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*** UPDATED x3 - Madigan office begs to differ - Rauner: Not enough *** Madigan crows about procurement bill passage, urges Rauner to negotiate budget with HDems

Monday, May 29, 2017

* The bill passed by a vote of 114-0. From Speaker Madigan’s office…

Speaker Michael J. Madigan issued the following statement Monday after the House voted to pass Senate Bill 8, a package of reforms negotiated by Gov. Bruce Rauner to help streamline acquisition of goods and services, reducing costs to the state:

“Today’s passage of a procurement reform package requested by Governor Rauner is another instance in which House Democrats have followed through on our commitment to work cooperatively with the governor to reduce the cost of government and address the issues facing our state.

“This bill is the result of negotiation between legislators and the administration. In January, I directed the House State Government Administration Committee to thoroughly evaluate the governor’s procurement proposal, and that committee approved the governor’s plan with bipartisan support.

“The biggest issue facing Illinois remains the state budget. As the governor continues to hold other aspects of his agenda as pre-conditions to his cooperation on a full balanced budget, I renew my request that the governor immediately focus on working with House Democrats to find common ground and pass a budget for our state. Today’s agreement is proof that House Democrats are willing to make compromises to move Illinois forward.”

The bill is SB 8.

*** UPDATE 1 ***  From Eleni Demertzis in the governor’s office…

Tiny, incremental steps to change our broken system are better than nothing, but what the House passed today is far from what is needed.

While Speaker Madigan’s Democrats continue to argue over how big of a tax hike to impose on the people of Illinois, the governor remains focused on enacting real and lasting property tax relief.

The governor has previously said that his procurement reforms could save a half-billion dollars a year. I’ve asked for some clarification.

*** UPDATE 2 *** The answer to my question…

​Because they’ve removed the most important structural changes from the bill, we can’t give any estimate on savings but we know it won’t be anywhere near that number. ​

*** UPDATE 3 *** From Steve Brown…

If the Governor is saying the differences between the Senate bill and the House amendment won’t result in savings, here’s the list of changes. None of these should reduce the number, and there was a claim SB8 as it passed the House would save $70M a year [the same claim made in the Senate].

* The House amendment requires agencies to submit a list of exempt contracts to the CPO. The purpose of this is to increase transparency and establish one location where members and the public can find information about exempt contracts. This was not included in the bill as it passed the Senate.

* As it passed the Senate, the bill exempted from the Procurement Code (1) public private partnerships, and (2) food purchased for commercial resale by public universities. This is not included in the House amendment.

* As it passed the Senate, the bill removes the 90-day cap on emergency procurements for construction at the request of Capital Development Board. This is not included in the House amendment.

* As it passed the Senate, the bill gives agencies authority to use master contracts, interpreted without CPO oversight. The House amendment clarifies the CPO has authority and allows a CPO to void, ratify, or affirm a joint purchase that was in violation of the law under the Governmental Joint Purchasing Act. This language was initially requested by House GOP members.

* As it passed the Senate, the bill repeals the procurement reporting requirement. The House amendment clarifies this language, but does not repeal it.

* As it passed the Senate, the bill creates a Special Committee to review procurement laws and recommend improvements in (i) efficiency, (ii) minority, female, and veterans contracting, and (iii) Illinois preference purchasing. The House amendment does not remove the General Assembly from procurement discussions, but does includes a committee solely focused on minority, female, and veterans contracting.

* As it passed the Senate, the bill allows universities to enter a lease for 30 years if the lessor has to make more than $100K in improvements. This is not included in the House amendment.

* As it passed the Senate, the bill includes the use of prequalified pools for all areas of procurement. This is not included in the House amendment.

* As it passed the Senate, the bill allows universities to directly contract, without CPO oversight, with the Midwest Higher Education Cooperation Act for computer and technology equipment, or services, and insurance. The House amendment allows these purchases with CPO oversight.

