Legislative Update: October 23, 2015

Action Delayed Again on State Budget
The Illinois House and Senate met in fall session on Tuesday, October 20, but once again lawmakers took no substantive action on the FY16 budget. Testimony on specific areas of the budget was heard in another Committee of the Whole, and leaders from the majority party moved amendments to a bill as they continue their efforts to cherry-pick which programs and services should be funded. This week’s activity did nothing to bring us closer to agreement on a budget. The next General Assembly session day is scheduled for Tuesday, November 10, which I find completely unacceptable. Prior to adjournment on Tuesday I renewed my call for an end to the budget stalemate by suggesting that the doorkeeper lock the doors and keep us there until an agreed budget is approved. You can watch my floor comments here.

Rauner Administration Reaches Agreements with Trade Unions
After several months of good faith negotiations, Governor Bruce Rauner agreed to terms on new four-year collective bargaining agreements with the International Union of Operating Engineers, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, and the International Association of Machinist and Aerospace Workers. The last set of agreements expired June 30, 2015.

The new contracts cover workers at the Departments of Agriculture, Central Management Services, Corrections, Historic Preservation, Human Services, Juvenile Justice, Military Affairs, Transportation, Veterans’ Affairs, and the Illinois State Police. The employees are all professional tradesmen and women who work as stationary engineers and plant operators, plumbers and steamfitters, and machinists.

The tentative agreements are being submitted to the membership of the trade unions for a ratification vote. The terms of the tentative agreements are confidential until the end of the ratification process.

As a continuation of the productive negotiating sessions, the trade unions and the Governor’s Office also pledged to form a long-term relationship to improve employer-labor relations in state government.

Fitch, Moody’s Downgrade Illinois
Fitch Ratings, whose credit ratings are closely watched by Wall Street and the global investment community, reduced Illinois’ “general obligation” (GO) bond rating from single-A-minus, the former ranking, to one notch closer to junk-bond status on Monday, October 19. The new BBB+ rating is only two notches above the lowest investment-grade rating (BBB-) and is three notches above BB+, which signals non-investment-grade (“junk bond”) status. Illinois’ GO bond rating is the lowest among the 50 states.

Following Fitch’s downgrade, Moody’s Investor Services downgraded its ratings on Illinois bonds. Thursday, Moody’s downgraded Illinois outstanding $27 billion of GO bonds to Baa1 from A3, while also lowering ratings on the state’s sales-tax (Build Illinois) bonds to Baa1 from A3, and on the state’s subject to appropriation bonds to Baa2 from Baa1. The outlook for all of these obligations remains negative.

Budget Stalemate Continues; Comptroller Munger Issues Financial Update
Comptroller Leslie Geissler Munger told Illinoisans on Friday, October 16 that the State’s unpaid bills, in the absence of budgeted appropriations for FY16, have reached $6.9 billion. Based on the assumption that no significant changes will alter current trends, the State’s backlog of unpaid bills will be about $8.5 billion by December 31, 2015.

While many subsets of the FY16 budget are being protected by at least 14 separate court orders, consent decrees, and continuing appropriations laws, not all of the budget is so protected. A major November 2015 pension payment of approximately $560 million, required by certified actuarial projections, is expected to be delayed. Payments due to many nonprofit socials service providers, Illinois university students and their institutions of higher education, counties, municipalities, 9-1-1 emergency call centers, and many other vendors are facing delay. Layoffs are taking place due to the inability of the State of Illinois to enact a constitutionally balanced budget.

First Gig Rock-N-Roll Camp for Kids Receives $2,000 Grant
In partnership with AT&T’s Investing in Illinois Awards Program, this week I had the pleasure of presenting leaders from the First Gig Rock-N-Roll Camp for Kids with a $2,000 grant. AT&T’s Investing in Illinois Award provides resources and recognition to organizations and programs in Illinois that are improving lives in their communities and the state by advancing education, economic growth, new technologies and other essential community services. I was proud to nominate “First Gig” for this grant. The hard-working and dedicated camp directors work tirelessly to nurture children’s love of music.

Illinois High Schools Increase their Graduation Rates
The increase, tallied for school year 2013-2014, reflects a higher number of high school graduates as a proportion of those entering high school. For 2013-2014, the rate for Illinois was 86.0%, up 2.8% from the 83.2% reported in 2012-2013. Higher graduation rates mean fewer dropouts. The new numbers were reported by the U.S. Department of Education on Monday, October 19.

Illinois has room for improvement in its high school graduation rates. The 2013-2014 report shows 19 states scoring above Illinois. All five neighboring states – Indiana, Iowa, Kentucky, Missouri, and Wisconsin – outscored Illinois on high school graduation rates in 2013-2014. Iowa’s graduation rate, 90.5%, was #1 among the 50 states measured.