Legislative Update: November 4, 2015

We are now in the fifth month without an approved budget, and it might seem as all hope is lost. But that’s not the case. There are signs of positive movement as seen with last week’s announcement that Governor Bruce Rauner and the four legislative leaders will return to the negotiating table on November 18. The Governor, along with House Speaker Mike Madigan, House Minority Leader Jim Durkin, Senate President John Cullerton and Senate Minority Leader Christine Radogno are expected to examine the delayed Fiscal Year 2016 budget process, and begin working toward a compromise agreement. This is definitely a small step in the right direction. I am very encouraged by this new development.

Although FY16 began on July 1, a constitutional balanced budget has not been enacted by the Illinois House and Senate. The State has continued to operate under consent decrees, court orders, continuing appropriations, and school appropriations, but this has created many operational problems. Recipients of State services, and providers of goods and services to the State, have been affected by the lack of a legal budget document. Spokespersons for all four legislative leaders expressed positive interest in the meeting. The gathering was requested by a consortium of nonpartisan advocacy groups. Sponsors of the request included the Better Government Association, the League of Women Voters, and the Illinois Campaign for Political Reform.

Donations Coming in for “Support Our Troops” Drive
I have been touched by the generosity of those wishing to help send our military men and women Christmas care packages. Thank you for your support! While the deadline of November 13 is quickly approaching, there is still time to make a donation that will bring Christmas cheer to the brave individuals who serve and protect our freedoms. Click here to find a list of suggested items for care packages. The drop-off location is my legislative office, at 929 S. Main Street (Suite 105A) in Lombard, and it is open from 9:00 a.m. to 3:30 p.m.

Chicago City Council Approves Largest Property Tax Hike in City History as Part of FY16 Budget
he new budget includes $755 million in property tax, and other tax and fee increases. The City Council voted on Mayor Emanuel’s budget and revenue measures on Wednesday, October 28. Although many aldermen expressed dismay at the tax and fee hikes, the final outcome of the vote was not in doubt. The Council vote was 35-15 in favor of the tax-increase package.

Concerns were expressed that even the significant taxes approved this week would not be enough to see the city and its troubled school system through the 2015-16 school year and calendar 2016 budget cycle. The debt rating of Chicago Public Schools has been reduced to junk-bond status, and entities related to the city’s government continue to rely on $800 million in additional financial aid and fiscal relief measures from the equally-troubled state government in Springfield.

September 2015 Unemployment Rate Declines to 5.4%; Few New Jobs Created Statewide
The Illinois Department of Employment Security (IDES) reported this month that the statewide jobless percentage for September was 5.4%, down 0.2% from the August 2015 total of 5.6%. However, this drop in the jobless rate was not caused by net new hiring. Illinois seasonally adjusted nonfarm payroll employment actually dropped by 6,900 jobs on a month-to-month basis in September, with sector weaknesses continuing in manufacturing, trade, transportation, and utilities. Strong sectors included education services, health services, and government.

Illinois unemployment rates remain higher than rates in neighboring states. According to the U.S. Bureau of Labor Statistics, seasonally adjusted jobless rates for September 2015 were 4.5% in Indiana, 3.6% in Iowa, 5.0% in Kentucky, 5.3% in Missouri, and 4.3% in Wisconsin. In addition, these states (unlike Illinois) were producing net new jobs. September 2015 unemployment was lower than the statewide average in greater Chicago (4.9%) and remained at above-6.0% recession levels in the three historically manufacturing-oriented cities of Danville (6.4%), Decatur (6.4%), and Rockford (6.2%).

Illinois’ State Employees Retirement System (SERS) Asks to Withdraw $225 Million
The withdrawals, which will be completed on December 10, will cover retiree benefits to be paid in November and December of this year. SERS believes this is the largest cash withdrawal it has ever made. Pension checks to existing beneficiaries are expected to go out on schedule.

The withdrawal was made necessary by the inability of the State of Illinois to meet its statutory obligation to SERS, and to parallel State-managed pension funds that cover the retirement needs of education professionals, for the payments of money in FY16 from general funds. Payments by the State to the pension funds are one of the areas where, in the absence of specific appropriations authority, the money cannot flow. In other areas of the State’s FY16 budget, money is flowing as a result of a cobbled-together combination of continuing appropriations, school appropriations, consent decrees, and court orders. The withdrawal of money from SERS’s deposited investments is expected to further deplete its funds and add to its long-term unfunded liability.

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As your voice in Springfield, I’m working to make our state and our communities the best they can be. If you have any suggestions, questions or concerns, please contact my district office at (630) 403-8135 or visit reppeterbreen.org.