News Flash
2012 - Spring Legislative Session Adjournment Update
(Posted 6/13/2012) - Dear Constituent,
This spring’s legislative session was adjourned on May 31st to the call of the chair or until such a time when Speaker Madigan would have reason for us to reconvene to address any unfinished business. Governor Quinn has indicated he might call the General Assembly into “Special Session” to address pension issues. The General Assembly is scheduled to return for the 2012 Veto Session the last week of November and the first week of December.
General Assembly Approves Budget
The Fiscal Year 2013 State Budget was the primary focus for the General Assembly. Central to crafting a truly balanced budget was the need to reduce current spending, eliminate the provider payment backlog, control future spending in the Illinois Medicaid program and reform the Illinois’ pension system. While the budget problem that is Medicaid was addressed, the needed reforms for the pension systems were not.Duplicating the process started last year, the House established a spending limit of $33.7 billion. This is the amount of money that the House determined would be available in Fiscal Year 2013. Unlike last year, the Senate adopted a higher spending threshold. Nevertheless, when the State budget was approved, the Senate did adhere to the $33.7 billion limit – less than the amount allotted in Fiscal Year 2012. The budget was not, however, easily adopted. There was opposition to elementary and secondary education spending cuts. The first attempt to pass this portion of the budget in the Senate failed. Only after separate Senate legislation, adding $175 million to the education budget, was it passed. The additional spending was to be paid for by imposing a 5% tax on satellite television providers and taxing offshore oil wells owned by Illinois companies. Neither the extra spending nor the additional taxes were considered by or voted on in the House.
Pensions
Illinois’ five statewide pension systems have aggregate unfunded liabilities of over $83 billion and those costs are escalating every year. Bipartisan negotiations to reform the pension system came very close but fell apart over a disagreement as to whether or not to shift pension costs for retired downstate and suburban teachers from the state to local districts. There is substantial concern by downstate and suburban legislators that shifting these costs to their local school districts will significantly increase property taxes. Although any changes at this point would most likely not impact the Fiscal Year 2013 budget, pensions must be addressed in the near future or the interest costs alone will continue to jeopardize future budgets. Legislators were unable to reach agreement on a pension stabilization plan, but may be returning to Springfield during the summer to address the issue. I am a chief co-sponsor of House Bill 5754 and House Bill 6158, both pension bills that have been held in the Rules Committee for months. It is my hope that these bills, which I believe are very fair and equitable solutions to the pension crisis, will be able to get the floor attention they deserve. Whether it is HB 5758 and HB 6158 or some other ultimate bill, legislators all need to work together with the stakeholders to find common ground on this very important issue.The Governor and the four legislative leaders met last week in Chicago in an effort to jump-start public pension reform efforts. According to reports, there is still significant disagreement about whether to shift the normal cost of public pensions to local school districts and universities. The participants in the meeting agreed to request local school district information on their financial reserve funds and overall financial status before meeting again next week. At this point, no agreement seems imminent and I will continue to monitor these negotiations.
Legislators, Constitutional Officers to Take Pay Cut in 2013
In May the Illinois House passed legislation rejecting cost of living raises (COLA’s) for lawmakers, the Governor, and the constitutional officers and, for the fourth year in a row, voted to cut lawmakers’ pay. General Assembly members will be required to take 12 furlough days. The provisions, contained in House Bill 3188, amount to a 5.5 percent pay cut for lawmakers. In these challenging times, I feel strongly that as elected leaders, we should lead by example with regard to these cuts. The bill also continues the cuts to legislators’ per diem and mileage compensation implemented last year. All of these reductions will save taxpayers $772,500 in Fiscal Year 2013.
