Spring Session in Context In addition, the senate president remained frustrated STATE of the STATE In January 2011, when the members of the 97th General with unresolved issues regarding the process for Assembly took the oath of office, there was no shortage executive‐level appointees. Throughout the upcoming of historic challenges facing Illinois. The state and the session, the Senate would work to reemphasize the nation had begun a steady, but fragile economic recovery important “advise and consent” role that Illinois’ after the worst recession since the Great Depression. Constitution gives to the higher chamber. However, state and local tax revenues remained weak, and their budget situations were grim.y Earl on, Illinois’ Further complicating matters was an Appellate Court unfunded pension liability took the spotlight as editorial ruling that deemede th State’s capital construction boards and wealthy business leaders ramped up program ‐ dubbed Illinois Jobs Now! by Governor Quinn ‐ attention to the very real problem. At the same time, unconstitutional. The legal challenge quickly made its federal funding from the American Recovery and way to the Supreme Court, but the Spring Session ended Reinvestment Act was phasing out and set to expire, before the court reached a verdict. compounding governments’ fiscal problems. However, a mid‐January, revenue‐stabilizing temporary income tax Also noteworthy: Chicago Mayor Richard Daley retired increase put state government within $1 billion of closing after holding office for the longest span ein th city’s the structural deficit ‐ without borrowing for pension history. Former Congressman and White House Chief of payments ‐ for the first time in years. Staff Rahm Emmanuel was elected his successor in the first round of municipal elections. Across the nation, newly elected Tea Party Republicans launched an assault on public employee unions in the VETO SESSION REVIEW name of fiscal austerity. The turmoil spilled over into The veto session of the 96th General Assembly was the Illinois when legislators from Wisconsin and Indiana fled first hint of how intense and potentially productive 2011 to Rockford and Champaign to prevent anti‐labor votes in could be for Illinois government. During that short their legislative bodies. The union‐related conflict did timeframe legislators enacted a number of substantial not spread to Illinois, but it did further intensify pension‐ changes to social and fiscal policy. benefit‐reduction rhetoric and play at least a small role in ongoing education reform efforts. Scoring major victories for human rights advocates, the General Assembly passed groundbreaking laws Education reform was one of several lingering issues from establishing civil unions and ending the death penalty. the 96th General Assembly. During veto session, Senate The civil unions law allows anyone in a committed President John Cullerton created three special relationship to receive all of the same rights Illinois committees to address three critical and complicated government gives to married couples. The bill also issues: Medicaid reform, education reform, and workers’ protects the rights of religious organizations to refuse to compensation reform. recognize or solemnize civil union ceremonies if they violate their religious beliefs. Medicaid reform was completed before the end of the 96th General Assembly’s final veto session. But Additionally, after a decade‐long moratorium, the negotiations on education reform and workers’ abolition of the death penalty ensures that the State of compensation continued. Illinois will never put an innocent person to death and helps end the practice of disparate punishments for the Business leaders and Republicans were especially same crimes committed in different jurisdictions by outspoken regarding workers’ compensation reform, different people. claiming it was key to improving the State’s business climate. Throughout the session, legislators engaged key To contribute to eth effort to close Illinois’ structural workers’ comp interest groups to seek reasonable budget deficit, the General Assembly passed a bipartisan compromises. Medicaid reform bill to streamline services and cut costs without doing significant harm to the populations the program serves. The law is expected to save the State Department of Communications | www.IllinoisSenateDemocrats.com | May 31, 2011 | Page 3 of 69 nearly $800 million over the next several years. To further fight the deficit and stabilize revenue, the General Assembly passed a temporary 2% income tax increase. The revenues allowed lawmakers to make the constitutionally mandated pension payment before appropriating funds to state programs and agencies. Unfortunately, the tax increase did not provide a cure to all of the