Legislative Report 3-31-10

Government Strategy Associates
4023 Terramere Avenue
Arlington Heights, Illinois 60004

M E M O R A N D U M


To: Laurie Dougherty
Gerry Bever

From: Terry Steczo
Maureen Mulhall

Re: Legislative Report

Date: March 31, 2010


The Pause That Refreshes?

A two-week hiatus. The final pit stop in the race (or crawl) toward adjournment of the 2010 legislative session. In approximately six weeks we’ll have an idea as to whether or not the General Assembly will cruise across the finish line, or sputter and choke and leave its owner(s) and crew with a jalopy in horrific condition and a mountainous “repair bill”. The smart odds may be on the latter.

The legislature has reached its technical halfway point and when it returns from its break will begin the process of finalizing action on many of the bills that have been approved by the first chamber and now will be considered by the second. They will also try to get their arms around a budget, and that shouldn’t be a problem this year with the emaciated state of the Illinois treasury.

What many consider to be “Nightmare on Monroe Street” began a few weeks ago when Governor Pat Quinn gave a short, fairly quiet budget message that painted a dismal picture of state finances and that offered cuts, borrowing and a proposed 1% education income tax surcharge to help Illinois get through the next fiscal year. He referred to the state of Illinois’ finances as a “crisis of epic proportions” and indicated that the structural deficit would be in the $13 billion range. But, he also indicated he was “an optimist but also a realist” so, realizing the legislature’s lack of spirit on the question of revenue generation and taxes, he throttled back on any overtly aggressive approach to new revenue.

Rather than throw down the gauntlet to the legislature Gov. Quinn suggested that given the fiscal constraints providing the pared down budget was the best he could do given the lack of available resources. Requesting authority to borrowing $5 billion will, for now provide the revenue stream that will be required to allow the state to provide a minimal level of services, according to the Governor. But, since the issuance of new bonds requires a three-fifths vote in the legislature this scenario can’t occur without at least some Republicans jumping on board … and they’re not even close to approaching the station yet. Nor will they be. So, we’re probably back to square one on that front.

A good deal of the Governor’s initial plan focuses on maximizing federal matching dollars. Efforts are being made to transfer programs and services as much as possible from general revenue funding to Medicaid. In those cases current non-Medicaid caseloads will be grandfathered and new non-Medicaid individuals will either not be served or will be resigned to be placed on waiting lists.

Mental health services were particularly hard hit. During the Department of Human Services budget briefing it was estimated that between 23 and 87 service agencies may fail and 3,800 jobs may be lost due to the cuts that would have to be endured. Thousands of individuals would be unable to receive services. Non-Medicaid related community-based mental health services would also be eliminated, according to the Department.

The Governor’s suggestion of the 1% education income tax surcharge was unexpected and carries great future risk. If there is some chance that the legislature will address this tax issue does that poison the prospect of doing the remainder of what’s necessary later? The 1% represents only about a third of what is needed to only start to straighten out the fiscal hole. The General Assembly does not act on tax questions lightly. If there is only going to be one bite at the apple, is this the bite that is preferred? Second, what happens to human services providers that have been revenue enhancement stalwarts during the last year? They were seemingly left at the gate on Wednesday, having to contend with even longer prolonged payment cycles, devastating cuts and the potential closure of scores of service providers doors while education gets targeted for some relief.

After the speech Sen. Bill Brady, the GOP nominee for Governor, called Quinn’s budget proposal a “catastrophe” but didn’t, and hasn’t, gone into detail about how he would balance the budget with the 10% across-the-board-cut and a tax reductions he recommends.

The proverbial ball is now in the legislature’s court. After the speech House Speaker Michael Madigan seemed to quash the idea of any tax increase saying that people don’t want one because they’re “hurting”. So, with bonding apparently doomed and with the 1% tax surcharge for education on a respirator, the Governor’s initial budget plan is about as sound as a house in Haiti. Shaky, at best.

Don’t expect to see anything too heroic to occur in the legislature between now and the end of the fiscal year. There has been rumor that the legislature may just punt like they did last year, send the Governor a six-month lump sum budget and then deal with it after November. Of all the scenarios it probably seems the most likely at this point in time.

