SPRINGFIELD — Democratic Gov. J.B. Pritzker framed Illinois’ $3.2 billion structural budget deficit as having three possible solutions Thursday, March 7: a 15 percent across-the-board cut to state spending, including education; a 20 percent income tax increase on every Illinoisan; or his preferred solution of a graduated income tax structure, which he claims will lower taxes on 97 percent of Illinoisans.
At a press conference in his office, Pritzker laid out the first public rate structure for the graduated income tax, which was a frequent talking point of his successful gubernatorial campaign. He detailed a proposal to lower rates for earners pulling in less than $250,000 while raising an estimated $3.4 billion in added revenue by hiking up the rate on income over $250,000.
Ultimately it would be up to the voters as to whether the graduated tax structure can become law. If three-fifths of the General Assembly votes to put the proposed constitutional amendment on a ballot, the public will have a chance to vote on the measure in November 2020.
If approved, the Legislature would then have the authority to implement Pritzker’s proposed rates or ones of its choosing.
Opponents said if the voters approve the amendment to change Illinois’ flat tax — which is currently 4.95 percent — there’s no telling whether the rate structure remains favorable to middle-class earners in the future.
Pritzker’s current proposed rates would range from 4.75 to 7.95 percent, and anyone making less than $250,000 per year would see their taxes decrease under the plan. The details came in an 8-page packet containing the basics of his proposal, which is not yet on file as official legislation.
The taxes would be applied marginally, meaning 4.75 percent rates would be applied to an earner’s first $10,000 of income, a 4.9 percent rate would apply to the next $90,000 of income, and a 4.95 percent rate would apply to an earner’s income from $100,001 to $250,000.
According to the plan, that means taxpayers in those brackets would pay a lower rate than Illinois’ current 4.95 percent rate which applies to every penny of income.
A 7.75 percent tax would take effect for income between $250,001 and $500,000, and a 7.85 percent rate would apply to an earner’s next $500,000, up to $1 million.
When an earner hits $1 million of income, every penny they bring in would be taxed at a 7.95 percent rate.
The Illinois House Republican caucus has unanimously signed onto a non-binding resolution opposing the tax and saying there’s “no need to negotiate” between the caucuses, and Senate Republican Leader Bill Brady, of Bloomington, said his caucus is opposed to the proposal as well.
But Pritzker said bond markets and potential residents need to know Illinois is on a path to stability if they are going to do business in the state, and the graduated tax would put Illinois on that path.
The proposal would also increase the state’s current property tax credit from 5 percent to 6 percent and include a per-child tax credit of up to $100 for an individual making $80,000 or less or joint-filing family making $100,000 or less. The corporate tax rate would remain flat, with a 7.95 percent rate applying across the board. That’s a .95 percent increase from the current rate.
* * *
CHILD WELFARE: Labor officials who represent workers in the Illinois Department of Children and Family Services say staff shortages in that agency have been making it difficult for case workers to keep up with a large volume of reports about abuse and neglect.
But they also say the situation has been getting better in recent months, and they hope state lawmakers will provide additional funding in next year’s budget to address the problem further.
“This is a very long-running problem,” said Anders Lindall, a spokesman for the American Federation of State, County and Municipal Employees Council 31, which represents DCFS workers.
The question about staffing levels arose in the wake of the death of 2-year-old Ta’Naja Barnes, of Decatur, in February.
Her family was the subject of an open case at DCFS. It was officially closed before her death, despite the fact that an agency working on contract with the department had been notified of ongoing concerns about the welfare of children in that family.
Barnes’s death, in fact, occurred just weeks after DCFS’s Office of Inspector General released its annual report,which included a number of findings related to the death of another child — 17-month-old Semaj Crosby, who died in Joliet in 2017. The inspector general found agency understaffing had been a significant issue.
Anne Irving, who works as AFSCME’s liaison to DCFS, said staffing shortages continue to exist in some regions of the state — as measured by the B.H. consent decree — including the central Illinois region, which was short 12 investigator positions as recently as March 5. But the local office in Decatur, she said, is currently fully staffed.
Anders Lindall, a spokesman for the American Federation of State, County and Municipal Employees Council 31, said its members are supporting Democratic Gov. J.B. Pritzker’s budget proposal for DCFS, which calls for funding an additional 126 staff members, including investigators and other front-line child welfare workers.
