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, IL – Lawmakers finished up the last week of the fall veto session on Nov. 10, but State Sen. Ron Sandack (R-Downers Grove) said that legislators will return to Springfield Nov. 29 to address outstanding issues relating to the state’s budget and business incentives.
The General Assembly was unable to come to any agreements this week regarding a jobs and tax relief package being floated to retain several major Illinois employers, including the Chicago Mercantile Exchange (CME) and Sears. The package could include other measures aimed at helping all Illinois businesses.
Negotiations on an incentive package stalled as Gov. Pat Quinn demanded a costly expansion of grants for low-income residents and the long-term costs associated with the legislation grew into the hundreds of millions of dollars. The state’s budget constraints make it incredibly difficult to offer costly incentives to businesses, though lawmakers and state leaders agree that it’s important that CME and other businesses remain in the state. Many lawmakers also cited fears that bowing to demands for incentives would create a possible precedent for similar future requests.
“I know of no reasonable person who would want CME or any other business to leave the state,” Sen. Sandack said. “However, the legislative proposals presented this week appear to be more of a bailout rather than a job-creating or a jobs-saving measure. The proposal would unquestionably create a precedent for other big businesses to ask for the same concessions down the road. That's not the kind of policy making, let alone business environment, Illinois should be perpetuating.”
Sen. Sandack suggested that instead of creating such a precedent, Illinois should enact policies that are friendly for all businesses instead of continuing to impose taxes and regulations that burden and hinder growth.
“The situation was created as a result of the tax increase in January, truthfully,” Sen. Sandack said. “Illinois has stifled businesses with its policies and taxes. CME and other businesses asking for tax breaks is symptomatic of bad business policy in the state. We certainly want to keep CME in Illinois, but we have to also have a level playing field for all.”
Also failing to meet lawmakers’ approval was a revised gaming package. Though House lawmakers considered a scaled-down gaming measure this week, the bill didn’t receive the support needed to advance. At this time the future of a large-scale gaming expansion in Illinois is uncertain.
However, Senate lawmakers did approve a measure to eventually restore to solvency the state’s unemployment insurance trust fund, which is on track to be more than $2 billion in debt by the end of 2011.
Unlike the state’s other financial challenges, the negative balance of the state’s unemployment insurance fund is the direct result of the economic downturn that forced employers to reduce their workforce. The increase in people drawing unemployment has bankrupted the trust fund.
Lawmakers joined business and labor representatives to negotiate Senate Bill 72, which outlines a plan to restore the unemployment insurance trust fund to solvency. Without the legislation, employers would have faced new federal penalties and higher costs; if signed into law, this legislation will save Illinois employers about $400 million and prevent the state from having to pay $240 million in interest payments to the federal government. Almost half of all Illinois employers will see a reduction in payments under the plan. The legislation also includes reforms that will allow the state to recoup improper unemployment insurance payments, and pursue those who abuse the system. It also includes incentives that will encourage both business and labor to return to the bargaining table in the future to assure continued solvency of the fund.
The Illinois Senate also passed two measures to address abuses of some state and Chicago public pension funds. One of the measures, House Bill 3815, drew criticism as a weaker reform of “union perks” in law, which allows union staffers to collect public pension benefits based on their union work. House Bill 3815 would only close the perks for most new hires, while current government employees who may work for a union in the future, and current union staffers who are members of public pension systems would not be affected. Senate Republicans preferred House Bill 3813, an alternative measure that advanced more stringent pension reforms.
“I’m pleased that this legislation was passed,” Sen. Sandack said. “There really was no logical reason for it not to as pension abuses of this kind were clearly unacceptable.”
Other public employee pension reforms are circulating throughout the Statehouse, but it is unclear still as to what could actually make it to the Senate or House floors. Sen. Sandack stressed the importance of pension reform in order to sustain the system.
“I know people are very weary of pension reform,” Sen. Sandack said. “However, it’s so important to understand that if we don’t fix this, there will be no pension fund in the future. It goes without saying that the absence of a sustainable pension fund would be a much worse situation than what we have now. The numbers are irrefutable and I support doing something now rather than wait and continue to watch the system further deteriorate.”
In one of the last few actions Thursday afternoon, the Senate concurred with the House in passing SB 2147, a measure that will fund the salaries of regional superintendents and Regional Offices of Education out of municipalities’ Personal Property Replacement Fund. The legislation was drafted after Governor Quinn line-item vetoed this part of the budget appropriations.
“The passing of this legislation is bad news for local units of government,” Sen. Sandack said. “It’s a money grab that has now been placed on municipalities due to poor fiscal management of the state.”
Sen. Sandack voted against the measure, saying he was unsupportive of these offices now being funded on the backs of local governments.
“With this legislation, municipalities are being mandated to fund a state obligation,” Sen. Sandack said. “It’s not good fiscal operation to further impose financial burdens on local governments that have already cut their budgets to live within their means when the state has not done the same.”
Also this week, reforms to work rules at Chicago’s McCormick Place convention center and exhibition facility (McPier) were advanced by the Senate Executive Committee.
Senate Bill 1992 address labor union concerns associated with a 2010 law that sought to ease stringent labor rules at McPier, after high labor costs encouraged several conventions to leave Illinois for more cost-effective locations. Labor unions protested the initial reforms, arguing the law interfered with the negotiating rights of private-sector employees.
Lawmakers, the governor and Chicago Mayor Rahm Emanuel worked with labor unions to negotiate a compromise settlement that satisfies the legal concerns surrounding the current work rules. The legislation would codify that agreement into law.