Unclear on the concept
Friday, Jun 16, 2017 - Posted by Rich Miller
* From a Quad Cities TV station report on the special session…
The governor says he supports a Republican budget that calls for term limits and a four-year property tax freeze.
That’s one weird budget.
Also, nowhere in the story is any mention made that the governor is supporting a plan that includes an increase in income taxes and a new service tax.
…Adding… To be clear, this goofiness is on the TV station, and not on the governor’s office. Rauner never said any such thing.
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* Tina Sfondeles…
The Senate president said he won’t call a Republican spending bill without a corresponding revenue bill.
Senate Democrats already passed a revenue bill with no Republican support. And while Rauner and the Republicans say they’ll now back a tax plan on their own terms, Republicans aren’t on record for voting for the measure, which would hike the income tax to 4.95 percent.
“I’m not going to vote on that [spending bill] unless we have a corresponding revenue bill to vote on, and they have to introduce that. And it would be helpful if the governor would say he’s for it because he’s never done that,” Cullerton said. “We are not going to take up any spending bills, especially since we already passed the governor’s exact introduced spending bill. So it’s hard to say that there’s anything wrong with that if you are a Republican.”
The Republican plan introduced on Wednesday is reliant upon a revenue bill, but didn’t include one. The politically unpopular measure continues to be a sticking point in the budget impasse.
* Despite what the Senate President says, a new spending bill is needed because the Senate Democrats’ plan didn’t factor in paying off the state’s mountain of past-due bills. That’s a very huge problem that has to be dealt with in an honest way.
But it would be helpful if the governor and the Republicans introduced their own tax hike bill. Introducing their own bill would prove they’re serious about this new “Capitol Compromise.” They’re going to need to at least amend the Senate’s tax hike bill (SB 9) anyway to change the income tax increase from permanent to temporary and to delete the retroactive to January 1st provision.
* There’s another problem with the new Rauner/Republican tax hike plan, however. A commenter reminded me earlier today of an Illinois Department of Revenue memo I published in late May about the Senate Democrats’ tax hike proposal…
Service tax provisions. The bill inserts 5 discrete services in the Retailers’ Occupation Tax Act (ROT) (storage; laundry and dry cleaning; private detective, private alarm, and private security service; structural pest control service; and tattooing and body piercing)… It is the Department’s opinion that there is a substantial risk that the service tax components violate the uniformity clause of the Illinois Constitution […]
Entertainment Tax Fairness Act. The bill creates a new 1% tax on subscribers of entertainment (paid video programming through numerous methods including cable). It is our opinion that this tax could be challenged under the Federal Internet Tax Freedom Act (ITFA). […]
Video Service Tax Modernization Act. SB 9 creates a new 5% tax on providers of direct-to-home satellite service, direct broadcast satellite service, and digital audio-visual work. The bill does not tax cable companies. It is very likely that this tax will be challenged by satellite service providers.
If Gov. Rauner and the Republicans listen to IDOR and jettison that revenue, they’ll have to find a way to fix the resulting budgetary hole. Because, according to IDOR, the Rauner/Republican budget may not actually balance the way it stands now.
Oops.
*** UPDATE *** A commenter on another thread reminded me that the Illinois Policy Institute’s Liberty Justice Center has threatened to sue if some of the Senate’s tax hikes are signed into law…
These new taxes on services, satellite TV, and streaming services aren’t just a nuisance; they are unlawful, according to attorneys at the Liberty Justice Center, a Chicago-based nonprofit law firm. […]
“If Senate Bill 9 becomes law, the Liberty Justice Center stands ready to immediately bring a lawsuit on taxpayers’ behalf to have these unlawful taxes struck down.”
The governor should address these issues.
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* Background is here. Press release…
The Appellate Court dismissed today the Pay Now Illinois coalition suit. A statement from Pay Now Illinois Chair Andrea Durbin is just below.
We are terribly disappointed in today’s ruling from the Appellate Court.
The Appellate Court has directed providers to the Court of Claims for relief. This is at best a theoretical, not a practical remedy. Even prior to the destructive budget impasse, human service providers routinely waited years for a judgement, and then had to wait for a subsequent appropriation to be paid. This process could literally take three, four, or even five years. When providers are due payment for service from an entire year or more, waiting for half a decade for payment does nothing to help providers meet payroll and pay their bills today. Further, the Court of Claims is in no way equipped to handle the massive filings that would result if all providers and vendors who are owed money from the State of Illinois sought relief through this means.
