Senate Democrat leaders reverted to their old tax-and-spend playbook during the week, advancing another unbalanced budget reliant on the state’s second largest tax increase ever.
In other action, Senate continued its committee and floor action on bills sent over from the House of Representatives, as well as amendments to Senate bills. The Senate Republican Caucus Web site has more information about legislation passed during the week by committees and by the full Senate.
Good-faith negotiations falter
After months of good-faith negotiations with members of the Senate Republican Caucus, the Senate’s majority party stepped away from negotiations to muscle through permanent tax increases – 4.95 percent tax rate for individual taxpayers and 7 percent tax rate for corporate entities.
Though Senate Democrat leaders have taken a step back from the progress made during the months of good-faith negotiations, my colleagues and I continue to advocate for property tax relief and common-sense reforms to make Illinois more business-friendly. Passing massive tax increases without significant, accompanying reforms will only exacerbate the state’s stagnant job growth and fleeing population.
In addition to raising income taxes, the Senate majority dug a little deeper into the pockets of Illinois’ families by leveraging even more revenues through an expanded, permanent tax on services. Laundry services, storage facilities, security systems, pest control, and several other body modification services are just a few of the classes of services that would be subjected to the traditional 6.25 percent sales tax. Additionally, two brand new classifications would assess fees and taxes on satellite TV and radio, Internet-based streaming services, and other entertainment products. But no tax on legal fees. Oh, wait, Madigan and Cullerton are lawyers. Hmmm. OK to tax the other guys, but not themselves.
Tax-and-spend ways continue
Every year since 2003, the General Assembly—over the objections of legislative Republicans—has passed unbalanced budgets that are predicated on either higher taxes, a scheme of skipping scheduled payments to the state’s retirement systems and vendors, or raiding dedicated funds.
The proposed Fiscal Year 2017 and Fiscal Year 2018 budget “fix” continues that same old playbook, after legislative Democrats walked away from the negotiating table early in the week. The spending plan was largely passed on a partisan roll call, with all Senate Republican lawmakers voting against yet another unbalanced budget.
“Watered-down” workers’ compensation
Senate Democrat leaders also walked away from the negotiating table when it comes to passing meaningful reforms to fix the state’s broken workers’ compensation system. Instead of continuing talks on a real workers’ compensation reform that will reduce costs for employers, the Democrat majority moved forward with House Bill 2525, which some contend will actually make the current system worse.
The proposal removes flexibility for insurers and their customers, while adding unnecessary delays and imposing significant resource demands and costs. Employers say it doesn’t go far enough to address other aspects of workers’ compensation reform—there are no limits on employer liability, no substantial changes to indemnity awards and no rebalancing of the fee schedule.
They then pushed through poorly-written legislation to put the state into the workers’ compensation insurance business. The problematic bill creates a government-backed insurance agency, putting Illinois taxpayers on the hook for a $10 million loan to create a new workers’ compensation insurance company.
For many years, Illinois employers have argued that the Land of Lincoln is at a severe economic disadvantage in terms of recruiting and keeping employers in the state, in no small part due to much higher rate of workers’ compensation insurance paid by Illinois businesses. Illinois employers already pay 27 percent more than the average state when it comes to workers’ compensation insurance rates. Illinois’ average payroll cost is $2.20/$100, while the national average is $1.85/$100.
Veterans’ hiring preferences
Seeking to help the brave men and women who served their country with honor, the Senate unanimously passed legislation that would extend veteran hiring preference rules to veterans of the National Guard and reservists.
House Bill 3261 states that members of the Illinois National Guard and reserve components of the United States Armed Forces shall qualify for the veteran hiring preference rules, if they served a minimum of four years in that role, regardless of whether they were mobilized to active duty.
Re-opening state employment to disabled individuals
In other action during the week, the Senate passed legislation to re-launch a program to help people with mental and physical disabilities find employment.
Senate Bill 1453 would create a new version of the program that would place persons with disabilities in positions where they are able to take advantage of their own special strengths. The legislation also ensures that the hiring of the supported employees does not negatively impact other existing employees and their positions. Senate Bill 1453 now awaits action in the House of Representatives.
Unfunded mandate relief
Another important measure was advanced by the Senate to require the Department of Commerce and Economic Opportunity to publish cost estimates highlighting the impact unfunded mandates have on local governments. Senate Bill 2066 is awaiting action by the Governor.
As part of the Local Government Consolidation and Unfunded Mandates Task Force chaired by the Lt. Governor, local government associations documented substantial growth in the number of unfunded state mandates restricting local control of local government activities over the years. The Illinois Municipal League identified more than 266 new unfunded state mandates imposed on their members since 1982. The Illinois Association of School Boards documented the enactment of more than 145 state mandates imposed on schools since 1992.
With nearly 7,000 units of local government, Illinois has more than any other state in the nation. In response, the Local Government Consolidation and Unfunded Mandates Task Force has been seeking ways to reduce the costs associated with redundant or unnecessary units of local government—costs that are passed on to local taxpayers.