TAYLOR VIDMAR
SPRINGFIELD — One year ago, lawmakers were slowly easing back to normalcy after a year of COVID-related restrictions that largely prevented them from gathering in person.
Upon their return, they tackled an ambitious agenda that included landmark climate legislation and the once-a-decade redistricting of state legislative and congressional district lines. It took several overtime session days to get it all done.
This year, lawmakers face a far less daunting calendar.
Both the House and Senate plan to adjourn on April 8 — three weeks from now, and far earlier than the typical skip-town date of May 31.
House Speaker Chris Welch, D-Hillside, told Lee Enterprises earlier this year that a shortened session was prescribed due to the overly active 2021 spring session as well as the looming June 28 primary, which was pushed back three months due to delays in receiving data from the U.S. Census for redistricting.
While the policy being tackled this year is considerably lighter than last, there are still a number of items that lawmakers will have to tackle in the next three weeks — likely the last before they face voters in November.
Here are three key issues that legislators will likely seek to address in the waning days of the 2022 spring session:
The budget
In February, Gov. J.B. Pritzker laid out a $45.4 billion spending plan for the fiscal year that begins July 1. And unlike most budget proposals in the fiscally-challenged state’s recent past, this one contained good news.
Pritzker’s office projects a $1.7 billion surplus from the current fiscal year and a $458 million surplus in the next fiscal year. This windfall comes from better-than-expected tax receipts generated by a robust economic recovery from the COVID-19 pandemic. It was also buoyed by more than $8 billion in federal stimulus funds from the American Rescue Plan.
The proposal includes increased appropriations for education, health care, human services and public safety. And it includes about $1 billion in one-time tax relief measures meant to address record-setting inflation.
“There’s a lot of things to like in the budget the governor sent us,” said House Majority Leader Greg Harris, D-Chicago, speaking to reporters at the Capitol on Thursday.
However, the governor’s budget proposal is simply that — a proposal. One that Harris acknowledged will likely undergo several changes before it goes up for a vote in the House and Senate.
Among the items getting significant pushback is Pritzker’s proposed freeze of the scheduled inflationary increase in the state’s gas tax.
Meant to relieve some pain at the pump, the measure would save drivers about two cents per gallon. But it would cost the state about $135 million annually in lost revenue that’s earmarked for road projects.
Organized labor, business groups and the construction industry have come out against the proposal, which statehouse insiders say has little to no chance of being included as-is.
However, there are other proposals floating to help Illinoisans with rising gas prices, such as a Republican plan that would essentially cap the sales tax on gasoline.
Pritzker himself acknowledged Friday that gas prices are “way above where it was even back in early February when I introduced the budget,” adding that “we’re looking at other ways that we can reduce the gas tax.”
Harris said several alternatives are being explored.
“We’re looking at a whole bunch of different options and there’s pros and cons to each of them,” Harris said. “I think everyone’s gonna be weighing which would be the best potential choice.”
Besides a few quibbles, Democrats seemed mostly content with Pritzker’s outlined spending plan, which is a good omen for him since they hold supermajorities in both the House and Senate.
Though there was some talk earlier this year of lawmakers returning for a few days in May to wrap up the budget, there appears to be a sense of urgency to get it done before leaving in early April.
American Rescue Plan funds
In 2021, Illinois was gifted $8.1 billion in federal stimulus funds through the American Rescue Plan, signed by President Joe Biden in March 2021.
The package offered a lifeline to a state that, at that point, was staring down significant financial challenges brought upon by the pandemic.
The budget approved last year allocated about $2.5 billion of the funds, including $1 billion for capital projects. Much of the rest went towards pandemic-related expenses, such as rent relief.
After more funds were used to replace sales and income tax revenue lost during the COVID-induced economic shutdown, about $3.5 billion remains.
Much of that money could be allocated toward paying down the $4.5 billion Illinois owes the federal unemployment insurance trust fund, which was used to pay benefits during the pandemic.
Earlier this month, legislation that would appropriate $2 billion in ARPA funds towards paying it down was approved in the Senate. That represents an agreement between Pritzker, Welch and Senate President Don Harmon.
Harris said that the number, which is about 25% of the state’s total ARPA allocation, is in line with the percentage other states have contributed towards paying back the feds.
However, it could still change. Pritzker said earlier this month that he and the legislative leaders were following the “agreed bill” process, which means negotiating with all major stakeholders — in this case, labor and business — until a measure that achieves near-universal support is crafted.
