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State of Illinois Budget Situation in July 2017

Wednesday, July 5, 2017   (0 Comments)
Posted by: Lindsay Wagahoff, MA
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Editor Note: This article has been updated to reflect the House override vote on July 6, 2017. 

 

 

State of Illinois Budget Situation in July 2017

 

Over this past weekend and 4th of July Holiday, the Illinois Capitol was a busy place. The Senate Minority Leader Christine Radogno resigned, and a budget package was voted on. Both items are detailed below.

 

Senate Minority Leader Christine Radogno Resigns

 

On Thursday, June 29, 2017, Senate Minority Leader Christine Radogno announced her resignation as a State Senator and the Senate Minority Leader, effective July 1, 2017.  Leader Radogno was elected to the Illinois Senate in 2006 and is from Lemont, Illinois.  During her press conference, Leader Radogno indicated she had decided to resign earlier in the year, and the end of the fiscal year was an appropriate time. Upon her resignation, the Senate Republicans needed to elect a new leader. On Friday, the Senate Republican Caucus elected Senator Bill Brady as their new leader. Leader Brady is from Bloomington, Illinois.

 

Budget Votes Over the Weekend and 4th of July Holiday

On June 21, 2017, the Governor called a 10-day special session for legislators to return to Springfield. The Special Session was supposed to focus on a balanced budget, education funding, workers’ compensation reform, as well as other issues.  The legislative leaders and working groups met several times over the course of the special session to try to reach a deal on a balanced budget, as well as many reform issues.

 

On June 30, 2017, it became clear a deal would not be reached by midnight, which would be the end of the fiscal year.  Ultimately, that meant the State would enter its 3rd fiscal year without a state budget.  As a sign of good faith negotiations, House Republicans put votes on a budget amendment that day. The Leaders vowed to keep negotiating and Speaker Madigan even sent a letter to the bond rating agencies to ask for more time before the State ends up being rated as “junk bond” status.  Both chambers were in session on Saturday July 1, 2017, to continue negotiations.

 

On Sunday, July 2, 2017, only the House came into session and filed amendments to bills that would become known as the “budget package.”  In the package were the following three bills:

 

  • SB 9 (Hutchinson/Davis, W.)-Tax Increase: This legislation increased the personal income tax rate from 3.75% to 4.95% and the corporate income tax rate from 5.25% to 7%. The tax increase becomes effective July 1, 2017, and will be permanent. The legislation also extends some other tax programs. 
  • SB 6 (Steans/Harris, G.)- Budget Bill: This legislation established a budget for the past two fiscal years, as well as a full year budget for FY 18. The legislation appropriated funds for a variety of items, including but not limited to the State Employee Group Insurance Program, social service agencies, and education.
  • SB 42 (Trotter/Harris, G.)-Budget Implementation Bill: This legislation outlined exactly how the budget was to be implemented. It is a necessary piece of legislation in the overall budget package. The legislation included several provisions, including but not limited to the following: i) a provision allowing the State to borrow up $8 billion to help pay back some of the old bills in the bill backlog; ii) a provision that funding for K-12 education had to be spent based upon “evidence-based” funding formula model, which has been a point of contention for the legislature; and iii) created a Tier 3 pension level for individuals in the State pension system.

Upon passage, all three legislative items would become effective immediately.

 

The House passed all three legislative matters on Sunday with Democrat and Republican support.  Even though the legislation had Republican support, it was not a true “deal.”  The measures passed the House with the following votes:  SB 9 (Hutchinson/Davis, W.) vote was 72-45-0, SB 6 (Steans/Harris. G.)  vote was 81-34-0, and SB 42 (Trotter/Harris, G.) vote was 36-19-0.

 

All three pieces of legislation then went back to the Senate to be voted on.  The Senate was not in session on Sunday and did not vote on Monday. They voted for the pieces of legislation on Tuesday, July 4, 2017.  The measures passed out of the Senate with the following votes:  SB 9 (Hutchinson/Davis, W.) vote was 36-18-0, SB 6 (Steans/Harris. G.) vote was 39-14-0, and SB 42 (Trotter/Harris, G.) vote was 36-17-0.

 

After the passage of the “budget package” in the Senate, the Governor immediately vetoed all three pieces of legislation. In his veto message, The Governor expressed his view that the package did not provide any regulatory relief and that the budget is unbalanced, also citing his dissatisfaction with  the criteria for the education funding formula.

 

Quickly following the Governor’s veto, the Senate overrode the veto on all three pieces of legislation. The override occurred on the following votes: SB 9 (Hutchinson/Davis, W.) vote was 36-19-0, SB 6 (Steans/Harris. G.) vote was 39-15-0, and SB 42 (Trotter/Harris, G.) vote was 36-18-0.

 

On Thursday, July 6, 2017 the House voted to override the Governor's veto. The override occurred on the following votes: SB 9 (Hutchinson/Davis, W.) vote was 71-42-0, SB 6 (Steans/Harris. G.) vote was 74-37-0, and SB 42 (Trotter/Harris, G.) vote was 71-41-0.

 

All three pieces of legislation have now become law. 

 

 

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