IRSI gives you a glimpse of the reality of Illinois public servants

HOUSE AND SENATE PASS BUDGET – NOW WHAT?

After a record breaking 71 days into the overtime session the House and Senate have passed a budget and it now awaits Governor Blagojevich’s signature.  However, the Governor has given no indication if he will sign, veto or simply do nothing with it.  His office has stated the budget doesn't adequately fund health care, state infrastructure and other needs.

 

The budget has $600 million in new funding for education and increased funding for human service providers.  Additionally, nursing home rates were increased, but no money was allotted for the CTA or the Governor’s health care plan.  Additionally the budget included the full pension payment but made no reform to the funding structure which is the source of the pension funding problem.

 

View the legislation – HB 3860

 

Over the weekend Governor Blagojevich continued to call the General Assembly into special session.  Just 11 members (six of 118 representatives and five of 59 senators) showed up and those who did called the session to order and then quickly adjourned. 

 

VETO PROF?

For the most part, the General Assembly feels they have done their job and sent a budget to the Governor.  The budget passed by a wide margin, so even if the Governor vetoed the bill, it seems there would be enough votes to override that veto. 

 

House lawmakers voted 99-9 for the budget plan and would need 71 votes to override a Governor’s veto.  In the senate, the budget passed by a 52-5 vote and would need 36 votes to override a veto.

 

PAYCHECKS?

While a lawsuit filed by AFSCME, a union representing nearly 40,000 state employees, found that state employees should be paid with or without a budget, providers that receive grants from the state for social services will suffer during the impasse as they will not receive their funding until the budget is signed into law.

 

PORK!

Many of you have probably read that the budget is laden with pork.  So what does that mean?  Well this budget has an estimated $200 million ($650,000 for each house member and over $1 million for each senate member) in member projects spelled out in the legislation.  In the past, budgets have simply included lump sums for each legislative caucus, giving no indication of how the money ultimately would be spent. This year, however, three of the four caucuses individually appropriated each project by line item in the budget. Only Senate Democrats are using the lump-sum approach.

 

As for the term “pork,” while it might make a good story, we really don't have to change the state's name to "Illinoink".  In the aggregate, the cost of all projects designated "pork" in the budget is roughly $200 million.  It is not necessarily wasteful spending, but state dollars that go to local communities for things that taxpayers want and need.  That includes funding for the Waterman Public Library for technology improvements, the DeKalb Egyptian Theatre for a renovation project and the Rochelle Senior Center for infrastructure improvements.  “Pork” also funds fire and police trucks and equipment and parks. 

 

Now, any expenditure of public money that isn't legitimate is inexcusable.  But $200 million is less than one percent of the state budget, and it's not clear that all this spending really constitutes “pork.” Even if it did, eliminating it wouldn't dent Illinois' fiscal problems. 

 

 

THE CAPITAL BUDGET UPDATE

A sorely needed $20 billion capital budget is going nowhere.  In the senate committee, Republicans withheld their votes from a bond authorization bill that would have funded the capital plan.  The Republicans said they were concerned about getting assurances that their projects would come to fruition.  Senate President Jones then called the capital budget “dead.”

 

For more information contact Chrissy Mancini, Director of Budget and Policy Analysis at cmancini@ctbaonline.org

 

CIGARETTES AND GAMING ARE NOT THE ANSWER -

WHY THERE IS STILL A CHANCE FOR REAL REVENUE REFORM!

So just how is this budget balanced considering lawmakers are required under the Illinois constitution to do so?  Well, this budget is “balanced” based on projected natural revenue growth and closing $125 million in corporate tax expenditures.  However, if revenue growth falls short of projections next year, the state will not have enough revenue to fund this budget in its entirety. 

Given the fact that last year’s budget was balanced on faulty premises (underfunding the state’s pension systems and deferring payment owed to medical professionals) the state is starting out with a $3.2 billion deficit.  It is now clearer than ever that Illinois needs to reform its income and sales taxes for a new reliable and sustainable revenue source.  

 

The session isn’t close to being over and many still support a modest increase in the state’s income tax.  Speaker Madigan has said he's in favor of it, organized labor is strongly behind it and over 500 groups have signed the A+ Illinois letter to the Governor supporting it. 

View the letter

 

Income Tax Options: read a CTBA analysis on potential uses of, and revenue generate by, increasing the state income tax by 1% or 2%.

