As this year's veto session winds down in Springfield, lawmakers will entertain plenty of high-profile bills. Is a budget deal within grasp? We offer a preview.
For supporters of civil rights, Illinois' veto session has already been a huge success. One month ago, state lawmakers approved a historic civil unions bills that will guarantee same-sex couples many of the legal rights, benefits, and protections given to heterosexual spouses under Illinois law. It's passage represented a triumph over bigotry and will certainly be remembered as one of the most important legislative victories of the 96th General Assembly.
This current crop of legislators isn't through working, either. Over the next seven days, the state Senate will meet four times and the House will meet seven times (including Saturday and Sunday) to conclude business from the previous legislative calendar. Because of a quirk in the Illinois Constitution, the Assembly can pass bills this month along simple-majority lines and implement those changes immediately, instead of waiting for the beginning of the next fiscal year (June 1, 2012). And several lame-duck lawmakers that aren't returning to the state capitol this spring will still be able to cast votes on measures that come up before January 12. The end of the veto session, in other words, provides a pitch-perfect opportunity to pass controversial legislation while limiting the political fallout from doing so. Here's a rundown of what the chambers will discuss as the final clock ticks down:
A Budget Deal?
Will Illinois finally take some crucial steps to repair its broken budget this week? Progressives are cautiously hopeful.
Yesterday, in an email alert to supporters, the Responsible Budget Coalition (RBC) called the remaining days of the veto session "crunch time" in the capitol dome. "Legislators are back in Springfield today," the coalition added, "making decisions that will determine whether ... essential services are restored, or threatened further."
The contours of that debate are still shifting, but a grand bargain is coming into view. Such a deal would probably center around Gov. Pat Quinn's proposal last week to borrow $15 billion this year. That money could be used to pay this year's pension contribution, roughly $6 billion in late payments to vendors that the state has already accumulated since June, and make several capital investments. The bonds would be paired with a tax increase of some kind to pay off interest and close, hopefully once and for all, Illinois' recurring deficit gap. (Remember, half of Illinois' budget gap is structural, meaning that the state's regressive and outdated tax system cannot generate enough revenue to pay for services.) The governor met with Democratic legislative leaders this morning to explain where he stands.
Would this deal be a good one? It would certainly improve upon the status quo. Getting caught up on the backlog of bills immediately is seriously important; doing so will ease the pain of struggling service providers, who have had to lay off staff and cut back on programs because of Illinois' volatile payment schedule. We've already written extensively on the merits of borrowing to cover the pension payments, which will be cheaper than skipping it all together and more humane than redirecting $4 billion from an already stripped-down spending plan.
Borrowing from banks is also far superior to borrowing off the backs of vendors, who the state currently treats as "involuntary lenders" when they fail to make reimbursement payments on time. The interest rates the state forks over to schools and hospitals, for example, is much higher than the terms they could get on Wall Street loans. And it's not like schools have a ton of rainy day money lying around to cover expenses while they wait for their checks.
The key question relates to taxes. House Speaker Michael Madigan (D-Chicago) has been polling members in his caucus about what type of revenue enhancements they'd be willing to support. During the gubernatorial campaign, Quinn urged the House to adopt a 1 percent income tax increase, which he dubbed an "education surcharge" and would raise roughly $3 billion annually but would not erase the structural deficit. (During the summer, Quinn's budget director David Vaught said he expected lawmakers to raise the state's income tax rate from 3 percent to 5 percent during January, a soundbite that forced a defensive Quinn to promise he'd veto such a maneuver.)
Something resembling HB 174, a comprehensive tax plan that the Senate passed in May 2009 and the RBC endorses, is definitely preferable. That package would bump the income tax rate up two points, expand Illinois' sales tax base to include consumer services, offer several layers of tax relief to poor and working people (raising the personal exemption by $1,000, the property tax credit from 5 percent to 10 percent, and the Earned Income Tax Credit from 5 percent to 15 percent), and ultimately direct new revenue into the state's Common School Fund.
Senate President John Cullerton (D-Chicago) has said repeatedly that his caucus will wait until the House makes a move, so that's where the action will be. As State Rep. Lou Lang (D-Skokie) told the Tribune this morning, "it's going to be potentially the busiest week we've had in a long time."
