Senate Week in Review: June 10-14

SPRINGFIELD, IL – Lawmakers return to Springfield for a special session on June 19. However, with the legislature’s top two Democrats at an impasse and the Governor unable or unwilling to take charge, the prospects for a major breakthrough appeared slim, State Senator Sue Rezin (R-Morris) said.

Sen. Rezin said she has been consistent about what she would like to see happen with pension reform.  She has advocated for sensible, comprehensive reform in order for the state to get back on a solid financial footing while still honoring the pension payments to retirees.  

“Comprehensive pension reform must include several components in order to get the job done for the state,” she said.  “It has consistently been my goal to achieve reform that is constitutional, that gives assurance that the state will fund the pensions, and that will protect taxpayers from future liabilities.  We need to move forward with a comprehensive, fair and affordable pension reform plan.”

Sen. Rezin also said pension reform must include strong funding language to prevent the state from taking pension holidays like it has done in the past.  

Strengthening the case to include strong funding language in pension reform is Senate Bill 1920, which would have allowed the Chicago Public Schools to take a $400 million pension holiday over the next two years.  The legislation was pushed during the last week of the legislative session at the same time pension reform was being pushed.  The bill ultimately failed in the House, but Sen. Rezin said it is an example of why funding guarantees should be included in reform.  

“We know how badly how state needs pension reform, yet the House tried to pass legislation that would only repeat the situation that put us here in the first place,”  Sen. Rezin said.  “They talk about reform and asking people to take less, but then propose a pension holiday.  It just doesn’t make sense and it is not good policy for our state.”  

Sen. Rezin said due to the impasse between Democratic leaders, it is unclear what will happen when legislators return to Springfield.  Senators could be asked to vote on a “hybrid” plan that melds two competing and contradictory proposals. But, with no commitment from the House Speaker to allow a vote on the hybrid, it may suffer the same fate as previous measures, even if it does pass the Senate.

In the House, a union-backed plan was stripped of its content and replaced with the same plan that failed to win support from Senate Democrats at the end of May.

Cost Shift on Agenda
Also up for debate in the Senate could be a plan to shift pension costs to universities and community colleges, SB 1687. The shift is a major goal of House Speaker Michael Madigan, who has also sought to move more pension costs onto downstate and suburban school districts.

But opponents of the cost shift argue it will result in property tax increases for community colleges and higher tuition costs for both community college and university students. It failed in the Senate on a 21-33 vote at the end of May, but Senate rules allow it to be brought back for another vote.

The Senate has scheduled a committee hearing on Tuesday, June 18, to discuss the cost shift, as well as alternative pension reforms for universities and community colleges.

Pension Hybrid
The hybrid pension plan in the Senate would likely include provisions of Senate Bill 1, the comprehensive measure that passed the House but failed in the Senate, as well as the contents of SB 2404, which passed the Senate, but has now been gutted in the House.

The more far-reaching cost-saving measures in Senate Bill 1 would go into effect first, but if struck down by the courts, then the weaker provisions of SB 2404 would become effective.

A similar hybrid effort passed the Senate earlier in the year, but with the bare minimum number of votes required. With the May 31 end-of-session deadline now past, legislation needs an extraordinary majority to go into effect immediately. So, it is likely that neither the hybrid bill nor the resurrected House plan would go into effect before July 2014, even if one of the measures passes.

Prospects for a resolution appeared dim at week’s end as both sides seemed to be hardening their positions. Although the Governor has consistently claimed that pension reform is his top priority, he has shown little interest in actively lobbying legislators of his own party.

Speaker Pushing Pension Cost Shift
Shifting pension costs to local taxpayers has long been a priority of the House Speaker and a deep concern for suburban and downstate lawmakers of both parties. Although the Speaker originally targeted local school districts – calling state funding of teacher pensions a “Free Lunch” – strong bi-partisan opposition forced him to focus instead on universities and community colleges at the end of the legislative session.

The “Free Lunch” claim was debunked by a Senate Republican study, which instead revealed that it is the Chicago Public Schools that have benefited disproportionately from the state’s school funding formulas.

Right-to-Carry Awaits Governor
Some lawmakers have also expressed hope that the special session could be used to address any action the Governor may take on Right-to-Carry legislation, which allows citizens to obtain permits to carry a concealed weapon in public.

Although House Bill 183 won approval with veto-proof majorities in both the House and Senate, many expect Quinn, who is fervently anti-gun, to either veto or amend the measure. A veto or amendatory veto would send the bill back to the legislature, where lawmakers could either override the veto or accept or reject any changes the Governor might propose.

