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Observations and comments about state government by State Representative Robert W. Pritchard.
District Office 815-748-3494 or E-Mail to bob@pritchardstaterep.com

July 24, 2017

In This Issue:
Ø  A Closer Look at the Budget
Ø  Local Government to Receive More Timely Payments
Ø  Status of Education Funding
Ø  Credit Rating Slide Halted for Now
Ø  Higher Education Funds Forthcoming
Ø  Senior Health Fair on Thursday

A Closer Look at the Budget
With any bill that is as comprehensive as an appropriation bill, people can focus on one section and overlook the compromises that were made to pass the bill.  For example, statements have been made there weren’t spending cuts.  No pension reforms.  No effort to pay old bills.  Upon a closer look at the FY2018 budget, you will see these perceptions are wrong.  
Perhaps most importantly we have a budget for the first time in 2 years.  We now have guidelines for spending and available revenue which are both below what the governor requested in his February budget address.  Yes, in order to recover from the crippling debt and unpaid bills, state income taxes were increased 1.2 percent for individuals and 1.75 percent for corporations--to a level below FY2014.  These increases were effective July 1st, the start of the new fiscal year.  The Illinois Department of Revenue estimates that the individual income tax increase will generate $4.453 billion in FY2018 and the corporate income tax increase $514 billion.
Just as few people are willing to pay more tax; neither are most willing to see their favorite program cut.  Even so, the budget provides for about $3 billion less spending.  Among those cuts were 10 percent less for public universities and 5 percent less for certain programs in most agencies. 
Spending for pensions will be reduced by $500 million through several actions in the appropriation bill.  There will be a third pension tier for new state workers, and pension payments will be evened out rather than fluctuating greatly from year to year.  More comments about old bill payment later in this newsletter.

Local Government to Receive More Timely Payments
The State Revenue Sharing Act provides an important source of revenue for local units of government like counties, townships and cities.  As the state receives income tax revenue, a portion is transferred to the Local Government Distributive Fund (LGDF) and paid monthly to the units based on population. 
With the state’s cash flow problems, revenue transfers have been delayed causing fiscal challenges for many units of government.  The FY2018 budget addresses this issue and LGDF funding in two ways. 
First, the budget and implementation bill makes the transfer of money from the state’s General Revenue Funds (GRF) to LGDF as a direct deposit thus making the money available immediately and avoiding the past delays in transfers of 2 months or more.  This is an issue local governments have been seeking for years.
The new budget also provides for a 10 percent reduction in the amount of funds sent to local governments just for FY2018 to help balance the state’s budget.  However, the state will also catch up in payment for the past 2 months currently owned local units.  The net effect on local units of government will be about a $90 million increase in payments during FY2018. 
This new procedure in transferring funds is another way the FY2018 budget seeks to address paying the backlog of bills.

Status of Education Funding
While the FY2018 budget provides for about $12 billion in funding for K-12 education, it cannot be spent unless Senate Bill 1—school funding reform-- is signed into law.  The governor has threatened to veto the bill so the Senate has held the bill since May 30 hoping to get some compromise with the governor.
Last week, Governor Rauner asked that the bill be sent to him by today or he will call more special legislative sessions this week.  The Governor appears ready to make amendments in his veto of the bill to reduce pension payments for Chicago schools among other actions.
The legislature then has two options: accept the amendments--which appear very unlikely-- or over-ride the veto.  If this veto cannot be overridden, the bill will be dead and conversations toward a better compromise would continue and a new bill drafted. 
Efforts are being made to find a compromise and draft it in a bill that could be passed and signed into law before the vote to over- ride the veto in the House.  While that is an uncertain course, it would preserve SB1 as the education reform bill and take into consideration concerns voiced by many legislators and the governor.
One of the current stumbling blocks is the charge that SB1 favors Chicago Public Schools (CPS) over other districts in the state.  The bill calls for the state to pay CPS current pensions (just like the state does for all other school districts), and allow CPS to count its unpaid pension debt as part of the districts local capacity target.  In addition, CPS will continue to receive grants based on 1995 student numbers rather than use current student numbers like all other districts.
Another stumbling block is the provision to provide a floor of funding for every school district based on their payments in FY2017 rather than a floor based on student enrollment.  The state currently pays districts an amount per student based on a three-year average enrollment.  
One of the compromises for the CPS benefits in SB1 would be to allow all school districts to have the 3rd party contracting provisions and management negotiation rights given to CPS in 1995.  Those provisions would allow districts to reduce expenses and give districts more flexibility.

