Harris agrees with Murphy that some costs could potentially be shifted to make the situation a little easier and bring the cuts down to a few hundreds of millions of dollars instead of billions of dollars. “Do you mean to tell me that we can’t have a reduction of $700 [million] to $800 million and not run sate government? I don’t buy that.” He said he is concerned that Quinn instead is going to propose some costly initiatives, such as an increase to the Earned Income Tax Credit for low-income workers.

Murphy said he is not expecting much out of the speech tomorrow. “He’s got a real divide in his party about whether to raise taxes or not, and I think he’s going to try to get out of tomorrow without saying anything concrete and hope nobody notices.” He, and other lawmakers, said that he has heard that Quinn's budget office, which originally had a larger revenue estimate than the one lawmakers approved, is revising its estimate down. Murphy reads this as indication that Quinn may follow the Senate Democrats' lead in framing the budget as a “doomsday” scenario.

Rep. Greg Harris said that whatever Quinn presents, his committee will meet the next day to continue with the budgeting process they, and other budgeting committees in the House and Senate, have started.

Rep. David Harris said that so far, Democrats and Republicans in his chamber have been able to work together to agree on a spending number. But once the debate comes down to how to spend the money, things may not remain so amicable. “The fireworks will start on Thursday,” he said.

Lawmakers face a slew of pension proposals

By Jamey Dunn

 A new proposal for state employee pensions would make the temporary income tax increase permanent to cover pension costs.

Skokie Rep. Lou Lang, a member of House Democratic leadership, pitched House Bill 2375 today. He said that all the other pension plans that have been up for consideration violate the constitutional protection of state workers’ retirement benefits. “I am not going to vote for a pension bill that I think is unconstitutional. This is the very first proposal on the table in all this time that is constitutional,” Lang said. “I think this debate has to start with a constitutional piece of legislation. Can we negotiate things? Of course we can. Can we talk things through? Certainly we will. But this is a good start to putting something on the table that will resolve the problem of the pension system.” Lang’s bill would make permanent the temporary personal income tax increase, which was passed in 2011, and dedicate the revenues to paying down the state’s almost $100 billion in unfunded pension liability. The tax increase is scheduled to start phasing out in 2015. Lang's proposal would guarantee annual pension payments from the state and restructure the so-called ramp, the state’s plan for paying off the unfunded liability. Lang said that under his plan, pensions would be 80 percent funded after 50 years.

The measure would also increase the retirement age to 67 and phase in over six years employees' contribution of an additional 3 percent of salary. Any money from the tax increase that is not needed for the annual contribution would be refunded to taxpayers. Lang does not yet have actuarial numbers for his plan. But he says estimates that starting in 2020, there would be at least $1 billion in funds for rebates. “There was an expectation by some taxpayers that we would be ending the additional 2 percent income tax increase. This is my way to say to them, ‘I’m sorry you’re going to have to share some sacrifice with us for a little longer, but I’m going to do my best to get as much money back to you as I can.’”

The bill calls for money currently being used to pay off pension bonds, which were issued when lawmakers and governors opted to borrow instead of making the annual pension contributions, to pay down the unfunded liability once the bonds are paid off.

The idea comes from a proposal by West Chicago Republican Rep. Mike Fortner. HB 2365, which Fortner introduced yesterday, calls for the pension bond revenue to shift to the liability once the bonds have matured. It also would require employees to contribute 8 percent of their salaries, which is the amount participants in the State University Retirement System currently pay. The proposal would also cap pensionable salary and offer an optional self-managed defined benefit plan. Such a plan is currently offered to university employees. “It draws a certain percentage of people who for various family reasons and fiscal reasons in their household find that it works better for them to do that. It’s purely a choice. That’s constitutional,” Fortner said of the self-managed plan. “It’s not as aggressive of some of the other ones, but I am confident it’s constitutional because we have a long history of doing it.”

 Fortner says his bill would “bring the rate of growth of the pension payments to a level that matches the rate of our natural revenue growth without a tax hike.” He says his plan would fully fund the pension systems by 2045. Both Lang’s proposal and Fortner’s proposal would include judges' pension systems. Previous proposals up for consideration did not. Sponsors of other plans have said that they did not want to create a conflict of interest for judges who might rule on the constitutionality of any pension changes that became law.

