Senate Reluctantly Passes Budget – Pension Reform Delayed

Observations and comments about state government by State Representative Robert W. Pritchard.

June 1, 2012

In this Issue:
· Senate Reluctantly Passes Budget
· Pension Reform Delayed
· Voters to Decide on Pension Sweeteners
· Park Sustainability Fee Stalls
· New Prison Release Program Approved
· Efforts to Control Fracking Delayed
· Enhancement to Enterprise Zones Passes
· Website Alerts When to Lower Flag

The spring session of the 97th General Assembly ended on May 31 as scheduled with the passage of the House budget, gaming expansion, and a number of pro- and anti-business measures. Everyone seemed ready to adjourn for the summer even though several issues including pension reformed went unresolved. I’ll provide a review of the major issues addressed by this legislature in the next issue of the Perspective.

Senate Reluctantly Passes Budget
It took two votes and the promise of a supplemental appropriation for the Senate to approve the House Education budget. Many legislators were angered that funding next year will be cut $259 million for K-12 education and $129 million for higher education. In particular many wanted more funding for early childhood education which was reduced $25 million from last year.

The Fiscal Year 2013 state budget was approved in ten bills that covered different program areas of the budget and its implementation. All sailed through both chambers despite reluctant votes for reduced spending until it came to education. To get the votes for the education bills in the Senate, legislators wanted more funding. Legislation was quickly written and approved to raise $175 million through a tax on satellite TV service and a tax on offshore oil rigs operated by Illinois companies. These new taxes were sent to the House for approval but no action was taken before it adjourned. Action may never be considered by the House.

The final budget sets a conservative estimate of $33.7 billion in general state revenue for FY 13 and authorizes expenditures of slightly under that amount. The budget plan allocates about $1.3 billion to pay unpaid bills and $17.3 billion for all non-discretionary items. What revenue was left–about $16.4 billion—was allocated for state programs which is about $854 million less than last year.

The specific spending in each program area was prioritized by legislators in a bipartisan process. This was the second year of such a process and legislators were asking good questions about the value of each program and what it accomplished. The budget now moves to the Governor for approval before the July 1 start of the budget year.

Pension Reform Delayed
Of all the major goals set for this legislative session, only pension reform failed to be resolved and it’s a good thing. The legislation introduced by Speaker Madigan two days before the end of session was unfair to retirees and shifted billions of dollars in state pension costs to local schools, colleges and universities.

Given the constitutional protection for state employee benefits and the promises made to them and retirees, any reforms must be fully discussed with affected parties and carefully analyzed for cost impact.

A working group comprised of the Governor’s staff and legislators met during the winter and was charged with developing recommendations by mid-April. I had contended that all affected parties needed to be involved in the reform discussions. Representatives of employees and retirees were only involved in a few meetings and then not in real give and take discussions.

Before the working group reached a conclusion, the Governor announced his pension plan and Speaker Madigan introduced his own pension bills. Neither of them explained their plans to employees or retirees from around the state as Rhode Island’s Treasurer did during his state’s pension reforms.

When Republicans complained about being cut out of the pension reform legislation discussions, Speaker Madigan turned over his bill to Republican leader Tom Cross one day before the end of session and refused to work any further on the bill.

Hopefully tempers will cool and all parties will come to the negotiating table to discuss a solution over the summer. Pension costs are expected to increase $800 million next year (to $5.9 billion) and annual payments will soon become too large a part of the budget to fund other essential state services.

Gov. Pat Quinn said he will meet with the four legislative leaders in the coming week to continue work on a pension plan. I will be urging the Governor to exert strong leadership, involve all the parties and work for a fair pension system for employees and taxpayers. We must not lose the momentum on this issue but should stop accusing employees for causing the pension problem.

Voters to Decide on Pension Sweeteners
With the passage of a constitutional amendment by the legislature (HJRCA 93), Illinois voters will get to decide this fall whether they want to make it tougher for state and local governments to sweeten public employee pensions.

The legislature this week approved the wording for the ballot initiative on whether a three-fifths vote by state lawmakers, city councils and school districts should be required to increase their government employee pension benefits. The higher vote threshold will make it more difficult to increase pension benefits.

Park Sustainability Fee Stalls
Over the past several years our governors have reduced general revenue funding for agency budgets and staff, and then proposed new user fees to fund them. The Department of Agriculture is one example where inspections are largely provided through fees instead of general revenue (tax) dollars.

The general revenue budget and work of the Illinois Department of Natural Resources (IDNR) has been severely strained due to major budget cuts and staff reductions as well. A budget that in 2002 totaled $107 million is now $48 million. There is no staff or money to do normal maintenance work at many state parks.

The IDNR Budget Sustainability bill was introduced this year to increase broad-based user and permit fees to operate the department. While it passed the House on its second vote, the bill failed in the Senate amidst a number of fee and tax proposals.

