State Roundup: Pension decision adds pressure to find alternatives
From Illinois News Network
As if there wasn’t already enough pressure on a Republican Governor and a Democrat-controlled General Assembly to find solutions for the coming fiscal year, they now must find a balance between annual increases of retiree pension benefits and vital state services.
Moody’s Investors Services says they never factored in the savings projected from the law, now deemed an unconstitutional diminishing of benefits, when giving Illinois a rating of A3 Negative.
But they do say Governor Bruce Rauner’s pension savings plan would be subject to further litigation and more delay. Rauner’s office said Friday there needs to be a constitutional amendment to make the pension clause more clear.
The court’s unanimous decision talked about revenue, but Moody’s says there may be a focus of shifting the funding burden for teachers and public university employees to their employers, but that could impact the credit rating of those institutions.
Among states with budget deficits, Illinois has largest
Among the states that have projected shortfalls in their budgets, Illinois has the largest by several billion. That’s according to a review by the Associated Press.
Numbers from 22 states expecting shortfalls in coming years compiled by the AP indicate Illinois is the worst with over $6 billion projected deficit. Pennsylvania is a distant second with a $2 billion deficit.
The Illinois deficit is due in part to a democrat controlled legislature approving spending levels in previous General Assemblies that absorbed billions in extra revenue from a temporary income tax increase.
Fiscal Year 2015 required fund sweeps in the hundreds of millions of dollars to fill a gap, something Governor Bruce Rauner insists won’t happen again for FY 2016.
Illinois has a provision in the state constitution that requires the Governor propose a balanced budget, something presented earlier this year. Rauner has said he plans on a 2016 fiscal year not dependent on increased revenue but some lawmakers criticized the proposed budget as being unrealistic.
Sandack: Working group should accelerate
With pension reform deemed unconstitutional and a looming budget deadline in weeks, movement towards solutions should be sped up. That’s according to one lawmaker involved in a working group between legislators and the Governor’s office.
The Illinois Supreme Court struck down a 2013 pension reform law which means Illinois will be setting aside $7 billion annually for state employee retirement, which could increase in years to come. Republican Representative Ron Sandack says things are going to have to be hurried to find solutions to limit the impact on services to taxpayers.
“So, to a certain extent we’re starting from scratch, although the Governor has a plan and I’m on that working group–I think we’re going to need to accelerate our efforts.”
Sandack says his proposal to allow municipalities to declare reorganization bankruptcy as a last resort should be even more important now because the state’s Supreme Court ruling on pension reform will impact both state and local government’s pension obligations moving forward.
The Supreme Court unanimously ruled the pension reform law was an unconstitutional diminishing of benefits. Illinois’ unfunded pension liability is $111 billion and growing while municipalities are collectively straddled with tens of billions more in public sector pension obligations.
Lang: Working groups not working
Several working groups featuring lawmakers and staff from the Governor’s office continue to meet on a variety of issues, but what the ultimately product will be is unclear. Democratic Representative Lou Lang says he’s involved himself in one of those working groups, but says he’s been told by the Governor’s staff to not discuss the details.
Speaking with WMAY Springfield last week, Lang says there seems to be an approach from the Governor’s office of trying to force a consensus on certain issues.
“And so if they want to have a real discussion about some of these items, whether it would be any of these working groups, then lets have a discussion. But no discussion can start from the point of view of ‘I’m right, youre wrong, we’re gonna do it my way or we’re not gonna do it at all’.”
Lang says the Governor seems adamant on getting major things in his Turnaround Agenda passed into law. Topping the list of priorities, according to the Governor’s office, is a provision to put term limits up for a vote on a ballot. The Governor has also campaigned on employee empowerment zones.
House Speaker Michael Madigan scheduled a vote on right-to-work for this week saying that the Governor should produce formal language for his proposal, but no formal language has yet been introduced.
Mooney: It’s crunch time for working groups
Later this week the Illinois House will take up the issue of Right-to-Work. Speaker Michael Madigan announced the vote as session wrapped up last week. House minority leader Jim Durkin said he wants the working group on the proposal to continue their work to build a consensus.
But Christopher Mooney, Director of the Institute for Government and Public Affairs at the University of Illinois, says time is inching towards an end-of-May deadline and something’s got to move.
“If reports of these working groups are correct that he’s demanding to get his Turnaround Agenda through before he’ll talk about any kind of compromises that might make the budget–even, even with serious, serious cuts–passable, he’s tying everything together and Jesus I don’t know what’s gonna happen.”
The deadline to pass legislation with simple majorities is the end of the month. The next fiscal year is set to begin July 1.
State police approved to use unmanned aerial vehicles
The Federal Aviation Administration has given the green light to Illinois State Police’s Unmanned Aircraft System, or UAS. ISP says using the moniker drone implies preprogrammed flight patterns to gather indiscriminate data, but ISP says they won’t be used for surveillance unless there’s a warrant.
ISP said they received approval after spending the past two years developing the program to ensure safety and compliance with various laws and civil rights groups.
UAS will be used to help take images of major traffic crashes and enhance documentation of crime scenes, but police say each mission will have specific circumstances. Among other uses ISP says they have approval–natural disasters, missing people searches or specific terrorism risks identified by the Department of Homeland Security.
ISP says they must get search warrants before they can use their systems on private property and any data must be destroyed within 30 days unless there’s evidence of a crime.