Lawmakers also have a union-backed proposal before them for the first time in the form of legislation. Senate Bill 2404 would require employees to pay an additional 2 percent of salary, phased in over two years, and guarantee that the state makes its required annual contribution. “The [union] coalition considers the introduction of SB 2404 to be the beginning of a discussion that the unions intend to see end with an agreement on a fair and constitutional bill that, when passed, will help Illinois get back on solid financial footing and ensure the participants on the state pension systems receive the pensions they have been promised,” said a statement from the Illinois Education Association.

But House Minority Leader Tom Cross does not support either Lang’s plan of the union-backed bill. “Leader Cross is not in favor of Rep. Lang’s proposal. He doesn’t believe that hardworking taxpayers in Illinois would be in favor of keeping their income taxes at a high level to pour that money into a broken pension system. We do not believe that this bill fixes our pension problem, which is the goal,” Sara Wojcicki Jimenez, a Cross spokeswoman, said in a prepared statement. “He also does not favor SB 2404. Leader Cross, [Northbrook Democratic] Rep. [Elaine] Nekritz and others are continuing to work on a comprehensive plan that will fix our pension problem — those details will be coming in the near future.”

Nekritz, who has tried to shepherd several versions of pension reform through the House, said she is continuing to negotiate pension legislation and is meeting with new legislators to educate them on the pension problem. She said negotiations are also ongoing. “While they knew it was bad, maybe they didn’t know it was this bad. And so the solutions, while they seem really difficult, are in fact the solutions that are needed to solve that big a problem. And I think we’re getting them to understand that.” Nekritz has her own bill, HB 98. Her plan would fully fund the system by 2043.

“I think there are a number of ideas that are out there that are interesting to look at,” Gov. Pat Quinn said today. However, he is generally sticking by his preference of Senate Bill 1. Senate President John Cullerton proposed SB1 as a compromise. It contains a proposal that was previously sponsored by Nekritz and being considered in the House during the lame duck session. That provision would temporarily freeze cost-of-living increases, require higher contributions from employees, put a cap pensionable salary and include a guarantee that the state makes its annual required contribution to the pension systems. The bill also tacks on a proposal that Cullerton says is constitutional He believes that to pass constitutional muster, some consideration must be given to workers for any reduction in their benefits. Legislation that passed in the Senate last year would have asked employees to choose between their compounded-interest cost-of-living adjustments or state-subsidized retiree health care. If the Supreme Court were to rule the House plan constitutional, it would become the law. But if the court rejected the House proposal, the Senate version could then be considered.

“I think that’s the right vehicle,” he said. “I think SB 1 understands that there are different concepts, but you can put them in one bill that can get the job done. ... There may be refinements, that’s part of the legislative process in both the House and the Senate, and people may have a new idea or two that could be useful, and if that’s the case, we put it in.” Quinn said of Lang’s proposal to extend the tax increase to pay off pension costs: “I really don’t feel that solving the pension problem is ... a revenue issue. I think we have to deal with it on a comprehensive basis, so it’s not just about revenue. It’s a lot more than that.”

But Lang said that even if a pension plan is signed into law and survives a court challenge, it is likely that the state would not be able to afford employee retirement costs without continuing the tax increase. “Even if one of the current reform plans on the table can reduce our annual pension payment from $6.5 billion to, let’s say, $4 billion, the inconvenient truth is without the income tax increase, we don’t have the $4 billion,” Lang said. “To pretend that Illinois can pay for even a reformed pension system without a portion of the current tax increase money is to whistle past reality.”

House approves higher threshold for pension increases but not tax hikes

By Jamey Dunn 

The Illinois House approved a measure today that would make it more difficult to increase pension benefits, but Republicans argue that the same threshold should be set for tax increases.

