What Happened in Springfield Last Week??
A State Budget, Sort of

Posted on June 4, 2010 by Dan Lesser

The General Assembly stands adjourned, for now, as legislators took the half-baked state budget pie out of the oven before it could finish cooking so they could rush off to appear at the Memorial Day weekend parades. 

Heading the list of unfinished business is the failure to provide for paying off the state’s $3.7 billion fiscal year 2011 pension obligation. The Governor had sought authority to borrow these funds, as Illinois did last year, but the General Assembly declined his request. 

Since borrowing authorization requires a 3/5 majority, at least one Republican vote was needed in the House. Two retiring Republicans voted in favor and one Democrat voted against, so the pension borrowing measure cleared the House by the narrowest of margins. In the Senate, however, where no Republican votes were needed (and none were forthcoming), two Democrats blocked approval of the pension borrowing authority on the grounds that it would simply aggravate our fiscal problems without being part of a plan, including a revenue increase, to actually solve our fiscal mess.

So where does the General Assembly’s decision not to approve borrowing authority to cover the FY11 pension obligation leave us? The budget approved by the General Assembly assumes that $6 billion in outstanding bills will be unpaid at the end of FY11. If FY11’s pension payment cannot be borrowed, then another $3.7 billion must be added to the $6 billion in unpaid bills that the budget is predicated on, making the grant total of unpaid bills at the end of FY11 $9.7 billion. Or, the pension funds could cannibalize themselves, selling off investments to meet current obligations and thus dramatically lowering future investment income. Given these unpalatable options, the Senate’s leadership may continue trying to find the one vote needed to approve borrowing $3.7 billion to cover the FY11 pension payment.

The fiscal year 2011 budget passed by the General Assembly (H.B. 859) resembles last year’s. Rather than making line-by-line appropriations as in the past, and as the Governor had proposed, the General Assembly continued last year’s practice of providing lump-sums to the agencies and leaving it to the Governor to decide which programs to fund and which programs to cut. The overall amount appropriated for grants remained about the same as last year but the appropriation for state operations was cut by 5 percent. The Governor was again given $3.2 billion in unallocated funds to spread around as he sees fit. Different state agencies fared differently – the Illinois Department of Human Services, for example, was appropriated only $2.5 billion, $1.5 billion less than its current appropriation of $4 billion, although the Governor can use the $3.2 billion in unallocated funds to cover some or all of this gap.

The General Assembly also passed an Emergency Budget Act, which gives the Governor sweeping powers to make cuts without legislative review (S.B. 3660, House Amdt. 9). It allows him to put more than $2 billion into a contingency reserve that could not be spent by the agencies. It also makes all state programs, whether authorized or required by state law, “subject to appropriation,” i.e., not operational unless supported by an appropriation that is not otherwise obligated or reserved. These emergency powers expire on January 9, 2011, at the end of Governor Quinn’s term.

While abdicating responsibility for making unpopular budget cuts, the General Assembly again avoided consideration of the only viable alternative for solving our budget mess – raising revenue, as the Responsible Budget Coalition has advocated, along the lines of House Bill 174, which would increase the individual income tax rate from 3 to 5 percent and broaden the sales tax base to include services, raising approximately $6 billion in annual revenues. The General Assembly also chose not to capture $320 million in annual revenue from a proposed cigarette tax increase. The General Assembly did approve a tax amnesty plan whereby tax cheats can pay off their debts without penalty, which is estimated to raise $250 million (S.B. 377, H. Amdt. 3). The legislators threw $50 million of this back by approving a “sales tax holiday” for back-to-school purchases in August.

The budget also relies on various one-time revenue sources, including $1.2 billion obtained by borrowing against the proceeds from the remaining 17 years of a tobacco settlement fund.

As the Illinois General Assembly was wrapping up last week, word came that the U.S. House of Representatives had stripped the enhanced Federal Medical Assistance Percentage (FMAP) six-month extension from the unemployment insurance extension package, considered the best vehicle for its enactment. Unless restored by the Senate and agreed to by the House-Senate conferees, or included in a different legislative package, this continuation of ARRA federal fiscal relief to the states will come to an end, blowing another $700 million hole in the FY11 state budget.

In sum, regardless of whether borrowing to pay this year’s pension tab is approved, the state will continue to lack the revenues to pay its bills. By the time this fiscal year comes to a close at the end of June, Illinois will have racked up $6 billion in unpaid bills. The budget proposed by the Governor and approved by the General Assembly assumes there will still be $6 billion in unpaid bills at the end of the next fiscal year in June 2011. Nobody believes that this number will not grow. While the Governor will make some visible cuts to programs, far more insidious and lethal will be the state’s continuing and expanding practice of not paying its bills. State-funded providers of services to young children, the elderly and disabled, the homebound, the developmentally disabled, the mentally ill, those addicted to alcohol and controlled substances and so on will not have the plug pulled on them all at once. Rather, they will die a slow and agonizing death as month by month the state’s payment for services rendered does not arrive and, one by one, they are forced to give up the ghost.   

