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Governor Rauner & General Assembly Close FY15 Budget Hole
Faced with a $1.6 billion FY15 budget deficit upon taking office, Governor Bruce Rauner almost immediately asked for executive powers to reorganize spending and enable the State to get through the fiscal year, which covers spending needs through June 30, 2015.

Without immediate action, the State would have been unable to make payroll at Illinois prisons, low-income working families would lose their child care assistance, court reporters would be laid off and money for services for the mentally ill and developmentally disabled would run out. In addition, inaction would have further delayed and perhaps jeopardized critical categorical school funding and State aid payments.

After negotiations in which House Republicans were full participants, the General Assembly agreed last week to language contained in HB 317 and HB 318. HB 317, an appropriations bill, made cuts and transfers in State spending. HB 318, a budget implementation bill, granted the Governor the legal authority to carry out and implement the cuts in spending and spending transfers made in HB 317. Together, these bills work to fill critical holes in the deliberately unbalanced FY15 budget passed by majority Democrats and signed by former Governor Quinn.

Approximately $1.3 billion of the moves occurred in the form of budget transfers from various funds, and approximately $400 million was in the form of an across-the-board budget cut. The HB 317-HB 318 package created $97 million in budgetary flexibility that can be used to respond to specific challenges, including the challenge of school districts that have run out of reserves.

After the bills were approved I was interviewed about the difficult votes and why they were necessary. You can listen to my comments here.

House Committees Advance 512 Bills to Floor
Friday was the deadline for movement of House Bills out of the House committee process. In all, the Illinois House advanced 512 bills from committee to the House floor. House committees began meeting in February to take testimony and hear advocacy from witnesses, proponents and opponents for and against the measures filed by House members. This work was finished up this week. After the conclusion of the two-week spring break, the House and its committees will consider floor action and amendments to the House bills that advanced out of committee. The House will also start looking at bills coming over from the state Senate. Less than 13% of the bills filed this spring achieved approval by a House committee prior to Friday’s deadline.

House Republicans Advance Several Bills to Address COD Debacle
In response to public outrage over perceived malfeasance at the College of DuPage (COD), House Republicans have advanced six pieces of legislation that seek to prevent future mismanagement at the community college.

Thousands of COD taxpayers and several state legislators were shocked in January when a $763,000 contract buyout deal for COD President Dr. Robert Breuder was rushed through the COD board process with no transparency for stakeholders. Public outcry intensified a few weeks later when it was learned that Dr. Breuder, his top administrators and the college trustees had also enjoyed close to $200,000 in high-end dining on the taxpayers’ dime. House Republicans, led by Representative Jeanne Ives (R-Wheaton) petitioned Speaker Mike Madigan at the time to schedule immediate hearings into what lawmakers felt was a clear misuse of public funds.

Just last week we learned of yet another instance of questionable financial decision-making at COD, when the Chicago Tribune broke a story about COD Foundation board member Carla Burkhart, who received a no-bid $630,000 contract for sign design and installation work at the college. The contract made reference to Burkhart’s experience as an architect, when, in fact, she is not an architect and her firm does not do architectural work.

