Done, but What Next?

Done, but What Next?

QuickView May 22, 2007

Page 1 of 15

QuickView – State Legislative UpdateApril 3, 2009

Tuesday, May 31, 2011

- Page 1 of 15 -

QuickView – State Legislative UpdateMay 31, 2011

Done, But What Next?

The House and Senate concluded its spring session during the last few minutes of May 31st. The Senate took action on the final parts of the budget at approximately 11:55 pm and officially adjourned at 12:01 AM. The House completed its business and adjourned at 10:55 PM. Nothing out of the ordinary for the juggernaut of the past nine straight days.

The General Assembly concluded the two main things they had to do this year – pass a budget and create new legislative districts. And as we fully expected these two big issues were dealt with in the final days.

The unanswered question is, will the Governor approve the state budget or will he veto it? It is assumed he will approve the redistricting maps, but it is not clear if he will veto the budget and call the General Assembly back into session. If he were to veto the budget, it would change the dynamics of what it would take to approve a budget and it could set in place a very long and drawn out battle.

State Budget Sent to Governor

As always, the state budget approval came down to the final stretch and there was some question as to whether it would be approved before the deadline. The House approved 13 different appropriation bills containing the numerous expenditure authorizations. The Senate passed its own version several weeks ago, but their expenditure lines were higher than what the House approved.

During the past few days, there was considerable speculation emanating from the Senate Democrat caucus that several members of the caucus were not happy with the lower appropriation levels in the House approved budget. Several attempts were made to reach a compromise to no avail. At one point, there were thoughts that some of the Senate Democrats would not support the appropriation bills and force the General Assembly into overtime.

To address the concerns of some of its members, the Senate attached approximately $440 million in additional spending to HB 2189, which contains the re-appropriations for capitol construction, and returned it to the House for its consideration. A large portion of the increased funds would be for elementary and secondary education and the College MAP program. Several members of the Senate Democrat caucus did not support the remainder of the appropriation bills, but the billsdid receive the necessary votes to pass and be sent to the Governor. The additional $440 million in spending contained in HB 2189 was held in the House.

Now the question becomes will the Governor approve the appropriation bills or use his veto pen to strike down the budget? If he chooses to use his veto pen, he will force the General Assembly back into a special session when any action will then take a super majority. To override the Governor’s veto or pass a new budget with a super majority, the support of the Republicans in each chamber would be needed.

The bills that contain the appropriations are contained in HB 123, HB 124, HB 132, HB 326, HB 327, HB 2107, HB 2109, HB 2165, HB 2167, HB 2168, HB 3700, and HB 3717. The majority of the Illinois Department of Agriculture and other agricultural related appropriations are contained in HB 124.

Agriculture Line Items

The following chart shows some of the key lines items relating to agricultural appropriated levels:

Line Item / FY 2010 Enacted / FY 2011 Enacted / FY 2012
Governor Proposed Level / Budget Approved
Cook County Extension / $4,736,400 / $2,893,900 / $2,893,900 / $2,749,200
State Cooperative Extension Service Trust Fund / $1,713,900 / $1,047,100 / $1,047,100 / $994,700
State Cooperative Extension Service Trust Fund – County Board Match / $12,160,000 / $10,000,000 / $10,800,000 / $10,800,000
Ag Extension - 4-H / $961,400 / $786,400 / $786,400 / $786,400
SWCD / $6,133,700 / $3,531,600 / $2,931,600 / $2,785,000
AgriFIRST / $250,000 / $250,000 / $0 / $0
Co. Fair and Exposition Authorities / $1,357,400 / $900,900 / $900,000 / $900,900
Co. Fair Rehabilitation / $2,602,000 / $1,301,000 / $1,301,000 / $1,301,000
Co. Fair & Agriculture Societies / $2,182,300 / $1,798,600 / $1,798,600 / $1,798,600
C-FAR / $0 / $0 / $0 / $0
Viticulture/Enologist / $142,500 / $142,500 / $142,500 / $142,500
Pesticide Act Administration / $4,400,000 / $4,500,000 / $5,100,000 / $5,100,000
Pesticide Enforcement Program / $900,000 / $700,000 / $600,000 / $600,000
Animal Disease Labs Act / $850,000 / $1,700,000 / $1,700,000 / $1,700,000
Livestock Management Facilities Act / $30,000 / $30,000 / $30,000 / $30,000
Meat and Egg Inspection / $0 / $300,000 / $300,000 / $300,000
Agricultural Education / $3,043,100 / $1,422,000 / $1,947,600 / $1,800,000
Food Safety Modernization Initiative / ______/ ______/ $200,000 / $200,000
Dixon Springs Agricultural Center (Included in HB 3700) / $350,000 / $328,300 / $328,300 / $328,300

