Week In Review: July 31

General Assembly Pay
·         House Republicans vote for bill to deny pay increase for selves in FY16. The measure, HB 576, amends State law to block implementation of the automatic pay increases slated to be paid in FY16 to Illinois elected officials. This action is necessary to prevent an annual automatic pay increase from being paid to members of the General Assembly, statewide elected officials, certain Cabinet-level executive branch agency directors and appointees, and county state’s attorneys. Automatic pay increases of this type have been mandated by the Compensation Review Act since 1984.

The increase for FY16, which is designed to help beneficiaries keep up with the level of inflation, is 2.0%. If HB 576 passes through the Senate and is signed by the Governor, this 2.0% pay hike will be blocked for the year. HB 576 also blocks scheduled increases in the legislator per diem and legislative mileage reimbursements that are meant to compensate legislators for their living expenses when living in, or traveling to and from, Springfield and other places of legislative duty. 

The 101-1-0 House vote on HB 576 was held on Tuesday, July 28. Gov. Rauner has signaled his support for blocking these pay hikes, but action on this bill in the state Senate is not certain.  The Senate will reconvene on Tuesday, August 4. 

FY16 Budget Crisis
·         Budget crisis continues. Two months after the constitutionally-mandated deadline for the Illinois General Assembly to complete its business, and one month after the beginning of the new fiscal year, Illinois still does not have a budget for FY16. Appropriations for the fiscal year, which began on July 1, 2015 and will end on June 30, 2016, are supposed to control how much money the State has to spend during this period; but as of Friday, July 31, there are no appropriations and no legal controls in place for expenditure areas other than elementary and secondary education this fiscal year.

The current budget crisis is the product of a series of questionable decisions by the Democratic majorities of both houses of the General Assembly. The Constitution strongly encourages the state legislature to enact an annual balanced budget, and then adjourn on or before May 31st of each year. In 2015, the members of the majority party failed to perform this duty. Their failure was no surprise, as the Illinois House and the Illinois Senate have had the same Democrat leadership teams in place for many years, and in past years they have repeatedly passed unbalanced budgets. For many years the budget was nominally “balanced” by underpaying monies into State-managed pension funds, thereby compounding the growing crisis. Current law requires full pension funding; however, and this will require the State to appropriate at least $36 billion in taxpayer money to continue existing operations in FY16. At the same time, current State tax laws will lead to the generation of only about $32 billion in revenue for State coffers in the same fiscal year. There is a gap of at least $4 billion in the current 12-month period.

In May 2015, the Democrats could have either come up with an FY16 budget that reduced State spending by $4 billion to close the gap, or proposed significant FY16 tax increases to close the gap in the other direction. They did neither. They brazenly voted for a $36 billion unbalanced “budget,” and then declared they had done their work and could leave Springfield. After their adjournment caused an uproar, Democratic Speaker Madigan reconvened the Illinois House – the operations of which he controls – for one day each week in June and July of 2015, but no new comprehensive budget appeared. Instead, the House majority repeatedly affirmed and offered changes to their existing unbalanced budget, even though most of it (school aid was an exception) had already been vetoed by Gov. Rauner.

State Employee Labor Relations/Pay Update
·         Litigation seeks to clarify how long State employees will be paid without a budget. Since July 1, Illinois has been operating without a State budget. Operations have continued, and State employees and workers have continued to be paid, for at least four weeks since this fiscal deadline. Litigation has, so far, produced a mashup of various legal decisions. These decisions point in different directions with regard to the status and standing of different pieces of the government and their employees. If there is any common theme to the current legal situation, it is the continuation of many State agencies’ cash flows at the level they operated on in FY15. This, in turn, has allowed these agencies to continue to pay their employees as of this week.

In one key case originating in Downstate’s St. Clair County, the current judgment being implemented is that of the Fifth Illinois Appellate Court. This decision, by the Appellate Court with jurisdiction over southern Illinois and handed down on Friday, July 24, affirmed the Circuit Court’s injunction and ordered that all State employees should be paid their full payroll checks.  However, the Appellate Court also recognized the non-lawful nature of this cash flow – which is being paid out without a budget – and simultaneously remanded the case to the Circuit Court with an order that the lower court should hold a hearing and determine an expiration date for the injunction. The Appellate Court’s remand order was seen by critics as recognition that the State is facing a substantial – and growing – moral hazard in operating without a budget.  Creating an expiration date for employee pay could be one way to increase pressure on key Illinois officials to develop a legal outcome to the current FY16 budget impasse.        

·         Governor vetoes bill to impose single negotiation platform on public labor negotiationsSB 1229 would amend the Illinois Public Labor Relations Act to replace collective bargaining with binding interest arbitration with respect to collective bargaining agreements that have expired.  The provisions of SB 1229 would be effective for four years (July 1, 2015 to June 30, 2019). The collective-bargaining process is the traditional pathway used by labor and management to resolve most issues of workplace life, pay, and benefits. Like all other gubernatorial vetoes, the veto of SB 1229 is subject to the oversight of the General Assembly. Gov. Rauner signed the veto message on Wednesday, July 29.