Providers contemplating contracts for FY18 should consider the state of affairs as it exists today. We have no budget for FY17 or FY18, the partisan warfare continues in Springfield, and at this point we have a total breakdown in the functioning of our state. This decision helps to remove some of the uncertainty that providers have faced over the past two years.
Pay Now Illinois still has a case pending in St. Clair County. We expect a decision shortly and certainly hope for a different outcome. We will also evaluate our next steps as a coalition; we have tried to go directly to the Illinois Supreme Court before and will consider whether to pursue that option again.
The real losers from today’s decision are the children, youth, families, and communities we serve – the elderly, the disabled, the homeless, people with mental health needs, or people who are addicted, victims of sexual assault or domestic violence, youth who run away from home or who are in trouble with the law – as well as the hundreds and thousands of employees who come to work each day trying to keep people safe, healthy, and able to achieve their potential. No one should rejoice in this decision.
* The ruling is here.
…Adding… Law Bulletin…
The panel rejected the coalition’s assertions that Rauner has acted beyond his gubernatorial authority by entering into contracts which weren’t funded, and then vetoing the appropriations bills that would have funded them.
“The governor was not obligated to approve any or all portions of appropriations bills by the General Assembly,” Justice Eileen O’Neill Burke wrote in the 35-page opinion on behalf of the three-judge panel. “Indeed, both the governor and the General Assembly are constitutionally constrained to propose or pass budgets and appropriations that do not exceed estimated available funds.”
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* Press release…
One day after House and Senate Republicans unveiled a compromise balanced budget plan to end the budget impasse, Governor Bruce Rauner today called lawmakers back to Springfield for a 10-day special session from Wednesday, June 21st through the June 30th fiscal year deadline.
“Republicans in the General Assembly have laid out a compromise budget plan that I can sign,” Governor Rauner said in a video announcing special session. “It provides a true path to property tax reduction and it reforms the way our state operates to reduce wasteful spending. It will fund our schools and human services, while spurring economic growth and job creation. It is a true compromise – and one I hope the majority in the General Assembly will accept.”
For two weeks, the majority in the General Assembly ignored repeated calls to return to Springfield since adjourning on May 31st without passing a full-year balanced budget. If no action is taken by the General Assembly to pass the compromise balanced budget plan by June 30th, the ramifications for our state will be devastating and long-lasting. In order to find a resolution, Governor Rauner issued 10 proclamations calling for special sessions every day starting Wednesday, June 21 at Noon. The proclamations direct the General Assembly to consider legislation that will reach a balanced budget with changes to our broken system, including property tax relief, job creation, term limits and spending caps. Should the General Assembly enact the compromise balanced budget plan prior to June 30th, the Governor will cancel any remaining special session days.
“We have tough, urgent choices to make, and the legislature must be present to make them,” Governor Rauner said. “In the days ahead, let’s show the people of Illinois we have their best interests in mind, not our own. And together, we will move our state forward to a better and brighter future.”
The official proclamation is here.
…Adding… Rauner’s official video is here.
*** UPDATE 1 *** From Leader Radogno…
“I am anxious to return to the Capitol to continue our work on a comprehensive budget solution. We have a very real deadline looming as we close yet another fiscal year without a budget in place. I hopeful we will have productive sessions, legislative leader meetings with true engagement from all four leaders, and bipartisan efforts toward compromise. I and my Caucus believe a comprehensive solution is within reach and we ought to do everything possible to achieve it before July 1. The alternative to not finding compromise will be devastating to Illinois.”
*** UPDATE 2 *** From the Democratic Governors Association…
Rauner Waits Until After Big Fundraiser to Call Special Session
Rauner Funneling Money to IL GOP To Continue Running Attack Ads During Budget Negotiations
Last week, Bruce Rauner held a memorable press conference where he attacked Democrats for holding “sham” hearings with “props” disguised as people, and threatened to “force” legislators back to Springfield for a Special Session. It was great theater.
And only that. Rauner waited two weeks to “force” legislators back because he could not call it before his big fundraiser on the 19th. That would have been bad optics.
And really his big press conference was one big play itself. The whole event came on the heels of a three-day campaign-like swing featuring the same kind of people “props” he would decry the next day.
Over the next few days Rauner will play the part of compromiser, all the while funneling millions to the Illinois GOP to continue running attack ads during budget negotiations.
The role that he was born for? “Most vulnerable incumbent in the nation.”
