By Jamey Dunn
The Illinois Supreme court issued a ruling Thursday on state employee health care that bodes ill for supporters of the recently passed cuts to public employee retirement benefits.
The court ruled that health care benefits for retirees fall under the pension protection clause—the very sentence of the state’s Constitution that many supporters of pension reform had hoped the justices would be willing to overlook. The pension clause states: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
The ruling indicates that the justices are inclined to side with public employees and retirees. In the 6-1 opinion, Justice Charles Freeman wrote: “Under settled Illinois law, where there is any question as to legislative intent and the clarity of the language of a pension statute, it must be liberally construed in favor of the rights of the pensioner.” Justice Anne Burke wrote the dissenting opinion. In it, she did not question the protection of the pension clause, but she argued that retiree health care benefits did not fall under that protection.
Some lawmakers seem to see the ruling as writing on the wall for the pension reform law, which is still working its way through the legal system. “Today, the Illinois Supreme Court made it very clear that the Pension Clause means what it says,” Senate President John Cullerton said in a prepared statement. “The court cannot rewrite the Pension Clause to include restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve. The clause was aimed at protecting the right of public employees and retirees to receive their promised benefits and insulate those benefits from diminishment or impairment by the General Assembly.”
Cullerton added: “If the court’s decision is predictive, the challenge of reforming our pension systems will remain. As I have said from the beginning, I am committed to identifying solutions that adhere to the plain language of the constitution.”
Kent Redfield, an emeritus professor at the University of Illinois Springfield, said that while the ruling pertains to a different case, the language used is clear. “You could find some way to parse some of it, but it’s really, really difficult. There’s no logical way to get to upholding Senate Bill 1 (the pension reform legislation) based on the clear content of this ruling and the way they’ve construed the pensions clause.”
Others disagree that the ruling is a harbinger of the pension law’s death. Rep. Elaine Nekritz, who was key player in getting SB 1 passed, said that the justifications the law makes for reducing benefits were not part of the retiree health care case. She said that the court has yet to consider those points. The law lays out the dire fiscal situation that the state is in and claims that state elected officials need special powers to curtail the estimated $100 billion unfunded liability and save the state from a budget disaster. However, one line in today’s decision seems to blow a hole in that argument. “In light of the constitutional debates, we have concluded that the [pension] provision was aimed at protecting the right to receive the promised retirement benefits, not the adequacy of the funding to pay for them.”
Supporters also claim that a reduction in the amount that employee would pay into the system represents a consideration they are being given for a change to the contract that is their membership in a pensions system.
Nekritz said that the ruling is clear that benefits are protected, but she says it is unclear if that protection is absolute. “Does it really mean that we can do nothing, or are there some things that we can do based on the legal arguments that we make under Senate Bill 1?”
Those arguments aside, if the Illinois Supreme Court rejects the new pension law, what options do legislators have?
Cullerton had proposed offering employees a choice between receiving subsidized health care coverage or keeping their current pensions benefits. If they had chosen health care, they would have seen a reduction in their retirement income including a cut to the expensive compounded interest cost of living adjustments (COLAs) retirees currently receive. Cullerton said that this scheme could potentially fulfill a legal standard of giving employees consideration for a reduction in benefits. The Senate approved the plan, but it was never called for a vote in the House.
However, that plan was based on the idea that health benefits were not protected by the Constitution—a concept that runs counter to today’s ruling. “The concept of consideration is still viable. The court has not rejected it or defined what the limits are. It’s just hard to see what you can give up in exchange,” Redfield said. “It’s hard to see what other major carrot you can offer to people in terms of giving up their COLA.”
Skokie Democratic Rep. Lou Lang introduced legislation that would extend the current income tax rates, which are due to start rolling back on January 1, to pay down the unfunded liability.
But Lang’s plan also calls for larger contributions from employees and an increase in the retirement age. Both of these provisions could be seen as a reduction in benefits by the court. Much of the revenue from the temporary income tax increase has gone toward making the required annual pension payment after lawmakers voted to skip payments and short payments for several years in the past.
There have also been proposals to change the pension payment schedule to even out the cost of the annual payment. The state is currently on a system that resulted in large balloon payments, much like a subprime mortgage. Some such plans also call for funding the system at 80 percent as opposed to 95 percent or 100 percent. Redfield said that a proposal that changes the payment structures would need to be combined with changes to the state’s revenue structure, such as expanding the sales tax base to some services, budget cuts or both. “As a stand alone, then it looks like an excuse to keep doing what we’re doing,” he said.
Republican candidate for governor Bruce Rauner has advocated for moving employees’ future benefits to a system that looks more like a 401-K. That plan would go even further than SB1, so it is unlikely that it would be upheld if SB 1 were rejected. But it is possible that the court’s ruling might strengthen his case for offering a defined contribution plan to newly-hired employees. “It may embolden Rauner to say well we’ve got to get everybody going forward into a defined contribution [plan],” Redfield said. However, such a proposal would have no impact on the unfunded liability for current employee and retiree benefits. It also means the state would likely have to start contributing to Social Security benefits for positions that do not currently offer them.
Meanwhile Gov. Pat Quinn is emphatically sticking by his opinion that SB 1 is constitutional. “We believe the pension reform law is constitutional. This landmark law was urgently needed to resolve the state’s $100 billion pension crisis. It was also urgently needed to ensure that teachers, university employees and state workers who have faithfully contributed to the pension system have retirement security,” said a written statement from his office. “We’re confident the courts will uphold this critical law that stabilizes the state’s pension funds while squarely addressing the most pressing fiscal crisis of our time by eliminating the state's unfunded pension debt.”
Redfield said that there will likely be many suggestions for a Plan B on pension reform in the coming months. “I think people will be floating lots of ideas that probably aren’t feasible and really won’t address the short-term problems—between now and November,” he said. “There’s nothing politically to be gained by standing up and saying ‘you know, we really, really screwed up, and we have no options but to raise your taxes.’”
But he said that new revenues and cuts to state services to cover the cost of the pension systems might be the only real option available to address the problem if the court rejects SB 1. If that happens, the state will almost certainly face another credit downgrade if it fails to act to address the liability. The current budget is based on $650 million in borrowing that has to be paid back. In Fiscal Year 2016, the tax rate will be lower for the entire fiscal year instead of just half of it. FY16 could turn out to be one doozy of a budget for lawmakers and whomever is the governor to sort out. “You want to be around for a historic session for the General Assembly? I think everybody has a front row seat,” Redfield says.
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Thursday, July 03, 2014
Friday, May 30, 2014
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:
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.
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.
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.
Wednesday, April 09, 2014
Quinn looks to lawmakers for new capital plan
By Jamey Dunn
Gov. Pat Quinn said today that he plans ask legislators to provide ideas for a new state capital construction plan.
Quinn said that he intends to ask the four legislative leaders to put together a special committee that would try to tackle the capital issue. He said he envisions a group of about 10 people. He said that the committee would operate much like the conference committee, which helped to break a stalemate on pension reform last year. The current five-year capital plan, which was approved in 2009, is nearing an end. The plan is funded through revenues generated by video poker machines in bars, truck stops and restaurants throughout the state and various increased fees and taxes. A new plan would likely require new revenues. “It is important to realize that the funding from the five-year [capital] plan that we adopted is, through this year, very strong, but in the future we’ve got to enhance it,” Quinn said in Springfield today.
Quinn would not point to any potential funding sources today. “We’ll engage with them very quickly,” he said of the committee. “There’s a lot of ideas. I think we need to explore each and every one.” But he said that he would not back any proposal to increase the tax on gasoline. “I think that’s a depleting resource. I think that using the gas tax to fund our future would not be a wise idea. I’m not for that.” At this point, the governor is not pushing for a bill to be approved by the end of the spring session. A member of his staff said lawmakers would likely be working on the issue throughout the year. However, the governor does want something in place to avoid a gap between the current capital bill and the next.
Quinn’s comments came at a news conference to unveil the Illinois Department of Transportation’s annual six-year plan. The $8.6 billion construction plan is focused on maintenance of the state’s existing infrastructure. IDOT Secretary Ann Schneider said that almost three-fourths of the spending would go toward maintenance. “This is a fiscally responsible program. We are not putting something out that the Department of Transportation and the state of Illinois cannot afford,” she said. The plan will be funded with almost $7 billion in federal money and $1.16 billion in existing state funds. The rest of the money will come from local sources and the last of the funds allocated for roads and bridges in the existing capital plan, dubbed Illinois Jobs Now! by Quinn. Go to IDOT’s website for a partial list of the projects covered by the six-year plan.
Gov. Pat Quinn said today that he plans ask legislators to provide ideas for a new state capital construction plan.
Quinn said that he intends to ask the four legislative leaders to put together a special committee that would try to tackle the capital issue. He said he envisions a group of about 10 people. He said that the committee would operate much like the conference committee, which helped to break a stalemate on pension reform last year. The current five-year capital plan, which was approved in 2009, is nearing an end. The plan is funded through revenues generated by video poker machines in bars, truck stops and restaurants throughout the state and various increased fees and taxes. A new plan would likely require new revenues. “It is important to realize that the funding from the five-year [capital] plan that we adopted is, through this year, very strong, but in the future we’ve got to enhance it,” Quinn said in Springfield today.
Quinn would not point to any potential funding sources today. “We’ll engage with them very quickly,” he said of the committee. “There’s a lot of ideas. I think we need to explore each and every one.” But he said that he would not back any proposal to increase the tax on gasoline. “I think that’s a depleting resource. I think that using the gas tax to fund our future would not be a wise idea. I’m not for that.” At this point, the governor is not pushing for a bill to be approved by the end of the spring session. A member of his staff said lawmakers would likely be working on the issue throughout the year. However, the governor does want something in place to avoid a gap between the current capital bill and the next.
Quinn’s comments came at a news conference to unveil the Illinois Department of Transportation’s annual six-year plan. The $8.6 billion construction plan is focused on maintenance of the state’s existing infrastructure. IDOT Secretary Ann Schneider said that almost three-fourths of the spending would go toward maintenance. “This is a fiscally responsible program. We are not putting something out that the Department of Transportation and the state of Illinois cannot afford,” she said. The plan will be funded with almost $7 billion in federal money and $1.16 billion in existing state funds. The rest of the money will come from local sources and the last of the funds allocated for roads and bridges in the existing capital plan, dubbed Illinois Jobs Now! by Quinn. Go to IDOT’s website for a partial list of the projects covered by the six-year plan.
Tuesday, April 08, 2014
Chicago pension changes pass in both chambers
By Jamey Dunn
The General Assembly today approved legislation to address the funding shortfall in pensions systems for Chicago city workers.
Mayor Rahm Emanuel’s proposal to stabilize the two systems fell flat last week, but sailed through the House and Senate today. The key factor that helped spur action was the removal of a provision that would have authorized city council members to approve a property tax increase. The new version of Senate Bill 1922, which is sponsored by House Speaker Michael Madigan, allows the city to pay for the plan with property tax money or any other available revenue.
Gov. Pat Quinn is running for re-election on a budget plan that would extend the current income tax rates instead of allowing them to sunset. The potential upside to his plan for some Illinoisans is that is would also offer a $500 annual credit for homeowners that Quinn has billed as property tax relief. Quinn made negative comments about the highly unpopular tax at most public appearances lately. Needless to say the governor opposed Emanuel’s push for a property tax increase blessed by state lawmakers. He panned it yesterday by calling it a “lousy tax” and saying that the proposal was “a sketch” not a clear plan.
But Emanuel described the proposal to reporters in Chicago as: “an honest compromise between leaders of organized labor and the city to secure the pensions; secure it in a way that city can afford it and make sure that to the 61,000 people who have come to relay on it, that it will be there.” Under the measure, workers would be asked to contribute more toward their retirement and would see reductions to their cost of living increases. Retirees would not get increases in 2017, 2019 and 2025. However, retirees with pension payouts of less than $22,000 annually would receive a minimum of 1 percent increase each year and would still get an increase during the skipped years. “If you do nothing, these plans are loosing money everyday. They’re going to go belly up within a decade,” Emanuel says.
As the legislation made its way through the process today, Quinn was unwilling to say whether he supported the bill. “I have to see the final bill. I’ll take a look at it. That’s what I do with all bills.” He did tell reporters that he was encouraged by the removal of the property tax components. “I think they got the message yesterday that [the] provision in the bill was not the way to go, and I’m glad they recognized that.” However, Quinn conceded that the city would have to find money somehow to cover the cost associated with the plan. “If they have any kind of pension reform, they need to have revenue to pay for it, but there’s many different creative ways to do that.”
Republicans in the House backed the plan, saying that it has to be done. “If we do nothing—we already have the roadmap for that. It’s called the city of Detroit,” said Elmhurst Republican Dennis Reboletti. “We can’t let the city of Chicago fail. And if the aldermen there chose to do nothing or choose to raise taxes, that’s their business.” The systems are governed by state law, so the General Assembly must sign off on changes. However, the revenue component of the plan can be handled at the local level. House Minority Leader Jim Durkin echoed that sentiment. “Doing nothing is not an option,” he said during floor debate. “We can’t ignore the fact that the city of Chicago is the economic engine of this state.”
Senate Republicans did not see the issue the same way. They called on the Democrats in their chamber to put the breaks on the legislation, which they say moved too quickly. “It will be here in two weeks, and we’re happy to partner with you, but it must be a true partnership,” said Senate Minority Leader Christine Radogno. Senate Republicans say they want to know what the plan is to deal with the city’s other underfunded pensions systems for teachers, firefighters and police officers. “What’s the plan? The place is on fire up there,” Palatine Republican Sen. Matt Murphy said. Murphy said that members of his party are worried that they city might look to the state’s coffers to bail out those systems.
Chicago Democratic Sen. Kwame Raoul, who sponsored the bill in the Senate, said that it is unrealistic to wait around for an omnibus bill that addresses all the systems because different bargaining units are working out their own negotiations with the city. But he said that if the city can work out a deal with labor, like his bill, lawmakers should approve it. “It’s irresponsible for us not to act when...labor and employer, labor and the city, has come to the table [on this bill],” he said. Raoul said that 31 out of the 34 bargaining representing those affected by the plan have offered no opposition to the bill.
Speaker Madigan had a busy day on the House floor today as the chamber also approved a constitutional amendment that he is sponsoring. House Joint Constitutional Amendment Resolution 52 prohibits denying the right to vote based on a person's race, color, ethnicity, status as a member of a language minority, sex, sexual orientation, income national origin or religion. Madigan said the amendment sends the message, “that in Illinois we believe that every legal voter should be treated equally and have the ability to vote for the candidate of their choice.”
Durkin also backed the speaker’s amendment, but others on his side of the aisle panned it as unnecessary. “This is a constitutional amendment looking for a problem,” said Rep. David Reis, a Republican from Willow Hill. Reis is a sponsor of legislation that would require voters to present identification at the polls. Madigan describe such requirements as “voter suppression” during the debate of his amendment.
If the Senate approves the proposal, which seems likely, it will appear before voters on the November ballot. While Madigan has not shared any ulterior motive for the amendment, some see the proposal as geared toward brining out the Democratic base for the general election.
The General Assembly today approved legislation to address the funding shortfall in pensions systems for Chicago city workers.
Mayor Rahm Emanuel’s proposal to stabilize the two systems fell flat last week, but sailed through the House and Senate today. The key factor that helped spur action was the removal of a provision that would have authorized city council members to approve a property tax increase. The new version of Senate Bill 1922, which is sponsored by House Speaker Michael Madigan, allows the city to pay for the plan with property tax money or any other available revenue.
Gov. Pat Quinn is running for re-election on a budget plan that would extend the current income tax rates instead of allowing them to sunset. The potential upside to his plan for some Illinoisans is that is would also offer a $500 annual credit for homeowners that Quinn has billed as property tax relief. Quinn made negative comments about the highly unpopular tax at most public appearances lately. Needless to say the governor opposed Emanuel’s push for a property tax increase blessed by state lawmakers. He panned it yesterday by calling it a “lousy tax” and saying that the proposal was “a sketch” not a clear plan.
