Rep. Wheeler's Weekly Roundup: January 13

General Assembly – 100th General Assembly Convenes
·         Illinois House members take oath of office, elect leadership.  The 100th General Assembly will be the legislative body that celebrates the bicentennial of Illinois as a state.  Each General Assembly is elected for a two-year period, and the 100th General Assembly will serve Illinois in our state’s 199th year (2017) and in our 200th year (2018).  House members have already filed more than 450 bills for the new General Assembly to consider.

The 118 members of the Illinois House of Representatives took a collective oath of office  on Wednesday, January 11 in the presence of family and friends in the auditorium complex of the University of Illinois at Springfield (UIS).  The new State Senate convened for the first time at the State Capitol on the same day.    Both chambers re-elected their majority leaders.  As part of the ceremony, after taking the oath the new House convened at UIS in its first session of the 2017-2018 period.  Jim Durkin was unanimously reelected as House Republican Leader by his colleagues.   In his inaugural remarks, Leader Durkin redoubled his call for budget reforms to end the current fiscal crisis facing the State.  Durkin also demanded that urgent attention be given to the current wave of homicides and violent crime in Chicago. 

The House Republican Caucus contains 10 new members who attended their first session days this week.  These are freshman members who were elected by their neighbors throughout Illinois, including the Chicago area and Downstate, to fight for economic growth and a taxpayer-friendly government that can live within its means.


Budget – FY17
·         “Stopgap” FY17 budget expires; lame-duck General Assembly does not enact new budget.  Upon the expiration of the “stopgap” FY17 budget on January 1, 2017, authorized State spending stopped on many programs that provide help for various social programs and institutions of higher education.  Efforts to reauthorize these programs for the second half of FY17 are being discussed in combination with the need for real budget reform and true reforms to the Illinois political process.  Illinois’ unpaid bill backlog now stands at $11 billion, and the Prairie State’s credit rating has dropped to 50th among the 50 states.      

Reform proposals under discussion include a hard freeze on property tax extensions, term limits for elected Illinois officials, workers’ compensation, and other issues.  Members and legislative leaders in the Illinois House and Senate discussed these issues during the final days of the 99th General Assembly. Although their goal was to reach comprehensive agreements on issues located in these and other contentious areas, and participants have reported that progress was made in these negotiations, final agreements could not be reached during the final days of the 99th General Assembly.  Senate leaders said that they are working to finalize a comprehensive budget plan by February 1.  The changes in the new budget plan could include changes to Illinois individual income tax rates, pension reform, a major expansion in Illinois casino gambling, and other significant changes to Illinois laws.

Criminal Law – Sentencing Reform
·         Major sentencing reform bill passed; Reform Commission delivers final reportSB 2872 will toughen probationary supervision over many people sentenced to crimes in Illinois, including repeat drug offenders and persons sentenced for possession of small quantities of high-schedule drugs such as heroin.  In a few cases, the intensive probationary supervision of these individuals will mean that some individuals who would have been subject to a mandatory prison term will, instead, be sentenced to intensive probation at the discretion of the court. 

Intensive probation opportunities will be concentrated on persons with a passive relationship to controlled substances; these individuals, in some cases, can still be helped by having their behavior supervised and getting access to treatments and supervisions overseen by the criminal justice system.  Behavioral supervision of this type is typically much cheaper to taxpayers than putting people in prison would be.  The bill also contained additional counseling, family support, and relocation assistance for some victims of violent crimes.  The House approved SB 2872 by a vote of 83-26-0.  The vote was held on Monday, January 9.        

This week’s action may not be the last word in sentencing reform in Illinois.  With an eye toward national criminal law standards and the State’s budget crisis (including costs generated by the Illinois prison system), Gov. Bruce Rauner appointed a Criminal Justice Reform Commission in 2015 to develop recommendations to reduce Illinois’ prison population and improve public security.  The Commission, which made 14 recommendations in 2016, has now released its final report.  The Commission’s year-end conclusions include 13 additional recommendations for the transformation of Illinois’ criminal sentencing system, for a total of 27 proposals.  These 27 proposed changes to Illinois’ current sentencing laws were aimed at meeting Gov. Rauner’s instructions that the Commission develop recommendations to reduce the prison population by 25 percent over a 10-year period. 

