SPRINGFIELD, IL – The battle over the state budget continued this week as House lawmakers returned to the Capitol.

House Speaker Michael Madigan and Democrats in his chamber muscled through an unbalanced and unconstitutional one-month budget, though they still refuse to work with Gov. Bruce Rauner and legislative Republicans on pro-jobs economic reforms that the Governor says must be part of the budget discussion.

Also this week, Gov. Rauner introduced a new proposal to reform Illinois’ broken pension system, which is underfunded by more than $100 billion; and wheat farmers are making steady progress, despite soggy fields.

Republicans fight for lasting change; Democrats respond with temporary Band-Aid

The standoff continued between reform-minded Republicans and status-quo Democrats in the Legislature during the week, amid questions and lawsuits about what the state can – and can’t – spend in the absence of a budget. On July 8, Gov. Rauner introduced legislation once again aimed at improving the state’s business climate and finding compromise with the Democrat legislative leaders.

Incorporating specific requests from President John Cullerton and Senate Democrats, Rauner introduced revised legislation for a property tax freeze – which includes Democrat language to change school funding in Illinois, and an updated compromise bill on workers’ compensation reform.

Rauner also introduced an updated version of pro-jobs legislation that would cut down on frivolous lawsuits and renewed his call for a vote on redistricting reform and term limits. However, instead of returning to the negotiating table or offering compromise of their own, the House instead passed a one-month spending plan that includes none of Rauner’s reforms.

Because their overall spending plan runs nearly $4 billion ahead of expected tax revenues, it will inevitably lead to one of two options: state services and programs running out of money long before the year’s end; or the immediate need for more money in the state’s coffers. Both Gov. Rauner and Republican lawmakers have said that any discussion about a tax hike shouldn’t come before structural reforms that create jobs and boost the economy.

Rauner unveils changes to Illinois’ broken pension system 

On July 8, Gov. Rauner unveiled a new proposal to reform Illinois’ broken pension systems, which are consistently rated as the most financially insolvent (more than $100 billion short) of any state. At issue is the generous-but-underfunded pension system for state employees – the subject of a recent Illinois Supreme Court ruling – as well as pensions for local government employees, teachers, policemen, and firefighters throughout Illinois.  

Rauner’s proposal includes an idea initially put forward by Senate President Cullerton, called “consideration,” that offers a financial incentive for workers who volunteer to move out of the state’s most expensive pension plan, with the goal of achieving much-needed long-term savings. The bill also includes targeted changes requested by the Democrat President of the Cook County Board, state assistance for teacher pensions in the financially-strapped city of Chicago, and the long-sought ability for local governments to declare bankruptcy in certain worst-case scenarios. 

The need to reform these broken pension systems is an issue of widespread bipartisan concern, caused by years of short-term decisions and deferred pension payments. The issue has once again been forced to the surface by a Supreme Court ruling in May that nullified a $130 billion long-term bipartisan reform passed by the Legislature in 2013, as well as statewide fears that the rising cost of pensions will continue to eat into state and local budgets. Neither the Democrat-controlled House nor Senate have yet indicated a willingness to take up Rauner’s compromise legislation.

 

Budget Stalemate 2015: How might this affect me?

As the 2016 Fiscal Year began July 1 without a state budget, many have questions regarding what state services and programs will be impacted if the budget stalemate continues.

Schools will start on time, as Gov. Rauner did sign the education funding portion of the budget. The education appropriation was the lone piece of the Democrats’ budget proposal that he signed into law. Rauner vetoed the majority of the budget, saying it was $4 billion out of balance.  

Emergency services will remain intact and function fully, such as the Illinois State Police and emergency management personnel. Prisons will remain open and prison guards will be on duty like normal. Local governments will continue to receive their normal funding transfers from state income taxes, sales taxes, and motor-fuel taxes.

Current state employees’ health, dental, or life insurance will not be affected, even if paychecks are delayed. As long as the employee continues to work, insurance premiums will be taken accordingly. An employee’s workers’ compensation will also not be affected. Also, if an employee is enrolled in the Deferred Compensation Program, as long as the employee continues to work and earn a paycheck, payroll deductions for Deferred Compensation should be taken accordingly. Employees enrolled in the Commuter Savings Program will also continue to receive the benefit under this program.

Benefits for retirees will not be impacted by the budget stalemate. All retired state employees will continue receiving their pension checks and health benefits, as these are considered continuing appropriations and do not need to be appropriated every year.

State employee pay sparks conflicting court rulings

A July 9 ruling from a St. Louis-area judge would allow Comptroller Leslie Munger to pay state employees in full, even without a state budget in place. The ruling out of St. Clair County Circuit Court contradicts an earlier ruling from a Cook County judge, which denied a request from the Comptroller to continue to pay all state workers their full salary during the budget stalemate.

Following the St. Clair ruling, the Comptroller’s office issued a statement confirming it will begin processing July 15 payroll checks. However, the issue is continuing to play out in court, as the Attorney General Madigan has indicated shewill appeal the July 9 ruling.

The St. Clair ruling was issued in response to a case brought forth by state employees’ unions, arguing that failure to pay workers their full wages violates their collective bargaining agreements. The St. Clair judge agreed, and ruled that the state should pay all workers if it would be impossible to separate union and nonunion salaries, as the Comptroller maintains.

Further complicating matters, an appellate court on July 9 began consideration of an appeal of the July 7 Cook County ruling. The appellate court ordered the Comptroller to hold off on making any payments until they have a chance to review that case. The Cook County court had found that the state could only pay certain state employees federal minimum wage until a budget is in place; the Comptroller’s office said that the state’s archaic financial system would make that impossible.

Wheat harvest progressing despite continued wet weather

Even with many fields still saturated, farmers were able to make substantial progress harvesting wheat during the week. According to the United States Department of Agriculture, wheat acres harvested jumped to 69% complete, up from just 38% during the previous week.

Hay cutting made significant progress as well, with the second cutting of alfalfa now 26% complete, up from a mere 8% the week before. Soybean farmers made only slight advances, completing just 1% more of their planting for a total of 94% of all Illinois soybeans planted. However, due to flooding in parts of the state, some fields may need to be replanted.

Precipitation last week averaged just .88 inches across the state, .11 inches less than normal, leaving an average of 2.8 days suitable for fieldwork. This week, however, has seen a return to continued heavy rains for much of the state, without many opportunities for farmers to get back into their fields.

Crop conditions are holding steady from last week, with 61% of corn acres rated as good or excellent, and 52% of soybeans receiving the same marks.