But Emanuel described the proposal to reporters in Chicago as: “an honest compromise between leaders of organized labor and the city to secure the pensions; secure it in a way that city can afford it and make sure that to the 61,000 people who have come to relay on it, that it will be there.” Under the measure, workers would be asked to contribute more toward their retirement and would see reductions to their cost of living increases. Retirees would not get increases in 2017, 2019 and 2025. However, retirees with pension payouts of less than $22,000 annually would receive a minimum of 1 percent increase each year and would still get an increase during the skipped years. “If you do nothing, these plans are loosing money everyday. They’re going to go belly up within a decade,” Emanuel says.
As the legislation made its way through the process today, Quinn was unwilling to say whether he supported the bill. “I have to see the final bill. I’ll take a look at it. That’s what I do with all bills.” He did tell reporters that he was encouraged by the removal of the property tax components. “I think they got the message yesterday that [the] provision in the bill was not the way to go, and I’m glad they recognized that.” However, Quinn conceded that the city would have to find money somehow to cover the cost associated with the plan. “If they have any kind of pension reform, they need to have revenue to pay for it, but there’s many different creative ways to do that.”
Republicans in the House backed the plan, saying that it has to be done. “If we do nothing—we already have the roadmap for that. It’s called the city of Detroit,” said Elmhurst Republican Dennis Reboletti. “We can’t let the city of Chicago fail. And if the aldermen there chose to do nothing or choose to raise taxes, that’s their business.” The systems are governed by state law, so the General Assembly must sign off on changes. However, the revenue component of the plan can be handled at the local level. House Minority Leader Jim Durkin echoed that sentiment. “Doing nothing is not an option,” he said during floor debate. “We can’t ignore the fact that the city of Chicago is the economic engine of this state.”
Senate Republicans did not see the issue the same way. They called on the Democrats in their chamber to put the breaks on the legislation, which they say moved too quickly. “It will be here in two weeks, and we’re happy to partner with you, but it must be a true partnership,” said Senate Minority Leader Christine Radogno. Senate Republicans say they want to know what the plan is to deal with the city’s other underfunded pensions systems for teachers, firefighters and police officers. “What’s the plan? The place is on fire up there,” Palatine Republican Sen. Matt Murphy said. Murphy said that members of his party are worried that they city might look to the state’s coffers to bail out those systems.
Chicago Democratic Sen. Kwame Raoul, who sponsored the bill in the Senate, said that it is unrealistic to wait around for an omnibus bill that addresses all the systems because different bargaining units are working out their own negotiations with the city. But he said that if the city can work out a deal with labor, like his bill, lawmakers should approve it. “It’s irresponsible for us not to act when...labor and employer, labor and the city, has come to the table [on this bill],” he said. Raoul said that 31 out of the 34 bargaining representing those affected by the plan have offered no opposition to the bill.
Speaker Madigan had a busy day on the House floor today as the chamber also approved a constitutional amendment that he is sponsoring. House Joint Constitutional Amendment Resolution 52 prohibits denying the right to vote based on a person's race, color, ethnicity, status as a member of a language minority, sex, sexual orientation, income national origin or religion. Madigan said the amendment sends the message, “that in Illinois we believe that every legal voter should be treated equally and have the ability to vote for the candidate of their choice.”
Durkin also backed the speaker’s amendment, but others on his side of the aisle panned it as unnecessary. “This is a constitutional amendment looking for a problem,” said Rep. David Reis, a Republican from Willow Hill. Reis is a sponsor of legislation that would require voters to present identification at the polls. Madigan describe such requirements as “voter suppression” during the debate of his amendment.
If the Senate approves the proposal, which seems likely, it will appear before voters on the November ballot. While Madigan has not shared any ulterior motive for the amendment, some see the proposal as geared toward brining out the Democratic base for the general election.
Monday, April 07, 2014
Quinn says gaming expansion talks "on the right path," pans Chicago pension plan
By Jamey Dunn
Gov. Pat Quinn today weighed in on some issues potentially facing lawmakers this spring session. The governor had some positive comments about a possible gambling expansion but criticized Chicago Mayor Rahm Emanuel’s plan to address the underfunded pension systems for city workers.
Quinn has been viewed as the roadblock to long-proposed racetrack and casino gambling expansion in the state. While the governor signed off on allowing video poker in bars, truck stops and restaurants across Illinois as part of funding for the capitol construction plan, he has twice vetoed gambling expansions for casinos and horse-racing tracks that have been sent to his desk. But he told reporters in Chicago today that he thinks some progress has been made on the topic. He said that he would not support any gambling expansion unless it has strong ethics rules and oversight from the Illinois Gaming Board. A proposed Chicago casino, which would be owned by the city, has been the target of Quinn’s scrutiny. He says he backs the idea, but so far has not liked the way lawmakers have proposed structuring the oversight of a city casino. “You’ve got to have strong ethical standards, and I think they need to be enforced, and it has to be done by the independent Illinois Gaming Board,” Quinn said today. “I think we have kind of ironed that out. I think we’re on the right path.” The governor has also said in the past that he would not support an expansion unless the revenues went to fund education.
Quinn said he is willing to meet with those supporting an expansion bill and then said he thinks the “issue could come up this year.”
The governor had less than positive things to say about Emanuel’s proposal to reduce the city’s $19.5 billion unfunded liability for its workers pensions. The plan would ask employees to pay a larger portion toward their retirement benefits and reduce their annual cost of living adjustments. The city would also increase local property taxes to bring in an additional $50 million per year for five years beginning in 2016. Pensions for police, firefighters and teachers are not included in the plan. If those systems are added in, the city’s unfunded liability is more than $29 billion.
House Speaker Michael Madigan is sponsoring the measure, which passed in committee but failed to make it to a floor vote last week. As part of his budget proposal for next fiscal year, Quinn pitched a plan to offer property tax relief to many homeowners while extending the current income tax rates. Today, Quinn said he was not impressed by the mayor’s proposal. “I wouldn’t call a bill; I would call it a sketch. It kept changing by the hour,” he said. Quinn said he wants to see a “comprehensive” proposal to address the shortfall in the city’s pension systems, but he would not offer specifics. “If they think they’re just going to gouge property taxpayers, no can do. We’re not going to go that way,” he said. “Chicago has to address its own situation with respect to pension reform, but I think they need to be a whole lot more creative than I have seen so far.”
Emanuel has pitched the concept as a hard-fought compromise worked out with unions. However, some labor groups do not support the bill. “We finally have a model that brings both reform and revenue together,” Emanuel told reporters at a different Chicago news conference today. “It was never anyone’s intention to have Springfield deal with that. That’s our responsibility. But I do believe, to actually give the 61,000 workers and retirees the certainty they deserve, you need reform and revenue. And we’ll deal with our responsibility.” The city’s pensions are governed by state law, so the General Assembly must approve any change. However, the city can increase the property tax on its own. A major sticking point in getting the bill passed is whether the increase will be included in the legislation. State lawmakers do not want to take the hit for a tax increase they believe should be approved at the local level. But unions want the security of knowing that the revenue would come with the benefit reductions instead of counting on city officials to approve the tax increase after their members’ benefits have already been cut.
Gov. Pat Quinn today weighed in on some issues potentially facing lawmakers this spring session. The governor had some positive comments about a possible gambling expansion but criticized Chicago Mayor Rahm Emanuel’s plan to address the underfunded pension systems for city workers.
Quinn has been viewed as the roadblock to long-proposed racetrack and casino gambling expansion in the state. While the governor signed off on allowing video poker in bars, truck stops and restaurants across Illinois as part of funding for the capitol construction plan, he has twice vetoed gambling expansions for casinos and horse-racing tracks that have been sent to his desk. But he told reporters in Chicago today that he thinks some progress has been made on the topic. He said that he would not support any gambling expansion unless it has strong ethics rules and oversight from the Illinois Gaming Board. A proposed Chicago casino, which would be owned by the city, has been the target of Quinn’s scrutiny. He says he backs the idea, but so far has not liked the way lawmakers have proposed structuring the oversight of a city casino. “You’ve got to have strong ethical standards, and I think they need to be enforced, and it has to be done by the independent Illinois Gaming Board,” Quinn said today. “I think we have kind of ironed that out. I think we’re on the right path.” The governor has also said in the past that he would not support an expansion unless the revenues went to fund education.
Quinn said he is willing to meet with those supporting an expansion bill and then said he thinks the “issue could come up this year.”
The governor had less than positive things to say about Emanuel’s proposal to reduce the city’s $19.5 billion unfunded liability for its workers pensions. The plan would ask employees to pay a larger portion toward their retirement benefits and reduce their annual cost of living adjustments. The city would also increase local property taxes to bring in an additional $50 million per year for five years beginning in 2016. Pensions for police, firefighters and teachers are not included in the plan. If those systems are added in, the city’s unfunded liability is more than $29 billion.
House Speaker Michael Madigan is sponsoring the measure, which passed in committee but failed to make it to a floor vote last week. As part of his budget proposal for next fiscal year, Quinn pitched a plan to offer property tax relief to many homeowners while extending the current income tax rates. Today, Quinn said he was not impressed by the mayor’s proposal. “I wouldn’t call a bill; I would call it a sketch. It kept changing by the hour,” he said. Quinn said he wants to see a “comprehensive” proposal to address the shortfall in the city’s pension systems, but he would not offer specifics. “If they think they’re just going to gouge property taxpayers, no can do. We’re not going to go that way,” he said. “Chicago has to address its own situation with respect to pension reform, but I think they need to be a whole lot more creative than I have seen so far.”
Emanuel has pitched the concept as a hard-fought compromise worked out with unions. However, some labor groups do not support the bill. “We finally have a model that brings both reform and revenue together,” Emanuel told reporters at a different Chicago news conference today. “It was never anyone’s intention to have Springfield deal with that. That’s our responsibility. But I do believe, to actually give the 61,000 workers and retirees the certainty they deserve, you need reform and revenue. And we’ll deal with our responsibility.” The city’s pensions are governed by state law, so the General Assembly must approve any change. However, the city can increase the property tax on its own. A major sticking point in getting the bill passed is whether the increase will be included in the legislation. State lawmakers do not want to take the hit for a tax increase they believe should be approved at the local level. But unions want the security of knowing that the revenue would come with the benefit reductions instead of counting on city officials to approve the tax increase after their members’ benefits have already been cut.
Wednesday, April 02, 2014
Statehouse roundup
By Jamey Dunn
There was plenty going on at the Statehouse today, and it’s only the first week of April. A House committee approved a bill to reform Chicago’s pension system for city workers; a group of Democratic senators filed legislation that would make sweeping changes to the way the state funds schools; and the Senate voted in favor of allowing children with epilepsy to use medical marijuana. Here’s a rundown of what happened:
Chicago pension changes
Two days after Chicago Mayor Rahm Emanuel presented his proposal to stabilize the city’s pension systems for workers, a House committee approved the plan. It would ask workers to contribute more to the system and would reduce their cost of living increases. The city would increase local property taxes to bring in an additional $250 million in property taxes. The legislation is intended to cut the city’s unfunded pension liability of $19.5 billion in half over 40 years. The General Assembly must approve the plan because the city’s systems are governed by state law.
While Emanuel says he has union support for his plan, not all labor organizations are on board. John Cameron, political director for AFSCME Council 31, called the plan “clearly and indisputably unconstitutional.” Senate Bill 1992 seemed to be set up to move quickly thought the legislature today. House Speaker Michael Madigan popped his amendments onto the bill shortly before the hearing, and the Senate held its own hearing shortly after the House panel voted. But the House adjourned before taking a vote. Republican leaders said that they could not support the proposal because they had not had time to digest its contents, and they said that they would rather see a plan that included the city’s retirement systems for police, firefighters and teachers, too. “We careen from one crisis to the next,” said Senate Minority Leader Christine Radogno. “Absent a long term plan, I couldn’t advise our caucus to be in favor of this.” But supporters said that the city is talks with with those groups, too. “You can say we’ve piecemealed, but they’re different entities,” said Chicago Democratic Sen. Kwame Raoul. “This is about solving a very serious problem that impacts the city of Chicago. ... This is a product of negotiations. It’s been indicated that other negotiations are ongoing and things don’t just come to a point of resolution magically at the same time.”
Medical marijuana for epilepsy
The Senate approved SB 2636, which would allow children with epilepsy access to marijuana as a treatment under the state’s medical cannabis pilot program. Some families have found that a liquid form of the drug helps control the disease in children with frequent seizures. Parents say marijuana oil has helped their children, who may have hundreds or thousands of seizures a day, to cut the number down to just a few. Last month, an Arizona judge ruled that two parents in the state could continue treating their son with the drug. Parents of epileptic children are pushing for legislation similar to SB 2636 in other states.
Campus smoking ban
The House approved SB 2202, which would ban smoking on public college campuses. The measure would apply to all university property and would let universities decide what the penalty would be for those who violate the ban. Opponents to the proposal argued that smoking policy decisions should be left to university trustees.
Education funding
After a committee spent more than a year scrutinizing the way the state distributes funds to schools, Democratic lawmakers unveiled a proposal to revamp the education funding formula today. Bunker Hill Democratic Sen. Andy Manar, who chaired the committee, said that currently only about 44 percent of the state education spending is doled out based on local need. He said SB 16 would change that so financial need would come into play when distributing about 90 percent of funds. The proposal would also eliminate the individual block grant that is given to Chicago schools, something Republicans on the committee have supported. The plan would also require more spending transparency at the district level. Maywood Democratic Sen. Kimberly Lightford said that the debate around school funding has to move away from focusing on which districts would be funding “winners” and which would lose out on funds. “We all win. We all win. All the school districts win when dollars are going to the areas that need it the most,” she said.
Manar agreed. “The idea that we can have a few premier school districts in the state that exceed every expectation ... and have an incredible number that lag behind and call that a win in the state system is not a win in my book.” Both said that they were introducing the bill now as a jumping point for debate. “We could have waited until the last week of may negotiated behind closed doors, popped a bill out and then had a vote. That’s not the way to do this,” Manar said. “I’m hopeful that we will have a bipartisan set of cosponsors on this bill.”
Republicans in the Senate said that they had not been invited to today’s press conference and that they had not seen the 400-page bill until it was filed last night. “We welcome the discussion of fair education funding. We believe Illinois school children deserve every opportunity for a quality education — in every school in Illinois,” said a statement from Senate Republicans. “Our 2013 look at school funding found Illinois’ current funding formulas to be outdated, skewed to benefit Chicago and not performing as designed by law. We are reviewing the legislation just filed. At first blush — we have dozens of questions and comments to contribute to the discussion as it is reviewed in the Senate and perhaps the House of Representatives. We want educators, superintendents, schools boards and other education professionals to have that opportunity as well.”
Constitutional amendment for victims’ rights
Skokie Democratic Rep. Lou Lang has been pushing for years to get rights for crime victims enshrined into the state’s Constitution. The House today approved his constitutional amendment to do just that. The amendment is part of a crowded field of efforts to get changes to the document before voters. House Speaker Michael Madigan is sponsoring two amendments. One would prevent discrimination against voters in the state and another would charge a 3 percent income tax surcharge on income over $1 million. The revenue from the additional tax would be used to fund education. Both of Madigan’s amendments have been approved by House committees. There are also two separate pushes to put amendments on the ballot through a citizens initiative. One, which is spearheaded by Republican gubernatorial candidate Bruce Rauner, would impose term limits on legislators. The other, which is backed by a well-funded committee, would change the way the state draws its legislative maps by taking the task out of the hands of lawmakers.