Many of the 14 recommendations made by the Commission in 2015-2016 have already been enacted into law to make a start toward reaching this ambitious goal.  The 13 proposals released in January 2017 were set forth in a timely manner for consideration by the new 100th General Assembly in the Spring 2017 session.   

Economy – 2017 Economic Forecast
·         Analytics firm Moody’s forecasts mixed economy for Illinois in 2017.  The forecast, which was released this week and posted online, depicts a continuation of relatively poor economic performances over the past 10 years for many key economic sectors in Illinois.  Over the past 10 years, the annualized growth rate in Illinois employment has been only 0.1%/year.  During this significant period of time and nationwide economic development, seven of 11 key job sectors have actually shown drops in Illinois employment as measured by Moody’s.  No area has shown growth of more than 1.8%/year (education and health services).  By contrast, three Illinois job sectors have shown annual rates of decline of 1.8% or more over this 10-year period (construction, manufacturing, and information).

In line with the lack of new jobs in Illinois, Illinois population growth has become negative.  From an annual rate of increase of 0.4% in 2007, reflecting the births of new Illinoisans and migration into Illinois of people looking for economic prospects, the net change of population of the Prairie State declined to a negative (-0.3%) in 2016.  This decline reflected a surplus of persons leaving Illinois over new entrants, and demographic shifts within Illinois in favor of an older citizenry with a lower birth rate.  The Moody’s annual report and forecast discusses the reasons for these trends and offers guidance on how they may be expected to continue into the future.  The Moody’s forecast was commission by the Illinois Commission on Budget Forecasting and Accountability (COGFA), the General Assembly’s nonpartisan budget arm.     

Education – Lead in School Water
·         New law to require testing of many Illinois school buildings for lead in tap water.  The poisonous substance could be in water anywhere in a school building or day care center that serves students aged fifth-grade-or-younger, including water fountains installed in school corridors.  SB 550 would create a statewide system for all school systems, other than Chicago, to test the water of each school building.  The Chicago Public School system says they have tested their schools already.  Other school systems that have already tested their water would also be exempted from this state mandate and lead testing results would have to be made public.

Studies show that Illinois has one of the largest number of lead service lines in the United States.  A lead-in-water scandal in Flint, Michigan has earned substantial news coverage throughout the Midwest.  Both Illinois and Michigan underwent fast economic development and boom conditions in the first three-quarters of the 20th century. During this period lead pipes and fittings were standard building supplies in building projects of all sorts, including school buildings. 

The cost of testing, which would be borne by school districts, would be from $500 to $5,000 per school building.  2,500 elementary schools and 11,000 licensed day care centers and homes would be covered by the legislation.  SB 550 was approved by the House by a bipartisan vote of 108-1-1.  The bill was approved by the House on Monday, January 9, and was sent to the Governor by the Senate on Tuesday, January 10.

Energy – Ethanol
·         New Chinese tariffs could create challenge to Illinois’ ethanol industry.  Illinois corn is used by refiners to distill ethanol, which is mixed with gasoline to make gasohol.  Gasohol is now the dominant motor fuel used to power American cars and non-diesel light trucks, and the health of the gasohol industry is a major factor in overall demand for American corn crops.  There are eleven ethanol plants in Illinois that specialize in the processing of corn to distill ethanol.  When ethanol is distilled from fermented corn, a solid, protein-rich substance is left behind.  This industrial byproduct is dried out and sold as “dried distillers grains.”  It is a fermented, fibrous mash that farm animals like to eat, and American ethanol distillers sell the substance all over the world.

Chinese manufacturers do not like competition, though.  In line with the mercantilist policies of that country, China imposed punitive tariffs this week on ethanol and dried distillers’ grains.  The tariff on the corn-based mash is of special significance to Illinois, as the U.S. burns almost all of the ethanol it produces but produces more dried distillers’ grains than our livestock can eat.  The Illinois Farm Bureau has expressed concerns about the Chinese tariff move.     

