News Flash
Springfield News - May 7th thru 11th
(posted 5/16/2012) - Constituents,
It is our busiest time of the year in Springfield, and I would like to provide you with an update on the key items that were discussed and/or voted on last week. These include: Retiree health care, Illinois public pensions, Child care, Facility closures, Enterprise zones, College Illinois audit, and Appropriations.
Retiree Health Care
On Wednesday, the Illinois House passed Senate Bill 1313, Amendment #9, which aims to stabilize the State’s health care system by requiring State retirees, to pay a portion of their healthcare premiums. This bill does not affect public school teachers or community college employees who already contribute premiums to the Teachers’ Retirement Insurance Program (TRIP) or the College Insurance Program (CIP). I have respect and appreciation for the work of public employees, which is why this was a very difficult decision for the General Assembly to make, but if nothing is done, our health care system will fail. This amendment has protections, giving lawmakers the opportunity to object if the changes are not implemented fairly.It is important that retirees understand that this bill does NOT take away retiree health care benefits. However, it will require retired employees to contribute to their health insurance premiums to help offset rising healthcare costs. Today there are 78,000 retirees who pay no premium for healthcare. Another 7,400 pay a portion of their premium and 36,000 dependents are enrolled but these premiums do not cover the true cost of the healthcare benefit. The change puts in place a mechanism that allows the Director of Central Management Services (CMS) to determine the State’s premium payments on behalf of retired employees – including lawmakers and judges. CMS has proposed guidelines for determining what retirees’ contributions will be based upon a sliding scale that takes into account length of service and ability to pay. The percent of cost the retiree will pay will also be based on his or her pension level. Senate Bill 1313 House Amendment #9 was approved in the Senate on Thursday and has been sent to the Governor for his signature.
Pensions – Chicago
Echoing calls to reform Illinois’ public pension laws, Chicago Mayor Rahm Emanuel visited Springfield on May 8 and asked for major changes in the State laws that govern the pension systems offered to City of Chicago officials and employees. Recent revelations of perks, such as the “double-dip” pension, have spurred cries for reforms and have also triggered warnings from the international investment and business community about our bond ratings. In conversations with lawmakers, Emanuel suggested that legislative inaction could threaten Chicago’s future status as a place for investment and job creation. Chicago’s unfunded pension liabilities are reported to top $20 billion – a figure compared by many observers with the State’s unfunded pension liabilities, which are approaching $85 billion.Child Care
One of the human services commitments made by the State is that of reimbursement to a wide variety of child care providers for services provided to children who come from households with incomes that make them eligible. Funding for these reimbursements in fiscal year 2012 has run out, and $73 million in additional funds will be required for the State to pay the bills of child care service providers through the end of the fiscal year (June 30). This shortfall is tied in part to an increased case load in the Temporary Assistance for Needy Families (TANF) program, which has had funds redirected to it at the expense of the child care program. Many child care service providers are licensed individual caregivers and small businesses. On May 8, Governor Quinn’s office stated that they had found funds that could be used as a “supplemental appropriation” to fill this gap. Lawmakers continue to work with the administration to ensure that the solution to this problem is revenue-neutral and falls within the agreed $33.2 billion Fiscal Year 2012 budget framework.Facility Closures
Governor Pat Quinn’s plans to close 35 facilities throughout Illinois, with a cost of up to 2,527 jobs, will hit Downstate Illinois especially hard. Many of the human services and correctional facilities listed in the closure plan are located in rural Illinois, especially central and southern Illinois. Most of the members of the Commission on Government Forecasting and Accountability (CGFA), a bipartisan General Assembly panel, voted “no” last week in a primary round on the closure requests. However, CGFA’s vote is advisory and will not prevent the Governor from padlocking the threatened facilities. In a last-ditch attempt to protect these threatened jobs and facilities, State Senators tried to move a bill (SB 3564) to allow CGFA to permanently block these closures. On May 9, however, the bill failed in the Senate by a vote of 29-23-1, allowing the Governor to continue to move forward with his plans to close the threatened facilities. The General Assembly does not have authority to stop him without legislation.Enterprise Zones
Enterprise zones are great economic development tools to create and retain jobs in Illinois. Between 1984 and 2011, the zones created 354,000 jobs and retained 536,000 jobs in Illinois.Unfortunately, without action by the General Assembly, Illinois’ 97 existing enterprise zones will begin expiring in 2013. On May 9, House Republicans made a Motion to Discharge Senate Bill 3688 from the House Rules Committee. Senate Bill 3688, which would extend the lives of Illinois’ enterprise zones for an additional 25 years, passed the Senate unanimously in April, but is being held hostage in the House Rules Committee.Several Representatives rose in strong support of the Motion to Discharge Senate Bill 3688 from the Rules Committee. Unfortunately, the legislation remains stalled.College Illinois! Audit
College Illinois!, a program operated by the Illinois Student Assistance Commission (ISAC) to provide a tax-advantaged prepaid tuition savings opportunity for Illinois residents, is currently actuarially unstable and is accepting no new accounts into its program. It has promised investors more returns than it can provide based upon current prudent projections of future investment returns and interest rates. Some of College Illinois!’ investments made before and during the 2008 economic downturn have led to significant losses. A report released on May 9 by the Auditor General’s office reveals some of the steps that led up to the current situation, including certain actions taken by College Illinois!’ former Director of Portfolio Management. The audit report suggests that one former employee may have made investment decisions based on personal benefit and reports administrators failed to adhere to required procurement protocol. The full report can be viewed at http://www.auditor.illinois.gov/.Appropriations
Discussions are ongoing in this very difficult budget year. An overall appropriations number has been set for every appropriation committee, and soon the Human Services, Elementary/Secondary Education, General Service, Higher Education, and Public Safety Committees will finalize appropriations within their individual areas. Making sure the requisite dollars are available for each of these committees is dependent on $2.7 billion dollars worth of Medicaid cuts. There is bipartisan support this year for a balanced budget which includes reserves to be used to pay down debt, and difficult budget cuts are a key element of all discussions.General Assembly Legislative Scholarship Program to End
Following the lead of members of the House, who voted to end the legislative scholarship program in April, Senators on May 3 also voted to end the controversial program. For many years I have carried legislation to end the program and the bill that finally passed carries the language of my original legislation. The scholarship program was laced with political favoritism. Attempts over time to reform the program failed, and unfortunately some legislators continued to use the scholarship program as a financial perk for the children or relatives of political donors and supporters.In reality, the scholarships are tuition waivers, which means the universities had to absorb the costs associated with the scholarships awarded to students. University budgets are already subject to intense pressures and unconscionable payment delays from the state, and the tuition waivers just added another layer of financial stress that has led to tuition increases. Recent reports from the Illinois State Board of Education suggest that universities collectively absorbed approximately $13 million for scholarships in fiscal year 2011 and $13.9 million in fiscal year 2010, with 1,487 scholarships awarded and obviously these costs are passed on to other students.
If signed by the governor, the program would end on September 1 of this year. While 70 of the state’s 177 legislators chose not to participate in the program this year, scholarships awarded to students for the 2012-2013 school year by those who did participate will be honored. I have not participated in the program for several years.
Your Voice Counts
As always it is my privilege to serve you and please feel free to contact my district office with any issues or concerns that affect you as an Illinois resident and as my constituent.