Harris said Thursday that the group continues to negotiate.
In addition to paying back the feds, lawmakers also must grapple with competing requests for the money. The struggling hotel industry, for example, has requested $250 million in ARPA funds.
Other requests, such as funds for additional affordable housing, have also been made.
“So I think the first step is we have to see how much we are going to appropriate to the unemployment insurance trust fund and then look at all the other different options, and there’s going to have to be some judgments made,” Harris said.
Another decision: spend the rest of the money this coming fiscal year or save some for the future? It’s an answer lawmakers should be able to provide before leaving in a few weeks.
Crime
Legislators statewide are facing pressure to address rising crime rates ahead of the November election.
Much of the pressure has come from within the statehouse itself as Republicans have continued to fight against the SAFE-T Act, which was spearheaded by the Illinois Legislative Black Caucus and passed on partisan lines in January 2021.
The SAFE-T Act is a sweeping criminal justice reform bill ushered through by Democrats that eliminates the state’s cash bail system, among other changes.
Most of the act’s provisions have yet to go into effect, but many Republican leaders have blamed it for recent increases in violent crime.
With no Democratic support, Republican efforts to repeal the SAFE-T Act and pass other major crime bills like Senate Republicans’ proposed Fund the Police Act have failed.
No criminal justice or public safety bill will pass without Democratic support, but Democrats don’t always agree on ways to tackle crime.
SB3070, which would increase criminal penalties for people who commit violent crimes against DCFS employees, has stalled in the Senate largely due to a lack of support from progressive Democrats who don’t support penalty increases of any kind.
Welch told Lee Enterprises in January that Democrats intended to take action on crime this session, namely carjackings and organized retail theft.
In February, Illinois Attorney General Kwame Raoul, joined by the Illinois Retail Merchants Association (IRMA), introduced a draft bill that would create a new criminal charge for organized retail crimes. The bill has not been filed yet.
IRMA President Rob Karr confirmed to Lee Enterprises on Thursday that the organization is still working with lawmakers to finalize language on the bill and that he expects the bill to come up later this session.
Democrats have been quiet about their plans, but with supermajorities in both chambers, they can afford to do so. Harris alluded to public safety bills to come during a press conference Thursday, so Democrats are likely to introduce a public safety package before session adjourns.
Conversations on crime also won’t end when session does. House Minority Leader Jim Durkin, R-Western Springs, stated in a January press conference that Republicans will run on public safety in 2022.
9 things to know about Pritzker budget plan
Pension contributions
Illinois’ largest general revenue fund expenses continue to be K-12 education and pensions. The latter will make up 20.7 percent of the proposed general revenue spending in the upcoming budget, or about $9.6 billion.
The governor has proposed adding another $500 million to the pension payment beyond what is required by law in fiscal years 2022 and 2023.
That’s notable, because previous governors have been widely criticized for shortchanging the pension system – something Pritzker proposed, then quickly abandoned, in his first year in office. Critics often point out that the state law governing pension payments already shortchanges the system from what accountants suggest should be paid into it.
The governor proposed spending $300 million of the surplus from the current fiscal year to pay down pensions, with $200 million added to the statutory payment in the upcoming budget.
The governor’s office estimated the $500 million increase beyond statutory amounts would reduce unfunded liabilities – which sit at about $130 billion – by about $1.8 billion. A pension buyout program previously approved by the General Assembly has reduced that liability by about $1.4 billion, according to the governor’s office.
Higher education
The governor proposed spending $2.2 billion on higher education, a $208 million increase from the current year. That includes a $122 million increase to Monetary Award Program grants to help students demonstrating a financial need attend college.
Universities and community colleges would see their budgets increased 5 percent, or $68 million, while adult education programs would see $2.5 million in new funding and funding would increase for minority teacher scholarships by $2.3 million
Through College Illinois, a state-run prepaid tuition plan that is no longer open for enrollment, the state has about $230 million in obligations that the fund cannot currently meet. Pritzker proposed spending $230 million in general revenue funds to pay down that remaining balance, and his team estimated the long-run savings at about $75 million
K-12 Education
Approximately 21 percent of the budget is dedicated to Pre-K-12 education, an increase of $498 million from one year ago.
That includes $350 million for the evidence-based funding formula for K-12 schools, which prioritizes new money toward the schools furthest from their “adequacy” target, which takes into account class sizes, a local district’s property values and other factors.
