State Roundup: Measure mandating financial instruction passes

From Illinois News Network

A measure to mandate curriculum in public schools to teach students about various consumer issues passed both the House and Senate and now heads to the Governor’s desk. Senate Bill 672 passed the Senate in March with 38 Senators voting in favor.

The measure, which would add consumer debt, student loans and identity-theft security to financial literacy subjects, found much more support in the House.

However, Republican Representative Ed Sullivan criticized the measure as another unfunded mandate. He also shared another reason why he voted no.

“Until the members of the General Assembly and state officers are gonna take this same class, I’m voting no.”

Supporters of the legislation pointed to studies showing students who learn about the various financial subjects have better credit scores later in life. SB 672 passed the House with five representatives voting no.

The measure now heads to the Governor’s desk.

Pension proposal in committee

Of the two proposals to address Illinois’ pension crisis from the Governor’s office, there appears to be some support for a constitutional amendment rather than a legislative fix. That’s the takeaway from a House Personnel and Pensions Committee Wednesday. After hearing specifics about the two proposals from staff of Governor Bruce Rauner, committee member and Democratic Representative Scott Drury said the fact there’s a constitutional amendment being proposed means the proposed legislative fix would be unconstitutional.

“And so your two proposals actually counterbalance each other, set your proposals off, apart.
And so I hope that we can use a subject matter hearing to try to come fourth with a real solution, not a solution that already been disregarded and discarded by the Supreme Court.”

Democratic Representative Carol Sente says going forward, the focus needs to be on what’s constitutional.

“Like the idea of a constitutional amendment. I think the people can speak and I think that’s a great idea. And I do think it’s important to try and do something”

Sente says it is still important to do something before an amendment can get before voters, but worries the current proposal the Governor’s office says would secure earned benefits but move future earnings to a second tier wouldn’t pass constitutional muster.

After last week’s Supreme Court ruling on pension reform being unconstitutional Moody’s said that the Governor’s pension reform proposal would be litigated and only cause further delay in addressing the growing unfunded liability which is $111 billion.

More downgrades in Chicago

It will now cost Chicago taxpayers even more money to borrow with a downgrade of Chicago Public Schools.

For a second day in a row, Moody’s Investors Services downgraded several governmental institutions in the Windy City to junk bond status.

Moody’s said that CPS’s downgrade from Baa3 to Ba3 with a negative outlook reflects the public school’s steadily escalating pension costs and the use of reserve funds to pay for the increased contributions, something the investors service says will put pressure on the district’s financial position.

Moody’s also says the state government’s financial problems will limit future state aid to the district. The Chicago Park District also received a downgrade from Baa1 to Ba1, also junk status.

Moody’s says that’s based on CPD’s ties with the City of Chicago government and the state’s pension reform law being deemed unconstitutional.

The financial firm downgraded both the city government and the city’s sewer projects Tuesday to junk bond status.

China Consul General addresses General Assembly

China and Illinois should continue to foster a collaborative and cooperative spirit. That’s according to the China Consul General.

Zhao Weiping addressed both chambers of the General Assembly Wednesday with the same message: continued collaboration and cooperation will benefit both China and Illinois. Weiping said China is the third largest export market for Illinois.

“And the major buyer of Illinois machinery, agricultural products, transportation equipment, chemicals, computers and electronic products. Illinois as an increasingly popular destination for Chinese investment has become a new home to nearly 60 Chinese companies.”

Weiping also said that Illinois is also becoming increasingly popular with people in China and cited 15,000 students studying at Illinois universities and more than 190,000 tourists visiting the Land of Lincoln.

Crowdfunding measure in state Senate

A measure allowing for small investments in small businesses from around the country passed unanimously in the House and sponsors hope for the same support in the Senate.

If passed in the Senate, House Bill 3429 would allow for small businesses to generate up to $4 million in investments from people within Illinois and outside the state.

Individuals would be allowed to invest up to $5,000. The Small Business Advocacy Council’s Elliot Richardson says the measure, if passed, would be a huge win for small businesses in Illinois by allowing small investments in their operations. Richardson says it’s different than other crowdfunding opportunities that are currently available.

“Instead of getting some sort of token of appreciation for investing in the company or something like you get in Kickstarter or a butt in or a piece of merchandise investors will actually get a small piece of equity in the company they invest in. So, it’s going to empower small businesses it’s going to empower local communities and it’s going to empower startups.”

Currently there is no law that allows for small investments in exchange for equity in a business. House Bill 3429 would make such investments legal. The measure passed the House unanimously and now heads to the Senate where it’s on the second reading agenda.

State settles cramming case

Illinoisans will get part of nearly $160 million dollars after a settlement with several cell phone service providers for a practice known as cramming. Most of that money is available as restitution for consumers.

Attorney General Lisa Madigan announced Sprint and Verizon will pay the settlement to resolve the allegations that they placed third-party charges on their customers’ bills.

Madigan says cramming happens when third-party vendors use consumers’ phone numbers like a credit card, adding charges to the bills for things like celebrity gossip, trivia, and other “bogus products” without requesting authorization leading to months of charges that go unnoticed.

The settlement includes protections to prevent such third-party charges. Consumers can submit claims to each of the carriers.

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