Credit Rating Slide Halted for now
The legislature may not have handed the governor a budget he wanted but at least it stopped a threatened downgrade in the state’s credit rating.  Moody’s Investors Service had warned of a downgrade to junk bond status if the state took no action on passing a budget. 
Yet there are long-term challenges still facing the state which continue to threaten its credit rating—now at Baa3.  The analysts are concerned about the pile of unpaid bills, and how the state will manage its cash flow situation.
The General Assembly crafted a way to pay the $15 billion in unpaid bills without raising taxes.  The budget sweeps special funds of about $1 billion and allows for the governor to borrow up to $6 billion dollars to pay the bills.  Combined with federal matching dollars for paying Medicaid bills, the accumulated unpaid bills could be reduced to about $4 or 5 billion--which many feel is acceptable for a budget of our size. 
The governor, however, is undecided if he will exercise that borrowing authority.  This indecision makes the credit agencies nervous.  They are also concerned that the governor hasn’t acted as he indicated to re-negotiate lower payments for judicial consent decrees that drove paying billions of dollars when the state didn’t have the money.     
Another practice that concerns the credit analysts is the state entering into contracts with vendors for services without having appropriation authority.  This has forced some vendors to wait years for payment and some have stopped serving the state or gone out of business.
The Governor could improve the fiscal situation by further reductions in state spending.  His agency heads in recent legislative hearings, however, didn’t have any ideas for cuts that they were willing to make.  It’s therefore hard to criticize the legislature for not making more spending cuts.
The climb out of the Illinois fiscal hole continues and much more work is needed to satisfy the credit agencies, citizens and businesses looking for a sound fiscal policy from the state.

Higher Education Funds Forthcoming
Comptroller Susanna Mendoza has released $695 million in existing education funds to begin paying community colleges, universities, and MAP grants for students.  The institutions were under severe budget constraint since state payments have only been made partially and intermittently over the past two years. 
This money included $327 million for the Monetary Assistance Program (MAP) that helps an estimated 110,000 students who qualified for the need-based scholarships.  The release of these funds is extremely significant as it provides assurances to many students attending school in the fall that they will have funding, and that scholarships would be honored.
The uncertainty of higher education funding over the past two years has encouraged nearly 60 percent of high school graduates attending college to go out of state.  In addition, out-of-state universities have been raiding Illinois schools to employ our best teachers and researchers.
The FY2018 budget provides back funding to pay higher education institutions for FY2017 at the rate of the budget in FY2015.  Collectively this funding provides assurances that the institutions will continue to receive accreditation, something that was in jeopardy.  Comptroller Mendoza added that every $1 invested in higher education returns $4 in economic activity for the state.


State Representative Bob Pritchard and State Senator Dave Syverson are hosting a health fair for older residents and their care givers next week in partnership with the DeKalb County Family Service Agency. The annual event brings together over 70 vendors representing different state agencies, local businesses, and health service organizations for area seniors.

The event will be held on July 27th from 9am-noon at DeKalb High School, 501 W. Dresser Road.

Rep. Pritchard urges area seniors to attend this year’s event to take advantage of the information and the various free health screenings available. “Bringing free health screenings directly to seniors is one way we hope to encourage overall health and wellness,” said Pritchard.

This year’s free health screenings will include hearing tests, and blood pressure. There will also be a special presentation on veteran’s benefits from the Illinois Department of Veteran’s Affairs, and a fire safety demonstration.

“I am looking forward to visiting with individuals and providers about their health and care needs plus facilitating the sharing of the tools they need to continue leading healthy lives,” said Senator Syverson. “This event conveniently combines various state and health services to help seniors improve every aspect of their lives.”

