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House plans June hearings after Rauner sabotages budget, other measures advance

6/01/2017
Legislative update 6.01.17
May 31 marked the last day of the scheduled spring legislative session and the 700th day without a state budget, yet Illinois lawmakers left Springfield without reaching an agreement late last night. Throughout the session, Governor Rauner’s sabotage tactics detoured negotiations on a responsible budget and the revenue increases needed to pay for schools, public higher education, and vital state services. As the Governor continues to prioritize the non-budget reforms of his so-called “turnaround agenda,” Illinois faces the prospect of entering a third year without a full state-spending plan.

The state’s backlog of bills stands at more than $14 billion. Public universities and community colleges are in crisis, social service agencies are shutting down, and K-12 schools are waiting for millions of dollars in delayed payments.

While Illinoisans suffer, the Governor continues to make non-budgetary, political demands as a prerequisite to approving a reasonable spending plan. As of June 1, any budget plan now requires a 3/5 majority vote to pass, meaning both Democrat and Republican votes will be needed.

The Illinois House plans to hold budget hearings throughout June to work to reach an agreement. Watch ift-aft.org for updates and scheduling information as it becomes available.

Despite the budget disappointment, the legislature made progress this session in several important areas. Here is an update on the key issues impacting IFT members that our union tracked and lobbied this session.
School funding
SB 1, the Evidence-Based Funding for Student Success Act, was approved by the legislature in the final hours of session. The bill makes comprehensive reforms to the Illinois school funding formula, including:

  • Creates an evidence-based formula based on individual weights for student needs, such as special education and bilingual education.

  • Establishes mechanics for a property tax swap which is intended to provide tax relief for high-tax, low-wealth districts. Each district could apply for state funds to replace local property tax dollars. The total amount a district can receive from the state would be capped at 1 percent of the district’s equalized assessed value (EAV). A separate appropriations bill would be needed to fund the tax swap fund.

SB 1 creates a new mechanism for funding schools, but does not actually appropriate FY18 funding. The K-12 budget would occur through a separate appropriations process.
 
Republicans and Democrats disagree on whether SB 1 reflects the recommendations of the Governor’s appointed school funding commission, and it is likely that he will veto it.


Charter commission bill heads to Governor
The House and Senate approved HB 768, legislation that eliminates the Illinois Charter School Commission’s ability to reverse a school board’s decision to deny, revoke, or not renew a charter. The commission is appointed by Governor Rauner and is not accountable to voters and taxpayers in a school district. This bill creates a charter school application process where only locally elected school boards and parents can decide if a charter school is good for their community. A charter applicant could appeal to the courts if it believes the application review process was not followed. Governor Rauner is expected to veto the measure.
Chicago elected school board bill nears final passage
HB 1774 creates an elected representative school board for the City of Chicago. Currently, the mayor appoints the school board, unlike every other school district in the state. The House will take one more vote to concur with amendments made in the Senate, and then this bill can be sent to the Governor. Stay tuned.

Workers’ compensation reform sent to Governor
In the spirit of compromise, the Illinois General Assembly passed a workers’ compensation reform bill, HB 2525, in the final hours of session. The Illinois AFL-CIO was neutral on the bill, which would provide employers with a compensation insurance rate reduction if they have a bona fide safety and return to work program in place, and creates penalties on employers who don’t authorize medical treatment for an injured worker.

Prior reforms were negotiated by labor and business and passed in 2011. As a result, the National Council on Compensation Insurance (NCCI) recommended a 30 percent reduction in employer premiums that should have resulted in more than $1 billion in savings for employers. However, those savings were pocketed by insurance companies and never passed on to Illinois businesses.

Despite the Governor’s demand that this reform be part of the budget process, he has pledged to veto the bill.

Workers compensation insurance fund
Responding to concerns of the Governor and business groups, the General Assembly also passed HB 2622. The legislation would create a not-for-profit insurance fund to create competition in the insurance industry and reduce workers’ compensation insurance premium costs for employers.

IFT helps defeat third-party contracting
Many bills this session attempted to increase privatization and third-party contracting by school districts. In the Senate, SB 13 and SB 478 were property tax freeze bills combined with mandate relief and relaxed rules on third-party contracting. SB 13 was never called for a vote and SB 478 was defeated.
   
In the House, HB 1261 would have eliminated the requirement that vendors who contract with a school district for non-instructional services must offer a similar benefit package to employees who perform the privatized services. The IFT and other unions opposed this bill because it incentivized privatization and encouraged school districts to give up control of important student services. Under this legislation, companies would likely have sought profits by cutting workers’ pay and benefits. Thanks to IFT opposition, this bill was not called for a vote.

Union efforts stall pension “reform” bill
SB 16 would have made an unconstitutional change to Illinois pension systems by forcing a choice between two lesser benefits for members of state funded plans. The bill passed the Senate, but was not pursued in the House thanks to a powerful outcry from IFT members and our union partners in the We Are One coalition. We will closely monitor this issue as session continues into June.

Automatic voter registration bill approved
The legislature passed SB 1933, which automatically registers eligible citizens to vote (unless they opt out) at the Department of Motor Vehicles, Secretary of State’s office, and several other state agencies. It is estimated that about 1 million of the state’s 2.2 million unregistered voters will be registered under this bill. The Governor has indicated his plans to sign the bill, making Illinois the ninth state with automatic voter registration.

Minimum wage hike approved
After significant debate, lawmakers approved an increase to the state’s minimum wage, from $8.25 to $15 by 2022. The bill is SB 81. Watch for updates on whether the Governor signs the measure.

Carried-interest loophole closure
The Illinois Senate passed SB 1719, legislation to close a lucrative loophole that hedge funds and other organizations use to avoid paying their fair share of state taxes. The measure was spearheaded by the Grassroots Collaborative, which estimates it will generate $1.7 billion in new revenue for the state. The House has not yet voted on the bill.

A look ahead
Stay tuned for updates on the budget and other critical legislation as the session continues into June.



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