Jobs, Pensions take center stage; week ahead features Governor’s Budget Address

 

“WEEK IN REVIEW”!

From the Illinois State House

 

Tom Cross

House Republican Leader, State Representative, 97th District

 

Another activity-filled week in Springfield had some encouraging highlights, including the introduction of a bold Jobs package to restore the strength of the Illinois economy and help jumpstart private-sector employment. There’s no question that jobs and the economy continue to be our # 1 priority, going hand-in-hand with reducing government spending and achieving consensus on a bipartisan plan to restore our state pension systems to long-term stability.

This week, the Governor is scheduled to deliver his annual budget address to a joint session of the General Assembly, outlining his priorities for the coming year. Stay tuned for more on that.

First, let’s take a look back at the past week and all the latest developments. Here then is our “Week in Review”!

P.S. Be sure to check out Sunday’s Chicago Tribune and Sun-Times editorials endorsing our bipartisan pension reform plan.

WEEK IN REVIEW

Budget

  • New Cross-Nekritz bill aimed at right-sizing Illinois budget, bridging gaps between various Springfield “pension fix” proposals.   The Illinois General Assembly failed in 2012 to enact a badly needed “pension fix” to help deal with the accumulated actuarial deficit of more than $96 billion in the five State-managed pension systems, but House Republican Leader Tom Cross and a Democratic House member, Elaine Nekritz, developed a working relationship to fight for a bipartisan solution.  While many challenges remain, a bill filed on Tuesday, February 26 – HB 3411 (Cross) – is seen as offering a way out of the dilemmas created by the State’s ongoing, unsustainable pension commitments.   Enactment of HB 3411, as introduced, is expected to reduce State spending commitments by an estimated $2 billion/year.  Pledging to move toward 100% pension funding by 2043, the bill creates a new “Tier 3” pension system for State employees hired on or after January 1, 2014. The Tier 3 system moves part way toward the defined-contribution model that is already in wide use among U.S. private-sector employers.  Employees, vested employees, and retirees in Tiers 1 and 2 will see adjustments to their pension benefits.   Nekritz is a top-ranking, hyphenated co-sponsor of Cross’s HB 3411.  

Chicago

  • Chicago Metropolitan Agency for Planning (CMAP) finds declining research and development investments in Chicago area.   CMAP, the intergovernmental agency asked by State and federal law to look at economic changes in the Chicago area, reported on Wednesday, February 27 that the area continues to support 580,000 jobs directly tied to manufacturing – including 375,000 people employed directly by manufacturers.  However, ongoing movement of industrial research and development from greater Chicago to California and the Northeast threaten these jobs.  CMAP warns of a continuation of the lost-jobs trend of the past decade.  About one-third of the Chicago-area manufacturing jobs that existed in 2001 were gone by 2011.  CMAP urged the State and its universities to expand its program of public-private partnerships to serve as “incubators” for new research and development.   A 2011 House Republican bill, HB 1876 (Cross/Holmes) led to the recent creation of UI Labs, a new Chicago-based partnership “think tank” that could be a model for further collaborations of this kind.

Economic growth

  • Led by Dwight Kay (R-Edwardsville), House Republicans announce plan to restore employment opportunities to Illinois.  Reforms to Illinois workers’ compensation law, tax structure, spurring private-sector research and development, reducing unnecessary State rules, speeding up State licenses and permits, and cutting application and filing fees were key elements of the growth-oriented  package unveiled on Monday, February 25.  Key bills in the package were HB 107 (Kay), HB 2230 (Kay), HB 2890 (Kay), HB 2891 (Kay), and HB 2892 (Kay).   Under current law, almost any injury assigned by a worker and a physician to work-related causes is defined as a workers’ compensation injury and compensated accordingly – even if the injury was caused by some other chain of events.  The January 2012 income tax increase continues to drive jobs away from Illinois to other and neighboring states, and the costs of key job-creation legal filings, such as the incorporation of a limited liability company (LLC), are some of the highest in the U.S.   The Kay/Republican package throws a spotlight on these job-unfriendly existing Illinois laws.    

Guns

  • Key “concealed carry” language tentatively approved by majority of House members.  After a lengthy debate over various facets of issues involving the Second Amendment rights of Illinoisans, a majority of the elected members of the Houseapproved language on Tuesday, February 26 to authorize Illinois residents to apply for, and receive, a license from the Illinois State Police to enable them to carry and possess a handgun or other concealable firearm on their person while walking on a sidewalk or other “public way,” and on or near their person when driving a motor vehicle on a street or highway.  Under current Illinois law this activity, for most Illinois residents, is the criminal offense of “unlawful use of a weapon,” but the decision by a federal appellate court to strike down Illinois’ UUW law (a decision later affirmed by the full Seventh Circuit appellate court) has strongly encouraged the Illinois General Assembly to take another look at this issue.  The vote on House Amendment #27 to HB 1155 was 67-48-0.  This vote signaled bipartisan majority support for the concealed-carry provisions of the amended bill, which has not yet come up for a vote on Third Reading.   

