This Week in Illinois: May 15, 2015

Property Taxes
Trick bag; no property tax relief in sight. Once again the Democrat-controlled House brought sham legislation to a vote for the sole purpose of putting Republican lawmakers in a trick bag and embarrassing the new Governor.

House Republicans have long worked to provide Illinoisans with much needed and deserved property tax relief. Each year members of the House Republican Caucus introduce legislation that would deliver property tax relief and each year the Democrats block those measures. The real roadblock to property tax relief has been the Democrat-controlled General Assembly.

It is not without reason that House Republicans question the majority leadership’s commitment to property tax relief, when out of the clear blue sky they embrace so-called property tax freeze legislation that neither includes reforms nor guarantees that property taxes won’t increase (so no freeze). It’s not hard to draw the accurate conclusion that it is just political theatre.

After being sworn into office, Governor Rauner took action to address high property taxes. He assembled a bipartisan working group to look holistically at thoughtful reforms that would provide meaningful property tax relief without strangling schools and local governments. The group is considering unfunded mandates, pensions and other factors impacting costs that keep property taxes high. Once the working group completes its assessment, it will bring its work product to the proper standing committee for a full hearing – provided the Democrat leadership permits it to get that far.

After Republicans voted “Present” on an amendment to a bill going nowhere, State Rep. Ron Sandack called for HB 136, legislation he filed on the first day of the 2015 session, to be released from the House Rules Committee where the Democrats have kept it bottled up. House Bill 136, a carefully crafted, measured approach to property tax reform targeting homeowners who have lost value on their homes, was immediately dismissed through draconian House Rules that provide the majority party a defense again virtually any legislation they don’t like.

Once again the Democrat leadership in the Illinois House showed why nothing gets accomplished in Springfield. Republicans stood together with Governor Rauner, casting a “Present” vote to express their disdain for the process.

Budget – FY16
Illinois lawmakers face finish line in fight over massive deficit. Both the House and the Senate held repeated budget hearings this week to discuss estimated FY16 budget shortfalls of $6 billion to $8 billion, depending on how the red ink is counted.

Governor Rauner submitted a budget for FY16 to the General Assembly in February. Since that time, Democrats that opposes Rauner have repeatedly attacked budgetary adjustments made in this spending plan, but have neither generated a budget of their own nor issued a projection of State revenues from which a budget can be generated. The General Assembly is required to enact a budget for FY16, starting July 1, no later than May 31.

Chicago – Debt Rating
Moody’s reduces Chicago’s credit rating to junk bond status. The downgrade to what Moody’s calls “Ba1,” a junk-bond level, was announced on Tuesday, May 12, and affects $8.1 billion in city general-obligation debt. The moved marked semi-official acknowledgement, by a major player in global debt markets, that there is material risk that Chicago may on a future date fail to repay its bondholders in full and the city may default on its debts. The New York credit-rating agency attributed this move to the Friday, May 8 decision by the Illinois Supreme Court to discard recent moves toward pension reform. The decision (Illinois Supreme Court ruling) found SB 1, a December 2013 law that sharply reduced future pension liabilities to many classes of Illinois public-sector workers, to be unconstitutional.

As recently as March 2014, Moody’s rated Chicago debt at A3. With this May 2015 move, Chicago’s GO bonds will no longer be suitable for most purposes of fiduciary investment, including investments by pension funds, annuity funds, and funds operated by Wall Street that provide savings options to workers enrolled in 401(k) plans. Junk-bond debt often continues to trade back and forth between speculators and aggressive income-oriented investment funds.

New York’s largest credit-rating firm also reduced credit ratings on various Chicago-related and secured Chicago debts this week. Ratings for Chicago Public Schools were knocked down to Ba3 junk status on Wednesday, May 13, affecting $6.2 billion in school debt. Billions of dollars of additional Chicago bonded debts are backed by Chicago water and sewer services, motor fuel tax revenue streams, and sales tax streams. Bond watchers will be looking for ratings changes by several of Moody’s’ competitors in the credit-rating industry, especially Fitch Ratings and Standard & Poor’s.

College of DuPage
House unanimously approves detailed performance audit of College of DuPage. In a unanimous show of support for the taxpayers who fund the College of DuPage (COD), the House of Representatives approved a resolution on Thursday that will launch a thorough performance audit of the college.

HR 55, sponsored by State Rep. Jeanne Ives, was filed in response to the decision by the COD board to provide outgoing College President Dr. Robert Breuder with a $763,000 severance package in exchange for his early departure as College President.

Through the language in HR55, the COD will assume the costs associated with a detailed audit the covers the following:

•The College of DuPage’s sources of revenues
•College expenditures, by category
•Whether the Board is carrying out its responsibilities required by Board policy
•Whether the Board is meeting its fiduciary responsibilities and ensuring compliance with the Public Community College Act and Board Policies
•Whether the compensation and severance packages provided to the COD president are comparable to compensation and severance packages provided to Presidents of other Illinois Community Colleges
•Whether changes to the College President’s compensation package were properly approved
•An amendment approved prior to the final vote expanded the scope of the audit to include the COD Foundation’s actions in the investigation.