There was plenty going on at the Statehouse today, and it’s only the first week of April. A House committee approved a bill to reform Chicago’s pension system for city workers; a group of Democratic senators filed legislation that would make sweeping changes to the way the state funds schools; and the Senate voted in favor of allowing children with epilepsy to use medical marijuana. Here’s a rundown of what happened:
Chicago pension changes
Two days after Chicago Mayor Rahm Emanuel presented his proposal to stabilize the city’s pension systems for workers, a House committee approved the plan. It would ask workers to contribute more to the system and would reduce their cost of living increases. The city would increase local property taxes to bring in an additional $250 million in property taxes. The legislation is intended to cut the city’s unfunded pension liability of $19.5 billion in half over 40 years. The General Assembly must approve the plan because the city’s systems are governed by state law.
While Emanuel says he has union support for his plan, not all labor organizations are on board. John Cameron, political director for AFSCME Council 31, called the plan “clearly and indisputably unconstitutional.” Senate Bill 1992 seemed to be set up to move quickly thought the legislature today. House Speaker Michael Madigan popped his amendments onto the bill shortly before the hearing, and the Senate held its own hearing shortly after the House panel voted. But the House adjourned before taking a vote. Republican leaders said that they could not support the proposal because they had not had time to digest its contents, and they said that they would rather see a plan that included the city’s retirement systems for police, firefighters and teachers, too. “We careen from one crisis to the next,” said Senate Minority Leader Christine Radogno. “Absent a long term plan, I couldn’t advise our caucus to be in favor of this.” But supporters said that the city is talks with with those groups, too. “You can say we’ve piecemealed, but they’re different entities,” said Chicago Democratic Sen. Kwame Raoul. “This is about solving a very serious problem that impacts the city of Chicago. ... This is a product of negotiations. It’s been indicated that other negotiations are ongoing and things don’t just come to a point of resolution magically at the same time.”
Medical marijuana for epilepsy
The Senate approved SB 2636, which would allow children with epilepsy access to marijuana as a treatment under the state’s medical cannabis pilot program. Some families have found that a liquid form of the drug helps control the disease in children with frequent seizures. Parents say marijuana oil has helped their children, who may have hundreds or thousands of seizures a day, to cut the number down to just a few. Last month, an Arizona judge ruled that two parents in the state could continue treating their son with the drug. Parents of epileptic children are pushing for legislation similar to SB 2636 in other states.
Campus smoking ban
The House approved SB 2202, which would ban smoking on public college campuses. The measure would apply to all university property and would let universities decide what the penalty would be for those who violate the ban. Opponents to the proposal argued that smoking policy decisions should be left to university trustees.
Education funding
After a committee spent more than a year scrutinizing the way the state distributes funds to schools, Democratic lawmakers unveiled a proposal to revamp the education funding formula today. Bunker Hill Democratic Sen. Andy Manar, who chaired the committee, said that currently only about 44 percent of the state education spending is doled out based on local need. He said SB 16 would change that so financial need would come into play when distributing about 90 percent of funds. The proposal would also eliminate the individual block grant that is given to Chicago schools, something Republicans on the committee have supported. The plan would also require more spending transparency at the district level. Maywood Democratic Sen. Kimberly Lightford said that the debate around school funding has to move away from focusing on which districts would be funding “winners” and which would lose out on funds. “We all win. We all win. All the school districts win when dollars are going to the areas that need it the most,” she said.
Manar agreed. “The idea that we can have a few premier school districts in the state that exceed every expectation ... and have an incredible number that lag behind and call that a win in the state system is not a win in my book.” Both said that they were introducing the bill now as a jumping point for debate. “We could have waited until the last week of may negotiated behind closed doors, popped a bill out and then had a vote. That’s not the way to do this,” Manar said. “I’m hopeful that we will have a bipartisan set of cosponsors on this bill.”
Republicans in the Senate said that they had not been invited to today’s press conference and that they had not seen the 400-page bill until it was filed last night. “We welcome the discussion of fair education funding. We believe Illinois school children deserve every opportunity for a quality education — in every school in Illinois,” said a statement from Senate Republicans. “Our 2013 look at school funding found Illinois’ current funding formulas to be outdated, skewed to benefit Chicago and not performing as designed by law. We are reviewing the legislation just filed. At first blush — we have dozens of questions and comments to contribute to the discussion as it is reviewed in the Senate and perhaps the House of Representatives. We want educators, superintendents, schools boards and other education professionals to have that opportunity as well.”
Constitutional amendment for victims’ rights
Skokie Democratic Rep. Lou Lang has been pushing for years to get rights for crime victims enshrined into the state’s Constitution. The House today approved his constitutional amendment to do just that. The amendment is part of a crowded field of efforts to get changes to the document before voters. House Speaker Michael Madigan is sponsoring two amendments. One would prevent discrimination against voters in the state and another would charge a 3 percent income tax surcharge on income over $1 million. The revenue from the additional tax would be used to fund education. Both of Madigan’s amendments have been approved by House committees. There are also two separate pushes to put amendments on the ballot through a citizens initiative. One, which is spearheaded by Republican gubernatorial candidate Bruce Rauner, would impose term limits on legislators. The other, which is backed by a well-funded committee, would change the way the state draws its legislative maps by taking the task out of the hands of lawmakers.
Wednesday, March 26, 2014
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.”
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.”
Wednesday, March 19, 2014
Incumbent losses and big spending races
By Jamey Dunn
The General Assembly is guaranteed to have some new faces next year after a handful of incumbents were knocked out in their primary races yesterday.
Chicago Democratic Rep. Antonia “Toni” Berrios spent more than $520,000 in her failed bid to retain her seat in the 39th district, according to spending projections compiled by Kent Redfield, professor emeritus of political science at the university of Illinois Springfield. Redfield tracks campaign spending for the Illinois Campaign for Political Reform. Will Guzzardi, who beat out Berrios to be the Democratic candidate for the seat, narrowly lost to her in the primary when he challenged her in the last election cycle. Guzzardi spent about $320,000, but he was also boosted by another almost $100,000 in independent spending, mostly from union groups.
The race was the second most expensive House primary. The bulk of Berrios’ funds came from Democratic Party organizations and House Speaker Michael Madigan. Berrios is the daughter of Cook County Assessor Joe Berrios, and while local politics came heavily into play in the race, it can also be chalked up as a loss to Madigan, who was unable to protect a member of his caucus. In 2012, Guzzardi, who is a community organizer in Logan Square and a former writer for The Huffington Post, lost by less than 200 votes. Yesterday, he won with a margin of more than 1,000.
Glen Ellyn Republican Rep. Sandra Pihos was defeated by Lombard Village Trustee Peter Breen. Pihos spent almost $400,000. Her funding came from Republican Party organizations, House Minority Leader Jim Durkin and organized labor. Breen, who is a lawyer with the conservative nonprofit legal firm the Thomas More Society, only spent a little more than $120,000. But Liberty Principles PAC, a political action committee chaired by conservative talk radio host Dan Proft, made more than $100,000 in independent expenditures supporting Breen in the campaign. Proft also backed Keith Matune against incumbent Rep. Ron Sandack, who is from Downers Grove. Sandack won that race by less than 200 votes, but as of writing this, Matune had yet to concede.
With its incumbent-targeted independent expenditures, Proft’s PAC was able to make the already-tight-on-cash House Republican leadership spend big in the primary. Liberty Principles Pac spent more than $1.5 million, almost all of which came from Lake Forest businessman Richard Uihlein, who runs the Uline packing supply company. His great-grandfather was a co-founder of Milwaukee's Joseph Schlitz Brewing Co. Uihlein has emerged in recent years as one of the topic conservative political contributors in the state. Four years ago, he moved Uline’s headquarters from Waukeegan two miles over the state line into Wisconsin after the company received millions in state and local tax incentives to make the move. (For more on Uihlein, see this very interesting Crain’s Chicago Business story, which looks at his recent uptick in political spending.)
Chicago Democratic Rep. Derrick Smith lost to attorney Pamela Reaves-Harris. The Generally Assembly voted to eject Smith after allegations that he took a $7,000 bribe, but he was re-elected to the seat in 2012. Elmhurst Republican Rep. Dennis Reboletti lost to Chris Nybo in the Republican primary for Sen. Kirk Dillard’s seat. Nybo is a former House member who was defeated by Dillard in the primary when he ran for the Senate in 2012. Dillard gave up his seat to run in the Republican Gubernatorial primary, but came in second to nominee Bruce Rauner.
A freshman incumbent was able to hang on to his seat in the priciest race in yesterday’s election. Chicago Democratic Rep. Christian Mitchell faced a challenge from community organizer Jay Travis. Mitchell spent nearly $770,000. He received his funding from House Democratic leadership, education reform groups and business groups. Meanwhile, Travis spent about $100,000. However union-funded groups made independent expenditures of more than $250,000 supporting her. The bulk of her campaign money also came from unions, which were presumably pushing back against Mitchell’s vote in favor of changes to public employee pension benefits. Mitchell had some high-profile supporters, including U.S. Democratic Sen. Dick Durbin. Despite his aggressive spending, Mitchell won by fewer than 500 votes. As of writing this, Travis had yet to concede.
The General Assembly is guaranteed to have some new faces next year after a handful of incumbents were knocked out in their primary races yesterday.
Chicago Democratic Rep. Antonia “Toni” Berrios spent more than $520,000 in her failed bid to retain her seat in the 39th district, according to spending projections compiled by Kent Redfield, professor emeritus of political science at the university of Illinois Springfield. Redfield tracks campaign spending for the Illinois Campaign for Political Reform. Will Guzzardi, who beat out Berrios to be the Democratic candidate for the seat, narrowly lost to her in the primary when he challenged her in the last election cycle. Guzzardi spent about $320,000, but he was also boosted by another almost $100,000 in independent spending, mostly from union groups.
The race was the second most expensive House primary. The bulk of Berrios’ funds came from Democratic Party organizations and House Speaker Michael Madigan. Berrios is the daughter of Cook County Assessor Joe Berrios, and while local politics came heavily into play in the race, it can also be chalked up as a loss to Madigan, who was unable to protect a member of his caucus. In 2012, Guzzardi, who is a community organizer in Logan Square and a former writer for The Huffington Post, lost by less than 200 votes. Yesterday, he won with a margin of more than 1,000.
Glen Ellyn Republican Rep. Sandra Pihos was defeated by Lombard Village Trustee Peter Breen. Pihos spent almost $400,000. Her funding came from Republican Party organizations, House Minority Leader Jim Durkin and organized labor. Breen, who is a lawyer with the conservative nonprofit legal firm the Thomas More Society, only spent a little more than $120,000. But Liberty Principles PAC, a political action committee chaired by conservative talk radio host Dan Proft, made more than $100,000 in independent expenditures supporting Breen in the campaign. Proft also backed Keith Matune against incumbent Rep. Ron Sandack, who is from Downers Grove. Sandack won that race by less than 200 votes, but as of writing this, Matune had yet to concede.
With its incumbent-targeted independent expenditures, Proft’s PAC was able to make the already-tight-on-cash House Republican leadership spend big in the primary. Liberty Principles Pac spent more than $1.5 million, almost all of which came from Lake Forest businessman Richard Uihlein, who runs the Uline packing supply company. His great-grandfather was a co-founder of Milwaukee's Joseph Schlitz Brewing Co. Uihlein has emerged in recent years as one of the topic conservative political contributors in the state. Four years ago, he moved Uline’s headquarters from Waukeegan two miles over the state line into Wisconsin after the company received millions in state and local tax incentives to make the move. (For more on Uihlein, see this very interesting Crain’s Chicago Business story, which looks at his recent uptick in political spending.)
Chicago Democratic Rep. Derrick Smith lost to attorney Pamela Reaves-Harris. The Generally Assembly voted to eject Smith after allegations that he took a $7,000 bribe, but he was re-elected to the seat in 2012. Elmhurst Republican Rep. Dennis Reboletti lost to Chris Nybo in the Republican primary for Sen. Kirk Dillard’s seat. Nybo is a former House member who was defeated by Dillard in the primary when he ran for the Senate in 2012. Dillard gave up his seat to run in the Republican Gubernatorial primary, but came in second to nominee Bruce Rauner.
A freshman incumbent was able to hang on to his seat in the priciest race in yesterday’s election. Chicago Democratic Rep. Christian Mitchell faced a challenge from community organizer Jay Travis. Mitchell spent nearly $770,000. He received his funding from House Democratic leadership, education reform groups and business groups. Meanwhile, Travis spent about $100,000. However union-funded groups made independent expenditures of more than $250,000 supporting her. The bulk of her campaign money also came from unions, which were presumably pushing back against Mitchell’s vote in favor of changes to public employee pension benefits. Mitchell had some high-profile supporters, including U.S. Democratic Sen. Dick Durbin. Despite his aggressive spending, Mitchell won by fewer than 500 votes. As of writing this, Travis had yet to concede.
Monday, March 17, 2014
Primary preview
By Jamey Dunn
With two candidates clearly in the lead for their perspective party’s gubernatorial nominations, statehouse watchers are not expecting many surprises from tomorrow’s primary election.
Since the early days of the Republican primary race, the question has been which candidate might become the viable alternative to wealthy businessman Bruce Rauner, who has consistently led in the polls? After gaining the support of public employee unions, it seems that Hinsdale Sen. Kirk Dillard has won that role, but it also seems that it won’t be enough for him to defeat Rauner.
A We Ask America poll of more than 1,000 likely Republican voters conducted on Sunday night found Rauner, who is from Winnetka, in the lead with 44 percent of the vote to Dillard’s 27 percent. Bloomington Sen. Bill Brady had 19 percent and Illinois Treasurer Dan Rutherford, who is from Chenoa, had just 9 percent. (Percentages do no add up to 100 percent because of rounding.) The margin of error for the poll is plus or minus 3 percent. “I would be surprised [if Rauner is not the nominee]. I mean, I really would,” said Kent Redfield, professor emeritus of political science at the University of Illinois Springfield. “His appeal has been broad. He’s not a regional candidate. He’s getting downstate support.”
It seems nearly impossible that Chicago Democratic Gov. Pat Quinn would be defeated by his primary challenger Tio Hardiman, who has been unable to raise any substantial funds. With the pressure off in that primary, unions may work to get members who usually cast a Democratic ballot in the primary to cross over and vote for Dillard as an alternative to the “union boss” bashing Rauner. Still, it looks unlikely that they could corral enough cross-over votes. According to the We Ask American analysis, based on a turn out of 800,000 voters in the Republican primary, Dillard would need 135,040 cross-over votes to win. “To get union people who are Democrats to cross over, I think, is just really hard. We don’t have much of a history of cross over,'' in the state, Redfield said. To put it another way, the We Ask America analysis says: “There may be enough cross over to move numbers tomorrow. But a few won’t be enough. Dillard needs a stampede.” Redfield, who tracks campaign contributions and spending for the Illinois Campaign for Political Reform’s Sunshine Project, said that according to his rough estimates, Dillard will likely have had about $2 million or $3 million total to spend on the campaign. That compares to Rauner’s war chest, which he says could be as large as $17 million.
At one point it seemed like Rutherford might emerge as the dark-horse contender, but accusations of sexual harassment and pressure to do political work from an employee dealt a mortal blow to his campaign, which has continued limping along it what seems to have become purely a symbolic effort at this point. Rutherford is not making a final tour of the state today and he has barred reporters from his election night party for supporters. “I don’t know where the Rutherford voters go. If you’re looking for a fresh face, and think that Brady and Dillard were old news ,and therefore you were attracted to Rutherford as the new person that had the energy, that was doing fundraising and stuff, then I don’t know that you automatically go back to Dillard or Brady. Some of its going to Rauner. I think that’s pretty clear,” Redfield says.
