End of Session 2008: Summary of Issues

 

 

Budget/Capital:

 

The Governor’s proposed budget also called for a $25 billion capital plan for school construction, roads, transit, and environment and energy-related infrastructure projects to be funded through a partial lease of the state Lottery.  The Governor’s other proposed sources of revenue included the securitization of state tobacco settlement funds, a pension obligation bond sale, and a sweep of special state funds, all of which were eventually rejected by the General Assembly.

 

The FY 2009 budget, contained in four bills, would eventually clear both chambers sans Republican support and without any relief for the state’s growing Medicaid backlog or addressing the projected $750 million deficit for the current fiscal year.  The House would also leave two Senate bills on the table that would have provided an additional $1 billion in revenue obtained through a controversial sale of pension bonds and special state funds sweeps. 

House and Senate leaders are currently meeting with the Governor to discuss resolution on the budget, which must be in place by July 1st or the state risks a government shutdown.  The Governor has the option of signing the budget, issuing line-item vetoes to balance it or vetoing the budget in its entirety, which would inevitably force lawmakers to return to Springfield for more special sessions.

 

 

Healthcare:

 

The Governor’s defiant move would later end up in court where a judge eventually granted an injunction to halt the expansion and discontinue services to thousands of individuals who had already enrolled under the expanded eligibility criteria.  In the meantime, the Governor’s actions would also prompt the House to attach an amendment to hundreds of bills that may require the promulgation of rules to demand General Assembly action before any of those rules could be implemented.  The “rules” amendment, as it came to be known, served as a source of disagreement between the House and Senate and ultimately prevented a number of bills from advancing to the Governor’s desk.

 

 

While the House largely ignored the Governor’s Illinois Covered proposal, that chamber did take the surprising step this year to allow a bill to advance to the floor that proposed an even more drastic step towards single-payer universal coverage.  HB 311 sought state-funded coverage for all Illinoisans, regardless of health status, citizenship, or state residency requirements while prohibiting private insurance companies and providers from operating in the state.  The legislation was never called for a final vote.

 

 

 

The Chamber was also involved in extensive negotiations on a similar bill that would have provided a more comprehensive approach to mandated coverage for habilitative services, including occupational, physical, and speech therapies, for children under the age of 19 with congenital or genetic birth defects.  HB 5595 was eventually amended to eliminate the Chamber’s outstanding concerns, but like the Chamber’s wellness bill and SB 1900, the legislation was also prevented from moving to the Governor’s desk by the “rules” amendment.

 

Other coverage mandates that did clear both chambers and now await action from the Governor include:

 

 

 

The assessment program, however, still had another major obstacle to overcome this session, as the current program is set to expire on June 30th.  Due to stricter federal standards for the program, legislators, hospitals, and the healthcare community were left with the daunting task of designing the extended program so that it meets with federal approval while still creating a level playing field for hospitals throughout the state.  The legislature finally signed off on legislation (SB 2857) authorizing a new 5-year state hospital assessment program on the last day of the legislative session providing hospitals with an additional $640 million a year.  The newly authorized program is still subject to the Governor’s and federal approval before it can be fully implemented.

Energy/Environment:

 

Many of the group’s recommendations did later surface in House and Senate legislation that sought to impose sweeping climate change mandates on businesses with the exception of the group’s most controversial proposal to impose a carbon tax that could cost state businesses billions of dollars.  The House and Senate legislation, however, only advanced so far as providing a springboard for subject matter hearings on climate change policies and the carbon tax proposal would never emerge beyond the group’s draft recommendations.

 

 

 

 

Labor/Employment Law:

 

 

 

Tax:

 

Although the legislation passed the Senate Education Committee early in the session, opponents of the legislation and legislators alike continued to question the timing of the legislation.  In addition to the numerous problems from which the legislation already suffered, the pursuit of an income tax this year runs counterintuitive to the state’s and the nation’s current economic status, which is currently waivers on the edge of recession.

 

 

The first of these proposals, HJRCA 42, sought to double the personal income tax rate for individuals or married couples who earn $250,000 or more.  The proposed constitutional change, however, also would have impacted some small businesses operating as Subchapter S corporations or limited liability companies (LLCs) that file using the personal income tax rate.  HJRCA 42, however, failed in the House by a vote of 52-60.

 

The second proposal, SJRCA 92, took a different approach by seeking an outright elimination of the state’s flat income tax rate thereby leaving the door open for legislators to statutorily impose a graduated income tax on individuals and corporations.  This alternative proposal, however, was no more popular than HJRCA 42 and only managed to receive 19 votes in support in the Senate.

 

 

In 2008, Illinois is projected to generate almost 270 million metric tons of CO2 that, if taxed at the suggested rate of $10 per metric ton, would end up increasing taxes on utilities and other major industries by $2.7 billion.  As in the case of last year’s Gross Receipts Tax (GRT), a new carbon tax would have driven thousands of businesses out of Illinois.  Ultimately, the Chamber’s campaign to generate attention and opposition against the massive tax increase helped keep the Governor from pursuing the controversial tax this year.

 

 

In the meantime, the Chamber continued to track any additional legislation that might have sought more tax “loophole” closures this year.  Despite the Governor’s proposed FY 2009 budget address, which suggested another round of “loophole” closures, no such legislation was ever introduced this year.

Other Issues:

 

The agreement, contained in HB 824, specifically seeks to ban businesses and individuals with state contracts or bids for a state contract totaling more than $50,000 from making a political contribution to any candidate or incumbent that will decide what entities will get a contract with the state.  While the legislation did strengthen the law in terms of cracking down on “pay to play” politics, HB 824 also placed some onerous registration requirements on businesses.  The Chamber attempted to secure changes to the legislation to reduce the administrative burden for businesses, but was only able to accommodate a couple of these changes before the House and Senate unanimously approved the legislation. 

 

Both the House and Senate sponsors, however, have agreed to continue working with the Chamber to address the remaining outstanding concerns through trailer legislation. 

 

 

In the meantime, polls continued to show a high level of public support for a constitutional recall provision, prompting the Senate to eventually pursue their own constitutional amendment, which included locally elected officials and judges among those public officials that could be subject to recall.  Although SJRCA 70 would receive a majority vote in favor of the new recall provisions in the Senate, it still fell shy of the three-fifths majority required for passage.

 

 

Despite the flurry of attempts to get individually proposed constitutional amendments on the 2008 ballot, such as the recall proposal, the ballot will only feature the   main question of whether or not a convention should be called.  Legislators did manage to follow through with their required preparations for the possible Con Con by establishing a Joint Committee for the Constitutional Convention Proposal (under HJR 111).  This committee was charged with preparing materials related to the question of calling a constitutional convention.  The legislative committee’s proposal was later captured in HJR 137 that set forth the required explanation of the proposed call for a Con Con, as well as an outline of arguments both for and against a new convention and the format of the ballot question.