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News | Roger C. Marquardt & Co., Inc.

March 16, 2019 Update

Governor’s Highlights
Governor Pritzker continues to promote his graduated income tax. This week, he released a new “tax calculator” that will allow taxpayers to see what their taxes would be under his proposed graduated income tax proposal.
Meetings are underway between the Governor’s office and legislative working groups to discuss video gaming and legalizing cannabis. Both are part of revenue sources for Governor’s proposed FY 20 budget. This week, the Senate assigned their cannabis legalization vehicle bill (SB7/Steans) to the Senate Executive Committee.
Governor Pritzker joined Michigan Gov. Gretchen Whitmer, Ohio Gov. Mike DeWine, Wisconsin Gov. Tony Evers and Pennsylvania Gov. Tom Wolf in opposition to President Trump’s proposed 90 percent cut to the Great Lakes Restoration Initiative. Their joint statement: “The Great Lakes hold 21 percent of the world’s freshwater, and they are among the most vital ecological and economic resources in America. Slashing the Great Lakes Restoration Initiative by 90 percent would cost our states thousands of good-paying jobs, hurt our tourism and recreation industries, and jeopardize public health. This is a risk we simply can’t afford to take.”
101st General Assembly
Barbara Hernandez, a member of the Kane County Board, was sworn in as new representative of the 83rd House District. Hernandez, of Aurora, replaces Democratic State Representative Linda Chapa LaVia, who resigned her legislative seat to become director of the Illinois Department of Veterans Affairs.
A bill (HB345 /Lilly) that would raise the age to purchase cigarettes and other tobacco products from age 18 to 21 was fast-tracked this week in the Illinois General Assembly. TheHouse approved the legislation by a vote of 82-31 on Tuesday. Once arriving in the Senate, the Senate Assignments committee bypassed committee and sent the bill directly to the Senate Floor. On Thursday, the legislation passed the Senate by a vote of 39-16-1. The bill now heads to the Governor’s desk.
The Illinois House approved SB 1596 (Sims) by a vote of 70-40-1 before adjourning Thursday. The bill passed the Senate last week. SB 1596 is targeted towards workers who have developed latent illnesses or injuries after coming in contact with asbestos, radiation or beryllium in the workplace.  Specifically, the bill amends the Worker’s Compensation Act and Workers’ Occupational Diseases Act to provide that provisions limiting recovery do not apply to injuries or death resulting from an occupational disease as to which the recovery of compensation benefits under the Act would be precluded due to the operation of any period of repose or repose provision. SB 1596 is headed to the Governor’s desk.
The LGBTQ Inclusive Curriculum Bill, HB246 (Moeller), passed the Illinois House by a vote of 60-42. The bill is now headed to the Illinois Senate. The House Transportation Committee approved HB2276(Carroll) which prohibits smoking in a car when a person under 18 years of age is present. HB 2276 is now headed to full House. HB252 (Guzzardi), which expands the Human Rights Act to employers with one or more employees, passed the House by a vote of 74-40. HB 252 is now headed to Senate. The Senate Environment and Conservation Committee approved legislation (SB2020 /Steans) which requires business, environmental and power agencies to work together to create a plan to make Illinois’ energy industry completely carbon-free by 2030. The bill now heads to the full Senate. The Illinois House also approved legislation (HB834/Moeller) by a vote of 86-28 which prohibits employers from asking job applicants about salary history. Two previous versions were vetoed by former Governor Rauner. The House Transportation: Regulation, Roads & Bridges Committee will hold a hearing on March 19 at 3:00 pm in Room C-1 of the Stratton Building to discuss conditions of Illinois bridges. Senate Appropriations I will hold a hearing on March 19 at 10 a.m. in Room 212 of the Capitol to discuss Department of Healthcare and Family Services FY 20 proposed budget. The House Revenue & Finance Committee will hold a hearing on March 21st at 8:30 am in Room 122B of the Capitol to discus local sales taxes and motor fuel tax. The House Personnel & Pensions Committee will hold a hearing on March 21st at 10:30 am in Room 118 of the Capitol to discuss downstate police and fire consolidation. Coming UpThe Illinois General Assembly stands adjourned for the week. Both chambers will reconvene on Tuesday, March 19at noon and will continue reviewing legislation at the committee level. March 22is committee deadline in the Senate. March 29 is committee deadline in the House.
Key Session DatesMarch 22- DEADLINE for substantive Senate Bills out of Senate Committee.March 29 – DEADLINE for substantive House Bills out of House Committee.April 2- Consolidated Election.April 12- DEADLINE for third reading of Substantive Senate Bills and Substantive House Bills.May 10- DEADLINE for Substantive Bills out of Committee in 2nd chamber.May 24- DEADLINE for third reading of Substantive Bills in 2nd chamber.May 31- ADJOURNMENT.

