IVCA Provides Updates for State and Federal Legislative Issues - 02.01.17

IVCA Provides Updates for State and Federal Legislative Issues


UPDATE provided by Stricklin & Associates on February 1, 2017:

Senate President John Cullerton, along with Senate Minority Leader Christine Radogno, began the new session of the Illinois General Assembly by introducing a bipartisan package of bills to address the budget--including both reforms and appropriations.  The 13 bills, covering everything from an income tax increase, worker’s compensation reform, property tax relief, gambling expansion and education funding reform, are designed to resolve the budget impasse which has gripped the state the past 18 months, and are tied to each other so that if one bill fails to pass then none take into effect.

The bills were given subject matter hearings in various committees last week--meaning that no votes were taken.  Critiques of the package were directed primarily against the minimum wage increase, sugar-sweetened beverage tax, and workers compensation reform, and as a result several changes to the package were introduced.

The original increase to the income tax rate from 3.75 percent to 4.95 percent was raised further to 4.99 percent. Additionally, the sugar-beverage tax was taken out altogether. However, a new "opportunity" tax on employers based on the size of their payrolls (not number of employees) was added to the package of tax hikes, as was an expansion of service taxes. Overall, the new taxes and reduction in tax loopholes amount to $6.5 billion.

Originally, Senate President Cullerton had hoped to call the bill on Wednesday the 25th following the state of the state address. With vocal opposition by large industry groups and concerns from members within both caucuses, that vote was ultimately delayed. Senate Minority Leader Radogno remains invested in the compromise and both Senate leaders are expecting a vote when members return the week of February 7th.

Attorney General Lisa Madigan has filed a motion to stop paying state employees without legislative authorization. During the past year and a half the state has been without a full budget, it has been argued that the continued payment of state employees has reduced pressure to resolve the impasse. A temporary order has been under effect that has allowed for the continuance of payments. If the motion moves forward and the threat of a government shutdown looms, there may be more movement on the Senate package or any other negotiations.  

The Governor has urged Comptroller Susana Mendoza to continue paying state workers even if the order to keep paying state workers is reversed in court. Mendoza has not taken an official position on how she will proceed if the motion moves forward--and whether or not she will continue to pay state workers.

Meanwhile, as of Monday, members of AFSCME--the state worker union covering over 30,000 people-- began its first-ever strike authorization vote. AFSCME and the Governor have failed to reach agreement on a new contract since one expired in July of 2015. The Governor alone, and not the General Assembly, is required to negotiate with the union, who have been unwilling to accept his proposals thus far. Voting is scheduled to be completed by February 19th.

On Wednesday January 25th, the Governor gave his State of the State address in which he highlighted several accomplishments from his two years in office, such as criminal justice reform and comprehensive clean energy legislation. While he expressed a tone of optimism and willingness to compromise, his speech highlighted the severe challenges Illinois faces without a budget, an $11billion unpaid bill backlog, and an unstable economy. The Governor especially focused on redistricting reform and term limits as two ways to address these structural problems. He expressed optimism surrounding the Senate negotiations, but did not affirmatively say whether he was supportive of the package. Additionally, he spoke at length about the need to improve our public education--both k-12 and higher institutions. Members reactions to the speech varied, but there is hope on both sides that a compromise will be reached to end the impasse.

Committees appointments have also been made in the House but the rosters have not yet been announced.

The Senate returns on February 7th, while the House returns February 8th.