AFSCME represents DCFS workers.
DCFS did not respond to multiple requests for answers to questions about its staffing levels or how it was responding to the Inspector General’s report.
But the agency’s interim director, Debra Dyer-Webster, told a legislative committee Tuesday, March 5 she is also hopeful lawmakers will address the staffing shortages.
* * *
CAPITAL NEEDS: The Illinois Department of Transportation was one among a variety of related local and state groups to talk about its funding needs for Illinois’ next major capital bill, which some lawmakers say they want by the end of the legislative session.
These discussions took place in a House subcommittee on capital needs Thursday, March 7, one of many gatherings held recently where industries relying on sound infrastructure in the nation’s central transportation hub could explain their requests to lawmakers.
While the assortment of statistics proving it varied, every group at the two-hour hearing agreed Illinois’ infrastructure is in poor condition and needs improvements.
Far and away the largest funding requests were from IDOT, which Omer Osman, the acting state secretary of transportation, said needs $13 to 15 billion over the next 10 years for the maintenance of state roads and bridges, with an additional $30 billion for upgrades and improvements to aviation, public transit, freight and passenger rail and new highways.
Springfield Republican Rep. Tim Butler said it’s more important to “get it right” than to rush a capital bill through without knowing how the state will fund it.
One option much-discussed was increasing the state’s motor vehicle tax, which currently sits at its 1991 level of 19 cents per gallon. Revenue from this tax is devoted exclusively to road and bridge needs.
Butler said he believes the state can pull more money for roads and bridges out of the gas pump without actually raising taxes.
Regardless, the legislature is not done hearing every group’s funding needs for infrastructure upgrades and replacements. The House Appropriations-Capital committee has similar hearings scheduled till mid-April, while the Senate has its own round of hearings.
“I’d love to have [a capital bill] done by May, but knowing how things work around here, I’m kind of skeptical that will happen,” Butler said.
* * *
REVENUE ESTIMATES: Illinois’ economy grew at a faster rate than expected in fiscal year 2019, but government forecasters warn of a potential economic slowdown as the state government prepares to pass an operating budget for FY2020.
At the Illinois House Revenue and Finance Committee meeting Thursday, March 7, Clayton Klenke, executive director of the Commission on Government Forecasting and Accountability, said Illinois’ growth in the 2018 calendar year should be considered “as good as it gets.”
Even so, he said, by the end of the fiscal year the state will have collected $184 million less than was accounted for during the enactment of the FY19 budget. The total collected was estimated at $35.3 billion, while the FY19 budget anticipated $35.5 billion in revenue.
That’s because of $300 million in revenue budgeted for the sale of the James R. Thompson Center in Chicago never materialized, and only $250 million of a budgeted $800 million in revenue resulting from inter-fund transfers was executed in the fiscal year.
The deficit was partially offset by greater-than-expected tax revenues, Klenke said. When the fiscal year ends on June 30, Illinois will have collected an estimated $450 million more than anticipated in income tax revenue and $84 million more than expected in sales tax revenue when the FY19 budget was approved.
Looking ahead to 2020, Klenke said an aggregation of economic forecasts predicts nation-wide economic growth of 2.5 percent in 2019 and 1.9 percent in 2020, down from 2.9 percent growth in 2018.
With those estimates, Klenke said projected revenue for FY20 is about $38.2 billion, which is about $140 million less than FY19 revenues. Despite the lower total, Klenke said actual growth of base funding, minus one-time revenues and transfers, is about $800 million.
HIGHER EDUCATION SPENDING: Higher education officials defended Gov. J.B. Pritzker’s proposed $137 million increase in higher education funding for next year before a key House committee on Thursday, March 7, while some lawmakers expressed skepticism the full request could be funded.
Nyle Robinson, interim director of the Illinois Board of Higher Education, called the proposal “the largest increase that higher education has seen, if passed, since Fiscal Year 2002.”
Included in Pritzker’s proposed budget is a $52 million increase, or about 5 percent, in operating funds for state universities; $13.9 million in new funding for community colleges; a $50 million increase for the Monetary Award Program, or MAP grants; a $10 million increase for the second year of the AIM HIGH financial aid program for first-year university students; $3.8 million for minority support programs at community colleges; $4 million for the Illinois Student Assistance Commission’s outreach services and operations; and $590,000 for the Illinois Math and Science Academy and the State Universities Civil Service Commission.
