Distributed via Email: February 20, 2008

GOVERNOR GIVES BUDGET ADDRESS

Governor Rod Blagojevich delivered his joint State of the State/Budget Message Wednesday and outlined his priorities for the Fiscal Year 2009 State budget. In stark contrast to his past several such addresses, the Governor came off as much more brief, conciliatory, and open to work with the legislature as he gave a speech containing some old and some new proposals. His remarks were framed with an overview of the unfavorable national economic picture and stressed that the Illinois budget will have to adjust to the "tough times" ahead.

For elementary and secondary education, the Governor stayed close to the recommendations recently made previously by the Illinois State Board of Education (ISBE) – calling for a $300 million funding increase over the FY 2008 budget. Though final allocations of the ISBE budget will be made by the legislature, the proposal calls for a $125 per pupil increase in the state aid formula's foundation level; full funding of the mandated categorical grants; and a $45 million increase in early childhood education. The General Assembly will soon begin debating the budget largely based upon the Governor's budget proposal.

The Governor also called for a $25 billion public infrastructure program – including $3.8 billion for school construction and school maintenance.

The Governor's budget overview can be found at www.illinois.gov; the ISBE budget book can be accessed at: http://www.isbe.net/budget/FY09_Budget_Book.pdf

BUDGET PROPOSAL HIGHLIGHTS

PUBLIC INFRASTRUCTURE PROGRAM
The Governor proposes a $25 billion capital program, including:

• $14.4 billion for roads and bridges
• $3.8 billion for school construction
• $2.7 billion for public transit
• $1.1 billion for higher education
• $1.1 billion for environment, energy, and technology
• $1 billion for economic development and housing
• $600 million for improved and expanded State facilities
• $500 million for airports and rail

TAX CREDIT
Following the lead of the federal government's attempt to "jump start" the economy, Governor Blagojevich proposes a one-time, refundable tax credit of $300 per child for Illinois taxpayers who qualify for the federal economic stimulus plan.

BUSINESS TAX CUT
The Governor, a year after proposing a "Gross Receipts Tax" on businesses he claimed were not paying their fair share of state income taxes, proposes the establishment of a 20% tax cut for businesses that paid corporate income taxes in Illinois in 2007.

HEALTH INSURANCE
The Governor proposes to expand the "Illinois Covered" health insurance program, including: "FamilyCare," the Illinois Breast and Cervical Cancer Program, electronic medical records; access for low-income adults, "Roadmap to Health," "All Kids Bridge," and other "affordable insurance options."

BUDGET CUTS
The Governor proposes a 3% across the board cut to the state budget, except for health care, education, and public safety.

INCREASED EFFICIENCY
The Governor proposes to consolidate more administrative functions through shared services, reduce leased space, and initiate an early retirement plan for State employees.

PENSION RESTRUCTURING
The Governor proposes to refinance "high interest pension debt" into "low-interest pension obligation bonds."

REVENUE SOURCES FOR NEW PROGRAMS

Here are the proposed revenue options for the new spending in the FY '09 budget:

COMMENT PERIOD OPEN FOR "GREEN CLEANING" RULES

Rules have been submitted to implement the new law that will require school districts to use environmentally safe cleaning products. The comment period to submit concerns about the proposed rule began on Feb. 1 and will be open for 45 days. You are encouraged to review the rule proposal and submit written comments voicing any concerns you may have with the rulemaking. For a sample comment letter, please contact Alliance lobbyist Susan Hilton at shilton@iasb.com. Even if a prior letter has been submitted, it is still essential that comments are received based on the submission of the proposal to the Illinois Register – which begins the process used by the Joint Committee on Administrative Rules (JCAR).

The entire text of the rule proposal can be found in the Illinois Register, Volume 32, Issue 5, from Feb. 1, 2009. It is on the internet at: http://ilsos.net/departments/index/register/register_volume32_issue5.pdf. Scroll down to the Illinois Green Governments Coordinating Council on page 82. Further information on the rules can be found in Alliance Legislative Reports 95-52 and 95-47.

Some of the Alliance concerns with the proposed rule include:

• The language seems to give the Council powers of review and approval of exemption submittals, when according to law schools must only provide written notification to the Council that they are utilizing the exemption.
• The inclusion of paper products goes beyond the intent of the legislation, which was to encourage schools to use green cleaning solvents.
• The rule should contain an inclusion of an exemption option that recognizes the human cost of implementing these guidelines (e.g., training costs).
• The rule should contain an inclusion of an exemption option that recognizes that green cleaning supplies may not work as well as standard cleaners. As "green cleaners" are still a fairly new market, and schools are limited to the cleaners approved by the Council, the exemption form should provide a section where a school can be exempted with a note that a green cleaner they used did not perform as well as their previous standard cleaner.

The Alliance lobbyists appreciate your involvement in this issue.

General Assembly Bill Text/Status

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