The state prepared to proceed with a construction bond sale on April 2, after an earlier bond offering was delayed at the end of January because of concerns about the stability of the market and how that might affect the interest rate the state would have to pay on the borrowing.
Although Illinois remains at or near the bottom of the nation in bond ratings, market conditions have generally stabilized in the two months that the sale was on hold. The state plans to borrow about $800 million for construction projects authorized under the 2009 bipartisan Jobs Now! program. The bonds are to be repaid with dedicated funds, including revenues from video gaming.
Pension reforms remain on almost everyone’s list as the top issue of the legislative session. Although Democrats control both the Senate and the House of Representatives, the two chambers have yet to agree on an approach to solving the problem.
The Senate sent the House a limited reform (Senate Bill 1) that would apply only to active teachers in the Teachers Retirement System. It would give teachers a choice between reduced cost of living adjustments on their future benefits and keeping access to retiree health insurance, or keeping a full cost of living adjustment and losing access to state subsidized health insurance. This legislation does not change pension benefits or health insurance for retired teachers, nor does it affect benefits or health insurance for employees in other state pension systems including the General Assembly retirement system. Senate Bill 1 passed on a purely partisan vote with no Republican support.
The House sent to the Senate several partial reforms, which may ultimately become part of a full package. The most significant change (House Bill 1165) affects cost-of-living adjustments for all retirees. It would limit the adjustments to $600 for those who are also covered by Social Security and to $750 for those who are not eligible for Social Security. The House has also sent the Senate measures that would increase the retirement age to 67 (House Bill 1166) and cap pensionable income at about $113,000 (House Bill 1154).
The Senate also sent to the House Senate Bill 1224, which would end the practice of allowing persons to use unused vacation and sick time to boost their pensions when they retire.
A major expansion of gambling in Illinois (Senate Bill 1739) advanced out of committee in the Senate, but remains on hold as supporters continue negotiations aimed at winning sufficient support for passage.
The bill as currently drafted authorizes a Chicago casino; slot machines at horse racing tracks and at O’Hare and Midway airports in Chicago; four new casinos outside Chicago (one each in Rockford, Danville, the Chicago south suburbs and Lake County); legalized Internet gambling (iGaming); and a ban on political contributions by those holding gambling licenses.
The Chicago Casino Development Authority would be run by a five-member Casino Development Board appointed by the Mayor. The Chicago casino would be allowed up to 4,000 gaming positions. The City could choose to install slot machines at O’Hare or Midway airports, but those machines would be included in the 4,000 gaming position cap for Chicago.
To date, no significant legislation has been advanced to address either a citizens’ right to carry firearms or to restrict the sale of semi-automatic weapons or high-capacity magazines. As the only state that denies citizens the right to carry firearms in public, Illinois remains under a federal court order to adopt right-to-carry legislation this spring.
The Senate has designated two lawmakers – one from each party – to lead negotiations on the issue. The House, however, has focused primarily on a series of high-profile test votes designed more to give the House Speaker ammunition for future political campaigns than to resolve any disagreements.
While progress has been made on the issue of hydraulic fracturing (sometimes known as “fracking”), final legislation has yet to be unveiled. Draft legislation (House Bill 2615) has been described as a model for the nation, but details continue to be negotiated.
Hydraulic fracturing uses pressurized water and sand to open up fissures in underground rock, allowing natural gas or oil to be more easily extracted. It has been estimated that the new technology could bring as much as 47,000 jobs and $9 billion into the Illinois economy. Environmental groups have split on the issue. Many have worked with proponents to insert safeguards into the draft legislation, but others have insisted on a moratorium on all fracturing.
In early March, a House committee sent legislation to the floor (House Bill 1) that would legalize the use of marijuana for medicinal purposes. No similar legislation has advanced in the Senate. The House measure would allow patients older than 18 who have been diagnosed with specific terminal illnesses or debilitating medical conditions to obtain marijuana.
Supporters argue that marijuana offers pain relief for certain conditions without creating the side effects that are common with some prescription drugs. Opponents say the medical claims are primarily anecdotal and that legalization for medicinal purposes will eventually lead to complete legalization of the drug.
Senate Bill 26 voluntarily expands the state’s Medicaid program eligibility to nearly 350,000 additional individuals, who are between the ages of 19 and 64 who are under 138% of the Federal Poverty Level.
This is the second exemption to the state’s moratorium on Medicaid expansions to take place within the last year. It is estimated that this expansion will cost the state an additional $574.4 million by 2020. However, when adding up costs associated with the expansion, the Department of Healthcare and Family Services indicated the cumulative cost could exceed $2.9 billion by 2020. The proposal passed the Senate with Republicans opposed and Democrats in support.
Another healthcare related measure (Senate Bill 1194) creates a process to regulate and license “navigators” required under the Federal Affordable Care Act as part of the implementation of healthcare exchanges. “Navigators” are tasked with raising public awareness of the availability of qualified plans, distributing informational material in a manner that is culturally and linguistically appropriate to the population being served, facilitating enrollment, and providing appropriate referrals in the event that an enrollee has a grievance or question.
The “navigator” legislation is sponsored by both Republicans and Democrats and was approved unanimously in committee. It awaits action by the full Senate.
These measures represent some of the most high-profile issues before the General Assembly to date. However, with almost two months remaining in the session before its scheduled adjournment, it is impossible to offer a comprehensive list of major measures that could be undertaken.
Budget and Illinois’ economy
Work is just beginning on the state budget. Governor Pat Quinn submitted his budget proposal in early March, and House and Senate committees are currently conducting hearings on all aspects of the Governor’s spending plan.
What is interesting is that while Illinois chips away at its massive $9.5 billion backlog of unpaid bills, some states are debating about what to do with extra tax revenue.
A March 24 article in the Wall Street Journal notes that our nation’s economic recovery has reinvigorated most states’ economies and allowed some states to boost their cash reserves. Questions are being raised, however, about the best use of the extra money – some want to cut taxes while others think the extra funds should be spent to further spur the economy and create more jobs.
According to the article, “States are projected to increase cash reserves collectively by $3.4 billion to $41.4 billion in the fiscal year that for most states ends June 30, according to the National Conference of State Legislatures. At that point, the accounts would be equivalent to roughly 9% of state revenue, the highest level since 2008, and near a level economists consider healthy, according to the National Association of State Budget Officers. At their lowest point, in 2010, the funds were 5.2% of revenue.”
Deciding what to do with extra cash is an enviable position for a state lawmaker. We must identify and get rid of the practices and procedures that are no longer working in Illinois, and take a closer look at what those states are doing right!