Light refreshments will be served, courtesy of the Voluntary Action Center, and all attendees will have the opportunity to win special door prizes. For questions about the upcoming event, contact Rep. Pritchard’s district office at (815) 748-3494.
Observations and comments about state government by State Representative Robert W. Pritchard.
District Office 815-748-3494 or E-Mail to bob@pritchardstaterep.com

July 3rd, 2017 
In This Issue:
ØFinally, a budget!
ØSpending Bill Highlights 
ØThe Value of Special Sessions
ØLegislation Debated in Regular Session
ØLocal Teacher Receives More Recognition
ØRemember Why We Celebrate

Finally, a budget!
What passed the General Assembly over the weekend was a balanced budget for FY2018 that included supplemental spending for FY2017 and a method to pay a portion of the state’s $14.3 billion of unpaid bills.  The budget relies on increasing income taxes to 4.95 percent for individuals and 7 percent for corporation, but does not include any proposed new program spending, expanded sales taxes, new gaming revenues or taxes on satellite entertainment.
My vote in support of the revenue and spending bills came from a basic conclusion that our state needs a balanced budget that stops the insane overspending, failure to pay our bills, and lack of stability.  It would have been easy to oppose the tax increase but I saw no other solution to solving our fiscal issues.
People have been asking for months if I was frustrated with the gridlock and failure to pass a budget.  I have been patient because there were lots of ongoing discussions with agreements over reforms, spending reductions and revenue.  Facing the start of our third year without a budget in my view was unacceptable.  It was time to vote on the bipartisan agreements that had been made.
Our state has been overspending available revenue for years.  When the temporary income tax ended in 2015, spending continued at the FY2015 level primarily due to court orders, consent decrees and continuing appropriations.  Without a budget, the state couldn’t seek court relief from spending nor could revenue be expanded.  
I believe reaching a balanced budget will bring stability and predictability for families and our economy.  Businesses have often told me they want the state to be fiscally responsible and have a stable tax structure.  The fact the state will now pay down old bills means small businesses and organizations that provide goods and services to the state will receive the billions of dollars owed them.  They can also plan on what their taxes will be and be less concerned about a much larger tax increase.

Spending Bill Highlights
The spending bill (SB6) cut general revenue spending by nearly $3 billion through across the board cuts of 5 percent to most operating lines and 10 percent cuts for colleges and universities.  Changes to the pension system cut an additional $500 million.
K-12 education funding included $350 million to begin implementing the new evidence-based funding formula, $50 million more for early childhood education and $38 million more for bilingual education.  Increased funding for regular and vocational transportation helps cover more of the school districts’ expenses but still only covers 84.6 percent of the costs.
Human Services highlights include rate increases for Community Care Program providers and front line community services staff, mental health centers, addiction treatment services and home services.  Eligibility for the child care program is raised to 185 percent of poverty, and there is FY2017 and FY2018 funding for domestic violence shelters.
Higher education funding included supplemental funding for FY2017 operations of public colleges and universities, and student Monetary Assistance Program funding for FY2017 and increased funding for FY2018.  The funding should significantly help Northern Illinois University turn things around and help stabilize declines in student enrollment.
General Services appropriations fully fund the group health insurance program, include cuts of 10 percent to the Governor and Lt. Governor, and pay court reporters out of local unit of government funding (PPRT) rather than state general revenue.  Funding was included for Soil and Water Conservation staff and programs.
The budget included re-appropriations for some capital projects approved in 2009 which include remaining funding to complete Stephens Hall at Northern Illinois University and the DeKalb Public Library expansion.

Observations and comments about state government by State Representative Robert W. Pritchard.
District Office 815-748-3494 or E-Mail to bob@pritchardstaterep.com

June 26, 2017
In This Issue:
Ø“You Can Bring a Horse to Water, But…”
ØAttention Drawn to University Challenges
ØADM Announces Expansion in Illinois
ØCommittee of the Whole Discusses Various Reforms
ØVeterans Invited to Join Advisory Council


 “You Can Bring a Horse to Water, But…”
Governor Bruce Rauner is trying a well-worn strategy of calling Special Sessions to bring legislators together to pass legislation.  In fact he’s called for sessions each day until a budget is passed or July 1, whichever comes first.
Like the old time adage I learned as a youth “you can bring a horse to water but you can’t make it drink.”  Neither could Special Sessions called by Governors Blagojevich nor Quinn get legislators to pass the bills they wanted.
Governor Rauner, however, tried something a little different than his predecessors and on the eve of Special Session, he delivered a state-wide televised address to Illinois residents.  In it he explained the purpose of his proclamation and urged compromise and unity during the Special Sessions.
There was a sense of urgency as legislators returned to Springfield last week since most had been hearing about the need to pass a budget from their constituents and service providers while they were home.  Like all the Special Sessions before, however, the Speaker gaveled the session to order then promptly adjourned it.  No one was allowed to “drink.” 
After the first few days of Special Sessions with no legislation or time for debate, the atmosphere got a little heated.  I spoke to emphasize the support and willingness of colleagues on my side of the aisle to work on a budget agreement.  You can see more of my remarks here.