There was no opposition in the House to a proposed constitutional amendment that would require that any increase in pension benefits for public workers to receive a three-fifths majority vote to pass. Currently, such increases require a simple majority. “There’s a lot of tough medicine in this resolution. I think the tough medicine is needed,” said House Speaker Michael Madigan, who sponsored HJRCA 49.Under the measure, an increase to salary or wages would not constitute a pension benefit increase, unless the raise was excessive. Madigan said that lawmakers could set the parameters for “excessive” pay increases.

The amendment would up the required support to override a veto of a bill containing pension benefits to two thirds of each chamber. Currently, only a three-fifths majority is required to override a veto. It also calls for increased benefits for municipal public workers to be approved by a three-fifths majority of a local board or council.

Union officials say that the state’s billions in unfunded pension liability was caused by lawmakers and governors opting to skip annual pension payments, not by increased benefits. “This change to the Constitution would not address the true crisis threatening Illinois public retirement systems, which is the habitual failure of politicians to adequately fund the modest pensions earned by public employees. We continue to believe that this funding crisis can only be solved by all parties working together in good faith, and our union remains committed to doing so,” said Anders Lindall, spokesman for the American Federation of State County and Municipal Employees Council 31.

A recent report from the Commission on Government Forecasting and Accountability found that the bulk of the shortfall is a result of underfunding.

Lindall also argued that the reduced pension benefits that went into effect last year do not meet federal requirements for employees, such as teachers, who will not receive Social Security benefits for the time they work for the state. “The lower pension tier forced on newly hired public employees must be fixed to avoid severe federal penalties. It is unwise to make such needed amendments more difficult to achieve,” Lindall said.

However, Madigan said that support for sweetening the benefits of those hired under the new pension benefits system is part of his motivation for supporting the amendment. “I’ve already been in conversations where people are saying that the tier two — that was created a few years ago and is in place for those hired to public jobs after Jan 1 of 2011 — is not sufficient. That it has to be improved. That we have to make it better,” Madigan said. “So that’s another reason to support this resolution and raise that vote count because those that even in the current crisis think that we ought to be improving pensions are here at the Capitol building already laying the seeds for what will be their efforts very shortly to again improve pension benefits.” Madigan said that the amendment is not meant to put a stop to benefit increases, but it would make it more difficult to pass them. “If you are an individual here, or if you are a member of a group in the legislature who wishes to work against these bills, this will advantage your position. … You’ll have a better chance.”

Rep. Darlene Senger, a Naperville Republican, said that the measure is “a step in the right direction” but does not solve the state’s pension problems. “I do want everyone to know that when you see this on the ballot in November, there’s a lot more work that has to be done before then in regards to reforming pensions,” she said. “This does not change anything in regards to the debt for the unfunded liabilities … and it does nothing currently to the crisis we have in regards to our state budget with trying to fund pensions and Medicaid.”

Springfield Republican Rep. Raymond Poe said that the amendment should also protect against lawmakers voting to skip pension payments by setting the threshold to skip a payment at a three-fifths majority. “We also need a safeguard in there that you can’t short those payments in the future,” Poe said. The measure contains no such provision. The issue of guaranteeing future payments into the pension system will likely play into the ongoing negotiations over other pension reforms that may include reductions in benefits for workers hired before lower benefits for new employees went into effect last year.

 After Madigan’s amendment was approved, Republicans moved to have two constitutional amendments that are languishing in the rules committee called to the floor for a vote. The amendments would require the approval of a three-fifths majority to increase taxes in the state. “Let me commend Speaker [Madigan] for realizing that some votes in this chamber carry heavier consequences and deserve a little bit of extra scrutiny. He is right that decisions that have great impacts on the fiscal health of Illinois residents and the state as a whole should have to meet a higher standard and require a greater threshold,” said Arlington Heights Rep. David Harris, who is listed as a sponsor on both amendments. Harris argued that such a higher threshold should also apply to tax votes. “This is nothing significant or new. We already require a higher voting standard for borrowing, for laws that would preempt home rule and to overturn the governor’s veto. The next logical steep would be to require the very same threshold for bills that would make Illinois residents have to pay more taxes.” The Republicans’ efforts were blocked and the measures did not come up for a vote.