The budget asks for another $54.4 million to provide early childhood education services to another 7,100 children, and another $96 million in transportation and special education grants for schools.
Another $12 million would be added to the Regional Offices of Education budget to address truancy and chronic absenteeism, and agriculture education funding would increase by $2 million.
Temporary tax relief
The governor cited rising inflation as the basis for creating about $1 billion in temporary tax relief for motor fuel, groceries and property taxes.
The motor fuel tax relief would not lower gas prices, but it would prevent an annual increase to the motor fuel tax that is written into law from taking effect this year. It prevents a hike of 2.2 cents per gallon of gas, according to the governor’s office – a taxpayer savings it pegged at $135 million.
Motor fuel tax money does not go to the general revenue fund, but rather to road construction projects. The tax holiday does not appear to affect a proposed $46.5 billion capital infrastructure budget, which is mostly an extension of the 2019 Rebuild Illinois plan.
The governor also proposed rolling back a 1 percent state grocery tax for the fiscal year, a taxpayer savings pegged at $360 million. The state would reimburse local governments for the effect of the tax holiday.
Illinoisans currently eligible for a 5 percent property tax credit under current law – that is, joint filers earning below $500,000 and single filers earning below $250,000 – would be eligible for another 5 percent property tax credit under the proposal, up to $300. The taxpayer savings is estimated at $475 million.
Rainy day fund
Illinois’ “rainy day fund” at its height contained only about $300 million since its 2001 creation, but that was spent down to almost nothing during a budget impasse under Republican former Gov. Bruce Rauner and Democratic leaders in the General Assembly.
Pritzker’s budget proposes adding $600 million to the fund with a supplemental budget from the current fiscal year, while dedicating $279 million to the fund in FY2023 to bring the balance up to $879 million.
The governor also proposed dedicating $898 million to pay down overdue health insurance bills.
Safety net
The beleaguered Department of Children and Family Services would see a funding increase of $250 million, or 16 percent, to about $1.3 billion from general revenue funds. That includes rate reforms for private sector providers in an effort to address staffing shortages, totaling $87.1 million.
The budget also provides $15.5 million to hire an additional 360 employees to address growing caseloads, improve caseload ratios and continue operations in licensing, monitoring and clinical services.
Funding for nursing homes would increase by $500 million, with lawmakers expected to take up rate reforms and a new provider assessment designed to maximize federal dollars, encourage improvement of care and staffing ratios.
Unemployment trust fund
As of Feb. 1, Illinois owed the federal government more than $4.5 billion for advances received to keep its unemployment insurance trust fund afloat during the height of the COVID-19 pandemic. By Sept. 30, Illinois will owe almost $32 million in interest on that borrowing.
If the state doesn’t take action to pay down the deficit, it could lead to massive unemployment insurance rate hikes on businesses and cuts to benefits for those claiming unemployment.
The budget does not include any money to pay down the borrowing, but the governor’s office said it remains in negotiations with lawmakers and representatives of labor and businesses on a solution. There’s serious consideration of using much of about $3.5 billion in remaining federal American Rescue Plan Act funding to pay down the deficit, according to the governor’s office.
Public safety
Pritzker noted his budget includes an $18.6 million increase to allow for three classes of Illinois State Police cadets. Another $5.4 million will go to opening a new forensic laboratory in Decatur in August.
The budget also includes $4.5 million to fund body cameras for ISP in accordance with a criminal justice reform bill passed one year ago, as well as providing the Illinois Law Enforcement Training and Standards Board with $10 million for distributing grants to local law enforcement for body cameras.
The Department of Human Services budget includes $240 million as part of a two-year, $250 million commitment to the Reimagine Public Safety Act, which aims at investing violence prevention resources in some of the state’s most dangerous areas. Just $5 million of that comes from the general revenue fund, with $235 million funded through the American Rescue Plan Act.
Revenues
The budget does not call for raising taxes to create any new revenues.
The state does expect a 4 percent increase in income tax receipts at $22.4 billion. Corporate income taxes are expected to decline 5.4 percent to $4.4 billion, with sales tax decreasing 1.3 percent to $9.9 billion and other sources netting $3.1 billion.
The lottery is expected to bring in $754 million, legalized gambling $157 million, and adult-use marijuana $142 million. Federal sources account for just over $4 billion.
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March 18, 2022 at 06:34PM
