As the Senate returned to Springfield during the ongoing budget stalemate, Republicans are calling for fundamental government reforms in conjunction with a balanced budget plan, while Democrats continue to forgo reform in favor of the status quo of spending more than the state collects in revenues.
During Senate debate September 9, I told my colleagues that it is short-sighted to leave necessary business reforms out of the talks about the state budget because the two issues are linked by their impact on the citizens of Illinois, and if we don’t get the reforms now, they are not likely to happen at all.
Before we can solve the budget we must have these reforms necessary to save the State of Illinois from complete financial disaster. Companies are leaving the state. Businesses are leaving the state. Jobs are leaving the state and with those jobs go the tax revenues that we so desperately need. Once we have these reforms, I believe that a budget will come very quickly.
Comptroller’s and Governor’s offices issue budget warnings
State Comptroller Leslie Munger says the state’s backlog of unpaid bills could hit $8 billion by the end of the year if the state continues at its current pace without a budget deal in place, while the Governor’s budget office told a Senate panel during the week that the state is on track to spend more than $38 billion this year.
Despite these dire fiscal warnings, Democrats continue to try and pass annual spending measures even though the state does not have enough money to pay for these initiatives.
Court orders, consent decrees, and statutory continuing appropriations are funding about 90 percent of the state’s budget right now. The state, however, is expected to bring in only $32 billion in revenue, according to the Governor’s office. The Comptroller said most of the state’s money is being spent at rates the state cannot afford. Current spending is based on previous Fiscal Year 2015 spending levels, while available revenues are much lower than last year’s as a result of the reduction of the previous temporary income tax hike.
Comptroller Munger says with no budget in place, Illinois’ unpaid bills could reach $8.5 billion in December, but that doesn’t include payments for obligations like higher education, employee-retiree health insurance, and MAP grants for students, which would add an additional $4.3 billion to the tab. Those are bills that can’t be processed without a state budget.
Democrats make false promises with the budget
Senate Democrats continued to play politics with the budget impasse, muscling through Senate Bill 2046, which they said would pay for human services, municipalities, and lottery winners. Appropriating money in this fashion is short-sighted and unrealistic, as Illinois’ spending is far outpacing available revenues. Without a balanced budget package, measures like Senate Bill 2046 amount to little more than a false promise.
Republican legislators continued to urge the reforms needed to turn our state around, followed by a comprehensive, balanced budget, not the piecemeal measures Democrat lawmakers continue to push. In fact, during debate the Democrat sponsor of Senate Bill 2046 admitted that this is “no way to run the ship.”
Illinois gets dismal rankings for its liability systems
Illinois is ranked 48th overall in a survey of business leaders on the fairness and reasonableness of state liability systems, released during the week by Harris Poll. Cook County/Chicago received the ranking of the second worst local jurisdictions, in terms of having a fair and reasonable litigation environment. Madison County was tied for third worst in that category.
The study estimates that if Illinois passes meaningful lawsuit reform, it could reduce the cost of tort settlements by $2,435 per million dollars of a settlement. Such reform could result in a potential increase in employment of between 0.9 percent and 2.5 percent. Based on current Illinois employment, that’s between 50,000 and 150,000 jobs. In fact, 75 percent of businesses surveyed said that the state’s lawsuit climate impacts where they locate or expand.
The survey found Illinois ranked 48th in overall treatment of tort and contract litigation, 50th in having and enforcing meaningful venue requirements, 49th of treatment of class action lawsuits and mass consolidation lawsuits, 48th in damages, and 47th in timeliness of summary judgment or dismissal. Illinois also ranked 48th in discovery, scientific and technical evidence, judges’ impartiality, judges’ competence, and juries’ fairness.
The survey was conducted for the U.S. Chamber of Commerce Institute for Legal Reform. Results were formulated through interviews with in-house general counsel, senior litigators or attorneys, and other senior executives who are knowledgeable about litigation matters.
Rough August for thousands of Illinois workers
A recent report from the Illinois Department of Commerce and Economic Opportunity details several of Illinois’ major employers who announced layoffs last month, impacting more than 2,000 workers. The report breaks down how many workers are impacted at several Illinois companies.
For example, Kraft Heinz announced 750 layoffs, Motorola announced 499 layoffs, Walgreens announced 270 layoffs, Nokia Networks announced 139 layoffs, McDavid Inc. announced 115 layoffs, and Telesource Services announced 98 layoffs.
News like this highlights the need for workers’ compensation reform, property tax reform, and reducing burdensome regulations on businesses, all of which would help foster growth, create jobs, and attract new business to Illinois.
Other legislative action
Governor Rauner took action on a number of bills during the week. A complete list is available on the Senate Action page of the Senate Republican Caucus Web site.