Distributed via Email: June 25, 2009

LEGISLATURE DOES LITTLE IN SPECIAL SESSION

The Illinois legislature this week met in a special session called by Governor Pat Quinn, but little was accomplished. Both the Senate and House of Representatives convened on Tuesday and Wednesday as the governor called them back to the Capitol in a push to call for another vote on an income tax increase. No such vote was taken.

The governor claims that if new revenues are not generated by an increase in the state's income tax rate, drastic cuts will have to be made in the Fiscal Year 2010 state budget. The cuts would hit social services and education the hardest, according to the Governor Quinn. The new fiscal year begins July 1.

Few political observers believed that there would be a vote this week on an income tax increase - and that if such a bill was called there was really no chance of passage. Now that Republican votes are needed to pass any bill with an immediate effective date (because the legislature has passed the May 31 deadline), new negotiations are ongoing on budget and related issues. Republicans have not closed the door on finding new state revenues, but the minority party says that first other budget-related items must be agreed to: more cuts to the state budget and no new state programs, Medicaid reform, pension reform, and more accountability for state spending. Simply, more time is needed for these discussions and legislators were not ready to take a vote on an income tax bill this week.

The House will return to the Capitol on Monday; the Senate returns on Tuesday. Again, no one really expects a vote on an income tax increase next week. Lawmakers could approve a temporary budget (30 days or 60 days) to allow for the ongoing budget discussions and to hold off on any major budget cuts or employee layoffs.

PENSION "NOTE" LEGISLATION

In an effort to ease budget pressures, a five-year pension bond deal passed out of the House Personnel and Pensions Committee yesterday and is pending on the House floor. SB 415 was sponsored by Representative Kevin McCarthy (D-Orland Park) in the House. The bill, along with a corresponding appropriations bill passed earlier in the spring session, makes the fully certified FY '10 payment to the state pension systems. It authorizes the state to issue $2.23 billion in general obligation bonds to pay the portion of the annual certified amount that pays down liability in the state's five pension systems for FY '10. The bonds would be paid back over five years with the total debt service on the bond totaling $257.4 million. Additionally, this bill limits the continuing appropriations for the state-funded retirement systems for fiscal year 2010 to the normal cost to the system for FY '10 as opposed to paying for both the normal cost and the liability. The resulting "savings" can be used for other parts of the state budget.

This legislative report is written and edited by the lobbyists of the Illinois Association of School Boards to provide information to the members of the organizations that comprise the Illinois Statewide School Management Alliance.

General Assembly Bill Text/Status

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