March 9, 2019 Update

Governor’s Highlights
Graduated Income Tax: Governor Pritzker released his plan to change the state’s tax structure from a flat to a graduated income tax. A copy of the Governor’s presentation, including proposed rates, is here.  The Governor projects the change in tax structure will generate $3.4 billion, and includes a new $100/child tax credit and a $100 million increase in the property tax credit. Illinois’ corporate income tax would increase from 7 percent to 7.95 percent under Gov. Pritzker’s plan.

Governor’s Proposed RateIncome
4.75%$0 – $10,000
4.90%$10,001 – $100,000
4.95%$100,001 – $250,000
7.75%$250,001 – $500,000
7.85%$500,001 – $1,000,000
7.95%Over $1,000,000

 The Governor argues the graduated income tax is the path forward for Illinois’ fiscal stability and challenged opponents, when negotiating the proposal, to share their specific “plan to address a $3.2 billion-dollar budget deficit, pay down $15 billion of debt from unpaid bills, and protect working families.”
Meanwhile, House Republicans filed House Resolution 153earlier in the week ahead of the Governor’s announcement stating their unified position against instituting any graduated income tax. Public relations campaigns by both proponents and opponents are now underway.
New Appointments

  • Paula Basta, Director of Illinois Department of Aging. Currently serves as director of senior services and health initiatives at Chicago Housing Authority and teaches at the Loyola University School of Social Work.
  • Ron Guerrier, Chief Information Officer of Illinois Department of Innovation and Technology. Guerrier has more than 20 years of experience managing IT in private sector and has served as chief information officer for large companies since 2012.
  • Robert Muriel, Director of Illinois Department of Insurance. Muriel is a civil and commercial lawyer with more than 20 years of experience representing small businesses and professionals in trials, appeals and arbitrations in state and federal courts. His core practice is civil and commercial litigation, including insurance coverage and bad faith claims, financial fraud claims, legal malpractice cases and consumer class action cases, including actions brought under the Fair Debt Collection Practices Act.

Bond Sale Schedule
The Governor will meet next week with rating agencies to discuss his pension and budget proposals. Illinois’ bond sale schedule per the Governor’s introduced FY 2020 budget is as follows:

  • April 2019 – $300 million in General Obligation Pension Acceleration Bonds
  • June 2019 – $1.5 billion in General Obligation Backlog Borrowing
  • August 2019 – $600 million in General Obligation capital bonds and $700 million General Obligation pension acceleration bonds
  • January 2020 – $500 million General Obligation capital bonds
  • March 2020 – $2 billion pension funding bonds. These bonds will either be General Obligation bonds or a new individual income tax bond requiring legislative approval.

Agency News
The Illinois State Police announced steps to improve operations, firearms services processes and information sharing to aid law enforcement officials statewide with enforcement of Firearm Owner’s Identification (FOID) card revocation laws. A list of ISP actions is here.101st General Assembly
Budget: The Commission on Government Forecasting and Accountability told Illinois lawmakers this week that they expect a $184 million revenue shortfall for the current fiscal year (FY 19). The Commission also warned that Illinois is likely to see an economic slowdown in 2020 which could further impact Illinois’ financial condition. GOFA’s revised estimates include $38.3 billion in revenue for FY 19 down slightly from the original predication of $38.5 billion in revenue. State income tax collections are projected to end the year $450 million higher than expected, and sales taxes are doing slightly better than expected. The state never sold the James R. Thompson Center which was projected to generate $300 million, and the state didn’t borrow money from special state funds which was authorized in the budget.
For next year, COGFA is predicting increases in both income and sales taxes, although the amount of growth isn’t expected to be as strong as it has been. However, some other taxes, like inheritance and insurance taxes, are expected to drop slightly. Without introduction of specific legislation, COGFA is unable to analyze or predict revenue estimates for portions of the Governor’s revenue proposals for FY 20 like sports wagering and recreational marijuana sales.
Plastic Bag Tax: SB1240 (Link) passed Senate Revenue Committee. The bill in its current form levies a 7-cent tax on plastic and paper shopping bags. 2 cents would be kept by retailer to cover   costs of implementing tax. The other 5 cents would be collected by the state, with 2 cents going directly to general revenue fund and another 3 cents deposited in the Checkout Bag Tax fund, which would fund solid waste management programs in the counties in which the tax was collected. The sponsor continues negotiating details of plastic bag tax with Governor’s Office, and the bill will likely be amended in the coming weeks. A plastic bag tax is one of the new revenue sources in Governor Pritzker’s proposed budget.
Capital Needs: Details have been finalized for a series of regional Illinois Senate hearings about local construction needs in communities around the state.

