The Capitol Buzz.....

Gov. Rod Blagojevich on Wednesday delivered his joint State of the State/Budget Address. The speech lasted only 22 minutes, which is just as well, since the spending plan was D.O.A., and for good reason.

The proposal calls for an increase of $300 million derived from an increase in the gaming tax rates and the revenues from an unused 10th casino license. The increase reflects the ISBE budget request of an additional $125 for the foundation level and a $500 increase for special education reimbursement.
 
This was, in many ways, a re-introduction of last year’s budget plan, which also was tied to a gaming expansion plan. This year, the governor simply proposed jacking up the highest tax rate on casinos to 70 percent, which would likely impact the sale price of the long-dormant 10th casino license.  Money from both the tax hike and the sale fund a very modest increase in education spending.

The governor’s new pension obligation bond scheme has serious problems from the IEA perspective. Just as with last year’s proposal, there is no sustainable funding source to pay the debt service on the bonds, thus eliminating much of the benefit of a bond sale for the pension systems.

 

This plan also puts off into the future the significantly higher state pension payments scheduled to be made in the next two years. The failure of past legislatures to make timely full payments created the underfunding problem, so new delays are counterproductive to having the strongest possible pension systems.

Illinois colleges and universities are targeted for budget cuts under this plan. While it is appropriate that “education” is among the few areas considered “off limits” to budget cutting, education, when used in this context, must be re-defined to include all public higher education institutions. The steady erosion of financial support for higher education is making the price of college unaffordable to an increasing number of Illinois families. The cost of tuition in Illinois is a crisis and it is time that was recognized by the governor and lawmakers.

The governor is proposing the Illinois Child Tax Credit, a one-time $300 per child tax credit. The program would cost the state $900 million and lawmakers on both sides of the aisle are on the record as calling the idea unaffordable.

 

Another revenue-reducer for the cash-strapped state is the Illinois Business Tax Cut, a one-time 20 percent reduction in corporate income taxes for corporations that paid taxes in 2007 and maintained employment levels. This proposal would cost $300 million.

 

Finally, it is proposed the state launch Illinois Works, a capital program for transportation, school construction and economic development, the remainder coming from federal or local matching funds. The funding mechanism for this project would come from a partial lease of the state lottery in the form of “securitization.” Debt service for the bonds would come predominantly from the road fund.

HB 4180 (Fritchey, D-Chicago) removes “prayer” from the title of the Silent Reflection and Student Prayer Act and removes language making the legislation mandatory.

 

The sponsor argued the purpose of the bill was not to remove prayer from school. Rather, it was his hope to put the decisions on how to best use silent reflection time back into the hands of the people who were elected and hired to make those decisions – school boards and teachers.

 

IEA supports this legislation. The bill passed out of committee (12 yes, 8 no). The roll call vote went as follows:
Yes: Reps. Smith, Mitchell, Bassi, Eddy, Froehlich, Kosel, Miller, Mulligan, Osterman, Pihos, Black, Flider
No: Reps. M. Davis, Chapa LaVia, Crespo, Dugan, Golar, W. Davis, Reis, Yarbrough
Absent: Munson, Pritchard

 

HB 4186 (W. Davis, D-Hazel Crest) was amended to remove “prayer” from all language pertaining to the Silent Reflection and Student Prayer Act, while still requiring a period of silent reflection.

 

IEA opposed this legislation, which failed to get enough votes to clear the committee. Voting “yes” were Reps. Smith, M. Davis, Mitchell, Chapa LaVia, Crespo, Flider, Golar, W. Davis, Mulligan, Reis. Voting “no” were Reps. Bassi, Froehlich, Kosel, Pihos and Yarbrough.

 

It should also be noted the Illinois Press Association was silent once again during the debate.

 

The IEA supports HB 4309 (Reis, R-Willow Hill), which stipulates a school will not lose state aid money for an unplanned non-attendance day. A school may claim this provision twice during a school year. Situations often arise during a school year in which the physical premises of a school building must be closed to the public, school employees, and students due to unforeseen circumstances (i.e. flooding, fires, hazardous material accidents, etc.) In the past, schools have lost state aid on days in which buildings were evacuated before the prescribed two-hour time period was reached. This legislation seeks to end that past practice. The bill passed unanimously out of committee.

 

Senate Pensions and Investments Committee
SB 1957 (Clayborne, D-Belleville) would give voting rights to the annuitant trustee on the Illinois Municipal Retirement Fund (IMRF). Currently, the annuitant trustee is unable to cast votes on actions that come before the board. IEA supported this legislation, which passed out of committee unanimously.

 

SB 1958 (Clayborne, D-Belleville) would allow the payment of interest to those receiving refunds from the IMRF board. This interest would be calculated on a member’s contributions from the date of service until the date of the refund. Under current law, those who leave the service of a participating IMRF employer and request a refund would only receive the contributions that they paid in, with the fund retaining the interest earned on the contributions of the employee. The interest rate that would be used to calculate the refund would be 3.75 percent. The fund uses 7.5 percent as its benchmark. IEA supported this legislation, which passed out of committee.

On Wednesday, the ISBE Education Policy Planning Committee held a meeting to gather background information on English Language Learners (ELL) regarding potential options for assessing ELLs for accountability purposes under NCLB.

 

The invited panel included experts who spoke about assessments in other states, the costs of developing a system and the need to make the gathering of data as comprehensive as possible.

 

Attendees included state Sens. Martinez and Delgado and state Reps. Froehlich, Hernandez and Soto.

 

Meanwhile, ISBE has released translated instructions for the ISAT tests for ELL students, here.

The IEA lobby day will take place on April 30. Buses will depart from various areas throughout the state to bring members to IEA Headquarters in Springfield for the lobby day. More information about the buses and their departure sites will be forthcoming in the weeks ahead.

 

Prior to lobby day, please try to meet with your local legislators about important issues in your school or district. A home district meeting is a perfect opportunity to establish a relationship with your elected representatives and to schedule a Springfield appointment with your legislator for Lobby Day. To find your state senator or state representative, please visit the State Board of Elections.

 

Food will be provided that day, along with a brief program at IEA Headquarters.

 

Higher Education Lobby Day will take place on April 9.

 

For tips on lobbying, please visit here and here.

Tobacco Securitization -- The existing settlement with the tobacco industry provides the state with revenues based in part on national tobacco consumption.  Securitization would transfer that risk to another party in exchange for immediate revenue.

 

In this case, $1.2 billion of one-time revenues could be obtained on favorable market terms to provide immediate cash.