* As it passed the Senate, the bill changes the Small Business Act to allow the state to count contractors and sub-contractors toward the goal of awarding 10% of total contract dollars to small businesses. This makes it easier to meet the 10% goal. The House amendment does not include subcontractors and moves the current requirements of the Small Business Act into the Procurement Code. The intent is to urge the State to enter into a greater number of contracts with small businesses.

- Posted by Rich Miller   19 Comments      


Today’s number: $484.5 million

Monday, May 29, 2017

* That number is the payment backlog in the state’s Public Transportation Fund

The RTA has resorted to short-term borrowing to stay current in its subsidy payments to the three transit agencies.

“We have maxed out our temporary short-term borrowing capacity,” Redden said.

CTA, Metra and Pace all have cash reserves, but the reserves are intended only as a stop-gap. Redden said all three agencies are looking at options that could include service cuts and fare hikes, which may be needed sometime in the coming quarter.

CTA and Pace have in place 2017 budgets that did not cut service or raise fares; in fact, Pace has augmented service, particularly on its expressway and tollway corridor services. Metra raised fares in February, with the intention of setting aside the additional revenues generated to help pay the local share of federally-funded projects.

…Adding… From the Senate President’s office…

The Senate President spoke at an Elmhurst College event a few weeks ago. His speech included this …

    My friend Kirk Dillard, the former DuPage County state senator, is now chairman of the RTA. The state owes that agency about $400 million. The agency borrows to cover the shortfall.

    Here’s the catch.

    The state doesn’t pay the RTA interest on the money that’s late, but the RTA has to pay interest on the borrowing to cover the state money.

    The agency ends up losing about $2 million a year because of this.

    That’s enough to buy five new METRA cars or rehab three train stations, which are far better uses of the dollars than paying loan interest.

    So, if you use METRA and you think the train cars are too crowded or too old or your local train station is rundown and needs updated, the state’s failure to pay its bills is to blame.

- Posted by Rich Miller   4 Comments      


A closer look at the GOMB memo

Monday, May 29, 2017

* AP

The House has committee hearings scheduled Monday to continue reviewing the $37 billion budget plan the Senate approved. It includes $5.4 billion in revenue raised mostly by a 32 percent increase in the personal income tax rate from 3.75 percent to 4.95 percent.

The Senate sent the plan to the House last week. It also includes $3 billion in spending reductions.

* Tribune

As Democrats were behind closed doors, Rauner budget director Scott Harry sent a letter to House members warning the governor would veto the Senate plan should it make it to his desk. Harry estimated the budget and tax plan was at least $435 million out of balance, and said it does nothing to pay down the bill backlog or put in place economic changes the governor has pushed such as a property tax freeze.

* Here’s that memo. I’ve added paragraph numbers so we can more easily dissect it…

From: Scott Harry, Director, Governor’s Office of Management and Budget To: Members of the Illinois House of Representatives
Date: May 28, 2017
Re: GOMB Analysis of SB 6

1) The Senate Democrats’ budget bill (SB 6) proposes to spend $5 billion more than the state’s fiscal year 2018 revenue forecast of $32 billion. Notably, Senate Democrats also passed a large tax increase to accompany SB 6 without any significant changes to our broken system – no real and lasting property tax relief and no economic reforms to grow the economy.

2) Drafted and voted upon without bipartisan support, SB 6 fails to make substantial spending cuts and has no real and hard spending cap beyond fiscal year 2018. If SB 6 were enacted, government spending would likely continue to explode, driving our state deeper into debt.

3) The Governor’s budget office estimates that even if the House enacted the Democrat-only tax hike proposal accompanying SB 6, the budget would be out of balance by at least $435 million in fiscal year 2018 (due to the lack of implementing legislation to achieve savings in the group health insurance program) and roughly $1 billion in fiscal year 2019. Furthermore, SB 6 takes no action to meaningfully pay down the bill backlog – concealing an even higher planned income tax rate than the Senate already passed.