Education Funding

The elementary and secondary education budget was contained in HB 327 and appropriates $6.85 billion to the Illinois State Board of Education (ISBE). This represents a reduction of $171 million compared to last years budget. The budget plan would maintain the current foundation level, $6,119 per pupil. Some provisions of the budget include:

$152 million reduction compared to last year for the General State Aid. The plan would be to keep the foundation level flat at $6,119, with a possible proration.
Fully funds mandated categorical grants – including regular transportation.
Eliminates funding for teacher/administrator mentoring, principal mentoring, standards and assessments, advanced placement, growth model assessments, and Response to Intervention.
Restores funding for Regional Offices of Education salaries.

As we indicated in the opening portion of the budget there was a “bonus budget” that was approved by the Senate, but held by the House. If it would have been adopted the bill would have provided an additional $216 million in funding for elementary and secondary education as follows:

$152 million in General State Aid (to avoid proration of state aid payments next year)
$9.5 million for the Textbook Loan Program which the House did not fund.
$3.2 million additional funding for reimbursement for the Free Breakfast/Lunch Program.
$6.5 million for Teachers and Administrators Mentoring Program not funded in the approved budget.
$2 million for the Principal Mentoring Program not funded in the approved budget.
$8 million for a Class Size Reduction Pilot Project not funded in the approved budget.
$10 million for Standards, Assessments and Accountability not funded in the approved budget.
$500,000 for Advanced Placement Classes not funded in the approved budget.
$1.2 million for Growth Model Assessments not funded in the approved budget.
$17.1 million additional funding for Early Childhood Education.
$200,000 additional funding for Temporary Relocation Expenses Revolving Grant Fund.
$3.2 million for the Illinois Hope and Opportunity Pathways Through Education Program.
$400,000 for the American Diploma Project.
$964,799 for the Response to Intervention Initiative not funded in the approved budget.
Funding for the current fiscal year to assure that the fourth quarter mandated categorical grant programs are funded before July 1.

(We would like to thank the Illinois Association of School Boards for allowing us to share their detailed information on the impact of the elementary and secondary education appropriations.)

Lapse Period Spending

Once again, to assist with balancing the state budget, the General Assembly increased the time it gives itself to pay its vendors. SB 2172 (President Cullerton/Speaker Madigan) extends the lapse period spending from August 31, 2011 to December 31, 2011. This will allow the state to float outstanding bills for an additional four months. This has unfortunately become common practice the past several years.

Workers Compensation – HB 1698 (Rep. Bradley/Sen. Raoul)

Nothing epitomizes the contentiousness of the legislative process better than the battle over reforming the Illinois Workers Compensation program. There have been several different bills approved by one chamber but not the other; negotiations between the major parties; tons of press releases; and stump speeches in committees and on the chamber floors; all of which occurred during the past several days. Negotiations were hosted under the auspices of the Speaker of the House and President of the Senate. The major parties involved in the negotiations were the business community (represented by the Illinois Chamber of Commerce, National Federation of Independent Business, Illinois Retail Merchants, Illinois Manufactures Association, and others), organized labor, the medical community (Illinois Medical Society and Illinois Hospital Association), and the trial lawyers.