Pritzker has referred to those proposals as a “down payment” on revitalizing higher education after years of budget cuts and shortfalls.
Robinson said higher education took its biggest hit during the budget impasse of 2015-2017 when colleges and universities lost about $1.2 billion of state funding they were expecting to receive.
Some committee members, however, suggested a full 5-percent increase across the board may be difficult to fund.
One portion of the higher education budget that lawmakers may try to trim is the State Universities Civil Service System, an agency that performs centralized human resources functions for all community colleges and universities.
The committee will continue holding hearings into other segments of the proposed $3.4 billion higher education budget throughout the session as lawmakers work to put together a final budget for the upcoming fiscal year.
* * *
NURSING HOME REFORM: Senior care advocates promoted legislation Wednesday, March 6, that is aimed at enforcing minimum staffing mandates, limiting the use of psychotropic drugs and heightening transparency for care violations at Illinois nursing homes.
At an Illinois State Capitol news conference, representatives of the senior advocacy group AARP said Illinois nursing homes have the worst rate in the nation for patient-to-staff care hours per day, and the second-worst rate in the nation for giving antipsychotic drugs without a psychiatric diagnosis, according to a study conducted by the group.
AARP also said 39 percent of nursing homes in Illinois received a low quality rating in 2015 from the Centers for Medicaid and Medicare Services, a federal agency within the United States Department of Health and Human Services.
State Sen. Jacqueline Collins, a Chicago Democrat, is the Senate’s lead sponsor of Senate Bill 1510, the Illinois Nursing Home Residents’ Quality Care Initiative.
Collins said the bill would implement a fine structure for nursing homes that fail to meet minimum staffing requirements, and would require the Department of Public Health to build a more easily searchable database for nursing home violations.
Illinois statute already requires 3.8 hours of care each day per resident needing skilled care and 2.5 hours each day per resident needing intermediate care. Collins said the fines are needed for nursing homes to “really become accountable.”
The bill also requires informed consent, meaning a signature from a resident or their legal representative, before psychotropic drugs can be administered. It would also mandate documentation if a psychotropic drug was administered under emergency conditions, such as if patients were considered a danger to themselves or others.
* * *
BAG TAX: A bill levying a 7-cent tax on plastic and paper shopping bags advanced out of the state Senate’s revenue committee Wednesday, March 6, with its sponsor promising to bring an amended proposal back to the committee in the coming weeks.
There was unanimous approval to advance the bag tax, Senate Bill 1240, from five Democrats and two Republicans present at the committee.
The bill’s sponsor, state Sen. Terry Link, a Waukegan Democrat, said the legislation would be amended after negotiations with Democratic Gov. J.B. Pritzker’s office.
Pritzker’s proposed budget includes $20 million in anticipated revenue from the tax.
“I’m working with the governor’s office to get the bill that they want and we want together,” Link said.
Link’s bill in its current form levies a 7-cent tax, with 2 cents being kept by the retailer to cover the costs of implementing the tax.
The other 5 cents would be collected by the state, with 2 cents going directly to the general revenue fund and another 3 cents deposited in the Checkout Bag Tax fund, which would fund solid waste management programs in the counties in which the tax was collected.
Link said these distributions of the revenue would be subject to change after negotiations.
* * *
TOBACCO 21: Legislation raising the minimum age to purchase tobacco products in Illinois was expected for a vote in the Senate Wednesday, March 6, but the sponsor decided to hold back because of hesitation on the part of new members.
Sen. Julie Morrison, a Deerfield Democrat, said freshmen in her party had questions about the Tobacco 21 initiative. She said those members did not feel comfortable voting on the bill without being fully informed, so she held the measure.
In an effort to curb early addiction, the bill would prevent anyone under the age of 21 from buying products containing nicotine, including cigarettes, e-cigarettes, vapes and chewing tobacco, to name a few.
This is the fourth time in as many years the legislation has been introduced. Each time, opponents generally argue if 18 is old enough for an Illinoisan to enlist in the military, vote for a political representative or get married, it should be old enough to purchase a cigarette.
