The spotlight in Springfield last week was on our new governor as he gave his first State of the State/budget address on February 20.
Governor Pritzker prioritizes education and a Fair Tax
Governor JB Pritzker laid out his budget priorities last week before a joint session of the Illinois General Assembly. He recommended that state resources be concentrated into three main areas: education, health and human services, and public safety. The governor reiterated that our state’s economic challenges cannot be solved without more revenue, and a Fair Tax is the answer.
"We agree with the governor – and 72 percent of Illinoisans – that our state’s wealthiest citizens should pay their fair share, while lower and middle-class families get a break. We are fully committed to helping pass a fair tax," said IFT President Dan Montgomery in a statement.
In addition to the Fair Tax, the governor’s budget proposal includes:
- $375 million increase for the K-12 education
- $24.5 million increase for Special Education
- 5 percent increase for universities and community colleges
- $100 million increase for the Early Childhood Block Grant
- $3.5 million for a match for the new federal “birth-to-5” program
- $5 million increase for Career and Technical Education
- $50 million increase for Monetary Assistance Programs (MAP) grants for needy students
- Devoting a revenue stream to pay down the systems unfunded liability (provided the state Fair Tax proposal is approved).
- Extending the pension funding ramp by seven years, which would result in a cut in state contributions in the near term. To help counter this reduction, a $2 billion pension obligation bond would be deposited with the systems.
- Using state assets as a deposit of capital into the systems to assist in addressing the unfunded liability.
- Making the optional pension buyout program permanent. This program allows members at the time of retirement to receive a partial buy out of their compounded 3 percent cost of living adjustment (COLA).
(It should be noted that these are initial proposals and would require legislative approval.)
Governor Pritzker proposed a supplemental appropriation for FY19 totaling $380 million to cover the back pay and step increases anticipated in April. The proposals would also address full funding of group health insurance and rebuilding state government.
The governor’s budget is contingent on an addition $1.1 billion in revenue from several sources, including: sports betting ($212 million), recreational marijuana ($170 million), plastic-bag tax ($20 million), vaping tax ($10 million), cigarette tax hike (additional $55 million), medical care organization assessment ($390 million), closing corporate tax loopholes ($94 million), phasing out the private-school scholarship credit ($6 million), progressive tax for video gaming ($89 million), and capping the retailers discount ($75 million).
If the new revenue package fails to receive legislative approval, the administration will propose a 4 percent cut to all state agencies.
Efforts continue to allow retirees to return to work
HB 1472 (Davidsmeyer) was approved by the House Pension Committee last week. The legislation allows retired teachers to return to work in designated subject shortage areas. The legislation applies to retirees returning to work between June 30, 2019 and June 30, 2021 and will not impact a retiree's annuity.
Wage gap bill queued up (again)
HB 834 (Moeller) was approved by the House Labor Committee. This bill addresses the wage gap for women and minorities by prohibiting employers from asking prospective employees about their wage history. The bill is identical to a bill that former Governor Rauner previously vetoed.
Process established for withdrawal from special education co-ops
SB 209 (Bertino-Tarrant) was approved by the Senate Education Committee. The bill provides districts and cooperatives with planning time to ensure appropriate student placement by requiring that a petition for withdrawal from a joint special education agreement must be presented to other member districts within 18 months from the date of the withdrawal.
House and Senate hearings on capital need commence
Governor Pritzker also called for a capital bill during his budget speech, but has not yet offered specifics about how to fund a capital program. Regional hearings will be held this spring in Decatur, Edwardsville, Elgin, and Peoria to provide input on such a bill. The IFT will keep you informed when details become available.
A look ahead
Senators return to their districts this week, while the House remains in session.