After the 2010 Republican gubernatorial primary came down to just a few hundred votes, those who closely watch Illinois elections are unwilling to call anything a totally certain bet. When multiple candidates are competing for a small pool of primary voters, relatively small changes in voter opinion can have big consequences. Still, there is a feeling among analysts and observers that Rauner has it sewn up. “Low-turnout low-interest primary, four candidates—yeah weird things can happen but it’s just it’s hard to see the dynamic about how anything’s going to change. Those tracking polls have been pretty consistent.” For more on the governor’s race, see Illinois Issues February 2014.
More than half of the 137 state legislative races are uncontested. About 30 candidates do not face a primary challenger but will face a general election opponent. Of the contested primaries, a few boil down to some key votes made by incumbents and outside groups having the money to challenge them. Freshman Rep. Christian Mitchell, a Chicago Democrat, is facing a tough race against opponent community organizer Jay Travis. Mitchell voted in favor of recently passed changes to public employee pension benefits. Now he has been hit with push back from public employee unions. Travis is reaping the benefits—in the form of campaign funding—from that fallout. Meanwhile education reform groups, such as Stand for Illinois Children, are putting cash into Mitchell’s campaign. So far, Mitchell has been leading in the polls. Redfield said it is important to House Speaker Michael Madigan that incumbents like Mitchell, who took a tough vote, not get knocked out by a primary challenger.“[If] those people were to go down then that will send a message that the speaker can’t always protect you. And the speaker’s not in favor of that message being out there.”
On the Republican side of the aisle, some incumbents are facing races against decidedly more conservative primary candidates. Downers Grove Republican Ron Sandack, one of only three House Republicans to vote in favor of same sex marriage, is facing Keith Matune in the primary. Matune’s bid is being financially backed in part by independent expenditures from a political action committee run by former Republican gubernatorial hopeful Dan Proft. Mundelein Republican Rep. Ed Sullivan, who also voted in favor of same sex marriage, is facing a challenge from Bob Bednar.
Wealthy conservative Republican Sen. Jim Oberweis, who is from Sugar Grove, has been leading Doug Truax in the Republican primary race to challenge incumbent U.S. Sen. Richard Durbin. This is Oberweis’ third try at running for the office. If he wins tomorrow, it will be the first time he has survived the primary in a U.S. Senate race. “You have this war about what’s the real Republican Party—the big ideological conflicts,” Redfield says. He says that social conservatives may be disappointed if Rauner is one of the candidates leading their ticket because he does not seem willing to fight culture war battles. Instead it seems likely he will focus on education reform and making the state more business friendly. “I can’t imagine Rauner’s going to be willing to spend political capital on social issues that he can’t win when he really wants to do these (other) things as far education, as far as tax code, those sorts of things.”
For more on what state legislative primary races to watch tomorrow, see Illinois Issues February 2014.
With two candidates clearly in the lead for their perspective party’s gubernatorial nominations, statehouse watchers are not expecting many surprises from tomorrow’s primary election.
Since the early days of the Republican primary race, the question has been which candidate might become the viable alternative to wealthy businessman Bruce Rauner, who has consistently led in the polls? After gaining the support of public employee unions, it seems that Hinsdale Sen. Kirk Dillard has won that role, but it also seems that it won’t be enough for him to defeat Rauner.
A We Ask America poll of more than 1,000 likely Republican voters conducted on Sunday night found Rauner, who is from Winnetka, in the lead with 44 percent of the vote to Dillard’s 27 percent. Bloomington Sen. Bill Brady had 19 percent and Illinois Treasurer Dan Rutherford, who is from Chenoa, had just 9 percent. (Percentages do no add up to 100 percent because of rounding.) The margin of error for the poll is plus or minus 3 percent. “I would be surprised [if Rauner is not the nominee]. I mean, I really would,” said Kent Redfield, professor emeritus of political science at the University of Illinois Springfield. “His appeal has been broad. He’s not a regional candidate. He’s getting downstate support.”
It seems nearly impossible that Chicago Democratic Gov. Pat Quinn would be defeated by his primary challenger Tio Hardiman, who has been unable to raise any substantial funds. With the pressure off in that primary, unions may work to get members who usually cast a Democratic ballot in the primary to cross over and vote for Dillard as an alternative to the “union boss” bashing Rauner. Still, it looks unlikely that they could corral enough cross-over votes. According to the We Ask American analysis, based on a turn out of 800,000 voters in the Republican primary, Dillard would need 135,040 cross-over votes to win. “To get union people who are Democrats to cross over, I think, is just really hard. We don’t have much of a history of cross over,'' in the state, Redfield said. To put it another way, the We Ask America analysis says: “There may be enough cross over to move numbers tomorrow. But a few won’t be enough. Dillard needs a stampede.” Redfield, who tracks campaign contributions and spending for the Illinois Campaign for Political Reform’s Sunshine Project, said that according to his rough estimates, Dillard will likely have had about $2 million or $3 million total to spend on the campaign. That compares to Rauner’s war chest, which he says could be as large as $17 million.
At one point it seemed like Rutherford might emerge as the dark-horse contender, but accusations of sexual harassment and pressure to do political work from an employee dealt a mortal blow to his campaign, which has continued limping along it what seems to have become purely a symbolic effort at this point. Rutherford is not making a final tour of the state today and he has barred reporters from his election night party for supporters. “I don’t know where the Rutherford voters go. If you’re looking for a fresh face, and think that Brady and Dillard were old news ,and therefore you were attracted to Rutherford as the new person that had the energy, that was doing fundraising and stuff, then I don’t know that you automatically go back to Dillard or Brady. Some of its going to Rauner. I think that’s pretty clear,” Redfield says.
After the 2010 Republican gubernatorial primary came down to just a few hundred votes, those who closely watch Illinois elections are unwilling to call anything a totally certain bet. When multiple candidates are competing for a small pool of primary voters, relatively small changes in voter opinion can have big consequences. Still, there is a feeling among analysts and observers that Rauner has it sewn up. “Low-turnout low-interest primary, four candidates—yeah weird things can happen but it’s just it’s hard to see the dynamic about how anything’s going to change. Those tracking polls have been pretty consistent.” For more on the governor’s race, see Illinois Issues February 2014.
More than half of the 137 state legislative races are uncontested. About 30 candidates do not face a primary challenger but will face a general election opponent. Of the contested primaries, a few boil down to some key votes made by incumbents and outside groups having the money to challenge them. Freshman Rep. Christian Mitchell, a Chicago Democrat, is facing a tough race against opponent community organizer Jay Travis. Mitchell voted in favor of recently passed changes to public employee pension benefits. Now he has been hit with push back from public employee unions. Travis is reaping the benefits—in the form of campaign funding—from that fallout. Meanwhile education reform groups, such as Stand for Illinois Children, are putting cash into Mitchell’s campaign. So far, Mitchell has been leading in the polls. Redfield said it is important to House Speaker Michael Madigan that incumbents like Mitchell, who took a tough vote, not get knocked out by a primary challenger.“[If] those people were to go down then that will send a message that the speaker can’t always protect you. And the speaker’s not in favor of that message being out there.”
On the Republican side of the aisle, some incumbents are facing races against decidedly more conservative primary candidates. Downers Grove Republican Ron Sandack, one of only three House Republicans to vote in favor of same sex marriage, is facing Keith Matune in the primary. Matune’s bid is being financially backed in part by independent expenditures from a political action committee run by former Republican gubernatorial hopeful Dan Proft. Mundelein Republican Rep. Ed Sullivan, who also voted in favor of same sex marriage, is facing a challenge from Bob Bednar.
Wealthy conservative Republican Sen. Jim Oberweis, who is from Sugar Grove, has been leading Doug Truax in the Republican primary race to challenge incumbent U.S. Sen. Richard Durbin. This is Oberweis’ third try at running for the office. If he wins tomorrow, it will be the first time he has survived the primary in a U.S. Senate race. “You have this war about what’s the real Republican Party—the big ideological conflicts,” Redfield says. He says that social conservatives may be disappointed if Rauner is one of the candidates leading their ticket because he does not seem willing to fight culture war battles. Instead it seems likely he will focus on education reform and making the state more business friendly. “I can’t imagine Rauner’s going to be willing to spend political capital on social issues that he can’t win when he really wants to do these (other) things as far education, as far as tax code, those sorts of things.”
For more on what state legislative primary races to watch tomorrow, see Illinois Issues February 2014.
Wednesday, February 19, 2014
Republicans put conditions on budget negotiations
By Jamey Dunn
On Monday, Illinois Senate President John Cullerton called on Republicans to help address a looming budget deficit as lawmakers craft the state budget for next fiscal year. Today, Republicans shot back with a list of demands.
Cullerton said at a Chicago news conference earlier this week that Illinois faces a nearly $3 billion shortfall for Fiscal Year 2015. He said several factors are coming together to create the shortfall. The temporary income tax increase will begin to step down in the second half of the fiscal year, taking an estimated $1.6 billion in revenue with it. Expenses such as Medicaid, the state’s annual pension payments and personnel costs are expected to increase. Cullerton asked Republicans to present ideas to address the shortfall.
“We want to work with the Democrats, but they seem to view bipartisanship as a one-way street, and its not,” said Senate Minority Leader Christine Radogno. “We have offered — we as Republicans — offered numerous solutions that have been disregarded, buried in subcommittee and frankly, at times, even mocked.”
Republicans say the state’s budget problems happened while Democrats were in power, and now they are being asked to help clean up the mess. They say their suggestions have been ignored in the past, and now they have a number of conditions for working with Democrats on the budget.
The Republicans want:
Radogno said Republicans plan to “insist that bipartisanship includes their votes on our ideas and not just the other way around.” She said lawmakers must do more than just produce a budget for this year. She says they must address long-term budget issues and make policy changes to improve the state’s economy. “There’s no budget that can succeed unless we fix the underlying economy in this state because we may have a one-year budget document that may take care of the next few months, but then we’re going to be right back in that crisis mode because we’re losing employers and we’re losing families.”
While the two caucuses held dueling news conferences this week, exchanges at a Senate budget hearing remained relatively subdued today. Some Republican members called Cullerton’s math into question, saying that the governor’s own projections do not predict such a large deficit. “Try was we might sometimes, saying a figure doesn’t make a figure factual,” said Mattoon Republican Sen. Dale Righter.
However, Chicago Democratic Sen. Heather Steans, said the figure is based on newer information than the governor’s budget office used for its projections. “I do think it’s clear we’re going to have budget challenges.” Steans, who is the chair of one of the Senate’s budgeting committees, said cuts would be necessary but that new revenue should also be on the table.
“I think we’re going to have a real interesting year,” said Sen. Mike Jacobs, a Democrat from East Moline. “We may have disagreement on how we got here, but it behooves us all to try to work toward a solution.”
On Monday, Illinois Senate President John Cullerton called on Republicans to help address a looming budget deficit as lawmakers craft the state budget for next fiscal year. Today, Republicans shot back with a list of demands.
Cullerton said at a Chicago news conference earlier this week that Illinois faces a nearly $3 billion shortfall for Fiscal Year 2015. He said several factors are coming together to create the shortfall. The temporary income tax increase will begin to step down in the second half of the fiscal year, taking an estimated $1.6 billion in revenue with it. Expenses such as Medicaid, the state’s annual pension payments and personnel costs are expected to increase. Cullerton asked Republicans to present ideas to address the shortfall.
“We want to work with the Democrats, but they seem to view bipartisanship as a one-way street, and its not,” said Senate Minority Leader Christine Radogno. “We have offered — we as Republicans — offered numerous solutions that have been disregarded, buried in subcommittee and frankly, at times, even mocked.”
Republicans say the state’s budget problems happened while Democrats were in power, and now they are being asked to help clean up the mess. They say their suggestions have been ignored in the past, and now they have a number of conditions for working with Democrats on the budget.
The Republicans want:
- The temporary income tax increase to be allowed to phase out, as is called for under current law.
- A proposal to amend the state’s Constitution to allow for a graduated income tax to be taken off the table.
- The approval of a workers' compensation reform bill that includes a requirement that employees prove they were hurt on the job.
- A prohibition on new programs and the expansion of existing programs in the FY 15 budget.
- Attorney General Lisa Madigan to request that the Illinois Supreme Court speed up its ruling on the pension changes that were recently passed into law.
- More aggressive implementation of the cost-saving Medicaid reforms approved in 2012.
Radogno said Republicans plan to “insist that bipartisanship includes their votes on our ideas and not just the other way around.” She said lawmakers must do more than just produce a budget for this year. She says they must address long-term budget issues and make policy changes to improve the state’s economy. “There’s no budget that can succeed unless we fix the underlying economy in this state because we may have a one-year budget document that may take care of the next few months, but then we’re going to be right back in that crisis mode because we’re losing employers and we’re losing families.”
While the two caucuses held dueling news conferences this week, exchanges at a Senate budget hearing remained relatively subdued today. Some Republican members called Cullerton’s math into question, saying that the governor’s own projections do not predict such a large deficit. “Try was we might sometimes, saying a figure doesn’t make a figure factual,” said Mattoon Republican Sen. Dale Righter.
However, Chicago Democratic Sen. Heather Steans, said the figure is based on newer information than the governor’s budget office used for its projections. “I do think it’s clear we’re going to have budget challenges.” Steans, who is the chair of one of the Senate’s budgeting committees, said cuts would be necessary but that new revenue should also be on the table.
“I think we’re going to have a real interesting year,” said Sen. Mike Jacobs, a Democrat from East Moline. “We may have disagreement on how we got here, but it behooves us all to try to work toward a solution.”
Monday, February 17, 2014
Cullerton: Lawmakers must address $3 billion budget shortfall
By Jamey Dunn
Illinois Senate President John Cullerton today highlighted the challenges lawmakers will face as they try to craft a budget for the next fiscal year.
Cullerton said at a Chicago news conference today that Senate Democratic staff members have been running the numbers as budgeting hearings will begin this week in the Senate. “We find that Illinois faces a nearly $3 billion budget hole for this coming [fiscal] year, and if not corrected, this could decimate classroom funding, send college tuition soaring and erode all the financial progress that we have made in the last few years.” Several factors are coming together to create the shortfall. The temporary income tax increase will begin to step down in the second half of Fiscal Year 2015, taking an estimate $1.6 billion in revenue with it. Expenses such as Medicaid, the state’s annual pension payments and personnel costs are expected to increase.
Gov. Pat Quinn’s budget address was scheduled to take place this week, but the General Assembly voted earlier this month to move it to March 26. Quinn’s staff says he needs more time because he intends to present a five-year budget plan. Republicans called the move political because the new date falls after the primary election, when Quinn would know whom his general election opponent would be. Quinn is the presumptive Democratic nominee, but four Republicans are vying for the GOP nomination. Two of them, Bloomington Sen. Bill Brady and Hinsdale Sen. Kirk Dillard, are sitting legislators.
Before the vote, Cullerton announced that the Senate would begin hearing budget ideas this week. “Surely people who have been running for governor for five years have some idea about what their budget should be,” he said. “For those who are disappointed in this, February 19th is the day to have your budgets ready.” A joint hearing of the chamber’s two budgeting committees is scheduled for Wednesday.
Today, Cullerton said he hopes to jump start a “discussion” on bridging the budget gap, and he called on Republicans in his chamber to present potential solutions. “We need to solve this $3 billion hole in our budget in a bipartisan way,” However, Cullerton said there is “no easy way to do it,” and he dismissed proposals such as cuts to Medicaid that Republicans have made in the past. “That would ignore the fact that we’ve already done that,” he said. Lawmakers approved and Quinn signed into law a package of Medicaid changes and new revenue in 2012.“This Medicaid reform package that was done in a bipartisan fashion — Republicans and Democrats — nothing was left on the table, and so it’s not like there’s $3 billion in savings that we ignored in our Medicaid reform bill.” Cullerton said lawmakers from both sides of the aisle have made tough choices to manage the budget in recent years, including approving changes to pension benefits for public employees. “We’ve gone right at the nature of the problems, pensions and Medicaid, and we’ve cut them.”
