State Representatives Kelly Burke and Fran Hurley voted “yes” Thursday as the Illinois House overrode the Governor Bruce Rauner’s veto of the first budget for Illinois in 3 years.
Democrat budget leader, Representative Greg Harris of Chicago, issued a press release hailing the vote to override the Governor’s veto. “This was despite of the continual efforts of Gov. Rauner, his cronies and their dark money Super-PACs from trying to derail all progress in the House and Senate to reach agreement. The volume of misinformation and the hateful, often violent messaging has been breathtaking. I cannot express enough thanks to both the Democratic and Republican members of the Senate who took an early lead in moving this forward and to my Democratic and Republican colleagues in the House who put State before politics and party to get the job done.”
Harris outlined the details of what he claimed was a balanced budget package:
Cuts over $3 billion from current spending levels.
Pays down $8 billion of our backlog of old bills.
Closes tax loopholes.
Spends less than the Governor’s introduced budget.
$1.4 billion in pension reform savings
Same income tax rate as the Republican proposed tax increase (yes. The same)
$350 million more for K-12 education, as well as $50 million increase for early childhood education.
Restores Research and Development Tax Credit and expands to the Manufacturing Equipment tax credit to attract new businesses and jobs to Illinois
There are 3 bills in the budget package:
The Budget Plan claims the following accomplishments:
$1 billion in savings from across the board budget reductions to state operations and bureaucracy
$350 million increase for Elementary and Secondary Education as part of the Evidence Based Model of school funding reform
$50 million increase for Early Childhood Education
Increase in proration for Student Transportation to 84.6%
Full funding for Bilingual Education
$3.2 million increase for Agricultural Education
$15 million increase to After School Programs
$8.5 million increase to Soil and Water Conservation Districts
$10 million increase to Cooperative Extension Services, County Fair and Agricultural Societies
$19 million in Job Training Grants
Both State and Federal LIHEAP fully funded
MAP grants increased by 10%
Operations of colleges, universities and community colleges funded at 90% of FY15 levels
Fully fund Community Care Program for seniors (CCP). No funding for Governor’s proposed CRP program
$10 million increase in Meals on Wheels for Seniors
Fully funds Medicaid
Fully funds pension and group health
Provides rate increases for disability, home service, senior services, mental health, substance abuse and SLF workers
Restores childcare assistance to 185% of FPL and restores access to families enrolled in education or training programs cut by the Governor
Fully funds Domestic Violence Shelters
Increases funding for violence prevention, mental health, substance abuse, services for at-risk youth, after school programs and Ceasefire
Restores Governor’s cuts to DD programs, Epilepsy Program, Autism Program, Teen Reach, Immigrant Integration and Welcoming Centers, Arc of Illinois, Homelessness Prevention and Homeless Youth services, Children’s Place, Youth Summer jobs and others
Increases funding for HIV/AIDS and Breast and Cervical Cancer screening and treatment
Funds the new Chicago Veteran’s Home
The plan to raise the tax revenue to pay for the budgeted items was also outlined by Harris:
Individual Income Tax Rate of 4.95%, Corporate Tax Rate of 7%, The same rates as in the House/Senate GOP proposal
Corporate Tax Loopholes closed
Modernizes State Tax Lien Act and Revised Uniform Unclaimed Property Tax Act to increase revenue
Doubles Earned Income Tax Credit (EITC) to provide tax relief for low and moderate income families
Increases the Education Tax Credit by 50%
Adds a Research and Development (R&D) Tax Credit
Expands the Manufacturing, Machinery and Equipment Tax Credit to include graphic arts
Creates a Classroom Supplies Tax Credit of up to $250 for teachers who use personal income to purchase classroom supplies
The budget implementation bill had the following “highlights” according to Harris:
Increases the Personal Needs Allowance for developmentally disabled individuals to $60 per month
Creates a Community Care Program Task Force to work with all stakeholders to develop recommendations on strategies to reduce costs and liabilities, modernize and increase efficiencies of the CCP program
Authorizes direct deposit (instead of transfers) of tax receipts to Local Government Distributive, Public Transit and Downstate Public Transit funds
Provides the AMTRAK operating subsidy
Authorizes $8 billion in payments for the backlog of old bills at the Comptroller’s Office
$1.2 billion in interfund borrowing to be repaid within 24 months
$300 million in fund sweeps from a selection of funds
Provides up to $6 billion GO Bond authorization for back bill payment, to be repaid via a level principle method
Allows Drug Rebate Fund funds to be used for Medicaid payments
Anticipates $2 billion in Federal matching funds for Medicaid payments
This is in addition to over $800 million in existing cash in the Commitment to Human Services and Educational Assistance Funds which are appropriated in SB6 to pay back bills of social service agencies and higher education
Authorizes MPEA to restructure its debt and pay back remaining deficiency payment to the State ($42 million) and a creates a reserve fund to protect against future shortfalls
Implements several pension reforms to reduce costs and help stabilize several pension systems
Requires contributions from State Pensions Fund to SURS to be a portion of the certified contribution rather than in addition to them.
Authorizes GRF share of SERS to be appropriated directly
Implements a limited cost shift for high salary SURS/TRS employees whose salaries exceed that of the Governor.
Requires recertification of the state systems to reflect Nov 1, 2017 changes
Includes the Chicago Municipal and Laborers Pension Reform proposal from SB14
Provides clarifying language for Chicago Firefighters Fund regarding COLAs for members in or after 1955 through 1965
Implements a Tier 3 defined benefit plan for Tier 2 members (if they elect) and future non-covered hires in SERS, SURS and TRS
In FY18 only, allows Governor to reserve up to 5% in OSF amounts appropriated (does not include Common School Fund, General Revenue Common School Special Account, Educational Assistance Fund, Fund for the Advancement of Education, Commitment to Human Service Fund or Bond Stabilization Fund)
In FY18 only, authorizes 4% transferability between operation lines for Executive Branch agencies (does not include other constitutional offices, legislative or judicial branches)
Establishes a Maintenance of Effort (MOE) for Special Education in local school districts
Extends FY17 lapse period by 1 month to allow agencies extra time to process FY17 vouchers
Harris said, “This balanced budget proposal is the first step toward rebuilding our State and restoring stability and predictability after the last 3 years of chaos. My commitment is to continue to work with my colleagues on both sides of the aisle to continue to stabilize our financial situation, as well as to address other non-budget structural reforms that will make Illinois more competitive for attracting new jobs and businesses, as well as improving the quality of life for all our citizens.”
Governor Rauner opposed the bills arguing that his turnaround agenda should have been adopted. Part of the turnaround agenda was a proposed property tax freeze on all local governmental units. Rauner had argued that the freeze should be for five years and any income tax increase should only last as long as the property tax freeze lasts.