  • 3 p.m. Monday, March 4 – Southern Illinois University Edwardsville, Morris University Center, Madison Room, 6 Hairpin Drive, Edwardsville
  • 1 p.m. Monday, March 18 – Decatur Public Library, 130 N. Franklin St., Decatur
  • 3 p.m. Monday, April 8 – Bradley University, Peplow Pavilion inside the Hayden-Clark Alumni Center, 1501 W. Bradley Ave., Peoria
  • 1 p.m. Tuesday, April 16 – Bilandic Building, 160 N. LaSalle St., Chicago
  • 1 p.m. Monday, April 22 – Gail Borden Public Library, 270 N. Grove Ave., Elgin

Documents provided to senators during the hearing will be uploaded to a publicly accessible portal. Additional hearings and town hall meetings on statewide construction needs may be added to the schedule.
Pensions: The Commission on Government Forecasting and Accountability (COGFA), the General Assembly’s budget-watchdog arm, issued a  report this week on The Illinois Municipal Retirement Fund, the City of Chicago pension funds, and the Cook County pension funds and their liabilities. The unfunded liabilities of the eight Chicago-based pension funds covered in this February 2018 report is $41.8 billion. The comparable figure for Cook County is $6.9 billion and the comparable figure for the Illinois Municipal Retirement Fund (non-Chicago, non-Cook County, non-police, and non-firefighting public employees in suburban and Downstate Illinois) is $3.0 billion.
SB 1864 (Link) passed Senate Public Health Committee. Adds electronic cigarettes to Smoke Free Illinois law.  The sponsor agreed to continue to work on the bill.  
The Senate Transportation Committee passed SR 68 (T Cullerton).  This resolution rescinds Gov. Rauner’s executive order on Autonomous Illinois.  
SB 1596 (Sims) passed the Senate along partisan lines by a vote of 41-16-1. Amends Worker’s Compensation Act and Workers’ Occupational Diseases Act to provide that specified Sections limiting recovery do not apply to injuries or death resulting from an occupational disease as to which the recovery of compensation benefits under the Act would be precluded due to the operation of any period of repose or repose provision. Provides that, as to any such injury occupational disease, the employee, the employee’s heirs, and any person having the standing under law to bring a civil action at law has the nonwaivable right to bring such an action against any employer or employers.  The bill now heads to the House for consideration.
An amendment to create a Clean Jobs Act was filed this week in the Illinois House. Committee Amendment # 1 to HB 3624creates the Clean Jobs Workforce Hubs Act, the Expanding Clean Energy Entrepreneurship Act, the Community Energy and Climate Planning Act, and the Clean Energy Empowerment Zones Act to reduce emissions, promote renewable energy sources, improve energy efficiency, and reduce carbon pollution related to transportation. Requires the Department of Commerce and Economic Opportunity to administer a program to 1) increase employment opportunities related to clean energy projects, 2) provide for creation of a clean jobs curriculum to increase workforce skills, and 3) provide for promotion of opportunities for small and disadvantaged businesses in clean energy development. Establishes a framework to achieve 100% reliance on renewable energy. Repeals the Kyoto Protocol Act of 1998.
Representative Marty Moylan, along with 34 co-sponsors, filed a resolution this week (HR157) urging lawmakers to slow process of legalizing recreational marijuana in Illinois so that lawmakers, stakeholders, and experts alike have the chance to consider the societal impact of legalization and examine all the data from other states that have passed similar legislation. Resolution is pending in the House Rules Committee. Governor Pritzker is pushing for legalization and is projecting to use $70 million in new revenue from licensing to fund the FY 20 budget. Opponents rallied against legalization this week at the capitol.
Senator Hastings filed an amendment to SB44 to tighten gun ownership laws in Illinois and require law enforcement officers to confiscate weapons and ammunition from people who have had their firearms permits revoked. The amendment adds new language to the state’s gun laws to require the Illinois State Police to confiscate firearms and ammunition from any person whose FOID card has been revoked. It would also require state police to report that person’s name to the National Instant Criminal Background Check System. The amendment further adds several new categories of people who would be barred from owning guns in Illinois, including: people with outstanding felony warrants anywhere in the United States; people subject to a protection from abuse order; people dishonorably discharged from the military; and any fugitives from justice. Stricter reporting requirements would be imposed on local governments and prosecutors to report to the state police the names and other identifying information of anyone who has been convicted of a crime or judged to have a mental condition that would disqualify them from owning firearms so the state police could forward that information to the national criminal background database. The legislation is in response to the recent mass shooting in Aurora, Illinois.
The House Cities & Villages Committee will hold a hearing on March 12 at 4 p.m. in Room D-1 of the Stratton Building to discuss the sale of municipal power transmission lines.
The House Labor Committee is holding a hearing on March 13 at 2:30 pm in Room 114 to discuss nursing staff limits.
The House Appropriations-Capital Committee will hold a hearing on March 14th at 8:30 am in Room 114 to discuss transportation needs. The House Prescription Drug Affordability & Accessibility Committee will hold a hearing on March 13th at 10 am in Room 114 to discuss patient perspectives on drug prices. COMING UPThe Illinois General Assembly will reconvene on Tuesday, March 12 at noon. Both chambers will continue reviewing legislation at the committee level. March 22 is committee deadline in the Senate. March 29 is committee deadline in the House.
Key Session Dates
March 22- DEADLINE for substantive Senate Bills out of Senate Committee.March 29 – DEADLINE for substantive House Bills out of House Committee.April 2- Consolidated Election.April 12- DEADLINE for third reading of Substantive Senate Bills and Substantive House Bills.May 10- DEADLINE for Substantive Bills out of Committee in 2nd chamber.May 24- DEADLINE for third reading of Substantive Bills in 2nd chamber.May 31- ADJOURNMENT.