Attention Drawn to University Challenges
Illinois universities were in the news this past week for the different challenges they face.  Northern Illinois University captured a lot of attention when President Doug Baker announced he would leave the University this week.  He came to the institution in 2013 with plans to build university relations with the community and focus the university on its core mission, strengths and opportunities.  He became embroiled in hiring decisions, his plans for changes and the lack of state financial support.
Acting President Lisa Freeman inherits more than the challenges of being the first woman president.  The faculty formed a new union in response to several issues including the lack of a pay raise in over 6 years.  Out-of-state universities are stalking key faculty with offers of more stability, job security and resources for their work.  Recruiting new students has become increasingly difficult as they look at lower tuition costs, program stability and better faculty moral at out-of-state institutions. 
These challenges, however, are not unique to NIU.  I spoke out in the House last week about the damage being down to all our universities and colleges—public and private-- due to the lack of a state budget. 
I referenced a letter from the Higher Learning Commission to members of the General Assembly and state leaders which drew alarm that our institutions may face loss of accreditation.  The Commission is the oversight agency for 19 states that assures the quality of colleges and universities for students.
Lack of accreditation would mean students are ineligible for federal financial aid.
The Commission letter pointed to other impacts of not having a state budget:
·        Higher tuition and fees
·        Declining student enrollment
·        Loss of faculty, staff and programs
·        Deteriorating buildings, labs and infrastructure
·        Depleted cash reserves and grants
I repeated my commitment to work together to find a budget agreement that will provide the necessary funding to higher education and with that, give the needed certainty that schools can continue to operate.  For NIU, I am ready and willing to help University President Freeman and the entire NIU community overcome these challenges and focus on ways it can improve the lives of students and support a growing Illinois economy. 
Today is Flag Day, where we commemorate the adoption of the United States Flag. Congress adopted the Stars and Stripes as the American flag on June 14th, 1777. After that, additional stripes and starts were added when welcoming new states. The colors were also specifically chosen and have special meaning: the red symbolizes hardiness and valor, the white symbolizes purity and innocence and blue represents vigilance, perseverance and justice.

National Flag Day is always observed on June 14th and typically celebrated throughout the entire week. After three decades of informal celebrations of this day around the country, Flag Day was officially established by President Woodrow Wilson on May 30th, 1916. But it wasn’t until President Harry Truman declared through an Act of Congress, Flag Day to be a national holiday. However, only Pennsylvania celebrates Flag Day on June 14th as a federal holiday.

Flag Day is an opportunity to show American pride. During this week, you will often see the flag proudly displayed on government buildings and many others around the country.

The American flag is a special source of pride and inspiration for United States citizens. Americans enjoy the greatest freedoms, and today you can celebrate by flying the flag!



The budget impasse has had a lasting impact on higher education in the State of Illinois. The University of Illinois School System—the state’s largest educator—expressed the effect the lack of state funding is having on its universities as well as students. 

University of Illinois officials wrote to lawmakers at the end of spring legislative session in the General Assembly to express their concerns over the continuing budget impasse, and detail the severity of its effect on state schools. You can find a copy of their letter here.

Above all, financial uncertainty has left faculty leaving for other opportunities and Illinois residents choosing other higher education options in other states. The impasse has hurt enrollment and impacted the national ranking of Illinois’ schools, leading many to choose other more appealing options. Illinois now ranks second, only to New Jersey, in having the highest net ranking of students who leave for colleges out of state. In 2015, that number amounted to 45% of high school graduates in Illinois.

Institutions of higher education have encouraged lawmakers to work together to put an end to the impasse and come to a budget agreement that will sufficiently fund Illinois’ schools and provide a more certain future.

With regular session in Springfield concluding without a budget in place, more pressure needs to be placed on lawmakers to encourage compromise and an end to the budget stalemate.