The "Economic Reform" Carrots
If Speaker Madigan has made one thing clear over the past two years, it's that Democrats who hold huge majorities in Springfield won't raise any major taxes without a little help from Republicans. To lure some across the aisle (and satisfy some Democratic members who are pretty conservative themselves), lawmakers have spent the past month studying several "reforms" they could implement to cut costs and/or improve performance in key areas of state government. Several will be strongly debated this week.
A proposed constitutional amendment (HJRCA 61) that would create strict spending limits in Illinois, for example, passed out of a House committee yesterday afternoon, despite warnings from labor unions and budget experts that the measure would "make the state budget process less responsive and more cumbersome without resolving the immediate fiscal crisis or the long-term structural deficit in Illinois." Madigan added himself as a co-sponsor, which indicates he's serious about moving the measure forward.
While no bill has been formally introduced yet, Medicaid is certainly in the crosshairs, as we outlined in December. State Rep. Frank Mautino (D-Spring Valley) told the State Journal-Register this week that he expects a reform package could tighten eligibility standards for the program, take larger steps to move the elderly and developmentally disabled from large institutions to community-based settings, and promote the use of cheaper generic drugs. (He ominously overlooked a push to expand the use of private managed care.) Legislation could be introduced today or Wednesday. Changes to the workers' compensation system are less likely given the time frame on which lawmakers are working, but also a possibility.
And then there's the controversial education reform platform heralded by Advance Illinois and the newly influential Stand for Children Illinois. As you may recall from our reporting on this issue, the package would alter teacher tenure rules, reform performance evaluations, experiment with merit pay, and make it more difficult for a teachers' union to strike. During their first hearing yesterday, State Sen. Kim Lightford (D-Maywood), who chairs the special Senate education reform committee, told her colleagues that she's likely to slow the process down. "Give the people who will have to implement these reforms time to figure them out," she said. "Not months. Not years. But not days either. That’s not right." Teachers, who are open to many of the reform ideas but are wary of attacks on due process specifically, laid out their own plans yesterday. Illinois Statehouse News has a solid rundown. Expect this debate to extend into the next legislative session, which begins in mid-January.
Casinos And Cigarettes
Income taxes aren't the only way lawmakers can raise new revenue. Before the upper chamber went on recess in December, for instance, it passed a large gaming expansion bill that advocates say could generate $1 billion annually. The legislation as written (SB 737) would add five casinos throughout the state (including one in Chicago) and allow existing riverboat casinos and racetracks to grow.
But changes are already in the works. Rep. Lang, the chief sponsor, held the bill during a committee hearing yesterday. Specifically, he wants to provide the state's existing casino operators with "credits" to compensate for the inevitable bump in competition. (Revenues dropped 4.5 percent last year to its lowest level in a decade.) Anti-gaming lobbyists have flooded the capitol to advocate against the legislation. They point to, among many criticisms, the miniscule support Illinois provides to gambling addicts and its unreliability as a revenue source. Quinn counts himself among the opponents.
Sen. Cullerton meanwhile, has once again expressed interest in raising Illinois' cigarette tax. It's not surprising why. Of the revenue proposals that were seriously debated in the House last session, a bill (SB 44) that would have raised the state's cigarette tax by $1 per pack (to $1.98) was by far the most politically popular. It already cleared the Senate in 2009 and Quinn supported it. And a new study published by economist Frank Chaloupka at the University of Illinois-Chicago reiterated that the excise tax could bring in $377 million per year while improving public health. The Land of Lincoln hasn't increased its smoking tax since 2002. This year, that could change.
What else is left on the agenda? State Rep. Karen Yarbrough (D- Maywood) is still fighting tooth-and-nail to build support in the House for a bill to abolish the death penalty. The legislation (SB 3539) survived a committee vote in late November but did not see a floor vote. One week ago, opponents of capital punishment were confident they had enough votes to get their measure passed. "I'll look every legislator in the eye that said they would support this," Yarbrough said yesterday. "I want to make sure my 'yeses' are still 'yeses.'" Quinn has promised he would not remove the state’s death penalty moratorium until "adequate safeguards" are in place but supports the punishment in extreme cases.
A measure that alters the way legislative districts are drawn is cruising along, too. In early December, the Senate overwhelmingly passed legislation (SB 3976) that would require four public hearings around the state and install provisions to keep ethnic and cultural communities in cohesive blocs. The lower chamber looks poised to do the same.