March 1, 2019 Update

Governor’s Highlights
Governor Pritzker signed legislation PA100-1198 to remove the current members of the Toll Highway Authority Board.   Pritzker promptly appointed a new Toll Highway Board (see below). All appointments require Senate approval.New Appointments

  • Omer Osman will serve as Secretary of the Illinois Department of Transportation (IDOT). Osman has over 29 years of experience in the civil engineering and management field at IDOT.
  • Illinois State Board of Education
    • Darren Reisberg, chair. Reisberg currently serves as the vice president for strategic initiatives and deputy provost at the University of Chicago.
    • Christine Benson, member. Benson has 35 years of teaching and administrative experience in Illinois public schools ranging from elementary, middle and high school.
    • Cynthia Latimer, member. Latimer has over 33 years of administrative and classroom experience in Aurora school districts.
    • Donna Simpson Leak, member. She currently serves as superintendent of Community Consolidated Schools District 168.
    • David Lett, member. He has spent more than 35 years teaching and leading K-12 school and in higher education. He currently is an adjunct professor on the Education Leadership Department at the University of Illinois at Springfield.
    • Susan Morrison, member. Morrison has worked as an Illinois educator and advocate for children for almost 40 years. She began her career as a social studies teacher, working for 10 years in Homer and Girard.
    • Cristina Pacione-Zayas, member. She currently serves as the director of policy at Erikson Institute where she generates systemic solutions leading to equitable opportunities and positive outcomes for young children, families, and communities.
    • Jane Quinlan, member. Quinlan currently is regional superintendent for the Champaign-Ford Regional Office of Education 9, where she previously was the assistant regional superintendent.
    • Jacqueline Robbins, member. She served as UniServ Director for Region 53 and 35 at Illinois Education Association from 2007 to 2017.
  • Illinois State Toll Highway Authority
    • Will Evans, Chairman of the Board of Directors. Evans has nearly 40 years of experience in strategic planning, operations, engineering, construction, large infrastructure projects and major IT system implementations and has been in senior leadership for over 20 years.
    • Jim Connolly, member. Connolly has been a member of the Laborers’ International Union of North America for over 48 years. He currently serves as the business manager of the Chicago & Vicinity Laborers’ District Council and has held that position since he was first elected in March 2000.
    • Stephen L. Davis, member. Davis is the Founder and Chairman of The Will Group, a firm overseeing several construction, manufacturing, technology, lighting, and energy industry companies.
    • Alice Gallagher, member. Gallagher has served as president of the Village of Western Springs since May 2017 after serving four years as a village trustee.
    • Karen McConnaughay, member. McConnaughay served two terms as state senator of the 33rd District, where she was the Republican Minority Whip and the minority spokesperson for the Senate Transportation Committee.
    • Scott Paddock, member. Paddock has more than 20 years of industry experience in sales, marketing and general management. Since 2011, he has served as the president of the Chicagoland Speedway and Route 66 Raceway.
    • Gary Perinar, member. Perinar currently serves as executive secretary-treasurer for the over 30,000 members of the Chicago Regional Council of Carpenters.
    • Cesar Santoy, member. Santoy is the principal of Studio ARQ, LLC and ARQ Design Build, Inc., architecture and construction firms that serve public and private sector clients as well as individual home and business owners.
    • Jim Sweeney, member. Sweeney is the president-business manager of International Union of Operating Engineers Local 150.

