Distributed via Email: July 13, 2009

GOVERNOR SIGNS CONSTRUCTION BILLS

Governor Pat Quinn, after weeks of refusing to sign the bills to create a new $31 billion statewide public infrastructure program, signed the bills into law today (Monday). The governor had earlier said that he would not take action on the capital plan until a State operating budget was in place, but changed his mind late last week.

Lawmakers return to the Capitol Tuesday to address the governor's veto of the bill to appropriate funds for the state's operating budget (SB 1197). No long term budget agreement is yet in place between the governor and the legislature and a partial budget will likely be in place until legislators return to Springfield in November.

SCHOOL CONSTRUCTION

Of the $31 billion available in the capital projects program, $1.5 billion will be available for school construction and $100 million is earmarked for school maintenance grants. The construction grant money is to be distributed through the current School Construction Grant Program operated by the Illinois State

Board of Education (ISBE) and the Capital Development Board (CDB). In HB 312, the 24 school districts that have been waiting for their promised state construction funding since Fiscal Year 2002 are specifically listed in the bill as recipients of funds. The rest of the school construction funds are supposed to be distributed through the current criteria and procedures used by CDB and ISBE.

Higher education was also included as $718 million was earmarked for state universities, $353 million was allocated for community colleges, and private colleges are to receive $300 million.

The capital projects bills are listed below. They are all effective immediately:

HB 255 creates the revenue streams for the construction bonds. It is now Public Act 96-0034.

HB 312 spells out the spending allocations for the construction program. It is now Public Act 96-0035.

HB 2400 contains the state bonding authority for the construction program. It is now Public Act 96-0036.

HB 2424 is the budget implementation bill for the construction program. Now Public Act 96-0037, it contains provisions to:

• Clarify the construction criteria for charter schools;
• Clarify the construction criteria for early childhood programs; and
• Clarifies that school districts that are located in counties that have approved the use of the county sales tax for the construction of schools are still eligible for the School Construction Grant Program.

SB 349 makes changes and clarifications to the increase in the liquor tax and the video gaming provisions. It is now Public Act 96-0038.

SB 1221 makes changes to some of the appropriations contained in SB 1197. It is now Public Act 96-0039.

SB 1959 makes changes to the provisions regarding construction for forest preserves and park districts. It is now Public Act 96-0040.

HOW IS IT PAID FOR?

To fund the statewide construction program, legislators veered away from the state income tax or the state's gasoline tax and turned to "user fees", gaming, and "sin taxes". HB 255 contains the following provisions:

• Legalizes and taxes video poker machines currently in use in bars and clubs throughout the state; $375 million
• Allows for Illinois Lottery "Lotto" tickets to be sold on the internet and allows for a private entity to manage the state lottery department; $150 million
• Increases the sales tax on candy, soft drinks (non-alcoholic drinks made with natural or artificial sweeteners, either carbonated or non-carbonated), and certain personal hygiene products (i.e. soap, shampoo, toothpaste); $110 million
• Increases the sales tax on wine, beer, and spirits; $113 million
• Increase in fees for automobile registrations; $181 million
• Increase in fees for automobile title transfers; $114 million
• Increase in fees for driver's license fees; $37 million

FISCAL YEAR 2010 BUDGET IN LIMBO

On July 1, the governor vetoed SB 1197, the bill that appropriated 50% of the amount needed to fully fund State operations for Fiscal Year 2010. House Speaker Michael Madigan and Senate President John Cullerton have called lawmakers back into session this week to take action on the governor's veto.

Though the governor had earlier said that he would keep the legislature in session all year before he would approve a "50% budget" or a temporary budget, he has now resigned himself to the fact that a budget agreement may have to wait. Governor Quinn indicated over the weekend that he will not push for a vote on an income tax increase this week, but would wait until legislators return in the November veto session. It was unclear whether or not the governor would work against a likely veto override vote by the General Assembly.

Most likely, then, the legislature will either override the governor's veto – making SB 1197 law – or approve some other bill that would allow the state government to operate through the rest of the year. Either way, the governor and legislators would then have to find some agreement in November to increase state revenues or would have to make more drastic cuts to the FY '10 budget.

School officials are urged to continue contacting their Senators and Representatives and ask for support for additional revenue for public education.

The budget bills are:

HB 2129, the bill that contains funding for General State Aid (a $231 increase in the foundation level) and full mandated categorical grant funding, is on the governor's desk.

HB 2145, the bill that contains funding for ISBE personnel and administration, was vetoed by the governor.

HB 2206, the bill that contains funding for the ISBE that is generated from the federal government, is on the governor's desk.

SB 1197, the bill that contains 50% of the requested funding for the other Illinois State Board of Education (ISBE) budget line items, was vetoed by the governor.

SB 2218, the bill that contains the budget implementation bill for the ISBE, is on the governor's desk.

ISBE PROPOSES NEW RULES

The Illinois State Board of Education (ISBE), in the June 12th edition of the Illinois Register, is proposing changing a rule in the Administrative Code that deals with Health Service record compliance. The rule titled "Public Schools Evaluation, Recognition and Supervision," includes a change that would reduce General State Aid payments by 10% if a school district, for two years in a row, fails to deliver a complete health services report on time. Please review this proposed change at: http://ilsos.net/departments/index/register/register_volume33_issue24.pdf on pages 271 and 272.

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.

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