S&P DOWNGRADES IL, MORE TO COME? UNIONS CALL FOR SUMMIT
On Friday, January 25, Standard & Poor’s Ratings Services downgraded Illinois' credit rating from A to A minus. According to the ratings agency, “The downgrade reflects what we view as the state’ sweakened pension funded ratios and lack of action on reform measures intended to improve funding leves and diminish cost pressures associated with annual contributions.”
The S&P downgrade comes in the same week that Fitch Ratings, despite an earlier decision to put Illinois on a “negative watch” chose to hold Illinois’ credit rating steady. Fitch, one of the three major credit agencies in the nation, warned earlier in the month that Illinois could face a downgrade if substantial progress was not made toward important issues. The ratings agency echoed that sentiment this week, cautioning that if no meaningful action is taken to address pension reform in the next six months, the state will suffer a downgrade.
Meanwhile, a coalition of labor unions has asked for a Pension Summit with the Governor and the four legislative leaders in February. According to Senator Brady, controlling pension costs is the single greatest challenge currently facing the state.
“Illinois has the worst-funded pension system in the nation,” said Brady. “It’s time to address this.”
BRADY NAMED GOP SPOKESMAN FOR INSURANCE COMMITTEE; MOVES TO NEW CAPITOL OFFICE
State Sen. Bill Brady (R-Bloomington) has again been named Republican Spokesman for the Senate Insurance Committee for the 98th General Assembly. Brady has served as the Republican spokesman for the committee since 2005.
“I am grateful for the chance to continue with the important work I have done over the past eight years as Republican Spokesman for the Insurance Committee,” said Brady, who also serves on the Senate Republican leadership team as an Assistant Leader.
The Senate has 22 committees which are tasked with analyzing legislation and making recommendations to the full legislative body. Once legislation has been introduced it is assigned to a committee. Only those bills that pass committee will be considered by the entire Senate.
Brady has also been appointed to serve on the Senate Agriculture and Conservation, Transportation, and State Government and Veterans Affairs Committees.
“I am looking forward to working with all of the committees I have been assigned to,” said Brady who adds, “Issues like agriculture, which is the back bone of Illinois’ economy, transportation, state government and veterans affairs represent a wide variety of the many issues important to the people of the 44th district. Working with these issues is an excellent opportunity to continue to serve my constituents.”
Additionally, Brady has moved to a new Capitol office. Brady will now be located in 103A Capitol Building, however the office phone number, (217) 782-6216 has not changed. Brady’s district office at 2203 Eastland Dr. Suite 3 in Bloomington and the district phone number (309) 664-4440 also remain unchanged.
‘ERIN'S LAW’ AIMS TO PREVENT SEXUAL ABUSE
During the week, Governor Pat Quinn signed into law a bill requiring schools to offer age appropriate sexual assault and abuse prevention and awareness programs for children from pre-k through high school.
Prior to this new state law, only secondary schools were required to include sexual assault and abuse awareness education.
House Bill 6193, known as “Erin’s Law” is a bipartisan measure named for Schaumburg native Erin Merryn. Merryn, a victim of sexual assault and abuse as a child, chose to quit her job three years ago in order to help other victims break their silence. She has dedicated herself to teaching children about sexual assault and abuse, and preventing them from becoming future victims. She is an author and activist currently working to get Erin’s Law passed in all 50 states.
COMPTROLLER WARNS STATE RUNNING OUT OF FUNDS
On Monday, Illinois Comptroller Judy Baar Topinka issued a warning that many of the state agencies that provide essential state services face a budget shortfall of $1 billion under the current budget. Topinka said that funding for agencies, including the departments of Aging and Children and Family Services, the state’s workers’ compensation program, and state employee group health insurance, will dry up before the end of the fiscal year on June 30.
Many of the organizations that will be most affected by the projected shortfall are those paid to provide services for aging, low-income or disabled residents. These agencies have already been hit hard by the state’s delinquent payments and growing bill backlog which currently totals around $9 billion.
Topinka’s warnings focused only on the fiscal year that ends on June 30. Last week Governor Quinn’s own budget office issued dire predictions about the state budgets that are to come over the next three years.
According to Senator Brady, this budget shortfall comes as no surprise to Senate Republicans. “When the budget was passed by Illinois Democrats in May of 2012 we warned that it was out-of-balance and unaffordable. What we’re seeing now is the result of passing that budget. When budgets that are not responsible are implemented, those who most need access to state services are often most adversely affected and that is tragic.”
