With Illinois’ new fiscal year beginning July 1, Governor Quinn signed the bulk of the state budget into law on the last day of June.
The budget does not include an extension of the 67% tax hike pushed by Quinn throughout the legislative session.
Although the Governor and his allies had painted a picture of draconian, and possibly dangerous, cuts if the tax hike was allowed to expire as promised, the legislature adjourned without extending the tax hike.
However, the Governor and his legislative allies did not abandon, but simply deferred until after the fall elections, a vote on the tax hike extension.
While taxpayers can breathe at least a temporary sigh of relief, the budget signed by Quinn defers decisions, rather than forces the state to live within its means. It is patched together using a variety of short-term fixes, fund transfers and other gimmicks.
Court tosses health insurance changes
In a decision that is likely to impact pension reforms adopted in 2013, the Illinois Supreme Court reversed a lower court ruling on changes in the state’s health insurance benefits for retirees.
In a 6-1 ruling on July 3, the state’s high court said state health insurance benefits for retirees are protected by the Illinois Constitution’s pension protection clause. Although the ruling focused on a July 2012 law that reduced health insurance benefits for retired state employees, the court’s finding was widely viewed as providing a clear signal on whether or not pension changes approved in Dec. 2013 would be held constitutional.
Those pension changes are currently under review by a lower court, but the case was expected to be ultimately decided by the state supreme court. The ruling in the health insurance case is likely to be used as guidance by the judge deciding the pension case.
A central issue is a provision in the Illinois constitution which states that pension benefits are “an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
$35 billion budget
The FY15 budget is based on a revenue estimate of $35.352 billion and total General Revenue Funds spending is approximately $35.4 billion.
It relies on $650 million in inter-fund borrowing (fund sweeps), $167 million in natural growth over original estimates, and another $40 million in hospital assessments.
A detailed analysis of the Fiscal Year 15 Budget can be found in the Senate Republican Caucus document “At a Glance – An Overview of the 2014 Spring Session.” The publication can be found by clicking on either the “Senate Action” or the “At a Glance (2014 Session Summary) links.
Budget underfunds education
The budget continues the pro-ration of the state’s General State Aid Formula’s foundation level grants for schools, granting schools just 89% of the foundation level.
In fact, since Pat Quinn became Governor, education funding for the state’s elementary and secondary schools has fallen by $621 million (FY 09 – FY 14).
In May, Republican lawmakers pushed for a change in the state’s school funding allocation. They argued that the state should guarantee the foundation level grant (that is meant to provide a base level of support for all students) be funded at 100% first, before other special purpose allocations are made.
The Governor sole cut in the budget was the elimination of a $250 million re-appropriation for Capitol building renovation and restoration. Critics pointed out that the cut was not real, as the money was not going to be spent in the coming year anyway.
Governor Quinn left untouched all other earmarks, shell games and fund diversions.
The Governor left intact his failed, but now re-branded and reshuffled, Neighborhood Recovery Initiative, which has been shipped over to the Department of Labor and given a new, yet to be determined, title.
He didn’t touch several undefined earmarks that were put into the State Board of Education budget. And he continued to approve taxpayer dollars for a teacher education initiative that has produced only a handful of teachers at a per-teacher cost that exceeds the tuition costs at Ivy League schools.
The budget is comprised of eight different appropriation bills and two Budget Implementation Acts:
· HB 6060/PA 98-0642 (FY14 Supplemental / FY15 Medicaid Expansion);
· HB 6093/PA 98-0677 (State Board of Ed / Educational Labor Relations Board);
· HB 6094/PA 98-0678 (Higher Education);
· HB 6095/PA 98-0679 (General Services);
· HB 6096/PA 98-0680 (Human Services Agencies, state pension and health insurance payments);
· HB 6097/PA 98-0681 (Public Safety);
· HB 3793/PA 98-0675 (Capital Construction – includes one Item Veto);
· HB 3794 (Road Capital Construction);
· SB 220/PA 98-0674 (Budget Implementation Act – BIMP);
· SB 274/PA 98-0682 (Budget Implementation Act –BIMP).
U.S. Supreme Court rules on Illinois case
In other news, an Illinois-based case prompted a June 30 decision by the United States Supreme Court involving some in-home healthcare workers. The Court overturned an Executive Order by Governor Pat Quinn that required in-home healthcare workers to pay union dues.
In June 2009, Quinn’s Executive Order 15 allowed for collective bargaining in the home-based support services provided, for the most part, by parents and family members of the disabled.
The Court ruled in the case of Harris vs. Quinn that a home is not a union shop and that decisions regarding the care for a disabled family member should remain with the caregiver and in the home.
The Court determined that in-home healthcare workers are not similar enough to full-fledged government employees to be forced to pay union dues. The state pays them using Medicaid dollars, but they are hired by the families, or are family members themselves, and work conditions are set by the families.
Other measures signed into law
In addition to the state budget, a number of other bills were signed into law, including a measure that will allow same-day registration and voting.
