PI Original Ellyn Fortino Wednesday November 6th, 2013, 2:53pm

A Look At The Fall Veto Session: What's Happened & What's Next (UPDATED)

Progress Illinois provides a roundup of the highlights from the fall veto session, and offers a look at what might be next.

The second half of the state legislature's veto session kicked off with a history-making start Tuesday after both the House and Senate approved legislation for Illinois to become the 15th state to legalize same-sex marriage.

The marriage equality bill, SB 10, now heads to Gov. Pat Quinn, who has pledged to sign the measure this month. The law would take effect June 2014.

Andy Thayer, co-founder of the Gay Liberation Network, said Tuesday marked a "victory for the grassroots."

"This was the people of Illinois, LGBTs and our allies and every walk of life, forcing the legislature to do the right thing," Thayer told Progress Illinois shortly after the House vote. "[House Speaker] Mike Madigan has had the power to do this all along, but it’s the people who transformed a bill that just a couple weeks ago was a dead letter for this fall veto session into victory. I think it’s important to put credit where credit is due: the grassroots organizing effort to people around the state is what made it happen."

A large rally to celebrate Illinois' marriage-equality victory has been scheduled for Thursday at 7 p.m. in Chicago's Boystown community in the Lakeview neighborhood. Check back with Progress Illinois for our full coverage of the event.

Meanwhile, the veto session ends Thursday, and lawmakers still have a full plate of other issues that may be addressed, some of which include legislation to strengthen sentences for gun crimes as well as various tax incentive proposals for Illinois companies.

Additionally, lawmakers have yet to approve a fix to the state's nearly $100 billion pension crisis, however it's looking less likely that a pension reform package will be called for a vote this week. That's because the legislature's conference committee tasked with creating pension reform legislation is still working on a deal.

The 10-member committee is currently considering a compromise pension reform proposal that would amount to $138 billion in savings over three decades. The proposal would change the 3 percent compound interest on cost-of-living adjustments (COLAs) to one-half of inflation. Also, active public employees would contribute one percentage point less to their personal retirement.

Illinois Senate President John Cullerton has said he supports the plan, but Madigan says he wants to see "substantial savings." The House pension bill Madigan supported that passed out of its chamber in May was estimated to save $163 billion over 30 years.

At the moment, the savings in the pension committee's proposal is being looked at by the pension systems' actuaries, which is about a 10-day process, Madigan's spokesperson Steve Brown told Illinois Issues.

James Nowlan, senior fellow at the Institute of Government and Public Affairs at the University of Illinois, said he predicts a vote on pensions may come in a special session, or possibly not even until the new legislative session starts in January.

"It's going to be very hard to put together a roll call that will generate a majority support for significant pension reform because of the strong concerns of organizations, such as labor and state retirees and employees, who represent a very significant interest in the state of Illinois," Nowlan said.

Tax Breaks For Illinois-Based Companies

Another big issue before lawmakers this veto session concerns tax breaks and other incentive packages for Illinois-based companies.  

The full House on Wednesday approved a measure, SB 1448, that would provide for $5 million in state tax breaks to Washington-based Univar, a company that distributes chemicals, for it to set up its headquarters in Downers Grove. The company would have to retain 100 jobs in the state and add a minimum of 69 jobs. The measure is now headed to the Senate.

Additionally, the Senate Executive Committee scheduled a Wednesday hearing about a $24 million subsidy package for Decatur-based Archer Daniels Midland Co. to have its global headquarters, including 100 jobs, remain in the state. The company is looking for a new location, possibly in Chicago, because Decatur isn't an ideal location for the recruitment of young workers. Last week, State Sen. Andy Manar (D-Bunker Hill) proposed an amendment to the ADM tax-break measure that calls on the company to create more Decatur-based jobs.

The Center for Tax and Budget Accountability's Executive Director Ralph Martire said lawmakers need to remember that the proposed $24 million would take away from funds that could be used to pay for core state services, including education, health, social services and public safety, which have seen significant cuts over recent years.

"This is revenue the state has to decide whether or not it's more staged for it to collect at this juncture and spend on those other core services or give back to a highly profitable, billion dollar company that doesn't need the economic stimulus to create a job, nor the economic incentive to create a job, because it's highly profitable at this juncture in time," he said. "Given how dire the state's current fiscal condition is, it's really hard to say that at this point in time that's the right decision."

Martire went on to say that there could be an instance when such a subsidy would be appropriate, but added that, "This is something that should be subjected to a rationale analysis, and it's very hard to construct a rationale argument for this."

He also made a point to note that Illinois' corporate income tax, at 7.3 percent, is not that significant. The Center for Tax and Budget Accountability is working on a new report to be released next year, which found that all American corporations paid $37 billion in income taxes to U.S. states in 2010, while they saw a collective net income of $1.8 trillion. As such, their effective tax burden was just 2.06 percent, Martire explained.

"It's not a substantial tax burden for businesses," he noted.

Other legislation the Senate Executive Committee may consider Wednesday looks to provide perks to the company that emerges from the OfficeMax Inc. and Office Depot Inc. merger, which is expected to be completed soon, but only if the company sets up its headquarters in Illinois. The company would be required to keep 2,000 jobs in the state and add an additional 200 jobs.

The other tax incentive bills that could possibly come up for a vote include HB 2536 and HB 3271.

Jacob Swenson, a leader with Fair Economy Illinois, said these recent tax incentive proposals show that legislators "have their priorities wrong." 

