Senate Week in Review: October 3 - 7, 2016
SPRINGFIELD – A bipartisan group of lawmakers tasked with crafting a proposal to reform Illinois’ education funding formula met again this week, this time discussing Illinois’ property tax system and its implications for school funding.
It could also once again become more costly for the state to borrow money as S&P Global Ratings dropped the state’s credit rating one notch. In related news, Gov. Bruce Rauner’s administration took steps to reduce the state’s financial risk on interest rate swaps and letters of credit dating back several years.
Also during the week, Senate lawmakers heard testimony from advocates who want Illinois to join a growing list of states that are removing the statute of limitations on sexual abuse of a minor. And, a new survey this week shows Illinois residents are demanding term limits for legislators and want politicians removed from the process of drawing legislative district maps every 10 years.
Illinois’ property tax system topic of latest Illinois School Funding Reform Commission
Meeting for the fifth time, the bipartisan Illinois School Funding Reform Commission discussed Illinois’ property tax system and its implications for school funding during its meeting Oct. 5.
Tom Johnson, the former President of the Taxpayers’ Federation of Illinois who is now retired, discussed the recent historical trend of Equalized Assessed Value (EAV) throughout the state. He illustrated for lawmakers that since 2009, EAV in Illinois has dropped 23 percent. Because the state’s school funding formula relies heavily on property taxes, which are calculated using EAV, this decline has dramatically impacted school districts.
Johnson also showed how the breakdown of commercial property and residential property within a school district’s boundaries can impact tax revenue for that school district. In addition, he explained to lawmakers for both PTELL (Property Tax Extension Limitation Law) and non-PTELL districts, how tax rates are calculated and talked about the Cook County property classification system. Finally, Johnson described Tax Increment Finance (TIF) districts and how they apply to available local resources.
The commission will meet again Oct. 19 and continue the discussion on how property taxes impact the state’s school aid formula.
Topics legislators discussed at previous meetings of the Commission included the hold harmless provision, funding distribution models, the relationship between school funding and workforce readiness, reviewing the “evidence-based” approach to funding education, and exploring best practices in school funding, among other topics. Chaired by Secretary of Education Beth Purvis, the Commission is tasked with making recommendations to the General Assembly to revise the current school funding formula by Feb. 1, 2017.
Illinois’ credit rating takes a hit
Citing Illinois’ massively underfunded pension liability as a major financial pressure, S&P Global Ratings dropped the state’s credit rating one notch to BBB on Sept. 30. Illinois is facing an unfunded pension liability of more than $111 billion, the largest in the country. The credit agency also cited “continued weak financial management” as a reason for its decision in addition to the state’s unpaid bill backlog totaling more than $8 billion.
The lower investment grade of BBB, just two levels above junk status, can make it more costly for the state to borrow money as interest rates are higher. Republicans say this is another reason Illinois must pass a constitutional pension reform law and pass a balanced budget with structural reforms that will grow Illinois’ economy, create jobs, and move the state forward fiscally. S&P noted another downgrade is possible if Illinois isn’t willing to “adopt a long-term structural budget solution.”
In related news this week, the Rauner Administration took steps to reduce the state’s financial risk on interest rate swaps and letters of credit dating back to the administrations of former Governors Blagojevich and Quinn.
The Rauner Administration completed negotiations with banks that hold the state’s swaps and say “the new terms are more favorable to the state and reduce the state’s financial risk. Under the new terms, the state is less likely to have the swaps terminated and owe a payout to the banks because the credit rating thresholds that allow the banks to terminate have been lowered. These new terms are better for the state than the terms agreed to by the Quinn administration in 2013 and the Blagojevich administration in 2003.” The Rauner Administration also says that this action will increase the ability to direct the state’s limited resources to education and social services.
Senate Committee explores removing statute of limitations for child sex abuse cases
The Senate Criminal Law Committee met Oct. 4 in Chicago to hear testimony and discuss legislative proposals on removing the statute of limitations on child sex abuse crimes. Illinois’ current law says sexual abuse against a child must be reported and prosecuted within 20 years of the victim turning 18 years old.
There are currently four proposals pending in the General Assembly that would remove the statute of limitations from felony child sexual abuse crimes. More than 30 states have no statute of limitations on child sexual abuse cases. Senators heard powerful testimony from victims who suffered sexual abuse as a minor and who now as adults are advocating for a change in Illinois law, so abusers don’t go unpunished do to the passage of time.
Survey finds Illinoisans support term limits, redistricting efforts by wide margins
A survey released Oct. 5 by the Paul Simon Institute found Illinoisans overwhelmingly support term limits and independent redistricting efforts.
The survey found:
• More than 80 percent favor a constitutional amendment limiting the number of terms a state representative or state senator can serve, while 17 percent are opposed.
• 72 percent of likely voters support an idea of an amendment establishing an independent commission to draw legislative district lines, while 18 percent are opposed. The Paul Simon Institute has been polling this question since 2010 and the support for redistricting reform this year is a record high.
The poll comes on the heels of an Illinois Supreme Court ruling in August that struck down a ballot referendum that would take the legislative district map drawing powers out of the hands of lawmakers. Efforts to get a proposed amendment on the ballot concerning term limits have also failed in the past.
Senator Luechtefeld says this recent survey is further proof these are reforms Illinoisans are demanding. That’s why he continues to push for legislation that would allow voters the opportunity to amend the Illinois Constitution to establish term limits and change the way legislative maps are drawn.
University of Illinois sees the largest number of freshman in school history
The University of Illinois campus in Champaign is busier this year thanks in large part to a record number of freshman—7,593 freshman students are hitting the books, one of the five biggest freshman classes in the country.
A student body of nearly 45,000 students also makes the U of I the seventh largest public university in the nation. The university says the campus has grown about 1 percent every year for decades. The U of I also boasts a top 10 ranking among all top public universities regarding ACT scores for the percentage of students who score between a 26 and 32 on the test.