Budget Update:
The Governor’s FY 20 budget bills have been filed in both chambers. Appropriations committees are working to review individual budget bills.
Governor Pritzker and Democratic leaders of the General Assembly plan to begin acting this session on legislation to approve a constitutional amendment to implement a graduated income tax as well as pass enabling legislation to establish the new tax rates. The constitutional amendment, if passed, will appear on the November 2020 ballot for voter consideration. Considering constitutional amendments during the first year of the two-year General Assembly is a break with tradition. Legislative leaders historically wait until the 2nd year of a two-year General Assembly to consider changes to the Illinois constitution.
101st General Assembly
The Illinois House was in session this week while the Senate was off. While the House had a full schedule of committee hearings planned, several hearings were canceled because legislation was not yet ready for consideration.
The Senate Transportation Subcommittee on Capital, in conjunction with the Senate Appropriations Committee, will hold a hearing on March 4, 2019 at 3 p.m. at SIUE Morris University Center (MUC), Madison Room in Edwardsville to discuss capital infrastructure needs. The House Prescription Drug Affordability & Accessibility Committee will hold a hearing on March 6th at 9:30 AM in Room 114 of the Capitol to discuss the systemic costs of high drug prices.
An amendment (SB 2132 (SCA 0001)/Castro) to create the Clean Jobs Workforce Hubs Act was filed in the Senate this week. The legislation creates the Clean Jobs Workforce Hubs Act, the Expanding Clean Energy Entrepreneurship Act, the Community Energy and Climate Planning Act, and the Clean Energy Empowerment Zones Act to reduce emissions, promote renewable energy sources, improve energy efficiency, and reduce carbon pollution related to transportation. Requires Department of Commerce and Economic Opportunity to administer program to increase employment opportunities related to clean energy projects. Provides for creation of a clean jobs curriculum to increase workforce skills. Provides for promotion of opportunities for small and disadvantaged businesses in clean energy development. Establishes framework to achieve 100% reliance on renewable energy. Amends Electric Vehicle Act, Illinois Power Agency Act, School Code, Public Utilities Act, and the Environmental Protection Act to implement the new programs. Repeals the Kyoto Protocol Act of 1998. Makes other changes. The amendment is scheduled for a hearing. The legislation is assigned to the Senate Energy and Public Utilities Committee. Coming Up The General Assembly returns to session on Tuesday, March 5th. Both chambers are scheduled to be in session every week for the next 6 weeks. Key Session Dates:March 22- DEADLINE for substantive Senate Bills out of Senate Committee.March 29 – DEADLINE for substantive House Bills out of House Committee.April 2- Consolidated Election.April 12- DEADLINE for third reading of Substantive Senate Bills and Substantive House Bills.May 10- DEADLINE for Substantive Bills out of Committee in 2nd chamber.May 24- DEADLINE for third reading of Substantive Bills in 2nd chamber.May 31- ADJOURNMENT.