Jobs – EDGE Tax Credits
·         General Assembly passes bill to extend life of job-creation program.  The life of the Economic Development for a Growing Economy (EDGE) program was extended for four months, until April 30, 2017, by SB 513. The passage of SB 513 was made necessary by the inclusion in the EDGE Act of a “sunset date” that causes the program to become inactive at intervals of time.  The General Assembly must debate and consider the effect on the State’s economy, and on our State budget, of any law that reduces taxes on the private sector and asks its firms to create new jobs in response.  The old sunset date of December 31, 2016 meant that the EDGE program hiccupped briefly and became inactive for a few days.  Creation of a new sunset date of April 30, 2017 means that the program has come back to life and can be used once again to create new Illinois jobs. 

Further debate in spring 2017 on the State’s job-creation performance is also likely.  One proposal calls for replacement of EDGE by a new job-creation tax incentive program, to be called THRIVE.  The provisions that could become part of the new THRIVE law will be discussed in the spring 2017 session.   The EDGE program extension law was approved by the House and Senate on Tuesday, January 10.  The House vote was 101-12-0.    

Jobs – December 2016 Layoff Notices
·         WARN Act filings create legal notice for major layoffs covering more than 600 Illinois workers.  Significant-sized layoffs that encompass the closure of an entire plant or operating office must be reported, under State law (the Worker Adjustment and Retraining Notification Act, or WARN Act), to the State of Illinois.  Employees affected by these mass layoffs are given up to 90 days’ notice to try to find new jobs, and the State publishes a monthly list of the plants and offices set to shut down.

In December WARN Act filings listed by the State in early January, the largest single layoff notice was posted by Trunk Club, a non-store-based adult clothing retailer.  Trunk Club, which is now part of the Nordstrom family of retailers, reported 154 Illinois layoffs to the State in December 2016 as part of their plans to close their Chicago distribution center by summer 2017.

Taxes – Property Tax Freeze
·         Freeze on future hikes in property tax extension approved by Illinois House, but not SenateHB 6630, a 99th General Assembly bill sponsored by House Republican Mark Batinick, would have imposed a permanent freeze on the extension portion of Illinois property owners’ tax bills.  The extension is the total amount, based on last year’s tax bills, that a taxing body is allowed to ask for in the current property tax year.   HB 6630 would have frozen these extensions throughout Illinois at the levels approved for levy year 2015, billed to taxpayers in calendar year 2016.  It would have sharply cut back the rates of property tax increases imposed on property owners in calendar year 2017 and following years.  

The State of Illinois does not run the school districts and local governments that are allowed to levy property taxes, but can take some steps to encourage or force these taxing bodies to limit the total sums of money they are allowed to ask for.  A property tax extension (PTELL) “freeze,” which would prevent the amount extended from going up from one year to the next, is one of the most powerful ways to exert this pressure.  Five House Republicans joined Rep. Batinick to co-sponsor the taxpayer-friendly measure.  The House vote on the 99th General Assembly bill, approved on Tuesday, January 10, was 76-24-6.  The state Senate did not take up this measure prior to the adjournment of the 99th General Assembly, and the issue will be discussed again by the new General Assembly this spring.

200 Years – Illinois Bicentennial
·         Governor Rauner convenes Bicentennial Commission, unveils new logo.  Governor Bruce Rauner convened the first meeting of the Illinois Bicentennial Commission this week and unveiled the official Bicentennial logo at the Old State Capitol. The co-chairs of the Bicentennial Commission were also announced.

“From Kaskaskia to Vandalia and now Springfield, this has been a long time coming, and I am honored that you can be a part of this effort to honor our past while paving the way for our future,” Governor Rauner said. “From our rich history to our rich soil Illinois has changed over the last two centuries but our focus is still much the same. We’re still deeply rooted and invested in our children’s education, moving Illinois forward through innovation and technology and working together to make our great state the best place to live in the country.”

At the meeting, Governor Rauner and Bicentennial Office Executive Director Stuart Layne unveiled the official bicentennial logo. The logo was created and donated by Ben Olsen, of Schaumburg PR agency 3 Monkeys and Aardvark Studios. The navy and gold design with 21 gold stars represents Illinois’ entry as the 21st state in the union. The colors are a nod to the State of Illinois’ official seal.

On September 20, 2016, Governor Rauner signed Executive Order 2016-11 to create the new Illinois Bicentennial Commission and the Governor's Office of the Illinois Bicentennial to lead the planning for the celebration of the state's 200th birthday.

For more information visit the Illinois Bicentennial Celebration website:  www.illinois200.com

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