Republicans also take issue with the removal of penalties in current law for minors possessing nicotine products. Proponents argue the punishments should be for retailers who sell to minors.
Morrison said Wednesday she was still going to try to push her legislation through the Senate. It is unclear if the two chief sponsors are coordinating or working to advance their individual measures through their respective chambers.
* * *
GUN OWNERSHIP: A state senator is proposing legislation that would tighten gun ownership laws in Illinois and require law enforcement officers to confiscate weapons and ammunition from people who have had their firearms permits revoked.
Sen. Michael Hastings, a Democrat from the Chicago suburb of Tinley Park, said the bill is a response to a mass shooting Feb. 15 in Aurora where five people were killed by a man whose firearm owners identification, or FOID, card had been revoked because of a prior felony conviction.
“Because, the last thing I want is for somebody who’s a felon to have a firearm, and we saw the results of that in Aurora,” Hastings said Wednesday, March 6.
Hastings is proposing to add new language to the state’s gun laws to require the Illinois State Police to confiscate firearms and ammunition from any person whose FOID card has been revoked. It would also require state police to report that person’s name to the National Instant Criminal Background Check System.
His proposal would also add several new categories of people who would be barred from owning guns in Illinois, including people who have outstanding felony warrants anywhere in the United States, people who are subject to a protection from abuse order, people who have been dishonorably discharged from the military and anyone who is a fugitive from justice.
It would additionally impose stricter reporting requirements on local governments and prosecutors to report to the state police the names and other identifying information of anyone who has been convicted of a crime or judged to have a mental condition that would disqualify them from owning firearms so the state police could forward that information to the national criminal background database.
* * *
Chicago Democratic Sen. Heather Steans is sponsoring legislation that would address Illinois' suicide prevention strategy, which has not been updated since 2002. At a news event in Springfield Wednesday, March 6, 2019, she stood in front of an American Foundation for Suicide Prevention sign with flower petals on it, which represented individual suicides in 2017. (Capitol News Illinois photo by Grant Morgan)
SUICIDE PREVENTION: Chicago Democratic Sen. Heather Steans is sponsoring legislation that would create a new Office of Suicide Prevention within the state’s Department of Public Health.
The new office, staffed by a director and an undetermined number of dedicated personnel, would direct the existing Illinois Suicide Prevention Alliance to create a new state suicide prevention strategy, and then help implement it.
The Alliance’s current prevention strategy is based on the 2002 guidelines and recommendations of the U.S. Surgeon General. In 2012, however, the Surgeon General released new data and research, and updated its prevention strategy.
Steans’ bill would make the Illinois Alliance update its statewide prevention strategy based on these new findings.
AFSP Illinois co-chair Steve Moore said this translates to making sure health care systems recognize that primary care doctors are “the first line of defense against suicide,” and, more generally, put greater emphasis on training and intervention. This is because, according to the legislation, over 30 percent of people are receiving mental health care at the time of their suicide, while 45 percent have seen their primary care physician within one month of their death.
* * *
PRESCRIPTION DRUG COSTS: Illinois lawmakers heard stories Friday, March 1, about how the rising cost of prescription drugs is endangering the lives of many of the most vulnerable people in society – the poor, the elderly and people with HIV – while advocates for those people laid the blame squarely at the feet of big businesses.
Meanwhile, those businesses – including drug manufacturers, insurance companies, and a little-known industry called pharmacy benefit managers – fought back, proclaiming their innocence and, at times, blaming one another for putting life-saving medicine out of reach for many Americans.
All that played out during a special joint meeting in Chicago of two House committees that are considering legislation to rein in the cost prescription drugs in Illinois, including the possibility of imposing price controls and punishing what some lawmakers consider to be price gouging.
“I think the one lesson we have learned here is that we have a lot of work today,” said Rep. Will Guzzardi, a Chicago Democrat who chairs the Prescription Drug Affordability and Accessibility Committee and is a lead sponsor of some of the legislation. “There are a lot of aspects of this industry that are harming consumers, and we need to step in and intervene to protect folks.”
Guzzardi’s committee, along with the House Insurance Committee, met for three and a half hours to hear consumer advocates, community pharmacists, the insurance industry and drug manufacturers.
