Home

Search

Browse

About IPO

Staff

Links

Session ends in scoreless tie

THE HIGHEST paid state legislature in the nation found itself incapable of getting much done this year. Off to its usual slow start, it appeared headed for the traditional flurry of productive horse-trading in the final weeks. But to the surprise of power brokers in and out of the General Assembly, there was just too much internal division along geographic and party lines, and too little effective leadership for the deals to go through. As a result most major issues were not dealt with.

There was no sweeping tax ceiling or tax reform bill passed -- despite the universal promises of last year's campaign (including the now-infamous Thompson Proposition, which truly proved to be "Proposition Zero").

There was no compromise on the replacement for the corporate personal property tax -- although one plan (H.B. 2569) passed both houses, and Gov. James R. Thompson announced as it was passed that he would veto it. Much of the business community is at odds with the bill's provisions that would tax corporate income at 2.85 percent above the present 4 percent. No consensus was ever reached, and the governor announced July 13 that he would use his amendatory veto power to reduce the tax level to 2.5 percent.

No gas tax increase or other long-term solution to bail out the crumbling transportation system and road fund was passed -- even though the House came back to Springfield nine days after its June 30 adjournment deadline. But there was only ineffectual squabbling over any and all proposals from the governor, the mayor of Chicago and other would-be statesmen.

As for tax relief, despite the fervent tears and prayers of the multitudes of inflation-weary souls, the big old General Assembly left for home happy after passing one lone tax break bill (H.B. 2564), which the governor announced months ago he would veto, and he did on July 13. Gov. Thompson says the state coffers cannot afford the revenue loss "without major slashes in spending for our schools, services for elderly, families and children, mental health, or other essential services." The bill would cost the state an estimated $45 million the first year, but climb to an estimated $660 million by the fourth year of a phase-in period. It would phase out all state and local sales taxes on food and medicine, taxes which amount to 4 percent levied by the state and 1 percent levied by most cities and counties. The average family spending $100 a week on food would save $260 a year in the final year of the plan. A family spending $150 a week would save $390 a year. The savings on drugs would be $50 for a family spending $1,000 a year for medicine.

Democrats who guided the bill through the legislature say the state can afford it because inflation will drive other tax receipts higher and whatever savings families realize on food and medicines will be spent on other items that are taxed. Many cited the expected $400 million available balance in the state treasury as proof. "There is no reason why anyone in a free country should have to pay taxes on necessities of life," said Sen. John L. Knuppel(D., Petersburg).

Gov. Thompson contends the bill is fiscally irresponsible because it offers no replacement for the lost state revenue. "That's a fraud, a deceit. It's trickery. It's the biggest con job promoted by this assembly and I'm going to veto it and hand it right back to them," he said.

Unemployment insurance, workers' compensation
Only one of the two high priority items affecting the state's business climate was passed: a revision of eligibility requirements for unemployment insurance (UI) statutes. The subject of workers' compensation (WC) inequities was not addressed by successful new legislation, and it is not clear to the entire business community whether the UI bill (S.B. 1331) sent to the governor June 29 is enough of an improvement to warrant much enthusiasm. Although the final UI bill was worked out in a compromise "agreed bill" process (where business and labor representatives met with public appointees of the governor), the Illinois Manufacturers' Association opposed it, and those business groups that backed it were unhappy with its high cost. (See next month's magazine for more details.)

One of the key features of S.B. 1331 raises the benefit ceiling for a worker with spouse and dependents from $135 to $165 a week. The measure will add $180 million to the tax burden of employers in the state, to go toward repaying $1 billion the state owes to the federal government for unemployment funds. However, the bill lenthens the ineligibility period for people who quit work, from eight weeks to 12 weeks.

Democrats backed the UI bill unanimously in both houses, while most Republicans voted against it -- despite the nonpartisan nature of the committee named by Gov. Thompson.

Drinking age
Both houses agreed to a bill (H.B. 21) raising the state's drinking age for beer and wine from 19 to 21. Illinois lowered its drinking age to 19 for sale, delivery and possession of beer and wine in 1973. In March the Chicago City Council raised the municipal drinking age to 21, citing increased disturbances and traffic accidents related to intoxicated youths.

One important aspect of the bill --making for a possible court challenge --is a provision which bans the state's 92 home-rule units of localgovernment from setting their own local drinking age limits. Under the state Constitution, home-rule units have the power to set

local laws which supercede state laws. Such powers, in order to be overruled by legislative action, must have a ruling from the chair as to whether the bill will take a simple majority or a three-fifths majority. On this bill both houses ruled that a three-fifths majority was not necessary since the bill declares exclusive state jurisdiction but does not preempt a constitutionally granted home-rule power. But that ruling may raise a legal question since many home-rule units have local ordinances now on the books to allow youths to drink beer and wine. It is not clear whether the exercise of exclusive state jurisdiction can be applied retroactively.

Education funding
With much less bickering than in past years, the legislature agreed to increase funding for elementary and secondary education nearly $52 million over the governor's request, or about 5.3 percent over last year's funding. The total $2.55 billion appropriation includes a $1.43 billion new state aid formula. The formula eliminates overpayments to school districts and end-of-year adjustments which penalize districts that have been overpaid. And the new formula provides "full access," according to its backers, thus eliminating the need for districts to reach a minimum taxing level to assure full state aid. The formula would raise the amount of money guaranteed by the state for each pupil from $1,310 to $1,363.

Total higher education funding of $1.035 billion was passed, $911 million of which comes from state general funds. The $911 million figure represents an increase of $9 million more than Gov. Thompson finally offered, but is $12 million less than the Board of Higher Education asked for. Included in the higher education appropriations were: a $48 student tuition increase for undergraduates and a $64 tuition hike for graduate students; a 7 percent minimum salary increase for faculty members; and a raise in the maximum scholarship award. Tuition revenues will bring in approximately one-tenth of the total appropriated revenues.

The governor approved almost all of the higher education appropriations on July 12, although he has vowed to veto most of the elementary and secondary education increases passed by the legislature.

Signing the higher education bill with cuts of only $8 million, Gov. Thompson noted that he was approving $14.7 million more than the budget he had recommended in March. He explained that several things had persuaded him to change his mind, including negotiation with people in higher education, the desires of the General Assembly and the balance in the general revenue funds at the end of the fiscal year. Of his cuts, $3.8 million was in the university retirement system's $58.7 million appropriation, and $4 million was in the $91.7 million Illinois Scholarship Commission budget.

Nursing home reform
A package of tough nursing home regulatory requirements, including a patient's bill of rights, won approval easily in both houses after being sponsored by Sen. Richard M. Daley (D., Chicago). The key bill, S.B. 316, carries a $1.4 million enforcement pricetag the first year, mostly for nurses aide training. Increased regulatory fees and fines for abuses are projected to bring in $400,000 in new revenues to pay for the reform.

The House and Senate have adjourned until October 3 when they will return to consider the governor's veto actions.