February 22, 2019 Updat

Coming Up:
The Illinois House will reconvene on Tuesday, Feb. 21 at noon. The Senate is off next week and will return to session on Tuesday, March 5. The Legislature will now focus in earnest on considering legislation at the committee level while the Appropriations committees begin reviewing the FY 2020 budget in detail at the agency level.
Governor’s Highlights:
Governor Pritzker signed a law (SB 1 Lightford/) raising Illinois’ minimum wage to $15/ hour by 2025.
He also named the following additional agency directors:
Representative Linda Chapa LaVia will serve as Director of the Illinois Department of Veterans’ Affairs. Elected to the Illinois House of Representatives in 2002, she was the first Latino to be elected to the General Assembly from outside of Cook County. When elected, she resigned her commission in the Illinois Army National Guard.Grace Hou will serve as Secretary of the Illinois Department of Human Services. Hou is currently the president of Woods Fund Chicago, a grant-making foundation that draws on the power of communities to fight brutality of poverty and structural racism.
Colleen Callahan will serve as Director of the Illinois Department of Natural Resources. Callahan currently manages her own communications consulting firm after spending more than seven years as state director for USDA Rural Development in Illinois. 
Deborah Hagan will serve as Secretary of Illinois Department of Financial and Professional Regulation (IDFPR). Hagan has been an advocate for consumer protection in the Office of the Illinois Attorney General for more than 36 years.
Mario Treto, Jr. will serve as Director of Real Estate at IDFPR. Treto currently serves as Deputy City Attorney for the City of Evanston where he provides legal counsel to elected officials, departments and staff with compliance, transactional and corporate matters.
Francisco Menchaca will continue to serve as Director of Financial Institutions at IDFPR. Menchaca has held the post since his appointment by Gov. Quinn in July 2013 and previously served the department as credit union supervisor.
Jessica Baer will continue to serve as Director of Professional Regulation at IDFPR. Baer has held the post since her appointment by Gov. Rauner in September 2016 and previously served the department as general counsel. 
Omer Osman will serve as the Secretary of the Illinois Department of Transportation. He has over 29 years of experience in civil engineering and management in IDOT.
Fiscal Year 2020 Budget Address highlights:On Wednesday, the Governor delivered his first budget address to a joint session of the Illinois General Assembly. His budget proposal for Fiscal Year 2020 spends $77 billion across all funding sources. The governor laid out his proposal as the first step in a multi-year plan to move Illinois forward and to bring back fiscal stability.
Also, he proposed addressing Illinois’ structural deficit, currently $3.2 billion. In order to address that deficit, he called on legislators to immediately change the approach to the state’s pension contributions and increase revenue. Going forward, the Governor called on lawmakers to implement a progressive income tax, a process likely to take at least 18 months to two years and will require voters to approve a change in the state’s constitution. He described the FY 2020 budget as a bridge to the future when additional revenue from the progressive income tax would be available.
Pritzker’s FY20 budget proposes to spend $38.75 billion in general funds and relies on $38.9 billion in general funds revenue. The budget also includes a $3.7 billion new Capital program ($17.7 billion new and re-appropriated funds).
New Revenue: The Governor proposes several new sources to fund state services for now, pending passage of a progressive income tax. The FY 20 budget proposes $1.1 billion in new revenue sources, including:

  • Taxing Medicaid Managed Care Organizations ($390 million);
  • Taxing e-cigarettes ($10 million);
  • Taxing cigarettes ($55 million);
  • Decoupling from the Federal Tax Credit for Repatriated Corporate Income ($94 million);
  • Legalizing and taxing sports betting ($212 million);
  • Legalizing and taxing recreational cannabis ($170 million);
  • Instituting a plastic bag tax ($20 million);
  • Phasing out the private school tax credit over three years ($6 million);
  • Creating a progressive tax on video gaming ($89 million); and
  • Capping the “retailers discount” ($75 million).