The legislature heads into its own “Final Four” – the last four weeks of the legislative session – beginning April 13 and there’s a full plate of issues to be resolved, all of them overshadowed by the whopping $13 billion projected deficit.

As the clock ticks and the rhetoric from both political parties becomes magnified, look for a series of non-solutions relating to the budget with some resolution of some major policy questions by the end of April. The odds may not be in favor at this point of an adjournment on May 7, but there is no doubt that legislators will be home for the summer/fall campaign season by the end of May at the latest. If not, then it could spell trouble for Governor Quinn. He needs to show that his decisiveness and prove his leadership credentials and the last weeks of a legislative session are a good time to do that. A blunder could prove very costly, even against an opponent that is perceived to be weak. Democrats will be doing everything possible in the coming weeks and months to avoid another 1994 when they lost control of the legislature and all of state government. Republicans, on the other hand, will use their last once of energy trying to invoke the spirit of 1994 to wrestle control of either the Governor’s office or one of the chambers of the General Assembly. With redistricting on the horizon in 2011, their political lives depend on it.

The legislature stunned everyone this past week by passing a huge pension reform package in just one day over the objections of every public employee and teachers union in the state. East coast bond houses wanted some sign from the legislature before April bond sales that the state was serious about getting pensions costs under control. Under threat of having higher interest rates imposed the legislature acted swiftly and decisively and created a new set of pension standards for new hires, including caps on benefits and an increase in the age to qualify for full benefits to 67. With the exception of the Chicago Tribune, observers who had cried out for the need for significant pension reform seemed pleased.

Game On

Nearly two months after the February primary election the tickets are finally complete, so it’s on to November! With Sen. Bill Brady’s nomination certified and Sen. Kirk Dillard’s gracious concession, the top of the Republican ticket for the fall election has been set for a few weeks. Now, with the Democrats having selected Sheila Simon of Carbondale, daughter of former Lt. Governor and U.S. Senator Paul Simon, as their choice as Governor Quinn’s running mate, the campaigns can gain full heads of steam heading into the upcoming campaign season.

The February primary election experiment has now officially come to an end. Governor Quinn has signed legislation to move the primary election back to March in 2012.

Democrats will insist that Brady’s views are Neanderthal and his running mate, 27 year old Jason Plummer is ill-equipped to take the reins of government should there be a gubernatorial vacancy. Republicans, on the other hand, will try to prove Quinn to be an indecisive liberal who wants to pick the taxpayer’s pockets by raising revenue. They’ll also do their best to scare up the ghost of Rod Blagojevich to try to create a link to Quinn. It may be a tough chore, given Quinn’s advocacy of good government and ethics in the past. But since Blagojevich won’t “go away” and continues his media blitz, and he’ll be on the front pages statewide once his trial is scheduled to begin in just a few months, he may prove to be an assist to the GOP either directly or indirectly.

Election Day is 186 days away.

Legislation of Interest

The following is a sampling of bills that have been introduced this legislative session and that are being monitored and the current status. A re-referral generally indicates that a bill will no longer be considered. However, some sponsors will file motions asking for extended deadlines. Those requests are honored in some limited cases.

HB 5115 - Creates the Prescription Drug Repository Program Act. Requires the Department of Public Health to establish a prescription drug repository program, under which a healthcare facility may donate a prescription drug or supplies needed to administer a prescription drug for use by an individual who meets eligibility criteria specified by the Department. Provides for civil and criminal immunity for drug and supply manufacturers and pharmacists in relation to the donation, acceptance, or dispensing of prescription drugs or supplies under the prescription drug repository program. (Current Status – House – Re-referred to Rules Committee)

HB 5347 - Provides that a utility that is regulated by the Illinois Commerce Commission that owns power stations or substations located within 200 feet of a lake, river, or stream in the State must file a report with the Commission by June 30, 2011 reporting any possible contamination resulting from the substation in nearby soil and water. Provides that if the utility has already completed a full environmental report on that property within the last 5 years, then that private report must be made available for public viewing by July 28, 2011. Provides that if no environmental report has been completed, then the utility has until August 30, 2011 to conduct and complete a full environmental survey of the property. Provides that the environmental study shall be filed with the Commission and shall include all data from the soil and water samples performed by the utility. Provides that the Illinois Environmental Protection Agency must review all surveys by November 30, 2010. (Current Status – House – Re-referred to Rules Committee)