List of Enacted State Budget-Related Legislation:

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The incalculable cost of the General Assembly's budget

Posted on June 22, 2009 by John Bouman

The Illinois General Assembly meets this week to attempt to resolve the budget.  Failure carries with it incalculable costs that prolong the recession and hit every legislative district. 

The impending cuts directly impact hundreds of thousands of children, seniors, people who are sick and hurt, the unemployed, and workers.  The costs to them are staggering, but there are other costs:

  • The state will get sued repeatedly.  Some of the cuts would violate federal or state laws.  Some would violate existing court orders and consent decrees.  The Attorney General’s office must defend all these cases, but it has its own shrunken budget and would be swamped.
  •  Proposed cuts violate the condition in the federal stimulus law that states not cut Medicaid.  This will cost us billions in federal stimulus funds.    
  • The state would also lose massive sums of federal matching funds and block grant dollars across a range of programs.
  • These lost federal funds come out of the Illinois economy – it is money not spent on goods and services in our state.
  • The Department of Human Services estimates that the cuts to its budget would cause a loss of 170,000 jobs outside of state government.  These are entrepreneurs, independent caregivers, and employees of non-profit or for-profit businesses that provide or support the programs in various ways.
  • Legislators have spent their careers building important programs that will be gutted or eliminated by this process.  Time, talent, and hard-won accomplishment would be wasted. 

The General Assembly’s budget would prolong the recession and hurt the state, not just those who need the programs.  We need to fund the government and not bring about all of the above incalculable costs.

 

 

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A Victory in Illinois: Making the Case for Inclusion of Workplace Protections in the Federal Violence Against Women Act

Posted on June 18, 2009 by Wendy Pollack

The effects of domestic and sexual violence are not checked at the door when a survivor of violence enters her place of employment. Oftentimes individuals who experience domestic or sexual violence report missing work due to the violence in their lives, enduring harassment by the abuser at work, suffering health problems that affect job performance, or losing employment due to the violence. A study by the U.S. Department of Justice found that, during a 12-month period, more than half of stalking victims lost five or more days of work, and about 130,000 stalking victims reported that they were fired or asked to leave their jobs because of the stalking. Yet, according to a survey conducted by the Bureau of Labor Statistics, over 70 percent of U.S. workplaces have no formal program or policy that tackles workplace violence.

It’s time for the federal government to act, following Illinois’ example, where late last month the Illinois General Assembly passed an important piece of legislation that is a notable victory for survivors of domestic and sexual violence, their families, and advocates. The Illinois Senate voted unanimously to concur with House Amendments No. 1 and No. 2 on Senate Bill 1770, an amendment to the Victims’ Economic Security and Safety Act (VESSA). Originally enacted in 2003 with then–State Senator Barack Obama as principal sponsor, VESSA provides unpaid, job-guaranteed leave and nondiscrimination protections for eligible employees who are survivors of domestic or sexual violence or who have a family or household member who is a survivor of domestic or sexual violence.

Since its enactment in 2003, VESSA has provided significant benefits and workplace protections for Illinois employees. VESSA allows a covered employee to take up to 12 weeks of unpaid time off from work to deal with the violence in her lives without losing her job during a 12-month period. VESSA also prohibits an employer from discriminating, harassing, or retaliating against an employee who is exercising her rights under this law.

Once signed into law, the amendment will expand VESSA to cover more employees in the private sector by decreasing the private employer threshold number of employees from 50 or more to 15 or more. The amendment adds language providing that an employee who works for an employer with at least 15 but not more than 49 employees may take up to 8 work weeks (rather than 12) of unpaid, job-guaranteed leave to deal with domestic or sexual violence during a 12-month period.

VESSA has proven to be a lifeline for employees coping with domestic or sexual violence. While VESSA allows for several weeks of leave, most employees who take leave take significantly less. And, of the 107 complaints that have been filed since enactment, most VESSA claims notably allege discrimination by the employer.

With the recession being a perpetual reminder of the crucial nature of job preservation and economic stability, the passage of S.B. 1770 is a surefire victory that will help more survivors of domestic and sexual violence maintain their employment and economic stability as they strive to remain safe and ultimately escape a violent situation. Action on the federal level is more pressing than ever.

 

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