With the Friday deadline for House Bills to be moved through the House committee process, the following COD-related bills are now headed to the House floor for formal debate:
  • HR55 (Ives): Directs the Auditor General to conduct a thorough performance audit at COD that is paid for by COD. Under the resolution, the performance audit would include the following determinations for Fiscal Years 2011-2014:
    • The College of DuPage’s sources of revenues
    • College expenditures, by broad category
    • Whether the Board is carrying out its responsibilities required by Board policy
    • Whether the Board is meeting its fiduciary responsibilities and ensuring compliance with the Public Community College Act and Board Policies
    • Whether the compensation and severance packages provided to the COD President are comparable to compensation and severance packages provided to Presidents of other Illinois Community Colleges
    • Whether changes to the College President’s compensation package were properly approved
  • HB303 (McDermod): Adds transparency to publicly-funded severance agreements by making them subject to the Freedom of Information Act.
  • HB3593 (Ives): Limits the term of a community college employment contract to no more than three years and caps the amount of a severance agreements to no more than one year. The bill also prohibits automatic renewal clauses and requires that renewal or extension discussions occur during open meetings.
  • HB3998 (Ives): Prohibits community colleges from holding more than four months of operating expenses in reserves (COD currently has 24 months of operating expenses in reserves).
  • HB4134 (Sandack): Provides that if community college trustees issue a severance package to an employee using State funds, the exact amount of the monetary severance package shall be deducted from the college’s state aid when the next aid disbursement is made by the Comptroller.
  • HB4135 (Sandack): Limits the amount of a community college severance package to one year of salary and one year of benefits.
HR55, HB303 and possibly HB3593 will stand alone on the House floor, while the other bills are likely to be amended and possibly combined.
After voting yesterday to provide Governor Bruce Rauner with the flexibility needed to balance the FY15 budget he inherited from former Governor Pat Quinn, State Representative Ron Sandack spoke about the tough votes and why they were necessary.
In response to the Illinois House approval today of House Bills 317 and 318, State Representative Ron Sandack (R-Downers Grove) has issued the following statement:

“The Illinois House worked in a bipartisan manner today to close a $1.6 billion budget hole that Governor Rauner inherited when he took office in mid-January. The votes we took were difficult, but necessary, so that our court system can remain open, our most vulnerable citizens can continue to receive important services, the State can meet payroll obligations at our prisons and low-income working families can have uninterrupted access to the child care assistance program.”

“The budget crisis we face today is the worst the General Assembly has ever seen. There is a very real threat that critical service areas of the budget will run out of money. Through a true act of bipartisanship, and pending Senate approval of the bills, we will now be able to finish this current fiscal year whole.”

“These bills grant Governor Rauner the flexibility he needs to balance the FY15 budget, and while the 2.25% reduction in general revenue funding is unfortunate, the Governor will have discretionary funds at his disposal to backfill cuts to schools and programs.”
This week State Rep. Ron Sandack spoke with Tony Arnold and Amanda Vinicky of WBEZ Talk Radio about political influence, and whether its better to be a local elected official or a statewide elected official. You can listen to the discussion here.
Hearing Held on Sandack Municipal Bankruptcy Bill
As fiscal pressures grow on Illinois local governments, residents and lenders are starting to look at ways that challenged units may be allowed to use in the future to reorganize their obligations. My HB 298 would amend the Municipal Code to allow cities, towns, and villages to file petitions and exercise powers pursuant to Chapter 9 of the Federal Bankruptcy Law. On Friday, the bill was heard in Chicago before the House Judiciary-Civil Law Committee, and 2 ½ hours of testimony was heard at the subject matter hearing.

Chapter 9 of the Federal Bankruptcy Code allows bankruptcy protection for municipalities and other units of government, but the law includes a provision that requires the units to gain state authorization as part of a filing. Currently Illinois statutes do not allow for such authorization to be given. HB298 would allow desolate and debt-ridden units of local government to have bankruptcy protection as a last resort tool for stabilizing financial affairs. Prior to filing, a unit of government would have to first prove that they are insolvent and not able to pay their bills, that they have attempted to restructure debt, and that they have acted in good faith with their creditors. In cases of local government bankruptcy filings, assets could not be seized or sold, or taken away in any fashion. It would simply provide a mechanism through which cities and other units of government could continue to provide basic and necessary services while being fair to all creditors.

Those who testified on Friday included Rockford Mayor Larry Morrissey, who testified as both a mayor and as a representative of the Illinois Municipal League, Civic Federation President Laurence Msall, outgoing Chairman of the Illinois Finance Authority William Brandt, and union representatives from various different unions that receive local pensions.