* * *
MANAGED CARE REFORM: Democratic state leaders said Tuesday, March 5, that Illinois’ “managed care” Medicaid system is threatening the viability of hospitals and access to health care in many parts of the state, and they are pushing legislation they say would reform the system.
“We have a broken managed care program in Illinois, and it’s threatening the very future of our health care providers and the patients they serve all around this state,” Senate Majority Leader Kimberly Lightford said during a news conference unveiling the legislation.
Under the managed care system, which Illinois launched in 2011, insurance companies are paid a flat, per-patient monthly fee to manage the care of most Medicaid recipients. These managed care organizations, or MCOs, are required to reimburse health care providers and make sure patients receive follow-up care with specialists, therapists or rehabilitation facilities following a medical procedure.
In theory, the managed care system is supposed to improve patient care and lower costs by avoiding preventable emergency room visits or hospital readmissions.
But Lightford, a Democrat from the western Chicago suburb of Maywood, argued that neither of those goals has been achieved. Instead of managing care, she argued, the MCOs are merely managing costs through excessive denials of claims and delayed payments, especially for facilities known as safety net hospitals, which serve large numbers of Medicaid and uninsured patients, and small, rural “critical access” hospitals that have 25 or fewer beds.
Lightford and Rep. Camille Lilly, a Chicago Democrat who is vice chair of the House human services budget committee, are sponsoring legislation that would require MCOs to make expedited payments to critical access and safety net hospitals. It would also require MCOs to promptly prepare follow-up care management plans after a patient is discharged from a hospital, and to update their health care provider rosters on a weekly basis to prevent unnecessary claim denials.
* * *
EDUCATION FUNDING: During just her third day on the job, Illinois State Board of Education Superintendent Carmen Ayala told a Senate appropriations committee Tuesday, March 5, she was encouraged by Gov. J.B. Pritzker’s public education funding proposal for fiscal year 2020.
That’s because the proposal adds $375 million to the state’s evidence-based funding formula and $100 million to early childhood education among funding increases in other areas.
“The need for funding in Illinois, as you know, is very great,” Ayala said. “Years of proration and the budget impasse inflicted much damage on our schools and our communities. Fortunately, thanks to your leadership, Illinois passed landmark education reform … and held up the state’s commitment to increasing education funding by $350 million in fiscal year 2019.”
Pritzker’s proposed FY20 budget adds $25 million on top of the $350 million in added funding called for each year by the landmark 2017 education funding reform. The $375 million in new funding will first be distributed to districts that are furthest from adequacy under the formula.
While Ayala said the increased funding will greatly benefit education, it would take an added $660 million annually for every district to reach adequacy goals by 2027.
“Obviously, there’s room for growth,” she said.
Ayala also praised the $100 million increase for early childhood education funding, which goes above and beyond the state’s minimum required funding level of $50 million for such programs.
* * *
LICENSE PLATES: Illinois law enforcement groups want to pump the brakes on proposed legislation that would do away with a requirement that Illinois cars display a front license plate.
A bill proposed by East Dundee Republican Rep. Allen Skillicorn would instruct the secretary of state’s office to issue only one license plate to drivers, instead of two, for cars, trailers and trucks. The plate would attach to the rear of the vehicle.
But removing the front plate would make it harder for police officers and other law enforcement officials to do their jobs, Ed Wojcicki, executive director of the Illinois Association of Chiefs of Police, said Tuesday, March 5.
“It would make it much more difficult to identify people who violate the law,” he said.
Opposition also is coming from the Illinois Sheriffs’ Association, a spokesperson for the organization said, because the front license plate is a “tool we use in our toolbox. We don’t need any more restrictions.”
The Illinois Tollway Authority also remains opposed to the legislation, said Senior Communications Manager Dan Rozek.
Illinois spends $3.20 to manufacture two license plates, according to a news release from Skillicorn’s office. Making only one would save 60 cents.
“Changing the plate requirement from two to one will save the state around $800,000,” he said.
* * *
MINORITY ENROLLMENT: The number of African-American students enrolled at public colleges and universities in Illinois has fallen nearly 26 percent in recent years, while enrollment among other minority groups increased.