State’s fiscal woes, making deep spending cuts unavoidable for the 2012 fiscal year. Department of Communications | www.IllinoisSenateDemocrats.com | May 31, 2011 | Page 4 of 69 Notable Legislative Accomplishments BY the NUMBERS Senate reached a compromise that reduces state spending, minimizes the impact on vital services, and Senate Bills 2,486 allows Illinois to start paying off its past due bills. Introduced Senate Bills 226 The budget process this year was complicated by Passed unprecedented spending pressures. When adding House Bills 3,791 together group health insurance payments, a drop in Introduced federal funds, higher constitutionally mandated House Bills 406 pension payments, debt payments, and statutorily Passed mandated transfers out of the General Revenue Fund, Bills Signed into 5 maintaining level funding for FY 2012 was impossible. Law Appointments 116 Despite these intense spending pressures, the first Confirmed thing the General Assembly did was appropriate money to meet State retirement system obligations. THE BUDGET This was the first time in years that the General Assembly has made the full pension payment without This year, the General Assembly took concrete steps to relying on borrowing. This action also helped shrink end the State’s operating deficit and put Illinois firmly Illinois’ unfunded pension liability. on the path to fiscal stability. Faced with intense spending pressures and slow‐to‐recover tax revenues, In the end, Illinois’ total spending will be $6.7 billion Senate Democrats took seriously their duty to cut less in FY12 compared to last year when factoring in government spending. Cuts to important programs the reality that $3.7 billion was borrowed to make like K‐ 12 education and medical services for low pension payments in FY11. In other words, total income Illinoisans were extremely difficult, but Illinois government spending went from $65.8 billion in reducing spending was the only way to balance the FY11 to $59.1 billion in FY12. While GRF spending budget. increased, discretionary spending dropped as a result of paying the State’s pension payment without At the end of the 96th General Assembly, House and borrowing, as well as a loss of $1.4 billion in federal Senate Democrats passed a revenue‐stabilization plan funding. It was impossible to make over $6 billion in that finally enabled the State to live within its means. total spending cuts without significant cuts to human However, even with new revenue, cutting the budget services and education. Senate Democrats worked to was absolutely necessary. Despite signing a law requiring government to spend no more than it takes Total Spending in, Governor Quinn introduced a budget that relied on State Spending FY 05-FY 12 GRF Spending nearly $2 billion in deficit spending. Leaders in the $70.00 House and Senate immediately pledged to reduce the governor’s spending blueprint, and both chambers $60.00 came up with their own revenue estimates. $50.00 The House’s revenue estimate was based on unstated $40.00 criteria, but the Senate adopted the estimates of expert, independent economists who work with the $30.00 legislature’s bipartisan Commission on Government $20.00 Forcasting and Accountabily. Democrats in both Billions) (in Spending chambers then proceeded to lay out their budget $10.00 plans. However, unlike in the House, Republicans in $0.00 the Senate refused to participate in the process other FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 than issuing empty news releases and holding press Fiscal Year conferences. In the end, Democrats in the House and Department of Communications | www.IllinoisSenateDemocrats.com | May 31, 2011 | Page 5 of 69 achieve substantial reductions without making cuts allowing for more transparency and increased more severe than necessary. Unlike Senate requirements before unions can go on strike. Republicans, Democrats made difficult, but necessary choices to balance the budget. The bill ‐ which has been described as a national model by United States Secretary of Education Arne Duncan ‐ The members of the Senate Democratic Caucus also passed the Senate unanimously on April 15, and realize that they will be cutting the budget for years to passed the House with near‐unanimous support on come. In order to keep the unfunded pension liability May 12. It currently awaits the governor’s approval. from increasing, pension payments will continue to ramp up. Other statutorily mandated spending like HISTORIC REDISTRICTING PROCESS Medicaid payments will also increase each year. In Every decade, Illinois is mandated by state and federal order to make these unavoidable payments, other law to realign the boundaries for legislative and areas of the budget will have to continue to shrink. congressional districts