In the 24 states that currently allow for municipal bankruptcy filings, the most notable cases are Detroit, Michigan, and Stockton, Vallejo and San Bernadino, all in California. As the hearing Friday was subject matter only, no vote was taken and the bill remains before the Judiciary-Civil Law Committee.

Negotiations Continue to Fill Budget Hole
Many questions are being asked about the current status of the FY15 budget, featuring spending commitments by the State of Illinois for the fiscal period ending June 30, 2015. Funds need to be shifted around in this budget in order for the State to keep certain commitments to prison guards, court reporters, providers of subsidized child care services that are mandated to be available, and other essential State services.

Governor Rauner has outlined a proposal to enact emergency fix-up measures to plug these holes in the FY15 budget. These holes became inevitable when former Gov. Quinn signed a Democrat-passed budget that was deliberately unbalanced. Check out the House Republican Caucus Blog for updates on this ongoing story.

Department of Employment Security Issues Monthly Report on Illinois Joblessness in Metro Areas
The report, which counted the jobless in January 2015, covers unemployment in fourteen areas defined by the U.S. Census. The Department found that for the eleventh month in a row, unemployment areas fell in each major Illinois metro area compared to year-earlier levels. However, joblessness remained very severe in significant manufacturing-oriented metro areas in Downstate Illinois. For example, pink slips remained a fact of life in hard-hit Decatur, with joblessness counted at 8.0% in January.

The report followed the Department’s report on March 12 that Illinois statewide unemployment, before seasonal adjustments, had fallen to 6.9%. This level signaled continued slow recovery from severe recession conditions. Economic experts continue to report that joblessness is not falling fast enough in Illinois to enable wage levels to increase under current market conditions.

Metro areas with lower-than-statewide-average unemployment in January 2015 included Bloomington-Normal (5.4%), Springfield (6.0%), and Lake County (6.5%). With local economies oriented toward specialty health care and health products, higher education, agriculture support, and the service sector, some Illinois metro areas continue to move towards recovery.

State Police Open Internet Window to Online Concealed Carry Applicants
Up until this month, the Illinois State Police have required Illinois firearms owners to submit paper applications for a concealed carry permits. However, starting this month, the State Police have begun to accept concealed carry permit applications online. This follows up on the startup period of the Firearm Concealed Carry Act, in which more than 91,000 Illinois residents have earned permits that enable them to carry concealed firearms. The Act became state law in July 2013 as Public Act 98-0063.

The Firearm Concealed Carry Act, which made Illinois the 50th and final state to have a concealed carry law on the books, was enacted as the result of a strong push from members of the Illinois State Rifle Association, which held their annual lobby day this week at the Illinois State Capitol. Gun owners gathered in Springfield on Wednesday, March 18 to push to defend and expand the law. Illinois residents continue to be subjected to time-consuming requirements as elements of the concealed-carry permit application process under current law.

The State Police, which also operate the familiar FOID Card system for firearm owner’s identification (FOID) cards, took this March 2015 changeover opportunity to also make changes in the way they accept FOID applications. As of March 9, they no longer accept FOID paper applications.

Firearms dealers also contact the FOID database when firearms are being transferred from seller to buyer. The State Police, as part of their movement online, is encouraging dealers to use the access-restricted website when making a firearm transfer inquiry.

Governor Issues Compulsory Union Payment Orders
Continuing his fight to remove union dues from the paychecks of non-union members, Governor Bruce Rauner has instructed State departments under his control to refrain from withholding compulsory union payments from nonunion employee paychecks until the issue can be further adjudicated. Under State practice prior to 2015, nonunion State employees in offices that had been organized by labor unions have been required to submit to withholding payments made over to the unions that have been recognized as representing their offices. These moneys are then paid to the unions. Labor calls these payments “fair share” payments, and says they should be turned over to cover what is described, by the unions, as the cost of being prepared to represent the nonmembers in labor-management disputes. Unions called the Governor’s moves non-contractual and unauthorized.

