Pritchard's Perspective for July 5th

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 5, 2016
In This Issue:
  Ø  Citizen Anger Results in Partial Budget
  Ø  Other Legislative Actions Last Week
  Ø  Impact of Budget Crisis Felt Across State
  Ø  IDOT Averts Project Shutdowns
  Ø  New Gun Law Proposed
  Ø  Concerns about Electronic Waste Increase
  Ø  Credit Rating Cut Means Higher Interest Costs
  Ø  Illinois Residents Brace for Higher Healthcare Premiums
  Ø  Vehicle Owners to See Relief

Citizen Anger Results in Partial Budget
It was the anger of citizens 240 years ago that resulted in the Declaration of Independence and the beginning of our nation’s democracy.  I believe it was similar citizen anger, this time directed toward our elected officials, that resulted in a partial budget being passed last week. 
The pressure for a full-year budget had been building since July 2015.   However, I believe it was the prospects of many schools and universities not opening this fall at the same time that legislators were campaigning for election that forced political leaders to finally allow a budget compromise. 
Make no mistake this partial budget is only a bridge to January; for the second fiscal year Illinois has failed to adopt a full-year budget and is the only state since the Great Depression to fail twice in this constitutional duty.   
Like last year, K-12 education is the only part of the budget to receive a full- year appropriation, which is $1 billion more than last year.  It was significant that the plan includes the Governor’s call for full funding of the school foundation level and $250 million more for districts with fewer property tax resources.  
SB2047 provides funding for road construction, colleges and universities, food and medical services at state prisons, critical human services and pass-through of federal program dollars.  Contact my office if you have questions about specific program funding.

Many service providers are giving a tentative sigh of relief with this spending authorization, but they will continue to struggle in the absence of a full-year budget.  Your financial support and volunteering will continue to be critical to their operations.  For example, Association of Horizon is looking for male student volunteers to help with a July 17-23 summer camp for people with disabilities.  The camp is located near Bloomington. 

Other Legislative Actions Last Week
The legislature has passed SB318 which authorizes the Chicago school board to raise property taxes by as much as $250 million annually to pay for Chicago public school teacher pensions.  Chicago Public Schools currently owes a $669 million pension payment to the teachers’ pension fund.  Money raised by any CPS tax hike must be deposited directly into the pension fund and cannot be diverted or used for any other purpose.
Action was also taken to bring so called parity in state payments to the Chicago and downstate teacher pension funds.  SB2822 authorizes the state, which hasn’t been making any pension payment for Chicago teachers to pay $215.2 million to the Chicago Teachers Pension Fund for 2017.  This sets the precedent for additional payments in future years.  A motion to reconsider the bill was made in the Senate which delays sending the bill to the Governor for action so that state-wide pension reform can be considered before December.
HB4678 was passed and has been signed into law assuring that the Medicaid rates for hospital services for Affordable Care Act adult clients is the same as the rate paid for traditional Medicaid beneficiaries.  It also restores $3 million in state funding for the Illinois Poison Control Center.

Impact of the Budget Crisis Felt Across State
Nearly one million vulnerable citizens across the state have lost critical services due to the budget impasse according to a survey conducted by United Way of Illinois (UWI).  Equally important, the survey of 429 human services agencies from every county in the state found the agencies had depleted their cash reserves and borrowed nearly $38 million to keep their doors open. 
Approximately 45 percent of respondents have been forced to lay off staff which is double the number just six months ago, and 36 percent of agencies anticipate they will have to close their doors in six months if a full-year budget is not passed.
Human services affected by the budget standoff include programs not protected by ongoing Illinois court orders, consent decrees, and continuing appropriations.  These include outpatient mental health services and drug treatment for non-Medicaid clients. 
While the partial budget passed last week will provide funding for many of these human services, the funding will end in January without further legislative action.  The appropriated funding will do little to compensate agencies for the cost of loans to keep operating, replace the experienced staff that was let go, or necessarily reinstate programs that have been cut. 
UWI is the statewide association of 52 local United Ways and the largest non-governmental funder of health and human services in the state.

IDOT Averts Project Shutdowns
In mid-June Illinois Department of Transportation (IDOT) Secretary Randy Blankenhorn sparked serious concerns when he announced that ongoing capital projects would be shut down on July 1 if the legislature did not pass spending authority.  Several contractors began removing heavy equipment from projects by the end of June.   
Project shutdowns would have impacted around 25,000 jobs statewide.  In addition, over $14 billion in operating money was available to fund the projects, but the department lacked authority to spend it.  These factors were among the many pressure points that caused leaders from both sides of the aisle to return to the negotiating table with renewed purpose.