4) From a technical drafting perspective, the FY17 appropriations in SB 6 were not drafted to address the true obligations of the state and fully cover commitments from FY16 and FY17. Other problems are caused by the drafting approach to structure the FY17 appropriations around spending authority that the Comptroller has established for consent decrees, court orders and continuing appropriations.

5) In sum, the House is considering a broken budget contingent on a large tax hike without any meaningful property tax relief or job creating reforms – which even if enacted would not even balance the budget. SB 6 is a lose-lose for taxpayers. If this bad deal for taxpayers comes to the Governor’s desk, he will veto it.

1) Oh, please. That is so misleading. Unlike the governor and his budget office, the Senate Democrats cut spending from the GOMB forecast and then added revenues. And that “large tax increase” was supported by the governor during negotiations.

2) The proposal didn’t receive GOP votes, but it most definitely received lots of Republican input. It makes billions of dollars more spending cuts than Gov. Rauner and his budget office proposed in February. And while there is no spending cap beyond FY 18, one can be enacted for FY 19 and beyond in the future. The governor could also simply propose a budget that has a spending cap.

…Adding… As mentioned in comments, Gov. Rauner’s agency directors all said during appropriations committee hearings that they couldn’t enumerate any cuts and that any cuts would be bad, yet Gov. Rauner’s budget director expects the Senate to find them anyway. Nice one.

3) The governor’s proposal to reduce spending on group health insurance requires changes to collective bargaining laws - something that Senate President Cullerton has completely ruled out. The Senate proposed the same reduction as Rauner did, but they put it on Rauner to achieve his spending reductions via the collective bargaining process and/or the courts.

And, seriously, they’re worried about a possible budget deficit in Fiscal Year 2019 that doesn’t even end for two more years? Really? Rauner can’t propose a solution to this alleged problem next February? From the Senate Democrats…

How much of his job is the governor expecting the Senate to do?

Exactly right.

I agree that it’s a copout for the Senate Democrats to punt on the bill backlog, among other things. No doubt about it. But Rauner did the exact same thing in his own budget proposal. From a May 9th report

The Civic Federation’s Institute for Illinois’ Fiscal Suitability is not able to support Governor Rauner’s recommended FY2018 budget because it has an operating deficit of at least $4.6 billion, presents an insufficiently detailed plan for closing the gap and does not address Illinois’ massive backlog of bills.

And from the Senate Democrats…

Two weeks ago, the Senate came within 3 votes of passing a budget that cut deeper while also refinancing that debt, and I don’t recall the governor rounding up votes to try to help get it passed.

4) “Technical drafting” errors are fixable.

5) If this is a “broken budget,” then why doesn’t the governor’s budget office propose a real one?

* Also, here’s an important point from Rep. Greg Harris (D-Chicago)

Harris said the whole budget discussion is taking place while Rauner is making public appearances and airing ads that attack the Democrats’ plan.

“They (Senate Democrats) actually passed a lot of the revenue ideas he’s been championing since he became governor,” Harris said. “He’s on social media and on paid advertising and on robocalls attacking people for doing the things he’s been suggesting.”

- Posted by Rich Miller   19 Comments      


*** LIVE *** Session coverage

Monday, May 29, 2017

* The House convenes at 10, the Senate convenes at noon. Watch it all in real time with ScribbleLive


- Posted by Rich Miller   Comment      


PREVIOUS POSTS »
* Memorial Day on social media
* It's just a bill
* Get in the game or go home
* "Right To Know" Is Wrong For Illinois. Vote No On SB1502
* *** UPDATED x3 - Madigan office begs to differ - Rauner: Not enough *** Madigan crows about procurement bill passage, urges Rauner to negotiate budget with HDems
* This Is Illinois
* Unclear on the concept
* Today's number: $484.5 million
* Board of Elections promotes doomsday scenario over $9,000 bill
* Civic Federation defends Civic Committee against Tribune attack
* HDems take tax hike bill away from Rep. Ives
* A closer look at the GOMB memo
* House Dems still can't find enough support for their own budget
* *** LIVE *** Session coverage
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