If the Senate approves HJRCA 49, it would appear on the ballot in the November general election. To be included in the state’s Constitution, it would require the support of either three-fifths of those who choose to vote on the question or the majority of those voting in the election .

Budget projection anticipates cuts

By Jamey Dunn 

A three-year budget projection that Gov. Pat Quinn’s office released today calls for cuts in most areas of state government.

The plan lays out a proposed 9 percent decrease in Fiscal Year 2013 to all areas of state spending other than education and health care, which would both remain funded at FY 2012 levels for the next three fiscal years. According to the report, all levels of education — from early childhood education to universities and community colleges — will escape the ax under Quinn’s proposed budget plan.

David Vaught, Quinn’s budget director, emphasized that the analysis released today is a projection, and the level of cuts to each area of government may differ when Quinn presents his budget, but 9 percent is generally what Quinn is looking at. “There will be adjustments up and down,” Vaught said.

He added, “They’re pretty serious cuts.”

The report, which is required under recent budget reforms, said that the cuts are due in part to the squeeze that pension and Medicaid costs will put on next year's budget. The FY 2012 budget pushed about $2 billion in Medicaid costs into next fiscal year, and at $5.3 billion, the required pension payment in FY 2013 is projected to be $1 billion more than last year’s payment.

Quinn has called for rate cuts to some Medicaid providers instead of slowing down the reimbursement cycle, which is the reason why so many FY 2012 Medicaid bills will be paid next fiscal year. “We don’t think that’s a good solution, and we think it just puts off the problem.” The report says Quinn plans to focus on pension reform in the coming fiscal year. “He’s not coming around to anything that’s unconstitutional, and he’s said that repeatedly,” Vaught said. However, he said that other options, such as targeting cost-of-living adjustments in pension benefits or shifting pensions costs to school districts and universities could be on the table.

Vaught said that next year’s budget could result in more staff reductions but would not say if that meant layoffs or simply not hiring to fill positions that open up. He said that agencies have been informed of the level of cuts the governor expects, and they will began presenting their ideas for implementing cuts to Quinn’s budget office next week.

According to the projections, the state will end the current fiscal year with a $507 million deficit. In FY 2015, the year the recent income tax increase is set to begin phasing out, Quinn’s office predicts a deficit of $818 million. Vaught said the projected deficit illustrates the need to turn the state’s economy around. “It shows you that economic growth is hugely important.” He said that supporters of the tax increase planned that the decision of whether to extend it once it is slated to taper off would be a subject of public debate and an issue for the 2014 gubernatorial election. “[The projections] tell us what we’ve got to work with.”

Vaught said today’s report is intended to start the conversation of the budgeting process with legislators, agencies and other interested parties. The report emphasizes that tough budget decisions are needed to get Illinois back on track. “FY 13 will bring challenges. Shortfalls of billions of dollars mean a government must change. Such changes are difficult and cannot be accomplished overnight or even in one fiscal year.” However, Vaught appeared hopeful. “We see a way to get Illinois out of the woods.”

2011 in review

By Jamey Dunn

It was a busy year at the Statehouse as Illinois legislators passed an income tax increase, a significant change to the state’s criminal justice system and reforms to two important state systems, among other bills.

Death penalty 
Perhaps the most pivotal change to come this year was the abolition of Illinois’ death penalty. Because of the state’s checkered past of false convictions, proponents argued that the state could not in good conscience reinstate the death penalty. More than a decade ago, George Ryan called for a moratorium on capital punishment after several death row inmates were exonerated. Ryan also commuted the sentences of 167 death-row inmates to life in prison before leaving office in 2003.

Opponents argued that law enforcement officers need the threat of the death penalty as a bargaining chip when negotiating plea deals or trying to get a confession. Others argued that state should have the option for the “worst of the worst” offenders. “Seven out of 10 of those people on death row when Gov. Ryan commuted their sentences didn’t contest their own guilt,” said Sen. William Haine, a Democrat and former prosecutor from Alton.

Former Democratic Rep. Susana Mendoza said she was conflicted about supporting the abolition because she supported the death penalty, but she said her decision to vote for the repeal came after she put aside her own emotions and acknowledged how flawed Illinois’ system has been. “We’ve come horrifyingly close to executing innocent men, and it could happen again,” Mendoza said.