"They're not serving working people," Swenson stressed. "We need to be putting people first and part of that is passing corporate tax transparency and creating a fair corporate tax policy so that we know that taxpayers are being well-served by the tax policy that we put in place."

Allen Wesolowski, a leader with ONE Northside, also part of the Fair Economy Illinois coalition, said it's imperative that the state legislature approve the pending Illinois Corporate Responsibility and Tax disclosure Act, HB 3627. The measure would require publicly traded Illinois corporations to disclose the amount of money they pay in state income taxes. Check out Progress Illinois' full coverage of the bill here.

"I think it's always premature to give new tax breaks when we don't know what's happening on the corporate tax side of the equation," Wesolowski said, adding that the governor should veto any of the recent tax incentive measures.

Last month, Quinn said he would "not consider"  any measure that gives Archer Daniels Midland Co., or any other company, tax breaks until lawmakers pass legislation that solves the state's $100 billion pension crisis.

But Nowlan said he believes the companies seeking the tax incentives or benefits will receive them.

"[The] weak business climate, the defensive position the state is in relative to the business climate, and the intense local energy or concern of the employment involved ... make it a relatively easy vote for legislators, and indeed many legislators may themselves think that in the future they would want tax incentives for their local industry," Nowlan noted.

Nowlan added that he doesn't think the governor will ultimately be against the incentive proposals, which he says can be structured in such a way that doesn't get in the way of pension reform.

"If the legislation is enacted now, the governor has 60 days in which to act upon receipt of the bill ... and therefore action on pensions will likely have been taken, whether successful or not I can't predict, so I don’t see that as a bar to the incentives being enacted."

Quinn's office did not return Progress Illinois request for comment about what the governor plans to do if the tax-break measures arrive on his desk.

Amisha Patel, executive of the Grassroots Collaborative, said it's telling that some lawmakers are looking to move these subsidy proposals forward at the same time that some 2 million people in Illinois saw their food aid reduced earlier this month now that a temporary increase to the Supplemental Nutrition Assistance Program has expired.

"Proposals that actually move to benefit low-income and working middle-class families ... meet so much more resistance than corporations that are looking for a handout," she said. "There seems to be a big disconnect and our policy makers are living that disconnect, because they continue to be more responsive to those who have money."

Gun control measure

Aside from the corporate tax packages, the legislature may take up State Rep. Michael Zalewski's (D-Chicago) amended bill for stricter gun sentences, which passed out of the House Judiciary Committee Tuesday evening.

As part of the recently tweaked measure, SB 1342, those who commit a crime involving aggravated unlawful use of a weapon would have to serve 85 percent of their sentences for a first offense. Zalewski lowered the minimum sentence for first-time offenders from three years to one year.

Felons and those known to be in gangs who are convicted of unlawful use of a weapon would be handed a minimum four-year sentence, which is less than the five-year sentence Zalewski originally proposed.

Under the measure, anyone caught with a loaded gun in public that does not have a valid Firearm Owners Identification Card will face an aggravated unlawful use of a weapon charge.

Other happenings

The House voted on Wednesday 42-16 to pass HB 1516, which looks to restore the 2012 cuts to Medicaid participants' dental benefits. Quinn signed off on $1.6 billion in Medicaid spending cuts in June 2012. Among other ways to cut costs, dental care for adults on Medicaid was eliminated, except in the case of a dental emergency. The measure to repeal the Medicaid dental reforms now moves to the Senate.

During the first half of the veto session, which took place October 22 and October 23, the House voted to allow the governor's veto to stand on HB 1200, which reduced the number of days museums are required to be free to the public, dropping the figure down from 52 days to 26 days.

Also during the first half of the veto session, various committees talked about Quinn's request for an additional $221 million in spending funds for this fiscal year's $35 billion budget. The governor called for $112 million of those funds to be used to pay 25,000 state workers back wages they have been owed since July 2011.

Yesterday, the House passed a bill, HB 209, to spend an additional $49.6 million this fiscal year, with some $30 million being allocated to a program to regulate concealed carry in the state. About $500,000 of the funds is new general-revenue spending. The measure, however, did not contain the funds for paying the workers' back wages, although lawmakers may take up the issue in an upcoming session, said State Rep. Louis Arroyo (D-Chicago), chair of the public safety budget committee.

“They’re still negotiating that. I think we’re going to have to come back. Sooner or later, we’re going to have to address that ... but I guess the negotiations have not gone well to be able to do that. I think that we want to deal with the pension[s] and we want to deal with other things,” Arroyo told Illinois Issues Tuesday. “The [legislative] leaders and the [appropriations committee] chairs are not ready to talk about that. [But] sooner or later, we’re going to have to pay for it, because if we’re paying interest on the money we’re incurring more debt. I don’t know how long we’re going to wait.”

UPDATE 11/7/13 (10:20 a.m.): The Senate Executive Committee on Wednesday approved a tax incentive proposal for ADM. As part of the measure, the company would receive $1.5 million in tax credits per year, but it would be required to add 100 jobs in Decatur from its locations outside of Illinois and also add 500 more jobs to the area within the next five years. At least 200 jobs would have to be at the company's new headquarters in Chicago, if it sets up shop in the Windy City.

Meanwhile, the committee also approved a $53 million tax-credit package as part of the OfficeMax Inc. and Office Depot Inc. merger. The measures may see a full Senate vote Thursday.

On Wednesday, the House approved $5 million tax break for Univar.

Comments

Log in or register to post comments