“The majority of the trustees were making some very bad decisions at the expense of the taxpayers who support the College of DuPage,” said Ives. “With the recent election, we now have several concerned taxpayers serving as COD trustees, and they are committed to unearthing the extent of the malfeasance and taking steps to prevent these types of problems from occurring in the future. I expect they will cooperate fully with the investigation.”

For more on this audit resolution, please visit The Caucus Blog.

Economy – Illinois Jobs
50-state survey shows recent Illinois job growth has underperformed neighboring states. The study, conducted by the nonpartisan Pew Charitable Trusts, counted the rates of new job creation in each of the 50 states between January 2008 (marking the start of the 2008-15 downturn) and March 2015. The study was released on Wednesday, May 13.

Study findings indicated that, when measured by percentage, the rate of job growth in Illinois underperformed similar numbers in Indiana, Iowa, Kentucky, Michigan, and Wisconsin. Although Illinois’ job growth was significantly slower than that of the nation as a whole, slow rates were also posted by many states in the U.S. Northeast other than New York. Some Midwestern states did well in the Pew study, with Michigan bouncing back significantly from the motor vehicle industry-led crash of the late 2000s. Paced by changes in labor-management law, Michigan added 417,900 jobs since its low point of March 2010, outpacing many of its Rust Belt neighbors.

General Assembly – Senate Bill Deadline Week
Most Senate bills had to be out of House committee by the end of this week to remain alive. As the General Assembly continues to move towards May 31 adjournment, members of the Illinois House and Senate scrambled to get committee approval for their bills this week. The coming week, May 18 through May 22, will see the deadline for Senate bills on the House floor.

By May 22, most Senate bills will either have been passed by the House and sent to the Governor for final signature, passed by the House as amended and sent back to the Senate for concurrence, or will have been sent to the House Rules Committee for failure to meet the deadline. Meanwhile, the Senate has a parallel deadline for House bills.

Right to Work
Sham hearings continue - this time on Right to Work. Continuing to put partisan game-playing before progress, House Speaker Michael Madigan again moved to divide the legislature this week by prematurely pushing a right-to-work proposal onto the House floor, dropping the language a few short hours before the vote. This is the latest in a series of un-negotiated proposals that forced Republicans to unite in protest against Madigan and the Democrats’ game-playing.

For several weeks House Democrats have been working to divide Illinoisans by pushing several sham budget bills and lopsided legislative "hearings" meant to bolster the super-majority party’s credentials with organized labor at the expense of taxpayers.

At the culmination of a nearly daylong debate Thursday, House Republicans expressed unity against Democrat shenanigans by refusing to cast a single YES vote in support of Madigan’s right-to-work proposal (HB 1286, House Floor Amendment #2). Individual members of the Republican Caucus expressed their disappointment at the counterproductive way Speaker Madigan is conducting the business of the General Assembly this spring.

House Republicans believe the working men and women of Illinois deserve better than this charade. They deserve leaders who will stand up for middle-class families, not use them as pawns in a political power struggle. Thursday’s vote was more political theatre from the same failed Democrat leaders who have bankrupted our state and hurt hardworking taxpayers. This right-to-work vote was nothing more than a cynical attempt to hold onto power at all costs. Middle-class families deserve better than this shameful display.

The right-to-work vote follows two weeks of "hearings" on billions of dollars and hundreds of pages of budget bills that did not go through the committee process, worker’s compensation reforms that did not go through the committee process, and tort reforms that did not go through the committee process.

It’s clear that while Illinois is facing an unprecedented budget crisis, Democrats in control would rather scheme to score political points than work across party lines to actually solve the problems their policies have created.

Tort Reform
House Republicans toughen push for tort reform. Trail-lawyer-friendly State laws and court procedures, which go far beyond the rights granted to trial lawyers in neighboring and comparable states, are blamed for a substantial share of the continued economic gap between Illinois and the rest of the U.S. House Republicans are working with civil justice reform groups to enact needed reforms to these laws.

Ragged and inconsistent legal dicta, derived from individual outliers of case law, have helped to create lawsuit-friendly Illinois courtrooms where trial lawyers eagerly congregate to go venue-shopping. Cook County contains less than half of the people of Illinois, but accounts for 64.1% of all court cases filed in Illinois. In southern Illinois, Madison County and St. Clair County, twin counties located across the Mississippi River from St. Louis, have become even more of a haven for venue-shopping. Civil actions are filed in Madison County at double the rate of Cook County, 6.5 times the rate of filings in Illinois outside these three counties, and many times the rate of filings of other U.S. states that do not encourage plaintiff law. Advocates have long called Madison County a “judicial hellhole.”

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