After taking public feedback, Gov. Pat Quinn signed the bill and communicated the sentences of all the inmates on death row. The passage of the plan resulted in some savings for the state as well as the elimination of some positions in the office of the state appellate defender's office.

Tax increase 
Early this year lawmakers voted to increase the income tax rate for the first time since 1989. Legislators voted to make that increase permanent in 1993. This year's temporary income tax hike raised the personal rate from 3 percent to 5 percent and the corporate tax from 4.8 percent to 7 percent.

Supporters said that the increase was necessary to get the state’s fiscal house in order. “This mess is a mess that is the responsibility of all of us. … It’s too late. It’s time for us to be adults, face the crisis and figure out together a solution,” said Rep. Barbara Flynn Currie, a Chicago Democrat. However, Republicans argued that Democrats did not do enough to cut the budget. Rep. Roger Eddy, a Hutsonville Republican, said that GOP calls for spending cuts have been ignored for years. “The time to be adults was eight years ago, when we were expanding programs,” he said. The measure also includes spending caps for the next four fiscal years.

The limits would be $36.8 billion in Fiscal Year 2012, $37.5 billion in FY 2013, $38.3 billion in FY 2014 and $39.1 billion in FY 2015. If legislators spend more, the tax increases will be nullified.

Worker’s compensation
Worker’s compensation reform was a top priority for all four legislative leaders and the governor at the beginning of the spring 2011 session. Lawmakers approved and Quinn signed a reform package backed by several business groups, but detractors were skeptical about how much money employers would save from the plan. The negotiations over workers’ compensation reform were tense. and at one point the bill’s sponsor — Rep. John Bradley, a Marion Democrat — threatened to call a bill that would have dismantled the entire system.

The legislation that passed in the end reduces the fees paid to doctors for treating employees by 30 percent, creates new rules for the appointment of arbitrators, who decide the outcome of claims, and requires the use of American Medical Association standards when determining workers’ level of impairment from injuries.

Republican opponents to the plan said it asks for too large a sacrifice from the medical community in the form of reduced fees and may not result in substantial savings for businesses. Doug Whitley, president of the Illinois Chamber of Commerce, said lawmakers should not think their work is done just because they made tweaks to the system. “The political leadership has to appreciate, understand, recognize that workers’ compensation is not a static action. … Even if we make progress in Illinois, that doesn’t mean that other states didn’t do things similarly. There’s a keeping-up-with-the-Joneses aspect to this.”

Education reform 
Teachers unions, education reform groups, administrators, business leaders and parents' organizations worked together on an education reform package that was generally agreed upon by all groups. The plan changes the way teachers are granted tenure, hired, fired or laid off.

Under the new law, teachers have to receive positive evaluations for three years to receive tenure. Teachers who earn “excellent” reviews in each of their first three years will also earn tenure. Teachers with tenure who receive two unsatisfactory reviews within a seven-year period could have their teaching licenses reviewed by the state superintendent and be required to complete professional development geared toward improving their performance or face having their licenses revoked. Layoffs will no longer be decided on a “last-in-first-out” basis but instead will be determined by qualifications and job performance. Seniority will only be used as a “tie-breaker.” Administrators will be free to hire any candidate for new positions instead of giving preference to teachers transferring within the district. The measure also makes it easier for districts to fire underperforming teachers.

“With this bill, we’re going to ensure that the better teachers stay and the lesser teachers go,” said Palatine Republican Sen. Matt Murphy. Half of teachers’ evaluations will be based on student performance under the new system that starts to kick in at different times for different schools based on size and student performance level. Most schools must switch to the new evaluations by 2016.

Rep. Monique Davis, a Chicago Democrat who cast the lone vote against the legislation in the House, said aspects of the bill that apply only to Chicago Public Schools, such as a greater threshold for going on strike that requires the support of a supermajority of voting union members, were discriminatory. “The intentions are good, but the results will not change a thing. I’m not going to be a union buster,” the former teacher and administrator said during floor debate. Unions outside of Chicago will need the support of half of union members to strike. The measure lengthens negotiations required before a strike and would force both sides to release their demands to the public if an impasse is reached.