New Gun Law Proposed
After the horrific killings in Orlando, Florida, a bipartisan group of lawmakers filed legislation that may help keep firearms out of the hands of individuals who have been deemed a public safety threat.  HB6588 protects the rights of lawful citizens while strengthening provisions of the Firearm Owners Identification (FOID) Act.   
The bill provides for rejecting or revoking the credentials of individuals who have been identified as a clear risk to the safety of others, have made threats of terrorism, or have been charged with an act of terrorism.

While providing law enforcement with an additional tool in the fight against gun violence and terrorism, the legislation also provides for a right to due process for those who have had a FOID card denied or revoked.  In addition to the stronger provisions for screening FOID card applicants, HB6588 also requires police chiefs and deputy chiefs to receive annual training concerning the FOID Act, the Concealed Carry Act, and firearms investigations.

Concerns about Proper Electronic Waste Increase
If you have ever had trouble trying to dispose of an old electronic device like TVs or computer monitors you are not alone.  The legislature passed the Electronic Products Recycling and Reuse Act in 2008, which banned disposal of electronic waste in landfills beginning in 2012.  Manufacturers of these devices are required to register with the state, pay a fee and meet annual recycling and reuse goals for the items they produce.  However, the recycling goals don’t come close to the volume of items being discarded and the salvage value from recycling the items exceeds the cost of recycling.
The legislature amended the Act in 2015 to direct the Illinois Environmental Protection Agency to review the issue and recommend a solution.  Their report issued February 1 can be viewed here.  A broad group of stakeholders from manufacturers to local governments and recyclers have met, but failed to agree on a solution to the issue.
It appears the legislature will have to amend the law to resolve the impasse.  If you have ideas for solving the problem, let me know.  Perhaps there needs to be a consumer charge when the electronic item is purchased or discarded like there is for vehicle batteries.

Credit Rating Cut Means Higher Interest Costs
Illinois’ credit rating has been downgraded once again reflecting the serious financial condition of the state and its ability to repay its debts.  Moody’s Investors Service and Standard & Poor’s new credit ratings for Illinois take it one step closer to “junk bond” status and next to the bottom among all states. 
As Illinois’ credit rating declines and the state borrows money for operations and capitol projects, Illinois taxpayers must pay higher interest rates.  In addition, the State faces the prospect of substantial supplemental penalties from lenders who have already lent the State money.
When the state recently borrowed $550 million, it paid an interest rate higher than nearly every other state would have paid.  The increased cost to taxpayers will be $12 million.  Even more concerning is the cost for borrowing $4 billion for anticipated road projects. 
Among the reasons cited for the credit rating downgrade include no full-year budget, pension debt and obligations, unpaid bills and an unfavorable business climate. 

Illinois Residents Brace for Higher Healthcare Premiums
Illinois residents should expect their Affordable Care Act—Obamacare-- premiums to go up, but how much remains unknown.  Sharp increases in average 2017 premiums, in many cases exceeding 10 percent, have been reported under the mandatory reporting provisions operating in many states.
Federal law requires premium increases of 10 percent or more to be reviewed by each state and Illinois has not completed the task.  United Healthcare, one of America’s three largest health care insurers, blamed higher than anticipated claims and resulting company financial losses for the premium increases. 
For many Illinoisans, participation in the ACA insurance marketplace is required by law and nonparticipants are subject to fines and penalties.  The State of Illinois operates a webpage, “Get Covered Illinois,” for persons who need to try to find new health insurance policies.  The next ACA open enrollment period will start on November 1, 2016, and will end on January 31, 2017. 

Vehicle Owners to See Relief
When Secretary of State Jesse White stopped mailing vehicle registration renewal reminders to save $450,000 in his budget, drivers were subject to a law enforcement citation for an expired sticker and a Secretary of State $20 late charge upon registration renewals.  Citizens complained loudly to legislators about not receiving reminders.
As a result, the House and Senate have passed HB4334, which awaits action by the Governor.  The bill would suspend the vehicle sticker late fees and prevent law enforcement from issuing citations if the vehicle owner was not mailed a registration reminder.  Police citations can be issued for expired stickers after 30 days.  The legislation will sunset on June 30, 2017.    

I hope you enjoyed the Independence Day weekend and wonderful weather for picnics.  Call my office if you would like to visit or there are ways my office may be of assistance.


Bob