He indicated that finding more to cut could be difficult, and any large spending reduction could result in slashing the state’s education budget. “We’ve already closed prisons, closed mental health facilities and other centers, cut payroll, head count is down thousands from years ago. So when someone says, 'Well, just eliminate the waste and fraud,' you have to cross-examine them and ask them what they’re really talking about.” While budget cuts have been made, the tax increase, which was approved with only Democratic support in 2011, also provided billions in revenue that helped Illinois partially climb out of the estimated $13 billion deficit it faced just a few years ago.
Republicans see this week’s hearing as another political maneuver in an election year. Senate GOP spokeswoman Patty Schuh said the hearing seems to be intended to provide the governor some “cover” for presenting his budget late. “Our members will be looking to see what the Democratic majority plans to do to keep the promises they have made.”
Illinois Senate President John Cullerton today highlighted the challenges lawmakers will face as they try to craft a budget for the next fiscal year.
Cullerton said at a Chicago news conference today that Senate Democratic staff members have been running the numbers as budgeting hearings will begin this week in the Senate. “We find that Illinois faces a nearly $3 billion budget hole for this coming [fiscal] year, and if not corrected, this could decimate classroom funding, send college tuition soaring and erode all the financial progress that we have made in the last few years.” Several factors are coming together to create the shortfall. The temporary income tax increase will begin to step down in the second half of Fiscal Year 2015, taking an estimate $1.6 billion in revenue with it. Expenses such as Medicaid, the state’s annual pension payments and personnel costs are expected to increase.
Gov. Pat Quinn’s budget address was scheduled to take place this week, but the General Assembly voted earlier this month to move it to March 26. Quinn’s staff says he needs more time because he intends to present a five-year budget plan. Republicans called the move political because the new date falls after the primary election, when Quinn would know whom his general election opponent would be. Quinn is the presumptive Democratic nominee, but four Republicans are vying for the GOP nomination. Two of them, Bloomington Sen. Bill Brady and Hinsdale Sen. Kirk Dillard, are sitting legislators.
Before the vote, Cullerton announced that the Senate would begin hearing budget ideas this week. “Surely people who have been running for governor for five years have some idea about what their budget should be,” he said. “For those who are disappointed in this, February 19th is the day to have your budgets ready.” A joint hearing of the chamber’s two budgeting committees is scheduled for Wednesday.
Today, Cullerton said he hopes to jump start a “discussion” on bridging the budget gap, and he called on Republicans in his chamber to present potential solutions. “We need to solve this $3 billion hole in our budget in a bipartisan way,” However, Cullerton said there is “no easy way to do it,” and he dismissed proposals such as cuts to Medicaid that Republicans have made in the past. “That would ignore the fact that we’ve already done that,” he said. Lawmakers approved and Quinn signed into law a package of Medicaid changes and new revenue in 2012.“This Medicaid reform package that was done in a bipartisan fashion — Republicans and Democrats — nothing was left on the table, and so it’s not like there’s $3 billion in savings that we ignored in our Medicaid reform bill.” Cullerton said lawmakers from both sides of the aisle have made tough choices to manage the budget in recent years, including approving changes to pension benefits for public employees. “We’ve gone right at the nature of the problems, pensions and Medicaid, and we’ve cut them.”
He indicated that finding more to cut could be difficult, and any large spending reduction could result in slashing the state’s education budget. “We’ve already closed prisons, closed mental health facilities and other centers, cut payroll, head count is down thousands from years ago. So when someone says, 'Well, just eliminate the waste and fraud,' you have to cross-examine them and ask them what they’re really talking about.” While budget cuts have been made, the tax increase, which was approved with only Democratic support in 2011, also provided billions in revenue that helped Illinois partially climb out of the estimated $13 billion deficit it faced just a few years ago.
Republicans see this week’s hearing as another political maneuver in an election year. Senate GOP spokeswoman Patty Schuh said the hearing seems to be intended to provide the governor some “cover” for presenting his budget late. “Our members will be looking to see what the Democratic majority plans to do to keep the promises they have made.”
Wednesday, February 05, 2014
Budget address delayed until after primary election
By Jamey Dunn
Gov. Pat Quinn will be giving his budget address later than originally planned this year.
The Illinois Senate today approved Senate Bill 1227, which moves the date of the budget address from February 19 to March 26. The House passed the bill Tuesday, and Quinn plans to sign it when it arrives on his desk. That means that he will wait until after the March primary election to present his vision for the state’s budget for Fiscal Year 2015 and beyond. Quinn’s office says he needs the extra time because he intends to present a five-year plan instead of the traditional one-year proposal. “In addition to presenting his budget on March 26, the governor will also present a five-year budget blueprint. Now that the budget picture is more stabilized — with pension reform, Medicaid overhaul, spending cuts, contract negotiations, collective bargaining agreement, etc. in place — we need to look at the bigger budget picture as we craft this year’s budget,and account for upcoming savings in order to develop the necessary solution that provides taxpayers and businesses with long-term certainty,” said a statement from Quinn’s office.
“I appreciate and applaud the approach by the governor’s office. This is what people are asking for when it comes to financial accountability,” said Democratic Sen. Dan Kotowski of Park Ridge, chair of one of the Senate’s budgeting committees. Kotowski said businesses in Illinois want to see long-term budget planning from state government. Supporters of the bill also noted that FY 2015 would be a difficult budget year because the temporary income tax increase will begin to sunset, taking more than $1 billion in revenue with it.
But Republicans say they aren’t buying it. “This is a total political sham,” said Palatine Republican Sen. Matt Murphy. He said it was insulting to frame the issue as a step toward good government. “Today’s request is purely political,” said GOP gubernatorial hopeful Sen. Kirk Dillard of Hinsdale. “The governor is waiting to see who his Republican opponent is.”
Bloomington Sen. Bill Brady, one of Dillard’s challengers in the Republican primary, agreed. “He needs to deliver his budget address, so the people of Illinois can know what is in it and we can debate that.”
Senate President John Cullerton said that moving the budget address is something lawmakers have done several times, including moving it for Republican Gov. Jim Edgar. Cullerton took a swipe at Brady and Dillard, who both ran for governor in 2010, when he suggested that members of the Senate use the original date as a time to present their own budget ideas. “Surely people who have been running for governor for five years have some idea about what their budget should be,” he said. “For those who are disappointed in this, February 19th is the day to have your budgets ready.” Brady beat Dillard in the 2010 primary and went on to lose the general election to Quinn. Brady, Dillard and the other Republicans running for governor — Bruce Rauner and Illinois Treasurer Dan Rutherford — have all avoided giving many specifics on how they would handle the state’s budget.
Both chambers plan to begin their budgeting process, even though Quinn’s speech will be delayed. “The governor is asking for a delay, but here in the House we aren’t asking for a delay. We’re going to move forward expeditiously,” House Speaker Michael Madigan said during Tuesday’s floor debate.
The House’s Revenue and Finance committee has already begun holding hearings on its revenue estimate for FY 2015. In recent years, the final budget approved by lawmakers has been based on the estimated produced by the committee. Marion Democratic Rep. John Bradley, who chairs the committee, said that he thought Quinn’s request is “deferential” to lawmakers, who have already started working on the budget. “The House is really the driver of the state budget,” Bradley said. “The last few years, the governor has attempted to make budgets and to put out numbers and disregarded the House Revenue and Finance Committee and this chamber, and it didn’t go well for him.”
Gov. Pat Quinn will be giving his budget address later than originally planned this year.
The Illinois Senate today approved Senate Bill 1227, which moves the date of the budget address from February 19 to March 26. The House passed the bill Tuesday, and Quinn plans to sign it when it arrives on his desk. That means that he will wait until after the March primary election to present his vision for the state’s budget for Fiscal Year 2015 and beyond. Quinn’s office says he needs the extra time because he intends to present a five-year plan instead of the traditional one-year proposal. “In addition to presenting his budget on March 26, the governor will also present a five-year budget blueprint. Now that the budget picture is more stabilized — with pension reform, Medicaid overhaul, spending cuts, contract negotiations, collective bargaining agreement, etc. in place — we need to look at the bigger budget picture as we craft this year’s budget,and account for upcoming savings in order to develop the necessary solution that provides taxpayers and businesses with long-term certainty,” said a statement from Quinn’s office.
“I appreciate and applaud the approach by the governor’s office. This is what people are asking for when it comes to financial accountability,” said Democratic Sen. Dan Kotowski of Park Ridge, chair of one of the Senate’s budgeting committees. Kotowski said businesses in Illinois want to see long-term budget planning from state government. Supporters of the bill also noted that FY 2015 would be a difficult budget year because the temporary income tax increase will begin to sunset, taking more than $1 billion in revenue with it.
But Republicans say they aren’t buying it. “This is a total political sham,” said Palatine Republican Sen. Matt Murphy. He said it was insulting to frame the issue as a step toward good government. “Today’s request is purely political,” said GOP gubernatorial hopeful Sen. Kirk Dillard of Hinsdale. “The governor is waiting to see who his Republican opponent is.”
Bloomington Sen. Bill Brady, one of Dillard’s challengers in the Republican primary, agreed. “He needs to deliver his budget address, so the people of Illinois can know what is in it and we can debate that.”
Senate President John Cullerton said that moving the budget address is something lawmakers have done several times, including moving it for Republican Gov. Jim Edgar. Cullerton took a swipe at Brady and Dillard, who both ran for governor in 2010, when he suggested that members of the Senate use the original date as a time to present their own budget ideas. “Surely people who have been running for governor for five years have some idea about what their budget should be,” he said. “For those who are disappointed in this, February 19th is the day to have your budgets ready.” Brady beat Dillard in the 2010 primary and went on to lose the general election to Quinn. Brady, Dillard and the other Republicans running for governor — Bruce Rauner and Illinois Treasurer Dan Rutherford — have all avoided giving many specifics on how they would handle the state’s budget.
Both chambers plan to begin their budgeting process, even though Quinn’s speech will be delayed. “The governor is asking for a delay, but here in the House we aren’t asking for a delay. We’re going to move forward expeditiously,” House Speaker Michael Madigan said during Tuesday’s floor debate.
The House’s Revenue and Finance committee has already begun holding hearings on its revenue estimate for FY 2015. In recent years, the final budget approved by lawmakers has been based on the estimated produced by the committee. Marion Democratic Rep. John Bradley, who chairs the committee, said that he thought Quinn’s request is “deferential” to lawmakers, who have already started working on the budget. “The House is really the driver of the state budget,” Bradley said. “The last few years, the governor has attempted to make budgets and to put out numbers and disregarded the House Revenue and Finance Committee and this chamber, and it didn’t go well for him.”
Monday, January 27, 2014
Fact check: Republicans on the budget
By Jamey Dunn
If one of the Republican primary candidates ultimately wins the race for governor, he will face some challenging budget conditions. The temporary income tax increase, which was approved in 2011, will begin to sunset during the last half of next fiscal year. Projections from Gov. Pat Quinn’s budget office estimate that Illinois will have a $2 billion budget deficit by the end of Fiscal Year 2015 and $7.5 billion in unpaid bills.
During the Republican debate last week, GOP candidates shared some of the ideas and qualifications they would bring to the table when looking to address the state budget.
Sen. Kirk Dillard touted his experience working under former Republican Gov. Jim Edgar. “We inherited a $1 billion deficit in a recession and left a $1.5 billion surplus, all without an income tax increase,” Dillard said. He noted that during Edgar’s time in office, the state’s credit rating went up and the backlog of overdue bills was paid down.
It is true that Edgar’s administration started off with a budget deficit and left office with a budget surplus and paying the state’s bills on time. Edgar made some difficult budget choices, including cuts to Medicaid. The income tax did not increase. However, after being elected in 1990, Edgar made a temporary income tax hike permanent. He told Illinois Issues at the time that the cuts that would be needed to allow the increase to sunset would have been too deep. “There's no way you can make that amount of cuts without cutting into programs that I think everyone agrees are necessary.” Making the increase permanent was part of the platform Edgar ran on. "I won with everybody knowing my position. Nobody can be surprised on that one,” he said.
The budget recovery was also helped along by the economic boom of the mid-1990s. When Edgar took office, the country was in recession and Gross Domestic Product growth was nonexistent. By the time he left in 1999, GDP growth was almost 5 percent. Over the same period, the federal government went from a $269.3 billion deficit to a $125.6 billion surplus. Economic growth could go a long way toward improving the state’s current fiscal condition, but the kind of economic bubble the country experienced in the '90s is not likely to reoccur in the foreseeable future.
State Treasurer Dan Rutherford said he plans to conduct a performance review of all state agencies, similar to one he did when he entered his current office. Rutherford pointed to budget cuts he has made as treasurer. “I cut the budget of the state treasurer’s office by 2 percent, next fiscal year 3 percent and then 5 percent — a total of 10 percent. I’ve got the experience to do that,” he said.
Rutherford has not yet made that 5 percent cut but plans to call for it under his budget for next fiscal year. He has managed to cut his office’s budget over the last few years. Some of the substantial reductions include closing the treasurer’s satellite offices throughout the state, reducing staff through attrition, cutting the vehicle fleet and reducing phone lines. The general fund budget for the treasurer's office in the current fiscal year is about $9 million. To call it a drop in the bucket of the overall General Revenue Funds budget would be an overstatement. While Rutherford’s cost-saving measures do seem to be effective for his office, many state agencies have made similar moves to cut costs. There are only so many cars, phone lines and employees you can get rid of and still do the business of state government. Agencies that provide social programs, such as Medicaid, must have offices throughout the state that applicants can reach. To bridge the revenue gap that will follow the sunset of the tax increase, it will take more than such nibbling around the edges of the budget.
Sen. Bill Brady pointed to recent pension reform legislation as a good start on tackling Illinois’ budget troubles. “It will save the taxpayers $190 billion,” he said.
Brady has his savings number wrong. In reality, the plan was originally estimated to save about $160 billion over 30 years. But new estimates from the retirement systems now peg the savings at about $145 billion. The new law will have to survive a court challenge to produce any savings.
Brady also said he would eliminate the Illinois State Board of Education.
Again, ISBE’s spending makes up a small fraction of overall education costs. Brady said he would create a department under the governor’s office to oversee education. Such a department would presumably have staff, need office space, phone lines, even a travel budget. So the spending now going to ISBE would not be totally eliminated. When former Gov. Rod Blagojevich proposed a similar idea, his department of education would have cost about 80 percent as much as ISBE did at the time. Brady said his idea is not just about the savings but would “end the bureaucratic red tape that harms our children’s educational opportunities every day.”
He failed to mention however, that most of the mandates imposed on schools are voted into law by the Illinois General Assembly.
Bruce Rauner said he would focus on fighting union bosses, who he says are driving up the cost of government operations. He said he wants to use creative negotiating tactics, such as those employed by former Indiana Republican Gov. Mitch Daniels.
Daniels put a merit pay system in place in Indiana and effectively ended collective bargaining for public employees through an executive order in 2005. He was able to do that because the collective bargaining provisions were originally put in place through a previous executive order in 1989. Indiana lawmakers voted to codify Daniels' move in 2011, so future governors would not be able to restore collective bargaining with their executive power. Daniels signed that legislation into law. “He used executive order and the power of the government office to stand up to the power of the government union bosses that control the state governments around the nation and are driving up costs and driving down productivity,” Rauner said. Since collective bargaining rights are written into Illinois law, such a move may not be so simple, or even possible, here.