Those figures were contained in the most recent analysis of underrepresented groupsin the state’s higher education system, which was delivered to the Illinois Board of Higher Education on Tuesday, March 5.
“We’ve done studies in the past and typically, students have difficulty as far as financing college,” Arthur Sutton, IBHE’s deputy director of diversity and outreach, said of the latest numbers. “Having to work and not being able to afford to go to college, that could be a circumstance that prevents someone from going to college.”
The latest annual report examined the five-year period from 2013 to 2017. During that period, enrollment among African-American students in Illinois fell 25.9 percent, to 54,370 students.
Over that same period, enrollment among Hispanic students grew 6 percent, to 95,167. Asian student enrollment grew 1.9 percent, to 28,745, and enrollment among all other underrepresented groups, including Native Americans, Pacific Islanders and disabled individuals, grew 5.1 percent, to 12,439.
The decline in African-American enrollment was especially sharp in the state’s community colleges, which saw drops of just more than 30 percent. The drop-off was less extensive among undergraduates at public universities, where African-American enrollment fell 14 percent.
* * *
SOUTHERN ILLINOIS INFRASTRUCTURE NEEDS: Local officials from southern Illinois told state lawmakers Monday, March 4, their highest priorities in a hoped-for public works package are upgrades to college and university campuses and expansion of regional highways. That expansion would include a proposed “Southwest Illinois Connector” linking the Carbondale and Murphysboro areas to the eastern edge of the St. Louis metropolitan area.
“I don’t think you can separate roads from an institution like (Southern Illinois University)-Carbondale,” said Marc Kiehna, a Randolph County commissioner and a leading proponent of the proposed connector highway.
Kiehna was one of several people who spoke during a joint meeting in Edwardsville of two Senate subcommittees that are putting together a proposed multi-billion-dollar public works package, known among lawmakers as a “capital bill.”
Illinois last approved a major public works package in 2009, during Democratic Gov. Pat Quinn’s administration, and several people told the Senate panel that another is long overdue.
“During the last four years, we had a governor that wasn’t helpful to Illinois, did not want to invest in our state and was willing to let our universities, roads and bridges crumble to achieve his political goal,” said Charles “Totsie” Bailey, of the Southwest Illinois Building and Trades Council, referring to former Republican Gov. Bruce Rauner.
Officials from the Southern Illinois University system presented a long list of projects, starting with an $83 million plan to refurbish the aging mass communications and media arts building and a $98 million science building on the Carbondale campus. The university is also hoping for a new education building for its medical school campus in Springfield.
In addition to those projects, however, John Dunn, interim chancellor of the SIU-Carbondale campus said the school has a backlog of about $700 million worth of “deferred maintenance” projects.
* * *
MARIJUANA DEMAND: A fully-matured adult-use marijuana program in Illinois could produce between $440 million and $676 million in annual revenue, and the expected demand would be far greater than the state’s current supply, according to a demand study released Friday, March 1.
The study was conducted by Freedman and Koski, a Colorado consulting firm which advises local governments on the implementation of marijuana legalization. It was commissioned by state Rep. Kelly Cassidy and state Sen. Heather Steans, both Chicago Democrats who have been working on legalization efforts for the past two years.
Illinois would have to produce 350,000 to 550,000 pounds in dried cannabis plants each year to meet the expected demand, the study said. The state’s existing industry could supply between only 35 percent and 54 percent of that number. The bill’s sponsors said the expansion of the industry will help increase minority-owned business inclusion.
“We’re contemplating additional license categories such as craft cultivation, transportation and processing to ensure that everyone is at the table,” Cassidy said. “These will create space for more innovation and entrepreneurship in the industry, but more importantly, provide opportunity for more diversity in an industry with a pressing need for it.”
The revenue and usage estimates were determined by using other states with legalized marijuana as a baseline, while factoring in Illinois’ usage and tourism rates among other demographic factors. Illinois would become the second-largest of the 11 states to legalize adult-use cannabis and the third-largest jurisdiction in the world after Canada and California.
The tax revenue estimates were based on a total mature-market marijuana industry revenue number of $1.69 billion to $2.58 billion, which was determined by medicinal prices and the usage estimates. These revenues, taxed at an assumed rate of 26.5 percent, would produce between $443,690,100 and $676,481,400 annually.