Rep. Greg Harris • 13th District
Springfield Update • November 14, 2011
Veto Session 2011, Week 2
There were a number of important issues acted on in Week 2 of the 2011 Veto Session, including:
- Stabilization of Unemployment Insurance Program
- Creation of new health insurance option for Illinois children
- Loophole closure delaying court-ordered tax sale of Cook County homes and properties
- Sustained Governor’s budget vetoes
- Override of Governor’s veto of Road Kill bill
- Authorization for Chicago City Council to vote on speed camera legislation in July 2012
There are also a number of issues outstanding for the Special Session of the legislature which will convene the week after Thanksgiving, including:
- Consideration of tax incentive packages for CME Group, Sears and others
- Restoration of cuts to homeless, mental health, substance abuse and state operated facilities (mental health, disability and correctional) based on sustaining Governor’s budget vetoes
- SB512 and other pension legislation
- Illinois Health Insurance Exchange
Here are brief synopses of the issues that were acted on, and links to the underlying legislation should you wish more details:
Unemployment Insurance. Due to the national economic downturn, the Illinois Unemployment Insurance (UI) program is in a state of crisis and verged on potential collapse in 2012. Illinois expects to end 2011 owing $2.4 billion in loans from the US Government for unemployment benefits paid to workers. Besides having to pay current unemployment benefits, the state would have owed interest of $82 million and federal penalties of about $1.2 billion next year. Clearly, this is unsustainable.
Through an agreed bill process, business and labor agreed to a solution for the UI Trust Fund that will slowly restore solvency, save employers about $400 million in taxes through 2019, significantly cut taxes for employers with no history of lay-offs (about 50% of Illinois employers) with no new reductions in benefits. This will be done with existing revenue bonding authority, so no new bonding authority must be expanded. This is a welcome relief for all taxpayers, especially small business owners and Unemployment Insurance recipients. You can see the legislation, SB72 here: http://ilga.gov/legislation/billstatus.asp?DocNum=72&GAID=11&GA=97&DocTypeID=SB&LegID=54663&SessionID=84
Child Only Health Insurance
When it became illegal for health insurers to deny coverage to children with pre-existing conditions, most insurers nationwide and in Illinois stopped issuing child only policies. (Child only policies were often purchased by parents who did not have employer-based health insurance and could not afford insurance for their whole families, but wished to protect their children. N.B. Blue Cross/Blue Shield of Illinois still offers 2 open-enrollment periods for child-only policies each year). The disappearance of these policies put the health of many children and the financial stability of many Illinois families in jeopardy.
HB3462, which I sponsored along with Sen. Heather Steans, allows Illinois families to buy insurance for their children under 19 through the Illinois Comprehensive Health Insurance Program (CHIP), even if those children do not otherwise qualify due to previous pre-existing condition rejections by insurers. This should be a reasonably priced and very welcome option for thousands of Illinois families. You can see the legislation here:
Cook County Property Tax Sale Relief
SB1335 closes a loophole that would have required Cook County to begin the process of selling all property taxes for which the second installment was delinquent Nov. 1 of this year. Coming only weeks after the tax bills were mailed and in these difficult economic times, this could potentially have thrown thousands of Cook County properties and their owners into legal turmoil. This legislation, which I sponsored in conjunction with Cook County Board President Toni Preckwinkle, allows taxpayers up to July of 2012 to fully pay their property taxes without threat of a tax sale. This bill awaits the Governor’s signature. You can see the legislation here:
Sustaining Governor’s Budget Vetoes
By not overriding the Governor’s reduction vetoes in the State budget, $300 million plus was made available for other purposes and to potentially stave off facility closings. These options will be discussed more below under the “Restoration of Budget Cuts” section. This action does push another $276 million of Medicaid liability to hospitals forward, however, and required changes to the Personal Property Replacement Tax in order to restore funding for the Regional Superintendents of Schools. These cost pressures will only add to the problems we will face in the next fiscal year’s budget.
Road Kill Bill Veto Override
Good news for those of you who wish to dine on flattened critters found on our state’s roads and highways. The House and Senate overrode the Governor’s veto of this legislation. Bon appétit.
City of Chicago Speed Cameras
The House approved Chicago’s request to allow the City Council to authorize installation and operation of ‘speed cameras’. This will not become law until: 1) Passed by the Senate 2) Signed by the Governor, 3) Approved by the Chicago City Council [no earlier than July 2012], and 4) Signed by the Mayor.