IDNR currently issues a number of permits for oil and gas, mining, fishing, dams, boating, falconry, and other scientific-related services, yet charges no fee or only a minimal fee to cover the costs of these services.

SB1566 would increase these existing fees and establish new fees for certain permits and programs. The bill does not include a state park entrance fee for Illinois residents, but does charge non-residents. Other non-permit related fees included in the language are a natural area registry, conservation stewardship program, environmental consulting services, and a $2 vehicle registration surcharge.

The package of fees in the bill was expected to generate $32 million; more than enough to hire staff, make repairs and operate programs. The issue will probably be reintroduced in this fall’s legislative session.

New Prison Release Program Approved
With the passage of SB 2621, a new early release program for prisoners is on its way to Governor Quinn’s desk. The legislation reinstates prisoner credits for good behavior behind bars or participation in self-improvement programs. Non-violent inmates could qualify for as much as six months’ time off their sentences.

Quinn shut down a similar program in 2009 after his administration released violent inmates weeks or even days after arriving at prison. With a prison population currently at 49,000 in facilities built to hold 34,000, officials fear a lawsuit could be filed due to overcrowding. As the state tries to reduce spending, it could save $38 million for every thousand prisoners released.

Efforts to Control Fracking Delayed
The new oil and gas mining process of rock fracturing called Fracking is essentially unregulated in Illinois. SB 3280 passed out of the Senate as an agreement between industry and environmentalists to establish standards and oversight before mining begins in the New Albany Shale areas of southeastern Illinois.

As the bill was debated in the House, various interests wanted changes that couldn’t be resolved before the session ended. Efforts to establish a two year mining moratorium while the changes were negotiated were strongly resisted. Further action on the bill is tabled until fall.

Land easements are currently being purchased and mining activity could add billions of dollars to the region’s economy. Any moratorium or uncertain regulation could result in mining companies avoiding Illinois and investing in other states.

Enhancement to Enterprise Zones Passes
Illinois’ Enterprise Zones have been given an extended life, enhanced accountability and opened to new areas of the state under legislation that passed the General Assembly this week. The Zones have proven to be a vital tool in our state’s quest to provide incentives that attract and retain businesses.

Businesses within an Enterprise Zone can take advantage of incentives–including tax credits, property tax abatements and sales tax exemptions. With the first group of Illinois’ 68 Zones set to expire in 2018, action was needed to continue the program.

SB 3616, which passed both houses, expands the number of Zones and creates a board to make final determination of qualification and proposals. Under the legislation, communities would compete for new or expanded zones and to retain older ones. Each Zone would also be expected to demonstrate its effectiveness at generating economic activity. Current Enterprise Zones include Elgin, Boone County, Rockford, Lee/Ogle Counties, LaSalle County and Waterman.

Website Alerts When to Lower Flag
HR 1098, which passed both houses, makes it easier for those flying the American and Illinois flags to know when to lower the flag to half staff in honor of a deceased hero. Organizations and government agencies are urged to post the website address where information will be given about a fallen military person, firefighter or law enforcement person.

You can subscribe to Illinois Flag Honors e-News summary service on the Office of the Governor’s website: www.illinois.gov/news/flaghonors.cfm

District Office 815-748-3494 or E-Mail to bob@pritchardstaterep.com

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Robert W. Pritchard (R-Hinckley) is the Illinois State Representative for the 70th district, serving the residents in portions of DeKalb, Boone, and Kane Counties. Bob has been serving in the Illinois House since 2003. Pritchard, affectionately known as Bob, has been serving in the Illinois House since 2003. Biography Bob was born February 2, 1945. He grew up on a farm outside Hinckley, Illinois where growing corn and soybeans instilled in him hard work and a sense of dedication. Bob and his family continue to their hard work by farming. He is married to his wife Mary, Associate Dean at Northern Illinois University, and has two grown sons, Matthew and Gregory. Education Bob majored in communications from the University of Illinois (Urbana-Champaign) earning both his bachelors and masters degree. Bob’s passion for farming and his education in communication gave him the unique opportunity to enjoy working in both fields. Professional Life Beginning as a Radio and TV broadcaster for a local area stations, Bob delivered the farming updates and local weather reports. Bob took advantage of his skills and has worked for universities as well as filled marketing, public relations, and community relation roles at DeKalb Genetics Corporation and Monsanto. Community Leader Before becoming a member of the Illinois House of Representatives Bob was an energetic and busy contributor to the communities of DeKalb County. Getting his hands dirty in all parts of local government, Bob served on the Hinckley-Big Rock Board of Education. Bob was never far from his roots in the farming community, and was elected to a leadership position for the DeKalb County Farm Bureau. He also served as chairman for the DeKalb County Board. Legislative History Bob has diligently worked for the betterment on a wide gamut of issues from early childhood and education, healthcare, conservation and the environment, job creation, and protecting the manufacturing industry. The values of hard work and dedication that were instilled in Bob from his years of farming are reflected in his mentality of representing his constituents.

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