Rauner, along with the other candidates, said he would find savings in the state’s Medicaid program, which he called “broken” and “corrupt” “Based on studies that have come to light recently, it looks like close to half of the enrollees in our Medicaid system aren’t entitled to receive the benefits they’re getting, based on the report so far.” As part of sweeping Medicaid changes passed last year, the state is checking on Medicaid recipients to make sure they are eligible to receive benefits. So far, 315,000 cases have been reviewed, and 40 percent of those were found to be ineligible. But the first cases being tested were ones that were suspected of not being qualified for benefits. The benefits in most of these cases were canceled because there was no response to the requests for verification. The department does not expect the number to remain that high as it continues the verification process. “The cancellation rate is expected to come down because the reviews started with cases that had been flagged for having a discrepancy,” said a statement from the department.
While much of what the Republican candidates said about the budget during last week's debate was true, or mostly true, none of the candidates has offered a comprehensive plan for how he would address the budget shortfalls that will come as the tax increase steps down.
To be fair, neither has presumptive Democratic candidate, Gov. Pat Quinn. So far, Quinn has refused to talk about whether he would support an extension of the tax increase. By law, Quinn is required to propose an FY 2015 budget that is based on current revenues. His budget address is scheduled for February 19.
If one of the Republican primary candidates ultimately wins the race for governor, he will face some challenging budget conditions. The temporary income tax increase, which was approved in 2011, will begin to sunset during the last half of next fiscal year. Projections from Gov. Pat Quinn’s budget office estimate that Illinois will have a $2 billion budget deficit by the end of Fiscal Year 2015 and $7.5 billion in unpaid bills.
During the Republican debate last week, GOP candidates shared some of the ideas and qualifications they would bring to the table when looking to address the state budget.
Sen. Kirk Dillard touted his experience working under former Republican Gov. Jim Edgar. “We inherited a $1 billion deficit in a recession and left a $1.5 billion surplus, all without an income tax increase,” Dillard said. He noted that during Edgar’s time in office, the state’s credit rating went up and the backlog of overdue bills was paid down.
It is true that Edgar’s administration started off with a budget deficit and left office with a budget surplus and paying the state’s bills on time. Edgar made some difficult budget choices, including cuts to Medicaid. The income tax did not increase. However, after being elected in 1990, Edgar made a temporary income tax hike permanent. He told Illinois Issues at the time that the cuts that would be needed to allow the increase to sunset would have been too deep. “There's no way you can make that amount of cuts without cutting into programs that I think everyone agrees are necessary.” Making the increase permanent was part of the platform Edgar ran on. "I won with everybody knowing my position. Nobody can be surprised on that one,” he said.
The budget recovery was also helped along by the economic boom of the mid-1990s. When Edgar took office, the country was in recession and Gross Domestic Product growth was nonexistent. By the time he left in 1999, GDP growth was almost 5 percent. Over the same period, the federal government went from a $269.3 billion deficit to a $125.6 billion surplus. Economic growth could go a long way toward improving the state’s current fiscal condition, but the kind of economic bubble the country experienced in the '90s is not likely to reoccur in the foreseeable future.
State Treasurer Dan Rutherford said he plans to conduct a performance review of all state agencies, similar to one he did when he entered his current office. Rutherford pointed to budget cuts he has made as treasurer. “I cut the budget of the state treasurer’s office by 2 percent, next fiscal year 3 percent and then 5 percent — a total of 10 percent. I’ve got the experience to do that,” he said.
Rutherford has not yet made that 5 percent cut but plans to call for it under his budget for next fiscal year. He has managed to cut his office’s budget over the last few years. Some of the substantial reductions include closing the treasurer’s satellite offices throughout the state, reducing staff through attrition, cutting the vehicle fleet and reducing phone lines. The general fund budget for the treasurer's office in the current fiscal year is about $9 million. To call it a drop in the bucket of the overall General Revenue Funds budget would be an overstatement. While Rutherford’s cost-saving measures do seem to be effective for his office, many state agencies have made similar moves to cut costs. There are only so many cars, phone lines and employees you can get rid of and still do the business of state government. Agencies that provide social programs, such as Medicaid, must have offices throughout the state that applicants can reach. To bridge the revenue gap that will follow the sunset of the tax increase, it will take more than such nibbling around the edges of the budget.
Sen. Bill Brady pointed to recent pension reform legislation as a good start on tackling Illinois’ budget troubles. “It will save the taxpayers $190 billion,” he said.
Brady has his savings number wrong. In reality, the plan was originally estimated to save about $160 billion over 30 years. But new estimates from the retirement systems now peg the savings at about $145 billion. The new law will have to survive a court challenge to produce any savings.
Brady also said he would eliminate the Illinois State Board of Education.
Again, ISBE’s spending makes up a small fraction of overall education costs. Brady said he would create a department under the governor’s office to oversee education. Such a department would presumably have staff, need office space, phone lines, even a travel budget. So the spending now going to ISBE would not be totally eliminated. When former Gov. Rod Blagojevich proposed a similar idea, his department of education would have cost about 80 percent as much as ISBE did at the time. Brady said his idea is not just about the savings but would “end the bureaucratic red tape that harms our children’s educational opportunities every day.”
He failed to mention however, that most of the mandates imposed on schools are voted into law by the Illinois General Assembly.
Bruce Rauner said he would focus on fighting union bosses, who he says are driving up the cost of government operations. He said he wants to use creative negotiating tactics, such as those employed by former Indiana Republican Gov. Mitch Daniels.
Daniels put a merit pay system in place in Indiana and effectively ended collective bargaining for public employees through an executive order in 2005. He was able to do that because the collective bargaining provisions were originally put in place through a previous executive order in 1989. Indiana lawmakers voted to codify Daniels' move in 2011, so future governors would not be able to restore collective bargaining with their executive power. Daniels signed that legislation into law. “He used executive order and the power of the government office to stand up to the power of the government union bosses that control the state governments around the nation and are driving up costs and driving down productivity,” Rauner said. Since collective bargaining rights are written into Illinois law, such a move may not be so simple, or even possible, here.
Rauner, along with the other candidates, said he would find savings in the state’s Medicaid program, which he called “broken” and “corrupt” “Based on studies that have come to light recently, it looks like close to half of the enrollees in our Medicaid system aren’t entitled to receive the benefits they’re getting, based on the report so far.” As part of sweeping Medicaid changes passed last year, the state is checking on Medicaid recipients to make sure they are eligible to receive benefits. So far, 315,000 cases have been reviewed, and 40 percent of those were found to be ineligible. But the first cases being tested were ones that were suspected of not being qualified for benefits. The benefits in most of these cases were canceled because there was no response to the requests for verification. The department does not expect the number to remain that high as it continues the verification process. “The cancellation rate is expected to come down because the reviews started with cases that had been flagged for having a discrepancy,” said a statement from the department.
While much of what the Republican candidates said about the budget during last week's debate was true, or mostly true, none of the candidates has offered a comprehensive plan for how he would address the budget shortfalls that will come as the tax increase steps down.
To be fair, neither has presumptive Democratic candidate, Gov. Pat Quinn. So far, Quinn has refused to talk about whether he would support an extension of the tax increase. By law, Quinn is required to propose an FY 2015 budget that is based on current revenues. His budget address is scheduled for February 19.
Thursday, January 23, 2014
Republican candidates retract their claws for Peoria debate
By Jamey Dunn
Republican candidates for governor toned down the personal attacks and played up their experience and electability during a primary election debate this evening.
When the four candidates came together last week, they spent much of the time going after each other. Tonight’s debate, held in Peoria, was more subdued. The candidates covered a lot of old ground, such as questions over the minimum wage. They also fleshed out some of their policy visions, which included eliminating the Illinois State Board of Education and cutting state funding for Amtrak train service.
Venture capitalist Bruce Rauner focused on what he says are his four priorities: improving the economy, cutting government spending, reforming education and imposing term limits on state elected officials. In addition to running for governor, Rauner is backing a push to put a constitutional amendment on the general election ballot that would limit legislators to eight years in office.
Rauner said that if elected, he would advocate for moving state workers into 401(k)-type retirement plans. He also said workers should receive merit pay for increasing productivity and meeting goals. He said he thinks former Indiana Republican Gov. Mitch Daniels was the “the best governor in America.” Rauner said: “He brought 30 superstars from the Indiana business community to the state capital, allocated responsibility and had them oversee the government. I will do exactly the same thing here.”
Daniels put a merit pay system in place in Indiana and effectively ended collective bargaining for public employees through an executive order in 2005. He was able to do that because the collective bargaining provisions were originally put in place through a previous executive order in 1989. Indiana lawmakers voted to codify Daniels' move in 2011, so future governors would not be able to restore collective bargaining with their executive power. Daniels signed that legislation into law.
“He used executive order and the power of the government office to stand up to the power of the government union bosses that control the state governments around the nation and are driving up costs and driving down productivity,” Rauner said. Since collective bargaining rights are written into Illinois law, such a move may not be so simple, or even possible, here.
While Rauner said the recent pension reform legislation was marginal and called it a “Band-Aid on an open wound,” Sen. Bill Brady said his vote in favor of the bill illustrates his ability to make difficult decisions. “I know what it’s like to take the tough vote. That was meaningful. You know, it wasn’t easy to tell people who paid in the system, we’re going to cut the way their pension grows.” But Brady said it would save taxpayers money and ensure that benefits are there for retirees in the future.
When asked what else he might do to cut government spending, Brady, who is from Bloomington, said he would eliminate the Illinois State Board of Education. “Partly because it saves money. But mostly because it will end the bureaucratic red tape that harms our children’s educational opportunities every day,” he said of the proposal. Brady said he would instead form a smaller education agency that would work directly under the governor. Former Democratic Gov. Rod Blagojevich had a similar plan. While he was able to reduce the size of the workforce at ISBE and other state agencies, he was never able to fully eliminate the agency.
Brady did take some digs at his fellow candidates. But he did so while rarely naming names and in a way that would have likely passed by the casual political observer. He did call out Rauner and Sen. Kirk Dillard on their stances on the minimum wage. Brady said the debate over the minimum wage that has gone on during the primary campaign has “damaged the brand’ of the Republican Party in the state. “Even businesses don’t want to see a cut in the minimum wage. They don’t want to see their employees' morale reduced and pay cut.” He added that the state cannot afford to increase the minimum wage.
Rauner, who is from Winnetka, has said in the past that he wanted to lower the minimum wage. He later reversed that statement, saying he would support an increase under certain circumstances. “It’s a double-edged sword ... and we need to be very thoughtful and cautious in our consideration of it,” he said during tonight’s debate. “Raising the minimum wage can help struggling families. However, raising the minimum wage can hurt small-business owners and can cause them to leave or close their doors or replace workers with machines. And that can end up hurting the very struggling families, struggling workers, it's designed to help.” He said he would back an increase if it came coupled with “comprehensive pro-business reforms,” such as worker's compensation changes and tax reforms.
Dillard said he does not support an increase to the minimum wage. However, he said that local marketplaces should “set the upper limits of the minimum wage.” He said, “It is clearly needed to be higher in places like Chicago than it would be in rural Tennessee.” Dillard added, “No one should be raising a family on a minimum wage.” He said elected officials should instead work to ensure that better paying jobs are available.
Gov. Pat Quinn, the presumptive Democratic nominee for governor, supports increasing the minimum wage.
State Treasurer Dan Rutherford agreed with Dillard. “We don’t want to have this be the base to which people try to aspire to, just to be at minimum wage.” Rutherford said he does not think the minimum wage can be increased now but said he is not closed off to the idea of discussing an increase in the future. “The idea of where we go in the future on the minimum wage is going to be contingent upon many other factors out there: where we are in the growth of this economy, where we are in regards to other business factors going on out there, where we are in regards to other taxes on our businesses.”
Generally Rutherford, who is from Chenoa, was the one candidate who discussed leaving room for negotiating most major issues if he becomes governor. He said he does not want to see the current income tax increase, which is due to begin stepping down in 2015, extended. However, he said he would come to the office with “everything on the table” so he could try to hammer out some major reforms. On the flip side, Brady vowed to veto any extension of the increase if he ends up behind the governor’s desk.
Rutherford did seem certain of at least one thing: He is unhappy with Amtrak. “There’s too many times you’re sitting there in a cold gravel parking lot waiting for a train that is four hours late,” he said when asked about state funding for the train service. Rutherford said that unless Amtrak could make its trains run on time, he does not support the state funding it.
When it came to making the case for their ability to win the general election, Rutherford was the most animated. He said he is a moderate who has won a statewide election and can reach out to diverse communities of voters. “I’m a reasonable Republican," Rutherford said. “I am not a Republican with horns and a tail.”
Brady said he could build off the name recognition he created with voters during his failed general election run against Quinn in 2010. He said his message could resonate with voters of all political stripes. “I don’t care if you’re an independent, Democrat or Republican, you can’t be happy with the highest unemployment [rate] practically in the nation,” Brady said of this race, “We’ll finish the job this time.”
Dillard, who is from Hinsdale, said his suburban connections, along with his ties to downstate -- he attended Western Illinois University and was married in central Illinois -- make him the ideal candidate. He also played up his executive experience as former Gov. Jim Edgar's chief of staff. Dillard said he is the only GOP hopeful who can win the general election. “I can guarantee you that all four of us up here us agree on one thing, and that’s that Pat Quinn needs to go, and that for too long, this state’s been controlled by one party and one city. We need to restore the political balance of Illinois.”
In the one of the most direct attacks during the debate, Dillard said that the negative press Rauner has begun to receive makes him a risky candidate. Most recently, court documents have surfaced tying Rauner’s former company, GTCR Golder Rauner, to neglect cases in nursing homes the company had invested in. In once case, a Florida jury awarded a $1 billion settlement to the family of Arlene Townsend, who died in one of the nursing homes at 69 years old after suffering more than a dozen falls and a hip fracture that went untreated for a week. “The drip, drip, drip, drip of stories day in and day out about Mr. Rauner’s business dealings and his history of pay-to-play activity will wash away our chances as a party to ever get rid of Pat Quinn in November,” Dillard said.
Rauner did not respond to Dillard’s statement. Instead, he emphasized his business pedigree without going into the specifics of his business dealings and alluded to his vast wealth as a positive. “I’m not out looking for political career. I don’t need a job. I can’t be bought, intimidated. bribed, influenced. I can just stand up and fight for taxpayers, schoolchildren, homeowners, small-business owners,” he said. “I am not the problem. Everyone that I am running against has been part of the problem for decades.”
Republican candidates for governor toned down the personal attacks and played up their experience and electability during a primary election debate this evening.
When the four candidates came together last week, they spent much of the time going after each other. Tonight’s debate, held in Peoria, was more subdued. The candidates covered a lot of old ground, such as questions over the minimum wage. They also fleshed out some of their policy visions, which included eliminating the Illinois State Board of Education and cutting state funding for Amtrak train service.
Venture capitalist Bruce Rauner focused on what he says are his four priorities: improving the economy, cutting government spending, reforming education and imposing term limits on state elected officials. In addition to running for governor, Rauner is backing a push to put a constitutional amendment on the general election ballot that would limit legislators to eight years in office.
Rauner said that if elected, he would advocate for moving state workers into 401(k)-type retirement plans. He also said workers should receive merit pay for increasing productivity and meeting goals. He said he thinks former Indiana Republican Gov. Mitch Daniels was the “the best governor in America.” Rauner said: “He brought 30 superstars from the Indiana business community to the state capital, allocated responsibility and had them oversee the government. I will do exactly the same thing here.”
Daniels put a merit pay system in place in Indiana and effectively ended collective bargaining for public employees through an executive order in 2005. He was able to do that because the collective bargaining provisions were originally put in place through a previous executive order in 1989. Indiana lawmakers voted to codify Daniels' move in 2011, so future governors would not be able to restore collective bargaining with their executive power. Daniels signed that legislation into law.
“He used executive order and the power of the government office to stand up to the power of the government union bosses that control the state governments around the nation and are driving up costs and driving down productivity,” Rauner said. Since collective bargaining rights are written into Illinois law, such a move may not be so simple, or even possible, here.
