Budget – FY16 Nears End
·         Fiscal Year 2016 nears its end without a budget.  FY16 will reach its end on June 30th, when the State of Illinois will possibly go an entire fiscal year without a budget.  Subsection 2b of Article VIII of the Constitution of Illinois requires the General Assembly to annually enact a balanced budget.

However, as FY16 began a year ago on July 1, 2015, no balanced budget had been enacted. An impasse began, with worsening consequences for entities depending on the State for day-to-day funding.  In addition, the lack of a constitutional balanced budget worsened Illinois’ standing among its neighbor states.  By June 2016, Illinois was poised to become the first U.S. state since the Great Depression years of the 1930s to try to operate for more than one year without any budget at all.  As one consequence of this somber milestone, Illinois’ credit rating had dropped by June to the lowest rank of any of the 50 states.

Budget – School Aid
·         State education funding to end June 30th; Republicans offer full funding bill.  Year-round learning programs, known as “summer school” to many older Illinois residents, are put at special risk by the pending shutoff of State school aid funds on July 1, 2016.  While many areas of State spending are not protected by court orders, consent decrees, and continuing appropriations and have already been cut off by the inability of the majority party in the Illinois General Assembly to enact a balanced budget, the State did pass a spending bill in FY16 just for schools.  Illinois elementary and secondary schools, with the help of General State Aid and other school aid programs, operated on schedule during the 2015-16 school year.  However, the school aid payments authorized by this FY16 bill will end on June 30 with the end of the fiscal year. 

House Republican Leader Jim Durkin and his colleagues are fighting for action on HB 6583 to provide full funding for Illinois schools for the 2016-2017 school year.  HB 6583 would allow every Illinois school district to be fully funded at 100 percent of the foundation level for the first time in seven years.  Additionally, the bill holds harmless those school districts that would lose state funding in 2017 due to rising property values along with a decline in poverty.  But most importantly, it removes K-12 schoolchildren from the crossfire of the larger budget impasse.

Governor Rauner has said he will sign the clean education funding bill and HB 6583 has the full support of House and Senate Republicans, who are urging Speaker Madigan and Senate President Cullerton to pass the bill next week.
You are invited to join me and State Representative Mark Batinick for a FREE ice cream social between 6:00pm – 8:00pm on Monday, June 27 at the Oberweis Dairy store located at 2274 Route 30 in Oswego.

We would like to answer your questions, listen to your concerns, and give you an update on the latest from Springfield and what we’re doing to fight for local families and taxpayers. Your feedback is especially important to us as we work toward reaching bipartisan compromise on the state budget.

Come join us at Oberweis Dairy in Oswego next Monday, June 27 between 6:00pm – 8:00pm! Just bring a copy of this invitation for a free ice cream treat. Families are welcome. For questions or more information, please contact my district office at (630) 345-3464.

Yours in Service,

Keith R. Wheeler
State Representative, 50th District
Budget – Transportation
·         Road and bridge maintenance lead to push to reopen capital spending cycle.  Illinois’ general funds budget impasse has led to problems in other areas where money is available, particularly capital spending for roads and bridges.  In these capital-spending areas, money from taxes other than income and sales taxes are set aside for specific uses defined by State law. The largest of these set-asides is money from the State per-gallon tax on motor fuel, which is put into the Road Fund and used to rebuild state-maintained roads and bridges. 

Governor Bruce Rauner and House Republican leaders called on Wednesday, June 15 for the immediate enactment of a “stopgap” road construction bill to maintain the State’s transportation program.  Contracting crews go out to many locations every summer to relay concrete and perform needed road maintenance.  This work continued even after the Illinois budget process came to a halt in June 2015.  However, the State’s legal counsel and accounting staff have now advised State leadership that this cannot continue on into FY17.  The director of the Illinois Department of Transportation, Randy Blankenhorn, warned reporters at a Wednesday news conference that his Department will be forced to suspend the IDOT construction program at month’s end unless money is released before then by law for transfer to contractors.    