HB 5482 - Provides that a water utility official or his or her designee must notify (i) the local fire officials of any hydrant that it finds necessary to take out of service for water main-related work due to emergency repairs or scheduled maintenance, whenever such maintenance work and hydrant out of service condition is expected to last more than 8 hours or if the main will be unattended at any time during the outage and (ii) the dispatcher or designated fire official of any hydrant reported to be inoperable or expected to operate with a rate of water flow less than a normal rate expected for the hydrant as soon as practical, but in no event more than 2 hours, after receiving the notice from an employee, contractor, police department, or other government official, and, under normal conditions, must have the hydrant restored to service within 48 hours. Provides a fine of $100 per day for failure to make the notification or repairs, which shall be paid to the fire department or fire protection district. (Current Status – House – Re-referred to Rules Committee)

HB 5485 - Provides that in certain eminent domain proceedings the fair cash market value of waterworks and sewerage system facilities is the depreciated value of the land and easements upon which the facilities are situated and all facilities and fixtures constructed or installed by the utility company (rather than the net earnings attributable to those facilities). Requires the acquiring municipality to reimburse the utility company for payments made by the utility in connection with the dedication or donation of any waterworks or sewerage system to the utility company. . (Current Status – House – Re-referred to Rules Committee)

HB 5491 - Provides that any residential property owner who willfully fails to comply with any provision of the Act while engaging in excavation or demolition on such residential property shall not be subject to a penalty under the Act for a first-time offense of the Act, but shall be subject to a penalty of up to $500 for each separate offense for any subsequent willful failures to comply with the Act. Provides that any residential property owner who fails to comply with any provision of the Act while engaging in excavation or demolition on a residential property shall be liable for the damage caused to the owner or operator of the damaged underground utility facilities or CATS facilities unless the damages resulted from the failure of owners or operators of underground facilities to comply with the provisions of the Act. (Current Status – House – Re-referred to Rules Committee)

HB 5837 - Provides that no public utility shall impose a sprinkler standby charge on the owners of structures that contain automatic fire protection systems. Provides that "sprinkler standby charge" means additional charges imposed by a public utility on owners of structures because the structures are equipped with automatic fire protection sprinkler systems. (Current Status – House – Re-referred to Rules Committee)
HB 6120 - Makes it a violation to fail to (1) submit to the Agency a discharge monitoring report as required under an NPDES permit, (2) perform monitoring as required under an NPDES permit, (3) obtain a stormwater NPDES permit for a construction site, (4) renew an NPDES permit, and (5) maintain at a construction site a stormwater pollution prevention plan as required under an NPDES permit. Authorizes certain violations of the Act and rules adopted under its authority to be enforced by administrative citation. (Current Status – – Re-referred to Rules Committee)

SB 580 – DuPage Water Commission. (Current Status – Senate – 3rd Reading)

SB 2549 - Provides that "plumbing" includes rainwater harvesting distribution systems, but does not include any rainwater harvesting distribution system or rainwater harvesting collection system unless otherwise required by the Illinois Plumbing Code. Requires the Illinois Department of Public Health to adopt and publish a minimum code of standards for rainwater harvesting collection systems and rainwater harvesting distribution systems by January 1, 2011. Requires rainwater harvesting collection systems and rainwater harvesting distribution systems to be (A) used only for non-potable uses and (B) constructed in accordance with the Illinois Plumbing Code. (Current Status – Passed Senate; - House – Rules Committee)

SB 3070 - Provides that if a carcinogenic volatile organic compound is detected in the finished water of a community water system at a certain level, then the owner or operator of that system must submit a response plan that meets certain requirements to the Illinois Environmental Protection Agency. Requires the Agency to approve, and the owner or operator to implement, the plan. Upon completion of the plan, requires the owner or operator to submit a response completion report to the Agency. Provides that any action taken by the Agency to disapprove or modify a plan or report may be appealed to the Illinois Pollution Control Board. (Current Status – Passed Senate – House – Rules Committee)