Late last week an announcement was made that a compromise bill was going to be offered. Some were supportive, but most were neutral (like the Illinois Chamber of Commerce, National Federation of Independent Business, Illinois Trial Lawyers, and others), but the Illinois Medical Society remained opposed on the portion that would have capped their reimbursement rates. The bill was approved by the Senate with 46 yes, 8 no, and 2 present votes on Saturday. On Sunday, the House called the bill and it was defeated with 55 yes, 39 no, and 19 present votes. After the vote it became clear that the Illinois Medical Society worked diligently to defeat the bill and was successful.

This evening the House sponsor called the bill again (bills on the order of Concurrence are allowed multiple roll calls) and it was approved with 62 yes, 43 no, and 10 present votes.

Analysis of the bill shows that this bill offers employers a better situation than they currently have. There is no negative impact on employers and reduces costs. It introduces important new elements to Illinois Workers Compensation law and repairs some problems with the current system.

Several major issues being sought by the business community were not included. The largest issue that was sought was to guarantee employers cost reductions through a higher causation threshold. Two other issues not addressed were more stringent American Medical Association guidelines or strong employer directed medical care networks. According the the Illinois Employment Law Council of the Illinois Chamber of Commerce, Illinois’ workers compensation system will maintain high costs and be out of line compared to other states. The bill has been approved by both chambers and will be sent to the Governor for his review and action.IFB has no position on HB 1698.

Borrowing Bills Fail

In an effort to pay down close to $6.2 billion in unpaid bills the state has incurred, Sen. Sullivan offered a package of bills to "restructure" the states tax exempt bonding last week. The bills would have allowed paying $1.48 billion for non-government vendors, $1.34 billion group insurance payments, $800 million for corporate income tax refunds, and $2.7 billion owed to governmental entities like municipalities, counties, and school districts.

There was no new dedicated revenue identified to specifically pay the bond payments so the bond principal and interest would have been paid from General Revenue Funds (GRF). The life of the bonds was 7 years and would have an interest cost of $800 million. What was interesting in the debate of the bill was that since the state is already paying interest on these past due bills, the state is going to incur $500 million to the vendors that are not currently being paid. The overall cost of the borrowing would essentially have a price tag of about $300 million.

The package of bills that included each portion were SB 342, SB 343, SB 344, and SB 345. The bills were defeated each by a vote of 19 yes, 23 no, and 4 present votes. There is some speculation that the bills were introduced and called for a vote to once again send a message to the Governor that there is no support to pass a borrowing plan.

Gaming Expansion - SB 744 (Sen. Link/Rep. Lang)

After several years of trying to expand gaming in the State, the General Assembly passed a bill to create 5 new casinos, allow slot machines at race tracks, allow expansion of current casinos, allow off track betting (OTB) at the state fair grounds, and other changes. To garner votes, there were all kinds of things packed into this bill. The bill was amended 8 times.

The bill would allow the creation of casino in Chicago, Danville, Rockford, Park City (in Lake County), and a location to be determined by a bidding process in the Chicago South Suburbs. The bill allows for a portion of the revenues raised from fees and taxes on these new and expanded casinos to be used to financially support the horse racing industry. Also included in the bill is approximately $20 million that will be used to provide added funding for several agricultural programs starting in July 2012.

It is estimated that if all the portions of SB 744 are implemented, the State could realize between $1 to $1.6 billion annually. Most of these revenues are not expected to be realized for several years due to the time needed to license, construct, and begin casino operations. There are many interesting programs that will receive funding from the potential revenue that could be generated. Some of those are: Depressed Communities Economic Development fund, county forest preserve districts for a botanic garden, $2.5 million for state parks, $2.5 million for state historic sites, and others.

