The Capitol Buzz....

When the legislature reconvened in mid-January after a 45-day recess from the prior session, few would have thought there would have been so many constitutional amendments.  It was a given that the question of whether to convene a constitutional convention was going to be on the ballot in November.  It has to be.  The suggested amendments that have since surfaced are of particular importance to the IEA.

 

SJRCA 86 (Raoul, D-13, Chicago) – The legislation proposes to amend the Revenue Article of the Illinois Constitution by authorizing a tax on, or measured by, income to be at a graduated rate.  It also states that in any such tax imposed upon corporations, the rate shall not exceed the average rate imposed on individuals by more than a ratio of 8 to 5.

 

On Wednesday, Sen. Raoul and Sen. Frerichs (D-52, Gifford) hosted a press conference introducing the legislation.  They were joined by Reps. Will Davis (D-30, Hazel Crest), the future House sponsor of the bill, Naomi Jakobbson (D-103, Urbana) and Kathy Ryg (D-59, Vernon Hills).

 

IEA Vice President Bob Blade spoke in support of the proposed amendment.

 

“We believe that this proposed constitutional amendment aligns with our organizational goal of a progressive tax and distribution system that guarantees equal revenues among schools regardless of district organization. The only way to begin a discussion that would achieve that goal is to level the playing field,” Blade said.  Other supporters of the legislation include the IFT, Voices for Illinois Children and Citizen Action-Illinois.

 

Raoul said the proposal is a way to level the taxing disparities that exist between low-income and high-income individuals. He shared a report that illustrated that the current system of taxation, the flat tax, is inherently flawed. As a result, those Illinois citizens with the lowest income pay a higher percentage of their income than highly compensated individuals. Finally, he stated that the proposal does not dictate what the income rates should be.  Rather, it merely lifts the current mandate and allows future general assemblies the opportunity to discuss other systems of taxation.

 

HJRCA 42 (Smith, D-91, Canton) – On Thursday, Rep. Smith held a press conference to introduce another constitutional amendment.  The proposal amends the Revenue Article of the Illinois Constitution with respect to limitations on income taxation.  The legislation is a funding bill that mandates taxation by three categories: individuals earning under $250,000, individuals earning more than $250,000, and corporations.  The constitutional amendment sets the tax rate for individuals earning $250,000 or more at 6 percent, or twice the rate imposed upon individuals earning less than $250,000.  The legislation preserves the tax ratio of 8 to 5 between individuals and corporations.

 

Additionally, the legislation provides that the basic amount of each standard exemption for individuals (under $250,000) shall be $4,500. The amounts of $250,000 and $4,500 shall be adjusted each year to reflect changes in a specified consumer price index.

 

Revenue collected from the increased taxes shall be deposited into each of the following funds: the Revitalize Illinois Schools Fund, the Rebuild Illinois Infrastructure Fund, and the Reward Illinois Working Families Fund.  Expenditures from the Schools and Infrastructure funds shall be made only for those respective purposes and only as specifically appropriated by law.

 

The Teachers’ Retirement System will phase out the Payroll Deduction Plan (PDP) over the next two years.  The plan allows active teachers to utilize payroll deduction to pay for optional service, 2.2 upgrades, and the Early Retirement Option through payroll deduction on a pretax basis.

 

In order to comply with recent IRS guidance, the TRS Payroll Deduction Program must be discontinued.  Full-time, employed members will no longer be able to use the program to pay for optional service, 2.2 upgrades, and the Early Retirement Option through payroll deduction on a pretax basis.  Other tax-deferred options still remain.  Please consult your tax advisor for details. 

 

Payroll deduction agreement forms for new enrollments must be received no later than 4:30 p.m. on May 15, 2008 at the TRS Springfield office. The program will end in June 2010; affected members will be notified by TRS.

Fund Sweeps
The Democratic-controlled Senate on Thursday passed HB 473 on a partisan 37-21vote. This legislation would grant the governor the authority to divert up to $530 million from special funds to prop up the state budget.  This proposal puts at risk the Teachers’ Health Insurance Security Fund (THIS), which is the fund that supports the Teachers’ Retirement Insurance Program (TRIP).  The TRIP provides retired teachers with health insurance.  Gov. Rod Blagojevich swept the THIS fund during his first term in office and would be granted the same ability if this legislation passes the House.  During floor debate, it was pointed out that the THIS fund could be one of the funds that the governor could divert money from.  Currently, the THIS fund contains $61 million.  IEA is opposed to this measure.

 

Passed House
HB 4225 (Eddy, R-109, Hutsonville) - This legislation prohibits a school district from being certified to be in financial difficulty as a result of the failure of the state comptroller to disburse certain school code reimbursements for receipt by the school district no later than June 30 of each year.  This IEA-supported bill passed the House unanimously and will now be considered by the Senate.

 

HB 4536 (Flider, D-101, Mt. Zion/Link, D-30, Vernon Hills) - This legislation allows teachers to return to teaching in subject shortage areas without impairing his or her retirement status or retirement annuity.  This IEA-supported bill passed the House unanimously and will now be considered by the Senate.

 

HB 4705 (Currie, D-25, Chicago/Lightford, D-4, Maywood) - This legislation provides for the Illinois State Board of Education to achieve a goal of "Preschool for All Children" through June 30, 2010 (instead of June 30, 2008).  This IEA-supported bill passed the House unanimously and will now be considered by the Senate.

 

SB 1874 (Forby, D-59, Benton/J. Bradley, D-117, Marion) - This legislation allows for a hold harmless supplemental appropriation of $21 million from the general revenue fund to the Illinois State Board of Education to be used exclusively for school districts that will receive less funding in the 2007-2008 fiscal year.  This IEA-supported bill now goes to the governor for his action.

 

Passed Senate
SB 1957 (Clayborne, D-57, Belleville/Holbrook, D-113 Belleville) - This legislation amends the Illinois Municipal Retirement Fund Article of the Illinois Pension Code to give the annuitant trustee the right to vote on any and all actions before the board of trustees and increases from four to five the number of concurring votes necessary for every decision or action by the board of trustees.  This IEA-supported bill now goes to the House for consideration.

 

SB 2500 (Demuzio, D-49, Carlinville/J. Watson, R-97, Jacksonville) – This legislation provides that any individual who begins serving as a superintendent on or after July 1, 2008, and has not previously served as a school district superintendent, shall participate in a new superintendent mentoring program established by the State Board of Education for the duration of his or her first two school years as a superintendent.  This IEA-supported bill passed the Senate unanimously, and now goes to the House for consideration.

Please join us in Springfield for a Lobby Day focused on higher education issues. This special Lobby Day has been put together by a coalition of higher education interests – both labor and management. 

Constitutional Amendment Joint Resolution is a joint resolution that proposes to amend the Illinois Constitution.  After adoption of the resolution by both houses of the Illinois General Assembly, a proposition to amend the Illinois Constitution is submitted to the electors of the state for adoption or rejection at the next general election.