Smart grid 
The two largest utility companies in the state will be able to increase customers' rates to make improvements to the state's electric grid and add so-called smart grid technologies. The plan allows Ameren and Commonwealth Edison to increase customers’ rates 2.5 percent annually to pay for improvements to the state’s electric grid ranging from basic repairs to poles and lines to cutting-edge technology that could allow utilities to prevent outages and customers to track their energy usage.

The companies are required to invest a total of $3.2 billion in the grid over 10 years. The measure also requires ComEd to create 2,000 new jobs through the plan and Ameren to create 450 jobs. If they do not meet those goals, they will be subject to fines.

Doug Scott, chairman of the Illinois Commerce Commission, which signs off on rate increases and will oversee the utilities under the plan, said the bill strips away too much regulation. “In the normal circumstance, our review serves a check to companies to spend money only on the items they are allowed by law. … We think that this bill significantly weakens that check and provides no real incentive for the companies to control their costs.”

Sponsors of the plan say the upgrades will bring economic development and allow the state’s aging grid to keep pace with modern energy demands. “Sometimes we’ve got to do what we’ve go to do,” said East Moline Democratic Sen. Mike Jacobs, who sponsored the plan. “If we’re going to have success in the 21st century, we need to have a 21st century grid.”

Gov. Pat Quinn adamantly opposed the legislation and vetoed it once it reached his desk. But the General Assembly overrode his veto in the fall session. 

Tax breaks 
After several businesses threatened to leave the Illinois, lawmakers voted to give tax breaks to some to try and stem job loss in the state. The package will give about $200 million in tax breaks to the CME group, and Sears. The plan contains other breaks meant to help businesses throughout the state — such as an extension of the research and envelopment tax credit and a reinstatement of the net operating loss provision in 2012 for losses up to $100,000. The package also offers tax breaks for individuals in the form of increasing the Earned Income Tax Credit from 5 percent of the federal credit to 10 percent over two years and linking the standard exemption to federal cost of living increases. In total, it is projected to cost about $300 million next fiscal year and $350 million by fiscal year 2014.

Up next 
The passage of the tax breaks passage spurred a call from both sides of the aisle in the House to roll back corporate income tax rates. “I think people at the time of the increase of the corporate tax realized that that was not the route to go,” House Minority Leader Tom Cross said. “Business after business potentially will be coming to the state and looking for relief, and doing it on a per-company basis is not the way to go.”

Expect the issue to get plenty of lip service, and maybe even some action, next year.
Other noteworthy pieces of legislation failed to gain in 2011 the support needed to become laws. However, the sponsors of many such bills say they will fight on. Rep. Lou Lang, a Skokie Democrat, will likely spend some time in 2012 trying to hammer out a plan gaming expansion that can pass in both chambers and gain Quinn’s signature. A plan he sponsored passed in 2011, but Quinn said it was too large of an expansion and refused to sign a bill that would allow slot machines at horse racing tracks. Without the slots for the tracks, Lang could not find the support to pass a scaled back gaming package during the fall veto session. Lang has also vowed to continue to push a bill that would allow the chronically ill access to medical marijuana. He has called various versions of such a proposal but has yet to find enough support to pass the plan in the House.

House Republican Leader Tom Cross has been unable to find the support to pass his plan to reduce pension benefits for current state employees, but he has been able to pass bills to try and reign in what many saw as abuses of the system. With a pension payment that is projected to be $5.3 billion — about $1 billion more than last fiscal year — expect to hear more about potential changes to benefits.

Illinois is the last state to allow the concealed carry of firearms, and a sponsor of a bill that would allow it says it “only a matter of time” before it happens here. The legislation failed in the House this year, but sponsor Brandon Phelps is working to drum up the votes and says he is only “five or six votes away” from House approval. “Forty other states are not wrong, I believe, and it’s not the Wild West anywhere else,” said Phelps, a Harrisburg Democrat. There are pending court cases, as well as federal legislation, that could also potentially open up the state to concealed carry.