While Rauner said the recent pension reform legislation was marginal and called it a “Band-Aid on an open wound,” Sen. Bill Brady said his vote in favor of the bill illustrates his ability to make difficult decisions. “I know what it’s like to take the tough vote. That was meaningful. You know, it wasn’t easy to tell people who paid in the system, we’re going to cut the way their pension grows.” But Brady said it would save taxpayers money and ensure that benefits are there for retirees in the future.
When asked what else he might do to cut government spending, Brady, who is from Bloomington, said he would eliminate the Illinois State Board of Education. “Partly because it saves money. But mostly because it will end the bureaucratic red tape that harms our children’s educational opportunities every day,” he said of the proposal. Brady said he would instead form a smaller education agency that would work directly under the governor. Former Democratic Gov. Rod Blagojevich had a similar plan. While he was able to reduce the size of the workforce at ISBE and other state agencies, he was never able to fully eliminate the agency.
Brady did take some digs at his fellow candidates. But he did so while rarely naming names and in a way that would have likely passed by the casual political observer. He did call out Rauner and Sen. Kirk Dillard on their stances on the minimum wage. Brady said the debate over the minimum wage that has gone on during the primary campaign has “damaged the brand’ of the Republican Party in the state. “Even businesses don’t want to see a cut in the minimum wage. They don’t want to see their employees' morale reduced and pay cut.” He added that the state cannot afford to increase the minimum wage.
Rauner, who is from Winnetka, has said in the past that he wanted to lower the minimum wage. He later reversed that statement, saying he would support an increase under certain circumstances. “It’s a double-edged sword ... and we need to be very thoughtful and cautious in our consideration of it,” he said during tonight’s debate. “Raising the minimum wage can help struggling families. However, raising the minimum wage can hurt small-business owners and can cause them to leave or close their doors or replace workers with machines. And that can end up hurting the very struggling families, struggling workers, it's designed to help.” He said he would back an increase if it came coupled with “comprehensive pro-business reforms,” such as worker's compensation changes and tax reforms.
Dillard said he does not support an increase to the minimum wage. However, he said that local marketplaces should “set the upper limits of the minimum wage.” He said, “It is clearly needed to be higher in places like Chicago than it would be in rural Tennessee.” Dillard added, “No one should be raising a family on a minimum wage.” He said elected officials should instead work to ensure that better paying jobs are available.
Gov. Pat Quinn, the presumptive Democratic nominee for governor, supports increasing the minimum wage.
State Treasurer Dan Rutherford agreed with Dillard. “We don’t want to have this be the base to which people try to aspire to, just to be at minimum wage.” Rutherford said he does not think the minimum wage can be increased now but said he is not closed off to the idea of discussing an increase in the future. “The idea of where we go in the future on the minimum wage is going to be contingent upon many other factors out there: where we are in the growth of this economy, where we are in regards to other business factors going on out there, where we are in regards to other taxes on our businesses.”
Generally Rutherford, who is from Chenoa, was the one candidate who discussed leaving room for negotiating most major issues if he becomes governor. He said he does not want to see the current income tax increase, which is due to begin stepping down in 2015, extended. However, he said he would come to the office with “everything on the table” so he could try to hammer out some major reforms. On the flip side, Brady vowed to veto any extension of the increase if he ends up behind the governor’s desk.
Rutherford did seem certain of at least one thing: He is unhappy with Amtrak. “There’s too many times you’re sitting there in a cold gravel parking lot waiting for a train that is four hours late,” he said when asked about state funding for the train service. Rutherford said that unless Amtrak could make its trains run on time, he does not support the state funding it.
When it came to making the case for their ability to win the general election, Rutherford was the most animated. He said he is a moderate who has won a statewide election and can reach out to diverse communities of voters. “I’m a reasonable Republican," Rutherford said. “I am not a Republican with horns and a tail.”
Brady said he could build off the name recognition he created with voters during his failed general election run against Quinn in 2010. He said his message could resonate with voters of all political stripes. “I don’t care if you’re an independent, Democrat or Republican, you can’t be happy with the highest unemployment [rate] practically in the nation,” Brady said of this race, “We’ll finish the job this time.”
Dillard, who is from Hinsdale, said his suburban connections, along with his ties to downstate -- he attended Western Illinois University and was married in central Illinois -- make him the ideal candidate. He also played up his executive experience as former Gov. Jim Edgar's chief of staff. Dillard said he is the only GOP hopeful who can win the general election. “I can guarantee you that all four of us up here us agree on one thing, and that’s that Pat Quinn needs to go, and that for too long, this state’s been controlled by one party and one city. We need to restore the political balance of Illinois.”
In the one of the most direct attacks during the debate, Dillard said that the negative press Rauner has begun to receive makes him a risky candidate. Most recently, court documents have surfaced tying Rauner’s former company, GTCR Golder Rauner, to neglect cases in nursing homes the company had invested in. In once case, a Florida jury awarded a $1 billion settlement to the family of Arlene Townsend, who died in one of the nursing homes at 69 years old after suffering more than a dozen falls and a hip fracture that went untreated for a week. “The drip, drip, drip, drip of stories day in and day out about Mr. Rauner’s business dealings and his history of pay-to-play activity will wash away our chances as a party to ever get rid of Pat Quinn in November,” Dillard said.
Rauner did not respond to Dillard’s statement. Instead, he emphasized his business pedigree without going into the specifics of his business dealings and alluded to his vast wealth as a positive. “I’m not out looking for political career. I don’t need a job. I can’t be bought, intimidated. bribed, influenced. I can just stand up and fight for taxpayers, schoolchildren, homeowners, small-business owners,” he said. “I am not the problem. Everyone that I am running against has been part of the problem for decades.”
Tuesday, December 10, 2013
Little change for state's bond ratings so far
By Jamey Dunn
The major bond rating agencies are having mixed reactions to changes to Illinois' public employee pension systems that were approved and signed into law last week.
Standard & Poor’s rating services upgraded its outlook on the state’s borrowing from “negative” to “developing.” However, the state retains its A- rating from the agency. According to S&P, the new outlook means that the agency could raise or lower the state’s rating in the next two years. “The change reflects the consensus reached on pension reform, which we believe could contribute to a sustainable path to fiscal stability,” S&P credit analyst Robin Prunty said in a prepared statement. “Although we view the consensus achieved by Illinois on this difficult issue as positive from a credit standpoint, the developing outlook reflects the implementation risk — legal and budgetary — associated with various provisions of the pension reform, as well as the overall structural budget challenges facing the state.” The new outlook comes as Illinois is planning to sell $350 million in general obligation bonds later this week.
Gov. Pat Quinn highlighted the change as a positive byproduct of the pension cuts that lawmakers approved and he signed into law. “I am pleased the ratings agencies are recognizing that Illinois is moving in the right direction,” Gov. Quinn said in a prepared statement. “As I’ve always made clear, one of the many reasons to resolve Illinois’ pension crisis was the negative impact it had on our bond rating, which cost taxpayers more money to finance critical repairs and improvements to roads, bridges and schools. This improved outlook will be the first of many positive developments towards a revitalized and stronger Illinois.”
But a change in outlook does not constitute much positive forward motion for the state, especially given how much of a beating Illinois’ credit has taken in recent years. The two other major rating agencies, Moody’s and Fitch Ratings, both issued positive statements about the new law. But neither has opted to adjust the state’s rating or outlook. Both said they would analyze the law to determine the extent of its fiscal impact. Supporters say it will save $160 billion and fully fund the pension systems by 2043.
Public employee unions are expected to bring a lawsuit against the state because they say the pension cuts violate the state’s Constitution, which contains an explicit protection for retirement benefits. “[Senate Bill 1] won’t save a penny. The bill is unconstitutional, so it’s savings are an illusion. It’s only going to cost the state time and money and kick the can down the road all over again,” said a statement from the We Are One Union coalition. Moody’s said in a brief analysis issued after the bill passed last week, that it would be able to factor the changes in the new law into the state’s credit rating if and when they are upheld by the courts.
All three rating agencies acknowledge that the state is facing other budget issues besides pension reform, including the loss of billions of dollars of revenue when the temporary income tax increase sunsets. The tax rate begins stepping down in 2015. Fitch’s said that the state must address some of its budget challenges to hang on to its current rating, which is the lowest in the country. “In addition to action on pensions, maintenance of the rating will require timely action on a more permanent budget solution to the structural mismatch between spending and revenues in advance of the expiration of temporary tax increases.”
The major bond rating agencies are having mixed reactions to changes to Illinois' public employee pension systems that were approved and signed into law last week.
Standard & Poor’s rating services upgraded its outlook on the state’s borrowing from “negative” to “developing.” However, the state retains its A- rating from the agency. According to S&P, the new outlook means that the agency could raise or lower the state’s rating in the next two years. “The change reflects the consensus reached on pension reform, which we believe could contribute to a sustainable path to fiscal stability,” S&P credit analyst Robin Prunty said in a prepared statement. “Although we view the consensus achieved by Illinois on this difficult issue as positive from a credit standpoint, the developing outlook reflects the implementation risk — legal and budgetary — associated with various provisions of the pension reform, as well as the overall structural budget challenges facing the state.” The new outlook comes as Illinois is planning to sell $350 million in general obligation bonds later this week.
Gov. Pat Quinn highlighted the change as a positive byproduct of the pension cuts that lawmakers approved and he signed into law. “I am pleased the ratings agencies are recognizing that Illinois is moving in the right direction,” Gov. Quinn said in a prepared statement. “As I’ve always made clear, one of the many reasons to resolve Illinois’ pension crisis was the negative impact it had on our bond rating, which cost taxpayers more money to finance critical repairs and improvements to roads, bridges and schools. This improved outlook will be the first of many positive developments towards a revitalized and stronger Illinois.”
But a change in outlook does not constitute much positive forward motion for the state, especially given how much of a beating Illinois’ credit has taken in recent years. The two other major rating agencies, Moody’s and Fitch Ratings, both issued positive statements about the new law. But neither has opted to adjust the state’s rating or outlook. Both said they would analyze the law to determine the extent of its fiscal impact. Supporters say it will save $160 billion and fully fund the pension systems by 2043.
Public employee unions are expected to bring a lawsuit against the state because they say the pension cuts violate the state’s Constitution, which contains an explicit protection for retirement benefits. “[Senate Bill 1] won’t save a penny. The bill is unconstitutional, so it’s savings are an illusion. It’s only going to cost the state time and money and kick the can down the road all over again,” said a statement from the We Are One Union coalition. Moody’s said in a brief analysis issued after the bill passed last week, that it would be able to factor the changes in the new law into the state’s credit rating if and when they are upheld by the courts.
All three rating agencies acknowledge that the state is facing other budget issues besides pension reform, including the loss of billions of dollars of revenue when the temporary income tax increase sunsets. The tax rate begins stepping down in 2015. Fitch’s said that the state must address some of its budget challenges to hang on to its current rating, which is the lowest in the country. “In addition to action on pensions, maintenance of the rating will require timely action on a more permanent budget solution to the structural mismatch between spending and revenues in advance of the expiration of temporary tax increases.”
Tuesday, December 03, 2013
Legislators approve changes to state's public pension systems
By Jamey Dunn
After years of debate and several failed attempts, the Illinois General Assembly passed changes today to the state’s pension systems for public employees.
After holding simultaneous floor debates, the Illinois House and Senate voted within minutes of each other to approve a new version of Senate Bill 1. The plan is the product of a special conference committee on pensions and negotiations among legislative leaders. Gov. Pat Quinn said he plans to sign the bill, which he called a “bipartisan victory for the people of Illinois.” Quinn, who voluntarily stopped taking pay until the bill was passed, said that after he signs it, he will look into picking up his back checks. “Today, this day, will always go down in history as the day that the people of Illinois through their elected representatives and senators took action for the future. The people have won. We have all won.”
The proposal is projected to save $160 billion over 30 years and fully fund the pension systems, which are currently underfunded by an estimated $100 billion, by 2043. It would reduce annual cost of living adjustments (COLAs) for current and future retirees. The bill would apply differently to employees and retirees, depending on how long they worked and which retirement system they belong to. The current COLAs are 3 percent compounding interest. Under the new SB1, the COLA would be determined by 3 percent of pension benefits or 3 percent of the product of years served multiplied by $800 for state employees or $1,000 for teachers and university employees. The COLA would be based on whichever number result is smaller. The numbers used in the formula, $800 and $1,000, would increase along with the Consumer Price Index. Some annual COLAs would be deferred for current employees upon retirement. The number of years an employee must skip the COLA is contingent of years of service.
Employees younger than 46 also would have to retire later. For each year an employee is younger than 46, an additional four months would be tacked onto the time he or she would have to work to receive full benefits. The proposal would also cap pensionable salary at $109,971, but that number would increase annually based on inflation.
The bill would reduce the employee contribution toward retirement benefits by one percentage point and allow the systems to sue the state if it does not make its required payment. However, lawmakers could vote to change the payment schedule and reduce the annual payment. The state would contribute 10 percent of the savings from the plan toward the unfunded liability starting in 2015. The state would also contribute an additional $1 billion after borrowing that was used to make pension payments in the past is paid off.
House Speaker Michael Madigan made his goals for pension changes clear during floor debate today. “We’re here today discussing the issue because of the cost, and what we want to do is get cost savings as a result of this bill.” Madigan said he did not call a union-backed proposal, Senate Bill 2404, for a floor vote in the House because it would not have produced enough savings. He said that the House had set the “high bar of achievement” when it passed an earlier version of SB 1 last spring. That proposal would have saved an estimated $163 billion. The plan failed to gain the needed votes to pass in the Senate. Madigan said that he was “severely criticized” for not allowing the SB 2404 to to be called in the House after it passed in the Senate. But he said today that he did not call it because he wanted to “shape the issue” and give people time to understand the difference in cost savings between the bills. He also wanted lawmakers “to understand that our goal is to achieve the most cost savings feasible as a result of the legislation.”
Madigan said that pensions had become “too rich” to be sustained, and that he and Republican leaders hoped to keep the savings from any new proposal near to those that would have been achieved by the previous SB 1. Madigan also said today that he believes COLAs, the biggest cost driver among the pension benefits, are not protected by the state’s Constitution. The speaker said that a smaller portion of the savings in the new version of SB 1 would be derived from benefit cuts. Under the old bill, almost two thirds of the savings were reductions, but under the new plan, the unfunded liability reduction would be split about half and half between cuts and additional funding.
Opponents argued that the issue is about more than the bottom line. “If this were only about picking the bill that saves the most money, we’d all pick the bill that saves the most money,” said Sen. Toi Hutchinson, an Olympia Fields Democrat. “It’s about taking people’s retirement benefits right when they need them the most, after they’ve worked hard and earned those benefits.”
Aurora Democratic Sen. Linda Holmes, the only member of the conference committee who did not support the bill, said that the plan was akin to theft. “I don’t know how there’s one person here with any understanding of business, with any understanding of contracts, who can sit there and say what we’re doing is right. This is wrong.” Homes and Hutchinson both said that the bill violates the state’s constitutional protection of pension benefits. That provision says: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
Hutchinson said of the constitutionality of SB 1: “I’m not a constitutional lawyer. I’m really not. But I can read, and it’s in the Constitution.”
Supporters of the bill say that the reduction in employee contributions and the funding guarantee offer a consideration in exchange for the benefits that would be reduced. The idea behind their argument is that under contract law, a benefit could be reduced if something else of value is offered as a consideration for the reduction. However many argue — including Senate President John Cullerton at one time — that employees would have to agree to the swap for it to pass muster. Cullerton’s SB 2404 would have offered employees choices between COLA reductions or state-subsidized health care in retirement.
Not all who voted in favor of the law today say they are certain that the bill is constitutional. However, they say that the crisis is too big to ignore. “The legislative process involves compromise. When it comes to pension reform, a compromise was found at the intersection of policy and political feasibility. The General Assembly stumbled at this intersection for years. Now, it’s time to move forward and allow the courts to rule on the constitutionality of our approach,” Cullerton said in a prepared statement.