The Illinois Public Labor Relations Act governs the relations between most non-educational public-sector employers and their employees. Affected entities include the State of Illinois, its 102 counties, and thousands of municipalities and other units of local government. The labor relations of these units are one of the factors that determine the income, sales, and property taxes that most Illinois private-sector residents pay.   

·         Contentious State labor negotiations extended until at least September 30. The State of Illinois continues to pursue negotiations with its principal union, AFSCME, with the goal of inking a new State labor contract. Several facets of these negotiations are relatively contentious, as labor and management grapple with overall issues of U.S. public policy and the relative spaces that should be given, in justice, to the public sector and private sector here in Illinois. As discussions continue, both sides have agreed to extend the negotiations until at least September 30. The agreement includes a mutual no-strike-no-lockout pledge that will operate throughout this period. 

Economic growth – Business licensure website
·         Governor signs one-stop license website bill co-sponsored by Keith Wheeler.  The measure, SB 659, directs the Illinois Department of Commerce and Economic Opportunity (DCEO) to create a one-stop “licensure application website” for businesspersons wishing to create new businesses or relocate businesses to Illinois. The General Assembly has directed that information be included on the single website to “walk applicants through” the initial stages of the permit application/license application or applications that may be required for implementation of these job-creation plans. Other states have already set up similar websites.

Gov. Rauner signed SB 659 into law on Friday, July 24, and the new website should be online by July 2017. 

Pensions – public employees
·         Attorney General Lisa Madigan signals that SB 1 decision may be appealed to federal Supreme Court. An Illinois Supreme Court decision in early May struck down the 2013 “pension reform” bill, SB 1, and ordered Illinois government officials and taxpayers to cover the entire unfunded costs of pension benefits promised to many Illinois workers in the public sector. These unfunded costs are estimated to exceed $100 billion, and the burden of meeting these costs is one of the elements in the FY16 budget crisis. 

The Illinois Supreme Court’s decision was an interpretation of legal language within the Constitution of 1970 that granted explicit contractual protection to pension benefits. While the constitutional interpretation of each state’s constitution is traditionally a subject for the sole jurisdiction of the Supreme Court of that state, some legal scholars believe that the urgency of this issue could grant the Attorney General standing to appeal the 2015 decision to the federal Supreme Court. The Attorney General is in the process of filing a paper asking for additional time to study the issue and possibly file this appeal.  Lisa Madigan’s action was described by “Crain’s Chicago Business” on Tuesday, July 28. 

Infectious disease – mumps
·         Mumps outbreak reported at the University of Illinois/Urbana-Champaign (UIUC). The highly infectious viral disease is controlled by childhood vaccinations, but many young people around the world do not undertake a full schedule of inoculations and shots for various diseases. Young children can be protected from mumps even before becoming toddlers by administration (typically when they are 12 months to 15 months old) of a multiprong vaccine that also protects them against measles, rubella, and varicella. University campuses can, however, be vectors for infectious disease because of their role as host locations for people from various U.S. states and international cultures where vaccinations are less widely practiced.

The McKinley Health Center at UIUC and the Illinois Department of Public Health (DPH) have begun to fight the outbreak and collect numbers on those afflicted. According to the “Chicago Tribune,” more than two-thirds of Illinois’ 73 known current cases of mumps have been diagnosed in Champaign County, home to Illinois’ flagship State University. Persons displaying symptoms of mumps, which include fever, headache, muscle aches and loss of appetite, should contact a medical professional. Persons with mumps are typically isolated from their peers to reduce the contagious spread of the virus.        

Mitsubishi – major auto plant to close
·         Bloomington-Normal officials offer help to transfer plant property. In a joint press release on Monday, July 27, Mitsubishi Motors and the United Auto Workers said that they would look together for a buyer for the 1,200-employee plant. Local officials have pledged to render every possible assistance to this effort. The plant, which makes compact cars and sport-utility vehicles, is scheduled to close on or about November 30, 2015.

The Mitsubishi plant in Bloomington-Normal is Illinois’ only foreign-owned motor vehicle assembly works. Other U.S. states, including Midwestern states, have been relatively successful at winning status as host locations for Asian and European carmakers. For example, Hondas are assembled in Indiana and Ohio; Toyotas in Indiana, Kentucky, and Texas; Hyundais in Alabama; and Nissans in Tennessee. In explaining Mitsubishi’s decision, auto industry critics pointed to Illinois’ relatively poor business climate and to low and falling demand for the vehicles designed and built by the Japanese-based motor vehicle conglomerate. Bloomington-Normal auto production has fallen from more than 200,000 vehicles in 2002 to 64,000 vehicles this year.  