Illinois is under a federal court order requiring the state to adopt Right-to-Carry legislation.

If the Governor acts before the June 19th special session date, lawmakers could take action while in Springfield, enabling the state to meet the federal court deadline without having to go through the expense of calling another special session.

Governor Signs Bills into Law
Measures signed into law during the week address internet betting on horses, the state contract with its largest public employee union and foreclosure grants.

Internet Betting on Horse Races (SB 1884/PA 98-0018):  Reauthorizes Advanced Deposit Wagering (ADW), which is a form of internet betting on horse racing. The authority expired Jan. 1, 2013 and will now be extended to Jan. 31, 2014. Also retroactively provides that any track that conducted ADW on or after January 1, 2013 is deemed validated, provided all taxes are remitted. (Twin Spires, TVG and Express Bet all continued to conduct ADW late into the month of January, past the sunset date).  The measure directs a one-time transfer from the Gaming Fund of $92 million to the School Infrastructure Fund, and ongoing annual transfers to the School Infrastructure Fund of $66.3 million; at today’s low bond interest rates this $60 million a year could pay for $1 billion in school construction bonds. Also creates the Chicago State University (CSU) Education Improvement Fund as a special fund in the State Treasury, and provides that beginning July 1, 2013 and every year thereafter $1.6 million will be transferred from the State Gaming Fund into the CSU Education Improvement Fund.  

AFSCME Contract (SB 1515/PA 98-0019): Incorporates components of the recently negotiated AFSCME contract regarding retiree health insurance. Requires the Department of Central Management Services (CMS) to offer a program of group health benefits for retirees 65 and older. Allows the director of CMS to develop a state group insurance incentive opt-out program for annuitants with 20 years or more service that are not yet Medicare eligible. Also gives the State Treasurer the discretion to determine if any monies in the Treasurer’s Rental Fee Fund are in excess of the amount necessary,  and transfer unobligated and unexpended moneys from the Fund into the State Pensions Fund. Additionally, allows the Treasurer the discretion to determine if a balance of $2.5 million in the Unclaimed property Trust Fund is sufficient to promptly pay out all unclaimed property claims and to keep more money in the Fund if the Treasurer determines that the amount is not sufficient.

Foreclosure Grants (SB 1674/PA 98-0020): This is a follow up to Senate Bill 16 (PA 97-1164) which created an expedited foreclosure process for abandoned residential property and created a foreclosure prevention program. The measure restricts the Illinois Housing Development Authority (IHDA) to no more than 4% of the annual appropriation of the foreclosure prevention program to be used for administrative overhead.

IDOT now accepting applications for ITEP
The Illinois Department of Transportation (IDOT) is now applications for the 2013 Illinois Transportation Enhancement Program (ITEP) Cycle.  ITEP provides funding for well-planned projects that provide and support alternate modes of transportation, enhance the transportation system through preservation of visual and cultural resources and improve the quality of life for members of the communities. ITEP requires communities to coordinate efforts to develop and build safe, valuable and functional projects in a timely manner.  The online application cycle is now open and will close on Tuesday, August 20, 2013.

Eligible project sponsors include: local governments; regional transportation authorities; transit agencies; natural resource or public land agencies; school districts, local education agencies, or schools; tribal governments; and any other local or regional governmental entity with responsibility for oversight of transportation or recreational trails (other than a metropolitan planning organization or a State agency) that the State determines to be eligible, consistent with the goals of subsection (c) of section 213 of title 23.  Although State agencies and MPOs with responsibility for oversight of transportation or recreational trails cannot sponsor a project, they can partner with an eligible project sponsor. Nonprofits are not eligible to be a project sponsor but can partner with an eligible project sponsor.  

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Around the District
This week, Sen. Rezin toured 1871, a co-working center for digital startups.  She was hosted by Sam Yagan, who explained that the company is celebrating its one-year anniversary.  According to their website, 1871 is a place for “Chicago’s brightest digital designers, engineering and entrepreneurs that are shaping new technologies, disrupting old business models, and resetting the boundaries of what’s possible.”  The company seeks to create an environment that boosts start up companies and grows businesses.  

Sen. Rezin also had the chance to be a dessert judge during a fundraiser for the Girl Scouts of Central Illinois, which turned into a benefit for the flood damage to Marseilles Elementary School.  The event, called Desserts First, was a competitive culinary event between seven local businesses that created a dessert using a Girl Scout cookie as an ingredient.  The school hopes to be able to re-open in the fall.  

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