While there is universal agreement about the benefits of encouraging all eligible citizens to vote, House Bill 105 drew opposition because it was viewed as presenting a potential threat to the integrity of the ballot. Concerns have been raised that the measure could invite vote fraud because of the combination of lax identification requirements for persons registering to vote and the tight timetable placed on election officials.
The measure also requires the State Board of Elections to submit a statewide advisory public question (non-binding) to the voters on the November 4, 2014 ballot asking: "Shall the minimum wage in Illinois for adults over the age of 18 be raised to $10 per hour by January 1, 2015?"
Other bills signed into law included:
Government Clean Up (SB 3443/PA 98-0692): “Budgeting for Results” annual clean-up eliminating various boards and commissions and allowing for some documents to be published online.
Hospital Bed Fee (HB 1322/PA 98-0683): Creates a hospital bed fee of $55 to fund implementation of the Illinois Adverse Health Care Events Reporting law of 2005. This is expected to generate $2 million from hospitals.
Solar Power (HB 2427/PA 98-0672): Allows the Illinois Power Agency to do a $30 million solar auction for power sent to Ameren and ComEd territories. The auction is one-time only. Contracts cannot be less than 5 years and 50% of the distributed generation auction must go to small projects.
African-American Disparities (HB 3748/PA 98-0684): Extends the reporting date of the Commission to End the Disparities Facing the African-American Community to December 31, 2015 (currently December 31, 2013) and extends the repeal date of the Commission to July 1, 2016 (currently July 1, 2014).
Education for Military Children (HB 3939/PA 98-0673): Initiative of the Lt. Governor's Office, who testified in committee. Interested parties within the military community, the Lt. Governor’s Office, and school management groups have been working on a solution to help transitioning military families, while maintaining a school district’s discretion on how to handle these students. The legislation authorizes and directs the governor to enter into the interstate military compact on behalf of the State of Illinois.
Juvenile Court Act Revisions (HB 4083/PA 98-0685): Clarifies the shared responsibilities and authority between the Department of Corrections and the Department of Juvenile Justice. Cleans up previous amendments and revisions made to the Act in 2006 and 2013.
Racial Profile Study (HB 4442/PA 98-0686): Extends the sunset date on the racial profile traffic stop statistical study from the current July 1, 2015 until July 1, 2019.
Swine/Cattle Disease Control Committees (HB 4663/PA 98-0687): Provides for changes of membership of the Swine Disease Control Committee and the Cattle Disease Control Committee. The intent is to transition these committees from a research-based focus, to an advisory committee in the case of a disease outbreak.
Alternative Certification (HB 4767/PA 98-0688): Changes the date for alternative certification for teachers who are admitted on or before September 1 (instead of June 30), 2014. This was an error in the law.
Juvenile Justice Employees (HB 4781/PA 98-0689): Makes changes to the qualifications of Department of Juvenile Justice personnel. Expands the type's of Bachelor's degrees that can be considered for employment if the candidate has at least two years’ experience in juvenile justice.
Lead Abatement (HB 5410/PA 98-0690): Addresses regulation and enforcement of the Lead Poisoning Prevention Act with regard to licensure, fines and penalties, billing the Department of Healthcare and Family Services (DHFS) for lead testing and evaluation of Medicaid-eligible children, reporting of lead-poisoning test results to the Department of Public Health (DPH), and other changes.
Auditor General (HB 5585/PA 98-0676): This is the annual legislation authorizing funding for the Auditor General’s office for the 98th General Assembly. Transfers $5,762,416 from various funds to the Audit Expense Fund. This includes a $15,184,775 transfer from General Revenue Funds.
Budget Implementation (SB 220/PA 98-0674): This is one of two Budget Implementation measures (Commonly called a BIMPs) for the coming fiscal year (The other is SB 274). Expands several programs at a time when the budget is drowning in red ink.
Extends by another year and increases the amount of the grants issued in the I-FLY Act which gives grants to airports.
Raids the Road Fund for an additional $4 million to give to Intercity Rail Subsidies.
Expands the physician educational grant program to include "other eligible primary care providers" such as dentists, nurse midwives, dental hygienists, psychologists, clinical social workers and marriage therapists.
Once again the budget raids the Personal Property Replacement Tax Fund (PPRT) at the expense of locals. This BIMP allows salaries for court reporters to be paid out of PPRT which traditionally have been expended by the state (FY14 $4.6 million).
Pushes back the implementation the Grant Funds Recovery Act.
Budget Implementation (SB 274/PA 98-0682): One of two Budget Implementation Acts (BIMPs), with the other being SB 220.
Links $650 million in budget transfers sought by the Governor to continued funding for legislative salaries and operations. Largely a response to the Governor’s failed attempt to veto legislative pay out of last year’s state budget, this creates a continuing appropriation (meaning it will go into effect without legislative or gubernatorial action) for legislative operations and salaries of members of the judiciary and legislature.