Minimum Wage Bill Clears Committee
HB 3345 would raise the Illinois minimum wage from $8.25/hour to $9.00/hour, starting in July 2015. Most Republicans, led by Governor Rauner, support examination of comprehensive reform of the State’s business climate laws and laws governing labor-management relations and practices. Areas ripe for discussion include issues of tort reform, workers’ compensation, and local worker freedom, seen by the Governor and many Republicans as necessary moves that must be included with an increase in the minimum wage. HB 3345 would further raise the Illinois minimum wage to $10.00/hour in July 2016. A separate increase in the Chicago minimum wage would not be affected by HB 3345. The measure moved this week from the House Labor and Commerce Committee to the Illinois House floor for further discussion.
Experts in the area of municipal bankruptcy gathered before the House Judiciary-Civil Law Committee in Chicago on Friday to discuss State Representative Ron Sandack’s (R-Downers Grove) HB298, which would allow Illinois municipalities to seek bankruptcy protections through Chapter 9 of the Federal Bankruptcy Code. Chapter 9 allows for bankruptcy protection, but includes a provision that requires municipalities to gain state authorization as part of a filing. Currently Illinois statutes do not allow for such authorization to be given.

“Today marked the beginning of an important and comprehensive discussion about whether or not the General Assembly should allow desolate and debt-ridden municipalities in Illinois to have bankruptcy protection as a ‘last resort’ tool for stabilizing and reorganizing financial affairs,” said Sandack. “We heard compelling testimony from both sides of the argument, and I look forward to the conversation continuing in the coming weeks and months.”

Sandack pointed out the significant differences between municipal bankruptcies and those filed by individuals or businesses. “Everyone needs to realize that bankruptcy protection for municipalities is much different than the types of filings that are available to citizens,” Sandack said. “One primary difference is that through the process of a municipal bankruptcy, assets cannot be seized, or sold, or taken away in any fashion. The process would simply provide a mechanism through which cities could continue to provide basic and necessary services while being fair to all creditors.”

According to Sandack, municipalities that wish to seek bankruptcy protection must first prove they are insolvent and not able to pay their bills, that they have attempted to restructure debt, and that they have acted in good faith with their creditors.

In addition to hearing from experts in the field of municipal bankruptcy, committee members also heard testimony from experts in the field of finance, from Rockford Mayor Larry Morrissey and Civic Federation President Laurence Msall, and from representatives of police and fire department unions. Through provided testimony, a recommendation emerged regarding the creation of an intermediary or “gatekeeping” authority which would work with municipalities with hopes of preventing an ultimate need for a bankruptcy filing.
“I am very open to the idea of a panel that would work with municipalities and try to help them regain financial solvency, because obviously bankruptcy would be a measure of last resort,” said Sandack. “By sponsoring this bill I am not encouraging municipalities to abandon efforts to regain financial stability on their own. The bill would simply provide municipalities with an additional tool to help them get their financial affairs in order.”

Governor Bruce Rauner has expressed his support of the bill.

Education Funding Task Force Begins Hearings in Springfield
On Wednesday, a newly-created bipartisan Education Funding Task Force met for the first time in Springfield. The 23-member panel includes 13 Democrats and 10 Republicans from the House of Representatives. As a vocal opponent to last year’s SB16, I was pleased to be named to this important task force. At our first meeting, we spent 1 ½ hours learning about SB1, which is the refiled version of SB16 with a few modifications. While I am still studying this bill, I have concerns about the new bill and how it would, much like last year’s SB16, channel millions in General State Aid (GSA) away from DuPage and other Collar County school districts, and send the funds to Chicago and downstate schools. I, along with several of my colleagues on the panel, am hoping to see an ultimate solution that does not penalize today’s successful districts by stripping away their already-limited GSA dollars. The task force will meet throughout the next few months and I look forward to seeking a bipartisan solution to Illinois’ school funding problems.