“Bruce Rauner’s decision to hold a fundraiser before calling a special session shows voters exactly what his priorities are,” said DGA Illinois Communications Director Sam Salustro. “The fact is that Bruce Rauner is more interested in playing politics than getting a real deal done for the people of Illinois. Holding fundraisers and campaign-style events, and running attack ads, is exactly the theatrical politics that landed his as ‘most vulnerable incumbent in the nation.’”
*** UPDATE 3 *** House Republican Leader Jim Durkin…
“With the fiscal year coming to a close and the House Democrats failure to produce a budget during session warrants the Governor’s action today. We can break this impasse if the House Democrats are willing to negotiate in good faith.”
*** UPDATE 4 *** This post is apparently popping up all over Facebook today…
*** UPDATE 5 *** From John Patterson, spokesman for Illinois Senate President John J. Cullerton…
I will remind everyone that the Illinois Senate has been in session the last six months and produced a balanced budget plan that was approved and sent to the Illinois House.
I’m not sure where Governor Rauner was during the first half of the year, but the Senate did his work and balanced his spending plan using the numbers and tax rate he wanted.
Now that he’s decided to engage, it would be helpful if he could use his influence to marshal the House Republicans to join the bipartisan coalition and support his tax increase and spending plan and get a balanced budget approved in the House. Until then, the Senate has already done the work and is waiting for the governor to finish the job.
Heh.
*** UPDATE 6 *** Sen. Bill Brady…
“It’s unfortunate that we’re in this situation, but I applaud Governor Rauner for doing what was necessary and calling the General Assembly back to Springfield,” said Brady noting, “This week I introduced a real, full year balanced state budget that isn’t another lifeline, stop gap, or band-aid budget. My budget and the compromise reform measures my colleagues have put forth this week are the real solutions that the people of this state deserve. I’m ready to roll up my sleeves and get back to work to get this done.”
*** UPDATE 7 *** Sen. Kwame Raoul…
I understand the urgency of ending the budget impasse. I understood that urgency last month, when I joined my colleagues in the Senate in voting for a balanced budget. What I wonder is why Governor Rauner seems to be in such a hurry now. Where was he last month? Where were the Republicans last month when we took difficult votes to pass a budget that will allow us to pay our bills on time?
The governor’s stalling on a budget deal isn’t just frustrating – it’s costly. The special session will cost taxpayers $64,687 a day, totaling $646,870 over the 10-day session. At a time when the state owes $15 billion in unpaid bills, this is hardly money we can afford to spend.
Again, I understand the need for immediate action. I simply wish Gov. Rauner and Republicans had been this interested in working quickly when we voted to pass a balanced budget in May.
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* Sun-Times…
The association that runs the popular Powerball lottery and Mega Millions games will drop Illinois at the end of June without a budget agreement.
Concern over the state of Illinois’ fiscal condition prompted that decision by the Multi-State Lottery Association, according to internal Illinois Lottery communications.
Illinois Lottery spokesman Jason Schaumburg on Thursday morning confirmed that the games will be dropped without a state budget. He said the association has never threatened to drop the games. […]
The state reported $99.4 million in Mega Millions sales and $208 million in Powerball sales within the 2016 budget year. It’s unclear how much revenue the state got from the sale of those tickets.
Sheesh, what an embarrassment.
*** UPDATE 1 *** Pritzker campaign…
Today, the Multi-State Lottery Association announced they voted to remove Illinois from the Powerball and Mega Millions lotteries due to Bruce Rauner’s 715-day budget crisis. In response, JB Pritzker released the following statement:
“The decision by the Multi-State Lottery Association is a clear rebuke of Bruce Rauner and the 715-day budget crisis he has unleashed on our state,” said JB Pritzker. “Rauner is a historic failure and bond ratings agencies, investors, and now U.S. lotteries are taking note. Under Bruce Rauner, Illinois has earned the reputation of being a bad investment and a state without stability or growth. This is what failed leadership looks like and the devastation will not stop until Bruce Rauner is out of office.”
*** UPDATE 2 *** Rep. Lou Lang…
“The decision today by the Multi-State Lottery Association to remove our state from participation in these lottery games is just another example of the absolute failure by the governor to do his job and govern. Due to the impasse that he has created, other states are now recognizing the lack of leadership by the governor, and they have made the decision that Illinois under Bruce Rauner is not a reliable partner.
“Not only does this affect Illinois gamers who enjoy playing the lottery games, but this will also have enormous negative effects on our public education system. This will take away millions of dollars of state funds for our schools, which are more critical now than ever. These effects just represent a small portion of the damage that the governor has done by holding up services and programs over items that have nothing to do with our state budget.
