As Senate lawmakers returned to Springfield Sept. 9 during the ongoing budget stalemate, Republicans are calling for fundamental government reforms in conjunction with a balanced budget plan, while Democrats continue to forgo reform in favor of the status quo of spending more than the state collects in revenues.
The State Comptroller is warning the state’s backlog of bills could reach $8 billion by the end of the year if state spending continues at its current pace without a budget deal in place. Similarly, Gov. Bruce Rauner’s budget office cautions the state is on pace to spend more than $38 billion, about $6 billion more than what the state is expecting in revenue for the year. Despite these dire fiscal warnings, Democrats continue to try and pass annual spending measures even though the state does not have enough money to pay for these initiatives.
In other news, a recent report highlighted the need for Illinois to pass pro-business reforms, thousands of Illinois residents honored and remembered the victims of the 9/11 terrorist attacks through a day of service, and the corn harvest is ramping up with more farmers expected to hit their fields this week.
Comptroller issues state budget warning
State Comptroller Leslie Munger says the state’s backlog of unpaid bills could hit $8 billion by the end of the year if the state continues to operate without a state budget, while the Governor’s budget office told a Senate panel this week the state is on track to spend more than $38 billion this year.
Court orders, consent decrees, and statutory continuing appropriations are funding about 90 percent of the state's budget right now. The state, however, is expected to bring in only $32 billion in revenue, according to the Governor’s office. The Comptroller said most of the state’s money is being spent at rates the state cannot afford in the long run. Current spending is based on previous Fiscal Year 2015 levels, while available revenues, which are based on the current Fiscal Year 2016 levels, are much lower than last year’s as a result of the reduction of the tax hike in January.
Munger says with no budget in place, Illinois’ unpaid bills could reach $8.5 billion in December, but that doesn’t include payments for obligations like higher education, employee-retiree health insurance, and MAP grants for students, which would add an additional $4.3 billion to the tab. Those are bills that can't be processed without a state budget.
Meanwhile, the Illinois Lottery is now facing a lawsuit due to the lack of a state budget. Two lottery winners filed a federal lawsuit this week seeking their lottery winnings, which the state has not paid. The Comptroller says without a budget, she doesn’t have the authority to issue checks over $25,000.
Democrats make false promises with the budget
Senate Democrats continued to play party politics with the budget impasse, muscling through Senate Bill 2046, which they said would pay for human services, municipalities, and lottery winners. Senate Republican lawmakers argued appropriating money in this fashion is short-sighted and unrealistic, considering Illinois’ spending is far outpacing available revenues. They noted that without a balanced budget package, measures like Senate Bill 2046 amount to little more than a false promise.
Republican legislators continued to urge a comprehensive, balanced budget, not the piecemeal measures Democrat lawmakers continue to push. In fact, during debate the Democrat sponsor of Senate Bill 2046 admitted that this is “no way to run the ship.”
New law enforces public disclosure of severance agreements
All severance agreements involving government employees will now be subject to public scrutiny and investigation after Gov. Rauner signed House Bill 303 into law on Sept. 10.
Strengthening current law, House Bill 303 closes a loophole that has allowed parties to keep certain severance settlements confidential. It provides that all settlement agreements will be subject to Freedom of Information Act (FOIA) requests and public review.
House Bill 303 was in part a response to a lucrative severance package that was awarded to the College of DuPage President Robert Breuder earlier this year. A closed meeting held by college trustees resulted in a $763,000 settlement for Breuder with little to no public review.
A severance agreement is defined as “a mutual agreement between any public body and its employee for the employee’s resignation in exchange for payment by the public body.”
Supported by the Better Government Association and Associated Beer Distributors of Illinois, House Bill 303 applies to all public bodies, which include legislative, executive, administrative or advisory bodies of the state. It also applies to public universities, colleges, townships, cities and municipal units of government.
Illinois gets dismal rankings for its liability systems
IIlinois is ranked 48th overall in a survey released during the week surveying business leaders on the fairness and reasonableness of state liability systems by Harris Poll, a global polling firm. Cook County/Chicago received the ranking of the second worst local jurisdictions, in terms of having a fair and reasonable litigation environment. Madison County, Illinois, was tied for third worst in that category.
The study estimates that if Illinois passes meaningful lawsuit reform, it could reduce the cost of tort settlements by $2,435 per million dollars, and result in a potential 0.92 percent and 2.5 percent increase in employment. Based on current Illinois employment, that’s between 50,000 and 150,000 jobs. In fact, 75 percent of businesses surveyed said that the state’s lawsuit climate impacts where they locate or expand.
The survey found Illinois ranked 48th in overall treatment of tort and contract litigation, 50th in having and enforcing meaningful venue requirements, 49th of treatment of class action lawsuits and mass consolidation lawsuits, 48th in damages, and 47th in timeliness of summary judgment or dismissal. Illinois also ranked 48th in discovery, scientific and technical evidence, judges’ impartiality, judges’ competence, and juries’ fairness.
The survey was conducted for the U.S. Chamber of Commerce Institute for Legal Reform. Results were formulated through interviews with in-house general counsel, senior litigators or attorneys, and other senior executives who are knowledgeable about litigation matters.
Rough August for thousands of Illinois workers
A recent report from the Illinois Department of Commerce and Economic Opportunity details several of Illinois’ major employers who announced layoffs last month, impacting more than 2,000 workers. The report breaks down how many workers are impacted at several Illinois companies.
For example, Kraft Heinz announced 750 layoffs, Motorola announced 499 layoffs, Walgreens announced 270 layoffs, Nokia Networks announced 139 layoffs, McDavid Inc. announced 115 layoffs, and Telesource Services announced 98 layoffs.
Illinois continues to rank near the bottom in various surveys and rankings when it comes to offering a business friendly climate. The Small Business Friendliness survey by Thumbtack, a consumer service website, recently gave Illinois a grade of F, the same grade the state received in 2014.
State Senator Dave Syverson (R-Rockford) says news like this highlights the need for workers’ compensation reform, property tax reform, and lessening burdensome regulations on businesses, all of which would help foster growth, create jobs, and attract new business to state.
Thousands volunteer in day of service
To honor the victims of the 9/11 terrorist attacks, thousands of Illinoisans from across the state joined Americans across the nation, volunteering in the 9/11 Day of Service and Remembrance. The day of service is an annual tribute to victims, survivors, and responders from that tragic day in 2001.
This year’s projects consists of delivering meals, refurbishing schools and community centers, collecting food and clothing, preparing communities for disasters, and reading to children. In many locations around the state, AmeriCorps and Senior Corps members will lead and participate in service projects.
The Executive Director of Serve Illinois says among the eight largest states, Illinois leads the way in the number of volunteers.
Corn harvest ramping up
A large number of Illinois farmers are now finishing their harvest prep work or are already harvesting their corn this week. By the end of last of week, only 2 percent of the state corn crop had been harvested, but that number is expected to jump significantly over the current seven day period.
According to the United States Department of Agriculture, 43 percent of the Illinois corn crop is now rated as mature, another figure that is expected to jump substantially over the next week. The amount of mature corn is above the five-year average of 37 percent, though the 2 percent of acres harvested is actually behind the average of 6 percent.
The soybean harvest may begin soon in earnest as well, with 12 percent already dropping leaves, one of the last steps before harvest can begin, and just slightly ahead of the five year average of 10 percent.
Progress is happening with other crops as well, with 22 percent of the state sorghum crop now rated as mature, and the third cutting of hay is 88 percent complete.