Health care

  • State Senate expands Medicaid to match guidelines created by nationwide Obamacare rules.  Enactment of the Affordable Care Act (“Obamacare”) in 2010 opened the door for a series of federal rulemakings that created guidelines for state Medicaid expansion.  The Illinois Senate action, approved on Thursday, February 28 by a partisan roll call vote of 40-19, will expand Medicaid eligibility to bring in residents with incomes up to 138 percent of the federal poverty line ($31,800 for a family of four).   Many of these residents had previously been ineligible for Medicaid.   The State-funded health care program is already Illinois’ largest healthcare insurer, with nearly 2.8 million enrolled residents; the expansion would add an estimated 342,000 new beneficiaries.   Critics pointed out that proponents of the expansion were unable to finalize estimates of the total budgetary cost of this expansion to Illinois.  The Medicaid expansion measure (SB 26) moved this week to the House for further consideration.        

Housing

  • New legal rules offer some additional protections to homeowners going through foreclosure.  The new rules adopted by the Illinois Supreme Court will add to the requirements imposed upon lenders when they file papers with a court seeking judgment of foreclosure.  The new rules will require the lender to file an affidavit setting forth various recourses that they have offered to a homeowner as an alternative to going ahead with the foreclosure filing and procedure.  The lender must affirm that they have explained the foreclosure process to the homeowner, and must clearly explain any loan modification processes that they have offered or are prepared to offer as an alternative to foreclosure.  Nothing in these new rules will prevent the foreclosure of a property if a borrower has violated the terms of the mortgage; the rules will standardize the communications that the lender must send to the borrower prior to the foreclosure taking place.   Under the separation of powers, the Supreme Court (not the legislature) adopts rules of procedure governing  the conduct of judges in the circuit and appellate courts.  The new rules were set forth on Friday, February 22.

State government

  • Amid strike talk, reports circulate of labor settlement between State of Illinois and AFSCME union.  Council 31 of the American Federation of State, County and Municipal Employees, usually called AFSCME, represents more than 35,000 employees of the state of Illinois.  This includes more than 82 percent of the workers that are employed in offices that report to Gov. Quinn.   State workers have been working without a contract since June 30, 2012.   Quinn originally demanded that AFSCME and other State-worker labor unions submit to significant wage cuts and concessions in health insurance.  After these demands were rejected, Quinn’s leadership team entered what are reported to have been acrimonious negotiations with union leaders.  A tentative settlement, with sealed terms, was announced on Thursday, February 28.  Terms of the settlement had not been announced as of “Week In Review” press time, but it was believed that State employees and retirees would be required to submit to significant cuts in health-care benefits, including sizable co-payments that workers and retirees would be required to pay.  Sizable co-payments for health and dental care are already familiar realities to most workers and retirees in Illinois’ private sector.

Taxes

  • Another major tax increase hits Illinois, as Democrat-led Cook County implements $1.00/pack cigarette tax hike.  The increase will raise the estimated Chicago cost of a legally-purchased pack of cigarettes about $11/pack, roughly equivalent to the price paid in New York City and among the highest price charged for this commodity anywhere in the world.  Buyers of legally-purchased packs of cigarettes in Chicago will pay $6.67/pack in taxes alone.   While the tax increase is expected to raise some money for Cook County’s unbalanced budget, county board President Toni Preckwinkle described the increase on Thursday, February 28, 2013 as a public health move designed to discourage smokers and potential smokers, particularly younger adults.  Observers predicted the move would further encourage continuing cigarette users to purchase tobacco outside of Cook County, especially in nearby northwestern Indiana (where prices will be roughly $3/pack less than in Chicago).  Cigarette smuggling may also increase.

Other

  • House committee narrowly approves same-sex marriage law, sets measure for debate by full House.  SB 10, which is called the “Religious Freedom and Marriage Fairness Act,” would direct Illinois’ county clerks to grant marriage licenses to same-sex couples.  Proponents say that nothing in the proposed law would place mandates on places of religious worship.  The controversial measure, which was heard on Tuesday, February 26 in the Democrat-controlled House Executive Committee, got 6 “yes” votes, barely enough to be reported out of the eleven-member committee.  The committee vote was 6-5-0, with all four House Republican members voting “no” against the bill.  Nine states have enacted some form of same-sex marriage, and 41 states (including Illinois) do not allow it.