“House Democrats have worked to meet the governor in the middle, including passing reforms to the procurement and worker’s compensation systems, and working to level the playing field for small and medium-sized businesses. Yet, the governor still refuses to come back to the negotiating table. Republicans and Democrats nationwide are reacting to the complete lack of leadership under Bruce Rauner, which is leading us on the path to become a deadbeat state.”
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* As expected…
Roadwork projects across Illinois could be on the chopping block as the state’s historic budget impasse continues.
The Illinois Department of Transportation will shut down roadwork statewide if lawmakers don’t pass a budget by the end of the month, officials announced Wednesday.
“Due to the General Assembly’s refusal to pass a balanced budget, the Illinois Department of Transportation loses its ability to pay contractors starting July 1,” IDOT communications director Guy Tridgell said in an email.
“While we are hopeful the situation is resolved before then, the department is notifying contractors that all construction work is to shut down on June 30. Contractors will be advised to secure work zones to ensure their safety during any potential shutdown. As always, the safety of the traveling public will be the top priority as the department works through this process,” Tridgell said.
Roadwork projects were put in jeopardy by the budget impasse last year as well, but a stopgap bill passed in the final hour secured roadwork funding.
…Adding… The contractor letter is here.
*** UPDATE *** From an IRTBA press release…
“The impacts of a shutdown are dire,” said Illinois Road and Transportation Builders Association (IRTBA) President & CEO Mike Sturino. “According to the Transportation for Illinois Coalition, the daily costs of a shutdown exceed $3 million just for direct costs associated with shutting a job down,” he added. “IRTBA member firms report that layoffs of thousands of Chicago area residents are imminent. Organized labor is reporting approximately 30,000 people will be out of work statewide if this shutdown happens.”
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[Bumped up to Thursday morning for visibility.]
*** UPDATE 2 *** SB 2214, the Senate’s budget bill, is now online. Click here to read it.
[ *** End Of Update *** ]
* From Sen. Bill Brady’s (Bloomington) press release on his newly introduced spending package contained in SB 2214…
Brady’s proposal includes a total of six budget related bills that contain a balanced $36 billion operating budget for FY18. Additionally, Brady’s plan proposes appropriations to pay off remaining FY16 bills as well as the balance of FY17 appropriations. It also includes a hard spending-cap of roughly $36 billion in general funds.
“I have always said that any deal we pass must be fair to the taxpayers of this state, which is why my budget includes a four-year spending-cap of $36 billion. If our constituents have to live within their means, it’s time for their state government to do the same,” noted Brady.
Under the legislation, the state would be allowed to issue up to $6 billion in revenue bonds to significantly reduce the state’s backlog of unpaid bills, saving the state millions of dollars on late-payment interest costs.
Brady’s budget increases funding for K-12 education by $250 million for the new evidence-based school funding formula, as well as providing a $35 million increase for Early Childhood Education. The budget also includes $156 million in pension parity for Chicago Public Schools while reducing the controversial Chicago Block Grant by $200 million.
Yep, cutting the CPS block grant and coming up $60 million shy of the earlier agreed CPS pension payment will really go down well with the Democratic leadership.
The budget walk-through can be seen by clicking here.
The proposal would also make $1.6 billion in unspecified transfers out reductions and pension spending would be cut by well over a billion dollars.
* Meanwhile, here are the reform bills…
Pension Consideration – HB 4064
Pension – HB 4065
Property Tax Freeze – HB 4066
Citizens Empowerment – HB 4067
Worker’s Compensation – HB 4068
Education Funding Reform – HB 4069
Notice that these are all bills introduced in their original chambers, so they have to start afresh (meaning three days of readings in each chamber) unless they find appropriate vehicles.
*** UPDATE *** Sun-Times…
An appropriations measure was filed on Wednesday afternoon and five other bills will be filed on Thursday, according to State Sen. Bill Brady’s office. Numbers released by Brady’s office show the Republican plan shows higher revenue totals for sales taxes — about $75 million more — and less money coming from the personal income tax hike — about $230 million less.
* Crain’s…
CPS says in a statement that the budget plan isn’t a compromise at all but “part of Rauner’s insistence that he gets all of what he wants to sign on to a bill, even if it means students living in poverty across Illinois get none of the state support they need.”
Among other things, CPS officials say, moving to a per-pupil rather than per-district funding plan like the new legislation proposes would have cut funding for two-thirds of the state last year. CPS along might lose up to $400 million, they add, based on an earlier version of the legislation.
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