Illinois lawmakers are no closer to a Fiscal Year 2016 budget resolution, as House lawmakers returned to the Capitol during the week to act on legislation vetoed by the Governor. More of House Speaker Michael Madigan’s shenanigans are expected as we waste more time accomplishing nothing in Springfield.
As the budgetary stalemate enters its third month, Moody’s Investors Service warned lawmakers that if we do not solve the budgetary stalemate soon, it could very likely impact the state’s bond ratings.
House fails to override controversial ‘AFSCME’ bill
Fortunately, Governor Bruce Rauner’s veto of a controversial “binding arbitration” bill was upheld as Speaker Madigan failed to muster the necessary 71 votes to override. By some estimates, if Senate Bill 1229 was upheld and eventually enacted, it could have cost the state an estimated $2 billion in the next four years for labor costs.
The legislation was controversial because it would have removed a duly-elected governor from union negotiations in the event of a contract dispute. Senate Bill 1229 would have placed the process of determining the outcome of taxpayer-paid, multi-billion-dollar labor agreements between the Governor and state employee unions in the hands of an unelected arbitrator.
Additionally, locally-elected union representatives would have been removed from the equation, and critics questioned a provision in the legislation that would have removed the union’s ability to strike. Now that the issue is resolved, lawmakers are hopeful that the Governor and the state’s largest public sector union, AFSCME, can move forward productively with ongoing negotiations.
Governor Rauner and Teamsters agree to contract terms
The Rauner Administration and the Teamsters have agreed to a new four-year contract for more than 4,600 state employees. The new agreement was lauded by both sides as being a “good deal” for taxpayers and the members of the bargaining unit.
The Teamsters represent a significant segment of the state’s Department of Transportation workforce.
Credit agency weighs in on budget impasse, fiscal woes
In a recent report, Moody’s Investors Service said that while the budget impasse currently “has had limited effects on our view of the state’s credit position,” the situation would change if a resolution can’t be negotiated in the coming weeks.
The report said that while the budget stalemate has “not yet strained the state’s finances…that will change if an accord is not reached soon.” In fact, Moody’s suggested that the state needs to have a budget in place by the end of September or the potential for a further credit downgrade will “greatly increase.” The chance of that happening does not seem very high to me.
The agency also underscored that they’ll be paying close attention to the “nature of the eventual agreement.” Of particularly interest to Moody’s is how the state will address its pension funding pressures and the state’s deficit, which has been estimated at a $4 to 5 billion shortfall for the current fiscal year.
Illinois’ low credit rating has massive trickle-down effects. It makes road building more expensive and local government borrowing more difficult, among other problems.
Illinois already has the lowest credit rating of all 50 states, and the state’s finances are further stressed by the City of Chicago’s financial instability. Earlier this summer, the Chicago Public Schools and McPier’s bond ratings took a massive hit as payments were nearly missed.
Farmers flock to Decatur for the Farm Progress Show
With a narrow window before harvest begins, farmers from across the country joined with agriculture professionals from around the world at the 2015 Farm Progress Show in Decatur.
The three-day event featured over 650 exhibitors showing off the latest innovations in farm machinery, seed genetics, and grain handling technology, in addition to a multitude of other vendors. Organizers planned for 150,000 visitors, and Show Director Matt Jungmann said attendance appears close to that number.
A number of lawmakers attended the event as well, meeting with constituents, local businesses and using the opportunity to simply learn more about the state’s leading industry.