Wheeler 64 Report: June 20, 2016

Illinois House Session Cancelled; Negotiations Continue to End Budget Impasse
House Republicans have been full participants in the continuing negotiations that are taking place to develop answers to the current questions that are affecting the Illinois budget. Talks are taking place on a variety of related issues that include school funding, higher education funding, funding for social services, labor/management reforms, and public-sector personnel expense issues.

House Speaker Michael Madigan cancelled the second of four scheduled Wednesday session days last week. Lawmakers would have met on June 15 to enable public discussion and debate on these issues, but as a result of the cancellation no meeting took place. The cancellation was criticized by Republicans, who want all sides to work together to end the current impasse.

Comptroller Munger Adds Voice to Calls for Balanced Budget Action
The Comptroller maintains a website and a Twitter feed that track the ongoing pileup of Illinois unpaid bills. As of Thursday, June 16, this number had passed $7.58 billion. These unpaid bills are owed to healthcare providers, providers of community social services, providers of essential supplies to residential facilities and prisons, and other involuntary creditors of the State.

The numbers tracked by Munger serve as a reminder that the Illinois General Assembly’s Democratic majorities failed to pass a constitutional balanced budget in spring 2015 for FY16, which began on July 1, 2015. This lack of a budget and of budgetary spending controls have choked off much of the cash flow needed by creditors dependent upon Illinois’ good name and prompt payments, while other areas of Illinois spending proceed unhindered because they are covered by court orders, consent decrees, and continuing appropriations.

School Districts Begin to Plan for Truncated 2016-17 School Year
A shortened school year could become a reality in Illinois if no State budget is enacted to appropriate money to public school districts. While education was funded in 2015-16 even in the absence of a state budget, this happened because the General Assembly passed a one-year spending bill that packaged together most of the usual line-items of State school aid. Democratic legislators last spring suspended what has become their overall refusal to appropriate money in a form tolerable to Governor Rauner and appropriated money for schools. However, the same lawmakers have so far refused to do the same thing this year.

School district spokespersons are telling the press that they are making plans for emergency budgets that will not include State school aid. Most school districts are dependent on both property tax revenue and State school aid, and will suffer if deprived of either source of funding. For example, the Monmouth-Roseville school board in west central Illinois is making preliminary plans to shut down operations and lay off teachers/other educational personnel after one semester of the 2016-17 school year. The plans include a proposal to hold an early graduation ceremony for the high school seniors of the district.

Rep. Anthony Resigns to Take Position with Department of Corrections
Republican Representative John Anthony of the 75th District, an Interstate 80-oriented district centering on Morris, Illinois, announced his resignation from the Illinois House last week in order to take on a new opportunity with the Illinois Department of Corrections. The lawmaker’s last full day in the Illinois House was Thursday, June 16.

Anthony, a former sheriff’s deputy, specialized in questions of criminal law and law enforcement in the House. Republican Leader Jim Durkin praised Rep. Anthony’s work in the General Assembly. “A former law enforcement officer, John quickly became a go-to guy on issues related to criminal justice and corrections. His expertise and insight on these matters will be missed,” Leader Durkin said.

During his time in the Illinois House, Anthony was the lead Republican co-sponsor of HB 1, the bipartisan 2015 measure to reform Illinois laws relating to heroin addiction, other opiate addictions and opiate-related deaths. HB 1 includes provisions to place opiate agonist drugs, such as Naloxone, in the hands of police officers and other first responders.

Moody’s Places Illinois Public Universities under Credit-Rating Review
The review process could result in Moody’s downgrading the outstanding public debt of seven public universities: the University of Illinois, Illinois State University, Southern Illinois University, Northern Illinois University, Governors State University, Northeastern Illinois University, and Eastern Illinois University. All of these Illinois institutions of public higher education have extensive infrastructural needs that are supported by periodic recourse to the capital markets.

Moody’s stated that the schools are vulnerable to the State budget stalemate. The General Assembly’s Democratic majority did not enact a budget bill in May 2016 to provide operating funds for Illinois State universities in the 2016-17 school year. The U of I, ISU and SIU currently have investment-grade credit ratings that are actually better than those enjoyed by the State of Illinois as a whole; their revenue streams are backed up not only by political decisions, but by other monies coming in, such as tuition, student fees, and federal loans and grants.

New Skittles Production Line Opens near Chicago
The factory, located in the Kendall County seat of Yorkville, will produce Skittles candy for the William Wrigley Company. The confectioner, which has longtime ties to Illinois, has expanded its production of the colored candies outward from their existing Waco, Texas factory. Up to 75 new employees will be hired in Illinois.

William Wrigley credited incentives from the Illinois Department of Commerce and Economic Opportunity (DCEO) for the decision to site the new production in Illinois. DCEO operates a package of workforce development programs that include job training and employment development for prospective employers in Illinois.

Rauner Administration Seeks Expedited Resolution of AFSCME Case
The labor negotiations between the Rauner administration and AFSCME, the labor union that represents 38,000 state workers, have not yet generated a contract. The Rauner administration has asked AFSCME to grant various concessions, including a wage freeze and a significant increase in AFSCME member and retiree health care co-payments and other forms of cost sharing, and AFSCME has so far refused.

Under state labor law, a series of procedures are laid out to follow in the case of an unresolved public-sector labor contract situation, including a recommendation by an administrative law judge. The Rauner administration has taken legal steps to expedite a resolution of the ongoing dispute. These steps included a move to legally bypass the administrative-judge step in the dispute resolution pathway.

The Rauner administration has stated that the health-care concessions they are seeking from AFSCME and its members could save taxpayers as much as $35 million to $40 million/month. These savings could be applied immediately to the cash-flow situation currently facing the State. The case is currently before the Illinois Labor Relations Board (ILRB), which could declare that talks are at an impasse. The administration’s move became public on Tuesday, June 14.