That budget deliberately underfunded some areas of government, such as the cost of public employee health insurance, and also relied on the Governor aggressively implementing other cuts, particularly in the state's Medicaid program.
Despite a bipartisan agreement for major cost-cutting reforms in the Medicaid program, the Quinn Administration has been slow to implement those reforms, making it unlikely that original savings targets will be met. Similarly, the budget assumed savings from a new union contract that the Governor's office has been unable to negotiate to date.
Topinka recommended that state agencies create reserve funds from financially-sound programs to offset the anticipated costs. She said funds needed to fill the projected shortfall should be redirected from state agencies that have more cash on hand.
HEALTH INSURANCE CASE SET FOR HEARING
Though it may be difficult to imagine, the state’s already dire budget problems could get worse depending on the results of a court case set for a Feb. 20 hearing. A judge in Sangamon County will then hear arguments from four lawsuits challenging a new law that requires state retirees to pay premiums for their health insurance.
Senate Bill 1313 repealed the state's health insurance subsidy of up to 100% (for retired employees with 20 years or more of service). Four lawsuits were filed challenging the constitutionality of the law. Those suits were consolidated into a single case in September 2012.
'WE ARE ONE ILLINOIS' TO HOST PENSION SUMMIT
The "We are One Illinois" Coalition has asked the Governor and four legislative leaders to a summit Feb. 11, at the Illinois AFL-CIO offices in Burr Ridge to discuss pension reform.
According to the group’s invitation the summit "is intended to serve as a forum to share perspectives, as well as to initiate a structured process by which we can work together to develop legislation that addresses our state's intertwined problems of inadequate revenues and underfunded pensions."
LAWMAKERS CONTINUE TO FILE NEW PROPOSALS
As the 98th General Assembly begins more than 1,150 new pieces of legislation were filed in the Senate between Jan. 23-24. Of these only a handful represented actual legislation with the vast majority being “vehicle” bills. More than 1,000 “vehicle” bills, which contain no substantive language, were filed by the Senate President.
In recent years, it has become customary for hundreds of measures to be filed that contain nothing more than references to sections of the Illinois statutes. The bills are generally held until later in the legislative session should the need arise to amend them to address special issues.
Among the measures filed that contain substantive language are:
Advanced Practice Nurses (SB 73): Removes requirements for written collaborative agreements with doctors and grants advanced practice nurses the ability to write prescriptions within their specialty.
"Crime-Free" Housing (SB 1151): Allows non-home rule counties and municipalities to adopt "crime-free" rental housing statutes that would require renters to obtain a license and submit to background checks and periodic inspections of rental property, as well as attend crime prevention training programs.
Gay Marriage (SB 110): Reintroduces a much-publicized measure legalizing gay marriage, that was not called for a vote in the recently concluded lame duck session. At the time, the sponsor said that absences of some members left the measure short of the votes needed for passage.
Hydraulic Fracturing (SB 105): Contains no substance, but is simply a placeholder for regulations that may be proposed during the legislative session. Hydraulic fracturing generally refers to the use of pressurized water to create cracks or fissures in underground rock layers to allow the release and recovery of natural gas. It is estimated that Hydraulic fracturing will account for nearly 70 percent of natural gas development in the future. The National Association of Manufacturers estimated that high recovery of shale gas and lower natural gas prices will help U.S. manufacturers employ 1,000,000 workers by 2025. America’s Natural Gas Association (ANGA) estimates that lower gas prices will add an additional $926 of disposable household income annually between 2012 and 2015, and that the amount could increase to $2,000 by 2035.
Overtime (SB 104): Clarifies that overtime pay is not required for an alternative shift schedule when that schedule has been bargained by a union and management.
Real Estate Auctions (SB 92): Changes licensing requirements for auctioneers who conduct real estate auctions.
Renewable Energy (SB 103): Require Illinois Power Agency plans to include purchase of renewable energy credits. Also requires electric utilities to purchase renewable energy credits including alternative retail electric suppliers.
Sexually-Violent Offenders (SB 93): Requires that sexually-violent offenders be separated from other residents of the Chester Mental Health Center. Clarifies that those sentenced to be confined at mental health centers as sexually-violent offenders are not granted the same rights and treatment as other residents of state mental health centers.
Truck Fleet Fees (SB 1158): Imposes a $40 per vehicle fee statewide on anyone registering 10 or more vehicles of specified types. Fees would be deposited into an alternative fuels fund.