Capitol Report for May 12, 2010

What did they expect?

When the week began, there was little to no talk about the budget or what the final product might look like. That probably should have been a telltale sign that the General Assembly was headed for overtime. In fact, much of the talk around the rail was focused on school vouchers, telecommunications reform, nursing homes and gaming.

However, as is often the case in Springfield, the budget began to show signs of life on Tuesday and by Wednesday some were talking about it all being a done deal.  There are four key pieces of legislation that eventually became the focus of the dialogue:

• SB 3660 (Demuzio, D-Carlinville/Currie, D-Chicago) is the House version of the Emergency Budget Act and pension holiday provision. The House amendments containing the budget are pending before the House Executive Committee. See more below.
• HB 2428 (May, D-Highland Park/Cullerton, D-Chicago) is the Senate version of the Emergency Budget Act. It passed the House by a vote of 31 “yes” to 26 “no” but is awaiting House action.
• HB 543 (Reitz, D-Steeleville/Cullerton, D-Chicago) is the Senate version of the pension holiday. It passed the Senate by a vote of 31 “yes” to 26 “no”, but is awaiting House action.  See more below.
• HB 859 (Hannig, D-Litchfield/Trotter, D-Chicago) is the Senate version of the Budget . It passed the Senate by a vote of 31 “yes” to 26 “no,” but is awaiting House action.
• SB 1211 (Trotter, D-Chicago/Madigan, D-Chicago) is the House version of the budget. It was defeated overwhelmingly in the House by a vote of 15 “yes” to 99 “no”.

On Thursday evening, shortly after the budget bill and Emergency Budget Act had passed out of committee, we began lobbying House Democratic members. The focus was on them because the House Republicans had essentially said they were not going to support either a proposal that would allow the state to borrow for the pension payment or a severely unbalanced budget.

Within a short period of time, we were able to peel off a sufficient number of the members to delay a vote on the Budget. The House soon adjourned for the evening and had in the interim requested a caucus meeting with Gov. Pat Quinn.

Despite a lengthy meeting with the Governor, no deal was struck. The House and Senate adjourned on Friday and will return at the “call of the chair.”  We are not sure when that will be, but we tend to think it will be sometime around the week of May 24^th.

Vouchers

As amended, SB 2494 (Meeks, D-Chicago/Joyce, D-Chicago) creates a permanent voucher program for Chicago called the Illinois School Choice Program.  The program provides a voucher to any student enrolled in a Chicago Public School that is performing in the lowest 10 percent or an overcrowded school that has a percentage of low-income students of 70 percent.

The voucher is equal to the foundation level per pupil at $1650, plus the poverty grant supplement of $2075, for a total voucher equal to $3725.   That voucher can be redeemed at any parochial or private school in the City of Chicago. The State Board of Education will administer the program. Additionally, the bill creates the School Choice Fund as a special fund in the state treasury.

This IEA-opposed bill was called for a vote last week, but was put on “postponed consideration” because the original vote of 48 “yes” to 66 “no” votes was not enough for passage.  See a video of the vote being taken here.  Stay tuned to see if this issue resurfaces again later in the session or in veto session.

Pension funding in limbo

During the most recent week of legislative action ending on May 7^th, the legislature entertained, passed and killed a number of issues that impact the funding of the Teachers’ Retirement System (TRS) and the State Universities Retirement System (SURS).  The specifics are below:

Pension holiday: The Senate passed HB 543 by a narrow margin (31-26).  The legislation provides that the Governor shall determine when and what amounts of pension payments to make to the retirement systems.  Currently, there is a statute that requires the state to pay into the retirement systems an amount determined by the retirement boards unless there is legislative action to change this.  This law would circumvent the current funding process and allow the Governor to withhold the required pension payments for the upcoming budget year.  The IEA is in strong opposition to this law because it will continue to erode the fiscal stability of the retirement systems.

SB 3660 also would legislate a seven-month pension holiday.  The legislation passed out of the House Executive Committee but has yet to be acted upon by the full House.  The IEA worked fervently to defeat this proposal and at the current time it shows since it was not called for a vote.

Pension funding: The House unfortunately has been unable to pass SB 3514 (Schoenberg, D-Evanston, Currie, D-Chicago).  The legislation would allow the state to sell bonds and to give the proceeds of $4.1 billion to the retirement systems for the full required pension payment.  The IEA supports this legislation and is hopeful that it will receive the required votes needed in the House.

What’s Next

The House and Senate adjourned last Friday and will return at the “call of the chair.”  We are not sure when that will be, but we tend to think it will be sometime around the week of May 24^th.