He warns in the absence of these new revenues, spending needs to be reduced by an equal amount.
Additional detail: As proposed, Pritzker estimates The Capital Projects Fund will receive an additional $89 million/year and local governments approximately $18 million under this alternative video gaming tax structure. With respect to the “retailer’s discount,” the Governor proposes a $1,000-per-month cap on the Retailers Discount, which he projects would increase revenue deposits by $75 million GRF and $58 million for local governments. He emphasized how he plans to spend funds generated from the yet to be enacted progressive income tax including: addressing the structural deficit, funding state services, stabilizing pensions and allocating $100 million annually to the Budget Stabilization Fund.
Highlights from the Governor’s budget proposal include:
Bill Backlog: According to the Illinois Comptroller’s Office, Illinois’ bill backlog stands at $8.1 billion. Pritzker’s FY 20 budget proposes to issue $1.5 billion in general obligation bonds in the summer of 2019 to pay off most of the interest-accruing bill backlog in the state employee health insurance program, the Medicaid program, and other overdue payments to vendors. The Governor proposes the reduction of the interest rate under the Prompt Payment Act to a market-based rate, perhaps tied to five-year U.S. Treasury rates. Additionally, the fiscal year 2020 budget proposal dedicates another $155 million in surplus towards backlog paydown.
Pensions:
The Governor’s plan to stabilize Illinois pension system includes:1. Progressive Income Tax: $200 million generated in new revenue from the enactment of a progressive income tax will be directly paid to the pension systems on top of the amounts certified by the systems annually.2. COLA Buyout: The COLA buyout program, authorized by the General Assembly in 2018, will be made permanent. Pritzker expects to decrease FY 2020 State contributions by approximately $125 million.3. Pension Bonds: $2 billion in pension bonds will be injected to the pension systems.4. Pension Holiday: The Governor will extend the pension payment ramp by 7 years to FY 2052 from FY 2045, while keeping the target funded ratio the same at 90%. Under this re-amortization schedule, FY 2020 general funds contributions are expected to be reduced by $878 million.5. Taskforces: Two pension taskforces have been created. The first taskforce is charged to find assets in State real estate and infrastructure to put into the State-funded pension systems for improvement to the systems’ financial health. The second one will make recommendations on the consolidation of local police/fire pension funds.
Education:
Pritzker proposes funding the Early Childhood Block Grant at $594 million, an increase of $100 million from last fiscal year. Early intervention is increased by $7 million. Funding for the Evidenced Based Model for elementary and secondary education is increased by $375 million. The FY 20 budget includes a 5% increase for public universities ($52.5 million) and community colleges ($13.9 million) as well as a $50 million increase to the Monetary Award Program. Also included is $35 million for the second-year cost of the AIM HIGH merit scholarship program for high achieving students.
Human Services:
The FY 20 budget increases the income threshold for the Child Care Assistance Program to 200 % of the federal poverty level ($30 million increase) which will serve approximately 10,000 more children. Once in the program, families will be allowed to continue with incomes up to 215% FPL.Also included: funding to address minimum wage changes for human service programs including addiction treatment, child care, developmental disabilities, home services, adult day care, homemaker services and others.
Funding is also included for the Chicago Veteran’s Home ($20.6 million), 126 additional direct care staff at DCFS ($9.8 million), and new lead screening ($6 million).
In addition to proposing a new managed care organization assessment, the FY 20 proposed budget provides funding for Medical program staff to administer, coordinate and implement the 1115 Behavioral Health Waiver ($3.2 million). $2.5 million is also being allocated for 119 additional staff to improve Medicaid cost avoidance and recoveries.
Public Safety: The FY 20 budget funds two new State Police cadet classes ($7.6 million), establishes funding for the Firearm Dealer License Certification Program ($5 million) and funds a new Department of Natural Resources Conservation Police Class of 20 officers.  
Capital Budget:The Capital Budget includes:

  • $1.8 billion for a FY 2020 pay as you go Road Program
  • $20 million for state wide broadband
  • $750 million in Lump sums for CDB deferred maintenance- (Statewide facilities – $600 million/Higher education – $150 million)
  • $ 662 million non-bonded/$25 million bonded EPA loans and grants for municipal water and environmental projects

Find official budget documents here.101st General Assembly:
In total, 2,153 Senate Bills and 3.713 House Bills were filed for consideration during the 2019 Spring Legislative Session.
A House committee approved legislation (HB 345/Lilly) to raise the smoking age to 21. The bill is now pending before the full House.
Last week Representative Marcus Evans filed House Bill 2864, establishing a pilot program for a 2.1-cent tax on every mile a vehicle is driven on state roads. Following considerable feedback, Representative Evans tabled the legislation.
The House Prescription Drug Affordability & Accessibility Committee will hold a subject matter hearing on Feb. 27th at 9:30 AM in Room 114 of the Capitol to discuss public opinion and policy overview. Republican State Senator Jim Oberweis filed paperwork to challenge first-term Democratic US Representative Lauren Underwood in 2020. Oberweis will give up his state Senate seat, up for election in November 2020.Key Session Dates:Feb. 26- Consolidated Primary Election.March 22- DEADLINE for substantive Senate Bills out of Senate Committee.March 29 – DEADLINE for substantive House Bills out of House Committee.April 2- Consolidated Election.April 12- DEADLINE for third reading of Substantive Senate Bills and Substantive House Bills.May 10- DEADLINE for Substantive Bills out of Committee in 2nd chamber.May 24- DEADLINE for third reading of Substantive Bills in 2nd chamber.May 31- ADJOURNMENT.