House Approves Medicaid Reform
Historic Medicaid reforms were a key component to fixing the State’s budget crisis. Without meaningful Medicaid reforms, Illinois’ backlog of unpaid bills would grow to approximately $21 billion by 2017, a level of spending that is simply unsustainable. The General Assembly’s action to cut nearly $1.6 billion from the State’s $11 billion Medicaid program will help get Illinois back on solid fiscal ground. With the passage of Senate Bill 2840, an estimated 300,000 unqualified individuals are expected to be removed from Illinois’ Medicaid rolls because they do not meet income eligibility guidelines, are not Illinois residents, have died, or have aged-out of the All Kids program. This eligibility verification alone will save taxpayers $350 million. The bill also provides for a moderate rate reduction for hospitals of 3.5% and exempts Critical Access and Safety Net Hospitals from the reductions.In addition, Senate Bill 2840 will also do the following:
- Roll back the Blagojevich expansion of Family Care by reducing the eligibility limit for parents to $30,000 for a family of four
- Impose a $10 co-pay for emergency room visits
- Require a $3.60 co-pay on all services and a $2 co-pay for generic medications
- Limit prescription coverage to four prescriptions per month without doctor certification or need or specialty drug/condition exception
- Eliminate funding for adult chiropractic services
Gambling Expansion Approved
Calling it a new revenue source during difficult financial times, the legislature adopted a new round of licenses to conduct gambling within a variety of Illinois venues. I voted against this bill because I do not support an expansion of gambling in Illinois. Senate Bill 1849 directs the State to award five additional licenses to operate riverboat casinos at specified locations throughout Illinois. The bill also authorizes a Chicago casino and the operation of slot machines at Illinois racetracks. SB 1849 raises estimated gaming tax revenue of $200 million a year, with additional one-time revenues through the awarding of the additional gaming licenses. The bill also provides funding for many agricultural programs and the State Fairgrounds. Governor Pat Quinn has indicated that he does not support the proposal.
House and Senate Approve Higher Cigarette Tax
A bill that more than doubles the State’s cigarette tax was approved toward the end of May. Under current law, the State charges a tax on cigarettes that is equivalent to 98 cents per pack of 20. Senate Bill 2194 raises the cigarette tax to $1.98 per pack. The additional revenue raised by this tax, an estimated $350 million per year, would garner a federal match, bringing in a total of $700 million for the State’s financially stretched Medicaid program. SB 2194 also contains language intended to create a financial incentive for Illinois hospitals and hospital-affiliated health care facilities to provide charity health care to low-income and underserved Illinois residents. I am a strong proponent of “Smoke Free” Illinois, but voted against this bill because I cannot and will not support supplementing our budget with additional, unsustainable revenue without creating the overall efficiencies we need in state government. If the rationale is that the higher cost of cigarettes will cause people to stop smoking or smoke less, than these are declining revenues that build a higher cliff in the future. The key to getting Illinois’ finances in order involves making difficult decisions; not simply creating more revenue sources. Propping up the Medicaid budget for another year with a cigarette tax increase won’t solve the problem; it only delays the inevitable and prolongs the uncertainty for families and providers.
The Legislature Approves “Caylee’s Law”
A bill that criminalizes the failure to report a child as “missing” sailed through the House and Senate this year. The bill stemmed from the case of two-year-old Caylee Anthony, who was found dead in 2008 and whose parent did not notify law enforcement officials of her disappearance for 31 days. The bill makes it illegal for a parent, guardian or caretaker of a child under the age of 13 not to notify the police of the disappearance within 24 hours. The reporting window for children two and younger is one hour. The law will also make it a felony to provide false information to authorities during a missing child investigation.
Scholarship Abolishment Bill Goes to Governor
Legislation to end the General Assembly Scholarship Program has advanced to the Governor. For years I have carried legislation to abolish the General Assembly Scholarship Program and I was pleased to see that the ultimate bill that ended the program included language from my previous bills. The controversial program was an unfunded mandate that allowed legislators to award up to eight scholarships each year covering tuition at State universities. In 2011, 1,327 tuition waivers were awarded in Illinois, costing the state universities $13,508,800. This $13.5 million is an unfunded mandate on state universities, where the costs were then passed on to other students paying tuition. The program has been scandal-plagued in recent years, as reports surfaced of legislators giving scholarships to the children of political contributors and supporters. In addition to ending the program, the bill creates the Tuition and Fee Waiver Task Force to evaluate tuition and fee waiver programs offered by State universities to employees.