Chicago Democratic Sen. Kwame Raoul, who was chair of the conference committee, said that if the Illinois Supreme Court did strike down the bill, the justices would likely give some indication in their opinion of what steps they think lawmakers could take on pension changes. “We have the worst unfunded liability in the United States of America, and we can’t continue to be cemented into a stalemate,” he said. “We cannot continue to be the embarrassment of the nation. We must act to steer our ship in the right direction.”
Madigan said he thinks the courts will uphold the bill. “Something’s got to be done. Something’s got to be done. We can’t go on dedicating so much of our resources to this one sector of pensions,” he said. The changes will apply to four of the five state pension systems: teachers, university employees, legislators and state government employees. Judges' pensions will not be affected under SB 1.
Union officials say SB 1 goes too far and is unconstitutional. They maintain that SB 2404 was the best choice. “There’s no victory in a bill that will get tied up in court, no victory in harming the lives of teachers and firefighters and nurses to a far greater degree than is just and necessary,” said Dan Montgomery, president of the Illinois Federation of Teachers. “We feel it's blatantly unconstitutional, and so claiming it saves $160 billion is a disturbing illusion. It will save no money at all.” There is some debate about whether opponents will have to wait until the law goes into effect in June before they can file suit. But at least one union leader indicated today that a suit could come sooner than June. “We would have to wait until the governor signs it, and then we can file a suit at any time. And then we’ll do it when we’re ready and when it’s most appropriate,” Montgomery said.
Other opponents said that the state should completely scrap its defined benefits system and move employees to a 401(k)-type plan for future benefits. Advocates for such plans argue that only employee benefits earned to date are protected by the Constitution. Rep. Thomas Morrison, a Palatine Republican, said that because the state has the worst-funded pension system in the nation, lawmakers have go to “go big” on reforms to solve the problem.
Senate Minority Leader Christine Radogno said she is aware of the human toll that cutting pensions would take. “We're very cognizant of the fact that this is not just a numbers issue, but it’s a people issue as well.” During negotiations, she pushed for a provision that would allow low-income retirees to keep their current COLAs until their pensions reached $30,000. But she said that that the changes must be made to address the state’s fiscal problems. She said that if the pension issue is addressed, other concerns such as the state’s overdue bills, will be easier to tackle. She also said that making the systems solvent should provide employees and retirees some piece of mind, even if they are upset that their pensions will be reduced. “They will be able to count on the benefits once we pass this bill,” she said on the Senate floor.
Several opponents on the Republican side argued only that lawmakers should slow down the process. They said there was not enough time for them to fully understand the more-than-300-page bill or for the public to grasp what was at stake. Republican gubernatorial candidate Sen. Kirk Dillard of Hinsdale was among them.
The proposal has the support of all four legislative leaders and Gov. Pat Quinn. Nonetheless. speculation that it might not pass was still floating around earlier today. (Those assessments may have been caution from supporters and wishful thinking from opponents.) Two other Republican candidates for governor, Illinois Treasurer Dan Rutherford and venture capitalist Bruce Rauner, both opposed the measure in the lead-up to the vote. Republican U.S. Sen. Mark Kirk also panned the bill, dismissing it as gimmicks that would not solve the problem.
Republican legislative leaders acknowledged that the political hubbub made their attempts to get votes for SB 1 more difficult. Radogno said she was glad that 10 members of her 18-member caucus voted in favor of the bill. “That’s more than half. I’m very pleased with it. It was a contentious vote,” Radogno said. “The caucus was a microcosm of the opposition that we heard outside. You had the folks that were very much from the union districts and were not going to be for the pension reform no matter what. And then you had people that were very ideological, saying that this isn’t good enough; we ought to just not do anything and let chaos reign and then we can come in and do something better.” New House Minority Leader Jim Durkin said that his vote count changed throughout the day. He said that the influence from people such as Rauner, as well as lobbying from union members, probably played a role. But he said that getting the vote done now was likely key to its passage. “I quite frankly believed that if we did not pass a bill today, that we would not see one next year because then it would get caught up in the governor’s election and all the drama that goes into it every four years.”
Madigan, who is known for delivering votes at crunch time, said it wasn’t easy. “Well, this was difficult because of the strength of the opposition and the intensity of the calls and contacts generated by organized labor among the Democrats. On the Republican side, their problem apparently was some of the gubernatorial candidates thinking about the campaign rather than the seriousness of the issue.”
Northbrook Democratic Rep. Elaine Nekritz, who has been working on the pension issue for more than two years, said that today’s vote might be the first in a series of bills to address underfunded pension systems. “I think that this will free up a lot of energy and capacity in the General Assembly to start focusing on the needs of the city [of Chicago] and they are significant and in may ways more immediate than the state’s need in terms of addressing the shortfalls in their pensions systems.”
Chicago Mayor Rahm Emanuel came to Springfield in 2012 and appealed to lawmakers for changes to the city’s pension systems. Many other municipalities are also struggling with underfunded pension systems. “There are police and fire pension systems around this state that are funded in the 10 [percent] to 20[percent] to 25 percent range that are very much at risk of being insolvent. Our work on pensions is by no means done. But this [vote] will let a lot of air back in the room to start addressing the other systems,” Nekritz said. Cullerton agreed. “Pension reform isn’t done. I am committed to building on our momentum and providing relief for our local communities facing similar problems. Specifically, it is critical that we turn our focus to the financial crisis facing the Chicago Public Schools’ pension system. I look forward to working with all leaders on this critical issue.”
After years of debate and several failed attempts, the Illinois General Assembly passed changes today to the state’s pension systems for public employees.
After holding simultaneous floor debates, the Illinois House and Senate voted within minutes of each other to approve a new version of Senate Bill 1. The plan is the product of a special conference committee on pensions and negotiations among legislative leaders. Gov. Pat Quinn said he plans to sign the bill, which he called a “bipartisan victory for the people of Illinois.” Quinn, who voluntarily stopped taking pay until the bill was passed, said that after he signs it, he will look into picking up his back checks. “Today, this day, will always go down in history as the day that the people of Illinois through their elected representatives and senators took action for the future. The people have won. We have all won.”
The proposal is projected to save $160 billion over 30 years and fully fund the pension systems, which are currently underfunded by an estimated $100 billion, by 2043. It would reduce annual cost of living adjustments (COLAs) for current and future retirees. The bill would apply differently to employees and retirees, depending on how long they worked and which retirement system they belong to. The current COLAs are 3 percent compounding interest. Under the new SB1, the COLA would be determined by 3 percent of pension benefits or 3 percent of the product of years served multiplied by $800 for state employees or $1,000 for teachers and university employees. The COLA would be based on whichever number result is smaller. The numbers used in the formula, $800 and $1,000, would increase along with the Consumer Price Index. Some annual COLAs would be deferred for current employees upon retirement. The number of years an employee must skip the COLA is contingent of years of service.
Employees younger than 46 also would have to retire later. For each year an employee is younger than 46, an additional four months would be tacked onto the time he or she would have to work to receive full benefits. The proposal would also cap pensionable salary at $109,971, but that number would increase annually based on inflation.
The bill would reduce the employee contribution toward retirement benefits by one percentage point and allow the systems to sue the state if it does not make its required payment. However, lawmakers could vote to change the payment schedule and reduce the annual payment. The state would contribute 10 percent of the savings from the plan toward the unfunded liability starting in 2015. The state would also contribute an additional $1 billion after borrowing that was used to make pension payments in the past is paid off.
House Speaker Michael Madigan made his goals for pension changes clear during floor debate today. “We’re here today discussing the issue because of the cost, and what we want to do is get cost savings as a result of this bill.” Madigan said he did not call a union-backed proposal, Senate Bill 2404, for a floor vote in the House because it would not have produced enough savings. He said that the House had set the “high bar of achievement” when it passed an earlier version of SB 1 last spring. That proposal would have saved an estimated $163 billion. The plan failed to gain the needed votes to pass in the Senate. Madigan said that he was “severely criticized” for not allowing the SB 2404 to to be called in the House after it passed in the Senate. But he said today that he did not call it because he wanted to “shape the issue” and give people time to understand the difference in cost savings between the bills. He also wanted lawmakers “to understand that our goal is to achieve the most cost savings feasible as a result of the legislation.”
Madigan said that pensions had become “too rich” to be sustained, and that he and Republican leaders hoped to keep the savings from any new proposal near to those that would have been achieved by the previous SB 1. Madigan also said today that he believes COLAs, the biggest cost driver among the pension benefits, are not protected by the state’s Constitution. The speaker said that a smaller portion of the savings in the new version of SB 1 would be derived from benefit cuts. Under the old bill, almost two thirds of the savings were reductions, but under the new plan, the unfunded liability reduction would be split about half and half between cuts and additional funding.
Opponents argued that the issue is about more than the bottom line. “If this were only about picking the bill that saves the most money, we’d all pick the bill that saves the most money,” said Sen. Toi Hutchinson, an Olympia Fields Democrat. “It’s about taking people’s retirement benefits right when they need them the most, after they’ve worked hard and earned those benefits.”
Aurora Democratic Sen. Linda Holmes, the only member of the conference committee who did not support the bill, said that the plan was akin to theft. “I don’t know how there’s one person here with any understanding of business, with any understanding of contracts, who can sit there and say what we’re doing is right. This is wrong.” Homes and Hutchinson both said that the bill violates the state’s constitutional protection of pension benefits. That provision says: “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
Hutchinson said of the constitutionality of SB 1: “I’m not a constitutional lawyer. I’m really not. But I can read, and it’s in the Constitution.”
Supporters of the bill say that the reduction in employee contributions and the funding guarantee offer a consideration in exchange for the benefits that would be reduced. The idea behind their argument is that under contract law, a benefit could be reduced if something else of value is offered as a consideration for the reduction. However many argue — including Senate President John Cullerton at one time — that employees would have to agree to the swap for it to pass muster. Cullerton’s SB 2404 would have offered employees choices between COLA reductions or state-subsidized health care in retirement.
Not all who voted in favor of the law today say they are certain that the bill is constitutional. However, they say that the crisis is too big to ignore. “The legislative process involves compromise. When it comes to pension reform, a compromise was found at the intersection of policy and political feasibility. The General Assembly stumbled at this intersection for years. Now, it’s time to move forward and allow the courts to rule on the constitutionality of our approach,” Cullerton said in a prepared statement.
Chicago Democratic Sen. Kwame Raoul, who was chair of the conference committee, said that if the Illinois Supreme Court did strike down the bill, the justices would likely give some indication in their opinion of what steps they think lawmakers could take on pension changes. “We have the worst unfunded liability in the United States of America, and we can’t continue to be cemented into a stalemate,” he said. “We cannot continue to be the embarrassment of the nation. We must act to steer our ship in the right direction.”
Madigan said he thinks the courts will uphold the bill. “Something’s got to be done. Something’s got to be done. We can’t go on dedicating so much of our resources to this one sector of pensions,” he said. The changes will apply to four of the five state pension systems: teachers, university employees, legislators and state government employees. Judges' pensions will not be affected under SB 1.
Union officials say SB 1 goes too far and is unconstitutional. They maintain that SB 2404 was the best choice. “There’s no victory in a bill that will get tied up in court, no victory in harming the lives of teachers and firefighters and nurses to a far greater degree than is just and necessary,” said Dan Montgomery, president of the Illinois Federation of Teachers. “We feel it's blatantly unconstitutional, and so claiming it saves $160 billion is a disturbing illusion. It will save no money at all.” There is some debate about whether opponents will have to wait until the law goes into effect in June before they can file suit. But at least one union leader indicated today that a suit could come sooner than June. “We would have to wait until the governor signs it, and then we can file a suit at any time. And then we’ll do it when we’re ready and when it’s most appropriate,” Montgomery said.
Other opponents said that the state should completely scrap its defined benefits system and move employees to a 401(k)-type plan for future benefits. Advocates for such plans argue that only employee benefits earned to date are protected by the Constitution. Rep. Thomas Morrison, a Palatine Republican, said that because the state has the worst-funded pension system in the nation, lawmakers have go to “go big” on reforms to solve the problem.
Senate Minority Leader Christine Radogno said she is aware of the human toll that cutting pensions would take. “We're very cognizant of the fact that this is not just a numbers issue, but it’s a people issue as well.” During negotiations, she pushed for a provision that would allow low-income retirees to keep their current COLAs until their pensions reached $30,000. But she said that that the changes must be made to address the state’s fiscal problems. She said that if the pension issue is addressed, other concerns such as the state’s overdue bills, will be easier to tackle. She also said that making the systems solvent should provide employees and retirees some piece of mind, even if they are upset that their pensions will be reduced. “They will be able to count on the benefits once we pass this bill,” she said on the Senate floor.
Several opponents on the Republican side argued only that lawmakers should slow down the process. They said there was not enough time for them to fully understand the more-than-300-page bill or for the public to grasp what was at stake. Republican gubernatorial candidate Sen. Kirk Dillard of Hinsdale was among them.
The proposal has the support of all four legislative leaders and Gov. Pat Quinn. Nonetheless. speculation that it might not pass was still floating around earlier today. (Those assessments may have been caution from supporters and wishful thinking from opponents.) Two other Republican candidates for governor, Illinois Treasurer Dan Rutherford and venture capitalist Bruce Rauner, both opposed the measure in the lead-up to the vote. Republican U.S. Sen. Mark Kirk also panned the bill, dismissing it as gimmicks that would not solve the problem.
Republican legislative leaders acknowledged that the political hubbub made their attempts to get votes for SB 1 more difficult. Radogno said she was glad that 10 members of her 18-member caucus voted in favor of the bill. “That’s more than half. I’m very pleased with it. It was a contentious vote,” Radogno said. “The caucus was a microcosm of the opposition that we heard outside. You had the folks that were very much from the union districts and were not going to be for the pension reform no matter what. And then you had people that were very ideological, saying that this isn’t good enough; we ought to just not do anything and let chaos reign and then we can come in and do something better.” New House Minority Leader Jim Durkin said that his vote count changed throughout the day. He said that the influence from people such as Rauner, as well as lobbying from union members, probably played a role. But he said that getting the vote done now was likely key to its passage. “I quite frankly believed that if we did not pass a bill today, that we would not see one next year because then it would get caught up in the governor’s election and all the drama that goes into it every four years.”
Madigan, who is known for delivering votes at crunch time, said it wasn’t easy. “Well, this was difficult because of the strength of the opposition and the intensity of the calls and contacts generated by organized labor among the Democrats. On the Republican side, their problem apparently was some of the gubernatorial candidates thinking about the campaign rather than the seriousness of the issue.”
Northbrook Democratic Rep. Elaine Nekritz, who has been working on the pension issue for more than two years, said that today’s vote might be the first in a series of bills to address underfunded pension systems. “I think that this will free up a lot of energy and capacity in the General Assembly to start focusing on the needs of the city [of Chicago] and they are significant and in may ways more immediate than the state’s need in terms of addressing the shortfalls in their pensions systems.”
Chicago Mayor Rahm Emanuel came to Springfield in 2012 and appealed to lawmakers for changes to the city’s pension systems. Many other municipalities are also struggling with underfunded pension systems. “There are police and fire pension systems around this state that are funded in the 10 [percent] to 20[percent] to 25 percent range that are very much at risk of being insolvent. Our work on pensions is by no means done. But this [vote] will let a lot of air back in the room to start addressing the other systems,” Nekritz said. Cullerton agreed. “Pension reform isn’t done. I am committed to building on our momentum and providing relief for our local communities facing similar problems. Specifically, it is critical that we turn our focus to the financial crisis facing the Chicago Public Schools’ pension system. I look forward to working with all leaders on this critical issue.”
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