Springfield, IL – A week before the Illinois Senate could take up a budget framework proposal, a report highlights the dire situation Illinois will face with its stack of unpaid bills if the budget impasse continues while Illinois’ credit rating is downgraded by Fitch.
Meanwhile, the Illinois School Funding Commission issued its report this week detailing a framework that could improve how Illinois funds its schools. The goal is for lawmakers to build off this bipartisan effort to ultimately enact a new and improved school funding formula.
Also this week, state workers represented by the union AFSCME began voting to authorize a strike.
State’s bill backlog grows
As vendors and healthcare providers who do business with the state of Illinois continue to wait months to be paid for services, a report from the Chicago Tribune this week highlights the dire scenario of Illinois’ backlog of unpaid bills if the state’s ongoing budget impasse continues in Springfield.
Unpaid bill estimates as high as $15 billion could be reality in Illinois by next July if lawmakers can’t come to agreement on a balanced budget proposal. The inability of the state to pay its bills on time also comes with a steep interest cost, to the tune of hundreds of millions of dollars. Last June, Illinois faced a bill backlog of $7.6 billion, but that has since grown to $10.7 billion. In addition to unpaid bills, current fiscal year spending is also on pace to be more than $5 billion out of balance – if passing a balanced budget remains elusive. Also this week, Fitch Ratings has downgraded Illinois’ $26 billion in general obligation bonds to BBB from BBB+. In issuing their report, Fitch’s noted the downgrade “reflects the unprecedented failure of the state to enact a full budget for two consecutive years…”
With the backlog and credit downgrade in mind, Senate leaders are taking the lead on tackling the state’s financial woes with negotiations continuing on a comprehensive budget framework that could ultimately put the state on a path toward a balanced budget. The framework includes budget cuts, as well as structural reforms that would grow Illinois’ economy, create jobs, and help the state regain its fiscal footing.
Senate could vote on budget framework
The Illinois Senate could vote next week on a bipartisan budget framework that would produce a balanced state budget, move Illinois forward economically and in job creation, and turn Illinois around fiscally.
The proposal includes budget cuts and critical structural reforms that will bring stability to Illinois, efforts that have been insisted upon by Senate Republicans. These include a property tax freeze, procurement reform, mandate relief, making it easier for local governments to consolidate, and workers’ compensation reform.
“We have to get the state on a path with a sustainable, balanced budget, and the reforms that will keep us there,” Senate Republican Leader Christine Radogno (R-Lemont) said Jan. 26 to the full Senate. “We need to do this for the good of the state.”
The budget framework also includes legislation that would fund public universities, mental health providers, addiction treatment centers, senior programs, breast and cervical cancer screening programs, youth services and programs for victims of sexual assault for the rest of the fiscal year (through June). These areas have not been receiving funding since the emergency stopgap budget expired Jan. 1.
Senate lawmakers return to the Capitol Feb. 7.
Education Funding Reform Commission issues framework for school funding solution
The Education Funding Reform Commission issued its report to the General Assembly Feb. 1, highlighting ideas for how the legislature could craft a bipartisan solution to the issue of creating a new and improved school funding formula. The bipartisan framework issued by the Commission comes after the group of 25 lawmakers from both parties and chambers and five members appointed by Gov. Bruce Rauner, met for 75 hours over the last six months.
In the report, the Commission says low-income children and those who live in areas of concentrated poverty require additional resources and attention to reach their academic potential. The Commission also concluded that as new money is added to the education funding formula, it will be distributed first to those districts farthest from adequacy targets. They also agreed that district-authorized charter schools should receive adequate funding that is equitable to the funds allocated to district-managed public schools on a per pupil basis and consolidation in certain areas of the state is important, but that the solution to this problem should not be reached through funding formula reform.
Lawmakers agree that more work on the framework is needed, but remained committed to finding a lasting solution.
“This has been a robust, bipartisan and bicameral process,” said Illinois Secretary of Education Dr. Beth Purvis, who chaired the Commission. “I am incredibly thankful that these really dedicated members of the General Assembly and the Governor’s appointees were able to come and have substantive conversations in which children were at the center of the decision-making.”
Over the course of the meetings, lawmakers listened and asked questions to a wide range of experts in the education field. Lawmakers discussed issues such as the “hold harmless” provision or in other words, ensuring no school district loses funding regardless of its make-up, funding distribution models, the relationship between school funding, mandate relief, workforce readiness, and property taxes, reviewing the “evidence-based” approach to funding education, exploring best practices in school funding, and several other topics.
Unionized state workers begin voting to authorize strike
With contract negotiations stalled between AFSCME (American Federation of State, County, and Municipal Employees) Council 31, Illinois’ largest public employee union, and Gov. Rauner’s administration, members of AFSCME began voting this week to authorize a strike. The vote will continue through Feb. 19.
If members vote to strike, it doesn’t necessarily mean the union will go on strike. It does, however, give AFSCME’s bargaining committee the ability to call a strike in the future. The strike vote comes on the heels of the Illinois Labor Relations Board in November declaring the two year old talks between the union and the administration are at impasse. That ruling allowed the administration to implement its last and best offer and allowed the union to vote on walking off the job. Gov. Rauner hasn’t been able to fully implement his offer yet, as in December, a St. Clair County judge issued a temporary restraining order on the administration from imposing its terms.
AFSCME Council 31 has never gone on strike. While the union represents 38,000 employees, 8,000 of those employees are not allowed to participate in the strike vote or strike at all due the nature of their job in areas such as Corrections and Juvenile Justice.