Plastic Bag and Wrap Recycling
Illinois is now poised to have the first comprehensive recycling program in the nation for plastic bags and film. It requires plastic bag manufacturers to register with the State and develop and implement take-back and recycling of plastic bags and film wrap throughout the State. The legislation protects consumers from locally imposed taxes on bags and preserves consumer choice and convenience by also prohibiting locally imposed plastic bag bans. This protection is in place for five years to give the collection and recycling program time to develop. This legislation embodies responsible use and will divert, at a minimum, 426 additional tons (852,000 pounds) of plastic from landfills to reuses in other plastic products. Most importantly, it includes plastic wrap which is 85% of the plastic waste stream. This legislation now goes to the Governor for his consideration.
Enterprise Zones
Enterprise zones are one of Illinois’ most successful economic development tools. According to the Illinois Department of Commerce & Economic Opportunity (DCEO)enterprise zones have been responsible for creating or retaining 900,000 jobs plus $49 billion in capital since their inception in 1982. Illinois currently has 97 zones, 9 of which expire in 2013 unless they are renewed statutorily. With that in mind, and the need to reform the 30-year old program, a group of business organizations met with a bipartisan group of legislators and agreed upon a comprehensive reform and extension package. As approved by the General Assembly, the bill extends all zones by 15 years. At that point the performance of each zone is reviewed and if it is functioning as intended can be extended another 10 years. A new Enterprise Zone Board is created and given the power to approve or deny decisions made by DCEO. All companies receiving tax benefits from enterprise zones must annually report their tax incentive information to the Illinois Department of Revenue who in turn will aggregate the information and report to the General Assembly.
EDGE Credit Disclosure
This new legislation requires the Department of Commerce and Economic Opportunity to disclose on its website the terms of future EDGE Credit agreements awarded by the Department.
Municipal Use of Tax Proceeds Extension
Changes were made to the Illinois Municipal Code stating that corporate authorities of a non-home rule municipality may, until December 31, 2020 (now, December 31, 2015), use the proceeds of a tax imposed under the Non-Home Rule Municipal Retailers' Occupation Tax Act, Non-Home Rule Municipal Service Occupation Tax Act, or the Non-Home Rule Municipal Use Tax Act for expenditure on municipal operations, in addition to or in lieu of any expenditure on public infrastructure or for property tax relief.
“Stripper Tax”
The legislation creates the Live Adult Entertainment Facility Surcharge Act by imposing an annual tax on strip club operators who allow alcohol consumption in their facilities. The bill allows for the operators to choose between paying a tax equal to $3.00 per patron admission or pay a specified tax based on the gross receipts of the strip club operator. All proceeds from this new tax are to be deposited into the Sexual Assault Services and Prevention Fund. If approved by the Governor, the bill becomes effective on January 1, 2013.
Revenue Estimates/Spending
Conservative revenue estimates for this current fiscal year will allow Illinois to pay down an additional $300 million in old bills. In the middle of May, legislators appropriated $150 million in unused money to serve as “matching funds” for Medicaid. With the help of the federal match, this action generated $300 million to be used exclusively for unpaid Medicaid bills from medical care providers. Conservative budgeting must continue every year so we can continue to pay down our State’s debt and overdue bills. Hopefully, less spending but more efficiency in government will become a permanent way of life for Illinois. We paid back $1.5 billion worth of bills this past year, still leaving us with $8 billion in unpaid bills.I will be traveling throughout the summer between Springfield and my home district office, meeting with constituents and attending a variety of forums. If I or my Legislative Director, Michelle Myers, can be of any assistance to you, please do not hesitate to call the Glen Ellyn office at (630) 858-8855 or email me at sandrapihos42@gmail.com (please include a phone number). It is an honor and a privilege to serve all constituents in my district and I am always happy to answer any questions or discuss your viewpoint.