 

Read the CTBA report on why expanding the state sales tax to services is good for Illinois.

 

THERE’S STILL TIME

Call your legislators!  Use the A+ Illinois toll-free legislative hotline.  Even if you've called before, lawmakers need to hear from you while there’s still time.  Call: 1-800-651-0315

 

GAMING

It now seems like gaming is off the table.  Mayor Daley has been quoted as saying it doesn’t give enough money to the City of Chicago and it would be difficult to pass a new license for a Chicago casino without granting one to the south suburbs or downstate.  Even if a Chicago casino did pass, and it seems unlikely, it would be years before the state would see any new revenue, given the fact that it would take a long time to get the casino up and running.

 

Resources:

• Commission on Government Forecasting and Accountability report on gaming revenues, Wagering in Illinois: 2006 Update.

• Commission on Government Forecasting and Accountability report, Discussion on Riverboat Gambling in Illinois (2005) - complete with state by state comparisons.

• Testimony given in May 2005 by economist Dr. Victor Matheson to the Illinois General Assembly on the fiscal impact of riverboat gaming.

 

CIGARETTE TAX

A 90 cent increase in the state cigarette tax passed the Senate last week, however it has yet to pass the House and the increase wouldn’t take effect until next year, meaning for FY 2008 it is meaningless.  Additionally, cigarette tax revenues decline overtime as more smokers quit. Frank Chaloupka, a University of Illinois at Chicago economist who studies the impact of cigarette price hikes on consumption trends reports that based on the effect of past price increases across the U.S., each $1-a-pack boost translates into 130,000 Illinois kids who would not take up smoking and an additional 58,000 adults who would quit.  While this would be a great way to help stop people from smoking, it also means cigarette tax revenue declines on a yearly basis, making it a bad choice for reforming the Illinois revenue system.

 

Consider that just since 2003, cigarette tax revenues in Illinois have underperformed inflation by $231 million.  This makes the cigarette tax a bad candidate for a reliable sustainable revenue source to fund necessary public services.

 

Illinois Cigarette Tax Revenues

	FY 2004	FY 2005	FY 2006	FY 2007 Estimate	FY 2008 Projection
Actual	$742	$674	$625	$610	$600
Prior Year Inflation Adjusted CPI		$766	$697	$646	$631
Difference		-$92	-$72	-$36	-$31
Source: FY 2008 Budget Book and U.S. Department of Labor

 

To learn more, read an analysis from the Institute on Taxation and Economic Policy on why the cigarette tax is a weak source of revenue.

 

For more information contact Chrissy Mancini, Director of Budget and Policy Analysis at cmancini@ctbaonline.org

 

WHAT DOES THE BUDGET MEAN FOR EDUCATION?

The General Assembly passed budget grants about $600 million more in funds for education.  This includes a $400 increase in the foundation level, bringing it to $5,734 per student.  The budget also increases the reimbursement rates for Mandated Categorical Grants (Special Education, Transportation, Free & Reduced Lunch/Breakfast) to 100% and increases the special education personnel reimbursement rate.  Funding for Gifted Education is reinstated at $5 million. 

However, the bill isn't the long-term solution to school-funding problems that many people expected when the legislative session began.  Further, it won’t put a dent into the funding crisis many districts face, let alone provide more money for school capital expenses or the increased cost of educating at risk and special ed students.  Further, this budget does not address Illinois’ over-reliance on property taxes to fund education or provide any relief to homeowners and other property taxpayers. 

This education budget is a continuation of the status quo and does nothing to eliminate the gap between local wealth and school funding or increase the state’s share in funding the cost of education.  The passed budget guarantees the education funding responsibility will continue to be placed on the shoulders of local property owners.

Resources:

 

CTBA Talking Points for FY 2008 School Funding Reform

A+ Illinois Statement on the Passed Budget

Ministers March for Schools at State Capitol, Meet with Gov. Blagojevich

 

For more information contact Chrissy Mancini, Director of Budget and Policy Analysis at cmancini@ctbaonline.org

 

 

IRSI Gives You a Glimpse of the Reality of Illinois Public Servants

 

For more information on Illinois Public Employee Retirement Systems please contact,

Jourlande Gabriel,

Director of the Illinois Retirement Security Initiative,

at (312) 332-1103 or jgabriel@ctbaonline.org.