9-1-1 prank calls – John Anthony bill
·         House Republican-sponsored measure creates financial penalty for 9-1-1 prank callers. The bill applies to persons who, by making a prank call to a 9-1-1 emergency-response number, commit the offense of disorderly conduct. This offense is defined as the act of knowingly transmitting a false alarm to an emergency-response 9-1-1 number. Persons who unknowingly transmit a false report to 9-1-1 should not be charged with the offense.
 
Under HB 3988, sponsored by State Rep. John Anthony, if a knowingly false 9-1-1 prank call is made, the court shall order the perpetrator to reimburse the emergency response pubic agency for the reasonable costs of the emergency response, not to exceed $10,000. As a retired sheriff’s deputy, Rep. Anthony is well aware of the cost to public safety rapid-response teams and their personal of prank calls like these. Gov. Bruce Rauner signed HB 3988 into law on Tuesday, July 28.  The House had previously agreed to the final language of the bill by a unanimous vote of 111-0-0.

“Scott’s Law” – Brian Stewart bill
·         Brian Stewart asks Illinoisans to remember public safety workers every December 23. HB 246 designates each December 23 as “Scott’s Law Day.” The day remembers Lt. Scott Gillen, a firefighter killed in a traffic accident on December 23, 2000. Investigators agreed that Scott’s tragic death should have and could have been prevented if drivers would slow down when seeing a stationary emergency-response vehicle with its lights flashing. “Scott’s Law,” enacted earlier by the General Assembly, requires drivers to slow down and, when possible, to safely change lanes. 

The designation of a “Scott’s Law Day” is meant to create a platform for public-service announcements to improve compliance with the existing law. Gov. Rauner signed the bill to create “Scott’s Law Day” on Tuesday, July 28.

Severe weather – Farmers seek flood relief
·         Substantial Illinois crop losses inevitable from heavy rains in spring and early summer. June 2015 was the second-wettest month on record in Illinois, with an average rain gauge measuring 9.37 inches of rain in 30 days – equivalent to three or four months’ precipitation in a normal year.  Many sections of Illinois were hit even harder by rain and storms. Signs of crop damage are visible throughout Illinois as bald patches appear in farmers’ fields. Seed corn and beans have been unable to sprout or develop in “wet spots” or entire inundated fields.

Gov. Bruce Rauner and members of the Illinois congressional delegation have asked Washington to approve a federal disaster declaration and disaster relief in response to the weather picture.  Missouri has filed a similar application. The disaster declaration, if it is made, will apply to specific flood-hit counties within Illinois and will qualify specified groups of people for enumerated types of emergency aid. In a typical summer-flooding disaster declaration, farmers in hard-hit counties are made eligible for low-interest emergency loans. These and other forms of assistance are meant to enable them to maintain operations and replant their fields in spring 2016.  

Veterans’ preferences – Robert Pritchard
·         New Veterans Preference in Private Employment Act signed into law.  HB 3122, which originated with Representative Bob Pritchard of DeKalb County, seeks to strongly encourage (but not require) a veterans’ preference path to employment in private-sector workplaces that opt into the program. The Act encourages all such programs to be set forth in writing and posted at the place of employment or employment website. The Act contains provisions intended to ensure that the policy, if in place, shall be applied with uniformity and continue to be in place should the employer be required to carry out a reduction in force.   

Governor Bruce Rauner signed HB 3122 into law on Tuesday, July 28.  The House had earlier approved the bill in a unanimous vote.

DuPage County – Local government consolidation
·         Peter Breen bill abolishes obsolete unit of local government.  HB 3747 winds up the affairs of the DuPage County Fair and Exposition Authority. Once-rural DuPage County strongly supports its county fair and, in past years, created an independent authority to operate it. The county’s long-term planning included the farsighted acquisition of a large parcel of property, the County Farm and fairgrounds, much of which was adaptively reused in the late 1980s for the county’s governmental complex and Courthouse Square west of Wheaton.

The DuPage County Fair celebrated its 61st gathering in July 2015. The fairgrounds also serve as a host for other celebration marketplaces and special events throughout the year. As the fairground’s activities diversify, DuPage County fair management has joined other county fairs throughout Illinois in moving towards a joint public-private-sector identity. The DuPage County Fair Association is completing the task of taking over the responsibilities of the Authority, leading to the consolidation of one unit of Illinois local government. With 6,963 units in March of this year, Illinois had more units of local government than any other state in the U.S.  

HB 3747 (Breen/Connelly) was signed into law on Wednesday, July 29 by Gov. Bruce Rauner.          

Week in Review

·         Get the Week in Review emailed directly to your inbox!  Sign up today to get a first-hand look at the continuing legislative and fiscal challenges facing policymakers in Springfield.