In addition, if approved the cameras around schools can only operate between 6am and 8:30pm Monday-Thursday and until 9pm on Fridays. The fines for 6-10 mph over the speed limit cannot exceed $50, and the fine for 10 mph or more over the legal cannot exceed $100. The original bill is SB985, and the current trailer bill is House Amendments 1 and 4 to SB1865, which await Senate action.
Here are brief synopses which still await the legislature upon our return after Thanksgiving:
Tax Incentive Package for CME Group, Sears and others
What started as a package of tax reductions for CME Group and Sears who have threatened to move their operations out of state has now become a “Christmas Tree” of those incentives and more. The key elements are summarized, along with their costs. There are still hearings ongoing before the House Revenue Committee on these issues. Putting aside the merits, or lack thereof, of the individual elements of the package, I am seriously concerned that the net cost in coming years will add up hundreds and hundreds of millions of dollars of new costs, in a time where we are having trouble living within our means.
- Revenue Source would be decoupling from the federal bonus depreciation for about $571 million the first year
- The expenses would be:
- Changes in revenue sourcing rules for CME Group and others, which would cost $42.5 million the first year and at least $85 million per year thereafter
- Reinstate the R&D Tax Credit with a 5 year sunset, for a cost of $30 million every year
- Reinstate the Net Operating Loss provision which would cost $275 million per year
- Reduction of the LLC filing fee to $100 for a loss of $11.5 million
- Increase in the Estate Tax exemption from $2 million to $5 million for a cost of $44 million per year
- EDGE tax credits for Sears which could $15 million per year for 10 years
- Increase of the State Earned Income Tax Credit (EITC) from 5% to 15% of the federal level, for an annual cost of $180 million per year
- Indexing of the current personal exemption to inflation for an annual cost of $20 million per year
While I believe that some of these issues may have merit, I will weigh my support carefully depending on their individual and collective impacts on the State, in addition to what I believe their public policy value is.
Restoration of Budget Cuts
Since the legislature sustained the Governor’s reduction vetoes in the budget, there are several hundred million dollars available to be appropriated to other uses. Among those being discussed are restoring cuts to homeless, community-based mental health and substance abuse services. I strongly support those restorations. Also being considered are cancelling the closures of certain state operated facilities including the Logan Correctional Center, and facilities for persons with mental illness or developmental disabilities. I believe that closing Logan would serve no purpose but to overcrowd other facilities and put both inmates and staff at risk.
While I believe that the State should close a number of its institutions for persons with disabilities and mental illness, those closure should be done in a thoughtful, planned way and only when there is capacity within community-based settings to house, treat and provide services for the clients. While there are certainly some residents of these facilities who need or wish to remain institutional settings, it is unconscionable to turn other vulnerable clients out with no plan in place to serve or protect them. I support keeping these facilities operating while community-based capacity is enhanced and transition plans put in place.
SB512 and other pension “reform” legislation
I remain staunchly opposed to proposal being put forth by the Civic Committee of the City Club of Chicago to create a 3-tier pension system that would force current employees into 401-K type private pension programs. While I fully support closures of loopholes to prevent abuse and fraud in the pension funds that we have recently voted to approved (for instance HB3813 and HB3815), I am aware that public employees have continued to pay their share of the pension costs. It is the government that has underfunded our pension liabilities over a period of years.
While there are responsible changes to our pension plans that can be made, those proposed in SB512 not only would devastate working families, they would potentially be held unconstitutional, and could have the perverse unintended consequence of costing the taxpayers of Illinois billions of dollars more over the years.
Illinois Health Insurance Exchange
I continue to work with consumer advocates, healthcare providers, the health insurance industry, insurance brokers, faith groups and others on acceptable language for creation of the Health Insurance Exchange to benefit small businesses and consumers in Illinois. I am delighted that stakeholders are working together and I believe can find reasonable compromises on issues of governance and financing mechanisms. Talks continue on a solution the largest remaining issue of the “market organizer” versus “active purchaser” models. Special thanks go to Rep. Frank Mautino has spent hours on negotiations on these complex and critical issues! You can see the most current proposed version of the law here: http://ilga.gov/legislation/fulltext.asp?DocName=09700SB1313ham004&GA=97&SessionId=84&DocTypeId=SB&LegID=57042&DocNum=1313&GAID=11&Session=