Please note: The Week in Review is written by a staff member of the Illinois Senate Republican Caucus and approved by legislators. It is meant to provide constituents with information about legislative action and activities during the week.
Springfield, Ill. – Last week, news reports highlighted a recent survey that suggests Illinois’ business climate comes up short for business executives, state Sen. Ron Sandack (R-Downers Grove) said lawmakers met to discuss the potential costs associated with the state’s forthcoming health benefits exchanges, and legislation to repeal pension perks for union officials is gaining media attention.
A special joint Senate and House committee met Sept. 21 in Chicago to continue hearings on the impact of the federal Affordable Care Act (ACA). One purpose was to review a consultant’s report, released days earlier, which showed health insurance exchanges required by the new federal law could cost Illinois up to $89 million annually.
The exchanges are intended as high-tech clearinghouses to assist individuals and small businesses in buying health insurance, which is required as part of a controversial provision included in the ACA. Although health insurance exchanges will not begin operating until 2014, state plans must be submitted to the federal government by next fall.
The report, from Health Management Associates and the Wakely Consulting Group, called the responsibilities of the health insurance exchanges "substantial.” The report pointed out that although federal funds would initially be available to assist in establishing an exchange, federal support would disappear by 2015.
In addition to the cost of the health insurance exchanges, the report also predicted that Medicaid enrollment in Illinois, already one of the fastest growing costs in state government, would grow by more than 3% between now and 2014. This increase would add about 400,000 new persons to the Medicaid rolls in Illinois, resulting in more than $109 million in new Medicaid costs beginning in 2014.
Earlier last week, a recently released survey completed by more than 300 business execs revealed a grim view of how companies perceives Illinois’ business climate. Bringing up the rear, behind only California and New York, Illinois is considered by the business executives surveyed to be one of the worst states to do business. Taxes, cost of business, over-regulation and anti-business policies all contributed to the state’s underwhelming ranking.
In contrast, Texas, North Carolina and South Carolina were viewed as the top three best states to do business. The survey was conducted by Development Counselors International, a consulting firm specializing in economic development and travel marketing.
Sen. Sandack said the results of the recent survey were “absolutely unacceptable; in fact it is embarrassing.”
“The time has come for us to ask whether we will let this continue, or if it is time for us to enact far better policies that encourage innovation and business growth,” said. “We need people back to work, and what is going on now in Illinois is obviously not working, in more ways than one.”
The survey results made headlines the same day Illinois House Republican Leader Tom Cross and fellow House Republicans unveiled a plan they say will attract and keep good jobs in Illinois.
The House GOP proposal offers several suggestions that were included in a jobs recovery plan rolled out by Senate Republicans last Spring, including:
- reinstating the Net Operating Loss (NOL) deduction that was suspended in the 96th General Assembly
- re-enacting and making permanent the Illinois Research & Development tax credit, which expired in 2010
- extending the duration of enterprise zones
Additional proposals advanced by House lawmakers include reducing the cost of establishing a Limited Liability Corporation in Illinois and increasing the estate tax exemption; the Senate GOP plan advocated for a complete repeal of the estate tax.
In other news, a recent media investigation revealed that at least 23 labor leaders will collect approximately $56 million from two city pension funds after they took leaves of absence from the city positions and went to work for unions full-time. In light of that information, House Republican Leader Tom Cross announced that he will file a bill that will prevent union leaders from receiving city pension benefits based off of their higher union salaries.
Sen. Sandack announced Thursday afternoon that he would sponsor Leader Cross’ legislation in the Senate.
“I have pushed for pension reform for awhile now,” Sen. Sandack said. “Perks that affect pensions are sometimes barely noticeable, but other times they are ticking time bombs, like in this instance, and they need to be corrected and reformed.”
This legislation could be a good first step in reforming other areas of the pension system, he said.
“Numerous other pension ‘sweeteners’ have been passed along many years that were not just for favored people, as we see in this instance, but were for every pensioner,” Sandack said. “While there was nothing but the best of intentions when they were implemented, these innumerable add-ons have made the entire system more expensive, compounding over all these years. Combine these add-ons with the fact that participants are living longer and other incidents associated with public pensions and you have a sustainability problem. These are the facts and it is more about math than anything else. Pension reform is needed now.”