While Illinois borrowed $550 million on Thursday, June 16 to meet immediate portions of the capital-infrastructure needs covered by this warning, none of this money can legally be spent unless an authorization can be wrung out of the Democrat-controlled Illinois General Assembly.   
Budget – Ratings Cut
·         Moody’s, Standard & Poor’s cut Illinois credit rating one notch.  The Moody’s Investors Service ratings cut, from Baa3 to Baa2, together with the Standard & Poor’s ratings downgrade  to BBB-plus, brings Illinois one notch closer to “junk bond” status.  As Illinois’ credit rating declines, Illinois taxpayers must pay higher interest rates.  In addition, the State faces the prospect of substantial supplemental penalties should credit ratings further decline, with borrowing covenant clauses in effect in which the State promised to lenders who have already lent the State money that it would maintain the value of its debt at investment-grade levels.  

Moody’s accompanied the ratings cut with a reaffirmation of its longstanding “negative outlook” statement on Illinois general-obligation (GO) debt, signaling the firm’s belief that further ratings cuts may be imposed on the Prairie State in the relatively near future.  Moody’s Investors Service and Standard & Poor’s are the world’s #1 and #2 providers of credit ratings to public and private entities.  A third firm that competes with and operates in close affiliation with Moody’s and Standard & Poor’s, Fitch Ratings, may also soon cut its ratings of Illinois debts. 

The credit ratings posted by Moody’s and its competitors are meant to gauge the probability that a piece of debt paper will go into default.  Credit rating cuts have preceded many of the major public-sector defaults of the recent past, including the city of Detroit and the commonwealth of Puerto Rico.  Governor Bruce Rauner responded to the debt downgrade on Thursday, June 9, with a call for “real structural changes to repair the years of unbalanced budgets and deficit spending.”
Budget – FY16/FY17
·         Second straight year without a State budget.  As the end of fiscal year 2016 (FY16) approached, House Republicans filed a budget bill, HB 6585, to cover both FY16 “stopgap” expenditures and some urgently-needed FY17 expenditure areas.  It would have appropriated badly-needed money to a wide variety of essential and job-creating state agencies and educational institutions, such as state universities and prisons. The appropriations contained in this bill were fully paid for from existing revenues.  HB 6585 was filed by House Republican leader Jim Durkin on Tuesday, May 31. 

However, the majority House Democrats refused to hear Republican budget bills. To add to the chaotic scene in Springfield’s State Capitol on the final night of the 2016 spring session, the majority Senate Democrats refused to pass the $7.5 billion out-of-balance “budget” approved by the House Democrats.  The supermajority party in the two chambers could not even agree on fake numbers for a massively-unbalanced spending plan for FY17, which will start on July 1, 2016.  In an unprecedented failure to govern, the Democrat supermajority did not pass a state budget by the May 31st deadline.  Entities that have been left waiting for more than 11 months for payment from the State were left in no doubt which party was at fault for the debacle.  Illinois’ public schools were also left unfunded as Democrats left town, pointing fingers at each other. 

A series of special sessions are expected to be held in June for lawmakers to make additional attempts to reach a budget and policy compromise.  Illinois Comptroller Leslie Geissler Munger has warned lawmakers that some state payments will end, and others will be delayed as long as eight or nine months, unless a budget deal that matches expenditures to revenues is reached prior to the start of the new fiscal year on July 1.   
Chicago, IL - State Rep. Keith Wheeler (R-Oswego) joined a group of Illinois lawmakers today to urge Illinois Auditor General Frank Mautino to voluntarily take an unpaid leave of absence while numerous investigations persist into irregular campaign expenditures and reporting procedures dating back to his time in the Illinois House of Representatives. The lawmakers stressed that Mautino cannot effectively do his job while under a lingering cloud of suspicion. 

“Over the last four months we have formally asked Auditor General Mautino four times to provide answers to the questions raised in the investigations, and still no answers are forthcoming. Recently it has come to light that federal authorities are looking into his campaign spending and reporting practices as well. There is no way that he can effectively do his job as Auditor General while defending himself against potential criminal charges and a State Election Board investigation,” said State Representative Grant Wehrli (R-Naperville).

A group of twelve legislators from the House sent an initial request for answers to Auditor General Mautino on February 1st asking for a written reply within 10 days. Mautino replied on February 9th that he needed more time to properly address the request. To accommodate the Auditor General, the lawmakers on February 11th extended their request deadline to February 25th. Mautino replied that he had retained a legal firm to assist him and would be working ‘…during the next few weeks in order to respond to your letter.’ In May lawmakers sent another request to which the Auditor General responded that the issue would be resolved by the State Board of Elections. Since that time, however, it has been revealed that the matter has grown into a federal investigation.