 

WHAT? Illinois Youth - Ready for Life: Teen Poverty & Youth Development Project

WHEN? August 14, 2007, 9:00 AM to 11:00 AM

WHERE? UIC Student Center East, 750 S. Halsted, Rm 302, 3rd Floor Tower, Chicago
For more information, click here to view the flyer.

 

WHAT? Illinois Youth - Ready for Life: Teen Poverty & Youth Development Project

WHEN? August 16, 2007, 9:00 AM to 11:00 AM

WHERE? Rend Lake College Market Place, 321 Potomac Blvd., Rm. 354 A/B, Mt. Vernon
For more information, click here to view the flyer.

 

WHAT? Moving from Poverty to Opportunity Action Forum: DeKalb, Kane, Kendall and McHenry Counties

WHEN? August 16, 2007, 6:30 PM to 9:00 PM

WHERE? Gayle's Memorial Missionary Baptist Church - 730 Gillet Avenue - Aurora

For more information, click here to view the flyer.

 

WHAT? State of Work Illinois Community Forum - Effingham

WHEN? Tuesday August 21, 12:00 to 1:30

WHERE? Crossroads Workforce Center, 1901 S. 4th St., 2nd Floor

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

 

WHAT? Moving from Poverty to Opportunity Action Forum: Chicago Southside

WHEN? August 22, 2007, 6:30 PM to 9:00 PM

WHERE? The Englewood Corps & Red Shield Center - 945 W. 69th Street - Chicago

For more information, click here to view the flyer.

 

WHAT? State of Working Illinois Community Forum - Carbondale

WHEN? Tuesday, August 28,  3:00 to 5:00

WHERE? TBA

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

 

WHAT? Single-Family Development: Community Housing Developers Institute

WHEN? September 11-12, 2007

WHERE? ICAA Training Facility, 3435 Liberty Drive, Springfield, IL
Contact: nate@housingactionil.org or 312-939-6074 x 201 More info: www.housingactionil.org.

 

WHAT? State Budget Briefing

WHEN? Monday, September 17,  9:00 to 11:00

WHERE? Spertus Institute – 618 S. Michigan, Chicago

The Center for Tax and Budget Accountability and the Donor’s Forum host a briefing with key state leaders about this year’s budget.

Register online

Contact Chrissy Mancini at cmancini@ctbaonline.org for more information

 

WHAT? State of Work Illinois Community Forum - Vermilion County

WHEN? Tuesday, September 18, 3:00 to 5:00

WHERE? University of IL Extension - Vermilion County 12190 U.S. Route 150 Oakwood, Il

View a flyer

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

 

WHAT? Your Pension and You

WHEN? Thursday, September 20, 3:00 to 5:00

WHERE? UIC Medical Center

Contact Carol Humble at JHumble368@aol.com for more information

 

WHAT? National Association of Social Workers (NASW) IL Chapter’s Statewide Conference, “Bridging Health Disparities: Help Starts Here”

WHEN? September 24-26, 2007

WHERE? Holiday Inn Chicago Mart Plaza, Chicago, IL

Click here for more information. 

 

WHAT? State of Working Illinois Community Forum - Peoria

WHEN?  Tuesday, September 25,  7:30 am to 9:00 am

WHERE? The Central Illinois Workforce Development Board

               One Technology Plaza

               211 Fulton Street, Suite 300

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

 

WHAT? State of Working Illinois Community Forum - Macomb

WHEN?  Friday, September 28,  10:00 am to 12:00 pm

WHERE? TBA

Contact Dia Cirillo at dcirillo@ctbaonline.org for more information

The forum, funded by the Grand Victoria Foundation, will bring together key leaders in the area to discuss the regions economic trends and opportunities.

 

WHAT? Property and Asset Management: Community Housing Developers Institute

WHEN? October 16-17, 2007

WHERE? ICAA Training Facility, 3435 Liberty Drive, Springfield, IL
Contact: nate@housingactionil.org or 312-939-6074 x 201 More info: www.housingactionil.org.

 

WHAT? Affordable Housing Month

WHEN? November 1-30, 2007

WHERE? Public education events and activities to be held throughout the state
Contact: nate@housingactionil.org or 312-939-6074 x 201 More info: www.housingactionil.org.