The breakdown of funds for agricultural programs is as follows:

Up to $5 million annually for the State and County Fair Assistance Fund to be used for the development, expansion, or support of county fairs. A county fair shall be eligible for a maximum grant of $20,000. The funds may also be used as grants to the Illinois State Fair and DuQuoin State Fair.
$250,000 annually for the Illinois Racing Quarter Horse Breeders Fund.
$10 million annually for the Soil and Water Conservation Districts.
$1 million annually for the Illinois Forestry Fund for costs with the CREP Forestry Assistance Program.
$4 million into the State Cooperative Service Trust Fund for grants to cooperative extension.
Up to $7,500 per fair per year for conducting pari-mutual wagering at county fairs.
$50,000 annually for standardbred horse drug testing at county fairs.
Up to $100,000 annually for supplement premiums offered in junior classes at county fairs.
$100,000 annually shared between the animal sciences department for equine research and education.
Funds generated through the Illinois State Fairgrounds Racetrack pari-mutual will be split evenly between a fund to be used for State Fairgrounds infrastructure improvement and a fund to be split between county fairs under the Agricultural Fair Act, Illinois Association of FFA, and U of I 4-H programs as determined by appropriation. No estimate of funds were specifically available for this provision.

The Association of Soil and Water Conservation Districts, Illinois Association of Agricultural Fairs, and Extension Partners all supported SB 774. The bill was approved by the House with 65 yes, 50 no, and 2 present votes and the Senate with 30 yes, 27 no, and 2 present votes.Illinois Farm Bureau has no position on SB 744.

Congressional Map Version 2 – SB 1178 (Sen. Raoul/Majority Leader Currie)

One of the first actions the Senate took when they convened today was to approve the Congressional redistricting maps. The Senate approved the maps with 34 yes, 25 no, and 0 present votes. For details on the new Congressional map please refer to last night's issue of QuickView. To see the maps in Google Maps please CLICK HERE.

NPDES Fee Bills – SB 1682 (Rep. Tryon)

SB 1682 proposed a fee for NPDES permits for Concentrated Animal Feeding Operations (CAFOs) of up to $1,200. The Illinois Farm Bureau, Illinois Pork Producers, Illinois Beef Association, and the Illinois Milk Producers Association worked diligently to oppose the bill.

The House sponsor, Rep. Tryon, called the bill for a vote on the House floor. SB 1682 received 48 yes votes, which was not enough for passage but enough to place the bill on postponed consideration. Postponed consideration gives the sponsor the ability to have a second chance and call the bill for another vote. However, Rep. Tryon decided not to call the bill a second time prior to adjournment.

The Illinois Farm Bureau, Illinois Pork Producers, Illinois Beef Association, and the Illinois Milk Producers Association will continue to share our concerns and opposition to the proposed fees for NPDES permits for livestock farms required to have them. The agricultural organizations will also continue discussion with the Illinois EPA in order to raise a number of environmental issues facing farmers. SB 1682 was held was held on Postponed Consideration in the House. IFB opposes SB 1682.

Pension Reform - SB 512 (Sen. Cullerton/Rep. Cross)

This past week there was also a push to change the State pension system for current and retired state employees and teachers. The bill was adamantly opposed by state employees, City of Chicago and Cook County employees, and teacher unions who put in place a massive action request. Legislators offices were flooded with phone calls. Some speculative reports put the number of calls at close to 30,000.

The pension reform proposal was included in House Amendment #1 to SB 512. The amendment would have affected the General Assembly Retirement System; State Employees Retirement System of Illinois; State Universities Retirement System; Teachers’ Retirement System; Judges Retirement System; Cook County Employees’ and Officers’ Annuity and Benefit Fund; Chicago Municipal Employees', Officers', And Officials' Annuity And Benefit Fund; Chicago Public School Teachers' Pension And Retirement Fund; Cook County Forest Preserve District Employees' Annuity And Benefit Fund; Chicago Laborers' And Retirement Board Employees' Annuity And Benefit Fund; and Chicago Park Employees' And Retirement Board Employees' Annuity And Benefit Fund.

The proposal would have made members in the pension systems elect which of the following three retirement plans to participate in starting on July 1, 2012 (January 1, 2013 for members of Chicago and Cook County Funds). Current Tier 1 members can choose between all three plans, Tier 2 members (hired after January 1, 2011) can choose between options two and three. If a member does not make an election, he or she will be automatically enrolled in Tier 2, the Revised Defined Benefit Plan. Judges will be required to make an election on the beginning of the next term of office.