February 15, 2019 Update

Coming Up The Illinois General Assembly will reconvene on Tuesday, February 19th at noon. The State of the State address will be combined with the Budget Address in a joint session of the Illinois General Assembly on Wednesday, Feb. 20.Governor’s Highlights
Governor Pritzker created two new taskforces to make recommendations to improve standing of state’s pension funds. This is in response to recognizing the need to reign in and control Illinois’ growing pension debt.
The Asset Assessment Taskforce will be co-chaired by Jaqueline Avitia-Guzman and Jamie Star. The taskforce will analyze state assets across Illinois and make recommendations as to their best use to help stabilize the state’s finances. Recommendations could include, but are not limited to, the repurposing or sale of these assets or transfer to state pension systems to improve their levels of funding.
Governor Pritzker implemented Executive Order 19 – 09 which establishes the Justice, Equity and Opportunity (JEO) Initiative. Lt. Governor Juliana Stratton will lead this JEO Initiative to centralize the state’s criminal justice reform efforts by fostering coordination and collaboration among stakeholders, executive agencies and organizations from across the state. The initiative will conduct research, pilot programs and advocate for legislation to ensure all branches of government are working proactively to expand fairness and equity.
Governor Pritzker also released reports from 11 transition committeesdesigned to guide the new administration in the following categories:
* Growing Our Agricultural Economy
* Budget and Innovation
* Educational Success
* Equality, Equity, and Opportunity
* Healthy Children and Families
* Restoring Illinois’ Infrastructure
* Job Creation and Economic Opportunity
* Powering Illinois’ Future
* Restorative Justice and Safe Communities
* Serving Illinois’ Heroes
* Illinois’ Emerging Leaders Stay tuned for more details as Governor Pritzker’s administration lays groundwork for introduction of FY 2020 budget. Pritzker campaigned on fully funding social services, increasing funding for higher education, early childhood, and funding the state’s infrastructure with a capital bill. However, the Pritzker administration released a new report  which details a $3.2 billion budget deficit for the upcoming fiscal year, 16 percent more than estimated in November. Late payment interest penalties related to the budget impasse have exceeded $1.25 billion, and interest on refinancing of the bill backlog will surpass $2 billion. Pritzker is expected to discuss a multi-year path to fiscal stability when he delivers his Budget Address on Feb. 20. Nothing yet on how Pritzker and his budget staff plan to finance the upcoming budget, but new revenue sources are on the table. While Pritzker campaigned on his support of a progressive income tax, implementation of any new “graduated” tax structure would require a change in the state’s constitution meaning that full implementation, if approved by the voters, is a couple of years away.
Governor Pritzker appointed Debra Dyer-Webster as acting Director of the Department of Children and Family Services. She will serve in the position until April 15.
101st General AssemblyThe Illinois House stands adjourned for the week. The Illinois Senate was not in session. Both chambers return to session on Tuesday, Feb. 19.
A minimum wage increase is one step closer to becoming law, passing the Illinois House this week by a partisan vote of 69-47-1.  The bill (SB 1/Lightford) will phase in an increase to the minimum wage to $15 (currently $8.25) by Jan. 1, 2025. For the first year only, employers with 50 or fewer employees will receive a 25 percent tax credit on the difference between pre-increase and post-increase wages. Credit then drops by four percentage points every year until it reaches five percent and is then eventually phased out for most employers. The bill also includes a tip credit for restaurant employees. After much lobbying and debate, economic and geographical considerations were not included in the final bill. Governor Pritzker is expected to swiftly sign the legislation. The Senate Transportation and Appropriations committees announced they will form subcommittees and do a series of public meetings around the state to talk about infrastructure investment ahead of the capital bill.
The House Progressive Caucus outlined platform of principles and legislative agenda for 2019 session. Their agenda: passing minimum wage hike, legalizing recreational marijuana and creating a donor-matching system where tax dollars are used to support political candidates who raise campaign funds in small amounts. Progressive Caucus members also plan to lead and weigh in on a number of other initiatives, including the push for a constitutional amendment to create a progressive income tax. Key Session Dates:February 20- State of the State/Governor’s Budget Address.February 26- Consolidated Primary Election.March 22- DEADLINE for substantive Senate Bills out of Senate Committee.March 29 – DEADLINE for substantive House Bills out of House Committee.April 2- Consolidated Election.April 12- DEADLINE for third reading of Substantive Senate Bills and Substantive House Bills.May 10- DEADLINE for Substantive Bills out of Committee in 2nd chamber.May 24- DEADLINE for third reading of Substantive Bills in 2nd chamber.May 31- ADJOURNMENT.