Slow Economic Growth continues in Illinois
The staff of the Commission on Government Forecasting and Accountability (COGFA) presented their FY16 Economic Forecast  in Springfield on Wednesday, March 10.  COGFA is the nonpartisan economic think tank of the Illinois General Assembly, and their Revenue Update for FY15 and numbers for FY16 will be key background data to be used by the General Assembly as they modify the State’s FY15 budget and craft a FY16 budget to meet the urgent fiscal needs of the State. 

COGFA’s numbers confirm that the post-2009 Illinois “recovery” has been the slowest economic expansion of the post-World War II period.  In each previous recession, not only were the rates of decline in economic output less severe, but the ensuing recoveries were faster and steeper.  Illinois economic trend lines, starting in 2010, show steady but very shallow, palely upward-trending movements.  New jobs are created in relatively low numbers and are being created, in Illinois, in insufficient numbers to force increases in median overall wage rates.    

The pale post-2009 “recovery,” combined with the pushdown of State income tax rates in January 2015 are two forces that continue to combine to create a worsening State of Illinois budget crisis.  A spreadsheet presented to staff by the Commission shows net income tax revenues dropping more than $4 billion in FY16, below what would have been paid to the State under the tax rates in effect in FY14.  Growth rates in tax revenues attributable to underlying rates of growth in the Illinois private-sector economy are expected to make up only $500 million of the lost income, leading to a structural deficit of $3.5 billion in FY16.  To this number is supplemented accumulated past-year deficits and unpaid State bills of many billions of additional dollars, plus the spending pressures created by many “entitlement” lines within the State’s budget.   

Sandack Offers “Page for a Day” Opportunities for Local Youth
Last week I had the pleasure of meeting the Schreiber family of Woodridge during a family visit to Springfield. Chas (the Boy Scout in the photo) served as a “Page for a Day” in the House of Representatives. If your family will be traveling to Springfield during a time when the legislature is in session, please notify my Springfield office at (217) 782-6578 so my staff can make arrangements for me to meet you. Children are able to participate in the General Assembly’s “Page for a Day” program, and my Springfield staff can also assist with scheduling of that activity.

Unemployment Remains Higher than U.S. as a Whole, but Drops another 0.1%
The figures for January 2015, reported on Thursday, March 12 by the Illinois Department of Employment Security (IDES), show that Illinois’s jobless rate fell from 6.2% to 6.1% in January 2015.  The same number was 8.2% in January 2014, down 2.1% over the 12-month period.

Soft spots in the statewide economic picture complicated the continued trend toward lower unemployment. Illinois employment – the number of Illinois residents with nonfarm payroll jobs – also dropped by 7,100 jobs in the same month.  The declining employment and unemployment numbers reflected a stagnating Illinois population and the continued movement of many Illinois residents out of the labor force altogether. 

Clock is Ticking on FY15 Budget Crisis Situation
The decision by the General Assembly and former Gov. Quinn to pass and sign an unbalanced FY15 budget in spring 2014 continues to endanger many Illinois residents.  These are persons who are paid from, or dependent on, budget lines in the FY15 State budget where the amounts set aside were not enough to fully fund the expense item until the end of the fiscal year on June 30, 2015. 

Examples of groups affected by unfunded FY15 budget expense lines include providers of subsidized Illinois child care, Illinois prison guards and circuit court reporters.  These are individuals and contractors who have been told of a fast-approaching date when Illinois must find more money to pay them.  Gov. Bruce Rauner has presented a proposal to the Illinois General Assembly to move money around within the budget to cover these anticipated urgent needs, but factions in the General Assembly who are politically opposed to the Governor have so far refused to allow this plan to come to the House floor for a vote.       

Many Parents Call for Allowing their Children to Opt Out of PARCC Tests
PARCC standardized tests, which utilize an online platform that students are expected to interact with as they take the test (rather than the format, familiar to their parents, of filling in bubbles on a piece of paper) began to be administered throughout Illinois on Monday, March 9.  The testing cycle is expected to continue for approximately four weeks.  Data from the test will be used to evaluate Illinois public and charter school students, teachers, schools and school systems.

Many parents are concerned about the new PARCC system, which from their point of view was sprung on their children without recourse and without sufficient warning.  No current law allows parents to withdraw their children from the PARCC test, which is supposed to be given to every eligible child in order to generate statistically significant results that can be used to gauge everyone’s performance.  Furthermore, the federal government has sent warning letters to Illinois’ State Board of Education to remind educators of the nexus between federal school aid and compliance with the order that students all take the test.

Attitudes by parents toward the PARCC mandate is becoming increasingly coordinated with resistance toward other mandates imposed by schools upon children, such as mandated sex education and compliance with certain health benchmarks.  Bills have been introduced in the Illinois General Assembly to discuss the issue.  The “Chicago Sun-Times” describes the issue from the standpoint of concerned parents.  

Comptroller Munger Urges Illinois Individual Income Taxpayers to Register
The Illinois Tax Refund Alert system, rolled out this spring by new Illinois Comptroller Leslie Geissler Munger, allows taxpayers to monitor the status of their Illinois tax returns, including an automated text-messaging system.  Similar to the familiar warnings that many of us get when our phone or cable bill is due, the test message will tell eligible taxpayers of their payment notifications.   Registration is free through the portal.

Supreme Court Hears Oral Arguments in Pension Case
The Illinois pension reform law enacted in December 2013 faced questions before the Illinois Supreme Court at oral arguments on Wednesday, March 11.  The Illinois Solicitor General, advocating for the law, stated that the controversial law had been enacted to solve a fiscal emergency.  Established constitutional law authorizes a state, in furtherance of its constitutional duty, to exercise what are called “police powers” that potentially override other considerations.  Plaintiffs seeking to strike down the law say that it improperly violates a section of the state Constitution.  Illinois has the worst-funded pension system of the 50 states.  A decision by the state Supreme Court, which is expected later this spring, could affect budget and pension law policies that will be before the General Assembly as it approaches the May 31 adjournment date.         

U of I Moves Forward with Plans for New Medical School at Champaign-Urbana Campus 
The facility for specialized medical education would be physically separate, and separate in its mission statement, from the existing “U of I” school on the Medical Campus of the West Side of Chicago.  University President Robert Easter announced on Wednesday, March 11 that he would recommend that the Board of Trustees approve the Champaign-Urbana medical school project.

Under the proposal, the University of Illinois’ Downstate hub campus will become the center of a cooperative center of medical education and bioengineering research and development.  The proposed medical school will leverage the University’s established Champaign-Urbana presence in engineering sciences.  The medical school is expected to work in financial and clinical affiliation with the Urbana-based Carle Foundation Hospital System.  The Carle alliance could create a platform to test new medical devices and therapies in a clinical setting.  This potential Champaign-Urbana operating model contrasts with the traditional teaching-hospital role of the Chicago-based University of Illinois-Chicago medical school and hospital. 

President Easter’s staff and consultants will present a spreadsheet binder to the trustees that will indicate that the injection of additional Illinois taxpayer funding to operate the new medical school will not be required.  The new (2014) Western Michigan University medical school in Kalamazoo offers a financial model for a bioengineering-driven, self-supporting medical school complex.  The trustees will be asked on Thursday, March 12, to approve the University of Illinois proposal.

Mobile Office Hours a Success in District 81
Thank you to all residents who have taken advantage of my mobile office hours so far this year. On Friday my staff was at the Woodridge Library, where they visited with and assistant several people.  This week the mobile office hours continue with two events. On Tuesday, March 17, my staff will be available from 10:00-noon at the Indian Prairie Public Library, 401 Plainfield Road in Darien, and on Thursday, March 19 they will be available at the Naper Boulevard Library, 2035 South Naper Boulevard in Naperville from 11:00 AM until 1:00 PM. If you are having trouble with a State agency, or are interested in learning more about available state programs, please stop by the event that is closest to your house.